Landlord and tenant — Repairs — Tenant’s failure to repair — Landlord’s power of entry to carry out repairs in case of default by tenant and to recover costs — Whether before landlord could take proceedings for recovery of costs the leave of the court was required under section 1(3) of the Leasehold Property (Repairs) Act 1938 — If proceedings were for breach of covenant to repair leave was required, but if they were for recovery of a debt leave was not required — Plaintiff landlord in present case sought leave under section 1(3) of the 1938 Act, but without prejudice to its claim that leave was not required — Nourse J in present case was faced with a conflict of authority, McNeill J in Swallow Securities Ltd v Brand having decided in a similar case that leave was required, but Vinelott J in Hamilton v Martell Securities Ltd having held that it was not required — Counsel in the present case both submitted that, in view of this conflict between two judges of co-ordinate jurisdiction, Nourse J was entirely free to choose between them and should not start with any preference — Nourse J, however, having carried out some independent research into the question, in which the court had an interest of its own, found guidance in a decision of Denning J, as he then was, in Minister of Pensions v Higham — His rule was that ‘where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred, if it is reached after full consideration of the earlier decision’ — Nourse J
The questions
in this case were raised in an originating summons taken out by the plaintiff,
Colchester Estates (Cardiff), the defendant, Carlton Industries plc, being
tenant of the plaintiff in respect of leasehold factory premises on the
Colchester Trading Estate at Cardiff. The plaintiff sought a declaration that
leave under section 1(3) of the Leasehold Property (Repairs) Act 1938 was not
required to commence certain proceedings.
The Hon
Christopher Bathurst QC and M J Brindle (instructed by Ward Bowie, agents for Walters
& Co, of Cardiff) appeared on behalf of the plaintiff; Michael Barnes QC
and P Talbot (instructed by Stones Porter & Co) represented the defendant.
Giving
judgment, NOURSE J said: This case is concerned with a provision in a lease
which empowers the landlord to enter and make good at his own cost wants of
repair for which the tenant is liable and then to claim repayment of the cost
from the tenant. Provisions of that kind have commonly been included in leases
since the early part of this century, if not before. The primary question here
is whether, before the landlord can take proceedings for the recovery of the
cost, the leave of the court is required pursuant to section 1(3) of the
Leasehold Property (Repairs) Act 1938. The outcome of that question depends on
whether the proceedings are properly to be regarded as proceedings for damages
for breach of a covenant to repair, in which case leave is required, or as
proceedings for recovery of a debt, in which case it is not.
The plaintiff
is an unlimited company called Colchester Estates (Cardiff). The defendant,
Carlton Industries plc, is the tenant of certain leasehold factory premises on
the Colchester Trading Estate in Cardiff which it holds of the plaintiff under
a lease dated April 13 1964 made between the plaintiff of the first part, the
defendant’s predecessor in title of the second part and a guarantor of the
third part. That lease was for a term of 27 years from December 1 1963 at a
rent which is currently £25,000 pa. The term will therefore expire at the end
of 1990 and still has more than six years to run. The tenant’s covenants are
contained in clause 2 of the lease. Subclauses (c) and (d) contain covenants to
paint the exterior and the interior respectively of the demised premises.
Subclause (f) contains a full repairing covenant (damage by fire, storm or
tempest excepted). Subclause (i), which contains the provision with which this
case is concerned, is in these terms:
To permit the
Lessors or their agents at all reasonable and convenient times by appointment
to enter the demised premises and examine the state of repair and condition
thereof and to check and take inventories of the Lessors’ fixtures therein and
that the Lessees will repair and make good all defects decays and wants of
repair thereto of which notice in writing shall be given by the Lessors to the
Lessees and for which the Lessees may be liable hereunder within three months
after the giving of such notice Provided that in case of default by the Lessees
the Lessors may make good such defects decays and wants of repair and the cost
of the same shall be repayable by the Lessees to the Lessors on demand.
Subclause (s)
contains a covenant to pay all reasonable and proper costs and charges and
expenses incurred by the landlord in relation to any notice under section 146
of the Law of Property Act 1925.
The assignment
of the lease to the defendant was made on June 25 1980. Between October of that
year and the summer of 1983 various notices under clause 2(i) or section 146
were given to the defendant by the plaintiff in respect of alleged wants of
repair. There were various meetings and negotiations which do not seem to have
led to much work being done. In any event the plaintiff was not satisfied.
Accordingly, on August 19 1983, it served two further alternative notices, the
first of which was intended to take effect under clause 2(i) of the lease if
section 146 and the 1938 Act do not apply, and the second of which was intended
to take effect if they do. Those notices related to what the plaintiff says are
wants of repair which have now become urgent and of which the aggregate cost is
put at £173,000. On September 1 1983 the defendant served a counternotice under
section 1(2) of the 1938 Act. By its originating summons issued on December 22
1983 the plaintiff effectively seeks leave under section 1(3) to commence
proceedings for the recovery of the cost of the work in accordance with clause
2(i) of the lease, but without prejudice to its claim that leave is not
required. That claim has been raised by an amendment which seeks a declaration
that the leave of the court ‘is not required by the plaintiff to commence
proceedings for the recovery of the costs incurred by the plaintiff of making
good defects decays and wants of repair under clause 2(i) of the said lease’.
On the primary
question the plaintiff contends that leave to commence proceedings for the
recovery of the cost of the work is not required and the defendant contends
that it is. If that question is determined in favour of the plaintiff, that
will be an end of the matter. If, on the other hand, it is determined in favour
of the defendant, then the defendant contends that the court has no power to
grant leave to commence the proceedings, first, because the plaintiff has not
yet incurred any cost which is recoverable under clause 2(i) and, second,
because the notice served by it under section 146 is in any event defective in
a particular respect. If both those contentions fail, then it is agreed that
the application for leave will have to be heard on its merits, but it is also
agreed that that exercise cannot be embarked upon today.
I turn
therefore to the primary question, which is by no means free from authority. In
Swallow Securities Ltd v Brand (1981) 45 P & CR 328 McNeill J
held that a right conferred on a landlord by a provision comparable with clause
2(i) was a right to recover damages for breach of a covenant to repair and that
the leave of the court to commence proceedings for the enforcement of that
right was accordingly required. However, in Hamilton v Martell
Securities Ltd [1984] 1 All ER 665 Vinelott J declined to follow the
decision of McNeill J and held the opposite. In the later case the material
provision was nearer in form to clause 2(i) than that in the earlier one, but
it is agreed that that is not a distinction of any importance. What may be of
importance is that Vinelott J was referred to certain authorities which were
not cited to McNeill J. Of these, the one to which Vinelott J attached the
greatest weight was the decision of the Court of Appeal in Middlegate
Properties Ltd v Gidlow-Jackson (1977) 34 P & CR 4 in which the
earlier decision of Roskill J in Bader Properties Ltd v Linley
Property Investments Ltd (1967) 19 P & CR 620 was approved. In each of
those cases it was held that the right conferred on a landlord by a covenant on
the part of his tenant to pay all expenses incurred by him in relation to any
section 146 notice or the like was a right to recover not damages but a debt
due from the tenant. Accordingly, the 1938 Act did not apply and the leave of
the court to take proceedings for the recovery of the amount of the expenses
was not required.
In Hamilton
v Martell Securities Ltd Vinelott J, having said that the
decision of the Court of Appeal in Middlegate Properties Ltd v Gidlow-Jackson
was binding on him, expressed the view that it compelled the conclusion that in
the case before him the landlord’s right to recover the costs of the repairs
was not a right to recover damages for breach of a covenant to repair within
section 1(1) and (2) of the 1938 Act; see [1984] 1 All ER at p 674j. He then
said that neither that decision nor the decision of Roskill J in the Bader
case, nor the decision of the Court of Appeal in Sidnell v Wilson
[1966] 2 QB 67 had been cited to McNeill J in Swallow Securities Ltd v Brand.
In Sidnell v Wilson both Lord Denning MR and Harman LJ — see
[1966] 2 QB at pp 76E and 79A — had described the mischief which the 1938 Act
was intended to defeat. Earlier in his judgment Vinelott J had gone into that
matter in some detail with a view to showing that it was at the least doubtful
whether the 1938 Act was intended to operate on a case of this kind; see [1984]
1 All ER at pp 672j-673e. Finally, Vinelott J pointed out that the attention of
McNeill J was also not drawn to the difficulties which later emerged as a
result of the decision of Mr Michael Wheeler QC in SEDAC Investments Ltd
v Tanner [1982] 1 WLR 1342 in applying section 1(5) to a case where a
want of repair has actually been remedied by the landlord, nor to the
difficulties which would seem equally to confront a landlord who sought leave
to bring proceedings to recover the cost of carrying out repairs before he had
actually carried them out.
On this state
of the authorities both Mr Bathurst for the plaintiff and Mr Barnes for the
defendant submitted that the existence of two conflicting decisions of judges
of co-ordinate jurisdiction meant that I was entirely free to choose between
them and should not start with any preference for one over the other. While I
readily accepted that that would be the position where the second decision was
given, for example, in ignorance of the first I was troubled at the suggestion
that it would necessarily be the same where the second was given after a full
consideration of the first. Since this is a question on which the court has an
interest of its own, I thought it right to make an independent research. That
led me to the decision of Denning J in Minister of Pensions v Higham
[1948] 2 KB 153. I put that case to counsel during the course of argument
yesterday afternoon and I hope and believe that they both had an opportunity of
saying what they wanted to say about it.
Minister of
Pensions v Higham was a case where Denning
J, who was then the judge nominated to hear appeals from the Pensions Appeals
Tribunals in England, was faced with a conflict between a dictum in an earlier
case of his own and a decision of the Court of Session on an appeal from one of
the Pensions Appeals Tribunals in Scotland. In the later case the Court of
Session, having considered the dictum in the earlier one and having no doubt
considered it fully, said that they were unable to agree with it. At [1948] 2
KB 155 Denning J, having stated the special position in which he was there
placed, said this:
I lay down
for myself therefore the rule that, where the Court of Session have felt
compelled to depart from a previous decision of this court, that is a strong
reason for my reconsidering the matter; and if on reconsideration I am left in
doubt of the correctness of my own decision, then I shall be prepared to follow
the decision of the Court of Session, at any rate in those cases when it is in
favour of the man, because he should be given the benefit of the doubt.
Had the
learned judge stopped there, I might well have agreed with counsel that the
case could not, by reason of its special features, be treated as being of any
general value. However, he went on to say this:
In this
respect I follow the general rule that where there are conflicting decisions of
courts of co-ordinate jurisdiction, the later decision is to be preferred, if
it is reached after full consideration of the earlier decision.
That
unqualified statement of a general rule comes from a source to which the
greatest possible respect is due. It is fortuitous that my own instinct should
have coincided with it. However diffident I might have been in relying on
instinct alone, the coincidence encourages me to suggest a reason for the rule.
It is that it
is desirable that the law, at whatever level it is declared, should generally
be certain. If a decision of this court, reached after full consideration of an
earlier one which went the other way, is normally to be open to review on a
third occasion when the same point arises for decision at the same level, there
will be no end of it. Why not in a fourth, fifth or sixth case as well? Mr Barnes had to face that prospect with
equanimity or, perhaps to be fairer to him, with resignation. I decline to join
him, especially in times when the cost of litigation and the pressure of work
on the courts are so great. There must come a time when a point is normally to
be treated as having been settled at first instance. I think that that should
be when the earlier decision has been fully considered, but not followed, in a
later one. Consistently with the modern approach of the judges of this court to
an earlier decision of one of their number (see eg Police Authority for
Huddersfield v Watson [1947] KB 842 at p 848, per Lord Goddard CJ),
I would make an exception only in the case, which must be rare, where the third
judge is convinced that the second was wrong in not following the first. An
obvious example is where some binding or persuasive authority has not been
cited in either of the first two cases. If that is the rule then, unless the
party interested seriously intends to submit that it falls within the
exception, the hearing at first instance in the third case will, so far as the
point in question is concerned, be a formality, with any argument upon it
reserved to the Court of Appeal.
Applying the
rule to the present case, first, I am satisfied that the decision of Vinelott J
was reached after full consideration of the decision of McNeill J. Secondly, I
am not convinced that Vinelott J was wrong in not following McNeill J. I have
had full and careful arguments on both sides, each of which was almost
certainly fuller than the argument on the same side in either of the earlier
cases. I think it inappropriate either that I should examine those arguments or
express any further view of my own. That implies no disrespect or ingratitude
to counsel. Indeed, the contrary is the case. Whatever may be thought appropriate
on any other occasion, this is a question upon which it is in my judgment
inappropriate that there should be any further debate or expression of judicial
view below the level of the Court of Appeal. In the circumstances I need say
only that I propose to follow and apply the decision of Vinelott J in Hamilton
v Martell Securities Ltd.
The plaintiff
therefore succeeds on the primary question. I will grant it a declaration in
the form sought in paragraph 2A of the amended originating summons.
