The question that arose in Blue Manchester Ltd v North West Ground Rents Ltd [2019] EWHC 142 (TCC) was whether an iconic 47-storey glass tower was in disrepair, despite a temporary fix that appeared to be holding.
Just eight years after the building was completed, the structural sealant holding the glass in position was failing. The building contractor installed temporary stitch plates to keep the glass in place, but went into liquidation without having found a permanent solution, and the tenant of the hotel, who occupied the first 23 floors of the tower, was concerned about their safety. It was also unhappy about their impact on the appearance of what should have been sleek and uninterrupted glass façades.
The court ordered the freeholder to repair the building to present substantially the same external appearance as at the date of the lease. But the judge added that, if it could show that the costs would be disproportionate, it could apply to substitute a different remedial scheme. And, in Blue Manchester Ltd v North West Ground Rents Ltd [2020] EWHC 2777 (TCC) – having already applied for and obtained planning permission for an alternative scheme and served notice under section 20 of the 1985 Landlord and Tenant Act 1985 on the residential leaseholders in the tower of its intention to undertake that alternative scheme, if permitted to do so – the freeholder sought to do just that.
The freeholder argued that its alternative scheme, which involved keeping the existing units of glass in place and providing additional protection against failure, was reasonably practicable and could be undertaken at proportionate cost, more speedily, and with fewer health and safety risks than the original scheme. But the court has refused its application, although it did grant the freeholder a further two years in which to effect the repairs.
The hotel operator was willing to accept the increased time and disruption intrinsically involved in undertaking the original scheme as a price worth paying for the restoration of the original appearance of the building. And the judge accepted that the importance that it attached to the appearance of the building was not idiosyncratic or perverse.
The original scheme was reasonably practicable. The work might present challenges, but they were capable of being solved. A competent contractor had tendered £6m for the work, which did not seem obviously disproportionate in the context of the £60m premium paid for the 999-year lease of the hotel – even if VAT and professional fees had to be added, and even though there was, admittedly, a significant risk that the cost of the work might increase.
The cost of the alternative scheme was likely to be in the region of £2.4m to £2.8m. But the freeholder had failed, over a prolonged period, to undertake the full design work required to demonstrate its practicability, as a result of which there was a residual risk that some real problem could emerge which could not easily be addressed. And, although the scheme was an obvious improvement on the stitch plates, it would still present a visual appearance that was materially different from and significantly less visually impressive than the original building.
Furthermore, the alternative scheme could have been suggested during the previous trial – which, although this was not fatal, certainly counted against the freeholder’s application. A trial is not a dress rehearsal; it is the first and last night of the show.
Allyson Colby, property law consultant
