Full repairing lease of steel-framed building — Building affected by “Regent Street disease” — Bad cracking of outer stonework — Landlord insisting on curative measures — Tenant proposing short-term remedy — Whether landlord’s programme going beyond “repair” — Whether tenant’s programme sufficient compliance with covenant — Judgment for landlord
The parties were, respectively, landlord and tenant of a Birmingham office building. Under the terms of a 33-year lease, granted in 1975, the tenant covenanted, inter alia, to keep the building in good repair and, when appropriate, to rebuild the whole or any part of it, notwithstanding that any disrepair might be due to an inherent or latent defect. By the same clause, the landlord was entitled to execute such work itself in the event of the tenant failing to comply with a written notice requiring the rectification of a relevant defect.
Constructed in 1915, the building was supported by a metal frame that extended into much of the brick and stonework of the outer walls. In December 1999, the landlord formally notified the tenant of severe cracking of the stonework. This had been escalating over the four years preceding the notice. It was not disputed that the cause of the damage was the rusting and consequent expansion of the frame, which, in all other respects, continued to afford satisfactory support to the building. The landlord insisted upon a programme of repairs costing an estimated £1m. These proposed works would involve the removal of the defective bricks and stones but also the opening up of the neighbouring stonework in order to expose and treat those parts of the underlying metal that were showing signs of corrosion.
In proceedings commenced by the landlord, the tenant contended that the covenant would be sufficiently performed by a programme of repairs at an estimated cost of £425,000, involving the filling and sealing of the cracks and openings, with any cracked stonework to be replaced only where such filling and sealing was not sensibly possible.
The judge accepted evidence from the landlord’s expert to the effect that the laminate rusting had, in many locations, reached a stage where the tenant’s programme would do little to prevent future rusting, and that this programme, unlike that of the landlord, would have to be repeated every three years.
Held: The landlord’s programme, but not the tenant’s, would be an acceptable way of repairing the building*.
The performance of an obligation to repair required the undertaking of such methods and mode of repair as a sensible person would adopt: see Stent v Monmouth District Council [1987] 1 EGLR 59. Depending upon the nature of the covenant and all other relevant matters, this might require either: (i) the eradication of the underlying cause of the damage, as, for instance, in Elmcroft Developments Ltd v Tankersley-Sawyer [1984] 1 EGLR 47, Ravenseft Properties Ltd v Davstone (Holdings) Ltd [1980] QB 12 and Stent; or (ii) the undertaking of only sensible prophylactic measures, as in Mcdougall v Easington District Council [1989] 25 EG 104 and Holding & Management Ltd v Property Holding & Investment Trust plc [1990] EGLR 65. In some circumstances, performance was accordingly not achieved if the proposed work would not permanently remedy the defect.
Neither the nature nor the cost of the work involved in the landlord’s programme removed it from the concept of repair. Due to the continued presence of laminating rust in areas adjacent to the cracked stonework, the tenant’s programme, if carried out, would not result in the building being in a state of repair even at the moment of completion of the works.
* Editor’s note: The tenant was given the option of adopting an alternative programme favoured by the landlord, involving the removal of the cracked stonework and the installation of a cathodic protection system designed to arrest corrosion by electronic means.
Jonathan Brock QC (instructed by Addleshaw Booth & Co, of Leeds) appeared for the claimant; Jonathan Gaunt QC (instructed by Osborne Clarke) appeared for the defendant.
Alan Cooklin, barrister
