Appellant breaching repairing covenant in respect of leased premises — Respondent issuing possession proceedings — Premises subsequently destroyed by fire — Respondent seeking leave to issue proceedings under section 1(3) of Leasehold Property (Repairs) Act 1938 — Appellant maintaining application redundant as criteria under section 1(5) impossible to establish at date of hearing — Whether date of hearing correct date for purposes of section 1(5) — Appeal dismissed
The respondent was the headlessee of a public house, which it sublet and subsequently assigned to the appellant. The appellant breached its repairing covenant and the premises fell into disrepair; the public house was later vandalised and damaged by a number of small fires. The respondent served the appellant with a schedule of dilapidations and, in February 2001, issued proceedings for possession.
In March 2001, another fire completely destroyed the property. In September 2002, the respondent applied for leave to issue proceedings for forfeiture and damages against the appellant under section 1(3) of the Leasehold Property (Repairs) Act 1938. Under section 1(5), leave could be granted only if the lessor could satisfy certain criteria, including proving the diminution in valuation of the property and the costs of repair. The question arose as to what constituted the relevant date at which that criteria should be assessed; the judge at first instance concluded this was the date of the issue of proceedings.
The appellant appealed on the basis that the relevant date was the date of the hearing. In lieu of settled authority, it based its argument on comments in Dowding & Reynolds, Dilapidations: The Modern Law and Practice (2nd ed). It argued that since the fire had totally destroyed the property between the date of the issue of proceedings and the date of the hearing, the application was redundant, and any diminution in value that arose as a result of the lack of repair was no longer relevant. Based on obiter remarks in Re Metropolitan Film Studios Ltd’s Application [1962] 1 WLR 1315, the respondent maintained that a section 1(5) application was not to be barred following anything that had happened between the issue of proceedings and the hearing.
Held: The appeal was dismissed.
The policy behind section 1(5) was to protect tenants from undue harassment by landlords in situations where the former had carried out repairs to premises between the date of the issue of proceedings and the date of the hearing. Taking that factor into account, together with the wording of the Act, including the fact that the present tense was used throughout subsection 1(5), it was to be concluded that the date of the hearing was the date upon which the section 1(5) grounds were to be proven. In general terms, therefore, the correct approach was that identified in Dowding & Reynolds.
However, where some or all of the grounds under subsection 1(5)(a) to (d) had existed at the date of the application but had ceased to exist by the date of the hearing, it was appropriate for the court to grant leave under ground (e), which accorded it an overriding discretion.
The judge at first instance had been in error to find that the relevant date was that of the issue of proceedings. However, he had considered his findings in the alternative, and had found that, in the event that the relevant date was the date of the hearing, he would have granted leave using the discretionary powers available to him under subsection (e).
The special circumstances allowed at (e) could include the situation where the test would have been satisfied when proceedings were issued. This was a compelling point in the situation where the section 1(5) tests were no longer applicable by reason of the destruction of the property and where this loss had been caused by the tenant’s alleged breaches. On the evidence, a causative link between the appellant’s breaches of covenant and the fires had been established. The major fire occurred at a time when the respondent was attempting to prevent exactly such an incident from taking place. That in itself was a special circumstance. It was just and equitable to allow the respondent to proceed under section 1(5)(e).
Jonathan Seitler and Jonathan Evans (instructed by Teacher Stern & Selby) appeared for the appellant; Howard Smith (instructed by Bude Nathan Iwanier) represented the respondent.
Vivienne Lane, barrister
