Lease of premises in spa town including pump room offering piped in mineral waters – Tenants obliged to operate pump room during opening hours – Landlord council’s concerns about water quality effectively putting pump room out of use – Whether landlord in breach of implied duty to supply water fit for public consumption – Whether issue triable only by process of judicial review
The defendant the landlords owned Rock Spa Pavilion in Llandrindod Wells, and in their capacity as local authority had powers and duties under the Water Industry Act 1991 and the Private Water Regulations made thereunder. In the same capacity the landlords were keen to promote the tourist trade centred upon the area’s natural mineral water resources. At all material times the plaintiff tenants, a married couple experienced in the restaurant trade, occupied the premises under a three-year lease for the purpose of supplying meals and enabling visitors to take one or more of three varieties of natural mineral water which were piped into a pump room on the premises from outside installations managed by the landlords. Clause 2(x) of the lease contained an express covenant by the tenants to ensure, at all times when the premises were open, that a supply of spa water would be offered to the public at a charge to be agreed from time to time with the landlords. Shortly after the tenants went into possession official concerns began to be expressed about the bacteriological and mineral content of the water.
On November 6 1991 the tenants received a letter from the landlords’ director of housing and environmental services requesting them not to supply waters to the public. Over the remaining period of the lease nothing occurred to restore confidence in the quality of the water supply and the tenants suffered a serious loss of revenue. In proceedings commenced in March 1994 the tenants alleged, inter alia, that the landlords were in breach of an implied term that they would supply the tenants with water so as to enable them to perform the covenant in clause 2(x) and that such water would be pure and fit for human consumption or, alternatively, that the landlords would take reasonable steps to ensure that it was. The landlords, relying primarily upon O’Reilly v Mackman [1983] 2 AC 237, applied to have that part of the claim struck out on the ground that it raised an issue of public law which was only determinable by process of judicial review. The trial judge allowed the application, and the tenants appealed.
Held The appeal was allowed.
1. On the facts before the court there was just enough material in support of the tenants’ allegation to resist the application to strike it out. Whether the alleged failure on the part of the landlords arose out of their contractual obligations or their public duties with regard to water supply was a matter that could only be explored at a full trial. However, to raise the issue squarely at such a trial, the tenants would have to plead with much greater particularity, stating, among other things, whether the letter of November 6 1991 was intended as a statutory prohibition or just an advisory warning, and clarifying the extent to which the landlords were responsible for the source or the pipes.
2. The tenants should have leave to amend.
Philip Mead (instructed by Bevans, of Bristol) appeared for the appellants; Mark Bailey (instructed by Dilwyns, of Llandrindod Wells) appeared for the respondents.
