Lease containing full repairing covenant by tenant preceded by alleged agreement that landlord would be responsible for major repairs – Whether agreement superseded by lease – Whether covenant enforceable by order for specific performance
In 1987 a freehold mansion and grounds in Epping belonged to V Ltd, which was owned by the second defendant, HH, and a relative, IH. On December 15 1987 V Ltd leased the entire mansion except the eastern annex to the first defendant, a company owned in equal shares by HH and another relative. On the same day V Ltd leased the eastern annex to HH. Granted in consideration of a £25,000 premium, each lease reserved an annual rent of £5,000 and imposed a full repairing obligation on the lessee. The expiry date in each case was December 14 2004. In or about 1995 V Ltd was declared insolvent and in 1996 the mansion was sold and then resold to the plaintiffs for £230,000. In November 1996 the plaintiffs’ solicitors claimed that both defendants owed five years’ arrears of rent and had allowed the mansion to fall into serous disrepair. The defendants in reply produced two documents, of which the plaintiffs were unaware, purporting to be copies of separate but identically worded agreements (the prior agreements) made between V Ltd and each of the lessees and dated November 17 1987. Referring to the intended leases, each document provided in effect that V Ltd would be responsible for major repairs while the lessees would attend to minor defects. The agreements permitted the lessees to carry out major repairs and treat the cost as rent paid in advance. In summary proceedings instituted by the plaintiffs for arrears of rent and specific enforcement of the repairing covenant in each lease, the defendants, relying on the prior agreements, denied any repairing liability and claimed that major repair costs already incurred exceeded the alleged arrears of rent. The plaintiffs maintained that the defendants’ obligations were governed solely by the terms of their respective leases.
Held Judgment was given for the plaintiffs.
1. Subject only to limited exceptions reliance, could not be placed on a prior document (not incorporated into the lease) so far as the same purported to contradict the terms of the lease: see Henderson v Arthur [1907] 1 KB 10. The absence in the leases of an express repairing covenant on the part of the landlord did not resolve the contradiction as it was well established that the landlord was under no implied obligation to repair: see, for example, Duke of Westminster v Guild [1983] 2 EGLR 37, CA. There was no evidence to show that the prior agreements and the leases formed part of the same transaction, nor was there any evidence of a mistake, made in the process of reducing the leases into writing, which might otherwise support a claim for rectification.
2. Reasons historically advanced for refusing specific enforcement of repairing obligations, for example, the supposed need for supervision by the court, now had to be read in the light of the speech of Lord Hoffman in Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1997] 1 EGLR 52. The modern law of remedies required specific performance of a tenant’s repairing covenant in appropriate circumstances. The leases under consideration, not only lacked a forfeiture clause, but also the usual provision enabling the landlord to enter and effect the repairs himself. These unusual circumstances, taken together with the seriousness of the disrepair, afforded good reasons for making an order of specific performance.
Mark Warwick (instructed by Philippsohn Crawfords Berwald) appeared for the plaintiffs; Helen Soffa (instructed by Turners, of Bournemouth) appeared for the defendants.