Lease of light-industrial unit — Repairing covenant — Asbestos roof — Whether covenant requiring replacement of roof on surrender of lease — Whether repairs sufficient — Whether claimant landlord entitled to recover certain costs — Claim allowed in part
The claimant was the landlord and the defendant was the tenant of a light-industrial unit under a five-year lease that expired in September 2002. The lease contained a tenant’s covenant “well and substantially” to repair and maintain the premises and to yield them up at the end of the lease “in good and substantial repair and condition in accordance with the covenants hereinbefore contained”.
The roof of the unit consisted of asbestos cement sheets that incorporated translucent roof lights. Immediately prior to the expiry of the lease, the defendant carried out extensive repair works to the roof, substituting damaged cement sheeting with new fibre cement sheets and replacing all roof lights and fixings. However, the claimant subsequently replaced the entire roof, and sought to recover the cost of doing so from the defendant. It argued that the condition of the roof on the surrender of the lease had been in breach of covenant, and contended that only the complete replacement of the roof, with new asbestos-free sheeting, was sufficient to comply with the covenant. The claimant also maintained that the new “topfix” roof fasteners were an inadequate replacement for the original bolt-hook variety, and that the manner of carrying out the repairs was itself in breach of covenant. The central issue on the evidence was whether, immediately before the commencement of the defendant’s repair works, it had been impossible to put the roof into the covenanted condition other than by complete replacement. The court had before it various experts’ reports containing recommendations ranging from works similar to those carried out by the defendant to more extensive renewal options.
The claimant also sought to recover certain sums pursuant to a terms in the lease requiring the defendant to pay all “proper costs and expenses” incurred in the preparation of a schedule of dilapidations and in connection with the enforcement of the lessee’s covenants.
Held: The claim was dismissed.
The roof of the property could be put into the covenanted condition by the carrying out of works that did not involve the complete replacement of the existing roof. All of the reports and advice obtained by both parties recognised that repair, rather than replacement, was a perfectly viable option. In cases involving a dispute between replacement and repair, replacement would be required only if repair were not reasonably or sensibly possible. If the covenant could properly be performed in one of two ways, the tenant was entitled to choose which method to use, and it could not be criticised for choosing the least expensive option: Ultraworth Ltd v General Accident Fire & Life Assurance Corp [2000] 2 EGLR 115 applied. On the evidence, the repairs carried out by the defendant had been sufficient to comply with the covenant. The continued presence of asbestos in the original roof sheets that had not been replaced could not be a reason to contend that the defendant had breached its repairing obligation. There was no evidence to suggest that the manner of carrying out the repairs was in breach of covenant. The decision to use topfix fasteners could not be criticised, and their installation by specialist roofing contractors also did not constitute a breach of covenant.
The claimant was entitled to certain costs and expenses incurred in connection with the preparation of a schedule of dilapidations and the enforcement of the repairing covenants. The latter would include work related to the collection of information or advice that was then passed on to the defendant in an attempt to get it to comply with the covenants, but could not include items of work performed for the claimant that went to the preparation of reports that were never passed on to the defendant. However, since these items had, in effect, already been paid prior to the commencement of the action, the claim under this head would be dismissed. The relevant clause in the lease did not entitle the claimant to costs incurred in respect of its own works carried out to the roof following the surrender of the lease.
Mark Wonnacott (instructed by Davenport Lyons) appeared for the claimant; Nicholas Dowding QC (instructed by Payne Hicks Beach) appeared for the defendant.
Sally Dobson, barrister
