Action for arrears of service charge — Counter-claim for breach of covenant to repair common parts — Defence to counter-claim that tenant caused flooding — Damages awarded on counter-claim — Whether landlord entitled to legal costs on indemnity basis — Appeal against damages
The respondent landlords are the owners of 56 Cadogan Place, London, SW1; the appellant is a tenant of a flat in the building holding a lease for 65 years from 1979. In proceedings brought by the landlords in the county court for arrears of rent and service charges, the tenant counter-claimed for damages for breach of the landlords’ covenant to keep in repair the common parts. The landlords’ defence to the counter-claim was that part of the disrepair to the common parts was attributable to flooding caused by the tenant. The county court judge awarded damages in the counter-claim less a sum attributable to the disrepair caused by the flooding. He also disallowed a sum claimed by the landlords in respect of legal costs incurred in seeking to recover the service charge.
The tenant appealed against that award contending that the damages were inadequate and that, under the terms of the lease, the landlords were not entitled to recover for disrepairs which were the subject of insurance; this put the onus on the landlords to show that the damage in issue was not insured. In the cross-appeal, the landlords contended that under the terms of the lease relating to the recovery of the service charge, they were entitled to recover legal costs associated with the claim as being the charges of “other professional persons as may be necessary or desirable …”.
Held Both appeal and cross-appeal were dismissed. (1) The award of damages on the counter-claim was not inadequate in all the circumstances. The point of law relating to disrepairs that might be covered by insurance had been raised too late. (2) The terms of the lease permitting the landlords to recover as part of the service charge the charges of “other professional persons” did not include legal costs incurred in seeking to recover an amount of service charge due from a tenant.
Mark Rowlands Ltd v Berni Inns Ltd
[1985] 3 All ER 473 considered.
Andrew Simmonds (instructed by Mears, Hobbs & Durrant, of Great Yarmouth) appeared for the appellant tenant; and Steven Whitaker (instructed by Julian Holy & Co) appeared for the respondent landlords.
