Landlord and tenant — Repairs — Damages — Landlord and Tenant Act 1985 — Defective Premises Act 1972 — Breach of implied obligation to repair dwelling — Assessment of damages
Since 1989 the
plaintiff had held a secure tenancy from the defendant council. The council had
an obligation to keep in repair the structure and exterior of the dwelling, and
the installations, under section 11 of the Landlord and Tenant Act 1985. They
also owed a duty to take such care as was reasonable, in all the circumstances,
to see all persons who might reasonably be affected by defects in the state of
the premises were reasonably safe under section 4 of the Defective Premises Act
1972. In the county court the judge found that there had been breaches of these
two obligations in respect of disrepair. These consisted of a collapsed wall,
rotten windows, a failed damp-proof course, loose plaster and skirtings, rat
infestation and leaking rainwater pipes. There was disrepair from October 1994.
The judge awarded the plaintiff, inter alia, general damages of £3,500,
having regard to the fact that part of the rent was paid through housing
benefit and that the plaintiff had not been paying the whole of the weekly rent
herself. The plaintiff appealed.
(1) in the context of a breach of an obligation to repair let property, the
purpose of an award of damages, so far as an award of money can do so, is to
place the tenant in the position he would have been in if the obligation to
repair had been properly performed; (2) that involves a comparison of the
property as it was for the period when the landlord was in breach of his
obligation with what it would have been if the obligation had been performed;
(3) for periods when the tenant remained in occupation of the property,
notwithstanding the breach of obligation to repair, the loss to him requiring
compensation is the loss of comfort and convenience that results from living in
a property that was not in the state of repair it ought to have been if the
obligation had been performed; and (4) if the tenant is forced by the
landlord’s failure to repair to sell or sublet the property, the tenant may
recover the diminution of the price or recoverable rent occasioned by the
failure to perform the covenant to repair. The appellant was entitled to
damages under the third proposition for distress and inconvenience, but not the
fourth. The judge was not obliged to assess damages separately under heads of
both diminution in value and discomfort, because, in cases under the third
proposition, those heads are alternative ways of expressing the same concept.
If a judge assesses damages on a global basis he should cross-check by
reference to the rent payable for the period of the breach of covenant.
The following
cases are referred to in this report.
Brent
London Borough Council v Carmel (1996) 28
HLR 203, CA
Calabar
Properties Ltd v Stitcher [1984] 1 WLR 287;
[1983] 3 All ER 759; [1983] 2 EGLR 46; [1983] EGD 578; (1983) 268 EG 697, CA
Chiodi
(Personal Representatives of) v De Marney
[1988] 2 EGLR 64; [1988] 41 EG 80; (1989) 21 HLR 6, CA
Davies v Peterson [1989] 1 EGLR 121; [1989] 06 EG 130; (1989) 21
HLR 63, CA
Dodd
Properties (Kent) Ltd v Canterbury City Council
[1980] 1 WLR 433; [1980] 1 All ER 928; [1980] 1 EGLR 15; [1980] EGD 229; (1979)
253 EG 1335, CA
Ezekiel v McDade [1995] 2 EGLR 107; [1995] 47 EG 150
Hewitt v Rowlands [1924] All ER 344; (1924) 131 LT 757; 93 LJKB
1080, CA
Johnson v Agnew [1980] AC 367; [1979] 2 WLR 487; [1979] 1 All ER 883;
(1979) 38 P&CR 424; [1979] 2 EGLR 146; [1979] EGD 969; 251 EG 1167, HL
McCoy
& Co v Clark (1982) 13 HLR 87
Pickett v British Rail Engineering Ltd [1980] AC 136; [1978] 3 WLR
955; [1979] 1 All ER 774; [1979] 1 Lloyd’s Rep 519, HL
Sturolson
& Co v Mauroux [1988] 1 EGLR 66; [1988]
24 EG 102; (1988) 20 HLR 332, CA
This was an
appeal by the plaintiff, Julie Wallace, from a decision of Judge Hardy in
Manchester County Court, in proceedings by the plaintiff for damages against
the defendants, Manchester City Council.
Jan Luba and
Peter Buckley (instructed by Clifford Chapman & Co, of Manchester) appeared
for the appellant; Ian Leeming QC and Robert Darbyshire (instructed by the
solicitor to Manchester City Council) represented the respondents.
Giving
judgment, MORRITT LJ said: In 1989 the plaintiff, Mrs Wallace, went with
her two small children to live in property belonging to Manchester City Council
at 62 Abergele Road, Fallowfield, Manchester. On August 22 1994 she was given a
written tenancy agreement. This stated that her rent was £45.26 per week. In
July 1995 the weekly rent was increased to £47.40 per week. Thus, at all times
since 1989, Mrs Wallace has been a secure weekly tenant and as such subject to
the provisions of Part IV of the Housing Act 1985.
There were two
relevant obligations on the part of the city council implied into such a
tenancy. The first was an obligation to keep in repair the structure and
exterior of the dwelling-house and the installations inside it, as prescribed
by and on the terms set out in section 11 of the Landlord and Tenant Act 1985.
The second subjected the city council to a duty to take such care as is
reasonable, in all the circumstances, to see that all persons who might
reasonably be affected by defects in the state of the premises are reasonably
safe from personal injury or from damage to their property caused by a relevant
defect as defined in section 4 of the Defective Premises Act 1972.
On March 8
1996 the property was inspected by Hiltons, building surveyors, on the instructions
of the solicitors acting on behalf of Mrs Wallace. They reported:
Discussions
with the Tenant revealed the following matters, namely:
— The
external wall below the Living Room window has collapsed some 2 to 3 months
ago.
— The windows
are generally rotten. That to the Living Room is in a particularly poor
condition. As a consequence the Living Room is always extremely cold despite
the heating being on continuously.
— A remedial
Damp Proof Course has been installed on 3 occasions to the Living Room, the
last being in August 1995. There is a mould build up behind the Tenants side
board to the side party wall.
— Plaster and
skirtings are deficient/falling off/loose to the Bedrooms.
— The Tenant
has suffered from constant infestation from rats which enter the property from
the drains at the rear of the house. The Council have attended on 3 occasions
to lay preventative substances. The operative has however stated that the rats
are eating the laid substances and that it may be possible for the infestation
to re-occur.
— The
rainwater pipe to the front elevation leaks badly during periods of heavy rain.
— We
understand that these deficiencies have existed over a number of years with the
Tenant having complained to the Council but gained no effective response.
On August 27
1996 the city council’s building surveyor inspected the property and prepared a
schedule of works. In December 1996 repairs were carried out by way of
replacing a window and repointing a wall, but, the city council contend, they
were unable to obtain access so as to carry out further works.
On January 24
1997 Mrs Wallace and her two children commenced proceedings in Manchester
County Court claiming that the city council were in breach of each of the two
obligations to which I have referred. They alleged that Mrs Wallace had
complained to the city council about the want of repair on many occasions since
1992. This was a material allegation, for the liability of the landlords under
both statutory provisions depends on having notice of the want of repair or of
the relevant defect, as the case may be. They alleged that each of them had
suffered distress, anxiety and inconvenience in consequence. They claimed
specific performance of the repairing obligations and damages for diminution in
the value of Mrs Wallace’s rent, for inconvenience in respect of all of them
and for the ill-health suffered by the children.
On July 2 1997
the action came before Judge Hardy. He heard evidence from Mrs Wallace, her
surveyor, Mr Williams, and the building surveyor for the city council, Mr
Claringbold. In his judgment, given on the same day, the judge recorded that to
a large extent the disrepair had not been disputed and that he was not invited
to make detailed findings or orders in that respect. He found that there had
been breaches of both the obligations relied on with the consequence that Mrs
Wallace and her children were entitled to damages. He assessed the damages to
be paid to each child at £2,000 and the special damages, for damage to
curtains, carpets and furniture, in the amount claimed, namely £780. The judge
continued:
That leaves
two heads of damages that are pursued. The one is the award of general damages
to the plaintiff and it is said to the children for the general inconvenience
and diminution in value it is said to the value of the property to them. I am
invited to consider dealing with an award partially on the basis of an order
for general damages and partially under what can be termed perhaps a subhead of
general damages, not exactly special damages but to calculate it on some basis
that assesses them as the diminution in the value of the tenancy to them in
relation to the amount of rent paid.
I am hesitant
about doing it that way. I know that other judges in concurrent jurisdictions
have done so and it may be a useful exercise to consider it in that way as part
of the way in which one arrives at a figure of general damages. I do not regard
it myself as a separate head of damages from general damages but a part of them
and if judges wish to use that method in arriving at their total figure they,
of course, so far as I am concerned [are] perfectly at liberty to do so.
Personally speaking, I do not find it a useful approach.
Added to
which it presents what, to my mind, is a considerable difficulty. If this lady
had been paying the whole of the rent out of her own pocket the argument might
have additional force, but for the majority of the time she was not paying any
of the rent out of her own pocket, but it was paid with housing benefit. For a
period of about two years she was contributing towards it at £18 per week.
Damages are
intended, in so far as money can, to place people in the same position as if
the [wrong] had not occurred. It seems to me that it is a breach of that
general principle to award to a person a sum calculated by relation to a figure
that has been paid to a defendant when it has not been paid by the plaintiff. I
can foresee all sorts of problems in doing it this way. It would in effect
reward the plaintiff by a figure that she had not suffered as a cash sum. It
seems to me far better, rather than use that approach, to award her a sum that
would be adequate compensation, in my view, for the damage she has suffered
which is the distress, inconvenience and disruption to her lifestyle and that
of her children by the defects complained of. That seems to me a far better way
of approaching it.
After
referring to such assistance as may be obtained from considering awards in
other cases, the judge awarded damages not only for the discomfort and distress
already encountered but also for the further discomfort when the remedial works
were being carried out, in the total sum of £3,500 for all heads of general
damage. Subsequently, the repairs set out in a schedule agreed between the
parties’ respective surveyors were carried out. Mrs Wallace has remained the
tenant of the dwelling-house.
This is an
appeal of Mrs Wallace, brought with the leave of the court below, from the
order of Judge Hardy. She does not dispute the awards of £2,000 in favour of each
of her children. Nor does she challenge the award of special damages. Her
contention is that in the passage from his judgment, which I have quoted, the
judge erred in three distinct respects. First, it is submitted that the judge
should have made an award in respect of the diminution in the value of Mrs
Wallace’s tenancy arising from the disrepair by reference to the rent paid in
addition to an award for discomfort and inconvenience. She submits, second,
that the fact that the rent was discharged out of the housing benefit to which
she was entitled could not disentitle her to damages under such a head. Third,
she submits that the award was so
these contentions in turn.
Diminution
in value
Counsel for
Mrs Wallace focused on that part of the judgment, which I have quoted, in which
the judge indicated that he did not regard diminution in value as a separate
head of general damage and did not propose to adopt that approach. Counsel
submitted that such a conclusion was an error of principle. He contended that
there were two parallel limbs, strands, paths or subheads of general damage,
namely: (1) diminution in value; and (2) discomfort and inconvenience. He
submitted that the judge was bound to make findings under both of them. He did
not contend that his approach was clearly required by previous authority, but
he did suggest that it was consistent with the decided cases and the practice
of the courts.
I shall, in
due course, consider the cases to which counsel for Mrs Wallace referred us in
this connection. But the agreed starting point is the basic principle that the
purpose of an award of damages, so far as possible by an award of money, is to
place the innocent party in the position he would have been in if he had not
suffered the wrong, whether breach of contract or tort, of which he complains.
We were referred to passages to this effect in Johnson v Agnew
[1979] 2 WLR 487* at p499, in the context of damages in lieu of or in addition
to a decree of specific performance, and Dodd Properties (Kent) Ltd v Canterbury
City Council [1980] 1 All ER 928†, in relation to repairs to property
necessitated by the commission of a tort. Thus, in the context of the breach of
an obligation to repair property let to another, the purpose of the award of
damages, so far as an award of money can do so, is to place the tenant in the
position he or she would have been in if the obligation to repair had been
properly performed.
*Editor’s
note: Also reported at [1979] 2 EGLR 146
†Editor’s
note: Also reported at [1980] 1 EGLR 15
Counsel for
Mrs Wallace relied on six decisions of this court. They were McCoy & Co
v Clark (1982) 13 HLR 87; Calabar Properties Ltd v Stitcher
[1984] 1 WLR 287*; Sturolson & Co v Mauroux (1988) 20 HLR
332†; Chiodi (Personal Representatives of) v De Marney (1989) 21
HLR 6‡; Ezekiel v McDade [1995] 2 EGLR 107 and Brent London
Borough Council v Carmel (1996) 28 HLR 203. I will refer to them in
that order.
*Editor’s
note: Also reported at [1983] 2 EGLR 46
†Editor’s
note: Also reported at [1988] 1 EGLR 66
‡Editor’s
note: Also reported at [1988] 2 EGLR 64
In McCoy &
Co v Clark (1982) 13 HLR 87 the plaintiff landlord sued for arrears
of rent and the defendant tenant counterclaimed for damages in respect of
disrepair to the roof over his flat. The judge accepted the submission that the
disrepair to the roof meant that the flat was worth substantially less to the
tenant than it would have been if the roof had been in order. He assessed the
damages on the basis of a proportion of the rent payable under the tenancy,
namely 10% for the first 113 weeks and 20% for the succeeding 68 weeks. The
tenant appealed on the grounds that such an award was too low. The Court of
Appeal accepted that submission. Sir David Cairns, with whom Stephenson LJ
agreed, considered that the figure found by the judge was too low. At p94 he
said:
I am
satisfied, not only that the judge did find, but that it is the right finding,
that the main cause of this dampness and the main cause of the flat being worth
less to the defendant than it otherwise would have been was the plaintiff’s
breach in relation to the roof.
On that
basis, was the compensation that was awarded to the defendant for it adequate?
In my view it was not. It is all very well to say that the defendant was not
spending a great deal of the day in the flat and that he was using it mainly as
a sleeping place. If he had the flat as a sleeping place and was willing to pay
£9 a week for the flat for that purpose, then he is entitled to a flat which is
comfortable for that purpose, and if it is substantially reduced in the degree
of comfort, then I think what he ought to recover is something proportional to
that reduction.
Counsel for
Mrs Wallace accepted that the case shows no more than that the assessment of
damages by reference to a proportion of the rent was a method acceptable to the
court. In particular, there was no separate claim or award for discomfort and
inconvenience. For my part, I do not think that the case is authority that
supports either side; the point with which we are concerned was not in issue.
But, in so far as it favours either of them, it supports the city council,
because Sir David Cairns evidently considered that a proportion of the rent
might be used as a measure of the degree of comfort foregone. To that extent
comfort and convenience and reduction in value of the flat were regarded as
opposite sides of the same coin.
In Calabar
Properties Ltd v Stitcher [1984] 1 WLR 287 the plaintiff landlord
sued for arrears of rent. The tenant, the assignee of the residue of a term of
99 years at a rent of £100 pa, counterclaimed for damages for breach by the
landlord of his covenant to keep the block of which the tenant’s flat was part
in good and substantial repair. The Official Referee decided that the dampness
in the flat of which the tenant complained was caused by water penetration
attributable to the landlord’s persistent failure to comply with his covenant.
He also concluded that the tenant was justified in moving to alternative
accommodation while the repairs were being carried out. The judge awarded
damages of £4,606 for the cost of redecoration of the flat, which he used as a
measure of diminution in value, and £3,000 for discomfort and loss of
enjoyment. He refused to award any damages to cover the running costs of the
flat when unoccupied nor for any consequential loss of use based on either the
capital value of the flat or its rack-rental value. The tenant appealed
contending that the judge should have awarded damages under those heads also.
Counsel for
Mrs Wallace relied on this case as showing that a tenant might obtain an award
of general damages for both the cost of redecoration, as representing the
diminution in value of the lease, and for discomfort and inconvenience to the
tenant occasioned by the landlord’s failure to repair. This is true; but,
first, there was no appeal against the awards of damages the judge had made,
only against those he had refused and, second, Stephenson LJ (at p290H), with
whom May LJ agreed, regarded the award of damages for the cost of redecoration
as an award of special, not general, damages.
The issues the
court was required to decide do not arise in this case. Nevertheless, two
members of the court made observations in relation to the question of the
recoverability of damages for consequential loss of use which are germane. The
tenant had contended that she was entitled to a further award for such damages
based on the diminution in the capital or rack-rental value of the flat
occasioned by the landlords’ failure to repair in accordance with their
covenant. The contention was based on a statement of Bankes LJ in Hewitt
v Rowlands (1924) 93 LJKB 1080 at p1082 that:
the measure
of damages is the difference in value to the tenant of the premises, from the
date of the notice to repair down to the date of the assessment of damages,
between the premises in their present condition and their value, if the
landlord on receipt of the tenant’s notice had fulfilled the obligations of the
covenant.
In rejecting
the submission for the tenant Stephenson LJ said at p293D:
The second objection
is that to submit that what the defendant has lost by the plaintiffs’ breach of
covenant is the consequent diminution in the value of the flat as a marketable
asset is to ask the court to take a wholly unreal view of the facts. The
reality of the defendant’s loss is the temporary loss of the home where she
would have lived with her husband permanently if the plaintiffs had performed
their covenant. She cannot increase her loss by deciding not to return after
the covenant has been performed, and she does not seek to do so. But she can
claim, as it seems to me, to be put in as good a position as she would have
been if the plaintiffs had performed their covenant, at least as early as they
had notice that the main structure was out of repair instead of years later. If
she had bought the lease as a speculation intending to assign it, to the
knowledge of the plaintiffs, the alleged diminution of rental (or capital)
value might be the true measure of her damage. But she did not; she bought it
for a home, not a saleable asset, and it would be deplorable if the court were
bound
comparable properties and value, on the fictitious assumption that what the
flat would have fetched had anything to do with its value to her or her
husband. I do not think we are bound by the authority of Hewitt v Rowlands,
93 LJKB 1080, or any other decision to do something so absurd.
Later at p295C
he added in relation to the decision in Hewitt v Rowlands:
What is plain
is that, in laying down the measure of damage, the court cannot have had the
capital or rental value of the cottage as a marketable asset in mind, because a
statutory tenancy is not marketable, and the court was considering the position
of a statutory tenant who was still living in the cottage and would lose his
interest in the cottage if he ceased to live there. What the difference in
value to the plaintiff of the statutory tenancy of the cottage repaired and
unrepaired may have been was not an easy matter for the registrar to assess,
but I suspect he would not have gone far wrong if he had equated it with what
the plaintiff might have to spend on performing the landlord’s covenant
(assuming the landlord would not perform it himself) and substantial general
damages for inconvenience and discomfort for the period from notice to the
landlord till assessment or performance of the covenant by the plaintiff. In my
judgment, there is nothing in that case which supports Mr Ralls’ claim to any
such additional sum as he claims for diminution in value to the tenant or which
would disable the judge from measuring that diminution and the defendant’s
damage by the amounts he has awarded as general and special damages — and by
the reasonably incurred costs of alternative accommodation, an item which was
never in issue in Hewitt v Rowlands, 93 LJKB 1080, because the
tenant never left the cottage he occupied.
At p297F
Griffiths LJ stated:
The object of
awarding damages against a landlord for breach of his covenant to repair is not
to punish the landlord but, so far as money can, to restore the tenant to the
position he would have been in had there been no breach. This object will not
be achieved by applying one set of rules to all cases regardless of the
particular circumstances of the case. The facts of each case must be looked at
carefully to see what damage the tenant has suffered and how he may be fairly
compensated by a monetary award.
In this case
on the findings of the judge the plaintiff landlords, after notice of the
defect, neglected their obligation to repair for such a length of time that the
flat eventually became uninhabitable. It was also clear that unless ordered to
do so by an order of the court, the plaintiffs had no intention of carrying out
the repairs. In these circumstances the defendant had two options that were
reasonably open to her: either of selling the flat and moving elsewhere, or
alternatively of moving into temporary accommodation and bringing an action
against the plaintiffs to force them to carry out the repairs, and then
returning to the flat after the repairs were done. If the defendant had chosen
the first option then the measure of damages would indeed have been the
difference in the price she received for the flat in its damaged condition and
that which it would have fetched in the open market if the plaintiffs had
observed their repairing covenant. If however the defendant did not wish to
sell the flat but to continue to live in it after the plaintiffs had carried
out the necessary structural repairs it was wholly artificial to award her
damages on the basis of loss in market value, because once the plaintiffs had
carried out the repairs and any consequential redecoration of the interior was
completed there would be no loss in market value. The defendant should be
awarded the cost to which she was put in taking alternative accommodation, the
cost of redecorating, and some award for all the unpleasantness of living in
the flat as it deteriorated until it became uninhabitable. These three heads of
damage will, so far as money can, compensate the defendant for the plaintiffs’
breach.
Later, at
p299B of the statement of Bankes LJ, which I have quoted, he commented:
Whatever
Bankes LJ meant by ‘the difference in value to the tenant,’ the one thing he
cannot have meant in the circumstances of that case was the diminution in the
market value of the tenancy, for it was a statutory tenancy which the tenant
could not sell, and thus it had no market value. In my view the difference in
value to the tenant must vary according to the circumstances of the case. If
the tenant is in occupation during the period of breach he is entitled to be
compensated for the discomfort and inconvenience occasioned by the breach and I
suspect that that is what Bankes LJ had in mind when he used the phrase ‘the
difference in value to the tenant’ in Hewitt v Rowlands, 93 LJKB
1080, 1082, for which the judge in this case awarded £3,000. If the tenant has
rented the property to let it and the landlord is aware of this, then ‘the
difference in value to the tenant’ may be measured by his loss of rent if he
cannot let it because of the landlord’s breach. If the tenant is driven out of
occupation by the breach and forced to sell the property then ‘the difference
in value to the tenant’ may be measured by the difference between the selling
price and the price he would have obtained if the landlord had observed his
repairing covenant. But each case depends upon its own circumstances and Hewitt
v Rowlands should not be regarded as an authority for the proposition
that it is in every case necessary to obtain valuation evidence.
In my view
there was no need for any valuation evidence in this case. I repeat that
damages in a case such as this should include the cost of the redecoration, a
sum to compensate for the discomfort, loss of enjoyment and health involved in
living in the damp and deteriorating flat and any reasonable sum spent on
providing alternative accommodation after the flat became uninhabitable.
May LJ agreed
with both judgments.
In my view,
while not constituting any binding authority on the point we have to decide,
the dicta I have quoted do not support the contention of Mrs Wallace. As
in McCoy & Co v Clark so in Calabar Properties Ltd v Stitcher
it was recognised that where the tenant wishes to remain in occupation of the
property the diminution in value occasioned by the landlord’s failure to
repair, for which he is entitled to be compensated, is the personal discomfort
and inconvenience he has experienced as a result of the want of repair. It is
evident that the court considered, and I agree, that the assessment of the
amount of money necessary to compensate the tenant was a matter for the judge
and not for expert evidence.
In Sturolson
& Co v Mauroux (1988) 20 HLR 332 the landlord sought to recover
arrears of rent. The defendant, a statutory tenant, counterclaimed for damages
for breach by the landlord of his covenant to repair and to provide certain
services. By the time of the hearing the necessary repairs had been carried
out. The judge awarded damages under two heads, namely £1,345 for diminution in
value, calculated as a percentage of the rent payable, and the balance for
discomfort, inconvenience and injury to health. The landlord appealed,
contending that the rent officer had taken the want of repair into account when
assessing the fair rent so that the award of damages gave rise to double
recovery. He also contended that the tenant had failed to mitigate his loss.
Both points were rejected. Counsel for Mrs Wallace relies on this case as
indicating the approval of this court to awards of damages on both the bases
for which he contends. It is true that the court did not disapprove of those
two awards, no party suggested that it should. But I do not accept that the
decision is any support for the proposition that a judge must award damages
under both those heads.
In Chiodi
(Personal Representatives of) v De Marney (1989) 21 HLR 6 a
statutory tenant occupying a flat at a registered fair rent of £8 per week
withheld the rent and was sued for possession. He counterclaimed for damages
for breach of the implied covenant on the part of the landlord to repair. The
judge awarded him damages under three heads, of which only one is relevant for
present purposes. That head was for inconvenience and distress calculated on
the basis of £30 per week for three and a half years. The landlord appealed
contending that, as the rent was only £8 per week, the award was too high. The
appeal was rejected. The case shows that a weekly sum, even in excess of the
rent payable for the premises, is a permissible way to calculate the monetary
compensation to be awarded for distress and inconvenience. It is no support at
all for the proposition that a court is bound to assess damages under the heads
of both inconvenience and diminution in value.
In Ezekiel
v McDade [1995] 2 EGLR 107 the court awarded damages for a negligent
valuation on the basis of diminution in value and discomfort and distress. It
was suggested that it was in some way supportive of the submissions made on
behalf of Mrs Wallace. I can only say that I disagree.
Finally,
counsel for Mrs Wallace relied on Brent London Borough Council v
Carmel (1996) 28 HLR 203. In that case the defendant, a secure tenant, when
sued for arrears of rent, counterclaimed for damages for breach of the
landlord’s obligation to repair. The judge awarded her general damages for
diminution of the value of the tenancy, calculated by reference to a reduction
in the rent payable, and general damages by reference to an annual sum. Counsel
for Mrs
bases for which he contends and leave to appeal was refused. One of the grounds
of appeal was that the awards of damages were excessive. Roch LJ said that
there was no indication that the awards were wrong in principle or excessive in
amount. Plainly, this case also indicates that damages may be awarded on both
bases. Likewise, in my view, it is no support for the proposition that the
court is bound to do so.
I have dealt
at length with the cases relied on by counsel for Mrs Wallace because of the
importance of the point raised on this appeal to district and county court
judges throughout England and Wales. I can express my conclusions more shortly
in the form of a series of propositions. First, the question in all cases of
damages for breach of an obligation to repair is what sum will, so far as money
can, place the tenant in the position he would have been in if the obligation
to repair had been duly performed by the landlord. Second, the answer to that
question inevitably involves a comparison of the property as it was for the
period when the landlord was in breach of his obligation with what it would
have been if the obligation had been performed. Third, for periods when the
tenant remained in occupation of the property, notwithstanding the breach of
the obligation to repair, the loss to him requiring compensation is the loss of
comfort and convenience that results from living in a property that was not in
the state of repair it ought to have been if the landlord had performed his
obligation: McCoy & Co v Clark; Calabar Properties Ltd v
Stitcher; and Chiodi v De Marney. Fourth, if the tenant does
not remain in occupation, but, being entitled to do so, is forced by the
landlord’s failure to repair to sell or sublet the property, he may recover for
the diminution of the price or recoverable rent occasioned by the landlord’s
failure to perform his covenant to repair: Calabar Properties Ltd v
Stitcher.
Obviously, the
tenant cannot claim damages in accordance with the third proposition for
periods occurring after the sale or sublease referred to in the fourth. To that
extent, as shown in Calabar Properties Ltd v Stitcher, those two heads
are mutually exclusive. This case is concerned with the proper application of
the third proposition, not the fourth. Thus, the question to be answered is
what sum is required to compensate the tenant for the distress and
inconvenience experienced because of the landlord’s failure to perform his
obligation to repair? Such sum may be ascertained in a number of different
ways, including, but not limited to, a notional reduction in the rent. Some
judges may prefer to use that method alone (McCoy & Co v Clark),
some may prefer a global award for discomfort and inconvenience (Calabar
Properties Ltd v Stitcher and Chiodi v De Marney) and
others may prefer a mixture of the two (Sturolson v Mauroux and Brent
LBC v Carmel). But, in my judgment, they are not bound to assess
damages separately under heads of both diminution in value and discomfort,
because in cases within the third proposition those heads are alternative ways
of expressing the same concept.
It follows
that, in my judgment, Judge Hardy was right when he said that diminution in the
value of the property in relation to the amount of rent paid is not a separate
head of damage. In the light of the submissions made to us I would make some
general observations on the problems of assessing damages in this field. First,
I would agree with the observations of Stephenson and Griffiths LJJ in Calabar
Properties Ltd v Stitcher that expert valuation evidence is not of
assistance when assessing the damages in accordance with my third proposition.
The question is the monetary value of the discomfort and inconvenience suffered
by the tenant. That is a matter for the judge. As Kennedy LJ observed in the
course of argument there is no market in out-of-repair council houses on which
expert evidence could be either admissible or helpful. Second, a judge who
seeks to assess the monetary compensation to be awarded for discomfort and
inconvenience on a global basis would be well advised to cross-check his
prospective award by reference to the rent payable for the period equivalent to
the duration of the landlord’s breach of covenant. By this means the judge may
avoid over- or under-assessments through failure to give proper consideration
to the period of the landlord’s breach of obligation or the nature of the
property.
Housing
benefit
Counsel for
Mrs Wallace accepted that if he did not succeed on his first point the question
of whether the judge was right to regard the source of the payment of rent as a
relevant consideration did not arise. It is not necessary to reach any concluded
view on the point, because, as counsel for the city council submitted, the
award of damages did not depend on it. For my part, I would only observe that
the problem the judge saw appears to have arisen from his view that the
diminution in rent basis, which he refused to adopt, looked to a diminution in
the value of the money the tenant paid by way of rent. In that event, it would,
as he thought, be wrong to reward the tenant by a figure she had not paid. In
my view, that is not what is meant by ‘diminution in value’. As the authorities
show, that phrase comes originally from the judgment of Bankes LJ in Hewitt
v Rowlands (1924) 93 LJKB 1080, the meaning of which was explained by
Stephenson and Griffiths LJJ in Calabar Properties Ltd v Stitcher
as a reference to discomfort and inconvenience. On that basis, the source of
the money with which to pay the rent is irrelevant to the extent of the
discomfort and inconvenience suffered by the tenant and what would be proper
monetary compensation for it.
Amount of
damages
Counsel for
Mrs Wallace submitted that the award of £3,500 was so low as to indicate that
the judge must have erred in principle, thereby entitling, and indeed
requiring, this court to intervene: see Pickett v British Rail
Engineering Ltd [1980] AC 136 at p151. His argument proceeded along the
following lines. A detailed examination of the facts of Calabar Properties
Ltd v Stitcher [1984] 1 WLR 287; Sturolson v Mauroux
(1988) 20 HLR 332; Chiodi v De Marney (1989) 21 HLR 6; Davies
v Peterson (1989) 21 HLR 63* and Brent LBC v Carmel (1996)
28 HLR 203, and a revaluation of the amounts awarded so as to arrive at current
values, indicate an unofficial tariff of damages for discomfort and
inconvenience of £2,750 pa at the top to £1,000 pa at the bottom. He relied on
the fact that Mrs Wallace had pleaded and given evidence to support her
allegation that she had frequently complained about the want of repair to the
city council since 1992. If the judge had awarded £3,500 for five years’
discomfort, then, counsel submitted, the annual award of £700 could be seen to
be well below the scale.
*Editor’s
note: Also reported at [1989] 1 EGLR 121
Counsel for
the city council disputes this approach. He points out that the judge did not
in terms accept Mrs Wallace’s allegation that she had been complaining, with
the result that the city council had notice of the want of repair, since 1992.
He relied on the fact that the notice of appeal accepted that the judge
appeared to have awarded £3,500 for inconvenience for a period in excess of
three years. The notice of appeal did not suggest that the judge should have
awarded damages in respect of the full period of five years. He pointed out
that an award of £3,500 for three years represented £1,166 pa, a sum within the
unofficial tariff relied on by counsel for Mrs Wallace.
It seems to me
that this dispute depends on the proper period for which to award damages. It
is unfortunate that the judge made no finding in this respect. Given the sums
involved it could not be right for us to remit the case to the judge to make
such a finding. In my view, we must do the best we can on the materials
available.
The allegation
in the particulars of claim was that Mrs Wallace gave notice of disrepair to
the city council in 1992. She gave oral evidence to that effect, particularly
in cross-examination. On the other hand, the first documentary reference to a
complaint being made is a note dated October 25 1994 made by the housing officer
to whom Mrs Wallace had specifically referred in her statement. This recorded a
complaint of rising damp. Moreover, the passage from the report of Mrs
Wallace’s surveyor, which I have already quoted, indicates that not all the
defects had existed for the full five-year period. The collapse of the external
wall occurred in early 1996, and work to the damp-proofing and rat preventive
substances had been carried out on three occasions before the report was
prepared in March 1996.
In these
circumstances, it appears to me that counsel for Mrs Wallace was right when
drafting the notice of appeal to infer that the period of breach of the
repairing obligation properly proved was three years. In my view, it has not
been demonstrated by counsel for Mrs Wallace that the judge did or should have
found a breach of obligation for any longer period. On the basis that the city
council were in breach of their obligation for the period October 1994 to July
1997, the damages awarded by the judge works out at approximately £1,000 pa.
Assuming, but without deciding, that there is an unofficial tariff, such as
counsel for Mrs Wallace suggests, in my view, it has not been shown that the
award made by Judge Hardy fell outside it. It follows that the amount of the
award is not such as to indicate any error in principle so as to entitle this
court to interfere with the award the judge made.
For all these
reasons I would dismiss this appeal.
KENNEDY LJ
agreed and did not add anything.
Appeal
dismissed with costs.