· A
recent case has established that a fixed-term tenant will be liable for
permissive waste at common law
It somehow feels appropriately English that, as
we confidently set forth into the new millennium, this column should be
considering a recent decision in which the judge went to some lengths to
research case law decided in the early part of what we must now learn to regard
as the previous millennium. This was necessary in order to decide whether or
not a tenant could be held liable under the ancient doctrine of waste for
allowing the demised premises to fall into disrepair.
In Dayani v Bromley London Borough
Council [1999]
PLSCS 260 the defendant had taken fixed-term leases of three
dwelling-houses from the claimant. It had done so in order to be in a position
to fulfil its statutory obligation to house homeless people. On the expiry of
these leases a dispute arose as to whether the defendant was liable for
allegedly allowing the properties to deteriorate. The lease itself contained an
obscurely drafted covenant dealing with the tenant’s repairing obligations, but
the bulk of the judgment was directed at another question that had been raised
as a preliminary issue. This was whether the council could, as a fixed-term
tenant, be liable for permissive waste.
The defendant tenant had covenanted to
keep… the interior of the Property in tenantable
repair (reasonable wear and tear and damage by insured risk excepted) and [at
the end of the agreement to give back the property in the same condition as
that set out] in the Schedule of Condition (reasonable wear and tear and damage
by insured risk… excepted), up to a maximum value of eight weeks rent.
It was the final qualification that caused the
problem.
The tenant, not unnaturally, claimed that,
however infelicitous the language, the clear purpose of the phrase was to limit
its liability under the covenant to a sum equal to no more than eight weeks’
rent. However, this view was firmly rejected by Judge Richard Havery QC who
felt that the limitation could equally have been intended to apply to the
exception rather than the tenant’s basic liability. He agreed with counsel for
the landlord that these last nine words of the covenant had to be treated as
meaningless. He further rejected the tenant’s further contention that this
should result in the whole covenant being struck out since, in his view, this
would produce an even greater departure from the parties’ intentions. He
therefore ruled that the express covenant should be read without the offending
phrase.
Accordingly, the tenant must be taken to have
expressly covenanted to keep the interior in tenantable repair and to return
each house to the landlord in the condition recorded in the Schedule of
Condition, both obligations being limited by the stated exceptions as to
reasonable wear and tear and insured risk.
Although the judgment does not make this clear,
it seems quite likely that the above ruling on the meaning of the covenant
would in itself resolve the dispute between the parties. It certainly appears
to be the case that any liability for permissive waste would not impose any
more extensive an obligation than that imposed by the express covenant.
Nevertheless, the question of whether or not a fixed-term tenant can, in law,
be liable for permissive waste was put fair and square to the court. That this
sparked the interest of the judge to a level far beyond the call of duty is
amply borne out by his own enthusiastic research into the subject.
Liability for waste is normally confined to
positive acts causing damage to the property. Only in the case of permissive
waste does the obligation extend to omissions, hence its potential importance
as a mechanism for imposing something analogous to an implied obligation to
repair. It is well accepted that neither tenants at will nor periodic tenants
are liable for permissive waste. The question mark hangs over whether section 2
of the Statute of Marlborough 1267 subjects fixed-term tenants to such a
liability.
The judge carried out an exhaustive review of
case law from 1293 through to the more modern (!) authorities of the 19th
century. He also considered the writings of Littleton, Coke and Blackstone.
This led him to the firm conclusion that the common law unquestionably accepted
the proposition that a fixed-term tenant was liable for permissive waste. He
then went on to consider the arguments to the contrary expressed in Woodfall.
He saw some force in the suggestion made there that the actual wording of the
Statute of Marlborough might be thought to be inappropriate to impose liability
for omissions. However, he concluded that to accept this point would fly in the
face of overwhelming authority to the contrary, much of it established by
judges acting soon after the statute was first passed.
ignored
Perhaps surprisingly, the judge made no
reference to the powerful policy arguments against imposing liability for
permissive waste on fixed-term tenants propounded by Dowding and Reynolds in
their modern treatise, Dilapidations, The Modern Law and Practice.
Particularly pertinent is their view that the modern law is rightly reluctant
to impose implied repairing obligations and that there is no justification for
distinguishing between fixed-term and periodic tenants when imposing liability
for waste. Furthermore, no mention was made of their contention that the
presence of any express covenant to repair (as there was in the present case)
ought, in any event, to be viewed as displacing any liability for permissive
waste.
It is quite possible that the ruling on
permissive waste made no difference to the outcome in Dayani.
Nevertheless, it is perhaps unfortunate that a judgment that is so strong on
legal scholarship should be so weak on its examination of sound policy reasons
for perpetuating and even helping to resurrect such an ancient form of
liability.