Liverpool City Council v Kassim [2011] UKUT 169 (LC)

A thank you to the EHP who brought our attention to this case. The full decision is also available as a pdf at the end of their post until the Lands Tribunal catches up.

Mr Kassim owns a rented flat. It was inspected by Liverpool who found a category 1 hazard under the HHSRS relating to excess cold. They issues a prohibition notice preventing use of the property until such time as K had installed a “fixed, permanent, whole flat heating system. This system must be programmable and capable of being controlled by the occupants, efficient and affordable to run” (emphasis mine).

K applied to the RPT for the notice to be quashed on the basis that since it had been issued he had double glazed all the windows and fitted electric panel heaters in various parts of the property. These were fitted with timer switches and thermostats. K therefore asserted that he had fitted a permanent heating system which heated the whole flat and was fully controllable by the occupants. L disagreed and contested his application on the basis that the heating system was not affordable. L relied on the HHSRS Operating Guidance originally issued by the ODPM in February 2006 and particularly the statement in para 2.20 of Annex D that heating systems “should be appropriate to the design, layout and construction, such that the whole of the dwelling can be adequately and efficiently heated” (my emphasis again).

The Tribunal agreed with K and quashed the notice. L appealed to the Upper Tribunal.

Before the UT L argued that the issue of cost was a relevant consideration. It did so on the basis that if a heating system was too expensive to run then the occupants would not use it. This would mean they were exposed to the effects of excess cold and therefore the mischief that the HHSRS was designed to deal with would remain. The UT ultimately agreed with this argument, with caveats.

The key caveats were in the manner in which this decision is applied. The UT were quick to make clear that the are limitations to the general applicability of this principle. THe HHSRS is meant to be assessed on the basis of the most vulnerable groups and for Excess Cold this means persons over 65. Lack of funds to pay high heating bills could be considered a general characteristic of the over-65 age group. However, other general characteristics of persons living in the area which L had sought to rely on were not characteristics of that age group and were therefore irrelevant.

In deciding how serious the hazard was and thence on what enforcement action to take regard had to be given to the nature of the occupiers and their views. Therefore, if the property was student accommodation where heating was stated as often being included in the rent then the cost of heating would not be a relevant factor and the seriousness of the hazard would be reduced. Then the views of the occupiers had to be taken into account in deciding precisely what enforcement action was appropriate to the hazard level identified.

The UT also made one other key statement. The decision on the relevance of cost of heating was stated to be made “independently of the guidance” although the UT held that it was supported by the guidance. The UT further stated that contrary to the position adopted by L the guidance was there to assist in the interpretation of the statutory provisions and did not have independent force.

The matter was remitted back to the RPT for them to re-make their decision in the light of this guidance.

General Comments
This case shows a new and interesting trajectory by the UT which will start to complicate the HHSRS. This is a movement away from heavy reliance on general principles and towards a consideration of the specifics of each case. This is, of course, as it should be. Every house is different. However, it adds to the expense and complexity of enforcement and increases the pressure on EHOs. That said, it also increases pressure on landlords as they will not be able to rely on fixed principles and will need to consider the facts of the property. It is notable that the views of the occupier were again considered relevant and both sides will have to take far more notice of this in future.
The second point to note is the very clear separation of decision making in the UT. Council officers too often consider the HHSRS on the basis of products and deliverables. By this I mean there is a focus, as in this case, on having good quality efficient heating which tends to dominate all thinking. Here the UT first considered whether there was a hazard. It found there probably was. It then said that a separate consideration had to be applied to the seriousness of the hazard taking into account the characteristics of the property and whether heating was included in the rent. Notably the UT stated that even if a category 1 hazard was held to exist (which requires enforcement action to be taken) the appropriate enforcement action might be a mere Hazard Awareness Notice (which requires no action). In addition, the views of occupiers had to be considered in deciding what enforcement action to take. It was not permissible to jump from cold to storage heaters without running through those intermediate steps.

We wouldn’t usually cover a PI case here on NL, but Simmons v Castle [2012] EWCA Civ 1039 has – and is intended to have – implications far beyond PI. The case itself was an appeal arising out of a road traffic accident. The Recorder had awarded damages which, I presume, the appellant thought were too low. Once permission to appeal was obtained, a settlement was reached which provided for the possibility of a higher award of damages in the event that certain specified conditions were met.

The Court of Appeal had no difficulty approving a settlement , but took the opportunity to make some general statements about the approach to general damages. It was noted that the Jackson Report had recommended that general damages be increased by 10%, to reflect the restrictions on the recovery of success fees, ATE insurance, etc, in CFA cases. Those reforms (but not the 10% uplift) were largely contained in Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

The Court noted that the reforms in the Jackson Review needed to be considered as a coherent whole and, accordingly, ordered that general damages awards should increase by 10% for any judgment delivered after April 1, 2013. Whilst this was a PI case, the court noted that this should apply to all claims in, inter alia, nuisance or tort, if the tort causes suffering, distress or inconvenience to any individual.

I understand why this is being done, but I can’t help thinking the CA has made a bit of a mess of this. Presumably it includes statutory torts (e.g. unlawful eviction and harassment). But what about disrepair if it’s only dealt with as part of s.11, LTA 1985? That isn’t a tort, but a contractual claim. Does the uplift apply? If not, why not?

Well, there’s an oddity. The Protection of Freedoms Act 2012 Schedule 2 para 12(1) has repealed section 8(2) of the Landlord and Tenant Act 1985. The relevant provision is:

Landlord and Tenant Act 1985

12 (1) Omit section 8(2) of the Landlord and Tenant Act 1985 (power of landlord to enter premises to view their state and condition).

(2) This paragraph extends to England and Wales only.

Section 8(2) provides:

(2)The landlord, or a person authorised by him in writing, may at reasonable times of the day, on giving 24 hours’ notice in writing to the tenant or occupier, enter premises to which this section applies for the purpose of viewing their state and condition.

But it only applies to tenancies let for less than £80 per year in London or £52 per year elsewhere, on a term of less than 3 years. So, roughly, none. The Protection of Freedoms Act has therefore helpfully protected tenants from a right of entry that nobody has any more anyway. But it is tidier.

Hat tip to the Garden Court Housing Bulletin.

What constitutes a defect or a lack of repair for the landlord to be liable for tenant’s injury?

This the first of a couple of cases involving liability under sections 2 Occupiers Liability Act 1957 and 4 of the Defective Premises Act 1972 and stairs, or rather in relation to the falling off of stairs

Gillian Drysdale v Joanne Hedges (2012) QBD 27/07/2012 [On Lawtel, not on Bailii yet]

Ms Drysdale was the tenant of Ms Hedges. The property was a mid terrace Victorian house on 3 levels (basement, ground and first). There were 3 steps up to the front door, without a handrail before the relevant date. There was a low (18″) wall between the middle step and the lowered area in front of the basement, about an 8 foot drop, and no wall at all at the top step.

The tenancy agreement was signed by the tenant on 8 October 2009, but backdated to 5 October 2009. Ms D had been provided with the keys some days before and spent the night of 4 October in the property. On 5 October, her fiance, Mr Stuart, arrived with a van load of possession. Her undisputed account was that on 5 October, which was a rainy day, she and Mr Stuart were jointly carrying a large box into the property, with her at the front, going backwards. She slipped on the middle step and fell over the low wall into the basement area, causing serious back injuries.

Ms D claimed, on the basis that the steps were “unduly slippery” due to being painted, being wet and the presence of dirt. In addition, Ms D alleged that the side wall was not sufficiently high and/or no guard rail was fitted.

The specific heads were breach of section 2 Occupiers Liability Act 1957, breach of repairing covenant in the tenancy agreement and section 4 DPA and common law duty of care.

Following evidence from both parties and from experts for both parties (albeit neither found to be ‘an expert in slipping’), the Court found as fact that the Defendant had painted the steps, renewed annually, for some years before the incident date, principally to improve their appearance. The paint was an external paint but not specifically non=slip and described as a ‘semi=gloss’ finish. The painting of the steps had increased the risk of slipping, particularly when the steps were wet, but the Defendant did not consider that painting the steps would increase the risk of slipping. The side wall was inadequate to prevent falls. The drop was dangerous and, while not unusual at the time the house was built, should have been regarded as dangerous by a reasonable landlord. There was no history of people slipping on the steps. Whether any dirt increase the risk of slipping was speculative.

Turning to liability, the Court held:

Section 2 Occupier Liability Act – this has been pleaded in the alternative if it was found that Ms D had not been the tenant at the time of the accident. However, Section 2 was held to be of no application, not merely on the issue of the commencement of the tenancy. S.2 was of general application, but a landlord’s duty was defined by s.4 DPA 1972. It could not have been Parliament’s intention that both sections would define a landlord’s duty. S.4 DPA replaced s.4 of the OLA, so it was to s.4 DPA that one must look for the full extent of the landlord’s liability in tort, at least normally. Support for this found in Murphy v Brentwood District Council [1991] 1 AC 398 where the House of Lords declined to accept a duty beyond that set out in the DPA.

Section 4 Defective Premises Act – Occupation in contemplation of the letting of the premises was covered by 4(3)(b)(i) or (iii), so it covered the circumstances of Ms H occupation.

A ‘relevant defect’ for the purposes of s.4 had to involve the premises being ‘not in good repair’ (Quick v Taff Ely BC [1986] QB 809 cited), meaning worse than it was at some earlier time. Alker v Collingwood [2007] 1 WLR 2230 cited on a duty to repair not being equivalent to a duty to make safe. Putting in a good condition did not equate to putting in a safe condition.. Laws LJ at p2236 said:

A house may offer many hazards: a very steep stairway with no railings; a hidden step; some other hazard inside or outside the house of the kind often found perhaps in particular older properties. I do not think it can be said that the Act requires a landlord on proof only of the conditions I have described for the application of Section 4 to make safe any such dangerous feature.

The wall to the steps could not be said to be out of repair. There was no evidence that it had ever been oter than it was. While the Claimant argued that the application of paint to the steps had put them out of repair, such that there was a defect that the removal of the paint would remedy, the Court did not accept this:

It is stretching the meaning of the word ‘repair’ to apply it to the removal of paint. The paint did not replace the stone but was additional to it. The stone did not require repair. The paint did not require repair: what it required was removal.

There was no breach of s.4 DPA (and also no breach of clause 3.2 of the tenancy agreement which contained the landlord’s repairing obligations – “to maintain the structure and exterior in good repair”.

Breach of Common Law duty – Cavalier v Pope [1906] AC 428 held that a landlord who let a property in a dangerous condition had no duty of care to the tenant and no duty to remedy the defect. The Claimant pointed to the duty found for public landlords in Rimmer v Liverpool CC, the Court of Appeal had found a liability for a Local Authority landlord which had designed, built and let properties. The Court of Appeal followed this in Targett v Torfaen BC [1992] 3 All ER. However, Boldack v East Lindsay DC 31 HLR 41 held that Cavalier v Pope was binding authority unless it could be distinguished.

The Claimant sought to argue for a duty of care, relying on Lips v Older [2005] PIQR P14, where a (1/3) duty had been found in respect of a tenant who had fallen off a low retaining wall into a lowered area. However, Cavalier v Pope was not raised in that case, which apparently found on the basis of common law negligence and a duty to make the entrance area reasonably safe. Lips was cited and followed in in Sowerby v Charlton [2006] 1 WLR 568, again a fall into an unguarded drop, but again without Cavalier v Pope being cited.

The Court held that Sowerby was not binding Court of Appeal authority for the proposition that a common law duty of care was owed in the circumstances of this case. Sowerby was primarily concerned with the CPR and the issue of whether the defendant could resile from an admission of liability. The Court’s views were in the context of what would happen if the judgment was set aside, rather than a declaring a duty. Lips v Older was a case presented and argued as common law negligence only, apparently without the existence of the duty being disputed.

In relation to Rimmer and Targett, the Claimant argued that issue was a positive duty of the landlord not to take steps to create a dangerous state of affairs and that this remained good law despite Murphy. Painting the steps fell under this positive duty.

The Court found that the unguarded drop fell under Cavalier v Pope and there was no duty to guard it. However, painting the steps gave rise to a common law duty to take reasonable care to ensure its application did not create risk of injury. Section 4 DPA covered injury arising from a failure to repair, but where the Act does not apply, the landlord owes a duty to take reasonable care not to create an unnecessary risk of injury.

However, on the facts, in painting the steps, the Defendant was doing what other people in his position would have done, applying paint said to be suitable for outdoor use, which had no warning against its use on steps or that it might become slippery in the wet. While the knowledgeable might have been alerted by ‘semi-gloss’ and ‘producing a sheen’, not the man in the street. The Claimant’s expert had acknowledged it was not unreasonable to apply the B&Q paint, though be personally would not have done. There was thus no breach of duty of care.

Claim dismissed. The Court’s sympathy to the Claimant as a victim of a decision that many consider needs to be reconsidered, but ‘the remedy can only be in another court’.

If anyone knows anything about an appeal, we’d be very interested to hear.

This is the second of two recent cases on Defective Premises Act 1972 and stairs (for the first see here). There is now a third case on Occupiers Liability Act 1957 with our note to come shortly.

Patrick Joseph Hannon v Hillingdon Homes Limited [2012] EWHC 1437 (QB)

Mr Hannon was a heating engineer, carrying out work at a house owned by Hillingdon Homes. The company Mr H worked for had a long term contract with Hillingdon Homes, which is the corporate vehicle through which LB Hillingdon manages its housing stock. Mr H was ordered to attend the property to power flush the heating system as a matter of urgency. This work involved him moving from the boiler downstairs to the water cylinder upstairs on a number of occasions.

A flight of stairs ran from the upper floor to the open plan lower floor. The stairs were mounted to the side wall. Originally, there had been a bannister to the stairs, fixed to the steps. This had been removed some twenty years before.

While heading downstairs quite fast to investigate a noise from the boiler, Mr H fell from the stairs into the open plan living area seriously injuring an ankle, leaving long term mobility problems.

Mr H claimed in negligence and under the DPA 1972. Hillingdon Homes defended on the basis that a) Mr H shouldn’t have done the work at the property in the absence of the bannister, or b) was himself negligent in the way he used the stairs, and c) there was a defence under the DPA in that Hillingdon cold not be shown to be aware, or that it should have been aware, of the removal of the bannister and then failed to re-instate them.

On the basis that LB Hillingdon had admitted that it would not have stopped operatives working in a property with no bannister until after Mr H’s accident, and that indeed LBH operatives had attended the property on at least 46 occasions since the bannister were removed by the tenant in 1991, it was not realistic to expect that Mr H should have refused to work at the property until a bannister was fitted, or that the risks of working without a bannister would be such that he should reasonably have declined to work there.

On contributory negligence, the reason for bannister in the first place is to protect the user of stairs when slipping while using the stairs in a reasonable manner. There are occasions when it is reasonable to use the stairs in a speedy way, and given the bang that Mr H had heard from the boiler, this was one of them. There was no unreasonable lack of care by Mr H for his own safety, so no contributory negligence.

On the defence to the Defective Premises Act 1972, a potential difficulty was that Hillingdon Homes was managing the property for LB Hillingdon, where the DPA requires a claim against the landlord. However, Hillingdon Homes had admitted that, for the purposes of this action, it was the landlord and the property was let to and occupied by the tenant at the material time. The Defence also cited LB Hillingdon as Hillingdon Homes’ ‘predecessor in title’.

The claim was brought under DPA section 4. From the provisions of section 4, four issues arose for the claim:

(1) Issue 1: Is the bannister part of the structure?
(2) Issue 2: Was the failure to replace the bannister a “relevant defect”?
(3) Issue 3: Is Hillingdon liable to Mr Hannon given that the tenant removed the bannister?
(4) Issue 4: Did Hillingdon have notice of the defect?

Issue 1: Contra Hillingdon’s argument that bannister were not part of the structure of the house (as per the repairing obligation under the tenancy agreement), banisters formed an integral part of a staircase under the Building Regulations 2000 (Requirement K and Guidance on K and para 1.27 ‘handrails for stairs). A handrail on each side of this staircase, over 1 metre wide, was required under the Regulations as a part of the structure of the stairs. There was no argument that the stairs were not part of the structure

Issue 2: Failure to replace the bannister was indeed a relevant defect:

The evidence shows that the bannister in question was removed by the tenant after she had first become a tenant. This removal occurred after the “material time” which is defined in the DPA as being, on the facts of this case, after the time when the tenancy commenced. Given its integral function, it is self-evident that the absence of the bannister was a defect in the state of the property which was continuing because of the failure or omission of the party responsible for the repairs of the structure to replace it or to insist on its replacement by the tenant.[para 33]

Issue 3: Was Hillingdon liable given that the tenant removed the bannister? Hillingdon argued that the repairing obligation was owed to the tenant and didn’t extend to defects caused by the tenant’s breach of covenant.

However, the Court agreed with the Claimant that

the repairing covenant is unqualified. The wording is wide enough to extend to all types of disrepair. If it had been intended to exclude disrepairs caused by the tenant, the covenant would or should have stated this in terms. Furthermore, in the context of the DPA, the definition of a relevant defect is provided to describe the type of situation giving rise to the landlord’s liability to a third party – Mr Hannon – and it is clear that that definition does not embrace a consideration of whose fault it was that the relevant defect came into existence.

The wording of the repairing covenant did require Hillingdon to repair relevant defects caused by the tenant. It was open to Hillingdon to re-charge the repair costs to the tenant or to require the tenant to rectify the defect. It was not open to them, under the covenant, to leave the defect unremedied.

Issue 4: Did Hillingdon have notice of the defect? Hillingdon argued that liability under s.4 DPA only arose once Hillingdon was on notice of the relevant defect and that the notice must comply withe the terms of the tenancy, such that a report must be given:

“immediately to us or our agents” since it was a defect in the property “which is likely to affect public health or the stability of the structure”. Alternatively, it was within the requirement of “other faults or disrepair” that had to be “reported as soon as possible.”

Further, Hillingdon had never been given notice by the tenant, at best independent contractors had become aware of the defect when making maintenance visits, but this was not notice to Hillingdon.

Against this, Mr H argued:

i) The tenancy agreement envisaged ‘notice to our agents’. This included an employee, or self employee, of an independent contractor attending the property for maintenance and repair purposes undertaken by the landlord, being agents at least for the purposes of receiving a report of disrepair. There had been many such visits, and as the absence of bannister was obvious, any of these visits constituted a report.

ii) Notice did not have to be in writing. Giving access to a maintenance contractor, where the defect was clearly visible, was giving notice.

iii) In any event direct employees of Hillingdon had visited, including a visit a few days before Mr H’s appointment. Notice was given by these attendances.

And iv) “Hillingdon must have undertaken a number of inspections of the interior of the property as their landlord in order to ensure that there were no relevant defects that required it to act in order to comply with its remedial or maintenance obligations under the lease. There was no evidence that such visits had occurred and, if that was so, that absence of inspection visits was itself a breach by Hillingdon of Hillingdon’s repairing obligations and gave rise to an obligation to repair such disrepairs as would have been observed had an inspection visit occurred.”

And finally, s.4 DPA gives rise to a liability where the landlord, as here, has an express right to enter and to carry out repairs and a further right, as here, to inspect to see if repairs are required. That liability arose even if Hillingdon as the landlord had not in fact exercised that right to inspect and repair as liability arose “from the time when by notice or otherwise [it] can put [itself] in a position to exercise” the right to inspect and repair. Hillingdon could have done so at any time over the life of the tenancy.

The court held that “For all these reasons, Hillingdon had been given sufficient and appropriate notice even if, which was not the case, it was necessary for that notice to have been given in order to found liability under the DPA”.

Hillingdon was therefore liable under the DPA for Mr H’s injury in full, with no contributory negligence.

Comment
This is a very useful case, not only on the meaning and extent of the DPA, but also on the issue of notice of defects for both the purposes of the DPA and on broader section 11/tenancy agreement disrepair claims.

While the point about liability arising when ‘from otherwise’ the landlord can put itself in a position to exercise its right to inspect and repair (where that right is in the tenancy agreement) is specific to the DPA, the successful arguments on notice at i) to iv) above are potentially useful in disrepair claims. That said, point iv) on failure to inspect being a breach of repairing obligation might be difficult to square with section 11 and will depend on the tenancy agreement terms.

The court’s findings on the bannister as structure may also be useful.

Is the Occupiers’ Liability Act 1957 still relevant in a landlord & tenant relationship, or not?

Jasmine Alexander v (1) Freshwater Properties Limited (2) Christopher Place [2012] EWCA Civ 1048

This was an appeal, decided within a few days of Drysdale v Fletcher in the High Court, but appearing to reach quite different conclusions on the applicability of the Occupiers’ Liability Act 1957. I’ll give my view on the apparent differences at the end.

Ms Alexander was the occupier (whether tenant or leaseholder is not clear) of a flat in a block. Freshwater Properties was the landlord of the block and Christopher Place was a building contractor hired by Freshwater.

Ms A suffered a traumatic partial amputation of a finger when it was caught in the front door to the block as it closed. The front door to the entrance hall was a common part.

Works had been commissioned by Freshwater, carried out by CP, including the removal, polishing and replacement of the exterior door handle to the front door.

Miss Alexander brought proceedings against both the landlord and the builder alleging breach of duty under the Occupiers’ Liability Act 1957 and negligence. It was her case that the self-closing mechanism fitted to the door was defective and that it was necessary for anyone leaving the building to pull the door shut in order to ensure that the lock engaged properly. Although positioned at knee height, the exterior handle had enabled that to be done safely. The removal of the handle made it necessary to pull the door closed by grasping its edge, taking care to move one’s fingers out of the way before it closed on them. The claimant said that the absence of the handle created a dangerous situation because it gave rise to a risk of precisely the form of injury which she had suffered on the day in question. There was a trial limited to the question of liability.

The evidence was that the self close mechanism to the door was erratic. The Recorder found that it was working on the day of the accident, but for some time, there had been a notice up reading:

“DEAR FELLOW RESIDENTS AND GUESTS,
PLEASE ALWAYS PULL OUTER DOOR FULLY CLOSED WHEN YOU GO OUT OR IN AND MAKE SURE THE CATCH CLICKS SHUT!
OR WE COULD GET STRANGERS COMI[N]G INTO THE BLOCK.
Thank you.”

Ms A had been more distracted than usual and had pulled the door harder the usual and misjudged the timing of the removal of her hand. The handle had been removed several weeks before the accident by CP and had not been replaced.

The Recorder found that the builder had been negligent in allowing the door to stay handless for so long, when it posed an obvious risk of injury. The builder should have known from the sign inside that the self closing mechanism was not reliable and so it was foreseeable that residents would resort to pulling the edge of the door.

The landlord was also liable. It knew that the self-close mechanism was defective. It had been involved in the decision to send the handle for polishing and should have been aware that it would be missing for several weeks. The landlord should have arranged a replacement or repaired the self-closing mechanism.

Liability was apportioned at 25% to the landlord, 75% to the builder, but with 25% contributory negligence by the Claimant.

The builder appealed, and then, out of time, so did the landlord. The builder argued that the Recorder had failed to apply the principles of negligence correctly, alternatively, he was wrong to assign 75% liability to the builder. The landlord also argued that the Recorder has been wrong on the principles of negligence, but in the alternative resisted the builder’s second argument on apportionment of liability.

The argument on liability was based on the way the recorder had summed up the statement of principle in Whippey v Jones [2009] EWCA Civ 452. The Recorder had said “What underlies the law is the concept of reasonable foreseeability of injury.”.

The builder argued that:

the Recorder failed to recognise that the builder would not be in breach of a duty of care towards those who used the front door unless a reasonable person in his position would have realised that the absence of an exterior handle might result in someone’s suffering injury by getting their fingers trapped in the door. In the present case that was highly unlikely: the door was fitted with a self-closing mechanism, the handle was not designed for closing the door, none of the residents who gave evidence thought that there was a serious risk of injury and for an accident to occur there would have to be an unusual sequence of events.

The landlord similarly argued:

that it is not enough that the defendant should have foreseen the possibility of injury; in order to be held liable it is necessary that a reasonable person in his position should have realised that the likelihood of injury was sufficiently great to require steps to be taken to prevent it. If the Recorder had adopted that approach he would have held that the risk of harm was so low that neither defendant could reasonably have been expected to guard against it.

The Court of Appeal held that the single sentence attacked “is not of itself sufficient to demonstrate that he failed to apply the correct principles, in particular the need to decide whether a reasonable person in the defendant’s position would have regarded the risk as sufficiently serious to require action.”

On the facts, the Recorder’s decision that the builder was negligent was wholly justified. The door was heavy and likely to injure fingers if trapped, the self close mechanism was clearly defective and residents were asked to pull the door closed behind them. The builder had removed the handle but failed to check how the door closed. As far as the landlord’s liability, the notice may have been put up by a resident, but an agent of the landlord visited regularly and was aware of the notice. The landlord had been a party to the decision to remove the handle and, through its agent, was aware it had been removed for some time.

The landlord sought to avoid liability by arguing that it had delegated authority for the works to the builder and so could rely on s.2(4)(b) of the Occupiers’ Liability Act:

In determining whether the occupier of premises has discharged the common duty of care to a visitor, regard is to be had to all the circumstances, so that (for example)—
[...]
(b) where damage is caused to a visitor by a danger due to the faulty execution of any work of construction, maintenance or repair by an independent contractor employed by the occupier, the occupier is not to be treated without more as answerable for the danger if in all the circumstances he had acted reasonably in entrusting the work to an independent contractor and had taken such steps (if any) as he reasonably ought in order to satisfy himself that the contractor was competent and that the work had been properly done.

But the Court of Appeal found that in failing to correct the self closing mechanism, or instructing the builder to fit a temporary handle, the landlord was personally negligent.

The landlord’s duty under section 2(1) (the “common duty of care”) was to take such care as in all the circumstances of the case was reasonable to see that the residents would be reasonably safe in using the premises. It was accepted that in the context of this case that amounted to the same as the common law duty of care. That was a personal duty which required the landlord for his own part to take all reasonable care to ensure that the residents were reasonably safe. It was not suggested that the builder was not a competent contractor or that the landlord had failed to satisfy himself properly of that fact, but that is not an answer if there has been negligence on the part of the landlord himself.

On the apportionment of liability:

The danger arose from a combination of a defective self-closing mechanism and the absence of an exterior handle. Both defendants were parties to the decision to re-polish and replace the handle and both knew that that would take some time. Both were, or should have been, aware that the door was heavy and that the self-closing mechanism did not work properly. Both were, or should have been, aware that the residents were encouraged to pull the door shut behind them when leaving the premises and both were, or should have been, aware that once the handle had been removed that could be done only by grasping the edge of the door and pulling it shut. The builder could have fitted some kind of temporary handle and, if he failed to do so, the landlord could have asked him to fit one. It might be said that the landlord, which had general responsibility for the common parts of the premises, was more responsible than the builder, because it had a general responsibility for the upkeep of the premises, including the self-closing mechanism. On the other hand, the builder had created the danger in the first place by removing the handle and failing to check that the self-closing mechanism worked properly. However, that may be, I do not think that the mere fact that the builder was responsible for the work on the handle provided a sufficient ground for holding him 75% liable. In my judgment there was no good reason in this case to attribute greater responsibility to him than to the landlord. In those circumstances I do not think that the Recorder’s apportionment of liability can stand. I would vary the order below to provide that the builder and the landlord are equally responsible.

Comment
While this case is interesting in itself on the issue of negligence and the apportionment of liability, it has concerns some questions, for instance for Case Check, that there may be a conflict with Drysdale v Hedges. Given that Drysdale v Hedges appeared to say that the Defective Premises Act had replaced Occupiers’ Liability Act for landlord/tenant cases. I’m not convinced that there is a conflict.

Firstly, this case was pleaded as an Occupiers’ Liability Act case, with no alternative DPA claim, and the issue of the DPA was not raised at first instance or on appeal.

And then it is worth noting that the relevant defect here was to the common parts of the building, retained and not demised by the landlord. Section 4 DPA is concerned specifically with premises let under a tenancy. The front steps in Drysdale were part of the demised property – a house and gardens.

A landlord may well owe a repairing obligation for the common parts under s.11(1A) on a short lease, and possibly under the express terms of a long lease. A missing door handle to the front door would be disrepair, as would a defective self-closing mechanism. It may be possible to plead personal injury arising from a disrepair liability in these circumstances but this is arguably not sufficient for DPA liability. Where an injury arises from a defect in common parts, rather than in the demised premises, Occupiers’ Liability Act may still be applicable.

Or Simmons v Castle round two

Simmons v Castle [2012] EWCA Civ 1288

As you may know, the original Court of Appeal decision in Simmons v Castle on the 10% uplift in general damages (our report here) was revisited after representations by the ABI and APIL.

I’m not sure that the revised judgment has made things any more workable, but it has clarified some issues relevant to housing.

First, general damages for “four types of damage in relation to both tort and contract cases, namely “pain and suffering and loss of amenity”., “physical inconvenience and discomfort”, “social discredit”, and “mental distress”" are are to be given the 10% uplift. (para 48)

The original judgment did not address contract cases, apparently excluding general damages for housing disrepair and elements of unlawful eviction. It would appear that general damages in such cases now should receive the 10% uplift.

Quite what this does conceptually to the Wallace/Shine assessment of quantum as a notional percentage of rent is another matter . The rent hasn’t gone up 10% but perhaps the discomfort and distress has been recognised as being 10% worse… And is this 10% on each component, or a Shine assessment with 10% added to the total?

Then when does the claimant get this uplift? The decision appears to be that all relevant claims where an award of damages is made on or after 1 April 2013 will get the 10%, except where the claim was funded under a CFA signed before 1 April.

Thus a legal aid or self funded Claimant whose trial was on 1 April would get the 10%, while a CFA funded claimant with a trial on the same day, wouldn’t get it, if the CFA was dated before 1 April.

Meanwhile, when considering settlement of cases that would otherwise come to trial after 1 April 2013, (as long as not on a CFA), should the 10% be a factor in negotiations? My view is that it should, as settlement is in the context of likely damages at trial.

There are also potential issues on advising CFA clients particularly as 1 April draws near. Would it be worth waiting and signing the CFA after 1 April? On the one hand, there is the potential 10% uplift in damages. On the other hand, there is the non-recoverability of the success fee, which will come out of the client’s damages. Unlike PI, there is, as yet, no one way qualified costs shifting for housing or judicial review claims, thus a costs risk for the client where ATE is no longer recoverable, from 1 April for new CFAs. Again unlike PI, there is, as yet, no ceiling on the amount of the damages that can be taken as a success fee in housing claims (in PI the caps is 25% of damages).

While in the average housing disrepair or unlawful eviction claim, it is likely that the client will be in a better position signing a CFA before 1 April 2013, how to explain and quantify these considerations for the client, who may well know about the 10% uplift in damages?

I rather suspect it is going to take a while for the fall out of this decision to subside…

Does the landlord’s repairing duty under Section 11 Landlord and Tenant Act 1985 extend to damage by fire, flood or tempest?

LB Hammersmith and Fulham v Carty is a County Court judgment reported on Hardwicke Chamber’s site which raises some interesting issues on the interpretation of Section 11(2)(b) of LTA 1985. This provides:

(2) The covenant implied by subsection (1) (“the lessor’s repairing covenant”) shall not be construed as requiring the lessor—
(a) [...]
(b) to rebuild or reinstate the premises in the case of destruction or damage by fire, or by tempest, flood or other inevitable accident, or
(c) [...]

Ms C was a secure tenant of H&F (whose tenancy agreement repairing duties were limited to s.11 specifically). There was a fire in April 2010, which was started in a neighbouring flat through arson by the tenant. The fire gutted that flat and did considerable damage to the walls, ceilings and electrics in the common area outside the flats. There was smoke damage to Ms C’s flat, but the only other particular issue was a smoke damaged air vent that required replacement. Ms C also complained about a lingering smell of smoke.

After the fire Ms C had moved out. Although repairs and temporary lighting were fitted in the communal part within some weeks, Ms C did not move back in, despite H&F insisting the property was fit for use. It appears she also stopped paying rent, or some rent.

H&F brought a claim for possession, Ms C counterclaimed for disrepair. The principle issue was the smoke damaged air vent.

H&F argued that as the fire had not been caused by disrepair or H&F’s actions, the resulting damage to common parts, which was accepted to be disrepair fell under s.11(2)(b) and that therefore no liability arose to Ms C.

It isn’t clear if Ms C was represented – I suspect not, but any information welcomed – but the District Judge apparently agreed with H&F and found that there was no liability for the fire related disrepair.

The Hardwicke note suggests that this argument could be extended to, for example, cases of water penetration between flats where the landlord is not primarily liable for the escape of water in the first place. It suggests that it would be a defence to a claim for the damage to the claimant’s flat (damaged plaster, walls, ceiling, electrics etc.) that the damage was the result of a ‘flood’ so no liability on the landlord’s part to rebuild or reinstate under s.11(2)(b).

I have doubts about this, beginning with the viability of describing a persistent, or intermittent but long term, leak as a ‘flood’…

noun
1 an overflow of a large amount of water beyond its normal limits, especially over what is normally dry land: [Source]

or

a : a rising and overflowing of a body of water especially onto normally dry land; also : a condition of overflowing [source]

It is also rare for water penetration to be due to the other tenant, or rather be due to something that does not fall under the landlord’s repairing obligation in that flat. Leaseholders are a different issue – but then a nuisance claim may depend on the landlord’s reserved right of entry to carry out repairs, if any (a post for another time).

So, if this argument is to have any role, it would arguably only be in cases of a one off, large scale flooding, caused wholly by the other tenant, or, as in this case, fire.

And then there is a fundamental question of whether the argument is right overall in its application to disrepair. Section 2(b) concerns liability to ‘rebuild or reinstate the premises’, (rather oddly as the rest of s.11, including (1) and (1A), refers to the ‘dwelling house’ and/or ‘building’). But arguably ‘rebuild or reinstate the premises’ has a different meaning to ‘keep in repair and proper working order’ the structure, exterior, water, gas, electricity, sanitation heating etc. (S.1 and s.1A), whether fire, flood or indeed tempest is involved. Destruction of the premises, not disrepair, would seem to be the target, otherwise s.11(1) has a very odd set of exclusions. ‘Reinstate’ is not used elsewhere in s.11 at all, so is arguably not synonymous with ‘repair’ – which was the argument made in this case.

But this might well be an argument we see played out in the future. It will no doubt be used by landlords.

For long leases, outside the provisions of s.11 Landlord and Tenant Act 1985, the repairing obligation of the landlord is limited to the exact terms set out in the lease, as is the extent to which the landlord can recover the costs of repairs from the leaseholder. As anyone who has dealt with repairs on housing association shared ownership schemes where the housing association is itself a lessee of part of the building will know, this can be an utter nightmare, where the immediate landlord can seem to escape any repairing obligations whatsoever. But what if the lease terms themselves contain an apparent error?

In Lucie Marie-Antoinette Campbell v Daejan Properties Ltd [2012] EWCA Civ 1503, the alleged error benefited the leaseholder, Ms Campbell held the lease of a maisonette on the 3rd and 4th floors of a house on Upper Wimpole Street, London W1. The relevant lease clauses read:

2 [...]
(xxv) To pay to the Lessor on demand two-fifths of the expense at all times and from time to time incurred by the Lessor in performing the covenant contained in Clause 3 (iii) hereof.

3 [...]
(ii) To keep the house insured against comprehensive risks to the full value thereof in some insurance office of repute and to pay all premiums when the same shall become due and produce to the Lessees on demand the policy of such insurance or a duplicate thereof and the receipt for every premium
(iii) To keep the roof and outside walls of the premises in good repair and condition and to paint the exterior of the premises once in every seven years and except in cases of emergency the Lessor shall before carrying out any work under this sub-clause obtain not less than two competitive estimates from substantial and reputable firms of contractors and shall submit them to the Lessees for approval and the Lessees shall be deemed to approve the cheaper or cheapest of the said estimates unless the Lessees shall within one calendar month of the receipt of the said estimates produce and forward to the Lessor an estimate from a substantial and reputable firm of contractors cheaper than the cheaper or cheapest estimate obtained by the Lessor and in such case the Lessor shall accept the estimate procured by the Lessees”.

Note the ‘house’ in 3(ii) and ‘premises’ in 3(iii). This clause was in the original 1958 lease and incorporated into a new lease in 1999.

Ms Campbell had previously negotiated down a demand for 40% of the insurance premium of the house to 33 and a third, on the basis that her maisonette only occupied some 29.2% of the floor area of the house.

In 2005/6 Daejan, the landlord, carried out substantial works of maintenance and repair to the house. There was then a dispute about Ms Campbell’s share of the costs of the work. Daejan took the view that Ms Campbell should pay 40% of the costs of works to the house. Ms Campell countered that 40% of works to ‘the premises’ meant to the roof and walls to the third and fourth floor, but nothing below that, including the lower walls and roofs to the basement and ground floor extensions.

Daejan brought a claim under s.35 Landlord and Tenant Act 1987 for an order varying the terms of the lease, seeking “a declaration that clause 3 (iii) of the 1958 lease, which was incorporated into the 1999 lease, should be construed as if the word “premises” in lines one and two had read “house”.”

Ms Campbell defended, on the basis that clause 3 (iii) meant what it said and had always been dealt with that way in the past.

At first instance, the Judge agreed with Daejan, finding five reasons why ‘premises’ should be read as ‘house’:

22. I consider that the following factors are particularly relevant. First, as regards the landlord’s obligation to insure the house at clause 3(2), the tenant’s share is specified at 40 per cent at clause 2(20). Similarly, as regards heating the house and the provision of hot water, the share as at 1958 was specified at eight-nineteenths, which amounts to 42.1 per cent.
23. Those factors suggest that if the tenant were indeed required to pay only 40 per cent of the costs of repairing and painting the exterior walls of the maisonette and nothing at all for the lower three floors or the basement, that would be proportionately a far lower contribution than the parties considered appropriate for the contributions clearly specified as applicable to expenses attributable to the house as a whole such as insurance and heating. I do not think that point is in any way weakened by the fact that the maisonette accounts for only 29.2 per cent of the floor area and, at least as at 1958, 26 per cent of the rateable value of the whole house.
24. Secondly, the main roof of the building is clearly that over the maisonette. It makes no sense that if the tenant has to pay only 40 per cent of the cost of maintaining and painting the exterior walls of the maisonette (that is the second and third floors of the building) and nothing at all for repair or painting of the other floors, nonetheless, it would have the burden of paying 40 per cent of repairs to the main roof.
25. Thirdly, if the tenant’s construction is correct, the tenant would not have the benefit of a covenant from the landlord to keep the building as a whole in good repair. I consider that would be a serious deficiency in a lease and to the manifest disadvantage of the tenant since disrepair of parts of the lower floors would clearly affect the amenity and potentially even the structural integrity of the maisonette. The fact that the demise in the lease includes the right of support to the premises is not an effective answer to this.
26. Fourthly, it is inconceivable that the landlord, having a long lease, would not provide for the costs of painting and repairs which it had to carry out to be covered by the aggregate contribution from the tenants. Mr Murch realistically accepted that that must be the case but on the tenant’s construction here, it is unclear where the balance of 60 per cent of the costs of the repair of the roof and the exterior walls of the maisonette would come from.
27. Mr Murch suggested that the other tenants, especially the professional tenants on the lower floors, could have an obligation in their leases to pay 100 per cent of the repair and painting of the discrete parts of the house leased to them and, in addition, to pay 60 per cent of the costs of repair of repair and painting the exterior of the second and third floors and the main roof. Although Mr Murch urged that the court should not speculate on what might be contained in the other leases which were not in evidence, that would be an utterly bizarre and unorthodox form of covenant, all the more so when one bears in mind that the ground floor is in dual occupation under two leases.
28. I note that in the Billson case, as I indicated, the Court of Appeal was prepared to proceed on a reasonable assumption on what was likely to be in the other leases, although they apparently were not in evidence before the court, and I feel it is entirely appropriate to dismiss as utterly implausible the suggestion that such a form of covenant would be contained in the other leases here.
29. Fifthly, there is the question of the estimates for repair work required by clause 3(3) which the landlord must provide for repairs within the scope of the covenant before it can charge for that work. The premises are defined to include not just the maisonette on the third and fourth floors but also the stairs leading up to them from the second floor of which the staircase abuts part of the external wall.
30. If the tenant were correct, then when structural repair was required to the second floor including the wall on the staircase side, a separate estimate for that part of the external wall which abuts the staircase would be required so that it could be provided to the tenant of the maisonette. Mr Murch submitted that this is not really such a practical problem as the landlord could obtain estimates for the whole work and then ask the builder or quantity surveyor to itemise this part of the wall separately.
31. However, under the clause, the tenant could serve a counter-estimate, obviously only for that part of that structural wall abutting the staircase comprising the premises, and that estimate may be cheaper. Under the clause, the landlord would then be obliged to accept the tenant’s estimate for that part of the wall even if the other builder’s quotation for the work to the whole of the wall was cheaper. This demonstrates the air of unreliability [unreality] which is created by the tenant’s construction.

Ms Campbell appealed. On appeal, she argued that the Judge had erred in his approach to construction and had, in effect, re-written parts of the 1958 lease. She then amended to include further grounds, “that as a result of the new lease granted in 1999, the alleged mistake in clause 3 (iii) cannot now be corrected”. She also sought to introduce fresh evidence, including the head lease and correspondence from the 1990s showing how the parties had interpreted the clause.

On the issue of construction of the lease, the Court adopted the approach to contractual interpretation set out in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, 2009 1 AC 1101 and in Pink Floyd Music Ltd v EMI Records Ltd [2010] EWCA Civ 1429.

What is clear from these cases is that there is not, so to speak, a limit to the amount of red ink or verbal rearrangement or correction which the court is allowed. All that is required is that it should be clear that something has gone wrong with the language and that it should be clear what a reasonable person would have understood the parties to have meant. [Lord Hoffmann in Chartbrook]

the court cannot introduce words into a contract unless “satisfied (i) that the words actually used produce a result which is so commercially nonsensical that the parties could not have intended it and (ii) that they did intend some other commercial purpose which can be identified with confidence” [Lord Neuberger MR in Pink Floyd]

The two questions for the court on construction were:

“(i) whether it is clear that something has gone wrong with the language of clause 3 (iii); (ii) if so, whether it is clear that reasonable persons would have understood clause 3 (iii) to be referring to all of the roofs and all of the external walls of the house.”

It was very hard to answer affirmatively to either of these. The lease clauses imposed a variety of different rates of charge, for insurance, for rates and water rates, for maintenance of common parts and so on. It was hard to see the clause 3(iii) as being either obviously out of line. Moreover:

There is no obvious pattern in the various service charge provisions which leads to the conclusion that the parties must have intended the lessee to pay 40% of the repair costs of all roofs and all outside walls. Indeed such an obligation would be surprisingly onerous since the floor area of the maisonette represents only 29.2% of the total floor area of the house. Furthermore the lessee of the maisonette derives no benefit from the flat roofs above the basement and the ground floor extensions.

The five reasons given by the judge below:

On the first, it was not possible to satisfactorily deduce from the other clauses an intention that the charge should be 40% of the house, as the charges varied too widely.

On the second, the requirement to pay 40% of the main roof repairs did make sense as the roof directly benefited the maisonette, and the three flat roofs which did not benefit maisonette entailed no contribution.

On the third, “it is correct that the lessee of the maisonette does not have the benefit of a covenant to keep the building as a whole in good repair. On the other hand the lessor was under such an obligation from other sources. Clause II (2) of the head lease imposed such an obligation. Mrs. Campbell has the benefit of that covenant under clause 1 (e) of the 1958 lease”. Daejan’s argument that construing the clause as meaning the premises was in this regard both too favourable to the lessor and to the lessee was not a basis for the court to re-write the contract, which usually required benefit to one party and detriment to the other.

On the fourth, “It is not always the case that the landlord of a property with multiple tenants on historic leases recovers 100% of his expenditure through service charges. Obviously this is what the landlord desires, but there are many possible reasons why he may not achieve that. There is no presumption in construing a lease that the service charge provisions will enable the landlord to recover all of his expenditure: see Rapid Results College Ltd v Angel [1986] 1 EGLR 53 at 55, column 1″

And on the fifth, while the clause could certainly produce difficulties in estimates for costs of works, with the lessor producing estimates for the whole house and the lessee producing estimates for the main roof and exterior of the premises only, this was not fatal to the clause. There had been no such problems to date and in any event, it was not unusual for procedures for sharing remedial costs between parties to give rise to problems.

Overall, it was not possible to say that in using ‘premises’ the dafter of the clause had made a clear mistake, nor was it commercially nonsensical. As a matter of fact, the parties had made previous arrangements according to the terms of the clause.

If I were counsel advising on the drafting of the 1958 lease, I would not recommend clause 3 (iii) in its present form. I would be inclined to advise the parties that the word “premises” should be changed to “house” and the contribution figure should be reduced from 40% to about 30%. However, I am not counsel advising the parties about what the lease should say. My task is to construe clause 3 (iii) judicially. In my view this is not a case of clear mistake, where the court can step in and construe the contract as if it said something different. Clause 3 (iii) should be construed as meaning what it says. The word “house” should not be substituted for “premises”.

Moreover, when the 1958 lease was replaced by the 1999 lease, it was open to Daejan to have proposed a modification of the clause. It did not. despite ongoing discussions over the operation clause since 1990. It was not necessary to decide whether this was in itself fatal to Daejan’s application to amend the lease term.

Courtesy of Beatrice Prevatt’s disrepair update in the December 2012 Legal Action, here are a couple of County Court disrepair cases. Both proving the general rule which we have previously noted, that it is only the least competent of private landlords that let disrepair claims get to trial these days.

Woolf v North London Homes Clerkenwell and Shoreditch County Court 19 April 2012

Ms W was the assured shorthold tenant of NLH. She had a two bedroom attic flat from 28 November 2008. She left in January 2011. There was disrepair complained of from the start of the tenancy, including a leak to the bath, a leaking toilet, a burst pipe and an intermittent hot water supply. These were remedied, but there were other problems from 2009. There was a bad smell of damp, the front door would not lock properly, the bathroom window was rotten and a pane of glass fell out. The roof was leaking. The building suffered from subsidence.

There was a report by an environmental health officer and the tenant’s surveyor, in March 210, confirming these defects. Ms W claimed for disrepair.

The landlords defended by asserting that Ms W was an alcoholic, that she had deliberately damaged the property, that she had kept dogs at the property, that she had left large quantities of nappies outside the premises and had caused the attendance of the police. (One can only presume that the landlords were not represented, as none of this could amount to a defence to the defects complained of. At best bits of it could lower damages.)

At trial, the Court rejected all the allegations against Ms W. The Court found that there was significant disrepair from the start of the tenancy, worsening to the time of the surveyor’s report in March 2010. During 2009, the premises had had defective windows and was subject to damp.

Rent: £1450 per month

Damages:
General damages at 20% of rent from the start of the tenancy to March 2010 (16 months). 30% of rent from March 2010 to January 2011 (8 months). Total £7,380

Special damages of £2,500 – excluding some of the ‘more exotic’ items in the schedule for which there were no receipts.

Total: £10,330.

Then there is:

Anane Addo v Sehmi Croydon County Court 21 June 2012

A counterclaim for disrepair in a possession claim. Ms A had the tenancy of a two bed house between June 2008 and the end of July 2010.

There was isolated damp in the property from the start of the tenancy. This was made worse in March 2009 when a water pipe burst. Following this, there was damp and mildew in most of the rooms of the property, in patches of about a metre square.

Croydon Council served a notice in April 2009 requiring the landlord to investigate the damp and mould growth. The landlord did nothing, asserting that ‘he was too poor to carry them out’ and blaming the tenant as her housing benefit had been stopped by Croydon while the disrepair remained outstanding.

Rent was £900 per month.

Damages
General damages of 60% of rent from May 2009 to end of July 2010: £8,100.

Comment
The housing benefit issue sounds unlikely on the face of it, and possibly unlawful. I don’t know of any interaction between HHSRS enforcement by the Local Authority and housing benefit payments, and putting the tenant in a position where rent arrears will inevitably accrue is extremely bad. More details welcomed from counsel or solicitors for Ms A.

Hunt & Ors v Optima (Cambridge) Ltd & Ors [2013] EWHC 681 (TCC)

This is a brief note on what was a complex case arising out of what, by any measure, appears to have been a very poor construction and subsequent maintenance of a new build block of flats. As will become clear, I’m rather troubled by some of the Court’s findings

There were numerous defects pleaded by 8 Claimants:

1. The roof on each of the Phases has leaked at one point or another for many years. The roofs are flat and were laid with some (unidentified) flat roofing membrane overlying insulation with the membrane bonded to the decking and insulation and with the membrane dressed up roof openings and penetrations (such as roof lights and pipes).
2. Item 2 relates to the pitched slate mansard roofs which run along much of the perimeter of the building. They contain Velux opening windows and, there is little dispute, there have been a number of leaks either around those windows or through the slates. There is a metal capping detail covering the join between the slates and the flat roof.
3. The guttering at roof level was aluminium. The complaint is now (it having been reduced in scope) that the guttering was set too close to the edge of the slate roof so that there was insufficient room left for the rainwater to “fall” into the gutter with the result that it spills over the gutter on to the slates and to the ground below.
4. Item 4 relates to the perimeter soffit boards which are located under the protruding roof eaves. It is said that the cover trim is loose and often hanging from the soffit boards. The boards themselves are loose together with the blocks off which they are supported.
5. Item 5 together with Item 6 comprise the two most substantial (alleged) defects. Item 5 relates to apparently significant deflection and bounciness of the floors of the flats above the ground floor, which is particularly noticeable when one walks over the floors. The larger the floor, the greater it seems the deflection is. There are issues as whether there is only bad workmanship or whether there is a design deficiency.
6. The major complaint relates to the noise levels and the alleged inadequacy of soundproofing between the apartments and the problems relate to the alleged incapacity of the horizontal elements to attenuate sound effectively.
7. The riser ducts in which various types of pipework ran vertically through the Building and individual flats have not been provided with any or any effective fire rated enclosure.
8. Flues from boilers in flats are in places said not to have been installed at the correct gradient and access to one boiler is alleged not to be in accordance with the relevant manufacturer’s requirements.
9. Cross smells (no longer pursued).
10. Electrical sockets where opened up have been found to lack any fire resistant material to the rear.
11. Water leaks have occurred in the Claimants’ flats on many occasions and from 2004 onwards. This is said to be attributable to poor plumbing work.
12. The Boiler to Flat 17 has a flue which runs over 9m with no or insufficient gradient.
13. This item relates only to Ms Ransome’s conservatory which was built on different and less effective foundations than the main building’s. The experts are agreed that the foundations were inadequate and the conservatory has not only subsided relative to the main building but it has also tilted away.
14. The car park is said to have settled due to inadequate base or sub base materials being provided. It does appear however that there are two main areas where there is some ponding and undulation.
15. At the edge of the car park in places there is a slot drain. At the foot of the gradient facing the entrance to Phase I, this has been crushed, apparently because it was insufficiently supported either by concrete haunching or with a suitable edge kerb.
16. The external surface water drainage runs between manholes, two of which are said to have been constructed the wrong way round and two sections of the drainage are bellied and water does not effectively drain out of them.
17. External foul drainage exhibit a number of defects including drain runs not being laid to appropriate falls, manholes not being set to the correct height and manholes being undersized.
18. Item 18 relates to the foul drainage laid beneath the building. The experts are all agreed that complete replacement of the foul drainage beneath the building is probably required. The occupants have complained about pervasive and obnoxious drainage smells and such opening up as has been achieved shows that very few of the drainage pipes have been supported so that they have sagged and foul drainage has leaked into the voids.
19. Finally there is some cracked block work (of a non-structural type) within the beam and block floor at ground level.

Aside from claims against the architecture practice which had signed off certificates of completion, the Claimants relied on a clause in the sale agreement for each flat, which stated that Optima, the developer and freeholder:

“shall cause the Premises to be completed in a good and workmanlike manner and with suitable materials pursuant to any Planning Permissions granted in respect of the Building so that the Premises shall be fit for occupation on completion and the Building will comply with all Planning Permissions and Building Regulations as soon as may be reasonably practicable…”

The Claimants also relied on the repairing covenants in each lease:

4.6.1 To maintain repair decorate renew amend clean repoint paint varnish whiten and colour
(a) the main structure of the Building and in particular but without prejudice to the generality thereof the roofs (which expression shall include any roof insulation materials or the like) and foundations external and internal walls (but not the interior faces of such parts of external and internal walls as bound the apartment or the rooms therein nor the doors exclusively serving the Premises in such internal or external walls) and timbers (including the timber joints and beams of the floors and ceilings thereof) external window frames main entrance doors chimney stacks drains gutters and external pipes thereof the passageways stairways and all Common parts of the building
(b) the sewers drains channels watercourses gas and water pipes electrical cables and wires supply lines in under and upon the Building
(c) the internal load bearing walls roof and floor joists of the Premises (but not including plaster or other surface material applied to interior faces of any load bearing walls whether internal or external or floor boards or ceilings)…”

To cut to the chase, both Optima and the architects lost. We won’t dwell on the architects. This was a relatively straightforward professional negligence issue, though with complicating facts and arguments. The measure of loss was capital diminution as at date of purchase.

The remainder of items (apart from the smell) were found for the Claimants either under the sale agreement (SA) (with limitation being found to run from completion of the building, not the individual flats) or the lease repair clause LR).

So:
1.Roofs: Liable under both SA and LR
2. Pitched roof: Liable under both SA and LR
3. Guttering: Liable for build under SA and for botched repairs under LR
4. Soffit boards to overhanging roof: Poor workmanship on installation – SA. Ongoing maintenance issues – LR
5. Deflecting floors/excessive bounce: Bad design and initial work – SA. More complexly, ‘repair, renew, amend’ in LR would cover joists to floors with deflection problems
6. Acoustic problems: sound insulation was unsatisfactory and inadequate, breach of Building Reg Schedule E2. Liable under SA. Not a breach of LR as not ‘structural’., but involving adding extra material for soundproofing to correct.
7. Riser Ducts: Constructed in breach of Building Regs. Liable under SA
8. Boiler flues: Liability on lack of fire stopping around flues under SA
9. Socket outlets: Lacked fireproof backing in contravention of Building Regs. Liability for architects as should have been picked up. Not addressed under SA or LR
10. Water leaks. Poor quality control on installation, poor fitting, poor specification. Liability under both SA and LR (for ongoing issues).
11. Boiler in Flat 17. Inadequate fall to outside wall on flue to boiler. Liability under SA
12. Conservatory. Was built for flat 1.On the evidence foundations done by Optima as precursor and part of sale agreement. Inadequate foundations leading to sinking and detaching from body of building. Liability under SA. No finding under LR.
13 Car park. Constructed badly in part, areas of settlement, but outside specifically demised parking spaces. No liability under SA or LR. (Also no liability for architects as not shown this should have been picked up).
14. Slot drain to demised part of car park. Badly constructed. Liability under SA.
15. Surface water drainage. Poor workmanship, inadequate gradients in drainage due to later ground settling. Breach of SA and also LR in not addressing gradient issue despite expert reports.
16. External foul water drainage. Inadequate falls, inadequate manholes. Liability under SA and also under LR for not replacing.
17. Foul drainage under the building. Gaps in pipes, poor ‘Heath Robinson’ supports, inadequate gradients and joints. Liability under SA and LR
18. Cracks to ground floor non-structural blockwork. No liability under SA, not yet established as maintenance issue as “not convinced to the requisite standard of proof that these “Premises” were thereby rendered unfit for occupation or that the Building overall as a result did not comply with the Building Regulations”, no liability under LR.

Damages under the SA and LR were primarily assessed on cost of works required, in lieu of specific performance. The leaseholders had formed a RMC and “Optima has proved over the years to be unreliable and unwilling to do or authorise little more than superficial and largely ineffective remedial works”. In addition, there was further investigation before a suitably specific order for specific performance could be drawn up, even if Optima could be relied upon to carry out the works, which it couldn’t.

There were the ‘loss of capital value’ damages against the architects, as mentioned above.

Then there were general damages for the leaseholders for inconvenience. I quote this at length for reasons I’ll come back to.

There are claims by each Claimant for general damages for inconvenience and discomfort. Each Claimant gave some evidence as to how it has been or each of the over the last 10 years. In Eiles v London Borough of Southwark [2006] EWHC 1411 (TCC), Mr Justice Ramsey confirmed in a tree root case that “modest but not generous” damages could be awarded for physical inconvenience and discomfort and mental suffering directly related to the matters complained of. He allowed £200 a year for the first five years of there being problems and £625 for the next two years where there was substantial disruption.
Most of the inconvenience and distress occurring here arose not only as the problems emerged but mostly out of the perceived inactivity of Optima. I find it difficult to see on the evidence that any inconvenience or distress has been or will be caused by the breaches of duty of S&P. The damage caused by S&P is the reduced capital value of the flats occurring by reason of defects which should have been picked up by S&P. S&P can not be criticised for failing to remedy any of the problems. The damages allowable against S&P are not as such for the cost of repairs which, when they will be carried out, will cause upheaval and inconvenience. I therefore propose to allow nothing for general damages against S&P.
In relation to Optima, the position is different. The results of their breaches of Clause 3.1 are that, first, the relevant Claimants suffered for a period of up to 9-10 years having to live in uncomfortable conditions, leaks being a regular and frequent problem, noise being an ever present problem, smells from sewage and deflecting floors, and, secondly, there will be serious inconvenience when the remedial works are carried out. Mr Bedwell has not lived in the premises since June 2007, Mr and Mrs Sahi since September 2010, Ms Ransome since October 2007 and Ms Wyatt has only lived at her flat between October 2003 to July 2004 and April 2008 to October 2009, their flats being rented out or occupied by others. The inconvenience and distress in their cases are mitigated by not actually living there for much of the time. The rents received have not been substantially less than the market rates. The position has been worsened by Optima’s failure to carry out the necessary work under its “repairing” covenants within a reasonable period.
Fair and modest allowances for general damages are as follows;

(a) Ms Ransome; 4 years occupation at £100 a year. One should add also an additional £150 for the inconvenience and aggravation of the remedial works being carried out and the time that will have to be taken by Ms Ransome in standing down tenants and in preparing her flat for the renewal works. Total £550.
(b) Ms Wyatt: a total of 27 months occupation at the rate of £100 per year. Like for Ms Ransome, I add another £150 relating to the impact of remedial works. Total £375.
(c) Mr Bedwell: a total of 32 months occupation at the rate of £100 per year. Like for Ms Ransome, I add another £150 relating to the impact of remedial works Total £427.
(d) Mr and Mrs Sahi: they have no claim for breach of Clause 3.1 and so their only entitlement to general damages relates to the failure by Optima to put right defects during their period of occupation. They lived there for 32 months. General damages at the rate of £40 each per year whilst they occupied is appropriate. Total £213.
(e) Mr and Mrs Peace: Similar considerations apply to Mr and Mrs Peace who have occupied their flat since February 2006. As for the Sahis, one must disregard the noise problem because it is not covered by the “repairing” covenant. An appropriate allowance is £40 each per year until the date of this judgment, 86 months. Total £573.
(f) Mr Hunt: he has lived at the flat since April 2004 and has particularly suffered from water penetration through the roof. There will have been nine years of occupation at the rate of £100 a year. In addition, he will have the inconvenience of the remedial works when they are done and an additional sum of £200 should compensate him for that. Total £1,100.

There were also some damages for prospective loss of sub-tenant’s rent, removal of furniture etc. when works were done.

Totals – with a set off against damages from Optima for the damages secured from the Architects, S&P.

“In addition there is judgment for all the Claimants against Optima for £225,142.51 in relation to the “common parts” defects.”

Comment

There are elements of interest in this case for anyone pursuing disrepair claims, whether leasehold or not. The manner in which liability is separated between the Sale agreement and the lease repairing covenant is worth considering, as absent the new build and initial sale agreement, a number of items would have attracted no liability against the lessor/freeholder.

Bu there is a more concerning aspect. While on the face of it, this looks like a broadly successful claim against freeholder/developer and architects by the leaseholders of a particularly poor development, I have some concerns around the approach to general damages for leasehold disrepair.

The TCC has adopted the approach to general damages for inconvenience, discomfort and distress set out in Eiles v London Borough of Southwark [2006] EWHC 1411 (TCC). But Eiles is effectively a case in tort, being a damage from tree root case, relying on breach of duty and foreseeability. The claim for general damages in this case, at least under the Sale Agreement and the repairing Covenant, is effectively contractual, not tortious, being a claim in breach of obligation under the lease.

Moreover, the damages awarded are minimal – £35 to £100 per year – for what in some instances was quite considerable inconvenience and discomfort, including repeated leaking, fallen ceilings etc..

The Court of Appeal set out the method by which damages should be assessed for breach of repairing covenant by a lessor in Earle v Charalambous [2006] EWCA Civ 1090. From para 32 of Earle.

I do not think that a direct analogy can be drawn with awards in relation to protected periodic tenancies, still less with the “modest” awards thought appropriate in other areas of the law (see e.g. Watts v Morrow [1991] 1 WLR 1421, 1439G). A long-lease of a residential property is not only a home, but is also a valuable property asset. Distress and inconvenience caused by disrepair are not free-standing heads of claim, but are symptomatic of interference with the lessee’s enjoyment of that asset. If the lessor’s breach of covenant has the effect of depriving the lessee of that enjoyment, wholly or partially, for a significant period, a notional judgment of the resulting reduction in rental value is likely to be the most appropriate starting point for assessment of damages. Generally, this reduction will not be capable of precise estimation; as Morritt LJ said in Wallace, it will be a matter for the judgment for the court, rather than for expert valuation evidence.

So, not only is the appropriate measure of damages a notional reduction in market rental value, this is expressly set against ‘the modest awards’ in other areas of law (vide the ‘modest but not generous’ awards in Eiles).

Where a leased flat is then sublet, as with some of the claimants in this case, any award of general damages is likely to be minimal, admittedly, but then the measure is in special damages of an actual reduction in market rent achieved.

The TCC appears, then, to have chosen the wrong measure of general damages for discomfort, distress and inconvenience. Earle v Charalambous is Court of Appeal authority. Quite why this should have happened can’t be discerned from the Judgment. Certainly there is no discussion of Earle v Charalambous, rather it simply seems to be assumed that Eiles was the appropriate guide. It may be that Earle v Charalambous was not raised, making this decision per incuriam on that issue, or it may be that the Court didn’t deal with the issue put before it. In any event, an award of general damages on an Earle v Charamlabous assessment would surely have been very significantly higher that the ‘modest’ awards made here.

Indeed, perhaps the question should be whether an Earle v Charalambous assessment should be applied in tortious or nuisance cases such as Eiles. After all, the ‘interference with the lessor’s enjoyment of the asset’ could be very similar, even if it is not through breach of a direct contractual obligation.

Council leaseholders, those who exercised the right to buy or those who bought from them, have been facing very hefty major works charges, perhaps particularly in London. When repairs have been carried out alongside Decent Homes programmes, or as large scale works of roof and window replacement have gone ahead, major works charges per household of £20,000 or more have not been uncommon, with some reaching £40,000 or £50,000. While there have been successful challenges to these on occasion, those challenges are the exception.

The DCLG is now proposing to cap charges for repairs recoverable by Councils. The proposed cap is £10,000 (or £15,000 in London) over a 5 year period, where there is some Government funding to the COuncil for repairs and maintenance (eg, the remnants of Decent Homes, or any future funding). The consultation is here.

This would be a very significant cap. While it may well give some relief to hard pressed leaseholders, the obvious question is what would Councils  do about required major works or completion of Decent Homes schemes if they are unable to recover a proportion of the costs from leaseholders (not just a delay – many councils have an installment scheme, but at all)? There is no suggestion of any alternative sources of funding opening up.

The suspicion is that there will be a great temptation to simply delay works, or not do them at all. And that may open up a whole fresh round of leaseholder litigation.

In the December edition of Legal Action, I noticed a decision from November 2012 (yes, 2012), called Miah v McGrogan [2012] EWCA Civ 1685 (Casetrack only).

Mr Miah seems to have been the landlord of a house which had been let to a number of students. They complained about the condition of the property and, although some remedial work was done, it was accepted that works remained outstanding (that might be too generous – Sullivan LJ notes that the Recorder “…conclude[d] not merely that the property was not in a properly habitable state at the start of the tenancy, but it also continued to be in a state that was not habitable up until April 2010…”.

Anyway, the students didn’t pay the last installment of rent, so Mr Miah sued.

The Recorder agreed that the property was in disrepair and that the tenants had been entitled to withhold the rent in response. In effect, there was a disrepair counter-claim which operated as an equitable set-off to the rent arrears claim.

The difficulty, said Mr Miah, was that no such counter-claim or set-off had ever been pleaded. That, said Sullivan LJ was “…little more than a somewhat unattractive pleading point.” The landlord was professionally represented. He knew what the case against him was. The students were all acting in person. There was nothing objectionable to the Recorder dealing with the case on the facts as she found them to be and not regarding herself as bring rigidly limited to the pleadings. Permission to appeal refused.

This one has been sitting in my draft collection for a while, but, as Christmas fades towards the new year, it finally got done. For the leaseholders in this particular appeal, it was, however, distinctly short of glad tidings.

Gavin & Anor v Community Housing Association Ltd [2013] EWCA Civ 580

What kind of liability might there be where a leasehold property is damaged by defects in parts retained by the landlord, but where there is no express repairing covenant by the landlord? This case took a rather unusual route in exploring the issue.

The Claimant, Ms F was the leaseholder of two adjoining commercial premises, Community Housing Association being the lessor.  Both properties consisted of the ground floor and basement of a larger building owned by CHA. The extent of the demise was to the coverings for floors, wall and ceiling plaster and Ms F covenanted to keep the demise in repair.  There was, however, no corresponding covenant by CHA to keep the building in repair. The closest was an insurance covenant, which read:

“To insure the Demised Premises and the Development in an insurance office of good repute or at Lloyds against the Insured Risks and in the event of the Demised Premises being destroyed or damaged by any of the Insured Risks the Landlord shall with all convenient speed (subject to the availability of all necessary labour and materials and the obtaining of all necessary permissions) lay out and apply in rebuilding repairing or otherwise reinstating the Demised Premises all monies received by virtue of such insurance other than monies received in respect of loss of rent Provided that the Landlord shall be under no liability to the Tenant hereunder if the insurance money under any policy of insurance effected by the Landlords shall be wholly or partially irrecoverable in the circumstances set out in 5(22) above….”.

Under a clause headed ‘Landlord’s Liability’ was:

“In any case where the facts are or should reasonably be known to the Tenant and not reasonably known by the Landlord the Landlord shall not be liable to the Tenant in respect of any failure of the Landlord to perform any of its obligations to the Tenant hereunder whether express or implied unless and until the Tenant has notified the Landlord of the facts giving rise to the failure and the Landlord has failed within a reasonable time to remedy the same.”

There was also a ‘cesser of rent’ clause:

“If the Demised Premises or any part thereof shall be destroyed or so damaged by fire or any other risk for which the Landlord is indemnified under the insurance of the Demised Premises so as to be unfit for occupation or use then unless the insurance of the Demised Premises shall have been vitiated by the act neglect default or omission of the Tenant the rent hereby reserved or a fair and just proportion thereof according to the nature and extent of the damage sustained shall be suspended and cease to be payable until the Demised Premises or damaged portion thereof shall have been reinstated or made fit for occupation or until the third anniversary of such destruction or damage whichever shall be the sooner.”

Ms F started trading from the premises as a gallery space, however, there was a series of problems . There was a leak from glass pavement lights into the basement of one of the properties in April 2004. These were repaired by CHA in September 2004 and a payment of £150 insurance money later made to Ms F. There was a second period of leaks through the pavement lights between June and October 2006; and a third period between May and June 2008.

In September 2006, one of the soil pipes carrying sewage from the flats above, which ran down the rear wall of one of the demises, leaked and sewage permeated the wall. CHA’s contractors remedied the leak in January 2005 and replaced part of the wall. There was later an insurance payment.

In February 2005, the stack pipe at the rear of the other demise leaked, which was repaired by CHA in April 2005. There was no insurance payment as it was under the £100 excess.Then in June 2005, a leak from a tap or leaking pipe in one the flats above inundated the premises, a week before an exhibition was due to start. This required replacement of a ceiling, in October 2005, and resulted in an insurance payment of £3,141.65.

Ms F continued to pay rent until June 2008, when payments ceased. CHA served notice, but Ms F also did not pay the September rent. Her solicitors argued that this was a set off against the rent paid in 2005, when the properties had been ‘unfit for occupation’ within the meaning of the cesser of rent clause set out above, such that no rent was due for those periods.

CHA re-entered the premises and changed the locks in October 2008. Ms F obtained an injunction for the leaseholders’ re-entry in November and this matter went to trial. CHA argued that even if the property was uninhabitable, which was denied, Ms F had no claim in restitution or otherwise to recover the rent paid in 2005. The High Court found that there was never an occasion on which the property had become uninhabitable for the purposes of the cesser of rent clause because “there was never an occasion when the premises were wholly unfit for occupation and use”.

Ms F also brought a claim for damages arising from the leaks, including financial loss arising. At one stage this was as high as £2 million. The claim was on the basis of

an implied obligation to keep the retained parts in repair or alternatively a common law duty as adjoining occupier to remedy any defect in those premises which was capable of causing damage to the demised premises.

At trial of the damages counterclaim, Judge Cowell accepted that there was an implied duty on CHA to remedy any defects in the retained parts that would cause damage to the demised properties.

He based this on the decision in Hargroves, Aronson & Co v Hartopp [1905] 1 KB 472 which was approved by this court in Cockburn v Smith [1924] 2 KB 119. The scope of that duty was, he held, to take reasonable care to remedy defects in the retained premises which the landlord knew had caused, or were likely to cause, damage to the premises demised to the tenants. Absent negligence, the duty to repair only arose once the landlord was aware that damage had been caused.

On the specific leaks, he found CHA were liable in respect of the February 2005 leak, as this could and should have been remedied by 8 April 2005, not 26 April, following Duke of Westminster v Guild [1985] 1 QB 688 and Gordon and Teixeira v Selico Co Ltd (1986) 18 HLR 219

On the other leaks, he found that CHA had carried out repairs in good time and that the flood from the flat above was an unforeseeable incident.

On the pavement light leaks, the first leak was covered by caveat lessee, being a pre-existing defect. But if that was wrong, it was within the capability of the lessee to remedy and fell under their duty to mitigate. The cost was covered by insurance. Considering the 2006 leak, CHA had acted promptly and at its own expense when insurance wouldn’t pay. The 2008 leaks did not give rise to any liability as CHA did not know or have any means of knowing where the leaks were coming from.

Judge Cowell awarded £100 in damages for the two and a half weeks for which he found liability established. As this did nothing to extinguish the rent arrears, he declared the forfeiture was stablished, possession to be given forthwith, with payment of mesne profits equivalent to market rent. He also awarded costs against Ms F on an indemnity basis.

Ms F had been acting in person at trial, but secured pro bono assistance for an (amended) set of grounds of appeal, though not representation at the hearing. The appeal grounds were:

(1) the judge was wrong to hold that the landlord’s liability for damage caused by a defect in the retained premises was limited to a liability in negligence and depended on the landlord having notice of the defect and a reasonable opportunity to remedy it. He should have held that the landlord was in breach as soon as the defect occurred and caused damage to the demised premises;

(2) the absolute duty contended for arose as an implied obligation under the lease. The principle of caveat lessee has no application;

(3) the judge misconstrued the rent cesser provisions which were triggered by the damage to part of the premises and the tenants were entitled to recover and set off the rent paid during that period against their liabilities for unpaid rent in 2008;

(4) if the tenants succeed on grounds (1)-(3) they are entitled to substantial damages for loss of profit;

(5) even if the tenants are wrong on grounds (1)-(3) the damages of £100 awarded for the breach which the judge found proved were grossly inadequate;

(6) and (7) if the tenants are entitled to substantial damages for loss of profit in excess of the rent due up to 29th October 2008 then the landlord was not entitled to forfeit the leases and the tenants’ continuing liability is to pay rent at the rate reserved and not mesne profits; and

(8) and (9) the judge’s order that the tenants should pay the costs of the action including the reserved costs of all interlocutory applications was clearly wrong.

CHA cross-appealed on the basis that the Judge had been wrong to find any liability, as

the express terms of the lease excluded the duty which the judge found to have been breached so that, regardless of any negligence or breach of duty, the landlord had no liability to the tenants for damage caused to the demised premises by any of the leaks.

The Court of Appeal considered liability first. An attempt by Ms F to argue that the rule in Rylands v Fletcher (1866) L.R. 1 Exch. 265 applied giving rise to a strict liability on CHA was quickly dealt with

The use in question must therefore be extraordinary and unusual in contrast to, for example, a domestic water supply or lavatory which are neither. It is therefore well established that the tenants cannot sue under Rylands v Fletcher for damage caused by defective guttering or leaks in water pipes retained by the landlord in the absence of proving negligence: see Carstairs v Taylor (1871) LR 6 Ex 217; Prosser& Son Ltd v Levy [1955] 1 WLR 1224. The same principle must apply to the soil pipes in this case.

There was no case in nuisance as nuisance was fault based, and any delays in abating a nuisance in this case was not such as to amount to the landlord adopting the nuisance, Sedleigh-Denfield v O’Callaghan [1940] AC 880.

The central question, then, was the liability that the Judge below had found via Cockburn v Smith and whether, as Ms F contended, there should be a general implied term in the lease that the landlord should keep the retained premises in repair at all times.

Cockburn v Smith did establish “an obligation [on the landlord] to take reasonable care that the premises retained in his occupation are not in such a condition as to cause damage to the parts demised to others”. While there was division as to whether this was tortious or an implied contractual term, the Court of Appeal in that case appears to have accepted that the obligation was best considered as an implied term of the lease.

However:

Whether the duty imposed on the landlord to take reasonable care of the retained premises arises in tort or contract, the court has still to consider whether the express scheme of repair or insurance imposed by the lease excludes any other form of liability which the law might otherwise impose. The tenants’ appeal on liability in this case depends not only on establishing that a liability on the landlord to keep the retained parts in repair should be implied or imposed over and above the express terms of the two leases but also that the implied obligation to repair should be absolute in nature in the sense that the landlord became liable for the consequences of the disrepair as soon as it occurred regardless of whether he had or should have had notice of the defect.

But the argument for an immediate liability faced serious difficulties. The tenant’s claim in damages was based on the line of authority culminating in Gordon v Selico Ltd and ”the Court of Appeal has decided in those cases that any liability derived from the position of the landlord as an adjoining occupier is based on negligence and notice and we are bound to follow those decisions”. This meant that the tenant’s argument for an immediate liability on the part of the landlord could not sit with Ms F’s claim for damages unless a contractual basis for an immediate liability could be established and moreover on based on more than the landlord’s control of the retained parts of the building. And there was also CHA’s argument that the express terms of the lease precluded the implication of any such term.

While in Earle v Charalambous [2006] EWCA Civ 1090, Carnwath LJ had made reference to ‘the general rule’ that “the covenant requires the lessor to keep the premises in repair at all times, and he is in breach immediately a defect occurs (British Telecommunications plc v Sun Life plc [1996] Ch 69)” this did not go anywhere, as it referred to the express covenant [or also the s.11 L&TA 1985 implied covenant, which does not apply to long leases. NL].

The problem for Ms F was seeking to imply a covenant which is stricter in effect that that which would be imposed on the landlord by reason of his control of the building. That latter obligation is “based on notice and corresponds in scope to the landlord’s obligation to repair defects in the demised premises themselves which only arises when facts come to his attention which would put a reasonable landlord on inquiry as to whether works of repair are needed: see O’Brien v Robinson [1973] AC 912.”

Liverpool City Council v Irwin [1977] AC 239 found that to impose an absolute duty on the landlord would “involve such a wide departure from the ordinary law relating to easements that it ought not to be held to exist unless expressly undertaken and should not be implied”.

More devastatingly for the tenant’s case, Gordon v Selico and Adami v Lincoln Grange Management Ltd [1998] 1 EGLR 58 both found that where there was a contractual scheme that provided for repair of the building, via insurance, there was no necessity to read in an implied term. Thus in Gordon v Selico:

The repair and maintenance scheme provided by this lease is a very cumbersome one and we agree with the learned judge that, even if the lessors and their agents were duly to carry out their obligations, the scheme might not always suffice to give the lessees necessary and timely protection — for example, as he pointed out, through the continued inability or refusal of other lessees to pay their proper contribution. Nevertheless, on a reading of the lease, we feel little doubt that it was intended, by all parties, to provide a comprehensive code in regard to repair and maintenance of the block. We are by no means satisfied that the implication of any further terms in this respect is necessary to give the lease business efficacy, or that the lessor, assuming it to have been a reasonable person, would have “agreed without hesitation” to the insertion of the suggested implied additional terms relating to the repair and maintenance of the block.”

And in Adami:

I can see no ground for importing any obligation on the part of the lessor to carry out works of repair to the block from causes which are not covered by an insurance policy effected pursuant to the terms of the lease (modified in practice by the substitution of a block policy and its extension to cover damage by subsidence), in particular damage which might result from the gradual deterioration of the structure during the term of the lease. In Duke of Westminster v Guild [1985] QB 688, Slade LJ, at p697, approved a passage in Woodfall, Landlord and Tenant 28th ed (1978) vol I, para 1/1465 p618 in these terms:
In general, there is no implied covenant by the lessor of an unfurnished house or flat, or of land, that it is or shall be reasonably fit for habitation, occupation or cultivation, or for any other purpose for which it is let. No covenant is implied that the lessor will do any repairs whatever …

The Court of Appeal found that the insurance clause in these leases provided such a scheme.

Although there is no express repairing covenant imposed on the landlord, the repair of the structure of the building is catered for through the provisions of clause 7(2). In the face of these provisions there is no reason based on necessity or business efficacy to alter the balance of the scheme by imposing an implied covenant to repair on the landlord, let alone one under which his liability to repair is made absolute. If one applies the modern approach to the implication of terms as a process of construction (see AG of Belize v Belize Telecom [2009] 1 WLR 1988) to do so would be to seek to improve the contract from the point of view of the tenant rather than to give it the meaning and effect which both parties must have intended given the terms and structure of their contract. The reasonable man looking at the matter with all the relevant background information would not in my view assume that the only meaning which could reasonably be given to the contract was that CHAL should be responsible for any defects in the repair of the retained parts irrespective of any negligence on its part.

For much the same reasons, the existence of what the parties obviously intended should be a comprehensive scheme for the repair of both the demised and the retained parts of the building is sufficient to exclude from their legal relationship any liability at common law in tort which the landlord might otherwise be subject to in relation to its retained premises.

And that did for Ms F’s claim and appeal. The Judge below had been wrong to find even the limited liability for one of the sewage pipe leaks.

On the cesser of rent issue, the tenant sought to appeal on the basis that the Judge below had failed to consider unfitness of part. But the tenant’s case had been that the property was wholly unfit for use and the Judge had been entirely entitled to find on that case. There was nothing in this ground of appeal.

This meant that there were outstanding arrears when the landlord forfeited. There was no set-off for disrepair damages. The possession order was correct as was the order for mesne profits.

The indemnity costs order against Ms F and the tenants was within the Judge’s legitimate ambit of discretion. There had been a Part 36 offer from the Landlord of £25,000 and costs. There had also been an offer from the landlord of a further 5 years lease of one of the properties at the same rent. Both had been refused by Ms F.

An award of indemnity costs did not necessitate:

some kind of misconduct on the part of the paying party and unreasonable conduct on the part of the tenants, coupled with their refusal of reasonable offers to settle, can in my view engage the court’s power and make the exercise of it proportionate. The reality of the claim in this case is that it was always exaggerated. Although the incidents of water and sewage leaking into the tenants’ premises were undoubtedly distressing and inconvenient, they never justified a claim for damages in excess of £2m and were, for the reasons I have given, in fact legally unfounded. Mere failure in the action is not enough to justify an award of costs on the indemnity basis but here the inflated nature of the damages claim was matched by a failure to limit the basis of the claim both factually and legally so that the judge was required, as he put it, to conduct a kind of inquiry instead of trying a case based on defined issues. Although some allowance has to be made for the fact that the tenants acted in person, that does not justify a complete disregard of procedural rules or the making of unfounded and exaggerated claims.

Appeal dismissed. Cross appeal allowed.

Comment

While a claim for £2 million for a few months interrupted trading for a gallery was always going to be an uphill battle in terms of evidence, the construction of the lease in this case was always going to present difficulties, in the absence of an express repairing clause. This is an issue that would apply equally to commercial and residential leases. But the Court of Appeal finding that the insurance arrangements provided for repair of the structure of the building, at least sufficient to stop the tenant’s own repairing obligations becoming otiose is fatal.

There is a clear lesson that the express obligations in the lease, to repair, or if silent, to insure, need to be every careful considered in any such case, as the likelihood of a leaseholder being able to argue for an implied obligation to repair (on notice) will depend on the express terms and on the basis of them being

necessary to give the lease business efficacy, or that the lessor, assuming it to have been a reasonable person, would have “agreed without hesitation” to the insertion of the suggested implied additional terms

Busy day for bits of news.

On the bedroom tax, Lord Freud announced in a House of Lords debate today that amending regulations to remove the 1996 claim exemption will be produced in March, though they haven’t got definite parliamentary time yet. (Not got a permanent Hansard link yet)

Lord Freud:

My Lords, I can tell the noble Lord that the numbers involved in this anomaly are small and the amounts are modest. We have put guidance out to local authorities and we intend to regularise the matter through regulations in March.

I have received another bedroom tax First Tier Tribunal appeal decision, from Liverpool. This is a successful appeal on the issue of room size, with two rooms held to be too small to be used as a bedroom and under-occupancy being the ‘flip side’ of overcrowding, such that the Housing Act 1985 rooms size provisions were relevant. Details and copy of the decision on the FTT decision page under Liverpool.

I have also heard of an FTT decision on the Zambrano eligibility regulations. (For a quick history on the Zambrano cases and regs, see here). Intriguingly, this was apparently a successful appeal on the basis that the regulations were incompatible with EU law.  More or this when I get it.

In an odd announcement, reported by the RLA, the Association of Independent Inventory Clerks (no, me neither) have released a report on private sector landlords failing to carry out urgent repairs, well, urgently. According to the report,

34 per cent of private tenants have faced a home emergency in the past 12 months; only one in three were dealt with on the same day while almost a quarter took more than a week to resolve.

The AIIC provided a helpful list of timeframes for urgent works.

• Landlords and agents have a duty of care to advise tenants on the correct course of action while contractors are organised, such as turning off gas taps, water stop cocks or main electricity supplies, to ensure that any problem does not cause danger to life and property.

• Any gas or major electrical fault is classed as urgent and should be attended to within 24 hours or less. This also applies when heating or hot water is affected, especially during cold weather.

• Water leaks – within 24 hours

• Cookers – within 48 hours

• Other broken appliances – washing machines, dish washers etc should be attended to within 72 hours.

• Communication is key and the landlord or agent should keep the tenant informed of the action taken to solve the problem that has been reported.

Unsurprisingly, this has not gone down well with commenters at ‘Letting Agent Today’.

Here is an interesting prospect* (and a big tug of forelock to Beatrice Prevatt at Garden Court for the initial suggestion).  Can a counterclaim for disrepair be brought after a possession order is made?

Conventionally, we’ve thought that a counterclaim would have to be raised before a possession order, or the complex and fraught option of applying to set aside the possession order would have to be followed, even assuming there was actually any basis for such an application. But there appears to be a solid argument based on Court of Appeal precedent to suggest otherwise.

Rahman v Sterling Credit Ltd [2001] 1 WLR 496 [Also on Bailii] was a mortgage possession case. A possession order had been made, but Mr R remained in the property and sought to counterclaim to re-open a loan transaction with the mortgagee as an extortionate credit bargain under s.139 of the Consumer Credit Act 1974. At first instance and first appeal Mr R was unsuccessful and a warrant ordered. At the first appeal Mr R accepted that he could not raise a defence to the possession order, it having been made, but maintained that a counterclaim could be brought. If successful, the counterclaim could then lead to an application to set aside the possession order.

The crucial parts of the Court of Appeal judgment granting Mr R permission to bring a counterclaim are at 502G to H:

In my judgment the fact that the possession order has been made and that there is no present claim to have it set aside does not affect the power of the court to permit Mr Rahman to make a counterclaim for relief under s.139.

In CSI (supra) it was held that the defendants were unable to serve a counterclaim on the plaintiffs after the plaintiffs had obtained summary judgment in respect of a dishonoured cheque and had been paid in full the amount of the judgment debt, with interest and costs. Roskill LJ said at 1075 C-E that he rested his decision on “this simple point”:

“. . . where a counterclaim, even if it has previously been raised, has not been the subject of a summons for directions or when required of a formal pleading before the time when the plaintiff has received full satisfaction of the judgment which he has obtained against the defendants, I do not think there is still extant any action by the plaintiffs in which the defendants could properly counterclaim against them. The action had, for all practical purposes, come to an end when satisfaction of the judgment had been obtained.”

Mr Neville attempted to distinguish CSI as a decision on the special provisions on summary judgment in Rules of the Supreme Court 1965 O 14 rule 3 (2) and contended that, in any event, on the facts of this case the judgment had been satisfied.

I do not accept those submissions. The real question is whether the action is at an end, so that there are no longer any proceedings by the claimant to which defendant can respond with a counterclaim. This action is not at an end. Mr Rahman and his wife are still living in the Property. Sterling continue to accept monthly instalments. Sterling have not yet obtained possession of the Property. They cannot do so without a further application to the court for a warrant of execution, the existing one having expired at the end of twelve months and more than six years has elapsed since the possession order was made: CCR O 26 rule 5 (i) (a) and The Mayor and Burgesses of the London Borough of Hackney v White (1995) 28 HLR 219. Although judgment for possession has been obtained, it has not been satisfied and it cannot be satisfied without a further application to the court for a warrant of execution. Such an application would be proceedings to enforce the security relating to the credit bargain within the meaning of s.139 (1) (b).

The situation seems to be parallel to that of a tenant having had a possession order or suspended possession order made, but before application for and execution of the warrant. The tenant remains in the property, rent is paid, and the landlord has not yet obtained possession of the property. There is the possibility for the tenant (at least a secure or assured tenant) to apply for a stay of warrant, or to apply to vary or discharge the possession order. The action is not at an end.

If this is right, and I am persuaded that it may well be, or at least should be, then a social tenant could seek the court’s permission to bring a disrepair counterclaim after the possession order has been made but before execution of the warrant. If the counterclaim was successful to the extent of extinguishing arrears (or more), there is the obvious opportunity to apply to discharge the possession order.

The next question is the relation of the counterclaim to the possession proceedings. The Court’s permission is required. As it is put in Rahman v Sterling.

Mr Rahman requires the permission of the court to make his counterclaim under Part 20: CPR 20.4. In deciding whether that claim should be dealt with in separate proceedings the court may have regard to the matters specified in CPR 20.9 These provisions are subject to the overriding objective in CPR Part 1. In my judgment, this is a case in which it is appropriate to grant permission to make a counterclaim rather than to direct that the issue of the s.139 application be made by separate action. There is a connection between the claim for the enforcement of the charge taken to secure the money advanced under the credit bargain in respect of which Mr Rahman seeks relief.

For rent arrears possession claims, there is arguably a clear connection between the possession order obtained for arrears of rent on the tenancy agreement, and the breach of obligation by the landlord for which the tenant seeks relief.

So, is this worth trying? I think it is. In fact I am doing*.

There is also the obvious benefit for the client that a counterclaim for disrepair should still obtain full legal aid funding, for eligible clients, where a stand alone claim may or may not be suitable for a CFA, even if one is available (e.g. small claims risk if works done promptly).

Also, it must be arguable that limitation – the 6 years on a tenant disrepair – is the six year prior to the date of issue of the possession claim and then subsequently (assuming the disrepair was extant for this period, of course). S.35(1) Limitation Act 1980 provides:

For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced—
(a)in the case of a new claim made in or by way of third party proceedings, on the date on which those proceedings were commenced; and
(b)in the case of any other new claim, on the same date as the original action.

And a disrepair counterclaim would fall under s.35(1)(b) as far as I can see.

[*By the end of tomorrow, 10 April 2014, it may no longer be just a prospect. I'll update if an update can be made.]

[Update. I've now been told of several cases on this point having been successfully run in the Leeds and London areas, and others in the North West. So, this is a viable line of argument with a track record.]

[update 10/04/2014 - my application effectively conceded, subject to limitation from date of Counterclaim, which made no odds on the facts.]

The post Disrepair – counterclaims after possession order. appeared first on Nearly Legal.

Following on from this post on disrepair counterclaims and as a precursor to a substantial post on disrepair quantum to follow very soon(ish), this is a County Court Judgment on an assessment of quantum hearing on 28 March 2014 (there was a default judgment in October 2013).

Clark v Affinity Sutton Homes Ltd. Barnet County Court 4 April 2014.

Mr C was the assured tenant of ASH since 2004. The property was a one bedroom flat with an initial weekly rent of some £66.

There were problems with damp at the property. The expert’s report of May 2013 found:

[a] Leaking within the vicinity of the bathroom

[b] Dampness internally within the kitchen sink unit

[c] Reception room – due to condensation dampness, mould growth is a problem to the external wall at low level

[d] Bedroom – due to condensation dampness, mould growth is relevant at a low level to the external walls and also a partition wall with the kitchen.

[e] Kitchen – due to condensation dampness some mould growth at a low level.

[f] Entrance hall, – due to condensation dampness, mould growth at a low level.

Following the decant of Mr C, ASH found:

that the damp problems have been caused by a completely defective damp proof course which has been breached and that the remedy will be to replace all of the floors in the premises with new concrete floors containing effective damp proof courses.

The dispute was over the extent and duration of the issues between 2007 and 2014 and then quantum resulting.

The Defendant’s case was that the periods could be broken down as:

[i] 2007 to 2008 – problems which could have been dealt with more quickly

[ii] 2009 to 2012 – no serious problems

[iii] 2012 2013 – serious problems

[iv] 2014 – no problems as the claimant could have decanted more quickly.

The Claimant argued that there had been significant damp problems throughout, and that the expert report and ASH’s own findings on the decant showed this.

The court found that there was an absence of complaints about damp between 2009-2011, while there were many com plaits in 2007-2008 and 2012-2014. There was no unreasonable delay in Mr C agreeing to decanting in 2014.

So on the balance of probabilities, there were two periods of problems that attracted damages:

[i] 1st April 2007 to 31st of August 2008

[ii] The whole of 2012, 2013 and up to the decant on 10 February 2014.

The method for assessment of quantum was agreed by both parties to be “by reference to a percentage of the rent due, depending upon my assessment of the seriousness of the problems”.

Mr C argued for 49% throughout, on the basis of Arabhalvaei v Rezaeipoor December 2007 Legal Action 30, where the assessment was 50% of rent, and other cases reported in Legal Action and the Housing Law Casebook over the years where the percentage of rent could not be ascertained.

The Defendant relied on other cases from Legal Action supposedly comparable, where the proportion of rent was between 30% and 38% of rent.

The Court found:

Doing the best I can, and taking into account the nature of the problems (less serious in the first period and more serious in the second period), their duration and the claimant’s vulnerability due to his medical conditions, I believe the appropriate percentage for the first period is 35% and for the second period is 45%. In particular, the extent and nature of the claimant’s medical problems mean that it must have been very difficult indeed for him living in the premises during these periods, particularly the second period

On the weekly rent for the periods, “periods 1 and 2 therefore come to £6,779.88″.

The 10% Simmons v Castle uplift was then applied to this total, to reach £7,457.86

Special damages. It is hard to make out from the judgment what the special damages were. Apparently items lost or damaged by damp, including carpets, dehumidifier running costs, and additional heating costs for affected periods.

Turning to special damages, I accept that the claimant has lost, or had destroyed, the various items listed in the schedule at items 1 to 16.  However, there is no documentary evidence of value and additionally, the claimant seeks replacement value rather than the value of the items as at the date of loss.

I accept in relation to item 6, the carpets, about which I will say more later, that replacement value is the appropriate method of calculation, as it would be difficult if not impossible to purchase second-hand carpets, but otherwise some discount has to be given for depreciation so as to properly assess market value.

I discount the figures claimed the items 1 to 16 (except item 6) by 25%.  I therefore reduce the sums claimed for those items, namely £2,916.99, by £729.24 and award £2,187.75.

For item 6, I award £479.85. There was discussion before me as to whether I should make any award for item 6 as the defendant is planning to re-carpet the premises following remedial work.  I was told that the claimant does not want the new floors to be re-carpeted and I therefore make this award on the basis that the defendant will not have to relay carpets following remedial work.

Item 17: the cost of running the dehumidifier is claimed at £20 per week for 8 weeks.  Mr. Douglas produced a document containing average running costs for dehumidifiers, but they vary greatly depending on the unit’s power rating and there is no evidence of the power rating of the unit provided.

The costs range from £1.22 to £18.27 per week based on 12 hours per day. The claimant says that he had to use the dehumidifier for 24 hours a day.  I accept, given the extent of the problem, that that would be reasonable, so the range increases to £2.44 to £36.54 per week. As the claimant’s figure of £20 falls squarely within that bracket, I accept his figure and award the amount claimed £160.

Item 18: the claimant claims extra heating for 6 years.  I will allow a claim for the periods I find that he was affected which total 183 weeks.  £5 per week seems a reasonable figure to me, so I award £915.

Total special damages: £3,742.60.

Total damages: £11,200.46

Comment

Interesting to see the continued progression of Shine v English Churches as the method of assessment of quantum.  Also good to see the unproblematic application of the Simmons v Castle uplift.

However, this case does perhaps illustrate the difficulties in supporting a precise assessment via case law, when much of the reported case law predates (or does not use) a Shine percentage assessment – opting instead for a Wallace tariff approach or a global assessment based on, well, whatever the Judge thought.

That said, 35% to 45% does not seem like a harsh assessment on the reported issues.

However, the position on not awarding damages for periods when the tenant’s activity in reporting issues had tailed off strikes me as problematic. In the absence of any evidence of repairs, the defect has to be presumed to continue. There may be many reasons why reporting tails off, or restarts, not least sheer weariness! But it seems that the Claimant’s witness evidence did not address that  period and the tailing off of notice, so we are not able to draw conclusions any different to the Court’s.

On special damages, given the presumable absence of receipts, etc.,  75% is a good result. The position on carpets is interesting – replacement value being the appropriate method of calculation as suitable second hand carpets would be difficult if not impossible to obtain. Unfortunately, how the final figure was arrived at – what the ‘discount for depreciation’ was – is not clear.

Our thanks to Morayo Fagborun Bennett of Hardwicke Chambers for the Judgment.

The post Disrepair: Damp and quantum appeared first on Nearly Legal.

2013 was a difficult year for claimant disrepair. Changes in legal aid funding have made it all but impossible to pursue a disrepair claim under legal aid alone, as funding is only available for an order to carry out repairs to where there is serious risk to health or well being of the tenant or other occupiers, and not for further repairs or the damages claim (although full funding remains for a counterclaim to a possession claim, which can be brought after the possession order).

For those carrying out disrepair claims under Conditional Fee Agreements, success fees ceased being recoverable from the Defendant, as did ATE premiums, but, despite the Jackson proposals for QOCS, the Claimant remained at risk of costs. Both success fee and ATE premium (if any found) now come from the Claimant’s damages award.

In this situation, while disrepair claims can certainly still be run, it is perhaps more important than ever for both claimant and defendant to be aware of the Courts’ assessment of quantum on disrepair cases.

So, here are some of the few recent-ish cases to have reached trial or reported settlement. Cases pre and post date the Simmons v Castle 10% uplift in general damages (for all claims where damages awarded after 1 April 2013, save for those funded on a CFA signed before 1 April 2013).

There is still a remarkable variation in the different Courts’ approaches to quantum, from a ‘broad brush’ or ‘global’ view, to a notional percentage of rent as per English Churches v Shine.

We noted Clark v Affinity Sutton Homes Ltd (Barnet County Court 4 April 2014), a few days ago.  The following County Court cases are from Beatrice Prevatt’s Housing Repairs Update Legal Action Dec 2013/Jan 2014 (available here):

Price v City and Town Group Central London County Court, 12 August 2011

A Rent Act protected tenancy. Water ingress and draughty windows since November 2000. Some limited repairs between 2006-2010. Claim issued in 2006. Order for extensive roof repairs in April 2010.

Defended on basis that property was old, 19th Century, and defects not major. Defence rejected. The age of the property did not mean that it should not be wind and water tight. Defects not de minimis. Defendant’s approach was dismissive and full repairs had taken more than a decade Defendant liable from end of December 2000.

Damages of 30% of rent overall, taking into account that the problems had diminished over the period. Average rent of £3,816 per year, giving general damages for the 112 months Dec 2000 to April 2010 of £10,685.

Southwark LBC v Munu &Munu Mayors and City of London County Court 16 May 2012

Disrepair counterclaim. A number of defects dismissed as not amounting to disrepair in law.  Also found tenants had been undo-operative and refused access. Found disrepair for:

Loose wash hand basin, with no cold water supply functioning. Ill fitting and draughty windows in two bedrooms. Ill fitted panels and kick boards following kitchen installation. Non-functioning bathroom extractor fan. Disconnected flush pipe to one WC.  Damages of £1250 awarded. (Period and proportion of rent unknown).

Also repeated backsurges of sewage due to defective external drain over period of 18 months, ‘a significant and very unpleasant intervention to home’. Damages of £2000.

Special damages of £3000 and an award of £500 to each of the three children. (I can’t see on what basis the award to the children was made, whether the backsurges were treated as disrepair or as nuisance, there doesn’t seem to be a basis for these awards).

Dr Malik v Brohler Bow County Court 25 October 2012

Counterclaim for disrepair on an assured short hold tenancy. The possession claim under s.21 was dismissed on failure to protect the deposit.

Court found notice of disrepair from December 2007. Significant dampness to two bedrooms for 6 years, making the rooms very cold. One bedroom unusable. The other bedroom had draughty windows. Cause of damp was a defective conservatory. Also gaps between the brickwork and the sliding doors of the conservatory. 4 years of a leak from WC into kitchen, leading to collapse of kitchen ceiling.

A squirrel had died in the space above the kitchen ceiling. Following repairs to the ceiling, the workman had left a gap in the ceiling through which maggots, then the squirrel’s corpse fell.

The electricity supply had been installed incorrectly, leading to 3 days without electricity, electric shocks and a concern for safety of tenant’s children. Re-wiring was not carried out for 6 months, during which time unsafe extension leads had to be used.

Damages of 40% of rent for final 6 months and 28% of rent for preceding 3 years 4 months (reduced from 30% rather than calculate what would have been a reasonable period for the landlord to have carried out repairs). Total general damages £15,322.66

Ngoma v Dhillon Birmingham County Court 6 December 2010

Assured shorthold tenancy of two storey, three bed house, from February 2006 to February 2012. Rent £550 per month.

Penetrating dampness to front and rear bedrooms causing mould growth, from perished brickwork and mortar. Broken seal to double glazing in front bedroom. Rising damp to front living room. Some damp to rear living room. Damp and mould in kitchen aggravated by leaks from bathroom above. Leaks from seals around bath and taps. Leak from kitchen sink into unit. Structural cracks. Incomplete drainage work from November 2010 leading to foul odour in the garden.

General damages assessed at 70% of rent for the full period. £27,720, with interest of £1,663.20. Total: £29,383.20

Hammersmith & Fulham LBC v Millani-Kalkhorani Willesden County Court 14 January 2013

Counterclaim to rent arrears possession proceedings. Tenancy began May 2005.

Missing banisters, defective windows and defective front door throughout.

From May 2005, blockage in drain from bathroom meant sink and toilet did not drain. Toilet leaked through kitchen ceiling light below making electrics short circuit. Toilet renewed in December 2006, but blockage remained. Toilet began leaking again in late 2007, with further blockages and electricity problems in 2008. Toilet replaced again in January 2009.

From 2010 further problems with toilet, the water supply and the boiler. New boiler installed in June 2010 but not functioning for a month. Other repairs poorly carried out or to poor standard.

Damages assessed on a ‘broad brush approach’. £2500 per year for 3.5 years from mid 2005 to December 2008. £750 for 2009, as there was disrepair, even if no further complaints from T. £1000 per year for 2010, 2011 and 2012. Total £12,500.

Olinski v Islington LBC Lambeth County Court January 2013

This was a long leaseholder case, with Islington as the freeholder. The claimant’s lease started in 2002. (As a reminder, leasehold claims have a 12 year limitation period. The measure for damages is the notional open market rent obtainable for a private tenancy of the property – Earle v Charalambous though beware the approach of the TCC in Hunt & Ors v Optima (Cambridge) Ltd & Ors)

There was serious subsidence caused by tree roots. The front bay window and rear extension were pulling away from the main structure and the side of the rear extension was bowed. The partition wall to the bedroom was warped. In 2003 the pillars of the main entrance moved and had to be propped up.

There was scaffolding up for nearly 10 years. The claimant was in temporary accommodation in a two bed flat from 2006 to 2012.

The claim settled for £18,044. General damages of £15,544 for a period of 8 years and 4 months, including 6 in temporary accommodation. £2500 special damages. A re-inspection by a structural engineer after 6 months and any further works required were agreed. The Council were to indemnify the claimant against the cost of any further works arising from subsidence for a period of 15 years, and would not charge the excess on any further works carried out under insurance to the claimant.

Asghar v Barnet LBC and Minoan Investments Limited Central London County Court 23 January 2013

This was a non-secure tenancy of a one bed flat provided to the Claimant by Barnet, who had lease the property from the freeholder. Minoan.

There was rising and penetrating damp from March 2007 until the Claimant was rehoused in August 201o.

The Council defended on the basis that it had no record of complaints. However the file disclosed was found to be plainly incomplete and the lack of any note of complaint did not mean that none had been made. The period of claim was found to be from March 2007 to October 2009 when the Claimant was found to have refused a reasonable offer of accommodation.had suffered ahed

General damages for the disrepair at 35% of rent of £386.04 per week, totalling £16,745.82 for 130 weeks.

The Claimant also brought a claim for psychiatric injury, on the basis that the depression and panic disorder from which he historically had suffered had been triggered by the disrepair. The Court found that the conditions were the main but not sole cause of the claimant’s condition. Damages were discounted by 20% to take the other causes not account. The case fell into the moderate JSB bracket (though without a prognosis). General damages of £10,000, reduced to £8,000. Total damages £24,745.82.

The Council’s part 20 claim against the freeholder was upheld to the full extent of the claimant’s damages award, despite the freeholder receiving a lower rent of £650-£720 pcm. There was no failure to mitigate by the Council as there was nothing in its lease then permitted it to carry out the structural works of repair.

Vaughan v MLs Properties Limited Edmonton County Court 23 May 2013

Assured shorthold tenancy of a two bed first floor flat in a block, beginning June 2009. Rent of £975 per month.

From November 2009 defective gas central heating. Dampness and water penetration to most rooms, exacerbating condensation and mould, defective plaster and problems with the electric installation.

Following works by the landlord’ contractors, defective double glazed windows in one bedroom and living room, and defective tiling in bathroom and WC.

Uneven floorboards with exposed nails and an unsafe fire escape from the start of the tenancy.

From September 2012, building works and scaffolding for the erection of a new storey immediately above, resulting in holed plaster, interference with quiet enjoyment and use of common parts. Communal garden overgrown and filed with debris from works, access pathway cracked and uneven.

At trial, the Judge decided that the landlord had breached an earlier debarring order and was debarred from defending on liability. The hearing proceeded on assessment of quantum, with the tenant’s evidence accepted wholly.

Damages: At about 30% of rent for 3.5 years, plus Simmons v Castle uplift giving general damages of £14,437.50. Special damages of £865. The claim limit of £15,000 was raised by the Court.

Read v Notting Hill Housing Trust Bow County Court 13 June 2013

Assured shorthold tenancy of two bed ground floor flat. Rent £289 per week.

A few months after moving in, the tenant reported that rats were getting into the property, also reported to the Council EHO. The entrance was through holes in the floorboards. There was also rising damp and a boiler which produced hot water only intermittently. The tenant was offered alternative accommodation about a year after reporting the rat problem. One child had gone to the grandmother because of the rat problem.

General damages based on the reasonable period for repairs to the floorboards being 28 days. On a ‘broad brush basis’ rat ingress was the worst problem. This case was on all fours with Dadd v Christian Action (Enfield) HA (1994) Legal Action 18, except that in this case the rats entered the flat. Damages at 80% of rent for the period 28 days after notification to a reasonable offer of accommodation being made to the tenant, 60 weeks, amounting to £13,872. For a further prior after the reasonable offer to termination of tenancy, damages at 20% of rent – amounting to £953. Total general damages £14,825

Special damages of £1000. Interest on damages £940. Less a set off for minor property damage of £150.

Claimant had beaten both her offers under Part 36, so a further 10% of damages £1,661 and Part 36 interest of £130 awarded.

Overall total £18,406

Aden v Birmingham City Council Birmingham County Court 3 July 2013

Secure tenancy of 3 bed house. Average rent £89 per week (£4,641 per year) Starting October 2006

Holed and defective plasterwork from start of tenancy until letter of claim.

Intermittent rainwater penetration into one bedroom (3 or 4 times a year in heavy rain)

Water penetration from bathroom into adjacent kitchen for 22 months

6 months leaking pipe in kitchen

Boiler breaking down once each winter and taking 1- to 14 days to repair.

Uneven, loose and defective flooring from start of tenancy

Defective extractor fan, perished window board and defective seals in bathroom. Other minor defects.

HHK McKenna did not make an order for specific performance, on the landlord’s assurance it would carry out the works in the claimant’s expert’s schedule.  He held that the extractor fan was part of the structure, so fell under s.11(1)(a), distinguishing the Circuit Judge’s decision noted  in O’Neill v Sandwell MBC [2007] EWHC 2004 (QB) (18/12/2007). On notice, the Claimant’s evidence was accepted and the reliability of the Council’s records was criticised.

On damages, using a ‘broad brush approach’, a six year period of loss, with some periods worse than others and some problems intermittent. About 38% of rent, being £1750 per year. Total £10,500. The Simmons v Castle uplift applied £1050, giving general damages of £11,550.

Special damages of £2100 (100% of claimed) and interest. Total £13,850.

Maloku v Southwark LBC Lambeth County Court September 2013

Secure tenancy of a studio flat. rent of £100 per week. Claim from mid 2008.

Dampness to walls and chimney breast of living room, with crumbling plaster. Damp spread to kitchen and hallway with further plaster damage. Repairs carried out in July 2011, but dampness returned in the same areas. Further repairs in February 2012.

Claimant and her daughter had lived with her mother between late 2010 and mid 2012 to avoid damp conditions.

Additional personal injury claim for the Claimant and for the Claimant’s daughter, based on expert evidence that the claimant had a history of asthma which had ceased to be troublesome. Damp, cold and mould had lead to a recurrence of her condition while resident at the property. The Claimant’s daughter suffered respiratory infections while in the property, with various A&E and hospital attendances, on the balance of probabilities these were caused by the conditions in the property ad there was no evidence of long term effects.

Claim settled for £17,000 for the Claimant, inducing £700 special damages, and £3,000 for the daughter.

Voysey v Ellas Croydon County Court 20 September 2013

Assured shorthold tenancy. Rent of £1050 per month. Claimant living there with adult daughter and son, so registered as blind.

Defective boiler for period of 3 and a half months. No heating or hot water (Claimant had to fill bath with saucepans of boiling water).

Minor but persistent leak to conservatory for 29 months

Defective drainage in bathroom for 24 months.

Landlord was notified of condemned boiler by British Gas and local council but refused to repair, claiming lack of funds.

After contested trial, award of general damages of £1250 for the 3.5 months lack of heating and hot water, £3000 for the 29 months of leak to the conservatory, £500 for two years of faulty drainage to bathroom. Total £4750.

No mention of Simmons v Castle uplift or a percentage rent assessment.

Comment

The overall message seems to be that the courts are still, in general, disposed to take a ‘broad brush’ approach, rarely (but sometimes) carrying out a detailed breakdown of quantum by issue, severity and duration in terms of percentage of rent. That said, it is also clear that the rent is borne in mind as a measure. There is also the odd award of ‘£500 for the children’ which doesn’t seem to have a basis.

It is worth noting that there is  some variation in quantum for similar issues, as a percentage of rent, though not at the extremes that have been seen in the past, there is an increasing convergence on the level of awards. That said, it seems that if you must be a tenant suffering disrepair, Birmingham is quite a good place to be suffering it.

But there is another theme, which is that landlords relying on the deficiencies of their own records to argue lack of notice, seem to be getting short shrift. ‘If it isn’t in our records, it didn’t happen’ is not flying as a defence on notice.

The extractor fan issue in Aden v Birmingham is interesting. I have encountered argument on this and no doubt will come up again.

The post Disrepair: La luta continua! appeared first on Nearly Legal.

Just a quick note on a County Court disrepair trial with an interesting finding on damp plaster

DR v Southwark LBC, Lambeth County Court 11 June 2014

DR had brought a claim for disrepair including for damp, saturated plaster to the external wall in the bathroom. There was, it appeared from first inspection, a mix of damp penetration and condensation damp.

The expert inspection before trial included carbide testing to the core of the wall which showed that while both the external surface and the internal surface and plaster of the wall remained wet, the core of the wall was dry, showing no water penetration.

At trial, the Claimant conceded that the majority of the damp in the property was caused by condensation, but maintained that Southwark was liable for the damp plaster in the bathroom, relying on Grand v Gill.

Southwark argued that wet plaster was not disrepair, relying on Post Office Properties v Aquarius Ltd [1987] 1 All ER 1055 CA. Southwark argued that although the plaster may be wet there was no disrepair in that it was of same standard that it would have been before. There was no deterioration to the structure. The case was similar to Quick v Taff Ely in that the main issue was condensation.

The expert’s report had described the plaster as ‘saturated’. The Claimant argued that this meant it was not of the same standard as when built.

Th court held that the saturated plaster was in disrepair – “It cannot be said that the level of humidity or moisture retention, whatever the cause, meant it has not reached a stage of being in disrepair”.

Damages for this and the wet front elevation external wall, were assessed at 20% of rent, reduced to 10% for the period after Southwark had carried out some works which had improved conditions at the property.

Comment
It is interesting to see a court actually approach this issue. The finding that saturated plaster was in disrepair, regardless of the cause, I think has to be right, following Grand V Gill. At the same time, it makes a pure ‘condensation/Quick v Taff Ely‘ defence by the landlord more difficult, if the plaster in a saturated condition. I suppose there may be an argument if it can be shown that tenant’s conduct exacerbated condensation, but that would be tricky to prove and would likely be by way of set-off or counterclaim, rather than a defence on liability per se.

And, although the conditions in the property were very unpleasant, with constant significant mould growth, 20% of rent is a decent figure for quantum for what was primarily saturated plaster to the bathroom.

Some more details on the arguments in the case are here and our thanks to Charlotte Collins at Anthony Gold for bringing this one to our attention.

The post Condensation damp and saturated plaster appeared first on Nearly Legal.

This is an issue we’ve looked at before, bringing a disrepair counterclaim after a possession order has been made. Now the Birmingham County Court has dealt with the issue on an appeal from the decision of a District Judge.

Midland Heart Ltd v Idawah [2014] EW Misc B48 (11 July 2014)

In this case, a possession order had been made in November 2002 (apparenly an SPO). There had subsequently been some seven stays of warrant on terms, in 2005, 2008, 2011 and 2012. In February 2014, the Defendant made an application for a further stay of warrant and permission to bring a counterclaim for disrepair, supported by an expert’s report of from an inspection in November 2012 (which had apprently been served on the Claimant in Janaury 2013) and a reinspection report from January 2014. The first report found:

“(a) some missing, slipped and displaced roof tiles; (b) a safety warning at risk label on the central heating boiler; (c) some structural movement of the property with some cracking internally and externally and with some slopes to floors. The remedial works can be limited to making good cracks at this stage unless matters were to significantly deteriorate; and (d) various ad hoc defects including a damaged bedroom light switch, remnants of a light bulb within a bedroom light fitting, evidence of rat infestation within the rear garden boundary.”

The second report found:

“…some repairs to the roof and chimneys, repairing of some internal or external cracks and the replacement of the central heating system including the fitting of a replacement central heating boiler and radiators throughout. However … there are significant ongoing defects at the property including (a) a drip leak to the water pipe serving the WC cistern that is causing severe dampness within the WC compartment, the abutting bedroom and the living room below; (b) the gas fires in this the front and rear living rooms have been disconnected; and (c) some ad hoc defects as detailed within the body of the report including a damaged front external door.”

The District Judge granted the application and permission to bring a counterclaim. The Claimant appealed.

On appeal, the Claimant argued

• that the district judge should not have permitted the counterclaim to include a claim to set off – essentially because that amounted to a defence – and in so doing, circumvented any process of appeal and/or application to set aside;
• secondly, that it deprived the claimants of an accrued limitation defence; and
• thirdly, that he failed to have any or any sufficient regard to delay.

The Circuit Judge derived from Rahman v Sterling Credit Limited [2001] 1 WLR 496 and British Anzani ( Felixstowe) Limited v International Marine Management (UK) [1980] QB 137 the following principles:

• where the tenant’s counterclaim for damages for breach of covenant to repair is an equitable set off then normal time limits do not apply where equitable relief is sought as section 36(2) of the Limitation Act 1980 applies.
• The real question is whether the action is at an end. Where, as in the present case the that means that the warrant for possession has not been executed, and thus the claimant has not obtained possession – then the court has a discretion whether or not to permit a counterclaim to be made in the proceedings.
• Delay of itself is not a reason to refuse such permission (Rahman)

The Claimant argued

three possible or potential outcomes to be considered. Firstly, if the tenant’s cross claim for damages for breach of the covenant to repair is, on its proper construction, being raised as an equitable set off then, so far as limitation is concerned, section 36 is engaged. The consequence of that is that there is in effect an unlimited limitation period, save, of course, for the consideration of laches or delay provided for in section 30(2). So far as the procedural aspect is concerned, a set off can only be raised as a defence (see CPR rule 16.6), and thus the defendant would have had to have applied to set aside the judgment and thus invoke the criteria of CPR rule 39.3, either directly or indirectly through the medium of CPR rule 3.1(2)(m): see in this regard the notes at paragraph 39.3.1 of the 2014 edition of ‘Civil Procedure’.

Secondly, if the tenant’s cross claim is a stand-alone cross claim proceeding as a counterclaim then, so far as limitation is concerned, section 35 is engaged, and that would involve a consideration of matters up to six years before the issue of these proceedings, i.e. before 2002 in this case. So far as the procedural aspect is concerned, that would involve the court in the exercise of discretion under CPR rule 20.4. I shall return to that point in a moment.

Thirdly, if the tenant’s cross claim was comprised within entirely separate proceedings then, so far as limitation is concerned, that would involve the consideration of matters which had occurred up to six years before the issue of such proceedings, which would, of course, be six years before 2014.

Further, there was a long an unexplained delay in bringing the counterclaim, this was a factor for consideration in the discretion exercised by the District Judge under CPR 20.4 and the District Judge had not given that factor due weight.

The Claimant also argued that the District Judge had not given due weight to the cost effectiveness of giving permission, arguing that there was insufficient procedural convenience in having this matter proceed as a counterclaim. However, the Circuit Judge considered that this was at best a secondary isue, following on from a decisions as to whether the counterclaim was appropriately formulated.

The Claimant had some problems with its argument on limitation as these had not been raised in the permission hearing. The Circuit Judge declined to consider them on the appeal for that reason, save as background to the Claimant’s attack on the exercise of discretion.

Against these points, the Defendant argued for the flexible approach to social housing matters taken by the courts in cases often dealing with periods of many years (eg the rent arrears schedule in the Claimant’s case), and that the Court had the power to rescind [or indeed discharge] a possession order, so a strict approach to a set aside was not required. Further, the Defendant:

pointed to the artificiality of the situation which obtains here. He submitted that what the tenant is seeking to do is to set off against the claim for unpaid rent (which, of course, founds the claim for possession) her cross claim for damages for breach of the covenant to keep the premises in good repair. In practical terms, it would be difficult, if not impossible, for a tenant in the position of this tenant to do that through the medium of a defence, because such tenant would not be able to satisfy the criteria set out in CPR rule 39.3.

The Circuit Judge found on the grounds of appeal as follows:

Ground 1 is that the district judge erred in permitting the respondent to submit a counterclaim which raised a set off. In subparagraph (2) the appellant states that: “By allowing a set off to be raised, the court has permitted the respondent to defend the original claim some 11 years after judgment was entered.” However, in my judgment, that is what in effect will be the position whether the tenant’s cross claim proceeds by way of a counterclaim in these proceedings or by way of separate proceedings. Either way the tenant will be seeking to set off against the claim for unpaid rent her cross claim for damages for breach of the covenant to repair. To my mind, the second principle identified by Mummery LJ in British Anzani is as relevant to the filing and service of a defence as it is to a counterclaim, when the real question is whether the action is at an end, which question necessarily involves consideration of the matters that are and/or remain in issue between the parties. Perhaps that analysis explains what is behind the reasoning that the provisions of CPR rule 39.3 are not in cases such as this strictly engaged. Instead the court is able to deploy its much wider powers under CPR rule 3.1(2)(m), and indeed generally, in considering an application such as this.

The District Judge had not erred in permitting the counterclaim.

So far as ground 2 is concerned – namely, that the learned judge failed to take any or any proper account of the fact that, by allowing a counterclaim, the appellant was deprived of an approved limitation defence – as I have already indicated, it is accepted that that point was not raised before the district judge and I therefore reject that ground of appeal.

And on ground 3

that the learned judge failed to take any or any adequate account of the delay in bringing the counterclaim – here while it is right that, in paragraph 6 of his short judgment, the district judge held as follows that “Having granted an adjournment, it would be most cost effective to grant the tenant permission to make the counterclaim within these current proceedings rather than issuing a separate set of proceedings”, it is clear from the transcript that, in paragraph 4 of his judgment, the district judge did have regard to the issue of delay. In those circumstances, I do not regard this as a matter to which the district judge failed to have any or any sufficient regard in the exercise of his discretion.

Appeal dismissed.

Comment

There are some interesting points floating around in this case about the status of a counterclaim in these circumstances. I think it is probably right that it cannot be permitted as a Defence per se, when there has been a possession order made and no set aside is (or can realistically be) sought. However, as an equitable set off against the arrears, it will in practice function as a Defence, at least if there is a full set off, as at that point the possession order could and should be discharged by the Court. I’m not sure that the Circuit Judge’s view that Rahman might well equally apply to the filing and serving of a Defence is right. This will perhaps remain to be tested further.

Equally, it is slightly disappointing that the limitation point wasn’t dealt with in detail. The landlords’ arguments on limitation in this and in other cases I know of, essentially boils down to ‘it’s not fair’. But given that the lack of limitation will only be an issue if there has been sustained breach of the landlord’s repairing covenant, with notice to the landlord, for over 6 years, ‘fairness’ is a bit of a tricky ground to rely on. Arguably, the landlord is not only in breach of the covenant for all that time, but demanded rent and brought possession proceedings despite regardless of its own failings.

I am sure that limitation will crop up again as an issue, given that section 36(2) of the Limitation Act 1980 would apply to any disrepair counterclaim, at least if pleaded solely as an equitable set off. The interplay with Section 35 on a straight counterclaim and the Court’s discretion under CPR 20 will have to await the right case.

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