Brikom Investments Ltd v Carr

This case concerns four blocks of flats at Herga Court, Sudbury Hill, Harrow. There are 102 flats altogether. In 1974 the landlords expended £18, 000 in repairing the roofs. They say that under a clause in the leases each of the tenants is bound to pay a contribution towards the expenditure, each according to the rateable value of his flat. The amount of the contribution ranges from £50 to £250. The landlords sued the tenants in the county court for their contributions. The tenants disputed the claim because they said that the landlords had told them that they would repair the roofs at their own cost. The landlords contended that the express clause in the leases had priority over anything the tenants were told: and that they were entitled to the sums claimed. The county court judge heard the case for seven days. He decided in favour of the tenants, relying on the principle stated in the High Trees case (1947) King's Bench 130, and the cases that have followed it. The landlords appeal to this court, saying that that principle does not apply for several reasons. It is these that we have to consider. But before I come to them, I must state the facts in more detail.

In the years before 1971, the landlords had let the flats to tenants at rack rents. But in 1971 they decided to offer long leases of 99 years each to the sitting tenants of the flats. Many accepted the offer: and after meetings, correspondence and contracts, leases were signed. They were all in standard form. They provided that the tenants should pay rent, and by way of additional rent, a maintenance charge, together with an excess contribution. Each lease contained an express covenant by the landlord that he would repair and maintain the main structure of the building, "including the principal internal timbers andthe exterior walls and the foundations and the roofs thereof". But each lease also contained an express stipulation that the tenant would pay a maintenance charge: and, in addition, the tenant would pay an annual contribution in respect of all the excess expenses which the landlord incurred. The amount of the contribution was to be ascertained by a certificate prepared by the landlord's accountant. It was to be paid by the tenants within 28 days of the service of the certificate. So, on the terms of the lease, the landlord could charge a contribution against each of the tenants on getting a certificate as to the amount, and serving it on the tenant.

Everything was done to satisfy the terms of the lease. In 1974 the landlords repaired the roof at a cost of £18, 000. In 1976 the accountants issued their certificates. These were served on the tenants. But in some cases the original tenants had assigned their leases. The landlord then claimed against the assignees.

In all strictness of law, neither the tenants or their assignees have any answer to the claim for contribution. The covenants in the lease are clear. But the tenants and their assignees rely on various representations or promises made by the landlords before and after the leases were executed. These were to the effect that the landlords would themselves repair the roofs at their own cost without making any charge against the tenants. The tenants and their assignees claim that, on this account, it would be inequitable and unjust for the landlords to insist now on their paying a contribution. They rely on the High Trees principle.

Before I consider this defence, I would draw attention to a preliminary objection on which the landlords relied. It wasan exception clause which was included in all the contracts which the tenants signed before entering into the leases. It purports to accept the landlords from any responsibility for any representations whatever. It is clause 7, which says:

"It is expressly agreed and declared that the foregoing conditions form and include the entire basis and terms of the Agreement for Sale and Purchase of the said leasehold flat and that no representation warranty or statement whether written oral or implied heretofore made by or on behalf of one party to the other shall be capable of being treated as forming part of the said terms or as an inducement by the Vendor for the Lessee to enter into this Agreement or as a warranty in relation to the subject-matter thereof or by the ground upon which the Leasee shall base any claim against the Vendor".

All I need say about that clause is that it is of no avail to the landlords whatever. The cases are legion in which such a clause is of no effect in the face of an express promise or representation on which the other side has relied, see Evans v. Andrea Merzario Ltd.(1976) 1 Weekly Law Reports 1078: at any rate when the circumstances are such that it would not be fair or reasonable to allow the landlord to rely on it, see section 3(b) of the Misrepresentation Act 1967.

So I put clause 7 aside and turn to the representation and promises on which the tenants and their assignees relied. They were first made in February 1972 - at a time when some of the tenants had signed agreements for leases, but had not actually executed the leases. The tenants had formed a tenants' association. About the 14th February, 1972 there was a meeting between the representatives of the landlords and some representatives of the Tenants 'Association. The roofs hadgot very badly out of repair by this time. According to the lease, the landlords ought to have repaired the roofs already. But they had put off the repairs because the landlords were hoping to get planning permission to put an extra storey on the top. In that case it would be unnecessary to repair the roofs. So their Mr. Jarvis made this promise or representation to the tenants; "If we get planning permission to put the extra storey on, there will be no need to repair the roofs. But, if we do not get permission, then we will repair the roofs at our own cost". The judge found clearly that that representation was made by the landlords' representative Mr. Jarvis.

As a result of that conversation, the tenants' representative, Mr. Rowe, wrote a circular letter which he sent to all the tenants of the 104 flats. It was dated the 18th February, 1972, and said:

"Dear Sir or Madam,

I have to advise you that the Association did not succeed in their approach to get the 99 years' lease altered. We have to accept it in its present form, or not at all.

However, we have successfully obtained the Landlords' covenant that he will arrange to repair all the roofs this summer at his own cost. As the condition of the roofs was our main concern (and that of many Building Societies who had been approached for mortgages), our efforts have not been in vain.

Regarding any future redevelopments, we shall have to rely on the Harrow Planning Committee to refuse permission, as they have done in the past. We understand that they consider the density at Herga Court has reached its limit and would refuse further applications for this reason alone.

The Association Committee thank you for your support andhope the necessity will not arise for us to be called upon at any future date.

Yours truly,

J. M. Rowe."

Some tenants relied on that circular letter and signed their leases on the faith of the oral representation. Other were more cautious: and by themselves or their solicitors got written confirmation from the landlord's agents saying that he would repair the roofs at his own expense. The judge said:

"These documents, in my view, are overwhelming evidence of the attitude of the landlords at the time. They were assuring the tenants, one after another, that the landlords would resurface the flat roofs, and they would not charge the cost of doing so to the maintenance account and that the work would be done in the Summer of 1972".

Relying on those promises - some oral and some in writing -the tenants signed the leases. Some asked for the leases to be altered to give effect to the promise: but the landlord said that he could not alter the form of the leases: because it covered the whole 99 years and he could not insert anything about this particular expenditure.

The landlords did not repair the roofs in 1972. They still sought planning permission to put an extra storey on top. This was opposed by some of the tenants. In 1973 there was another meeting between the landlord's representative and the tenants. The tenants were aggrieved because the landlord had not yet repaired the roofs. The judge found that the landlord's representative "in effect repeated the assurance which they had given to Mr. Rowe and others in the early part of 1972 that, if planning permission was refused, they would undertake resurfacingof the roofs and not charge it to the tenants". On the faith of the renewed promise in 1973, the tenants did not press for further repairs to be done at that time. In November 1973 the landlords' application for planning permission was turned down. Then at last the landlords began to buy the asphalted to repair the roofs.

In due course in 1974 the landlords did repair the roofs. It cost them some £18, 000. In May 1976 the accountant got out the certificates and they were served on each of the...