British Glass Manufacturers' Confederation and another v University of Sheffield
| Jurisdiction | England & Wales |
| Judge | Mr Justice Lewison |
| Judgment Date | 26 November 2003 |
| Neutral Citation | [2003] EWHC 3108 (Ch) |
| Court | Chancery Division |
| Date | 26 November 2003 |
| Docket Number | Case No: HC002C02839 |
[2003] EWHC 3108 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London WC2A 2LL
The Honourable Mr Justice Lewison
Case No: HC002C02839
Mr Jonathan BrockQC and Mr Andrew Davies (instructed by HLW) for the claimants
Mr Paul de la Piquerie (instructed by Keeble Hawson) for the defendant
Hearing date: 25 November 2003
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
On 24 June 1958 the University of Sheffield demised to the British Glass Industry Research Association premises at Northumberland Road, Sheffield, for a term of 1000 years from 29 September 1957 at an annual rent of £1. The association has since changed its name to the British Glass Manufacturers Confederation. It is a non profit-making body whose object is to promote research into glass manufacturing and glassware.
The lease contained the following (among other) tenant's covenants:
"Forthwith to erect upon the demised premises a laboratory and office building with sewers and drains thereto in accordance with plans elevations and sections to be approved by the Landlord" (clause 2 (iii))
"Well and substantially to repair and at all times during the continuance of the term to keep in repair the said laboratory and office building to be erected on the land hereby demised and all sewers or drains in or under the said land and all other buildings and erections which at any time during the said term may be upon any part of the land hereby demised" (clause 2 (v))
"At the end or other sooner determination of the said term peaceably to surrender up to the landlords the land hereby demised together with the said laboratory and office building and other buildings and erections well and substantially repaired in accordance with the covenant hereinbefore contained" (clause2 (vi))
"Forthwith to insure the same and to keep the said laboratory and office building and all other buildings or erections which during the said term may be upon the land hereby demised insured from loss or damage by fire to the full value thereof …" (clause 2 (ix))
"As often as the said laboratory and office building or other buildings or erections on the land hereby demised shall be destroyed or damaged as aforesaid forthwith to rebuild and reinstate the same under the direction and to the satisfaction of the surveyor for the time being of the landlords it being hereby agreed that all moneys to be received by virtue of any such insurance as aforesaid shall be applied so far as the same shall extend in so rebuilding and reinstating the said laboratory and office building or other buildings or erections and in the case the same shall be insufficient for that purpose then the tenants shall make up the deficiency out of their own moneys" (clause 2 (x))
The tenant seeks a declaration that, subject to planning and general law, it or its assigns are entitled to replace the laboratory and office building currently on the land with other buildings, and may use those other buildings without any contractual restriction on their use. The landlord counterclaims for the following relief:
i) a declaration that the total demolition of the laboratory and offices currently on the site would be a breach of the tenant's covenant to repair;
ii) an injunction restraining the tenant from demolishing those buildings;
iii) a declaration that the tenant is estopped from using the demised property for a purpose other than research laboratories and ancillary offices; and
iv) an injunction restraining the tenant from redeveloping the buildings comprised in the demised property by their demolition and the redevelopment of the site by the erection of residential accommodation.
The University of Sheffield has had a department of glass technology since 1915. For many years it was the only centre for co-operative research for the glass industry. The research or much of it was paid for by the glass industry. Members of that industry formed a supervisory body called "the delegacy" which took part in the management of the department. The association was formed in 1955. It had two original purposes:
i) to take over the responsibility of the delegacy; and
ii) to set up a research association under the aegis of the Department of Scientific and Industrial Research.
In 1957 the university offered the association the site at Northumberland Road. The association had previously been housed on a site at Elmfield, close to the university itself, and the Northumberland Road site was adjacent to it. It was zoned, in planning terms, for university development. The university and the association worked in close co-operation, and doubtless expected that close co-operation to continue. This, and the fact that the association was to bear most of the cost of erecting the buildings on the site, may explain the grant of such a long lease at a nominal rent. Laboratories and associated offices were constructed in 1958 and opened by Lord Halifax in June 1959. They are now some 45 years old. By late 2001 the association had decided that they were no longer suitable for its purposes, and decided to relocate. It conducted an informal bidding process, in which the university participated unsuccessfully. The association has now assigned its lease to NHE (Northumberland) Ltd, which has been joined to these proceedings as the second claimant. It proposes to demolish the existing buildings and redevelop the site. The issue for me, put shortly, is whether the lease or an estoppel forbids this.
It is worth noting, at this point, not only the covenants that the lease contains, but also covenants that it does not contain. It does not contain:
i) a restriction on the permitted use of the buildings on the site (apart from a general covenant not to cause annoyance or disturbance to the landlord or to neighbours);
ii) a restriction on alterations (whether structural or non-structural);
iii) a restriction on alienation (although in view of section 19(l)(b) of the Landlord and Tenant Act 1927 this omission is not surprising).
In order to prevent the demolition of the existing buildings the landlord relies on the repairing covenant. The argument is that a covenant to repair carries with it a duty not to destroy the subject-matter of the covenant The principle is usually traced to Willis J's direction to the jury in Gange v Lockwood (1860) 2 F & F 115, in which he said:
"A covenant to repair, uphold and maintain or keep in good repair raises a duty not to destroy the demised premises and the pulling them down, wholly or partly, is a breach of such covenant."
Mr de la Piquerie advances this submission as a general rule of the construction of repairing covenants. In Hannon v 169 Queen's Gate Ltd [2000] 1 EGLR 40 Mr Bernard Livesey QC, sitting as a judge of the Chancery Division, said that the logic behind the principle was "suspect" and that the principle "is faintly absurd nowadays". But in my judgment the principle thus expressed is not an absolute rule of law. It is a conclusion reached as a question of construction of the lease. In other cases, judges have considered other covenants contained in the lease in question and have reached a contrary conclusion. In Doe d Dalton v Jones (1832) 4 B & Ad 126 the lease contained a tenant's covenant to repair the premises "together with such buildings improvements and additions whatsoever as at any time during the said term should be erected set up or made by him". The property in question was a dwelling-house, and the term of the lease was 40 years. The tenant took down part of the front of the house and converted the lower part into a shop and exhibition room of pictures. He removed the old windows and put in larger shop windows. He stopped up an old door and put in a new one. It was held that no breach of covenant had been committed. Parke B said that the lease:
"contemplates "improvements" and "additions" and only provides against non-repair, which is permissive waste. Under such a lease can it be said that a valuable house was to be kept in precisely the same condition for forty years?"
In Rose v Spicer [1911] 2KB 234 a lease of a piece of ground had been granted for 99 years. The tenant covenanted to erect a chapel or place of religious worship. The lease contained a covenant by the tenant that he would "well and substantially repair support uphold maintain … amend and keep the said demised chapel offices buildings and premises … in good and substantial and tenantable repair". The tenant also covenanted not to "alter or vary the front elevation of the said demised chapel offices buildings and premises" without the landlord's consent. The chapel ceased to be used for worship in 1909. In 1910 the lease was assigned to Hyman and Rosenthal who wished to turn the chapel into a cinema. In order to do so they removed some ornamental iron railings; opened a new door in the west wall; constructed two new internal staircases, and made other internal alterations. A majority of the Court of Appeal held that these alterations amounted to a breach of the repairing covenant. As Fletcher Moulton LJ put it:
"Had the railings or the staircases or the gallery fallen out of repair a notice to repair them must have been obeyed by the lessees on pain of forfeiture. How can it be gravely suggested then that their actual removal and destruction is not a substantial breach of the covenant to repair and maintain?"
Buckley LJ dissented. He pointed first to the covenant to yield up the premises "with all improvements". He said that the word "improvements" was...
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