Elizabeth Ann Frasca-Judd v Galina Golovina
| Jurisdiction | England & Wales |
| Judge | Mr Justice Holgate |
| Judgment Date | 05 February 2016 |
| Neutral Citation | [2016] EWHC 497 (QB) |
| Docket Number | Case No: HQ14X05032 |
| Court | Queen's Bench Division |
| Date | 05 February 2016 |
[2016] EWHC 497 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Holgate
Case No: HQ14X05032
Mr J Davis (instructed by Clyde & Co) appeared on behalf of the Claimant
Mr A Butler (instructed by Ashley Wilson Solicitors) appeared on behalf of the Defendant
Introduction
In 2009 the claimant, Mrs. Frasca-Judd, was the owner of Moat Cottage, West Grafton, Marlborough, Wiltshire. On 18 December 2009 she let the property for 18 months to the defendant, Ms. Golovina, by a tenancy agreement in writing. This was arranged by Mr Geoff Clyesdale of Hamptons International Estate Agents.
At the heart of the claim lies clause 2.3.12 of the agreement, which imposed upon the defendant an obligation:
"To take all appropriate precautions including any such as may be required from time to time by the Landlord to prevent damage occurring to any installation in the Premises which may be caused by frost including providing background heat at all times during the winter months especially when Premises are vacant, provided that the sub-clause shall not oblige the Tenant to lag or otherwise protect pipes that are not already lagged or protected."
The claim is for damages for breach of clause 2.3.12 and/or negligence arising from flood damage to the cottage around the beginning of 2010.
On 21 December 2009 Mr Clyesdale sent the defendant the keys to the property and two days later she took physical possession. Her permanent residence was a flat in Prince Consort Road, London SW7.
On 27 December 2009 the defendant left the property to return to her London flat over the New Year period. On 14 January 2010 Mr David Puddephatt, who was employed by the claimant to look after the gardens, attended at the property. When he looked through the windows he saw that severe water damage had occurred inside the house. He telephoned the claimant to notify her of the damage, switched off the mains water supply and called the claimant's plumber, Mr Neil Sheppard, to the scene. Mr Sheppard discovered that the heating was not on and consequently the water pipes had frozen. The same day the claimant notified Mr Clyesdale and her insurers, the National Farmers' Union Mutual Insurance Society Limited, of the damage.
On 15 January 2010 the insurers instructed Crawford & Company Adjusters (UK) Limited to deal with the adjustment of the insurance claim on their behalf and Ms. Julia Pearce, was appointed to manage the claim. She adjusted the claim to the figure of £128,089.71. The insurer paid that sum to the claimant and remedial works were carried out.
It appears that the defendant did not reoccupy the cottage. The parties agreed that the tenancy be surrendered on 26 October 2010 and the claimant sold the property on 7 December that year. However, the current claim was not brought until 25 June 2013. It is brought by the insurer in the name of the claimant landlord pursuant to its rights of subrogation. The claim is based on a breach of clause 2.3.12 of the tenancy agreement and negligence. It seeks damages amounting to £128,089.71, to cover the costs of repair and reinstatement in the sum of £97,189.71, damage to contents in the sum of £15,000 and I note, in particular, loss of rental income in the sum of £15,900. This loss of rental income relates to the period of seven months and two weeks during which the property was uninhabitable i.e. from 14 January 2010 to 28 August 2010 (see paragraph 27 of the witness statement of Ms. Pearce).
The defendant denies liability. Without prejudice to that denial, she has served a counter schedule disputing some of the figures. But fortunately the parties have agreed that subject to liability, damages should be assessed in the sum of £117,000.
The issues in the claim before the court
Two issues are raised by the defence, one legal and one factual. The legal issue arises from paragraph 14A of the Re-Amended Defence:
"… the claimant has been indemnified against her losses by her insurers and this claim is brought pursuant to rights of subrogation allegedly existing under the policy of insurance. However, the intention of the parties as it appears from the lease is that the claimant was required to insure the property for the benefit of both parties and recoup any loss from the occurrence of an insured risk from her insurers …"
The defendant pursues this argument not only in relation to the claim in negligence, but also the claim for breach of clause 2.3.12.
Paragraph 11A of the Amended Defence also contended that the damage caused did not fall within clause 2.3.12, because it did not represent damages to an "installation". Mr Butler on behalf of the defendant, abandoned that point in paragraph 7 of his skeleton, quite rightly in my view.
The factual issue is whether on the balance of probabilities the court is satisfied that when the defendant left the cottage on 27 December 2009 the heating was turned off. Mr Davis for the claimant, accepted that if on that date the heating had been left on and subsequently the system failed for whatever reason during the period running up to 14 January 2010, the defendant would not be liable for any of the damages claimed, whether for breach of the tenancy agreement or in negligence.
On the other hand, Mr Butler accepts on behalf of the defendant that if the court is satisfied that on 27 December 2009 the heating was turned off, then causation is established and the defendant is liable for the agreed damages, subject only to the legal issue raised.
The appeal
On 1 July 2015 the defendant issued applications for summary judgment against the claimant, or to strike out the claim, on the grounds that the subrogation claim must fail because it was the common intention of the parties to the tenancy agreement that: (a) the landlord would insure for the benefit of both parties the property against risks which would include the incident and the damages claimed; and (b) the landlord would look to that insurance for indemnification and not to the tenant for damages. It is common ground that the landlord has been fully indemnified by the insurers.
Following the hearing on 26 October 2015, Master Leslie refused the defendant's application. He ordered the defendant to pay the claimant's costs of the application in any event and to pay £6,000, including VAT, on account within 21 days. He also refused permission to appeal. He dismissed the defendant's application on the basis that the claimant's submissions on the legal issue were sufficiently arguable to justify their being pursued at trial. He concluded that the defendant's arguments were not so strong and clear cut at that stage as to persuade him that the landlord had no realistic prospect of success on the issue.
The defendant appealed against Master Leslie's decision. That appeal was listed to be heard at the substantive trial. On 24 November 2015 Mrs. Justice Nicola Davies granted a stay of execution of Master Leslie's order pending the appeal. On the question of permission to appeal the claimant accepts that it should be granted and I do so grant.
The parties agree that because the legal issue will be determined one way or the other in this judgment, the only practical significance of the defendant's appeal at this stage concerns the Master's order that the defendant should pay the costs of the application to strike out and for summary judgment in any event. At one point the defendant submitted that the correct order should have been costs in the case. However, during argument it was accepted that if the Master was entitled to conclude that the case of the legal issue was arguable then his costs order could not be impugned. Instead, the defendant contends the Master should have held that it was clear that the defendant's legal defence was correct and therefore, the claimant had no realistic prospect of success on the claim. In that event, but only in that event, it would follow that the strike out should have succeeded and the defendant should have been awarded her costs of the application.
The Legal Issue
It is common ground that the claim in subrogation is dependent upon whether the claimant landlord is entitled to damages from the defendant for a breach of clause 2.3.12 or negligence, by failing to ensure that the heating system was left on when she vacated the cottage.
The submissions for both parties began with the decision of the Court of Appeal in Mark Rowlands v Berni Inns Limited [1986] QB 211. The claimant in that case was the freeholder of the building. It let the basement to the defendant under a lease of 30 years under which the tenant covenanted to keep the interior of the basement premises in good repair. The landlord covenanted to keep the main walls, timbers, boundary walls and services of the basement in good repair.
The tenant's covenant in clause 3(4) to repair the interior of the premises contained an exception in these terms:
"Damage by or in consequence of any of the insured risks excepted, save where the insurance effected by the landlord shall be vitiated in whole or in part by any act or omission by the tenant or by any person acting for or under the tenant."
The judgment of Kerr LJ records that the tenant's additional covenants under clauses 3(5) and (6), dealing with obligations to paint and decorate the premises and to yield up the premises in a proper state of repair at the termination of the lease, were subject...
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