Goldmile Properties Ltd v Lechouritis
| Jurisdiction | England & Wales |
| Judge | Sedley LJ |
| Judgment Date | 29 January 2003 |
| Neutral Citation | [2003] EWCA Civ 49 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B2/2002/1026 |
| Date | 29 January 2003 |
[2003] EWCA Civ 49
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE STOCKPORT COUNTY COURT
(H.H. JUDGE TETLOW, SITTING AT MANCHESTER COUNTY COURT)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Sedley
Lord Justice Rix
Case No: B2/2002/1026
MR NICHOLAS DOWDING QC and EDWARD PETERS (instructed by Messrs Guillaumes) for the Appellant
MR DAVID BERKLEY QC and JONATHAN RULE (instructed by Messrs Gorvins) for the Respondent
This is the judgment of the court.
The appeal
This is a second appeal. Lord Justice Carnwath gave permission for it to be brought because it raises a question of general importance: where the performance of a lessor's repairing covenant impinges on the lessee's quiet enjoyment, is it sufficient that the lessor has taken all reasonable steps to avoid disturbing the tenant or is he required to take all possible precautions?
It will be apparent from this formulation of the issue that neither party contends that one covenant simply trumps the other, and for the reasons which follow we consider this to be the correct approach.
The lease
The tenancy in question is a business tenancy held on a lease of just under twenty-two years of the ground floor and basement of a seven-storey building in Warrington at a rent of sixteen thousand pounds per annum. The claimant, who was the lessee, conducted a restaurant business there. The lease, in familiar form (including the traditional eschewal of all punctuation, however convoluted the clause), contained the following provisions:
a) By clause 5.1, an express covenant for quiet enjoyment in the following form:
"That the Tenant paying the rents hereby reserved and observing and performing the several covenants and stipulations on the Tenant's part herein contained shall peaceably hold and enjoy the Demised Premises during the Term without any interruption (except as herein provided) by the Landlord or any person rightfully claiming under or in trust for it"
b) By clause 5.3, the following covenant to provide services:
"That [sic] subject to the Tenant paying the Service Charge to use its reasonable endeavours to provide the services specified in Part IIA of the Fifth Schedule hereto".
c) The material services as specified in paragraph 1 of part IIA of the schedule:
"Repairing cleansing maintaining renewing replacing amending decorating and putting keeping in substantial repair and condition the roof external and any party walls and other load bearing members of the structure of the Building and such other parts of the Building and the Common Parts as are not the responsibility of the tenants of the Building".
d) In paragraph 2.3, provisions for payment by way of additional rent of a service charge, defined in part I of the fifth schedule to include the costs of structural repairs, apportioned among the tenants of the building.
e) In clause 6.1, a provision for relief from payment of rent where loss of user is caused by an insured event.
The works
In March 1997 the lessor brought in contractors to clean the external walls and windows of the building and to repair the seals between the frames and the walls. The work, which was completed within the six-month contract period, required scaffolding and sheeting to be fixed to the outside of the building. One consequence was that the tenant's restaurant business was quite seriously disrupted: from outside, the restaurant appeared to be closed; inside, it became dingy and frequently contaminated with building dust. These facts, which must be typical of many such situations, are not in dispute.
The claim
In this situation the lessee claimed damages in the Stockport County Court for loss of profit and disruption to his business. In a short and lucid judgment, District Judge Russell found for the defendant lessor. He concluded:
"I accept that the work was carried out to meet, as far as possible, the claimant's requirements within the time scale of the contract period and I believe that the defendant has been as helpful as it can with regard to the reduction and the payment of the service charge. I accept that the defendant is entitled to repair only in such a way that the covenant for quiet enjoyment is not breached and in broad terms, given the extent and nature of the works undertaken by the landlord, I suppose it is inevitable that any tenant will suffer a measure of inconvenience during the duration of the works. There will have been noise; there will have been dust, and there will have been some diminution in the light to the premises as a consequence of the sheeting.
"As I have indicated, I am satisfied that the landlord (the defendant) was necessarily carrying out a repairing obligation under the terms of the lease. In addition to being necessary, those works were extensive. I am satisfied on the evidence before me today that the defendant took all reasonable steps to minimise the potential risks. I am not satisfied that the defendant has breached the covenant for quiet enjoyment and in those circumstances I find for the defendant."
On the claimant's appeal, heard at Manchester County Court on 30 April 2002, His Honour Judge Tetlow reversed the district judge's conclusion because he rejected its legal premise. He held:
"In the absence of any express provision in the lease, granting a landlord the right to do things which might otherwise breach the covenant of quiet enjoyment, such a right would have to be implied. There is nothing in the wording of the lease that I have been referred to which would give rise to such an implication or give rise to such a construction. … . Such a right cannot be unfettered. If it is fettered, is it a right subject to taking all [or] reasonable steps, or is it a right subject to taking all possible precautions? … .
"I suppose it might be arguable that if the necessary works could not be carried out at all without some disturbance mounting to a breach of covenant, then licence pro tanto would be implied. However, that does not meet the situation here. The finding of all reasonable steps having been taken does not equate to all possible steps having been taken or that the works would be impossible...
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