Maunder Taylor v Blaquiere
|England & Wales
|Lord Justice Aldous,Lord Justice Tuckey,Lord Justice Longmore,LORD JUSTICE ALDOUS
|14 November 2002
| EWCA Civ 1747, EWCA Civ 1633
|Court of Appeal (Civil Division)
|B2/2002/1370,Case No: B2/2002/1370
|14 November 2002
 EWCA Civ 1633
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
MR RECORDER HAMLIN
Royal Courts of Justice
London, WC2A 2LL
Lord Justice Aldous
Lord Justice Tuckey and
Lord Justice Longmore
Case No: B2/2002/1370
Mr Nicholas Dowding QC and Anthony Tanney (instructed by Cawdery Kaye Fireman & Taylor) for the Appellant
Timothy Fancourt (instructed by Gisby Harrison) for the Respondent
This appeal concerns issues of law arising from a preliminary question decided by Mr Recorder Hamlin in his judgment of 14th June 2002.
The appellant, Mr Blaquiere is the tenant of Flat 2, which forms part of numbers 14, 15 and 16 Hyde Park Gardens W2. Those houses have now been split into flats. Each house includes a terrace at a raised ground floor level. Mr Blaquiere's flat is a large semi-basement which extends under the terraces of all the flats and it spans all three houses.
Mr Blaquiere's tenancy is derived from an underlease dated 17th December 1978 which expires in 2047. The freeholders are the Church Commissioners and the underlessors are Hyde Park Estates (Guernsey) Ltd which I will refer to as Guernsey. They are in administrative receivership.
For the purposes of this appeal it is not necessary to go into the detail of Mr Blaquiere's lease nor the leases of the other lessors in the houses. It is sufficient to record that all the underleases provide for a ground rent of £750 per annum and contain a requirement that the underlessee should pay "by way of additional rent as and when demanded a proper proportion according to rateable value (as specified by the landlord or its managing agents) of the annual cost or anticipated cost in connection with the Building (hereinafter called "the service charge") as estimated by the landlord's surveyor". The service charge covers the usual costs such as repair, maintenance of the lifts and common parts of the building and the supply of heating. Clause 3 contains the landlord's obligation. It imposes inter alia an obligation to insure the premises and to maintain the structure of the building in good and substantial repair and condition and to decorate the exterior as and when reasonably considered to be necessary.
In 1998 Mr Blaquiere's flat suffered from a range of problems arising from Guernsey's breaches of covenants under the lease. Those problems included water ingress, rot to structural timbers, difficulties with the drains, general disrepair and lack of decoration of the common parts outside Flat 2. According to Mr Blaquiere those defects made Flat 2 uninhabitable. As they were not remedied and Guernsey appeared to have no intention of remedying them, Mr Blaquiere and another tenant of the property applied for the appointment of a manager under section 24(1) of the Landlord and Tenant Act 1987. The Leasehold Valuation Tribunal acceded to that application and on 1st December 1998 Mr Maunder Taylor of 1320 High Road, Whetstone, London N29 9HP was appointed as manager of the property pursuant to the provisions of the 1987 Act. The order made by the Tribunal stated that his appointment should continue "upon the terms set out in the order until further order but shall automatically terminate upon the sale or transfer" of Guernsey's interest in the building. The relevant parts of the order are in these terms.
"3. The Manager shall be further authorised to carry out the following functions and duties:
a. to receive any rents, profits, service charges and other money payable by the Tenants of the Building or the Respondent in respect of the building,
b. to recover any arrears of any such sums due as aforesaid arising from the date hereof from the tenants of the building or the respondent,
c. to administer the service charge, the reserve account and any rent deposit and any bank accounts opened and required in connection with the management of the building and to maintain the sole mandate in respect of all bank accounts appertaining thereto,
d. to carry out the obligations of the respondent contained in clause 3 of the tenants' leases, in particular and without prejudice to the generality of the foregoing to include:
I. The provision of services (as defined in the leases aforementioned) to the building
II. The respondent's repairing obligations in relation to the building
III. To arrange for the insurance of the building with a reputable insurer and in respect of the risks set out in the leases aforementioned.
e. To receive, consider grant or otherwise deal with all applications for consents of whatsoever nature and howsoever arising as to dealings, alterations or any other matters requiring the consent of the respondents as far as such consents relate to the tenants or their properties within the building. For the avoidance of doubt the respondent hereby declares and agrees that in such circumstances where the Manager has confirmed that such consent or licence shall be granted the respondent will execute such document concerning consent without delay or request for payment.
7. The parties hereto shall have liberty to apply to the Leasehold Valuation Tribunal for further directions or clarification in respect of the terms of this order should the same be required."
Before being appointed manager by the Tribunal, Mr Maunder Taylor had produced a report which was used to inform the Tribunal of the problems that existed. Shortly after his appointment he sent to the tenants a draft service charge budget for the forthcoming year which included sums for major works to the building. He discussed it with the tenants and then caused to be prepared a tender for carrying out the repair works which was put out on or about 12th January 1999. It seems that the general works of external repair to the building were completed some time in 1999. However it is Mr Blaquiere's case that the necessary works to the terrace above and the common parts outside Flat 2 were not done at that time. Mr Maunder Taylor contends that there were good reasons for that. Such disputes will have to be resolved at trial, but they do not arise on this appeal. This appeal arises from the claim made by Mr Maunder Taylor as manager in respect of Mr Blaquiere's share of the costs expended by Mr Maunder Taylor for repairs and the supply of services. The initial claim amounted to just over £24,000. He has subsequently issued a second set of proceedings for further sums expended and the total claimed from Mr Blaquiere exceeds £62,000.
Mr Blaquiere has pleaded a number of defences, but a principal defence to both of those sets of proceedings is a claim to set off sums the subject of a counterclaim. That counterclaim asserts that by virtue of his appointment Mr Maunder Taylor owed Mr Blaquiere the like duties of repair as did Guernsey under the underlease. Those duties to repair had not been carried out with the result that Mr Blaquiere suffered damage. In his amended defence to the counterclaim, Mr Maunder Taylor admitted that he did owe duties, but he alleged that such duties were confined to a duty to take reasonable care in managing the buildings within the confines of his appointment as manager. He also contended that there was no right of set off.
I need not go further into the detail of those proceedings. This appeal is concerned with the way the judge answered one of the two questions which the parties agreed should be tried first. They were:
"1. Whether the duty owed by the claimant to the defendant following his appointment as manager by the Land Valuation Tribunal and in relation to the management of the Property known as 14–16 Hyde Park Gardens, London W2 (the Property) is limited to the (conceded) duty of care or whether the duty is greater and equivalent to that owed by Hyde Park Estates (Guernsey) Ltd as (the intermediate) landlord?
2. Whether the defendant may set off against the claimant's claims as manager for service charges such sums as he might be entitled to claim by way of damages from Hyde Park Estates (Guernsey) Ltd for breach of the landlord's covenants?"
The Judgment—The judge concluded that the claimant Mr Maunder Taylor did not owe to Mr Blaquiere an equivalent duty of care to that owed by Guernsey. He answered the first question to that effect. His primary reason was that he could see no legal route to the conclusion Mr Blaquiere advanced, namely that the duties owed by Guernsey and Mr Maunder Taylor were the same. He said:
"18. … It is not and cannot be suggested that the effect of the appointment was to create any privity of estate or of contract between the claimant and either the tenants generally or those who sued for his appointment. Although Mr Tanney urged his submissions that the claimant is to be regarded as having assumed the Landlord's obligations by virtue of the Order or by statutory assignment such does not stand analysis. Part II of the 1987 Act does not provide for any such assignment and it appears inconsistent with the terms of the Order."
"20. The Order is both predicated upon the basis that the Landlord's interests and obligations continue and that it is those obligations that the claimant is authorised to carry out until such interest is disposed of. I accept Mr Fancourt's submission that I should be reluctant to impose the obligations relied upon by the defendant in the absence of clear words in the Order providing for them. In his turn, Mr Tanney urged the imperative nature of paragraph 3 (d) of the Order and the importance to the tenants that the covenants should...
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