Morcom v Campbell-Johnson

In this case the question is whether the landlords of a block of flats can charge an increased rent to the tenants on the ground that they have made improvements to thepremises.

The Governors of the Gray Coat Hospital own a block of flats at Gray Coat Gardens. They have In recent years expanded on work on those premises amounting to £25,000, which has qualified them to increase the rent under the new 1954 Act on account, of the repairs. But in addition to that increase they claim in these proceedings that they are entitled to the increase given by the 1920 Rents Act, section 2, subsection (l)(a), which authorises an increase: "Where the landlord has since the 2nd September, 1939, incurred … expenditure on the improvement of structural alteration of the dwelling-house (not including expenditure on decoration or repairs)", the question for our determination is whether three Items of work come within the description "improvement of the dwellinghouse" – that is, of the flat – "(not Including expenditure on decoration or repairs)". The first item of work, concerned the drainage system. When these flats were put up nearly 60 years ago they had water closets the refuse from which was taken down one set of pipes into drains below the ground: and alongside they had wash-hand basins and baths from which a separate set of pipes went down the house but when they got underground the water went into the same drains as the refuse from the water closets. That was what is called a two-pipe system. In the course of time it has been found that that system – the two-pipe system – is not the best that can be devised. It is better to have a system whereby everything – refuse and water – from water closets, wash-hand basins and baths is ell taken down by one set of pipes. This is called the one-pipe system. It so happened that in these flats after 60 years the two-pipe system had come to the end of its life, end the landlords were faced with the question whether to repair all that system. piece by piece or whether they should put in a modern one-pipe system. The landlords, having taken advice, were told that the better way and, indeed, the cheaper way of mailing good this drainage system at the present day was to instal a one-pipe system. It was a system which the bye-laws of the LondonCounty Council require for any saw dwellings. They did the work at a cost of £5,200.

The second item of work concerned the cold water supply to the flats. when the flats were built such flat had its own storage cistern of 80 gallons in the flat. But in the course of time, troubles arose. For instance, some of the tenants bed put taps on the rising mains; and the pipes were worn out. The system had come to the end of Its life. The landlords took advice and decided that the best way to make the system good wee that Instead of having 80 gallon tanks, one in each flat, to put a 480 gallon tank in the top of the building which would supply the six flats. That is what they did. The work coat £4, 600.

The third item of work was the lowering of the area in the middle of or adjacent to the flats. The trouble was of long standing. When the area was first made, it was an inch or so higher than the damp course, with the result that if water collected in the urea it might percolate into the walls above the damp course and so might rise up the wills and cause dry rot. That was he defect in the work done when the flats were originally built. It was decided, when all the work of repairs was being done, that the area should be lowered an inch or two so as to bring it below the damp course. That cost £690.

The County Court Judge, in a careful Judgment, has said that the primary facts are undisputed. He held that all these three works were improvements and qualified the landlords for an increase. I think his decision involved necessarily the true construction of this Statute; end that is a point of law which this Court is in a position to review.

I find greet difficulty in framing a definition of what is an "improvement" as distinct from a "repair". Perhaps the most helpful way is to give a few illustrations. In otrood Eatates v. Gregory, there was an old-fashioned privy, at the bottom of a garden which was simply a pit which was emptied every month or as by the Local Authority. The landlords removed that old-fashioned privy, end (substituted a modern water closet in which the refusewas talien away by a water-borne system. That was. no doubt, an improvement. In Eates v, Rowland, reported in 1952, 2 Queen's Bench at page 12, the floor of a house had become rotten by damp. When the floor was made good, instead of rutting in e wooden Floor, a tiled floor was put in. That was held not to be an "improvement", but a "repair". But In the self-same case 8 new concrete bed, some nine inches in depth, was put into the house because the water level in the area had risen. That was held to be an "improvement". Lord Justice Jenkins at page 21 said: "The replacement of a floor of some Kind would, I thin, therefore fairly come within the description of 'repairs" – and he held that the tiled floor replacing the old wooden floor was repairs. The vaster of the Rolls, air Raymond Evershed, at page 23t. said: "In the course of the argument examples were given showing that what was undoubtedly repair might yet involve same degree of improvement, in the sense of the modern substitute being better than that which had gone before".

It seems to me that the test, so far as one can give any test in those matters, is this: If the work: which is done is the provision of something new; for the benefit of the cloudier, that is, properly speaking, an improvement; but if it is only the replacement of something already there, which has become dilapidated or worn out, then albeit that it is a replacement by Its modern equivalent, it comes within the category of repairs and not improvements.

Applying this test, it seems to me that the drainage system in these flats is the same now as the system which existed before. All that has happened is that instead of there being two pipes to carry the water and refuse away, there is one sipe. That is simply the replacement of the older two pipes by its modern equivalent of one pipe. It comes, I tink, properly within the category of repairs and not that of improvement, so also with the cold water system. There were six individual tanks before, one in each flat. That has been replaced by one bulk storage tank in the roof of the block. That again is simply the replacement of something which existed before by a more suitable modern substitute.In both eases, as the surveyor said, it was a cheaper way of doing it than it would have bean simply to restore the old system as it was. It seems to me that in both those instances the work done properly comes within the category of repairs and not that of improvements.

It is material to notice that, 90 far us the tenants are concerned, the position in the flats for them from the practical point of view la no different from what it was before. The water closets, the baths, and the cold water system all operate just as they were before. If anything, some of the tenants said that it was a little more inconvenient, because, for instance, the baths were higher. In a sense, of curse, the work benefits time in the same way as any repairs mist benefit the people who live in a house, because, when it gets old and dilapidated, they are better off when it is repaired and made good, Bat that is the extent of the benefit to them. There is no provision of anything new for their benefit, but only the replacement of the old parts by a modern equivalent, and, in my judgment, that does not amount to improvement so as to qualify the landlords for an increase in rent.

There remains the third item, which, I confess, has given me much difficulty. That is the lowering of this area. Mr. Megarry submitted to an that on the strict and true construction of this statue, an improvement baa got to be executed on the site of the flat it self – on the dwelling house it self. I am not, for myself, prepared to-day to go so far as that. I can well see that there is much force In what Mr, Heathcote-williems contended, that if, for instance, a landlord brings a water supply into a row of houses or an electricity supply into a row of houses, the whole of that expenditure would qualify for an increase. The expenditure on the common pipe which led up to the house would have to be apportioned amongst the Individual houses, even though the expenditure was common to all. The same would apply if a new lift were put into a block of flats instead of an old staircase. I do not myself wish to exclude the feasibility in such a case of the landlord qualifying for an appropriate increase. I wouldnot be deterred from so holding by the fact that the status makes no express provision for apportionment, I think the Courts have enough resources open to them to solve questions of that kind But, nevertheless, when I come to consider this particular expenditure – lowering en art e to make good a defect...