Reedbase Ltd and Anr v Fattal and Ors
| Jurisdiction | England & Wales |
| Judge | Sir Patrick Elias,Lady Justice Arden,Lord Justice Singh |
| Judgment Date | 19 April 2018 |
| Neutral Citation | [2018] EWCA Civ 840 |
| Docket Number | Case No: B2/2015/1913 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 April 2018 |
[2018] EWCA Civ 840
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
CENTRAL LONDON COUNTY COURT
HIS HONOUR JUDGE HORNBY
REF: 3YK67837
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lord Justice Singh
and
Sir Patrick Elias
Case No: B2/2015/1913
Daniel Dovar (instructed by Collyer Bristow LLP) for the Appellants
Jonathan Chew (instructed by Forsters LLP) for the Respondents
Hearing dates: 31 January 2018
Judgment Approved
The first two issues to be determined on this appeal are (1) whether the manner in which the landlord replaced the appellant tenants' terrace tiles satisfied the landlord's obligation to make good damage to the demised premises under the terms of the appellants' underlease; and (2) whether the trial judge, HHJ Hornby, erred in holding that the landlord had conducted sufficient consultation with the appellant tenants in relation to its proposal to replace the terrace tiles previously laid by them.
Outline of events leading to the action which gives rise to this appeal
The appellants on this appeal, who were the defendants in the action, are tenants of two penthouses on the top of a block of apartments in 14–112, Nottingham Terrace, London NW1. Those penthouse apartments had terraces around them and also a large terrace on the top of the adjoining property in York Terrace West. The claimants in the action (the respondents to this appeal) are the landlord of the apartments and service charge trustee. The management company is a further respondent. The appellants have shares in the first claimant company. They defended an action for arrears of rent and made a substantial counterclaim for damages for breach of covenant.
The management company desired to repair an asphalt roof under the terraces adjoining the two penthouses. The appellants, however, had placed tiles on top of this roof. Accordingly the management company recognised that it would have to come to some agreement with the appellants about removing these tiles. They came up with a proposal to seal the roof with a plastic substance called Decothane on which some tiles called “Grantile” would be placed. However, after sending out a specification for this, the management company discovered that it would invalidate the guarantee offered by Decothane if the tiles were placed directly on the Decothane. The appellants in any event wanted a more expensive tile. Accordingly, the management company put forward the proposal that the tiles should be fixed by a pedestal system, which involves inserting “shims” or small sized plastic wedges between the tiles and the Decothane. The financial difference was approximately £30,000 on works worth over £300,000.
In the event, the new tiles took some seven months to source. For that time the contractors went off-site. But in the end the tiles were fixed. The judge made a site visit and was satisfied that the work was well done. He observed during the trial that the terrace was “stunning”. The trial took eleven days and there were several witnesses. HHJ Hornby delivered a detailed judgment of over 160 paragraphs and 40 pages, to which I pay tribute.
The cost of the works done to the roof were added to the service charge, to which the appellants contribute 10%. The rest has been paid by the other tenants and none of them has objected to the cost involved.
Before entering into these works, the management company had to go through the statutory process of circulating their proposals, obtaining estimates and making estimates available for inspection by tenants in the way required by the Service Charges (Consultation Requirements) (England) Regulations 2003 (“the Consultation Regulations”). I describe the relevant parts of the Consultation Regulations in a later section of this judgment, and the relevant provisions are set out in the Appendix to this judgment.
The appellants object to paying the rent now payable, which includes an element attributable to the cost of these works. They contend that the work was not done in conformity with the landlord's covenant to make good damage occasioned by repair. They also contend that there was a breach of the Consultation Regulations. They further claim that the judge was wrong in his calculation of damages.
Issue (1): landlord in breach of obligation to make good damage?
I start with the claim that the works involved a breach of the covenant make good damage occasioned by repairs. This turns on the meaning of Clause 2(7) (B) in the appellant's underlease, which reads as follows:
(B) To permit the Superior Lessor the Lessor and the Service Company and all other persons authorised by them respectively with or without workmen tools and appliances at all times during the said term upon previous notice (except in the event of emergency) to enter upon the demised premises and to execute any repairs decorations additions alterations or things to the Building or any part thereof or to any adjoining premises and (without limiting the foregoing) to open construct lay down renew alter repair cleanse empty or maintain any gutters sewers watercourses drains cisterns water pipes cables electric wires gas pipes conduits ducts or heating or sanitary apparatus or other conducting media and all appliances telephone or other service or supply in connection with or for the accommodation of any other parts of the Building or any adjoining property and to survey other parts of the Building or to search for or amend any defect accident or want of repair to any other parts of the Building and to execute any repairs or works to the demised premises which may be required by the Superior Lessor the county or local authority or any public or national authority the Lessor or the Service Company making good to the demised premises all damages thereby occasioned and causing as little inconvenience to the Tenant as possible.
Mr Daniel Dovar, for the appellants, submits that this clause requires the landlord to replace the tenant's property like with like, and that the landlord was in breach of this covenant in two respects.
First, the substituted terrace tiles are said to give rise to a problem with “ponding”, that is, the collection of rain water in puddles. The appellants' further point is that the tiles require more maintenance when they are fitted on the pedestal system than if they are fitted by direct application to the asphalt roof. The tiles have to be removed so that the area underneath can be cleaned and the position of the shims has to be rectified from time to time. Therefore, they say that the landlord did not and could not perform its obligation to make good the damage by replacing like with like.
In my judgment, all these arguments must fail because of the judge's findings of fact. The judge held that there had been ponding before the works were undertaken. He considered that this had been part of the original design of the building. However, the judge found that there was no ponding after the works were done and that, if any excess water collected, it was beneath the tiles. Moreover, the amount of ponding after the works was de minimis and accordingly there was no breach of the covenant to make good (see Judgment, paragraphs 149 and 151).
The judge brought together a number of his reasons for rejecting the appellants' claim for failure to make good the damage caused by removing and replacing the terrace tiles in paragraph 161 of his judgment, which reads as follows:
161. I further find that the decision of the Claimants to apply Decothane over the asphalt and to use the Caro system for the tiles required by the Defendants on the terraces complied with their obligations and accords with the experts of both sides. I find that the system introduced by the Claimants were works that complied with their obligations to keep the property in good and substantial condition. Mr Dovar in his closing submissions argued that the terraces were in poor condition. He asserted that there was stagnant water, a breeding ground for biting insects, tripping hazards and problems with the Caro system. None of these allegations have been proven. Reasonable maintenance is required. I find that the drainage system is sufficient although the terraces are subjected to an excessive profusion of plants. They cause problems and expense. They belong to the Defendants. The Claimants have been very reasonable in allowing the proliferation of greater and bigger plants. I must reject the concluding submissions of Mr Dovar claiming damages firstly for breach of covenant.
The judge's approach is supported by authority. In Bradley v Chorley Borough Council (1985) 17 HLR 305, this Court held that “what work can reasonably be required of the landlord will depend upon the facts of each particular case.” This Court made it clear that the obligation to make good did not impose an absolute standard, but an obligation so far as possible to restore property to its pre-existing condition. The condition of the demised premises before the work takes place is a key consideration. So, for example, it might be the case that the landlord could make good a wall with already badly damaged wallpaper on it by painting it with emulsion (see per Sir John Donaldson MR and per Eveleigh LJ in Bradley at 309).
The landlord may not be able to restore the premises to exactly what was there before. Here the landlord could not reasonably be expected to lay promenade tiles directly on to the Decothane or to replace the promenade tiles in their pre-existing damaged condition. What the landlord did was to improve the tenant's property by installing new and apparently superior terrace tiles. There was no question of defective work or poor quality tiles being used....
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...Reedbase Limited and another v Fattal and others [2018] EWCA Civ 840 the Court of Appeal was asked to decide if a statutory consultation should have been repeated when a landlord changed a specification of works to residential leasehold The Court also considered whether the landlord had fai......