Stonecrest Marble Ltd v Shepherds Bush Housing Association Ltd
| Jurisdiction | England & Wales |
| Judge | Richard Williams |
| Judgment Date | 23 September 2021 |
| Neutral Citation | [2021] EWHC 2621 (Ch) |
| Court | High Court |
| Docket Number | Claim No: PT-2020-000077 |
[2021] EWHC 2621 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
BIRMINGHAM DISTRICT REGISTRY
Priory Courts
33 Bull Street
Birmingham, B4 6DS
HHJ Richard Williams
(sitting as a High court Judge)
Claim No: PT-2020-000077
Paul Stafford (instructed by Newhall Solicitors LLP) for the Claimant
Henry Webb (instructed by Winckworth Sherwood LLP) for the Defendant
Hearing date: 28 June 2021
(Draft judgment circulated to the parties' legal representatives by email dated 17 September 2021)
Introduction and background
This is my judgment following the remote trial of 3 preliminary issues, although counsel for the claimant describes the principal question as:
“the circumstances in which a landlord may incur any liability to a tenant, whether in the tort of nuisance or in negligence, as a result of its failure to inspect, cleanse or repair any parts of the building remaining under its control, or under an express term in the lease for breach of quiet enjoyment, for damage caused by water ingress from the retained premises which renders the demise materially unusable.”
Stonecrest Marble Limited (“ C”), the tenant, is a company specialising in the sale to the public of tiles and tiling products for use in residential premises.
Shepherds Bush Housing Association Limited (“ D”), the landlord, is a regulated social housing provider in the London area, although some of the buildings comprising D's housing stock also contain commercial units.
D is the long leasehold owner of 7 Townmead, Wandsworth Bridge Road, London, which comprises (i) a ground floor commercial unit (“ the Property”) and (ii) residential units extending over the remaining first to third floors of the building (“ the Retained Parts”).
By a lease dated 9th October 2015 (“ the Lease”), D demised the Property to C for a term of 10 years ending on 8 th October 2025 and to be used solely for “ the sale display and storage of tiles and flooring accessories” (“ the Permitted Use”). The initial rent was £28,000 per annum, although the Lease further reserved as rent amongst other things a service charge and insurance.
By order dated 23 November 2020 it was directed that the following matters be heard together as preliminary issues (“ the Preliminary Issues”):
a. Whether the terms of the Lease exclude any liability of D towards C to inspect, cleanse and/or maintain the gutter at the building of which the Property forms part (“ Preliminary Issue 1”)
b. Whether D is legally obligated to take steps to inspect and clear the guttering at the building of which the Property forms part (upon notification by C as to the condition of the guttering or otherwise) so as to prevent the occurrence or continuance of any nuisance to those premises (“ Preliminary Issue 2”); and
c. Whether, for the purposes of the rent suspension provisions in the Lease, strictly on the assumption that the Property was damaged by water ingress, this a risk against which D was obliged to insure under the Lease. (“ Preliminary Issue 3”).
Joint Statement of Assumed Facts
The following facts are agreed as being assumed for the purpose of this trial of the Preliminary Issues and for that purpose only:
a. That at all material times the Lease was subsisting and that there had been no surrender or other event determining the same;
b. That at the relevant time the Insurance Policy terms put in place in May 2018 (under which Aviva Insurance Limited is the Insurer and the D is the Insured) were in force;
c. That at least one incident of water ingress to the Property occurred;
d. That the cause of the water ingress was the blockage by the gradual accumulation of debris in a drainage gutter in that part of the building within the possession of D above the Property;
e. That C had done nothing to cause or to contribute to the water ingress;
f. That C had done nothing to void any insurance claim by the D or any party in respect of the water ingress;
g. That the water ingress was such as to cause damage to the Property;
h. That the water ingress was such as to render the Property materially inaccessible or unusable by the C for the Permitted Use.
Admitted facts
C invites the court also to take into consideration the following facts admitted in D's Defence:
a. On 18.9.17, C reported to D for the first time that there was water ingress into the Property;
b. There was some further water ingress into the Property on a limited number of occasions between 18.9.17 and 19.11.19, during periods of heavy rain. When this occurred, it led to some pooling on the floor within the Property;
c. The parties' surveyors conducted a joint inspection of the building and the Property on 31.7.19;
d. Both parties' surveyors identified the cause of the water ingress was a blocked rainwater downpipe which led to water overflowing from the gutter during periods of heavy rain;
e. C's surveyors' report was provided to D's solicitors on 9.8.19; and
f. The downpipe was fully unblocked on 15.11.19.
Material provisions in the Lease
The key provisions in the Lease so far as relevant to determination of the Preliminary Issues are as follows:
“ Agreed Terms
1. Interpretation
The following definitions and rules of interpretation apply in this lease.
1.1 Definitions:
……….
Annual Rent: rent at an initial rate of £28,000 (Twenty Eight Thousand Pounds) per annum and then as revised pursuant to this lease and any interim rent determined under the LTA 1954.
……….
Common Parts: the roads, paths, loading and bin areas, Service Media and other parts of the Estate other than the Property and the Lettable Units.
……..
Insurance Rent: the aggregate in each year of the:
(a) gross cost of the premium before any discount or commission for the insurance of:
(i) the Property, other than any plate glass, for its full reinstatement cost (taking inflation of building costs into account) against loss or damage by or in consequence of the Insured Risks, including costs of demolition, site clearance, site protection and shoring-up, professionals' and statutory fees and incidental expenses, the cost of any work which may be required under any law and VAT in respect of all those costs, fees and expenses; and
(ii) loss of Annual Rent from the Property for three years;
(b) a fair proportion of the gross cost of the premium before any discount or commission for the insurance of:
(i) the Common Parts for their full reinstatement cost (taking inflation of building costs into account) against loss or damage by or in consequence of the Insured Risks, including costs of demolition, site clearance, site protection and shoring-up, professionals' and statutory fees and incidental expenses, the cost of any work which may be required under any law and VAT in respect of all those costs, fees and expenses; and
(ii) public liability in relation to the Common Parts; and
(c) any insurance premium tax payable on the above.
Insured Risks: means fire, explosion, lightning, earthquake, storm, flood, bursting and overflowing of water tanks, apparatus or pipes, impact by aircraft and articles dropped from them, impact by vehicles, riot, civil commotion and any other risks against which the Landlord decides to insure against from time to time and Insured Risk means any one of the Insured Risks.
……………
Permitted Use: the sale display and storage of tiles and flooring accessories within Class A1 of the Town and Country Planning (Use Classes) Order 1987 or such use within Class A1 of the Town and Country Planning (Use Classes) Order 1987 as the Landlord may consent to, such consent not to be unreasonably withheld where the proposed additional or alternative use is acceptable having regarding to the principles of good estate management.
……………
Property: the ground floor shop at premises in Wandsworth Bridge Road as shown edged red on the Plan but excluding any Service Media in or under or over that unit…..
…………
Service Charge: a fair proportion of the Service Costs.
Service Costs: the costs listed in clause 8.2.
Service Media: all media for the supply or removal of heat, electricity, gas, water, sewage, air-conditioning, energy, telecommunications, data and all other services and utilities and all structures, machinery and equipment ancillary to those media.
Services: the services listed in clause 8.1.
…………..
2. Grant
2.1 The Landlord lets with limited title guarantee the Property to the Tenant for the Contractual Term.
………..
2.3 The grant is made with the Tenant paying the following as rent to the Landlord:
(a) the Annual Rent and all VAT in respect of it;
(b) the Service Charge and all VAT in respect of it;
(c) the Insurance Rent;
(d) all interest payable under this lease;
(e) all other sums due under this lease.
..……..
8. Services and Service Charge
8.1 The Services are:
(a) cleaning, maintaining and repairing the Common Parts including all Service Media forming part of the Common;
(b) lighting the Common Parts and cleaning, maintaining, repairing and replacing lighting machinery and equipment on the Common Parts;
(c) cleaning, maintaining, repairing and replacing refuse bins on the Common Parts;
(d) cleaning, maintaining, repairing and replacing signage for the Common Parts;
(e) cleaning, maintaining, repairing, operating and replacing security machinery and equipment (including closed circuit television) on the Common Parts,;
(f) cleaning, maintaining, repairing, operating and replacing fire prevention, detection and fighting machinery and equipment and fire alarms on the Common Parts;
(g) cleaning, maintaining, repairing and replacing a signboard showing the names and logos of the tenants and other occupiers at the entrance to the Estate;
(h) maintaining the landscaped and grassed areas of the Common Parts;
(i) supply cold water to the Property; and
(j)...
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