The Post Office v Aquarius Properties Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SLADE,LORD JUSTICE RALPH GIBSON,SIR ROGER ORMROD |
| Judgment Date | 18 December 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J1218-13 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 86/1177 |
| Date | 18 December 1986 |
[1986] EWCA Civ J1218-13
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM AN ORDER OF MR JUSTICE HOFFMANN
Royal Courts of Justice
Lord Justice Slade
Lord Justice Ralph Gibson
Sir Roger Ormrod (Not Present)
86/1177
MR M.H. SPENCE Q.C. and MR A.D. DINKIN, instructed by Messrs Masons, appeared for the Appellants (Defendants).
MR PAUL MORGAN, instructed by B.A. Holland Esq., appeared for the Respondents (Plaintiffs).
I will ask Lord Justice Ralph Gibson to give the first judgment.
This is an appeal by landlords from the decision of Hoffmann J. given on 26th July 1985 by which he made a declaration at the suit of the Post Office, who are the tenants and the plaintiffs in the action, that on the true construction of an underlease dated 25th June 1969 the Post Office is not liable to carry out certain work to the basement floor and walls at Abbey House, 74/76 St. Johns Street, London EC1. The appeal raises question's of principle upon the proper construction in law of repairing covenants in common form. The facts which have given rise to these questions, however, appear to be highly unusual. In short, there is shown to be a defect in the structure of the basement of an office building which was present from the time of the construction of the building. During a period of time when the water table rose at the place where the building stands, the defect permitted ground water to enter the basement so that water stood ankle deep on the floor for some years. The defect has not grown worse but is in the same condition as when the building was built. Apart from permitting water to enter, which disappeared when the water table dropped, leaving the basement dry for the last two years, no damage to any part of the building is shown to have been caused by the defect.
The first question, accordingly, is whether it has been proved that the building was out of repair so as to give rise to an obligation under the covenant to put it into repair. The second question—which appears to have been treated as the main, if not the only, question at the trial—is whether, assuming the building to be in a state of disrepair by reason of the existence of the defect, any of the schemes of treatment put forward for curing the defect were capable of being regarded as work of repair as opposed to being structural alterations and improvements.
On this appeal the findings of fact of the learned judge have not been questioned. I set out his primary findings in his words:
"Abbey House is an office building in the City of London constructed in the mid-sixties. Since 1969 it has been let to the Post Office on a full repairing lease by Aquarius Properties Limited. For most of the time between 1979 and 1984 the basement was ankle deep in water. This appears to have been the result of a rise in the level of the local water tables combined with defects in the construction and possibly the design of the building. In 1984 the water table subsided again and since then the basement has been dry.
"The tenant's lease expires in 1991 but the building has a life expectancy of many years and it is therefore agreed by landlord and.tenant that remedial work is necessary to make the basement waterproof in case the water table should rise again.…..
"The building consists of front and rear sections. The basement runs under both. It has 12-inch thick reinforced concrete walls. Under the front section of the building the basement floor is a reinforced concrete raft 3 feet thick which, together with the walls, supports the ground and six upper storeys. At the rear there are only two upper storeys and the basement slab is of lighter construction. For the most part it is 8 inches thick….. The floor has been constructed integrally with the walls by forming a 5 inch upstand around the edge of the floor and then using that as the base for the walls. This upstand is called the 'kicker'.
"Concrete has to be cast in sections with each new section of wet concrete being poured alongside or above a section which has already dried. There is also a tendency for concrete to shrink as it dries, partly from chemical reaction and partly on account of evaporation. The result is to produce a construction joint between sections of concrete which, unless suitably bridged, may admit water. In the design of Abbey House basement PVC water bars were specified for insertion at the construction joints beneath the concrete floor and on the outside of the walls up to a height of 6 feet from a datum line corresponding to the surface of the basement con crete floor. These water bars are, in effect, strips of PVC which are keyed into the concrete and overlay and construction joints by some inches on each side.…..
"The contract documents record that in November 1964 3 trial holes had shown the water table to lie 1 3/4 feet below the datum line to which I have referred, that is about a foot below the 8 inch section of the rear basement floor. In May 1965 the Engineer engaged for the construction of the building reported the water table 3 inches higher. In 1979 it appears to have risen to at least 6 inches above the basement floor and the flooding took place. There is no evidence that ground water entered at any higher level.…..
"I have had the benefit of the views of two eminent structural engineers on the causes of the flooding and the remedies which should be adopted. Both agreed that there had been a failure of the kicker joint between the floor and the walls. This was caused by poor workmanship which had produced weak areas of concrete or what Mr Reith, the plaintifffs' expert, described as honeycombing of the concrete. This means that the concrete consists in places almost entirely of aggregage and is deficient in sand and cement. It is therefore relatively porous. Unless care is taken this phenomenon tends to occur at the bottom of the section being cast and in this case affected the concrete immediately above the kicker. There was also evidence that some construction joints had not been formed with care and that the water bars had therefore been inadequate to prevent the ingress of water."
The learned judge then considered whether, in addition to the porous concrete in way of the kicker joint and the inadequate water bars, other causes of the entry of ground water had been proved. He considered shrinkage of concrete as a possible cause of the detachment of water bars, which may have allowed water to enter between them and the concrete, and possible cracks in the 8 inch slab, but no such defects were positively shown to have existed.
Next the learned judge considered the remedial measures proposed by the two experts. He approached the matter in that way because he had defined the issues in the case as whether the remedial work necessary to make the basement waterproof was "repair" within the meaning of the tenant's covenants. Mr Reith, the tenant's expert, recommended the more elaborate and expensive asphalt scheme, costing, at £175,000, rather more than twice the less elaborate rendering scheme, at £86,000, recommended by Mr Deverill, the landlord's expert. Reliance by the tenants upon evidence showing more expensive work to benecessary and by the landlords upon evidence showing that much less expensive work would suffice resulted no doubt from the concern of the parties over whether this work could properly be regarded in law as work of repair.
The scheme proposed by Mr Reith at £175,000 was, as described by the learned judge, as follows:
"Mr Reith recommends the tanking of the basement with a layer of asphalt covering the floor and the walls up to a height of 5 feet. Since asphalt does not bond very well with concrete it would have to be held in place by an additional concrete slab of 12 inches thickness laid over the floor and an inner concrete skin 6 inches thick within the walls. In order to add additional weight to the floor, he also recommends the extension of the inner concrete walls to the ground floor slab so as to enable its weight to be transmitted to the basement floor and the construction of heavy internal partitions for the same purpose."
Mr Deverill proposed two alternative schemes. The learned judge described them as follows:
"One is an asphalt tanking scheme similar to that of Mr Reith. The differences are that Mr Deverill considers that it would be excessive to allow for the possibility of a 5 foot head of water. In his opinion 3 feet would be enough.….. He agrees that it would be advisable to cover the asphalt on the floor with an additional 12 inch concrete slab. Mr Deverill's second and preferred scheme involves the use of water-proof rendering in place of asphalt. This would be strongly bonded to the floor and walls and would, therefore, not need an inner concrete skin or covering. On the floor, however, Mr Deverill still thinks it advisable to add another 9 inches of concrete slab firmly bonded to the existing slab and reinforced on the upper side. The water-proof rendering would then be applied to the upper surface of the new slab. Mr Deverill proposed the rendering scheme as a cheaper and more elegant solution than the traditional asphalt scheme. He agreed that the application of rendering was technically more demanding than asphalt and that unless the workmanship was good there was a higher risk of failure. Mr Reith said that his experience taught that the rendering scheme was too risky and that asphalt was worth the additional expense.
The learned judge observed that the choice between the schemes involved an evaluation of the additional risk in the cheaper...
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