Well that is what you get when you have the most odd case going in town.. where its all about family and connections.. was I ever really going to win when the landlords (Baroness) chairpersons brother in law was the highest Judge in the land.. some how I don't think so.. you don't half pick them Jo.. or are they picked for me on the highest of authority as a battle I alone am forced to declare to you..
The highest Judge in the land talks of http://www.supremecourt.gov.uk/docs/speech-130508.pdf Maintenance, champerty and barretry which finally ceased to be criminal offence's and torts by virtue of sections 13 and 14 of the Criminal Law Act 1967
In my case the insurers fight for their own share of my possessions.. very historical.. like his speech..
and yet he writes in his own speech about the real barons who fought for their lands and why we are a civilized society now thanks to the people..
Ironically I fight for my land, for what is my money, it does not belong to him or any other..
Isn't it barbaric in this day and age for me to declare war.. or is this war of all our army of people with this case be it picked to pieces, oh you would see it was, if you did look..
I think you would find they know the war they fight with me and it's symbolism historically and now.. for my case may be complex but it has greater meaning.. which they are fully aware of..
But on the interesting matter of what is actually going on... in the grand scheme of things.. to do with the way the ESTABLISHMENT is dealing with child abuse here is an oddity..
I went to court on Friday and low and behold Sally Bercow's case is on the same day..
Strangely there were just three cases on the daily cause list.. The court was well and truly locked down..
I went to the prayer room with my friend and we held hands and said the psalm 37 of David aloud mainly not to fret at the inevitable corruption, knowing they would chop off my head within minutes..
Four journalist witnesses in a strangely cameraed up court and a Judge who did not seem confident in his cause..
Judgement was handed down that I had lost my appeal, that the other side be the victors with no leave to appeal to the supreme court the highest of the land but why would he want to face me.. do you understand?
The conspirators had their way that day
I stood and said they had made a clause 5 (22) administrative error that has not been dealt with
and the Judge of no courage said "it's in the Judgement" and finished with a bow his endeavour
But there is nothing in the Judgement of the case I fought for 5 years to plead
They may as well have made me deal with a parking fine when it was a mortgage that I plead
What ways.. can this really be law.. there is a joke in this somewhere when they are all above the law
See my other blog.. for what went on.. www.shopsbuildinginsurancelaw.blogspot.com @justjomakinglaw twitter
Footnote to Sally
This draft Judgement was sent to us as is standard for correction in fact, spelling mistakes etc and so I sent back this.. with absolutely no reply.. whatsoever... I then filled out an N244 form to see if they could stay the Judgment as clause 5(22) in other words.. MY CASE.. had not been dealt with.. to the N244 form for a stay it was answered with a NO.. and that was it.. pathetic..
I still think that the supreme court should have the balls to deal with this important procedural admin error (that's putting it nicely) as I will have to go to Europe and won't be quiet about it...
It's not difficult to understand.. so read.. it just requires patience that is ALL....
Case No: B5/2010/2396
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
HH JUDGE COWELL
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 24th May 2013
LORD JUSTICE MUMMERY
- - - - - - - - - - - - - - - - - - - - -
GAVIN & ANOR
- and -
Community housing association limited
(now one housing group limited)
- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -
Ms Jo Flores (Gavin) appeared in person for Appellants
Ms Zia Bhaloo QC (instructed by Bircham Dyson Bell LLP) for the Respondent
Hearing dates : 2nd and 3rd May 2013
- - - - - - - - - - - - - - - - - - - - -
1. This is an appeal by Ms Jo Flores (formerly Ms Jo Gavin) and Ms Chantal Cracy against an order of HH Judge Cowell dated 22nd September 2010 which was made at the conclusion of proceedings in the Central London County Court.
2. Ms Flores is the tenant of commercial premises at 104, Cromer Street, London, WC1 (“104”) under a lease from the Respondent, Community Housing Association Limited (“CHAL”), dated 8th June 2000. Together with Ms Cracy she is also the tenant of adjoining premises at 106/108 Cromer Street (“106”) under a lease from CHAL dated 17th March 2005. The lease of 104 was granted for a term of 6 years from 8th June 2000 at an initial rent of £3,500 per annum subject to review. The lease of 106 was granted for a term of two years from 8th April 2004 and was then extended on 17th March 2005 for a term until 7th April 2014 at an initial rent of £9,000 per annum again subject to review.
2. CHA is the acronym for ‘Community Housing Association’ that has been used throughout the trial and adding an L for limited cannot be the new acronym in the judgment, as limited does not form any part of any acronym.
3. The demise under both leases comprised the ground floor and basement of the premises including internal plaster; ceiling and floor coverings; doors and windows; and all conduits within the demised premises. It did not extend to any part of the upper floors of 104 and 106 which have been converted into residential flats and have been let as such by CHAL. Nor did it include the soil pipes on the outside rear wall of the building which serve the upper part of the premises.
3. The lease for 104 Cromer Street was at an initial rent of £6,500 not £3,500.
One cannot use the term ‘part of the premises’ it can only be said as ‘outside’ of the retained premises. Or it could be construed as ‘part’ if ‘part’ is used, as if the premises were ‘part’ as opposed to ‘above’ with a separate entrance and exit.
4. Under both leases the tenants covenanted to put and keep the demised premises in good and substantial repair, decoration and condition (clause 5(6)(b)) and to decorate them every three years (clause 5(6)(c)) but there is no corresponding covenant by CHAL as landlord to repair those parts of the building which it has retained. Instead its only express covenants are that the tenant should have quiet enjoyment of the demised premises (clause 7(1)) and an insurance covenant (clause 7(2)) which (so far as material) is in these terms:
“To insure the Demised Premises and the Development in an insurance office of good repute or at Lloyds against the Insured Risks and in the event of the Demised Premises being destroyed or damaged by any of the Insured Risks the Landlord shall with all convenient speed (subject to the availability of all necessary labour and materials and the obtaining of all necessary permissions) lay out and apply in rebuilding repairing or otherwise reinstating the Demised Premises all monies received by virtue of such insurance other than monies received in respect of loss of rent Provided that the Landlord shall be under no liability to the Tenant hereunder if the insurance money under any policy of insurance effected by the Landlords shall be wholly or partially irrecoverable in the circumstances set out in 5(22) above….”.
4. With regard to the comment in brackets (so far as is material); the UKU building policy which forms an integral part of two leases insured repairing obligations, had an express obligation, with regard to ‘Property Owners Liability’ as well as ‘Material Damage’ in the building policy. POL as it is known was very ‘material’ to the case because it covered business interruption caused by any retained premises of the landlord and indeed the claimants qualified for POL under the loss assessors report for UKU so that is not in dispute and must be made clear as it is not at all in this draft and it is primary fact as proved.
The claimants additionally through another RSA loss assessors report qualified for the RSA excess liability cover too only if the primary policy UKU POL was exceeded, as it was, due to the delays by the landlord in repairing the leaseholders premises. Evidence of the two policies being linked as forming an integral part of the same policy for the leaseholders for which they paid a premium was given to the court of appeal.
Ms Flores handed the document to the court of appeal which clearly said on the front page of the 15 pages she handed up of the RSA excess POL policy and is hi-lighted as such as saying; ‘Property Insured- (Commercial Property where required) The terms of the policy apply separately to each property as though each had been insured by a separate policy.
On the second page there is further evidence of the excess liability policy being linked to the primary policy and is also hi-lighted as saying;
CROSS LIABILITY CLAUSE
If more than one policyholder is named in the schedule each policyholder so named shall be considered, as a separate and distinct entity and cover shall be construed as applying to each policyholder as though each had been insured separately
Further and highlighted also; ‘page 157 RSA combined liability Insured associated companies lodged with the company (noted interest lodged) & page 158 Section 6 Excess POL Primary Policy is UKU!
Ms Bhaloo tried to say our case was a section 11 and that was a lie and Ms Bhaloo further blatantly gave false information and lied in court saying that the UKU policy was not linked to the RSA policy. She further lied when asked if the UKU building policy covered POL and she said no it is just for material damage. She knew she was lying on both counts as she did with section 11, disputed by the judge correctly. This lie is the undoing of the case and must be re-read in the factual evidence of the RSA policy documents Ms Flores handed the court. Finally on that point Ms Bhaloo gave false information when asked what was the ‘development’? She said this was standard wording, when actually the ‘development’ is the 17 million pounds residential ‘development’ paid for by government grant given to CHA in 1998 and as such is insured! Hence there is an expressed covenant to keep the residential flats which form part of the ‘development’ insured from all risks including escape of water so that is the corresponding express covenant to repair the retained parts. It therefore cannot be said there is no corresponding covenant if one is to take Clause 7(2) of the lease, so far as is material and apply it.
5. The “insured risks” are defined by clause 1(11) to mean:
“loss or damage by or in consequence of fire and such other risks as the Landlord may deem desirable or expedient including three years loss of rent and architects and surveyors fees and demolition clearance and similar expenses.”
6. Clause 5(22) provides that:
“In the event of the Demised Premises or the building in which they are situate or any neighbouring premises or any of them or any part thereof being destroyed or damaged by any of the Insured Risks and the insurance money under any policy of insurance effected thereon by the Landlord being by reason of any act neglect default or omission of the Tenant wholly or partially irrecoverable forthwith in every such case to pay to the Landlord on demand the cost of rebuilding and reinstating the building or buildings so destroyed or damaged such rebuilding works to be carried out by and in accordance with the requirements of the Landlord and the Tenant being allowed towards the expenses of so doing (upon such rebuilding and reinstatement being completed) the amount (if any) actually received by or on behalf of the Landlord (other than in respect of loss of rent) under any such insurance as aforesaid in respect of such destruction or damage.”
7. Under the heading “Landlord’s Liability” clause 6(5)(a) also provides that:
“In any case where the facts are or should reasonably be known to the Tenant and not reasonably known by the Landlord the Landlord shall not be liable to the Tenant in respect of any failure of the Landlord to perform any of its obligations to the Tenant hereunder whether express or implied unless and until the Tenant has notified the Landlord of the facts giving rise to the failure and the Landlord has failed within a reasonable time to remedy the same.”
8. In addition to these provisions clause 6(3) of each lease contains a cesser of rent clause in the following terms:
“If the Demised Premises or any part thereof shall be destroyed or so damaged by fire or any other risk for which the Landlord is indemnified under the insurance of the Demised Premises so as to be unfit for occupation or use then unless the insurance of the Demised Premises shall have been vitiated by the act neglect default or omission of the Tenant the rent hereby reserved or a fair and just proportion thereof according to the nature and extent of the damage sustained shall be suspended and cease to be payable until the Demised Premises or damaged portion thereof shall have been reinstated or made fit for occupation or until the third anniversary of such destruction or damage whichever shall be the sooner.”
9. There is also the usual proviso for re-entry in the event of rent being unpaid for 21 days or of any breach of the tenant’s covenants: see clause 6(1).
10. The appellants fitted out the demised premises at some expense for use as gallery space and, as part of their business, let out part of the area for exhibits and other commercial events. But on at least four occasions between April 2004 and June 2005 the interior of the demised premises was damaged by the ingress of water and on two occasions sewage from the parts of the building retained by CHAL. The judge found that in April 2004 gaps between the glass pavement lights above the basement of 106 let water through. They were repaired in September 2004 and in January 2006 an insurance payment of £150 was made in respect of the damage. In September 2004 one of the soil pipes carrying sewage from the flats above leaked and sewage permeated the rear wall of 104. The leak was remedied by the landlord’s contractors on 31st January 2005 and part of the wall was then replaced. A further insurance payment was made in respect of the damage.
10. When the leak at 106 is mentioned as starting in April and commencing in Sept 2004 that is incorrect. It was repaired as ‘agreed’ by both parties in Nov 2004. Also the damage of £150 was ‘material damage’ (as was all the £3,500 ‘reimbursed’ to the claimants) not damages. The £150 payment was for a small section of ceiling that still had to be repaired and was by the claimants. The rest of the repair of the April-Nov 04 repair was made by the defendants, including fixing the pavement and the internal ceiling. So either miss out the irrelevant £150 re-imbursement or put in all the material damage facts of repair or this continues to be mis-leading as that particular repair amounted to thousands of pounds worth of repair not £150.
Again the Sept 2004 to Jan 2005 date is incorrect it was finished in Feb 2005 as agreed by both parties.
The words ‘a further insurance payment was made in respect of the damage’ is misleading to. Firstly to who as it was not us? Secondly is this again ‘material damage’ or damages it is very unclear?
The 7th Feb-26th April 2005 soil stack leak says ‘Again this would have resulted in an insurance payment but for the excess on the policy of £100.’ It is very unclear as to whom the draft is referring to. Being paid to whom? For what?
The 24th June – Oct 2005 flooding incident says the, “costs of the works were met by the insurer” but all the costs of ‘material damage’ were met by the insurer, to either the claimant or the landlord whom ever had fixed. The word is re-imbursed for material damage and that would make all this a lot clearer.
On the words ‘associated damages to the exhibition’ no damages were paid or associated costs whatsoever. A small amount of stationary ‘contents’, were paid for those that were flooded. The associated damages or costs are still the subject of a POL investigation and these court proceedings will determine if POL pays out. So again this is very misleading.
To make it clear we were reimbursed as we mitigated our losses by doing the repairs ourselves other costs associated with the exhibition clearly have not been met. It would be like getting run over by a car, paying your own medical bills and then when liability is established being reimbursed for you medical bills but nothing for damages yet. Reimbursed, as a word must therefore be used.
11. On 7th February 2005 there was then another leak from a stack pipe on the rear wall of 106 which was repaired on 26th April 2005. Again this would have resulted in an insurance payment but for the excess on the policy of £100. Finally on 24th June 2005 water from a tap or leaking pipe in one of the flats above 104 inundated the demised premises about a week before an art exhibition was due to be held. It necessitated the replacement of the ceiling (which was completed in October 2005). The cost of those works was met by the insurers and the appellants received a cheque direct from the insurers of £3,441.65 to meet these and other costs associated with the exhibition.
12. The judge found that all of these leaks (including the defective pavement lights) emanated from the premises retained in the ownership of CHAL. But, in the absence of any express repairing covenant in respect of its adjoining premises, CHAL contended that it had no liability to the appellants beyond being required to lay out payments received from the buildings insurance it had taken out pursuant to clause 7(2) of the leases in the repair of the damage to the demised premises which had been caused. It is common ground that this was done.
12. CHA had no express responsibility except to pay out monies received from the insurers. It is common ground this was done. It is not common ground and cannot be contended as such. POL on the insurance policy or cessor of rent whether partially unfit/wholly unfit has not been paid out as contended. Also as proved it will not be paid out as the landlord vitiated the insurance policy by failing to repair on time and/or make claims on the insurance policy on time. If the landlord (hypocritically back by the insured to avoid the claim) believes that the repairs were repaired reasonably after notice then tell that to the insurers not to all else. CHA have an express covenant and a proprietary duty to attain the POL payment owed to the claimants as set out in 7(2) of the leases for business interruption (and for rent owed) as set out in the schedule of loss with the particulars of claim, as part unfit and at times wholly unfit with the said times clearly stated in the schedule as well as multiple occurrences often subsumed to one period of unfitness and therefore claim of damages. It would be a duty of the court to point to this information and it would be difficult to see how the insurer after backing a claim that the landlord repaired on time could then turn around and say the opposite since they have backed this line of thinking. It in turn then does not get them off the hook to honour the landlord in an expressed obligation to be covered for property owner’s liability. CHA could even admit it as Chris Natt did when he said “I thought we were covered even if we did wrong, I think we could end up with a very bad defence in court’. The policy does not allow for people to admit liability, ‘except’ when they say, it is obvious. Well it is obvious. The liability came from outside of the retained parts and Jaqui Greene also admitted it when she said the leaseholders could claim for business interruption, loss of rent and damages. All of which Ms Flores pointed to in court. It is unfortunate that the landlord is now put to a weak defence of lies and avoidance of the issue that they broke the terms of the insurance. They should admit it or the court say that it is true as HHJ Cowell did say and this is ignored in the draft. The landlord and the claimant who were once morally and socially on the same side have been set against each other to save the insurers a claim. This must be addressed. The landlord, who are not now even in the cover of the insurers would do well to admit liability and put a stop to this moral injustice. They would have much to gain by having the courage to do so when they know they are liable by anyone’s reasonable standards of interrupting another’s business and then being held hostage by their insured to defend the ridiculousness of this once simple claim that only got bigger as time moved on and the claim escalated. A chartered accountant could then assess the damages as historically suggested but until then their mighty legal team cannot ruin us indiscriminately.
13. Until June 2008 the appellants continued to pay the rent due under both leases but the rent due on the June quarter day was not paid and, as a result, CHAL served notices in respect of both leases that unless payment was received within 7 days it would proceed to re-enter and forfeit the leases. The rent due on 29th September also went unpaid and the landlord served further notices of its intention to forfeit the leases. The appellants responded through their solicitors to the effect that they had no liability for rent for those quarters because they had continued to pay rent in 2005 when the demised premises had been unfit for occupation within the meaning of the cesser of rent clause contained in clause 6(3) of the two leases. As a consequence, they were entitled to recover the rent paid (but not due) during this period and to set off the relevant amount against the rent due in September and October 2008.
13. The rent was paid albeit by bullying us with the treat of eviction but it has never been proven that it was not paid, quite the contrary it was proven that it was and that evidence was too offered to the court of appeal, which said they did not need to see it. It was however accepted by all the judges involved so couldn’t now be said not to have been paid at the date of re-entry making it a trespass.
14. On 29th October 2008 CHAL re-entered 104 and 106 and changed the locks. On 4th November Wilkie J. granted the appellants an injunction ex parte requiring CHAL to allow them back into possession and this injunction was continued until trial by Christopher Clarke J. on 14th November. The landlord’s case at the inter partes hearing (and on this appeal) is that the appellants have no claim in restitution or otherwise to recover the rent which they paid in 2005 even if (which is denied) the premises were unfit for occupation in that period. Judge Cowell found at the trial that the cesser of rent clause had never come into operation because, as he put it, there was never an occasion when the premises were wholly unfit for occupation and use. That conclusion is challenged in one of the grounds of appeal on the basis that the judge failed to give any consideration to whether “any part” of the demised premises became unfit for use.
14. It should say the challenge ‘as set out in leases with the inseparable insurance documents regarding the cessor of rent ‘if the demise becomes part or wholly unfit’ then the cessor of rent comes into operation. HHJ Cowell addressed that in his second judgment.
15. The appellants’ claim for damages was issued on 3rd December 2008 and eventually came to trial on 12th July 2010. It sought to recover damages for financial loss consequent on the disrepair to their premises caused by the leaks I have mentioned. This was said to have run into many hundreds of thousands of pounds in the form of lost business and at one point the damages claim exceeded £2m. In order to succeed in a claim for this type of loss the appellants must establish a breach of duty on the part of CHAL whether in contract or in tort arising from the various leaks which occurred. The basis of such liability is said to be an implied obligation to keep the retained parts in repair or alternatively a common law duty as adjoining occupier to remedy any defect in those premises which was capable of causing damage to the demised premises.
15 The claim was thousands of pounds as the business could command those figures. The figures are not said without expert evidence. The other claim is for the loss of opportunity of Ms Flores social enterprise Youth Parliament and is an additional claim under the CPR rules and should be stated as such and is justified by the defendant’s knowledge of the social enterprise. It is additional damages not business interruption covered under POL in the express clause 7(2) of the leases.
In order to succeed in a claim for this type of loss the claimants need to establish a breach of duty in contract. The breach of duty is the act of omission that has been proved in disclosure and earlier by the eminent loss adjuster Alan Harris that the landlord had vitiated the insurance and POL could therefore not be paid.
The basis of such liability is said to be an implied clause etc etc, no that is not what Ms Flores said in court. She clearly stated at the court of appeal she either wanted absolute liability as covered by an insured risk, which is the purpose of liability insurance of the building and/or an implied covenant to 5 (22) of the leases regarding vitiating the insurance. No case was made in the court of appeal that CHA had any repairing obligations and none can no be said to have been sought that would simply be to now make things up and try something that was never asserted. If it were asserted notice and other issues may have been brought into the equation but Ms Flores steered very clear in her path to establish that the implied clause she sought to establish was 5(22) and no other.
16. Judge Cowell accepted that there was a duty on the part of CHAL to remedy any defects in the retained premises which would cause damage to the demised premises at 104 and 106. He based this on the decision in Hargroves, Aronson & Co v Hartopp  1 KB 472 which was approved by this court in Cockburn v Smith  2 KB 119. The scope of that duty was, he held, to take reasonable care to remedy defects in the retained premises which the landlord knew had caused, or were likely to cause, damage to the premises demised to the tenants. Absent negligence, the duty to repair only arose once the landlord was aware that damage had been caused.
17. The judge found that there was no breach of duty in respect of the leak from the soil pipe at the rear of 104 because the landlord had acted reasonably in attempting to trace the source of the leak once the damage it was causing had been notified. He also found that the flood caused by the leak in the flat above 104 in June 2005 was an unforeseeable accident and that repairs were carried out promptly. But he did hold CHAL liable for breach of duty in relation to the leak from the soil stack pipe at the back of 106 in 2005 not because it ought to have been aware that the pipe was leaking but because, once alerted to the damage, it could and should have remedied the leak by 8th April 2005 at the latest. Its failure to carry out the repairs until 26th April was therefore actionable.
18. In relation to the claim based on the leaking pavement lights at 106, the judge was asked to consider three separate periods. The occasion of the first leaks at the time of the grant of the first lease in 2004; a second period of leaks between June and October 2006; and a third period between May and June 2008. The judge accepted that the problems with the pavement lights were covered by the principle of caveat lessee which I will come to later. But if wrong about that he held that the leak in 2004 could have been easily remedied by the tenant and was within their duty to mitigate. The cost of repair was later met by insurance. In relation to the leaks in 2006, the judge held that there was no culpable delay on the part of CHAL and that when it appeared that the repairs would not be covered by insurance then the work was done at the landlord’s expense. Again the judge held that the tenants should have carried out repairs themselves earlier as part of a duty to mitigate. The judge also decided that there had been no breach of duty in respect of the leaks in 2008 because at no time did CHAL know or have the means of knowing where the leak was coming from.
18. The pavement was an insured risk as in water ingress. An insured risk. It is neither here nor there how that was caused or if the defendant was covered it mattered not to the claimant. The judge held that the pavement did belong to the defendant and therefore POL would be established which is an insured risk. The claimants had no means to fix a pavement nor should one be suggested as a reason to relief the defendant of a duty to make claims on the insurance for damage was caused to the claimant’s premises. At all times the claimants complied with their own repair obligation they cannot in law be expected to cover repairs outside of the demise. They could not afford the thousands to do so. Not to depart from reality the job involves 5 men and a lorry load of black molten substance to seal the pavement and is expensive. Further the claimants have no right to touch the pavement in law and were expressly forbidden (as proved in email correspondence) by the defendants not to contract the defendant’s contractors to mitigate. This has to be addressed in the draft as the claimant’s hands were simply tied and we had no duty to mitigate even if we tried to. The 2008 leak was caused by rain leaking into the pavement seal the defendants had access to the pavement and had the means of knowledge from two previous repairs there was therefore nothing to trace and/or means of knowing does not enter the equation once they had notice too as proved it was reported.
If you are which is not clear from the draft talking of the electricity cupboard then that was an insured risk and the insurance paid for contractors found the leak in 10 minutes. Bad contactor as in woodfall on the defendant’s behalf in law is not an excuse for a three-year leak.
19. In summary then the judge found that only one breach of duty sounding in damages had been established and that related only to the three weeks in April 2005 when there was a delay in remedying the leak to the soil stack at 106. For this he awarded the tenants the sum of £100. Since this was obviously insufficient to extinguish the arrears of rent he declared in his order that both leases had been forfeited by the landlord’s re-entry on 29th October 2008 and ordered the appellants to deliver possession of the premises at 104 and 106 forthwith. They were ordered to pay mesne profits in a sum which represents the market rent of the premises from the forfeiture of the leases until possession and to pay the costs of the action to be assessed on an indemnity basis. He also refused permission to appeal.
19. There were no arrears and no set-off, so if insufficient to extinguish the arrears is being used then the fact must be established that there were no arrears.
20. The tenants’ original grounds of appeal were based on an alleged breach of the rules of natural justice and/or Article 6. They acted in person at the trial and the judge is said to have failed to ensure that there was a fair trial. They also challenged the judge’s formulation of the scope of the landlord’s duty. But in November 2012 they secured the assistance of Mr Jan Luba QC pro bono who re-formulated the grounds of appeal and successfully obtained leave from this court on 4th December 2012 to substitute the amended grounds for those contained in the appellant’s notice. Although Ms Flores has argued the appeal in person, we have been assisted by the very full Advocate’s Statement first used at the hearing on 4th December as well as by the submissions which Ms Flores has made. There are now 9 grounds of appeal which can be summarised as follows:
(1) the judge was wrong to hold that the landlord’s liability for damage caused by a defect in the retained premises was limited to a liability in negligence and depended on the landlord having notice of the defect and a reasonable opportunity to remedy it. He should have held that the landlord was in breach as soon as the defect occurred and caused damage to the demised premises;
(2) the absolute duty contended for arose as an implied obligation under the lease. The principle of caveat lessee has no application;
(3) the judge misconstrued the rent cesser provisions which were triggered by the damage to part of the premises and the tenants were entitled to recover and set off the rent paid during that period against their liabilities for unpaid rent in 2008;
(4) if the tenants succeed on grounds (1)-(3) they are entitled to substantial damages for loss of profit;
(5) even if the tenants are wrong on grounds (1)-(3) the damages of £100 awarded for the breach which the judge found proved were grossly inadequate;
(6) and (7) if the tenants are entitled to substantial damages for loss of profit in excess of the rent due up to 29th October 2008 then the landlord was not entitled to forfeit the leases and the tenants’ continuing liability is to pay rent at the rate reserved and not mesne profits; and
(8) and (9) the judge’s order that the tenants should pay the costs of the action including the reserved costs of all interlocutory applications was clearly wrong.
20. Ms Flores was ordered to have pro-bono by LJ Ward. Her grounds have before pro-bono and then after been that the landlord broke the terms of the insurance and had an expressed covenant in the lease to get the insurance to pay as in the case of vural v security archives.
If you are going to summarise the wording for the grounds of appeal then this needs to accurately reflect what was sought in the grounds. I want the original grounds put in here as they leave bits out especially in ground two for example;
What is said is this;
2. The judge misdirected himself in law as to the landlord’s liability for disrepair
under the leases held by the tenants in this case. He ought to have held that the
tenants’ obligations to repair, in respect of the demised premises, were
matched by a correlative implied obligation on the landlord to keep in repair,
at all times: (1) the parts of the building retained in its ownership and control,
defects in which may affect the demised premises; and/or (2) such parts of the
building as might, if defective, lead to the occurrence of damage covered by
an insured risk.
Now if Ms Flores were to take out ‘and/or’ it would say;
He ought to have held that the tenants’ obligations to repair, in respect of the demised premises, were matched by a correlative implied obligation on the landlord to keep in repair, at all times: such parts of the building as might, if defective, lead to the occurrence of damage covered by an insured risk.
So we can all summarise to show what we mean but one cannot simply leave parts out! The insurance here has been omitted and as Ms Flores argued that point 5(22) as the implied covenant in court this cannot be simply left out! It is misleading.
21. In his Advocate’s Statement and at the hearing on 4th December Mr Luba made it clear that the tenants could not and did not seek to go behind the judge’s findings of fact as to the extent of the damage to their premises or as to the cause of that damage. But prior to the hearing of the appeal Ms Flores sought permission to challenge the findings by the judge that there was no negligence by asking this court to find (1) that the claimants had previously asked for the structure to be repaired so as to put the landlord on notice of the defects and (2) that the flood from the upstairs flat was not an accident but was due to disrepair. This application was opposed by Ms Bhaloo QC on behalf of CHAL on the basis that it would necessitate an adjournment of the appeal in order to produce transcripts of the relevant evidence and was in direct contradiction of the basis on which permission to appeal on the amended grounds was granted. In my judgment we should refuse permission to add these grounds of appeal. The judge had all the evidence and the material provided in support of the application has not persuaded me that there is any substance in either point. Moreover permission to appeal was granted on the footing that it was not open to the tenants to seek to go behind the judge’s findings as to the circumstances in which the damage came to be caused. The tenants obtained permission to appeal on that basis and I can see no justification for allowing them to resile from that position.
21. It was never said in the court of appeal that transcripts on the point of the structure were needed by Ms Bhaloo nor that proceeding would need to be adjourned. However evidence was provided that the claimants did ask for the structure to be repaired and HHJ Cowell had said that there would be a duty to repair on notice if this was the case. The irrefutable evidence does not therefore require transcripts for the finding of fact and the court of appeal should deal with the matter and not simply resile from it due to delay tactics when they have the evidence at hand and it is conclusive of primary fact that ought to be challenged. It does not conflict or have consequences for any other grounds that were sought. It is simply an error of primary fact and no amount of technicality can divert from the issue outstanding that caused such consequences as the claimants business to be utterly unworkable as they were then illegal.
22. The other introductory matter which I need to mention is the respondent’s notice. CHAL have served a respondent’s notice by which they cross-appeal against the judge’s award of £100 for breach of duty in respect of the delayed repair of the external soil pipe at 106. Their case is that the express terms of the lease excluded the duty which the judge found to have been breached so that, regardless of any negligence or breach of duty, the landlord had no liability to the tenants for damage caused to the demised premises by any of the leaks. They also rely on the fact that in the case of 104 Ms Flores failed to apply to the County Court for a new tenancy under Part II of the Landlord and Tenant Act 1954 by the 6th April 2009 when the landlord’s s.25 notice expired. As a consequence, Ms Flores, they say, has lost her right to possession of those premises regardless of whether the lease was forfeited for non-payment of rent in October 2008.
23. I turn then to the first two grounds of appeal which relate to the nature of the landlord’s liability (if any) to repair the retained part of the building. The tenants’ case on this depends upon the duty which the judge found to be established by the decision of this court in Cockburn v Smith and on the more general argument that the court should in this case imply into the lease a covenant by the landlord to keep the retained premises in repair at all times. It is, of course, critical to the success of this argument that the legal obligation thereby imposed should be strict and absolute in nature and not (as the judge found) a qualified obligation dependent upon the landlord being negligent in the upkeep of his premises and having notice of the damage which the item of disrepair was causing to the tenant.
23. “It s dependant as the judge found on notice”, or “qualified” by that, well it’s all very well to say, dependant on what the judge found, it is actually dependant on law. The appeal considers whether the judge erred in judgment with regard to common law, hence the appeal. It is therefore not dependant on what the judge decided in law as that is legally being disputed and all the correct procedures and grounds have been put forward for the court of appeal to analysis the judges decision in law. Therefore it must be decided independently of what the judge said and correct law applied if necessary. The laws applied are being disputed and not finding of fact as the facts are dependant on common law ‘duty’ and in this case an ‘absolute’ liability only because we were covered by liability insurances as part of the contractual obligation an expressed covenant.
So to look at notice we need to look at the authorities so for example in the case of Hargrove which we had permission to appeal on using that law, notice was given 2 days before a rainwater gutter flooded the claimant’s premises. The court held that two days was enough notice. In the claimants case here notice has not been analysised, although it was put before the court by Ms Flores, at the appeal hearing as written evidence and stated as follows.
NOTICE – us and them means the ‘Claimants and the Defendants’.
104 stack us beginning of Sept 04 them 14th Sept 04
104 Flood us 24/06/05 them agreed
106 stack us 7th Feb 05 them agreed
1st pavement flooding us April 04 them Oct 04
2nd pavement flooding us beginning of June 06 them Aug 06
3rd pavement flooding us 20 June 08 them agreed
1st electricity cupboard water ingress to both shops us June 05 them 1st Sept 05
2nd electricity cupboard water ingress to both shops us June 06 them agreed
3rd electricity cupboard water ingress to both shops us 13th May 08 them agreed
Fire exits locked us early 2005 them 19th Aug 2005
The time scale of leaks being repaired are the very reason that the insurers believed that the CHA vitiated the insurance by not repairing on time.
It would be odd if the insurance company namely an integral part of the contract in the lease, can decide not to allow a claim on the basis of ‘an act of ommission’ by the landlord failing to repair on time and yet the court does not even look at those facts to reasonably analyse if that decision was correct in contract law.
Notice was the subject of the 10 days trial in July-Sept 2010. The length of time to repair each soil stack leak, flood or the structure are as follows and Ms Flores said the following in the court of appeal aloud as well as orally stating thereafter some additional information as regards to the consequences of this dispute even with notice;
106 premises – rainwater leak – 7 months to stop the water ingress
104 premises - stack pipe leak – 4 months to stop the foul waste ingress
106 premises – stack pipe leak – 2.5 months to stop the foul waste ingress
104 premises – Flooding from above – 7 months for full ceiling reinstatement
106 premises – rainwater leak – 4 months to stop the water ingress
106 premises – rainwater leak – 24 months and fixed only after repossession
Electricity Cupboard between premises – pipe leak in ceiling – 3 years to locate
106 premises – Broken fire panel and smoke detectors – claimants replaced
106 premises – Dangerous wiring throughout spurs not ringed– claimants fixed
106 premises – No flooring paid for by public. Claimants had to put one down.
106 premises – No security shutters to date although paid for by public grant.
Between premises leading to fire exit – No emergency lighting 3.2 years to fix
106 premises - No ventilation or airbricks rendering the space illegal - not fixed.
Between premises – Fire exit locked and door swinging inward – 3.2 years to fix
The entire building - Commercial & residential tenants, no fire certificate to date.
Both premises – Breach of duty and of contract on leases regarding building insurance, claims not being made, making the building insurance void, so no payment for claimants when interrupted in business for over 10 years on and off.
Harassment, bribery, fraud, trespass and eviction plus putting the claimants through a to date three years court case (never mind an outstanding 8 year claim on the building insurance) to defend the claims and be reinstated to the premises.
Insurances never paid to date and shops unlawfully taken by force.
Corruption at the trial with this ‘public body’ with many connections to the judiciary not being recognised to date as is now European Law that they have influence so a Judicial review needed.
Still dragging us claimants ‘acting in person’ through the courts without legal representation as the insurances are paying their ‘defence’ (a commercial decision they are allowed to take FOS investigating) ‘legal costs’ and not ours as they have ‘triggered’ the ‘defending a claim’ clause when it is us that is the ‘defendant’ since we were unlawfully evicted.
The building insurance has no cover for ‘landlords and tenants’ disputes (of trespass) but is defending them anyway to save the claim on the liability insurances because it is in their interest to leave us on our knees.
None of the above therefore has been dealt with in the draft judgment with regard to the common law in giving ‘notice’ which could then qualify a ‘duty’ in common law.
In our case that ‘duty’ is simply not necessitated as we are contractually covered from day one as in an ‘absolute’ liability by liability insurance POL on the buildings policy. Therefore the landlord’s only expressed covenant and ‘duty’ was to make an insurance claim to have the repair fixed on time/and or for POL from day one because the liability came from outside of the retained parts for which POL covers and as stated we qualified for under two assessments by two loss assessors for the building liability policy.
To deal briefly with Cockburn v Smith (although Hart v Rogers a supplemental case is no longer an authority that the landlord who retained the roof was under an ‘absolute’ duty to repair), it was held that the landlord was under an obligation to take reasonable care once he had notice but in that case the landlord had some express repair obligations to the common parts. In our case the landlord had no express obligations (except to keep the demised and the common parts the ‘development’ insured against all risks) to repair and that was not argued. Notice was however argued as in a common law ‘duty to take reasonable care’ initially but in the court of appeal no time was wasted on the argument instead Ms Flores contended that in clause 5(22) of the lease their was an implied obligation for the landlord not to break the terms of the insurance so that in the landlords expressed obligation, monies could be laid out once damage was done from premises retained by the landlord and outside of Ms Flores demised premises. All parties were simply insured against the occurrences that took place.
24. Contract aside, the owner of adjoining premises does, of course, have a liability in nuisance for damage caused by an actionable interference with his neighbours’ enjoyment of their own property. The nuisance may (and usually does) consist of the lawful use of the defendant’s own land but matters such as a blocked drain which causes water to overflow on to the neighbour’s land have been held to be actionable: see Sedleigh-Denfield v O'Callaghan  AC 880. In principle therefore the blocked soil pipes were capable of amounting to a nuisance to the tenants in this case but a cause of action based on tortious nuisance does not assist them. It is now accepted that liability in nuisance is fault-based and that the defendant must be shown to have used his land in a way which he knows or ought to have foreseen would cause damage to his neighbour. This can include the adoption of pre-existing nuisances but in such cases the defendant must be shown to have failed to remedy the problem once he became aware of it: see Sedleigh-Denfield v O'Callaghan (supra) at page 905.
24. Again here to deal with Sedleigh-Denfield v O’Callaghan again this is notice-based law where a blocked drain was not made safe with a grid over three years and finally caused trespass in foul sewage to the claimant. It was held that the defendant failed to make the drain safe and adopted the nuisance over the three-year period so despite notice damage was eventually caused and held as such.
In our case it is again important in common law to look at the above notice periods and ask that if after notice was given did the defendants repair on time with the assistance of insurance or did they continue a nuisance by their default in making insurance claims an expressed contractual obligation. The insures say they failed to repair in a timely manner and caused an act of omission. Does the court agree or not they had a ‘duty’ to make insurance claims to repair upon notice?
25. In the course of her oral submissions Ms Flores referred to the rule in Rylands v Fletcher (1866) L.R. 1 Exch. 265 as a possible ground for strict liability on the part of CHAL. The judge was not asked to consider the case on this basis nor does this argument form part of the grounds of appeal. But there are in any event obvious difficulties about it. Liability under the rule in Rylands v Fletcher depends upon the defendant keeping on his land some inherently dangerous thing which poses an exceptionally high risk of damage to neighbouring property should it escape. In Transco plc v Stockport Metropolitan Borough Council  2 AC 1 the House of Lords resisted the call to integrate this principle of liability into the law of negligence on the basis that the strict liability it imposes can be limited to this category of case. Lord Bingham (at paragraph 10) said that:
“It has from the beginning been a necessary condition of liability under the rule in Rylands v Fletcher that the thing which the defendant has brought on his land should be "something which … will naturally do mischief if it escape out of his land" (LR 1 Ex 265, 279 per Blackburn J), "something dangerous …", "anything likely to do mischief if it escapes", "something … harmless to others so long as it is confined to his own property, but which he knows to be mischievous if it gets on his neighbour's" (p 280), "anything which, if it should escape, may cause damage to his neighbour" (LR 3 HL 330, 340, per Lord Cranworth). The practical problem is of course to decide whether in any given case the thing which has escaped satisfies this mischief or danger test, a problem exacerbated by the fact that many things not ordinarily regarded as sources of mischief or danger may none the less be capable of proving to be such if they escape. I do not think this condition can be viewed in complete isolation from the non-natural user condition to which I shall shortly turn, but I think the cases decided by the House give a valuable pointer. In Rylands v Fletcher itself the courts were dealing with what Lord Cranworth (LR 3 HL 330, 342) called "a large accumulated mass of water" stored up in a reservoir, and I have touched on the historical context of the decision in paragraph 3(3) above. Rainham Chemical Works  2 AC 465, 471, involved the storage of chemicals, for the purpose of making munitions, which "exploded with terrific violence". In Attorney General v Cory Bros & Co Ltd  1 AC 521, 525, 530, 534, 536, the landslide in question was of what counsel described as an "enormous mass of rubbish", some 500,000 tons of mineral waste tipped on a steep hillside. In Cambridge Water  2 AC 264 the industrial solvents being used by the tannery were bound to cause mischief in the event, unforeseen on the facts, that they percolated down to the water table. These cases are in sharp contrast with those arising out of escape from a domestic water supply (such as Carstairs v Taylor (1871) LR 6 Ex 217, Ross v Fedden (1872) 26 LT 966 or Anderson v Oppenheimer (1880) 5 QBD 602) which, although decided on other grounds, would seem to me to fail the mischief or danger test. Bearing in mind the historical origin of the rule, and also that its effect is to impose liability in the absence of negligence for an isolated occurrence, I do not think the mischief or danger test should be at all easily satisfied. It must be shown that the defendant has done something which he recognised, or judged by the standards appropriate at the relevant place and time, he ought reasonably to have recognised, as giving rise to an exceptionally high risk of danger or mischief if there should be an escape, however unlikely an escape may have been thought to be.”
25. Rylands v Fletcher here in the draft it states that Rylands v Fletcher was not argued except orally by Ms Flores and yet the advocate’s statement and the skeleton makes reference to the case as follows;
45. Ground 1 of the Amended Grounds of Appeal is that:
The judge misdirected himself in law as to the extent of a landlord’s
liability for damage caused to demised premises by a defect in another
part of same building which is retained under the ownership and
control of the landlord. He ought to have directed himself that the
landlord was liable to the tenant for all loss caused by the defect and
not simply for such loss as is suffered after the landlord has had
knowledge of the defect and a reasonable opportunity to remedy the
46. The judge’s error was to hold that the landlord’s only duty was to repair the
48 Transcript of Judgment p40 para 
49 Transcript of Judgment pp47-48 para 
50 Lease, clause 5((6) at p93 and p126
51 Transcript of Judgment p43 para 
52 Transcript of Judgment pp42-43 para  and 
defect in the retained premises “as soon as reasonably practicable after he
knows it is causing damage to [the demised premises]”.53 With respect that
cannot be the law. If it were, a landlord could let premises encapsulated within
a building, of which he otherwise retained ownership and control, and let
those parts fall to ruin. Even if the defects in the other parts frequently caused
damage to the demised premises, his only duty would be to attend to the
specific item of repair and prevent it causing further damage. If it re-occurred,
or another defect caused damage in the demised premises, the landlord would
again not be liable in damages provided the defect was rectified reasonably
quickly after his having notice of it.
47. It is not impossible to imagine cases (and this case may be a paradigm) in
which a series of defects, each in turn repaired reasonably promptly by the
landlord, successively causes such damage to the demised premises that they
are rendered worthless but in respect of which loss of use or value the landlord
(by prompt after-the-event repairs in each case) escapes liability.
48. The judge ought to have used the ‘duty’ he identified in Duke of Westminster v
Guild  QB 688 as a basis for holding that the liability of such a landlord
arises as soon as the defect in the part retained by him causes damage to the
The Learned Judge placed substantial weight on the case of Duke of Westminster v Guild  Q.B. 688. In that case, at page 701, Slade L.J. said as follows:
“There is a general principle established by such cases as Hargroves, Aronson & Co. v. Hartopp  1 K.B. 472 and Cockburn v. Smith  2 K.B. 119 which is summarised, in our opinion accurately, in Woodfall, Landlord and Tenant, 28th ed. (1978), vol. 1, para. 1-1469, p. 621:
"Where the lessor retains in his possession and control something ancillary to the premises demised, such as a roof or staircase, the maintenance of which in proper repair is necessary for the protection of the demised premises or the safe enjoyment of them by the tenant, the lessor is under an obligation to take reasonable care that the premises retained in his occupation are not in such a condition as to cause damage to the tenant or to the premises demised."
In Hargroves, Aronson & Co. v. Hartopp  1 K.B. 472 the plaintiffs were tenants of a floor in a building of which the defendants were the landlords. A rainwater gutter in the roof became stopped up and the defendants failed to clear it out for a few days after receiving notice of the stoppage. They were held to be in breach of a duty of care to the plaintiffs and liable for the damage done. In Cockburn v. Smith  2 K.B. 119 the facts were similar and the defendant landlords were held liable to the tenant for damage suffered by her as a result of defects in the guttering of the roof of the building of which the landlord retained control. Scrutton L.J. considered, at p. 133, that the landlord's duty was based on "that modified doctrine of Rylands v. Fletcher (1868) L.R. 3 H.L. 330 which is applicable where he retains in his control an artificial construction which becomes a source of danger to his tenant." Bankes and Sargant L.JJ. preferred not to decide whether the relevant duty arose out of a contract between the parties or whether it was an instance of the duty imposed by law upon an occupier of premises to take reasonable care that the condition of his premises does not cause damage: see  2 K.B. 119 , 130 and 134. But they expressed no doubt that the relevant duty existed.”
49. The judge seems to have imported requirements that, before any liability can
arise, there must be: (1) knowledge or notice of a need for repair on the part
of the landlord; and (2) a reasonable opportunity for repairs to be carried out.
That puts the tenant of ‘enveloped’ premises in a seriously vulnerable
50. The correct approach would be to hold that the landlord is usually absolutely
liable if a defect in the non-demised premises causes damage to the premises
demised. That would put the landlord subject to the Guild duty in no different
position from any other landlord who owes a duty to keep defects in retained
parts from damaging the demise. As Carnwath LJ (as he then was) said in
Earle v Charalambous  EWCA Civ 1090:54
“In applying a standard lessor's repairing covenant, the law draws a
distinction between disrepair in the demised premises themselves, and
disrepair in other parts of the building within the lessor's control. In
53 Transcript of Judgment p47 para 
54 At 
the latter case the "general rule" applies: that is, the covenant requires
the lessor to keep the premises in repair at all times, and he is in
breach immediately a defect occurs (British Telecommunications plc
v Sun Life plc  Ch 69).”
Although it can be said the landlord has no expressed repairing covenant in the leases they do have an expressed covenant in the leases to insure against ‘all risks’ that could cause damage to the demise which can be said is the same thing under different construction. The Earle v Charalambous case is used to outline the accepted ‘general rule’ that requires the ‘lessor to keep in repair at all times’ and it hi-lights what is meant by the definition of ‘at all times’ in terms of construction and meaning of the words, even if it is as with this case, within the insurance policy, which are in this case attached inextricably to the leases and landlords obligations and specifically require the landlord to keep the retained premises in repair ‘at all times’ (including pipes and anything that causes water ingresses). It can be said as an authority that the construction of words in the policy ‘at all times’ to keep (the pipes) in repair is the ‘general rule’ and therefore ‘absolute liability’ is attached to this case upon failure to do so and is in this case the negligence causing nuisance that voided the policy. It is therefore a Rylands v Fletcher case. In all of the disrepair that affected the premises none of the items of disrepair served the claimants premises or was for the use of the premises what so ever. In Rylands v Fletcher, “the person who for his own purpose brings on his lands and collects and keeps there anything likely to do mischief, if it escapes, must keep it in at his own peril, and if he does not do so, is prima (fact) facie answerable for all the damage which is the natural consequence of its escape.
Further in both leases the landlord retained rights to enter the demise to repair and
at the permission to amend hearing HHJ Cowell said, “at any rate the issues arising from the law of nuisance are sufficiently pleaded in terms of FACT in the pleadings.”
It would therefore be hard to say that this argument does not form part of the grounds of appeal as the draft says as one can see above it clearly does.
In dealing with the issue however which the draft then does of Rylands and Fletcher a number of authorities are cited to give reason as to why no stricter liability at common law in terms of an implied obligation to repair after notice should exist other than what is already contractual and has therefore remedy.
In the draft however we then see a lengthy set of quotations of various laws to suit the argument brought about by the claimants to the appeal using Barrett v Lounova. Barrett v Lounova was held that the defendant should have an implied obligation to repair the exterior of the premises despite no expressed obligation to do so where the tenant has an expressed obligation to repair the interior of the demise and it was argued that without such implied obligation on the part of the landlord to repair the exterior, the interior could become a futile exercise of repair.
First the draft mentions the laws relied on by HHJ Cowell. Gordon and Teixeira v Selico Co Ltd but in this case the fraud was committed by a third party.
He mentions Duke of Westminster v Guild but in this case the nuisance came from the claimants own land and caused a trespass to the defendants land.
The draft then goes on and says that HHJ Cowell quoted Bankes LJ in the case of Cockburn v Smith and explains a want of reasonable care after notice where he is given notice and fails to repair.
The draft says that HHJ Cowell mentions Carstairs v Taylor but this was a case where an animal caused the said leak and this was deemed as an act of God not the fault of the landlord.
The draft also says that HHJ Cowell mentions Hargrove v Hartopp but this was a case where it was said that it was too late to say that the defendant should have insured against damage and held that after notice the landlord was liable to the tenant to clear a gutter that caused damage to the tenant.
The writer of the draft in our case in the court of appeal goes on to then quote LJ Scrutton and his concerns over whether the issues brought up arise in tort or in contract and the legal implication left open. He concludes that LJ Scrutton thinks it is tort. A duty to take reasonable care not to cause nuisance.
As for the legal implication left open as to tort or contract the writer of the draft mentions another case that merits a possible answer to that legal implication Gordon v Selico Co Ltd and says that Goulding J expressed the view of whether there was a gap in the instrument (ie the leases) and said it was more natural to fill the gap by implication, ie an implied duty, than by the law of tort. He used a leading authority Liverpool City Council v Irwin in his thinking on the matter. That was a case of large dwellings where cisterns overflowed and vandalism was on the estate but it is a case where the housing act 1961 section 32 came into play and although no express repair obligations fell on the landlord the court decided some could be implied in their absence to make sense of the instrument to keep the common parts in repair and easements in working order. In this case it was seen as an incomplete contract and necessitated an implied obligation rather than many cases of tort. In effect it made the system now workable for good rather than having case after case claiming nuisance in tort so it was a more effective longstanding decision.
26. It is also necessary as part of this test to show that the use by the defendant of his land for the purpose of accommodating the dangerous operation or installation falls within what Blackburn J in Rylands v Fletcher called the non-natural use of his land. The use in question must therefore be extraordinary and unusual in contrast to, for example, a domestic water supply or lavatory which are neither. It is therefore well established that the tenants cannot sue under Rylands v Fletcher for damage caused by defective guttering or leaks in water pipes retained by the landlord in the absence of proving negligence: see Carstairs v Taylor (1871) LR 6 Ex 217; Prosser& Son Ltd v Levy  1 WLR 1224. The same principle must apply to the soil pipes in this case.
27. Judge Cowell was persuaded that any liability based on the landlord’s retention of the external and upper parts of the building depended upon proof of negligence and notice. He based his judgment for the tenants in relation to the delay in repairing the soil pipe at 106 on the legal duty described in Cockburn v Smith (supra) and later considered in Duke of Westminster v Guild  1 QB 688 and Gordon and Teixeira v Selico Co Ltd (1986) 18 HLR 219.
28. In Cockburn v Smith the landlord was sued for damage caused to a tenant’s flat by a leak of rainwater from a defective gutter which was excluded from the demise. The landlord had been put on notice of the defect but failed to take reasonable steps to repair it. Bankes LJ (at page 129) said that:
“It cannot now be suggested that there was any agreement express or implied which can accurately be described as an agreement to repair the roof or the guttering; but there is a line of authorities to show that a landlord is under an obligation to take reasonable care that the premises retained in his occupation are not in such a condition as to cause damage to the parts demised to others. In some of these authorities it was not necessary to decide the point expressly, because in the opinion of the Court there was no want of reasonable care; but three of these cases indicate that if it had been necessary to define the duty of the defendant it would have been defined in the terms I have suggested.”
29. He then referred to Carstairs v. Taylor and Hargroves & Co. v. Hartopp and continued (at page 130):
“Whether this duty arises out of a contract between the parties, or whether it is an instance of the duty imposed by law upon an occupier of premises to take reasonable care that the condition of his premises does not cause damage, I prefer not to decide. Lord Buckmaster speaks of it as a contractual obligation (3), and Greer J. as arising out of contract. There is much to be said for that view, but it is an immaterial question. If the duty is imposed by law, the point on which Greer J. decided in favour of the respondent does not arise, and the appellant's right to damages is clear as soon as it is established that the respondents were guilty of negligence.”
30. Scrutton LJ (at page 132) thought that liability was tortious and based on a modification of the rule in Rylands v Fletcher to a duty to take reasonable care to ensure that no damage was caused. This is the principle in operation in cases like Carstairs v. Taylor and in Duke of Westminster v Guild this court confirmed that the landlord’s liability under the principle applied in Cockburn v Smith was based on a duty to take reasonable care to ensure that the retained premises were not in such a condition as to cause damage to the tenant. It left open the question whether the legal basis for the duty lay in contract or in tort but in Gordon v Selico Co Ltd, Goulding J ( 2 EGLR 79) expressed the view (at page 84) that:
“the better characterisation of the alleged duty of the lessor is as an implied term. Where there are gaps in an instrument expressing the reciprocal obligations of landlord and tenant, it is, in my judgment, more natural to fill them by implication, as the House of Lords did in Liverpool City Council v Irwin  AC 239, than to invoke the law of tort.”
31. In the Court of Appeal this passage was referred to by Slade LJ without criticism and it seems to me that we should treat this line of authority as establishing that the obligation on the landlord to repair in these cases is based on an implied term. Ultimately the precise juristic basis of liability may not matter in cases where, as here, the parties have a contractual relationship under the terms of the lease. Whether the duty imposed on the landlord to take reasonable care of the retained premises arises in tort or contract, the court has still to consider whether the express scheme of repair or insurance imposed by the lease excludes any other form of liability which the law might otherwise impose. The tenants’ appeal on liability in this case depends not only on establishing that a liability on the landlord to keep the retained parts in repair should be implied or imposed over and above the express terms of the two leases but also that the implied obligation to repair should be absolute in nature in the sense that the landlord became liable for the consequences of the disrepair as soon as it occurred regardless of whether he had or should have had notice of the defect.
32. The second point is not open to the tenants in this court insofar as they base their claim for damages on the line of authority culminating in Gordon v Selico Ltd. The Court of Appeal has decided in those cases that any liability derived from the position of the landlord as an adjoining occupier is based on negligence and notice and we are bound to follow those decisions. If an implied obligation to repair regardless of notice is to be established then it has to be contractual and to be based on some other factors beyond the landlord’s control of the external and upper parts of the building in which the demised premises are situated. And in that alternative context (whatever it may be) it is still necessary to consider Ms Bhaloo’s argument that the implication of any such term is precluded by the scheme of the lease.
32. The writer of the draft says that the second point “that the implied obligation to repair should be absolute in nature in the sense that the landlord became liable for the consequences of the disrepair as soon as it occurred regardless of whether he had or should have had notice of the defect” is not open to the tenant to plead as the writer suggests that the claimants follow the line of authority of Gordon and Teixeira v Selico Co Ltd but as stated before, in this case the fraud was committed by a third party and I cannot see how now saying that the claimant is now not open to arguing the implied obligation of clause 5(22) by the landlord has anything to do with this one authority. As a matter of fact the defendant brought the authority at a later stage on day 2 to the court of appeal and the claimant was given little if any time to argue it. I reiterate that the leases obligations are that of the landlord and tenant or their servants or agents. The landlords third party has little if anything to do with the fact that they the landlord vitiated the insurance. Had it been a case where the insurers had done wrong then we together with the landlord would be suing the insurers the landlords agent. In terms of our relationship to the insurers it has been strictly through the landlord and any contact we have with them has been through the landlord so far as was limited to assess the claim in this case. In the lease it says other than rent all monies will be received by the landlord to make good. The special fact that the insurance reimbursed the claimants directly for some material damage is because the landlord did not repair the material damage on some occasions and the claimants were put to paying to mitigate further consequential losses and to be able to trade without effectively going out of business due to the landlords failure to repair so we were therefore reimbursed.
The second point therefore remains in that the landlord was absolutely liable because insurances were in place for liability for damage including business interruption because of any of the insured risks outside of the demise affecting the demised premises. That is quite clear and should not be made out to be something that makes it different from what was pleaded at the court of appeal.
The writer says of the “The Court of Appeal has decided in those cases that any liability derived from the position of the landlord as an adjoining occupier is based on negligence and notice and we are bound to follow those decisions.”
Further with regard to the Gordon and Teixeira v Selico Co Ltd case notice was given and there is a serious failing here to address it and as stated has not been assessed in common law at the court of appeal even on the basis that we may have followed that line of thinking which we did not and said we did not seek to.
“If an implied obligation to repair regardless of notice is to be established then it has to be contractual” we contend that is is contractual in that we were insured for absolute liability under the insured risks we had paid for if damage was to come from sources retained by the landlord such as a neighbours flat but not occupyer as that would suggest a common household for which has been established there was none and no easements either.
Futher Ms Bhaloo has not suggested an alternative she has argued on the grounds of notice and a reasonable opportunity to repair. She has not once argued that the instrument is complete without an implied covenant to not cause the insurance to be vitiated under 5(22) she merely defendended the argument by saying that it may have been deliberately left out by the architect of the lease and that is not a good argument. The landlord breaching the terms of the insurance has left the claimant without compensation for business interuption yet they still paid the bills, rent and business rates as well as were put to taking out loans to sustain there position without being able to trade due to the landlord being unable to compensate them or making any application for cessor of rent. This unduly enriched the landlord whilst they were covered by insurances for which they contractually made the claimants pay towards. There can be no argument that the landlord breached the terms of the insurance as all Judges to date except the court of appeal (who have in the draft judgment failed to state it) have said as fact that they did, therefore an implied covenant to clause 5(22) is necessary to the instrument of the leases to ensure it is not absurd and that in this case and any future case a landlord cannot commit an act of ommission and in doing so vitiate the insurance and make the leaseholder pay for it by further consequential losses.
If it were to be the case every leaseholder in Great Britain should be worried that a landlord can simply break the terms of the insurance of their house and put them through a court case to prove tort with their insurer backing them to save a claim, which I am sure the court of appeal could not be responsible for in law as this would be then a case for.
33. Reference was made in the Advocate’s Statement to the judgment of Carnwath LJ in Earle v Charalambous  EWCA Civ 1090 who, in the context of a claim for damages for breach of a lessor’s covenant to repair the roof of a building containing residential flats, said (at  of the addendum) that:
“In applying a standard lessor's repairing covenant, the law draws a distinction between disrepair in the demised premises themselves, and disrepair in other parts of the building within the lessor's control. In the latter case the "general rule" applies: that is, the covenant requires the lessor to keep the premises in repair at all times, and he is in breach immediately a defect occurs (British Telecommunications plc v Sun Life plc  Ch 69). In the former case, by contrast, there is no breach until the lessor has had notice of the defect and a reasonable time to carry out the necessary remedial works (ibid; O'Brien v Robinson  AC 912). In BT (at p 79), Nourse LJ accepted that there might be other exceptions to the "general rule", for example if the defect is caused by an occurrence wholly outside the lessor's control.”
33. The writer of the draft of Judgment goes on to mention British Telecommunications plc v Sun Life plc  Ch 69 which is a case about the writing of a lease and the actual meaning in construction of leases of the words ‘to keep in repair’ and so it was judged in that case and now is accepted in law as to be the ‘general rule’, that ‘to keep in repair’ means, the landlords retained premises are to be kept in repair “at all times”.
The writer then mentions as stated ‘by contrast’, an authority that is actually an ‘exception’ to the rule as the writer must know and says it is the ‘standard rule’. It is the case of O’Brien v Robinson which is a case where the claimants suggested to their landlord after complaining of noise that their bedroom ceiling may fall down due to dancing above. In effect by saying that the ceiling might fall down to the landlord it was regarded as ‘notice’ of the possiblity that the dancing could cause their bedroom ceiling to fall down and established in this excetional case with ‘special facts’ that ‘before a breach of duty can arise notice must be given’. But this ruling has often has been critised as being the exception rather than the standard rule. A hairline crack on the ceiling was not visible for 3 years to the tenant nor the landlord before the ceiling actually fell down and the landlord pleaded that they had to give notice if the defect was on their own premises and the landlord could not see it to make any investigations or had had a resonable opportuniy to fix it . Therefore notice was based on it being invisible which was never our case if we are to use an exceptional authority as the contrast, that is just unacceptable. The general rule therefore must be in contruction with regard to the insured risks clause 7(2) to keep in repair ‘at all times’ insured risks. This is then an absolute liability as covered with liability insurance for damage that comes from outside of our premises where notice in our case has been given/ and or notice is not necessary as the defects are in the retained parts.
The writer then says quoting LJ Norse that there can be exceptions to the rules like when the occurrence of damage is wholly outside of the landlords control.
34. But the general rule referred to is one derived from the construction of a landlord’s express covenant to keep the retained premises in repair. The general rule is that this should be interpreted as imposing on the landlord a duty to keep the retained premises in repair at all times so that liability depends upon disrepair and not upon notice of disrepair. But the issue here is not how one construes such a covenant but rather whether a covenant to that effect can be implied into these particular leases.
34. The writer wonders if in the case of British Telecommunications plc v Sun Life plc  Ch 69 above which is about ‘construction’ of the lease/instrument, whether or not this construction in that case as an implied covenant can be used in our leases in reality, ‘to keep in repair, at all times’ parts retained by the landlord.
In clause 5(22) of the leases it says as a leaseholders obligation that if we break the terms of the insurance by any act that vitiates the insured risks, we shall forthwith pay the cost of re-building or cover any would be insured risks ourselves as a natural consequence of us voiding the policy which would only be fair and we signed the leases as such to accept those potential events.
It follows that insurances are in place for the development as to amount to an insured repairing covenant of parts of the building not demised to us and that we should in no way affect those parts in becoming un-insured or we would be responsible for that in the contract of the lease clause 5(22).
We conclude that the same implied covenant should apply because of the expressed covenant to keep the rest of the building, the development, in repair “at all times” covered by an insured risk.
35. Quite apart from the general point relied upon by CHAL about the scheme of the two leases, there are, I think, obvious difficulties about attributing to the parties an intention to impose on the landlord an implied obligation to repair which is stricter in effect than would be imposed by law based on his control of the building. As already explained, that obligation is based on notice and corresponds in scope to the landlord’s obligation to repair defects in the demised premises themselves which only arises when facts come to his attention which would put a reasonable landlord on inquiry as to whether works of repair are needed: see O’Brien v Robinson  AC 912.
35. The writer begs the question if the liability is stricter than common law by the implication of a clause then it there is difficulties for the writer to impose an implied clause on those grounds. However the writer has never explored notice given in the draft judgment nor applied a ‘duty’ in common law which the lease does not have due to there being no expressed repairing obligations. So it goes without saying that the lease to any reasonable person, does not cater for the eventuality that the landlord’s scheme of repair could be vitiated by the landlord meaning an implied term would be necessary to give the commercial lease business efficacy or else in the event of disrepair the landlord could repair at any time rendering the premises worthless if a succession of leaks were to occur as was our case. They have a duty by the general rule to comply with the expressed terms of the insurance to keep the premises and retained parts in repair ‘at all times’.
The writer of the draft judgment says, “As already explained, that obligation is based on notice and corresponds in scope to the landlord’s obligation to repair defects in the demised premises themselves which only arises when facts come to his attention which would put a reasonable landlord on inquiry as to whether works of repair are needed: see O’Brien v Robinson  AC 912.” But I think that that is sufficiently dealt with above.
36. It is noteworthy that in Liverpool City Council v Irwin  AC 239 the implied contractual obligation imposed on the City Council to repair the common parts which they retained such as the lifts, staircases, rubbish chutes and passages, took the form of an obligation to take reasonable care to keep them in reasonable repair even though they were crucial to the tenant’s enjoyment of the building and their own flats. Lord Wilberforce (at page 256) said that:
“It remains to define the standard. My Lords, if, as I think, the test of the existence of the term is necessity the standard must surely not exceed what is necessary having regard to the circumstances. To imply an absolute obligation to repair would go beyond what is a necessary legal incident and would indeed be unreasonable. An obligation to take reasonable care to keep in reasonable repair and usability is what fits the requirements of the case. Such a definition involves - and I think rightly - recognition that the tenants themselves have their responsibilities. What it is reasonable to expect of a landlord has a clear relation to what a reasonable set of tenants should do for themselves.”
36. However the writer draws our attention to the point again and in doing so quotes Lord Wilberforce as perhaps qualifying the above with the case of Liverpool City Council v Irwin and concludes with Lord Wilberforce saying about the necessity to have an implied clause as opposed to what an occupier can reasonably do for themselves. In that case the landlord owned a block of flats and did not keep the common parts lifts, staircases, chutes in good order so the contract was incomplete to allow everyday living absent of an implied repair covenant by the landlord to repair the common parts to be liveable for the tenants. Perhaps this case shows necessity for an implied clause as does our case.
37. At page 269B-D Lord Edmund-Davies said that:
“The next question that arises is: what is the nature and extent of such obligation? In other words, is it absolute or qualified? If the former, any failure to maintain (save of a wholly minimal kind) would involve a breach of the landlord's obligation, and in Hart v. Rogers  1 K.B. 646 Scrutton J. considered, at p. 650, that such was the view taken by the court in Miller v. Hancock  2 Q.B. 177. But later decisions, such as Dunster v. Hollis  2 K.B. 795 and Cockburn v. Smith  2 K.B. 119, treat the duty only as one of reasonable care, and such is the conclusion I have come to also. To impose an absolute duty upon the landlords in the case of buildings in multiple occupation would, I think, involve such a wide departure from the ordinary law relating to easements that it ought not to be held to exist unless expressly undertaken and should not be implied.”
37. Further the writer quotes Lord Edmund-Davies who ponders on the question of whether that is an absolute duty to repair the common parts or whether it is qualified by special facts as to amount to a breach in the landlords obligations.
He looked at the case of Hart v Rogers (which is no longer an authority) where the landlord did not repair the roof which leaked into the claimant’s premises and this was outside of their control so was seen as an absolute liable case. LJ Scrutton in the Hart v Rogers case looked at another case of Miller v Hancock when deciding the outcome. This was a case where the claimant’s visitor fell down the stairs because they were worn and defective and it was held that there was a duty to keep the staircase/common parts in repair, as the landlord must have known that visitors may attend. However later cases, which the writer quotes, say that there is only a ‘duty’ to take reasonable care. Lord Edmund-Davis conclude that in a building of multiple occupations with easements (meaning of use to all) there can only be a ‘duty’ to take reasonable care.
In our case there was no easements and we were commercial leaseholders for which section 11 does not apply. We happen to have leased shops underneath a multiple occupation development but that is a far cry from being ‘in’ a building of multiple occupation where special facts and enjoyments are applicable as to the residents tenancy agreement. Most commercial premises (as we were here with three stories above us) are underneath flats of some sort or other on every high street and the landlord may be the same for both premises but that does not lump them altogether as each entity has special rights that are contractually based or tenancy based. Therefore neither contract can affect the other. If however the landlord insures as a whole, it must be noted as fact in this case, that each insurance as with our building insurance is seen as being separately insured as if no relationship existed except to make claims through the landlord. It must also be noted that the lease forbids us to take out separate building insurance except through the landlords scheme, which is seen as wholly separate.
38. It is said that the judge should have held that the tenants’ express obligations under the leases to repair the demised premises were matched by a correlative implied obligation on the part of the landlord to keep in repair the retained parts of the building. Reference was made to the decision of the Court of Appeal in Barrett v Lounova (1982) Ltd  1 QB 348 where the tenant covenanted to keep the interior of the demised premises in good repair but there were no covenants by either tenant or landlord in relation to the external structure. The court implied a covenant by the landlord to repair the exterior on the basis that, without it, the tenant would over time find it physically impossible to comply with his own covenant. I do not think that we get much assistance from this decision. There is no suggestion that the implied obligation to repair was absolute in nature and the court was not faced (as in this case) with a lease which imposed on the landlord the insurance obligations contained in clause 7(2). In this case it cannot be said that the tenant is left without remedy in the case of any disrepair of the structure. That constitutes an insurable risk and the landlord is required under the terms of the leases of 104 and 106 to apply the insurance monies in making good the damage and disrepair.
38. Starts with “It is said” and this does not make sense, who said it? Actually it was referring to clause 5(22) and Barrett v Lounova was cited to suggest an implied covenant to cluase 5(22). This does not indicate at any stretch of the imagination that another case and their special facts ie Barrett v Lounova required our case to have the exact same correlative implications. The case was used as an authority to show that sometimes an implied obligation is necessary to give business efficacy as was held, in the special facts of the case of Barrett v Lounova, where the leaseholder as with our case had repairing obligations to repair the interior of the premises alone and the landlord as in this case and ours had none to repair the exterior and thus failing any repair of the exterior, which had to fall on someone and that someone was judged to be the landlord, the interior could not be kept in repair. So the same principle is in our case. If the landlord breaches the terms of the insurance and we cannot get repairs done or claim compensation when put out of business by an insured risk, there should be an implied covenant to keep the building insured and not invalidate the insurance or the contract has no business efficacy and therefore needs an implied clause to 5(22) for the landlord to comply correlatively with their expressed covenant to keep the premises insured at all times. This is similar to an implied repairing covenant as in the case of Barrett v Lounova because in the absence of one, a disrepair condition of the premises makes the commercial premises unworkable in contract without insurance being in place for the disrepair/risks.
However after mentioning the above case the writer says;
“There is no suggestion that the implied obligation to repair was absolute in nature and the court was not faced (as in this case) with a lease which imposed on the landlord the insurance obligations contained in clause 7(2). In this case it cannot be said that the tenant is left without remedy in the case of any disrepair of the structure. That constitutes an insurable risk and the landlord is required under the terms of the leases of 104 and 106 to apply the insurance monies in making good the damage and disrepair.”
That is absolutely correct and failing to keep the premises in repair by vitiating the insurance means they have broken a contractual obligation!
39. Of much greater assistance are the decisions of this court in Gordon v Selico (supra) and in Adami v Lincoln Grange Management Ltd  1 EGLR 58. In Gordon v Selico the court accepted that the imposition on the tenants of a scheme under which they each contributed to a maintenance account to be used in the repair and maintenance of the structure of a block of flats was sufficient to exclude the implication of any obligation on the part of the landlord to carry out such repairs. Slade LJ said that:
“Mr Sunnucks has submitted that, having regard to the comprehensive nature of the provisions of the lease relating to the repair and maintenance of Flat C and of the block, Court Mansions, as a whole, this is not a case where the learned judge was justified in implying any covenants relating to these matters. The lease, he pointed out, is in an unusual form, providing as it does for the repair and maintenance of the building by a system of express covenants and trusts. If the defendants are in breach of any of those express provisions relating to repair and maintenance, the proper remedy, in his submission, is by reference to the agreed system and not by reference to suggested implied covenants to which the parties never agreed.
We think this submission is correct and indeed in this court Mr Brock, on behalf of the plaintiffs, has not sought seriously to challenge it. Where a written tenancy agreement relating to a flat, forming part of a larger building in multiple occupation, manifestly does not embody the complete agreement between the parties the court may well be willing to supplement the written document by implying terms placing obligations on one party or the other. Such a case was Liverpool City Council v Irwin  AC 239, where the “conditions of tenancy” which tenants were required to sign related only to the obligations on the part of the tenants, not of the lessor council. However, as Lord Wilberforce observed in that case (at p 254), “such obligation should be read into the contract as the nature of the contract itself implicitly requires no more, no less: a test in other words of necessity”. Lord Cross in the same case said (p 258) that the court “must be able to say that the insertion of the term is necessary to give — as it is put — 'business efficacy' to the contract and that if its absence had been pointed out at the time both parties — assuming them to have been reasonable men — would have agreed without hesitation to its insertion”. The repair and maintenance scheme provided by this lease is a very cumbersome one and we agree with the learned judge that, even if the lessors and their agents were duly to carry out their obligations, the scheme might not always suffice to give the lessees necessary and timely protection — for example, as he pointed out, through the continued inability or refusal of other lessees to pay their proper contribution. Nevertheless, on a reading of the lease, we feel little doubt that it was intended, by all parties, to provide a comprehensive code in regard to repair and maintenance of the block. We are by no means satisfied that the implication of any further terms in this respect is necessary to give the lease business efficacy, or that the lessor, assuming it to have been a reasonable person, would have “agreed without hesitation” to the insertion of the suggested implied additional terms relating to the repair and maintenance of the block.”
39. Again the writer refers to repairing obligations (that were not pleaded) in referring to the case of Adami v Lincoln Grange Management Ltd and Gordon v Selico, where there is as is with our case a comprehensive insurance scheme to deal with repairs.
The writer quotes LJ Slade (many of the LJ’s quotes are from LJ’s at enterprise chambers of the defendants counsel it should be noted) as referring to Mr Sunnucks saying, “If the defendants are in breach of any of those express provisions relating to repair and maintenance, the proper remedy, in his submission, is by reference to the agreed system and not by reference to suggested implied covenants to which the parties never agreed.” And we utterly agree with LJ Slade’ sentiment we are not looking to seek an implied covenant to repair we are seeking an implied covenant with regard to the insurance repairing scheme being kept in place at all times. Further we agreed with Justice Clarke at the original hearing when he said that we were to match disrepair with the insured risk and take the claim to the county court to assess. That is what we have done throughout and yet are constantly being put to justifying common law repairing obligations instead of contract is what has bedevilled this case throughout. Every single Particular of the Claim and further in great detail in the claimants submissions on liability states that the landlord failed to keep the insurance in place and/or make claims. Even the writer digresses to another allegation of repair implications as if the requested implied covenant of clause 5(22) and its corrective application did not make any appearance in the proceedings at the appeal whatsoever. Ms Flores was clear she had two points in law which were an implied covenant should applied and that should make the case absolute in liability from the moment of damage from the retained parts as covered by the insurances under the POL scheme. It would seem by a clever use of wording and many delay tactics throughout this 5-year case we have departed from the real issues of liability, that we all were insured for it.
Back to LJ Slade he went on to say;
“Where a written tenancy agreement relating to a flat, forming part of a larger building in multiple occupation, manifestly does not embody the complete agreement between the parties the court may well be willing to supplement the written document by implying terms placing obligations on one party or the other. Such a case was Liverpool City Council v Irwin  AC 239, where the “conditions of tenancy” which tenants were required to sign related only to the obligations on the part of the tenants, not of the lessor council.”
However Lord Wilberforce then said; “such obligation should be read into the contract as the nature of the contract itself implicitly requires no more, no less: a test in other words of necessity”
And Lord Cross Chelsea of which Ms Flores also cited in the court of appeal said
that the court; “must be able to say that the insertion of the term is necessary to give — as it is put — 'business efficacy' to the contract and that if its absence had been pointed out at the time both parties — assuming them to have been reasonable men — would have agreed without hesitation to its insertion”.
The two cases quoted have special facts but the sentiment of the Lords above remain the same so as to judge those individual cases on their special facts.
The facts therefore in the case of Gordon v Selico are that a third party covered up dry rot before the leaseholders took on the lease. There could be no implied term for fraud of the third party that covered the contract between the two parties.
In the case of Adami v Lincoln Grange Management Ltd this was a subsidence case where new management Grange took over a long lease of the claimant and put in a provision for subsidence. The original lease was preferred and referred to throughout the trail by the claimant, who as Ms Flores said in court quoting the case seemed like a cantankerous man who wanted the lease to remain the same and the insurance scheme with it but by adopting the scheme by payment he had even though he objected to it inadvertently gone along with it. He decided to use insurance monies laid out when subsidence occurred to fix this problem himself but then made a claim for extras. It was decided that no implied term in either lease should apply as the scheme for which he went along with provided for subsidence and all the other residents were happy to go along with the scheme. The case was dismissed.
In each case the request for an implied covenant to repair does not merit one as the insurance provides remedy but in our case what should be the case with the insurance has been affected by the actions of the landlord to make us un-insured.
It is therefore essential that an implied covenant to 5(22) protects our position for all the above reasons cited by the Lords above and as is seen as authority in the once final court the House of Lords.
If this draft does not address that then the claimants are applying now in time to take the case to the Supreme Court. They should not be put to doing this is the light of comments to this draft. They also seek permission to address judicial influences in this case as stated they would do if the issues are not addressed.
In the Adami case J Vinelott said at the end of judgment “More generally, I can see no ground for importing any obligation on the part of the lessor to carry out works of repair to the block from causes which are not covered by an insurance policy effected pursuant to the terms of the lease (modified in practice by the substitution of a block policy and its extension to cover damage by subsidence), in particular damage which might result from the gradual deterioration of the structure during the term of the lease. In Duke of Westminster v Guild  QB 688, Slade LJ, at p697, approved a passage in Woodfall, Landlord and Tenant 28th ed (1978) vol I, para 1/1465 p618 in these terms:
In general, there is no implied covenant by the lessor of an unfurnished house or flat, or of land, that it is or shall be reasonably fit for habitation, occupation or cultivation, or for any other purpose for which it is let. No covenant is implied that the lessor will do any repairs whatever …”
In our case it is an absolute requirement to keep the demised premises and the development in repair and most especially I might add fit for human habitation, with fire certificates (which there were none) and with business efficacy with regard to the structure according to the terms of the insurance, forming an integral and expressed covenant of the landlord to keep the premises insured and in repair at all times, in accordance with the lease.
40. Similarly in Adami the tenants of various blocks of flats were required under their leases to repair the demised premises and to maintain an insurance policy against risks to be specified by the landlord. The landlord maintained a block policy for the development which included the risk of subsidence. When this occurred the issue arose as to whether the landlord was required to do more than to lay out the insurance monies to repair the damage caused by the insured risk.
41. The court rejected the submission that an obligation by the landlord to repair the structure of the building should be implied into the lease. Vinelott J said that:
“In my judgment, the contention that it was an implied term of the 1990 lease that the lessor would be liable to make good any damage to the structure of the block whatever might be the cause of the damage, is simply untenable. The lease contains an elaborate scheme under which exceptional damage to the structure is to be covered by insurance effected in the joint names of the lessor and the lessee and maintained at the expense of the lessee; similar obligations are to be imposed upon the lessee of every other maisonette or flat in the block. The lessor is given power to enlarge the scope of the policy beyond fire and damage by aircraft, so as to enable the insurance to be extended at the expense of the lessee if it becomes apparent that damage to the structure may result from other causes. After 1971 damage by subsidence following a succession of dry summers became a common experience and it was, no doubt, for that reason that the lessor (who by this time had effected insurance in its own name under a block insurance policy with the consent or acquiescence of the lessees) extended the insurance to cover subsidence. In so far as damage to the structure results from an insured risk, there is simply no ground for importing any implied obligation to do more than lay out any insurance moneys coming into the hands of the lessor, in making good that damage (any deficiency in the insurance moneys being made good by the lessees).
More generally, I can see no ground for importing any obligation on the part of the lessor to carry out works of repair to the block from causes which are not covered by an insurance policy effected pursuant to the terms of the lease (modified in practice by the substitution of a block policy and its extension to cover damage by subsidence), in particular damage which might result from the gradual deterioration of the structure during the term of the lease. In Duke of Westminster v Guild  QB 688, Slade LJ, at p697, approved a passage in Woodfall, Landlord and Tenant 28th ed (1978) vol I, para 1/1465 p618 in these terms:
In general, there is no implied covenant by the lessor of an unfurnished house or flat, or of land, that it is or shall be reasonably fit for habitation, occupation or cultivation, or for any other purpose for which it is let. No covenant is implied that the lessor will do any repairs whatever …
In the context of a lease for a term of some 260 years at a nominal rent granted by a corporate lessor originally incorporated as a management company, in which shares are held by the lessees of all the maisonettes and flats comprised in the development and which contains detailed provisions governing the repair of the individual maisonettes and flats, the levying of a service charge to meet the costs of the maintenance of the community land and for insurance to be effected and maintained at the expense of the lessees to cover damage from any catastrophe affecting a block as a whole so far as reasonably foreseeable, it is, in my judgment, impossible to presume an intention that the cost of maintaining the structure of each block should fall on the lessor. No such implication can be founded on the obligations on the part of the lessee under clause 9(b)(iv) to permit the lessor to view the property and to effect work necessary for upholding the building (see Sleafer v Lambeth Borough Council  1 QB 43) and the same principle must apply also to the covenant by the lessee in clause 9(b)(ix) to co-operate with the lessor and other lessees in carrying out repairs to the block.
Mr Marshall relied on the decision of the Court of Appeal in Barrett v Lounova (1982) Ltd  1 QB 348.
The decision of the Court of Appeal in Barrett v Lounova is, of course, binding on this court. However, in my judgment, it must be taken as decided upon the special facts of that case and no principle can be discerned which requires the implication of an obligation on the part of the lessor to keep the structure of the block in good repair. I would dismiss the appeal.”
42. I take the same view in relation to the leases of 104 and 106. Although there is no express repairing covenant imposed on the landlord, the repair of the structure of the building is catered for through the provisions of clause 7(2). In the face of these provisions there is no reason based on necessity or business efficacy to alter the balance of the scheme by imposing an implied covenant to repair on the landlord, let alone one under which his liability to repair is made absolute. If one applies the modern approach to the implication of terms as a process of construction (see AG of Belize v Belize Telecom  1 WLR 1988) to do so would be to seek to improve the contract from the point of view of the tenant rather than to give it the meaning and effect which both parties must have intended given the terms and structure of their contract. The reasonable man looking at the matter with all the relevant background information would not in my view assume that the only meaning which could reasonably be given to the contract was that CHAL should be responsible for any defects in the repair of the retained parts irrespective of any negligence on its part.
42. The writer take the same view about an implied repairing covenant for which none was asked for. Yet the writer does not deal with the implied covenant request to clause 5(22) to keep the development and the demise insured at all times.
Somewhat ironically the writer goes on to say; “Although there is no express repairing covenant imposed on the landlord, the repair of the structure of the building is catered for through the provisions of clause 7(2). In the face of these provisions there is no reason based on necessity or business efficacy to alter the balance of the scheme by imposing an implied covenant to repair on the landlord, let alone one under which his liability to repair is made absolute.”
The writer quotes the case of Belize v Belize which is about a companies articles of association, (so a construction case of what is meant by the words in a particular contract), that by way of these articles of the company let two people of little or no consequence to the company, in charge, if others resigned, it was basically seen as absurd when an actual situation arose so the court decided that its intervention to alter the instrument/contract/articles was necessary as it had obviously been left out in error by the architect of the contact who did not think of an eventuality that actually did occur. The reasonable men argument was used to give the instrument the correct intention as would have been be done if both parties had thought of that situation and those special facts at the time.
The writer in our case goes on to say;
“The reasonable man looking at the matter with all the relevant background information would not in my view assume that the only meaning which could reasonably be given to the contract was that CHA should be responsible for any defects in the repair of the retained parts irrespective of any negligence on its part.”
But that is not what we contend we simply are all insured and the landlord is responsible to make claims to have those parts repaired at all times, POL covers business interuption when the damage is from outside and can be claimed for.
Now interestly, this is the only mention throughout the case of potential negligence on the landlords part. What does that sentence mean? What is the writer referring to?
It is our case and has been agreed by the trial judge that the insurers said the landlord committed an act of omission which had the direct consequence of us being stopped from claiming on the POL and that the landlord failed to claim on cessor or rent for times when the premises as the claimants contend were either partially or wholly unfit as set out in the schedule of loss.
The writer suggests and has used much law above to do so that no implied repairing covenant should be in place but that has never been pleaded.
Is the writer going to address what has been pleaded as an implied covenant in the clause 5(22) of the leases; that insurance monies not received by the landlord due to an act of omission by the leaseholder, should too be a correlative obligation and an implied covenant as was pleaded? As Lord Cross of Chelsea said that the court; “must be able to say that the insertion of the term is necessary to give — as it is put — 'business efficacy' to the contract and that if its absence had been pointed out at the time both parties — assuming them to have been reasonable men — would have agreed without hesitation to its insertion”. And to the modern day case of Belize v Belize which is then cited by the writer as giving advantage to the claimant by an implied term to repair than with respect is not what was pleaded but since the case has been cited it is important to say that without the implied term the contract would and did become unworkable with the landlord claiming rent at times of unfitness and by their own default making the claimants un-insured under the POL scheme in place under two insurers and the structure indisrepair under three insurers and contiuing to leave the claimants in a position of indifference whilst lying to them that they were chasing POL when they had already been told they breached the policy.
I therefore do not think that Belize v Belize would unfairly improve the contract it would be utterly fair and correlative in obligation not to breach the insurance.
43. For much the same reasons, the existence of what the parties obviously intended should be a comprehensive scheme for the repair of both the demised and the retained parts of the building is sufficient to exclude from their legal relationship any liability at common law in tort which the landlord might otherwise be subject to in relation to its retained premises.
43. We very much agree that the existence of what the parties obviously intended should be a comprehensive scheme for the repair of both the demised and the retained parts of the building is sufficient to exclude from their legal relationship any liability at common law in tort which the landlord might otherwise be subject to in relation to its retained premises.
44. It follows from this that the judge was wrong in my view to have held that CHAL even came under a duty to repair the retained parts including the stack pipes and the pavement lights and therefore to award the tenants damages of £100 for the breach which he found to be proved. In these circumstances, it is unnecessary to consider the landlord’s alternative argument in relation to the pavement lights that they were covered by the principle of caveat lessee. The issue of quantum does not therefore arise but I observe that although the judge is criticised for his award of a nominal £100 for loss of profit in the three week period in April 2005, the independent joint expert (Mr Hall) reported that there was no evidence that, but for the delay in repairing the leak, the tenants’ business would have earned income in the relevant period.
44. The writer says here due to the above comments in 43. that in these circumstances, it is unnecessary to consider the landlord’s alternative argument in relation to the pavement lights that they were covered by the principle of caveat lessee.
That is a good decision as we have said all along that the priciple of caveat lessee had no application in a case where the defects were in the retained parts and covered by the insured risks.
The writer says also that since there was no ‘duty’ the finding of negligence and the award of £100 for three weeks, more than should have been for the nine foot of shit down the walls, cannot now be held and the defendants therefore succeed in their counter claim in this court of appeal to quash the £100 compensation awarded for those three weeks.
The writer also adds in isolation that the judge found that no bookings had taken place in that time and simply takes an imbalanced view despite the claimants contending in their skeleton that the assessment of damages at £100 is extraordinary on the judge’s own findings of fact (not least that at one point the “smell was really bad in 106-108”and the recurrence of repeated ingress of water must have been “quite enough to daunt the bravest of spirits”). In his judgment on quantum, the judge approached the assessment at a simple matter of looking at the lost
income for bookings during the exact three-week period when he found that
the premises could not be used for display/hire. Such approach takes no
sensible account of the impact on the tenants’ ability to attract customers, to
display their art or hire the exhibition area, of the fact that the premises
recurrently had a foul or damp smell and/or were damp as a result of ingress of
water, foul water or sewage.
Further, on the judge’s own findings, the tenants had had to make repeated
claims on the insurance policy. In relation to each claim there had been a
£100 excess. That excess was a loss which they suffered by reason of the
landlord’s default and for which they were awarded no damages.
The writer in so far as acknowledging in common law that the defendants have no expressed repair duty or any duty to take reasonable care or have not caused an actionable nuisance or have not been negligent, so as to retrieve in the court of appeal in this judgment the award of £100, then at the very least it should be acknowledged that the excesses paid for by the claimants of £100 per incident were not the excess of the claimants as contended as the damage came from the retained parts so those excesses were the landlords. It would be odd if not only the claimants suffered the damage from the retained parts but had to pay for the suffering at £100 of each occurrence and this should be stated as such in relation to the laws on who pays excesses.
Cesser of rent
45. This point is now only relevant to the amount of arrears of rent for which the tenants are liable. Absent any liability on the part of CHAL for substantial damages for loss of profits, there were outstanding arrears at the time when the landlord re-entered in October 2008 and both leases were therefore validly forfeited on that date. It follows that CHAL is entitled to possession as ordered by the judge and to mesne profits in the sums he awarded.
45. As contended no rent was owed at the time of re-entry. If it followed that 5(22) clause was to be implied for the landlord to observe the same and not vitiate the insurances then not only was rent not owed but £39,000 in rent was paid and unduly enriched the landlord.
46. The cesser of rent clause is only triggered when the demised premises “or any part thereof” are destroyed or damaged so as to be “unfit for occupation or use”. Although the judge is criticised in the grounds of appeal for concentrating on whether the demised premises as a whole were ever unfit for occupation or use, this was because a case based on partial unfitness was never pursued at the trial. The tenants’ case was that the demised premises had become wholly unfit for use and their damages claim was based on that factual premise. Since both experts were agreed that this was not the case, it was obviously open to the judge to reject the contention that clause 6(3) had come into operation. There is nothing in this ground of appeal.
46. The writer says “this was because a case based on partial unfitness was never pursued at the trial.” But if the writer checks the schedule of loss partial unfitness was pleaded as well as the premises being at times wholly unfit. And if it follows that the scheme of insurance is to be upheld then the partial unfitness is also covered by the terms of the insurance as pleaded.
The writer says “Since both experts were agreed that this was not the case, it was obviously open to the judge to reject the contention that clause 6(3) had come into operation.” It is not clear as to which two experts the writer is referring to and the fact that their was a third and forth expert. This needs to be made clear as we contend that our own expert surveyor said the place was unfit. The expert froensic accountant assessed the damages as such and the joint surveyor said that the places were unfit for ocupation. So this is not at all acurate.
47. The judge ordered the appellants to pay the costs of the action on an indemnity basis including the reserved costs of the hearing before Christopher Clarke J. and various pre-trial interlocutory hearings before Judge Cowell himself. Two points are taken in the amended grounds of appeal. It is said that the case did not justify the exercise of the exceptional power to award indemnity costs particularly in relation to the period before CHAL made various offers to settle. The tenants also say that they should not be required to pay the reserved costs of all the interlocutory applications given that in a number of them they were successful.
47. The writer says “It is said that the case did not justify the exercise of the exceptional power to award indemnity costs particularly in relation to the period before CHA made various offers to settle.” Firstly as Ms Flores said in court improper inducement to fix a £5,000 repair or have your rent doubled is not an offer to settle. The writer continues, “The tenants also say that they should not be required to pay the reserved costs of all the interlocutory applications given that in a number of them they were successful.”
The writer says the indemnity costs were from the start of the £25,000 offer made the day before proceedings commenced. That we contend was an insulting offer and was based solely on the insurers not wanting to pay £100,000 in lawyers fees at the trial and takes no consideration of the fact that the claimants had by then in the two years leading up to trail had to pay out £50,000 in legal costs on top of the already outstanding claim. Matt Kelly QC who was at the mediation said it was a cheap shot of saving the costs of the trial and agreed to settle at that point at £450,000 for which was rejected by the defendants and their insured who were paying for the proceedings. Incidentally this cheap shot cost the claimants £8,000 in counsel and solicitors fees and further added to their costs how then does £25,000 cover this. It is not by a long shot reasonable and should not be seen as such to give additional indemnity costs from the point of this offer, which for the record is only not stated as starting from this point. Where this evidence came from is unknown and should be made clear.
The claim is for in the region of £600,000 and is backed by expert evidence and qualified by years of disrepair when the claimants could command as much as £800 for an evenings hire and did and also could hire the place for £5,000 a month at a discount rate and did too as Ms Flores said in the court of appeal. To quote big figures as if it were out of the ordinary and to use that as an excuse for indemnity costs is to patronise the ability and scope of the claimants business. Further the claim for £1.9 million is for exceptional damages in relation to the work of the social enterprise New NAYPIC Youth Parliament and their loss of opportunity especially at the present time, which can only serve to raise the claim if this continues.
48. In ordering the appellants to pay the costs on an indemnity basis the judge took into account a number of factors. The claim had at one stage been put as high as £2m but in the end resulted in an award of £100. The precise nature of the claim was never made clear in the pleadings and the defendants incurred expense in, as the judge put it, fighting in the dark. As to the starting point for indemnity costs, the judge had to consider whether they should commence from the date of a Part 36 offer on 16th July 2009 when CHAL offered to pay to the appellants £25,000 and their costs or from the start of the proceedings. In relation to that, the judge took into account the fact that in 2007 the landlord had offered to continue the lease of 104 at the same rent for another five years. Although not a Part 36 offer, this was influential in persuading the judge to order indemnity costs from the start.
48. The writer says, “The reality of the claim in this case is that it was always exaggerated.” Which suggests the writer agrees with the defendants when they suggest this but it has to be taken in the context that the word exaggerated is the only term of the insurance that can void it on our part. This word is used deliberately to implicate us as having done something wrong in terms of the claim. It is false and unfounded. The writer needs to qualify not just by using the figure of 2 million to come to an exaggerated conclusion but favts too as the claimants have only ever been able to claim for what they have lost which is in that region when looking at the special facts of the social enterprise. Ms Flores whilt working for NAYPIC raised half a million pounds from the age of 17 to 21 years old and that this helped develop a national structure for NAYPIC, she a professional fundraiser. This evidence proves that she could and was, doing more than that long after her employment to ensure the organisation became independent and to create an independent youthg economy. Essestially those are special facts and could be seen as remote if judged to be too remote however Ms Flores contends that the breaches of the landlord effectively ruined her chances of doing business in this venture for which the shops had been set up to achieve.
49. The appellants are right, of course, to submit that the judge’s power under CPR 44.4(3) to award costs on the indemnity basis is exceptional in the sense that the circumstances relied on to justify the order must take the case out of the norm. But it is not necessary to show some kind of misconduct on the part of the paying party and unreasonable conduct on the part of the tenants, coupled with their refusal of reasonable offers to settle, can in my view engage the court’s power and make the exercise of it proportionate. The reality of the claim in this case is that it was always exaggerated. Although the incidents of water and sewage leaking into the tenants’ premises were undoubtedly distressing and inconvenient, they never justified a claim for damages in excess of £2m and were, for the reasons I have given, in fact legally unfounded. Mere failure in the action is not enough to justify an award of costs on the indemnity basis but here the inflated nature of the damages claim was matched by a failure to limit the basis of the claim both factually and legally so that the judge was required, as he put it, to conduct a kind of inquiry instead of trying a case based on defined issues. Although some allowance has to be made for the fact that the tenants acted in person, that does not justify a complete disregard of procedural rules or the making of unfounded and exaggerated claims.
49. The writer says that the claim was for the reasons of lack duty or want reasonable care of repairing obligations legally unfounded, that as may well be in the legal case for implied repairing obligations but it is not the case for the landlord voiding the insurance which was the case pleaded. It therefore stands that applying indemnity cost for a valid case cannot apply. It says in law in CPR indemnity costs 44.4.3 indemnity costs are rare and not to be used as a tool with regards to mediation. This landlord has never once at any juncture offer to seriously mediate and was asked many, many times to do so starting with Alan Harris and ending with Veale Wansborough and Matt Kelly QC. They have simply used legal might to try to crush us out of the claim hence why it is so high now and rising every day it goes on. We would never even at this juncture turn down a serious offer of mediation reflecting our real costs and taking even a fraction of potential losses to date. No offer has been made to do this only tactics to save costs have been used. You have to understand from the beginning none of them wanted to pay because of their dispute with each other. We will not spend the rest of our lives paying for their act of omission and if we are put to doing so that is simply injustice and there really is no law that does not address at the very least the real issue.
The writer goes on to enhance the line that the claimants did not make the case clear. This is legal poppycock and a poor excuse for indemnity costs.
50. I therefore consider that it was within the legitimate ambit of the judge’s discretion for him to make an award of indemnity costs in this case and to do so from the start of the proceedings. The only remaining question is whether the order should have included the reserved costs.
51. It is, of course, true that the appellants were successful before both Wilkie J. and Christopher Clarke J. in being restored to the premises and resisted a subsequent attempt to vary those orders. But the judges who decided those applications reserved the costs to the trial so that the ultimate burden of the costs would be decided having regard to the outcome in the action. Had it been appropriate for the tenants to receive the costs of the applications regardless of that, an order would have been made in their favour at the time. As things have turned out, the landlord’s re-entry into the premises was lawful and the appellants had no right to remain in possession thereafter. In these circumstances it was within the trial judge’s discretion to direct that the costs of those applications should follow the event.
52. For these reasons, I would dismiss the appeal and allow the Respondent’s cross appeal against paragraph 2 of the judge’s order.
Lady Justice Black:
53. I agree.
Lord Justice Mummery :
54. I also agree.