LAW REPORT 12 September 1995; Landlord in breach of repairing covenant

British Telecommunications plc v Sun Life Assurance Society plc; Court of Appeal (Lord Justice Nourse, Lord Justice Roch and Lord Justice Hutchison) 28 July 1995

A landlord was in breach of his covenant to keep in repair the other parts of a building in which the demised premises were situated immediately they ceased to be in repair, not after a reasonable period for doing the repairs had expired.

The Court of Appeal unanimously dismissed an appeal by the defendant landlord, Sun Life Assurance Society plc, against a preliminary ruling by Mr Justice Aldous ([1994] 2 EGLR 66) that it was in breach of a covenant to keep in repair the exterior brick cladding of Randolph House, Wellesley Road, Croydon, of the sixth and seventh floors of which the plaintiff, British Telecommunications plc, was the tenant.

Kirk Reynolds QC and Wayne Clarke (Church Adams Tatham) for the landlord; Jonathan Gaunt QC and Christopher Nugee (Ashurst Morris Crisp) for the tenant.

Lord Justice Nourse said the covenant in question was contained in clause 3(5) of what had been called the Franthorne lease, which required the landlord:

from time to time and at all times during the said term to uphold, maintain, cleanse and keep in complete good and substantial repair and condition the demised premises . . . and including all party and other walls, boundary walls and fences.

The obligation extended to the building as a whole. The distinctive feature of this case was that the defect occurred in the external cladding at fifth-floor level, part of the building not comprised in the premises demised to the plaintiff.

It was now established, by a line of authority culminating in the House of Lords' decision in O'Brien v Robinson [1973] AC 912, that, where a defect occurred in the demised premises themselves, a landlord was in breach of his obligation to keep them in repair only when he had information about the defect such as would put a reasonable landlord on inquiry as to whether works of repair were needed and he failed to carry out the necessary works with reasonable expedition.

The defendant argued that the same rule applied by analogy where the defect occurred elsewhere in the building. Although, since the premises affected by the defect were either in his possession or under his control, a landlord must be treated as having the necessary knowledge as soon as the defect occurred, he was not in breach of his obligation to repair it until he had failed to do so with reasonable expedition thereafter.

Though initially inclined to accept that submission, his Lordship was now satisfied from a consideration of the authorities on which the rule in O'Brien v Robinson was founded that it was in truth an exception from the general rule and, moreover, one which proved it.

The rule in O'Brien v Robinson was principally founded on the majority decision of the Court of Exchequer in Makin v Watkinson (1870) LR 6 Exch 25, where a landlord successfully pleaded lack of notice in defence to an action for alleged breach of a covenant to maintain the premises. Channell B referred to Vyse v Wakefield (1840) 6 M & W 442 as authority for the proposition that when a covenant would, according to the letter, be an unreasonable one, words not inconsistent with the words used might be interpolated to give it a reasonable construction. At p28 he said:

Now here repairs are to be done to the exterior of the premises, as to which it is just possible that the lessor might, by observation, acquire a knowledge of their necessity. But the main timbers of the building, which must be within its carcase, and the roofs are to be kept in repair; and of the repairs required for these he could have no knowledge without notice . . . Here, therefore, . . . we ought to import into the covenant the condition that he shall have notice of the want of repair before he can be called on . . . to make it good.

The basis of that decision necessarily affirmed the general rule, recognised in the subsequent authorities, that a landlord must be held to the terms of his covenant to repair if the defect occurred in premises not comprised in those demised to the tenant. The general rule was that a covenant to keep premises in repair obliged the covenantor to keep them in repair at all times, so there was a breach of the obligation immediately a defect occurred.

Lord Justice Roch and Lord Justice Hutchison agreed.

Paul Magrath, Barrister