Tenant Found in Breach of Maintenance Covenant by First-tier Tribunal

OUTCOME: Allowed

1

FIRST - TIER TRIBUNAL [NAME] CHAMBER ([NAME])

Case Reference : MAN/00EQ/LBC/2021/0011

[NAME] : 8 Beechwood Knutsford Cheshire [POSTCODE]

Applicant : [redacted] : [NAME]

Respondent : [redacted] : [RESPONDENT] of Application : Application for a Determination that a Breach of Covenant has occurred Section 168(4) Commonhold and Leasehold Reform Act 2002

Tribunal Members : Judge R [NAME] Mr S Wanderer MRICS

Date and Venue of Hearing : 30 November 2022 – By Video

Date of Decision : 30 November 2022

DECISION

© CROWN COPYRIGHT 2022

2

Decision The Tribunal determines that the Respondent has breached the terms of clause 2(3) of the lease dated 20 May 1966 between The [APPELLANT] and [NAME]. The Application 1. The Applicant, [APPELLANT], has been the registered proprietor of the freehold [NAME] known as 8 Beechwood Knutsford Cheshire [POSTCODE](the “[NAME]”) registered under title number Ch 386146 at HM Land Registry since 4 April 2000. The Respondent to the application is [RESPONDENT], the registered proprietor of the leasehold of [NAME] registered under title number CH 17614 at HM Land Registry since 6 May 1997.

2. The Applicant holds the leasehold intertest in [NAME] pursuant to a lease dated 20 May 1966 between The [COMPANY] and [NAME] (the “Lease”), on the following terms:

Term

999 years from 25 March 1963

Annual rent £15 per annum(initial)

3. By application dated 18 November 2021, the Applicant seeks an order under section 168(4) of the Commonhold and Leasehold Reform Act 2002 (the “Act”). The Applicant contends that the Respondent has breached clauses 2(3) and 2(13) of the lease. 4. Clause 2(3) states:

“that the [NAME] will throughout the said term at the expense of the [NAME] and without being thereunto required well and substantially repair cleanse maintain amend and keep the said demise premises and all fixtures and additions thereto and all sewers drains water courses and other appurtenances thereto including the fence on the side or sides of the demised premises as may be indicated by “T” within the boundary of the land shown edged red on the said plan in good and substantial repair and condition.”

3

5. Clause 2(13) states:

“not without the previous licence in writing of [NAME] to permit any parts of the said demise premises or any dwellinghouse or building erected or to be erected thereon to be used otherwise than as a private residence only and not to erect or permit to be erected upon the demised premises or any part thereof any machinery or do or permit to be done thereon any wilful damage waste spoil or destruction or anything which shall be or may grow to be a nuisance or annoyance to the [NAME]” 6. The following documents are attached to the application: a. Interim Schedule of Dilapidation and Wants of Repair by [NAME] [COMPANY] dated 5 November 2021 b. The Lease.

The Law 7. Section 168 commonhold and leasehold Reform Act 2002 states:

4

8. The tribunal’s Jurisdiction under section 168(4) is 2 determine whether a breach of covenant or condition has occurred. The tribunal does not have jurisdiction under this section to determine whether there has been a waiver of any right to forfeit the Lease by the Applicant or whether any remedy that the Applicant may claim in the future is available to it.

9. However, the Tribunal notes that there is a distinction between a waiver of the right to forfeit the Lease and a waiver of any covenant itself. In respect of the former, this is not a matter that the tribunal is able to determine. However, the latter is key to a determination of whether there has been a breach of the covenant as if the covenant itself has been waived, it cannot have been breached.

10. The position was considered in detail by [NAME], Deputy Chamber President, in [NAME] v [COMPANY] (2021) UKUT 266 in which he reviewed the differences between a waiver of the right to forfeit and a waiver of the covenant itself at paragraphs 24 to 32. He stated: “26. It is necessary to bear in mind an important distinction when considering the issue of waiver in the context of a breach of covenant. The distinction is explained in Woodfall: Landlord and Tenant , at 17.092, as follows:

"Waiver of the right to forfeit is not the same as waiver of a breach of covenant. The former depends on the principle of election and only bars one remedy, leaving the landlord's right to damages intact. The

5

latter depends on the inference of consent, and bars all the landlord's remedies in respect of the breach in question. Neither of these kinds of waiver will prevent the landlord from relying on the covenant in respect of subsequent breaches."

11. The Deputy President then referred to the case of Swanston Grange (Luton) Management [COMPANY] v Langley-Essen [2008] L & TR 20 in which the Lands Tribunal (HHJ Huskinson) explained that: “in order to determine whether a breach of covenant has occurred, it may sometimes be necessary for a tribunal to determine whether the landlord has waived the right to rely on the covenant at all. If the covenant does not bind the tenant, because the landlord has waived its right to rely on it, there can be no question of the tenant having breached the covenant.” DIRECTIONS 12. On 13 May 2022, the application was considered by the Tribunal and a directions order made by Judge Bennett indicating that the Tribunal does not consider that an inspection of [NAME] will be necessary, that it considers the matter appropriate for a determination in the absence of the parties, allowing the parties an opportunity to indicate whether they wish to make oral representations and setting out a timetable for the exchange of documents and providing directions in relation to [NAME] evidence.

13. In compliance with the directions order, the Tribunal received the following documents: a. Applicant’s Bundle; b. [NAME] witness report of the Respondents valuer; and c. A witness statement from the Respondent, Mr [RESPONDENT].

14. A Supplementary bundle was received From the [NAME] on 23 September 2022.

6

15. Subsequently, the Respondent requested an attended hearing the matter was listed for hearing today.

16. At today’s hearing the Applicant was been represented by Mr [COUNSEL], solicitor, and the Respondent was represented by [COUNSEL] of Counsel. Procedural Matters 17. By application dated 9 November 2022, the Applicants applied to the tribunal for permission adduce [NAME] witness report. Whilst the report was included within the Applicants bundle of 30 May 2022, no application for permission to rely on the report had been made previously.

18. Paragraph 19 of the Tribunal Procedure (First Tier Tribunal)([NAME] Chamber) Rules 2013 states:

7

19. Whilst it is disappointing that the application to rely on witness evidence was not made earlier, it is noted that the experts report is dated 5 November 2021 and was included within the Applicant’s Bundle dated 30 May 2022. Furthermore, the Respondent did not raise any objection to the Applicant relying upon the [NAME]’s Report.

20. Therefore, whilst there may not have been an application at the earliest stage and permission was not sought when this matter was previously dealt with by the tribunal, permission was granted at the hearing for the Applicant to rely upon the report. Evidence 21. Thus, prior to the hearing today, the Tribunal had the opportunity to consider all the documentation that had been provided in advance.

22. The Applicants state within the [NAME]’s Report that, on 13 September 2021, they received an e-mail from Mr. [NAME], Assistant Housing Standards Officer at Cheshire East Council. The e-mail was a request for assistance in bringing [NAME] back into use or to improve the external appearance of [NAME]. Mr [NAME] advised that “[NAME] has now been empty for 15 years and the owner has submitted various planning applications to extend and refurbish [NAME], although no action has been taken and [NAME] is continuing to deteriorate. [NAME] has been in its current state of repair with no roof slates for the past three years at least”.

23. The schedule provided by the [NAME] records the works that they suggest are required to be done to the premises in order for there to be compliance with the lease. In the interests of brevity, the contents of the schedule of dilapidations set out within the [NAME] are not repeated here.

24. The Respondent's evidence is set out in his witness statement dated 16 September 2021 in which he sets out the very sad background of how [NAME] previously belonged to his mother and that his parents had both been killed in a road traffic accident in 1997. At that time, he lived in the USA and was the only surviving member of the family.

8

25. He explains how difficult his life had been at that time due to his sudden loss and how [NAME] had been “in the hands of” his uncle, his mother’s brother, who he had understood arranged for [NAME] to be rented out.

26. He also states that when [NAME] was first registered in his name, the incorrect address of [ADDRESS] was included when the correct address is [ADDRESS] and, therefore, that he has not been received correspondence in relation to [NAME]. As such, he's not been able to respond to the [NAME] in a timely manner and attempt to rectify any alleged breaches of the lease.

27. Mr [NAME] explains how, upon his return to the UK, he began the process of attempting to renovate [NAME]. He does not provide details of any events between 2005 and 2018 but states that in around 2018 he began work on [NAME] which included stripping the roof tiles. However, he then decided to revise [NAME] and paused the works whilst he made a further application for planning permission. It seems that this application failed, was appealed but that the appeal was and subsequently rejected. He states that it is these protracted proceedings that are the cause of the breaches of clause 2(3) of the lease but that he does still have the first planning permission.

28. The Respondent indicates that if the tribunal orders that there has been a breach of the lease that he would be willing to rectify any breach.

29. At the hearing, Ms [RESPONDENT] for the Respondent confirmed that the Respondent did not dispute that [NAME] had fallen into disrepair and accepted that there had been breaches of the Lease but indicated that he does not accept that those breaches arose from any wilful neglect.

30. The Respondent initially indicated that he was content not to give evidence but following the submission of Mr [APPELLANT] on behalf of the Applicant, he decided that he would like to give further evidence to the Tribunal. No objection was raised by the Applicant and the Respondent was permitted to give evidence to elaborate on the contents of his witness statement.

9

31. The Respondent’s initial evidence was that he did not accept that he had not done any works to [NAME] as he had been very much involved with [NAME] through his application for planning permission. Subsequently, in cross-examination, he confirmed that whilst some works had been done to [NAME], very little had been done in terms of repairs and he accepted that [NAME] is in the condition shown on the photographs at page 50 of the Applicant’s Bundle. This shows [NAME] to have had all the roof titles removed from a large section of [NAME].

32. During his evidence, the Respondent also acknowledged that he had not obtained the Applicant’s permission to carry out the works to [NAME] either for which he has the benefit of planning permission or for which he is now seeking planning permission.

DECISION 33. Following a detailed consideration of the evidence and the submissions of the parties, and in the absence of any challenge to the enforceability of the covenants, the Tribunal has determined as follows: Clause 2(3)

34. The Respondent accepts by his acceptance of the lack of roof tiles on [NAME] and his admission that there is a broken window and that a fascia board and gutter has been removed, that he has not repaired, cleansed, maintained [NAME] for a significant period of time.

35. As such, the Tribunal finds that there has been a breach of Clause 2(3) of the Lease. Clause 2(13)

36. In relation to Clause 2(13), no evidence has been provided by the Applicant to suggest that [NAME] has been used otherwise than as a private residence, that any machinery has been erected on [NAME]. However, the final part of the clause is a prohibition against doing or permitting to be done: “any wilful damage waste spoil or destruction or anything which

10

shall be or may grow to be a nuisance or annoyance to the [NAME]” 37. The question of whether [NAME] has become a nuisance or annoyance to the “[NAME]” is not straight forward. The newspaper articles provided on pages 5 and 6 of the supplementary bundle refer to “residents on Beechwood in Knutsford saying they are “at the end of their tether” and refer to [NAME] as “an eye sore””. Reference is also made to “countless complaints”.

38. In the case of [NAME] v [NAME] and others [2009] EWCA Civ 1081, Lord Justice Rimmer considered the interpretation of the words “nuisance or annoyance” in the context of the development of a [NAME]. Whilst the question in that case related to the erection of a building that blocked the view, the same reasoning can be adopted in relation to a building that is unsightly. Either way, the question is whether the appearance of a building can amount to a “nuisance or annoyance”; whether as a result of the appearance of the building itself (as in this case) or by it obstructing another view.

39. Within the case of [NAME], reference was made to the case of Tod-[NAME] v Benham (1888 ) 40 Ch D 80. That case related to the establishment of a hospital for the treating of diseases and whether the carrying on of such a trade would amount to the breach of a covenant not to do “… any act, matter or thing which shall or maybe or grow to the annoyance, nuisance, grievance or damage of the lesser, assigns or the inhabitants of the neighbouring or adjoining houses”.

40. At paragraph 93, [NAME] LJ stated:

“Now ‘annoyance or grievance’ are words which have no definite legal meaning. It has been pressed upon us that we cannot say that it was that which was an annoyance or grievance to reasonable people, because the Judges, in speaking of what would be an annoyance to reasonable people, are only speaking of what they themselves really think would be in annoyance or grievance. That is

11

the difficulty that Judges very often have to deal with; they must not take that to be an annoyance or grievance which would only be so to some [NAME]. They must decide not upon what their own individual thoughts are, but on what, in their opinions, and upon the evidence before them, would be an annoyance or grievance to the reasonable, sensible people; and, in my opinion, an act which is an interference with the pleasurable enjoyment of a house is an annoyance or grievance, and within the definition given by V-C Knights-Bruce in [NAME] v [NAME] 4 De G & Sm 322. It is not sufficient in order to bring the case within the words of the covenant, for the Plaintiffs to show that a particular man objects to what is done, but we must be satisfied by argument and by evidence, that reasonable people, having regard to the ordinary use of a house for pleasurable enjoyment, would be annoyed or aggrieved by what is being done.” 41. [NAME] LJ made similar points. He stated at 95-96:

“…Now what is the meaning of annoyance? The meaning is that which annoys, that which raises objections and unpleasant feelings. Anything which raises an objection in the minds of reasonable men may be an annoyance within the meaning of the covenant.” 42. Based on the above, Lord Justice Rimmer concluded that the erection of a house that interferes with a view could amount to a nuisance. In a similar way, this Tribunal finds that the unsightly nature of a [NAME] could also be a nuisance.

43. Reflecting upon that analysis and considering the contents of the newspaper articles within these proceedings, there is evidence to show that there are a number of local neighbours who find [NAME] to be an eyesore and who have raised complaints about it. On the balance of probabilities, the Tribunal finds that that the present condition of [NAME] is a “nuisance or annoyance”.

44. However, this tribunal also needs to consider whether the Respondent's failure to carry out works of repair and maintenance to [NAME] are

12

sufficient to amount to the Respondent doing or permitting the following:

“any wilful damage waste spoil or destruction or anything which shall be or may grow to be a nuisance or annoyance to the [NAME]” 45. Whilst Ms [RESPONDENT] on behalf of the Respondent submitted that the Respondent did not wilfully breach the covenants, the Respondent’s own evidence confirmed that he had carried out works to commence the removal of part of [NAME] prior to stopping work and leaving [NAME] in that condition with the inevitable result that it became a nuisance and an annoyance to the neighbours.

46. Even if he had not carried out the works that resulted in [NAME] becoming an eyesore himself, he plainly permitted [NAME] to fall into a dilapidated state in circumstances where he had the power to prevent that from happening.

47. On balance, therefore, the Tribunal also finds that the Respondent is in breach of Clause 2(13) of the Lease. Costs 48. Neither party made any application to the Tribunal in respect of costs. Appeal 49. If either party is dissatisfied with this decision an application may be made to this Tribunal for permission to appeal to the Upper Tribunal, [NAME] Chamber ([NAME]) on a point of law only. Any such application must be received within 28 days after these reasons have been sent to the parties under Rule 52 of the Tribunal Procedure (First-tier Tribunal)([NAME] Chamber) Rules 2013.

Judge R [NAME] 30 November 2022