A recent High Court judgement regarding a tenant's claim for damages due to alleged disrepair in commercial premises provides insights into the precise scope of repairing covenants and the stringent requirement to prove causation of loss.
Facts:
Susan Coombs, who has leased the premises since 2007 to run a pet shop and aquarium, brought a claim against her landlords, Mr. and Mrs. Hayes. She alleged that, in June 2019, structural damage to the exterior of the premises, caused by adjacent Network Rail works, led to a significant infestation of vermin and flooding. She claimed these issues, which she said the landlords failed to remedy promptly, caused a drastic decline in her business, forcing its closure. Her pleaded claim sought over £133,000 in damages, primarily for loss of profit. Ms. Coombs' claim was based on several clauses of her lease.
Mr. and Mrs. Hayes denied any breach of their repairing obligations or causation of her alleged losses. They counterclaimed for approximately £28,000 in rent arrears and £20,450 in dilapidations costs.
The trial Judge found no evidence of a structural failure or material alteration in the premises prior to late 2019 that readily explained the flooding or vermin infestation. He concluded that Ms. Coombs failed to establish that the water ingress was due to a defect for which the landlords were responsible.
The Judge found that Ms. Coombs had not provided sufficient evidence to establish that her claimed financial losses were caused by the alleged breaches. She sought permission to appeal.
Decision:
The High Court dismissed Ms. Coombs’s renewed application for permission to appeal against a judgement that rejected her claim for damages against her landlords and partly allowed their counterclaim for unpaid rent.
While Mr. Justice Constable agreed that some of the wording of the trial Judge might not have been adequate, the substance was correct. Ms. Coombs did not prove disrepair, giving rise to the landlords' lease obligations. As a result, any claim for breach of the quiet enjoyment covenant would have been impossible, as they were based on the same arguments.
The Judge found no inconsistency between dismissing her claim for disrepair while allowing a rent reduction. Indeed, while she did not prove that a lack of proven disrepair caused the extensive business losses (for the main claim) and the acknowledged damp caused by the storm in late 2019/early 2020, this nonetheless justified a temporary rent reduction.
The Judge was allowed to prefer the landlord’s evidence supported by bank statements rather than Ms. Coomb’s claim of cash payments. Mr. Justice Constable affirmed that, even if Ms. Coombs had succeeded on any liability grounds, the failure to prove her losses would have led to the claim's dismissal.
Implications:
This case strongly reinforces the "notice" rule in landlord repairing obligations. This highlights that a landlord's contractual repairing obligation is generally not triggered until they have received proper notice of the disrepair, especially for issues within the demised premises that are not under the landlord's direct control. Tenants must provide clear and timely notice to their landlords of any alleged disrepair, ideally in writing and with supporting evidence (e.g., photos). Delaying notification can significantly weaken a claim for breach of repairing covenants and associated losses.
The specific wording and scope of covenants within a lease (e.g., repairing obligations, quiet enjoyment, insurance duties) are the bedrock of landlord-tenant relationships. Courts will meticulously interpret these clauses to determine the extent of each party's responsibilities.
The case distinguishes between a state of disrepair that might justify a rent reduction (e.g., damp from a storm) and a disrepair that can be causally linked to more severe consequences, such as vermin infestation or business failure.