[2024] UKUT 193 (LC)

I now turn to the provisions of the lease on which the appellant relies. Mr Bates KC rightly emphasised the approach set out by the Supreme Court in Arnold v Britton, and particularly paragraph 15:

Clause 5(5)(a) of the leases requires the landlord “To maintain and keep in good and substantial repair and condition … the main structure of the buildings”. Mr Bates KC argued that the FTT was wrong to find that remedying a structural defect, absent some degree of physical damage or deterioration, does not fall within that obligation. He accepted that this was not a work of “repair”, because the authorities are clear that there can be no repair in the absence of disrepair. But the work falls squarely within the natural and ordinary meaning of the word “maintain”, which means to prevent damage or harm. They will ensure that the buildings do not fall down and are safe for occupation and habitation; if the work is not done the building will not be “maintained” or in “good condition”.

Mr Bates KC relied on the decision of the Deputy President, Martin Rodger KC, in Assethold Limited v Watts where the Tribunal had to decide whether a landlord was entitled to recover from its tenants the legal expenses incurred in a dispute with the owner of neighbouring land over work to a party wall. One of the provisions on which the landlord relied was its covenant to maintain the property, and to do whatever “may be considered necessary or desirable” for its “proper maintenance safety [and] amenity”. At paragraph 44 the Deputy President recorded the landlord’s argument:

That argument was not successful because incurring legal fees was found not to fall within the covenant to maintain (although the landlord succeeded on a different basis); but Mr Bates KC relies on what the Deputy President said at paragraph 49:

The work in question here is precisely to preserve the building in a functional condition, said Mr Bates KC. Looking again at the points made in paragraph 15 of the Supreme Court’s judgment in Arnold v Britton, the natural and ordinary meaning of this covenant encompasses the work. Another relevant provision is clause 5(5)(j) which sets out the professionals that the landlord is required to instruct: the wide range of skills indicates the breadth of the landlord’s obligations. As to what the parties knew at the time the lease was granted, at the time of the grant of each of these leases everyone had good reason to suppose that the problems of the Large Panel System had been fixed. All the work required had been done. So it is wrong to suggest that if the parties intended work caused by the large Panel Systems to be included they would have said so expressly; on the contrary there was no reason for them to mention it.

For the respondent, Ms Gibbons pointed out that the approach to “maintain” in Assethold Limited v Watts does not take the appellant far enough; there was no finding that to maintain means to improve on the building’s original state or to put the buildings into a condition they have never before been in.

Ms Gibbons continued to rely on the authorities about the meaning of “maintain”, which the FTT found persuasive. I can go through them relatively briefly.

Welsh v London Borough of Greenwich [2000] 3 EGLR 41 was a claim for damages by a tenant; the Court of Appeal found that by allowing severe black spot mould to develop in the building the landlord was in breach of its covenant to “maintain the dwelling in good condition and repair.” There was no disrepair, but the problem was caused by a failure to provide thermal insulation or dry lining for the walls, and crucially the problem was a physical one which meant that the building was not in good condition.

In Fluor Daniel Properties Ltd and ors v Shortlands Investments Ltd [2001] 2 EGLR 103 the issue was whether a landlord was entitled to recover by way of service charge the cost of replacing major components of the air-conditioning in the building, which it could do if the work fell within its covenant to “uphold maintain repair amend renew …and otherwise keep in good and substantial condition and as the case maybe in good working order and repair… all apparatus equipment plant and machinery” in the building. The landlord failed; Blackburne J found that although the covenant “extends to the doing of works which go beyond repair strictly so called”, nevertheless the obligations “presuppose that the item in question suffers from some defect (i.e. some physical damage or deterioration or, in the case of plant some malfunctioning) such that repair, amendment or renewal is reasonably necessary” (emphasis added).

In Mason v Totalfinaelf UK Limited [2003] EWHC 1604 (Ch) Blackburne J reached a similar conclusion in a claim for damages for terminal dilapidations. Here the covenant in question was to “well and substantially uphold support maintain amend repair decorate and keep in good condition the demised premises”, and the question was whether that could include preventive work; it was held that it could not, and that there was no authority for the proposition that:

The same conclusions were reached in Westbury Estates Ltd v The Royal Bank of Scotland Plc [2006] CSOH 177 (the Outer House of the Scottish Court of Session) and in Alker v Collingwood Housing Association Ltd [2007] EWCA Civ 343. Finally Ms Gibbons turned to Dowding & Reynolds, Dilapidations, where there is no separate consideration of the meaning of a covenant to “maintain” but a discussion of an obligation to “keep in good condition”. At paragraph 8-14 under that heading the learned authors discuss of Welsh v Greenwich LBC and the Court of Appeal’s approach to a covenant to “maintain … in good condition and repair” and say this:

Paragraph 8-15 states:

Mr Bates KC argued that the cases turn on their own facts, and that all I need do is look at the words of the lease in light of what is said in Arnold v Britton. I do not agree that these authorities are rendered irrelevant by the Supreme Court’s decision; the appellant accepts, as it must, that the meaning of “repair” is well-established, and in the same way the approach taken by the courts to “maintain” – and similar terms such as “keep in good condition” - cannot be ignored. The cases seem to me to speak with one voice that such covenants are engaged only where there is some form of physical deterioration; none of the cases supports the appellant. Assethold Limited v Watts is as unhelpful as the rest; what was argued there was that maintenance was “the preservation of the subject matter of the covenant in its original state” (Assethold paragraph 44, quoted at paragraph 34 above), and at paragraph 49 the Deputy President said that “To maintain involves preserving a functional condition by acts of maintenance performed on or to the thing to be maintained”; the emphases are mine. To preserve is not to make something new, or to make something safe that was not safe.

In Alker v Collingwood Housing Association Ltd at paragraph 13 Laws LJ said:

That sums up the position precisely. The consistent approach of the authorities is that whilst “maintain” does mean something different from “repair” – it is not otiose and can denote something preventive rather than remedial – neither a covenant to repair nor a covenant to maintain is a covenant to remedy structural defects, nor to make safe a building that was not safe when it was built.