O’Connor v Old Etonian Housing Association Ltd

Under section 11(1)(b) of Landlord and Tenant Act 1985, the duty to keep an installation for supplying water, gas or electricity in proper working order is distinct from the duty to keep it in repair. At the commencement of a tenancy, the installation must be designed and constructed so that it can perform its function. It must also function under supply conditions that it is reasonable to anticipate. The duty is not absolute and does not require operation despite every supply variation or temporary interruption. Whether later adaptation is required depends on the circumstances. The same construction applies to a materially identical contractual covenant.

The tenants occupied four top-floor flats in Eton House. Before the tenancies began, the landlord replaced wider communal water pipes with smaller pipes. The pipes initially supplied adequate water, but reduced water pressure from 1992 caused intermittent and prolonged inadequacy. Wider pipes or a booster pump would have restored the supply.

The trial judge held that there was no breach. Blackburne J allowed the tenants’ appeal, holding that the installations had to be physically or mechanically capable of supplying water. The landlord appealed to the Court of Appeal. The issues concerned the meaning of proper working order, variations in utility supply, and any duty to adapt the installation after an unforeseen change.

1. Appeal allowed. The assumed facts did not enable liability to be determined. Blackburne J was wrong to reach a final answer in favour of the tenants, but the first-instance decision was also incapable of standing as a final determination. The costs matter was remitted to Clerkenwell County Court for a case management conference if compromise was not reached.
2. The duty in section 11(1)(b) of the Landlord and Tenant Act 1985 to keep installations in proper working order is distinct from the duty to keep them in repair. An installation incapable of working properly because of defective design or construction is not in proper working order. It must therefore be designed and constructed, when the tenancy begins, so that it is capable of performing its function. The court applied the principles drawn from Liverpool City Council v Irwin [1977] AC 239.
3. The required capacity is not judged by an absolute standard requiring operation despite every vagary of supply. Nor is it judged solely by conditions existing when the installation was installed. The test is whether the installation can function under those supply conditions that it is reasonable to anticipate will prevail. The court explained that Campden Hill Towers Ltd v Gardner [1977] 1 AER 739 concerned temporary interruptions and did not resolve the effect of longer-term changes in supply characteristics.
4. By way of guidance, the court stated that a later duty to modify an installation cannot be answered categorically. A deliberate technical change may require modification as a matter of business efficacy. An unforeseen change may make modification disproportionate if short-lived, whereas prolonged deprivation of supply may make relatively modest expenditure reasonable.
5. The materially identical contractual covenant was to be construed in the same way. If compromise was not reached, the issues were to be resolved on findings, or a binding agreement, as to the material facts.

• Court of Appeal: The landlord’s appeal from Blackburne J was allowed. The court held that the assumed facts were inadequate to determine liability and remitted the costs matter to Clerkenwell County Court for case management if compromise was not reached.
• High Court, Chancery Division: Blackburne J, on 9 February 2001, allowed the tenants’ appeal from the trial decision and held that the landlord had to ensure that the installations were physically or mechanically capable of supplying water to the flats.
• Mayor’s and City of London Court: His Honour Judge Marr-Johnson held on 22 August 2000 that the landlord had not breached the statutory or contractual obligation on the assumed facts.