Jacey Property Company Ltd v de Sousa

A contractual machinery clause requiring a tenant’s contribution to expenditure to be determined by the landlord’s surveyor must be observed. A landlord cannot substitute a solicitor or another person, however competent in other respects, where the lease has entrusted that determination to the surveyor alone.

The meaning of a repairing covenant depends on its contractual context. A duty to maintain adjoining property so as to provide support and shelter concerns physical support in this lease. A perceived gap in repair obligations cannot justify rewriting unambiguous contractual language.

The landlord obtained possession of a lock-up shop, mesne profits, repair costs, legal costs and interest from its tenants. The tenants had used the premises to prepare hot food, contrary to the agreed user, and counterclaimed for alleged failures to repair common drains.

His Honour Judge Fysh QC rejected the tenants’ estoppel case, held that their contribution to drain-repair costs was recoverable, and construed the landlord’s repairing covenant as not extending to ordinary blockages in common drains. The tenants appealed. The central issues were whether the factual findings on waiver or estoppel could stand, whether the service-charge machinery had been followed, and the scope of the covenant to provide support and shelter.

1. Appeal allowed in part. Lady Justice Arden held that the appeal failed on the user, estoppel and repairing-covenant issues, but succeeded on the drain-expense contribution. Lord Justice Laws concurred in her reasons and Lord Justice Pill agreed.

2. The trial judge was entitled to prefer Mr Cornbloom’s evidence to that of Mrs De Sousa on the material issue: whether he knew of, or sanctioned, on-site food preparation. An appellate court should be slow to disturb a trial judge’s factual evaluation. The omissions from the judgment did not undermine its essential reasoning or make its factual conclusion unsafe. The judge was not required to address every argument or item of evidence, provided that the parties and the appellate court could understand the critical reasoning.

3. The lease made the tenant’s liability for a fair contribution to drain expenditure dependent on determination by the landlord’s surveyor. That agreed machinery could not be satisfied by the landlord’s solicitor acting in a surveying capacity. Unlike unreported 12 March 1999, the court itself had not determined the appropriate contribution. The £1,113.58 contribution, and the related interest, therefore had to be removed from the order.

4. Clause 4(3), requiring the landlord to maintain and repair the remainder of the building so as to provide support and shelter for the demised premises, concerned physical support. Its context included an express reservation of lateral and subjacent support. Common drains did not fall within that limited covenant merely because a blockage could prevent the tenant’s business from operating. Any resulting repair gap could not justify altering the parties’ agreement. The remaining counterclaim issues therefore did not arise.

5. The possession order remained effective. The stay was removed, possession was ordered within 14 days, and the landlord received 80 per cent of its costs in this court and below.

• Court of Appeal (Civil Division): Allowed the appeal only as to the drain-expense contribution and related interest; otherwise upheld the County Court’s order: [2003] EWCA Civ 510.

• Central London County Court (His Honour Judge Fysh QC): Ordered possession, mesne profits, repair-related sums, legal costs and interest, and dismissed the tenants’ counterclaim.