English Churches Housing Group v Shine

Damages for breach of a landlord’s repairing covenant compensate an occupying tenant for the loss of comfort and convenience caused by the disrepair. They may be assessed globally or by reference to a notional reduction in rent. A global award should ordinarily be cross-checked against the rent payable.

Although the assessment is not mechanistic, an award exceeding the rent requires clear reasons and facts warranting that result, notably relevant conduct by the landlord. Other things being equal, the rental value represents a rule-of-thumb maximum. A tenant’s unreasonable refusal to accept suitable temporary accommodation and consequent delay in repairs amount to a failure to mitigate loss.

The respondent was a secure weekly tenant whose flat was affected by serious damp, dry rot and defective bathroom flooring. The appellant landlord accepted liability for damages under section 11 of the Landlord and Tenant Act 1985. The trial judge awarded £19,000 for approximately seven years of disrepair, including £16,000 for the period from 1999 to June 2003.

The landlord appealed from the order of Shoreditch County Court dated 10 June 2003. It contended that the award was manifestly excessive, that the tenant’s repeated refusal to vacate the flat had not been reflected in the assessment, and that the judge had wrongly refused to determine reserved costs or permit the set-off of an earlier costs award.

The central damages issue was how compensation for discomfort and inconvenience should be assessed where the tenant’s conduct had substantially delayed the repairs.

1. Appeal allowed. The £19,000 damages award was set aside and £8,000 substituted. The trial judge’s global award was manifestly excessive, unexplained and unsupported by a cross-check against the rent payable.

2. Damages under section 11 of the Landlord and Tenant Act 1985 are contractual. For a tenant remaining in occupation, they compensate for the loss of comfort and convenience resulting from living in premises which should have been repaired. A court may use a global assessment, a notional reduction in rent or a combination of those methods. A global figure should be cross-checked against the rent, consistently with Wallace v Manchester City Council (1998) 30 HLR 1111.

3. The guidance in Wallace is neither mechanistic nor absolute. Distress and inconvenience may justify damages exceeding the rent. Such an award nevertheless requires clear reasons, and the facts—particularly the landlord’s conduct—must warrant it. Other things being equal, the rental value is a rule-of-thumb maximum for this kind of claim.

4. The tenant had repeatedly and unreasonably refused suitable temporary accommodation, disobeyed court orders and delayed the repairs. The judge was wrong to regard him as entitled to be difficult. His failure to mitigate required a substantial reduction. The court allowed £3,000 for the period to mid-1999, £3,217 for the period from mid-1999 to January 2001 and £1,950 thereafter, rounded to £8,000. This represented about 36 per cent of the rent over the longer period used for the cross-check.

5. The refusal to determine reserved costs was set aside. The landlord was awarded the costs of five specified interlocutory hearings, subject to detailed assessment. No separate order was made for additional costs caused by excessive documentation.

6. The landlord could set off the £1,500 costs awarded on the earlier interlocutory appeal against the damages. That costs order formed part of the proceedings, and set-off was appropriate where otherwise it was unlikely to be enforced.

• Court of Appeal (Civil Division): The appeal was allowed in [2004] EWCA Civ 434. The £19,000 award was set aside and £8,000 substituted. Reserved costs were awarded for specified hearings, and a £1,500 costs set-off was permitted.
• Shoreditch County Court: On 10 June 2003, His Honour Judge Cotran awarded the tenant £19,000 damages, dismissed the landlord’s possession counterclaim, declined to award specified reserved costs and refused the requested set-off.
• High Court, Chancery Division: On the tenant’s earlier interlocutory appeal, Hart J reinstated the claim but upheld the injunction requiring temporary vacation of the premises. The tenant was ordered to pay 75 per cent of the landlord’s appeal costs, assessed at £1,500.