Irontrain Investments Ltd v Ansari

Where a person is told that water is escaping from premises and creating a known risk of damage to neighbouring property, that notice engages a common-law duty to investigate the cause and take reasonable steps to remedy, prevent or minimise the risk. The notice need not identify the precise defect.

An owner of let premises may recover rent withheld by tenants because of negligent damage, even without an express rent-abatement provision. The general rule concerning recovery by a reversioner is not universal. Expenditure incurred in an unsuccessful attempt to claim under a superior landlord’s insurance policy may, however, be too remote.

Irontrain Investments Ltd claimed damages from Salim Ansari, the lessee of Flat 3 in a building owned by the respondent, after two leaks from Flat 3 damaged Flat 1. The claim was advanced in breach of covenant and negligence. The respondent claimed rent withheld by Flat 1’s tenants, lost rent during the period of repair, repair costs and a loss adjuster’s fee.

On 24 February 2005, His Honour Judge Mackie QC found liability on both bases and awarded damages with interest. Mr Ansari appealed, challenging the sufficiency of notice, the recovery of rent withheld during the tenants’ occupation, various items of special damage and the suggested limitation under section 18 (1) of the Landlord and Tenant Act 1927. The central issues were whether the negligence claim was established and what losses were recoverable.

Lord Justice Jonathan Parker gave the leading judgment. Lord Justice Lloyd and Lord Justice Auld agreed. The appeal was dismissed, subject to reducing the special damages award by £132.19.

1. Notice and duty of care. It was sufficient to inform the defendant that water was coming through the ceiling of the flat below. Once notified, he had to establish the cause and, where the risk was his responsibility, take reasonable steps to remedy it. The Court applied the approach stated in Leakey v The National Trust [1980] QB 485 at 524. The trial judge was entitled to find breaches of the common-law duty to prevent or minimise the known risk of damage.
2. Loss of rent. Ehmler v Hall [1993] 1 EGLR 137 was indistinguishable and decisive. The general rule that a reversioner can recover only damage to the reversionary interest is not universal. The respondent could recover rent withheld by Flat 1’s tenants as a reasonable consequence of the negligent damage. The absence of an express contractual term permitting rent to be withheld made no difference. There was no risk of double recovery.
3. Alternative contractual claim. Since the negligence claim succeeded, it was unnecessary to determine the contractual claim under clause 4 (i) of the lease or the effect of section 18 (1) of the Landlord and Tenant Act 1927. The statutory argument therefore remained unresolved by the Court of Appeal.
4. Special damage. The £132.19 loss adjuster’s fee was too remote because it was incurred during an unsuccessful attempt to persuade the superior landlord to claim under its insurance policy. There was no satisfactory basis for interfering with the trial judge’s award for further repair works.

The judgment was accordingly varied only by disallowing the loss adjuster’s fee, and the appeal was otherwise dismissed.

• Court of Appeal (Civil Division): [2005] EWCA Civ 1681. Appeal dismissed, subject to the reduction of special damages by £132.19.
• Central London County Court: On 24 February 2005, His Honour Judge Mackie QC entered judgment for Irontrain Investments Ltd for damages and interest, finding liability in both negligence and breach of covenant.