Twinmar Holdings Ltd v Klarius UK Ltd & Anor

A repairing covenant is assessed by reference to the age, character and locality of the premises, and to the requirements of the relevant class of tenant, at the commencement of the lease. Repair may require renewal of subsidiary parts and steps to prevent deterioration which will occur during the term, but liability arises only when the premises are actually out of repair. For roof lights, a visible and significant reduction in translucence may constitute disrepair even without leakage. The recoverable cost is limited to work reasonably necessary to remedy the breach, allowing for betterment and reasonable mitigation. Associated preliminaries are not reduced merely because the final works cost less than the tender, unless the reduced scope would have shortened the contract period.

The claimant, the freehold owner of an industrial warehouse, claimed damages from its former tenant under repairing and associated covenants in a 25-year lease. The claim concerned dilapidations following expiry of the lease, including roof lights, external panels, cleaning, flooring, dock levellers, access and safety measures, preliminaries, professional fees, alternative accommodation, the cost of preparing the schedule of dilapidations and interest.

The principal dispute concerned whether deterioration of GRP roof lights amounted to disrepair, whether the roof lights were windows within the lease, and what reasonable costs were recoverable. The tenant also disputed liability for particular damage, the extent of necessary access arrangements, betterment and the period and rate of interest.

1. Repairing covenant. The starting point was the test in Proudfoot v Hart (1890) 25 QBD 42, read in the light of Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716 and Westbury Estates Ltd v The Royal Bank of Scotland plc [2006] SLT 1143. The relevant question was what would make the premises reasonably fit for occupation by the likely class of tenant, having regard to conditions at the commencement of the lease, not its expiry.
2. Repair included making good damage so far as possible, including renewal of subsidiary parts, while taking account of the age of the premises. A covenant to keep premises in good and substantial repair required reasonable steps to prevent deterioration which would take place during the term. There was no breach until the premises were actually out of repair.
3. The roof lights were in disrepair because their surface abrasion had caused a visible and significant reduction in translucence. Leakage was not essential. The roof lights were not “windows” within the lease because they were neither glazed with glass or an effective glass substitute nor set in frames.
4. The claimant recovered the reasonable cost of Delglaze treatment and safety netting. Perimeter edge scaffolding was recoverable only to the extent reasonably necessary, and the remaining access could reasonably have been provided by suitable lifting equipment. The court allowed for betterment in assessing the replacement entrance barrier and applied reasonable mitigation in relation to the dock levellers.
5. The tenant was liable for the specified external panels, cleaning, floor repairs, dock levellers and other proved breaches. The cost of preliminaries was not to be reduced simply because the final account was lower than the tender; reduction was appropriate only if the omitted work would have shortened the contract period. Professional fees were allowed at 12 per cent of the works awarded as damages.
6. For interest, the court applied the principles stated in Claymore Services Ltd v Nautilus Properties Ltd [2007] BLR 452. Interest was awarded for the full period at 3 per cent above base, reflecting delay in pursuing the claim and the available evidence.
7. The claimant was entitled to judgment for the recoverable sums, with the parties to calculate the precise total and interest. No further order was made following the defendant’s winding-up, because the judgment was effectively declaratory.

Not stated in the judgment.