Stratton & Anor v Patel & Anor

A landlord’s obligations under separate lease schedules may be cumulative. An insurance-reinstatement clause does not restrict a broader obligation to make good damage caused by redevelopment works unless the lease uses sufficiently clear language. A tenant’s repairing covenant may take precedence over a more general landlord repairing covenant, avoiding concurrent obligations for the same parts of the building.

Where parties have agreed to pursue a contractor or its insurers, that may amount to a waiver of the landlord’s immediate obligation for a defined period. A claim under the Party Wall etc. Act 1996 dispute-resolution machinery is distinct from a court claim for damages. Where reinstatement is the appropriate remedy, the court may accept an undertaking to carry out the works and adjourn assessment of their cost.

The claimants were tenants of restaurant premises leased by the defendant. Building works undertaken above the restaurant caused water ingress and a fire, which left the premises unfit for use. The defendant accepted responsibility for the contractor’s negligent workmanship, the fire, the defective box gutter and deficiencies in fire protection.

The issues concerned the extent of the demise, the parties’ repairing and insurance obligations, the effect of the Second and Sixth Schedules to the lease, a Party Wall Award, quiet enjoyment, derogation from grant, tortious liability, exemplary damages, loss of income and the appropriate remedy. The court also considered whether the claimants had waived reliance on the defendant’s insurance obligations while pursuing the contractor and its insurers.

1. Lease construction. The roofs identified in the agreed issues formed part of the demised premises. The tenant’s specific repairing obligation under clause 4.5 prevailed over the landlord’s more general obligation under clause 5.3, which therefore did not extend to those demised areas.
2. Insurance and redevelopment obligations. Clause 5.2.2 created an exception to the tenant’s repairing obligation for damage caused by an insured risk. It did not provide an exclusive remedy for damage caused by the landlord’s negligence. The Second and Sixth Schedules imposed distinct and cumulative obligations. The insurance machinery did not restrict the landlord’s wider obligation to make good damage caused by the redevelopment works.
3. The claimants had waived reliance on the defendant’s obligation to pursue the Aviva policy until March 2011, while both sides looked to the contractor and its insurers. After March 2011, the defendant should have arranged the necessary works. They should have been completed by the end of November 2011.
4. Party Wall Award. The Award was not invalid. Even if some works fell outside the statutory scheme, the Award operated at least as an agreement between the parties. Section 11(8) of the Party Wall etc. Act 1996 provided a route to a surveyor’s determination of expenses, not a court assessment of damages. The claimants could not use the Act or Award to obtain damages instead of accepting reinstatement works.
5. Claims based on quiet enjoyment, derogation from grant, negligence and nuisance did not provide a separate recovery beyond the contractual claims. Exemplary damages were unavailable because the claim was fundamentally contractual and, in any event, the defendant had not deliberately delayed reinstatement to force surrender of the lease.
6. The claimants failed to establish loss of income because the restaurant had not been shown to be profitable. The court accepted the defendant’s undertaking to carry out the necessary remedial works, including restoration of a functioning kitchen and specified mechanical and electrical works, and adjourned assessment of the cost of reinstatement and other deferred damages. Specific performance was unnecessary, exemplary damages were nil, and interest was nil until damages were assessed.