Moorjani v Durban Estates Ltd

Damages for breach of a repairing covenant compensate impairment of the tenant’s leasehold rights and amenity. Discomfort, inconvenience and distress are symptoms of that impairment, not separate losses that make occupation essential. A tenant’s non-use of the premises for reasons unrelated to the disrepair does not automatically defeat the claim, although it may substantially reduce damages as mitigation or because the circumstances make a lower award just. Rental value is an appropriate starting point for temporary impairment, subject to a broad assessment of severity, duration and the tenant’s use. An appellate court should not disturb a trial judge’s quantification absent an error of principle or an assessment that is plainly wrong.

The appellant held a 150-year lease of a flat. A flood caused damage, and the landlord failed adequately to pursue insurance-funded reinstatement. The building’s common parts also remained in disrepair. The appellant was living with his sister before the flood and continued to live there until 2008, for reasons unconnected with the disrepair.

The Central London County Court dismissed claims for repair-related damages during the appellant’s non-occupation, awarded £1,500 for loss of amenity while he occupied the flat, and rejected the claim for three outstanding repair items. The appeal concerned those matters and the assessment of common-parts damages. The central issue was whether non-occupation unrelated to the disrepair prevented recovery for impairment of the leasehold amenity.

1. Appeal allowed in part. The nil awards for loss of amenity during the appellant’s non-occupation were set aside. The award for the period after he resumed occupation was upheld. Judgment was entered for £7,380, comprising £3,930 for impaired amenity, £1,650 for warped doors and £1,800 for bedroom repairs.
2. The better analysis of damages for breach of a repairing or reinstatement covenant is that the loss is temporary impairment of the amenity rights forming part of the tenant’s proprietary interest. Discomfort, inconvenience, distress and related health effects are symptoms of that impairment. The analysis applies beyond long leases, including periodic, secure and statutory tenancies.
3. Non-use for reasons unconnected with the disrepair is not automatically fatal. The tenant’s use of the property is ordinarily res inter alios acta, subject to mitigation and to the court’s power to temper the compensatory rules where justice requires. Non-occupation may therefore substantially reduce, but need not eliminate, damages.
4. Rental value is an appropriate starting point for temporary impairment. The court may apply a broad percentage assessment, taking account of the severity and duration of the disrepair, habitability, occupation and mitigation. In this case the Court of Appeal used 2.5 per cent for common-parts disrepair during non-occupation and 10 per cent for the combined flat and common-parts disrepair during part of the period.
5. The trial judge was entitled to assess damages for the occupied period by a global figure cross-checked against rental value. That assessment was not to be disturbed merely because the appellate court might have awarded more, absent an identifiable error of principle or an award so low as to be plainly wrong.
6. On the factual findings, the landlord was liable for the warped doors and bedroom repairs. The defects were caused by the flood, fell within the insurance policy, and had been identified to the landlord’s agents in time for a claim to be pursued. The landlord had to show, if it could, that the failure to recover from insurers was not attributable to its agents. The electrical repairs remained unproved.

• Court of Appeal (Civil Division): [2015] EWCA Civ 1252. Appeal allowed in part from the Central London County Court. The nil awards for impaired amenity during non-occupation and for two repair items were reversed, the occupied-period assessment was upheld, and judgment was entered for £7,380.
• Central London County Court: order of HHJ May QC dated 22 December 2013. Claims for loss of rent and three repair items were dismissed; the common-parts claim before 2005 was dismissed; £1,500 was awarded for common-parts disrepair during occupation; and the claim for amenity loss during non-occupation was dismissed.