Baillie v Savage

A rent suspension clause requiring destruction or damage during the tenancy may be engaged where that initial damage creates a real risk of further damage which makes the premises unfit for occupation and use. The clause requires a sufficient connection between the damage occurring during the tenancy and the resulting unfitness. A construction requiring rent to remain payable while the property faced a dangerous risk of further landslip was not commercially sensible. On appeal, the court will not make new factual findings from an unexplored photograph or factual case that was not put to the relevant expert at trial.

The tenant of a house relied on a rent suspension clause after part of a garden retaining wall collapsed, leaving a continuing risk of further collapse and making the property unsafe. The District Judge awarded the tenant £18,059, ordered release of a deposit, and ordered payment of £10,000 on account of costs.

The landlord appealed, arguing that the remaining wall was a separate structure and that its pre-existing bowing was not damage caused during the tenancy. The central issue was whether damage occurring during the tenancy, together with a consequent risk of similar further damage, satisfied the clause.

1. Appeal dismissed. The rent suspension clause required two factual conditions: first, that part of the premises had been destroyed or damaged during the tenancy; and secondly, that the nature of that destruction or damage rendered the premises unfit for occupation and use. The collapse of part of the garden wall satisfied the first condition.
2. The second condition could be satisfied by a real risk of further damage of a similar nature, particularly where the further damage was potentially dangerous to the occupants. The court applied the reasoning in Summers v Salford Corporation [1943] AC 283, where the risk of a further failure was sufficient to make premises unfit for habitation.
3. There had to be a sufficient connection between the damage during the tenancy and the unfitness. Damage during the tenancy, coupled with the risk of further similar damage and the resulting unfitness, supplied that connection. The clause was not confined to specified events such as fire, storm or tempest.
4. The approach was consistent with the strict interpretation of rent suspension provisions illustrated by Manchester Bonded Warehouse Co v Carr (1880) 5 C.P.D. 507, but that decision did not govern the materially different wording of clause 14.
5. Independently, the appellant could not establish a break in causation by relying on the alleged separation of the wall into two sections. That factual case had not been put to the expert in cross-examination. An appellate court does not make new factual findings from a photograph without the issue having been explored at trial.
6. The challenge to the apportionment of one third of the rent was outside the permission granted to appeal and did not assist the primary case.

• High Court (Chancery Division): Appeal from the District Judge’s order dated 23 November 2017 dismissed.
• District Court: Judgment entered for the claimant for £18,059 inclusive of interest, with release of a £2,025 deposit and payment of £10,000 on account of costs.