Fouladi v Darout Ltd & Ors

An appellate court should not interfere with a trial judge’s findings of fact, including evaluative findings, unless there is an identifiable error or the decision cannot reasonably be explained or justified. Contractual obligations concerning sound insulation may inform the assessment of damages, which compares the actual position with the position had the contract been performed. A landlord is not liable for a tenant’s nuisance merely because it knew of, or failed to prevent, the nuisance. Liability may arise where the landlord authorised or actively participated in it. A court may award continuing damages alongside a mandatory order requiring remedial works.

The judgment concerned two appeals from the County Court at Central London concerning noise transmitted between adjoining flats in a mansion-block development. The trial judge found that works to the upper flat’s floor had reduced sound insulation and caused actionable nuisance, and that the lessee had breached contractual obligations concerning floor coverings and alterations. He awarded damages, ordered remedial works and dismissed claims against the landlord for nuisance and breach of the covenant for quiet enjoyment.

The upper-flat defendants challenged findings of fact, liability, damages and the remedial order. The claimant challenged the dismissal of her claims against the landlord. The central issues were whether the trial judge had made an appealable error, the recoverability and continuation of damages, and whether the landlord had authorised or participated in the nuisance.

1. Appeal on findings of fact. The challenges to the trial judge’s assessment of the claimant’s evidence and the extent of the noise nuisance failed. Applying McGraddie v McGraddie [2013] 1 WLR 2477, Henderson v Foxworth Investments Ltd [2014] 1 WLR 2600 and the principles summarised in Fage UK Ltd v Chobani UK Ltd [2014] ETMR 26, the appeal court could not re-evaluate evidence which the trial judge had considered thoroughly and explained. The critical findings had evidential support, including the evidence of local-authority officers.
2. Contractual obligations and damages. Regulation 14 imposed a continuing obligation. Kitchen and bathroom floors had to be covered with suitable material to avoid noise transmission, while the other floors had to be covered with carpet and underlay. Damages were assessed by comparing the actual position with the position that would have existed had the contractual obligations been performed. The claimant’s alterations to the lower flat did not remove or materially limit the recoverable loss because noise affected the flat generally and the relevant consequences were within the reasonable contemplation of the parties.
3. Consent and remedial relief. The works to the floor were not within the written licence by implication. A mandatory order could specify the remedial works required to abate the nuisance and secure compliance with the contractual obligation. It was appropriate to require an acoustic strategy and to permit further applications concerning the scheme of works.
4. Continuing damages. The court had jurisdiction to award damages at a daily rate pending completion of the mandatory remedial works. The defendants could not raise for the first time on appeal an argument concerning periods when the occupiers were absent.
5. Landlord’s liability. Applying Malzy v Eichholz [1916] 2 KB 308, as reaffirmed in Southwark LBC v Mills [2001] 1 AC 1 and Lawrence v Fen Tigers Ltd (No 2) [2015] AC 106, the landlord was not liable merely because it knew of the works and could have prevented them. The evidence did not establish authorisation or active participation. Insofar as Chartered Trust plc v Davies [1997] 2 EGLR 83 stated an incompatible principle, it was not applied. The claim for breach of the covenant for quiet enjoyment consequently also failed.
6. The appeal by the first to third defendants was dismissed on all grounds. The claimant’s appeal against the fourth defendant was dismissed. The timetable for remedial works was to be reset at hand-down.

• High Court (Chancery Division): appeals from the County Court at Central London were dismissed. The trial judge’s order was maintained, subject to resetting the timetable for remedial works.
• County Court at Central London: judgment handed down on 28 February 2018 and order made on 3 May 2018. The first to third defendants were held liable in contract and nuisance; the claim against the fourth defendant was dismissed.