Triplark Limited v Philip John Whale & Ors

A landlord’s right to renew a communal heating and hot-water system does not necessarily include a right to impose a materially different repairing obligation on lessees. Lease covenants must be construed in their documentary, factual and commercial context. A reference to fixtures and additions in a tenant’s repairing covenant may concern items introduced by the tenant, rather than apparatus installed by the landlord as part of a replacement communal system. The court may adopt the established principles governing declaratory relief, but declarations should not be granted where the proposed relief would not resolve the decisive issue. A replacement system requiring heat-interface units could not be treated as imposing the same repairing obligations as the original system where the lease did not confer that power.

The claimant was landlord of Northwood Hall, a block of 194 flats let under long leases. It sought declarations concerning its ability to replace the communal heating and hot-water system with a different system using heat-interface units, and to disconnect the existing system. In the alternative, it sought a declaration concerning the supply of hot water and heat to the exterior of each flat.

The defendants argued that the proposed system would impose a new and more onerous repairing obligation, because the units and associated apparatus would become their responsibility under clause 3(3) of the leases. The central issue was whether clauses 5(7), 5(8) and 5(17), read with the repairing covenant, authorised that result.

1. Declarations. The court adopted the principles concerning declaratory relief summarised in The Bank of New York Mellon, London Branch v Essar Steel India Limited [2018] EWHC 3177 (Ch). Declaratory relief is discretionary. Relevant considerations include the existence of a real dispute, the parties’ interests, practical utility, whether all sides have been properly heard, and whether a declaration is the most effective means of resolving the issue. The court did not need to determine whether the declarations failed those tests because the lease-construction issue was decisive.
2. Construction of the repairing covenant. Applying Arnold v Britton [2015] UKSC 36, the lease had to be construed by reference to the natural and ordinary meaning of its words, the other lease provisions, its overall purpose, the circumstances known to the parties and commercial common sense.
3. The word “additions” in clause 3(3)(a), read with the reference to fixtures, was properly understood as referring to fixtures and additions introduced by the lessee to the demise. It did not confer on the landlord an unrestricted power to install new communal apparatus and then require the lessee to repair it as though it formed part of the original demise.
4. The proposed heat-interface units would create a repairing obligation of a different character and greater extent from that arising under the original system. The absence of express restrictive language in the lease did not authorise the landlord to impose that additional burden. The landlord’s rights of access and to carry out works did not establish such a power.
5. London Borough of Southwark v Baharier [2019] UKUT 0073 (LC) was distinguishable. It concerned the landlord’s ability to recover the cost of providing services, not the scope of a tenant’s repairing covenant.
6. The claimant’s declarations were declined. The court directed counsel to submit a draft order and left any consequential matters, including costs, for further consideration if required.