Barry Maguire & Anor v Sathita Phanphet & Anor

A covenant prohibiting removal of a landlord’s fixtures is breached when fixtures are removed without consent, even if they are replaced with new items. The question is whether removal occurred, not whether the property was improved or suffered damage. A covenant prohibiting acts which may compromise building insurance does not require proof that the policy was actually breached, but the alleged risk must be supported by evidence, ordinarily from the insurer or an expert. A covenant concerning use of premises for a purpose from which nuisance may arise is directed to the use of the property. A separate covenant against unreasonable noise may extend to building works, but breach requires sufficient factual evidence of the level and unreasonableness of the noise.

The landlords of a converted two-flat Victorian house appealed against a determination by the First-tier Tribunal (Property Chamber) on an application under section 168 of the Commonhold and Leasehold Reform Act 2002. The tenants had comprehensively refurbished their flat, replacing fixtures, removing part of an internal wall, undertaking electrical and other works, and causing alleged noise and disruption.

The First-tier Tribunal found a breach concerning removal of part of a non-structural wall, but rejected the landlords’ claims concerning other fixtures, insurance and nuisance. The appeal concerned whether those three determinations involved errors of law.

1. Removal of fixtures. The appeal succeeded on this ground. The covenant in clause 2(c) of the lease prohibited removal of the landlord’s fixtures without prior written consent. It was breached by removal followed by replacement; the First-tier Tribunal had wrongly construed it as applying only to permanent removal. The Upper Tribunal substituted a determination that five internal doors, skirting boards, the kitchen and the bathroom were landlord’s fixtures removed in breach of covenant, in addition to the internal wall already identified.
2. Insurance covenants. The appeal failed on this ground. Clauses 4(c) and paragraph 2 of the Fourth Schedule were engaged if the tenants did something that might render the insurance void or voidable or cause an increased premium. Actual breach of the policy was unnecessary. However, the landlords had produced only speculation and no evidence from the insurer or an expert linking the works, or the increased premium, to an insurable risk. Their own opinion was insufficient. The Insurance Act 2015 did not require the tenants to notify the insurer before carrying out the works and was irrelevant to the alleged covenant breach.
3. Nuisance and noise. The appeal failed on this ground. Paragraph 1 of the Fourth Schedule concerned use of the flat as a private dwelling and was not directed to disturbance arising from refurbishment carried out in that use. Paragraph 3(a), however, prohibited unreasonable noise made by the listed activities or otherwise. The words “or otherwise” were broad enough to include unreasonable noise from builders. Nevertheless, the First-tier Tribunal had made no sufficient findings about the level of noise or whether it was unreasonable. The Upper Tribunal could not make fresh findings of fact on appeal, so the First-tier Tribunal’s conclusion remained undisturbed.
4. The appeal therefore succeeded only in relation to the removal of fixtures and failed in relation to insurance and nuisance.

• First-tier Tribunal (Property Chamber): determined under section 168 of the Commonhold and Leasehold Reform Act 2002 that the tenants had breached the fixture covenant by removing part of an internal wall, but had not breached the other fixture, insurance or nuisance covenants.
• Upper Tribunal (Lands Chamber): allowed the appeal concerning removal of fixtures, set aside the corresponding part of the First-tier Tribunal’s decision and substituted its own determination. The appeals concerning insurance and nuisance were dismissed.