Hawksmoor Wren Limited v Farah Cohen

In determining whether lease covenants have been breached, the tribunal must construe the relevant words objectively in their documentary, factual and commercial context. The natural and ordinary meaning of the words, the lease as a whole, its purpose, the circumstances known to the parties, and commercial common sense may be relevant. A defined term in one provision does not necessarily govern the use of the same word elsewhere. A breach may be established even though the relevant alteration was made by a predecessor in title.

Hawksmoor Wren Limited appealed from a decision of the First-tier Tribunal (Property Chamber) concerning alleged breaches of covenants in a residential lease. The First-tier Tribunal found breaches relating to storage in common areas and Airbnb use as an unlawful business use, but rejected other alleged breaches.

The appeal concerned the construction of the word structure, the adequacy of the First-tier Tribunal’s reasoning, and alleged breaches relating to structural alterations, insurance and nuisance, and parting with possession.

1. Construction of the lease. The objective ascertainment of the parties’ intention required consideration of the background knowledge at the date of the lease and the documentary, factual and commercial context. Relevant matters included the natural and ordinary meaning of the clause, other provisions of the lease, the overall purpose of the clause and lease, the known or assumed circumstances, and commercial common sense, while disregarding subjective intention evidence. The tribunal applied the approach in Arnold v Britton [2015] UKSC 36 [8].
2. The defined term Structure in clause 1(vii) did not control the separate use of structure in schedule 6, regulation 15. In that provision, the word had the wider meaning of an interconnected construction. Decking on the terrace therefore constituted a prohibited structure. Its construction by a predecessor in title did not prevent the breach being established.
3. The alleged structural alterations under clause 3(12) were not established. The First-tier Tribunal was entitled to conclude that the decking, artificial grass and pebbles did not require structural alteration, and there was no authority establishing that mechanical fixings necessarily amounted to structural alterations.
4. The First-tier Tribunal was entitled to reject the nuisance aspect of the insurance allegation. The evidence did not establish nuisance by guests affecting the insurance policy. The finding of breach of the user covenant, and its potential impact on the landlord’s insurance, stood.
5. Airbnb occupation pursuant to a licence did not amount to parting with possession. The First-tier Tribunal made no error of law in rejecting that alleged breach.
6. The appeal was allowed. In addition to the breaches found below, breaches were established in respect of the prohibition on structures on the terrace and the non-residential user affecting the landlord’s insurance. The other rejected allegations stood.

• Upper Tribunal (Lands Chamber): appeal from the First-tier Tribunal (Property Chamber) allowed. Additional breaches were established, while the other rejected allegations stood.