A repairing covenant (or any other covenant) can be implied into a lease where the written terms clearly do not spell out the whole bargain and the nature of the contract, the actions of the parties and the circumstances justified the finding of an implied term (Liverpool City Council v Irwin).

Leases: repairing covenants: ‘tenantable repair’

While the courts generally seem not to give much weight to qualifying words such as ‘tenantable’, it can be relevant to consider whether a likely prospective tenant of the property would be put off by any deterioration of its fabric (including the state of decoration). This seems to be a dimension that is added by the word ‘tenantable’ (Proudfoot v Hart).

Lease renewals and estoppel

Estoppel by acquiescence requires that the party said to be estopped or to have waived a right must appreciate the relevant legal rights that he has and not merely the facts giving rise to them (Kammins Balrooms Co Ltd v Zenith Investments (Torquay) Ltd).

Proprietary estoppel

When registered owners signed certain documents intended to transfer their ownership and development rights to ‘small houses’ in the New Territories this gave rise to a proprietary estoppel claim even though there was no contract of sale (Best Star Holdings Ltd v Lam Chun Hing).

Proprietary estoppel and future property

After Thorner it seems that an assurance for proprietary estoppel must relate to identifiable property and that a claim to an estate in the future (where there is substantial doubt as to what it will comprise) will  be inadequate. Re Basham may mark the furthest extreme of what is possible (McDonald v Frost).

The transaction between P and D3 was completed when D1 and D2 attended the offices of the solicitors acting for P and signed a bundle of documents. Each gave G (representing P) a general power of attorney and signed 8 letters addressed to the District Lands Officer relating to various matters in connection with the development of a small house. Despite this, D2 later sold the various floors of the ‘small house’ on his property to third parties.

The court found that P had a successful claim in proprietary estoppel as against D1 and D2. By attending at P’s solicitors offices and signing the powers of attorney and other documents they led P to believe that it was acquiring an interest in the houses that they would build on the land. P spent substantial sums of money in reliance on this representation (such as the payment to D3 and the money spent in the construction of the small houses) (paras. 138 – 140). The judge thought that P would succeed either on the basis of proprietary estoppel by representation or on the basis that D1 and D2 had stood by and allowed P to spend money on the land when they knew of his mistaken belief that he would acquire an interest in it.

In terms of relief, the court declared that D1 and D2 were estopped from asserting their proprietary rights in the property against P (para. 147). It stopped short of ordering title to be transferred to P since the purchasers from D2 were not parties to the proceedings and so the court had not had the opportunity to address the issue of priorities. It did not rule out the prospect of such an order being made at a later date (paras. 148 – 150).

In McDonald v Frost ([2009] EWHC 2276) J entered into a bargain with his daughters. The court found that the bargain was that in return for gifts made to each of them during his life (equivalent to 20,000 pounds each) they would each pay him 100 pounds a month for the rest of his life. Although he may have made assurances that he would leave the family house to them on his death, they were not the reason for the monthly payments and there was no detrimental reliance upon them.

The House of Lords held, by a majority, that despite the apparently clear wording of the statute, the landlord did have the power to waive its right to object to the early application and allow the court to entertain it. Lord Diplock based this conclusion on a purposive (rather than literal) interpretation of the provision. The provision regulated the rights of private parties inter se and the party who could benefit from the provision could waive it (at 881).

The House of Lords also held, however, that the landlord had not waived its right to object to the early application. Lord Diplock thought that this waiver would be a type of estoppel and said:

‘the party estopped by acquiescence must, at the time of this active or passive encouragement, know of the existence of his legal rights and of the other party’s mistaken belief in his own inconsistent legal rights. It is not enough that he shall know of the facts which gave rise to the legal right. He must also know that he is entitled to the legal right to which those facts give rise.’ (at 884).

The landlord knew the date of the application but there was no evidence to show that he had appreciated that the application had been made too early before the four month deadline had passed.

‘["Good tenantable repair"] appears to me to mean such repair as, having regard to the age, character, and locality of the house, would make it reasonable fit for the occupation of a reasonably-minded tenant of the class who would be likely to take it.’ (at 55).

As Anstruther Gough Calthorpe v McOscar later explained, this definition needs to be carefully understood. It does not mean that the standard of repair required by the covenant (as originally intended by the parties) is reduced if the character of the area later declines. Perhaps one could say that ‘tenantable’ adds to, rather than subtracts from, the basic covenant to repair.

The usual rules of construction apply to a Deed of Mutual Covenant (Thorogood Estates Ltd v Robinson Heights (IO)).

Leases: repair

The fact that the demised premises have deteriorated due to age or the elements does not mean that the work required to put right the deterioration falls outside the repairing covenant. It is still repair if the work to be done concerns a subsidiary part of the whole and does not amount to renewal of the whole or substantially the whole of the demised premises (Lurcott v Wakely and Wheeler).

A covenant to repair a building is a covenant to do what is needful and necessary for the maintenance of the structure so that it may be expected to last for its normal life. The standard does not fluctuate according to the character of the neighbourhood (a covenant to keep something ‘tenantable’ may be different in this respect) (Anstruther Gough Calthorpe v McOscar).

Pallant v Morgan equity

Equity is unlikely to assist where the relief claimed would amount to a variation of a concluded contract; this is even more reasonable where there is not one contract but a complex web of contracts. The necessary arrangement or understanding must be present (Kilcarne Holdings Ltd v Targetfellow (Birminghan) Ltd). 

Lurcott v Wakely and Wheeler ([1911] 1 KB 905, CA (Eng)) concerned a lease of an old house. The front wall had to be demolished and rebuilt and the question was whether this constituted repair.  The English Court of Appeal decided that it was. The fact that the lack of repair was the result of the passage of time and the effect of the elements did not take the deterioration outside the scope of a covenant to repair. The question was whether the required work fell short of renewal of the whole or substantially the whole of the demised premises but only required the renewal of subsidiary parts.

Fletcher Moulton LJ said:

‘Now what is the meaning of keeping old premises in good condition? … It means that, considering that they are old premises, they must be kept in good condition as such premises.’ (at 916)

If the property is dilapidated at the date of the grant, the repairing covenant obliges the covenantor to put the property in repair.