Delgable Ltd v Perinpanathan

J U D G M E N T

1. LORD JUSTICE PILL: Lord Justice Lloyd will give the first judgment.

2. LORD JUSTICE LLOYD: This is an appeal from an order in the Central London County Court made on 21st June 2005 following a hearing before Mr Recorder Sapsford QC, in which he was concerned with an action between Delgable Ltd (the respondent in this court) and Mrs Amara Perinpanathan (defendant before him, and appellant before us). The proceedings concerned the obligations under a sub-lease of part of 153 Praed Street, London W2, but in order to set the scene I must start with the head lease of the premises.

3. The head lease is dated 26th January 1979 and was made between the landlord, Eros Property Investments Ltd, and the tenant, Leo Simmons. Contractually it was for 20 years from 25th September 1978. On the expiry of the contractual term, the tenancy was continued under the provisions of Part II of the Landlord and Tenant Act 1954. It comprised the whole of 153 Praed Street. The premises were defined conveniently in Part 3 of the First Schedule as follows:

"All that piece or parcel of land situate on the South side of Praed Street London W2 together with the shop and buildings erected thereon known as 153 Praed Street aforesaid."

Mr Simmons was I think already a tenant of the property, and he gives that as his address.

4. The freehold reversion was acquired by Delgable Ltd in 1999. The head lease contains a fairly normal set of covenants, the tenant's covenants in Part 1 of the Third Schedule and the landlord's covenants in Part 2 of that Schedule. There is a tenant's repairing covenant in paragraph 2.1 of Part 1, which is in common form terms, and there was a covenant by the tenant in paragraph 4.1 not to charge, assign or sublet part only of the premises, which was subject to a proviso saying that nothing in the paragraph was to prevent the tenant from subletting the first, second and third floors of the premises to Delgable Ltd for the contractual term less three days, at a rent of £3,000 per annum subject to review.

5. Pursuant to that proviso and with (I think I am right in saying) a specific licence to underlet, the sub-lease was granted on 28th February 1979 by Mr Simmons to Delgable, trading as Planographic Printers. The premises, again, are defined in Part 3 of the First Schedule as follows:

"First, Second and Third Floors, 153 Praed Street, London W2 and the stairway providing access thereto."

6. The sub-lease was for 20 years less three days from Christmas 1978, and it too was continued following the expiry of the contractual term under the 1954 Act.

7. The tenant's covenants are again set out in Part 1 of the Third Schedule, and they match precisely the covenants in the equivalent part of the head lease. In paragraph 2.1 there is thus the general repairing obligation which relates to "the Premises", i.e. whatever was demised by the sub-lease.

8. There is, however, a further paragraph which is of greater importance in the context of the sub-lease than it is likely to have been in the context of the head lease, in paragraph 1.4 of Part 1 of the Third Schedule. That is in the following terms:

"To pay a fair proportion (to be determined by the Landlord's Surveyor) of the expenses from time to time payable for supporting repairing maintaining cleansing and renewing all walls fences gutters sewers drains and any other things the use of which is common to the Premises and to other property adjoining or near thereto."

9. In the context of the head lease that is likely to have referred only to matters common to No 153 and its immediately adjoining property, which was presumably No 151 on one side and No 155 on the other, or possibly property backing on to it. In the context of the sub-lease, since the premises are only part of 153 Praed Street, the obligation is likely to be of greater importance because other property adjoining or near to the premises would include the ground floor and basement of No 153, as well as adjoining properties next door either way.

10. Mr Sen, for the appellant, pointed to a number of other paragraphs among the tenant's obligations to which he attached importance. Paragraph 2.2 is the tenant's obligation:

"To procure that the exterior surfaces of all buildings or structures comprising or within the Premises previously painted grained or varnished are painted grained or varnished in every third year of the term and also in the last year of the term ..."

It goes on to deal with internal parts of such buildings or structures.

11. Paragraph 3.2.2 is a rebuilding obligation of no direct importance, but Mr Sen pointed to it because of its opening words:

"In the event of the buildings comprising or within the Premises or any of them or any part thereof being destroyed or damaged by any insured perils ..."

12. Paragraph 3.3 is an obligation not, without the landlord's prior written consent, to display any sign or advertisement on the premises or any part thereof.

13. Paragraph 5.1 is an obligation not to erect any new building nor to make any addition to or alteration in the external appearance, plan, elevation or construction of any building comprised in the premises.

14. Paragraph 7.3 obliges the tenant to permit the landlord to exhibit on the premises a notice that the same are to be let or sold, but not in such a position as would interfere with or interrupt the tenant's business, and to permit inspection by appointment by intending tenants or purchasers.

15. Those are the provisions in the sub-lease on which Mr Sen bases his submissions. The issue before this court -- it was only one of the issues before the judge in the County Court -- was whether the underlease included the roof of 153 Praed Street. If it did, the sub-tenant, Delgable, was obliged to repair it, by virtue of paragraph 2.1 of the sub-lease, and it would bear the whole of the cost. If it was not comprised in the sub-lease, then the defendant remained liable to repair it under paragraph 2.1 of the head lease, an obligation which of course by then she owed to Delgable as reversioner, but she claimed successfully in the court below that she was an entitled to a contribution to that cost by virtue of paragraph 1.4 of the Third Schedule of the sub-lease.

16. Before addressing that point, I must say a few words about how the matter came to the court below. Mrs Perinpanathan applied for a new tenancy under the 1954 Act of the ground floor and basement. At first (this was before it had been acquired by Delgable), the then freeholder did not oppose the application. The proceedings, however, were stayed under the Civil Procedure Rules in April 1999 and they remained stayed for a considerable time. The stay was finally lifted in 2004. At that stage Delgable, having acquired the reversion, was permitted to change its position so that it did oppose the application for a new tenancy.

17. On its part Delgable started separate proceedings claiming forfeiture of the head lease, possession, arrears, and damages for breach of covenant. The damages claim included a largish amount for repairs to the roof and consequential damage due to the defendant's alleged failure to repair.

18. In Delgable's action Mrs Perinpanathan was granted relief against forfeiture on terms and on her application she was granted a new tenancy, but only of the ground floor. She chose not to take up the offer of relief against forfeiture because of the terms, nor to take up the new tenancy. The damages claimed included damages in a number of respects, and it is only the one in respect of the failure to repair the roof on which Mrs Perinpanathan was given permission to appeal by Neuberger LJ.

19. So the question before us is a clear and short point: did the underlease, with its succinct description of the premises demised, include the roof of number 153 Praed Street or not? There is no reference to the roof anywhere in either the head lease or the sub-lease anywhere.

20. Mr Sen challenges the decision against his client in the court below by reference to the paragraphs in the underlease which deal with exterior decoration (for example, paragraph 2.2), and he draws from that the proposition that the underlease included the external walls at first, second and third-floor levels. He goes on from that to say, if it included the external walls, it is likely to have included the roof above as well. He particularly relies on the references in paragraph 2.2 to "all buildings or structures comprising or within the Premises", and in paragraph 3.2.2 to "the buildings comprising or within the Premises" to say that, whereas "structures" might be sufficiently accounted for by the conclusion that the external walls are part of the underlease, the larger word, as he would put it, "buildings" shows that the underlease must comprise more than just the interior and the external walls of the first, second and third-floor levels and must therefore include the roof. His submission is that, leaving aside the small point of the staircase which leads up from the ground-floor hall to the first floor, essentially what the parties were doing by this underlease was to divide the building horizontally at the point between the ceiling of the ground floor and the floor at first-floor level and to demise to Delgable Ltd everything above that level, and to leave the landlord with everything below that level apart from the stairway giving access to the ground from the first floor.

21. The learned Recorder dealt with this point briefly and succinctly in paragraphs 23 to 26 of his judgment. He concluded that the roof was something the repair of which was comprised within paragraph 1.4 of the sub-lease, and that it was not included in the terms of the demise by the sub-lease. He accordingly concluded that Mrs Perinpanathan was obliged to Delgable as head landlord to repair the roof, but also entitled to claim from Delgable as sub-tenant a contribution to the cost of that repair which he put at 60% to Delgable, on the basis, presumably, that they had 60% of the building.

22. Mr Sen, as I say, attaches importance to the references to structures and buildings in the tenant's covenants and to those covenants which refer to the exterior and the external surfaces.

23. It is I think a point of marginal importance to note that the defendant did at some point have some work done to the roof, at a point in time when perhaps she or her advisers had not focused on the question of whether it was her obligation to pay for it. I take that not as any kind of evidential indication that she was obliged to repair the roof, but at least as indicating that there was no problem for her about gaining access to the roof for the purposes of repairs if she did need to gain that access. I dare say scaffolding was needed.

24. Mr Sen's submissions did not identify for us any factual matters other than the head lease, the underlease itself, and the general design and construction of the property as a five-storey building divided in the way that I have mentioned and occupied correspondingly, as being relevant to the construction of the underlease.

25. It is I think relevant that the terms of the underlease as regards the tenant's covenants do match precisely the equivalent covenants in the head lease. That is for a good and obvious reason, namely that the head lessee, having entered into the various obligations to the freeholder as regards the use of the premises, has to ensure when subletting part of the premises (as of course she would if she were subletting the whole) that the sub-tenant is obliged to her at least in the same terms, lest she find that by virtue of some act or omission on the part of the sub-tenant she is in breach of her obligations under the head lease, but has no remedy against the sub-tenant because of a divergence between the respective obligations.

26. It seems to me that, perhaps particularly in that context, the provisions in paragraphs 3.3, 5.1 and 7.3 of Part 1 of the Third Schedule to the sub-lease are entirely equivocal. I am content to accept Mr Sen's proposition that the external walls at first, second and third-floor level are comprised in the sub-lease. Indeed, in the absence of a more careful and exact definition of what is or is not demised, it would pose certain difficulties for the sub-tenant if the external walls were not comprised in the demise because it might be a trespass to do anything, even superficially, on to interior of those walls, for example to put up a picture or a clock or whatever one might wish to do involving putting a nail or other fixing device into the wall.

27. In support of that, Mr Sen relies on paragraph 2.2 as regards external decoration. But that obligation in itself goes no further than to show that there are, or at least may be, structures comprised or within the premises which have exterior surfaces which have been painted, grained or varnished. Those would presumably have been the areas around the windows on the front and back walls of the property. That in itself seems to me to be entirely neutral as regards whether the roof is part of the demise.

28. Mr Sen, as I say, attaches more importance to the cumulative use of the phrase "structures or buildings" in paragraph 2.2 and of the use of the word "buildings" in paragraph 3.2.2. He submits, perfectly properly, that in general terms one must seek to give meaning to every word in a document, and that one must therefore seek to give a distinct meaning to "structures" and to "buildings". It seems to me that in the context of a lease of this kind, and particularly a sub-lease carved out of and therefore matching a head lease, that submission is one of less force than it might have in a different context. In the context of the head lease, which was a lease of the entire building, constructed on the piece or parcel of land which represented 153 Praed Street, there is a building, there are perhaps structures within it, but it seems to me that it would be going too far to say that the use of the cumulative words, or perhaps alternative words, "buildings" and "structures" shows that the draftsman and the parties were intending to refer to something distinct by each word. In particular, it seems to me that it puts a great deal too much weight on the word "buildings" to say that a building must have a roof, and therefore the use of the word "buildings" in these two paragraphs show that the roof is part of what was demised, even though not referred to elsewhere.

29. Given that specific attention has unfortunately not been addressed in the drafting of the sub-lease to the consequences of the subdivision of the property, except in the very limited and rather generalised definition of the premises, there is in fact very little material upon which the court can proceed, and it would be fair to say that either result might have been a reasonable one to aim for.

30. Ultimately, I find paragraph 1.4 the best guide. Mr Sen, perhaps curiously, having succeeded below on paragraph 1.4, submitted that because the roof is not referred to it cannot be taken to be part of the subject matter of paragraph 1.4. He was in a sense safe in so doing, because there is not a respondent's notice by Delgable saying that the judge was wrong to attribute to them an obligation to contribute 60% of the cost of repairing the roof. Mr Sen says there is no reference to roof, and although there is the broad phrase "any other things", he says that that has to be construed as being of the same kind as the words mentioned before: "all walls fences gutters sewers drains".

31. I disagree with that. It seems to me that the phrase -- which in context is not just "any other things" but "any other things the use of which is common to the Premises and to other property adjoining or near thereto" -- is as broad as it could be, and that in the context of the sub-lease it includes the roof, just as it would have included the foundations, if a point had arisen at the other end of the building, so to speak.

32. That being so, it seems to me, as it did to the judge, that this is at least some guidance to the allocation of responsibility between the intermediate tenant and the sub-tenant under the sub-lease, there being no other provision which points at all clearly to whether the roof was or was not included in the demise, apart from what one can glean from the very brief description of the premises, which are perfectly capable of referring simply to the lateral divisions of the first, second and third floors. It seems to me that paragraph 1.4 is the best guide to the fact that what the parties intended by this sub-lease was that matters outside the first, second and third floors as such, the use of which was common to the premises and to other properties, such as the ground floor and basement, which would include the roof, were not comprised in the subletting and therefore remained the obligation of the intermediate tenant, Mrs Perinpanathan, to repair under her obligation in the head lease, but she was entitled to a contribution under paragraph 1.4 from the sub-tenant, on the very fair and reasonable basis that the work done was for the sub-tenant's benefit as well as for hers. It seems to me that if it had been intended that the sub-tenant should bear the responsibility for repairing the roof for its own account and therefore with no contribution from the intermediate tenant, that is something that I would have expected to have been expressed by more clear language than we have in this sub-lease.

33. I should say that Mr Sen referred us to some previously decided cases about roofs and obligations in respect of their repair, but, for my part, I do not find it necessary to refer to any of them. Each of them turns on its own factual context, both as regards the structure concerned, the particular subdivision created by whatever lease or underlease was concerned, and of course the terms of the particular lease.

34. For those reasons, I do not propose to refer to any of the authorities, although I do not wish to be thought in any way critical of Mr Sen for referring us to them. It is ultimately a question of fact in each case, which depends on looking at the particular building or structure that is in question, in the case of a sub-lease to see how it has been subdivided (if at all), to consider any other relevant facts and to consider the terms of the particular lease in question.

35. But on the facts of the present case, it seems to me that the Recorder was right in the conclusion to which he came. While it seems to me that Mr Sen has put his case attractively and as powerfully as it could have been put on behalf of the appellant, I, for my part, would dismiss this appeal.

36. LORD JUSTICE KEENE: I agree.

37. LORD JUSTICE PILL: I also agree.

ORDER: Appeal dismissed with costs assessed in the agreed sum of £7,250, inclusive of VAT, to be paid within 14 days of today's date.

(Order not part of approved judgment)