Tsao v Pempengco

This application concerns a dispute between Mr Wendell Tsao, the applicant landlord, and Mr Danilo Pempengco, the respondent tenant, for possession of the tenant’s property, and who should be liable for its cost of repair. It involves a long tangled tale of dispute, extending over some 20 years, as to the condition of the property and who was responsible for it. The landlord seeks permission to appeal an order of District Judge Nicholson, sitting in the West London County Court on 14 December 2006. In the judgment giving rise to that order, the judge found for the landlord in the sum of £33,458.99 for arrears of rent, and for the tenant in the sum of £25,094.24 for damages for disrepair. He dismissed the landlord’s claim for possession of the tenanted flat, and he granted an injunction requiring the landlord to carry out various remedial works to the property, including the replacement or making good of damp courses, and other remedial measures to stop rising damp in the premises. He ordered the landlord to pay the tenant’s costs as to 80%, subject to detailed assessment. So, in substance, the landlord’s claim for arrears of rent, though technically correct, was a pyrrhic victory, given the amount of damages awarded against him for failure to keep the property in repair, and the injunction imposed that he carry out a number of substantial remedial works.

The landlord, by this application for permission to appeal, also seeks a stay of execution, on the basis that the remedial works subject to the injunction have, in fact, already been carried out many years ago by the local authority. The factual background is set out in the judgment of District Judge Nicholson. In summary, the tenant is a protected tenant under the Rent Act of 1997, and has been in occupation of the property since September 1978, over 20 years; and the property, for a considerable period of that time at the very least, has been in a serious state of disrepair. The landlord’s case has been that the disrepair is attributable to the tenant’s behaviour -- in particular, in relation to the damp problems invading the flat. His case before the judge was that the tenant had caused all these damp problems, by hanging up wet washing and allowing it to drip on the floor, bathing in a way so that water spilt onto the floor, and also for not securing adequate ventilation.

In the course of the 20 or so years of this running saga, the landlord instituted proceedings against the local authority, alleging that it was responsible for the disrepair because it had performed work -- in particular, in relation to damp-proofing of the floor, pursuant to statutory notices -- negligently. It is clear by then, not only from the initial notices which led to that work being undertaken by the local authority, but also by the landlord’s perception that it had not done them properly, for whatever reason, that the landlord was on notice that there were damp problems there, and, on his understanding, that they were due to failure to provide proper damp-proofing provisions beneath the floors of the flat. The tenant’s case, which he pleaded in his defence, was that the landlord had failed negligently, or contrary to section 4 of the Defective Premises Act of 1972, to remedy the disrepair of which he knew or ought to have known. And there was also a counterclaim for damages, for breach of the landlord’s implied obligation to keep the property in good repair. There were a number of issues before the judge: one, of limitation, which has not led to any continuing dispute. He ruled that the claim was limited to a period after 12 June 1989, proceedings having been initiated in June 1995, and that the counterclaim was similarly limited, running from a period after July 1989, the counterclaim having been filed in July 1995.

As to the landlord’s claim for rent arrears, as I have indicated, the judge decided that the tenant was responsible to pay some £34,500 odd, minus deductions, a small amount of unpaid rent, resulting in a figure of £33,500 odd. As to the issue raised by the tenant’s response to the claim for those arrears, and to his counterclaim for damages for breach of obligation to repair, the judge had a considerable body of evidence, going in large part, but not solely, to the question of damp penetration upwards into the floor of the flat. The claimant, Mr Tsao (the landlord), conducted the hearing before the judge on his own and prepared for it on his own; and was clearly aware, some significant time before trial, that on the principal issue as to the cause of damp (which was undoubtedly present in the flat in an unacceptable degree), the battleground was whether the structure of the flat was such that it allowed water to enter upwards through the ground floor, causing, or largely contributing to, all the damp problems of which complaint had been made over the years; or whether the real cause (or a substantial contribution to the cause) of the damp was not damp penetration of that sort, but from the tenant’s aquatic habits - the way in which he bathed, did his washing, and otherwise lived in the flat.

However, on that issue, of which Mr Tsao was fully aware, he called no expert evidence. There was expert evidence in the case, principally in the form of a report by Mr Y. M. Levin, a chartered surveyor, on behalf of the tenant, following an inspection in November 2004. The salient parts of his report, for the purposes of this application, are that he concluded that there was damp penetration for want of sufficient waterproof membranes, giving rise to the main body of dampness in the flat and its complications. In reaching that view, not only was he relying on his own examination, but he had the benefit of a report prepared by experts on behalf of Mr Tsao some years before, reaching the very same conclusion on his behalf, in the claim that he had then made against the local authority for failure to carry out its statutory duty to make the premises habitable. There was also oral evidence from Mr Levin, all of which the judge rehearsed in his judgment: evidence of cross-examination in particular, in which, as in his report, he acknowledged that there was likely to be some contribution to the overall dampness from the tenant’s own - as I have described it - aquatic behaviour.

But he concluded, both in his report and in the witness box, when the matter was put to him by Mr Tsao in cross-examination, that the contribution of the tenant was insignificant in the overall problem, which, in his view, resulted from inadequate damp-proofing. There was also an expert report from Mr Davies, an electrical engineer acting on behalf of the tenant. That, too, indicated that many of the difficulties for the electrical appliances and wiring in the flat had their origin in dampness -- dampness coming not only up from the floor, but in the walls. Also before the judge, there were reports of the experts whom the landlord had instructed for the purpose of his action against the local authority in the late 1980s, which, as I have indicated, said, just as Mr Levin did, that the problem here was inadequate damp-proofing. In addition, in the bundle before the judge and in evidence, was a letter from Charles Living & Son, a firm of chartered surveyors acting on behalf of the tenant to like effect. There were a number of other expert reports, which generally supported the tenant’s case on other aspects, which are not particularly germane to this application. As was apparent from Mr Levin’s evidence, written and oral, he was aware of the dual contribution: major, in his view, from want of sufficient membrane; minor, in his view, from the tenant’s conduct; and the judge reflected that evidence accurately, it seems to me, in a finding that Mr Levin had been aware, when he made his examination and made his report, of the landlord’s belief that the disrepair was attributable to the tenant’s behaviour, and took it into account accordingly to the extent that he did.

So it was on that fundamental, central issue, that the judge was able to, and did, find that the principal cause of disrepair, in the sense of damage due from water and its knock-on effects on other aspects of the condition of the flat, was failure by the landlord properly to keep the premises in repair by properly ensuring that they were sufficiently damp-proofed. There was an issue as to whether the landlord had notice of any of this disrepair. The judge was clearly of the view that he had, and had been put on notice in a number of ways, over a period of time. This is how he put it in paragraphs 14 and 15 of his judgment:

The judge, as he was entitled to, took the view that that was adequate notice for the purpose. In his overall conclusions, he said then that the expert evidence painted a consistent picture over a 20 year period, leading and allowing him to conclude that the property was in a serious state of disrepair, and unfit for habitation. The respondent did bathe in such a way as to cause water to spill onto the bathroom floor, and dealt carelessly with wet washing, so therefore he had contributed to that dampness and condensation, but had not caused it. For the judge, the significant and overriding cause of disrepair, on the evidence before him, was not the acts of the tenant, but the landlord’s failure to ensure the property was appropriately maintained. I should note that the judge, in reaching those conclusions, commented that the landlord’s credibility, in his view, had been undermined by the fact that he had been prepared to argue that the tenant was the cause of disrepair in this dispute, whilst also earlier maintaining a course of action against the local authority alleging it to be responsible. In fairness, too, I should note the judge also expressed some reservations about the credibility of the tenant, who, he said, was prone to exaggeration.

There were a number of grounds of appeal, eleven in number, which are all set out in the bundle and referred to carefully by Mr Ground in his skeleton argument. The first is that the judge was wrong in finding that the flat was unfit for human habitation, after the local authority had spent a lot of money in the early 1980s undertaking the building work for it; that he was wrong to find that the flat was worth the rent that had been fixed for it by the rent officer and rent assessment committee; third, that he should have held that the state of disrepair was attributable to the conduct of the tenant, because the judge had failed to take into consideration, or sufficiently into consideration, the effect of the evidence going to that, and also in relation to a specific incident of a leak, in, I think, 2004; the fourth ground of appeal was that the judge was wrong, by refusing to grant an injunction, to prevent the tenant from causing further damage to the flat in the way that the landlord had alleged; five, that he was wrong in finding that the tenant was entitled to damages for breach of covenant to repair, when this overlaps with the previous allegation that the landlord had no notice of the state of disrepair -- an allegation which, as I have indicated, the judge rejected; six, the judge should not have relied on the expert reports because the experts did not know about the tenant’s bathing habits at the time of writing them (well, that is not correct. It figures as part of the allowance made by Mr Levin in his report, and in his answers to questions put to him in writing, and was thoroughly canvassed with him in cross-examination. He was aware of it in the final opinion that he gave); seven, that the judge erred in taking into consideration a report before the remedial works of the local authority -- I think that must be before 1982; and that he erred, eight, in finding that the landlord had notice of disrepair. And there are two other grounds, which I do not think really assist very much on the application today. There is one ground, though, and that is ground eleven: that the judge made an error, arising out of a judgment that the landlord had against the tenant separately for £1,578.86. The judge, it appears, deducted from that sum a figure of £744 in favour of the tenant. It appears to have erred in holding that that money should be deducted from the tenant’s arrears of rent. There should have been no such deduction at all.

Since those grounds of appeal were prepared, further proposed grounds of amended appeal have been put before the court, arising out of subsequent investigations made by an expert, Mr Graham Roy Coleman, into the state of the flat, as to its dampness or otherwise in September 2007 -- that is to say, getting on for nine months after the date of judgment. The first expert instructed by Mr Tsao to examine that crucial question, Mr Coleman has undertaken, I think, what can fairly be described as a preliminary, but nevertheless a reasonably thorough, investigation of the premises now that the carpeting lino and other floor covering have been removed. The floor has had a chance to breathe, and no doubt the tenant’s water activities no longer affect it.

He found, having excavated in some parts, the presence of a bituminous sheet-type membrane beneath the floor slab, which to his necessarily patchy and limited examination appeared to be sound. He conducted a very limited inspection, as he put it, of the walls, showing that they were visibly dry, although there were rusted metal angles present at the base where the wall met the floor. In general, he found evidence which led him to conclude that the dryness he saw now, when compared with the wetness that was shown in photographs he had seen of the premises a month before, when the carpets and lino was down and showing everything to be very wet, was explicable because there was adequate damp-proofing throughout, and always had been; but now the effect of the tenant’s water activities were no longer present. I should add that he acknowledged that there were problems here and there, at the edge of the damp-proof membrane, which did not fully protect the perimeter of the screed from the base of the wall; but overall, his opinion was that there is an effective damp-proof membrane in the solid floors. The floors, when he examined them, were dry; and the wetness of yesteryear to the solid floors and carpets was the result of spillage during bathing and washing activities, not rising damp.

There is an application for the court to admit such evidence, with a view to supporting a further ground of appeal that the judge, for want of this evidence at the trial, made a serious error in attributing the blame to the landlord, instead of to the tenant, for the dampness in the flat. A further proposed ground of appeal consisted of complaints of the judge’s treatment of Mr Tsao, and his conduct of the case, suggesting unfairness preventing him from properly putting his case.

Of the various eleven grounds originally relied upon by the landlord, it is sufficient for me to say that I can see no error of law made by the judge in any of them; and that such criticisms he has of the judge’s findings of fact, giving rise to his conclusion, go essentially to the judge’s view of the evidence before him. The judge’s decisions, in the light of that evidence, seem to me eminently within the ambit of acceptable reasoning to justify the conclusions he reached, save for the item mentioned in ground eleven, where he appears wrongly to have deducted £744 from the sum to which the landlord was entitled. It is said that that was a matter which would have been, or was, not expected, and was effectively acknowledged by the other side in the course of the trial, and would not be contentious now if that sum were put back in, to increase slightly the overall figure of entitlement to the landlord.

So what to make of the new grounds of appeal, Mr Coleman‘s post-judgment preliminary report as to the state of the property as he found it, and the complaints about the judge’s treatment of Mr Tsao and the conduct of his case? I have read the transcripts and the passages of which Mr Tsao complains, or would like to complain, and I have to say that in this long trial and the need to keep it within bounds, the familiar difficulties a lay litigant has and the judge has in assisting and encouraging the matter to proceed are not untypical. The judge’s interventions, even if there could be any criticism, do not approach a basis for finding that he behaved unfairly to Mr Tsao, and certainly not such as to vitiate the conclusions that he reached on the evidence before him.

As to the proposed new evidence, that is to say, evidence that was not before the lower court, the normal rule is that the court will not receive it unless it orders otherwise. We have moved on some way from the old restrictions of Ladd v Marshall, but, nevertheless, the court has to look with care, and with the interest too of the overriding objective in mind, at whether it is just and fair and necessary to admit new evidence, particularly after a long, carefully prepared and conducted case of this sort, involving much technical and minute detail and long history. The first thing to say is that Mr Tsao, the landlord, knew, as I have said, the critical issue, before he went into the trial: namely, whether the dampness was caused in substance by the failure of repair, or whether it was caused by the tenant’s conduct. Indeed, he had carried the flag for disrepair in his complaints against the local authority in the late 1980s, by way of allegation that they had failed to do their job properly to deal with the dampness when they intervened in 1982; so that had been part of his case that was among the material before the judge, as I have indicated, in the form of an expert report that the landlord had obtained at that earlier stage to deploy against the local authority.

Notwithstanding Mr Tsao’s appreciation of that conflict of possible contributions to the main trouble, he did not instruct an expert for the purpose of assisting his case on this fundamental issue in this litigation. It is said on his behalf, by Mr Ground, that he was a litigant in person, and could be forgiven for taking the view that the logic as he saw it, and from what he knew of the tenant’s behaviour, would necessarily, if justice was done, result in a judgment in his favour. But whatever his own subjective approach to the matter, the court has to look at it objectively. And, given the importance of the issue, and of his awareness of it, it is difficult, it seems to me, for him to maintain now that he should be entitled, after the matter has gone against him, to seek to re-open that fundamental issue, which was shouting to be dealt with by the way of expert evidence on both sides at the time of the hearing before the district judge. There is also the question whether Mr Coleman’s report is of sufficient weight, in its preliminary form and its necessarily limited conclusions (which the author himself acknowledges), to undermine the thorough investigation of the matter by the judge on the expert evidence available before him; not only that of Mr Levin, but also of at least two other experts on behalf of the tenant; and in evidence, the landlord’s own earlier expert evidence in his battle with the local authority.

The judge, as will be remembered, was somewhat concerned about the landlord’s evidence, given his clearly inconsistent approach as to the two causes of blame for the dampness, according to whom he was suing. In my view, it would be wrong at this stage, given the history of the matter, and for the reasons I have given, to allow Mr Tsao to amend his notice of appeal -- to seek to rely upon this preliminary report, obtained long after the event, to unseat all that has gone before. Now, I think I have probably dealt with all the main issues; I hope so, for the purpose of this application. For the reasons I have given, I refuse permission to appeal; and, with that refusal, goes my refusal to permit the amendment of the proposed notice of appeal.