Sunlife Europe Properties Ltd v Tiger Aspect Holdings Ltd & Anor [2013] EWHC 463 (TCC) (07 March 2013)

Sunlife Europe Properties Ltd v Tiger Aspect Holdings Ltd & Anor [2013] EWHC 463 (TCC) (07 March 2013)

The measure of damages for breach of repairing covenants is the lower of the reasonable cost of putting the premises into the condition required by the leases and the diminution in value of the landlord's reversion caused by the breaches, as capped by section 18(1) of the Landlord and Tenant Act 1927. The tenant is not required to upgrade or alter the premises beyond the standard at the time of demise, and the landlord cannot recover for works that go beyond what is necessary to remedy the breaches or for costs that are disproportionate to the benefit obtained. Supersession may limit recovery where upgrading or refurbishment would have rendered repair works abortive.

Citation
[2013] EWHC 463 (TCC)
Parties
Claimant: Sunlife Europe Properties Limited; First Defendant: Tiger Aspect Holdings Limited; Second Defendant: Tiger Television Limited
Jurisdiction
England and Wales
Judgment Date
07 March 2013
Procedural Posture
Terminal Dilapidations Claim / High Court Trial Judgment
Outcome
Claim allowed in part; damages awarded subject to statutory cap and detailed assessment of necessary works.
Legal Topics
Dilapidations, Repairing Covenants, Measure of Damages, Diminution in Value, Statutory Cap Under Landlord and Tenant Act 1927 S.18(1), Supersession, Duty to Mitigate, Betterment
Landlord and Tenant Property Law Contract Law Dilapidations Repairing Covenants Measure of Damages Diminution in Value Statutory Cap Under Landlord and Tenant Act 1927 S.18(1) +3 more

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Parties

Sunlife Europe Properties Limited

Claimant

Tiger Aspect Holdings Limited

First Defendant

Tiger Television Limited

Second Defendant

Procedural Posture

Terminal Dilapidations Claim / High Court Trial Judgment

Legal Issues

  1. 1 What is the correct measure of damages for breach of repairing covenants in a terminal dilapidations claim?
  2. 2 Does the statutory cap under section 18(1) of the Landlord and Tenant Act 1927 limit the landlord's recovery?
  3. 3 What is the scope of the tenant's repairing obligations under the leases?

Ratio Decidendi

The measure of damages for breach of repairing covenants is the lower of the reasonable cost of putting the premises into the condition required by the leases and the diminution in value of the landlord's reversion caused by the breaches, as capped by section 18(1) of the Landlord and Tenant Act 1927. The tenant is not required to upgrade or alter the premises beyond the standard at the time of demise, and the landlord cannot recover for works that go beyond what is necessary to remedy the breaches or for costs that are disproportionate to the benefit obtained. Supersession may limit recovery where upgrading or refurbishment would have rendered repair works abortive.

Court Disposition

Claim allowed in part; damages awarded subject to statutory cap and detailed assessment of necessary works.

Orders

  • Damages awarded to Sunlife for breach of repairing covenants, limited to the lower of the cost of necessary remedial works and the diminution in value as determined by the court.
  • Costs to be assessed.