PGF II SA & Anor v Royal & Sun Alliance Insurance Plc & Anor

PGF II SA & Anor v Royal & Sun Alliance Insurance Plc & Anor

The court held that damages for breach of repairing covenants are to be assessed at common law as the reasonable cost of repair, subject to the statutory cap under Section 18(1) of the Landlord and Tenant Act 1927. The landlord's intention at the date of lease termination is relevant, but in this case, no clear intention to redevelop or replace the cladding existed at the relevant date. The doctrine of supercession applies only where the landlord had a settled intention to carry out works that would render the tenant's repairs valueless. The appropriate standard of repair is that required to put the premises into repair, not to modern standards. The Claimants are entitled to recover...

Parties
Claimant: PGF II S.A.; Claimant: PGF II (LIME) S.A.; 1st Defendant: Royal & Sun Alliance Insurance PLC; 2nd Defendant: London & Edinburgh Insurance Company Limited
Jurisdiction
England and Wales
Judgment Date
13 July 2010
Procedural Posture
Civil Landlord and Tenant/dilapidations / Judgment After Trial
Outcome
Judgment for the Claimants against both Defendants; judgment for the First Defendant against the Second Defendant on indemnity.
Legal Topics
Dilapidations, Damages, Repair Covenants, Section 18 Landlord and Tenant Act 1927, Supercession, Indemnity, Lease Interpretation
Landlord and Tenant Contract Law Property Law Dilapidations Damages Repair Covenants Section 18 Landlord and Tenant Act 1927 Supercession +2 more

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Parties

PGF II S.A.

Claimant

PGF II (LIME) S.A.

Claimant

Royal & Sun Alliance Insurance PLC

1st Defendant

London & Edinburgh Insurance Company Limited

2nd Defendant

Procedural Posture

Civil Landlord and Tenant/dilapidations / Judgment After Trial

Legal Issues

  1. 1 What is the correct measure of damages for breach of repairing covenants under Section 18(1) of the Landlord and Tenant Act 1927?
  2. 2 How does the doctrine of supercession affect the assessment of damages?
  3. 3 What is the relevance of the landlord's intention at the termination of the lease?

Ratio Decidendi

The court held that damages for breach of repairing covenants are to be assessed at common law as the reasonable cost of repair, subject to the statutory cap under Section 18(1) of the Landlord and Tenant Act 1927. The landlord's intention at the date of lease termination is relevant, but in this case, no clear intention to redevelop or replace the cladding existed at the relevant date. The doctrine of supercession applies only where the landlord had a settled intention to carry out works that would render the tenant's repairs valueless. The appropriate standard of repair is that required to put the premises into repair, not to modern standards. The Claimants are entitled to recover...

Court Disposition

Judgment for the Claimants against both Defendants; judgment for the First Defendant against the Second Defendant on indemnity.

Orders

  • Claimants to recover damages for dilapidations as assessed in the annexed schedule, calculated on the basis of Mr Plough's scheme and other findings.
  • Claimants to recover £6,000 plus VAT for the cost of preparing the schedule of dilapidations.