Yeung v Potel & Anor [2014] EWCA Civ 481

A Court of Appeal case on the problems with the edges of demises and reserved rights of access, involving, in this case, a land grab above a ceiling and a demand to access the flat above.

Flats 3 and 4 were part of a 4 storey building. Flat 3 lay directly under flat 4. The Claimants/Respondents owned the lease of Flat 4 and the Defendant/Appellant Flat 3.

Problems arose when Dr Y, the Defendant/Appellant, started works in Flat 3.

In November 2008 the defendant commenced major building works in his flat. He did not give notice to the claimants of what he was proposing to do. Nor did he serve any Party Wall Act notice on the claimants. The defendant’s works included removal of internal walls, insertion of a steel beam, removal of the existing ceiling and attaching a metal frame to the underside of the floor joists of Flat 4. The defendant intended and intends to attach a new ceiling to that metal frame. It will be higher than the former ceiling of Flat 3.

Dr Y’s aim was to let Flat 3 for a higher rent. There was damage and disturbance caused to Flat 4 as a result of his works.

The Claimants sought an injunction, and issued a claim for damages in nuisance and negligence and the costs of restitutionary work. The amended claim sought an order that the ceiling be returned to its previous position. An interim injunction was granted and when that lapsed, the claim continued as a claim for damages for the return of the ceiling.

Dr Y, undeterred, defended and counterclaimed for assorted damages and

an injunction requiring the claimants to allow him (i) to gain access to Flat 4 and (ii) to turn off the gas supply in Flat 4 for a short period. The reason why the defendant sought this injunction was because he wished to re-route the gas pipe and move the gas meter in Flat 3. Having raised the ceiling in Flat 3, the defendant wished to raise the gas pipe and gas meter as well, so that they would not be unsightly. He could not carry out this operation unless the gas supply in Flat 4 was turned off for a short period.

At first instance, things did not go well for Dr Y.

i) The property demised to the defendant comprised Flat 3 up to and including the existing ceiling, but not the joists to which that ceiling was fixed.

ii) By removing that ceiling and installing a new ceiling at a higher level the defendant trespassed on the claimants’ property.

iii) The defendant’s works caused extensive damage to the walls and floors of Flat 4. The works also caused nuisance in the form of noise and dust.

iv) Damages are assessed at £87,627.05. This figure includes £4,000 general damages and £12,850 VAT, which will be due on the remedial costs.

v) The defendant’s various counterclaims for damages are dismissed.

vi) The defendant is not entitled to move the gas meter and gas pipe to their proposed new positions. The terms of the defendant’s lease do not entitle him to gain access to the claimants’ flat in order to turn off the gas supply for that purpose.

vii) Accordingly, the defendant’s counterclaim for an injunction is dismissed.

D to pay 90% of C’s costs.

Dr Y, remaining undeterred, and with perhaps a degree of chutzpah, appealed to the Court of Appeal. His grounds, or at least those that were given permission, were:

i) On the true construction of his lease and the claimants’ lease the defendant had the right to lay a gas pipe up to and between the joists on which the floor of Flat 4 rested. Therefore the defendant had a right pursuant to schedules 1 and 2 of the two leases to enter Flat 4 and turn off the gas supply for that purpose.

ii) Moving the gas pipe to the proposed location is not unreasonable. In any event the leases do not include a requirement of reasonableness.

iii) Alternatively, the gap between Flat 4’s floor joists and Flat 3’s original ceiling forms part of the demise of Flat 3. Therefore the defendant should be permitted to run the gas pipe there, even if he is not allowed to run the gas pipe between the floor joists of Flat 4.

iv) The judge made certain errors in assessing the costs of remedial works. Damages should be reduced accordingly.

The Court of Appeal went on to deal with those grounds, observing in passing that “The documentation for this appeal is in a lamentable state. We are grateful for the assistance of counsel as they, like us, struggled with the bundles and the photographs.”

The relevant lease clauses read as follows (identically for both flats, save for the specified demise):

“ALL THAT flat shown for identification on the plan annexed hereto and therein edged red situate at and forming part of the Building known as 50 Warwick Gardens W.14, in the County of London being the flat numbered 3 and being on the first Floor of the said Building (including the ceilings and floor of and in the flat the joists or beams on which the said floors are laid but not the joists or beams to which the said ceilings are attached and the internal walls of the flat up to the same level and also including all cisterns tanks sewers drains pipes wires ducts and conduits used solely for the purpose of the flat) AND TOGETHER with the easements rights and privileges mentioned in the First Schedule hereto subject as hereinafter mentioned EXCEPT AND RESERVED unto the Lessor as mentioned in the Second Schedule hereto.”

Schedule 1 to the lease defined the easements and privileges included in the lease. These included:
“4. The free and uninterrupted passage and running of water and soil gas and electricity from and to the Flat through the sewers drains and watercourses cables pipes and wires which now are or may at any time hereafter be in under or passing through the Building or any part thereof.
5. The right for the Lessee with servants workmen and others at all reasonable times on notice (except in case of emergency) to enter upon other parts of the Building for the purpose of repairing cleansing maintaining or renewing any such sewers drains and watercourses cables pipes and wires as aforesaid and of laying down any new sewers drains and watercourses cables pipes and wires causing as little disturbance as possible and making good any damage caused.”

Schedule 2 to the lease defined the exceptions and reservations. These included:
“2. The free and uninterrupted passage and running of water and soil gas and electricity in through and under the Flat through the sewers drains and watercourses cables pipes and wires which now are or may at any time hereafter be in under or passing through the Flat or any part thereof.
3. The right for the Lessor and the owners and lessees of the other flats comprised in the Building with servants workmen and others at all reasonable times on notice (except in case of emergency) to enter upon the Flat for the purpose of repairing cleansing maintaining or renewing any such sewers drains and watercourses cables pipes and wires causing as little disturbance as possible and making good any damage caused.”

The issue was that there was a mismatch between the Schedule 1 provisions and the Schedule 2 provisions. Schedule 1 referred to ‘new’ pipes and wires, but schedule 2 para 3 referred only to ‘maintaining or renewing’, so only existing pipes, not new ones.

Dr Y invited the Court to imply the words ‘or laying new’ into Schedule 2. The Court was unpersuaded, following the position in Wheeldon v Burrows (1878) 12 Ch D 31 to the effect that “if a vendor or lessor wishes to reserve any rights over property of which he is disposing, he must do so expressly. Save in exceptional situations, such as necessity, reservations will not be implied.”

In this case, implying such a reservation fell considerably short of necessary, and the lease functioned perfectly well without the suggested implied term.

Dr Y’s claim for an injunction for access to Flat 4 to turn off the gas supply while he changed the pipes in Flat 3 failed.

Moreover, his plans for where he wanted to put the new pipes, either between the floor joists supporting Flat 4, or directly under the joists but above where the old ceiling of Flat 3, failed. On the extent of the demise of Flat 3, the Court of Appeal agreed with the Judge at first instance. The demise was given in the lease as “all that flat…(including the ceilings…but not the joists or beams to which the said ceilings are attached…”. This clearly did not include any area above the ceiling.

In removing his ceiling and occupying the area under Flat 4’s mists, Dr Y was indeed trespassing.

The joists to which the ceiling was attached and the area above that ceiling were demised to the lessees of Flat 4. The gap between the defendant’s original ceiling and the claimants’ floorboards served a useful purpose, in that it was a barrier which would reduce noise and disturbance passing from one flat to the other. An alternative possible construction of the lease is that the gap between Flat 3’s ceiling joists and Flat 4’s floor joists was retained by the freeholder. Even if that be correct, the defendant had no right under his lease to occupy that space.

Dr Y had effected a “land grab” and remained in occupation of an area that he was not entitled to occupy.

The decision of the Judge below left a curious position. As Dr Y has not been ordered to re-instate the ceiling in the original position, possibly because of the costs of doing so, and there had been no award of damages in lieu of an injunction, Dr Y was effectively left in place as a trespasser to that area.

The argument on the wrong assessment of damages got nowhere, as Dr Y’s “argument is based upon an understandable misreading of the second block of figures in the builder’s estimate at page 398 of the bundle. Owing to a typographical error all the figures on the right-hand side of this block are one line lower than the items on the left-hand side to which they relate.” Once that error was taken into account, there was no basis to argue that the Judge below was incorrect.

Comment

This is a lesson in the strict construction of reservations of rights in leases, but it also presents a rather puzzling conclusion in leaving Dr Y in possession of space under the floor of Flat 4 that is either Flat 4’s or, perhaps, the freeholders, but in any event is not his.

If the cost of remedial work to re-instate the ceiling in the original were high, this was as a consequence of Dr Y’s “land grab” itself, . Besides, as the Court of Appeal noted, that space between floor and ceiling could serve useful purposes ” in that it was a barrier which would reduce noise and disturbance passing from one flat to the other”.

However, Dr Y clearly cannot carry out the new gas installation if that requires access to flat 4, which apparently it does. His intention to route the pipes between or under the joists to the floor of Flat 4, although an act of trespass, has not per se been prevented. Nor, as far as I can see has Dr Y’s intention to fix a new ceiling to the underside of the joists, although again, there would continue the trespass.

An unsatisfactory result at first instance in leaving this lacuna over Dr Y’s continued occupation of the space, but apparently not subject to cross-appeal.