Fouladi v Darout Ltd & Ors (2018) EWHC 3501 (Ch)

Although the judgment is dated December 2018, this has just appeared – a case on the perennially vexed topic of noise from a flat above. In fact it is an appeal and cross appeal on a county court judgment and order on a claim by a leaseholder against both the upstairs leaseholder and the freeholder. The reason that the claim was made, reached trial and then appeal might be connected to the value of the claimant’s flat being some £2,400,000.

Ms F, claimant, is the leaseholder of the flat below that of the second and third defendants, the Ks, and the first defendant family holding company leaseholder, Darout Ltd. The fourth defendant was the freeholder, St Mary Abbots Court Ltd.

Ms F’s claim was in respect of noise from the flat above, both ordinary everyday noise and unusual noise, resulting from renovation works done in 2010. Those works, as far as the flooring went, did not meet building regulation requirements or a lease obligation to reduce noise transmission.

The original claim was both in contract and in nuisance against the first to third defendants, and also in nuisance and breach of quiet enjoyment against the freeholder.

At first instance in Central London County Court, HHJ Parfitt had found that the noise from the upper flat was ordinary, everyday noise, but that the first defendant was liable in contract and the first to third defendants were liable in nuisance. The claim against the freeholder was dismissed.

The first to third defendants appealed, and the claimant cross-appealed on the dismissal of the claim against the freeholder.

I am not going to go into all of the issues raised on appeal. It is a lengthy judgment and many of the nine (nine!) grounds of appeal were in effect trying to appeal findings of fact. Those all got short shrift from the High Court, not only on principle but on the basis that the first instance judgment was well considered and clearly took into account the matters raised.

However, there are more general issues of law considered which should be looked at.

The main factual points are:

The lease of the upper flat (in common with the other leases) had a covenant

NOT without the consent in writing of the Landlord carry out or permit to be carried out any addition or alteration to the Premises or any part thereof and not to alter or cut any of the principal walls or timbers thereof nor erect or build any additional or substituted building whatsoever upon the Premises or any part thereof nor carry out or permit to be carried out any alterations to the heating system the hot water system the general plumbing systems and/or any conduits connected thereto without the previous consent in writing of the Landlord (not to be unreasonably withheld)

The lease also contained two regulations:

“THE Tenant will cover and keep covered the floors of the Premises with carpet and an underlay other than the floors of the kitchen and bathroom which shall be properly and suitably covered with suitable material to avoid the transmission of noise.”

and

“the laying of non-carpet or tiled floors within a flat must be adequately insulated and sound proofed before it is approved …”

Before alterations took place to the upper flat in 2010, a consent had been sought from the freeholder and granted, but that consent sought and given did not include replacing the floors. (An argument that such a consent was present by implication in view of the alterations that did receive consent was made by the defendants in this appeal, but was dismissed – see 48. and 49.)

It appears, though this is not entirely clear, that there was also a mutual obligation clause in the leases. But in any event, the judge at first instance had held that “the covenants in the lease which the First Defendant had broken were part of a letting scheme which could be enforced against the First Defendant by the Claimant.” This was the basis for the claim in contract.

Frustratingly, it does not appear that this issue of a ‘letting scheme’ was much argued at first instance, and not at all on appeal. As the High Court notes

The judge held that the work to the floor of Flat 66 as part of the 2010 Works was an alteration to Flat 66 which required permission in accordance with clause 3(f) of the lease. It was also common ground that the lessee of Flat 62 could directly enforce clause 3(f) against the lessee of Flat 66 as clause 3(f) was part of a letting scheme. While the question of the letting scheme including clause 3(f) might have been open to argument, no point of that kind was raised on this appeal.

As lack of mutual enforceability between leaseholders on lease obligations is usually the stumbling block for any claim in contract in such cases, it would be good to know on what basis it was found in this case. Anyone?

Then there was the issue of the finding in nuisance. The first instance judge found that the noises from the upper flat were from everyday and ordinary and ordinary use. But nonetheless found that the noise was significant and substantial and such as to be a serious interference with the claimants’ occupation of their flat. This does not present a straightforward issue in nuisance, but it was not one addressed on appeal, as the High Court notes:

77. Grounds 6 and 7, which I am about to deal with, raise points which are relevant to the claim against the First to Third Defendants in nuisance. Before addressing those points, I wish to comment on a particular feature of the claim in nuisance in this case.

78. The judge held that the transmission of noise from Flat 66 to Flat 62 constituted a nuisance to Flat 62. He also held that most of the noise was transmitted by activities in Flat 66 which were the result of the ordinary use of a residential flat. At the hearing of the appeal, Mr Wignall referred to Southwark LBC v Mills (2001) 1 AC 1 for the proposition that in the ordinary case, in the absence of some other relevant feature, the ordinary use of a residential flat cannot give rise to an actionable nuisance even if the noise generated by that nuisance constitutes a considerable interference with the use of another flat above or below or adjoining the first flat. How then did the judge conclude that the ordinary use of Flat 66 did constitute an actionable nuisance? The answer was that he held that the nuisance was created in this case by reason of the work done to the floor in 2010 when the pre-existing floor which provided good insulation against sound transmission was taken up and replaced by a new floor which did not provide good insulation against sound transmission.

79. I raised with counsel the question of whether the work to the floor in 2010 could produce the result that noise from the ordinary use of Flat 66 after 2010 could be an actionable nuisance. Mr Johnson submitted that it was the work to the floor which was the nuisance and the later transmission of noise was the continuing result of that nuisance. Mr Wignall (for the defendants) had not argued the contrary at the trial and the judge had plainly proceeded on the basis put forward by the Claimant. There is no ground of appeal which challenges this analysis as to the basis of liability. Indeed, in his skeleton argument, Mr Wignall accepted the analysis of the Claimant. Further, there is no distinction to be made between the position of the First Defendant and the Second and Third Defendants as regards the works done in 2010 as it is clear on the judge’s findings that the choice of the works done in 2010 was made by the Second and Third Defendants and the works were carried out by the First Defendant as lessee of Flat 66 in accordance with those choices.

80. Since there is no ground of appeal challenging the analysis put forward by Mr Johnson, as described above, I will not discuss that analysis. This judgment should not be taken as upholding that analysis nor, indeed, holding that it is unsound. I simply proceed on the basis that the analysis is not challenged on this appeal.

This surely has to be a question for future argument in other cases. Granted, in Southwark v Mills, it was a pre-existing lack of soundproofing that enabled the level of noise, so the issue of altering a property in such a way as to increase the level of noise transmission is factually different, but at the same time, the argument that the works to the floor were the nuisance, and the subsequent noise the consequence, is not at all straightforward.

The argument raised on appeal was that the second and third defendants could not be liable in nuisance for their ordinary and everyday noise when it was the first defendant that had carried out the alterations.

The argument followed the first instance Judge’s finding following Stannard v Charles Pitcher Ltd (2003) Env LR 10 that the lease obligations were relevant in assessing nuisance – a ‘material condition that applied’.

The defendants tried to argue that the terms of the lease should not be considered in relation to the second and third defendant. But this was not argued at first instance, indeed, the reverse, and the High Court was not prepared to consider it as a new point. But then, even if it had been raised at trial:

I am far from clear that if this new point had been argued at the trial, it would have made any difference to the evidence which would have been called or the way in which the evidence would have been examined. The position which was agreed at the trial was that the terms of the lease of Flat 66 were relevant to the assessment of what is lawful or unlawful as a matter of potential liability in the law of nuisance: see how the judge described matters at paragraph [122] of his judgment. It was not said that the terms of the lease were conclusive so it would seem that the parties would have appreciated that any other matters relevant to liability in nuisance would still have to be investigated at the trial. In these circumstances, without finally deciding whether to allow Mr Wignall to raise this new point, I will consider the submissions made on the point and then decide what should be done. 96. If Mr Wignall is right that the terms of the lease of Flat 66 are relevant to the assessment of the liability of the First Defendant in nuisance but are not relevant to the assessment of the liability of the Second and Third Defendants in nuisance, I do not see how that would make any difference to the liability of the Second and Third Defendants on the findings made by the judge. The judge’s central findings were set out in paragraphs (182) to (185) of the judgment. Those findings fully support the conclusion that the transmission of noise from Flat 66 was a nuisance to Flat 62. The nuisance was caused by the works to the floor in 2010. Those works were done by the First Defendant as it was the lessee under the lease but they were also done by the Second and Third Defendants who, on the judge’s findings, made the choice as to what works were to be done in 2010. Accordingly, on the judge’s findings, even if one disregarded the terms of the lease of Flat 66, the correct finding was that the First to Third Defendants were liable in nuisance.

All of the defendants’ grounds of appeal were dismissed, and the original judgment upheld.

Then there was the claimant’s cross appeal on the freeholder’s liability. It was argued that while the freeholder had not authorised the nuisance, the freeholder’s actions in not taking any steps on the alterations to the floor, despite apparently being aware that alterations had gone beyond those licensed amounted to participating in the nuisance.

This did not get anywhere, and involved the High Court distinguishing Chartered Trust plc v Davies (1997) 2 EGLR 83. as not correct on the issue of the landlord’s liability where it was aware of a nuisance that it failed to stop (save on the issue of parts under the landlord’s possession and control).

The issue was the degree of connection of the freeholder landlord with the leaseholder tenant’s nuisance. The High Court set out the scale of potential involvement:

126. (…) In many cases, there would appear to be a sliding scale of connection between a landlord and a nuisance carried out by his tenant, as follows:

(1) a landlord failing to take steps to prevent a nuisance when he does not know that a nuisance is being carried out;

(2) a landlord failing to take steps to prevent a nuisance when he does know that a nuisance is being carried out;

(3) a landlord authorising a nuisance; and

(4) a landlord participating in a nuisance.

I do not say that it is impossible to find that a landlord has participated in a nuisance created by his tenant even where he has not authorised the nuisance. A case where that could arise is where, on the particular facts, the landlord is directly involved in the nuisance but cannot be said, separately, to have authorised it because his authority for the nuisance was not needed under the pre-existing terms of the lease. Indeed, in Lawrence v Fen Tigers Ltd (No 2) (2015) AC 106, it was held that the landlord had not authorised the nuisance by letting the premises to the tenant but the Supreme Court went on to consider whether, on the facts, the landlord was liable on the ground that he had participated in the nuisance.

On the facts and argument in this case, the claimant sought to argue, based on Chartered Trust plc v Davies, that the landlord had participated by failing to take steps to prevent the nuisance where it could have done. This was not successful.

128. The judge held that the case was governed by the principle in Malzy v Eichholz (1916) 2 KB 308. He held that the failure of the Fourth Defendant to prevent the works to the floor did not render it liable in nuisance. He distinguished Chartered Trust plc v Davies on the ground that the Fourth Defendant was not in possession and control of Flat 66.

129. It is clear that the Fourth Defendant could have taken steps to prevent the First Defendant carrying out works to the floor. The works required consent under clause 3(f) and the Fourth Defendant did not give that consent. The Fourth Defendant knew that works to the floor were being carried out. However, the judge did not make a finding that the Fourth Defendant knew that the works involved a nuisance. The Fourth Defendant could have made enquiries and might then have established the position but that would not support a finding that the Fourth Defendant knew of the commission of a nuisance.

130. Mr Johnson (for the claimant) submitted that the Fourth Defendant had control of the works because it had the power to withhold consent to the works or to grant consent subject to conditions. He also stressed that that Fourth Defendant knew that the works were being carried on. He relied heavily on Chartered Trust plc v Davies . Indeed, I do not think that his case would have been arguable but for the reliance he sought to place on Chartered Trust plc v Davies . Mr Johnson pointed out that the landlord in that case was held liable in nuisance for failing to stop the nuisance of which it was aware and which it might have been able to stop. 131. It is clear that some of the reasoning in that case is not consistent with the law as stated in Malzy v Eichholz . It is also now clear that the law is correctly stated in Malzy v Eichholz and that is the law which I ought to apply in this case. Chartered Trust plc v Davies was not cited in Southwark LBC v Mills and the actual decision was explained in Lawrence v Fen Tigers Ltd (No 2) at (14) as being possibly justified on the ground that the landlord in that case was in possession and control of the common parts of the shopping centre. As I will apply the legal principles as stated in Malzy v Eichholz , it follows that I will not apply the incompatible statements of principle in Chartered Trust plc v Davies.

For the same reasons, effectively, the appeal on breach of quiet enjoyment was dismissed.

The damages award of £281.25 per week from November 2010, and £40.18 per day from judgment until remedial works were completed, was upheld. It isn’t entirely clear what basis damages were awarded on, but from the figures it looks like loss of amenity based upon notional open market rental value.

Comment

While this is a very interesting case, and very helpful on clarity on landlord’s liability for nuisance, I do wonder if it will give undue encouragement for the many people wanting to take action on the issue of noise from neighbours.

The contractual liability here is not common (and I wish we knew more about the basis for that finding). The question about whether ordinary and everyday noise can amount to nuisance is left open, to say the least, with the High Court openly not wanting the appeal judgment to be authority for the proposition that the works to the floor were the actionable nuisance.

So some key issues of liability were, it seems, not argued at first instance or on appeal. I’m not sure how far that gets us…

(* Niche, I’ll admit. Smug points for anyone getting it are undermined by the awareness that you are old now…)