Oxford City Council v Dr Piechnik, County Court at Oxford, 31 July 2019 (Unreported elsewhere, we’ve seen the judgment.)
Oxford CC is the freehold owner of a 15 storey block of flats. Some 16 of 85 flats are now held by long leaseholders on right to buy leases. Oxford had a scheme of major works which was subject to substantial dispute by the leaseholders. These included a new ventilation system, new windows, a sprinkler system, a new fire alarm system, additional walls and panels to balconies, and insulation and cladding.
While only a county court decision, this is a significant decision on what is increasingly a widespread issue for councils and their leaseholders.
In order to carry through these works, Oxford demanded access to the leaseholders’ flats. When that was refused, this claim was issued. Meanwhile, there were FTT proceedings as to whether the works, in whole or in part, amounted to improvements that were not recoverable under the leases.
The FTT held that some of the works were indeed improvements and not recoverable under the leases. The present proceedings, which had been stayed on an undertaking, were restored, to answer two preliminary issues:
Whether the lease could be construed to give Oxford a right to enter a demised flat for the purposes of carrying out works of improvement, not repair.
Whether The FTT decisions on what amounted to an improvement bound the present court.
The freeholder’s repairing obligation was to:
…maintain the external main walls foundations and roof of the building the party walls and party floors and ceilings not included in this demise and the pipes including water drainage gas supply pipes television cables and electric supply cables (excluding meters) serving the building and used in common with the owners lessees or occupiers of the other flats in the building main entrance passages landings staircases stores and drying areas and the lift(s) enjoyed or used by the Tenant in common with the other owners lessees or occupiers of the other flats in the building and (where applicable) the accessways paths forecourts car parking areas landscaped areas boundary fences and walls adjoining the building and being part of the Estate in good and substantial repair and condition…(emphasis added).
In addition, Schedule 6 paragraph 14 of Housing Act 1985 imposed implied covenants on the landlord to:
(1) to keep in repair the structure and exterior of the dwelling-house [which would in the present context be a reference to the Premises] and of the building in which it is situated (including drains, gutters and external pipes) and to make good any defect affecting that structure;
(2) to keep in repair any other property over or in respect of which the tenant has rights by virtue of this Schedule;
(3) to ensure, so far as practicable, that services which are to be provided by the landlord and to which the tenant is entitled (whether by himself or in common with others) are maintained at a reasonable level and to keep in repair any installation connected with the provision of those services;
(4) to rebuild or reinstate the dwelling-house and the building in which it is situated in the case of destruction or damage by fire, tempest, flood or any other cause against the risk of which it is normal practice to insure.
The tenant’s covenants included to
…permit the Council and its Surveyor or Agent and (as respects work in connection with the premises and any neighbouring or adjoining premises) their lessees or tenants with or without workmen and others at all reasonable times during the term on giving 2 days previous notice in writing (or in case of emergency without notice) to enter into and upon the whole or any part of the premises for the purpose of repairing any part of the said building or any other adjoining or contiguous premises and for the purpose of making repairing maintaining supporting rebuilding cleansing lighting and keeping in order and good condition all roofs foundations sewers pipes cables watercourses gutters wires television aerials and associated apparatus (if any) or other structure or other conveniences belonging to or serving or used for the whole or any part of the building AND ALSO for the purpose of laying down maintaining repairing and testing drainage gas and water pipes and electric wires and cables television aerials and association [sic] apparatus (if any) and for similar purposes the Council its lessees or tenants (as the case may be) making good all damage caused to the premises. (emphasis added)
The court noted that the leaseholder’s obligation to provide access was not co-extensive with the freeholder’s repairing obligation, and was possibly rather wider.
On this basis, the court found:
46. In my judgment under the relevant Lease the Defendant would be under an obligation to permit the Claimant access for purposes which went beyond the express or implied repairing obligations. So, to use as the following hypothetical example (it being my intention to avoid making factual findings in respect of the Major Works themselves):
suppose that the Claimant wanted to lay down new cables or make a new structure or convenience which fell within the terms of paragraph 12, then it would neither be a derogation from grant, or a breach of the covenant for quiet enjoyment, for the Claimant to enforce the Tenant’s covenant to permit access.
However, Oxford wanted to go further and argued that it could undertake works and demand access for ‘beneficial’ works that were not covered by the lease clauses, or the Housing Act 1985 implied covenants. This was argued on the basis of a general power of management set out in s.21(1) Housing Act 1985:
The general management, regulation and control of a local housing authority’s houses is vested in and shall be exercised by the authority and the houses shall at all times be open to inspection by the authority.
The Circuit Judge held:
The claimant was seeking a right to enter the demised premises to carry out beneficial works which not under either the lease clauses or the Housing Act 1985 implied covenants.
The right of quiet enjoyment must be respected. But there was a limited basis for implying such a right of access.
The Circuit Judge took into account that under a secure tenancy a landlord would have an implied right of access to carry out works to avoid injury ( McAuley v Bristol CC (1992) QB 134 and Lee v Leeds CC (2002) 1 WLR 1488 ). So:
63. In my judgment there is a limited right of access which arises independently from the express terms of the Lease or the implied term derived from statute, where the Tenant’s refusal of access interferes with powers otherwise available to the Landlord and which the Landlord wishes to exercise so as to avoid the risk of death or personal injury or to remedy a state of affairs which is injurious to health. That far I am able to go, in eroding the tenant’s right to quiet enjoyment in the context of Question One, but no further. It seems to me that such limited right of access is impressed upon the grant of lease, by virtue of paragraph 2(2)(b) of Schedule 6 to the Housing Act 1985, it being a right which was available against the tenant, under or by virtue of the existing secure tenancy, for the benefit of other property.
Thus the finding was
(1) the Lease does give the Claimant the right to enter the Premises for the purpose of carrying out works of improvement which are not works of repair, because
(a) Clause 7.3 includes obligations to carry out specified works irrespective independent of whether they works of repair, as such (“the Express Duties”).
(b) the Claimant has duties to carry out works in accordance with the implied terms imposed by the Housing Act 1985 which might be wider than the repairing covenant at clause 7.3 (“the Implied Duties”);
(c) in order to facilitate the performance by the Claimant of the Express Duties and the Implied Duties there is a corresponding right of access (“the Implied Right of Access”); and
(d) in addition to the Implied Right of Access, the Tenant has covenanted in clause 3 and paragraph 12 of the Fourth Schedule to permit access for works which are not necessarily works of repair (“the Express Right of Access”);
(e) in addition to the Implied Right of Access and the Express Right of Access, the Claimant has the right to enter the Premises for the purposes of carrying out works in order to avoid the risk of death or personal injury, or to remedy a state of affairs which is injurious to health (“the Extended Right of Access”).
(2) The Trial Judge will have to consider each of the disputed items to determine whether or not they fall within the ambit of the Implied Right of Access or the Express Right of Access or the Extended Right of Access, as formulated. I have not expressed any view.
On the second issue, there was an issue estoppel but only to the extent that any of the works had been determined to be an improvement rather than a repair, and only to the extent that the FTT was determining the recoverability of the costs of works from leaseholders.
The rest was left for full trial.
Comment
Hmm. This may be going to a higher court. I think it probably should be. While the defendant’s repair/improvement distinction may not be enough to prevail in the light of the lease clauses and the HA 1985 implied clauses, that does not give the council freeholder he ability to do whatever it wants inside and to the demise.
Do councils have an extended right to access ‘for the purposes of carrying out works in order to avoid the risk of death or personal injury, or to remedy a state of affairs which is injurious to health’ to leasehold demised properties? And if so, what needs to be established first?
And, of course, this does not apply to private freeholders, or housing association landlords, which raises further questions.