Kerr & Anor (as Trustees) v Maass (2019) EWHC 95 (Ch) (This was from January, but has only just appeared.)

This is a rather odd case concerning possession of a farmhouse in the Forest of Dean. It had been first occupied by the defendant’s mother and step father in 1993. The terms of this were in dispute, but the rent was £155 and the step-father was to undertake repairs and maintenance to the property. The step-father did carry out some repairs, but he moved out in 2002, visiting and leaving some possessions there thereafter. The mother moved out in 2006. Various other family and friends lived at the property in subsequent years. The defendant had rented and bought property of his own, but took on repairs to the farmhouse and regarded it as his family home.

In 2010, the claimant and the defendant discussed terms on which the defendant and his family might stay at the property. Again, some terms were in dispute, but a rent of £155 per month, with the defendant to carry out maintenance and repairs were agreed. The defendant carried out some repairs, but the property fell into some disrepair.

In 2017, the claimant served a s.21 notice and claimed possession of the property. The defendant defended on various grounds, including human rights under Art 1 and Art 8, which by trial had become one ground of proprietary estoppel, by way of estoppel by acquiesence. The defendant also counter-claimed for disrepair. The defence pleaded:

The said Mr Milo Kerr acquiesced in the Defendant and his predecessor Mr Rohwedder’s belief that they had a more substantial right in or over the property than they would have had as tenants under an assured shorthold tenancy in the following ways:

(a) by allowing the Defendant and Mr Rohwedder to conduct, or standing by whilst the Defendant and Mr Rohwedder conducted, repairs and improvements to the property whilst himself knowing or believing that the property was subject to an assured tenancy which in fact imposed a repairing obligation on the Claimant;

(b) by encouraging the said belief of the Defendant and Mr Rohwedder by asserting that the liability for repairs was that of Mr Rohwedder;

(c) further or alternatively by wilfully shutting his eyes to the true incidence of liability for repairs under the tenancy which he believed existed.

Further, such acquiescence amounts to unconscionable conduct sufficient to give rise a right in favour of the Defendant deriving from proprietary estoppel based upon the said acquiescence.

On the witness evidence, the court held that there was no evidence that the claimant had been aware that the statutory repairing obligation fell upon him.

Leaving aside his own statement as to what his belief was, I can see no extrinsic reason to suppose that he might have known that. He was not a lawyer and his knowledge of landlord and tenant law, while not nil, was rudimentary. Moreover, Mr Rohwedder and Mr Maass both had the belief that it was possible for the repairing obligation to fall on them by agreement, and Mr Maass had himself been a landlord for a period yet did not know about the effect of s. 11.

There was therefore no basis for estoppel by acquiescence. Further, there was no pleading that the claimant was aware of the defendant’s belief as to his right to stay in the property. There was no basis in precedent to bring a defence of estoppel where:

A’s knowledge of a belief by B as to some other issue altogether (in the present case, a contractual obligation to keep in repair) could found a right based on a belief by B of which A was not aware.

And yet further, there was no detriment. The defendant had expended a considerable amount of time and some funds on the property, but mostly these were on improvements, rather than repair and maintenance, and done without the claimant being aware of them. Against that was also the many years of well below market rent.

The defence failed.

On the counterclaim, the principle element was damp to the property, severe in places, and rotting window frames.

The claimant argued that he had not been put on notice of the disrepair, at least until his inspection in May 2017, which had been followed by the s.21 notice. The court held, however, that the damp was severe enough to have been evident on a short visit by the claimant to the property in 2014, so the claim was for a four year period.

The counterclaim had been limited to not more than £10,000 and only general damages pleaded. The court’s approach, on very limited evidence, was (at 134 to 144):

Mr King (for the defendant) relied on Wallace v. Manchester (1998) 30 HLR 111 for the proposition that damages could be on the basis either of diminution in value, or a “global award” or both. He also argued that there was an “unofficial tariff” of £1,000 to £2,750 per annum, but that that had not been adjusted for inflation. However, I note that the £3,500 for three years of disrepair awarded in Wallace was for a situation where an external wall had partially collapsed, the windows were rotten and there was a constant infestation of rats: an order of magnitude worse than Arams Farmhouse.

Finally, he directed attention to the total cost of repairs in the May 2018 report, and said that that plus the value of work done by Mr Kerr should be the proper measure, albeit that of course it would then be capped at £10,000.

I reject the cost of repairs of £40,980 as a relevant or principled approach for the reasons given above: it is not correlated to the impact of the problems on Mr Maass and his family. I also reject the sums spent by Mr Maass as being of any real relevance.

As I have said above, I do not think that Wallace is a good comparable, for two reasons which pull in opposite directions: its age suggests it is would be too low, but on the other hand and in the other direction, the disrepair was much worse.

A more recent case in the materials shown to me was Earle v. Charalambous (2006) EWCA Civ 1090 where a long leaseholder suffered damp and water penetration (clearly still worse than Arams Farmhouse but not nearly so bad as in Wallace) and the award was £13,500 for the first two year period and £10,000 for the second two year period when things were so bad that the tenant moved out. The second period award was just under half the rental value.

I was only addressed on these matters relatively briefly and only really by Mr King, since Mr Ingham’s main line of defence was the factual proposition that no notice had been given to Mr Kerr, which I have rejected. I believe the appropriate overall principles are:

a. This is a contract claim and the overall principle applies of putting the claimant in the position, so far as money can, as if the obligation had been performed, i.e. the property had been kept in repair.
b. The relevant loss is the discomfort and inconvenience suffered.
c. The level of rent is relevant and may be used as a factor.
d. Loss to the tenant’s asset in the property may be relevant but that can only apply to a long lease, not relevant to my task.

The present case is a complex one in relation to trying to use the level of rent in the assessment, because of course it was unrealistically low, precisely because the parties had agreed that the obligation to repair should be on Mr Maass.
Mr King submitted that I should have regard to what the rent would have been had the parties not made such an agreement, but of course I do not know what that would have been; only that it would have been significantly more.
So I think rent paid (or notionally payable) can only be the very broadest indicator in this case, given the uncertainties. The overall rent actually paid in the 4 year period will have been £7,440.

Doing the best I can, I find that the discomfort caused was well above the trivial, but still at the lower end of the spectrum compared with cases like Wallace and even Earle. Things were nothing like bad enough for Mr Maass and his family to consider moving out, they enjoyed their life at Arams Farmhouse, and had things been truly awful I think Mr Maass would have taken action himself, as had been done earlier in relation to damp (see item 13(f) in Mr Maass’ statement in relation to 2002).

I therefore award £5,000, being £1,250 per year. This is in fact well over 50% of the rent paid but at the same time at the lower end of other awards, for the reasons arising from the artificiality of the rent noted above.

A possession order was made and £5,000 awarded on the counterclaim, costs order to follow.

Comment

Leaving aside the estoppel defence (given that you don’t get an estoppel based only on what you think), and the relative oddity of the nature of the agreement around this tenancy, the approach to the disrepair claim appears to be that of a global award based on the severity of the effects of the disrepair on the tenants, with a cross check against the rent (albeit here a well below market rent).

I’m not entirely sure on what basis the difference with leasehold cases like Earle v Charalambous (our note) is made out. The leasehold cases are also ‘loss of amenity’ cases, as with ‘tenancy’ disrepair claims (see for example, Moorjani v Durban Estate Limited (2015) EWCA Civ 1252 and our discussion on disrepair damages here), and I am unconvinced that ‘loss to the asset in the property’ is different to ‘loss of amenity’, (save potentially in an effect on an actual sale price).

Discomfort, distress and inconvenience are a subset of loss of amenity (Moorjani), and damages are awardable for the loss of amenity in total, not simply the degree of discomfort, distress and inconvenience. Whether this would have resulted in a different award here is another matter altogether (one suspects not).