Manuel Jiminez (plaintiff) v Daniel Morrissey, Patrick J McGrath, Mary McGrath and Thomas McGrath (defendants)
Landlord and tenant - Construction of leases - Construction of covenants to repair - Whether any of defendants liable in respect of the repair of the plaintiff's roof and hence liable for prevention of leak and or damages in respect of it - Whether breach of plaintiff's right to quiet and peaceful enjoyment - Whether the plaintiff in breach of his obligations under the lease by failing to meet his obligations to pay service charges.
The High Court (before Mr Justice O'Neill) judgment delivered July 18th 2005.
In the instant case notwithstanding that the roof was not demised to the first named defendant under an earlier lease, there was nevertheless an express covenant to repair it and the first-named defendant was bound by this, and would have to call upon the lessors in the earlier lease to honour their obligation to repair the roof or otherwise be liable in damages to the plaintiff.
For there to be a breach of a covenant in respect of a quiet and peaceful enjoyment, there has to be an interference with the enjoyment by the lessee of his demise which is of a very substantial nature.
The High Court so held in finding the first-named defendant liable to the plaintiff in respect of the disrepair of the roof over the kitchen area of the plaintiff's demise.
James Dwyer SC and Noel Cosgrove BL for the plaintiff; Paul Gardiner SC and Paul H O'Neill BL for the defendants.
Mr Justice O'Neill commenced his judgment by outlining the background to the case. The plaintiff was the owner and operator of a restaurant at the junction of Parliament St and Cork Hill in Dublin. The plaintiff held the premises, known as Units 1 and 2 and the basement area thereof, on foot of a lease made on 11th December 1993 from the first- named defendant. The lease was for a period of 33 years from 9th December 1993 at the rent of £40,000 per annum which had since risen to €120,000 per annum. The first-named defendant acquired his interest in the premises from the second, third and fourth-named defendants under an indenture of lease dated June 24th, 1992, whereby in consideration of the payment of the sum of £395,000 Units 1 and 2 were demised to the first-named defendant for a term of 999 years subject to a yearly rent of £1.00.
For seven to eight years the plaintiff complained of a leak in the flat roof at the rear of the premises demised to him, permitting rainwater to enter the kitchen area. In July 2002 when works were being carried on in an adjoining property, remedial work was carried out to the roof, but it failed to rectify the leak.
Mr Justice O'Neill stated that the first issue that arose was whether any of the defendants were liable to the plaintiff in respect of the repair of the flat roof in question, and hence liable for the prevention of the leak and/or damages in respect of it.
Counsel for the plaintiff submitted that the first-named defendant, by virtue of his covenant to repair in his lease with the plaintiff, was liable. He conceded that although the lease from the first-named defendant to the plaintiff did demise the roof to the plaintiff, the lease from the second, third and fourth-named defendants to the first-named defendant did not demise the roof in question to the first- named defendant so he could not in turn give it to the plaintiff.
It was further submitted on behalf of the plaintiff that, notwithstanding that the roof in question had not been demised to the first-named defendant, the first- named defendant was liable under the covenant to repair in his lease with the plaintiff, and entitled under his lease with the second, third and fourth-named defendants to call upon them to carry out the necessary repairs or suffer the damages in respect of the cost of the repairs and the plaintiff's consequential losses.
It was further submitted that continuance of the leak was a breach of the covenant for quiet and peaceful enjoyment contained in the lease from the first defendant to the plaintiff.
In this regard, counsel contended that the quiet and peaceful enjoyment of the premises had been interrupted, insofar as an essential part of the operation of a restaurant was interfered with when rainwater leaked into the premises and furthermore for the duration of the period of repair it was apprehended that the restaurant would have to close.
It was submitted on behalf of the defendants that notwithstanding the covenant to repair, the first-named defendant did not covenant to repair the roof, as it was not demised to him by the second, third and fourth-named defendants and he could not repair what he did not have.
It was further submitted that the second, third and fourth- named defendants had transferred their interest in the property in 2001 to Cork Hill Management Ltd, and thus they had no liability in respect of the complaints made by the plaintiff. In respect of the covenant for a quiet and peaceful enjoyment in the lease, it was submitted that the plaintiff was not entitled to avail of same as he was in breach of his obligations under the lease having failed over several years to pay the service charges due.
Mr Justice O'Neill then set out the relevant parts of the two leases and stated that it was clear that the lease of June 24th, 1992 did not transfer the roof to the first-named defendant and thus the apparent demise of the roof in the lease of December 11th, 1993 to the plaintiff was ineffective.
Mr Justice O'Neill said it was also beyond argument that Clause 5.4 of the lease of December 11th, 1993 imposed on the first-named defendant an obligation to keep in good repair and condition, inter alia the roof.
Clause 5.4 provided that; To keep in good repair order and condition all parts of the estate not hereby demised, including any common areas and the right of way, the roof, the exterior and all structural parts of the estate to include the internal structural parts and party walls and to keep the right of way properly lit.
Provided that this covenant;
1. Shall apply only to those parts of the estate the poor order or condition of which would materially effect the carrying on of business in the demised premises.
2. This covenant shall not apply to those parts of the estate which form the part of the demised premises or premises demised or sold to other tenants or owners of parts of the estate.
3. This covenant shall not apply to those parts of the estate the repair and maintenance of which is the responsibility of the tenant or other tenants or owners of parts of the estate.
Mr Justice O'Neill was satisfied that the inclusion of "roofs" in the description of the demised premises as contained in the first schedule of the lease of December 11th, 1993 was an error, and that having regard to the fact that the roof was not demised under the lease of June 24th, 1992 and the fact that there was an express covenant on the part of the first-named defendant to repair the roof in the lease of December 11th, 1993, it was never intended the roof would form part of the demise to the plaintiff.
Notwithstanding the fact that the roof was not demised to the first-named defendant under the lease of June 24th, 1992, Mr Justice O'Neill stated there was nevertheless an express covenant to repair it in clause 5.4 of the lease of December 11th, 1993.
Mr Justice O'Neill stated that the first-named defendant was bound by the covenant to repair in Clause 5.4 and would have to call upon the lessors in the lease of June 24th, 1992 to honour their obligation to repair the roof or otherwise be liable in damages to the plaintiff, unless as was submitted by counsel for the defendants, clause 5.4.3 had the effect of excluding any obligation to the plaintiff on the part of the first- named defendant to repair the roof. Counsel for the defendants relied heavily on the final phrase in clause 5.4.3 which read "or owners of parts of the estate".
Counsel contended that as the second, third and fourth-named defendants and their successors in title, Cork Hill Management Ltd, were and are "owners of parts of the estate", ie the roof and were responsible under the lease for its repair and maintenance. Mr Justice O'Neill said it was not easy to reconcile that contention with the general scheme of the two leases, and that the net effect of such a contention would be to render Clause 5.4 nugatory insofar as the "main structural parts of the building and which the said unit forms part including the roof, foundations, and external parts thereof - and all cisterns, tanks sewers, drainpipes, wires, ducts and conduits not used solely for the purpose of one unit" as reserved in the lease of June 24th, 1992 to the lessor in that lease, who on the submission above would be "an owner of part of the estate" as envisaged in clause 5.4 of the lease of December 11th, 1993.
Mr Justice O'Neill said such an interpretation of clause 5.4.3 would rob the first named defendant's covenant to repair of any real meaning or substance, and in his view that cannot have been intended. Mr Justice O'Neill stated it was quite clear in the lease of June 24th, 1992 the lessor had, by virtue of clause 4 of the Seventh Schedule to that lease, a clear obligation to keep the reserved property in a good and tenantable state of repair, decoration and condition. The first- named defendant enjoyed the benefit of that covenant. Mr Justice O'Neill was satisfied it was not intended that the lease of December 11th, 1993 should operate in such a way as to exclude any meaningful obligation to repair on the part of the first-named defendant in respect of the reserved estate, and thus to leave the plaintiff with no redress or recourse in respect of disrepair of the reserved estate, bearing in mind he would have no right to carry out repairs to the reserved estate without the permission of its owners, and did not enjoy privity with the lessors under the lease of June 24th, 1992.
Therefore Mr Justice O'Neill concluded that clause 5.4.3 did not have the effect contended of excluding any obligation on the part of the first-named defendant to repair the roof and he remained liable to the plaintiff under clause 5.4 of the lease of December 11th, 1993 in respect of its disrepair.
Mr Justice O'Neill commented that in light of the foregoing, it was unnecessary for him to deal with the second submission of the plaintiff, ie that his entitlement to a quiet and peaceful enjoyment of the demised premises pursuant to clause 5.3 of the lease of December 11th, 1993 had been breached. However, for the sake of completeness Mr Justice O'Neill went on to express his opinion. He noted that the authorities do not define in a specific way what constitutes a disruption of quiet enjoyment.
However, it appeared to Mr Justice O'Neill to be beyond doubt that for there to be a breach of a covenant in respect of a quiet and peaceful enjoyment, there has to be an interference with the enjoyment by the lessee of his demise which is of a very substantial nature. Mr. Justice O'Neill noted that many of the cases involved a total disruption of possession.
Mr Justice O'Neill stated that no evidence was given as to the extent of the interference caused by the leak, it merely being described in counsel's opening as a leak into the kitchen and cleaning portion of the restaurant that occurred when there was inclement weather causing rainwater to come down the walls onto the floor. He also noted that it was stated that at no stage had the business been interrupted.
Mr Justice O'Neill was of the view that such an interference fell significantly short of the threshold required to give rise to a breach of the right to quiet enjoyment, and fell more into the category of an annoying irritation.
Mr Justice O'Neill referred to the fact that it might be necessary to close down the kitchen and restaurant for a short period for the purpose of carrying out repairs, but in his view temporary interruption of a business for a short duration to carry out essential repairs would not normally be regarded as amounting to a breach of the right to a quiet and peaceful enjoyment.
Mr Justice O'Neill was thus of the opinion that the complaints made by the plaintiff did not amount to a breach of the plaintiff's right to quiet enjoyment.
Mr Justice O'Neill then referred to the evidence of non-payment by the plaintiff of service charges, including charges in respect of insurance.
This evidence had not being challenged on behalf of the plaintiff, save to argue the validity of the demand on the basis that all the procedures set out in the lease of June 24th, 1992 had not been complied with. Mr Justice O'Neill stated that the plaintiff was not a party to the lease of June 24th, 1992 and was not entitled to insist on punctilious observance of the elaborate accounting procedures set out in the lease for determining the service charges. The plaintiff's obligation was to pay what was due by the first-named defendant to his lessor. Mr Justice O'Neill was satisfied that the plaintiff was legally bound to pay the charges, and noted he was obliged to submit to a claim in the Circuit Court for a substantial portion of these charges.
Mr Justice O'Neill was satisfied that the plaintiff was not entitled to the benefit of Clause 5.3 of the lease, as in failing to meet his obligation to pay the service charges, he had for some considerable time been in default of his obligations under the lease of December 11th, 1993 he could not be regarded as "performing the covenants and agreements on the part of the tenant".
In conclusion, Mr Justice O'Neill was of the opinion that the first-named defendant was liable to the plaintiff by virtue of Clause 5.4 of the lease of December 11th, 1993 in respect of the disrepair of the roof over the kitchen area of the plaintiff's demise, the plaintiff had failed to demonstrate a breach of his right to quiet and peaceful enjoyment of his demise, and was not entitled to the benefit of Clause 5.3 because of the breach of his obligation to pay service charges due.
Solicitors: Patrick Donaghy & Co (Dublin) for the plaintiff; Reddy Charlton McKnight (Dublin) for the defendants.
Joan Kelly, barrister