Triplark Limited V Whale And Others [2024] EWHC 1440 (Ch)
Author: Courtney Wilbor
The High Court judgment in the recent case of Triplark Limited v Whale and others has confirmed that a landlord’s works are not within the terms of its repairing covenant, and therefore costs of the same are irrecoverable from tenants as service charges, where the works increase the maintenance burden on the tenant.
Background
To understand the context of the case, it is first necessary to review the outcome of the preceding trial in 2019 concerning the same property at Northwood Hall in Highgate. At that time, proceedings between an FTT appointed manager at Northwood Hall and a number of lessees determined that service charges containing the costs of a partially-installed replacement heating and hot water system were not payable. This decision was made on the basis that the works did not fall within the terms of the lessees’ leases.
Now, to matters as present and Triplark Limited’s (“Triplark”) attempts to find an alternative way around the 2019 decision, in order to complete the works that the appointed manager had previously started. Following the end of the FTT appointed manager’s term, management responsibility at Northwood Hall was reinstated in Triplark in its capacity as landlord. Shortly after, Triplark issued a Part 8 claim in the High Court which sought the following declarations as to the construction of its obligations under the leases in relation to the heating and hot water systems:
- [Para 15] It is entitled to renew, by replacement, the hot water and/or central heating systems in the property in circumstances where the replacement is not identical but provides the same service it has covenanted to provide; and/or
- It is entitled to disconnect the hot water and/or heating apparatus in any flat from an existing communal hot water and/or heating system and reconnect that apparatus to the replacement communal system(s) provided in its absolute discretion that such work is necessary or advisable for the proper maintenance, safety and administration of the property
- [Para 16] If Triplark were to install a system capable of providing the required hot water and/or heat up to the exterior of the flat in a manner that the flat owner could connect to if they wish and then decommission the pre-existing system so that it no longer supplied hot water or heat, Triplark would not be be in breach of its obligations to supply hot water and heat.
Analysis
Central to the case were two covenants contained within each lease. One was a tenant repair covenant which included a requirement to repair the “central heating apparatus… solely applicable to the flat and all fixtures and additions thereto”. The other was a landlord covenant which imposed an obligation to “maintain and renew when required the central heating and hot water apparatus and all ancillary equipment thereto other than that contained in the flat”.
The differences surrounding the intended installation and the previous system were that, rather than the water being heated within communal boilers and then being supplied to each flat via a network of pipes, thus keeping the abovementioned tenant and landlord covenants easily separated, the new heating and hot water system would be produced via a heat exchanger which served each flat. The heat from that heat exchanger would subsequently heat the water within the secondary heating and hot water circuits for each flat.
The question before the judge was therefore whether Triplark was entitled to change the communal heating and hot water system in such a way.
Triplark contended that its covenant permitted it to install the new system, following which the tenants would be liable to repair any issues in respect the new heat exchangers on the basis that the covenant applied to “all fixtures and additions thereto”. Rejecting this argument, the judge concluded that “fixtures and additions” referenced within the tenant repair covenant solely applies to things added to the demise by the lessee, as opposed to things added to the heating system by the landlord. With the addition of another heating device, the judge contended that the requirement that the tenant be responsible for repairing the secondary flat system could only be viewed as an “additional burden not contemplated by the parties upon entering the lease”.
The claim was therefore dismissed, with the judge refusing to make any of the declarations sought by the landlord.
The case is likely to have significant impact in that it demonstrates the boundaries of the costs recoverable from a tenant where the landlord issues works which will increase the maintenance burden on that tenant. Following the judgment, landlords should consider whether any proposed works may be subject to a challenge by the tenants on this ground.
At Acuity, we have expertise in advising clients on disputes surrounding service charge provisions within lease. Please contact Jennifer Butcher, Lead Partner in our Property Litigation team for further information on how we can assist.
