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New Crane Wharf Freehold Ltd v Dovener [2019] UKUT 98 (LC)

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30th May 2019

Summary

Where an entry clause requires a tenant to permit his or her landlord entry upon receipt of reasonable notice, the relevant time for the grant of permission to enter is the date and time of the proposed appointment. Unless the landlord attends at that time and is not able to enter, there is no breach of the covenant to permit entry if the tenant simply remains silent.

Facts

NCWF sought determinations in the First-tier Tribunal (Property Chamber) (Residential Property) that D had breached covenants contained in his lease. D admitted to facts that constituted breaches relating to subletting and to unlawful alterations. The FTT determined these breaches occurred.

The third alleged breach, not admitted, was that D had refused NCWF entry into the property.

Clause 3.08 of D’s lease required him “to permit [NCWF] and its agents and workmen at all reasonable times on giving not less than forty eight hours notice (except in case of emergency) to enter the Demised Premises for [certain purposes].

NCWF wrote to D on two occasions requiring access to inspect the property, which was a lawful purpose under this clause, giving at least 48 hours’ notice and providing a reasonable time for the appointment.

D did not directly respond to the first letter. In a later e-mail D demanded to know why NCWF required access, stating that it was an invasion of privacy and prevented D’s quiet enjoyment of the property.

D did not respond at all to the second letter.

NCWF never explained to D precisely why it wanted to inspect D’s property, only citing its right to do so under Clause 3.08 to inspect the property.

Each letter proposed dates and times for workmen to inspect the property. There was no evidence from NCWF that workmen ever attended and tried to obtain access on any of the proposed dates.

NCWF argued that D’s failure to respond to the two letters was a breach of covenant. NCWF also made an application for costs under Rule 13(2) of the Tribunal Procedure (First-tier Tribunal) Rules 2013.

NCWF also made an application for costs under Rule 13(2) of the Tribunal Procedure (First-tier Tribunal) Rules 2013.

Issues

1. Whether D had breached Clause 3.08; and
2. Whether any costs order should be made under Rule 13(2).

First Instance

The FTT decided that there has been no breach of Clause 3.08 by D. The clause required D to permit NCWF access upon receipt of reasonable notice. It did not, however, require D to confirm an appointment offered by NCWF.

Given this, a failure by D to positively respond to NCWF and confirm a particular appointment was not a breach of the covenant. D has also never expressly refused NCWF access.

However, had NCWF’s agents turned up to a particular appointment and tried to gain entry, and either D had refused or failed to facilitate entry such that NCWF was not able to enter the property, then NCWF may have been able to establish that D had not permitted entry in breach of Clause 3.08. As for costs, the FTT refused the Rule 13(2) application on the basis that D had admitted to two sets of facts that constituted breaches, and there was no breach of the re-entry clause. The two breaches were in any event either minor, potentially waived by NCWF, or a result of an honest mistake by D. It was not appropriate to make a costs order under Rule 13(2).

Decision on appeal

HHJ Behrens first determined that to “permit” is a positive act. The real issue is when D must give his permission. Whilst it may be good practice for landlords to secure their tenants’ permission prior to the appointment time given, there is no requirement under Clause 3.08 that such permission be granted by D prior to the NCWF turning up at the date and time of the proposed appointment. Further, whilst that requirement would be more commercial convenient, it is not necessary to give business efficacy to the lease, so is not to be implied into it.

This means that where no response is received by NCWF from D, NCWF’s agents must attend and try to obtain access at the proposed appointment. Unless access is not permitted at that time, there will be no breach by D.

However, if D clearly refuses NCWF entry at the proposed time, it would be reasonable for NCWF to rely upon that refusal. NCWF would not need to attend, and a breach would occur.

However, it may be open to D to recant his refusal prior to the appointment time. Reliance upon the recanted refusal may no longer be reasonable. There may be other times when it would not be reasonable for a landlord to rely upon a tenant’s refusal. Or where the tenant’s refusal is not sufficiently clear so as to be reasonably relied upon.

As for costs, D did admit to the facts constituting the other breaches determined by the FTT (albeit that D did not admit to the breaches). It was open to the FTT to assess the seriousness of these breaches, and whether there were mitigating factors for those breaches in exercising its discretion under Rule 13(2). For those reasons, the UT declined to interfere with the FTT’s decision on costs.

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