Quiet disenjoyment

The notion of "quiet enjoyment" has led the Court of Appeal a merry dance. Landlords should take note.

Surveyors and lawyers will know that where the word "demise" is used in a lease, it is settled law and convention that a covenant of "quiet enjoyment" is deemed to have been given by the landlord. This covenant extends to all acts of the landlord and the lawful acts of those claimed under him. In essence, the covenant gives the tenant the right to recover damages from the landlord if the persons to whom the covenant extends physically and substantially interfere with the tenant's enjoyment of the land demised.

In the covenant of quiet enjoyment, the lessor undertakes not that the tenant will be free from noise, but free from disturbance by adverse claimants to the property. This has not prevented attempts to get round inadequate repairing covenants of the landlord. A repairing covenant does not oblige a landlord to carry out works of improvement that would upgrade the property to meet building regulations standards. Most leases only oblige the landlord to repair the structure and exterior. For this reason, the quiet enjoyment covenant has been pressed into wider service.

In the decision of Mr Justice Laddie in Southwark Borough Council vs Mills ⁽¹⁾, the tenants of the council flats claimed the council had breached the covenant of quiet enjoyment in that the sound-proofing was so inadequate they could hear all the private and most intimate moments of their neighbours' lives. The council argued the covenant related only to protecting the tenants' actual occupation and did not amount to a covenant to improve the flats to meet modern building standards. The judge was sympathetic to the council's arguments yet found the council liable for breach of the quiet enjoyment covenant where it let adjoining flats to be used in such a way that it interfered with the reasonable enjoyment of tenants' premises.

Shortly before the Southwark case, a similar point came up in Baxter vs Camden Borough Council ⁽²⁾. This was a case in which the tenant alleged to be suffering intolerable noise from adjoining premises. This time, the case was pleaded on the covenant of quiet enjoyment basis and in nuisance. The Baxter decision went to the Court of Appeal in two parts, firstly on the quiet enjoyment argument. On this, the court accepted the landlord could be liable in these circumstances, but it did not make a ruling to that effect since the matter had to be referred back to the county court. On the second part, based on the tort of nuisance, the landlord was found not liable for tenants' noise since ordinary use of the residences was not capable of becoming a nuisance. ⁽³⁾If the use was unreasonable, there could be a liability in nuisance by the landlord, but not on these facts.

The Southwark judgment in the Court of Appeal, based solely on quiet enjoyment, held by a majority that landlords were not liable under the covenant for quiet enjoyment. Yet the judgment leaves it clear for appeal since a number of issues were left open for argument before the House of Lords. Leave has been given. For example, the landlords did not quibble with the principle that, under the covenant of quiet enjoyment, a landlord can be liable for acts of his own or his tenants that interfere with ordinary, lawful enjoyment of the leased premises. The pivotal question for the Court of Appeal was not the basis of this liability but the parameters to be placed on it. The Court of Appeal was unanimous that it was not necessary for the activities of which complaint was made to amount to an actionable nuisance, but there was dissension on virtually everything else in the judgment.

There is a serious prospect that the House of Lords might allow the covenant to be widened. This decision is clearly of concern to landlords, their contractors and consultants, who may have indemnified clients against such claims through collateral warranties.

1. Southwark Council vs Mills (1998) 2 EGLR 30

2. Baxter vs Camden London Borough Council (1998) 2 EGLR 29

3. Judgment 5 November 1998 TLR 11/11/98