Hepenstall v County Council of Wicklow

• Jurisdiction: Ireland
• Judgment Date: 19 January 1921
• Date: 19 January 1921
• Court: Court of Appeal (Ireland)

Hepenstall v. Wicklow Co. Council.

HEPENSTALL

and

COUNTY COUNCIL OF WICKLOW

Appeal.

Malicious injury - Destruction of building - Covenant by lessee to deliver up in

good repair - Measure of compensation to lessee.

Where the property of a lessee or tenant liable under covenant to keep and deliver it up in good and tenantable repair, and whose term could be determined by a six months' notice to quit, or was about shortly to expire, is maliciously destroyed, the measure of compensation under the Criminal Injuries Code is the cost of reconstruction.

So Held by the Court of Appeal (Sir J. Campbell C. and Ronan L.J., O'Connor L.J. dissentiente).

Case Stated by Gibson J. at the Summer Assizes, 1920, for the County of Wicklow.

This was an appeal by the applicant from an order of the County Court Judge of Wicklow, dated 9th June, 1920, on the ground of insufficiency of the amount awarded for the malicious destruction of a vacated police barrack. Mr. Kingsmill Moore appeared for the applicant; the County Council were not represented. The award was for £400 and costs.

The facts were as follows:—The premises which had been destroyed had been demised by Lord Wicklow in 1833 to Farrell by lease for lives, which had dropped, at the yearly rent of £5 12s. 0d., and a yearly tenancy on such determination was in being on the former terms at the time of the malicious injury. Wren, then owner of the lessee's interest, demised the premises to Sir Andrew Reed for police purposes on 9th December, 1892, at the yearly rent of £20, with special powers to determine the tenancy, which powers have not been exercised. Wren's interest became vested in the applicant, who was thereby, on the one hand, liable to the head landlord for the yearly rent and performance of the contract terms so far as applicable to a yearly tenancy, and, on the other hand, was entitled to enforce the rent and obligations against the Constabulary authorities under the letting of 1892.

The premises were situate in the county, and, though Miss Hepenstall thought that a higher rent might be obtained, I was of opinion and found as a fact that £20 a year was the fair permanent letting value if the premises were uninjured, whether let to the police authority or to any other tenant, and that no increase of such rent could reasonably be anticipated. The estimate for rebuilding the premises was £1,426, allowing a discount for new being substituted for old buildings, and for some exaggeration; the Council not being represented, I found that £1,200 should be allowed if the cost of reconstruction was the proper criterion of value.

Mr. Kingsmill Moore contended that the liability to repair, and deliver up in repair, fixed the reconstruction cost as determining the compensation to be awarded. I was of opinion that the compensation depended, particularly in the case of an unoccupied hereditament, on the damage to the reversioner's estate, and that, though the occupier might possibly measure his loss by what it would cost to make the premises again suitable for occupation— a different question, on which I abstained from expressing any opinion—in such a case as that before me the actual loss to the landlord's estate was the essential matter for consideration. I illustrated my view by premises originally costing £5,000 to build, and that it would take a like amount to restore. Such buildings in the process of time, from change of character of neighbourhood, or otherwise, might have permanently depreciated in value, or have been let in tenements, so that they would only be sold at a sum representing their then present reduced value. They might let at a rent or rents of, say, £50 a year altogether without any prospect of increase. I thought that in such case the landlord could only recover the amount of his real loss—a sum corresponding with the true present saleable value of the property. He could not demand in the example given £5,000, which, at 5 per cent., would yield £250 a year as compared with £50 rent, the actual permanent letting value of the premises. Much of the house property in Dublin consists of mansions once occupied by persons of position, and now degenerated into slum tenements. If breach of covenant to repair or deliver up in repair entailed liability to rebuild and restore, the landlord could turn the breach of covenant into a means of getting a profit quite beyond the saleable value of the property if the covenant had been fully satisfied or had been specifically performed by re-erection. Where the premises are sub-let, and the covenants binding the middleman and the sub-tenant are not identical, the difficulty is obvious.

In the present case Lord Wicklow did not apply for compensation. If the middle interest would expire in a year or two, could the middleman always be entitled to damages as if the premises were to be rebuilt by him, or would he be confined to the true damage sustained by him? As the point is important, and Mr. Kingsmill Moore said that decisions at Assizes and elsewhere have proceeded on this view, I agreed at his instance to state a case. The order under appeal, lease by Lord Wicklow, and letting to the police authority are to be taken as incorporated with and forming part of this case. My decision was that the award of the County Court Judge was right as to amount, and should be affirmed.

The question for decision of the Court of Appeal is as follows:—Was the applicant entitled to have compensation assessed on the basis that the cost of rebuilding was the determining criterion or factor irrespective of the actual present value, assuming that the premises had been kept in repair or rebuilt, and there had been no breach of contract terms?

If the answer is affirmative, the order is to be varied by substituting £1,200 for £400, with £13 10s. 0d. costs and £2 expenses of appeal. If the answer is negative, the order is to be affirmed without costs of appeal.

The lease of 1833 contained the following covenant by Brian Farrell, the lessee: "And also shall and will from time to time, and at all times during the continuance of this demise, well and sufficiently preserve, uphold, maintain, repair, and keep the said demised premises . . . in good, sufficient, and tenantable order, repair, and condition, and at the end of said term or other sooner determination of this, whichever shall first happen, shall and will leave and yield up the quiet and peaceable possession thereof unto the said William Howard, Earl of Wicklow, his heirs or assigns, in like good and sufficient tenantable order, repair, and condition."

Sir James Campbell C. :—

The question for decision in this case is upon what principle compensation is to be awarded under the Criminal Injuries Code for the malicious destruction of house property in cases where the claimant is a lessee or tenant, bound by contract, express or

implied, to keep and deliver up the premises in good repair. I do not think it necessary to discuss or review the authorities at any length, as I am satisfied they compel us to decide that the true principle to be applied in such cases as the present is as stated in Mayne on Damages in the following words:—"When the action is brought upon the covenant to repair at the end of the term the damages are such a sum as will put the premises into the state of repair in which the tenant was bound to leave them." This proposition was adopted and applied by Denman J. in Morgan v.Hardy(1); by the Court of Appeal in England in Joyner v.Weeks(2); and by Wills and Lawrance JJ. in Hendersonv. Thorn(3). In Joyner v. Weeks(2) it was found that the lessor, pending the expiration of the defendant's term, had granted a new lease to a third person, to date from such expiration, and that this new lease was at an increased rent, and contained covenants for the expenditure of £200 in alterations and for the keeping of the premises in repair. It was consequently contended for the defendant that, owing to the existence and terms of this new lease the lessor would be entitled to have the premises put in repair, and had therefore sustained no loss by the breach on the part of the defendant of his covenant to repair; but the Court of Appeal rejected this contention, holding that it afforded no answer to the defendant's breach of covenant under which his lessor was entitled to such damages as would affect the restoration of the premises.

But the question is, in my opinion, placed beyond the region of controversy by the subsequent decision of the House of Lords in a case in which the facts very closely resembled those of the present case. I refer to Conquest v. Ebbetts(4). In that case a lease contained covenants by the lessee to keep the premises in repair, and to deliver them up in good repair. A sub-lease was granted, containing similar covenants on the part of the sub-lessee, with notice to him of the original lease. An action by the lessee against the sub-lessee for damages for breach of his covenant to keep in repair was brought about three and a half years prior to the date of the determination of the sub-lease, this date being ten days prior to the date of the expiration of the

original lease, and was referred to the Official Referee for an assessment of the damages. He arrived at the amount by ascertaining how much it would require to put the premises into the state of repair in which they would have been had the sub-lessee performed his covenant, and then allowing a rebate from that sum in consideration of the fact that the sub-lease had still three and a half years to run. It was held by the House of Lords, affirming the Court of Appeal, that the Referee had assessed damages on the correct principle, and that his award should be upheld. All the authorities bearing on the question were fully and elaborately reviewed, counsel for the appellants admitting that had the action been for damages at the expiration of the lease for breach of the covenant to deliver up...