In J N Hipwell v Szurekthe Court of Appeal held that a term should be implied into a lease that the landlord was responsible for the safety of the electrical installations, in order to give business efficacy to the lease.
The tenant ran a café, meeting place and function room from the business premises. However, while in occupation the tenant experienced problems of unsafe electrical wiring which included a small fire and a sparking plug socket which eventually caused the closure of the business. The landlord was held to be in repudiatory breach which the tenant accepted of the implied obligation as to the safety of the electrical installations at the business premises.
The Court found that the lease was ‘an oddly balanced document, imposing on the tenant far more extensive covenants than upon the landlord.’The tenant covenanted to keep the whole of the premises and the fixtures and fittings in repair whereas the landlord only covenanted to keep the premises insured and to maintain the accessways and car parking areas.
The obvious gaps were that there were no express provisions made regarding the exterior of the premises nor its plumbing, electrical supply or installation. The court found that these items could not have been caught by the tenant’s obligation to keep the fixtures and fittings in repair despite the entire agreement clause.
It is important to note that at trial the landlord in oral evidence accepted that it ‘was considered to bear responsibility for keeping in repair the structure and exterior of the Premises and installations for the provision of e.g. water and electricity’, as was necessary because the premises were part of a development including other business for which ‘the electricity supply was from a common source.’
Furthermore, it was argued that the reservation to the landlord of the right of access for the purpose of repairing, maintaining or renewing any service media in the lease obviously demonstrated an obligation as regards the safety of the service media it had installed at the premises.
The Court of Appeal therefore implied a covenant in the lease that the landlord was responsible for the electrical installation and other service media provided.
The case demonstrates once again the importance of clear drafting and prevents landlords from hiding behind ‘entire agreement’ clauses.