Andrew Lane and Alex Bastin look at the implications of the recent Court of Appeal Judgment in Grand-v-Gill for residential landlords and tenants.
“…Accordingly I would hold, as a general proposition, that plaster forming part of or applied to walls and ceilings is part of the structure of the relevant premises.” (Lord Justice Lloyd at paragraph 34 of the Grand judgment)
For housing practitioners residential disrepair work, though of course important for tenants and undoubtedly costly for landlord, is not generally seen as being at the most exciting or “cutting edge” end of the work. Disputes are largely fact sensitive and matters of law generally well established. However, one area of constant relevance and dispute relates to issues of damp and consequent plaster damage. Who is responsible for such damage – the landlord or tenant?
Previously the 3 authorities most commonly cited on behalf of a landlord were Quick v Taff Ely Borough Council  Q.B. 809, CA (save as provided by express clause, condensation is not without more within the repairing obligations of a landlord unless caused by or causing actionable disrepair); Southwark LBC v McIntosh  1 E.G.L.R. 25 (a landlord is not liable merely because a dwelling-house suffers from damp, unless the damp arises from physical damage to the structure and exterior of the dwelling, or the damp has itself caused damage to the structure or exterior) and Irvine v Moran  1 E.G.L.R. 261 (plaster damage is not part of the structure of a demise).
However, on the 19th May 2011 the Court of Appeal gave judgment in Grand-v-Gill  EWCA Civ 554 and looked again at the question of plaster damage and a landlord’s responsibility for it. Ms Grand was an assured shorthold tenant of a 2-bedroom top floor flat where she lived with her daughter. Mr Gill was the lessee of the flat and her landlord. The flat suffered from damp and mould, caused in part by water penetration through a defective block roof and guttering (which it was accepted were outside Mr Gill’s responsibility), which was so bad the daughter could not use her bedroom until works were done in April 2009.
The tenancy provided for nothing more than the landlord’s implied repairing obligations set down in s.11 of the Landlord & Tenant Act 1985 – in broad terms covering the structure and exterior of the demised premises. In May 2009 Ms Grand was awarded £5,600 general damages for disrepair (including a 3 year period where the boiler was defective) and breach of quiet enjoyment against Mr Gill. However, the judge ruled that liability for the roof and guttering did not fall on the landlord as they were outside his demise and further that the damp and mould was principally an issue of condensation, which was a consequence of a design fault and for which Mr Gill was not liable (Quick v Taff Ely BC).
The Judge expressly noted that had Mr Gill been responsible for the damp and mould (though made no mention of the defective plaster) then damages would have been awarded at the annual rate of £2000 pa, but instead found that damages should be assessed on a reduced basis because he was not entirely liable and rather it was the “exacerbation factors” – lack of heating, defective guttering allowing water into the living room and window defect – which fixed him with any liability at all which reduced the potential damages by 90% to only £600 (i.e. £200 pa).
Paragraph 17 of Lord Justice Rimer’s judgment explained Ms Grand’s fundamental case on appeal:
“17…Quick’s case shows, as the judge recognised, that liability under repairing covenants such as Mr Gill’s for conditions caused by condensation resulting from a design defect does not arise unless they result in physical damage covered by the landlord’s covenant, when the repairing obligation will apply. In this case, however, the judge found (or ought to have found) that there was physical damage, resulting in disrepair, to what is said to have been part of the structure of the property, namely the plasterwork in the living room (front wall and ceiling) and in the kitchen (ceiling).”
18. In my judgment, assuming that the plasterwork damage identified by Mr Lovatt is correctly characterised as damage to the ‘structure’ of the flat, it was damage for which Mr Gill was responsible under his repairing obligations under both the tenancy agreement and the provisions in section 11(1) of the Landlord and Tenant Act 1985 (see Quick v. Taff Ely Borough Council  QB 809, per Dillon LJ, at 818E). A key question, however, which Mr de Waal very properly raised with us, is whether such plasterwork did form part of the ‘structure’ of the flat. Only if it did was Mr Gill liable to repair it.”
Given that plaster damage in disrepair cases is not unusual it is somewhat surprising that there has not been prior precedent challenge to the law following Moran’s case. Beforehand, as the Court of Appeal explained, one has a number of authorities in which the point was conceded by the landlord (such as in Staves & Staves-v-Leeds City Council (1991) 23 HLR 107). Mr Recorder Thayne Forbes in Moran had been very definite on the point and in a passage long-used by landlords’ advisers since said in respect to the interpretation of section 11’s predecessor:
“As I have said, section 32(1)(a) and the words “structure of the dwellinghouse” mean something less than the dwellinghouse overall and limited to the essential material elements that go to make up the structure of the dwellinghouse. It seems to me that internal wall plaster is more in the nature of a decorative finish and is not part of the essential material elements which go to make up the structure of the dwellinghouse. I therefore hold that internal wall plaster and, for the same reasons, the door furniture do not form part of the structure of the dwellinghouse, bearing in mind I have held that those words mean something less than the overall construction.”
Ms Grand’s counsel sought, ultimately successfully, to argue that the Recorder was wrong to say that plaster did not form part of the structure of a dwellinghouse and that whilst internal plasterwork may not give a property stability it does contribute to its appearance and shape. The proper distinction for determining liability, he said, was whether the plaster could be seen as decoration or fittings or not. If the latter then it came within the landlord’s implied repairing obligations.
The Court of Appeal agreed and Lord Justice Rimer crucially determined at paragraph 25 of his judgment:
“…whilst I would accept and adopt Mr Recorder Thayne Forbes’s observations as to the meaning of ‘the structure…of the dwellinghouse’ as providing for present purposes. as Neuberger LJ put it, a good working definition, I am respectfully unconvinced by his holding that the plaster finish to an internal wall or ceiling is to be regarded as in the nature of a decorative finish rather than as forming part of the ‘structure’. In the days when lath and plaster ceiling and internal partition walls were more common than now, the plaster was, I should have thought, an essential part of the creation and shaping of the ceiling or partition wall, which serve to give a dwellinghouse its essential appearance and shape. I would also regard plasterwork generally, including that applied to external walls, as being ordinarily in the nature of a smooth constructional finish to walls and ceilings, to which the decoration can then be applied, rather than a decorative finish in itself. I would therefore hold that it is part of the ‘structure’. I would accordingly accept that the wall and ceiling plaster in Ms Grand’s flat formed part of the ‘structure’ of the flat for the repair of which Mr Gill was responsible.”
This case will undoubtedly end the many arguments that would otherwise have arisen as to a landlord’s obligation towards internal plasterwork and proper interpretation of section 11 and any relevant express tenancy provisions. The implications are therefore apparent and the “watch this space” prediction is not so much in how Grand is applied to liability questions (about which there can now be little argument in this area) but rather in the proper assessment approach to damages and whether that should be based on the unofficial tariff set down in Wallace-v-Manchester City Council (1998) 34 HLR 1111 (as applied by the trial judge in Grand) or the unrestricted notional rent reduction promoted in English Churches Housing group-v-Shime  EWCA Civ 434. An article for another day?