#6675 - Jervis V. Harris I - Commercial Remedies BCL

Jervis v. Harris

Facts

In the action the plaintiff landlord seeks to enforce certain covenants contained in an underlease dated 11 July 1947 for a term of 999 years less 10 days from 24 December 1899. The underlease was granted at a premium of 26,000 and a rent of 1,000 per annum. It was originally granted in respect of the entire works at a site at Adelphi Street, Salford. The defendant has become the tenant of part of the site known as the West Works at an apportioned rent of 80 per annum.

The second and third preliminary issues are concerned with clause 2(10) of the underlease which gives the landlord the right from time to time during the term to enter on the demised premises to view the state of repair and to remedy any want of repair at the tenant's expense. The second preliminary issue ("the Act of 1938 issue") is whether the clause is enforceable by the landlord without the leave of the court first obtained under section 1 of the Leasehold Property (Repairs) Act 1938.

Clause 2(10) of the underlease authorises the landlord or the superior landlords to enter upon the demised premises from time to time during the term granted to view the state of repair and to give notice in writing to the tenant of any defects or want of repair. The tenant is required within three months to make good all such defects or want of repair of which he has been given notice, and in default the landlord or the superior landlords may do the work themselves and recover the costs and expenses of the work from the tenant on demand.

The defendant has failed to carry out any of the work needed to remedy such wants of repair, and it is the landlord's intention to exercise his rights under clause 2(10) of the underlease to enter and do the work himself and recover the cost from the defendant. The defendant has refused to allow the plaintiff or his workmen to enter upon the premises, and the plaintiff has accordingly brought the present proceedings seeking, inter alia, an injunction to restrain the defendant from preventing him from entering the premises and carrying out works of repair thereon.

The question is whether the plaintiff is entitled to enforce any of the provisions of clause 2(10) without first obtaining the leave of the court under section 1 of the Act of 1938. Subsections (2) and (3) of section 1 have the effect that a right to damages for breach of a tenant's repairing covenant is not enforceable by action commenced at a time when three or more years of the term are unexpired without the leave of the court. The question, therefore, is whether the landlord's right to enter the property, effect the repairs himself and then claim to recover the cost of doing so from the tenant is a claim for damages for breach of a covenant by the tenant "to keep or put in repair during the currency of the lease all or any of the property comprised in the lease."

Holding

The short answer to the question is that the tenant's liability to reimburse the landlord for his expenditure on repairs is not a liability in damages for breach of his repairing covenant all. The landlord's claim sounds in debt not damages; and it is not a claim to compensation for breach of the tenant's covenant to repair, but for reimbursement of sums actually spent by the landlord in carrying out repairs himself. I shall expand on each of these distinctions in turn.

The law of contract draws a clear distinction between a claim for payment of a debt and a claim for damages for breach of contract. The distinction and its consequences are set out in Chitty on Contracts, 27th ed. (1994), vol. 1, p. 1046, para. 21-031. As there stated, a debt is a definite sum of money fixed by the agreement of the parties as payable by one party to the other in return for the performance of a specified obligation by the other party or on the occurrence of some specified event or condition; whereas damages may be claimed from a party who has broken his primary contractual obligation in some way other than by failure to pay such a debt.

The plaintiff who claims payment of a debt need not prove anything beyond the occurrence of the event or condition on the occurrence of which the debt became due. He need prove no loss; the rules as to remoteness of damage and mitigation of loss are irrelevant; and unless the event on which the payment is due is a breach of some other contractual obligation owed by the one...