Duval v 11-13 Randolph Crescent Ltd [2020]

Duval v 11-13 Randolph Crescent Ltd [2020]

Duval v 11-13 Randolph Crescent Ltd [2020] UKSC 18 is an English contract law case where the Supreme Court emphasised the necessity of interpreting lease covenants in context, considering the nature of the works involved, and ensuring the practical efficacy and coherence of the lease agreements.

11-13 Randolph Crescent, a block of nine flats in London, was the subject of this appeal. Dr Julia Duval and Mrs Martha Winfield held leases for two of the flats. The appellant landlord owned the freehold and acted as the management company, with all shares owned by the flat lessees. The leases contained Clauses 2.6 and 2.7, requiring the landlord's consent for alterations and preventing lessees from cutting into roofs, walls, etc. Additionally, Clause 3.19 obligated the landlord to enforce certain covenants at the request and cost of any lessee.

In 2015, Mrs Winfield sought a license for substantial alterations. Initially refused, the landlord reconsidered but faced legal challenges from Dr Duval, who sought a declaration that the landlord lacked the power to permit a breach of Clause 2.7. The dispute reached the Supreme Court.

The Supreme Court unanimously dismissed the appeal. Lord Kitchin delivered the judgment, emphasising the need to interpret the leases in context. The nature of the leases as long-term contracts for substantial premiums was considered, acknowledging the inevitability of necessary works over their lifetime. Routine improvements were distinguished from activities potentially damaging to the building.

Clauses 2.6 and 2.7 addressed routine improvements and activities akin to waste or destruction, respectively. The court clarified that Clause 2.6 allowed for lessees' routine alterations with landlord approval, while Clause 2.7 pertained to potentially destructive works.

The critical question involved whether the landlord could license structural work breaching Clause 2.7. Clause 3.19 did not expressly prohibit it, but the court found an implied term: the landlord promised not to undermine Clause 2.7's absolute covenant. This followed from the purpose of the covenants and the lessee's entitlement under Clause 3.19 to enforce them.

The court highlighted the impracticality and incoherence of allowing the landlord to defeat a lessee's right based on timing—whether the landlord or lessee acted first. Clause 2.7, addressing potentially damaging works, appropriately required the consent of other lessees.

The judgment clarified the scope of lease covenants and implied terms, ensuring practical efficacy and coherence. It affirmed that certain works, especially those potentially destructive, necessitate the consent of other lessees and cannot be authorised by the landlord in a manner undermining the absolute covenant of Clause 2.7.
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