Breach of covenant: Burden of proof in claim for breach of covenant and evidence supplied at Tribunal (Eldersan Ltd v Covic (personal representative of Mrs Dusica Macrae-Brown deceased – 2019)
In a claim for breach of covenant in respect of alterations carried out at a property, the Upper Tribunal was asked to review whether the decision made by the First-tier Tribunal was correct where the Court had found that the burden of proof had not been discharged as a result of a difference in opinion between experts.
In Eldersan Ltd v Covic (personal representative of Mrs Dusica Macrae-Brown deceased) , the appellant owned the freehold of a property divided into two flats, the ground floor flat let to the deceased Macrae-Brown and her husband in 1989. The lease contained standard covenants, including those preventing alterations being made to the property without the previous written consent of the landlord. In particular, the tenant covenanted at clause 3(1) to keep the premises ‘in good substantial and tenantable repair and condition and in particular so as to support shelter and protect the parts of the property other than the demised premises…’.
The tenant obtained planning permission for a single-storey extension at the property and was given landlord’s consent by a formal licence for alterations. The works exceeded those permitted by the licence, removing the spine wall of the property which was replaced by a stud partition and removing a chimney breast, supporting the chimney in the property above through steel joists.
The freeholder applied to the First-tier Tribunal in respect of the breach of covenant. Two structural engineers were engaged:
- The first concluded that movement and cracking in the spine wall of the first floor flat had been caused by the works undertaken.
- The second concluded that the movement was instead caused by earlier removal of a stair wall, age of the building and other means unrelated to the works.
The FTT found that lease covenants had been breached by virtue of the works carried out but, as the opinions by the experts differed, could not conclude that clause 3(1) had been breached. The FTT stated that the freeholder had failed to meet the burden of proof in respect of this claim.
The Upper Tribunal considered whether the FTT was correct in its assessment of expert evidence, finding in favour of the freeholder and allowing its appeal.
The UT decided that the FTT had not carried out essential examination and evaluation of evidence presented to the tribunal, and the UT determined that the documents supplied were sufficient to reach a conclusion that the works carried out to the ground floor flat had led to the damage to the flat on the first floor. The FTT should have referred to the facts presented instead of falling back on the burden of proof allowing it to reach a different determination.
The UT visited the property, allowing it to reach a decision that the works had caused the first-floor damage and the lease covenant at clause 3(1) had therefore been breached.
Advice and action
A positive decision by the Upper Tribunal, Eldersan presents a clear guide that the First-tier Tribunal must consider the evidence presented to it and reach a conclusion based on those facts before it can rely on a burden of proof argument.
Whilst a case will always be stronger where experts are in agreement, this case does support the view that the Tribunal must consider all evidence and make its decision based on a full assessment of the facts.
The Upper Tribunal found in favour of the freeholder and allowed its appeal. The Court decided that the FTT had not carried out essential examination and evaluation of evidence presented to the First-tier Tribunal.