The case Liverpool City Council v Irwin [1977] AC 239 involved a legal action brought by the plaintiff, Liverpool City Council, against the defendants, Leslie and Maureen Irwin. The House of Lords heard the appeal on February 16th, 17th, 18th, and March 31st, 1977. The council owned a 15-story block located on Hai Heights in Everton, Liverpool where the defendants were tenants. They resided in a maisonette situated on the building’s 9th and 10th floors.
The contract of tenancy was a form that outlined the obligations of the tenants but not the landlord. The form lacked the signature of the landlord, making it an incomplete or one-sided contract. This omission in the “tenancy document” leads the courts to interpret the parties’ intentions and imply terms necessary for the contract’s validity.
The courts have the authority to imply terms into a contract in order to ensure its efficacy for business purposes. Additionally, there are various other grounds on which a court may choose to imply terms into an incomplete contract or one that necessitates the court’s involvement in order to strike a fair balance between the rights and obligations of both parties involved. This is carried out with the aim of preventing one party from shouldering all the risks, losses, or gains associated with the transaction at hand. In this particular scenario, the landlord initiated legal proceedings in the county court subsequent to the defendants ceasing their rent payments.
The tenants lodged a counterclaim for minimal compensation, alleging that the plaintiffs had breached section 32(1) of the Housing Act 1961 by failing to uphold the proper functioning of installations within the dwelling house. Furthermore, the tenants contended that there was an unwritten obligation to maintain communal areas such as lighting, stairs, lifts, and rubbish chutes. Additionally, they argued their right to peaceful occupation as stipulated in their tenancy agreement. After examining the property, the court concluded that it was in an appalling state.
The defendants were awarded nominal damages by the court as their counter claim was successful. The landlord was granted possession but ordered to pay ? 10 in nominal damages. The Liverpool City Council appealed to the court of appeal, arguing that they had no contractual obligation to maintain and repair common parts, did not violate any statutory laws in section 32(1) of the housing act, and did not breach the tenants’ implied right to quiet enjoyment.
The court allowed the appeal and determined that the plaintiff did not violate section 32(1) and was not contractually obligated to maintain common areas. Additionally, the court believed that including such a requirement in the contract was not necessary for its business effectiveness. Lord Denning disagreed with this decision and believed that the test should be based on what a reasonable person would do. Would the plaintiff have taken appropriate measures to ensure the maintenance and repair of common areas?
Denning and other justices concluded that the plaintiff did not breach any obligations. The Irwin family appealed this decision to the House of Lords, arguing that the landlord had an unambiguous duty to maintain and repair common areas. They also claimed that the landlord violated section 32(1) of the housing act because there was a cistern in their house that would flood when flushed. The Irwin family contended that this system could not be considered as being in “proper working order”.
During the trial, various issues were brought up, including the landlord’s pursuit of possession due to unpaid rent and the tenants’ counter-claim for nominal damages. The tenants contended that the council had neglected the building, resulting in blocked rubbish chutes, unlit stairs, and non-functional lifts. They also alleged a breach of the implied covenant for quiet possession and a violation of section 32(1) of the housing act concerning proper maintenance of appliances. Their arguments relied on the precedent set by Milter V Hancock. This case established that landlords can be held accountable for failing to maintain shared areas such as stairs, as evidenced by an injury sustained by a visitor to the property. The court determined that defendants have a responsibility to ensure staircase upkeep for reasonable enjoyment of the premises. Despite being overturned, this ruling continues to be frequently cited.
The court in Liverpool City Council V Irwin ruled in favor of the tenant and granted all the tenants’ counter claims based on their site inspection. On appeal, the majority of judges concluded that the defendant cannot be obligated to repair and maintain common parts, as such a term was not explicitly stated in the tenancy agreement. They determined that it is unnecessary for business efficacy and would impose an excessive burden on the landlord.
The landlord was found to have not violated section 32(1) of the housing act. However, Lord Denning disagreed with the majority’s decision and argued that landlords should be responsible for maintaining and repairing communal areas. He believed it was the duty of landlords to ensure these spaces were well-maintained in order to take care of their tenants. Despite his dissent, Lord Denning ultimately agreed with his fellow judges in determining there was insufficient evidence of negligence on the part of the landlord, leading him to conclude that the landlord was not at fault.
The tenants’ appeal before the House of Lords raises issues regarding the interpretation and nature of a current contract between the parties. Furthermore, it is argued that previous cases involving landlords and tenants of multi-storey buildings establish an implied easement for “common parts,” which grants legal rights of way relating to legal easements. Additionally, there is concern regarding the extent of the landlord’s obligation to repair and maintain these common parts. The specific debate centers on whether the standard should be reasonable care or a stricter requirement.
Justice Salmon suggests that there is a contractual relationship between Liverpool City Council and the Irwin’s, with legal obligations for both parties. This conclusion can be drawn from the fact that there is possession in an incomplete contract, as seen in this case. Lord Wilberforce asserts that the actions of the parties can fill in the missing elements. Examining the actions of the parties, it becomes clear that the tenant has had possession since 1966, while the landlord has maintained control over common areas such as lifts, staircases, and rubbish chutes.
The tenants in this scenario live in a maisonette on the 9th and 10th floors. Their relationship is that of landlord and tenant, with corresponding duties and liabilities. Lord Salmon states that there is an implied license from the landlord for tenants of the 15-storey block to use the lifts and stairs. There are two differing opinions on easements. One suggests that the landlord’s liability should be limited to ensuring the safety of those using the stairs, making sure they are safe for use. Liverpool City Council denies liability for repair and maintenance, only conceding responsibility for safety based on the Safety Occupiers Act of 1957. They argue that they are not required, by common law, to rent out a habitable dwelling, suggesting it would be a stretch to expect them to repair and maintain the tenant’s right of way. The second opinion implies that the landlord has a duty to repair and maintain common areas so they are always available for use by tenants and their visitors.
In Miller V Hancock, Lord Wilberforce argues that the test should be necessity. The essential parts required for the tenant’s occupancy must be kept in reasonable repair and suitability by the landlord. The majority of Lord Wilberforce’s colleagues concluded that the landlord is obligated to exercise reasonable care, rather than facing charges of failing to do so. This duty includes maintaining, repairing, and ensuring proper lighting for staircases. The tenant heavily relied on Moorcock during the court proceedings.
The Moorcock case involved ship-owners (plaintiffs) and jetty operators (defendants) who entered into an agreement for the use of the defendants’ facilities for loading and unloading goods. During low tide, the plaintiffs’ boat ran aground while at the defendants’ jets. The defendants, who collect tolls and fees for their services, argued that they were not responsible for the incident because the bed one must pass through to access their jetty was under the control of the conservation SOC.
The court determined that the ship-owners did not possess knowledge about the low or high tide that could potentially cause harm to their ship. This information was exclusive to the jetty owners who were responsible for such knowledge. Consequently, the jetty owners had a responsibility to inform their customers about any imminent danger, which resulted in the defendant being held accountable for compensating the plaintiff. In the case of Liverpool City Council, Mr. [counsel for the tenant] represented the tenant’s interests.
Godfrey states that the landlord retains control over the stairs and lift in this scenario. The responsibility for repairing and maintaining these easements is crucial for the contract to operate effectively. Additionally, during the appeal, there was a discussion about including section 32(1)(b) of the Housing Act 1961 as a default provision in the tenancy agreement, despite not being explicitly stated.
Section 32(1)(b) of the lease agreement requires the leaser to maintain and repair the installations in the dwelling house. The Irwin’s argued that their apartment’s water listern was defective, causing the floor to flood when flushed. Consequently, the Irwin’s claimed that the Liverpool city council violated this section. Mr.
Godfrey, counsel for the Irwin’s, submitted that in lettings of this type, the general law not only grants an easement of access but also provides a legal remedy if access is denied. This means that the owner responsible for repairs must ensure that they are carried out, even though the owner benefiting from the easement is the one directly enjoying it. Lord Edmund-Davies concluded that the only way a flat like this can be used is if the Liverpool city council maintains the common areas.
Both His lordship and Miller V Hancock opined on the need to clarify whether this implied term should be absolute or qualified. However, Dunstar V Hollis provides a more accurate ruling. It states that the obligation to maintain and repair common parts only applies in tenancies when the demised property is a multi-story building. In the appeal of Section 32, it was determined that the appeal should be allowed and the tenants were awarded a nominal fee of ?5.
In the decision of Hancock V Miller and Lister V Rumford, it was further clarified whether the landlord’s duty to repair is contractual or statutory. The application of section 32(1) of the housing act has shifted this responsibility from contractual to statutory. If the parties explicitly agree, it may still be considered contractual. However, when there is no agreement, section 32(1) of the housing act fills in the gaps. Liverpool City Council V Irwin exemplifies the distinction between implied terms of law and implied terms of fact. As the case progressed to the House of Lords, LCC V Irwin became a notable example of implied terms of law. Implied terms in law frequently arise in recurring similar cases, such as the mutual trust and confidence rule in employer/employee contracts. Implied terms of fact, on the other hand, stem from the court’s attempt to determine the presumed intentions of the parties involved.
Examples of implied terms of fact can be seen in cases such as the Moorcock case. Implied terms of fact refer to those terms that are deemed to be understood or intended by both parties involved in a contract. These terms are often imposed by law to ensure the efficient conduct of business transactions. If an opportunity to question the parties arises, and they are asked whether the desired outcome sought by the plaintiff is what the defendant intended, their response would determine the inclusion of implied terms. Therefore, it is not solely based on necessity but also on reasonableness given the specific circumstances.
A duty of care that is reasonably necessary is postulated by Lord Denning. The case LCC V Irwin brings up the question of whether landlords should be held liable for common parts as an absolute obligation. It suggests that a distinction should be made in cases where the landlord/tenancy agreement involves multi-storey premises. In these cases, there is an implied term that guides the landlord/tenant relations and places a duty of care on the landlord regarding common areas.
The duty of care to maintain the common areas for the tenants’ enjoyment is a reasonable right, not an absolute one. Initially, the counter-claim in LCC V Irwin granted this right without reservation. However, other courts were less lenient in granting this right, and ultimately, the House of Lords established a standard that was necessary for effective business functioning. Additionally, another emerging test is the consideration of wider factors, such as the reasonable expectations of the parties, rather than strict necessity. This suggests a lower standard.
Sometimes, a matter may not be governed by fact or law, resulting in no implication being made. Lord Denning had difficulty classifying Liverpool City Council V Irwin as falling under either fact or law, but the majority of other justices consider it to be implied terms of law.
Bibliography:
1) Housing Act 1961- Section 32(1)
2) Housing Act 1961- Section 32(1)(b)
3) Lister v. Romford Ice and Cold Storage Co. Ltd. [1957] A. C. 555; [1957] 2 W. L. R. 158; [1957] 1 All E. R. 125
4) Miller V Hancock [1893] 2 Q. B. 177, C. A.
5) Moorcock, The (1889) 14 P. D. 64
