Breach of Covenant: Whether damages awarded for breach of covenant to repair are subject to a 10% uplift (Khan v Mehmood – 2022)

When assessing damages in respect of breach of a repairing covenant, should the 10% uplift set out in Simmons v Castle be applied by the court?

The background

In Khan v Mehmood [2022], the respondent occupied a property, which was in a state of disrepair, from 2005 and was granted a tenancy in 2011. The appellant brought possession proceedings in 2013, but the respondent counterclaimed on grounds of disrepair. At first instance, the District Judge found that the tenancy had commenced in 2007, awarding damages from that period at a rate of 50% of the rent. The judge applied a 10% uplift following the earlier decision of Simmons v Castle [2012]. The appellant appealed against the period of time for which damages were awarded, as well as grant of the 10% uplift.

In Simmons v Castle, a 10% uplift on damages was made in consideration of the Jackson reforms on costs in civil litigation. The 10% increase compensated successful claimants pursuing litigation under a Conditional Fee Agreement, who were deprived of the right to recover success fees from defendants under such reforms.

The decision

The Court of Appeal found that the 10% uplift set down in Simmons v Castle did apply to damages for breach of a repairing covenant, finding in favour of the respondent.

Damages were assessed at 50% of the rent from March 2011, which was when the Court of Appeal found that the tenancy commenced.

It was held that the damages for disrepair compensated for the discomfort, inconvenience and distress suffered by the respondent, and that Conditional Fee Agreements are a common means of enabling tenants to pursue disrepair claims against landlords. The Court found that the 10% uplift was intended for this type of claim, compensating the respondent for the success fee which was not recoverable from the landlord.

Advice and action for landlords

This decision provides important guidance in the application of the Simmons v Castle 10% uplift, confirming that disrepair claims brought against a landlord by a tenant sit firmly within the purposes for which the uplift was intended.

The decision was unanimous, with damages awarded to the tenant respondent. Landlords are advised to be aware of the application of the uplift when entering into litigation surrounding disrepair.