Manchester’s Beetham Tower in disrepair: Lessons from a “Draconian” remedy

A new disrepair case has been reported, relating to Manchester’s tallest building: the iconic Beetham Tower in Manchester (you know it; that new glass one with the top half larger than the bottom half). Here we explore the ramifications and lessons to learn from an unusual case.

In Blue Manchester Limited v North West Ground Rents Ltd [2019] EWHC 142 (TCC), the judge heard about three issues including potential disrepair to the cladding.

The Landlord had obligations to the hotel-operator Tenant to keep the retained parts of the building (including the cladding) in repair.  Problems had been found with parts of the cladding installation and, prior to the hearing, a temporary solution had been implemented.  More particularly, the bond provided by the structural sealant of the insulated ‘shadow box units’ was failing in some cases.  The temporary remedy was to screw-stitch pressure plates to the frame profiles, to hold the panels securely in position.

The question for the judge to consider was whether, at the time of the hearing, the cladding was in disrepair.  He found that it was in disrepair.  In so doing, he relied to a very large extent on the 5-stage analysis of disrepair published within Dowding and Reynold’s dilapidations text book.  He also took the aesthetics of the building into account.

To the observer, informed only by the facts as reported in the judgement, it seems relatively clear-cut that the cladding would be found to be in disrepair.

For the defendant landlord though, this appears to have been a problematic case for three particular reasons:

1. They are a ground rent company and may have had little expectation of having to get involved with works of this scale, the recovery of the cost of which might be restricted by the terms of leases with the various tenants.
2. Matters were also complicated somewhat by the demise of Carillion and by both parties holding warranties against the cladding sub-contractor.
3. The claimant tenant was (unusually) asking the judge to award the remedy of ‘specific performance’ as well as damages.

It is the granting of an order for specific performance which perhaps elevates this case to the unusual.

That remedy was awarded despite the judge describing it as ‘draconian’ and also despite the tenant having an alternative contractual remedy akin to a Jervis v Harris process.

It is more normal for specific performance not to be granted in England and Wales, because the terms of any order can be difficult to draft, such that it would be difficult for the party obliged to comply with the order to know whether it was doing so in an appropriate manner.  In this case the judge allowed what he considered to be a reasonably generous time frame (of 18 months) for the landlord to comply, and also allowed the landlord to apply to the court for further guidance under certain circumstances.

The Tenant was also awarded damages for any continuing loss it may suffer as a consequence of the landlord’s various breaches.

It is not known whether leave to appeal will be requested or granted, or any appeal made or won.

Lessons to learn:

1. Parties to a lease (or indeed any contract) should understand the potential implications of the obligations they are signing up to. It sounds as though the landlord might have difficulty recovering all of the cost of the works through the service charge, and this in circumstances where their 999 year interest will have meant that any opportunity to claim against the development team would expire (relatively) quickly, because the warranties would not be for an equivalent 999 years.
2. Don’t assume that specific performance will not be granted. It just might; going to court is an uncertain business.
3. Inspect cladding installations regularly and frequently, even if they are ‘new’.