New v Gromore Limited & Mindcross Limited

 

The Message

Developers have to respect tenant’s rights and possessions.

The Case

The High Court has had to decide who, if anyone, is liable for the destruction of an internationally-acclaimed sculptor’s life’s work which was stored in a demolished lock-up garage

Terry New is a renowned sculptor and head of Fine Art at the Royal Academy Schools. In 2002, he rented a lock-up garage in a row of garages in London, SE14 to store, in particular, the moulds from which he casted copies of his sculptures. In late April 2007, he discovered that the garage had been demolished and all his possessions destroyed. He claims the contents were worth some £400,000 and he sued his landlords and the developers that had undertaken the demolition works. The landlords sought to hold their own agent, Andrew Pennell, liable if he had authorised the developers to undertake the works.

The first question for the Court was to establish what sort of tenancy Mr New had had as the landlords claimed it had been terminated by a notice to quit they had served. Mr New claimed he had a business tenancy which was protected by the Landlord and Tenant Act 1954 so it could not have been lawfully terminated by a simple notice to quit.

The simple tenancy document allowed use of the premises as a private garage or for storage. The landlords claimed that the garages were built as domestic garages to serve nearby residential properties and the word “private” governed storage as well so that any business use was prohibited. The Court disagreed. It held that the use for storage was unlimited and noted that the letting had clearly not been for domestic use as Mr New did not live in any of the adjoining flats.

Accordingly, Mr New had a business tenancy which had not been terminated and entry into the garage had been a trespass and breach of his tenancy rights.

The Court then had to decide who was responsible? What had happened was that the landlord had contracted to sell the whole site comprising 43 garages to Mindcross for over £1 million for residential redevelopment. The contract allowed Mindcross access to the vacant garages prior to completion to undertake soil and other tests. The landlords had then identified the empty garages by inspecting all garages. Those that were still in use had their garage door marked with a white cross. Attempts were made to contact or notify the tenants of occupied garages but, unfortunately for him, Mr New was abroad at the time.

A notice was displayed by Mindcross at the site telling tenants they had until 21 April 2007 to vacate their garages prior to demolition works commencing on 23 April 2007. Many tenants duly removed their goods or abandoned possessions they no longer wanted and, due to some fly-tipping as well, there was some confusion on site as to what was rubbish and what was not. The contractors, not being art connoisseurs, did not appreciate that the contents of Mr New’s garage had any value and thought they had been abandoned. They proceeded to clear and demolish the garage in accordance with their instructions from Mindcross to clear the site.

There was substantial contact between the landlords and their agent, Mr Pennell, on the one hand and Mindcross on the other prior to the events in question. Mindcross claim they were given authority by Mr Pennell to clear the site and were unaware that any garage doors with white crosses remained. Mr Pennell claimed he had given no such authority and that Mindcross was only entitled to deal with vacant garages so as to sink bore-holes and carry out other investigations before commencing their development.

After hearing all the evidence, the Court held that the landlords and Mr Pennell had not authorised Mindcross to enter and clear and then demolish Mr New’s garage and that the landlords, who had no idea as to the value of Mr New’s possessions, had no liability to Mr New at all in relation to Mindcross’s unlawful actions. Mr New’s remedy was against Mindcross for trespass and wrongful interference with his goods.

Accordingly, Mindcross is liable to compensate Mr New for all his losses and, if his claim is as large as he contends, Mindcross’s liability will be very substantial. Obviously, it is essential that landlords and developers fully appreciate that tenants, even of lock-up garages, have rights that need to be respected.