Frasca-Judd v Golovina [2016] EWHC 497 (QB)

Case No HQ14X05032

[2016] EWHC 497 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

Venue Royal Courts of Justice, Strand London WC2A 2LL

Date Friday 5th February 2016

Before

MR JUSTICE HOLGATE

Between

ELIZABETH ANN FRASCA-JUDDClaimant

GALINA GOLOVINADefendant

(Transcript of the Handed Down Judgment of

WordWave International Limited

Trading as DTI

165 Fleet Street, London EC4A 2DY

Tel No: 020 7404 1400, Fax No: 020 7831 8838

Official Shorthand Writers to the Court)

MR J DAVIS (instructed by Clyde & Co) appeared for Claimant

MR A BUTLER (instructed by Ashley Wilson Solicitors) appeared for Defendant

Judgment

Introduction

[1]In 2009 the claimant, Mrs. Frasca-Judd, was the owner of Moat Cottage, West Grafton, Marlborough, Wiltshire. On 18 December 2009 she let the property for 18 months to the defendant, Ms. Golovina, by a tenancy agreement in writing. This was arranged by Mr Geoff Clyesdale of Hamptons International Estate Agents.

[2]At the heart of the claim lies clause 2.3.12 of the agreement, which imposed upon the defendant an obligation:

“To take all appropriate precautions including any such as may be required from time to time by the Landlord to prevent damage occurring to any installation in the Premises which may be caused by frost including providing background heat at all times during the winter months especially when Premises are vacant, provided that the sub-clause shall not oblige the Tenant to lag or otherwise protect pipes that are not already lagged or protected.”

The claim is for damages for breach of clause 2.3.12 and/or negligence arising from flood damage to the cottage around the beginning of 2010.

[3]On 21 December 2009 Mr Clyesdale sent the defendant the keys to the property and two days later she took physical possession. Her permanent residence was a flat in Prince Consort Road, London SW7.

[4]On 27 December 2009 the defendant left the property to return to her London flat over the New Year period. On 14 January 2010 Mr David Puddephatt, who was employed by the claimant to look after the gardens, attended at the property. When he looked through the windows he saw that severe water damage had occurred inside the house. He telephoned the claimant to notify her of the damage, switched off the mains water supply and called the claimant’s plumber, Mr Neil Sheppard, to the scene. Mr Sheppard discovered that the heating was not on and consequently the water pipes had frozen. The same day the claimant notified Mr Clyesdale and her insurers, the National Farmers’ Union Mutual Insurance Society Limited, of the damage.

[5]On 15 January 2010 the insurers instructed Crawford & Company Adjusters (UK) Limited to deal with the adjustment of the insurance claim on their behalf and Ms. Julia Pearce, was appointed to manage the claim. She adjusted the claim to the figure of £128,089.71. The insurer paid that sum to the claimant and remedial works were carried out.

[6]It appears that the defendant did not reoccupy the cottage. The parties agreed that the tenancy be surrendered on 26 October 2010 and the claimant sold the property on 7 December that year. However, the current claim was not brought until 25 June 2013. It is brought by the insurer in the name of the claimant landlord pursuant to its rights of subrogation. The claim is based on a breach of clause 2.3.12 of the tenancy agreement and negligence. It seeks damages amounting to £128,089.71, to cover the costs of repair and reinstatement in the sum of £97,189.71, damage to contents in the sum of £15,000 and I note, in particular, loss of rental income in the sum of £15,900. This loss of rental income relates to the period of seven months and two weeks during which the property was uninhabitable i.e. from 14 January 2010 to 28 August 2010 (see paragraph 27 of the witness statement of Ms. Pearce).

[7]The defendant denies liability. Without prejudice to that denial, she has served a counter schedule disputing some of the figures. But fortunately the parties have agreed that subject to liability, damages should be assessed in the sum of £117,000.

The issues in the claim before the court

[8]Two issues are raised by the defence, one legal and one factual. The legal issue arises from paragraph 14A of the Re-Amended Defence:

“… the claimant has been indemnified against her losses by her insurers and this claim is brought pursuant to rights of subrogation allegedly existing under the policy of insurance. However, the intention of the parties as it appears from the lease is that the claimant was required to insure the property for the benefit of both parties and recoup any loss from the occurrence of an insured risk from her insurers …”

The defendant pursues this argument not only in relation to the claim in negligence, but also the claim for breach of clause 2.3.12.

[9]Paragraph 11A of the Amended Defence also contended that the damage caused did not fall within clause 2.3.12, because it did not represent damages to an “installation”. Mr Butler on behalf of the defendant, abandoned that point in paragraph 7 of his skeleton, quite rightly in my view.

[10]The factual issue is whether on the balance of probabilities the court is satisfied that when the defendant left the cottage on 27 December 2009 the heating was turned off. Mr Davis for the claimant, accepted that if on that date the heating had been left on and subsequently the system failed for whatever reason during the period running up to 14 January 2010, the defendant would not be liable for any of the damages claimed, whether for breach of the tenancy agreement or in negligence.

[11]On the other hand, Mr Butler accepts on behalf of the defendant that if the court is satisfied that on 27 December 2009 the heating was turned off, then causation is established and the defendant is liable for the agreed damages, subject only to the legal issue raised.

The appeal

[12]On 1 July 2015 the defendant issued applications for summary judgment against the claimant, or to strike out the claim, on the grounds that the subrogation claim must fail because it was the common intention of the parties to the tenancy agreement that:(a) the landlord would insure for the benefit of both parties the property against risks which would include the incident and the damages claimed; and

(b) the landlord would look to that insurance for indemnification and not to the tenant for damages. It is common ground that the landlord has been fully indemnified by the insurers.

[13]Following the hearing on 26 October 2015, Master Leslie refused the defendant’s application. He ordered the defendant to pay the claimant’s costs of the application in any event and to pay £6,000, including VAT, on account within 21 days. He also refused permission to appeal. He dismissed the defendant’s application on the basis that the claimant’s submissions on the legal issue were sufficiently arguable to justify their being pursued at trial. He concluded that the defendant’s arguments were not so strong and clear cut at that stage as to persuade him that the landlord had no realistic prospect of success on the issue.

[14]The defendant appealed against Master Leslie’s decision. That appeal was listed to be heard at the substantive trial. On 24 November 2015 Mrs. Justice Nicola Davies granted a stay of execution of Master Leslie’s order pending the appeal. On the question of permission to appeal the claimant accepts that it should be granted and I do so grant.

[15]The parties agree that because the legal issue will be determined one way or the other in this judgment, the only practical significance of the defendant’s appeal at this stage concerns the Master’s order that the defendant should pay the costs of the application to strike out and for summary judgment in any event. At one point the defendant submitted that the correct order should have been costs in the case. However, during argument it was accepted that if the Master was entitled to conclude that the case of the legal issue was arguable then his costs order could not be impugned. Instead, the defendant contends the Master should have held that it was clear that the defendant’s legal defence was correct and therefore, the claimant had no realistic prospect of success on the claim. In that event, but only in that event, it would follow that the strike out should have succeeded and the defendant should have been awarded her costs of the application. The Legal Issue

Mark Rowlands Limited v Berni Inns Limited

[16]It is common ground that the claim in subrogation is dependent upon whether the claimant landlord is entitled to damages from the defendant for a breach of clause 2.3.12 or negligence, by failing to ensure that the heating system was left on when she vacated the cottage.

[17]The submissions for both parties began with the decision of the Court of Appeal in Mark Rowlands v Berni Inns Limited

[1986] QB 211

. The claimant in that case was the freeholder of the building. It let the basement to the defendant under a lease of 30 years under which the tenant covenanted to keep the interior of the basement premises in good repair. The landlord covenanted to keep the main walls, timbers, boundary walls and services of the basement in good repair.

[18]The tenant’s covenant in clause 3(4) to repair the interior of the premises contained an exception in these terms:

“Damage by or in consequence of any of the insured risks excepted, save where the insurance effected by the landlord shall be vitiated in whole or in part by any act or omission by the tenant or by any person acting for or under the tenant.”

[19]The judgment of Kerr LJ records that the tenant’s additional covenants under clauses 3(5) and (6), dealing with obligations to paint and decorate the premises and to yield up the premises in a proper state of repair at the termination of the lease, were subject to an exemption similar to that contained in the tenant’s main repairing covenant.

[20]There were two insurance covenants. The tenant covenanted to insure the basement for third party and property owner’s liability risks and the landlord covenanted:

“To keep the landlord’s premises including the demised premises insured against loss or damage by the insured risks and to lay out any money received under such insurance in rebuilding and reinstating as quickly as possible the demised premises or such parts thereof as shall be destroyed or damaged.”

[21]The tenant covenanted to pay an “insurance rent” in the following terms:

“To pay the landlord the sum or sum of money equal to the amount or amounts (whether increased by any act or omission of the tenant or not) which the landlord shall from time to time spend in effecting or maintaining the insurance of the demised premises...”

The tenant also covenanted to pay a fair proportion of the cost of insuring the whole building against losses which included loss of rent and the costs of rebuilding.

[22]Clause 6(4) of the lease contained a provision for the suspension of rent:

“If the demised premises or any part or parts of the landlord’s premises are so damaged or destroyed by any of the insured risks as to make the demised premises unfit for occupation or use and insurance in respect thereof has not become vitiated by any wilful or reckless act or omission of the tenant or any person acting under the tenant then the rent hereby reserved or a proper proportion thereof according to the extent of the damage sustained shall from the date of such damage or destruction and until the demised premises shall have been reinstated or made fit for occupation or use ... cease to be payable...”

[23]The landlord took out the insurance in accordance with his covenant. The tenant was not a party to that contract or named on the policy. The whole building was destroyed by a fire caused by the tenant’s negligence. The insurer paid the monies due under the policy and then brought an action in the landlord’s name against the tenant to recover the sum paid to the landlord. As in the present case that claim included loss of rent. In the leading judgment of Kerr LJ the issue was said to be (page 221 A-B):

“...whether a landlord's fire insurers can recover damages by subrogation from a tenant by whose negligence the insured building has been destroyed or damaged by fire when the lease provided that: (i) the landlord should insure the whole building against (inter alia) fire, (ii) the tenant was to contribute to the cost of the insurance, (iii) the tenant was to be relieved from his repairing obligations in the event of damage to the building by fire, and (iv) the landlord would lay out the insurance monies to rebuild the demised premises.”

He then restated the issue in the following terms (p 221 C-D):

“Since the insurers' right of subrogation depends on the rights of the landlord, the issue can also be stated as being whether under a lease in such terms a landlord who has been fully indemnified by his insurers under an ordinary policy covering the risk of fire, whether caused by accident or negligence, can nevertheless recover damages from the tenant on the ground that the fire had been caused by his negligence.”

[24]The court held that the tenant was not a co-insured party and so the decision in Petrofina (UK) Limited v Magnaload

[1984] QB 127

did not provide a defence (see page 224B).

[25]The next issue was whether the landlord’s policy was nonetheless effected for the tenant’s benefit as well as its own. The Court of Appeal held that it was, albeit that they did not think that this was the decisive issue (see page 225C). By reference to the terms of the lease they concluded that it was plain that the mutual intention of both parties was that the landlord’s insurers should insure for the benefit of them both (see pages 225 to 226). In summary this was because:(i) The defendant was required to contribute to the costs of the insurance by an additional rent;

(ii) The landlord was required to insure the building and to apply insurance monies to reinstate them;

(iii) In the event of the insured risk occurring, the tenant was correspondingly relieved from its repairing obligations, so long as the insurance had not been vitiated by an act or omission on the tenant’s part;

(iv) Clause 6(4) relieved the tenant from the obligation to pay rent insofar as the building was damaged or destroyed by an insured risk, provided that the insurance had not become vitiated by an act or omission on the tenant’s part.

[26]The court held that provided the tenant had an insurable interest in the subject matter of the insurance policy there was no legal principle to prevent effect being given to the common intention that the policy would enure for the benefit of both parties (page 226B). It was held to be sufficient to demonstrate an insurable interest that the tenant was interested in the continued existence of the building so that it could carry on using the area demised to it (pages 227 to 228).

[27]The court then went on to address what was described as the real issue between the parties (p 228 E-F):

“This is whether the terms of the lease, and the full indemnification of the plaintiff by their receipt of the insurance monies, preclude it from recovering damages in negligence from the defendant, or whether the plaintiff’s right to recover such damages remains unaffected. In the former case the plaintiff’s insurer would obviously be equally precluded from bringing the present action in the name of the plaintiff by virtue of its rights of subrogation.”

[28]This issue had not been considered in any previous English case and so the Court of Appeal reviewed a number of Canadian and US decisions. The issue in those cases was as follows: where a tenant as well as his landlord benefits from the landlord’s insurance, whether that fact, together with lease provisions similar to those in Rowlands were sufficient to exonerate the tenant from liability in negligence (p 230 A). The Court of Appeal noted (p 230 D-F) that although the terms of the leases considered in the cases varied, those in Agnew-Surpass Shoe Stores Limited v Cummer-YongeInvestments Limited (1975) 55 DLR (3d) 676 “were most closely in line with the present case”, because the tenant’s repairing covenant excluded the obligation to repair damage caused by fire, and the tenant’s obligation to contribute to the cost of the insurance only arose in the event of any increase in premiums due to structural changes or alterations made by the tenant.

[29]The Court of Appeal also noted that in subsequent Canadian cases the tenant’s position and the terms of the lease were less favourable in comparison with the Rowlands case, but the majority of the court in those decisions still, nonetheless, decided that the tenant was exonerated from liability.

[30]For a summary of the law in Canada the Court of Appeal relied upon the decision of the Supreme Court of Nova Scotia in Greenwood Shopping Plaza Ltd. v Neil J.Buchanan Ltd (1979) 99 DLR (3d) 289, page 291:

“The essential reason can be put quite simply: cl. 14 of the lease is a covenant with and for the benefit of the tenant Buchanan that the landlord Greenwood will keep the building insured against loss by fire, including fire caused by anyone's negligence. The tenant can rely on the landlord's covenant to insure and can refrain from insuring against any liability to the landlord for its own negligence. The landlord must then look only to its own insurance if it suffers loss and cannot sue the tenant for loss that it had promised to insure. The landlord's insurer has, by subrogation, no greater right than has its insured and thus it also cannot sue the tenant for any insured loss.”

[31]The Court of Appeal in Rowlands also referred to the passage of the judgment of Laskin CJ in T Eaton & Co Limited v Smith (1977) 92 D.L.R (3d) 425 at pages 428 to 430 including the following:

“Had the landlord insured without giving a covenant to that effect in the lease [that is the covenant to insure], the tenant's risk of liability for fire resulting from negligence would be unquestionable; and if the landlord collected from his insurer, the latter would have an equally unquestionable right of recovery from the tenant in a subrogated action... where the covenant to insure is not at large but is, as in this case, a covenant with the lessee that the landlord will keep the buildings on the premises insured against loss by fire, it must be given effect against liability for fires arising from the tenant's negligence because otherwise, as a covenant expressly running to the benefit of the tenant, it would have no subject-matter ….. This is not a case where one has to consider whether there is some provision exonerating one contracting party from liability to the other for the former's negligence. Rather it is a case where a supervening covenant has been given and taken to cover by an insurance policy the risk of loss from a fire caused by negligence. An insurer could not refuse to pay a claim for loss by fire merely because the fire arose from the insured's negligence. I can see no reason why its position can be any better against a tenant, whose negligence caused loss by fire, if the lease with the landlord makes it clear that a policy was to be taken out by the landlord to cover such fires, and a policy is written which does so. In short, the insurer can claim only by subrogation under the lease.”

[32]The position in the United States was summarised by the Court of Appeal by reference to paragraph 376 of the section on Landlord and Tenant in the Corpus Juris Secundum under the heading “Insurance by Lessor”:

“Where the covenant requires the lessor to maintain insurance to provide against loss by fire or storm, it has been construed as protecting both parties, especially where it further provides that the lessor is to use as much of the proceeds as is necessary for reconstruction in the event of fire or storm, and the lessee can rely on the covenant even if the fire is caused by his negligence, or the negligence of his employees…”

[33]The Court of Appeal in England decided to follow “this impressive series of North American authorities” (see page 232 E). It rejected the insurer’s arguments that the purpose of the landlord’s covenant to insure and to apply the insurance monies for reinstatement, was simply to relieve the tenant’s liability under its repairing covenant, but not a liability for fire caused through its negligence (in the absence of an express exemption). The Court stated:

“An essential feature of insurance against fire is that it covers fires caused by accident as well as by negligence. This was what the plaintiff agreed to provide in consideration of, inter alia, the insurance rent paid by the defendant. The intention of the parties, sensibly construed, must therefore have been that in the event of damage by fire, whether due to accident or negligence, the landlord’s loss was to be recouped from the insurance monies and that in that event they were to have no further claim against the tenant for damages in negligence. Another way of reaching the same conclusion ... is that in situations such as the present the tenant is entitled to say that the landlord has been fully indemnified in the manner envisaged by the provisions of the lease and that he cannot therefore recover damages from the tenant in addition, so as to provide himself with what would in effect be a double indemnity.”

In this judgment I refer to the words I have italicised in that passage as the Rowlands principle (see also the headnote at

[1986] QB 212

B-C).

[34]The Court of Appeal also relied upon considerations of “justice, reasonableness and public policy” as providing complementary support for its conclusion (p 233C), which was based essentially upon the proper construction and effect of the lease itself.

[35]Mr Butler submitted that in applying the principle in Rowlands in this case, for the word “fire” one should read “flood”. Mr Davis agreed with that proposition.

[36]The defendant also submitted that the Rowlands principle applies to the tenant’s contractual liability under the tenancy just as much as to negligence on her part. The claimant accepted this proposition. Although the landlord and tenant cases referred to by the parties concerned claims in negligence for damages, there is clear authority to support the defendant’s contention that the Rowlands principle applies to contractual liabilities as well as to negligence (see for example Guard Marine and Energy v ChinaNational Chartering Company Limited (The Ocean Victory)

[2015] 1 Lloyds Reports 381

at paragraphs 74 to 75). In other words, the legal issue in this case depends upon the proper construction and effect of the tenancy agreement.

Agnew-Surpass Shoe Stores Limited v Cummer-Yonge Investments Limited

[37]I briefly refer to this decision of the Supreme Court of Canada ((1975) 55 DLR (3d)676). There the appellant was the tenant of premises in a shopping centre, of which the respondent was the owner and landlord. The lease required the landlord to insure the shopping centre, including the building in which the tenant had his premises:

“Against all risk of loss or damage caused by or resulting from fire” and required the tenant to take good and proper care of the leased premises: “Except for reasonable wear and tear ... and damage to the building caused by perils against which the lessor is obligated to insure hereunder.”

[38]The landlord’s fire insurance policy on the shopping centre provided indemnity against fires without exception for fire resulting in negligence, whether on the part of the landlord or the tenant or a third party. A fire broke out in the tenant’s premises as a result of the tenant’s negligence. The insurer pursued a claim in the landlord’s name by subrogation against the tenant. The decision of the majority of the court that the claim in subrogation failed was founded upon the terms of the lease, including(a) the landlord’s covenant to insure the shopping centre against a list of specified risks and

(b) the exception of the perils to be insured by the landlord from the tenant’s obligation to repair. Laskin CJ added at page 225:

“...where a convenant runs to the lessee from the lessor it goes beyond mere promise at large or statement of intention and enures to the lessee’s benefit according to its terms.”

Laskin CJ also relied specifically upon the requirement for the tenant to pay to the landlord any increase in insurance premiums for the building directly attributable to structural changes or improvements made by the tenant to its premises, as reinforcing the wide scope of the landlord’s insurance obligation (p 231). It does not appear that the tenant had to make any other dedicated contribution to the landlord’s cost of insurance (see pp 241 and 244-5). In the present case the claimant did not submit otherwise.

[39]The majority concluded (p. 231):

“When all the foregoing provisions of the lease are read together, they force the conclusion that the lessee is to have the benefit of fire insurance to be effected by the lessor in respect of loss or damage arising from the lessee’s negligence.”

[40]The court concluded that the covenants in the lease in that case were sufficient to place upon the landlord the risk of loss or damage by fire arising from the tenant’s negligence, adding (at p 235): “These clauses are quite inconsistent with the position of the respondent that it was protecting only its own interest without benefit to the appellant. There would be no need of covenants running to the appellant if that was the case. Thus the majority held that on the wording of the tenancy agreement in that case the lessee’s exoneration from liability to repair was defined by reference to the landlord’s obligation to insure the building and the scope of that obligation (see also the judgment of Pigeon J, page 248)

Surrey Heath Borough Council v Lovell Construction Limited

[41]In Surrey Heath Borough Council v Lovell Construction Limited

[1990] 48 BLR 108

, the Court of Appeal commented on the effect of the decision in Rowlands, albeit not in the context of a claim by way of subrogation. Dillon LJ said:

“So far as the covenants in the lease were concerned [referring to the lease in Rowlands] which were the relevant contractual provisions, the case affords no foundation whatsoever for any submission that an insurance provision necessarily and by rule of law overrides any other contractual agreement between the parties. The effect of the contractual agreement must always be a matter of construction. People are free to contract as they like. It may be the true construction that a provision for insurance is to be taken as satisfying or curtailing a contractual obligation, or it may be the true construction that a contractual obligation is to be backed by insurance with the result that the contractual obligation stands or is enforceable even if for some reason the insurance fails or proves inadequate.”

Lambert v Keymood Limited

[42]Both parties drew attention to the decision of Laws J (as he then was) in Lambert vKeymood Limited

[1999] 1 Lloyds Law Reports 80

. The defendant was the tenant of five commercial premises on a disused airfield under a oral tenancy granted by the claimant. The premises were uninsured. A serious fire took place as a result of a bonfire lit by the defendant in order to burn some rubbish. It was accepted that the tenant had been negligent. Laws J found that it was a term of the oral tenancy that the claimant landlord should arrange and pay for fire insurance on the buildings. However, he rejected the tenant’s argument, which had relied upon the Rowlands case, that the common intention of the parties was that the landlord would be indemnified by that insurance instead of being able to sue the defendant in damages for negligence.

[43]The judge held that a bare covenant by a landlord to arrange and pay for insurance does not of itself raise a conclusive presumption that any insurance taken out also enures to the benefit of the tenant. Instead, such a covenant may have that result in the absence of any further explanation.

[44]It is also important to note that because in Lambert the tenancy agreement was entirely oral and there were no other relevant clauses, the court had to determine whether it had been the common intention of the parties that the landlord would insure the premises for the tenant’s benefit by drawing inferences from factual evidence. By contrast, in the present case the entirety of the tenancy agreement was expressed in writing, and the parties agree that the issue of common intention is to be determined solely by reference to the terms of the tenancy agreement and not by reference to any factual evidence.

Barras v Hamilton

[45]In Barras v Hamilton

[1994] SC 544

the Inner House of the Court of Session followed the decision in Rowlands. The landlord had let an industrial unit to a tenant by a verbal agreement, under which the landlord was obliged to arrange buildings insurance and the tenant would pay a proportion of the premium attributable to the unit he occupied. There was no obligation upon the landlord to lay out on reinstatement any insurance monies received. Lord Ross, the Lord Justice-Clerk, with whom Lord Prosser agreed, held that the principle adopted in the Canadian cases and in Rowlands applied equally in Scotland (see page 551). He concluded that:

“In the event I am satisfied that on the basis of the principle laid down in these cases the intention of the parties must have been that in the event of damage to unit 2 by fire from whatever cause the landlord was to be recouped from the proceeds of the insurance policy and was to have no further claim against the tenant. The principle laid down in these cases appears to me to be fully in accord with earlier Scottish cases which had recognised that parties to a contract may agree as to how fire risk is to be allocated between them.”

That conclusion followed a full review by the judge of the reasoning in Rowlands and in the Canadian cases.

[46]Lord Prosser said at page 555:

“Any landlord may see it as being in his own interest to insure the property which he has let to a tenant. If a landlord simply chooses so to insure the subject, that fact will in no way alter the tenant’s liability in reparation. But if a landlord obliges himself, in a mutual contract with the tenant, to insure the subjects, that obligation, in which the tenant is the contractual creditor, must, in my opinion be regarded as having been undertaken in the tenant’s interests in return for the mutual obligations undertaken by the tenant. That the obligation to insure is undertaken in the tenant’s interests is perhaps particularly clear, where the tenant himself undertakes a specific obligation to the landlord to pay the cost of that insurance. If one concentrates upon the fact that effecting the insurance of the subjects is a contractual obligation, enforceable against the landlord by the tenant, I can see no reasonable alternative to the conclusion that as between the landlord and the tenant, the landlord is accepting that the tenant need not himself insure the subjects and will not be liable to the landlord for any loss or damage suffered by the landlord which falls within the scope of the agreed insurance. If the landlord has in fact under-insured, that will be a matter for him. But having agreed to insure the subjects, he is bound, in my opinion, in a question with the tenant, to bear those risks covered by the insurance in question, with no recourse against the tenant for any loss or damage falling within the scope of the insurance cover.”

[47]Lord Cameron of Lochbroom said at page 556:

“The starting point must be the terms of the lease and what can be deduced from them in respect to the intentions of the parties concerning insurance cover. Two questions therefore fall to be answered. The first is whether the provisions in the lease place upon the landlord the risk of loss and damage arising from a fire caused by the tenant’s negligence ...”

At page 557 he said:

“In my opinion the answer to the first question is yes. If parties to a lease agree that the cost of the insurance of the subjects let is to be borne by the tenant, but arranged by the landlord, then I consider it to be a clear inference that the insurance to be effected will include ... cover against the ordinary perils, one of which is fire. …. such cover against the peril of fire would be the ordinary cover which would extend to fire caused by accident or negligence.”

At page 558

the judge stated the principle to be derived from the authorities:

“Unless there is another explanation for the landlord’s covenant to insure, the tenant is entitled to the advantage of his payment of insurance premiums for a policy under which indemnity is given for loss by fire, including fire arising from some person’s negligence, be it that of the tenant or someone else.”

Finally, at pages 559 to 560 he said:

“Accordingly, adopting the principles which was accepted in the Berni Inns case and in the Canadian cases cited to us, I am of the opinion that the provisions of the lease in this case by which the landlord agreed to provide insurance over the let subjects against the ordinary perils including fire, in consideration of inter alia the premium therefor paid by the tenant as insurance rent, placed upon the landlord the risk of loss and damage arising from a fire caused by the tenant’s negligence insofar as that loss or damage was occasioned to the subjects let, ….. Adopting the words of Kerr LJ in the Berni Inns case at page 232 the intention of the parties, sensibly construed, must have been that in the event of damage to the let premises by fire, whether due to accident or negligence, the landlord’s loss was to be recouped from the insurance moneys and that in that event the landlord was to have no further claim against the tenant for reparation for such damage in negligence. It follows therefore that under the lease the obligation undertaken by the pursuer as landlord to insure the subjects let at the expense of the defender as tenant, imported an obligation which was for the joint benefit of the parties and therefore that the insurance cover obtained in fulfilment of that obligation by the appellant enured for the benefit of both parties, so that in respect of loss and damage sustained by the pursuer as a result of the destruction of unit 2 by fire caused by the defendant’s negligence, the respondent is relieved of any liability to make reparation for his negligence in respect of that loss and damage.”

[48]In my judgment, the following principles may be derived from the authorities:-(1) The court should construe the terms of the tenancy agreement in order to determine how the parties have agreed to allocate risk between themselves;

(2) A covenant by a landlord with his tenant to insure the demised premises in return for mutual obligations by the tenant is an important indicator that the parties intended that the tenant (a) need not take out insurance for the risk covered by the landlord and, (b) would not be liable for any loss or damage suffered by the landlord falling within the scope of that which the landlord has agreed to cover;

(3) The strength of that indicator will depend upon the other terms of the tenancy, including whether they provide some alternative explanation for the covenant to insure;

(4) The strength of that indicator is greater where the tenant is contractually obliged to pay for, or to contribute towards, the cost incurred by the landlord of insuring the premises;

(5) Other relevant indicators include terms of the tenancy which relieve the tenant from repairing or other contractual obligation in the event of damage by an insured risk, or which require the landlord to lay out insurance monies on remedying damage caused by an insured risk, or which suspend the obligation to pay rent whilst damage from an insured risk prevents use of the demised premises. But the application of the principle in Rowlands does not depend upon the inclusion of all or any of these terms in the tenancy agreement;

(6) Where applicable the principle in Rowlands will defeat a claim brought against the tenant in negligence even in the absence of a clause expressly exonerating the tenant from liability for negligence. I would add that Woodfall’s Law of Landlord and Tenant also treats the covenants discussed in Rowlands as factors or indicators in deciding whether the court should infer that the parties’ common intention was that the landlord would look to an insurance policy rather than the tenant for indemnification, rather than as prerequisites for drawing that conclusion (see paragraph 11-104).

[49]It follows from the principles set out above that I must reject one of the main submissions made by the claimant, namely that the Rowlands principle does not apply unless the tenant covenants to pay insurance rent, or some other sum dedicated to covering the cost of the insurance taken out by the landlord for the demised premises. I am reinforced in that conclusion by two further points. First, in the Agnew-Surpass case the tenant was only liable to pay the landlord any increase in insurance premiums attributable to structural changes or improvements made by the tenant (see page 231). In Rowlands Kerr LJ stated that out of the Canadian cases the terms of the lease considered in Agnew-Surpass were most closely in line with those before the Court of Appeal. Second, the landlord’s covenant to insure forms part of a series of mutual obligations which include the rent which the tenant covenants to pay in return for the landlord’s obligations. The incidence of the obligations undertaken by the landlord or by the tenant generally affects the level of rent payable in the market for premises. For example, the level of rent payable for premises can be affected by whether the landlord takes on the obligation to repair premises and/or whether he takes on the obligation to insure premises.

[50]It was also common ground at the hearing that typically a rack rent receivable by a landlord will cover the costs of the obligations he undertakes to perform, so as to leave him with a net return on his capital asset. Thus, even when there is no dedicated provision for the payment by the tenant of the entirety of the cost of insurance, where a tenant pays a full open market rent (without a premium) he will normally be paying for, or at least substantially contributing towards, the cost of the landlord’s various obligations, including any covenant to insure. For example, in the present case the annual rent for the cottage was £31,200 per annum. The claimant did not suggest that that figure failed to cover the costs of the landlord insuring the premises and complying with her other obligations to the tenant.

The effect of the tenancy agreement in this case

[51]It is common ground between the parties that the tenancy agreement in the present case was for a short-term letting of residential property using the standard form terms of a large managing agent. However, I should add that the drafting of the form is, to put it at its lowest, unclear and even self-contradictory in several places. It does present some problems of construction which emerged during argument.

[52]The first indicator as to how the parties agreed to distribute risk is contained in clause 3.5.1 of the tenancy by which the landlord agreed with the tenant to insure (inter alia) the building to cover any public liability:

“as well as compensation for any loss suffered by the landlord.”

[53]The second phrase is very broad. Taken literally it would include any breach of any of the tenant’s covenants, which would not appear to have been the parties’ intention. However, I do not have to decide that issue, because it is common ground that the insurance obligation covered the landlord’s loss in this case, whether expressed as negligence or as a breach of clause 2.3.12 on the tenant’s part.

[54]Second, although the tenant was not required to pay a separate insurance rent to cover the cost of the premium for the policy which the landlord had to take out, by clause 2.23.1 the tenant covenanted not to do anything which could vitiate the insurance policy or result in the premium being increased and:

“To repay to the landlord all sums from time to time paid by way of increased premiums and all reasonable expenses incurred by the landlord in or about any renewal of the said policy rendered necessary by a breach of this provision.”

That obligation is similar to the provision treated by the Court in the Agnew-Surpass case as being relevant (page 231). Moreover, the tenant contributed to the cost of the insurance taken out by the landlord through the payment of rent.

[55]Third, there was no covenant by the landlord to lay out insurance monies on remedial works, but that is not an essential requirement in order for the Rowlands principle to apply (see Barras).

[56]Fourth, it is important to consider the relationship between damage caused by insured risks, the insurance policy and the distribution of risk between the parties under the terms of the tenancy.

[57]Clause 5.4.1 deals with the premises becoming uninhabitable by any of the “insured risks”. The term “insured risks” is not expressly defined in the agreement, but it was common ground that it should be taken to refer to the risks insured by the landlord under clause 3.5.1. Clause 5.4.1 reads as follows:

“If the Premises shall be destroyed or damaged by any of the “Insured Risks” so as to be unfit for habitation and use, the rent hereby reserved shall cease to become payable until the Premises have been rendered fit again for occupation and provided that the Landlord’s Insurance shall not have been vitiated as a result of any act or omission by the Tenant, his family, any occupier, guest or contractor of the Tenant or the Insurer pays to re-house the Tenant then the Tenant or Landlord may by giving written notice to the other or the Agent terminate the Tenancy forthwith in which event any rent which may have been paid by the Tenant in respect of any unexpired period of the Tenancy shall be repaid by the Landlord.”

[58]The first part of this clause provides that if the cottage were to be so damaged or destroyed as to be uninhabitable or unusable, the tenant would cease to be responsible for the rent, even if the tenant was at fault, whether through breach of contract or negligence. The clause is therefore similar to the provision upon which the Court of Appeal in Rowlands based its reasoning (at pages 223 and 225). It plainly transfers to the landlord the risk of the tenant having to pay rent for premises which cannot be used, and converts it into a claim for loss of rent, for which the indemnity provided by the insurance policy is the landlord’s sole remedy. This part of clause 5.4.1 directly supports the tenant’s defence to the claim for loss of rent, which stands at £15,900.

[59]The second part of clause 5.4.1 gives both the tenant and the landlord an option to terminate the tenancy provided that (inter alia) the tenant has not been responsible for the insurance contract becoming vitiated. Subject to that proviso, even where the tenant has caused the damage, and even if that damage was caused by the tenant’s breach of contract or negligence, he or she may terminate the tenancy.

[60]Clause 2.24.1 deals with other consequences of the premises being destroyed as follows:- “If either the whole or part of the Premises is destroyed or damaged by fire, tempest, flood, explosion or other cause during the Tenancy and the total or part of the insurance money due under the Landlord’s policy which covers such risks is not paid due to an act or failure of the Tenant, his family, visitors or contractors then the Tenant will pay the sums that are irrecoverable in addition to the Rent to the Landlord and the reasonable professional fees incurred by the Landlord.”

[61]The “risks” referred to are risks which the landlord is expected to insure against (i.e. under clause 3.5.1). If through the tenant’s fault the whole or part of the insurance monies which would otherwise be payable to the landlord are not paid, the tenant must pay that irrecoverable amount, or shortfall, to the landlord “in addition to the Rent.” Two things follow. First, it would appear that clause 2.24.1 qualifies the suspension of rent provision in the first part of clause 5.4.1, which does not contain any qualification to deal with a vitiation of the insurance policy caused by the tenant. Second, it was thought necessary to include 2.24.1 in order to deal with all other losses resulting from insured risks, including losses caused by the tenant, which are covered by the insurance policy. Where that insurance contract is not vitiated by the tenant’s acts or omissions, then the clear implication is that the landlord’s remedy is to recover his loss from the insurer and not from the tenant by claiming damages.

[62]In my judgment, clauses 2.24.1, 3.5.1 and 5.4.1 are important in understanding how risk is distributed in this particular contract, with the intention that the landlord should rely upon her insurance policy for loss and damage caused by the insured risks. That distribution of risk between landlord and tenant does not distinguish between insured risk losses according to whether they are caused by negligence or breach of contract on the tenant’s part. These clauses form an important part of the framework of the tenancy agreement for assessing the significance of the other provisions referred to in argument.

[63]I deal briefly with clause 2.30.1 which was relied upon by Mr Davis to support the claimant’s case, albeit faintly. In summary, this provision enables the landlord to recover costs, commission, other loss and expenses (inter alia) arising from a range of actions taken by the landlord to enforce her rights, including “any major breach by the tenant of this agreement.” Contrary to the claimant’s submission, this clause does not deal with damages for losses caused by a breach of contract. The focus instead is on the recovery of costs and expenses incurred in enforcing the tenancy agreement. I also note that this provision does not deal with damages for breaches of the agreement which are less than “major”. More to the point, clause 2.30.1 does not deal with the effect of the landlord’s obligation to insure, or impact upon those clauses which do deal with that subject.

[64]Thus far, the clauses examined clearly show that it was the common intention of the landlord and tenant under their agreement that the landlord’s insurance would be for the benefit of both parties and that risk in relation to the landlord’s loss or damage caused by insured risks (even where the tenant is responsible) be dealt with by recourse to the insurance policy which the landlord was obliged to take out, and not as a claim for damages against the tenant. In some instances where the tenant is held responsible for vitiating the insurance policy, liability is imposed upon the tenant, but that situation did not arise in the present case.

[65]The remaining clauses referred to in argument, namely clauses 2.3.1, 2.3.2, 2.3.4, 2.3.12, 3.4.1, 3.4.2 and 7.6, are all concerned with the responsibility of the parties for the condition of the premises. They were relied upon primarily by the claimant. The issue is to what extent do they modify or displace the provisional conclusion reached above, in the context of damage by an insured risk which rendered the cottage uninhabitable. Not surprisingly for a short-term tenancy of this nature, the main repairing responsibilities were imposed upon the landlord.

[66]Clause 3.4.1 requires the landlord to comply with section 11 of the Landlord and Tenant Act of 1985, an obligation to repair (inter alia) the structure and exterior of the dwelling, certain installations in the dwelling, for the supply of water, gas and electricity and for sanitation, and installations for space heating and heating water. This clause throws no light on how defaults by the tenant are to be dealt with.

[67]Clause 3.4.2 requires the landlord:

“To provide and maintain the Premises Contents Fixtures and Fittings in good repair during the Tenancy except in respect of damage caused by the Tenant or any person residing or sleeping in or visiting the Premises, for which the Tenant is to be solely responsible and liable to repair.”

[68]Even if the closing words of this provision were to be treated as enlarging the tenant’s repairing covenant in section 2 of the agreement, they say nothing about the interaction between “damage caused by the tenant” and the landlord’s insurance for the insured risks. In particular, the closing words contain nothing to indicate that they impose a pecuniary liability upon the tenant, notwithstanding the approach taken elsewhere in the agreement, for example in clauses 5.4.1 and 2.24.1 (see paragraph 61 above and also paragraphs 70-1 below).

[69]Turning to the tenant’s obligations, clause 2.3.4 is a provision typically found in a short-term letting of a dwelling. It reads:

“To use the Premises in a reasonable manner and to keep the furniture effects or other items forming part of the contents specified in the Inventory, together with the interior of the Premises, clean and in the same order and preservation as at the commencement of the Tenancy (fair wear and tear and damage by accidental fire and the Insured Risks only excepted.”

This clause expressly excludes the tenant from liability for insured risks and operates in the same manner for the distribution of risk between the parties as clauses 3(4), (5), (6) in Rowlands (see [1986] QB at pp. 221-2, 225 and 233).

[70]Clause 2.3.1 only requires the tenant to:

“To take reasonable precautions to keep the interior and exterior” of the property in the same repair and condition as at the commencement of the tenancy. Given the opening words of the clause, the claimant did not suggest that this was a repairing obligation. Indeed, if clause 2.3.1 were to be so construed, it would contradict clause 3.4.2. The drafting is unclear, but it would appear that the clause is aimed at requiring the tenant to avoid damaging the premises, taking their condition at the start of the tenancy as a benchmark. “Fair wear and tear due to reasonable and normal use and damage by accidental fire and other Insured Risks is excepted unless the same shall result from any act or omission on the part of the Tenant ….”

. This is not happily worded. “Fair wear and tear” would normally include acts or omissions on the part of the tenant and so the imposition of liability for such matters in the final part of the clause cannot be taken to apply literally to the words of exception which precede it. Likewise, the object of the exception is to exclude the tenant from being liable for Insured Risks, unless an act or omission on the part of the tenant causes the insurance for such risks to be vitiated.

[71]For the purposes of deciding whether the principle in Rowlands applies, I do not consider that this clause is materially different from clause 3(4) in that case (see page 222) a fortiori in the context of the provisions already considered.

[72]Clause 2.3.2 only imposes a liability on the tenant in respect of the decorative condition of the premises. In any event, the structure of this provision and its exclusions are the same as clause 2.3.1 and so the same conclusion applies.

[73]Clause 7.6 was a special condition inserted into this particular tenancy agreement. It provided:

“Notwithstanding and subject to the provisions of Clause 2.24 (Destruction of Premises) above the Tenant agrees not to have or permit any open fires within the grounds of the Premises, such fires to include but not limited to bonfires and charcoal barbecues, which may generate sparks so as to cause an increased risk of fire damage to the thatched roof of the Premises. For the avoidance of doubt responsible use of open fireplaces within the Premises (if any) is permitted. It is also agreed to avoid doubt that if the Tenant has or allows any open fires within the grounds of the Premises the Tenant will be liable to compensate the Landlord in full for any fire damage suffered to the Premises.”

[74]The drafting and effect of parts of this clause are unclear, beginning with the words “Notwithstanding and subject to ... clause 2.24.” Nonetheless, clause 7.6 does expressly impose an obligation on the tenant to compensate the landlord for any fire damage to the premises resulting from any open fire in the grounds. This clause is a highly specific provision indicating that damages are recoverable notwithstanding the scheme for indemnification by the landlord’s insurance contained in the body of the tenancy agreement. The fact that it was thought necessary to include such a specific obligation and remedy is consistent with the view that damage by insured risks caused by the tenant is otherwise to be compensated by insurance monies in accordance with Rowlands.

[75]Clause 2.3.12 is designed to prevent pipe breakages and water damage resulting from frost. To that end the tenant is required to provide background heat at all times during the winter, especially when the property is vacant. However, unlike clause 7.6, which was inserted specifically for this letting, the standard provision in clause 2.3.12 does not provide for the tenant to pay compensation or damages in the event of breach. Read alongside clauses 2.3.1, 2.3.2 and 2.3.4, in my judgment clause 2.3.12 does not displace the intention of the parties revealed by the other provisions to which I have referred, namely that(i) the landlord’s insurance policy will be for the benefit of both parties and

(ii) loss and damage caused by the tenant and falling within the insured risks should be indemnified under the landlord’s insurance policy taken out under clause 3.5.1 and not by a claim in damages against the tenant.

[76]The above reasoning is sufficient for me to decide that by virtue of Rowlands and related authorities the claimant is not entitled to bring the pleaded claims for damages against the defendant, whether under clause 2.3.12 or in negligence, because they fall within the scope of the landlord’s obligation to insure and, according to the terms of this particular tenancy agreement, it was the common intention of landlord and tenant that the landlord’s sole remedy would be to claim on that policy. For these reasons the subrogated claim by NFU Mutual must fail. I should add that in this case the landlord brought a purely monetary claim and the issue was whether, by virtue of the tenancy agreement, the landlord was to be indemnified solely by the insurance policy and not by way of damages against the tenant. This case did not involve a claim to enforce a forfeiture clause and no argument was addressed as to the extent to which such a provision would affect the application of the Rowlands principle.

[77]For completeness I briefly address considerations of justice, reasonableness and public policy referred to at page 223 of Rowlands, noting that the insurers in this case have not relied upon such matters in order to support their claim.

[78]Parties to short-term tenancies of this type, containing a landlord’s covenant to insure, are likely to expect that insured risks would be covered by that insurance and therefore, in the event of damage by an insured risk occurring (even if caused by the tenant), they would also expect that the landlord would be indemnified by the insurance policy which has been taken out for the benefit of both parties. The parties would not expect that the landlord could choose instead to claim damages for the loss from the tenant, whether in negligence or for breach of contract. Such an outcome would simply benefit the insurer. If, however, the insurer indemnifies the landlord and then is able to recover that amount by subrogation from the tenant, then the tenant would need, as was submitted by counsel for the tenant in the Rowlands case, to seek their own insurance to cover their liability for the same risks. That would introduce additional and unnecessary insurance costs. Although the landlord’s insurance covers risks for damage caused by the tenant, whether accidental or negligent, if the landlord’s insurer were to be entitled to recover by subrogation from the tenant the amount paid to the landlord, the benefit conferred upon the tenant by the landlord’s covenant to insure would, to that extent, be negated.

[79]Although there has been no evidence from the parties as to the effect of these matters on the market, as a matter of common sense potential tenants would be surprised if they were not protected by the landlord’s insurance, especially as they have contributed to the cost of that insurance through the rent they pay as compared with other lettings where the landlord does not covenant to take out insurance. If they were to be accepted, the claimant’s contentions could therefore have a negative effect upon some rental values in the market, to the disadvantage of landlords.

[80]Insurers who issue policies on tenanted properties do not influence the terms of those tenancy agreements. By virtue of the Rowlands case the risk of whether they are entitled to rely upon subrogation depends in any event upon the terms agreed in tenancy agreements already entered into by other parties. There has been no evidence as to whether that legal reality, which has existed for many years, has already been reflected in risk assessment by insurers and the premiums they charge, or the extent to which those premiums assume recovery from tenants by subrogation.

[81]Taking all these matters into account, I do not consider that the conclusion I have reached would be contrary to any principles of public policy, reasonableness or justice.

[82]I have set out these further observations for completeness but, as I have said, they are not essential to my decision, which rests upon the construction of the terms of the tenancy agreement in this case and established legal principle.

The factual issue

[83]Lastly, I turn to the factual issue upon which the claimant bears the burden of proof applying the civil standard. I approach this in accordance with the principles laid down in decisions such as Re B

[2009] 1 AC 11

. Mr Butler also relied upon a passage in the judgment of Stuart-Smith LJ in Ikarian Reefer

[1995] 1 Lloyds Reports 455

at page 459 where it was held in the circumstances of that case, and not as an immutable principle, that the burden of the proof borne by the claimant was not discharged if the evidence failed to exclude a substantial possibility that the damage was attributable to some other cause for which the defendant was not responsible. Mr Davis did not dispute that that approach should be applied in the present case, consistently with subsequent authorities such as Re B.

[84]In this case it is common ground that the tenant had only recently moved in at the beginning of the tenancy on 23 December 2009. The weather was cold. She and her partner decided to move back to London on 27 December 2009 for the New Year. At that stage the daytime temperature was only about two degrees. No more detailed evidence on temperatures during this period was given by either side. People in general are aware of the need to protect water pipes in buildings from becoming frozen, as well as the need to lag pipes. But, of course, not all pipes are lagged and there is also a general awareness of the need to keep the air temperature in a building significantly above zero during the winter.

[85]The defendant is a physicist. As a Russian, she is familiar with winter conditions in her country and the need to maintain an adequate temperature in a house, even when unoccupied. I find that she must have been aware of the risk of frozen pipes leading to water leakage or flooding at the time in question. The issue is whether nevertheless the claimant has shown that it is more probable than not that the defendant decided to turn the heating off when she left the cottage on 27 December 2012 and did so. The defendant maintains that she checked, amongst other things, the lights, taps, windows and heating system. She left one lamp on for security reasons, checked that the heating was on and then made sure that the property was locked up and left. She was the last person to leave the cottage that day.

[86]In cross-examination the defendant was asked whether she had by this stage read through the tenancy agreement. She said yes. Indeed, in an email dated 30 November 2009 from the defendant to the managing agent at Hamptons, Mr Clyesdale, she stated that she had looked at the agreement and considered it to be workable. She raised some questions, but also asked to see the landlord’s insurance for the property at that early stage. She therefore showed herself to be acting as a sensible, prudent occupier of property would do.

[87]I turn to examine the evidence relied upon by the claimant. Mr David Puddephatt, used to maintain the cottage and the gardens for Mrs. Frasca-Judd. It had previously been occupied by the claimant, but once the property was let he said that he would visit it only once a week, mainly to deal with the garden. He said the inside of the property was not his business.

[88]Mr Puddephatt said that he was uncertain as to whether he had visited New Zealand over the Christmas period of 2009, but an email dated 31 December from the claimant indicates that he was absent from the UK over that period and was not due to visit the property again until 6 January 2010. He said he visited on 14 January 2010 before 9 am. He walked around the perimeter of the property and looked through the back door to the kitchen. He saw water coming down through the ceiling in several places and he went inside. The house was very cold. He said the temperature inside was around the same as that outside, which he thought was between minus 2 and plus 4 degrees Celsius. It was clear, he said, that the heating was not on. He did not claim to have looked at the heating controls. He called the claimant’s plumber, Mr Neil Sheppard. Mr Puddephatt says that he did not switch off the heating and that Mr Sheppard “discovered that the heating was switched off.”

[89]No further details were given about the circumstances in which that discovery was said to have taken place. No direct evidence was given in-chief by Mr Puddephatt that he inspected the controls with Mr Sheppard and so, not surprisingly, he was not cross- examined by the defendant about this.

[90]Mr Sheppard was not called to give evidence. No description has been given in the evidence about the heating system or the controls. It was suggested by the defendant’s counsel that at some point the system was replaced. No evidence about the controls has been obtained for the relevant period in 2010.

[91]The defendant says that the boiler looked about 30 years old. Mr Puddephatt said the boiler was not new. He said it was serviced, but was unable to give details about the service history.

[92]The only other live witness called for the claimant was the claimant’s loss adjuster, Julia Pearce. In paragraph 13 of her witness statement she told the court that she telephoned Mr Sheppard to establish whether the heating had been switched on when he arrived at the scene. She referred to a contemporaneous file note of her conversation with him in which he is recorded as having informed her that the leak was caused by the pipes freezing and that the system was switched off when he arrived at the property. No further detail was given. The file note dated 20 January 2010 simply says:

“Heating ? - Off at time of discovery.”

[93]At one point in her evidence Ms. Pearce suggested that the electricity supply to the cottage had tripped because of the water damage. In fact, there is no evidence to support that. Her file note at page 184 of the trial bundle A simply says “electric - tripped.” No one has given any evidence as to why the supply had tripped and whether it is possible that it had tripped before the pipes became frozen. Likewise, no evidence has been given as to the position of the electrical circuits relative to the location of the leaks. Some or all of these questions could perhaps have been addressed by Mr Sheppard if he had been called.

[94]The main piece of evidence relied on by the claimant was a copy of a screenshot entered by Mr Clyesdale on his computer at Hamptons, which reads as follows:

“Received a call from the landlord today who confirmed that her gardener had visited the property today to discover that the pipes had burst and water was pouring through the ceilings of the property resulting in the ceilings falling through and a number of rooms being flooded. The landlord asked me to call the tenant to inform them of the situation, find out when they last visited the house and to find out if they had left the heating on in the house while they were not there. I spoke to Mr Sullivan [partner of the tenant and named occupant] who confirmed that they were last in the house over the Christmas period. I asked him if they had left the heating on in the house when they left and he said: ‘No. We turned everything off. The only thing that we left on was the fridge.’”

It is to be noted that this record of the screenshot record was retained in Hampton’s filing system. It sets out the specific instruction from the claimant to ask whether the heating system had been turned on and the answer to that question which Mr Clyesdale recorded.

[95]No Civil Evidence Act notice was served in relation to this material, but on 3 March 2014 the claimant’s solicitor wrote to the defendant’s solicitor disclosing the document and calling for an explanation. Unfortunately, Mr Sullivan is deceased. His date of death has not been given in evidence. It appears from a letter from the defendant’s solicitors of 4 April 2014 that he was alive at that time. Even in the absence of a Civil Evidence Act notice, it must have been obvious to the defendant’s advisors that the claimant would rely on the document. The defendant’ initial objection to the admissibility of it was withdrawn during the trial.

[96]The parties agree that it is a matter for the court to assess the weight to be given to the copy of the screenshot. Mr Clyesdale was not called. It appears that he is no longer employed by Hamptons. However, no information however has been given to the court as to when he ceased to be so employed, or as to any steps taken to locate him and, if any steps were taken, the results.

[97]I note that Hamptons had email communications with the defendant after 14 January 2010. The gist of these is that the defendant was saying that the landlord should contact her insurers and that she had no liability for the loss which had occurred. In his responses by email Mr Clyesdale referred to the tenancy agreement, but most surprisingly he did not refer to what apparently had been said by Mr Sullivan.

[98]On 26 January 2010 the defendant’s solicitor then wrote to Hamptons to deny liability and they asked for confirmation by return(a) that there were no grounds to suggest that their client was responsible for the damage and

(b) that the damage was caused by an insured risk.

[99]Mr Clyesdale responded on 28 January 2010 that he was unable to give the confirmation sought. Once again, he did not refer to the conversation which, according to the screenshot, is said to have taken place with Mr Sullivan.

[100]On 24 February 2010 the loss adjuster wrote to the defendant referring to clause 2.3.12 of the tenancy agreement and stating:

“We understand that when you left the premises the central heating was not left on and accordingly the resulting damages was entirely foreseeable.”

Once again no reference was made to any conversation with Mr Sullivan or to what the latter is supposed to have said.

[101]On 26 February 2010 the defendant’s solicitor wrote to the loss adjuster asking to see any evidence supporting the allegation that the flooding had been caused by the bursting of frozen pipes allowing water to escape. The solicitor sent a chasing letter on 3 March 2010. On 15 March 2010 an email was sent by Mr Sheppard to the loss adjuster repeating the state affairs as he found it when he visited on 14 January:- “Upon arrival the heating was found to be switched off. However, there was someone else there at the time of our arrival who was trying to find the mains water stopcock to isolate the water supply. We do not know whether he switched the heating off or not.” The only reply from the loss adjuster to the questions posed by the defendant’s solicitor was the terse reply dated 17 March 2010 which merely enclosed that email. Still no reference was made to what Mr Sullivan is supposed to have said.

[102]When eventually the screenshot was disclosed by the claimant’s solicitors on 3 March 2014, a reply was sent by the defendant’s current solicitors dated 4 April 2014 in the following terms:

“Dealing with your letter of March 2014, we have received our client’s instructions. Our client does not agree that Mr Clysedale’s purported attendance note is an accurate record of what was said to him by Mr Sullivan and can only think that Mr Clysedale misheard or misunderstood Mr Sullivan, or in haste inaccurately recorded what he heard. Our client states that Mr Sullivan was in her company when he had the telephone conversation with Mr Clysedale. Our client and Mr Sullivan state as follows. Mr Sullivan was not the last person to leave Moat Cottage; Mr Sullivan - who was driving them back to London - and our client’s daughter waited in the car while our client finished in the Cottage and locked up. Our client states that she checked the taps in the bathroom and in the kitchen toilet, and that the lights were off; she then checked that the boiler was on. She states that final actions before leaving the Cottage was to turn on the lamp in the conservatory (because it was on when they arrived at the Cottage and our client assumed it was left on for security reasons when the Cottage was empty) and she checked that the radiators in the conservatory were on. Please be aware that our client states that the boiler was not on when they arrived at the cottage.”

Of course, so far as that letter’s reference to Mr Sullivan is concerned, it is another hearsay statement. But the defendant gave evidence in court entirely consistent with that response to the claimant’s allegation based upon the screenshot.

[103]I then turn to section 4 of the Civil Evidence Act and in particular the non-exhaustive considerations set out in sub-section 2. First of all under sub-paragraph (c) the screenshot involves multiple hearsay. Second, under sub-paragraph (a) of course the late Mr Sullivan cannot be called give evidence. But there is no explanation in evidence as to why Mr Clyesdale (or even Mr Sheppard) was not called and that is a significant factor, particularly in view of the response from the defendant’s solicitor by letter dated 4 April 2014. As for sub-paragraph (b) it appears that the record was inputted into Hampton’s computer system on the same day as the conversation. So far as paragraphs (d), (e) and (f) are concerned, they do not apply so as to reduce the weight otherwise to be given to the statement.

[104]There is a head on conflict between the contents of the screenshot and the defendant’s live evidence. But, as I have already noted, her explanation in live evidence is consistent with that which was said by her solicitor in April 2014. In my judgment, cross-examination did not undermine her evidence or reveal her to be unreliable on these matters as a witness. Furthermore, it is highly surprising that in early 2010 no reference was made to any statement by Mr Sullivan, despite the fact that there were several opportunities to do so. That reinforces my concerns that the claimant’s insurers have not called Mr Clysedale and have given no proper explanation for this, which is all the more surprising in a case where the legal expenses are substantial in relation to the sum claim. I also note that no witness statement from Mr Sheppard has been served.

[105]Given the weaknesses in the the claimant’s evidence and the burden of proof borne by the claimant, I am wholly unable to say that Ms. Golovina’s evidence should not be accepted on this issue. Accordingly, I find on the balance of probabilities that when she left the cottage on 27 December 2009 she did leave the heating system on. The possibility that the heating system failed subsequently cannot reasonably be excluded.

Conclusions

[106]For all the reasons set out above the claim is dismissed.

[107]I also dismiss the defendant’s appeal against the order of Master Leslie (see paragraphs 12 to 15 above). Although I have reached clear and firm conclusions on the construction of the tenancy agreement and the application of the Rowlands principle, I have had the benefit of more extensive submissions and research into the case law than did Master Leslie. On the material before him, I do not think that Master Leslie could properly be criticised for deciding at that stage that the claim was sufficiently arguable such that the defendant’s application to strike out and for summary judgment should be dismissed.