Rainbow Estates Ltd v Tokenhold Ltd and another

Landlord and tenant — Repairs — Covenant — Whether specific performance of tenant’s repairing covenant can be granted In 1976 the second defendant and his brother bought a Grade II listed building and later transferred the freehold to V, a company owned by the brothers. In 1993, when a bank came to enforce its charge on the property, the brothers revealed the existence of two leases of the property dated December 15 1987, each granted by V. The leases, of separate parts of the property, were granted to the first and second defendants respectively. Each lease contained a covenant by the tenant to repair the property demised. Following an appointment of a liquidator, the freehold was ultimately acquired by the plaintiff. On December 10 1997 the recorder held that the defendants were responsible under the leases for repairs. The defendants applied to amend their defence to seek rectification of the repairing covenants. The plaintiff landlord sought specific performance of the repairing covenants. Held: The applications to amend the defence were refused. An order for specific performance of the repairing covenants was granted. A modern law of remedies requires specific performance of a tenant’s repairing covenant to be available in appropriate circumstances and there are no constraints of principle or binding authority against the availability of the remedy. First, even if want of mutuality were any longer a decisive factor (which it is not), the availability of the remedy against the tenant would restore mutuality as against the landlord. Second, the problems of defining the work and the need for supervision can be overcome by ensuring that there is sufficient definition of which has to be done in order to comply with the order of the court. Third, the court should not be constrained by the supposed rule that the court will not enforce the defendants’ obligation in part. Subject to the overriding need to avoid injustice or oppression, it will be appropriate for the remedy to be available when damages are not an adequate remedy or, in the more modern formulation, when specific performance is the appropriate remedy. It follows that not only is there a need for great caution in granting the remedy against a tenant, but also that it will be a rare case in which the remedy of specific performance will be the appropriate one: in the case of commercial leases, the landlord will normally have the right to forfeit or to enter and do the repairs at the expense of the tenant; in residential leases, the landlord will normally have the right to forfeit in appropriate cases. The lack of any serious alternative remedy, the absence of any real dispute about the repairs required, the scope of the repairs and the deterioration of the state of the property and the notices served by the district council together strongly point to specific performance being the appropriate remedy. The following cases are referred to in this report. City of London v Nash (1747) 3 Atk 512; 1 Ves Sen 12 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1997] 2 WLR 898; [1997] 3 All ER 297; [1997] 1 EGLR 52; [1997] 23 EG 141, HL Gordon v Selico Co Ltd [1986] 1 EGLR 71; (1986) 278 EG 53; (1986) 18 HLR 219, CA Grist v Bailey [1967] Ch 532; [1966] 3 WLR 618; [1966] 2 All ER 108 Henderson v Arthur [1907] 1 KB 10 Hill v Barclay (1810) 16 Ves June 402; (1811) 18 Ves June 56; 2 Ves Jun Supp 451 Jervis v Harris [1996] Ch 195 Jeune v Queens Cross Properties Ltd [1974] 1 Ch 97; [1973] 3 WLR 378; [1973] 3 All ER 97; (1973) 26 P&CR 98; [1973] EGD 976; 228 EG 143 Moseley v Virgin (1796) 3 Ves 184 Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627; [1998] 05 EG 150, HL Peninsular Maritime Ltd v Padseal Ltd [1981] 2 EGLR 43; [1981] EGD 423; (1981) 259 EG 860 Posner v Scott-Lewis [1987] Ch 25; [1986] 3 WLR 531; [1986] 3 All ER 513; [1986] 1 EGLR 56; (1985) 277 EG 859 Price v Strange [1978] Ch 337; [1977] 3 WLR 943; [1977] 3 All ER 371, CA Rayner v Stone (1762) 2 Eden 128 Redland Bricks Ltd v Morris [1970] AC 652; [1969] 2 WLR 1437; [1969] 2 All ER 576, HL Regional Properties Ltd v City of London Real Property Co Ltd; Sedgwick Forbes Bland Payne Group v Regional Properties Ltd [1981] 1 EGLR 33; (1979) 257 EG 64 Tito v Waddell (No 2) [1977] Ch 106; [1977] 2 WLR 496; [1977] 3 All ER 129 Tustian v Johnston (Note) [1993] 2 All ER 673 Verrall v Great Yarmouth Borough Council [1981] QB 202; [1980] 3 WLR 258; [1980] 1 All ER 839, CA This was the adjourned hearing of a summons by the plaintiff, Rainbow Estates Ltd, under Ord 14 of the RSC in proceedings against the defendants, Tokenhold Ltd and Herman Herskovic, for arrears of rent and breach of covenant. Mark Warwick (instructed by Philippsohn Crawfords Berwald) appeared for the plaintiff; Helen Soffa (instructed by Turners, of Bournemouth) represented the defendants. Giving judgment, MR LAWRENCE COLLINS QC said: I gave judgment in this matter on December 10 1997, when I decided that the defendants were bound by tenants’ repairing obligations in leases of Gaynes Park Mansion, Epping, a Grade II listed building. The summons was stood over for further argument on the form of the relief. I am asked to decide whether the court has power (and, if so, under what conditions) to grant an order for specific performance of a tenant’s repairing covenant, which is not the subject of modern authority, although a recent Law Commission report has recommended legislation to give the court power to decree specific performance of a repairing obligation in any lease or tenancy: Landlord and Tenant: Responsibility for State and Condition of Property, Law Com no 238, 1996. Background The facts as they appear from the documents are set out fully in my judgment of December 10 1997 and I summarise them here for convenience. The plaintiff, Rainbow Estates Ltd (Rainbow), is the freeholder of Gaynes Park Mansion, Epping, Essex, a Grade II listed building. The first defendant, Tokenhold Ltd (Tokenhold), is the leaseholder of the mansion (excluding its eastern annex) and the second defendant, Mr Herskovic, is the leaseholder of the eastern annex. In 1976 Mr Herskovic and his brother bought the mansion and subsequently the freehold was transferred to Venrich Ltd (Venrich), a £100 company owned by Mr Herskovic and his brother. In about 1989 Barclays Bank advanced money on the security of the mansion. In 1993, when Barclays Bank was considering enforcing its charge on the property, Mr Herskovic and his brother revealed to the bank the existence of two leases of the property. Each of the leases was dated December 15 1987 and each was granted by Venrich: one was to Tokenhold and comprised the mansion other than the eastern annex; the other was to Mr Herskovic and comprised the eastern annex. In each case the tenants were granted leases until December 14 2004 at a rent of £5,000 pa, with the tenants covenanting ‘to keep and maintain the property in good and tenant-like repair throughout the term’ and ‘to permit the landlord and its agents at all times reasonable access to examine the condition of the premises’. When Barclays’ solicitors made inquiries about the leases from Turners, who had acted for 35 Venrich on the Barclays loan, they told Barclays’ solicitors that they, Turners, had been unaware of the existence of the leases. In June 1991 Venrich was struck off the Companies Register for failure to comply with filing requirements, and at some time in 1995 Barclays Bank applied to have it restored in order to present a winding-up petition and appoint a liquidator. In 1996 the liquidator sold the property to Senator Properties Ltd (Senator) for £150,000, which on November 5 1996 then transferred it to Rainbow for £230,000. Subsequently, in the course of correspondence and of these proceedings, Tokenhold and Mr Herskovic maintained that no rent was due under the leases and that there was no repairing obligation in the tenants, because the leases were subject to two agreements dated November 17 1987 under which the repairs were to be the responsibility of the landlord, Venrich, and under which the cost of work undertaken by the tenants could be deducted from the rent. In my judgment, I decided (on the assumption that the agreements and the leases were genuine documents): (a) that there was a conflict between the agreements and the leases; (b) that, in general, where there is a conflict between a lease and a prior agreement, the rights of the parties are governed by the lease; (c) that there was no credible evidence that the agreements and the leases were part of one transaction. The consequence was that the defendants were responsible for repairs and were in arrears with the rent. I also noted that a prior agreement may be relied on to seek rectification of the later agreement on the basis that the later agreement did not properly give effect to the real agreement between the parties: Henderson v Arthur [1907] 1 KB 10, at p13; but I also noted that in the present case there was no suggestion of mistake. Rectification claim The defendants now seek to amend their defence by adding a plea that the leases were intended to embody the agreements, but failed to do so by failing to provide that the tenants’ duties and responsibilities were limited to cleaning, handyman work and repairs, gutter cleaning, grass and hedge cutting, refuse and rubbish clearance, electricity supply, hot water supply and central heating maintenance; and that the leases were drawn up and signed under a mutual mistake of fact that keeping and maintaining the property in tenant-like repair meant not allowing the property to fall into disrepair rather than putting into repair; and a draft amendment to the prayer seeks rectification of the leases so as to embody the agreement actually made or their true intentions. In my earlier judgment I recorded the unsatisfactory nature of the evidence on behalf of the defendants about the execution of the agreements and the leases. The evidence on the present application does not even begin to address the question of mistake or the origin or execution of the documents. All that Mr Herskovic says is that his brother gave copies of the agreements and the leases to Barclays in 1989, and he produces a copy letter dated June 8 1989 from his brother- and sister-in-law to Barclays, referring to the leases. Both he and Miss Maxwell (the defendants’ solicitor) rely on the price (£150,000) on the sale by the liquidator to Senator as indicating knowledge that the freeholder was responsible for repairs, but the price does not tend to indicate knowledge and has nothing at all to do with mutual mistake. I refuse the application because: (a) the defendants seek leave to defend in circumstances where I have already heard an application under Ord 14 in which evidence of mistake should have been adduced; in the course of that application the defendants did not seek leave to defend on any such basis as is now put forward; (b) the evidence in support of the application to amend and/or for leave to defend does not present any factual basis whatever for the exercise of the discretion to rectify; there is no evidence about the inception and execution of the documents; and there is no evidence that the parties intended the leases to carry out the terms of the agreements and not to vary them; and (c) in any event, the remedy is not available if it would prejudice a bona fide purchaser for value without notice, and there is nothing in the assertion that the price paid for the property by Senator indicates that Senator (and still less Rainbow) knew that the repairing obligation fell upon the landlord. Specific performance of landlord’s repairing covenant Until relatively recently it was generally accepted that repairing covenants could not be specifically enforced, whether they were landlord’s covenants or tenant’s covenants. The decision on which that view rested was the decision of Lord Eldon LC in Hill v Barclay (1810) 16 Ves June 402. In refusing a tenant relief against forfeiture for breach of a repairing covenant, Lord Eldon said, at p405, that the landlord: may bring an action for ejectment upon non-payment of rent: but he may also compel the tenant to pay the rent. He cannot have that specific relief with regard to repairs. He may bring an action for damages; but there is a wide distinction between damages and the actual expenditure upon repairs, specifically done. Even after damages recovered the landlord cannot compel the tenant to repair: but may bring another action. The tenant therefore … may keep the premises until the last year of the term; and … the most beneficial course for the landlord would be, that the tenant, refraining from doing the repairs until the last year of the term, should then be compelled to do them. But, said Lord Eldon, ‘the difficulty upon this doctrine of a Court of Equity is, that there is no mutuality in it. The tenant cannot be compelled to repair’. The view that the landlord’s covenant could not be specifically enforced came to be based on the theory that there was no mutuality because the tenant’s covenant could not be specifically enforced, or because the works could not be adequately defined, or because effective compliance could not be obtained without the constant supervision of the court: cf Fry, Specific Performance, 6th ed 1921, at pp42–50 and pp222–223. But today there is little or no life in these reasons. First, as regards the requirement of mutuality, it is now clear that it does not follow from the fact that specific performance is not available to one party that it is not available to the other: want of mutuality is a discretionary, and not an absolute, bar to specific performance. The court will grant specific performance if it can be done without injustice or unfairness to the defendant: Price v Strange [1978] Ch 337, at p357, per Goff LJ. Second, as regards the need for precision in the terms of the order, it is: a question of degree and the courts have shown themselves willing to cope with a certain degree of imprecision in cases of orders requiring the achievement of a result in which the plaintiffs’ merits appeared strong; … it is, taken alone, merely a discretionary matter to be taken into account … It is, however, an important one. Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1997] 3 All ER 297*, at p304b, per Lord Hoffmann. *Editor’s note: Also reported at [1997] 1 EGLR 52 So also, the objection to an order for specific performance based on the need for the court’s constant supervision is designed to avoid repeated applications for committal, which are likely to be expensive in terms of cost to the parties and the resources of the judicial system, but as regards orders to achieve a result, Lord Hoffmann said, at p303c: Even if the achievement of the result is a complicated matter which will take some time, the court, if called upon to rule, only has to examine the finished work and say whether it complies with the order… This distinction between orders to carry on activities and to achieve results explains why the courts have in appropriate circumstances ordered specific performance of building contracts and repairing covenants (citing Wolverhampton Corp v Emmons [1901] 1 KB 515 (building contract) and Jeune v Queens Cross Properties Ltd [1974] 1 Ch 97 (repairing covenant)). In particular, it became settled that the court will order specific performance of an agreement to build if: (a) the building work is sufficiently defined; (b) damages would not compensate the plaintiff for the defendant’s failure to build; and (it seems) (c) the defendant is 36 in possession of the land so that the plaintiff cannot employ another person to build without committing a trespass: Snell’s Equity, 29th ed 1990, at p595. The analogy with agreements to build was relied on by Sir John Pennycuick V-C in Jeune v Queens Cross Properties Ltd [1974] 1 Ch 97 in deciding that the court could specifically enforce a lessor’s repairing covenant. In that case, tenants complained of a failure by the landlord to reinstate properly a stone balcony at the front of a house in Westbourne Terrace, London W2, comprising four flats. The tenants sought an order that the landlord should reinstate the balcony in the form in which it existed prior to its partial collapse. Sir John Pennycuick V-C acknowledged that commonsense and justice required the grant of the relief. But he acknowledged, at p99G, the view in some textbooks that: specific performance will never be ordered of repairing covenants in a lease. So far as the general law is concerned, apart from a repairing covenant in a lease, it appears perfectly clear that in an appropriate case the court will decree specific performance of an agreement to build if certain conditions are satisfied. The conditions were that the work was sufficiently defined by the contract; damages would not be an adequate remedy; and the defendant was in possession, and so the plaintiff could not have the work done without committing a trespass. These conditions were fulfilled, and after referring to the statement of Lord Upjohn in Redland Bricks Ltd v Morris [1970] AC 652, at p666, that the court must be careful to ensure that the defendant knows exactly what he has to do so that in carrying out an order he can give contractors the proper instructions, Sir John Pennycuick said there was no difficulty about that, but a difficulty arose from the decision of Lord Eldon LC in Hill v Barclay. In holding that there was no reason in principle why an order should not be made against a landlord to do some specific work, he said (obiter) of Hill v Barclay: Now that decision is, I think an authority laying down the principle that a landlord cannot obtain against his tenant an order for specific performance of a covenant to repair. In concluding that the landlord’s covenant could be the subject of an order for specific performance he said, at p101C: Obviously, it is a jurisdiction which should be carefully exercised. But in a case … where there has been a plain breach of a covenant to repair and there is no doubt at all what is required to be done to remedy the breach, I cannot see why an order for specific performance should not be made. More recently, orders have been made against a landlord to enforce a covenant to employ a resident porter; what had to be done was capable of definition, and enforcing compliance would not involve superintendance by the court to an unacceptable degree: Posner v Scott-Lewis [1987] Ch 25*, at pp33–37; and against a landlord requiring removal of dry rot, on the basis that, notwithstanding the difficulty of working out the appropriate order, damages would not be an adequate remedy: in particular, the condition of the premises was continually deteriorating: Gordon v Selico Co Ltd (1986) 18 HLR 219† (CA); see also Peninsular Maritime Ltd v Padseal Ltd [1981] 2 EGLR 43 (CA) interlocutory mandatory injunction to use best endeavours to put lift into working order; Tustian v Johnston (Note) [1993] 2 All ER 673, at p681. *Editor’s note: Also reported at [1986] 1 EGLR 56 †Editor’s note: Also reported at [1986] 1 EGLR 71 These decisions show that there is no longer any life in the proposition that the court will not grant specific performance against a landlord of a covenant to repair, either because of lack of mutuality or because of the supposed need for constant supervision; and in the case of dwellings, there is now a statutory jurisdiction to order specific performance of a landlord’s repairing covenant. The Landlord and Tenant Act 1985, section 17 (replacing Housing Act 1974, section 125) provides: In proceedings in which a tenant of a dwelling alleges a breach on the part of his landlord of a repairing covenant relating to any part of the premises in which the dwelling is comprised, the court may order specific performance of the covenant whether or not the breach relates to a part of the premises let to the tenant and notwithstanding any equitable rule restricting the scope of the remedy, whether on the basis of a lack of mutuality or otherwise. Specific performance of tenant’s repairing covenant Is there any reason in principle why an order for specific performance should not be made against a tenant in appropriate circumstances? It would not be profitable to consider whether the statements in the older authorities that tenant’s repairing covenants were not specifically enforceable were ratio or dicta: in Rayner v Stone (1762) 2 Eden 128 the basis of the decision was that the work could not be sufficiently defined; in Hill v Barclay the actual decision was that the tenant could not obtain relief against forfeiture for breach of the repairing covenant, and one of several, alternative, reasons was lack of mutuality, in the sense that if there were relief from forfeiture, the landlord would have to bring successive actions for damages since ‘the landlord cannot compel the tenant to repair … there is no mutuality in it. The tenant cannot be compelled to repair’ and otherwise the tenant would ‘have the option, against the will of the landlord, of keeping the lease upon those terms; from time to time breaching the covenant, which he cannot be compelled to perform’; see also City of London v Nash (1747) 3 Atk 512; Moseley v Virgin (1796) 3 Ves 184 dicta suggesting tenant’s repairing covenants could not be specifically enforced. The statement in Jeune v Queens Cross Properties Ltd [1974] 1 Ch 97, at p100, that ‘a landlord cannot obtain against his tenant an order for specific performance of a covenant to repair’ was obiter, as was the remark by Oliver J in Regional Properties Ltd v City of London Real Property Co Ltd [1981] 1 EGLR 33, at p34, that there was ‘grave doubt whether … a tenant’s covenant is capable of specific performance’, although he went on to acknowledge that Hill v Barclay ‘may logically be much weakened as an authority, if indeed it ever was more than a mere dictum’ by the decision of Sir John Pennycuick V-C. According to Halsbury’s Laws, 4th ed vol 27(1), 1994 (ed Colyer et al), ‘specific performance of a tenant’s repairing covenant will not ordinarily be granted’, citing Hill v Barclay, but the editors go on: This has long been stated by textbook writers to be the law but the jurisdiction to grant specific performance of contracts to do building works has developed and there seems no reason in principle why such an order should not be made if the works are sufficiently defined … and the order is not being sought as a means of circumventing the statutory restrictions on the recovery of damages… It may be that the remedy will often be inappropriate because damages will be a sufficient remedy; but this may not be so where the landlord has no right of entry and the property is deteriorating rapidly … Dowding and Reynolds, Dilapidations: The Modern Law and Practice, 1995, at pp555–559, suggest that there is no reason in principle why specific performance should not be granted: first, there is no logical reason for distinguishing between covenants to repair and other contractual obligations; second, if specific performance can be granted of a landlord’s covenant there is no reason for a different rule for a tenant’s covenant; third, there is no reason to distinguish between building obligations (for which specific performance can be granted) and repairing obligations; fourth, even if the older cases do decide that specific performance of a tenant’s obligation can never be granted, the law relating to specific performance has developed significantly: see also Woodfall on Landlord and Tenant, 1994, para 13.099; Jones and Goodhart, Specific Performance, 2nd ed 1996, at p189; Spry, Equitable Remedies, 1990, at p116. Like the editors of Halsbury’s Laws and Woodfall on Landlord and Tenant, Dowding and Reynolds suggest (at p561) that the court will not allow the remedy of specific performance to circumvent the protection which the Leasehold Property (Repairs) Act 1938 was intended to confer on tenants: although the 1938 Act does not apply to a claim for specific performance, they suggest that the court would be 37 reluctant to make an order where an action for damages or forfeiture would be subject to the restrictions imposed by the 1938 Act and where the circumstances are such that leave would not be granted. The effect of the 1938 Act is that, in the case of a tenancy of not less than seven years with three years or more unexpired, forfeiture or claims for damages for breach of repairing covenants are not available until certain conditions have been fulfilled. The effect of the 1938 Act is that the court will only grant leave if the landlord can prove that one of the conditions specified in section 1(5) of the 1938 Act have been fulfilled and that the court is satisfied in the exercise of its discretion that leave ought to be granted. The conditions are (in summary): (a) that the immediate remedying of the breach is required for preventing substantial diminution in the value; (b) that the immediate remedying of the breach is required to give effect to any enactment or court order; (c) where the lessee is not in occupation, that the immediate remedying of the breach is required in the interests of the occupier; (d) that the breach can be immediately remedied at an expense that is relatively small in comparison with the much greater expense that would probably be occasioned by postponement of the necessary work; or (e) special circumstances which, in the opinion of the court, render it just and equitable that leave should be given. In my judgment, a modern law of remedies requires specific performance of a tenant’s repairing covenant to be available in appropriate circumstances, and there are no constraints of principle or binding authority against the availability of the remedy. First, even if want of mutuality were any longer a decisive factor (which it is not) the availability of the remedy against the tenant would restore mutuality as against the landlord. Second, the problems of defining the work and the need for supervision can be overcome by ensuring that there is sufficient definition of which has to be done in order to comply with the order of the court. Third, the court should not be constrained by the supposed rule that the court will not enforce the defendant’s obligation in part: this is a problem raised by the Law Commission report, Landlord and Tenant: Responsibility for State and Condition of Property 1996, paras 9.10 and 9.13, but it is not raised elsewhere as an objection; it is by no means clear that there is such a principle, and, in any event, if there is such a principle, it applies where the contract is in part unenforceable (Jones and Goodhart, op cit, pp57–61); it does not mean that the court cannot in an appropriate case enforce compliance with a particular obligation such as a repairing covenant. Subject to the overriding need to avoid injustice or oppression, it will be appropriate for the remedy to be available when damages are not an adequate remedy or, in the more modern formulation, when specific performance is the appropriate remedy. This will be particularly important if there is substantial difficulty in the way of the landlord effecting repairs: the landlord may not have a right of access to the property to effect necessary repairs, since (in the absence of contrary agreement) a landlord has no right to enter the premises, and the condition of the premises may be deteriorating. In all cases the court must be astute to prevent oppression, even if tenants are no longer (as they were said to be in Rayner v Stone (1762) 2 Eden 128, at p130) for the most part of ‘mean and low circumstances’. The leading texts suggest that the remedy should not be available to circumvent the restrictions on the recovery of damages or forfeiture under the 1938 Act. The 1938 Act, however, does not apply to decrees of specific performance, and it would not be right to treat the legislation as covering the remedy when it does not in terms apply. That would be an impermissible extension of a statute to cover a case where it is not applicable. What the court should do is to prevent specific performance from being used to effectuate or encourage the mischief which the 1938 Act was intended to remedy. The object of the 1938 Act was to remedy the mischief of speculators or unscrupulous landlords buying the reversion of a lease which had little value and then harassing the tenant with schedules of dilapidations, not with a view to ensuring that the property was kept in proper repair for the protection of the reversion, but to put pressure on the tenant: see authorities cited in Jervis v Harris [1996] Ch 195, at pp204–205 (CA). Although the court should not use the provisions of section 1(5) of the 1938 Act as if they were applicable, it should be astute to ensure that the landlord is not seeking the decree simply in order to harass the tenant: in so doing, the court may take into account considerations similar to those it must take into account under the 1938 Act. It follows that not only is there a need for great caution in granting the remedy against a tenant, but also that it will be a rare case in which the remedy of specific performance will be the appropriate one: in the case of commercial leases, the landlord will normally have the right to forfeit or to enter and do the repairs at the expense of the tenant; in residential leases, the landlord will normally have the right to forfeit in appropriate cases. Present case The present case has the following unusual features. First, as regards the appropriateness of the remedy of specific performance, there is no adequate alternative remedy. The leases, unusually, contain no forfeiture clause or proviso for re-entry: consequently, breach of a repairing covenant will not entitle the landlord to forfeit the leases. Nor do the leases contain a term allowing the landlord access to the premises other than for the purpose of examining their condition: consequently, the landlord cannot enter the premises, carry out the works and recover the cost from the tenants. The first defendant is a £100 company and the second defendant’s means are unknown. There is no evidence as to the value of the repairs involved, but I was told by counsel for Rainbow that it was in the order of £300,000 and counsel for the defendants did not object to that figure, which does not seem at all unrealistic in the light of the photographs of the mansion in the evidence. There is evidence of serious disrepair and deterioration of the property. The statement of claim had annexed a substantial schedule of dilapidations. The counterclaim relied on the same schedule for the purposes of the defendants’ claim that Rainbow was responsible, under the terms of the November 1987 agreements, for repairs. The affidavit by Rainbow’s solicitor in support of its Ord 14 application exhibited the surveyor’s report and schedule of dilapidations and deposed that ‘the property has become seriously dilapidated’ and that the extent of the disrepair was apparent from the report. The report noted that there was ‘very considerable disrepair’ and that the schedule concentrated on those defects which affected the value of the reversion, those which if not properly repaired would lead to more extreme damage, and those which would be the subject of local authority enforcement notices. There is nothing in the evidence served on behalf of the defendants in the Ord 14 application which suggests that the contents of the schedule are denied: indeed, on the contrary, the affidavit of Miss Maxwell (the defendants’ solicitor) expressly relied on the defendants’ counterclaim, and suggested that it was a matter for evidence ‘as to who is liable for such repairs’. Only on January 28 1998 did Mr Herskovic depose that repairs were in hand and that if an order is made the defendants will have no opportunity to challenge the schedule by introducing their own surveyor’s evidence or querying the costings. This falls a long way short of raising triable issues as regards the breach of the repairing obligations, especially in the light of the fact that until then the defendants had been relying on precisely the same schedule of dilapidations. Evidence has been filed by Rainbow that Epping Forest District Council have served notices pursuant to the Housing Act 1985 and the Environmental Protection Act 1990. The effect of non-compliance with the notices under the Housing Act 1985 is that if neither the landlord nor the tenant does the work, the council may do so, and their costs are, until recovered, a charge on the premises to which the notice relates: 1985 Act, Schedule 10, para 7(1). The same result applies if an abatement notice under the Environmental Protection Act 1990 is not complied with: 1990 Act, section 81A(4). Rainbow provided a schedule showing that there is a considerable overlap between the dilapidations schedule produced by its surveyors and the works required by Epping Forest District Council under the 1985 and 1990 Acts. 38 The schedule of works required is sufficiently certain to be capable of enforcement, particularly in the light of the unusual feature that the defendants themselves relied on Rainbow’s schedule of dilapidations in making their own counterclaim in reliance on what they claimed were the landlord’s obligations under the agreements. As I have said, the defendants’ evidence on the Ord 14 application did not challenge Rainbow’s evidence verifying the statement of claim and exhibiting the schedule of dilapidations. Consequently, the lack of any serious alternative remedy, the absence of any real dispute about the repairs required, the scope of the repairs and the deterioration of the state of the property and the notices served by Epping Forest District Council together strongly point to specific performance being the appropriate remedy. Nor is there any force in the grounds on which the defendants rely to resist an order for specific performance. First, it is said that because damages could not be awarded if the requirements of the Leasehold Property (Repairs) Act 1938 are not met, then specific performance could not be ordered. There is no logical or legal basis in this argument. In any event, even if the requirements of section 1(5) of the 1938 Act should be applied by analogy, or as discretionary grounds to prevent oppression, it is plain that several of the grounds could be made out, especially: ground (a) (to prevent substantial diminution in value); ground (b) (to give effect to enactments etc); and ground (d) (increased expense due to postponement of work). I do not accept the argument (based on Tito v Waddell (No 2) [1977] Ch 106, at p326) that the order would be made in vain in support of a merely transient interest: first, there is no longer any absolute rule that specific performance will not be granted to protect transient interests: Verrall v Great Yarmouth Borough Council [1981] QB 202 (CA); second, the fact that Rainbow hopes, or intends, to sell the property at a profit does not mean that the order would be in vain. Nor can it be said (relying on Grist v Bailey [1967] Ch 532) that the order should be refused because there was a common mistake by the parties to the action as to the terms of the tenancy (ie it can be inferred from the price paid that Rainbow knew that the repairing obligation fell on the landlord). The evidence put forward by the defendants is that the liquidator of Venrich (the original freeholder owned by Mr Herskovic and his brother) sold the property to Senator for £150,000, and that shortly afterwards Senator sold the freehold to Rainbow for £230,000; and that in January 1997 Rainbow was advertising the freehold for sale at £575,000. The inference drawn is that the liquidator of Venrich sold the property, and Senator bought the property, on the basis that the freeholder was responsible for repairs. But there is no reason for that inference to be made, and if it be the case that Rainbow obtained a bargain, that is no impediment to the making of the order if its object is legitimate: in any event, the fact that Rainbow has put the property on the market for a much higher price than it paid does not prove anything if (as I was told by counsel for Rainbow) there has been no purchaser interested in such a price. Finally, it is suggested that because the leases contain options for the lessees to purchase the freehold (although there is no provision for a price or the fixing of a price and the options are not registered) it would be unjust to grant specific performance of the repairing covenants. But the question of the validity or enforceability of the options is not one for decision at this stage. There is no suggestion that the options have been exercised. The defendants counterclaim for declarations that they have options to purchase the freehold, which Rainbow denies. This unresolved claim does not make it unjust to grant specific performance of the repairing covenants; although in general the court will not compel a defendant to perform his obligations specifically if it cannot ensure that any unperformed obligations of the plaintiff will be specifically performed (Price v Strange [1978] Ch 337, at p367), here there is no evidence of unperformed obligations of Rainbow and, even if the options are valid, the repairing obligations are capable of independent enforcement. In my judgment, therefore, in the unusual circumstances of this case an order for specific performance is appropriate, subject (as in Gordon v Selico Co Ltd (1986) 18 HLR 219, at pp241–242) to liberty to apply to a master, who is to have discretion to make directions for the working out of the order. Interest on overdue rent The court has a discretion to award interest on a debt as from the date the cause of action accrued: Supreme Court Act 1981 section 35A(l); Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627. The cause of action accrued when the rent became due, and an assignee of the reversion is entitled to the rent: Law of Property Act 1925 section 141. Accordingly, interest may be, and will be, awarded as from the dates the rents were due.