Amsprop Trading Ltd v Harris Distribution

Amsprop Trading Ltd v Harris Distribution Ltd [1997] 1 WLR 1025

Landlord and tenant – Covenant to repair – Underleases

Facts

Harris was the subtenant of a property who had covenanted with the tenant to maintain and repair the property. Further to this, the subtenant had also agreed to allow the landlord (Amsprop’s predecessor) and agents of the landlord to enter the property to examine the repairs and to recover the costs of doing so. The issue with this, however, was that Amsprop could not recover the costs of the work from the subtenant as he was not subject to the contract. Amsprop subsequently brought an action against Harris on the basis that the covenants were clearly meant to benefit the landlord and as per the Law of Property Act 1925, section 56, a person could take a benefit of a covenant even if he was not named as a party on the conveyance.

Issue

The court was required to consider whether Amsprop was a third-party to the agreement between his predecessor and the sub-tenant or whether, as per the Law of Property Act 1925, Amsprop could derive a benefit from the covenant on the basis that he was meant to derive a benefit from this.

Decision/Outcome

The court dismissed the claim that was brought by Amsprop. It was found by the court that someone who was not a party to the original contract could only gain an advantage under the Law of Property Act 1925, section 56, where it had been made for that individual’s benefit. A third party, which Amsprop was considered to be, could therefore not claim under this provision.