Craigard (Dartford) Limited & Anor v Westbury Homes (Holdings) Limited & Anor

Facts

The claimants own the freehold of a purpose-built two-storey office building at Crossways Business Park, Dartford. They bought it for £3.1m in March 2021 as a property syndicate investment. The first defendant held the building under a lease dated 9 July 2003, and the second defendant was its surety. From 2007 the first defendant sub-let the building to office occupiers, and the lease expired on 8 July 2023. The heating, ventilation and air-conditioning (HVAC) system dated from the building's construction. Its chillers ran on R22 refrigerant, which could no longer be used. The tenant's managing agents had known for years that the chillers needed replacing but put the work off, hoping the system would last until the lease ended. From the time they bought the building, the claimants told investors and sub-tenants that they planned to replace the whole HVAC system. After the lease expired they carried out a large refurbishment, including a new VRF system and a new MVHR system costing £566,089.15. They served a schedule of dilapidations and issued proceedings on 8 November 2024. They claimed £1,609,125.53 for remedial works, loss of rent and professional fees; the remedial works figure was later reduced to £1,237,571.01. The defendants accepted liability for more limited works. They also contended that section 18(1) of the Landlord and Tenant Act 1927 capped damages at £123,161, or at £1,059,695 if the claimants' case on the works was accepted.