215: Full repairing covenant required removal of asbestos at Swansea Dock
Pullman Foods Ltd v Welsh Ministers and another 
The tenant, Pullman Foods Ltd, occupied a parcel of land at Swansea Dock under a 42 year lease. The landlord, Welsh Ministers, served a notice to terminate the lease without granting a new tenancy at the end of the term. No new tenancy was sought by the tenant and the lease subsequently ended and the property was vacated.
The landlord had written to the tenant requesting the removal of any buildings on the property by the end of the term and all damage to be made good under the terms of the lease. The tenant removed part of the buildings but failed to remove the remains of the buildings which contained asbestos.
The lease contained an obligation on the tenant to:
‘Deliver up the demised premises leaving the same in good and substantial repair and condition to the satisfaction of the Landlord’.
The landlord argued that the tenant had breached the repairing covenant in the lease as they had not fully removed the buildings and had failed to leave the property in good and substantial repair and condition.
The court held that the use of the word ‘condition’ in this covenant shows that the obligation was capable of extending to doing works that went beyond strict repair. The presence of asbestos at the property meant that it was in a damaged or deteriorated condition and therefore was not left in a good condition as required by the covenant.
The tenant’s parent company, BFS Group Limited, was granted licences to enter the property and remove the asbestos and the remains of the buildings. The parent company failed to remove all of the asbestos. As a result, the contamination spread across the wider site and required extensive, costly remediation works. The landlord argued that the parent company was liable for the costs of remediation under the terms of the licences.
The court held that the parent company was liable for the full costs of remediation of the property and the tenant was liable for damages resulting from the breach of the repairing covenant.
This case demonstrates the importance of tenants carrying out environmental searches as part of their due diligence prior to entering into a lease. Tenants also need to be aware that the use of the word ‘condition’ in repair and yield up covenants may place a higher standard of repair on the tenant.