High Court Determines When Condensation Indicates Disrepair

Kerry Bretherton KC and Santosh Carvalho acted in a successful appeal in the case of (1) Better Intelligent Management Limited (2) Phoenix Place (Liverpool) Management Ltd v Zaid Alothan Holdings Ltd and Others [2026] EWHC 371 (Ch) in the Chancery Division of the High Court .

The case concerned a development in Liverpool, where the long leaseholders brought claims against the freeholder and management company over window disrepair. The units were triple glazed sealed units.  The windows progressively failed over time, causing a loss of inert gas between the panes and resulting in condensation. The question on appeal was whether this was ‘disrepair’ within the meaning of the leaseholders’ repair covenants.

The case was unusual in that it was appealed to the High Court on two occasions. HHJ Monty KC held at trial and after the case was remitted to him that there was no disrepair because the defects were installation defects present from the outset rather than physical deterioration in the condition of the windows. HHJ Monty KC’s first decision was successfully appealed because Mr Justice Richard Smith found that the learned Judge wrongly focused on the condensation and misting rather than addressing the Appellants’ (freeholder and management company) actual case – that progressive failure of the window seals is disrepair. Richard Smith J remitted the case back to HHJ Monty KC to determine whether the windows were in disrepair, including the nature and cause of the seal failures and whether such failure was progressive.

Mr Justice Rajah allowed an appeal against HHJ Monty KC’s second decision. He found that the learned Judge’s repeated conflation of the latent nature of the defect with the question of whether subsequent physical deterioration had occurred was an error of law. The progressive failure of the window seals and glazed units, with the number of failed window units increasing across successive inspections, was a physical change in the windows for the worse amounting to disrepair. This was regardless of the fact that it was traceable to a latent installation defect.

Kerry Bretherton KC and Santosh Carvalho were instructed by Mr Richard Owen of HM3 Legal Services Ltd.

Read the full judgment here.