The plaintiff leased the defendant a storeroom and offices on the ground floor of a building he owned. para. 10 of the lease contract provided inter alias: "2. Once the tenant has entered on the premises, he is liable to the landlord for any damage he is at fault in causing ... 3. It is for the tenant to prove that there was no faulty conduct ..." At about 4.35 p.m. on 25 October 1971 a fire broke out in the store-room where the defendant kept samples of PVC, and burnt the building to the ground. On 27 October the defendant gave notice terminating the lease forthwith, as the leased property was no longer fit for use (para. 542 BGB). The plaintiff refused to accept this termination on the ground that the fire had been caused by the defendant's improper storage of the plastic samples. Despite official investigations, the cause of the fire remained unascertained.
The plaintiff claimed rent for November 1971. The Landgericht granted the claim, and the defendant's appeal was dismissed, along with its claim for a declaration that it was not at fault. The defendant's further appeal is now dismissed.
I. The Court of Appeal held that since the cause of the fire was unknown, the dispute between the parties turned on which of them had the burden of proof. It held that the burden of proof lay on the defendant, as this was 'unambiguously agreed in the contract of lease.' Under para. 10 nos. 2 and 3 of the lease contract it was for the tenant to prove that damage to the leased property was not due to any fault on the part of himself, his employees or his workers. Such a contractual allocation of the burden of proof was legally unobjectionable; indeed, it was consonant with the rule in para. 548 BGB whereby it is for the tenant to prove that any alterations or deteriorations resulted from using the property in a manner permitted by the contract. Since it was not clear what the cause of the fire was and consequently that it was not due to his fault, the defendant had not satisfied the burden of proof imposed upon him.
II. These views are unassailable.
1. It is correct that even when the leased property is destroyed, a claim for rent remains unaffected (para. 324 BGB) and the right to terminate the lease on special grounds does not arise (para. 542 BGB) if the tenant is responsible for the destruction.
2. It is also correct that in the present case it is no more possible to establish the tenant's responsibility for the fire than its cause. 3. Nor was the court below wrong to hold that the defendant tenant has the burden of proof under para. 10 nos. 2 and 3 of the lease contract, and that this contractual agreement is substantially in line with the rule in para. 548 BGB. a) In para. 10 no. 2 of the lease, the parties agreed that the tenant should be responsible for damage caused to the leased property by faulty conduct on the part of himself, his family, his workers and staff, his subtenants or any persons delivering goods to the premises or doing work on them. In para. 10 no. 3 of lease contract, the tenant accepted the burden of proving that no such faulty conduct had occurred. The appellant contends that the Court of Appeal misconstrued this clause by overlooking the 'careful distinction' drawn by the parties between causation and fault. This criticism is unfounded. It is consistent with the literal meaning and plain purpose of clause no. 10 nos. 2 and 3 of the lease to hold that the tenant has the burden of proving both the cause of the harm and the absence of fault on the part of himself and of those under his control. It would be unrealistic to treat the distinction between 'at fault in causing' in para. 10 no. 2 and 'faulty conduct' in no. 3 as anything other than a mere variation in wording. It is plain that the 'faulty conduct' in no. 3 refers to the conduct which causes the harm. Furthermore, the construction made by the court below is soundly based on the equitable consideration that if a thing is damaged the burden of proving the cause of harm and absence of fault should lie on the person who had the thing in his control or within his sphere of influence. In the present case, as in most leases, that person is the tenant. b) As the appellant seems to concede, the allocation of the burden of proof under para. 10 no. 3 of the lease in the event of damage to the leased property is consonant with the rule in para. 548 BGB: the tenant normally has the burden of proving that any alteration in the condition of the thing resulted from using it conformably with the contract (references omitted). c) The Court of Appeal took no view on the question whether the imposition of the burden of proof on the tenant under para. 548 BGB is of general application, or whether a distinction should not be drawn in view of the fact that the landlord has duties regarding the condition of the thing and its maintenance in a usable state which are correlative to the tenant's obligation to use the thing only as the contract permits. In particular, it did not inquire whether the tenant who, by doctrine and decision alike, bears the burden of proof under para. 548 BGB in cases where the landlord is claiming damages for the total or partial destruction of the property, should also bear it in cases like the present, where the landlord is claiming rent for property which is no longer usable (para. 324 BGB) and the tenant has treated this as a withdrawal of the property from use which entitles him to terminate the lease forthwith. The matter is not free from doubt. Among those commenting on para. 324 BGB there are two views. One view is that if the debtor whose performance has become impossible (here the landlord) nevertheless claims counter performance, he must prove that the creditor (here the tenant) is responsible for the impossibility. The other view is that it is for the creditor (here the tenant) to prove that responsibility for the impossibility attaches to the debtor (here the landlord) (references omitted). Leaving aside the further contested question whether para. 542 BGB applies concurrently with paras 324 ff. BGB (references omitted), it is agreed that if a landlord who is claiming rent wishes to use para. 242 BGB in order to defeat the tenant's defence that he has terminated the leased on the ground that the property is no longer usable, the landlord must prove that its inability to be used is due to the tenant's fault (references omitted). d) This case, however, can be resolved without answering these questions.
In an action for rent where the landlord has been unable to perform because the property is destroyed and the tenant has given notice of termination on the ground that it is no longer usable, the landlord, who may well have the burden of proof in cases falling under paras 324, 542 BGB, does not have it in a case like the present where it is clear that the destruction of the leased property resulted from the way the lessee used it. In such a case para. 548 BGB ousts any conflicting rule. The tenant's right to use the property generates the duty to use it only within the limits permitted by the contract. This gives rise to duties of care and protection regarding the leased property. Dangers and risks which lie in the use of the leased property, as distinct from dangers and risks which lie in its construction or in noxious external influences, are for the tenant and the tenant alone. It follows from this that, regardless of the nature of the claim being made by the landlord or of the litigational posture adopted by the tenant, the tenant must have the burden of proving that he is not responsible for harm due to the use of the leased property.
In the present case the fire cannot be due to anything other than the special use which the defendant was making of the leased premises. The fire started in the storeroom. As the speed with which the whole building was burnt down demonstrates, the material stored there was very combustible, though perhaps not highly inflammable. The fire started at 4.35 p.m., only five minutes after the end of work in the defendant's business; of course the defendant would be responsible under para. 278 BGB for any careless conduct on the part of his employees regarding fire.
In the present case the burden of proof on the defendant under para. 10 nos. 2 and 3 of the lease is the same as it would be under the rule in para. 548 BGB, on which it is modelled. e) There is no weight to the appellant's contention that para. 10 no. 3 of the lease is inequitable as imposing on the tenant 'an unlimited liability even for accidents'. The clause does not envisage liability for destruction or damage due to mere accident. There is nothing inequitable in including among those for whose fault the tenant must answer under, para. 278 BGB persons who are delivering goods or performing services. It is consistent with the rationale of the contractual, and indeed the statutory, attribution of the burden of proof, for the activities of such persons fall within the tenant's area of responsibility. But there is no need to pursue this point here, since even the defendant himself does not assert that the fire could have been due to any supplier or tradesman.
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