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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> McHale v Cadogan [2010] EWCA Civ 14 (21 January 2010) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2010/14.html Cite as: [2010] 4 EG 113, [2010] EWCA Civ 14, [2010] NPC 6, [2010] HLR 24, [2010] 14 EG 110, [2010] 1 EGLR 51 |
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ON APPEAL FROM THE LANDS TRIBUNAL
THE PRESIDENT AND MR P R FRANCIS FRICS
LRA/44/2007
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE RIMER
and
LORD JUSTICE PATTEN
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McHALE |
Appellant |
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- and - |
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THE RT HON CHARLES GERALD JOHN EARL CADOGAN |
Respondent |
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Anthony Radevsky (instructed by Messrs Pemberton Greenish) for the Respondent
Hearing dates : Tuesday 15th December 2009
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Crown Copyright ©
Lord Justice Rix :
"TO use its best endeavours to provide for the premises throughout the said term a full-time Caretaker…who shall reside in the Caretaker's flat rent-free as a licensee on a service basis…"
"The cost of employing a housekeeper or housekeepers and also in respect of the accommodation (if any) to be provided for such housekeeper or housekeepers (a) the cost to the Lessor of outgoings for such accommodation (including loss of rack rent thereon)…"
"24. In our judgment, if paragraph 3 of the Third Schedule, in providing for the recovery of the cost of housekeeper's accommodation within the building, could only be referring to the caretaker's flat in the basement, the specific inclusion of "the loss of rack rent" within the definition of the "maintenance contribution" would, notwithstanding the provisions for certification of such charges being "incurred", entitle the under-lessor to include the rack rental value of the basement flat, precisely because the language is used in the context of the head-lease which requires it to be let rent-free. We would be forced to give some meaning to the provision, rather than reject it as meaningless or mere surplusage or an obvious mistake, and that is the only meaning it could have."
"Once, however, it appears that the words could, at least theoretically, have meaning and effect even if they do not entitle the underlessor to recover a loss which he has not in fact suffered, there is no reason to construe "the cost of providing such accommodation (including loss of rack rent thereon)" as including a loss not incurred or suffered in an amount made irrecoverable by the terms of the head-lease. The underlease should not be construed as entitling the underlessor to recover as part of the maintenance charge a sum in excess of providing the services, unless such construction is unavoidable."
"21…By clause XI(c) the flat is to be provided to the Caretaker rent-free. That does not preclude a provision in any underlease to charge a rent to the underlessee for the flat granted to the underlessee, fixed by reference to the market value of the Caretaker's flat. No more does it, in my judgment, prohibit the requirement of a covenant to pay the same sum under the name of a service charge but recoverable as rent. On its proper construction there is nothing in the headlease to affect the question to be decided, save that it is part of the context under which the underleases must be construed, that the headlessee is bound to provide a Caretaker and to accommodate him rent-free. Mr Munro accepted that such obligations could sensibly be imposed by the freeholders for estate management reasons, namely to avoid the risk of any caretaker obtaining security of tenure, but to maintain the standard of the premises for the benefit not only of the demised premises but also of the surrounding area…
25. I am forced to the conclusion that unless the words of the sub-paragraph are rejected they must be construed as entitling the second respondent to recover a notional rent of the Caretaker's flat as part of the Service Charge. That is the obligation that a reasonable tenant would perceive that he was entering into. There is no ambiguity and no need or right therefore to resort to the contra proferentem rule properly so-called…"
"this underlease does not clearly include the notional rent of the caretaker's flat forgone by the landlord in the various items that the landlord is expressly allowed to recover from the underlessee in the service charge."
Lord Justice Rimer :
Lord Justice Patten :