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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> 69 Marina, St Leonards-On-Sea, Freeholders of v Oram & Anor [2011] EWCA Civ 1258 (08 November 2011) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2011/1258.html Cite as: [2011] EWCA Civ 1258 |
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OF
APPEAL (CIVIL DIVISION)
ON APPEAL FROM Hastings County Court
His Honour Judge Hollis
![]() ![]() Strand, London, WC2A 2LL |
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B e f o r e :
OF
THE HIGH COURT
LORD JUSTICE HOOPER
and
LADY JUSTICE RAFFERTY
____________________
![]() ![]() |
Claimants / Respondents |
|
- and - |
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John Oram & Mohammed Ghoorun |
Defendants / Appellants |
____________________
Grace Cullen (instructed by Heringtons LLP) for the Respondents
Hearing date : 25 October 2011
____________________
OF
JUDGMENT
Crown Copyright ©
The Chancellor :
(1) "There shall also be paid by wayof
further or additional rent such sum or sums to be assessed in manner referred to in this clause as shall be a just and fair proportion
of
the amount which the Landlord may from time to time expend and as may reasonably be required on account
of
anticipated expenditure
(i) in performing the Landlord's obligations as to repair maintenance and insurance hereinafter contained
(ii) in paymentof
the proper fees
of
the surveyor or agent appointed by the Landlord in connection with the carrying out or prospective carrying out
of
any repairs and maintenance herein referred to and the apportionment
of
the cost
of
such repairs maintenance and collection between the several parties liable to reimburse the Landlord for the same and such fees for collection
of
the rents hereby reserved and the other payments to be paid by the Tenant under this clause." (clause 1(b))
(2) "PROVIDED FURTHER such just and fair proportion shall be such sum as the rateable valueof
the flat bears to the total rateable value
of
all the flats in the Building…" (second proviso to clause 1.)
(3) "The Tenant HEREBY CONVENANTS with the Landlord as follows:
(1) To pay the rents and other moneys hereby reserved and made payable at the times and in the manner in which the same are hereby made payable without any deduction whatsoever." (clause 3(1))
(4) "(12) To pay all expenses including solicitors' costs and surveyors' fees incurred by the Landlord incidental to the preparation and serviceof
a notice under Section 146
of
the Law
of
Property Act 1925 or incurred in or in contemplation
of
proceedings under Section 146 or 147
of
the Act notwithstanding in any such case forfeiture is avoided otherwise than by relief granted by the Court and to pay all expenses including solicitors' costs and surveyors' fees incurred by the Landlord
of
and incidental to the service
of
all notices and schedules relating to wants
of
repair
of
the premises whether the same be served during or after the expiration or sooner determination
of
the term hereby granted (but relating in all cases to such wants
of
repair that accrued not later than the expiration or sooner determination
of
the said term as aforesaid)."
(clause 3(12))
(5) "Subject to contribution by the Tenant as hereinbefore provided the Landlord hereby covenants with the Tenant as follows:
(1) at all times during the said term to keep in good and substantial repair and in clean and proper order and condition those parts and appurtenancesof
the Building which are not included in this demise or in a demise
of
any part
of
the Building" (clause 4(1))
"5. I am quite clear that this clause [clause 3(12)] in the lease is quite separate to clause 1(b) and this clause is an individual covenant between each tenant and the lessor.
6. I am also satisfied, having carefully considered this clause, that it does not pertain only in circumstances where a notice has been served under Section 146of
the Law
of
Property Act, which it has not in this case. There have been schedules relating to wants
of
repair that were served and the matter was referred to the LVT, who made determinations in relation to the value
of
the repairs to be done.
7. So in my view this clause falls to be determined quite exclusively from clause 1(b) and it binds the tenants in this case to paying all that they have specifically cost the lessors in termsof
dealing with these proceedings, both before the LVT and before this court, in relation to solicitors' costs."
"10. She [the District Judge] concluded that the costs before the tribunal should fall under 3.12of
the lease. Although she does not go into the details, it must be the case that in deciding that she was taking the view that the costs fell incidental to the, or in contemplation
of
the preparation and service
of
proceedings under section 146 or 147
of
the Law
of
Property Act 1925.
11. It seems to me that that was a perfectly reasonable view to have come to, and although I have given permission for this appeal, because it did seem to be a complicated issue that should be revisited. I am satisfied, having had the assistanceof
Mr Speller for the lessees and Ms Naylor for the lessors, that the District Judge was not wrong in coming to the decision she did. Especially bearing in mind that it is not now challenged that these were costs that the lessees could incur, indeed it seems they were sensible to do so as the lessees themselves were represented before the valuation tribunal and there was a question
of
equality
of
arms before that tribunal, although I know they do their best to discourage these sort
of
additional expenses."
He went on to consider and reject the other grounds of
appeal.
"an amount payable by a tenantof
a dwelling as part
of
or in addition to the rent—
(a)which is payable, directly or indirectly, for services, repairs, maintenance or insurance or the landlord's costsof
management, and
(b)the whole or partof
which varies or may vary according to the relevant costs."
It follows that the liability of
the Lessees under clause 1(b) though recoverable as rent was a service charge for the purpose
of
the legislation relating to that subject matter. That legislation is now contained in the Housing Act 1996.
"A landlord may not, in relation to premises let as a dwelling, exercise a rightof
re-entry or forfeiture for failure by a tenant to pay a service charge…unless
(a) it is finally determined by (or on appeal from) a leasehold valuation tribunal…that the amountof
the service charge…is payable by him, or
(b) the tenant has admitted that it is so payable."
Subsections (2) and (4A) plainly recognise that the s.146 procedure is applicable in the case of
re-entry or forfeiture in the case
of
non-payment
of
a service charge. Given that the definition
of
service charge includes "an amount…payable as a part
of
…the rent", the evident intention is that the s.146 procedure, as modified, is to be applicable in cases
of
non-payment
of
a service charge even when such charge is recoverable as part
of
the rent.
"(1) A leasehold valuation tribunal may determine that a party to proceedings shall pay the costs incurred by another party in connection with the proceedings in any circumstances falling within sub-paragraph (2).
(2) The circumstances are where–
(a) … ,or
(b) he has, in the opinionof
the leasehold valuation tribunal, acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably in connection with the proceedings.
(3) ….
(4) A person shall not be required to pay costs incurred by another person in connection with proceedings before a leasehold valuation tribunal except by a determination under this paragraph or in accordance with provision made by any enactment other than this paragraph."
No order for costs in favour of
the
Freeholders
was made by the Tribunal but counsel for the Lessees does not contend that this paragraph precludes recovery
of
such costs if a liability exists under the leases.
(a) "expenses…incurred by the landlord…in or in contemplationof
proceedings under s.146…"; and
(b) "…all solicitors costs…incurred by the landlordof
and incidental to the service
of
all notices and schedules relating to wants
of
repair…".
Given that the determination of
the Tribunal and a s.146 notice are cumulative conditions precedent to enforcement
of
the Lessees' liability for the
Freeholders
' costs
of
repair as a service charge it is, in my view, clear that the
Freeholders
' costs before the Tribunal fall within the terms
of
clause 3(12). If and insofar as any
of
them may not have been strictly costs
of
the proceedings they appear to have been incidental to the preparation
of
the requisite notices and schedules.
Lord Justice Hooper
Lady Justice Rafferty