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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Gilje & Ors v Charlgrove Securities Ltd  EWCA Civ 1777 (4 October 2001)
Cite as:  16 EG 182,  1 EGLR 41,  EWCA Civ 1777,  L & TR 33
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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ORDER OF THE LANDS TRIBUNAL
(His Honour Judge Michael Rich QC)
APPEAL FROM ORDER OF HIS HONOUR JUDGE RICH QC
Thursday, 4th October 2001
B e f o r e :
LORD JUSTICE MUMMERY
LORD JUSTICE LAWS
|GILJE and Others|
|- v -|
|CHARLGROVE SECURITIES LTD|
Smith Bernal Reporting Limited, 190 Fleet Street,
London EC4A 2HD
Tel: 0171 421 4040
Official Shorthand Writers to the Court)
MR T DUTTON (Instructed by Nicholson Graham Jones of London) appeared on behalf of the Respondent
Crown Copyright ©
"1. The claimants are tenants of flats within 27 Lennox Gardens, London SW1 ("the property"). The property is a mid-terraced house comprising four floors plus basement. There are six flats within the property. Five flats are let on long underleases ("the leases"). The sixth flat is in the basement and is occupied by the caretaker.
2. The defendant holds the reversionary interest immediately expectant on the termination of the leases.
3. The leases are in substantially similar terms with some variations.
4. The leases contain, amongst others, the following clauses:
`4. The lessee hereby covenants with the lessor and with and for the benefit of the owners and lessees from time to time during the currency of the term granted of the other flats comprised in the building that the lessee will at all time hereafter during the said term:
..... (2) To pay to the lessor in each year a sum equal to twelve and one half per centum per annum of:
(i) All monies expended by the lessor in carrying out all or any of the works and providing the services and management and administration called for under clause 5 (4) ......
5. The lessor hereby covenants with the lessee as follows:
..... (4) That (subject to contribution and payment as herein before provided) the lessor will maintain, uphold and keep the building (other than the parts thereof to be maintain[ed] by the lessee or any other lessee of a flat in the building) in accordance with the obligations set out in the fourth schedule hereto.
..... The fourth schedule:
Costs, expenses, outgoings and matters in respect of which the lessee is to contribute:
[In the leases of Flats 1 and 5:]
..... 6. Expenses of management to include the proper and reasonable charges of any managing agents any legal and accountancy charges properly incurred in management and including the lessor's liability of whatsoever kind in relation to this lease and the costs of enforcing the covenants herein contained.'"
"`The lessor shall provide a resident housekeeper or porter to perform the services specified in the sixth schedule hereto provided that the lessor shall not be liable to damages for any omission on the part of such housekeeper or porter for any interruption to such services.'"
"`Gas, electricity, telephone, general and water rates and internal maintenance repairs of the flat occupied by the resident housekeeper or porter.'"
"`(Duties of Resident Housekeeper or Porter):
..... 4. To reside in the flat provided in the building and to be in attendance between the hours of 7 am and 12 noon and at such other times during the day as the lessor shall require or as may be found necessary for the proper fulfilment of these duties.'"
"16. The purpose of the above arrangement"
"was to enable the defendant to recover a rent for the caretaker's flat through the service charge as a rent payable by the caretaker out of the caretaker's wages, rather than as a notional rent payable directly by the tenants. The defendant is entitled to recover caretaker's wages, through the service charge, pursuant to paragraph 8 of the fourth schedule of the leases, subject to the Court's determination as to reasonableness, pursuant to section 19 (2A) of the Landlord and Tenant Act 1985.
17. A rent of £150 per week, if properly chargeable, is a reasonable rent for the caretaker's flat.
18. A wage of £125 per week is a reasonable rent for the caretaker."
"In my judgment, the scope of the covenant in clause 4 (2) to pay a proportion of the money expended in providing the services called for under clause 5 (4), must be determined by reference to the scope of the services to which schedule 4 contemplates contribution, and a restrictive construction by reference to grammatical construction or the dictionary definition of the words of either clause 4 (2) or 5 (4) is not appropriate."
"If in this context, one asks whether the provision of a resident caretaker includes the provision of a residence for that caretaker, as one of the matters in respect of which the underlessees are to contribute, there must in my judgment be at least an ambiguity. That one cannot provide a resident housekeeper without providing the residence is, of course, obvious. That provision, by the allocation of a particular flat in the building, was, however, as I have pointed out, contemplated at the time of the grant of the underlease and is part of the context in which its provisions fall to be construed. The problem, may therefore, be expressed, as Mr Dutton has sought to express it: was the cost of the provision of the caretaker's flat part of the consideration for which the original lessee paid £15,000 or is it to be met by an addition to the annual service charge throughout the term of the underlease?
That ambiguity seems to me to be clearly resolved by the express provision of paragraph 9 of the 4th schedule, which includes certain particular expenses of the caretaker's accommodation as specified expenditure `in respect of which the lessee is to contribute', but makes no reference to the value of the accommodation itself, as being such `cost expense outgoing or matter'. At the least, if, contrary to my view, there remains an ambiguity, such ambiguity must be resolved against the landlord, and I find that the service charge provisions do not require the underlessees to make a contribution to compensate the landlord for the notional rent of the caretaker's flat."
"I should refer finally to the second of the recitals to the underlease which records that
`the lessor has previously granted or intends hereafter to grant underleases of the flats in the building other than the premises hereby demised and ..... to impose the restrictions set forth in the fifth schedule ..... '
The flat reserved for the occupation of the resident porter or housekeeper is and clearly was intended to be an exception to that recital. Mr Holbech, who has appeared for the landlord, accepts that the factual context in which these somewhat disconnected provisions must therefore be construed, includes a scheme whereby one out of six flats in the building was to be held available for the occupation of what is now called the resident caretaker, and the costs of running the building were to be met by the underlessees of the other five flats. It is in this context that the provisions as to service charge which I have already set out will fall to be construed."
" ..... if the lease enumerates a number of aspects of the costs of the provision of the caretaker's flat for which the tenant is liable, there is obviously a fairly formidable argument open to the tenant that the parties cannot have intended any further aspects of the costs of the caretaker's flat to be included in the service charge."
"It is clear that the landlord's obligation to provide a flat for the accommodation of the caretaker is a `liability ..... in relation to this lease'. It is however, in my judgment, equally clear that it is not `a charge incurred in management'."
"The costs, charges and expenses incurred in employing a caretaker for the buildings whether resident on the premises or otherwise."
"Costs, expenses, outgoings and matters in respect of which the lessee is to contribute."