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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 >> Morshead Mansions Ltd v Di Marco  EWCA Civ 1371 (10 December 2008)
Cite as:  L & TR 15,  1 P & CR 23,  NPC 138,  1 BCLC 559,  EWCA Civ 1371
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON CIVIL JUSTICE CENTRE
MR RECORDER MITCHELL QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE WALL
LORD JUSTICE TOULSON
| MORSHEAD MANSIONS LIMITED
|- and -
|LEON DI MARCO
WordWave International Limited
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
MR LEON DI MARCO the Respondent in person
Hearing date : 4th November 2008
Crown Copyright ©
Lord Justice Mummery :
"(1) In the following provisions of this Act "service charge" means an amount payable by a tenant of a dwelling as part of or in addition to the rent-
(a) which is payable directly or indirectly for services, repairs, maintenance, improvement or insurance or the landlord's costs of management and
(b) the whole or part of which varies or may vary according to the relevant costs.
(2) The relevant costs are the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with the matters for which service charge is payable.
(3) For this purpose-
(a) "costs" includes overheads; and
(b) costs are relevant costs in relation to a service charge whether they are incurred, or to be incurred, in the period for which the service charge is payable or in an earlier or a later period."
"The Directors may establish and maintain capital reserves, management funds and any form of sinking fund in order to pay or contribute towards all fees, costs and other expenses incurred in the implementation of the Company's objects, and may require the Members to contribute towards such reserves or funds at such time, in such amounts and in such manner as the Members shall approve by ordinary resolution passed in general meeting and may invest and deal in and with such monies not immediately required in such manner as they shall from time to time determine."
"Resolutions 5 and 6 are intended to secure the company's ability to ensure payment of the sums required to finance anticipated expenditure in the service charge funds in 2007. We intend to re-decorate the exterior of the building next year (it will then be four years since this substantial and costly task was last undertaken) and we have allowed the sum of £250,000 to pay for this work.
The company needs another £150,000 to finance the provision of normal services such as the buildings insurance premium, cleaning etc. Together, these sums amount to £400,000, i.e. the amount of the proposed Recovery Fund. The interim service charge for 2007 will also be £400,000.
Whilst each leaseholder will receive a demand for their respective share of the interim service charge, payment of the Recovery Fund demand…will entitle the payer to an equivalent credit against their respective service charge liability thereby eliminating it.
…There is almost no defence to a claim in proceedings for debts owed under the Company's Articles of Association …. Conversely, by comparison, the opportunities to avoid or delay payment of a service charge available to a member qua leaseholder are almost limitless.
In the light of the past deliberate obstruction of the Company's repair programme …it would be remiss of the Directors to fail ..to take every possible step available that would mitigate the consequences were the Company to face yet further opposition to the achievement of its objectives, the most important of which is to restore and then maintain the building in a state of repair…"
"..attempt to seek payment of an interim payment in relation to items which clearly would normally fall within a service charge provision."(paragraph 34)
Mr Di Marco's submissions
"Provided that payment of your contribution to the Recovery Fund 2007 in the amount of £2000 is indeed received on or before the due date, your account will be also credited with the sum of £1,923.08 thereby discharging your liability to pay the interim service charge due on 1 January 2007."
Lord Justice Wall:
Lord Justice Toulson: