Brunswick Mansions Management Company Limited v Triplerose Limited
[2023] UKUT 31 (LC)
Thanet Lodge (Mapesbury Road) & Anor v Arun Mirchandani
16 July 2024
[2024] UKUT 205 (LC)
Upper Tribunal
A company managing a building tried to charge leaseholders for its legal bills. A judge ruled that the lease didn't allow this, emphasizing that contracts must be clear about such costs. The judge considered previous similar cases and decided the lease wording wasn't broad enough to cover legal fees in tenant disputes.
Key Facts
- •Appeal against First-tier Tribunal (FTT) decision refusing recovery of legal and mediation expenses as service charges.
- •Appellant: Thanet Lodge (Mapesbury Road) RTM Company Limited.
- •Respondent: Arun Mirchandani.
- •Dispute concerns the interpretation of a lease dated 15 June 1995.
- •Legal fees incurred in various matters, including advice on RTM company constitution, disputes with other leaseholders, and a compensation claim.
- •FTT held that the lease did not permit recovery of legal fees as service charges.
- •Appeal focuses solely on the construction of the lease.
Legal Principles
Contractual construction: Court must identify the intention of the parties by reference to what a reasonable person would have understood them to mean, considering natural and ordinary meaning, other relevant provisions, overall purpose, facts and circumstances known at the time, commercial common sense, and disregarding subjective evidence of intentions.
Arnold v Britton [2015] UKSC 36
Liability for legal fees as service charges requires a clear and unambiguous clause in the lease; general wording may not suffice.
Sella House Ltd v Mears (1988) 21 HLR 147
Absence of specific mention of legal advice is not fatal to recovery if general language is sufficient and the context supports it.
Assethold Ltd v Watts [2014] UKUT 537 (LC)
A clause concerning management or service provision does not allow recovery of legal costs incurred in disputes with tenants.
No. 1 West India Quay (Residential) Ltd v East Tower Apartments Ltd [2021] EWCA Civ 1119 and Kensquare Ltd v Boakye [2021] EWCA Civ 1725
General wording in a definition clause must be interpreted within the context of the entire lease and the landlord's obligations.
Holland Park Management Company Limited v Dell [2023] EWCA Civ 1460
Outcomes
Appeal dismissed.
The lease does not permit the recovery of legal costs as service charges. The relevant clauses, even when interpreted broadly, do not explicitly or implicitly include legal fees incurred in disputes with leaseholders. The costs related to the RTM company's constitution were not contemplated by the original lease.