The appeal concerned the issue of whether a clause in a lease contained an obvious error, which the court should correct as a matter of construction.
The relevant clause governed the extent of the landlord’s repairing obligations and the extent of the tenant’s obligation to contribute to the cost of those repairs. D, the Respondent landlord, obtained a declaration that the clause should be construed so the word “house” substituted the word “premises”. The result of this construction meant that C, the Appellant tenant, had to pay 40% of the repair costs of the entire house although her masionette accounted for only 29.2% of the total floor area. Further, C’s masionette derived no benefit from flat roofs above the basement and ground floor extensions to the house.
In allowing C’s appeal and setting aside the declaration, the court held that the service charges provisions in the lease imposed a profusion of different obligations on C. One could not conclude that the parties intended that C would pay 40% of the repair costs of all the roofs and the outside walls. The requirement that C would pay 40% of the cost of the main roof made sense as it was of immediate benefit to the masionette. It may be unusual for a tenant’s liability to be confined to the walls and roofs specifically enclosing the defined masionette, but such a provision was far from absurd. There was some logic to what had been agreed. There was no presumption in construing a lease that the service charge provisions would enable the landlord to recover all of its expenditure.
It was far from clear that the parties had made a mistake in the drafting of the relevant clause. It did not produce a result which was commercially nonsensical. The clause must be construed in accordance with its actual wording without substituting the word “house” for “premises”.
Elizabeth Dwomoh / 1st Jan 2013
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