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Twenty Two Clifton Gardens Limited v Thayer Investments SA [2012] UKUT 71 (LC)

This appeal to the Upper Tribunal (Lands Chamber) concerned a freeholder’s efforts to recover the solicitors’ costs and surveyors’ fees of LVT proceedings.

Flat 1 22 Clifton Gardens (“the Property”) was held under a lease (“the Lease”) which stated.

10 The Company shall of its own volition or if requested by the Lessee take all reasonable steps to enforce the observance and performance by the Lessee of other flats in the block of the covenants and conditions in the leases of the other flats which fall to be observed and performed by the Lessee

The appellant freeholder argued that (1) paragraph 10 of the Lease obliged it to enforce the Lease’s covenants as against the respondent lessee; and (2) the costs were recoverable under paragraph 11 as LVT proceedings were (in its discretion) necessary for the better use and enjoyment of the Property.

HHJ Walden-Smith rejected the appellant’s submissions. She held that paragraph 10 referred to enforcing leases of others and not enforcing the Lease itself and that (in this case) bringing LVT proceedings was not “necessary for better use and enjoyment of the Property” — the collection of service charges being a by-product of the provision of the services for the better use and enjoyment of the property not a service in itself.

Whilst it is true that each lease must be interpreted on its own wording and that previous authorities give little assistance in this regard (see HHJ Rich LJ’s comments in Forcelux Limited [2004]) this case serves as a reminder that tribunals will only interpret a lease to allow the recovery of costs in the clearest of circumstances — with the lease containing clear and unambiguous terms.

Elizabeth Haggerty / 1st Apr 2012


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