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Arnold v Britton & Ors

Arnold v Britton & Ors

Case [2015] UKSC 36 10 June 2015

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Summary

Easter Term
[2015] UKSC 36
On appeal from: [2013] EWCA Civ 902

JUDGMENT

Arnold (Respondent) v Britton and others (Appellants)

before

Lord Neuberger, President
Lord Sumption
Lord Carnwath
Lord Hughes
Lord Hodge

JUDGMENT GIVEN ON

10 June 2015

Heard on 26 January 2015

Appellants
Timothy Morshead QC
Rawdon Crozier
(Instructed by Fursdon Knapper Solicitors)

Respondent
Michael Daiches
(Instructed by Morgan la Roche Solicitors)

LORD NEUBERGER: (with whom Lord Sumption and Lord Hughes agree)

This appeal concerns the interpretation of service charge contribution provisions in the leases of a number of chalets in a caravan park in South Wales.

The facts

The facts may be summarised as follows (although they are more fully set out by Lord Carnwath in paras 81 to 103).

Oxwich Leisure Park is on the Gower Peninsular, and contains 91 chalets, each of which is let on very similar terms. The five leases which we have seen were granted between 1978 and 1991, either for a premium (of less than £20,000) or in return for the lessee constructing the chalet. Each of the 91 chalets was let on a lease which was for a term of 99 years from 25 December 1974 and reserved a rent of £10 per annum increasing by £5 for each subsequent period of 21 years. Para (2) of the recital of each lease contains the statement that the chalets on the Leisure Park were intended to be subject to leases "upon terms similar in all respects to the present demise".

Clause 3 of each lease contains various covenants by the lessee, and it is introduced by the words:

"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 hereby granted of the other plots on the estate so far as the obligations hereinafter mentioned are capable of benefitting them …"

The covenants that follow concern use, repair, alienation and the like. Crucially for present purposes, clause 3(2) is a covenant to pay an annual service charge. Each lease also contains covenants by the lessor. One such covenant is to provide services to the Park, such as maintaining roads, paths, fences, a recreation ground and drains, mowing lawns, and removing refuse. The lessor also covenants in clause 4(8) that leases of other chalets "shall contain covenants on the part of the lessees thereof to observe the like obligations as are contained herein or obligations as similar thereto as the circumstances permit".

Twenty-five of the chalets are said by the respondent, the current owner of the Leisure Park and the landlord under the leases, to be subject to leases containing a service charge provision in clause 3(2), which requires the lessee to pay for the first year of the term a fixed sum of £90 per annum, and for each ensuing year a fixed sum representing a 10% increase on the previous year – ie an initial annual service charge of £90, which increases at…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Arnold v Britton & Ors

Details

Case: [2015] UKSC 36
Decision Date