Mr Reekie’s lease of Flat 5
12.The leases of the eight flats in the building were granted between August 1990 and March 1994, and the FTT was told that they were essentially in the same form. Further investigation (undertaken for the first time during the hearing of the appeal) demonstrated that that was not the case. A standard form of lease appears to have been modified in certain important respects on each grant so that Mr Reekie’s three leases are different from each other, and none of them is in the same form as the leases of the other five flats. 13.The interest of the landlord is now vested in OCRA which has also assumed responsibility for the obligations to be performed by the management company.14.Those obligations are described in Part I of the Fifth Schedule to the lease and include keeping all parts of the building not included in any demise in good and substantial repair and condition. That obligation requires that OCRA keep the lift in repair. In return, the lease of Flat 5 includes an express right to use the lift (at paragraph 2(c) of the Second Schedule).15.The cost of performing the management company’s obligations in any one year (and of maintaining a sinking fund for future years) is referred to in the lease as the “Total Service Cost”. Each lease of a flat in the building includes provision for the leaseholder to pay a specified percentage of the Total Service Cost, a sum referred to as the “Service Charge”. 16.The various flats are of different sizes and these are reflected in their different contributions towards the total service cost. In the case of Flat 5 the Service Charge is defined in recital 1(p), as follows:“Service Charge” means 7.338% per centum per annum of the total service cost subject to Clause 2 of Part II of the Fifth Schedule.”The contributions required by Mr Reekie’s leases of Flats 1 and 2 are much greater and, in aggregate for all three flats he is responsible for almost 45% of the Total Service Cost.17.The definition of Service Charge is expressed to be subject to clause 2 of Part II of the Fifth Schedule. Part II of the Fifth Schedule has two clauses, which I will refer to as “clause 1” and “clause 2”. Clause 1 is the main source of the dispute between Mr Reekie and OCRA. The whole of Part II provides as follows:“1. In respect of any parts of the main structure of the Building (for example the lift flat roofs or balconies) and the driveway leading to the garages at the rear which are the responsibility of the Company under Part One of this Schedule but of which only a tenant or certain tenants have the use the Company may charge such tenant or those tenants either the whole or such part as the Company thinks fit of the cost of maintenance of those parts to reflect such use2.Any doubt difficulty or dispute as to the apportionment of the total service cost under this Schedule shall be resolved and settled by the Company whose decision shall be final and binding on all the tenants”18.Mr Reekie is obliged to make equal half-yearly payments on account of the Total Service Cost followed by a balancing charge or credit when the annual account has been prepared. By way of exception to this pattern clause 3(1) of the lease entitles the management company to give notice at any time requiring payment within fourteen days of a contribution towards “any unusual or unexpected expenditure” required for the performance of its covenants. This was the provision under which the demand of 19 November 2019 was made.19.The FTT interpreted the reference in clause 1 of Part II of the Fifth Schedule to parts of the main structure “of which only a tenant or certain tenants have the use” as a reference to parts of the main structure which a particular tenant is “able to use”. Mr Reekie was able to use the lift to come and go from Flat 5, if he chose to do so, and on that basis the FTT determined that he was liable to contribute towards the cost of the proposed work.