[2024] UKUT 193 (LC)

Second is the proviso to the definition of Total Expenditure in the leases of 7 Malting House and 44 Brewster House (italicised in the text quoted at paragraph 17 above). The effect of the proviso is to narrow down any provision in the lease that enables the landlord to charge to the service charge the cost of “such repairs as amount to the making good of structural defects”; it therefore has no effect at all unless any of the provisions of the lease allow the landlord to charge for such items. The appellant relies upon the terms of the lease (although it does not say that the proposed work amounts to “repair”); it says that if the lease does allow it to charge for the work then the proviso in these two leases does not affect that entitlement because the need to strengthen the buildings against normal loading was not known until very recently. Conversely, if the provisions of the lease do not allow the appellant to charge for the work the proviso does not add anything.

As will be seen, I agree with the FTT that the terms of the lease do not allow the appellant to charge the lessees for the work, and so the terms of the proviso are irrelevant.

Ms Gibbons sought to argue that the proviso was nevertheless relevant in that it had obviously been drafted with the right to buy legislation in mind and that that strengthened the respondents’ position, since the policy of that legislation was that they should not be charged for this sort of work. I am unimpressed with that argument. Policy changed in 1986 and the right to buy legislation was amended so that the landlord’s ability to recover a service charge was not regulated beyond the first five years of the lease; I do not agree with Ms Gibbons, nor with the FTT, that a policy expressed in legislation that is no longer in force should colour the construction of the leases. They are to be construed in accordance with the ordinary principles of construction as elucidated in Arnold v Britton [2015] UKSC 36.