Criterion Buildings Ltd v McKinsey & Company Inc (UK) & Anor [2021] EWHC 216 (Ch) (11 February 2021)

Criterion Buildings Ltd v McKinsey & Company Inc (UK) & Anor [2021] EWHC 216 (Ch) (11 February 2021)

The defendants failed to establish a prima facie case that the service charges demanded were not a 'due proportion' as defined in the lease. The landlord's apportionment method, based on internal floor areas and adjusted for the theatre's unique space, was permissible and consistent with the lease. The claimant is entitled to recover the sums claimed as service charges.

Citation
[2021] EWHC 216 (Ch)
Parties
Claimant: Criterion Buildings Ltd; First Defendant: McKinsey & Company Inc (United Kingdom); Second Defendant: McKinsey & Company Inc
Jurisdiction
England and Wales
Judgment Date
11 February 2021
Procedural Posture
Commercial Property Dispute / Trial Judgment
Outcome
Claim allowed
Legal Topics
Service Charge Apportionment, Sinking Fund Contributions, Lease Interpretation, Set Off of Rent, Burden of Proof
Property Law Landlord and Tenant Commercial Leases Service Charge Apportionment Sinking Fund Contributions Lease Interpretation Set Off of Rent Burden of Proof

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Parties

Criterion Buildings Ltd

Claimant

McKinsey & Company Inc (United Kingdom)

First Defendant

McKinsey & Company Inc

Second Defendant

Procedural Posture

Commercial Property Dispute / Trial Judgment

Legal Issues

  1. 1 Whether the service charges demanded represent a 'due proportion' as defined in the lease
  2. 2 Whether the landlord's apportionment method is fair under the lease terms
  3. 3 Whether sinking fund contributions are properly included in the service charge

Ratio Decidendi

The defendants failed to establish a prima facie case that the service charges demanded were not a 'due proportion' as defined in the lease. The landlord's apportionment method, based on internal floor areas and adjusted for the theatre's unique space, was permissible and consistent with the lease. The claimant is entitled to recover the sums claimed as service charges.

Court Disposition

Claim allowed

Orders

  • Defendants to pay the sum of £2,232,259.65 plus interest as service charges under the lease
  • Defendants liable for costs and interest as determined