Wilor Investments Ltd v Kenyon-Smith & Ors [2001] EWCA Civ 1690 (22 October 2001)

Wilor Investments Ltd v Kenyon-Smith & Ors [2001] EWCA Civ 1690 (22 October 2001)

On the true construction of the underlease, the landlord's entitlement to recover management costs is limited to 10% of the direct costs and expenses incurred in performing the specified covenants. The landlord cannot recover the fees of a managing agent in addition to this 10%, nor can it recover more than 10% by employing a manager. The cost of a manager under Part B of the Second Schedule is a direct cost and is included in the calculation of the 10%.

Citation
[2001] EWCA Civ 1690
Parties
Claimant/respondent: Wilor Investments Ltd; Defendant/appellant: Peter John Kenyon-Smith; Defendant/appellant: Jane Margaret Kenyon-Smith; Defendant/appellant: Henry Ilsen
Jurisdiction
England and Wales
Judgment Date
22 October 2001
Procedural Posture
Appeal / Court of Appeal Judgment on Preliminary Issues From Chancery Division
Outcome
Appeal allowed
Legal Topics
Service Charges, Lease Construction, Management Fees, Underlease Interpretation
Landlord and Tenant Property Law Service Charges Lease Construction Management Fees Underlease Interpretation

Case Brief

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Parties

Wilor Investments Ltd

Claimant/respondent

Peter John Kenyon-Smith

Defendant/appellant

Jane Margaret Kenyon-Smith

Defendant/appellant

Henry Ilsen

Defendant/appellant

Procedural Posture

Appeal / Court of Appeal Judgment on Preliminary Issues From Chancery Division

Legal Issues

  1. 1 Whether the landlord can recover more than 10% of costs and expenses as management fees under the underlease
  2. 2 Whether fees of a managing agent are recoverable as costs and expenses under the underlease
  3. 3 Whether the cost of a manager under Part B of the Second Schedule is included in the 10% management expenses

Ratio Decidendi

On the true construction of the underlease, the landlord's entitlement to recover management costs is limited to 10% of the direct costs and expenses incurred in performing the specified covenants. The landlord cannot recover the fees of a managing agent in addition to this 10%, nor can it recover more than 10% by employing a manager. The cost of a manager under Part B of the Second Schedule is a direct cost and is included in the calculation of the 10%.

Court Disposition

Appeal allowed

Orders

  • Set aside the parts of the order reflecting the judge's conclusions on the preliminary issues
  • Declare that the landlord may not recover more than 10% of the costs and expenses as management fee under the underlease