Spender & Ors v Fit Nominee Ltd & Anor [2025] EWCA Civ 1578 (05 December 2025)

Spender & Ors v Fit Nominee Ltd & Anor [2025] EWCA Civ 1578 (05 December 2025)

The correct test for 'reasonably incurred' under s.19(1) of the Landlord and Tenant Act 1985 is whether, judged by reference to the circumstances at the time the landlord entered into the contractual obligation, the decision to incur the costs was reasonable in both process and outcome. The fact that costs payable in later years under a long-term contract exceed market rates does not, by itself, render them unreasonable if the original decision was reasonable. The burden of proof lies on the party asserting unreasonableness to establish a prima facie case, after which the court decides on the whole evidence.

Citation
[2025] EWCA Civ 1578
Parties
Appellants: Liam Philip Spender & 69 Others; Respondent: Fit Nominee Ltd; Respondent: Fit Nominee 2 Ltd
Jurisdiction
England and Wales
Judgment Date
05 December 2025
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Service Charges, Long Term Contracts, Reasonableness of Costs, Burden of Proof, Leasehold, Statutory Interpretation
Landlord and Tenant Property Law Contract Law Service Charges Long Term Contracts Reasonableness of Costs Burden of Proof Leasehold +1 more

Case Brief

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Parties

Liam Philip Spender & 69 Others

Appellants

Fit Nominee Ltd

Respondent

Fit Nominee 2 Ltd

Respondent

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether costs incurred under long-term contracts for equipment hire and maintenance were 'reasonably incurred' under s.19 Landlord and Tenant Act 1985 and recoverable as service charges
  2. 2 Correct test for reasonableness under s.19 in context of long-term agreements
  3. 3 Allocation of risk for long-term contracts where market prices change

Ratio Decidendi

The correct test for 'reasonably incurred' under s.19(1) of the Landlord and Tenant Act 1985 is whether, judged by reference to the circumstances at the time the landlord entered into the contractual obligation, the decision to incur the costs was reasonable in both process and outcome. The fact that costs payable in later years under a long-term contract exceed market rates does not, by itself, render them unreasonable if the original decision was reasonable. The burden of proof lies on the party asserting unreasonableness to establish a prima facie case, after which the court decides on the whole evidence.

Court Disposition

Appeal dismissed

Orders

  • The Judge's substituted decision is upheld; costs under the Countryside Contracts for 2018-2020, subject to the landlord's concession of 25% reduction for 2020, are recoverable as service charges.