Orchard Trading Estate Management Ltd. v Johnson Security Ltd. [2002] EWCA Civ 406 (26th March, 2002)

Orchard Trading Estate Management Ltd. v Johnson Security Ltd. [2002] EWCA Civ 406 (26th March, 2002)

The variable rentcharge created by the Deed is an estate rentcharge within s. 2(4)(b) of the Rentcharges Act 1977, as it is for the benefit of the units and relates to the performance of covenants. The payment of rates is for the benefit of the units and falls within the statutory definition. The rentcharge is not...

Source-derived case information.

Citation
[2002] EWCA Civ 406
Parties
Respondent: Orchard Trading Estate Management Ltd.; Appellant: Johnson Security Ltd.
Jurisdiction
England and Wales
Procedural Posture
Civil Appeal / Appeal From Preliminary Issues Determination
Outcome
Appeal dismissed
Legal Topics
Rentcharges, Estate Rentcharges, Reasonableness of Charges, Enforceability of Covenants
Property Law Land Law Rentcharges Estate Rentcharges Reasonableness of Charges Enforceability of Covenants

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Parties

Orchard Trading Estate Management Ltd.

Respondent

Johnson Security Ltd.

Appellant

Procedural Posture

Civil Appeal / Appeal From Preliminary Issues Determination

Legal Issues

  1. 1 Whether the Deed creates an estate rentcharge within s. 2(4) of the Rentcharges Act 1977
  2. 2 Whether the rentcharge is excluded by s. 2(5) because it does not represent a payment which is reasonable in relation to the covenant imposed

Ratio Decidendi

The variable rentcharge created by the Deed is an estate rentcharge within s. 2(4)(b) of the Rentcharges Act 1977, as it is for the benefit of the units and relates to the performance of covenants. The payment of rates is for the benefit of the units and falls within the statutory definition. The rentcharge is not invalidated by the absence of an express limitation of reasonableness, as it is measured by actual expenditure incurred by Orchard in performing its covenants.

Court Disposition

Appeal dismissed

Orders

  • Appellant to pay Respondent’s costs on the standard basis subject to detailed assessment if not agreed
  • Appellant to make an interim payment in respect of costs in the sum of £25,000