Cases - Jollybird Ltd and others v Fairzone Ltd
Record details
- Name
- Jollybird Ltd and others v Fairzone Ltd
- Date
- (1990)
- Citation
- 2 EGLR 55, CA
- Legislation
- Keywords
- Commercial property - landlord and tenant – service charge- covenant to repair and maintain a central heating system – covenant for tenant to pay a fair proportion of costs incurred, calculated by floor space – agreement containing provision for service charge to be increased if the cost of fuel ‘increased proportionately’ – whether the landlord was entitled to increased the service charge per square foot based on the percentage increase in fuel so as to profit from the supply of heating
- Summary
-
The landlord covenanted to repair and maintain a central heating system. The tenants covenanted to pay a fair proportion of the expenses incurred, calculated by reference to floor area, such charge being not less than a fixed rate per square foot and which could be 'increased proportionately at any time ... if the cost of fuel ... shall at any time exceed the cost thereof at the date of the lease'.
The landlord sought to increase the rate per square foot stated in the lease based on the percentage increase in fuel costs which would have resulted in the landlord making a profit from the supply of heating. It was held the landlord was only entitled to make a charge calculated by reference to floor area, subject to the minimum charge set out in the lease. Although a profit might arise where fuel costs were below the minimum charge, the proviso could not be construed as intending to give the landlord a profit in other circumstances.