Cases - Leonara Investment Company Ltd v Mott Macdonald Ltd
Record details
- Name
- Leonara Investment Company Ltd v Mott Macdonald Ltd
- Date
- [2008]
- Citation
- EWHC 136 QB; PLSCS 47
- Legislation
- Keywords
- Commercial property - landlord and tenant – service charge – condition precedent - agreement providing for tenant to make payment on account based on landlord’s estimate of expenditure for forthcoming year – payment dependent upon landlord preparing an estimate – where the landlord had failed to provide an estimate whether he was entitled to payment
- Summary
-
The leases provided for the tenant to make payments on account based on the landlord's estimate of the anticipated service charge for the forthcoming year and for the landlord to prepare a statement of the actual costs at the end of each service charge year. The tenant was to be credited with the amount of any overpayment while in the event of a deficit this would be demanded from the tenant.
The landlord issued statements that indicated the landlord had spent less than the originally estimated amounts and appropriate credit notes were sent to the tenant in respect of the overpayments. However, shortly after issuing the statements the landlord discovered that it had erroneously omitted an item of expenditure and wrote to the tenant requesting an additional payment.
The landlord contended that the tenant was liable to pay any sum being a proportion of actual service costs regardless of when or in what form the landlord demanded payment while the tenant submitted its liability dependent upon the procedure set down in the lease being followed. The trial judge commented that the obligation to pay sums in advance on a quarterly basis depended upon the landlord exercising the option of preparing an estimate and that if there was no exercise of the option, there was no obligation for the tenant to make payments in advance.