Cases - Edwards and Walkden (Norfolk) Ltd & ors v The Mayor and Commanalty and Citizens of the City of London

Record details

Name
Edwards and Walkden (Norfolk) Ltd & ors v The Mayor and Commanalty and Citizens of the City of London
Date
[2012]
Citation
EWHC 2527 (Ch)
Legislation
Keywords
Fairness of a variable service charge – New business tenancies – Indoor market – Metropolitan Meat and Poultry Markets Act 1860, section 9, section 14, section 15, section 26, section 32, section 33, section 34, section 37, section 40 – Landlord and Tenant Act 1954, section 24, section 33, section 34, section 35 – City of London (Various Powers) Act 1963
Summary

The Claimants (T) leased from the Defendant (L) premises within a market on terms including payment of rent plus service charges, subsequently varied to an all inclusive fixed rent. The terms of the new business tenancies fell to be determined by the Court in accordance with section 35 of the Landlord and Tenant Act 1954 (LTA 1954).

The preliminary issues were:

  • whether T was entitled to a rent reduction on account of income received by L from the commercial offices and car park within the market premises; and
  • whether the rents to be fixed by the Court should be an all inclusive fixed rent as proposed by T or rent plus a variable service charge as proposed by L.

Pursuant to section 9 of the Metropolitan Meat and Poultry Markets Act 1860 ('the 1860 Act'), L was obliged to use the income from the commercial leases for the purposes of supporting the maintenance and operations of the market. T’s leases were silent as to how the rent and service charges paid to L had to be used. Further, there was no statutory limitation on the amount L could charge T or on which market purposes the income from the commercial leases and car park had to be used. L was at liberty to spend it on market purposes that were unconnected with the direct provision of services for T. Accordingly, the relevant sections of the 1860 Act could not be construed as enabling a lower rent to be agreed by landlords and tenants for the purposes of setting rent under section 34 LTA 1954.

In principle, a Court should not ordinarily exercise its discretion under section 35 LTA 1954 to change the basic parameters of the commercial arrangement between a landlord and tenant. Yet, L had shown good and sufficient reasons to justify a change back to the original payment structure under the new tenancies. The parties agreed that L should be entitled to recover all of its ongoing costs of maintaining and operating the market from T. Restoring the payment structure to include a variable service charge would accord with fairness and justice between the parties.