Construction of lease terms: wrong word used?

In Campbell v Daejan Properties Ltd ([2012] EWCA Civ 1503, CA (Eng)) a building was split into several units. C was the tenant of a maisonette on the upper (third and fourth) floors of the building. She originally held the property under the terms of a lease for 65 years granted in 1958. This required her to contribute 40% of the cost of repairing the roof and walls of ‘the premises’ (the maisonette rather than the entire building). Her property was covered by the original pitched roof of the building but there were three other flat roofs over extensions to the original building. C had contributed to the cost of repair work carried out in 1992 with her share of the cost having been calculated in accordance with the above arrangement.

In 1998, D granted a new lease of the premises to C for 164 years. This lease repeated the identical arrangement concerning C’s liability to contribute to the cost of repairs. Nevertheless, after repair works in 2005 / 6, D argued that a mistake had been made when the new lease was granted and that C should be liable to contribute 40% to the cost of repairing the roofs and walls of the whole building and not just the costs associated with repairing the roof and walls surrounding C’s maisonette. This was a claim based on an approach to the proper construction of the lease rather than on rectification.

D failed in the Court of Appeal; the lease meant what it said (or said what the parties must be taken to have intended). After a brief review of the authorities, Jackson L.J. said:

‘The two questions which I must address are: (i) whether it is clear that something has gone wrong with the language of clause 3 (iii); (ii) if so, whether it is clear that reasonable persons would have understood clause 3 (iii) to be referring to all of the roofs and all of the external walls of the house.’ )[47]).

It was not clear that something had gone wrong with the language.


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