Upper Tribunal says earlier ruling on same building should have guided lease reading

The Upper Tribunal (Lands Chamber) considered how far an earlier decision on the same Bournemouth building should have guided the First-tier Tribunal's reading of a leaseholder's service charge covenants, in an appeal by a leaseholder.

Background

The appeal concerned Flat 1, Rockstead, 18 West Overcliff Drive, Bournemouth. The building is a Victorian or Edwardian villa converted into five flats. A sixth flat, in the Coach House, has been sold off under a separate title, so liability was adjusted to reflect five flats rather than six.

The respondent, Rockstead Holding Company Limited, brought a county court claim in 2022 for service and other charges, originally made in May 2022. A Deputy District Judge gave judgment for the respondent in October 2023, but the appellant's appeal to the Circuit Judge succeeded. In July 2024 the service charge issues were transferred to the First-tier Tribunal (FTT). On 11 July 2025 the FTT upheld the respondent's claim.

Deputy President Martin Rodger KC gave permission to appeal on 3 December 2025. He identified two points. The Lands Chamber decision in Lardy v Van Gytenbeek [2010] UKUT 347 (LC) had reached a different construction of similar lease provisions involving the same property. It was also arguable that some provisions relied on did not allow payments on account.

The question

The appeal was distilled into four questions of lease construction. They covered the meaning of "to include" and "shared by" in Part I, paragraph 3 of the Fifth Schedule, and the meaning of "is common" in Part II, paragraph 3. The fourth was whether the respondent could recover on-account charges where Part II omitted the words "to be incurred".

The approach

HHJ Hanbury applied the principles in Arnold v Britton [2015] UKSC 36. Under those principles a lease is interpreted by identifying what the parties meant through the eyes of a reasonable reader. Save in a very unusual case, that meaning is most obviously to be found in the language used. The less clear the words, the more a court may depart from their natural meaning, but it will not rewrite the agreement. There is no presumption that a lease lets a landlord recover all its expenditure through service charges.

The appellant argued that Lardy was binding on the Upper Tribunal or at least highly persuasive. The FTT had accepted that the earlier decision was binding on it.

In the judge's view, the starting position was Lardy, because it concerned the same building and identical or almost identical lease terms. The FTT ought to have construed the lease consistently with it unless there were differences in the lease terms. The Upper Tribunal should be slow to interfere with a specialist tribunal, but should not hesitate to do so where its interpretation is legally incorrect.

The reasoning on the first issue

In Lardy, "to include" in Part I was read as meaning "and in addition". By contrast, "in particular" in Part II was read in its dictionary sense, introducing examples of what went before rather than extending it.

The judge said there would be logical reasons for giving "in particular" an extended meaning, but that would be contrary to Lardy. He said the FTT's interpretation appeared unwarranted because of the earlier decision. The leases were described as clearly poorly drafted.

Sources

• Vincent Chent-Wei Teo v Rockstead Holding Company Limited [2026] UKUT 309 (LC), Upper Tribunal (Lands Chamber), 30 June 2026