“28.
“34. Having said all of that, in my judgment, litigation costs do not, as a matter of construction, fall within clause 5.23 of the lease. Every contract is to be construed on its own words. In broad terms, the approach to the construction of provisions in a lease, specifically those which would considerably expand a tenant and, therefore, guarantor’s liability beyond that which is usually to be found in a lease, should be construed strictly and narrowly (see Sella House Limited -v- Mears[1989] 1 EGLR 65 and Morgan -v- Stainer [1993] 33 EG 87). 35. Properly construed, the effect of clause 5.23(1)(d) is that the costs which are there being referred to are all of the costs which are relating to an application for approval or consent, but excluding the costs of litigation. There would be no reason for the costs of litigation to be encompassed within the wording which I have cited, because those costs would follow the event of the litigation. If the landlord had unreasonably refused to consent to an application for licence to assign which resulted in the tenant having to issue proceedings, it would be right and proper that the landlord should pay those costs and the situation would follow in reverse. 36. There is no need to construe this clause in a way which would enable the landlord, irrespective of the reasonableness or otherwise of its position in relation to the grant or refusal of an application for a licence to assign, to be able to recover the costs from the tenant and, indeed, it would be quite astonishing if, without the clearest of wording, any such finding could be made. Thus, even if there had been a demand for payment of these costs, in my judgment, it would have been of no effect, because the litigation costs in question do not fall within clause 5.23(1)(d). I therefore reject the claimant’s submission to the contrary.”
“29. The fundamental problem which the claimant faces is that it is a precondition of tenant liability that a demand for payment of costs be made. The burden of proving liability under this clause falls upon the claimant. Not only is there no pleaded allegation that there ever was any demand for payment of these costs from the tenant, but on the evidence before me, there is absolutely no evidence at all that the claimant ever demanded payment of these costs from the tenant. 30. That was accepted by Chris Christodoulou in evidence. The claimant’s counsel deftly attempted to get around her lay client’s frank acceptance of the factual position by submitting that there must have been a demand for payment for those costs from the tenant prior to the order of District Judge Lightman of19 October 2016 . That, of course, is a non sequitur because whilst there may well have been a submission for an order for costs, which self evidently was successful by reason of the learned District Judge’s order, there is no evidence that there was any subsequent demand for payment of those costs from Red Rooster.”
“General approach to construction The object to be achieved in construing any contract is to ascertain what the mutual intentions of the parties were as to the legal obligations which each assumed by the contractual words in which they sought to express them. For this purpose, however, the intention of the parties must be objectively ascertained, and what must be ascertained is what is to be taken as the intention which reasonable people would have had if placed in the situation of the parties. The actual intention of the parties is irrelevant; a court of construction can only give effect to what it perceives as the actual intention of the parties “if that intention appears from a fair interpretation of the words which they have used against the factual background known to them at or before the date of the lease, including its genesis and objective aim”
“23 Seventhly, reference was made in argument to service charge clauses being construed “restrictively”
“Construction against grantor Where there is a doubt about the meaning of a grant, the doubt will be resolved against the grantor. Similarly words in a contract, particularly exclusion clauses, are construed against the person for whose benefit they are inserted. In the case of a lease, this usually means that ambiguities are resolved against the landlord. This does not mean that the court should lean in favour of deciding the case against the landlord’s interest in the particular circumstances; rather it means that a lease should be construed, in case of ambiguity, in favour of giving the tenant more freedom rather than less. However, in the case of a lease, where the end product is often the result of drafting by both parties, the application of this principle may be entirely arbitrary. In addition the principle does not come into play unless the court finds itself unable on the material before it to reach a sure conclusion on the construction of a reservation or other contractual term. The presumption itself is not a factor to be taken into account by the court in reaching its conclusion on construction.”
“17 First, the reliance placed in some cases on commercial common sense and surrounding circumstances (e g in Chartbrook[2009] AC 1101 , paras 16—26) should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract. And, again save perhaps in a very unusual case, the parties must have been specifically focussing on the issue covered by the provision when agreeing the wording of that provision. 18 Secondly, when it comes to considering the centrally relevant words to be interpreted, I accept that the less clear they are, or, to put it another way, the worse their drafting, the more ready the court can properly be to depart from their natural meaning. That is simply the obverse of the sensible proposition that the clearer the natural meaning the more difficult it is to justify departing from it. However, that does not justify the court embarking on an exercise of searching for, let alone constructing, drafting infelicities in order to facilitate a departure from the natural meaning. If there is a specific error in the drafting, it may often have no relevance to the issue of interpretation which the court has to resolve. 19 The third point I should mention is that commercial common sense is not to be invoked retrospectively. The mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly, or even disastrously, for one of the parties is not a reason for departing from the natural language. Commercial common sense is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made. Judicial observations such as those of Lord Reid in Wickman Machine Tools Sales Ltd v L Schuler AG[1974] AC 235 , 251 and Lord Diplock in Antaios Cia Naviera SA v Salen Rederierna AB (The Antaios)[1985] AC 191 , 201, quoted by Lord Carnwath JSC at para 110, have to be read and applied bearing that important point in mind. 20 Fourthly, while commercial common sense is a very important factor to take into account when interpreting a contract, a court should be very slow to reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of wisdom of hindsight. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed. Experience shows that it is by no means unknown for people to enter into arrangements which are ill-advised, even ignoring the benefit of wisdom of hindsight, and it is not the function of a court when interpreting an agreement to relieve a party from the consequences of his imprudence or poor advice. Accordingly, when interpreting a contract a Judge should avoid re-writing it in an attempt to assist an unwise party or to penalise an astute party. 21 The fifth point concerns the facts known to the parties. When interpreting a contractual provision, one can only take into account facts or circumstances which existed at the time that the contract was made, and which were known or reasonably available to both parties. Given that a contract is a bilateral, or synallagmatic, arrangement involving both parties, it cannot be right, when interpreting a contractual provision, to take into account a fact or circumstance known only to one of the parties. 22 Sixthly, in some cases, an event subsequently occurs which was plainly not intended or contemplated by the parties, judging from the language of their contract. In such a case, if it is clear what the parties would have intended, the court will give effect to that intention. An example of such a case is Aberdeen City Council v Stewart Milne Group Ltd[2012] UKSC 240 , where the court concluded that “any . . . approach” other than that which was adopted “would defeat the parties” clear objectives”, but the conclusion was based on what the parties “had in mind when they entered into” the contract: see paras 21 and 22.”
“to employ at the Lessors' discretion a firm of Managing Agents and Chartered Accountants to manage the Building and discharge all proper fees salaries charges and expenses payable to such agents or such other person who may be managing the Building including the cost of computing and collecting the rents and service charges in respect of the Building or any parts thereof (ii) To employ all such surveyors builders architects engineers tradesmen accountants or other professional persons as may be necessary or desirable for the proper maintenance safety and administration of the Building.”
“each tenant was to pay all legal and other costs that may be incurred by the landlord in obtaining the payment of maintenance contributions from any tenant in the building.” (My emboldening). An action was taken by the landlord which the tenant substantially won save for small sums of money. The landlord was required to pay the costs and sought to recover those through the clause from the very tenant to whom the costs were ordered to be paid. David Neuberger QC, sitting as a deputy, found against the landlord on two grounds. First a narrow construction of the words of the clause and (page 6): “Second, in connection with any dispute which gets to court between the landlord and any tenants the court would of course have the power to award costs in the normal way. Accordingly, giving para 5(b) a restrictive rather than a wider effect does not result in any great unfairness to the landlord. Should he be involved in proceedings under the lease, which involve him incurring costs which do not fall within para 5(b), the court would normally award him costs if his position was right in law. The protection afforded to the landlord by para 5(b) on costs to the extent that the court does not think it right to award him his costs should, in my view, be given a limited, rather than a wider, effect accordingly.”
“20. … Liability under that covenant extends to: (a) “expenses…incurred by the landlord…in or in contemplation of proceedings under s.146…”; and (b) “…all solicitors costs … incurred by the landlord of and incidental to the service of all notices and schedules relating to wants of repair…”
“any application or request for any approval or consent”