Linda Foster & Anor v Wargrave on Thames Housing Association Ltd [2026] EWHC 1910 (KB)

[2026] EWHC 1910 (KB)

Case No KA-2025-000035

IN THE HIGH COURT OF JUSTICE

KING’S BENCH DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 24/07/2026

Before

THE HONOURABLE MR JUSTICE SWEETING

Between

Wargrave on Thames Housing Association LtdRespondent

The First Appellant appeared in person for in person

The Second Appellant appeared in person for in person

Andrew Morrell (instructed by Blandy and Blandy Solicitors) for Respondent

Hearing Hearing date: 22 nd July 2026

Approved Judgment

This judgment was handed down remotely at 11:05am on 24 th July 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

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THE HONOURABLE MR JUSTICE SWEETING

Introduction

[1]The appeal concerns a narrow issue of contractual construction arising out of the possession proceedings brought by the Respondent Housing Association against the Appellants, Ms Foster and Mr Hitchens. Permission to appeal was refused by Mr Justice Ritchie on the papers but granted by Mr Justice Kimblin on Ground 1 only, namely the proper interpretation of the tenancy agreement and, in particular, whether the disputed sums claimed as an “Electricity Charge” fell wholly within the scope of the contractual provisions governing that charge.

[2]The Appellants became tenants of Flat 49, Elizabeth Court, pursuant to an assured shorthold periodic tenancy commencing on 1 April 2023. The premises comprise a self-contained one-bedroom flat within a development operated by the Respondent for older residents. HHJ Davies found, correctly and without dispute by the time of trial, that Ms Foster and Mr Hitchens were joint tenants under the agreement.

[3]There was no negotiation; the tenancy was granted on the Respondents’ standard terms. However, in response to the Appellants’ expression of interest, in 2022, the Respondents explained: “It may be helpful to give you an indication of costs. We charge a total monthly rental which includes a service charge, water rates and electricity (the provision of under floor background heating only). The service charge includes House Management and support services, laundry facilities, maintenance of gardens and grounds, cleaning of common areas, emergency call and alarm system, CCTV Security, mail collection, communal TV aerial and licence. Council Tax is not included.” (My emphasis)

[4]The tenancy agreement defines the “Premises” as Flat 49, Elizabeth Court, together with rights to use the communal areas, facilities and grounds at Elizabeth Court. The agreement therefore draws a distinction between the Appellants’ flat, defined as the “Premises”, and the communal parts of the development. That distinction assumes some significance in relation to the contractual provisions governing the recovery of service charges and electricity charges.

[5]Under the agreement, the monthly sums initially payable comprised a basic rent, a service charge, an electricity charge and a water charge, all of which were separately identified and itemised. At the commencement of the tenancy, the electricity charge was stated to be £129 per month.

[6]During the course of 2023 a dispute arose concerning the Respondent’s underfloor heating system and the electricity charge. The Appellants contended that they were not liable to pay the disputed electricity sums. The Respondent maintained that the charge was contractually payable. From September 2023 onwards the Appellants withheld payment of the electricity charge. Possession proceedings followed. In a reserved judgment, delivered extempore, HHJ Davies held that the Appellants were contractually obliged to pay the charge and that their failure to do so constituted a breach of the tenancy agreement. He therefore found that breach was established and ultimately made a suspended possession order.

[7]The present appeal is concerned not with the wider factual disputes that featured at trial, but with the anterior question of whether, on its proper construction, the tenancy agreement entitled the Respondent to recover from the tenants, under the heading of “Electricity Charge”, all of the sums which it sought to recover and which formed the basis of the alleged breach.

Relevant Contractual Provisions

[8]The tenancy agreement distinguishes between four separate monthly payments, namely: i) Basic Rent; ii) Service Charge; iii) Electricity Charge; and iv) Water Charge.

[9]Clause A2 provides for those charges to be separately identified at the commencement of the tenancy. Clause A3 deals with services. It provides that the Respondent shall make available or provide specified services for which the tenant is to pay the service charge. Those services include, amongst other things, building maintenance services, a lift, guest room, maintenance of gardens and grounds, laundry and residents’ lounge facilities, TV aerial services, external camera security, cleaning and furnishing of common areas, emergency call and fire alarm systems, emergency lighting and a mail collection service. The clause then provides that:

“Separate charges will be made for electricity and water supplied to the Premises by the Association.”

[10]Clause A4 addresses changes in rent and other charges. It permits variation of the rent and, by clause A4(iii), provides that the service charge, electricity charge and water charge may be varied using the same procedure.

[11]Within the section headed “The Association’s Obligations”, clause B3 is headed “Electricity and Water Charges”. It provides that one of the obligations is:

“To pay the respective Electricity and Water Authorities any amounts due to them. The Association will supply timed, off-peak electrical underfloor or radiator background heating only to the Premises.”

[12]Within the section headed “The Tenant’s Obligations”, clause C2 requires the tenant:

“To pay the Association the rent, service charge, electricity charge and water charge monthly in advance...”

[13]Clause C4 (“Outgoings”) further provides:

“To meet all outgoings applying to the Premises for which the tenant is responsible including Council Tax, Electricity and other costs whether metered or billed.”

[14]Like a number of the provisions relevant to Ground 1, clause C4 is directed to liabilities applying to the “Premises”, as contractually defined.

[15]A further aspect of the factual background should be noted. At the hearing of the appeal, Mr Morrell, on behalf of the Respondent, accepted that Flat 49 was served by a separate metered electrical supply, as the Appellants had submitted. I was also told that the only electrical supply provided by the Respondent to the Appellants’ flat was that which powered the underfloor heating system. The Appellants obtained their ordinary domestic electricity through their own separately metered supply.

[16]Those matters do not determine the issue of construction. They do, however, form part of the factual context against which the relevant contractual language falls to be construed.

[17]The significance of clause C4 is not that it directly creates liability for the Electricity Charge. Liability for the Electricity Charge arises from clauses A2 and C2. However, clause C4 provides some assistance in identifying the contractual scheme which the parties adopted. i) First, clause C4 is concerned with outgoings “applying to the Premises”. As with clauses A3 and B3, the focus is upon liabilities attributable to the Appellants’ own flat, as opposed to liabilities incurred in relation to the common parts of the development. ii) Secondly, clause C4 expressly refers to the tenant meeting the cost of “Electricity and other costs whether metered or billed”. Read naturally, that language contemplates electricity consumed at the Premises and recovered either by direct metering or by billing. It is notable that the clause does not refer to contributions towards electricity consumed elsewhere in the building, still less to communal lighting, CCTV, residents’ lounge facilities, emergency call systems or other communal services. iii) Thirdly, the clause sits alongside the uncontested factual position that Flat 49 had its own separate metered electrical supply and that the only electrical supply provided by the Respondent to the Premises was the supply powering the underfloor heating. Against that background, clause C4 tends to reinforce the distinction drawn elsewhere in the agreement between electricity attributable to the Premises and charges relating to communal facilities. iv) Finally, if the Respondent’s construction is correct, a curious feature emerges. The agreement would contain an express obligation requiring the tenant to meet electricity costs applying to the Premises, whether metered or billed, while at the same time permitting the Respondent to recover under the separate Electricity Charge, which covers the electricity which was only provided to the Premises for heating, the cost of electricity consumed in communal areas and for communal services. Whether the parties can sensibly be taken to have intended such a division of cost is one of the questions raised by the competing constructions.

The Issue Raised by Ground 1

[18]The parties advance materially different interpretations of these provisions.

[19]The Appellants contend, in substance, that the agreement draws a distinction between the service charge and the electricity charge; that the services identified in clause A3 are recoverable through the former; and that clause B3 defines the subject matter of the latter by reference to the supply of timed, off-peak electrical underfloor or radiator background heating to the premises. They place particular reliance upon the wording of clause B3 and upon the use of the word “only” within that provision.

[20]The Respondent contends for a broader construction, which was accepted by the judge below, in the sense that he accepted the factual evidence from the Respondent’s witness as to what was being charged to the tenant under the Electricity Charge. In summarising the evidence, HHJ Davies recorded that:

“Mr Hurley told me, and I accept, that the electricity charge in the tenancy agreement covers the use of underfloor heating to the flats, communal lighting, the residents’ lounge and the CCTV.”

[21]Later, when addressing the contractual dispute,

the judge stated:

“The contractual charge, which I have found covers not only the underfloor heating but also the contribution towards other communal charges, does not fall to be paid only based upon usage.”

[22]Accordingly, the judge accepted the Respondent’s case that the Electricity Charge extended beyond the supply of electricity associated with the underfloor heating within Flat 49 and encompassed contributions towards electricity consumed in communal facilities and common areas of the development. On that basis he concluded that the charge was contractually due and payable notwithstanding the Appellants’ refusal to use the heating system. The Appellants’ criticism is that this was determined on the basis of factual evidence about what the charge was intended to, or in the opinion of the witness did, cover when, properly framed it engaged an issue of contractual construction which had been squarely raised on the Appellants’ case.

[23]The issue on this appeal is ultimately a narrow one. It is not whether the Respondent was entitled to levy a service charge. Nor is it whether the Respondent incurred electricity costs in operating the common facilities at Elizabeth Court. The question raised by Ground 1 is whether, upon a proper construction of the tenancy agreement read as a whole, the contractual “Electricity Charge” was confined to the supply identified in clause B3, namely the supply of timed, off-peak electrical underfloor or radiator background heating to the Premises, or whether it extended to the wider category of communal electricity costs for which the Respondent contends and which the judge held were recoverable through that charge. That issue lies at the heart of the finding that the Appellants were in breach of the agreement by failing to pay the disputed sums and is accordingly the sole issue arising on this appeal.

Applicable Legal Principles

[24]On appeal, the Court will not interfere with findings of primary fact made by the trial judge unless satisfied that the judge was wrong. However, the interpretation of a written contract raises a question of law that can properly be determined an appellate court. The relevant principles are well established.

[25]The task of the Court is to ascertain the objective meaning of the contractual language which the parties have chosen to employ. That exercise requires the contract to be considered as a whole and in its documentary, factual and commercial context. The Court seeks to identify what a reasonable person, possessed of the background knowledge which would reasonably have been available to the parties at the time of contracting, would have understood the language to mean.

[26]The starting point is the natural and ordinary meaning of the words used. However, textual analysis cannot be divorced from context. Interpretation is a unitary exercise in which the language of the provision must be read in light of the agreement as a whole and the consequences of rival constructions. The weight given to textual, contextual and commercial considerations will vary according to the circumstances and the nature of the contract in question.

[27]Commercial common sense may assist where the language is capable of bearing more than one meaning. It cannot, however, be invoked to undervalue the language which the parties have chosen or to rescue a party from the consequences of an agreement which, with hindsight, appears imprudent or inconvenient.

[28]Particular significance attaches to defined terms and to words of limitation used by the parties. Where a contract expressly distinguishes between different categories of charge, service or obligation, the Court should, so far as possible, adopt a construction which gives coherent effect to those distinctions and avoids treating carefully drafted language as redundant. Equally, where the parties have established separate charging mechanisms within the same agreement, the Court should be slow to construe those mechanisms in a way which substantially overlaps them unless the language clearly requires such a result.

[29]Applying these principles, the question for the Court is whether, reading the tenancy agreement as a whole and against the relevant factual background known to the parties at the time it was made, the contractual Electricity Charge was confined to electricity supplied by the Respondent to the Premises or extended also to the costs of electricity consumed in providing communal services elsewhere within the development.

Discussion

[30]The starting point is the structure of the agreement itself. The parties deliberately adopted four distinct monthly charges: basic rent, service charge, electricity charge and water charge. The agreement does not treat those as interchangeable labels. Rather, each is directed towards a distinct subject matter and must be construed on the assumption that the parties intended each charge to perform a separate contractual function.

[31]The agreement further distinguishes consistently between the “Premises”, namely Flat 49, and the communal facilities and common parts of the development. That distinction appears throughout the tenancy and is reflected, amongst other places, in clauses A3, B3 and C4. The significance of that distinction is that where the agreement intends to refer to services provided to the tenants’ own flat, it does so expressly.

[32]Clause C4 is instructive in that regard. It requires the tenants to meet all outgoings applying to the Premises, including electricity, whether metered or billed. As noted earlier Flat 49 was served by its own separate metered electrical supply. The only electrical supply provided by the Respondent to the Appellants’ flat was, as a matter of fact, that which powered the underfloor heating system. The contractual scheme therefore made the Appellants responsible for all electricity consumed within the flat itself, whether through their own metered supply or through electricity supplied by the Respondent for the operation of the underfloor heating.

[33]Against that background, clause B3 assumes particular importance. It is the provision which explains what electricity the Respondent itself undertakes to supply. The language used is precise. The Association agrees that it:

“will supply timed, off-peak electrical underfloor or radiator background heating only to the Premises.”

[34]In my judgment the natural meaning of that provision is that the Respondent’s electrical supply obligation is confined to the supply there described. The word “only” is not surplusage. It performs a limiting function. Moreover, the limitation is expressed by reference to the Premises, namely the Appellants’ own flat. The “separate charge” referred to in clause A3 is in turn for supply “to the Premises”.

[35]The factual basis upon which the judge accepted the Respondent’s case was that the Electricity Charge covered not merely electricity supplied for underfloor heating but also communal lighting, the residents’ lounge and CCTV and, by implication perhaps, other electrical consumption associated with services provided throughout the development.

[36]That construction sits uneasily with the contractual allocation of responsibility elsewhere in the agreement.

[37]Clause A3 identifies the services for which the service charge is payable. Those services include, amongst other things, the residents’ lounge, external camera security, emergency call systems, emergency lighting, cleaning and furnishing of common areas and various other communal facilities. The Respondent’s evidence was that some, although by no means all, of the electricity required to operate those facilities was recovered separately through the Electricity Charge.

[38]I find that difficult to reconcile with the language and structure of the tenancy agreement. The more obvious construction is that the services identified in clause A3 include the power necessarily required for their operation. The provision of a residents’ lounge necessarily entails the electricity required to illuminate and operate that facility. The provision of a CCTV system necessarily includes the electricity required to power cameras and associated equipment. The same is true of emergency lighting systems, alarm systems and other electrically operated communal facilities.

[39]Put another way, the provision of those facilities is the service. The electricity required to make them function is an integral component of that service rather than a separate service supplied to the tenants.

[40]Had the parties intended communal electricity consumption to be recovered through a separate Electricity Charge one would have expected the agreement to say so in clear terms. Instead, the clause dealing with services lists the relevant communal facilities and the clause dealing specifically with electricity distinguishes electricity and water supplied to the Premises. The Respondent’s construction requires a substantial category of costs associated with services already identified in clause A3 to be carved out and treated as recoverable under a separate charging regime notwithstanding the absence of any express language to that effect.

[41]In my judgment that produces a less coherent reading of the contract than the construction advanced by the Appellants. It also creates an obvious tension with clause C4 and with the accepted fact that the Appellants were separately responsible for all ordinary electricity consumed within their own flat.

[42]Reading the agreement as a whole, and giving the words used their ordinary meaning, I conclude that the contractual Electricity Charge was confined to electricity supplied by the Respondent to the Premises, namely the supply used for the underfloor heating system described in clause B3. It did not extend to the recovery of the cost of electricity consumed in operating communal facilities and common areas of the development.

Conclusion

[43]For those reasons I conclude that the judge erred in accepting the Respondent’s construction of the tenancy agreement.

[44]The agreement distinguishes between charges for services and charges for electricity supplied to the Premises. Properly construed, the service charge provisions encompass the communal facilities provided by the Respondent, including the electrical power necessarily required for the operation of those facilities. The separate Electricity Charge is limited by the language of clause B3 to electricity supplied to the Premises for the purpose there identified.

[45]It follows that the judge’s finding that the Electricity Charge lawfully included contributions towards communal lighting, the residents’ lounge, CCTV and other communal electrical consumption cannot stand.

[46]Ground 1 is therefore made out. The disputed sums were not, on the true construction of the tenancy agreement, wholly recoverable under the contractual Electricity Charge relied upon by the Respondent. The conclusion that the Appellants were in breach of the tenancy agreement by failing to pay those sums was accordingly based upon an erroneous construction of the contract, and the appeal must be allowed.

Consequences of this Construction

[47]I should address two matters which do not, in my judgment, follow from the conclusion I have reached. i) First, it does not follow that the Appellants were charged twice for the same expenditure. The Appellants are entitled on this appeal to rely upon the evidence accepted by the judge below, namely that the Electricity Charge was treated by the Respondent as including the cost of electricity consumed by certain communal facilities. Equally, however, there was no issue at trial as to the detailed accounting treatment of those costs within the Respondent’s charging structure. It is therefore entirely possible that, had those sums not been attributed to the Electricity Charge, a corresponding adjustment would have been made to the Service Charge. The evidence does not permit any reliable conclusion that the same expenditure was in fact recovered twice. ii) Secondly, the issue before the Court is one of contractual characterisation rather than accounting outcome. The tenancy agreement deliberately creates separate charging mechanisms, namely rent, service charge, electricity charge and water charge. It further provides, by clause A4, a mechanism by which those charges may be varied from time to time. The fact that a particular item of expenditure was not recoverable through the contractual Electricity Charge does not necessarily determine whether the Respondent could lawfully have sought to recover the same expenditure through some other charging mechanism provided by the agreement.

[48]The point may be illustrated in this way. If the Respondent’s costs of providing communal services increased as a result of higher electricity consumption in communal areas, those increased costs were capable, consistently with the terms of the agreement, of being reflected in the Service Charge rather than in the Electricity Charge. Whether that would have occurred, and if so in what amount, is not a question which arises for determination on this appeal.

[49]The significance of the present appeal is therefore narrower. The question is not whether the Respondent could recover the relevant expenditure by some contractual route. It is whether the tenancy agreement entitled the Respondent to recover it through the particular charge relied upon, namely the Electricity Charge. For the reasons I have given, I conclude that it did not. END