Reddendum clause — Rent 10% of gross receipts relating to playing football — Whether receipts include income other than gate money — Effect of auditors’ certificate — Action by landlord dismissed
By a lease dated August 19 1982 the defendant football club is the tenant of premises at Stamford Bridge, Chelsea, London SW6; the plaintiff is the landlord. By clause 1(1)(b) of the lease, the rent, in the events that happened, was defined as: “ten per cent of the gross receipts for the use of the demised premises received by the Tenant (being receipts for the use of the demised premises for the purposes of playing professional football where a charge is made for admission or a fee is received for the use of the demised premises) in such quarter …”.
The landlord contended that in computing the gross receipts sources of income other than gate money should be included; this might include advertising, broadcasting and television, programmes, catering and commercial sponsorship.
Held The action was dismissed.
The words in the parentheses restrict the clause to charges for admission and fees for the use of the ground arising out of its use for professional football. Receipts from commercial ancillary activities should not be included: the draftsman could not have intended to include other income without more detail. Season ticket receipts must be time-apportioned by reference to the quarters in which the matches to which they relate are played.
The reddendum clause provided for an auditor’s certificate as “evidence” of the receipts upon which the rent became payable; this means conclusive evidence, subject to any grounds upon which the certificate could be upset. The auditor was not expected to decide questions of construction, but to verify the receipts. On these matters his certificates are binding on the parties.
Jones v Sherwood Computer Services unreported December 7 1989 considered.
Anthony Scrivener QC and Paul Morgan (instructed by Lovell White Durrant) appeared for the plaintiff; David Neuberger QC and Erica Foggin (instructed by Denton Hall Burgin & Warrens) appeared for the defendant; and Patrick Talbot QC (instructed by James Chapman & Co, of Manchester) appeared for the third party, Alexander Tatham & Co.
