Mott MacDonald (MM) has won a service charge dispute with the landlord of its Croydon headquarters.
HH Judge Richard Seymour QC held that on the terms of its lease MM was not liable to pay £260,000 in service charges to its landlord, Leonora Investment, regarding the 1960s office block St Anne House,
In July 2000, Leonora granted MM a lease of the ground, first, second and third floors of the 12-storey building to MM for a period of 10 years.
It provided that service charges would be payable in accordance with a specified procedure. This provided that Leonora would send MM an estimate for the coming service charge year and that Mott would pay that charge by equal quarterly instalments in advance.
After the end of each service charge year, Leonora would send MM a statement of the actual service costs, at which point any overpayment would be credited to or any deficit demanded of MM.
That procedure was accordingly followed for the service charge year ending 24 December 2002.
However, on 15 January 2003, MM received an invoice from Leonora demanding more than £260,000 as “contribution for redecoration etc” for the previous year.
It refused to pay and Leonora sued.
At the High Court, HH Judge Seymour QC ruled, as a preliminary issue, that MM was not liable to Leonora under the invoice because the specified procedure had not been followed.
Leonora Investment Company Ltd v Mott MacDonald Ltd Queen’s Bench Division (HH Judge Richard Seymour QC, sitting as a judge of the High Court) 7 February 2008.
David Holland (instructed by Speechly Bircham LLP) appeared for the claimant; Mark Warwick (instructed by asb law, of
