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England and Wales High Court (Chancery Division) Decisions


You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Boots UK Ltd v Trafford Centre Ltd [2008] EWHC 3372 (Ch) (08 December 2008)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2008/3372.html
Cite as: [2008] EWHC 3372 (Ch)

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Neutral Citation Number: [2008] EWHC 3372 (Ch)
Case No: HC07C03418

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL
08/12/2008

B e f o r e :

MR. JUSTICE MORGAN
____________________

Between:
BOOTS UK LIMITED
Claimant
- and -

TRAFFORD CENTRE LIMITED
Defendant

____________________

Digital Transcription by Marten Walsh Cherer Ltd.,
6th Floor, 12-14 New Fetter Lane, London EC4A 1AG
Telephone No: 020 7936 6000. Fax No: 020 7427 0093
DX 410 LDE [email protected]

____________________

MR. KIRK REYNOLDS QC (instructed by Shoosmiths) for the Claimant
MR. MICHAEL BARNES QC (instructed by Walker Morris) for the Defendant

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    MR. JUSTICE MORGAN:

    Introduction

  1. This case involves the interpretation of the service charge provisions in a lease of retail premises at a shopping centre known as the Trafford Centre. The landlord is the Trafford Centre Limited (to whom I will refer as "the landlord") and the tenant is Boots UK Limited (to whom I will refer to either as "Boots" or "the tenant"). The landlord is represented by Mr. Barnes QC and the tenant is represented by Mr. Reynolds QC. As Mr. Reynolds pointed out the case has a seasonal topicality as part of the dispute concerns the cost of Christmas decorations and a Santa's Grotto at the Trafford Centre and the case is being heard some two weeks before Christmas.
  2. The lease

  3. The lease is dated 10th December 2002. It granted a term of 25 years from 11th March 1998. The Trafford Centre opened around that time. The landlord was the Trafford Centre Limited. The tenant was known as Boots the Chemists Limited at the date of the lease but is now known as Boots UK Limited. The premises are described as Unit MSU4 at the Trafford Centre.
  4. The lease contains in clause 1 a large number of definitions to which my attention has been drawn but to which it is not, I think, necessary to refer in this judgment, with one exception. That exception is the definition of Promotion which is defined to mean:
  5. "... advertising and other forms of promotion of the Centre intended to bring additional custom to the Centre which shall be reasonable and proper but excluding any advertising in respect of letting any unlet units".
  6. The lease provides for the tenant pay to the landlord a service charge. The covenant which requires the tenant to pay the service charge is clause 3.3.3 of the lease which cross-refers to the provisions in Schedule 4 to the lease to which I will, in due course, turn.
  7. Before going to Schedule 4 it is relevant to refer to clause 6 of the lease which sets out certain obligations on the part of the landlord. Clause 6.2 identifies certain matters which could generally be regarded as services which are to be attended to by the landlord. They include a number of obvious matters such as repair, decoration, cleaning and lighting of the common parts. Between paragraph 6.2.1 and 6.2.5 there are a number of matters which are the subject of an obligation given by the landlord to the tenant in the relevant respects but those paragraphs do not by any means identify the full list of matters which can be called services which are to be provided by the landlord to the tenant under this lease.
  8. Clause 6.2.6 of the lease is a proviso and it is relevant to refer in particular to clause 6.2.6.3 which is in these terms:
  9. "The landlord may in its absolute discretion vary, extend, alter or add to the services or other items to be provided under this lease, including the provision of facilities outside the Centre such as (but without limitation) additional car parking, traffic management systems, landscaping and signage, if the landlord reasonably considers (after consultation with the tenant) that by so doing the same will be for the general benefit of the tenants in the Centre."
  10. Clause 6.2.7 I will not read in full but it can be summarized as placing certain obligations on the landlord requiring the landlord to use reasonable endeavours to provide service charge items in an efficient and cost effective manner in the interests of the Centre as a whole, having regard to various matters including the obligation to manage the Centre as a high class shopping centre.
  11. By clause 6.6 of the lease the landlord agreed to observe various obligations on its part contained in the schedules.
  12. By clause 6.7 the parties agreed certain terms, to which I need not refer in any detail, as to the policy to be adopted as to the use of the Centre.
  13. Schedule 4 contains the detailed service charge provisions. Many of those provisions deal with matters of machinery to which it is not necessary to refer. However, some of the more relevant provisions deal with the description of the items for which a service charge may be levied. I will read the opening words of paragraph 1 of Schedule 4 which are in these terms:
  14. "The service charge is the actual cost reasonably and properly incurred by the landlord in any service charge period in defraying all costs relating and incidental to discharging its obligations under clauses 6.2 and 6.3 and in providing other services in each case in the interests of good estate management of a high class shopping centre and the proper enjoyment of the centre by the tenants, occupiers and their visitors and any other cost that the landlord is entitled to include in the service charge, less any deductions that the landlord is obliged or entitled to make pursuant to the provisions of this schedule and in particular includes (but is not limited to) the costs reasonably and properly incurred by the landlord on the following items or such of them as may from time to time be applicable."
  15. Before referring to the specific items which follow those opening words in paragraph 1 of Schedule 4, I draw attention to the fact that the definition of service charge refers to certain costs. It specifies in particular the costs relating to and incidental to discharging the obligations under clauses 6.2 and 6.3 but then it goes on in a general way to refer to the costs of providing other services and indeed any other costs that the landlord is entitled to include in the service charge.
  16. The charging provisions, as they are expressed, are in general terms, in other words this is not a case where the charging provision refers to a number of highly specific and particularised matters, with or without some general words taking the form of a sweep-up provision at the end of a particular list. Indeed, the list which follows these general words is said to refer to things which are included in the general words but the general words are expressly not limited to the items which are listed.
  17. The first item in the list is in paragraph 1.1 which refers to "providing any additional service or other items under clause 6.2.6.3". I refer back to clause 6.2.6.3 which had been expressed in general terms to refer to such services as the landlord might in its reasonable discretion add to the services provided, subject to certain controls in the clause which I have already recited.
  18. Continuing with the list of items in paragraph 1 of Schedule 4, my attention was drawn to paragraph 1.4 which refers to:
  19. "... maintaining, operating and replacing any signs, loud speakers, public address or music broadcast systems or closed circuit television or the like in the retained parts".
  20. Similarly my attention was drawn to paragraph 1.10 which refers to:
  21. "... providing and maintaining any furniture, furnishing and features in the retained parts".
  22. Lastly in this list is paragraph 1.19 which more succinctly refers to: "providing Promotion".
  23. Schedule 4 contains a number of later provisions which control or modify the general operation of the words I have so far read. For example, paragraph 9.3 of Schedule 4 excludes from items within the service charge certain capital costs connected with the construction of the Centre or the fitting out or equipping of parts of the Centre.
  24. Similarly paragraph 9.4 excludes from items within the service charge the cost of any improvement or refurbishment of the Centre or any part of it except any element that otherwise would properly constitute an item of the service charge.
  25. Paragraph 9.8 excludes from items within the service charge, any costs of the landlord in letting or reletting a lettable unit or renewing the tenancy of a lettable unit.
  26. I next turn to paragraph 10 of Schedule 4 which is the provision which has given rise to the litigation in the present case. This paragraph reads as follows:
  27. "10.1. The landlord shall bear 50% of the cost of Promotion in any service charge period.
    10.2. The total cost of Promotion in each service charge period shall not exceed 10% of the total service charge (net of any VAT and of any management and professional fees as referred to in paragraphs 1.17 and 1.18)."
  28. Although the clause I have quoted refers to paragraphs 1.17 and 1.18 I need not refer to the detailed provisions of those paragraphs; their scope is adequately explained in paragraph 10.2 itself.
  29. Pausing at that point, the issue between the parties is essentially as to what is the "cost of Promotion" in the two places in which that phrase appears in paragraph 10 of Schedule 4. The operation of paragraph 10 is otherwise straightforward. Paragraph 10.1 provides for the thing which is the cost of promotion to be shared between the landlord and the tenant. Similarly paragraph 10.2 is clear as to its operation. In a case where one is dealing with the cost of promotion there is a cap on the amount of the expense which can be entered into the service charge calculation.
  30. Finally, in relation to Schedule 4, I briefly mention the provisions of paragraph 13 of Schedule 4 which provide for certain income which the landlord might receive in various ways from parts of the Centre to be brought into account in drawing up the service charge account for a particular service charge period.
  31. The disputed matters

  32. There are four matters or things which are provided by the landlord at the Trafford Centre where the landlord and the tenant in this case are in dispute as to their correct treatment under the provisions of the lease to which I have referred. The four matters or things have been grouped under these headings: first, entertainments; secondly, Christmas decorations; thirdly, Santa's Grotto and, fourthly, an installation known as the Sky Wall.
  33. I should stress that as to these four disputed matters there is no dispute about the landlord's entitlement to include a charge for these matters in the service charge account. In other words it is agreed between the parties that on the true interpretation of the provisions of the lease and in particular the true interpretation of Schedule 4 to the lease, the costs incurred by the landlord do fall to be considered and included in the service charge account as service charge items.
  34. The dispute is one which arises under paragraph 10 of Schedule 4 to the lease. In short, Boots contend that the costs of the four disputed matters are part of the cost of Promotion to which the provisions of paragraph 10 apply and similarly, in short, the landlord contends that the costs of the disputed matters are not governed by paragraph 10. That is to say there is no 50/50 sharing between the landlord and the tenant and there is no cap as to 10% as expressed in paragraph 10.2 of Schedule 4.
  35. Similarly, there is no dispute as to whether the various other qualifications and limitations and requirements of the service charge provisions have been provided. In particular, the tenant does not say that the charges were unreasonable or improper in any way or that any pre-condition to recovery has not been properly complied with.
  36. The preliminary issue

  37. The dispute having arisen, the Master ordered on 22nd February 2008 the trial of a preliminary issue in these proceedings. I will marginally rephrase the preliminary issue as ordered by the Master so that it reads as follows: "For the purpose of paragraphs 1 and 10 of Schedule 4 to the lease dated 10th December 2002 made between the parties hereto the provision by the defendant at the Trafford Centre of (a) Christmas decorations, (b) entertainments, (c) grotto and (d) Sky Wall constitute 'Promotion' as that expression is used in paragraph 1 and paragraph 10 and as it is defined on page 7 of the lease".
  38. The hearing before me was the trial of the preliminary issue so ordered.
  39. The facts

  40. The factual material before the court is essentially contained in two witness statements: one witness statement is of Mr. Butterworth, who is the managing director of the landlord. The other witness statement is the witness statement of Mr. Martin who is a representative of Boots. In addition to the material contained in these witness statements I was provided with two bundles of photographs and two DVDs which contained images of the Centre and also of some of the entertainments that in the past have been provided at the Centre.
  41. I should say a word about the purpose of this evidence. As I understand it, this evidence is not for the purpose of assisting me or the parties with the process of construing the express words used in the lease. In other words, this material has not been put before the court as part of the matrix of fact which will influence the meaning chosen for the express words in the lease. The information is put before the court so that when the court has construed the lease it will apply its chosen meaning to the facts as revealed in the witness statements so as to produce the answer to the preliminary issue.
  42. Before dealing more specifically with the facts of the four disputed matters I ought, I think, to refer to some of the evidence as to the character of the Trafford Centre. I take this from the witness statement of Mr. Butterworth. He says that the Trafford Centre receives approximately 30 million visits per annum. Regular customer surveys estimate that repeat customers account for approximately 94% of the visits. Some of these repeat visits are once a week and others only twice a year. The average dwell time at the Centre is approximately two hours. He refers to the time when the Centre began to be constructed in 1995 and he states that the object at that time was to create an unusually high quality environment with an element of fantasy and theatre which customers would view as extraordinary and entertaining. The objective he says was to make a visit to the Trafford Centre something more than a mere shopping expedition.
  43. He then lists some of the more significant retailers who are represented at the Centre and they include John Lewis, Selfridges, Marks & Spencer and Debenhams. The Trafford Centre contains one of the largest food courts in the world with over 60 restaurants and it offers extensive leisure facilities including a very large cinema and a tenpin bowling alley. Mr. Butterworth also describes the quality and character of the finishes which are of high quality and indeed are opulent.
  44. He then makes more general comments about the character of what is on offer by the landlord to shoppers at the Trafford Centre. He refers to numerous leisure opportunities and he also refers to other attractions and leisure opportunities in the vicinity of the Centre. He does this to stress that the facilities available attract customers as much for the purposes of a day out as for making individual pre-targeted purchases.
  45. Mr. Butterworth explains that within the Trafford Centre there are areas where the shopping malls are particularly wide or where there is a junction between two shopping malls. These larger available areas can be used to provide promotional space for external users. For example, a new car model can be displayed. When such a display is agreed with the Trafford Centre that is at no cost to the landlord, indeed, these activities may produce a revenue for the landlord which is then credited to the service charge account. Mr. Butterworth also refers to various amenities and facilities, such a creche or shop mobility services which are available for those visiting the Centre.
  46. What I have so far read from Mr. Butterworth's witness statement is not in dispute and I can rely upon it as general background information for the purpose of assessing the application of the lease in this case to the disputed matters.
  47. I turn then to the first disputed matter, that is as to the entertainment or entertainments provided in the Trafford Centre. The evidence is that a number of entertainers are regularly and repeatedly engaged to perform in designated places in the Trafford Centre. It is commonplace for there to be a jazz band. There is frequently a string quartet and various other entertainers perform on a stage which is near to the food court. In one of the DVDs which I was invited to view it was possible to see that there is a considerable variety of types of entertainment and different entertainers have in the past performed in the Trafford Centre.
  48. The evidence is that children's entertainment is also catered for. There is a creche, there is a play area and there is an animated character called Barney Bear who patrols the malls, often in a suitably-sized motor vehicle. There is also a Barney Bear Club which has a large number of members. Mr. Butterworth states that the repeated daily entertainments have become a recognised and expected integral part of the total facilities which the Centre provides to its customers.
  49. To indicate the broad measure of agreement between the parties as to the facts which are relevant in this case I will refer briefly to the witness statement of Mr. Martin of Boots. He also refers to this question of the entertainments at the Centre. One of the themes which Mr. Martin develops in his evidence, I have to say largely by way of submission, is that the attractions at the Centre which are material for present purposes are there not so much to bring people to the Centre but to encourage people to remain at the Centre, when they are in. I will not at the moment deal with that particular distinction but I explain it because some of the matters referred to by Mr. Martin are for the purpose of underscoring that distinction rather than to quarrel with the factual material put forward by the landlord.
  50. Thus, in relation to entertainments Mr. Martin of Boots says that the purpose of the entertainments is to increase what he has referred to as dwell time. Once customers are attracted to the Centre, he says, they are kept there by the provision of entertainments so that they will stay longer and that may generate more custom.
  51. The next disputed matter to which I ought to refer is the question of Christmas decorations and I will describe this together with the facts as to Santa's Grotto. Indeed, neither of these matters are in the least remarkable and therefore need very little by way of description. As far as Christmas decorations go this centre has Christmas decorations for a significant period in the run up to Christmas. They are not different in character from decorations in other shopping centres. It has been emphasized before me that the quality and attraction of the decorations in the Trafford Centre are at the top end of the range, but in the event nothing turns on that.
  52. Santa's Grotto is a well known feature of many department stores. Some of the department stores in the Trafford Centre may have such a grotto but in addition the landlord provides a grotto to which members of the public can go, on payment of a charge, and at the grotto various other benefits can be secured by paying a further charge.
  53. Mr. Martin in his evidence, when he refers to Christmas decorations, says that a centre such as the Trafford Centre is expected to be decorated at Christmas and that decorations attract customers to the Centre when those customers might otherwise be tempted to go elsewhere. He also refers to the grotto as having the purpose of attracting customers to the Centre or to persuade them to remain in the Centre for a longer period.
  54. The last of the four disputed matters is the installation known as the Sky Wall. Because of a specific point of detail to which I will return later in this judgment I will read verbatim what Mr. Butterworth of the landlord says about the Sky Wall as follows:
  55. "The Sky Wall is a large permanent television screen mounted in the food court. It gives diners information about the Centre generally and provides a better view of the various activities on offer. It is also used by the centre's retailers and restaurants to advertise their presence and to inform customers of their latest offers. Other external organizations can also take advantage of the Sky Wall's ability to reach a wide number of the centre's customers by using it to advertise their products and services. The cost of advertising on the Sky Wall is recovered by Trafford Centre from the individual retailer if he chooses to use it for that purpose and the net income goes directly back into the service charge. Therefore the use of the Sky Wall for advertising reduces the overall service charge. When it is not being taken advantage of by the tenants the Sky Wall shows music videos to further entertain customers."
  56. Mr. Martin also describes the Sky Wall. I need not read out, I think, everything Mr. Martin says as there is very little, if anything, by way of dispute. I draw attention to the fact that Mr. Martin says the Sky Wall is a large screen that not only shows information about the Centre but also shows promotional material in the form of advertising of items specifically within the Centre. Mr. Martin suggests that it is easy to say that the principal beneficiaries of the Sky Wall are the food retailers but he accepts that other retailers do obtain some benefit from it.
  57. The submissions for Boots

  58. Mr. Reynolds, counsel for Boots, took me with care through the various service charge provisions in the lease. He focused in particular on the definition of Promotion in clause 1 of the lease. He drew attention to the phrase "intended to bring additional custom to the Centre". He submitted that this reference to intention was satisfied where the intention behind the expenditure had the sole purpose of bringing custom to the Centre or the dominant purpose of bringing custom to the Centre but was also satisfied where a substantial part of the purpose was to bring custom to the Centre. If any one of those matters were shown, then the requirements of the definition were satisfied. He continued by drawing a link between something which is intended in that way to bring additional custom to the Centre and the part of the definition which refers to the promotion of the Centre. Mr. Reynolds' submission tended to equate something which would bring additional custom to the Centre with something which was a form of promotion of the Centre.
  59. As regards the four disputed matters in this case he accepted and indeed averred that they were intended to bring additional custom to the Centre, therefore they were a form of promotion of the Centre, therefore they were within the definition of Promotion and therefore they were governed by paragraph 10 of Schedule 4 to the lease.
  60. The submissions for the landlord

  61. Mr. Barnes, counsel for the landlord, made four submissions of a general character as to the approach which I should adopt to the meaning of the word "promotion" in the definition of Promotion in clause 1 of the lease. Mr. Barnes submitted that advertising and promotion of the Centre could only occur where the advertising or promotion was outside the geographical extent of the Centre with the result that anything done within the Centre itself to make the Centre attractive could not be said to be advertising the Centre or promoting the Centre.
  62. Mr. Barnes' second submission was that the word promotion conjures up the idea of something which is irregular as to occurrence, perhaps even one-off as to occurrence, that being what was normally meant by the concept of promotion. Promotion was not satisfied here by something which occurred regularly, that would be to go outside the ordinary meaning of a promotion.
  63. Mr. Barnes' third submission was that something which was a promotion was something out of the ordinary or unusual. If one found the occurrence of something usual and predictable then one had something which was not, as to its character, a promotion.
  64. Mr. Barnes' fourth submission was of a different character. This turned upon a careful detailed analysis of the listed matters in paragraph 1 of Schedule 4 to the lease. Mr. Barnes submitted that some of the four disputed matters, if not all of them, were separately provided for in the list so that one would not reach the conclusion that those matters were within Promotion, or providing Promotion in paragraph 1.19 of Schedule 4. More specifically Mr. Barnes submitted that the Sky Wall installation came naturally and comfortably within paragraph 1.4 referring as it does to loudspeakers, public address systems and music broadcast systems and for good measure referring to "the like".
  65. Mr. Barnes also prayed in aid paragraph 1.10 of Schedule 4 which refers to furniture, furnishing and features and submitted that the Sky Wall, the grotto and the decorations could comfortably and properly be placed within the word "features" in that paragraph.
  66. As these matters properly came within other paragraphs one should hesitate before placing them within paragraph 1.19 which refers to providing promotion and if one did not place them within 1.19 then one should also keep them away from the provisions of paragraph 10 of Schedule 4
  67. Discussion

  68. My reaction to Mr. Reynolds' submission on behalf of Boots is that it gives proper and full weight to the phrase "attempt to bring additional custom to the Centre" but does not give proper weight to the words "other form of promotion of the Centre". The way in which the definition of promotion appears to work is that one has to be satisfied that the matter in question is a form of promotion of the Centre before one asks the separate and subsequent question whether that form of promotion is intended to bring additional custom to the Centre.
  69. There are forms of promotion at the Centre that would not be designed to bring additional custom to the Centre. For example a promotion for sale of the landlord's interest in the Centre, which might involve many things being said which are properly described as a form of promotion of the Centre, but which would fall outside the definition because the purpose of the expenditure in question was not the purpose of bringing custom to the Centre.
  70. Accordingly, in so far as Mr. Reynolds' submission was designed to persuade me that once I was satisfied of the necessary intention I should need little persuasion before holding that the expenditure was on promotion, I am not to that extent persuaded.
  71. As regards Mr. Barnes' submissions and in particular the first three of them, Mr. Barnes has drawn attention to certain features of a promotion, possibly features that will often been found in relation to promotion. The feature might be that it is outside the Centre or that it is irregular or that it is unusual.
  72. Where I depart from Mr. Barnes' approach is that I am not persuaded that these commonly occurring features are essential in all cases. One can look at the three features and consider the position separately. The definition of promotion refers to advertising and other forms of promotion at the Centre. Mr. Barnes positively asserts that an advertising hoarding outside the Centre would come within those words. I see no reason, certainly no reason as a matter of language, for holding the words do not apply to an advertising hoarding which is geographically placed within the Centre itself. So I do not accept that this is a necessary matter which has to be shown as a first step to considering whether the expenditure is within the definition of Promotion.
  73. Much the same reasoning, in my judgment, applies to the question of whether the activity is regular or unusual. One can consider activities which might be regular rather than irregular, usual rather than unusual which could none the less properly be described as a form of promotion of the Centre.
  74. As far as Mr. Barnes' fourth submission is concerned, which depends upon other items in the list in paragraph 1 of Schedule 4 being a more natural home for the matters in dispute in this case, I do not find that a helpful solution or helpful approach to the solution of the problem, particularly in a case where, as I have emphasised earlier, the charging provisions do not go straight to a list followed by a sweeping-up provision but go, first, to general words which it is accepted by the parties in this case cover the matters in question and having used general words in that way the draftsman has then included or referred to a list of matters, to which the general words are expressly not limited. With that style of drafting of the service charge items in this case I did not expect to find, and I did not find, any real help in the approach which Mr. Barnes adopted.
  75. My approach

  76. Having described the provisions of the lease, the disputed matters and the submissions that have been made to me I can now indicate the approach which in the end finds favour with me. I start with the words of the definition of Promotion in clause 1 of the lease. I find that it refers to advertising and other forms of promotion of the Centre. That phrase indicates that advertising is one form of promotion but the types of promotion which are within the definition are not confined to advertising. It must follow that there will be things which are not merely advertising but which can properly be said to be a form of promotion of the Centre.
  77. It is also clear and indeed there is no dispute that the thing being promoted is the Centre rather than individual property within the Centre or something narrower than the concept of the Centre itself. It also seems to me that for something to come within the definition of promotion it has to come within the opening phrase: "advertising and other forms of promotion of the Centre". In other words, applying the definition to this case, if I am to hold, for example, that the entertainment is within the definition of Promotion, I have to satisfy myself that entertainment is a form of promotion of the Centre.
  78. If I am not satisfied about that then I must hold that entertainment is not within the definition of promotion, whatever the purpose of the entertainment being provided might be, that is whether it is intended to bring additional custom or have some other function. If I am satisfied that the disputed matters are a form of promotion of the Centre then I am able to go to the next stage which is to ask, as Mr. Reynolds asked, whether they were intended to bring additional custom to the Centre, although it may be that there was relatively little dispute about that part of the enquiry.
  79. The remainder of the definition has not caused particular difficulty and indeed does not give rise to any particular assistance in construing the all important part which is, in my judgment, the phrase "other forms of promotion of the Centre".
  80. Continuing with my own approach to the meaning of promotion and how it applies in this case I ought to refer again to the submissions made by counsel as to the right test to adopt for the purpose of answering the question. It can be seen from what Mr. Barnes submitted that he essentially put forward what could be called a "bright line test", that is to say he defined criteria, he specified matters which drew a line between that which was within the definition and that which was outside the definition. His bright line, particularly the one dealing with activities inside and outside the Centre, would make the task of deciding whether the definition was satisfied or not a comparatively straightforward one.
  81. My difficulty, as I have explained, with Mr. Barnes' approach, is that I do not find the definition uses any such bright line. It uses instead general English words. It does not provide for express limitations such as inside or outside, regular or irregular, usual or unusual and, for the reasons I have given, I do not feel able to read in those limitations in a purported interpretation of the express words used.
  82. The test put forward by Mr. Reynolds could perhaps be described as an "elephant test". That is, it does not attempt to find a comprehensive all-embracing definition of what is meant by a form of promotion. A form of promotion is something that one recognizes when one sees it and the task is to say "yea" or "nay" to the disputed matters whether they come within one's ordinary understanding of the phrase: "a form of promotion".
  83. I incline to see the matter, as far as the test is concerned, along the lines that Mr. Reynolds suggested but I am also inclined to come to a different conclusion from that which Mr. Reynolds would wish me to reach. Applying an elephant test in this case it seems to me that one can distinguish between something which is a promotion of the Centre and something on the other side of the line, which could be described in various ways something along these lines, as something which is of benefit to the Centre, something which is an attraction within the Centre, something which is a service, a facility or an amenity within the Centre. It seems to me, in the context of these service charge provisions seeking to identify cases where the landlord is obliged to contribute 50% and be subject to a cap, I can distinguish between a service, a facility, an amenity or an attraction on one side of the line and a form of promotion on the other.
  84. Directing myself in this way, I would hold as follows. The entertainments in this case I would regard as a facility or an amenity or an attraction but not a form of promotion of the Centre. I would reach the same conclusion in relation to the Christmas decorations and the Grotto, that is to say they are a facility, an amenity or an attraction of the Centre but they are not a form of promotion of the Centre.
  85. As far as the Sky Wall is concerned, subject to a qualification which I will deal with at the end, I would regard the Sky Wall as a facility or an amenity or an attraction but not a form of promotion of the Centre.
  86. Before reaching a final conclusion based upon my own reaction to the language in this case I have, of course, considered whether the commercial purpose of the provisions, first, is of assistance and, secondly, produces or might produce a different answer to that suggested by the language. The parties have themselves speculated about what the commercial purpose might have been. They have not in the end felt able to say that the commercial purpose is clear and points to one solution or the other. I too, I confess, am far from clear as to the commercial purpose behind these provisions. I think in those circumstances my conclusion has to be that there is nothing in the commercial purpose, whatever it was, which should take one away from the ordinary meaning based on one's reaction to the language of the lease.
  87. Therefore, having considered the commercial purpose in that brief way my conclusion remains that the four items in question are not a form of promotion, they were not, therefore, Promotion and they are not the subject of paragraph 10 of Schedule 4.
  88. A qualification

  89. I indicated earlier that a qualification may be appropriate in relation to the Sky Wall. I have read the relevant paragraph from Mr. Butterworth's evidence in which he refers to the Sky Wall giving those watching it information about the Centre generally. That is distinguished from the Sky Wall being used to advertise individual retailers and restaurants. I have also referred to Mr. Martin's evidence which essentially agrees with the fact that one function of the Sky Wall is to provide information about the Centre generally.
  90. With that in mind I return to the definition of promotion which refers to advertising and other forms of promotion of the Centre. It seems to me that using the Sky Wall in order to provide information about the Centre would naturally come within the phrase "advertising and other forms of promotion of the Centre". I would reach a different view if I were able to accept Mr. Barnes' various qualifications on the meaning of promotion but I have already rejected his suggestion that the promotion must be outside the Centre, that it must be irregular as to occurrence and it must be unusual. I do not accept those qualifications and in those circumstances I reach the conclusion that in so far as there is a cost in relation to providing advertising or a promotion of the Centre on the Sky Wall, then that is a cost of promotion to which paragraph 10 in Schedule 4 would appear to apply.
  91. I am not able to take that matter further at this stage, this being the trial of preliminary issue but the parties have indicated that if I reach that view I should express it and they will then consider the appropriate next step to take.


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URL: http://www.bailii.org/ew/cases/EWHC/Ch/2008/3372.html