Boots UK Ltd v Trafford Centre Ltd

Whether expenditure is a service charge cost of “Promotion” depends first on whether it is advertising or another form of promotion of the centre, and only then on whether it is intended to bring additional custom. The definition does not impose bright-line requirements that the activity occur outside the centre, be irregular, or be unusual. Ordinary language may distinguish promotion of a centre from facilities, amenities, attractions or services provided within it. In this case, entertainments, Christmas decorations and Santa’s Grotto were facilities, amenities or attractions, not Promotion. The Sky Wall was likewise such a facility when used for information or entertainment, but expenditure on advertising or promoting the centre through it was a cost of Promotion.

The claimant tenant occupied retail premises at the Trafford Centre under a lease containing detailed service charge provisions. Schedule 4 required the landlord to bear 50% of the cost of Promotion and capped the total cost of Promotion chargeable in each period at 10% of the relevant service charge.

The parties agreed that the costs of entertainments, Christmas decorations, Santa’s Grotto and the Sky Wall were otherwise service charge items. The preliminary issue was whether those matters constituted “Promotion” under the lease definition, which referred to advertising and other forms of promotion of the centre intended to bring additional custom.

1. Construction of the definition. The phrase “advertising and other forms of promotion of the Centre” was the essential starting point. It required the court first to determine whether the relevant matter was a form of promotion of the centre, and then to ask whether it was intended to bring additional custom. Showing the necessary intention alone was insufficient.

2. The definition used general English words and imposed no bright-line requirements that promotion occur outside the centre, be irregular, or be unusual. Those features might commonly occur, but they were not essential. Nor did the fact that an item appeared elsewhere in the service charge list prevent it from being Promotion, since the charging provisions began with broad words and the list was expressly non-exhaustive.

3. Applying the ordinary meaning of the language, the entertainments, Christmas decorations and Santa’s Grotto were facilities, amenities or attractions within the centre, rather than forms of promotion of the centre. Their costs therefore fell outside paragraph 10 of Schedule 4.

4. The Sky Wall was similarly a facility, amenity or attraction when used for entertainment or general information. However, to the extent that expenditure related to advertising or promoting the centre on the Sky Wall, it was a cost of Promotion to which paragraph 10 appeared to apply. The precise consequential accounting issue was left for the parties to address after determination of the preliminary issue.

This was a first-instance determination of a preliminary issue ordered by the Master on 22 February 2008. No appellate history is stated in the judgment.