Linda Foster & Anor v Wargrave on Thames Housing Association Ltd

Where a tenancy agreement creates separate rent, service, electricity and water charges, each charging mechanism should be given a coherent contractual function. The natural and ordinary meaning remains the starting point, read with the agreement as a whole and its factual and commercial context. Defined terms and limiting words matter. An electricity charge confined to electricity supplied to the premises for specified heating does not extend to electricity used for communal facilities unless clear contractual language requires that result. Electricity needed to operate communal lighting, CCTV, a residents’ lounge and similar facilities is ordinarily part of the service being provided, rather than a separate supply to the tenant’s premises.

The appellants were joint tenants of a flat in a development operated by the respondent housing association. Their tenancy agreement separately identified basic rent, service charge, electricity charge and water charge. The appellants withheld the electricity charge after disputing the scope of the sums claimed.

HHJ Davies accepted that the electricity charge covered underfloor heating and electricity used for communal lighting, the residents’ lounge and CCTV. He found non-payment to be a breach of the tenancy agreement and made a suspended possession order. Permission to appeal was granted on the issue of contractual construction only.

The appeal concerned whether the electricity charge was confined to electricity supplied to the appellants’ flat for underfloor heating, or also covered electricity consumed in communal areas and facilities.

Appeal allowed. Ground 1 was made out. The finding that the appellants were in breach depended on an erroneous construction of the tenancy agreement.

1. Contractual interpretation is a question of law for the appellate court, although primary factual findings are not disturbed unless the trial judge was wrong. The court must ascertain the objective meaning of the language chosen, viewed as a whole and in its documentary, factual and commercial context.
2. The natural and ordinary meaning of the words is the starting point. The exercise is unitary. Commercial common sense may assist where language is capable of more than one meaning, but cannot be used to undervalue the language chosen or rescue a party from an inconvenient bargain.
3. Defined terms, words of limitation and separate charging mechanisms should be given coherent effect. The court should be slow to construe distinct charges as substantially overlapping unless the contract clearly requires that result.
4. The agreement distinguished the appellants’ flat, defined as the Premises, from communal areas and facilities. Clause C4 made the tenants responsible for electricity applying to the Premises, while clause B3 stated that the association would supply timed, off-peak electrical underfloor or radiator background heating only to the Premises. The separate electricity charge in clause A3 was likewise directed to electricity supplied to the Premises.
5. Electricity required to operate communal lighting, CCTV, the residents’ lounge, emergency systems and similar facilities was an integral part of the services identified in the service charge provisions. The agreement contained no clear language permitting those communal electricity costs to be carved out and recovered through the separate electricity charge.
6. The disputed sums were therefore not wholly recoverable under that charge. The court did not determine whether the respondent could recover relevant expenditure through another contractual mechanism, such as the service charge, or whether any double recovery had occurred.

• High Court (King’s Bench Division): In [2026] EWHC 1910 (KB) , the court allowed the appeal on Ground 1 and rejected the construction of the electricity charge adopted below.
• Trial decision: HHJ Davies held that the electricity charge included underfloor heating and specified communal electricity costs, found non-payment to be a breach, and made a suspended possession order. No citation for that decision is stated.

Permission to appeal was refused on the papers by Mr Justice Ritchie and later granted by Mr Justice Kimblin on Ground 1 only.