Boots objected to the level of payment it was being forced to make towards Christmas decorations, the Santa's Grotto, Skywall, and other entertainment. It said this type of entertainment should be technically classed as promotions and therefore be split 50:50 between the retailers and the landlord, Peel Holdings.
The judge on the case, Mr Justice Morgan, said entertainment should be considered a part of the centre facilities and not an extra promotional expense, and ruled in favour of the landlord on all four counts.
In his summing up Morgan said: “You can distinguish promotion of the centre from the benefit to a customer of an attraction, service, and amenity. Entertainments are a facility or an amenity, not a promotion. The same conclusion can be reached as to Christmas decorations and the Santa’s Grotto.”
The ruling is likely to be a landmark case for future service charge disputes, with retailers increasingly looking to question unfair charges before signing leases as a means of cutting back on costs.
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