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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Windsor-Clive & Ors v Rees & Anor [2019] EWHC 1008 (Ch) (18 April 2019) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2019/1008.html Cite as: [2019] EWHC 1008 (Ch), [2019] 4 WLR 74, [2019] WLR(D) 270 |
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BUSINESS AND PROPERTY COURTS IN WALES
PROPERTY, TRUSTS AND PROBATE LIST (ChD)
2 Park Street, Cardiff, CF10 1ET |
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B e f o r e :
sitting as a Judge of the High Court
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(1) THE HONOURABLE IVOR EDWARD OTHER WINDSOR-CLIVE, EARL OF PLYMOUTH (2) LADY EMMA WINDSOR-CLIVE (3) THE HONOURABLE DAVID JUSTIN WINDSOR-CLIVE (as Trustees of The St Fagans No. 1 and No. 2 Trusts) |
Claimants |
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- and - |
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(1) JENKIN THOMAS REES (2) PHILLIP REES |
Defendants |
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Stephen Jourdan Q.C. (instructed by Michelmores LLP) for the Defendants
Hearing date: 3 April 2019
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Crown Copyright ©
JUDGE KEYSER QC:
Introduction
The Farm and the Lettings
The 1965 Tenancy Agreement
"3. All mines minerals substances of every description stones flints chalk gravel sand peat earth and clay whatsoever in upon or under the premises with full and free liberty and power (including power and right to let down the surface without compensation) to enter upon the farm or authorise others to enter upon the farm in order to search for win dress make merchantable and carry away the same and to execute all work incidental thereto doing as little damage as the nature of the case may admit making the Tenant reasonable compensation for loss of crops (if any) for the current year and allowing the Tenant a proportionate reduction in rent for all land so permanently taken or damaged.
4. All timber and other trees pollards heirs saplings underwoods and woodlands with right of entry for himself and others authorised by him to plant mark fell cut and carry away the same over any part of the holding or lands hereby demised making the Tenant reasonable compensation for any loss or damage sustained thereby any claim for loss or damage to be rendered within two calendar months of the date of the occurrence of such damage.
5. Subject to the provisions of the Ground Game Acts of 1880 and 1906 all game ground or otherwise (including nests and eggs) fish wild fowl snipe landrail and plover together with a right for the Landlord and all persons authorised by him to preserve hunt shoot fish course and sport and the Tenant undertakes to assist in the preservation of game and the prosecution of poachers on the premises.
6. Power to take possession at any time of any portion of the holding (except house buildings or gardens) for building development or any purpose mentioned in Section 31 of the Agricultural Holdings Act 1948 on giving the Tenant three months' notice in writing paying the Tenant compensation for his interest therein and allowing a proportionate reduction in the rent of the Farm.
7. Right for the Landlord and his Consultant and all others authorised by him with or without horses carriages and other vehicles to enter on any part of the Farm lands and premises at all reasonable times for all reasonable purposes."
The 1968 Tenancy Agreement
"PROVIDED ALWAYS AND IT IS HEREBY AGREED [X] that the Landlord shall have the right and power to resume possession of the land hereby let or any part thereof on the expiration of three calendar months' notice in writing … if the said land is required for any of the following purposes namely Building, the addition ot [sic] [?] the said land to any Building leasehold plot, Mining, Quarrying, Sewering, Draining, Road Making, Planting or other Estate Development, the laying of Gas, Water or Electric Mains or for any other easement approved by the Landlord or required by a Local Authority.
AND FURTHER [Y] that the Landlord may at any time and at all times during the said tenancy enter upon the said premises with Agents Servants Workmen and others for the purpose of inspecting the same or for making roads sewers or drains or for any other purpose connected with his estate".
The Facts
"I spoke briefly with Phillip earlier today to let him know that surveyors will be conducting a walk over survey of parts of Maesllech tomorrow and on Thursday (14th and 15th September). The survey will be conducted on foot only, and will primarily use public rights of way. However, they also wish to skirt along the margins of some fields so as to gain a better view of the farm. I attach a plan showing the routes marked in yellow, not all of them affecting Maesllech."
This made it clear that the surveyors, though largely staying on public footpaths, would also enter the margins of some fields. It is possible that Jenkin did not see that email; it was sent to a different email address from that generally used by Jenkin at the time. But the fact that it was sent at all makes it likely that Mr Hyde told the defendants that the surveyors would want to leave the footpaths. The defendants correctly acknowledge that they made clear to Mr Hyde that the surveyors were to remain on the public footpaths and not enter onto any other part of the Farm. Mr Perons made a file note of the report he received from Mr Hyde:
"Chris Hyde has reported to me that he has sought to arrange access for a walkover inspection by EDP tomorrow (14th September). In response to the latest request, Phillip Rees has told Chris Hyde today that he will deny access, unless conducted from the public footpath."
"I went to Maesllech today to seek confirmation that Jenkin Rees would allow EDP access for the walkover surveys.
Philip Rees, speaking for his father, tried to claim that he understood that as his father had applied for arbitration, they didn't have to allow access for surveys.
I told him that wasn't the case at all. Philip Rees said that they wanted to [seek] advice from Barry Meade. I said that Barry Meade was away until 23rd September. I said that they needed to take advice because, should they not permit access, I was required to refer the matter to Burges Salmon.
Philip Rees said that they might speak to Barry Meade's son, Philip Meade. I said that I thought that would be a good idea."
There is some dispute as to who raised the possibility of speaking to Philip Meade, but in all other respects the note seems to be a reasonably accurate summary of the essential parts of the conversation.
"My recollection of the outcome of that meeting was that it was left that we would think about it. Phillip or I might speak to Philip Meade and then contact Mr Perons. Although Mr Perons had suggested that the survey should take place on 22 and 23 September, that was plainly not going to be the case because of the need for advice. More importantly in the context of what then happened, Mr Perons did not give any indication that there was any urgency about proceeding with this."
(That evidence largely reflects the contents of a letter that Phillip wrote to Mr Perons on 23 September.) Mr Perons' evidence was that his understanding remained that the defendants were denying access (see paragraphs 61 and 62 of his second statement) but that they would seek advice and revert to him. He states that he told the defendants the date for the habitat survey; he does not state that he told them the date was critical, but he does not describe any discussion concerning changing the date.
"Let's touch base in the morning and discuss further. We certainly need to resolve this as a matter of urgency.
It is of paramount importance to the Plasdwr application that we update the ecology surveys. To put it bluntly (and I hope not to appear rude, but just so we are aware of the ramifications of not doing the survey), the Plasdwr application will be refused on ecology grounds if we do not update the ecological surveys. …
We have 8 working days left to revise the Environmental Statement of which 2 of those days will be spent in the field doing the survey work. We simply must try to avoid changing the survey date, particularly as our ecology team is now fully booked for September.
If access cannot be granted I will need to update Redrow on this and explain the repercussions, but will of course liaise with you further before doing so."
Jenkin states that Mr Perons did not tell him the contents or tenor of Mr Bird's email and that at no point did he tell him that the matter was urgent or that legal action would be commenced if access were not given for the bat survey.
"We hope it is clear that we accept that the Landlords must have access for the ecological survey. If there are to be arguments about the rights and wrongs of that it should be in the future. …
I do not think that I should be involved in this at all because I am not a tenant of the farm. However, we agree that we will accept whatever the Judge thinks is the proper way to deal with this. …"
Phillip also sent a further letter by email to Mr Perons, to broadly similar effect. He wrote: "The sad thing is that these Court proceedings started without proper communication from you and without my Father even opposing access."
Summary of the parties' cases
Discussion
The approach to construction
"The contract should be given the meaning it would convey to a reasonable person having all the background knowledge which is reasonably available to the person or class of persons to whom the document is addressed."
The ramifications of that approach have been discussed in detail in many cases. I refer in particular to Rainy Sky S.A. v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900; Arnold v Britton [2015] UKSC 36, [2015] AC 1619, esp. per Lord Neuberger PSC at [15]-[22]; and Wood v Capita Insurance Services Limited [2017] UKSC 24, [2017] AC 1173, esp. per Lord Hodge at [10]-[13].
"1. It is well established that a landlord, like any grantor, cannot derogate from his grant. To put it in more normal language, as has been said in a number of cases, a landlord cannot take away with one hand that which he has given with the other …
2. In order to determine whether a specific act or omission on the part of the landlord constitutes derogation from grant, it is self-evidently necessary to establish the nature and extent of the grant …
3. 'The exercise of determining the extent of the implied obligation not to derogate from grant involves identifying what obligations, if any, on the part of the grantor can fairly be regarded as necessarily implicit, having regard to the particular purpose of the transaction when considered in the light of the circumstances subsisting at the time the transaction was entered into': per Sir Donald Nicholls VC in Johnson & Son Ltd v. Holland [1988] 1 EGLR 264 at 268A.
4. There is a close connection, indeed a very substantial degree of overlap, between the obligation not to derogate from grant, the covenant for quiet enjoyment, and a normal implied term in a contract. Thus, in words which apply equally to an implied term in a contract, Bowen LJ said in Myers v. Catteson (1889) 42 ChD 470 at 481, in relation to the derogation from grant principle, that one should give effect to what he called 'the obvious intention of the parties, so as to give the transaction between them a minimum of efficacy and value which upon any view of the case it must have been their common intention that it should have.' In Southwark Borough Council v. Mills (1999) 4 AER 449 at 467F Lord Millett explained that, to a large extent, the covenant for quiet enjoyment, and the obligation of a landlord not to derogate from his grant amounted to much the same thing.
5. The terms of the lease will inevitably impinge on the extent of the obligation not to derogate. Express terms will obviously play a part, possibly a decisive part, in determining whether a particular act or omission constitutes a derogation. An express term should, if possible, be construed so as to be consistent with what Hart J called 'the irreducible minimum' implicit in the grant itself. However, as he went on to say, a covenant relied on by the landlord 'if construed as ousting the doctrine in its entirety is repugnant … and should itself be rejected in its entirety' — see Petra Investments Ltd. v. Jeffrey Rogers plc (2000) Landlord and Tenant Reports 451 at 471."
I need not refer to the other principles mentioned in that case; the facts did not concern derogation from grant by way of derogation from exclusive possession.
"Rights reserved to a landlord under the terms of a lease are to be construed narrowly against the landlord - see William Hill (Southern) Limited v Cabras (1986) 54 P & CR 42."
The claimant was tenant of the ground floor and basement of a building owned by the defendant landlord. The lease reserved a number of rights to the landlord. One such right was to carry out construction works to the building itself and to erect new buildings on adjoining property of the landlord. Another such right was a right of entry, as follows: "The right to enter … the Premises at any time during the term at reasonable times and on reasonable notice … to inspect them, to take schedules or inventories of fixtures and other items to be yielded up at the end of the term, and to exercise any of the rights granted to the Landlord elsewhere in this Lease …" The deputy judge rejected the submission that the right of entry included the right to build. After the remark quoted above, he continued:
"In my judgment, what is described by clause 1-1 as the 'Right of entry to Inspect' does not extend to coming on to the Premises and, indeed, occupying them for a significant period of time, for the purpose of carrying out building works on adjoining property belonging to the Landlord. That, it seems to me, would be to give to the clause an extravagant rather than a narrow meaning. The rights that it seems to me clause 1-1 is referring to are rights that entitle the Landlord to come on to the Premises for the sort of matters which are already referred to in that clause."
"Upon reasonable prior written notice … the tenant shall permit the Landlord and those authorized by it at all times to enter (and remain unobstructed on) the Premises for the purpose of:
13.1.1 inspecting the Premises for any purpose, or
13.1.2 making surveys or drawings of the Premises, or
13.1.3 complying with the Landlord's obligations under this Lease or with any other Legal Obligations of the Landlord
Provided that the Landlord shall cause as little interference and disturbance as is practicable and shall make good any damage caused forthwith and to the reasonable satisfaction of the Tenant."
Sharp J held that paragraph 13 of the lease did not permit the activity intended by the landlord. She considered that the usual meaning of the word "survey" was not such as to include the drilling of boreholes. She also, at paragraph 39, considered the immediate context in which the word "survey" occurred in the lease:
"As to immediate context, the use of the preposition 'on' together with the words which follow the word survey itself (and drawings) suggest that the word survey, in the context, means a survey of (rather than under) the land and of the buildings on the land (in contrast with the clause dealing with Hazardous Waste, where the parties provide specifically for what is or is not to be placed 'under' the Premises). Interpreting the words in paragraph 13.1.2 in the way in which a reasonable commercial person would construe them, I do not think one can detach the word survey from its immediate context which in my view, the argument advanced by [counsel for the landlord] seeks to do."
Sharp J also considered the question whether the degree of interference with the tenant's quiet enjoyment that would be permitted on the landlord's construction of paragraph 13 was consistent with the language used:
"41. When endeavouring to ascertain the presumed intention of the parties and whether the parties would have intended the word survey to encompass every activity which could possibly be so described, it is also material in my view to consider the interaction between paragraph 13.1.2 and the Tenant's right to quiet enjoyment. The covenant to quiet enjoyment would be significantly undermined in my view if the Landlord has the right (as it is contended it does) to enter the Premises, and conduct whatever could be described as a survey, including a geological survey for example, no matter how intrusive, no matter what disruption was caused to the Tenant's business and however long such activities might take; even allowing it – on [the landlord's] interpretation so it seems to me – to demolish part of any building with the only proviso that it should cause as little damage and disturbance as is practicable and make good any damage forthwith to the reasonable satisfaction of the Tenant.
42. Such significant inroads into the Tenant's right to enjoy the Premises free from interference is not a result it seems to me that the parties would have contemplated when executing the Lease. If such had been the intention of the parties to a commercial lease, one would expect to find much clearer words or indication to that effect within it."
"To permit the Landlord and its agents at all reasonable times with or without workmen on giving forty eight hours written notice (except in emergency) to the Tenant to enter upon the Premises generally to inspect and examine the same to view the state of repair and condition thereof and to take a schedule of the Landlord's fixtures and of any wants of compliance by the Tenant with its obligations hereunder."
The parties did not put forward any background matter as bearing on construction; they relied simply on the provisions of the lease. Delivering the opinion of the Court, Lord Reed said:
"12. A lease, like any other contract, must be construed as a whole, and so as to give proper effect if possible to all of its provisions. In the present case, it is necessary in particular to achieve a fit, if possible, between the landlord's right to inspect and examine, by virtue of clause 3.11, and the tenant's right to be maintained in possession, reflected in clause 4.1.
13. Since a lease is essentially a grant of possession of the subjects of the lease for the period of the lease, it is implicit, if not expressed, that the landlord is precluded from any action which encroaches materially upon the tenant's possession of those subjects during that period. The landlord's obligation to maintain the tenant in exclusive possession may however be qualified by the terms of the lease. [Lord Reed then referred to provisions in the lease that did qualify the tenant's possession, which however imposed requirements for minimising disturbance and making good any damage caused; and he continued:]
14. There is a striking difference between the wording of the provisions which we have just discussed and that of clause 3.11. Although clause 3.11 entitles the landlord to enter the premises 'to inspect and examine the same to view the state of repair and condition thereof...', there is no express obligation to do so in such a way as to cause the least practicable disturbance to the tenant; nor is there any obligation to make good any damage caused. In a professionally drafted lease, the omission of such obligations, when they are specified in several other provisions, is unlikely to have been unintended. While not necessarily conclusive in itself, it strongly suggests that it was not envisaged or intended that the exercise of the landlord's right of inspection under clause 3.11 would cause any material disturbance to the tenant, or would result in any material damage to the premises.
…
16. More generally, it appears to us that if it had been the intention of the parties to the lease that the landlord should be entitled under clause 3.11 to interfere with the tenant's possession of the premises to the extent contended for by the pursuers (which, as we have explained, would involve intrusive investigations lasting several days and the cordoning off of parts of the forecourt of the premises), one would expect to find a much clearer indication to that effect in the lease."
1) An exception or reservation will, if possible, be construed in such a manner as to preserve its validity.
2) Therefore the court will, where it is possible to do so, construe an exception or reservation as restrictively as is required to avoid a derogation from grant or a conflict with the covenant for quiet enjoyment. In the words of Neuberger J in Platt v London Underground Ltd (supra): "An express term should, if possible, be construed so as to be consistent with what Hart J called 'the irreducible minimum' implicit in the grant itself."
3) There is no further rule that a reservation is to be construed restrictively against a landlord.
4) However, the application of the standard principles of construction, including the requirement to have regard to all of the provisions of the instrument and to the principal purpose and subject matter of the instrument, will tend to lead the court to expect that substantial qualifications of the rights to exclusive possession and quiet enjoyment of the demised premises will appear clearly from the lease. Further, apparently broad and unqualified words in reservations may, on closer examination, be found to have a more restricted meaning when read in their immediate or wider textual context.
5) If it is not possible to construe an exception or reservation in a manner consistent with the 'the irreducible minimum' implicit in the grant itself, it will be struck down as being repugnant to the lease.
6) The contra proferentem rule operates only if the exception or reservation is ambiguous, in the sense that the court is unable to decide on its meaning by the use of the materials usually available for interpretation.
7) By reason of the principles of construction set out above, the contra proferentem rule can only apply if the court cannot otherwise decide among two or more constructions, all of which are consistent with the irreducible minimum consistent with the grant itself. This is because: (a) if any possible construction of the reservation would be inconsistent with the irreducible minimum implicit in the grant itself, the reservation will have been struck down as repugnant to the grant; and (b) if, of two possible constructions of the reservation, one would be consistent with the irreducible minimum implicit in the grant itself and one would not, the court will have chosen the former in accordance with the principles set out above.
8) Once the court is forced to have recourse to the rule, the correct position is that the reservation operates as a re-grant by the tenant and therefore the reservation falls to be construed against the tenant, who is considered to be the proferens.
The 1965 Tenancy Agreement
The 1968 Tenancy Agreement
Remedy
"Such an injunction [that is, a quia timet injunction] should not, ordinarily, be granted unless the plaintiff can show a strong probability that, unless restrained, the defendant will do something which will cause the plaintiff irreparable harm—that is to say, harm which, if it occurs, cannot be reversed or restrained by an immediate interlocutory injunction and cannot be adequately compensated by an award for damages. There will be cases in which the court can be satisfied that, if the defendant does what he is threatening to do, there is so strong a probability of an actionable nuisance that it is proper to restrain the act in advance rather than leave the plaintiff to seek an immediate injunction once the nuisance has commenced. 'Preventing justice excelleth punishing justice'—see Graigola Merthyr Co Ltd v Swansea Corporation [1928] Ch 235 at page 242. But, short of that, the court ought not to interfere to restrain a threatened action in circumstances in which it is satisfied that it can do complete justice by appropriate orders made if and when the threat of nuisance materialises into actual nuisance (see Attorney-General v Nottingham Corporation [1904] 1 Ch 673 at page 677)."
In Vastint Leeds BV v Persons Unknown [2018] EWHC 2456 (Ch), [2019] 4 WLR 2, Marcus Smith J considered the authorities relating to the grant of quia timet injunctions and at [31] set out the principles that he derived from them; the following principles are relevant:
"(3) When considering whether to grant a quia timet injunction, the court follows a two-stage test: (a) First, is there a strong probability that, unless restrained by injunction, the defendant will act in breach of the claimant's rights? (b) Secondly, if the defendant did an act in contravention of the claimant's rights, would the harm resulting be so grave and irreparable that, notwithstanding the grant of an immediate interlocutory injunction (at the time of actual infringement of the claimant's rights) to restrain further occurrence of the acts complained of, a remedy of damages would be inadequate?
(4) There will be multiple factors relevant to an assessment of each of these two stages, and there is some overlap between what is material to each. Beginning with the first stage—the strong possibility that there will be an infringement of the claimant's rights—and without seeking to be comprehensive, the following factors are relevant: (a) If the anticipated infringement of the claimant's rights is entirely anticipatory—as here—it will be relevant to ask what other steps the claimant might take to ensure that the infringement does not occur. … (b) The attitude of the defendant or anticipated defendant in the case of an anticipated infringement is significant. As Spry, Equitable Remedies, 9th ed (2013) notes at p. 393, '[o]ne of the most important indications of the defendant's intentions is ordinarily found in his own statements and actions'. (c) Of course, where acts that may lead to an infringement have already been committed, it may be that the defendant's intentions are less significant than the natural and probable consequences of his or her act. (d) The time-frame between the application for relief and the threatened infringement may be relevant. The courts often use the language of imminence, meaning that the remedy sought must not be premature (Hooper v Rogers [1975] Ch 43, 50).
(5) Turning to the second stage, it is necessary to ask the counterfactual question: assuming no quia timet injunction, but an infringement of the claimant's rights, how effective will a more-or-less immediate interim injunction plus damages in due course be as a remedy for that infringement? Essentially, the question is how easily the harm of the infringement can be undone by an ex post rather than an ex ante intervention, but the following other factors are material: (a) The gravity of the anticipated harm. It seems to me that if the some of the consequences of an infringement are potentially very serious and incapable of ex post remedy, albeit only one of many types of harm capable of occurring, the seriousness of these irremediable harms is a factor that must be borne in mind; (b) The distinction between mandatory and prohibitory injunctions."