UYCF Ltd (formerly Night Trunkers (London) Ltd) (Claimant/Respondent) Christopher and Penelope Anne Forrester (Defendants/Appellants)
| Jurisdiction | England & Wales |
| Judgment Date | 08 December 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J1208-14 |
| Docket Number | CCRTF 1999/1308/B2 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 December 2000 |
[2000] EWCA Civ J1208-14
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM SLOUGH COUNTY COURT
(HIS HONOUR JUDGE HOLDEN)
Lord Justice Thorpe and
Lord Justice Potter
CCRTF 1999/1308/B2
MICHAEL KING (instructed by Messrs Gordons of Marlow, Bucks) appeared on behalf of the Appellants
TIMOTHY DUTTON (instructed by Messrs Stevens & Bolton of Guildford) appeared on behalf of the Respondent.
POTTER LJ:
Introduction
This is an appeal by the defendants against the judgment of HH Judge Holden in the Slough County Court on 18 th November 1999 and his order of the same date whereby he gave judgment for the claimant for damages to be assessed in lieu of specific performance in respect of the breach by the defendants of a covenant to erect an office building pursuant to Clause 3(2) of a lease dated 2 nd May 1992 made between the first defendant as freehold owner and lessor and the claimant company under its previous trading name as lessee (In 1995 the first defendant transferred the freehold into the name of himself and his wife jointly.) The judge also dismissed the defendants' counterclaim for rectification of the lease by deletion of Clause 3(2), alternatively a declaration that the covenant was void for uncertainty or otherwise imposed no obligations upon the defendants. The appeal turns upon the issue of uncertainty.
The History
The lease related to premises known as The Yard, Low Meadow Farm, Windsor Road, Gerrards Cross, which was demised to the claimant for the purposes of its fleet transport business for a term of twelve, subsequently increased to twenty-five, years at a rent of £25,000 per annum subject to rent reviews every three years. The user of the premises was limited to that of a haulage contractor unless altered with the previous consent in writing of the lessor. By clause 3(2), the lessor covenanted as follows:
'To erect in the position shown edged blue on the plan herewith a permanent office building in accordance with the specification contained in a letter of even date and signed by the parties a copy of which is annexed hereto … .'
The plan attached to the lease showed a rectangular area edged blue on open ground immediately adjacent to a large hangar like structure used as workshops and the forecourt area in front of it. The area was designated "New Offices". However, no signed, or any, letter of specification was annexed to the lease and, as the judge held, none existed. Oddly, no period for compliance with the covenant was provided for and, for a considerable period after the claimant went into possession as lessee the parties took no steps to implement the clause. Indeed, without the matter being further pursued or discussed, the claimant, rather than requiring implementation of the covenant, erected on open ground a little way from the blue edged area marked on the plan a two-storey Portakabin which the claimant occupied as offices in place of a single Portakabin already there which the first defendant had removed at the claimant's request. The claimant also demolished the workshop and replaced it with a timber-framed barn. Other works were also carried out elsewhere on the premises, by agreement with the first defendant, on the basis that the claimant paid for them and obtained any necessary planning permission.
The matter only came to a head when the local authority served a planning enforcement notice for removal of the two-storey Portakabin and the claimant gave notice to the defendants that he required them to comply with the covenant in Clause 3(2).
It was not possible for the judge to reach any conclusion as to the intention of the parties as at the time the lease was signed so far as the nature or detail of the office building contemplated by Clause 3(2) was concerned. Neither party asserted that such details had been agreed or discussed and, in any event, the judge held that neither of the protagonists, namely the first defendant as lessor and Mr Parker for the claimant lessee, was a witness of truth. It was the first defendant's case, as pleaded in paragraph 4 of his Amended Defence and Counterclaim, that, in negotiations prior to the grant of the lease, Mr Parker informed him that the claimant had plans for improving the premises, including the building of a new office on the blue land if planning permission could be obtained Mr Parker also stating that the claimant would pay for the improvements. The first defendant elsewhere pleaded that, having orally agreed that the claimant could carry out the improvements provided that he paid for them and obtained the necessary planning permission, he was unaware that Clause 3(2) had been included in the lease at all. His case at trial was that he had been tricked by the claimant and his solicitor, who acted for both parties in drafting the lease, into signing the lease in a form which included Clause 3(2).
The claimant on the other hand pleaded at paragraph 3 of the Reply that, in the prior negotiations, it had been agreed that the defendants would be responsible for the construction of the new office building and for obtaining the necessary planning consent.
The judge made no detailed findings upon these matters. The greater part of his judgment is taken up with the allegation of trickery and what may or may not have been the first defendant's true state of mind as to who was to build any proposed office premises. He concluded that the first defendant in fact had known what he was signing. He also dealt at length with Mr Parker's credibility, not least because at a late stage, Mr Parker had produced a form of specification which he said existed at the time the lease was signed and was that referred to in Clause 3(2); however, the judge had little hesitation in rejecting that evidence. Finally, the judge was highly critical of the role and performance of the solicitor.
The judge dealt with the question of whether or not the Clause 3(2) was enforceable or void for uncertainty relatively briefly. He said that if the covenant was to 'stand up':
"it can only do so if there is a sufficient degree of certainty, and this has been the subject of very interesting submissions .. . I have reached the conclusion that the covenant (and of course I am talking only of the main covenant in real terms) is not void for uncertainty. I think if, as I concluded, there was an intention that an office building should be built on a site, the site being well delineated, I ought to strive, as Mr Dutton [for the claimant] says, to see that situation achieved and in so doing I think it is again a question of attempting to use my common sense and to ask myself again another question. What would the parties have thought in the circumstances to be an appropriate office building? I do not really have great difficulties in that, because it would be a building which the landlord would know would be appropriate and necessary for his tenant. To some extent it would have some relationship to the original defunct building but that is not in itself an important aspect. It would have to be a building that would have to be placed in a certain situation having regard to the plan attached to the lease. I agree with Mr Dutton that its eventual size will be to some extent limited, not only by the planning permissions but the size of the plot, but more importantly by the needs of the tenant. I think the most attractive aspect of the submission that Mr Dutton made is this, that in the end it is a decision for the landlord to make. He is the controlling factor and can only be forced to agree to a building which he regards in all the circumstances to be reasonable. I suppose it is trite to say, if there is a disagreement in relation to that aspect, it is another contention that some court will have to sort out as between the parties. As Mr Deung I think put it in his report, it has got to be a permanent building of reasonable construction ….
… I appreciate that to some extent we are on newish ground here and I have to say I have reached the decision with a degree of diffidence because I well understand and have carefully considered Mr King's very strong submissions in relation to this aspect. It is, as he says, a question of degree, but I think on balance there is sufficient here to say that there is not the degree of uncertainty in the situation that [the first defendant] would wish there to be …
That effectively is the judgment as far as it goes. But it really seems to me, gentlemen, that the interesting area of the case may well turn out to be the question of whether or not in all the circumstances I am going to exercise a discretion."
In that last sentence, the judge was referring to the claim for specific performance pleaded by the claimant. However, Mr Dutton for the claimant then indicated that the claim for specific performance was no longer pursued and the judge accordingly ordered that there be judgment for damages to be assessed.
The Principles Relating to Uncertainty
As stated in The Interpretation of Contracts (2 nd Ed) by Kim Lewison QC at para 7.10, p.213, the task of the court is to construe the contract or other document in issue according to the ordinary canons of construction and then to determine whether the document, as so construed, is void for uncertainty. Thus, the first step necessary to be taken in respect of a lessee's or landlord's covenant alleged to be void for uncertainty is to identify the obligation which the parties intended to...
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