Agricultural land – Licence – Termination – Appellant and respondent obtaining letters of administration of father’s estate – Administrators granting licence of estate land to appellant – Appellant failing to pay licence fee – Respondent seeking possession of land – Whether licence being terminated – Whether judge erring in law in concluding that effective notice terminating licence despite service by respondent only when licensor included appellant – Appeal allowed
The appellant and the respondent were brothers. Their father had died intestate in 1995, leaving a farm as his principal asset, comprising a farmhouse and garden and five other plots of land. In July 1998, the administrators of his estate, who included the appellant and the respondent, conveyed the farmhouse and garden to the appellant and his partner. On the same day they also granted to them a licence of farm outbuildings and various fields.
On 16 February 2006, when the appellant had failed to pay the £1 annual licence fee specified in the licence agreement, solicitors purportedly acting “on behalf of all the family members” of the deceased wrote to the appellant requesting him, within seven working days, to pay the £7 arrears of licence fee owing to the estate.
The arrears were not paid and the respondent commenced proceedings seeking various heads of relief, including possession of the land the subject of the licence. An issue arose whether the licence had been terminated. The respondent claimed that the licence had been terminated under clause 4(b) of the licence agreement in consequence of the appellant’s failure to pay the arrears of the licence fee within the specified period.
The judge found as a fact that the 2006 notice had been given only on behalf of the respondent, whereas, at the relevant time, the licensor was both the appellant and the respondent, as administrators of their father’s estate. The judge held that, to hold that no notice could be given was an unsatisfactory contractual result which the parties could not have intended. The solution was to construe the reference to licensor in clause 4(b) as referring to all persons who together were the licensor, apart from any person who was also the licensee. On that construction, the notice in the present case could be given by the respondent alone and was effective: [2011] EWHC 3553 (Ch). The appellant appealed.
Held: The appeal was allowed.
The judge had erred in concluding that the notice to terminate the licence was effective despite being served by only one individual, where the licensor consisted of two people.
It was not necessary to imply into clause 4(b) that “the licensor” did not mean the same as elsewhere in the licence. The appellant was expressly described as one of the individuals making up the licensor in the opening words of the licence. A reasonable person, having all the background knowledge which would reasonably be available to the audience to who the licence was addressed, would regard it as improbable that, in this short, simple, professionally drawn document, the defined phrase “the licensor” was intended to mean one thing in the opening words and clauses 1 to 3 but something else in clause 4(b): Featherstone v Staples [1986] 1 EGLR 6, [1986] 278 EG 867 distinguished.
The reasonable person might well foresee the potential practical difficulty in the event, as happened, that the respondent wanted to serve a clause 4(b) notice on the appellant and the appellant refused to join in its service. However, he would also know that the appellant was a party to the licence in his capacity as a joint administrator. He would therefore recognise that the appellant’s duties owed to the estate as such an administrator would require him, at least for the purpose of the service of such a notice, to subordinate his own conflicting personal interests and concur in its service; that there would be no reason why, if so advised, the appellant could not so concur expressly without prejudice to his right in his personal capacity to dispute the justification for the notice; and that it would then be open to the appellant to dispute its justification in any proceedings that might subsequently be brought against him, in which proceedings the interests of the estate would be sufficiently represented by the respondent. Alternatively, if the appellant were to decline to join in the giving of any notice for the service of which there was proper justification in the interests of the estate, the reasonable man would recognise that it would in principle be open to the respondent to seek his removal as an administrator, if necessary, by court proceedings, upon the successful conclusion of which the appellant would cease to have any status as a licensor and would not need to join in any clause 4(b) notice.
The reasonable man would therefore be likely to conclude that, although an interpretation of “the licensor” in clause 4(b) as including any licensor who was also a licensee might give rise to practical difficulties and unwanted expense in the future, there was no basis for concluding that it would render the machinery of clause 4(b) unworkable. The clause might have been drafted in a way that would avoid any such difficulties arising in the future, by providing for the relevant notice to be given by the licensors other than any who was for the time being a licensee. However, it was not the court’s function to improve the document it was called upon to construe, nor did it have any power to do so. Moreover, as clause 4(b) remained workable even if its working out might, in the event of obstruction from the appellant, prove cumbersome or expensive, there was no necessity and so no justification to imply the sort of term implied by the judge: Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10, [2009] 1 WLR 1988 applied.
James Howlett (instructed by Nelsons Solicitors, of Derby) appeared for the appellant; Timothy Clarke (instructed by Moody & Woolley, of Derby) appeared for the respondent.
Eileen O’Grady, barrister
