Commercial lease – Construction – Survey – Landlord wanting to enter premises to drill boreholes and take samples for environmental survey – Tenant refusing consent – Whether terms of lease permitting landlord to enter premises for purposes sought – Appeal dismissed
The appellant landlord let commercial premises that had formerly been used as a petrol station the respondent tenant for a term of 30 years from December 2000. The rent reserved was £32,000 pa subject to five-year reviews. The appellant was the successor in title to H Ltd, having acquired the freehold in 2008 for £1.04m. The lease remained vested in the respondent. Paragraph 13 of schedule 4 of the lease entitled the landlord to enter the premises on reasonable notice to make surveys and drawings.
In May 2008, the appellant informed the respondent that it wanted to carry out an environmental investigation survey in June 2008; the survey would necessitate the drilling of 13 boreholes, 12 to a depth of 5m and one at 20m. The respondent refused consent and the appellant applied to the county court for a declaration that it was entitled to enter the premises to carry out the survey, pursuant to para 13 of schedule 4 of the lease.
The judge concluded that “survey” in para 13 did not include the activities that the appellant wanted to carry out and dismissed its claim. The appellant appealed. It contended that the judge had taken into account irrelevant matters in construing the meaning of “survey” in the lease, such as its motive and the effect of the environmental survey upon the respondent; and, in particular, he had taken into account various dictionary definitions of “survey” to ascertain the normal meaning of that word, which was a wrong approach in law.
Held: The appeal was dismissed.
A reasonable person having all the background knowledge that would reasonably have been available to the parties when the lease was executed would not have thought that para 13 of the lease entitled the appellant to enter the premises for the purpose of drilling boreholes and taking samples.
The court was entitled to have regard to dictionary definitions as an aid to construction in order to ascertain the natural and ordinary meaning of words in their relevant context, in particular where the ambit of the activities covered by the word in question was in doubt, as in the instant case. The words were to be interpreted in the way in which a reasonable commercial person would construe them and the standard of the reasonable commercial person was hostile to technical interpretations, undue emphasis on the niceties of language or literalism: Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896 and Paterson v Crystal Palace FC (2000) Ltd [2005] EWCA Civ 180 applied.
In the instant case, the way in which environmental matters were dealt with and the overall scheme of the lease indicated that the activity permitted by “survey” depended upon what was being surveyed. In the context of a lease, a survey would be of the buildings on the land or of the land. A survey of the land, as was clear from the dictionary definition, identified its boundaries and description. A survey of a building was another type of survey, which might involve identifying its state and condition. However, in either case, the notion of a survey did not involve destroying the thing surveyed, merely finding out more about it.
Under the scheme of the lease, the parties appeared to have been content to let sleeping dogs lie on the question of contamination, as a result of the premises’ former use as a petrol station, until shortly before the expiry of the lease, when the tenant was obliged to carry out such investigations as were necessary to avoid environmental liability.
Furthermore, the tenant’s right to quiet enjoyment would be significantly undermined if the landlord had the right to enter the premises and conduct a survey no matter how intrusive, what disruption was caused to the tenant’s business and however long such activities might take, with the only proviso that it should cause as little damage and disturbance as was practicable and make good any damage forthwith to the tenant’s reasonable satisfaction. Had the parties to a commercial lease intended such significant inroads into the tenant’s right to enjoy the premises free from interference, one would expect to find much clearer words or an indication to that effect.
Edward Denehan (instructed by CKFT Solicitors) appeared for the appellant; Timothy Dutton (instructed by Halliwells LLP, of Manchester) appeared for the respondent.
Eileen O’Grady, barrister
