The Court of Appeal has reserved judgment in a dispute relating to the validity of a lease covenant providing for the construction of permanent office buildings.
The landlords of premises at Low Meadow Farm, Windsor Road, Gerrards Cross, have challenged a ruling, made by Judge Holden in the Slough County Court last November, that the covenant could not be set aside on the grounds of uncertainty.
The clause in the 25-year lease, which haulage operator UYCF Ltd signed in 1992, specified the erection of “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”. However, it was common ground between the parties that there had never been a specification letter.
The court was told that when UYCF obtained outline planning permission for new office buildings in 1996 and asked landlords Christopher and Penelope Forrester to comply with the terms of the covenant, the request was refused on the basis that no specifications had been agreed and that the clause was therefore void.
Michael King, counsel for the landlords, argued that the intention of the parties had been to provide a specification so as to ensure sufficient certainty, but their failure to do so could not be remedied by the court as this would be tantamount to making their agreement for them. He said that the covenant could have a large number of possible meanings, such as to size, style and extent of accommodation.
There was “no room for the operation of reasonableness, or any other implication which might cure uncertainty, because this would be contrary to their express agreement that they would provide the specification”, he said.
However, Timothy Dutton, counsel for the lessee, argued that the broad outline of the landlords obligation was clear from the terms of the lease, which referred to the nature of the offices, the tenants use of those offices in connection with permitted haulage contractor use, and the approximate size.
He said the fact that the landlords would have a number of options in the construction of the building, materials, colours etc, was true of many contractual obligations and did not render the clause void.
Night Trunkers (London) Ltd (now UYCF Ltd) v Forrester and another Court of Appeal (Thorpe and Potter LJJ) 15 November 2000.
Michael King (instructed by Gordons, of Marlow) appeared for the appellants; Timothy Dutton (instructed by Stevens & Bolton, of Guildford) appeared for the respondent.
PLS News 17/11/00
