Make yourself clear

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One of the first things we learn in law school is that any statement, written or spoken, can be ambiguous and open to interpretation if not carefully drafted or expressed.

Many disputes turn on interpretation of such clauses in agreements and can result in a timely and costly legal battle, eventually relying on a Court or other independent arbitrator to determine the true ‘construction’ or meaning of the clause. It can be an expensive lesson to learn for the ambiguous drafter.

The Court of Appeal recently considered the true construction of a clause in a tenancy agreement between Mr Grimes, a tenant farmer at Burnham-on-Crouch, and his landlord the Trustees of the Essex Farmers and Union Hunt (the Hunt).

Mr Grimes and his father had farmed a holding of 121 acres under a succession of Agricultural Holdings Act tenancy agreements with the Hunt as the landlord. Latterly, from October 2006, Mr Grimes farmed the holding on a fixed-term basis by way of two 3-year agreements, one dated from 2006 and the later agreement dated from 2009. Each agreement contained a page of Particulars identifying the parties and detailing Mr Grimes’ address as Glebe Way, Burnham-on-Crouch.

Both tenancy agreements contained the following clause regarding service:

Either party may serve any notice (including any notice in proceedings) on the other at the address given in the Particulars [at the beginning of the tenancy agreement] or such other address as has previously been notified in writing.

Upon making the first rental payment in December 2006, Mr Grimes sent a cheque to the Trustees along with a handwritten note notifying the Trustees of his change of address to Maple Way, Burnham on Crouch.

On 1 July 2011, the Trustees delivered a notice to quit the holding with the intention of terminating the second tenancy on 30 September 2012. The notice was delivered to Glebe Way, Mr Grimes’ previous address, detailed in the Particulars. One of the questions for the judge in Chelmsford County Court was to consider whether Glebe Way was a good address for service, even after Mr Grimes had notified the Hunt of his change of address to Maple Way. The County Court judge found that the notice was validly served on Mr Grimes and therefore the tenancy had been validly terminated. Mr Grimes subsequently appealed this decision.

The Court of Appeal in turn considered whether the notice to quit had been validly served on Mr Grimes and reflected upon the true construction clause for service, considering the clause in light of the parties’ intentions at the time of entering into the contract and the contract as a whole. The Court concluded, from a commercial and common sense point of view, that the parties “cannot sensibly have intended that the serving party [the Hunt] should continue to have the option of serving at the old address once he has been notified of the new one”.

The Court of Appeal found that the correct service address for Mr Grimes was Maple Way, his new address, and not that detailed in the Particulars. Accordingly, the notice to quit had not been validly served on Mr Grimes and it followed that the tenancy had not been validly terminated. The Hunt was ordered to pay Mr Grimes £31,500 in damages and in addition was ordered to pay £100,000 towards Mr Grimes’ legal bill.

The wording of the clause is common in agreements and serves as a stark reminder to practitioners to be as unambiguous as possible when drafting to avoid disputes such as these. It also serves as a reminder for landlords to keep their tenant’s details carefully preserved and up-to-date and to be clear on what the correct address for service is.

If you have any questions about notices to quit or indeed checking that your legal documents are unambiguous and up to date, please do not hesitate to contact us.

You can read a copy of the approved judgment here: http://www.bailii.org/ew/cases/EWCA/Civ/2017/361.html

 


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