England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
HIS HON. JUDGE RICH Q.C.

		Royal Courts of Justice Strand, London, WC2A 2LL Wednesday 12th December 2001

Lord Justice Ward and Lord Justice Rix:

1. This is the judgment of the court to which we have each contributed. The appeal raises questions of the interpretation of a 999 year lease granted in 1924 of a property on the corner of Wells Street and Margaret Street in London W.1. The property is, or perhaps at the time was, part of the Howard de Walden estates in the West End and Lord Howard de Walden in whom the legal estate was vested on trust for the lessor was as such trustee a party to the indenture. The lessee at the time was the London Diocesan Fund and their successor in title, whom we shall continue to call "the lessee", is the respondent Spring House Freehold Ltd. who acquired the lease in 1980. Mount Cook Land Ltd., the appellant, is the lessor's successor in title and we shall call it "the lessor" where convenient.
2. The hereditaments demised by the lease dated 23^rd September 1924 were described in these terms:-

"All that piece or parcel of ground with the messuage or dwelling house and all other erections thereupon built situate and being on the West side of and numbered 70 and 71 in Wells Street and on the South side of Margaret Street in the Parish of St. Marylebone in the County of London and which said premises are known as St. Andrews National Schools and with the dimensions and abuttals thereof are more particularly delineated and described in the Plan in the margin hereof Together with all yards areas vaults ways lights easements watercourses and appurtenances to the said premises belonging (Except the free passage of water and soil from other premises of the Trustee or the Lessor or his or their tenants through the channels and drains appertaining to the said premises hereby demised and commonly used for that purpose) TO HOLD the said demised premises unto the said Lessees ..."

3. The Plan shows marked in red what was or what had been the school buildings which are, however, there described as "business premises". There are party walls to the south and to the west and in the south-western corner there is an "area" so described coloured grey and pink which presumably was the old enclosed schoolyard. On the eastern or the Wells Street boundary there is a strip marked "area" between the edge of the building and what were probably the railings on the pavement. This is shown to be 36 ft. 5 ins. long, though upon closer examination of the plan this is actually the length of that side of the building. The strip is 4 ft. 1 in wide. Between the western or Margaret Street edge of the building, which is there 43 ft. 11 ins. long, and the probable railings marking the boundary there is another "area" 5 ft. 11 ins. wide. These two "areas" converge at the corner into a quadrilateral shape created by the building itself being indented. The measurements of the building at this point of indent are again precisely given as 9 ft. 2 ins. x 13 ft. 2 ins. but no measurements are given for the other two sides of this quadrilateral shape which narrows as it reaches the corner. It would seem that together these two strips and the quadrilateral shape marked a basement area below the level of the pavement. Access would have been gained to this basement by steps leading down from Margaret Street near the corner. Steps are also shown on the plan from the street (or more accurately probably the pavement) giving two points of access to the building itself from Wells Street, one over the Wells Street basement area and the other at the corner at the indented configuration.
4. Things have changed since 1924. The old school as such has gone and the building is now an office block and shop. Whether this is a conversion of the old school buildings or whether it is a new building erected at some time between 1924 and about 1955 is not established by the evidence. The photographs suggest that it might be a new building but nothing turns upon that. The important change is that the old basement areas have now been completely covered by pavement lights at the same level as the pavement itself. Although railings are still seen to be in place at the adjoining property in Margaret Street, they have been removed from this property and there is no obvious boundary between the property and the pavement. Entrance to the basement areas is now obtained through the building itself at basement level and access is no longer available directly from the street. Whereas it would originally have been possible to look over the railings into the basement areas, it is now impossible to see into them through the skylights. The photographs suggest that the main entrance to the building is now from Margaret Street, not at the corner as originally shown. For the purposes of this appeal, the important consequence of these alterations to the layout is that it has become possible to park a motor car on these covered areas and the evidence is that for many years the occupiers have parked one or more motor cars on these skylights by driving off the roadway, over the pavement and with care stationing one car on the Wells Street corner, and two over the Margaret Street pavement lights. The lessee and its licensees have continued to park motor cars in that way ever since it acquired the lease in 1980.
5. Relying on Clause II(9) of the lease, the lessor's solicitors wrote to the lessee on 6^th April 1999 giving formal notice that the lessee was with immediate effect forbidden to place "any motor vehicles, motor cycles or other goods outside of the premises demised to (it) pursuant to the above mentioned lease". The lessor also gave notice that if the parking continued then action including forfeiture of the lease might be taken. We do not know why this stance was adopted by the lessor, and it does not matter for the purpose of this appeal why it sought to impose the ban. The issue is only whether it is entitled to do so. One does not have to be unduly cynical to observe that parking on one's doorstep is a great advantage and that the cost of parking in the West End of London is very expensive; so the right to park probably has quite a significant value. After service of a notice under Section 146 of the Law of Property Act 1925, the parties sensibly agreed that the lessee would bring proceedings in the Central London County Court for a declaration that it and its licensees are entitled to park vehicles on the demised premises. On 17^th November 2000 His Hon. Judge Rich Q.C. granted that declaration but gave permission to appeal. So the matter comes to us.
6. The appeal gives rise to three questions of construction of the concluding part of Clause II(9). Reading the clause in full, it provides with emphasis given to the material part:-

"That (without such previous written consent as aforesaid) no placard advertisement or announcement of any description shall at any time be exhibited on the outside of the said premises (save and except that there may be exhibited in the windows of the ground floor of the said demised premises any placard advertisement or announcement relating to goods actually dealt in by and in the ordinary course of the business or occupation of the occupant or occupants of the said premises and except that there may be placed on the outside of the said ground floor by means of a suitable fascia board permanently fixed either above the windows and door or on the window sill an inscription showing the name or names or business or occupation or businesses or occupations of the said occupant or occupants) And that no goods shall at any time be or remain placed outside the said premises which or of any nature which the Lessor shall have forbidden to be or to remain so placed."

(The use of a capital "A" is a faithful transcription of the copperplate manuscript in which the lease is drawn even though it otherwise appears to be part of one sentence).

7. Three questions arise in the construction of those italicised words:-

i) Are motor vehicles "goods" within the meaning of that clause? The judge held that they were not. This ruling is the subject of the appeal.

ii) Is it apt to say that a motor car is "placed" outside the said premises? The judge held that the word is not inappropriate. There is a cross-appeal by the lessee against that part of the decision.

iii) Are the motor cars placed "outside the said premises"? The judge held that the words meant outside the building even though within the demise. The lessee also challenges this ruling in its respondent's notice.

The meaning of "no goods shall at any time be or remain placed ..."

8. We find it convenient to deal with questions i) and ii) together but to start with the meaning of "placed".

As for the meaning of "placed".

9. Mr Andrew Walker, counsel for the lessee, submits that the word "placed" is important when reading the covenant as a whole because it throws light on the meaning of "goods". He submits that the activity of parking motor cars is not "placing" goods outside the said premises. He contends that if the parties had intended to include parking cars, they would have selected a different noun (e.g. "things" or "items" or "goods and chattels") and would also have used a different verb (e.g. "put" or "left").
10. The judge dealt with this as follows:-

"Placed is a general word which may be apt to describe vehicles which would be parked. I accept, of course, that if one were using a phrase specifically directed to the parking of vehicles, one would be unlikely to use the word "placed" and "park" would be the apt word. But if one needs a generic word to cover both vehicles and other things, "placing" is as apt a description of leaving them in a position on the ground as any and is the most general word available."

Conclusions as to the meaning of "placed".

11. (1) We agree with the judge. As the Oxford English Dictionary observes, "place" is "often a mere synonym of put". In ordinary discourse when asking, "Where shall I park?", the answer may well be, "Put your car over there". When Mr Walker submits that placing has a connotation of arranging goods for a purpose, Mr David Hodge Q.C. for the appellant, observes that the task of parking these three cars in the quite tight space available involves exactly that skilful arrangement.

(2) In our judgment "place" is such a colourless, general word that it throws no light on the shades of meaning to be given to "goods".

As for the meaning of "goods".

12. The judge held:-

"There is no doubt at all in my mind that the word "goods" can be used to include a motor vehicle and there can be little doubt that, in certain circumstances, it must necessarily be apt to include a motor vehicle. An example would be where the premises were used for the sale of motor vehicles which is indeed one of the uses which is contemplated as a possibility and therefore specifically prohibited in Clause II.8 of this lease. But, the word "goods", in my judgment, is as citations from dictionaries indicate, capable of meaning not only any possessions or personal property, but also more specifically property which is used as merchandise or wares offered for sale.

The sub-clause which I have to construe is in the context of a clause which so far as its first words are concerned, deals with the display of advertisement for business and for goods. The part to which I have already referred deals, amongst other things, with a placard advertisement or announcement relating to goods actually dealt in by the occupant of the premises. It appears to me that in the context of this clause, the use of the word "goods" is intended to be more limited than a word such as "thing" which would have been apt to exclude any item of property by which the lessor might have thought it appropriate to prohibit. I can see the objective in terms of a restriction in the use of the premises, which might embrace the display or accommodation of goods in this more limited sense, falling sensibly within Clause II.9. If the clause had been intended to restrict in every way anything that might have a visual impact upon the passer by or might be restrictive of the use of the premises, more generally than is already provided by the long list of prohibitions in Clause II.8, I think that it would have been necessary to use more specific words than those that have been chosen by the draftsman of this clause.

In case of ambiguity it is accepted that the words must be construed restrictively against the grantor rather than extensively. Goods normally is commonly used with a restricted meaning, albeit that it is capable of a wider and less restricted meaning. In this context, I construe it as having a restricted meaning and vehicles parked on the property as not being goods in the sense used in Clause II.9 ..."

13. Mr Hodge submits that the judge erred in placing undue emphasis on the earlier words of the clause. He failed to give significance to the capital letter in "And" which hints at a more free-standing provision. If a link was intended it was an easy matter of draftsmanship to make that clear. He submits that the purpose of the clause was to give the landlord a flexibility over the long term of the lease to promote the appearance of the landlord's estate. There was no sufficient ambiguity to justify a resort to a construction against the grantor.
14. Mr Walker concedes that goods can include cars but, construed in the context of the surrounding text, the implicit limitation is to goods, i.e. merchandise or wares offered for sale so as to prohibit, as was common in older leases, the activity of putting goods for sale outside the premises. He submits that for a purposive construction to be applied, the purpose must be the purpose of both parties and not just one of them: see Bank of Nova Scotia v Hellenic Mutual Ltd. [1990] 1 QB 818.

Conclusions as to the meaning of "goods".

15. It is common ground, as the dictionary definition makes clear, that "goods" can be widely understood to mean "property or possessions", or more narrowly "saleable commodities, merchandise, wares" or, as Mr Walker puts it, "tangible moveable property viewed as an item or items of commerce". There is clear authority that a motor car was goods for the purposes of the Factors Act, 1889: see Stadium Finance Ltd. v Robbins [1962] 2 QB 664. There Ormerod L.J. said at p. 670:-

"The word "goods" in the section does not appear to have anything other than the ordinary meaning. ... I cannot see why ... (a motor car) does not come within the definition "goods"".

Danckwerts L.J. agreed with that judgment and said at p. 676:-

"In my view, the word "goods" must include all chattels of which physical possession is possible, notwithstanding that they are not easily moveable ..."

The case was, of course, one concerned with the meaning of the word in the statute but the reference to the ordinary meaning of the word is at least persuasive even if it is not conclusive.

16. The issue for us is whether a motor car is excluded from the wide range of property or possessions ordinarily encompassed within the meaning of "goods". That task of interpretation has to be carried out against the background knowledge which would reasonably be available to the contracting parties in the situation in which they were at the time of the execution of this lease: see Earl of Lonsdale v A.-G. [1982] 1 W.L.R. 887. Because the basement areas were open in 1924, parking motor cars was not likely to have been in the immediate contemplation of the parties. Motor cars were, however, familiar on the streets of London in 1924 and the user clause at II.8 contains a prohibition against the premises being used for the business of "Dealer in Motors or Hirer Out or keeper of Motors". This was a 999 year lease so it must have been within the contemplation of the parties that the premises might be altered perhaps in a way to make a motor business feasible and allow the display of motor cars in the way in which they are presently parked. We do not consider that the physical state of the property at the time of the lease takes the vexed question of interpretation much further.
17. In our view the crucial question is whether or not the words taken in the whole context of the clause are limited by the preceding words which place a restriction on any placard, advertisement or announcement "relating to goods actually dealt in by and in the ordinary course of the business or occupation of the occupant or occupants of the said premises". We conclude the words are not so restricted.
18. First, if it had been intended to qualify "goods" in the part of the clause under our microscope, then it would have been perfectly simple to say "no such goods" as that would make it plain that the veto was limited to the goods actually dealt in by the occupant. On the contrary the expression is "no goods", which prima facie is unlimited.
19. Secondly, although we cannot treat the use of the capital letter "A" as importing a free self-standing provision, nonetheless the absence of any additional words which clarify "goods" in the latter part of the clause and the absence of any apparent link between the two parts suggest to us that the limitation for which the lessee contends cannot properly be imputed.
20. Thirdly, the immediate context of the word "goods" in its two appearances in the clause is different. In its first appearance the context is dealing with a grant of permission to exhibit advertisements in the ground floor windows, and that permission is naturally limited to advertisements about goods actually dealt in by the tenant: otherwise the building might become a hoarding for mere advertising. Whereas in its second appearance, the word is found in the context of a restriction on goods themselves which may be physically placed outside the premises: in that context, there is no reason to limit the restriction to goods actually dealt in by the tenant, or to merchandise at all. On the contrary, if anything might be placed outside the premises, it might be thought to be things which were part of the tenant's business stock in trade, rather than things which were not.
21. Fourthly, if one asks what the purpose of the restrictions in clause II.9 might be, the answer would seem to be that the clause as a whole is concerned with the appearance of the exterior of the building. Thus the clause limits what advertisements or notices may be exhibited on the outside of the premises or in the windows and what may be placed outside the premises. On that basis it would make no sense to limit the landlord's power to prohibit what the tenant may place outside the premises. Some examples will illustrate the point. It would be odd if the landlord could prevent a tenant from selling his wares outside the premises, but could not prevent him from leaving his office furniture there while he decorated inside. Moreover, if permission were given to a tenant to operate a café in the premises (the lease contains a general prohibition on that and other trades in clause II.8), it would be odd if the tenant could not place food outside the premises, but could place tables, chairs and umbrellas there. Similarly, it would be odd that under clause II.8 the landlord is entitled to prevent a tenant from dealing in or garaging motorcars, but under clause II.9 cannot prevent a tenant parking cars outside the premises. Examples of this kind could be multiplied. Such considerations may well be thought to apply a fortiori to the open basement area which in 1924 when the lease was executed existed beneath today's pavement lights. Thus the construction favoured by the judge and supported by Mr Walker leads to uncommercial, unbusinesslike and surprising results.
22. We are, therefore, left in the position that the word by its natural and ordinary meaning covers a wide range of property or possessions and we are not satisfied that that width is restricted by the context of the clause as a whole to merchandise or wares or goods offered for sale, as Mr Walker contends, or even more narrowly to the goods actually dealt in by the occupant, which seems to be the judge's interpretation. On the contrary, we are satisfied that the word must be given its wide meaning. Accordingly, the plain and ordinary meaning prevails and "goods" includes motor cars. There no ambiguity and thus no need to resort to the contra proferentem rule. On this aspect of the case, the appellant's arguments prevail and the words are therefore capable of extending to motor cars being parked outside the premises.

The meaning of "outside the said premises".

23. The judge accepted that the ordinary meaning of the word "premises" is the subject matter of the demise as Mr Walker had submitted. Yet he held that the habendum drew a "coherent distinction between "premises" meaning building and "demised premises" meaning the whole subject matter of the demise". He recognised that the words were not used consistently throughout the lease and it was, therefore, necessary to construe the phrase as it appeared in Clause II.9 in its context. He concluded as follows:-

"It is first to be noted that (the earlier) part of the sub-clause uses indiscriminately "premises" and "demised premises" in the same way as they are used in other clauses which it is not necessary for me to recite also.

That part of the clause, however, is directed to the prohibition of advertisement or the like, visible from outside the premises, whichever premises means in this context. It uses the phrase "on the outside of the said premises" whereas the phrase in the part of the clause which I have to construe uses the phrase "outside the said premises".

In my judgment, in each case, the reference is to the area which is outside the building, albeit that the placards and advertisements for display "on the outside of the said premises" would include, in my judgment, exhibits on the outside railings as they then were, or on the forecourt as it now is. I construe "outside the said premises" in the sub-clause which I have to construe as certainly incorporating the area where the vehicles are in fact parked as being outside the building."

24. There is, as I understand counsels' submissions, no substantial dispute about the principles to be applied. First, both agree that, to adopt the judgment of Slade J. in Earl of Lonsdale v A.-G. [1982] 1 W.L.R. 887, when construing the relevant words of the 1924 indenture it will be necessary to attempt to do so in the way in which commercial men would have interpreted them in 1924 when used in relation to a commercial transaction of this kind.
25. Secondly, the standard conveyancing meaning of the word "premises" has long been established as meaning the subject matter of the habendum of the lease. We were referred to Whitley v Stumbles [1930] A.C. 544 where Viscount Hailsham observed at p.546:-

"It is, of course, conceded that in strict conveyancing language the word "premises" is used as meaning the subject-matter of the habendum in a lease ..."

In Bracey v Read [1963] Ch. 88, Cross J. said at p. 92:-

"The word "premises" is not defined in the Act (the Landlord and Tenant Act 1954). Its legal meaning, of course, is the subject matter of the habendum in a lease, and it would cover any sort of property of which a lease is granted ..."

26. Both those cases recognise, however, that "premises" may have another meaning. Whitley v. Stumbles [1930] AC 544 was concerned not with a lease but with the Landlord and Tenant Act 1927. The question was whether an incorporeal right of fishing, demised as part of a lease, was part of the "premises" for the purpose of the Act. Viscount Hailsham gave the only reasoned speech, with which the rest of their Lordships agreed. It was held that "premises" in the vital part of the statute had its strict legal meaning of the subject matter of the habendum of a lease, which would include incorporeal rights. Nevertheless, in reviewing the Act, Viscount Hailsham accepted that in certain sections "premises" was used in "a colloquial sense … as meaning merely the physical buildings and land which are included in the lease". At pp. 546/7 he said: –

"My Lords, I think it is fair to say that in some of the earlier sections of the Act it is plain that the Legislature is considering primarily physical premises such as buildings. We find, for instance, in s. 4, sub-s. 1(a), a reference to the possibility of "the premises" being demolished; and we find in s. 5, sub-s. 3(b) (ii.), that the landlord can prove that he intends to pull down or remodel "the premises," and it was argued on behalf of the appellant that this phrase and other similar instances showed that the Legislature, when it used the word "premises," meant only buildings. That contention proves too much. It is conceded – indeed it must be conceded – that the word "premises" does not mean only buildings; it means also at least the land on which the buildings are erected and the land immediately surrounding the buildings, and yet the expression "pull down or remodel the premises" would be wholly inept for such a purpose. It was conceded in argument also that it must include some incorporeal hereditaments such as, for instance, easements. When one gets that concession, which I think was quite properly and necessarily made, then it is manifest that although the word "premises" is being used in a narrow sense to this extent that the Legislature is at times contemplating rather the buildings in which the trade is carried on than the whole of the subject-matter of the lease, yet it does not intend to exclude other things which are properly described as premises in the strict legal sense when it is appropriate that they should be included."

27. In Bracey v Read, where the issue was whether the letting of gallops for exercising racehorses was a business tenancy within the Landlord and Tenant Act 1954, Cross J., after referring to the legal meaning which we have cited, went on to qualify that statement by adding:-

"... but no doubt the word is used sometimes in a popular sense which is considerably more restricted, in the sense of buildings, or buildings with land immediately adjoining them. I do not think that in the popular sense anybody would say that some gallops on a downland with no buildings on or near them, could be described as "premises". Undoubtedly sometimes in legislation "premises" has been construed in a popular rather than in a legal sense."

28. Whilst not referring to Alice in Wonderland, both counsel seem to be agreed that in the same lease, indeed in the same clause of the lease, the word "premises" may bear one meaning at one time and another at another time. In our judgment it is clear that "premises" is a chameleon-like word which takes its meaning from its context. Since it can mean almost anything the task of the court is to give the word the meaning which it most naturally bears in its context and as reasonably understood by the commercial men who entered into the agreement.

Conclusions as to the meaning of the words "the said premises".

29. The first step is to examine how the words are used in the lease. Where appropriate we have added the emphasis. Since the habendum is so obviously important, we start there. It begins in standard form with the words "All that piece or parcel of ground with the messuage or dwelling house and all other erections thereupon built situate ..." That would include not only the buildings but the land upon which they are actually built and the basement areas, all of which were created by the work of construction and development of the site and form part of the "erections thereupon built". Then the habendum continues, "which said premises are known as St. Andrews National Schools and with the dimensions and abuttals thereof are more particularly delineated and described in the Plan ..." Because the plan, if one looks at it carefully, seems to concentrate on giving the precise dimensions in feet and inches of the actual building, then one is inclined to think that the premises known as the St. Andrews National Schools with the precise measurements given on the plan must be a reference to the school building alone. Moreover the building is described on the plan as "business premises". If the clause had been introduced by "which premises" then one would have been more easily able to adopt (and perhaps adapt) the colloquial meaning and say that "St. Andrews National Schools" was the erection on the land which the draftsman had in mind as the premises because it is that building which is particularly delineated in the plan in feet and inches. The problem with that construction is that the words do not begin "which premises" but "which said premises". By use of the word "said" we are referred back to the preceding words and they cover the whole of the demise. The judge considered that a distinction could be drawn between the building and all else because the habendum continued "Together with all yards areas vaults ways lights easements watercourses and appurtenances to the said premises belonging". There is force in that view. On closer analysis, however, it is far less clear. The areas and vaults could indeed be said to "belong" to the building, but they also belong to the whole and certainly the easements more naturally belong to the whole of the premises which are the subject of the demise. That seems made clear by the exception of "the free passage of water and soil from other premises of the Trustees or the Lessor ... through the channels and drains appertaining to the said premises hereby demised". That would suggest that "the said premises" which are referred to are "the said premises" which are the subject of the demise. Then the habendum concludes: "To hold the said demised premises unto the said Lessees ...". The result of this analysis is that one finds in the habendum, which in conveyancing practice is the important starting point of the deed, three phrases, "the said premises", "the said premises hereby demised" and "the said demised premises". In our judgment the natural meaning to be given to the habendum is that the draftsman was intending to refer to the same thing when using the three different expressions and in this context it should be the whole subject of the demise and we cannot agree with the judge that there is at this stage a coherent distinction between the building and the whole subject matter of the demise. It is not a model of clarity, and, being cautious, we should treat this clause as too opaque to throw illuminating light on clause II(9).
30. It is next necessary to see how these phrases are used throughout the rest of the lease. We begin with the sub-paragraphs of Clause II. In (1) the lessee is to pay the rates payable in respect of "the said demised premises". Clearly this is a reference to the whole of the premises demised.
31. (2) imposes a repairing covenant in respect of "all present and future buildings upon the said premises". There is a clear and telling distinction drawn between the buildings themselves and "the said premises" upon which they are or will be erected. In this clause "the said premises" must refer to the whole of the demise. Then clarity is blurred by the clause going on to require the lessee to paint "all the outside wood and ironwork and other outside parts usually painted of the same premises". When one thinks of painting, one usually thinks of painting the building but the reference to "ironwork" is perfectly capable of referring to the railings which almost certainly marked the boundary of the whole of the demised premises. We are far from convinced that painting "the said premises" is limited to painting the building alone.
32. (3) requires the lessee to yield up to the lessor "the said premises so painted ... with all additional erections ... upon the said premises ..." The lessor has to yield up the whole and there is again the reference to the erections upon the said premises.
33. (4) requires the lessee to indemnify the lessor for party wall works in respect of "the premises hereby demised". Although party wall works obviously affect the building alone, there is also reference to drainage and sewerage and the reference to the premises hereby demised suggests that the whole of the demise is thereby affected.
34. (5) requires the lessee to contribute to the repair of sewers etc. used in common "by the occupiers of the said premises" and the occupiers of other premises contiguous thereto. This is again a reference to the whole.
35. (6) gives the trustee and lessor the power to enter "upon the said premises and examine the state thereof" and to leave notice of any defects "upon the said demised premises". This may be a little equivocal but since one cannot enter the building without entering the stairs over the basement areas shown outside the building, on balance it seems to refer to the whole.
36. (7) may be more significant. It requires the lessee to insure "all buildings for the time being in the said demised premises". Here is again a recognition that the buildings are only part of or, in the language of the clause, are "in" the said demised premises. We note that whereas in sub-clause (2) there had been reference to "buildings upon the said premises" here is a reference to "buildings ... in the said demised premises".
37. (8) is the user clause restraining the carrying on without permission or the exercise "in or upon any part of the said premises the trade business or calling" then listed. If "the said premises" was confined to the building itself, then the clause would not bite on the sub-basement areas or the covered areas which have replaced them. That seems an unlikely intention to impute to the parties. For the moment we pass over sub-clause (9).
38. (10) is more equivocal. It provides that without the lessor's consent "no building or erection shall at any time be built or placed on the said demised premises and no addition or alteration affecting the elevation external structure or stability of the said premises or any parts thereof shall at any time be made to any building or erection for the time being on the said demised premises and that no machinery shall at any time be erected or affixed to the said demised premises ..." As in sub-clause (7) there is reference to buildings being placed on the said demised premises. So the distinction is again drawn between the building and the whole of the demised premises upon which it is erected. Then the clause continues that "no addition or alteration affecting the elevation external structure or stability of the said premises" shall be made "to any building on the said demised premises". Although "elevation" of "the said premises" more naturally refers to the building elevations, "stability of the said premises" could be a reference to the stability of the whole including the walls down from the pavement to the basement. What must not be affected is "the said premises" that is to say the whole of the demise and the manner in which it is not to be affected is by alterations made to any building on (and now making assurance double sure) "the said demised premises" i.e. again the whole. One makes of this what one will.
39. The judge referred expressly to sub-clause (11) which provided that without consent "the ground floor of the said premises shall not at any time be divided into or used as more than three shops warehouses or offices" with specified dimensions "but this restriction is not to prevent the use of a separate door and passage leading to those portions of the said demised premises other than the front of the ground floor thereof". As the premises then stood the only part which constituted the ground floor of the said premises was the ground floor of the building so that there the said premises must refer to the building itself. The proviso allows a separate door to portions of the "said demised premises other than the front of the ground floor thereof", in other words the ground floor of the demised premises. That would suggest that the ground floor of the building is being treated as the ground floor of the whole. This sub-clause shows, as well as any, the inconsistent drafting.
40. (12) prevents anything done upon or in connection "with the said demised premises" which would be an annoyance or nuisance, whereas when it comes to waste, (13) prohibits that being done "upon the said premises". The draftsman can hardly have intended nuisance to extend to the whole of the demise but waste only to the buildings.
41. (14) allows the landlord to erect buildings adjoining or near to "the said demised premises" and (15) deals with the assignment of "the demised premises".
42. The re-entry clause in III gives the right to re-enter upon "the said premises" and the covenant for quiet enjoyment in IV is again for the enjoyment of "the said premises". There "said premises" must refer to the whole of the subject matter of the demise.
43. The result of this trawl through the lease suggests to us that, with one or two exceptions where there is some equivocal or ambiguous drafting, the overwhelming preponderance of reference in this lease to "the said premises" is a reference to the whole of the demise.
44. At last we turn the microscope on clause II(9). It seems to be in two parts, the second being the final clause beginning "And ..." with a capital "A".
45. The first part seems clearly to be concerned with the external appearance of the property. It prohibits the exhibition of any placard, advertisement or announcement "on the outside of the said premises". "On the outside of the said premises" does more naturally refer to the exterior of the building itself because it would be on the walls that the advertisement would be painted or pasted or fixed. The landlord contends that this meaning should be given to "the said premises" throughout the sub-clause. It is, therefore, necessary to test whether that natural meaning in this early part of the clause is the intended meaning. It does produce anomalies. If, as seems to be common ground, at least this first part of sub-clause 9 is concerned with the external appearance of the property (using a neutral word) then that purpose is defeated by narrowly confining "the said premises" to the building itself. If it is so confined, there is nothing to stop the tenant hanging his advertisements on the outside of the railings to the property. He could erect structures in the basement area on which to place his placards. The parties can hardly have intended that. It suggests that the words must have a wider meaning than a reference to the building only. There is, however, another anomaly. If the words "on the outside of the said premises" are to be literally construed to refer only to the outside perimeter of the demised premises so that "the said premises" refers only to the whole demise, then again the sub-clause would not work. It seems to us that a purposive construction would be that no placard, advertisement or announcement should be placed on any external part of the premises.
46. That prohibition is subject to exceptions. The first is to permit the placard, advertisement or announcement to be exhibited "in the windows of the ground floor of the said demised premises" [note, not simply "the said premises"], provided it related to the goods actually dealt in by and in the ordinary course of the business or occupation of the occupant or occupants "of the said premises". One has to read that to mean that the placard may be exhibited in the windows of the ground floor of the building on the demised premises and that it should relate to the goods which the occupant deals with in the ordinary course of his business or occupation of not just part of the demised premises, the building alone, but of the whole of it including the basement area. The phrases "the said demised premises" and "the said premises" are here used interchangeably. The second exception is to permit to be placed "on the outside of the said ground floor by means of a suitable fascia board permanently fixed either above the windows and door or on the window sill an inscription showing the name or names or business or occupation or businesses or occupations of the said occupant or occupants". The place at which this inscription is to be fixed makes it clear that the draftsman had the building itself in mind. On the other hand, "the said ground floor" is a reference back to the "ground floor of the said demised premises". And so once again should be read to mean the ground floor of the building on the demised premises.
47. The analysis so far leads us to conclude that there is no consistent or coherent meaning being given to these interchangeable phrases which are being used without any apparent discrimination. It follows that "the said premises" cannot with certainty be taken to refer to the building. There is much to suggest it is not so confined.
48. So we come finally to the concluding and material part of sub-clause 9. Mr Walker submits that this part of the clause has merely been tacked onto the clause as a whole and is concerned with the different subject matter of preventing street trading in the public thoroughfare rather than with what goes on within the boundary of the demise itself. There is some force perhaps in the thought that the phrase beginning "And that no goods ..." may not in its origin have been an integral part of clause II(9) and the use of the capital letter "A" may suggest that the draftsman was turning to a different subject matter regulating the use of the premises. We are not persuaded that we can treat this as a free-standing sub-clause standing apart from what precedes it. That is not how it is drafted. Even if it were completely separate, it would still have to be read in the context of the whole.
49. Taking the words as they stand, they give the lessor power to forbid goods being or remaining in place "outside the said premises" and there is no hint in the language whether the draftsman was intending to refer to the building or to the whole of the premises which form the subject of the demise. It seems to us impossible to find the answer from the language itself.
50. Even if a colloquial meaning is to be given then, as Lord Hailsham accepted as rightly conceded in Whitley v Stumbles, the word does not mean only the buildings but the land immediately surrounding the buildings. Given the integrated construction of the building above ground and below ground level, can one confidently say the basement is not part of the building? Would goods on the roof be placed outside the premises?
51. We have to see whether there was some clear purpose and whether or not one meaning or the other has to yield to business common-sense. The lessor's overall case is that throughout the whole of sub-clause (9) the phrase is primarily concerned with anything which may affect the appearance of the exterior of the premises. That does make sense though it can equally be said that his estate may be somewhat blighted if unacceptable goods or piles of rotting rubbish were left on the pavement outside his premises. The lessee's overall case is that this covenant was intended to prohibit the conduct of business outside the property by trading on the pavement. The lessee also submits that the lessor would wish to prevent activity like the regular dumping of unsightly refuse on the pavement which could harm the value of the property. There is some force in each of these contentions. There are perhaps greater difficulties in the lessee's way. Applying his construction to the particular problem that has arisen in this case, it would mean that the lessor could not object to the motor cars being parked on the pavement lights but could seek to ban motor cars being parked in the roadway outside (assuming for the purpose of this argument that the occupants could lawfully park outside). That does seem odd. In the area of the pavement and roadway the lessee is neither the lessee nor the lessor the lessor. Within the area of the demise the relationship of landlord and tenant exists and the lessor may wish to exercise control whereas beyond that area public rights and obligations would seem to take precedence. Had the matter rested there we might have been inclined to accept the lessor's case. However, Mr Hodge could not challenge Mr Walker's submission that it was sometimes a recognised practice in old leases of this kind for the lessor to seek to control what the lessee was doing even outside the boundaries of the demised premises and to control what the lessee was placing in the public highway. If that could have been the purpose, then we cannot confidently assert that it was not the purpose. One has to be sure that it is the purpose of both parties and not just one before one can safely embark on a purposive construction.
52. If that tool of construction is too blunt, where do we find the meaning of this phrase? In the context of the lease as a whole the words tend almost invariably to mean the whole of the demised premises. In the context of the preceding parts of sub-clause 9 their natural reference to the building is displaced by the lack of consistency and there is much uncertainty as to that meaning. We are driven reluctantly to conclude that the uncertainty pervades the meaning of the clause we have to construe. We are left in real doubt as to what was intended. It follows that the expression is ambiguous and, very much as the last resort, we are driven to construe the clause against the grantor. "Outside the said premises" means outside the boundaries of the premises the subject of the demise.

The result of the appeal and cross appeal.

53. Although the appellant was successful in persuading us that the judge attributed the wrong meaning to the word "goods", the respondent by his cross-appeal has also persuaded us that the judge was wrong in his interpretation of "outside the said premises". In the result the declaration stands and the appeal must, therefore, be dismissed. We confess that we do not find that result unsatisfactory. This was a 999 year lease which one would hope would leave the lessee as nearly free as a freeholder could be. Cars have been parked here for years without objection and whilst that does not prevent the lessor exercising his right, if he has one, there is a sense of opportunism about the lessor's case and it may be thought unfortunate were the lessee to have to pay a considerable annual licence fee for a fortuitous benefit that arose from an alteration of the premises to which the lessor gave approval many years ago.

Order: Appeal dismissed with costs agreed in the sum of £6,000; application for permission to appeal to the House of Lords refused.

(Order not part of approved judgment)