ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE FLOYD
HC08C00726
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE RICHARDS
and
SIR DAVID KEENE
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AKZO NOBEL UK LIMITED |
Appellant |
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- and - |
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ARISTA TUBES LIMITED |
Respondent |
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WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
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MR JONATHAN GAUNT QC (instructed by Geldards LLP) for the Respondent
Hearing date: 10th December 2009
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Crown Copyright ©
Lord Justice Mummery :
Background
"Those Agreements require us to give three months' notice to terminate and we accordingly therefore give notice to terminate our Licence Agreement on 31 January 2008, when all five units will be vacated."
"If by [31 December 1999] all Property Consents shall not have been obtained in respect of any Business Property then either the Seller or the Purchaser may, by three months notice in writing to the other, terminate on the date of expiry of that notice, the obligations of the parties hereto in respect of that Business Property under this Schedule 7 (Properties) (but without prejudice to antecedent breach) in which event the Purchaser shall vacate the Business Property in question by the end of such notice period."
The judgment
"31. Firstly, I think that this construction gives effect to the purpose of the paragraph, which is to enable the parties to bring an end to the relationship if one of them chooses to do so and if the Property Consents have not been obtained at the expiry of 12 months from the date of the BPA. It is inconsistent with this purpose to allow an obligation to complete to arise after the notice has been served. The whole point of the notice is that time for completion has passed.
32. Secondly, service of a notice leads automatically to the defendant vacating the premises precisely because there has been no completion. It is not consistent to give the notice these automatic and final consequences and at the same time allow an obligation to complete to be created after service of the notice.
33. Thirdly, the claimant's construction produces business uncertainty. If the claimant were able to trigger completion at any time during the notice period, the defendant could be placed in a position where it would not know where it stood until shortly before the expiry of the period. I think Mr Gaunt is right that the clause contemplates a period of certainty where the claimant can seek another tenant and the defendant can make preparations to vacate. Given the factual background of the use of the premises for industrial purposes, where giving vacant possession involves moving out of a manufacturing facility, it is not surprising that such a period is provided for. The ability to require completion within the notice is destructive of reasonable commercial certainty.
34. Fourthly, if the purpose of the paragraph were, as the claimant contends, to allow the failure to complete to be remedied within the notice period, I would expect this to have been effected by clear words. One would also have expected that the obligation to vacate at the end of the notice period to have been qualified expressly to allow for this possibility. None of this was done."
Akzo's points
Conclusions
Result
Lord Justice Richards:
Sir David Keene: