Jersey Unreported Judgments

Lease - claim by the Plaintiffs for declarations that a lease entered into between them and the Defendant be declared cancelled.

[2019]JRC054

Royal Court

(Samedi)

1 April 2019

Before     :		T. J. Le Cocq, Esq., Deputy Bailiff, and Jurats Grime and Thomas
Between	Peter Smith and Louise Bracken-Smith		Plaintiffs
And	Jersey Oak Limited		Defendant

Advocate M. L. Preston for the Plaintiffs.

Advocate P G. Nicolls for the Defendant.

judgment

the deputy bailiff:

1.        This is a claim by Mr Peter Smith ("Mr Smith") and Mrs Louise Bracken-Smith ("Mrs Bracken-Smith") (jointly "the Plaintiffs") for declarations that a lease entered into between them and Jersey Oak Limited ("the Defendant") having effect from the 1^st April, 2017, ("the Lease") be declared void ab initio or cancelled. 

2.        The Plaintiffs' claims are put on the basis that there was a breach of an express or implied term of the Lease, and a misrepresentation (either deliberate or innocent) made by Mr Simon Bellwood ("Mr Bellwood"), a director and founder of the Defendant, prior to the grant of the Lease on which the Plaintiffs relied and which became a fundamental term of, and without which they would not have entered into, the Lease.  They seek a declaration that the Lease is void ab initio on the grounds of dol or dol par reticence.  Alternatively, they further list a number of breaches of the terms, express or implied, of the Lease which, they argue, are so serious and fundamental as to entitle them to cancellation of the Lease.

3.        The Defendant denies any misrepresentation or any such fundamental term and any breaches of the Lease.  Further, the Defendant says that if any of its actions do amount to breaches of the Lease then those breaches are not of sufficient materiality to lead the Court to cancel the Lease.  Furthermore, the Defendant counterclaims against the Plaintiffs for alleged breaches by the Plaintiffs of the Lease.

Background

4.        The Plaintiffs are the owners of a substantial Grade 4 listed property known as "Chateaubriand", La Rue du Guillaume et Dannevile, St Martin ("the Property") which they purchased from Mr Robert Messervy ("Mr Messervy") in September 2009.

5.        The Property comprises a substantial family home and a number of outbuildings some of which are connected to the family home at the rear.  Separately, at some modest distance from the family home, is a structure which, at the time of the purchase of the Property by the Plaintiffs, was used for Mr Messervy's business.  There are also substantial lands and gardens including what is termed as "a parking area". 

6.        Mr Messervy continued to use the separate building and other parts of the Property for the purpose of his business and drew up a short lease to formalise that arrangement between himself and the Plaintiffs.  That lease was dated 9^th October, 2009, and leases certain of the outbuildings for an annual rental of £24,000 payable monthly in advance ("the Messervy Lease"). 

7.        The Messervy Lease is short and limited in its terms providing only, in addition to the description of the demised premises, term and rental, that the lessee would agree to cut the lawns, driveway, banks and carry out the branchage, pay the parochial occupier rates in respect of the rented buildings and keep the Plaintiffs indemnified against all or any claims, actions, demands, costs, expenses or other losses or prejudice arising out of or in connection with the occupancy or use of the Property.  Furthermore the lessee agreed not to park vehicles or machinery with the exception of a forklift in the concrete yard between the sheds and would also make every possible effort to keep the area around the showroom/workshop in a tidy state. 

8.        There was a side arrangement between the Plaintiffs and Mr Messervy that he would give them three months' notice if he ever chose to leave.  The relationship between the Plaintiffs and Mr Messervy was described as "very relaxed" and indeed Mr Messervy even put the rent up of his own accord every year in accordance with the RPI index.  It appears to have been an arrangement that was entirely satisfactory to all parties and, as Mr Smith said in evidence with reference to Mr Messervy,  "It was clear that he had a big emotional attachment to the property.  He respected it as our family home just as it had been his.  He loved taking care of the grounds.  We had a good relationship with him....". 

9.        Mr Messervy eventually gave notice to bring the Messervy Lease to an end at the end of 2016. 

The Lease

10.      Prior to executing the Lease there were, as might be expected, a number of conversations between Mr Smith, in particular, and Mr Bellwood.  Mr Bellwood also produced two documents termed "proposals". 

11.      It is not necessary to set out all of the documentation but, for example, in an email of 31^st January, 2017 Mr Bellwood writes setting out his intentions were he to take on a lease of the demised premises.  In that the following may be found:-

"... We are also proposing to run a business which is much more considerate of your privacy and the fact that the property is on the same site as your home..."

"... Whilst the location of the property and the layout are less than ideal for a retail premises, I feel that we can make this work for us but only at the right lease/ingoing price.  ..."

"To illustrate my plans and to help you consider a way forward I have listed below what I intend to do, with your consent of course:-

...

·         Yard 1 - Fence off across front and put in double gates to secure access and make it look less commercial;

...

·         Showroom - ... this would be a high end lifestyle showroom with similar to what you would expect from somewhere like David Hick Interiors - slightly better than a garden machinery workshop so would look good...

·         Rear yard - possibly put in a temporary structure for outdoor furniture (or a marquee initially).

..." 

12.      The first proposal for the Lease was dated 30^th January, 2017, ("First Proposal") and contains the following:-

"This proposal has been prepared in the knowledge that the buildings are next to your home and that minimal disruption, safety and privacy etc. are strong considerations.  Equally, I hope you agree that this proposal is balanced with a pragmatic view that the buildings have to be worth leasing and that a business has to function within them."  

13.      And, under the heading "External use of the premises" the First Proposal states:-

"We are keen to ensure that our use of the property and any sub-tenant's use is in a manner which is harmonious with your home."

14.      The second proposal was dated 6^th February, 2017, ("Second Proposal") and although it contains similar detail to that contained in the First Proposal the words quoted above in the First Proposal are absent other than the statement with regard to the use of the property and the use for any sub-tenants as being "in a manner which is harmonious with your home" which is contained within the Second Proposal. 

15.      The Lease was signed by the Plaintiffs on 13^th March, 2017, and by Mr Bellwood on behalf of the Defendant on 14^th March, 2017.  As indicated above it was expressed as coming into effect on 1^st April for a period of 5 years.  The annual rental was £28,200 payable monthly in advance on 1^st of each month and a provision was inserted for the increase of the annual rental in accordance with the Jersey cost of living index on the anniversary of the Lease throughout the term.  The description of the property subject to the Lease ("the Demised Premises") was in the same terms as set out in the Messervy Lease namely:-

"The building comprising of showroom/workshop/office/stores, shed complex to the west of the concrete yard, storage areas and buildings to the east of the concrete yard (grinding shed and next ground floor storage room and lofts above running from the south wall as far as the north edge of the raised floor level, the hard-core area to the east of the main building and the car park to the far south east of the property."

16.      It is apparent that the Lease was largely modelled on the Messervy Lease but contained the following additional terms which are of some relevance:-

(a)       At paragraph 1 of the Lease, there are provisions relating to the repair and maintenance of the Demised Premises and the following appears:-

"In view of the fact that buildings within this agreement will be potentially demolished/refurbished/rebuilt at a future date.  Both parties agree that there is already significant rot in western range of sheds, damage to doors, windows and floors: the level of maintenance needs to be in keeping with the functionality of the buildings to keep them wind and watertight.  That is not to say rotten windows need replacing, more they need to be leak-proof and should look acceptable/clean. 

Upon signing of this lease and payment of the deposit, the lessee has full right of access to the premises (subject to permission from the previous lessee).  The lessee will pay for all initial repairs and maintenance in return for a rent-free period at the end of the lease.  See section below.  The lessors agree to provide their maintenance person for four hours per day to assist with this until it is complete. 

The lessors will pay for a qualified plumber and an electrician to test the systems and provide a letter/certificate confirming that the existing utilities, fuse boards etc. are up to regulations so that we can ensure health and safety are met." 

(b)       At paragraph 4 the Lease states:-

"The lessee will not park vehicles, or machinery, with the exception of the forklift, in the concrete yard between the sheds and will also make every possible effort to keep the area around the showroom/workshop in a tidy state." 

(c)       At paragraph 5:-

"The lessee - will have 24 hour access to premises within this agreement.  Retail space will be open subject to agreed normal hours of business Monday - Saturday.  On occasion the lessee will open the showroom outside of these hours for invitation only events, for example, one off sales events etc." 

(d)       And, at paragraph 6:-

"Sub-lease - where the lessee agrees sub-lease agreements with Jersey Oak Limited clients for rental space are limited to the length of master agreement and do not supersede this lease.  Jersey Oak Limited will notify the lessor of such agreements and give written notice of sub-lessee tenants and nature of storage use.  The lessor (Peter Anthony James Smith and Louise Bracken-Smith) have the right of veto of any sub-lessee if the nature of business is not agreeable with family home/setting (e.g. if this involves dangerous or toxic materials, large vehicles (7.5 tonne and over)).  For basic sub-leases such as dry storage of household goods or vehicles it would be acceptable to just notify the lessor of who they are and what they are using the space for."   

17.      We have set out the terms above in part because they are relied upon by both the Plaintiffs and the Defendant, but also because they illustrate a certain informality and want of precision in the preparation of that document.  It is common ground that neither the Plaintiffs nor the Defendant took legal advice on the terms of the Lease which they negotiated directly between them and which they drafted based, as we have said, largely upon the Messervy Lease. 

The Order of Justice

18.      The Plaintiffs' Order of Justice asserts that it was their understanding that the Defendant would operate what might be termed "a cottage industry" under the "Genuine Jersey" brand that would have "little or no impact upon their family life and home". 

19.      It further alleges that the Defendant was aware from the outset that the Demised Premises were situated on the property which comprised a substantial family home and further asserts that it was "an express and/or implied term of the Lease that the Defendant was to operate its business and behave in that context at all times".  It is asserted by the Plaintiffs that this was fundamental term of the Lease and that they would not have agreed to the operation of a business from the property that was other than in keeping with its status as a family home. 

20.      It is further alleged that there was an implied term that the Defendant would comply with all relevant planning laws, regulations and orders in its occupation of the Demised Premises. 

21.      The Plaintiffs go on to allege that there were express representations made by Mr Bellwood on behalf of the Defendant that he was to operate a cottage industry from the Demised Premises where the Defendant's oak furniture would be stored, and there would be some retail activity. 

22.      It is alleged that the Defendant has, in fact, created at the Demised Premises a retail unit that is akin to what might be found at a garden centre and that a large range of products is sold on a scale that was unanticipated by the Plaintiffs.  It is further alleged that at the time of discussions leading up to the signing of the Lease the Plaintiffs had been knowingly (or innocently) misled by Mr Bellwood and/or the Defendant and had they been aware of the true nature of the Defendant's proposed business activities they would not have agreed to enter into the Lease. 

23.      Accordingly, so it is alleged, there was a "vice du consentement", specifically dol, so that the Lease was void ab initio and, in the alternative, in that the Defendant failed to communicate to the Plaintiffs its true purpose for the use of the Demised Premises there was a dol par reticence such as to render the Lease void in the same way. 

24.      Further, it is alleged that the Defendant is in breach of the terms of the Lease by:-

(i)        Constructing a marquee of a permanent nature without the consent and in breach of the requirements of the planning department;

(ii)       Removing a metal staircase in the barn area of the Demised Premises and constructing there a new staircase in an alternative area of the barn area of the Demised Premises without consent;

(iii)      Occupying an area within the loft of the barn that fell outside the scope of the Demised Premises without consent;

(iv)      Erecting a fence around the lower car park area without consent; and

(v)       Operating its business and behaving in such a way as to breach a fundamental term of the lease, namely to respect the fact that the Demised Premises are adjacent to and in part adjoined to the Plaintiffs' family home. 

25.      The Defendant denies that there was ever an implied or express term in the Lease that the Defendant operated a "cottage industry" and equally denies that the operation of its business at the Demised Premises impacts on the Plaintiffs' family home any more than would be expected for a property that has a commercial tenant present.  The Defendant also denies that there was any fundamental breach of the terms of the Lease.  Moreover, the Defendant denies making any false representations in connection with the kind of business that it would operate (and points to the amount of rental as being inconsistent with a "cottage industry" style of business) and asserts that it did not knowingly mislead the Plaintiffs in any way.  The Defendant denies each of the alleged breaches of the terms of the Lease.  

The evidence

26.      There were a number of witnesses who had provided statements and were cross-examined.  The main evidence was given by the Plaintiffs personally and by Mr Bellwood on behalf of the Defendant.  We had the opportunity of evaluating carefully the demeanour of all of the witnesses and how their evidence was given and the findings of fact that we make below derive in part from our assessment of the witnesses. 

27.      The references to the evidence below are not exhaustive on each of the allegations and points dealt with.  We have, of course, taken all of the evidence whether referred to expressly below or not into account in making our findings of fact. 

The formation of the Lease and general allegations

28.      Mr Smith gave evidence of how he and his wife wanted to find a "forever home" with lots of space for their children to play.  He gave details of the purchase of the property and the creation of the Messervy Lease. 

29.      When the Messervy Lease came to an end, he had discussed with his wife whether or not they wanted to enter into another lease - their long term plan being to develop the Property - and they agreed that they didn't really want another shop area.  Eventually they decided to seek a tenant who would accept and understand their plans and ideally replicate what he describes as the "low maintenance tenancy" that he had had under the Messervy Lease.  He pointed out that he spends a lot of time at home because of the nature of his job and that for him and his wife it was "of primary importance to us that any tenant respected the property as a family home. "Home" is a very important concept to Louise and I.  Given our frequent travel with work, weekends and holiday time are incredibly important to us as a family and being able to enjoy time in our home is a significant part of that...".    

30.      He described how he had been put in touch with Mr Bellwood and that he first met Mr Bellwood in February 2017 and he showed him the outbuildings.  Because of their future plans, which involved demolition of parts of the Demised Premises, Mr Smith said he explicitly told Mr Bellwood that it would not be worth putting substantial capital into the project if he did take the space on and that they were looking for a short-term tenancy.  The initial discussion had centred around the store and barn areas but then Mr Bellwood asked if Mr Smith would consider renting the retail space.  During that conversation Mr Smith said that he stressed to Mr Bellwood the importance of his concept of "family" and that it should be possible for his children and pets to roam as they wish.  He said that Mr Bellwood confirmed that he understood the importance of the home environment to Mr and Mrs Smith. 

31.      Mr Bellwood was persistent in wanting the retail area and Mr Smith told us that he had been given to understand by Mr Bellwood that it would only be used for private client appointments where he would hold viewings for his high-end products.  He communicated a vision to Mr Smith of selling bespoke oak products and needed a space where he could do that.  He was informed that the Defendant's business was under the "Genuine Jersey" banner.  In his statement Mr Smith goes on to say "I understood that this would be something of a "cottage industry" type of operation".  There was some discussion of holding invitation only events on Sundays in the run up to Christmas and Mr Smith indicated that that would not seem unreasonable to him.  Mr Smith says, Mr Bellwood, "certainly portrayed to me that this was going to be a very low key retail area that would be used specifically for viewings of invitation only events.  Had that not been the case then I would not have entertained the idea of leasing the retail space to him."   

32.      Mr Smith recalls a discussion in the kitchen of his home and how Mr Bellwood had discussed doing quite a lot of work on the Demised Premises.  Mr Smith had stressed to him that because of the Plaintiffs' plans such would be a waste of money. 

33.      Mr Smith subsequently arranged for Mr Bellwood to meet with himself and Mrs Bracken-Smith and a similar conversation took place.  They, Mr Smith and Mrs Bracken-Smith, both stressed again that it was of the highest priority for them to maintain the family home environment and their privacy.  Eventually, at Mr Bellwood's request, they agreed to a five year term but indicated to him that there would be no extension and that would be the last time they would lease out the Demised Premises. 

34.      Mr Smith confirmed that he did not seek any legal advice in connection with drafting the Lease and relied upon the Messervy Lease as a starting point.  He had prepared the draft of the Lease and sent it to Mr Bellwood and Mr Bellwood had responded with a few proposed amendments.  He pointed out that Mr Bellwood sent them an email of 15^th February, 2017, which contained the following words:-

"Obviously I am more than happy to consider other criteria as I am very mindful of this being your family home and I totally respect that." 

35.      Essentially, so Mr Smith asserted, they trusted Mr Bellwood personally and his proposed amendments were incorporated into the Lease. 

36.      There was, so it appears, some friction before the Lease started in that there was some difficulty getting a quote for electrical works and Mr Smith asserts that Mr Bellwood had been difficult and rude to an individual coming up to give a quote to the extent that the individual had refused to quote for the work and Mr Bellwood had also been rude and verbally aggressive to Mrs Smith's PA.  Mr Smith characterised Mr Bellwood's behaviour as erratic or unbalanced. 

37.      In cross-examination Mr Smith was asked about the original meetings and discussions with Mr Bellwood.  He confirmed that Mr Bellwood had seemed charming and passionate about what he was doing and that he had described his business as an artisanal local business with craft products.  His initial impression of Mr Bellwood had been that he was charming and respectful.  He was asked about the various written proposals prepared by Mr Bellwood explaining his ideas in connection with the Lease. 

38.      It was Mr Smith who had sent the draft of the Lease by email dated 14^th February, 2017, expressing in that email that he hoped that it "captures all we discussed". 

39.      It was put to Mr Smith that neither he nor his wife were alleging that Mr Bellwood had lied.  Mr Smith answered that he believed that Mr Bellwood had lied in conversations in January or February when he had presented the business as a bespoke retail business.  Mr Bellwood was unequivocal, his stated vision was of a high end low flow business and the nature of it was bespoke oak under the Genuine Jersey banner.  He talked about "private clients" at an early stage.  Communications between Mr Bellwood and Mr Smith had been largely verbal but Mr Smith had been very clear in his understanding.  There was nothing in writing relating to the suggestion that the retail premises would be "invitation only" and he confirmed that he did not have any difficulty with operating within normal opening hours as provided for in Clause 5 of the Lease.  

40.      It was put to Mr Smith that the email of 14^th February suggested that the Lease captured everything that had been discussed between them and that there were no extraneous terms of the sort now asserted by Mr Smith.  To that suggestion Mr Smith responded that he had not intended to capture all of the conversations that had taken place between himself and Mr Bellwood on which he relied.  It was put to him that the allegations relating to the nature of the business were not raised in the earlier correspondence between the Plaintiffs' legal advisers and Mr Bellwood. 

41.      In re-examination Mr Smith was taken to the email of 31^st January, 2017, written to him by Mr Bellwood and when asked again about why he did not take legal advice, Mr Smith said that he did not think he needed lawyers and that the arrangement was based on "trust and respect". 

42.      We next heard from Mrs Bracken-Smith.  She too gave evidence relating to the background and her family and also referred to the evidence contained within her husband's statement and the harmonious relationship under the Messervy Lease. 

43.      With regard to the Lease, she confirmed, as had Mr Smith, that she had not previously heard of the Defendant and had never come across Mr Bellwood before February 2017 when the question of the Lease first arose.  All of the conversations had in fact happened between Mr Bellwood and Mr Smith and a lot of her understanding derived from what Mr Smith had told her.  She confirmed that she and her husband had not initially been keen to have another retail unit but her husband had told her that Mr Bellwood's intention was to use the retail area for "high end clients to have viewings of high spec, bespoke items."  It sounded to her like this was a very specific use for retail premises rather than opening a general shop. 

44.      She only met Mr Bellwood for a short time before the Lease was entered into.  He came to the Property to visit and she said he seemed like a "nice guy".  She also said "he was keen to let us know that he understood the need to respect the area as our home".  She confirmed that her husband drafted the lease which was very basic and that he liaised with Mr Bellwood to finalise the terms.  She did review the final draft. 

45.      She then said that very shortly after the Lease had been signed Mr Bellwood's demeanour and attitude towards her and her husband had changed.  The way she characterised this is that he went from being polite and understanding to being very demanding of them and also of Mr Messervy.  He had an aggressive manner about him.  She gave evidence about Mr Bellwood's behaviour towards a person who came to give a quote for various electrical works and his rudeness to another person quoting for the work.  She explained that tensions between herself and her husband on the one part and Mr Bellwood on the other grew very quickly. 

46.      In addition to the specific allegations of breaches of the Lease referred to below, Mrs Bracken-Smith pointed to various instances which she characterises as aggressive behaviour on the part of Mr Bellwood and as behaving disrespectfully to them as a family and to their family home.  She gave an example in March of 2018 in which Mr Bellwood complained to St Martin's Public Hall about an incident involving the Plaintiffs' children using a BB pellet gun within the grounds of their home.  On being frustrated by the response of the parish which viewed it as an entirely domestic affair she said that Mr Bellwood proceeded to contact the JSPCA stating that they should investigate whether the dogs had been shot by the children.  He had made the allegation, which she found out about over the telephone with the police, that the children had treated the pets with cruelty and this, although untrue, caused considerable upset in the family.  She pointed to events held by herself and her husband at the home, including a work summer party.  After this, Mr Bellwood raised a complaint with them relating to one glass bottle that was left out although the Plaintiffs had had the site professionally cleaned. 

47.      At the time planned for her daughter's fourth birthday party, Mr Bellwood had arranged a week long summer sale event starting on Sunday 15^th July, 2018.  Had the Plaintiffs been asked they would not have agreed.  He refused a request from the Plaintiffs to close the shop on the Sunday.  Mr Bellwood refused on the basis that he did not require their permission to open as he was holding an invitation only event which was permitted by the Lease.  Mrs Bracken-Smith had found out through the company's social media that the event was open to loyalty card holders and anyone who had posted a "like" on the company's page on Facebook.  It was not therefore, in her view, an invitation only event.  The shop continued to trade until 4pm. 

48.      She also said that her children had become progressively more concerned about Mr Bellwood and she herself feels very uncomfortable around him.  She pointed to an incident in March 2018 when she was leaving her office in Bath Street and encountered Mr Bellwood and noted that he was standing on the opposite side of the road to her work staring up at it.  She felt like he might have been deliberately harassing her.  She also pointed to a number of emails passing between Mr Bellwood and the Plaintiffs' legal advisers.  Some of these we refer to below.  She worried about the family's safety at home, pointing to fast driving by Mr Bellwood whilst on the property. 

49.      In cross-examination Mrs Bracken-Smith accepted that her understanding was based in part upon what she understood Mr Bellwood had told her husband.  She was asked whether or not she had looked at the Defendant's website and she said she had not looked at it and was not in 2017 aware of it.  In response to the questions put to her she maintained the position that she had originally stated in her affidavit. 

50.      She felt that the character and behaviour of Mr Bellwood was well illustrated by his email to the Plaintiffs' legal representative of 22^nd February, 2018, following difficulties with the marquee to which we refer below.  We repeat the entirety of that email in which Mr Bellwood says:- 

"Will you ever stop?  This is ridiculous, what a dirty game you and your clients like to play.  If you don't get off my back and start playing fair I will have no choice but to play the same game as you.  The extension to the existing building - is this really such an issue or are you just trying to cause as many headaches as possible to rid yourself of Jersey Oak before the expiry of the lease?  The Court will already see this obvious tactic and it will be frowned upon. 

Planning will be up today to check the legality of it at your request! 

As for my response, if I have to take it down I will, instead I will use this area (which the marquee occupied) for the storage of boats and vehicles, just as it was when I took on the lease.  I am sure this will be a real eye saw for your clients and such an improvement on the marquee!  Incidentally I can actually earn £500.00 pcm month off this space so it may well have done me a favour.  Moreover, regarding the entire premises, I am looking for a new retail outlet and if I find one I will still keep the lease with your clients until the very final day in 2022 - just out of principle.  I can earn more money off that property in sub-lets than they earn in rent off me, in fact, double the amount.  I will thoroughly enjoy the experience of knowing how much it annoys them - call it revenge for the unethical, immoral, selfish behaviour they have shown in the past 6 months. 

Also, if you want to continue with the dirty tactics, I will follow suit. 

(1)       Does Sergio possess a valid chainsaw licence? 

(2)       Does your client have a valid employers insurance and permission from Regulation of Undertakings? 

(3)       Does Louise's company actually pay for the cleaner at Chateaubriand

(4)       Does Louise's company actually pay for Peter's mobile phone bills? 

This list can go on and on and on as much as you want Mr Preston.  Clearly your client's are very tenacious and determined, I however, am very principled and fair.  How far do they want to keep going with this.  4 more years of giving each other a lot of grief, in their family home, is a long time.  I get the pleasure of going home at night, they don't. 

Also, just as an observation, I will be using the yard (where the forklift stays) for storage of the wheelie bin and other items as I have just noticed that the lease only excludes vehicles and not storage - which is my understanding from my discussions with Peter prior to the lease being signed.  The only caveat he mentioned at the time was as long as they could get through to access their property it was fine.  Clearly, the sofas have been sat there for 6 months so the precedent has already been set and I chose to try and keep the peace by leaving it clear.  The rules seemingly have now changed and they will stop at nothing to cause me as much difficulty as possible in running my business.  Why then do I need to try and keep the peace.  I will now run my business to the letter of the lease, if this includes leaving my wheelie bin in the yard of the top of the drive then that is my choice to do so.  I am also getting some signs put up on the fence that I have erected - just for your information. 

Nothing personal, business is business." [SIC]   

51.      We heard next from Sonia Velosa.  She was the Plaintiffs' housekeeper and she lived at the property next door to the family house. 

52.      She gave evidence that on 18^th August between 5 and 6pm she was sitting in her van in the driveway outside the house when she noted that the Defendant's van was coming in and that it was driving too fast.  She noted where the family dogs were lying and she was concerned that the van would hit them as it did not slow down.  It was, as she says "a crazy speed".  The dogs managed to get out of the way but Ms Velosa was shocked as to how fast it passed them.  When the van eventually stopped Mr Bellwood got out and slammed the door shut. 

53.      In cross-examination Ms Velosa confirmed that she was aware of the difficulties between the Plaintiffs and the Defendant and she was not in any way involved with the Lease.  She simply recalled the one incident to which she had referred and there was another incident where the dogs were not present.  She did not, of course, keep watch at all times. 

54.      We then heard from Leónia Nadine Nunes Araújo Sá Brás who is the Plaintiffs' nanny for their four children.  She was with them when the Messervy Lease was operating and she says that there were never any complaints then. 

55.      She had temporarily left the Plaintiffs' employment but then returned to work for them in September 2017.  She noticed the signage for the Defendant Company and that visually the area was very different than it had been under the Messervy Lease.  She noted additional fencing. 

56.      Shortly after she returned she began to have issues with the driveway being blocked by the Defendant's van and that had continued to happen.  She expressed the view that Mr Bellwood had been at the property and had caused a "big change in the home environment and this has affected the children".  She said that he treated them like a nuisance.  He made his complaints about them through the Plaintiffs' gardener, Sergio.  She was concerned about possible injury to the children should they be playing outside the entrance of their house where customers of the Defendant drive outside the area of the Demised Premises and the driveway which happens regularly.  She was also concerned that the speed at which Mr Bellwood drives on the driveway leading up to the Demised Premises. 

57.      We next heard from Mr Messervy who gave evidence as to the background and how the Messervy Lease had been entered into.  He confirmed that when that lease came to an end he had moved out of Chateaubriand for the most part by mid-February of 2017 but there were things to tidy up and finish off which took him until just after end of March. 

58.      He recalled that Mr Bellwood came on site a significant period before his lease had ended.  As soon as he gave Mr Bellwood permission to begin to bring things on to site prior to 1^st April, 2017, Mr Bellwood's behaviour towards him had changed.  He had become demanding and was constantly pushing him to get things done so that he could get to areas that he would be renting even though his lease had not actually at that time started.  He demanded that Mr Messervy power wash areas so he could start painting them. 

59.      He recalled other circumstances in connection with the electrical system and alarm system in which Mr Bellwood was confrontational with him.  He summarised his evidence in chief, essentially repeated in cross-examination, with a most unflattering characterisation, of how, in Mr Messervy's view, Mr Bellwood behaves. 

60.      We heard from Mr Antony William Sargeant.  Mr Sargeant had no evidence to give in connection with the Lease or indeed the relationship between the Plaintiffs and the Defendant.  His evidence related to his experience of Mr Bellwood in a different business relationship who he describes as flying off the handle in "a screaming rage about the smallest thing" and within a few minutes after that behaving as if nothing had happened.  Mr Sargeant also pointed to a situation in which Mr Bellwood was supposed to use certain premises as a store but he also used it for manufacturing against that restriction.  In cross-examination he confirmed that he found Mr Bellwood difficult to talk to in a rational way. 

61.      Mr Bellwood's statement and oral evidence paint a rather different picture.  He says that when he first met with Mr Smith at a café on 28^th January, 2017, Mr Smith had indicated that he wanted to lease the property in a way which would be attuned with his family's needs.  Mr Bellwood says that he had then explained what he wanted to do with the property which was to conduct a retail home and garden products business and he said that he sold "bought in products" via their website and the Harbour Gallery.  He explained that he envisioned a showroom that would allow the Defendant to retail its own Genuine Jersey products as well as those bought in from suppliers elsewhere.  He had prepared the First Proposal and sent it under cover of an email of 30^thJanuary 2017. 

62.      There was then an exchange between himself and Mr Smith as a result of which he said that he would put a further proposal together.  At no time in the exchanges between them had Mr Smith done anything to suggest that he disliked the Defendant's plans and certainly had not objected to anything proposed by the Defendant, including the erection of the marquee. 

63.      Mr Bellwood explained that at the time that Mr Smith confirmed that they had an agreement in principle he was confident that conversations and email exchanges between them to that date created an informal agreement to cover areas that the Lease itself did not specifically mention. 

64.      He pointed to a gradual deterioration in the relationship between himself and the Plaintiffs but maintained that at no time did he knowingly act other than in accordance with the terms of the Lease or his discussions and written exchanges with Mr Smith. 

65.      In cross-examination Mr Bellwood accepted that it had been important to the Plaintiffs that he had respect for their family home and they wanted minimal impact.  He disputed, however, that they did not initially want a retail outlet nor was it correct that he had to convince them concerning his retail proposals.  He accepted that the First Proposal expressed the importance of balancing the objectives of the business with respect for the family environment and also the right on the part of the Smiths to veto any sub-tenants. 

66.      Mr Bellwood thought that he respected the Plaintiffs' family home and he had thought that his business model fitted with what they wanted.  He maintained that he never said that he only sold bespoke furniture to private clients or that the use of the property would be by invitation only or there would be a limited footfall or things of that nature.  He had told Mr Smith what his business did. 

67.      It was put to him that the contents of the Jersey Oak webpage on the Genuine Jersey website did suggest that "Jersey Oak designs are purchased off the shelf or privately commissioned (bespoke) to accommodate all tastes and budgets".  Mr Bellwood said that that website was somewhat outdated and that the document was really weighted towards the Genuine Jersey part of the business. 

68.      The contents of the Jersey Oak online store was also put to him and it was clear that a substantial number of different items were on sale.  However, Mr Bellwood maintained that he had properly characterised his business to the Plaintiffs.  He had never used the term "artisanal" but could well have used the words "craftsman", "handcrafted" or "bespoke" which was part of his business.  He had told the Plaintiffs that he was going to create a "lifestyle showroom" which is what he had done.  He insisted that he had properly explained the business to the Plaintiffs.  There was no mention of a "cottage industry". 

69.      He accepted that the family home needed to be respected but he made the observation that clearly there had to be some form of impact as the Defendant is running a commercial operation from a commercial building.  He denied that there was any basis to allege that either the Plaintiffs' children or indeed Mrs Bracken-Smith had any cause to fear him. 

70.      His email of 22^nd February, 2018, referred to above was put to him.  He informed the Court that he was not proud of writing that email but was "rattled".  He had not intended to threaten the Plaintiffs but he had felt threatened himself because it related to his whole livelihood.  What had been a dream was turning into a nightmare. 

Construction of the Marquee 

71.      In his affidavit Mr Smith gave evidence that in early June 2017 the Defendant had erected a marquee which was in effect joined as an extension to the showroom area of the Demised Premises with a structured entranceway.  Mr Smith had been absent during the time that the marquee was being erected although Mrs Bracken-Smith had contacted him to express concern.  He expressed himself as being shocked when he saw the construction. 

72.      Mr Smith informed us that he had spoken to Mr Bellwood in March or April of 2017 about putting a temporary marquee in place over the summer months but had not anticipated that it would be there for other than June and July nor of the permanent nature that it appeared to be.  In his view it was unsightly and he was particularly concerned because it clearly was not a temporary structure as it appeared to be laid on concrete foundations.  Mr Smith was concerned about the breach of the planning law as the property was in the Green Zone and he and Mrs Bracken-Smith had always been very mindful of planning restrictions. 

73.      Mr Smith had spoken to Mr Bellwood about these concerns who did not give the impression that he thought there was any planning issue involved.  Mr Smith indicated that the marquee should be taken down. 

74.      In an email of 27^th June, 2017, Mr Smith wrote to Mr Bellwood in the following terms:-

"[I am] ... very concerned that the construction of [the] marquee may contravene planning restrictions on our property.  You did inform me that you would be putting up a marquee but as I mentioned the other day you did not discuss building foundations, erection of fence or building a permanent "looking" entrance.  The planners are particularly sensitive about "pushing the boundaries" in the Green Zone.  If the marquee does contravene regulations in current form you must comply immediately with the Planning Department's instruction.  Louise and I will accept no responsibility regarding the additional construction on areas you have rented." 

75.      Faced with a lack of response from Mr Bellwood either about meeting planning regulations or agreeing to remove the marquee Mr Smith contacted a Mr Keith Bray of the Planning Department.  He arranged for Mr Bray to visit the property and inspect the marquee and also confirmed to Mr Bray that if there were issues with the structure, the Plaintiffs would not be consenting to any retrospective planning application. 

76.      Mr Bray visited the property on 8^th September, 2017.  The marquee did not have the necessary planning permission and was unauthorised as it had been in place for longer than the 28 day time limit possible for a "movable structure".  Furthermore, so Mr Smith understood, it exceeded the area permissible. 

77.      Mr Bellwood was clearly exercised by the visit from Mr Bray as on 8^th September at 12.50pm he sent an email to the Plaintiff's legal advisers in the following terms:-

"The Planning Department have visited since my earlier email today and have taken photos of the marquee area.  So that you are aware I will be pursuing this matter vigorously and I do wholeheartedly believe, and the evidence concurs, that this Marquee was agreed by your clients.  This simply further evidences the issue of bullying by your clients and in fact is reinforced by your shamefully embellished emails. 

If the marquee is outside of planning restrictions, which I was led to believe was acceptable, then this clearly is a matter for the Planning Department and plays no further part in our discussions.  If as a result of this, change of consent by your clients, and subsequently the Planning Department allow the marquee to remain I will be pursuing a claim against your clients for all costs and any loss of income. 

On another note, as you will be well aware any Planning issues are extremely public matters and we will be taking full advantage of this as it serves to provide a good marketing opportunity for Jersey Oak. 

"The much awaited Christmas Shop at Jersey Oak's new Home and Garden Showroom - will Santa come and visit or will the Planning Department play the role of Scrooge".  Catchy don't you think?" [SIC] 

78.      Subsequently, on 21^st September, 2017, Mr Bellwood indicated that he would be filing a retrospective planning application for the marquee and demanded that the Plaintiffs countersign it.  His communication was in the following terms:-

"...With regard to the planning application for the marquee structure, I will be submitting a retrospective planning application for this structure.  I had checked this out with planning but I was not made aware that such a structure required planning permission it if was erected for more than one month per year.  An error on my part.  I have to submit this application no later than Monday 9^th October, 2017.  I will be submitting this application to yourself so that your client can sign it.  In order for your client's have enough time to sign this form please can you advise me of a date when I would need to submit this to your office so I can collect it on Monday 9^th October and submit to the planning office? 

I would like to point out that a refusal to sign this document will further serve to evidence the disgracefully unwelcoming nature of your clients given that we have written evidence of their consent to such a structure being in place.  Furthermore, evidence also highlights how this structure forms an integral part of Jersey Oak plans for the property.  Failure to sign such an application would be a further breach of the Agreement from your clients.  These application fees will be paid for by Jersey Oak as this was our error, should your client's oppose this application any additional costs will be added to the invoices which we will send you." 

79.      The Plaintiffs' refusal to sign a retrospective planning application was confirmed that day. 

80.      By October it was clear that no steps had been taken to remove the marquee and in response to a communication from Mr Bray the Plaintiffs' legal advisers confirmed that fact. 

81.      A further email was sent by Mr Bellwood asking the Plaintiffs to support the retrospective planning application and saying that their refusal to do so would be a "u turn".  In subsequent communications with the Plaintiffs' legal adviser Mr Bellwood asserted as before that the Plaintiffs had agreed to the erection of the marquee and intimating that a claim would be lodged against the Plaintiffs in the event that as a result of actions by the Planning Department and the Plaintiffs lack of co-operation the Defendant would be required to remove the marquee.  After a period the Planning Department served an enforcement notice requiring the marquee to be removed within three months which expired on 16^th February, 2018. 

82.      The marquee began to be dismantled in mid-February 2018.  After the removal of the marquee and the entrance way the Defendant put up metal fencing around the area where the marquee had been. 

83.      Mr Smith, in his statement, suggested that this was an example of Mr Bellwood asserting that he had a right to do what he did even though it was clear that he did not.  It was also an example, so Mr Smith said, of a lack of respect for himself and his wife and that all Mr Bellwood was doing was seeking to secure as big a retail space as possible even though that had not been the understanding before the Lease was entered into and showed that Mr Bellwood's representations in that regard were simply untrue. 

84.      In cross-examination Mr Smith recalled a conversation between himself and Mr Bellwood concerning the marquee in which Mr Bellwood had said that he wished to sell "summer products" and therefore wanted a temporary marquee for the summer months.  He had never authorised what had been erected and would never therefore have agreed to a retrospective application.  This, he felt, had led to a breakdown in trust between himself and Mr Bellwood. 

85.      Mrs Bracken-Smith, in her statement, largely repeated the evidence of Mr Smith.  She referred to Mr Bellwood's tone as becoming more and more threatening and indicated that in December 2017 Mr Bellwood had written to herself and Mr Smith attaching a draft Order of Justice claiming £142,000 plus additional damages and demanding that certain things were agreed such as making a retrospective planning application for the marquee. 

86.      In his statement Mr Bellwood confirmed that the marquee did not have foundations but rather had a ring of concrete laid on top of the existing yard space to allow the legs of the marquee to sit properly.  He noted that concerns had been raised by the Plaintiffs in connection with the erection of the marquee. 

87.      Mr Bellwood pointed out that the erection of the marquee was something that was first anticipated in the First Proposal as referred to above.  It was not the erection of the marquee that appeared to trouble the Plaintiffs but rather the fact that it might have been in breach of planning regulations.  He, therefore, did not understand why the Plaintiffs did not sign a retrospective planning application for something for which he felt he had been given permission.  He confirmed that he was given a notice to take down the structure which he did within the timeframe allowed by the Planning Department. 

Removal of the Metal Staircase

88.      In his statement Mr Smith indicated that Mr Bellwood approached him in August 2017 about making a number of changes to the internal layout of the barn which would include the removal of a metal staircase and a new staircase fitted in a slightly different position.  Mr Smith says, "I unequivocally told him he could not move the metal staircase".  Thereafter, Mr Smith had been away on business in New York and by the time he had returned Mr Bellwood had removed the metal staircase.  Mr Smith's handyman Sergio, had been with Mr Bellwood when he carried out the work and confirmed to Mr Bellwood that Mr Smith had not agreed.  Apparently, Mr Bellwood had ignored this communication.  Mr Smith asked Mr Bellwood to return the staircase to its original position by an email of 19^th August, 2017, and Mr Bellwood had admitted that he had ignored Sergio telling him not to remove the staircase because he was firmly of the view that Mr Smith had told him he could remove it. 

89.      In cross-examination Mr Smith maintained strongly that he had not given permission.  It was put to him that there is no reference in the Lease to a prohibition on making any alterations and he replied that there was no reference to permission to do so. 

90.      In his statement Mr Bellwood said that he was entirely clear that Mr Smith had agreed to the removal of the staircase and complained that Mr Smith had changed his mind or not remembered their previous discussions.  He explained the amount of work that he did in order to move the staircase which had been substantial. 

91.      In cross-examination Mr Bellwood repeated his assertion that Mr Smith had not refused permission to move the metal staircase although he agreed that Sergio had said so.  He also agreed that he had ignored this.  He did not think it was necessary to check with Mr Smith - he thought that the new stair arrangement looks better and that he had offered re-instatement. 

92.      We also heard evidence from Mrs Rachel Compton, Mr Bellwood's mother, who, whilst she lives outside of Jersey, has visited him in Jersey around about the time in question.  She recalls that in around the beginning of May she was there when Mr Smith and Mr Bellwood were discussing moving the staircase.  She indicated that "Peter was fine with it being moved and agreed it straightaway".  She confirmed that she has a very close relationship with her son and they speak on a daily basis. 

Occupying an area outside the Demised Premises

93.      Mr Smith also gave evidence in connection with the allegation that the Defendant had occupied more of the property than was demised to it under the Lease.  He stated that in or around June 2017 he had agreed with Mr Bellwood that Mr Bellwood could remove part of the flooring on the first floor of the barn used by the Defendant for storage to increase the height of the ground floor storage area.  In doing so he therefore reduced certain of the loft space allocated to the Defendant in the Lease.  Mr Bellwood then asked Mr Smith if he could use a further area of the loft and Mr Smith agreed. 

94.      What was intended, so Mr Smith tells us, to be an act of goodwill unfortunately encountered difficulties.  The part of the loft space that the Plaintiffs had agreed to allow the Defendant to use in a conversation between Mr Smith and Mr Bellwood was in fact in use by the Plaintiffs for their own personal storage 1^st July.  On 21^st June, 2017, Mr Bellwood informed Mr Smith that there was a container at the dock waiting to be delivered and that if it could not be delivered and its contents stored, he and Mr Bellwood would be charged £55 per day.  There then followed a somewhat difficult exchange of communication by emails.  It is not necessary to set those out in detail.  One example suffices in which in an email Mr Bellwood responding to Mr Smith said:-

"I think I need to be frank here - we agree the timings already on that space, it was only courtesy for me to remind you.  I need this moved so that we have space to put our deliveries in - I will not be paying £55 per day for a container to sit on the port whilst paying you for space that I cannot occupy.  This is your issue not mine, so please be respectful and do not make it my issue ... I'm a pretty upfront kind of guy and being honest, I think you are taking advantage here.  I cannot do without this space beyond 1 July - as agreed." 

95.      A number of other issues arose in connection with the occupation of the space and the treatment of the Plaintiffs' goods that they moved and were being stored under a tarpaulin outside pending delivery to charity.  Mr Smith says that because of the various issues between the Plaintiffs and Mr Bellwood, the Plaintiffs withdrew their consent to the company using the additional area of loft space.  This was confirmed in their legal adviser's own email to Mr Bellwood of 7^th September 2017.  Mr Smith confirms that at no point did the additional area form part of the space that had been let to the Defendant.  As at the time of the evidence before us the area had not yet been cleared by the Defendant. 

96.      In his own witness statement, Mr Bellwood does not appear to dispute the fact that he had taken an additional area of loft space but does regret, so we interpret it, the way the communications between himself and Mr Smith went forward as he, Mr Bellwood, had erroneously thought that an agreement had been reached for him to take over the new areas from 1^st July 2017 as opposed to the end of July.  He disputes that there was any difficulty concerning the disposal of the Plaintiffs' property held in that area because attempts to donate it to charity had been unsuccessful and he, Mr Bellwood, had understood that the items in question were to be disposed of. 

97.      In cross-examination Mr Bellwood said that he thought the loft space had been covered by the Lease but accepted in cross-examination that he did not know whether the space that he had been given was part of the Demised Premises or not.  

Erection of a fence around the lower car park

98.      Mr Smith in his evidence noted that in around June 2017 Mr Bellwood asked for permission to erect a gate at the entrance to the carpark area that was allocated to the Defendant.  This was to be an area where he, his staff and sub-tenants could park.  The Plaintiffs were content with this but were then shocked to come home one day to find a 14ft fence around the outside of the car park with no gate.  This, so Mr Smith felt, affected his enjoyment of the property as he could not see the sea view across to the coast of France.  Mr Smith said there was no mention of the fence being put up and he would never have agreed to it if there had.  He had spoken to Mr Bellwood who did not see anything wrong with what he had done and said that he did not want people to see what was behind it.  Mr Smith asked Mr Bellwood to remove the fence and although he refused to remove it entirely the height was reduced to approximately 7ft. 

99.      In cross-examination it was put to Mr Smith that, in the email of 31^st January, 2017, there had been references to fencing off across the front yard and putting in double gates.  Mr Smith confirmed that he had told Mr Bellwood that he was not happy about it but felt that he had no option but to agree a reduction in the height of the fence.  As he said, "I felt I had no choice". 

100.   In Mr Bellwood's statement he maintained that there had been discussions about building a fence and he was surprised when Mr Smith had challenged that on Mr Smith's return home after the fence had been built.  Mr Bellwood explained that this exchange with Mr Smith made him feel quite shaky.  Mr Smith returned a short while later and stated that Mrs Bracken-Smith would not be happy with the fence and he said after a little discussion "we agreed, together, that we [Jersey Oak] would make the fence a little lower than was planned and we shortened it slightly in length as well".  Mr Bellwood had thought that was the end of the issue.  He had pointed out to Mr Smith that this was in his written proposal prior to the Lease being signed off.  Mrs Compton also gave evidence about the meeting over the fence describing, as had Mr Bellwood, Mr Smith's attitude as aggressive in tone and intimidating.  However, on Mr Smith's return things had been much calmer and a compromise had been agreed. 

General allegation re breach of fundamental term

101.   The evidence that we heard relating to the establishment of what the Plaintiffs assert is a fundamental term of the Lease, namely to respect the fact that the Demised Premises are adjacent to the Plaintiffs' family home, is largely as set out in the preceding paragraphs in connection with the formation of the Lease. 

102.   The allegations relating to the alleged breach of that fundamental term are themselves referred to above.  In essence, they may be summarised as encompassing the way that the Defendant, through Mr Bellwood, behaved towards the Plaintiffs, the manner in which he drove his car, the manner in which he allocated to himself rights which the Plaintiffs did not give him, the manner in which he complained to the St Martin's Honorary Police, dealt with the Plaintiffs' property and behaved generally.  As we have said, the evidence is that Mrs Bracken-Smith feels uncomfortable around Mr Bellwood and that the children were frightened of him.  In essence, he has behaved, so it is alleged, in an intimidating and aggressive manner. 

103.   We were referred in submissions to certain correspondence seeking a compromise passing between the Plaintiffs' legal advisers and Mr Bellwood.  In an email of 3^rd November, 2017, as part of the correspondence concerning the dispute between the parties the Plaintiffs' legal adviser writes:-

"... for the avoidance of any doubt, my clients maintain that you remain in breach of the agreement.  However, they hope to reach a compromise with you as to the remainder of the term of Jersey Oak's occupation and it is their hope that, in the spirit of such compromise, you will pause and take a sensible approach to matters going forward.  With that in mind there is no need for them to set out in terms the basis upon which they would seek the cancellation of the agreement and your company's eviction. 

It seems that the most sensible way forward is for there to be a formal lease drawn up which would govern Jersey Oak's occupation going forward.  The agreement as drafted is inadequate.  If you agree to the matters listed below, I will draft a lease for your consideration. 

However the following points are pre-conditions of any agreement being reached so as to avoid court proceedings:- 

(1)       The marquee must be removed;

(2)       The staircase must be replaced; and

(3)       You must remove your property from that part of the barn that you are not entitled to occupy.  Plainly, without a plan it may be necessary to meet on site in order to explain to you precisely which area this refers to although my clients are clear that you do know the part to which they are referring." 

104.   In an email of 3^rd November, 2017, Mr Bellwood responds:-

"In the meantime, I am afraid that I am unable to agree with your conditions of the drafting of a new lease.  I am amenable to a re-drafting of the lease but not the conditions you mention as I have covered the specifics previously and your client gave consent to each point that you mention.  ...". 

105.   This exchange was put before the Court on the basis that the proposal by the Plaintiffs was an open one and it appears to us that the Plaintiffs were not seeking to alter the opening hours, or the nature of the business conducted by the Defendant. 

The Law

106.   Any analysis of the type required by a case such as this must begin with the express terms of the Lease.  We must, accordingly, first identify what are the express terms of the Lease and thereafter go on to consider what, if any, terms might be implied. 

107.   Once the terms of any agreement are identified that will usually determine the outcome of a dispute.  We have regard to the important Jersey law principle embodied in the maxim "la convention fait la loi des parties". 

108.   In Basden Hotels Limited -v- Dormy Hotels Limited [1968] JJ 911 the Court said:- 

"But we cannot leave this matter without referring to another maxim.  It is the often quoted maxim "La convention fait la loi des parties".  Like all maxims it is subject to exceptions, but what it amounts to is that courts of justice must have high regard to the sanctity of contracts and must enforce them unless there is a good reason in law, which includes the grounds of public policy, for them to be set aside. 

It appears to us that there is now no reason in law why the clause on which the plaintiff company relies should be set aside. 

... 

The agreement cannot be said to be against public policy.  On the contrary, it is against public policy that an agreement of this nature should be avoided, for the avoidance of the agreement would have the effect of depriving the tenant of the fruits of his labour.  There is, unfortunately, nothing which the courts of this Island can do where a tenant has failed to safeguard himself, but any provision for safeguard which has been made is not to be set aside without good reason.  As we have said, the option to purchase is part and parcel of the contract of lease and those who accept the property must be held to be bound by the whole contract." 

109.   In Incat Equatorial Guinea Limited and Four Others -v- Luba Freeport Limited [2010] JLR 287, William Bailhache, Deputy Bailiff (as he then was), helpfully places the maxim in the overall context of contact law where he said:-

"Pausing there, it is noteworthy that these requirements for the creation of a valid contract go some way to explaining the ancient maxim: la convention fait la loi des parties, which reflects art. 1134 of the French Code Civil, which is in these terms: "Les conventions, légalement formées tiennent lieu de loi à ceux qui les ont faites."

At the heart of this provision in the French Code Civil and behind the maxim to which we are so accustomed in Jersey is the concept that the basis of the law of contract is that each of the contracting parties has a volonté, or will, which binds them together and requires that the mutual obligations which they have agreed be given effect by the courts.  The notion of volonté as the foundation of the contract is sometimes thought to result from the political liberalism of the age of reason and to the economic liberalism of the 19th century, where obligations imposed from outside should be as few as possible.  A man is bound only by his will, and because he is the best judge of his own interests the best rules are those freely agreed by free men.  However, it is to be noted that rather earlier the same rationale appears in the commentaries of Berault, Godefroy & d'Aviron on La Coutume Reformée de Normandie, vol. 1, at 74, this edition being published in 1684, where the authors said this: "Car la volonté est le principal fondement de tous contracts, laquelle doit avoir deux conditions, la puissance & la liberté..." before going on to consider the restrictions which the law imposes on the making of contracts which are contrary to good morals or otherwise unlawful, notwithstanding the volonté which existed in the contracting parties.

It is because the concept of volonté is so important to the making of contractual arrangements that the grounds of nullity which exist for erreur, dol, deception d'outre moitié and lesion become so comprehensible.  The principles which are encapsulated in these objections to the formation of a valid contract go to whether or not it can truly be said that there was a common will of the contracting parties to make the contract which comes under consideration.  These grounds of nullity go directly to the reality of the consent of the parties to make the contract (see also Marett -v- Marett (1) [2008] JLR 384, at paras 58-60)).    

110.   The Plaintiffs in this case argue that a number of terms should be implied into the Lease.  A clear statement of when terms will be implied into a contract under Jersey law has been set out in the case of Grove and Briscoe -v- Baker [2005] JLR 348 in which Sir Philip Bailhache, Bailiff, states:-

"15. We turn next to the law relating to implied terms.  Pothier's rules for the interpretation of contracts, to be found in his Traité des Obligations, vol. 1, 5th rule, para. 95 at 88-89 (1821 ed.), provide, in translation:

"Usage is of so much authority in the interpretation of agreements, that a contract is understood to contain the customary clauses although they are not expressed; in contractibus tacite veniunt ea qua sunt moris et consuetudinis. 

For instance, in a contract for the lease of a house, though it is not expressed that the rent shall be paid half-yearly at the two usual feasts, and that the tenant shall do such repairs as are usually done by tenants; these clauses are understood. 

So in contract of sale, although the clause that the seller shall be bound to warrant and defend the purchaser from evictions, is not expressed, it will be understood." 

16. The rule that terms may be implied into a contract if it is the custom of the trade to include them has been developed by the courts.  In Sibley (née Pavey) -v- Berry (née Du Feu) (7), the Court of Appeal considered an appeal by the widow of a man who had lent money to the respondent free of interest in order to enable her to buy a house.  There was no written contract.  The evidence was, however, that it was an indefinite loan, made in friendship, which was repayable upon the sale by the respondent of the house which she had purchased.  The principal question of the court was whether a term could be implied into the contract requiring the respondent to sell the house or, alternatively, stipulating that the loan was repayable on reasonable notice.  The Court of Appeal examined the principles applied in England, as laid down by the House of Lords in Liverpool C.C. -v- Irwin (4), citing a passage from the speech of Lord Wilberforce ([1977] A.C. at 253-254):

"... [T]here are varieties of implications which the courts think fit to make and they do not necessarily involve the same process.  Where there is, on the face of it, a complete, bilateral contract, the courts are sometimes willing to add terms to it, as implied terms: this is very common in mercantile contracts where there is an established usage: in that case the courts are spelling out what both parties know and would, if asked, unhesitatingly agree to be part of the bargain.  In other cases, where there is an apparently complete bargain, the courts are willing to add a term on the ground that without it the contract will not work - this is the case, if not of The Moorcock (1889) 14 PD 64 itself on its facts, at least of the doctrine of The Moorcock as usually applied.  This is, as was pointed out by the majority in the Court of Appeal, a strict test-though the degree of strictness seems to vary with the current legal trend - and I think that they were right not to accept it as applicable here.  There is a third variety of implication, that which I think Lord Denning M.R. favours, or at least did favour in this case, and that is the implication of reasonable terms.  But though I agree with many of his instances, which in fact fall under one of other of the preceding heads, I cannot go so far as to endorse his principle; indeed, it seems to me, with respect, to extend a long, and undesirable, way beyond sound authority. 

The present case, in my opinion, represents a fourth category, or I would rather say a fourth shade on a continuous spectrum.  The court here is simply concerned to establish what the contract is, the parties not having themselves fully stated the terms.  In this sense the court is searching for what must be implied." 

Le Quesne, J.A. continued:

"It remains to consider whether the case can be brought within the second of Lord Wilberforce's categories, that is, the category of cases in which something must be implied because without it the contract 'will not work'.  Lord Wilberforce himself remarked further about this category of case on page 254; 'In my opinion such obligation should be read into the contract as the nature of the contract itself implicitly requires, no more, no less: a test, in other words, of necessity."  He went on, on page 255, to refer to the judgment of Bowen, L.J. in the earlier case of Miller -v- Hancock.  In that judgment, referring to the term which, in that case, it was sought to imply, which in fact he held should be implied, Bowen, L.J. said that the terms to be implied was something without which the whole transaction would be futile, something the absence of which would render the whole transaction inefficacious and absurd. 

If one considers these terms, necessity, futile, inefficacious, absurd, it is clear that the test to be applied is a stiff test." 

17. This then is the hurdle to be overcome by a contracting party who seeks to persuade the court that a term should be implied into a contract.  It must be shown either that the term is customarily included in contracts of the kind in question, or that it is necessary to imply the term in order to ensure that the contract is not futile, inefficacious or absurd."  

111.   Although in Grove above the Court sought to tie the concept of implied terms to Pothier's rules for interpretation in fact Sibley, quoted therein, appears to rely entirely upon the English approach to implied terms contained in Liverpool C.C. -v- Irwin.  We, in our judgment, are bound by the decision of the Court of Appeal in Sibley and approach the matter accordingly. 

112.   The Plaintiffs' case is put on the grounds of a misrepresentation, fraudulent or innocent, by Mr Bellwood to the Plaintiffs prior to the creation of the Lease and that such a misrepresentation, to the extent that it exists, gives rise to a "vice du consentement".  A "vice du consentement" as such is often concerned with questions as to whether or not there has been dol (which may be translated as fraud) or dol par reticence which may for these purposes be considered as a "fraud by silence".  The question for the Court in this case is whether, by what may be termed a misrepresentation or dol there is a vice du consentement.  A number of cases have dealt with these themes. 

113.   In Steelux Holdings Limited -v- Edmonstone (née Hall) [2005] JLR 152, Sir Philip Bailhache, Bailiff said:-

"10. Fraudulent conduct, including the making of a fraudulent misrepresentation, can be a moyen de nullité, or a cause of the nullity of an agreement.  The underlying principle of fraud, which we may say embraces both dol and fraude, is bad faith.  Fraud is a vice du consentement, that is to say, a defect which nullifies the apparent consent between the parties and allows the defrauded party to treat the contract as void.  If, therefore, a party knowingly makes a false statement which induces the other party to sign a document and thereby to enter a contract, there is a defect of consent which allows the other party to treat the contract as void.  It may not be necessary that the statement is, at the time it is made, knowingly false; if the statement is in fact false, and the other party acts upon it, there is nonetheless a defect of consent (vice du consentement) because the other party enters the contract under the mistaken impression that the statement or representation is true.  It may be seen, therefore, that the distinction between mistake (erreur) and fraud (dol) as defects of consent may sometimes be blurred.  There is, in either event, a defect of consent which allows the injured party to treat the contract as void.  The burden of proof lies upon the party who asserts that there is, in law, a defect of consent."

114.   And, at paragraph 13 said:-

"As a matter of general principle, under the law of Jersey the parties to a contract are expected to defend their own interests.  The maxim is: La convention fait la loi des parties.  But fraud is a flexible notion.  Silence can, in certain circumstances, amount to fraud.  If one party, particularly a party who is more experienced and worldly-wise than the other, is silent as to a material fact which, if it had become known to the other party, would have led to a refusal to enter into the contract, that may well amount to fraud which may lead to a setting aside of the contract.  In French law, the concept is known as reticence dolosive.  We would characterize it as dishonest or fraudulent silence.   Although Poingdestre did not expressly refer to dishonest silence, he did state (Les Lois et Coutumes de Jersey, at 206 (1928)) that, in the context of a contract between persons of unequal bargaining power-"tout contract ou transaction extorqué par ... persuasions indirectes est presume fraudeux principallement quand la personne induite est foible de jugement ou d'aage ...".  In this case, it is unnecessary to decide whether or not there was dishonest silence, but, if there had been, the obligation to pay interest would have been set aside."

115.   In Toothill -v- HSBC Bank Plc [2008] JLR 77, Birt, Deputy Bailiff (as he then was) said:-

"17. It is not disputed that Mr and Mrs Toothill agreed jointly and severally to borrow the various sums referred to above from HSBC.  There was therefore a contract between each of them and HSBC.  In the absence of some vice de consentment, that contract was binding upon both defendents-la convention fait la loi des parties.  

18. The law recognises that, in certain circumstances, an apparent consent to a contract can be set aside because of a vice de consentement; for example, if A has been induced to enter into a contract with B by reason of a misrepresentation of fact by B.  

19.      In this case, Advocate Heath argues that HSBC has been guilty of misrepresentation towards the appellant.  In this area of the law of contract, there is no material difference between English law and Jersey law.  A misrepresentation is a false statement of fact, past or present, as distinct (generally) from a statement of opinion, intention or law.  Whilst most representations are express, they may also be implied.  A person may also be guilty of misrepresentation by conduct.  This, a person who sits down in a restaurant and orders a meal is representing thereby that he has the means to pay.  Advocate Heath argues that HSBC was guilty of misrepresentation by conduct and we deal with this below when considering her submissions on the facts."  

116.   And at paragraph 22 the Court went on to say:-

"22. This court would wish expressly to leave open the question of whether the law of Jersey should recognise a duty of positive disclosure in the wider circumstances envisaged by the Bailiff or whether a duty of positive disclosure should be confined to those circumstances where it exists under English Law, even if, jurisprudentially, it is preferred in this jurisdiction to treat it as dol par reticence.  Such a decision would be a matter of considerable practical importance to those who contract under Jersey law and should be the subject of full argument and consideration.  However, we are today concerned only with the question of whether the appellant has shown an arguable defence.  In the light of the dictum of the Bailiff, it is obviously arguable that, if HSBC may have been guilty of "dishonest or fraudulent silence," the appellant may have a defence to the claim and leave to defend should be given." 

117.   In Sutton -v- Insurance Corporation of the Channel Islands Limited [2011] JRC 027, William Bailhache, Deputy Bailiff (as he then was) said:-

"46. We must remind ourselves, however, that we are not concerned with English law or French law but what is the law of Jersey.  This we must identify from precedents where they exist and from customary law.  In our view, cases in Contract which have been brought before the Royal Court upon the basis of misrepresentation, where the claim is that an innocent misrepresentation did not become part of the contract terms but did induce the making of a contract which would otherwise not have been made, can sometimes be properly understood by reference to the Law on Erreur, the most recent exposition of which is to be found in the decision of the Court of Appeal in Marett -v- O'Brien [2008] JLR 384.  It has to be recognised that whatever might have been the position in England or in France, the decisions of the Royal Court in reported contract cases since 1950 show that the Court has been prepared to investigate whether there has been an innocent misrepresentation which did not become incorporated in the contract terms as a warranty or condition but did induce the making of the contract.  This must have been taken to have been upon the basis of a vice du consentement which goes to the issue as to whether there was any true common will or volonté to agree the terms of the contract (in this connection see also the judgment of the Royal Court in Incat Equatorial Guinea Limited and others -v- Luba Freeport Limited [2010] JRC 083A).  A fraudulent misrepresentation clearly allows the contract to be avoided.  But we go further and hold that Jersey's contract cases show that, depending on the facts, including, in particular, the materiality of the alleged misrepresentation to the contract and its actual impact on the party to whom it is made, an innocent misrepresentation which induces a contract can be another form of vice du consentement just as erreur or dol."

118.   As we are here concerned with whether or not there was a meeting of minds between the Plaintiffs and the Defendant and must therefore consider dol or dol par reticence and misrepresentation in the sense set out in Steelux we must also consider aspects of "erreur". 

119.   In Viscount -v- Booth [2018] JRC 170, the Court said:-

"29.    In the judgment of the Court of Appeal in Marett v Marett and O'Brien [2008] JLR 384, at paragraphs 55 - 64 inclusive the Court said this:-

"55     As noted above, Advocate Sinel submits that there was no consent, under Jersey law, and therefore no enforceable compromise agreement. This is not the time for a detailed analysis of the Jersey law of contract-for some of the difficulties in relation to this topic see Kelleher, The Sources of Jersey Contract Law, 3 Jersey Law Review, at 1-21 (1999). The general principles can be taken from the helpful summary in Advocate Sinel's contentions on this issue (to which there was no objection by Advocate O'Connell).

56       There are four elements necessary to constitute a contract under Jersey law: (i) capacity; (ii) consent; (iii) cause; and (iv) objet.

57       Ignoring capacity, which is not in issue, the Jersey law of contract determines consent by use of the subjective theory of contract (see Pothier, Treatise on the Law of Obligations or Contracts, transl. Evans, para. 4, at 4; para. 91, at 53; para. 98, at 59 and Appendix V, at 35 (1806) and Selby v. Romeril (34). And see Mobil Sales & Supply Corp. v. Transoil (Jersey) Ltd. (24) and La Motte Garages Ltd. v. Morgan (14) (which must now be considered per incuriam on this specific point in the light of Selby v. Romeril)).

58       It follows that, "for a contractual theory based on the subjective intention of the parties, a mistake is the principal obstacle to a valid contract" (Sefton-Green, Mistake, Fraud & Duties to Inform in European Contract Law, at 72 (2005)).

59       Consent is prevented, amongst other things, by erreur/error (Pothier, Traité des Obligations, paras. 17-20, at 13-16 (1827 ed.); Domat, 1 The Civil Law in its Natural Order, book 1, title, 1, at 53-54 (Strahan transl., 1722); French Civil Code, arts. 1109-1110). In turn, erreur may be of two kinds: erreur obstacle (erreurs that prevent the meeting of minds necessary to constitute a contract's creation and cause a contract to be a nullity absolue) and erreur vice du consentement (a defect of consent where there is consent/meeting of minds but consent is impeachable for some other reason and which causes a contract to be a nullity relative: as to which see French Civil Code, arts. 1109 and 1118). Steelux Hldgs. Ltd. v. Edmonstone (née Hall) (36) is recent Jersey authority for the proposition that a vice du consentement (and, a fortiori, erreur obstacle) will render a contract void ab initio, that is to say, it never existed. Erreur vice du consentement is said to be relevant in this case.

60       As to erreurs obstacle, such erreurs may themselves be of three kinds: erreur sur la nature du contrat (mistake as to the nature of the agreement, e.g. gift v. for value); erreur sur l'objet (mistake as to the subject of the agreement); and erreur sur l'existence de la cause (mistake as to the basis or purpose of the agreement). Each of these erreurs obstacle will prevent the subjective meeting of minds that is fundamental and necessary to the existence of consent and the creation of a contract under Jersey law. Returning to erreurs vice du consentement, these erreurs are of two kinds: erreur sur la personne and erreur sur la substance.

61       Cause is the basis of or the reason for the contract. It is thus constituted by the interdependence of promises or the mutual performance of obligations. Hence, where the basis upon which a party enters an agreement (the cause) either fails or never comes to pass at all, the agreement is, according to Jersey law, null (Pothier, op. cit., paras. 42-46, at 24-28; Domat, at 35; and French Civil Code, art. 1131).

62       Objet is a party's obligation of performance under a contract (Pothier, op. cit., para. 53, at 32; French Civil Code, art. 1126). It is what a party promises to do under the contract by way of performance/discharge of his or her obligations. If there is to be objet under a contract, the promised performance must be: (i) certain; (ii) possible; and (iii) lawful.

63       As to certainty, the promised performance must be sufficiently certain if this particular requirement is to be satisfied (see Selby v. Romeril (34), where the contract failed because the objet was not defined or was uncertain). Alternatively, objet must be capable of determination (see Groom v. Stock (8) (employee's right to bonus unenforceable because no means provided for its determination)).

64       But if, in Jersey law terms, mutual mistake may be unnecessary to invalidate a consent order (at least in relation to any underlying contract) and the question is whether or not there was a vice du consentement, then, in my opinion, there was no such defect, no such vice in this case. There was no mistake as to the subject matter of the agreement or as to its principal terms. There may have been a misunderstanding by TP as to the consequences or ramifications of the agreement but that, in my view, is not enough. In my view, the order by consent in this case satisfied the requirements of the Jersey law of contract.""

120.   And, at paragraphs 32 to 34, speaking of Pothier, the Court said:-

32.      We think that the following extracts, all of which are to be found in Partie I, Chapitre I, under the heading De l'erreur are of interest. 

33       In paragraph 17 Pothier says:-

"L'erreur est le plus grand vice des conventions: car les conventions sont formées par le consentement des parties; et il ne peut pas y avoir de consentement lorsque les parties ont erré sur l'objet de leur convention; ..."

34. And then, at paragraph 18:-

"L'erreur annulle la convention, non seulement lorsqu'elle tombe sue la chose même, mais lorsqu'elle tombe sur la qualité de la chose que les contractants ont eu principalement en vue, et qui fait la substance de cette chose.  C'est pourquoi si, voulant acheter une paire des chandeliers d'argent, j'achéte de vous une paire de chandeliers que vous me présentez à vendre, que je prends pour des changeliers d'argent, quoiqu'ils ne soient que de cuivre argenté; quand même vous n'auriez eu aucun dessein de me tromper, étant dans la même erreur que moi, la convention sera nulle, par ce que l'erreur dans laquelle j'ai été détruit mon consentement; car le chose que j'ai voulu acheter est une paire de chandeliers d'argent; ceux que vous m'avez présentés à vendre étant des chandeliers de cuivre, on ne peut pas dire que ce soit la chose que j'ai voulu acheter..."

And later in the same paragraph:-

"II e nest autrement lorsque l'erreur ne tombe que sue quelque qualité accidentelle de la chose.  Par exemple, j'achète chez un libraire un certain livre, dans la fausse persuasion qu'il est excellent, quoiqu'il soit au-dessous du mediocre: cette erreur ne détruit pas mon consentement, ni par consequent le contrat de vente; la chose que j'ai voulu acheter, et que j'ai eue en vue, est véritablement le livre que le libraire m'a vendu, et non aucune autre chose; l'erreur dans laquelle j'étois sue la bonté de ce livre ne tomboit que sue le motif que me portoit à l'acheter, et elle m'empêche pas que ce soit véritablement le livre que j'ai voulu acheter: or nous verrons dans peu que l'erreur dans le motif ne détruit pas la convention; il suffit que les parties n'aient pas erré sue la chose qui en fait l'objet, et in eam rem consenterint.""

121.   And, at paragraphs 36 and 37, the Court said:-

"36. We also note with interest the examples in the notes that appear under Article 1110 (Dalloz Code Civil 1986-87) as follows:-

"1. L'erreur de l'une des parties sue la valeur d'une chose ne peut entraîner la nullité du contrat, sauf le cas où la lesion est admise comme une cause de rescision..."

"2. L'erreur sur la substance s'entend non seulement de celle qui porte sue la matière même dont la chose est composée, mais aussi, et plus généralement, de celle qui a trait aux qualités substantielles (authenticité, origine, utilisation, etc.) en consideration desquelles les parties ont contracté..."

...

"8. L'erreur de droit ou de fait, qui porte, non pas sue la cause de l'obligation, mais seulement sue les motifs qui ont determine le consentement, ne vicie pas, en principle, le consentement, et est, dès lors, sans influence sue la validité de la convention...."

37. We translate the phrase "erreur sur la substance" as encompassing "fundamental mistake" which in our judgment is a fundamental mistake as to the nature of the thing contracted for or its essential qualities." 

122.   Lastly, the Defendant cites a number of authorities which demonstrate that the Court should not cancel a lease other than in sufficiently serious circumstances.  In D.M. Le Cornu and J.E. Le Cornu -v- C.I. Heat Pump Bureau Limited, Glover and Black [1991] JLR 197, the Court (Hamon, Commissioner, presiding) said:-

"As the court said in Bailhache (née Hubert) -v- Williams (née Lewis) (2) [1968] JJ at 1079:

"Circumstances can well be such that it is just and equitable to order the cancellation of the lease, but it is unjust and inequitable where the effect of making such an order is to impose an excessive penalty." 

According to Pothier, the obligations of the tenant arise in three ways (Traité du Contrat de Louage, at 354 (1821 ed.)): "Les engagements du conducteur, dans le contrat de louage, naissent aussi ou de la nature due contrat, ou de la bonne foi qui doit y regler, ou des clauses particulières qui y ont été apposées." 

A tenant who misuses a property cannot claim the right to continue to enjoy its use.  As Pothier says (op. cit., para. 323, at 225):

"Le locataire qui ne remplit pas ses obligations en n'usait pas, comme il le doit, de la maison qui lui a été louée, ne doit pas, en vertu du quelque clause que ce soit, demander que le locateur lui continue la jouissance dont il mésuse."

There must, however, as we have said, be good reason to cancel a lease.  Dalloz said in 30 Répertoire, para. 300, 355 (1853): "Du reste, on comprend que la résiliation ne peut être prononcée que dans les cas graves". 

We must exercise our discretion, therefore, and consider whether the breaches of covenant are such as to warrant cancellation of the lease, but we must also bear in mind the defence that has been pleaded that there was a schedule of dilapidations prepared to which the lease is subject and which placed the plaintiff's under an obligation to carry out works which were a prerequisite to any works being carried out on the property by the defendant."    

123.   In Fort Regent Development Committee -v- Regency Suite Discotheque and Restaurant Limited [1990] JLR 321 the Court said:-

"It is clear from the authorities cited to us that there is really very little difference in the argument on law between the plaintiff and the defendant.  Both Mr. Pallot and Mr. Fielding have given much assistance to this court in setting out the legal authorities upon which we can rely.  On one matter both parties were agreed.  If the court is to cancel a lease (particularly a long-term lease such as the one before us) then there must be more than a technical breach.  The substance of the breach must prejudice the lessor in a real way.  As it was stated in Hamon -v- Fisher's Grocery Stores (3):

"La Cour n'est pas tenue de prononcer immédiatement la résiliation; elle peut accorder au défendeur un délai pour d'exéecuter, et apprécier si l'inexécution est suffisamment grave pour entraîner la resolution, ou si elle ne justifie que des dommages-intérêts." 

Mr. Pallot in his meticulous argument asked us to consider the nature of the discretion of the court and, in this regard, cited a passage from Bailhache (née Hubert) -v- Williams (née Lewis) (1).  The court said (1968 J.J. at 1079) that "circumstances can well be such that it is just and equitable to order the cancellation of the lease, but it is unjust and inequitable where the effect of making such an order is to impose an excessive penalty." 

The alternative would, of course, be an award in damages but we can foresee great difficulty in attempting to assess a payment of damages if we felt that the facts justified cancellation but also felt that such cancellation would be too harsh.  The problem was immediately apparent to Mr. Pallot, who conceded that the plaintiff could not be easily compensated in damages."

124.   Of course the issue of cancellation of a lease for breach of its terms only arises if a valid lease has been entered into.  If there is a vice du consentement such as the agreement never existed in the first place then it is void ab initio and no question of cancellation for breach arises. 

Findings of Fact, Discussion and Conclusion

125.   We start with the terms of the Lease itself accepting that it is possible to have as part of the Lease expressed terms which are not part of the written document, and indeed to imply terms if the tests set out in Grove above are met.  We cannot, in our view, do so unless we are satisfied that either those terms must be implied or, with regard to any express but unwritten terms of the Lease, they are certain and clear and capable of being enforced. 

126.   The written terms of the Lease, no matter what may be said of the drafting, are tolerably clear.  The extent of the Demised Premises is set out, the rental, the term, and certain obligations and express understandings between the Plaintiffs and the Defendant.  We must also determine what, if any, further terms should be considered as incorporated into the Lease and, in particular, whether the Lease should be seen as governed by any additional express terms relating to the use to which the Demised Premises was to be put (that is the nature of its business) and whether or not the Defendant had to behave in a way that respected the fact that the Demised Premises were adjacent to and part and adjoined the Plaintiffs' family home, and what any such terms might mean. 

127.   We found the Plaintiffs to be honest witnesses and, as we set out below, we accept what they say about the things that occurred. 

128.   In our judgment, however, there was no doubt that Mr Bellwood intended to operate the business in the way that he subsequently did.  The Lease itself makes provision for operation within normal business hours or by invitation and the second of the proposal documents talks about building a marquee and things of that sort.  Whether or not the Plaintiffs focused on these documents, it seems to us that clearly Mr Bellwood anticipated a more substantial operation than did the Plaintiffs. 

129.   We do not think that Mr Bellwood misrepresented the nature of the Defendant's business dishonestly or innocently.  He may well have emphasised certain aspects of the Defendant's business which he believed the Plaintiffs would like but in the context of the Lease, the express terms of which provided for ordinary operating hours, a not insubstantial rent, and in the context of the fact that he described himself as being a showroom similar to "David Hick Interiors", in our judgment the Plaintiffs understood what Mr Bellwood anticipated to a very large extent (although possibly not fully) when the Lease was executed.  We have had the benefit of a site visit and it seems to us that the nature of the premises, the refurbishment that the Defendant carried out, the rental, and the fact that a car parking space was part of it must have made it clear that the premises were going to be operated as more than a "cottage industry" or by occasional invitation.

130.   We accept that in the pre-contractual conversations there was discussion about the nature of the Defendant's business and the Plaintiffs gained the impression that it was a "cottage industry" or "artisanal" in its nature.  We think, however, that those words were characterisations given by the Plaintiffs to their understanding of those conversations and not express statements made by Mr Bellwood.  We accept that there were discussions about invitation only events but the discussions between Mr Bellwood and Mr Smith - and in our judgment Mrs Bracken-Smith's understanding derived to a very substantial extent from what she was told by Mr Smith - inevitably evolved over time and achieved greater clarity.  It seems to us that the terms of the Lease itself when it states that "retail space will be open subject to agreed normal hours of business Monday - Saturday.  On occasion the lessee will open the showroom outside of these hours for invitation only events ..." represents the final position.  At the time the Lease was entered into, no matter what had been discussed on earlier occasions, the Plaintiffs must have anticipated that there would be a commercial retail operation operating during normal working hours.  Anything else is to our mind inconsistent with the express terms of the Lease.  Accordingly, in our judgment, there was neither dol nor dol par reticence.  

131.   As a matter of fact we accept the evidence of the Plaintiffs in this case to the affect that they have made it clear also to Mr Bellwood that maintaining the character of a family home was of real importance to them and that they expected Mr Bellwood, and hence the Defendant, to behave accordingly. 

132.   That desire on the part of the Plaintiffs was understood by Mr Bellwood and he made reassuring statements to them about his intention.  Even taking the approach as we understand it in English law statements of intentions cannot be representations unless the statement that it was an intention was itself false.  The evidence does not take us that far.  We have no reason to think that what Mr Bellwood stated to be his intention he did not mean at the time. 

133.   Were there in some way a fundamental unwritten term of the Lease about respect for the family home?  Any express terms, especially those said to be fundamental to the Lease, must in our view be capable of very clear identification and expression.  In our judgment the failure to put what the Plaintiffs may have believed to be such understandings, into writing and to express then with clarity and certainty makes their position difficult.  The Lease, insofar as it is in writing, of course makes no mention of these "fundamental terms".

134.   At its highest the most that Mr Bellwood indicated was what he intended to do when he had a lease of the premises.  In our judgment it would not have been difficult to have had a lease prepared that reflected the concerns that operated on the mind of the Plaintiffs and restricted the activities of the Defendant if indeed that had been clearly understood between them and was of such overarching concern to the Plaintiffs at the time.  Taking any understandings 'on trust' may well have prevented any clear articulation of what the Plaintiffs understood or wanted. 

135.   Undoubtedly, the Defendant made representations that it would treat the Plaintiffs with respect for their family home but we have no reason to assume that it did not intend to do so when those statements were made.  We do not doubt that Mr Bellwood was extremely keen to secure the Lease but we do not think that he anticipated that he would cynically do what he wanted after the Lease had been granted in breach of what he knew to be a fundamental term.  It would indeed have been foolish from a commercial point of view for him to do so. 

136.   We do not find that such a term was expressed between them in sufficiently clear terms to form an express term of the Lease nor can we imply it adopting as we must the principles in Grove -v- Briscoe.  It is certainly not a term which is customarily found in such leases nor is it necessitated by the requirement not to render the contract futile, inefficacious or absurd.  It is none of those things without the implication of such a term.  It is simply a fully formed commercial lease.  It is not clear precisely what such a term, if such it be, might mean and what behaviour it might prohibit or permit.  Expressions such as "respect for a family home" and the like are protean in nature and are subject to many different possible interpretations. 

137.   In terms of the alleged actions taken by Mr Bellwood and the Defendant which are said to be in breach of the understanding that the Plaintiffs' family home would be respected these, so it seems to us, are examples of the deteriorating relationship between the Plaintiffs and Mr Bellwood. 

138.   It may be that the Plaintiffs would have wished to specify a number of additional terms when they realised the effect of granting a lease in the terms that they did but the Court cannot now re-draft the Lease for them.

139.   Neither, in our judgment, does what was understood to amount to an "erreur".  There was no erreur such as should, in our view, undermine the volonté that underpins this contract.  There is no error about the fundamental nature of the contract, or the contracting parties, the thing contracted for or its essential qualities.  It was a lease of a commercial premises. 

  Marquee

140.   With regard to the marquee, in our judgment it is clear that some form of marquee was intended by Mr Bellwood and that was made tolerably clear in his email of 31^st January, 2017.  We equally accept, however, that there was nothing more than that assertion, and the Plaintiffs did not in our judgment expressly agree to the erection of the marquee.  Their concerns, however, seemed to be, not that the marquee was erected at all but that it may have breached planning regulations.  This indeed proved to be the case. 

141.   It does not seem to us that any proper interpretation of the Lease includes the right to erect a marquee or indeed to carry out any alterations or additions to the Demised Premises.  Accordingly, to do so, the express consent of the Plaintiffs would have been required.  Even were we to be wrong about that, this is a matter in which we think that in all the circumstances, including the nature of the Demised Premises and its location such a term prohibiting any alterations without express consent and any breach of planning requirements would have been implied into the Lease.  In our judgment, the construction of the marquee was done without authority and was accordingly in breach of the Lease. 

Fence

142.   We also think that the erection of the fence was done without the consent of the Plaintiffs.  We accept Mr Smith's evidence that he agreed to a gate but that he would not have agreed a fence.  We accept that the erection of the fence was anticipated in the email of 31^st January, 2017, but permission for the building of a fence had not been given.  In our judgment, when presented with a fait accompli Mr Smith agreed to the fence being reduced in height but would not have agreed to its erection had he been asked in advance.  To that extent, therefore, in our view the fence was erected without authority and/or in breach of the implied term that we have mentioned above. 

Staircase

143.   With regard to the metal staircase we are satisfied that this was done by Mr Bellwood without permission and to that extent required by the Plaintiffs we order its reinstatement. 

Loft

144.   With regard to the occupation of the loft, in our judgment the section of the loft occupied by the Defendant was not part of the Demised Premises and was offered by Mr Smith in the spirit of cooperation as a concession.  In our view the Defendant is occupying that part as a trespasser, that concession being revoked. 

145.   A number of the above examples to us illustrate what might be seen as a characteristic view taken by Mr Bellwood.  He has treated potentially tentative conversations or expressions of wishes by him (for example in his email of 31^st January, 2017), and silence as express permissions by Mr Smith and has proceeded accordingly.  He has taken the view either that the Plaintiffs would not mind or, in the case of the metal staircase, having been told that Mr Smith did not want to have it removed, that he, Mr Bellwood, knew best.  It seems to us to be clear that, as Mr Bellwood accepted he had been told that Mr Smith had changed his mind, he should have paused any work and clarified the position with Mr Smith before proceeding.  He did not do so. 

146.   In our judgment when confronted with a challenge to his preferred course or, indeed, a perceived change of the position as he had understood it or hoped it to be Mr Bellwood became aggressive and confrontational.  The email that he sent on 22^nd February, 2018, set out at paragraph 51 above and the fact that he procured that a draft Order of Justice was sent on Christmas Eve are unfortunate examples of this behaviour to say the least. 

147.   There is little doubt that the relationship has soured and that Mr Bellwood has behaved in ways that the Plaintiffs would never have anticipated as being possible when they entered into the Lease.  Regret with hindsight, however, is not an "erreur" or "vice du consentement". 

148.   What are the consequences of the breaches of the Lease that we have found?  The marquee has, of course, been removed so it is no longer there in breach of the Lease.  The fence, though erected without permission, was the subject of a compromise in which Mr Smith accepted its remaining at the present height.  The metal staircase has not been reinstated but in evidence before us Mr Bellwood indicated that he would be prepared to reinstate it if the Court found that it had been removed in breach of the Lease.  As we have said, the additional storage area is not covered by the Lease at all.  The Plaintiffs do not seek damages and we are left considering whether these breaches should give rise to the cancellation of the Lease. 

149.   Significant though these breaches of the Lease were, in the light of the principles relating to setting aside for breach (as opposed to being void for erreur which is not established) we do not think that they were sufficiently material to give rise to the cancellation of the Lease.  Firstly, the consequences of the breach of any terms of the Lease are not set out within the Lease itself.  It would, to our mind, be an inequitable punishment to cancel the Lease in such circumstances particularly in view of the investment made by the Defendant in creating the retail outlet at the Demised Premises.  It was suggested to us that to cancel the Lease would be to create an existential threat to the Defendant's business and we have no reason to doubt that.  In our judgment the failings with regard to the Lease are capable of being remedied by the Defendant and as we have said, if the Plaintiffs wish it, the Defendant must reinstate the staircase. 

150.   Accordingly, we find:-

(i)        The lease is not void ab initio on the grounds of erreur, dol or dol par reticence;

(ii)       The Defendant has carried out works without  authorisation and wrongfully remained in part of the Plaintiffs' premises to which it is not entitled;

(iii)      Notwithstanding these actions, we do not think in the exercise of our discretion, that it would be fair or appropriate to cancel the lease for the reasons set out above;

(iv)      To the extent required by the Plaintiffs the Defendant must rectify all of the unauthorised actions taken by it in breach and vacate forthwith that part of the Plaintiffs' property occupied without permission. 

Counterclaim

151.   The Defendant's Answer which Mr Bellwood prepared before the Defendant was represented, contains a written counterclaim which occupies some three paragraphs.  The paragraphs aver that it was the Plaintiffs' intention to cancel the Lease before the end of the term because they no longer wanted to lease part of their property to a commercial business and the allegations made against the Defendant were an attempt to make the relationship untenable.  Further, both the Plaintiffs and the Defendant had agreed that a relatively informal lease would be adequate and that in some way the informality of the Lease meant that both the Plaintiffs and the Defendant were happy with the proposals submitted or discussed between them.  Lastly, prior to June 2017 it is alleged the Plaintiffs were content with what was planned by the Defendant. 

152.   These are generalised allegations which to an extent have been covered in the findings we have made above.  In our judgment the allegations made by the Plaintiffs against the Defendant were not attempts to make the relationship untenable merely because they had changed their mind.  They were allegations, which we have largely accepted, of improper behaviour on the part of the Defendant.  Neither do we accept that the circumstances alleged by the Defendant meant that the Plaintiffs and the Defendant were happy with the proposals submitted generally between them prior to the execution of the Lease nor that the Plaintiffs were content with what was planned by the Defendant.  As we have said, we have largely accepted the Plaintiffs' evidence in that regard. 

153.   Accordingly, we reject the assertions made within the Defendant's counter-claim. 

154.   In the prayer to the answer and counter-claim filed by the Defendant, a number of requests for orders are made by the Court.  Many of these are simply requests that the Court declare that the Plaintiffs should comply with some of the express terms contained within the Lease.  We decline to do so.  Clearly both parties should comply with the express terms of the Lease.  To an extent some of the items in the prayer go beyond the express terms of the Lease and accordingly we decline to make those orders.  More fundamentally, however, the requests set out in the prayer, though to an extent touched on Mr Bellwood's statement are not underpinned in the pleadings nor was there a request made to us to amend the pleadings.  In our judgment the matter has not been sufficiently dealt with either in the pleadings or the evidence such that we should make any order on the Defendant's counter-claim.  It would be necessary for a fresh claim to be brought should allegations that the Plaintiffs are in breach of the express terms of the lease continue to be made. 

Authorities

Basden Hotels Limited -v- Dormy Hotels Limited [1968] JJ 911. 

Incat Equatorial Guinea Limited and Four Others -v- Luba Freeport Limited [2010] JLR 287. 

Grove and Briscoe -v- Baker [2005] JLR 348. 

Liverpool City Council -v- Irwin (4) ([1977] A.C. 253-254). 

Sibley (née Pavey) -v-. Berry (née Du Feu) 1992 JLR Notes-4b.  

Steelux Holdings Limited -v- Edmonstone (née Hall) [2005] JLR 152. 

Toothill -v- HSBC Bank Plc [2008] JLR 77. 

Sutton -v- Insurance Corporation of the Channel Islands Limited [2011] JRC 027. 

Viscount -v- Booth and Anor [2018] JRC 170. 

D.M. Le Cornu and J.E. Le Cornu -v- C.I. Heat Pump Bureau Limited, Glover and Black [1991] JLR 197. 

Fort Regent Development Committee -v- Regency Suite Discotheque and Restaurant Limited [1990] JLR 321.