Allyson Colby considers the outcome of a case involving a tenant farmer refusing to allow a bat survey.
Key points
- Reservations in leases are not subject to any arcane principle of landlord and tenant law, or to any rule that they are to be strictly construed
- They are to be interpreted in accordance with the usual principles of contractual interpretation
- The rights of the parties to a lease must be made to work sensibly together
Lord Hoffman’s announcement, in Investors Compensation Scheme v West Bromwich Building Society [1997] UKHL 28, that “almost all the old intellectual baggage of ‘legal’ interpretation has been discarded”, heralded a new and less formulaic approach to contractual interpretation.
But old habits die hard – and the arguments put to the court in Windsor-Clive and others v Rees and another [2020] EWCA Civ 816; [2020] PLSCS 130, prompted Lewison LJ to remark: “At times I thought that we were being asked to carry that baggage again.”
The litigation concerned land belonging to the Earl of Plymouth, who had obtained outline planning permission for a large-scale housing development. But the land was let to a farmer who was unwilling to provide access for a bat survey, which was a requirement of the permission.
One of the farmer’s leases reserved rights for the landlord “and all others authorised by him with or without… vehicles to enter on any part of the farm lands… at all reasonable times for all reasonable purposes”. The other enabled the landlord to “enter… with agents, servants, workmen and others for the purpose of inspecting… or for any other purpose connected with his estate”.
Were these rights sufficiently wide to enable surveyors to obtain access to the land to count bats and to attach remote detectors to trees for periods of four or five days at a time? The tenant argued that it has long been established that clauses reserving rights of entry to landlords should be strictly construed – and claimed that the rights reserved in his leases did not include rights to leave anything on the farm.
Strict construction
Lewison LJ spoke for the Court of Appeal. He noted that English law regards restraints on alienation in leases with disfavour, without commenting. But he explained that the judiciary has become wary of interpreting documents by reference to strict rules once thought to be applicable to particular types of clause or classes of instrument.
For example, exemption and exclusion clauses in contracts were once regarded as candidates for “strict construction”. However, the modern tendency to harmonise rules of interpretation means that special rules or presumptions can no longer be applied mechanistically to ambiguities in such clauses. The court must use all its tools of linguistic, contextual, purposive and common-sense analysis to ascertain what the clause really means (see Nobahar-Cookson v The Hut Group Ltd [2016] EWCA Civ 128).
What then of the authorities, cited in textbooks, suggesting that rights of entry should be strictly construed? Lewison LJ did not regard any of the cases cited to him as supporting the proposition that rights of entry are to be strictly construed – or even that, where there are two possible interpretations, the narrower one must be preferred. Rather, the courts have applied the ordinary rules of interpretation so that rights of entry operate sensibly.
Lewison LJ accepted that there is a tendency to expect substantial qualifications to rights to exclusive possession and quiet enjoyment to be clearly set out in the lease. He also agreed that reservations in a lease should, if possible, be interpreted so as to preserve their validity – and may, therefore, need to be construed restrictively to avoid any derogation from grant or conflict with covenants for quiet enjoyment. But there is no further rule requiring reservations to be construed restrictively against landlords.
Contra proferentem
His Lordship also cast doubt on the argument, based on a suggestion in St Edmundsbury and Ipswich Diocesan Board of Finance v Clark (No 2) [1975] 1 WLR 468 that, where a reservation is ambiguous, the contra proferentem rule benefits landlords – and not tenants.
The contra proferentem rule enables the court to construe provisions against “the profferor”. In the case of a lease, the profferor is normally the landlord. But the thinking in St Edmundsbury was based on the “highly technical conveyancing notion” that tenants are the profferors of reservations because they re-grant them to their landlords. However, Lewison LJ found it hard to see why different rules should apply, depending on whether rights of entry flow from reservations or other provisions in a lease, and left the point open for consideration in a future case.
Putting this together
A lease grants exclusive possession of land on terms. So if a landlord exercises rights in accordance with those terms, he does not derogate from his grant unless he seriously interferes with, or frustrates, the tenant’s enjoyment of his rights. It is a question of fact and degree – and what is intrusive in one case might not be intrusive in another.
The court accepted that the exercise of a right to inspect should not cause “any material disturbance” to a tenant or result in “material damage” to premises. But it rejected the farmer’s argument that the rights of entry required the landlord to enter, inspect and depart without leaving anything on the land, even for a short time.
Had the landlord wished to install widespread CCTV or time lapse cameras for ecological or habitat monitoring, the degree of intrusion would have had to be balanced against the reasonableness of the landlord’s purpose. And much would have depended on the position, nature and effect of such devices. But that was not what was required here and the Court of Appeal decided that the installation of Anabat detectors for short periods was within the scope of the rights of entry in the tenant’s leases.
Allyson Colby is a property law consultant
