Landlord and tenant – Right of entry – Derogation from grant – Appellant tenants refusing respondent landlords access to farm to carry out surveys in connection with development – Respondents seeking permanent injunction restraining appellants from interfering with rights of access – Judge refusing permanent injunction but ruling on rights of entry – Appellants appealing – Whether judge erring in approach to construction of reservation in favour of landlord – Appeal dismissed
The respondents owned land comprising Maesllech Farm in Radyr, a strategic site for development as part of Plasdŵr “garden city”, to the north-west of Cardiff. The appellants were tenants of the farm under two written tenancy agreements. Under the 1965 agreement, the right was reserved for the landlord “and all others authorised by him … to enter on any part of the farm lands and premises at all reasonable times for all reasonable purposes”. The 1968 agreement enabled the landlord to “enter upon the said premises … for the purpose of inspecting… or for any other purpose connected with his estate”.
In 2014 two applications for outline planning permission were made in respect of land including the farm. A dispute arose when the respondents commissioned surveys connected with the proposed development but the appellants refused access to their land. The respondents sought a permanent injunction restraining the appellants from interfering with the exercise of their rights of access. However, the appellants argued that a clause reserving rights of entry in favour of the landlord should be construed narrowly. A right of access, limited only by a requirement of reasonableness, was inconsistent with the grant of exclusive possession and the landlord’s implied covenant for quiet enjoyment and obligation not to derogate from his grant.
The High Court dismissed the respondents’ claim for a final injunction, holding that their rights of entry did not entitle them to dig excavations, sink boreholes or erect structures on the land; although it was permissible under the terms of the lease, to install remote bat monitors and for a surveyor to place discreet reference points on the land to assist in a visual survey and inspection: [2019] EWHC 1008 (Ch); [2019] PLSCS 75. The appellants appealed.
Held: The appeal was dismissed.
(1) The ordinary principles governing the true construction of a contract applied to tenancy agreements and leases. The court should be wary of interpreting documents, such as the tenancy agreements in the present case, by reference to strict rules applicable to particular classes of document. Rights would not generally be implied in favour of a grantor or lessor. In the case of an implied reservation, by definition the term which was sought to be implied would to some extent run counter to the express terms of the instrument in question; whereas in the case of an implied grant, by definition the term which was sought to be implied would be designed to enable what was expressly granted to be the better enjoyed by the grantee: Wheeldon v Burrows (1879) 12 Ch D 31 applied. Johnston & Sons Ltd v Holland [1988] 1 EGLR 264, Platt v London Underground Ltd [2001] 2 EGLR 121, Southwark London Borough Council v Mills [2001] 1 AC 1 and Mexfield Housing Co-operative Ltd v Berrisford [2011] 3 EGLR 115 considered.
(2) Commercial parties were entitled to allocate between them the risks of something going wrong in their contractual relationship in any way they chose. The court had to use a common-sense analysis to discern what a clause meant. If possible, rights excepted or reserved by a landlord in a lease should be construed so as to avoid a derogation from grant or a breach of the landlord’s covenant for quiet enjoyment. While the interests and requirements and duties of the landlord had to be given maximum flexibility, that had to be consistent with the interests of the tenant who was granted rights under the lease.
(3) Clear words would be expected to justify intrusive investigations amounting to material disturbance or damage to the tenant. In each case, it was a question of the interpretation of the particular right reserved to the landlord. Whether something was material disturbance or damage was clearly a matter of fact and degree. Where the derogation principle applied, all it did was to militate against an interpretation which would result in a substantial or serious interference with the tenant’s use and enjoyment of the leased property; or frustrate the purpose of the letting. It was in every case a question of interpreting the clause in its context. Part of that context was the fact that the purpose of the contract was to confer on the tenant the right to exclusive possession of the subject matter of the letting on the terms of the lease or tenancy for the contractual term. However, there was no principle that rights of entry should be strictly construed in favour of either the landlord or the tenant. The right had to be interpreted to work in a sensible fashion.
(4) In the present case, the only thing that the 1965 agreement permitted the landlords to do was to enter on any part of the farm land at all reasonable times for all reasonable purposes. Just as a contract had to be interpreted as a whole, so did an individual clause. It was not right to divide up the clause into watertight compartments. The right of entry was not a right to enter for entry’s sake but a right to enter for a particular purpose. If a purpose was a reasonable, the proper interpretation of the right to enter the land had to enable them to do what was reasonably necessary to achieve that purpose. Reasonably necessary was not the same as convenient or desirable. But conversely, if what they wanted to do to achieve a particular purpose was highly intrusive, then the purpose itself might be held not to be reasonable. By the same token, the time at which the landlords wished to do something might or might not be reasonable, depending on what it was that they wished to do. The interpretation of the right could not be considered in the abstract. Whether something that the landlord wanted to do on the land was permitted by the right was a question of fact and degree in each case. In the circumstances, there had been no error in the judge’s approach.
Stephen Jourdan QC and Gavin Bennison (instructed by Ebery Williams Ltd) appeared for the appellants; Katharine Holland QC and Christopher McNall (instructed by Burges Salmon LLP) appeared for the respondents.
Eileen O’Grady, barrister
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