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A lease required T to convert two separate shops into one combined unit,
with a central staircase. Subsequent rent reviews were to be on the basis
that the premises included the new staircase, but otherwise all those works
carried out by T were to be disregarded. On that basis, the conversion of the
premises into a single unit was to be disregarded. However, on the rent
review, L argued that this did not make sense, since the clause provided for
rent to be based on the new staircase, but that was only possible in the
context of the two units being knocked into one.
Accordingly, L argued that
such a nonsensical result could never have been intended, and that a
common sense approach implied that the rent review should be on the basis
of one, single, unit. L also pointed out that the premises were in a highly
fashionable and expensive area (Sloane Street) and accordingly L would
never have agreed to a discount on these terms. In response, T argued that
the court should look at the actual language used and could not substitute
wordings simply to make the provision fairer or more commercial.
The High Court decided that the wording of the clause was clear and there
was no reason not to give full effect to it. As far as the argument of there
having been a mistake made, there was simply no evidence of L ever
suggesting that the rent be reviewed on the basis of one shop, or of T ever
having agreed to that. The lease had been carefully negotiated by experts,
and an argument based on mistake simply could not succeed.
This is one of those cases that has no wider application, but does illustrate
that the fact an agreement seems to be nonsense from a commercial point
of view does not necessarily mean that there has been a mistake. In reality,
in such cases the remedy is likely to lie in suing the professional advisers!
Cadogan Estates v Escada [2006] EWHC 78 (Ch), noted in [2006] Property
Week 24 February.
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April 2006 |
