C - Construction
30/6/20
LAMESA INVESTMENTS LTD v CYNERGY BANK LTD [2020] EWCA Civ 821
Summaries principles of contractual interpretation [18]. A clause in an agreement between banks for the loan of Tier 2 capital provided that the borrower would not be in default if it did not pay in order to comply with a mandatory provision of law. On its proper interpretation sanctions made by the United States against an indirect owner of the lender justified the non-payment of interest by the borrower and the clause was not limited to prohibitions which directly bound the borrower.
29/5/20
MV PROMOTIONS LTD v TELEGRAPH MEDIA GROUP LTD [2020] EWHC 1357 (Ch)
Considers principles of contractual interpretation especially where there is uncertainty over the identity of a party [16-17], the correction of mistakes by construction [18] and rectification [34]. On the facts the court was satisfied that a rectifiable mistake had been made identifying the counter-party but in the exercise of the court’s discretion, the court declined to order rectification.
22/5/20
MICHAEL WILSON & PARTNERS LTD v SINCLAIR [2020] EWHC 1249 (Comm)
The lower court had been right to refuse to make a final third party debt order (TPDO). Summaries principles for construction of contracts [20]. On its proper construction, a loan agreement made by deed required notice as a pre-condition to the obligation to repay. Until notice was served and had expired, there was no sum due or accruing due from the debtor. The making of an interim TPDO did not operate as notice. Cases which establish that demand is not a pre-condition to recover a debt due on demand had no application.
11/5/20
EUROPEAN FILM BONDS A/S v LOTUS HOLDINGS LLC [2020] EWHC 1115 (Ch)
Summarises principles for the interpretation of contracts [52], estoppel by convention [98] and penalty clauses [146]. A provision that delivery of a film was to be conclusively presumed in certain events of default was not a penalty 166].
24/4/20
2 ENTERTAIN VIDEO LTD v SONY DADC EUROPE LTD [2020] EWHC 972 (TCC)
Considers the duty of care expected of a bailee warehousing goods [58]. Summarises the court’s approach to the principles of contract construction [221] and the meaning of “indirect or consequential loss or damage” in an exclusion clause [222]. On the facts, loss of profit and business interruption costs did not constitute indirect or consequential loss or damage [241].
19/6/19
SEAFOOD SHACK LTD v DARLOW [2019] EWHC 1567 (Ch)
Considers whether an alleged misnomer of a party in a document can be cured through the process of construction [30] or rectification [43]. On the facts, neither was possible.
31/8/17
ROYAL DEVON & EXETER NHS FOUNDATION TRUST v ATOS IT SERVICES UK LTD [2017] EWHC 2197 (TCC)
A claim for wasted expenditure was not excluded by a contract clause expressed to exclude liability for loss of profits, business, revenue, goodwill or anticipated savings, and/or indirect or consequential loss or damage. But any liability was limited by a clause expressed to cap the aggregate liability of either party under the contract for all defaults to specified sums.
19/5/17
BRITISH AIRWAYS PLC v AIRWAYS PENSION SCHEME TRUSTEE LTD [2017] EWHC 1191 (Ch)
Considers principles to be applied in construing the provisions of a pension scheme [408] and the basis on which challenges can be made to the exercise by trustees of discretionary powers [483]. On the facts, the challenges failed.
10/12/15
LBG CAPITAL NO.1 PLC v BNY MELLON CORPORATE TRUSTEE SERVICES LTD [2015] EWCA Civ 1257
On their proper construction, certain securities known as Enhanced Capital Notes, had become redeemable because a Capital Disqualification Event (as defined) had occurred. The court was satisfied that something had gone wrong with the language used in drafting the documentation. There was no difficulty ascertaining what the correction by interpretation should have been to the erroneous drafting, even if there might be slightly different views as to the precise wording of any potential replacement text [90]. A reasonable person with the appropriate background knowledge would have understood the documents to have that meaning. The judgment includes a useful summary of regulatory requirements for capital raising by banks following the financial crisis in 2008 [6].
29/10/15
MORTGAGE EXPRESS v COUNTRYWIDE SURVEYORS LTD [2015] EWCA Civ 1110
On its proper interpretation a standstill agreement covered claims in deceit.
25/9/15
SCOTTISH POWER UK PLC v BP EXPLORATION OPERATING COMPANY LTD [2015] EWHC 2658 (Comm)
Considers principles of contractual construction, including whether a term is to be regarded as a condition precedent or an innominate term.
24/9/15
NHS COMMISSIONING BOARD v SILVOSKY [2015] EHWC (Comm)
A term could not be implied into a contract that an annual payment was variable rather than a fixed sum. Claims for rectification were also dismissed.
16/7/14
PREMIER TELECOM COMMUNICATIONS GROUP LTD v WEBB [2014] EWCA Civ 994
In the absence of any term to the contrary, when contracting parties agreed that shares should be sold at a value to be determined by an expert valuer, the expert’s valuation was binding and could not be challenged in court proceedings.
11/7/14
GREENWICH MILLENNIUM VILLAGE LTD v (1) ESSEX SERVICES GROUP PLC [2014] EWCA Civ 960
The rule in Canada Steamship v R (that an indemnity is not to be construed to include the consequences of negligence of the party indemnified unless this is stipulated expressly or by necessary implication) is a rule of presumed intention. In the case of a construction contract, a failure by the party indemnified to spot defects perpetrated by its contractor or sub-contractor should not ordinarily defeat the operation of an indemnity clause, even if that clause fails expressly to encompass damage caused by the negligence of the party indemnified. So an indemnity covered loss caused by a sub-contractor in respect of workmanship defects that led to a flood, even though the defects should have detected on an inspection by the indemnified party. In any event, the sub-contractor was liable in negligence.
4/7/14
CAPITA (BANSTEAD 2011) LTD v RFIB GROUP LTD [2014] EWHC 2197 (Comm)
Contains useful summaries of the general principles for interpretation of contract terms and the special treatment given to the interpretation of clauses relied on to exempt a party from the consequences of his own negligence or to indemnify him against loss caused by such negligence [14-15]. On the facts the purchaser under a share sale agreement was liable to be indemnified by the seller only for losses whose effective cause was wrongful conduct before the transfer date.
2/7/14
EDMOND DE ROTHSCHILD SECURITIES (UK) LTD v EXILLON ENERGY PLC [2014] EWHC 2165 (Comm)
On its true interpretation, a contract entitled the claimant to a success fee if the stated event occurred regardless of whether the claimant was the effective cause of that event. This accorded with business common sense because it would have been difficult to establish whether the claimant had been the effective cause.
21/3/14
FUJITSU SERVICES LTD v IBM UNITED KINGDOM LTD [2014] EWHC 752 (TCC)
Contains a useful analysis of the principles of contractual construction when considering exclusion clauses and the circumstances in which contracting parties may assume fiduciary duties. On the facts a clause excluding the liability of a main contractor to a sub-contractor for loss of profits was effective, there was no fiduciary relationship between the parties and no duty of good faith was owed.
25/10/13
AGEAS (UK) LTD v KWIK-FIT (GB) LTD [2013] EWHC 3261 (QB)
A reference to service of proceedings in a contract did not incorporate by reference the CPR provisions as to service but meant only that the proceedings had to be brought to the defendant’s actual attention.
23/4/13
BMA SPECIAL OPPORTUNITY HUB FUND LTD v AFRICAN MINERALS FINANCE LTD [2013] EWCA Civ 416
A clause in a loan facility provided for a prepayment fee in the event of ‘voluntary payment’ before the first anniversary. The agreement had been professionally drafted and listed specific circumstances amounting to voluntary payment. None of those specific circumstances applied, so no fee was payable despite the fact that the loan had been repaid on a voluntary refinancing. Where there are two possible constructions of a document, a court is entitled to prefer the one more consistent with business common sense, but business common sense is not to be elevated to an overriding criterion, does not refer to the individual judge's own notions of what might have been a sensible solution, and does not refer to business common sense from the point of view of one of the parties [24].
11/4/13
ANDERSON v LONDON FIRE & EMERGENCY PLANNING AUTHORITY [2013] EWCA Civ 321
A clause in a collective pay agreement for staff pay in year 3 to increase by 2.5% or 1% above National Joint Council salary scale did not fail for uncertainty or as an agreement to agree. Applying ordinary rules of contractual interpretation, the clause was to be read as if the words ‘whichever is the greater’ had been included. It would have been obvious to the employer that no other meaning would reflect a deal the staff union would have contemplated when the agreement was negotiated.
14/3/13
IN THE MATTER OF LEHMAN BROTHERS INTERNATIONAL (EUROPE) (In Administration) [2013] EWCA Civ 188
LBIE laid off risks from derivative trading by entering into back-to-back transactions with the respondent on terms of an ISDA 2002 Master Agreement and a side letter. It was held that under the Master Agreement the terms of the side letter were 'material terms' which were to be taken into account for the purpose of determining compensation payable on early termination of the transactions. In reaching this conclusion the court invoked the principle that where more than one interpretation was possible, the court should prefer the one more consistent with business common sense, and that words are to be given their natural meaning unless it is clear that this was not intended.
5/2/13
BANK OF NEW YORK MELLON (LONDON BRANCH) v TRUVO NV [2013] EWHC 136 (Comm)
Contains a useful brief summary of the approach to interpretation of commercial contracts at [43], and observations on the meaning of subordination at [57].
24/1/13
PHOENIX LIFE ASSURANCE LTD v FINANCIAL SERVICES AUTHORITY [2013[ EWHC 60 (Comm)
The court approached the interpretation of contractual provisions (here for a guaranteed minimum pension in a single premium with-profits policy) on the basis that it would take account of what would make business sense not only to dispose of impossible interpretations and those which flout common sense, but as providing guidance as to the parties’ intentions more generally. The court accepted that commercial documents sometimes do include redundant provisions, that the contra proferentem rule is a rule of last resort which is never determinative, and that the nature of some contracts is such that the factual background known to the parties is not very significant.
21/12/12
FCL (LONDON) LTD v VOICE [2012] EWHC 3684 (QB) [29]-[31]
In deciding the terms of an oral or partly oral contract evidence of the parties’ subjective understanding is admissible as is evidence of things said or done after the contract.
28/11/12
NAKANISHI MARINE CO LTD v GORA SHIPPING [2012] EWHC 3383 (Comm) [9]
In a commercial contract between commercial parties, ambiguity is to be resolved in favour or the construction which favours common sense and commerciality and, where appropriate, contra proferentem the party whose solicitors drafted the contract. Clear words would also be required before construing a clause in a way which deprived a party of a valuable right.
1/11/12
MIR STEEL UK LTD v MORRIS [2012] EWCA Civ 1397
Like any other contract term, an exclusion or indemnity clause has to be interpreted in the context in which it was made. Dicta suggesting that in the absence of express words any doubt should be resolved against the party relying on the clause, were guidelines and not to be applied mechanistically. Here the parties had known of the factual basis on which a potential claim might be made at the time when the indemnity was given, so the words ‘any claim’ were properly construed as intended to include claims based on intentional torts.
1/11/12
PROCTER & GAMBLE CO v SVENSKA CELLULOSA AKTIEBOLAGET SCA [2012] EWCA Civ 1413
In a carefully drafted contract, the fact that the price of goods payable in Sterling had been agreed by reference to a budget for production costed in Euros and a particular exchange rate, did not justify reading the contract as providing a fixed rate of exchange.
9/5/12
SCOTTISH WIDOWS FUND & LIFE ASSURANCE SOCIETY v BGC INTERNATIONAL [2012] EWCA Civ 607
Statements made during negotiations were only statements of the negotiating stance at that point in time, and could not be relied on as proving the common intentions of the parties.
© Copyright 2014 Neil Levy All Rights Reserved. Disclaimer