Donington Park Leisure Ltd v Wheatcroft & Son Ltd [2006] EWHC 904 (Ch)
CONTRACT LAW – LICENCES – IMPLIED TERMS – NON-DEROGATION FROM GRANT
Facts
The tenant of a lease over a racing-circuit persuaded its landlord to allow it to use additional land for parking during a large event. The parties later disagreed as to what terms had been agreed: what vehicles were permitted, what access points could be used, whether notice had to be given and whether the contract was assignable.
Issues
The issue was the extent to which the court could ‘fill in the gaps’ left by parties in contractual agreements.
Decision/Outcome
The High Court held that the court can only imply terms into an agreement in limited circumstances. It cannot do so merely because the contract is unfair or unclear: the implication must be necessary to give business-efficacy to the contract, in circumstances where an ordinary person would think it obvious that the parties intended the implied term to be part of the agreement or would have agreed to it.
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The licence covered parking for cars and motorcycles. The court declined to read in the proposed wider uses, including access for service vehicles and sewerage tankers.
It was held that the tenant could use the relevant gates for permitted vehicles or pedestrians, according to the gates’ suitability. Restricting access in a way that materially impaired the licence would derogate from the grant.
The court implied a term requiring the tenant to give reasonable notice of the three days on which it needed the site.
The licence was assignable in principle, but the judge held that it should reflect the lease’s restriction allowing assignment of the whole rather than part. The judge would settle a form of licence consistent with these findings if the parties asked.
