Donington Park Leisure Limited v Wheatcroft & Son Limited

 

The Message

The Court can help parties to plug holes in their Agreements but only to a limited extent.

The Case

The High Court has determined what further terms should be contained in a Licence Agreement for use of some additional land during the holding of the British Motor Cycle Grand Prix each year (Donington Park Leisure Limited v Wheatcroft & Son Limited (7 April 2006)).

Donington Park Leisure Limited (“DPL”) is the tenant of the Donington Park Motor Racing Circuit pursuant to a lease for 25 years from 1997. In December 2003, it reached an oral agreement with the Defendant, its landlord, for use of some additional land for parking during the holding of the annual Grand Prix which attracts a crowd of over 65,000. The parties, who do not appear to have the best of relationships, fell out over what terms they had actually agreed. Following proceedings, a Consent Order was entered into in April 2005 pursuant to which the landlord agreed to guarantee DPL car parking on the site known as the Sunday Market Site for 3 days in each year at a fee of £30,000 per annum from 2004 until the end of the Lease.

The parties then fell out again and applied to Court to resolves their disputes as to exactly what had been agreed. In particular, the landlord argued that DPL could only use the Site for parking cars and motorcycles, it could not use the majority of the gates leading from the Site to the Circuit, it had to give substantial advance notice as to when it required use of the land, and it could not assign the benefit of the Agreement.

The Court emphasised that, whilst it can be tempting to fill holes left by parties in their Agreements, the Court can only do so in limited circumstances. It cannot imply a term into an Agreement in order to make it better or fairer; it can only do so where such a term is necessary to give “business efficacy” to the Agreement where it is obvious that an omission has been made and both parties would have agreed to such a term at the time.

The Court determined that use of the words “car parking” obviously included the use of motorcycles but excluded the crossing of the land by emergency and service vehicles and parking for sewerage tankers and mobile lavatories and control towers and suchlike as it was not obvious from the wording that any wider use was intended.

The Court held that DPL could use all points of access to the Circuit even though this would involve crossing further land belonging to the landlord as the doctrine of non-derogation from grant means that a landlord, having granted a right with one hand, cannot take away the means of enjoying it with the other.

A Court can help parties to actually carry out what they have agreed by implying a term which supplies the mechanism for them to do so. Accordingly, the Court implied a term that DPL had to give reasonable notice as to when it wished to use the Site and that such notice had to be given within 28 days of the date for the Grand Prix first being publicised or, if earlier, by 28 February in any year.

As it was not obvious that the parties had intended that the Agreement could not be assigned by DPL, the Court was unwilling to imply any term preventing transfer of the benefit of the whole of the Agreement and, as the landlord had guaranteed that parking would be made available, the Court held that the landlord was to be taken to be restricted in how it dealt with the Site and that DPL was entitled to enter a restriction on the title of the landlord to ensure that its rights were protected.

In this case, it would appear that the parties were simply unable at the time to agree any detailed terms but, as a consequence of being able to only agree the most basic terms, they have both had to incur substantial costs in establishing what the detailed terms are to be and, no doubt, neither are entirely satisfied with the result.