Neutral Citation no. [1999] 1937

Ref:

GIRJ2697

 

 

 

Judgment: approved by the Court for handing down

Delivered:

09/06/99

(subject to editorial corrections)

 

 

1999 No 2

IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND

 

CHANCERY DIVISION

 

-------

 

BETWEEN

BRIAN LUNDIE

Plaintiff;

 

and

 

 

ANDREW MILLAR & COMPANY LIMITED

 

Defendant.

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GIRVAN J

 

JUDGMENT

 

INTRODUCTION

 

This matter comes before the Court by way of an Originating Summons seeking a construction of the terms of a user covenant contained in a lease dated 1 May 1995 ("the lease") made between the plaintiff as lessor and the defendant as lessee.

On the hearing of the Originating Summons Mr Lockhart appeared on behalf of the plaintiff and Mr Shaw appeared on behalf of the defendant. I am indebted to counsel for their well presented and persuasive arguments which skilfully analysed the construction issues arising out of the relevant covenant.

THE RELEVANT TERMS OF THE LEASE

Under the terms of the lease the plaintiff demised to the defendant the premises described in the lease as "the supermarket and lock-up shop known as Shop No 1 Kings Crescent, Doagh Road, Newtownabbey" ("the premises") for a term of 15 years from 1 November 1994 to 31 October 2009 at an annual rent of 15,500 which was subject to review under a rent provision clause.

The lessee entered into a user covenant in respect of the premises in the following terms:

"Not to use the demised premises or permit or suffer the same to be used as a betting shop bookmaker's office cafe, snack-bar coffee bar or restaurant or for the sale of spirituous or intoxicating liquor or for any purpose other than as a supermarket and shop for the sale by retail of groceries, green groceries, provisions, fresh meat, frozen foods, barbecue chickens, milk, bread and cakes, toiletries, confectionary items, ice-creams, hardware, tobacco and cigarettes and homebakery and post office and to take possession of and use and occupy and trade from the demised premises for the foregoing purpose within one calendar month from the date of entry hereunder and thereafter to continue so to do throughout the whole period of this Lease provided nothing in this Lease shall be taken as a warranty that the demised premises can lawfully be used for the said purpose."

 

The demised premises have a floor area of some 2,500 sq ft. The defendant operates a hot food counter in the premises which is staffed and trades between 9.00am and 3.00pm. It sells various items of hot food. Most of the trade at the hot food counter is before 1.00pm. The supermarket itself operates between 6.00am and 10.00pm. The hot food lines sold at the hot food counter include Irish stew, soup, curry, lasagne, cottage pie, chicken (including chicken breasts, chicken legs and chicken drumsticks), stuffed sausages, sausages, filled sodabread, Ulster fry, chicken burger, spicy potato wedges, pies, pasties, sausage rolls, ham shanks, pork ribs and beefburgers.

The plaintiff operates a hot food bar close to the demised premises. He sells a range of hot food which includes fish, sausages, battered sausages, pasties, cheese and onion pasties, beefburgers, chicken burgers, scampi, chicken nuggets, curry sauce, salad rolls, hot dogs, chicken breasts, chicken legs, southern fried chicken, battered chicken strips, bacon baps, chips, onion rings, battered mushrooms, mushy peas and gravy.

THE PARTIES' CONTENTIONS

Mr Lockhart on behalf of the plaintiff argued that on its true construction the user covenant precluded the defendant from selling hot foods in the demised premises. He further argued that the prohibition on using the premises as a snack-bar excluded their use for the sale of hot food. He secondly argued that the second limb of the clause when referring to a "supermarket and shop" should be read together and the sale of hot foods was outwith the approved list of saleable items. The permission to sell barbecue chicken by necessary implication excluded the sale of other cooked items on the expressio unius rule of construction. The user clause having expressly listed the category of permitted items excluded items which were not expressly or impliedly included within the list. The clause was defined with care so as to protect the lessor's own hot food bar situated in the same block of shops. Hot food, Mr Lockhart argued, did not fall within the concept of "groceries" or "provisions" within the permitted list.

Mr Shaw countered these contentions by arguing that the permitted activities were those of firstly a supermarket, secondly a shop selling the listed items, thirdly a homebakery and fourthly a post office. Each of those categories were separate and connected by the word "and". "Supermarket" and "shop" were two different uses. If there was any ambiguity in the clause in this regard the document should be construed against the lessor on the contra proferentem rule of construction. Each word of a formal document such as this lease is to be presumed to have been advisedly used for a purpose and if supermarket and shop represented one concept one of the words would have been surplusage. The presumption would have been against that. He argued further that in any event such hot food items represented "provisions" and "groceries" for the purposes of the permitted list. He further argued that the Court should lean in favour of a result which was reasonable. There was no reasonably logical reason why certain types of food could be sold cold or pre-cooked but not warm and just cooked. Thus, for example, cooked cold ham could be sold on the premises as groceries and provisions but, if the plaintiff was correct, cooked hot bacon could not. Such a result was so unreasonable that the Court should strive to avoid such a construction.

THE PLAINTIFF'S CONCESSION

Initially there was some conflict in the affidavit evidence before the Court as to practices currently operated in supermarkets in respect of the sale of heated cooked foods but in opening the case on behalf of the plaintiff Mr Lockhart conceded that it was not unusual now for a supermarket to sell a line of hot foods. Accordingly it is common case that a covenant permitting the use of premises to be used as a supermarket without further would not prevent the sale of cooked warm or hot foods.

GENERAL COMMENTS

Having regard to the persuasiveness of the conflicting arguments it is clear that the wording of the lease lacks the clarity of expression which it is desirable should be found in any well drawn lease. Terms such as snack-bar, groceries and provisions and supermarket are everyday words in common use though it is only when lawyers start to analyse them that it can be seen that they are words of a protean nature (to adopt Gibson LJ's description in Sloan v Northern Ireland Housing Executive [1984] NI 29 at 36 G-H referring to the scope of the business of a supermarket.) The aim of good drafting must be to avoid conflicting interpretations and to express clearly for all to see the respective rights and obligations of the parties. When everyday words with imprecise meanings are used the draftsman should provide clear guidance to the reader of the document. It must be borne in mind that in the context of a lease in construing a user covenant any ambiguity will fall to be construed in favour of the grantee on the contra proferentem rule of construction (see for example Killick v Second Covent Garden Property Co Ltd [1975] 1 WLR 468). A Court will however endeavour to interpret the wording as used and must avoid the easy route of finding an ambiguity where on final close analysis an ambiguity does not exist.

THE SNACK-BAR ISSUE

It is necessary to firstly consider the argument that the relevant use infringed the covenant prohibiting the use of the demised premises as a "snack-bar". The word "snack-bar" is a modern one, referring to a place where snacks are sold and consumed. A snack may be defined as a light casual or hurried meal or a small quantity of food eaten between meals (see for example the definition in the New Shorter Oxford English Dictionary). While the items of hot food sold and purchased on the defendant's premises when taken away and consumed may be regarded as snacks the counter at which they are sold is not in my view a "snack-bar" just as a delicatessen counter selling cold meats, cheeses and other edible items could not be regarded as a snack-bar. Such items may likewise become snacks when taken out of the shop. It was accepted as part of the evidence in the case that none of the hot food items were eaten as such on the premises. The word "snack-bar" is in any event the second word in a list of inter-related words "cafe, snack-bar, coffee bar or restaurant". This list refers to a genus of locations in which edible or drinkable items are consumed where purchased.

Even if that conclusion is wrong and the sale of hot food items for consumption off the premises would be an activity carried on in a snack-bar it would not follow that the defendant would be in breach of the covenant. Cases such as Stuart v Diplock [1989] 43 Ch D 343, Lewis & Co (Westminster) v Bell Property Trust [1940] Ch 345 and Labone v Litherland Urban District Council [1956] 1 WLR 522 make the distinction between the carrying on of a trade or business and the sale of particular items within that trade or business even though those items might themselves be properly sold by another trade or business. Thus in Lewis & Co (Westminster) v Bell Property Trust the trade or business which the tenant was entitled to carry on was that of a tea-shop. In the course of that trade or business the tenant sold cigarettes and tobacco. It was held it was not in itself a breach of covenant to carry on business only as a tea-shop. In Stuart v Diplock 43 Ch 252 the lessor's covenant was not to permit to be carried on on certain premises the business of ladies outfitters. The defendants who were hosiers sold four classes of articles the sale of which was an essential part of a ladies outfitting business but were also commonly sold by hosiers. The Court of Appeal held that there was no breach of covenant. The bona fide sale by hosiers along with numerous other items of certain articles of hosiery the sale of which was an essential part but not the whole of the ladies outfitting business was not a breach of the covenant there being no covenant that the lessor would not carry on any part of the business of ladies outfitters.

If, contrary to my conclusion, the sale of hot foods for consumption off the premises were part of the business of a snack-bar it does not follow that the sale of hot food for consumption off the premises in a supermarket (which is now a legitimate supermarket activity) would be a breach of the covenant not to use the premises as a snack-bar.

THE GROCERIES AND PROVISIONS ISSUES

If the sale of hot food constituted the sale of "groceries" or "provisions" it would be within the permitted list. Neither word is defined in the lease and modern usage of the words is loose and somewhat ill defined.

The word "provisions" may take its character from the surrounding context. Thus in Whittle Ltd v Stalybridge Corporation (1967) 65 LGR 344 the court had to construe the word provisions in its context in the Stalybridge Improvement Act 1828 which empowered a local authority to erect and maintain within and for the town a market and to provide stalls for the sale there of "meat, fish, poultry, vegetables, fruit and other provisions". Buckley J held that the listed items gave rise to a genus. Apart from being solids being used for human consumption he concluded that they had the common characteristic of being natural products not subjected to a manufacturing process. He said that:

"Applying the ejusdem generis rule here `other provisions' must be confined to other natural products of a kind which go to fill the larder and not extend it to anything like bread or confectionary which is the product of a baker's activity."

 

Apart from indicating that the word "provisions" can take its meaning from its context the decision does not assist in determining the question which falls for determination in the present case.

In Lovell & Christmas v Wall (1911) 104 LT 85 the issue raised was whether a manufacturer of margarine fell within a prohibition against carrying on a business as a "provision merchant". Not surprisingly the court held that it did not. The case provides little guidance as to what is meant by "provisions".

In its dictionary definition "provisions" refers to "a supply of necessaries or materials provided, especially of food and drink, food etc provided, supplies of food, drink etc for an expedition." (See the New Shorter Oxford English Dictionary). Chambers Dictionary refers to "provisions" inter alia as "a store of food". A housewife purchasing food and household necessaries is said to be buying provisions for she thereby is making provision for herself and her family and there is an implication that the provisions are the sort of items which are brought home and kept (often in a larder or refrigerated) for use over a period or at least not immediately. A person buying food as a carry out intending to consume it almost immediately outside the premises does not seem to me to be buying "provisions". As a matter of impression I consider that the sale of hot food sold at the hot food counter does not qualify as the sale of "provisions".

"Groceries" are goods normally sold by a grocer. The origin of the word grocer was connected to the word "gross" and initially referred to a person selling wholesale or "in gross". That original meaning has become long since obsolete and the current definition of the word as set out in the New Shorter Oxford English Dictionary is "a dealer in, especially, dried and preserved foods and other miscellaneous household provisions." The sale of dried and preserved foods would represent only a small part of a grocer's business nowadays (having regard to the development in food technology). The sale of hot food heated or cooked on the premises for almost immediate consumption does not, however, to my mind represent an activity of a grocer and I conclude that such items as the hot food items sold by the defendant in the present instance would not come within the permitted use of the premises for the sale by retail of groceries.

Mr Lockhart raised the subsidiary argument that the express provision permitting the sale of barbecue chicken implied that such an item would not otherwise be saleable under the category of provisions or groceries and by implication excluded other cooked foods sold hot. This line of argument provides some support for Mr Lockhart's contention that provisions and groceries would not include barbecue chickens or other preheated or cooked foods sold hot on the premises for consumption almost immediately thereafter.

THE SUPERMARKET ISSUE

In Northern Ireland Housing Executive v Sloan [1984] NI 29 the Housing Executive had demised shop premises to a tenant who covenanted not to carry on any business other than that of a supermarket and if any difference arose as to any item to be sold on the premises in connection with the business the Executive's decision would be final and binding. A butcher and baker complained that the tenant was selling items within the range of goods normally sold in a butcher's shop or a homebakery. The Executive determined that those items should not be sold by the tenant operating the supermarket and it subsequently applied for an injunction to restrain the continuous sale of the items. The Court of Appeal affirmed the decision to grant an injunction holding that it was within the lessor's power to limit the categories of items which could be sold, that the power to do so did not oust the jurisdiction of the court to determine questions of law and the latter part of the clause was not repugnant to the earlier part which conferred a right on the tenant to operate a supermarket.

Gibson LJ at 36 stated:

"As I have earlier observed the first sentence in the covenant gives the defendant a right to carry on the trader business of a supermarket in the premises. The only limitation on his rights in that regard is provided by the negative provision that he is not to engage in any other trade or business. The scope of the business of a supermarket is protean. Its shape and character in the range of goods with which it deals will vary with the size and situation of the premises as well as with a variety of external considerations: and much of the evidence on the trial turned on the question whether certain goods were within or without the proper scope of this particular supermarket. I do not think it necessary to embark upon that quest. Suffice to say, that whatever may be the proper sphere of activity of this shop the first sentence of the covenant permits it and forbids any activity beyond it."

 

In view of Mr Lockhart's concession that the hot foods are commonly sold in like circumstances in many supermarkets the sale of such items would be within the proper sphere of activity of a supermarket unless reading the clause as a whole what would otherwise fall within the activity of a supermarket is excluded.

It seems to me that the question comes down to this namely whether in Clause 21 "supermarket and shop" represents a single use qualified by the list of permitted items or whether it contemplates two separate uses, firstly as a supermarket (with an unqualified right to carry on the activities which can be carried on in a supermarket) and as a shop in which a qualifying list of permitted sale items may be sold.

Support for Mr Lockhart's contention is to be found to some extent in the description of the demised premises in the First Schedule paragraph 1(i) in the Lease which defines the premises as "the supermarket and lock-up shop". Furthermore the clause as a whole proceeds upon the basis that there is a single permitted purpose albeit made up of different facets (homebakery, post office, supermarket and shops selling permitted items).

The word "supermarket" has now become a well established term in common usage. Like many neologisms the initial meaning of the word has developed with the passage of time. In Caliber (Woolwich) Ltd v Tesco Stores Ltd (1977) 247 EG 479 Sir John Pennycuick speaking in 1977 said:

"I do not accept the contention that the word `supermarket' is even now an ordinary English word which the court may be taken to be acquainted with its meaning subject only to refreshing itself by reference to dictionaries. It is clear that the word `supermarket' started as a fancy trade name in the distributive food trade and as such it was a technical term. It may well be that the word `supermarket' is in the course of development into an ordinary English word but even today it seems to me that that word is no more than passing through the intermediate area between a technical term and an ordinary english word".

 

Since then the word has become more deeply embedded in common parlance and is more easily understood. Thus in R v Maldon District Council Ex Parte Pattani [1998] 1 PLR 90 Collins J said:

"It is not, in my view, possible to indicate precisely what can and cannot be sold in the store which is described as a supermarket. Clearly, the emphasis is on food. But in addition supermarkets customarily sell and can be expected to sell household goods together with some other miscellaneous things. The essence is self-service and items which can conveniently be included in a trolley or basket and which the shopper will find it convenient to buy when he or she does the weekly (or more frequent) food and household shopping. Although the bulk is self-service, most supermarkets have, for example, delicatessen or specialist meat or fish counters where the customers are served by assistants. Such purchases are usually placed in the trolley and paid for at the check-outs, but that is often not the case with cigarettes or news stands which are also regularly found in supermarkets."

 

It can be said that a supermarket is a retail store and thus a shop albeit selling goods usually on a self-service format though with the possibility of serviced counters. If Mr Shaw is correct an item not falling within the permitted list and hence not sellable in the premises qua shop may nevertheless be sold in the premises qua supermarket. Such a result appears to me to be illogical. Why it might be asked do the parties take care to define what items may be sold in the premises as a "shop" if the permitted supermarket use is wider and untrammelled by the restrictions on the use of the premises as a shop.

Mr Shaw rightly reminds the court that in construing a document of this nature it should be assumed that every word is advisedly used by the parties and that the word supermarket must have been intended to add something additional to or different from the use of the premises as a shop. The positive obligation to operate the premises as supermarket and shop and homebakery and post office (as well as the negative obligation not to use the premises for any other purpose) obliges the defendant to ensure that the shop is operated on supermarket lines (which would not otherwise be the case if it was merely required to be operated as a shop.) The additional word "supermarket" thusdoes add a characteristic to the shop activity.

In the result I hold that the defendant is not entitled to sell in the demised premises hot food items other than barbecue chicken.


1999 No 2

 

IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND

GIRJ2697

CHANCERY DIVISION

 

 

-------

 

BETWEEN

BRIAN LUNDIE

Plaintiff;

 

AND

 

 

ANDREW MILLAR & COMPANY LIMITED

 

Defendant.

-------

 

 

 

 

J U D G M E N T O F

 

 

GIRVAN J

 

 

 

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