Hannon v 169 Queen’s Gate Ltd: ChD 23 Nov 1999

A letting scheme created a restriction on new building within the scheme, but was so phrased as to be descriptive not prescriptive, and the landlord was free to subdivide surrendered flats. In the absence of clear words to the contrary the landlord was free to build up above existing buildings. The restriction affected only development on a horizontal plane.
CS Bernard Livesey QC: ‘. . . the courts are reluctant to imply a term where, as here, there is a long and complex legal document drawn up by the lawyers in which the parties have crystallised the terms of their relationship. The conditions that must apply before the courts will imply a term in these circumstances were set out by Lord Simon in BP Refinery (Westernpoint) Pty Ltd v Shire of Hastings (1978) 52 ALJR 20 at p26 and repeated by Sir Thomas Bingham MR in Philips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472 at p481 as follows:
for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that ‘it goes without saying’; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.
To this, the defendant has suggested that a sixth principle has been added by Hughes v Greenwich London Borough Council [1994] 1 AC 170, that the courts would imply a term into a contract only where there was a compelling reason for doing so, which I accept, although it seems to me that this may simply be another way of looking at Lord Simon’s second condition.’


Bernard Livesey QC


Times 23-Nov-1999, [2000] 1 EGLR 40


England and Wales

Landlord and Tenant

Updated: 05 August 2022; Ref: scu.81222