Lancashire Insurance Company Ltd v MS Frontier Reinsurance Ltd
| Jurisdiction | Bermuda |
| Judgment Date | 05 August 2011 |
| Docket Number | Civil Appeal 2010 No. 21 |
| Date | 05 August 2011 |
| Court | Court of Appeal (Bermuda) |
In The Court of Appeal for Bermuda
Before:
Zacca, P
Ward, JA
Auld, JA
Civil Appeal 2010 No. 21
Mr N Hargun for the Appellant
Mr D Kessaram for the Respondent
The following cases were referred to in the judgment:
Flacker Shipping Limited v Glencore Grain LimitedUNK [2002] EWCA Civ 1068
Wisniewski v Central Manchester Health AuthorityUNK [1998] PIQR 324
Tradax Export SA v Dorada Compania Naviera SA ("The Lutetian")ELR [1982] 2 QB 140
English v Emery Reimbold & Strick Ltd.WLR [2002] 1 WLR 2410
Landlord and tenant-Assignment of lease-Commercial premises-Termination notice-Conduct of party-Waiver
JUDGMENT of Ward, JA
Introduction
1. On the 16th day of October 2008 Raphael Limited as landlord, Lancashire Insurance Company Ltd. as tenant/vendor and MS Frontier Reinsurance Ltd. as assignee/purchaser entered into a tripartite agreement for the assignment of a lease.
2. The Lease was in relation to the rental of commercial premises at Mintflower Place, 8 Par-la-Ville Road in the City of Hamilton for the space of three years at the initial rate of $60 per square foot otherwise expressed as $65,100 per month from the first day of January 2009.
3. Pursuant to Clauses 2 and 6 of the Agreement, the plan was that Lancashire would take possession of the leased area being floors 5 and 6 of the building known as Mint Flower Place at #8 Par-la-Ville Road but would assign the lease to MS Frontier following completion of fitting out works on floors 5 and 6 of the adjoining building known as Power House at #7 Par-la-Ville Road. On the 23rd January 2009 Lancashire became the tenant of Mint Flower Place and it was expected that MS Frontier would have become the Assignee by April 2009 but in the event the call to take up the Assignment was not made until the 18th December 2009. Because of the delay and a decline in rental values between 16th October 2008 and 18th December 2009, MS Frontier served Notice of the Termination of the Agreement on the 13th January 2010.
4. Lancashire contends that the Agreement for the Assignment of the Lease was not validly determined by the service of the termination notice on the 13th January 2010. MS Frontier argues that it was. Kawaley J. found that the Notice to Terminate was validly served. Lancashire has appealed against that finding of the 7th October 2010 on the following grounds.
Ground 3A of the Grounds of Appeal, relating to the proper construction of the Agreement for the Assignment of the Lease dated 16th October 2008.
3.1 The learned judge erred in law in holding, in effect, that under Clause 1.1.2 of the Agreement dated 16 October 2008 for, inter alia, the Assignment of a lease ("the lease") of commercial premises situate at floors 5 and 6, 8 Mint Flower Place, Par-la-Ville Road in the City of Hamilton, the Condition Date
is a date 15 days after the service of the written notice following the completion of the fit out works. The learned judge should have held that, on the true construction of the Agreement and the Notice dated 18 December 2009, the Condition Date was the date upon which the written notice was served upon the Respondent or any later date agreed upon by the parties.
3.2 In the premises, the learned judge should have held that the Condition Date was either 18 December 2009, the date of service of the notice, or 31 December 2009 the date agreed upon between the parties' respective attorneys. The learned judge should have held that there was at the very lease prima facie evidence that the Condition Date was agreed to be 31 December 2009.
5. The Condition Date was the date on which the assignment of the Lease had to take place. It is defined in Clause 1.1 of the Agreement as having the meaning:
The date falling no more than fifteen (15) Working Days following the later of
1.1.1. completion of the Lease; and
1.1.2 receipt by the Assignee of the Tenant's written notice confirming completion of their fit out works in relation to their occupation of the 5th & 6th floors of 7 Par-la-Ville Road, Hamilton and such written notice shall be given by the tenant immediately following the completion of its said fit out works.
6. The attorneys for Lancashire served its Notice of Completion of Fit-Out Works at Power House on 18th December 2009. The Notice read:
We confirm that the Lease was completed on 23 January 2009 and we hereby give notice of completion of our client's fit out works to the 5th & 6th floors, 7 Par-la-Ville Road, Hamilton. Accordingly, the conditions set out in the Agreement have been satisfied and our client now requests the assignment to be completed without delay. The Deed of Assignment was sent to your attorneys on 30 November 2009 duly executed by our client and we look forward to its return to enable completion of the same.
7. The conditions for triggering the Condition Date had now been met, namely, completion of the Lease and service of Notice of Completion of the Fit-Out Works at #7 Par-la-Ville Road.
8. Fifteen working days following 18 December 2009 would be a date after the 31st December 2009, namely, 13th January 2010.
9. However, pursuant to Clause 6.6 of the Agreement, if the Condition Date had not occurred by 31st December 2009, either party could terminate the Agreement. Clause 6.6 reads:
If for any reason the Condition Date has not occurred by the 31st December 2009 then the Tenant or the Assignee may serve written notice on the other to determine this Agreement and upon service of such this Agreement shall determine and cease to have effect and no party shall be under any further liability to any other party under this Agreement without prejudice to any pre-existing right of action of any party in respect of any breach by any party of its obligations under this Agreement.
10. As the Agreement was not terminated by either party by 31st December 2009, under the power granted by Clause...
To continue reading
Request your trial