Vone Securities v Cooke

• Jurisdiction: Ireland
• Judge: Costello J.
• Judgment Date: 24 July 1978
• Neutral Citation: 1977 WJSC-HC 1405
• Judgment citation (vLex): [1977] 12 JIC 0601
• Docket Number: No. 3404P./1976,[1976 No. 3404P.]
• Court: High Court
• Date: 24 July 1978

High Court

Supreme Court

[1976 No. 3404P.]

Vone Securities v. Cooke

Vone Securities Limited

Plaintiff

and

Gerald Cooke

Defendant

Cases mentioned in the report:—

¹ Bruner v. MooreELR [1904] 1 Ch. 305.

² Wilkins v. McGinityIR [1907] 2 I.R. 660.

³ Winchester Court Ltd. v. HolmesUNK (1941) 165 L.T. 396.

⁴ Lester v. Garland (1808) 15 Ves. 248.

⁵ Helsham-Jones v. Hennen & Co. (1914) 84 L.J. Ch. 569.

⁶ United Scientific v. BurnleyWLR [1977] 2 W.L.R. 806.

⁷ Meggeson v. GrovesELR [1917] 1 Ch. 158.

⁸ United Dominions Trust (Commercial) Ltd. v. Eagle Aircraft Services Ltd.

⁹ Catesby's CaseUNK (1606) 6 Rep. 62a.

¹⁰ Bluck v. Rackham (1846) 5 Moo P.C. 305.

¹¹ Schiller v. Petersen & Co.ELR [1924] 1 Ch. 394.

¹² Dyke v. SweetingENR (1745) Willes 585.

¹³ P. Phipps & Co. v. RogersELR [1925] 1 K.B. 14.

¹⁴ Wilkinson v. CalvertELR (1878) 3 C.P.D. 360.

¹⁵ Watters v. CreaghDLTR (1957) 92 I.L.T.R. 196.

Landlord and tenant - Lease - Option to purchase - Notice of intention to exercise option - Notice to be given by lessee "six months" prior to specified date - Whether expression referred to lunar or calendar months.

Plenary Summons

On the 30th July, 1976, the plaintiff issued a summons claiming (a) a declaration that the plaintiff had lawfully and properly exercised the option to purchase the premises at No. 17 Anglesea Street and Nos. 24 and 25 Temple Bar in the city of Dublin as provided in a lease dated the 22nd July, 1971, made between Gerald Cooke of the one part and Brian Joseph Carthy of the other part, and (b) specific performance of the agreement created by the exercise by the plaintiff of the said option. The facts appear in the judgment of Costello J., infra. The plaintiff and defendant agreed that the giving by the plaintiff of due notice in accordance with the terms of the option clause contained in the lease was a condition precedent to the exercise by the plaintiff of the option to purchase therein mentioned. The plaintiff's action was tried by Costello J. on the 25th November, 1977.

The defendant appealed to the Supreme Court from the judgment and order of the High Court. The appeal was heard on the 12th June, 1978.

The plaintiff held portion of certain premises as lessee under a lease for a term of ten years from the 16th August, 1971, subject to a proviso which stated that the lessee would be entitled to have an option to purchase the entire premises for £60,000 at the end of the first five years of the term if the lessee, "six months" before the expiration of the five-year period, gave notice to the lessor of the lessee's intention to exercise the option. The yearly rent reserved by the lease was payable by the lessee in advance "by two half-yearly instalments." On the 17th February, 1976, the plaintiff wrote to the defendant's agent stating the plaintiff's intention to exercise the option, and the letter was received by the defendant's agent on the same day. The defendant objected that the plaintiff was not entitled to exercise the option as the plaintiff had not given notice, before the date specified in the lease, of its intention to do so. The plaintiff sought in the High Court an order declaring that the plaintiff had exercised the option in accordance with the terms of the lease.

Held by Costello J., and affirmed by the Supreme Court (O'Higgins C.J., Henchy and Kenny JJ.), in making the order sought, 1, that, apart from certain exceptions, at common law the word"month" means prima facie a lunar month of 28 days when used in a legal instrument.

Bruner v. MooreELR [1904] 1 Ch. 305 considered.

2. That the relationship of landlord and tenant was not one of the exceptions to the common-law rule.

3. (O'Higgins C.J. dissenting) That an examination of the terms of the lease failed to disclose an intention by the parties thereto to refer to calendar months when using the expression "six months" in the option clause and that, accordingly, the plaintiff had given the said notice before the date stipulated in the lease and in accordance with the terms thereof.

Cur. adv. vult.

Costello J.

The facts in this case are agreed and can be shortly stated. By an indenture of lease of the 22nd July, 1971, the defendant demised to the tenant therein the premises described as "all that the ground floor and basement being the messuage or public house and licensed premises known as Cookes 17, Anglesea Street and 24/25 Temple Bar, parish of St. Andrew and county borough of Dublin . . ." It was provided that the tenant was to hold the premises "from the 16th day of August, 1971, for a term of ten years" at the yearly rent therein specified.

The lease contained an option clause which made provision by which the tenant could purchase the entire premises at 17 Anglesea Street and 24/25 Temple Bar. It was in the following terms: "and provided always that the tenant shall at the end of each five year period have the option to purchase the entire premises known as 17 Anglesea Street and 24/25 Temple Bar with vacant possession for a sum of not less than £60,000 (sixty thousand pounds) the tenant shall give notice of his intention to exercise such option six months before the expiration of any of the relevant five-year period. Also provided that should the tenant exercise such option at the end of the first five year period he may purchase the said premises for the sum of £60,000 (sixty thousand pounds)." It will be noted that certain grammatical errors crept into the drafting of the first proviso but these are not of any significance and do not affect the issues which arise in these proceedings.

By a deed of assignment of the 12th January, 1976, the lessee's interest under the lease was vested in the plaintiffs herein. On the 17th February, 1976 (the significance of that date will appear in a moment) the plaintiffs' solicitors wrote to the defendant's solicitors as follows: "Our clients, Vone Securities Limited, the holders of the lessee's interest in the premises 17 Anglesea Street and 24/25 Temple Bar, Dublin (comprising ground floor and basement) have instructed us to formally notify you of their intention to exercise the option contained in the lease to purchase the premises with vacant possession for the price of £60,000." This letter was received by the defendant's solicitors before lunch-time on the 17th and they replied immediately as follows: "We acknowledge receipt of your letter of the 17th instant received shortly before lunch-time today. We have sent a copy to our client for instructions." It was agreed, without the necessity of formal proof, that the defendant himself received a copy of the communication of the 17th February on the 18th February. On the 19th February the defendant's solicitor wrote again to the plaintiffs' solicitors as follows: "We have now received instructions regarding your letter of the 17th instant. Our client points out that the purported exercise of the option is late." Although several issues have been raised in the course of these proceedings it is clear that the point taken in this letter is the central one in the case and that the principal matter of controversy which I have to determine is whether the notice was served in the time provided for in the lease.

A determination of this central issue is facilitated (though by no means concluded) by an agreement between counsel on one aspect of the case. The lease speaks of the tenant having the option to purchase "at the end of each five year period" and provides for notice to be given "before the expiration of any of the relevant five year period." It also makes provision for the price which is to be paid should the tenant exercise his option "at the end of the first five year period". The lease, it will be recalled, is dated the 22nd July, 1971, and under it the tenant was to hold the premises "from the 16th day of August, 1971" for a term of ten years. It has been agreed that the first five year period referred to in the option clause would have expired at midnight on the 16th August, 1976; but there agreement ends.

The defendant's contention is that the six months notice mentioned in the clause should have been given at latest by midnight on the 16th February, 1976, and that the notice given by the plaintiffs was ineffective as it had been given on the 17th February. On the other hand, the plaintiffs say that the notice was given within proper time and is a valid notice.

I accept Mr. Gill's submission on behalf of the defendant that the terms of the option clause which I am considering must be strictly construed and that there must be an exact compliance with them before his client is bound by his offer to sell the property mentioned in it: see United Dominions Trust (Commercial) Ltd. v. Eagle Aircraft Services Ltd.⁸ and United Scientific v.Burnley.⁶ [1977] 2 W.L.R. 806. Therefore, I hold that for the plaintiff to have exercised validly the option contained in the lease notice of his intention to exercise the option should have been given six months before the expiration of the first five year period, i.e. six months before midnight on the 16th August. The controversy between the parties is thus narrowed to a single net issue, which is whether the period mentioned in the option clause is a period of six lunar months or six calendar months. If the period is six calendar months, then the notice was not served within the time specified in the agreement as it was not served until the 17th February. However, if the word "months" in the option clause means lunar months, then the plaintiffs' notice was in time because it could have been served any time prior to 168 days calculated back from midnight on the 16th August, 1976, and the service on the 17th February, 1976 (or, indeed, service on the 18th) was prior to that period.

The plaintiffs' contention is that the rule of the common law which I should apply is that, in agreements of the sort I am considering,...