1. I have had the privilege of reading in draft the opinion of my noble and learned friend, Lord Hoffmann. Like my noble and learned friend, Lord Walker of Gestingthorpe, whose opinion I have also had the privilege of reading, I agree with all his reasoning and I share Lord Walker’s admiration for the way it has been expressed. For the reasons they give I would allow the appeal.

2. I agree that Persimmon’s argument that the House should take account of the pre-contractual negotiations raises an important issue. Every so often the rule that prior negotiations are inadmissible comes under scrutiny. That is as it should be. One of the strengths of the common law is that it can take a fresh look at itself so that it can keep pace with changing circumstances. But for the reasons that have been set out by Lord Hoffmann I think that the arguments for retaining the rule have lost none of their force since Prenn v Simmonds [1971] 1 WLR 1381 demonstrated, as Lord Wilberforce put it at p 1384, the disadvantages and danger of departing from established doctrine.

3. In the Court of Appeal Lawrence Collins LJ said that the policy reasons for the rule have not been fully articulated: [2008] EWCA Civ 183, para 106. I am not sure, with respect, that everyone would agree with him. Lord Gifford did his best to explain what they are in his dissenting opinion in Inglis v Buttery (1877) 5 R 58, 69-70. When that case came before this House Lord Blackburn said that they set out exactly what he himself thought: (1878) 3 App Cas 552, 577. As Lord Gifford explained, the very purpose of a formal contract is to put an end to the disputes which would inevitably arise if the matter were left upon what the parties said or wrote to each other during the period of their negotiations. It is the formal contract that records their bargain, however different it may be from what they may have stipulated for previously

4. Lord Blackburn clearly saw no conflict between the exclusionary rule and Lord Justice Clerk Moncreiff’s proposition that the Court was entitled to be put…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Chartbrook Ltd v Persimmon Homes Ltd

Details

AGLC: Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38
Case: [2009] UKHL 38
Decision Date: 1 July 2009

CaseChat Overview and Summary

Chartbrook Limited, a landowner, entered into an agreement with Persimmon Homes Limited, a housebuilder, for the development of a residential and commercial property in Wandsworth, London. The agreement included a formula for calculating the price to be paid by Persimmon for the land, which comprised a total land value and an additional residential payment (ARP). The dispute centered on the interpretation of the definition of ARP in the agreement. Chartbrook argued that the ARP was to be calculated as 23.4% of the price achieved for each residential unit in excess of the minimum guaranteed residential unit value, less certain costs and incentives. Persimmon argued that the ARP should only be paid if the price achieved for a residential unit exceeded the minimum guaranteed residential unit value, in which case the ARP would be the difference between 23.4% of the achieved price and the minimum guaranteed residential unit value. The House of Lords considered whether the pre-contractual negotiations could be taken into account in interpreting the contract and whether rectification was available if the written agreement did not reflect the parties' prior consensus. The House of Lords held that the pre-contractual negotiations were inadmissible in interpreting the contract, as the rule excluding such evidence was well established and served the interests of economy and predictability in contractual disputes. The House of Lords also held that rectification was available if the written agreement did not reflect the parties' prior consensus, which was to be determined objectively. However, the House of Lords allowed Persimmon's appeal on the ground of the correct construction of the contract, as the agreement did not mean what Chartbrook contended it meant. The House of Lords concluded that the ARP was to be calculated as the difference between 23.4% of the achieved price and the minimum guaranteed residential unit value, if the achieved price exceeded the latter. The House of Lords allowed Persimmon's appeal and dismissed Chartbrook's claim.

Orders