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All Out of Options: Keeping Words in their Context

Date: 31/07/2020 | Dispute Resolution

The wording that solicitors draft, reflecting their client’s instructions, will determine their client’s legal relationship with other people.  In the case of a dispute about what those words mean, the courts must try to interpret the parties’ intentions.

Although it is not always possible, the words a solicitor chooses always try to accurately reflect their client’s instructions.  A recent case in a long line of cases where it was necessary for the court to try to interpret the words chosen by a solicitor on behalf of their clients is New Ingliston Limited v Edinburgh Airport Limited

A developer granted an option to purchase land to Edinburgh Airport, who wanted to use the land for operational purposes.  The option could only be exercised on the satisfaction of certain conditions. The Airport took the view the conditions were satisfied and served a notice to purchase the land.  The developer took the view that the conditions were not satisfied and asked the court to clarify the position.

The condition in question was that the land to be purchased had to be zoned for a use consistent with four “key objectives”.  The dispute narrowed in on whether the last three “key objectives” had to be read in the context of the first “key objective”, or whether these could be considered as separate and independent objectives that required to be individually met.

The first key objective was for the area to be zoned as an international business district.  The other key objectives included achieving the optimum development potential and maximising the land value as a whole.  As one would expect, the developer wanted to maximise the payment due from the Airport for the land, and argued that the optimum development potential and land value should be considered independently of the zoning as an international business district.

The question the court had to grapple with was: were the optimum development potential and maximised land value restricted to the area being an international business district area, or did the area require to be otherwise zoned if that alternative use maximised the value?

The commercial judge held that the other key objectives were restricted by the first key objective.  The starting point to interpret what the parties meant was the “natural and ordinary meaning of the words”.  The list of objectives contained the word “and” – i.e. all four had to be met. The objectives had to be read in the context of each other.  The first objective was an objective in itself; it was not subsidiary to the others.  That meant the obligation to optimise development potential and maximise land value only applied insofar as the area had been designated as an international business district, with the result that the Airport’s option notice was valid and legally effective.

What does this case highlight?  In short: the importance of words used in legal agreements, the structure of clauses in agreements, whether “and” or “or” should be used, and the need for precision in drafting.  Ultimately, the structure of the clause and the use of the word “and” were instrumental here. 

So, the next time a solicitor asks many a detailed question, keep in mind that they do so with one eye on what a judge might make of the words that they go on to choose on your behalf.

The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers Stewart LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.

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