- A notice terminating a licence must be given by all the licensors, even if one of the licensors is also a licensee (and so would not wish to terminate the licence)
Fitzhugh v Fitzhugh
In the March 2012 edition of Property Update, we considered the case of Fitzhugh v Fitzhugh. In that case, a licence was granted to the defendant and his partner to use some land for grazing animals. The licence was granted by the claimant and the defendant, who together were the administrators of their father's estate.
The agreement provided that it could be terminated by the licensor in the event of a breach by the licensee which was not remedied. The defendant did not pay the annual fee required under the agreement. The claimant (alone) gave notice to terminate the licence. The High Court held that the notice was valid, even though the agreement defined the 'licensor' as comprising both the claimant and the defendant. The defendant appealed.
The Court of Appeal allowed the appeal. The defendant was expressly defined as one of the individuals making up the 'licensor'. It was improbable that in a short and simple, professionally drawn, document the defined term was intended to mean one thing in one part of the document but something different somewhere else.
Since the document was workable, even if its working may prove cumbersome or expensive (see below), it was not necessary to imply a term that in the termination provision 'licensor' was to be read as excluding any person who was also the licensee.
The notice was therefore invalid as it had not been served by all the licensors.
Things to consider
The claimant was not left entirely without a remedy. The court ruled that the defendant's duties as an administrator would require him to subordinate his own conflicting personal interests and concur in service of the notice. If he did not do so, it would be open to the claimant to seek his removal as an administrator (if necessary by court proceedings), which would then enable the claimant to act alone.
However, removing the defendant as administrator would take time and could be expensive. The parties could have avoided this result by expressly providing that notice to terminate could be given by the licensor, other than any licensor who was for the time being a licensee.