Winwood & Ors v Biffa Waste Services Ltd & Anor [2011] EWCA Civ 108

Case No A3/2010/0586

[2011] EWCA Civ 108

IN THE COURT OF APPEAL (CIVIL DIVISION)

[2010] EWHC 242 (Ch)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Sir Edward Evans-Lombe (sitting as a Judge of the High Court)

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 17/02/2011

Before

LORD JUSTICE JACOB

LORD JUSTICE HOOPER

LORD JUSTICE RIMER

Between

(1) MICHAEL RALPH WINWOODAppellants

(2) HUGH BAMPFIELD CARSLAKEAppellant

(3) THE MARSH TRUST LIMITEDAppellant

(1) BIFFA WASTE SERVICES LIMITEDRespondents

(2) BIFFA HOLDINGS LIMITEDRespondent

(Transcript of the Handed Down Judgment of

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Mr Adam Rosenthal (instructed by Osborne Clarke) for Appellants

Mr David Hart QC (instructed by Dundas & Wilson LLP) for Respondents

Hearing Hearing date: 23 November 2010

Judgment

Lord Justice Rimer :

Introduction

[1]This appeal is against the determination of preliminary issues made by Sir Edward Evans-Lombe (sitting as a Judge of the High Court in the Chancery Division) by his order of 19 February 2010. The claimant/appellants are Michael Winwood and Hugh Carslake (suing as the trustees of the E.E. Marsh Land Settlement) and The Marsh Trust Limited. The defendant/respondents are Biffa Waste Services Limited (‘Biffa’) and Biffa Holdings Limited (‘Holdings’). The appellants were represented before us by Adam Rosenthal and the respondents by David Hart QC.

[2]The issues before the judge turned on the construction of a single clause in a 99-year lease dated 22 November 1993 granted by the appellants (hereafter ‘the landlord’) to Biffa of a site at Stewponey, Stourton, Staffordshire. Holdings joined in the lease as Biffa’s guarantor. The site comprised a largely worked out gravel pit. The purpose of the lease was to enable Biffa, in the course of its business, to deposit waste in the cavity created by the gravel workings. It is not in dispute that the clause in question required Biffa to apply for planning permission. What is in dispute is whether (as Biffa claims and the judge held) Biffa satisfied that obligation by (as it did) applying for, and obtaining, the particular permission which it did; or whether (as the landlord claims) the clause imposed upon Biffa a wider, continuing obligation to apply for planning permissions which would ensure the continued use of the site for landfill purposes.

[3]In what follows I shall(i) summarise the background facts at the date of the grant of the lease,

(ii) refer to its material provisions,

(iii) summarise the material facts subsequent to its grant,

(iv) identify the issue before the judge and his conclusion,

(v) summarise the arguments advanced on the appeal and

(vi) explain my conclusions.

The background facts at the date of the grant of the lease

[4]At the date of the lease in 1993, the site had the benefit of(i) a waste disposal site licence dated 18 February 1981, as modified on 7 October 1982, granted to T & S Element Limited (‘Element’) by the disposal authority, the Staffordshire County Council (‘the County Council’), under the Control of Pollution Act 1974 (‘COPA’); and

(ii) a planning permission dated 27 October 1987 for extraction and landfill operations that the County Council also granted to Element, this time in its capacity as the planning authority.

[5]Section 3(1) of COPA prohibited the deposit of ‘controlled waste’ on any land unless the land was occupied by the holder of a licence issued pursuant to section 5. Element’s site licence, as modified, allowed the deposit of waste materials as follows:

‘Materials deposited within the site shall be restricted to commercial and industrial wastes, excavated material, builders wastes and clean dry pervious material at a maximum rate of 400 tonnes per day of which not more than 100 tonnes per day shall comprise commercial and industrial wastes.’

[6]The planning permission permitted the extraction of minerals from the site and for the resulting void to be infilled and restored via the importation of landfill materials. Condition 20 provided for the restoration of the excavated gravel pit to forestry use by 31 December 2003 in accordance with prescribed stages. It is material to the argument and so I will set it out:

‘20. Unless otherwise agreed in writing with the County Planning Authority, the whole of the site … shall be restored to forestry use by 31st December, 2003, in general accordance with the following stages: (i) The excavation shall be filled with imported waste material in accordance with the phasing indicated on Plan D and Table 4 “Operations Schedule” attached. (ii) On completion of filling within each Phase, topsoil, subsoil and soil making material shall be replaced on the top of the tipped material, so as to achieve a minimum thickness of 1 metre cover over the whole of the tipped surface. (iii) The final contours of the restored surface, including the respread soil cover, shall generally conform with the contours indicated on Plan D attached. (iv) In the first available planting season following the completion of topsoil spreading on each and every restoration phase, trees shall be planted in accordance with a specification previously approved by the County Planning Authority, setting out details of … [and the details follow, which it is unnecessary to cite].’

I have emphasised condition 20(iii) as it is of particular relevance. The restoration was to be carried out in five phases shown on plan D, starting at the northern end.

[7]The regulatory regime under COPA was replaced by the more extensive regime enacted in sections 29 to 78 in Part 2 of the Environmental Protection Act 1990 (‘EPA’). The basic regulatory scheme remained, however, one under which there was a prohibition upon the deposit of controlled waste in or on land otherwise than in accordance with the terms and conditions of a waste management licence granted in respect of a specified site by the waste regulation authority under section 35(1), being land which had the benefit of a relevant planning permission. The EPA provisions relating to landfill were not in force at the date of the lease, although the lease recognised their imminent implementation, which happened in May 1994. Licences issued under COPA continued in force under EPA until they expired.

[8]When, in 1993, the lease came to be granted, Element transferred its site licence to Biffa. By that stage the restoration contours prescribed by condition 20(iii) were not in line with adjacent ground levels, which were several metres higher than those of the restoration contours. Biffa had in mind that it might seek permission to raise the level of the contours. Paragraph 9 of the agreed statement of facts recorded this as follows:

‘At the time of entry into the Lease, (i) the contours approved under the 1987 planning permission did not tie in with adjacent ground levels and left a step of several metres between existing adjacent land and the level of the infilled area; (ii) [Biffa] had told [the landlord] that [Biffa] might obtain an increase in waste volumes capable of being received on site via an amendment to the contours provided for in the existing site planning permission and site licence.’

Biffa’s case is that the clause in the lease that is in issue was included so as to require and enable this to be done.

The lease

[9]The lease was for a term of 99 years from 1 October 1993 subject to Biffa’s option in clause 10(5) to determine it if the ‘waste disposal operations’ and ‘landfill activities’ had ceased, the site had been restored and a period of aftercare had elapsed. Clauses 6 and 7 contained complicated rent provisions, to all of which it is not necessary to refer. Their essence was to gear the rent by reference to Biffa’s activities carried out on the site. Clause 6(2) reserved a ‘certain rent’ of £150,000 per year during the first 18 years of the term (until 1 October 2011); and during such time as the site was being used for ‘landfill activities’, clause 6(3) reserved a yearly rent equal to 25% of the ‘Gross Landfill Revenue’. Those rents were, however, liable to be increased by the provisions of clause 6(5). That provided (by clause 6(5)(a)) for an increase of the ‘certain rent’ to £250,000 per year and (by clause 6(5)(b)) of the ‘landfill activities’ rent to a level of 32% of ‘Gross Landfill Revenue’ if Biffa obtained a site licence permitting the deposit of any or all of(i) industrial waste,

(ii) commercial waste,

(iii) household waste (as such expressions are defined in EPA),

(iv) special waste (as defined in the Control of Pollution (Special Waste) Regulations 1980), and

(v) difficult waste (as defined from time to time by the Department of the Environment or generally understood in the industry). Clause 7(6), however, provided for the ‘certain rent’ payable under clauses 6(2) and 6(5)(a) to cease to be payable from such date as the ‘Void Space’ – in short, the cavity, but I give its fuller definition later -- had been filled and no further ‘Void Space will become available within the [site] as a result of any Extraction Operations being carried out at that time or within the foreseeable future …’. In such event, clauses 6(7) to (9) provided for a smaller ‘surface rent’ to become payable based on a use of the site for agricultural or forestry purposes only.

[10]Clause 8 contained the tenant’s covenants. Clause 8(3)(a) confined the use of the site to the purposes of ‘Extraction Operations, Waste Disposal Operations, Landfill Activities, Recycling Activities’ and other purposes permitted by the lease. Clause 8(3)(b) provided that after 30 September 2011 or such later date as should be permitted by a planning permission, the land was not to be used ‘for any purpose other than for Recycling Activities and agriculture and/or forestry and restoration aftercare and monitoring under the conditions of the Planning Permission and the Site Licence.’

[11]Clause 8(5)(a) required the tenant, so far as material:

‘Within … 12 months … to apply for and use all reasonable endeavours to obtain a Planning Permission and a Site Licence in respect of the Demised Land … in its discretion acceptable to the Tenant in accordance with Clause 6(5) Provided that if any application is refused or is not determined within any statutory period the Tenant may but shall not be obliged to make or proceed with any appeal against refusal or non determination thereof The Tenant shall keep the Landlord fully informed of any such applications or approvals and progress thereon and the eventual outcome thereof.’

Clause 6(5), summarised in [9] above, was the one that increased the rents if Biffa obtained a licence for the deposit of additional types of waste not permitted under the current site licence. It is unnecessary to set the provisions out, but it is relevant to note that, if Biffa did obtain any such planning permission and site licence as is referred to in clause 8(5)(a), clause 8(5)(b) then required it to carry out the waste disposal operations necessary to implement them and not to apply to vary them without the landlord’s consent; and clause 8(5)(c) provided that if the authorities should propose any variations, Biffa was to notify the landlord which was then to be entitled to make representations relating to its interest in the site.

[12]Clause 8(6) imposed obligations upon Biffa as follows (clause 8(6)(d), which I have emphasised, is the one in dispute):

‘(a) To use all reasonable endeavours to procure the carrying-out of the Extraction Operations as quickly as is economically viable and feasible and to do so in such a way as to create the maximum practicable Void Space in the Demised Land. (b) To compact the Waste Materials in such a way as to make the best practicable use of the Void Space (c) Subject to subclause (d) next following to carry out the Landfill Activities within the Term so as to achieve restoration in accordance with the Site Licence and the Planning Permission (d) At the Tenant’s cost to apply for and use all reasonable endeavours to obtain a Planning Permission and Site Licence to enable the Tenantto carry out the Landfill Activities to the highest practicable contours (e) Not to deposit or permit to be deposited any radioactive waste on the Demised Land.’

[13]Clause 1 defined the terms used in clause 8(6). ‘Extraction Operations’ means the winning, working and subsequent sale of saleable minerals from the site. ‘Void Space’ means such part of the site as is from time to time available and permitted by the Site Licence to be used for Waste Disposal Operations and Landfill Activities. ‘Site Licence’ means any waste disposal licence ‘from time to time in force’ permitting Waste Disposal Operations and Landfill Activities on the site. ‘Waste Materials’ means unsaleable sand, gravel, hoggin, overburden and topsoil, whether removed from the site or imported, and any material the importation of which is permitted by a Site Licence. ‘Landfill Activities’ means the commercial operation of filling the Void Space on the site with Waste Materials. ‘Planning Permission’ means any permission ‘from time to time permitting’ the use of the land for Extraction Operations, Waste Disposal Operations, Landfill Activities and Recycling Activities.

Events subsequent to the grant of the lease

[14]In February 1994 Biffa applied to the County Council for a modification of the planning permission by the raising of the restoration contours referred to in condition 20(iii). On 30 June 1994 the County Council approved such a modification by way of a new scheme of restoration contours.

[15]Until August 1994, Biffa had disposed of waste by, as it was required to do, filling the areas comprising phases 1 and 2 of the landfill operation (the first two of the five phases referred to in condition 20). Their infilling was by then incomplete. On 19 August 1994 the County Council, acting in its waste regulatory capacity, further modified the site licence so as(a) to restrict the disposal of waste to the phase 1 and 2 areas, but

(b) to increase the daily input of waste from 400 to 2,000 tonnes a day. The waste material that could be deposited in the two areas was restricted to dry, non-hazardous commercial and industrial wastes, inert excavation and inert construction/demolition wastes. The restriction in (a) above in relation to phases 1 and 2 was the first time in the licence’s life that such a spatial restriction had been imposed. In order to be able to deposit waste in the areas comprising phases 3, 4 and 5, Biffa would have to apply for a fresh site licence; and to obtain it, Biffa would have to include and implement a scheme for the engineering and capping of the remainder of the site with a composite liner. Biffa had received an indication from the National Rivers Authority in 1992 that, subject to the site being suitably engineered, the site could accept a wide range of wastes, and Biffa had concluded that they might include special and difficult wastes.

[16]In November 1996 Biffa did apply for a fresh site licence in respect of phases 3, 4 and 5. It sought to extend the range of waste materials that it might deposit on the phase 3, 4 and 5 areas so as to include ‘difficult wastes’. It also sought an increased rate of filling from 2,000 to 3,000 tonnes per day.

The judge explained the outcome of Biffa’s application as follows:

‘16. … The determination of this application was much delayed and was only finally made, granting Biffa’s request, on 13th July 2001. By this date Biffa’s application was governed by new rules, the Pollution Prevention and Control (England and Wales) Regulations 2000 (“the PPCRs”). These rules were made under section 2 of the Pollution Prevention and Control Act 1999 which was legislated to give effect to a European Directive on integrated pollution prevention and control (96/61/EC). The PPCRs did not directly apply to existing landfill sites until 2007. However, new sites and sites which were proposing a “substantial change in operation” were to be regulated from an earlier date. Critically it became unlawful to extend the operations on an existing licensed site after January 2001 so as to bring about a “substantial change” in those operations without a permit granted under the PPCRs (PPC permit). By this stage also the waste regulator had ceased to be the County Council and had become the Environment Agency. Biffa’s application involving a widening of the ranges of wastes to be deposited in phases 3, 4 and 5 was considered by the Environment Agency to involve a “substantial change”. Thus Biffa required a PPC permit to be able to deposit wastes of the type it wished to deposit. 17. To complete the legislative picture, the PPCRs themselves were substantially amended and replaced by the Landfill (England and Wales) Regulations 2002 which carried into effect a further European Directive adopted in 1999, Council Directive 99/31/EC, which imposed a series of technical requirements and prohibitions on landfill sites. To operate the site as it wished it was still necessary for Biffa to obtain a fresh site licence. 18. The Void Space on phases 1 and 2 of the Site has now been filled and restoration works to the surface have been completed. No fresh licence in respect of the Site has been applied for by Biffa under the 2002 Regulations which now apply. Accordingly, backfilling phases 3, 4 and 5 with waste has not been and cannot now be undertaken. Biffa have operated clauses 6(3) and 7(6) and ceased to pay the “certain rent” and percentage of gross landfill revenue which they were bound to pay had they continued to operate the site with effect from 25 December 2000. Thereafter, the Claimants commenced these proceedings for breach of contract, being breach of the provisions of clause 8(6)(d) of the Lease. ….’

[18]The result was therefore that, although Biffa obtained the modified site licence in respect of phases 3, 4 and 5 that it had requested, it was unable to continue its landfill operations in relation to those phases without obtaining a permit under the PPCRs. Biffa did not apply for such a permit. It had applied on 28 August 1998 to vary the provision in condition 20 of the 1987 planning permission requiring the reinstatement of the site by 31 December 2003 by extending that date to 2010. The County Council, however, indicated that it would not permit that extension and Biffa did not pursue the matter. Having filled the phases 1 and 2 areas, Biffa ceased all its landfill activities on the site by the end of December 2000; and as those areas had been filled to the levels authorised by the planning permission and site licence, Biffa ceased paying the ‘certain rent’. It claimed (and the landlord now accepts, although originally it had not), that clause 7(6) had come into effect. Biffa asserts that it is now liable to pay only the clause 6(7) ‘surface rent’.

The preliminary issues

[19]The landlord’s claim was that Biffa had breached its obligations under clause 8(6)(d). The assertion (set out in paragraph 29 of the amended Particulars of Claim) was to the effect that clause 8(6)(d) imposed upon Biffa a continuing duty from the moment the lease was executed to use all reasonable endeavours to obtain planning permissions and/or site licences that would enable it to continue landfill activities on the land to the highest practicable contours. If, said the landlord, such permissions could have been obtained, the ‘certain rents’ would have continued to be payable during their duration. Biffa denied that it was subject to any such duty.

[20]The preliminary issues that Deputy Master Smith directed were set out in paragraphs 17 and 18 in the document (which also included the agreed facts) attached to his order. The judge considered that the form of the issues over-complicated the essence of what he had to decide and that the heart of the point at stake was whether(i) as the landlord contended, clause 8(6)(d) imposed a broad obligation upon Biffa to make such applications for planning permissions and site licences (or variations of existing permissions and licences) as might from time to time be necessary to ensure that the landfill activities on the land may continue for as long as possible; or,

(ii) as Biffa contended, it only imposed a much narrower obligation, namely that Biffa must use reasonable endeavours to obtain a variation of the planning permission and site licence in force as at the date of the lease so as to enable the landfill of the cavity to continue upwards to the highest practicable contours of the land comprising the site. It was not suggested to us that the judge was wrong so to simplify the issue. The judge’s decision

[21]The judge agreed with Biffa as to the construction of clause 8(6)(d). First, the landlord’s argument that Biffa was subject to a continuing duty to obtain planning permissions and/or site licences for continuing landfill activities ran counter to the provision in clause 8(6)(d) that Biffa’s obligation was to obtain a planning permission and site licence, the indefinite article pointing in a singular rather than a plural direction. Second, the closing words of the sub-paragraph – ‘… to the highest practicable contours’ -- also told against the argument. They were, I understand the judge to have held, apparently a reference to the parties’ common contour restoration intentions at the date of the lease and were inapposite for inclusion in a clause imposing a continuing obligation of the broad nature asserted by the landlord. Further, it was unlikely that the draftsman would make such an important clause in the lease serve two purposes, namely(a) to impose such a continuing duty, and

(b) to implement the parties’ joint desire to increase the holding capacity of the site.

[22]Third, the judge considered it odd that, if the subparagraph had the broad effect contended for, it should be included in a clause otherwise dealing with what he called ‘nuts and bolts’ issues. Fourth, he rejected an argument that the contrasting language of clause 8(5)(a) supported the landlord’s argument in relation to clause 8(6)(d). On the other hand, he recognised that clause 8(6)(d) did not fit perfectly with Biffa’s intentions, because it contemplated obtaining a site licence, whereas all that was required to deal with the contours point was a variation of the planning permission.

The judge concluded his reasoning as follows:

‘25. I can well imagine that a site owner, negotiating the provisions of a lease to a waste disposal contractor, might wish to include in that lease a provision having the effect of paragraph 29 of the Particulars of Claim. Against a background of continually changing regulation, there would be real commercial advantage in obtaining from the site operator tenant a covenant so to arrange his operations and/or to apply for or vary licences so as to enable “Landfill Activities” to continue on the site for as long as they profitably might. I do not detect from the matrix of fact, existing at the date this Lease was made, any compelling reason why I should give the words of sub-clause 8(6)(d) the stretched meaning which the Claimants’ submissions require having regard to the words used and their place in the provision of the Lease: - contrast the background facts in the ICS case ibid [Investors Compensation Scheme Limited v. West Bromwich Building Society [1998] 1 WLR 896, 912-913]. This is particularly so where there exists on Biffa’s case on accepted facts (see para. 6 above), an explanation for the presence of this sub-clause where it appears in the Lease and using the terms which it does. In my judgment, Biffa’s explanation for the provisions of sub-clause (d) and their position in the Lease is to be preferred to that of the Lessors.’

[24]The judge therefore answered the preliminary issues in paragraph 17 of Deputy Master Smith’s order by declaring that, on a proper construction of the lease, clause 8(6)(d) was incapable of obliging Biffa to carry out any of the actions specified in paragraph 17. That made it unnecessary for him to deal with the issues raised paragraph 18, but he added that, had he concluded that Biffa was under some continuing duty to apply for site licences to make it possible to keep the site open for waste disposal, he:

‘… would have construed the words “reasonable endeavours” in sub-clause 8(6)(d) so as not to impose upon Biffa an obligation to pursue an application for a site licence where it was reasonable for Biffa to suppose that the conditions or other limitations attached to the grant of such licence would make any operations covered by the licence unprofitable.’

The appeal

[25]The landlord’s contention remained before us what it claims to be a simple one, namely that clause 8(6)(d) imposed a continuing obligation upon Biffa from time to time as appropriate both to apply for, and use all reasonable endeavours to obtain, planning permissions and site licences in order to enable the carrying on of landfill activities. Whether simple or not, the breadth of the argument raised questions as to whether Biffa was obliged by the succinct language of clause 8(6)(d) to:(i) apply to modify the site licence granted in 1994 so as to extend the landfilling operations to phases 3, 4 and 5;

(ii) apply to modify the 1994 licence so as to limit the nature of waste permitted under it such that it would not have amounted to a ‘substantial change’ for the purposes of the PPC regime;

(iii) apply for a landfill permit under the PPC regime; and

(iv) apply for a planning permission to permit the use of the site for depositing waste beyond 31 December 2003. Biffa’s case remained that clause 8(6)(d) imposed no more than a ‘once and for all’ obligation to apply for the raising of the restoration contours approved by condition 20(iii) so as to bring them level them with adjacent ground levels.

[26]In developing the landlord’s argument, Mr Rosenthal submitted that the judge fell into error by failing to take sufficient account of the context in which the lease was granted, as evidenced by the statement of agreed facts and the terms of the lease itself. He pointed to the fact that the rent payable was geared to the permitted landfill activity, the lease providing for the rents to be increased by the provisions of clause 6(5) but for them to cease to be payable once there is no more ‘Void Space’ – land available to be filled and a licence permitting it. The landlord therefore had an obvious commercial interest in maximising the rent payable, whereas it is said the judge’s construction deprived the landlord of the means of ensuring that its interest was protected. Mr Rosenthal referred to Chartbrook Limited v. Persimmon Homes Limited

[2009] 1 AC 1101

, at [16], per Lord Hoffmann, and at [87], per Lord Walker of Gestingthorpe, for the proposition that the ‘commercial purpose’ of a transaction is part of the relevant matrix of fact relevant to its interpretation. He accepted, I believe, that there may be some ambiguity in clause 8(6)(d), but his point was that, given the commercial purpose of the lease, it should be read as imposing the broader duty contended for.

[27]As for the particular bases upon which the judge founded his decision, Mr Rosenthal criticised the judge’s reliance on the significance of the indefinite article in clause 8(6)(d) as pointing to a singular rather than to multiple applications. He cited Martin v. David Wilson Homes Limited

[2004] 3 EGLR 77

, in particular paragraphs [22] and [42] to [44] of Buxton LJ’s judgment, as showing that the use of the indefinite article is not always an appropriate way of signifying singularity. In addition, ‘Planning Permission’ and ‘Site Licence’ as used in the lease (including in clause 8(6)(d)) were defined in clause 1 as meaning any permission or licence in force ‘from time to time’, which also told against singularity; and clause 2(2) included what Mr Rosenthal said was a standard term in well-drawn commercial leases, namely that ‘… words importing the singular include the plural and vice versa …’.

[28]As for the judge’s reliance on the significance of the words ‘to the highest practicable contours’ in clause 8(6)(d), Mr Rosenthal accepted in his written argument and in his oral opening that the draftsman may there have had in mind the limitation of the contours in the existing planning permission and the parties’ intention that their levels should be raised. But, he said, it did not follow that Biffa’s duties under clause 8(6)(d) were limited to making the application that it did in 1994 in order to achieve such a raising. He said that the point was a neutral one: whilst those words may have reflected the parties’ intentions at the time of the lease, they equally affirmed that every permission or licence must seek to achieve restoration to the highest practical contours.

[29]In his reply, Mr Rosenthal adopted a different stance with regard to the sense of the words ‘to the highest practicable contours’. He pointed out that paragraph 9(ii) of the agreed statement of facts (quoted in [8] above) showed no more than that Biffa ‘had told [the landlord] that [Biffa] might obtain an increase in waste volumes capable of being received on site via an amendment to the contours provided for in the existing site planning permission and site licence.’ That was, therefore, at most a reflection of Biffa’s intention that, following the grant of the lease, it might seek an amendment to the contours; but, he said, expressions of intention with regard to what is proposed to be achieved by a contractual document are inadmissible in its interpretation so that the court should leave them out of account.

[30]Mr Rosenthal pointed next to the judge’s observation that, on Biffa’s argument, the reference in clause 8(6)(d) to the need to obtain a ‘site licence’ was superfluous because it already had such a licence and the contour restriction was exclusively governed by the conditions of the 1987 planning permission. The inclusion of the obligation to apply for a ‘site licence’ was therefore another factor telling against the judge’s construction. Mr Rosenthal was asked during his opening whether he was correct in saying that no licence would also be needed if the contour condition in the planning permission was altered so as to raise the levels, as to which he was unable to advance a positive submission. Nor could he explain why, upon the landlord’s suggested construction, a site licence would be necessary, whereas it was said not to be necessary under Biffa’s construction. In the event, Mr Rosenthal did not press further in opening the point based on the inclusion in clause 8(6)(d) of the ‘site licence’ reference. Mr Hart’s response to it was that paragraph 9(ii) of the agreed facts expressly reflected that it might not be sufficient merely to vary the planning permission condition as to contours, but that it might also be necessary to vary the site licence: and he said this was a sufficient explanation for the ‘site licence’ reference in clause 8(6)(d). In his reply, Mr Rosenthal submitted, this time positively, that any application confined to a raising of the contours would not require a site licence (or a variation of one): it would only require a variation of condition 20(iii) of the planning permission.

[31]Mr Rosenthal also submitted that the judge’s construction did not stand easily with the contrasting language of clause 8(5)(a). That imposed an obligation upon Biffa to apply for a particular type of permission -- a clause 6(5) extension of the range of depositable waste -- and did so by imposing a specific time limit within which such application was to be made. Whilst clause 8(6)(d) also imposed an obligation to apply for a planning permission and site licence, it did not impose anytime limit for doing so. Mr Rosenthal referred to the judge’s point that, if clause 8(6)(d) bore the width of meaning that the landlord sought to attach to it, the clause 8(5)(a) obligation would be unnecessary. His response was that whereas clause 8(5) imposed what he called ‘start up’ obligations upon Biffa, clause 8(6) only came into operation once the initial obligations under clause 8(5) had been complied with. In addition, whereas clause 8(5)(a) focussed on obtaining a permission and licence so as to enable the disposal of the various types of waste described in clause 6(5), clause 8(6)(d) was more general in its terms.

[32]Mr Rosenthal advanced a further submission based on the provision in condition 20 requiring that, absent agreement otherwise in writing with the County Council, the site must be restored to forestry use by 31 December 2003. Clause 8(3)(a) and (b) contemplated a wider use of the site up to 30 September 2011 (and perhaps beyond), whereas because of condition 20 any such wider use beyond 2003 would require a planning permission; and it would be a permission which would necessarily have to go beyond the raising of the levels of the contours. This, said Mr Rosenthal, further indicated that the obligation imposed by clause 8(6)(d) was of a wider nature than the judge had held.

[33]Mr Rosenthal also criticised the judge’s point that clause 8(6) was dealing with ‘nuts and bolts’ and so was an inappropriate clause in which to include a provision of such a broad nature as that for which the landlord contends. He said that, in contrast to the clause 8(5)(a) obligation, clause 8(6) imposed a series of obligations in relation to each stage of Biffa’s operations of the site. The fact that the obligation under 8(6)(d) was broader than those under the preceding sub-clauses did not make it an inappropriate place to put it.

Discussion and conclusion

[34]Mr Rosenthal advanced every argument that, I consider, might fairly be advanced in support of the landlord’s case. Ultimately, the answer to the issue of construction that was before the judge and is now before this court is a fairly short one that does not in my view usefully admit of very extensive analysis. In my judgment, the judge came to the correct conclusion as to the interpretation of clause 8(6)(d), although I would arrive at the same conclusion by a slightly different process of reasoning.

[35]I do, first, have respectful reservations as to the judge’s reasoning with regard to the weight that I interpret him as having attached to the parties’ intentions at the time of the lease with regard to a proposed application by Biffa for a raising of the condition 20(iii) contours. Insofar as he did attach weight to this, it is perhaps not surprising because certainly Biffa’s intention in that regard was placed before him as an agreed fact in paragraph 9(ii) of the statement of agreed facts: and the parties must, therefore, have regarded it as a fact to which the judge could properly have regard. I consider, however, that Mr Rosenthal was correct in his reply to question the legitimacy of such regard as an aid to the interpretation of clause 8(6)(d). In Investors Compensation Scheme Ltd v. West Bromwich Building Society

[1998] 1 WLR 896

, at 912, 913, Lord Hoffmann explained that the law excludes from the background admissible for the interpretation of a document ‘… the previous negotiations of the parties and their declarations of subjective intent’, which means that it is not legitimate to invoke in aid of the interpretation of clause 8(6)(d) the fact that Biffa had told the landlord what its intentions were in relation to the contour levels. In Chartbrook Ltd and another v. Persimmon Homes Ltd and another

[2009] 1 AC 1109

the House of Lords endorsed the interpretation principles explained in the ICS case (see per Lord Hoffmann at paragraph [14], with whom the other members of the House agreed).

[36]I do not, however, regard the exclusion from consideration of Biffa’s expressed pre-lease intention as of material moment. Clause 8(6)(d) has to be construed in the context of the lease as a whole; and that exercise is assisted if it is first construed on a more micro-level in the context of clause 8(6), of which it forms one of five sub-clauses. The judge described this clause as dealing with ‘nuts and bolts’ issues, although I consider, with respect, that Mr Rosenthal may have come closer by describing it as setting out the successive stages of the overall landfill operation that the lease was about. Clause 8(6)(a) was devoted to the obligation to create the cavity to be filled (there was some unresolved discussion before us as to whether Biffa was or is actually engaged in creating cavities rather than filling those created by others). Clause 8(6)(b) was then devoted to imposing a particular obligation in relation to the filling of the cavity so created. Clause 8(6)(c) is particularly important. It provided that ‘Subject to subclause (d) next following’ Biffa must ‘carry out the Landfill Activities within the Term so as to achieve restoration in accordance with the Site Licence and the Planning Permission’. That obligation takes the reader straight back to the 1987 planning permission, in particular to condition 20 which dealt expressly with the ‘restoration’ obligations upon which the permission was conditioned; and condition 20(iii) prescribed the ‘final contours’ of the restoration exercise by reference to the attached plan. Clause 8(6)(c) was, therefore, one that (inter alia) required Biffa to restore the cavity to the levels of those contours.

[37]The significance of the obligation imposed by clause 8(6)(c) is that it was made expressly subject to clause 8(6)(d); and that sub-clause imposed an obligation directed at obtaining a permission that would enable Biffa ‘to carry out the Landfill Activities to the highest practicable contours.’ In my judgment, the inclusion of those last five words can, in the context, sensibly only be read as showing that the clause 8(6)(d) obligation upon Biffa was to apply for a variation of the existing planning permission so as to raise the level of the contours prescribed by condition 20(iii). There is no need (any more than there is any right) to have recourse to the evidence of Biffa’s expressed intention in that regard in order to make the link between the clause 8(6)(d) obligation and the condition 20(iii) restoration obligations. The language of clauses 8(6)(c) and (d), read together, makes the link itself; and a consideration of the uneven levels of the existing permitted contours and of the adjacent land – which can be looked at as part of the admissible background material and is referred to in paragraph 9(i) of the statement of agreed facts – itself provides cogent supporting evidence of what clauses 8(6)(c) and (d) obviously collectively intended. Mr Rosenthal’s responsive, but undeveloped, submission to the court’s point to him that clause 8(6)(c) provided the key to the case was that it merely strengthened the landlord’s case for a wide construction of clause 8(6)(d). I respectfully disagree. I consider that it dealt that case a mortal blow.

[38]I would therefore conclude that it is apparent that at any rate the primary focus of clause 8(6)(d) was directed at the imposition upon Biffa of an obligation to apply for a variation of condition 20(iii) so as to raise the limits of the restoration contours. The question that then arises is whether that is the limit of the operation of the sub-clause; or whether it also imposes the wider obligation upon Biffa of the continuing nature that the landlord asserts.

[39]I have not been persuaded that there is anything in its language, read in the context of clause 8(6) in particular and of the lease as a whole, that justifies any such wider interpretation. First, the manifest link between sub-clauses 8(6)(c) and (d) – with the function of the latter being to impose a qualification upon the obligation under the former – is a strong pointer away from it. There is nothing in the language of clause 8(6)(d) expressly indicating that any such wider interpretation was intended; and once its obvious function is identified, there is no justification for any attempt to read one into its words.

[40]Second, whilst I accept that the use of the indefinite article in clause 8(6)(d) is not necessarily conclusive that the parties were there referring to the obtaining of a single planning permission and site licence, I would not accept that either the provisions of clause 2(2) of the lease, or anything else, justify interpreting clause 8(6)(d) as referring to multiple planning permissions and site licences. The inclusion in the lease of a provision such as that contained in clause 2(2) does not require a notional re-writing of every singular reference in the lease as if it were a plural reference. The exercise that the landlord is asking of the court remains one of interpretation; and that exercise requires the relevant language to be interpreted in its context, which was the point made by Buxton LJ in paragraph [44] of his judgment in Martin v. David Wilson Homes Ltd

[2004] 3 EGLR 77

. Once the conclusion has been arrived at that what clause 8(6)(d) is about is obtaining an alteration of the terms of condition 20(iii) of the planning permission, the context makes it plain that the sub-clause is focussed only upon obtaining a single planning permission directed at that particular end.

[41]Third, I am disposed to accept that it is not apparent why, on the interpretation of clause 8(6)(d) that I would favour, the sub-clause also referred to an obligation to obtain ‘a … Site Licence’. I say that because it is not clear to me that a modification of the existing site licence would be required in order to fill the cavity to any higher contour levels that might be permitted, although if Biffa wanted to increase the daily rate of infilling, or to change the nature of the permitted waste, a modification would be required. I do not, however, regard this feature of the sub-clause as requiring a fundamental re-assessment of what I would regard as the limits of its reach. One explanation of such feature may be that it was included simply as a matter of caution in case a raising of the contours would also require a modification of the licence. I do not regard the reference to the ‘site licence’ as providing a sufficient platform upon which to base the landlord’s suggested interpretation.

[42]Fourth, the judge was, I consider, correct to conclude that if clause 8(6)(d) had been intended to do the major work that the landlord claims to derive from it, it would not have been tucked away as a sub-clause in clause 8(6), in a context and in language showing that its function was limited to qualifying the clause 8(6)(c) obligation by applying for a variation of the condition 20(iii) ‘restoration contours’ obligation. I recognise, as Mr Rosenthal pointed out, that when faced with a question as to the interpretation of a document, the court should view with caution arguments along the lines of ‘if the parties had intended the clause to mean this, they would have written it differently’. In the present case, however, I find it impossible to see that, in the context in which it appears, the parties intended to inject into the mere 35 words of clause 8(6)(d) the broad and continuing obligations for which the landlord contends.

[43]In my judgment, the judge’s decision was correct. I would dismiss the appeal.

Lord Justice Hooper :

[44]I agree.

Lord Justice Jacob :

[45]I also agree.