Royal Mail Estates Limited`s High Court case against Maple Teesdale Borzou Chaharsough Shirazi was recently linked to the interpretation of a contrary agreement. In that case, Kensington Gateway Holdings Ltd (the „company“) claimed to enter into a contract with Royal Mail Estates Limited („Royal Mail“) for the sale and purchase of real estate. Under the contract, Royal Mail agreed to sell properties for $20 million. The buyer was defined in the contract as the business. In a paragraph of the payment agreement, the mining company agreed to pay production royalties based on the amount of material it obtained. In the paragraph that covered the licence fee, it stated, „Notwithstanding the contrary provisions of this section, the tenant pays the landlord a minimum annual licence of $75,000.“ Id. at 472. The paragraph adds that the mining company would make a catch-up payment at the end of the year if royalties fell below $75,000 in any given year. In these cases, lawyers often use a phrase such as: „Despite a sexual hierarchy.“ Then they add what required a particularly important provision a special heap. This writing technique is a problem.
This means that the treaty could say two different and inconsistent things. The reader could read the bad and rely on it, believing that the parties really meant it. If the reader does not read the entire document, he may miss any provision that really governs and replaces the wrong one, the one the reader believed. In such a situation and without explicit agreement to the contrary, all beneficiaries of a facility must contribute to the costs of their maintenance and repair. This case teaches that „notwithstanding“ clauses are shabby tools that can be used if you try to retain a contract without causing any surprises. The case also shows the dangers of the word „entry.“ „Entering“ could relate to anything — the whole agreement, just a paragraph or just a particular approach within the framework of the agreement. It`s a lazy way to make a point. Maple Teesdale sought a summary verdict, finding that Royal Mail`s assertion would necessarily fail because Maple Teesdale was not a party to the contract.
The applicant parties argued that the phrase „the benefit of this contract is for the purchaser himself“ constituted an agreement contrary to the meaning of Directive 36C (1). Whenever a lawyer is tempted to include a clause „despite everything“ in an agreement, he should resign and figure out how to take stock correctly, once and in a way that every reader (i.e. the court) will understand. And if the lawyer still cannot resist the temptation, he should at least make it clear what „here“ means. The dispute boils down to the phrase that began „notwithstanding all the contrary provisions,“ falling in the middle of the paragraph on production royalties. What did that mean? If it referred to the whole agreement, the mining company owed $75,000 a year, no matter what. However, if „here“ applies only to sales of production royalties, without mining, there has been no liability for production royalties, the mining company is not required to pay the minimum production licence. The Court dismissed the appeal and ruled in Royal Mail`s favour that the wording of the clause in question, in order to reach an agreement contrary to the meaning of S. 36C (1), had to objectively mean that „the parties intended that the contract would not enter into force as agreed with the agent.“ The court also found that another paragraph of the said production tax „on the basis of the removal of the materials from .
. . Property. Id. at 474. The „despite“ clause does not seem to have exceeded this language.