Lloyd's Maritime and Commercial Law Quarterly
MODIFICATIONS, WRANGLES, AND BYPASSING
Robert Harris*
Rock v MWB
The Supreme Court recently handed down judgment in Rock Advertising Ltd v MWB Business Exchange Centres Ltd.1 The judgment is notable for three things: the Supreme Court’s “clean break with something approaching an international common law consensus”2 on the issue of the effect of “No Oral Modification” (“NOM”) clauses, thus overturning the unanimous judgment of the Court of Appeal;3 the wrangles between Lord Sumption4 and Lord Briggs on the means by which NOM clauses may themselves be modified; and the Supreme Court’s bypassing of the issue of consideration, despite the widespread hope that the case might provide an opportunity for some consistency to be restored to this muddled area of English law.
This note will argue: that the Supreme Court’s recognition of the effect of NOM clauses is to be welcomed; but that the reasoning in Lord Briggs’ minority judgment is to be preferred to that of Lord Sumption’s leading judgment; and that it is deeply regrettable that the Supreme Court declined to deal with the issue of consideration. Lord Sumption observed that “Modern litigation rarely raises truly fundamental issues in the law of contract”.5 He is undoubtedly correct, and that is why the Supreme Court should have taken advantage of this rare opportunity when such an “exceptional”6 appeal finally reached our highest court for deliberation.
The facts and issues
The facts are straightforward. For seven or eight years, Rock had occupied as licensee premises managed by MWB. In August 2011, Rock agreed in writing to occupy larger premises for 12 months commencing 1 November 2011; the licence fee agreed was £3,500 per month for the first three months, then £4,433.34 per month from February 2012. Rock was unable to meet its financial commitment and, by late February 2012, had accumulated arrears of over £12,000. On 27 February 2012, an oral agreement was made between Ms Evans (MWB’s credit controller, who, on the trial judge’s findings, had “at least ostensible authority”7 to make such an agreement) and Mr Idehen (Rock’s sole director) to reschedule the licence fee payments from February to October 2012; Rock would pay less than the amount originally agreed for the first few months, but more thereafter, such that the arrears would be cleared by the end of the year. On the same day, Rock paid £3,500 to MWB, this being the first instalment due in accordance with the revised payment schedule. On 29 February 2012, having spoken to her finance director, Ms Evans emailed Mr Idehen to say that MWB wished payments to be made as per the original payment schedule, not
* Keble College, University of Oxford.
1. [2018] UKSC 24; [2018] BLR 479; [2018] 2 WLR 1603 (Lady Hale, Lords Wilson, Sumption, Lloyd-Jones and Briggs) (hereafter “Rock v MWB”).
2. At [32] (Lord Briggs).
3. [2016] EWCA Civ 553; [2016] 2 Lloyd’s Rep 391; [2017] QB 604 (Arden, Kitchin and McCombe LJJ).
4. With whom Lady Hale, Lord Wilson and Lord Lloyd-Jones agreed.
5. At [1].
6. Ibid.
7. [2016] EWCA Civ 553; [2016] 2 Lloyd’s Rep 391; [2017] QB 604, [8] (Kitchin LJ).
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