The recent Court of Appeal decision in Fitzhugh v Fitzhugh [2012] EWCA Civ 694 overturned the High Court’s decision and held that a notice purporting to terminate a licence was invalid if it was served by only one of the joint licence owers.
This was an unusual case in that one of the licence owers was also a licensee and as such was not willing to be involved in terminating the licence. On reviewing the termination clause the court considered that a reasonable person, with all the background knowledge that would have been reasonably available, would not have considered the meaning of ‘licence ower’ to be any different in the termination clause within a licence to its definition in the rest of the licence.
Although it was possible to have foreseen practical difficulties and unwanted expense if a licence ower who was also the licensee refused to join service of a notice, this did not mean that it was not possible to terminate the licence under the terms of the termination clause. The court felt that there was no justification for it to construe ‘licence ower’ as referring to all licence owers other than those who were also licensee.
This decision has implications for those drafting licences where an individual or party is both a licence ower and licensee. If the intention is that it will be possible for a single licence ower or licensee to validly serve a notice then it is important that this be made expressly clear when the licence is agreed.
