Court allows partial rectification of wind farm contract while affirming option exercisable only in 2042.

THE COURT OF APPEAL

Neutral Citation Number: [2018] IECA 252

Record No. 2016/205

Peart J.

Hogan J.

Whelan J.

BETWEEN/

KNOCKACUMMER WIND FARM LIMITED

PLAINTIFF /

RESPONDENT

- AND -

DENIS CREMINS AND SHEILA CREMINS

DEFENDANTS /

APPELLANTS

JUDGMENT of Mr. Justice Gerard Hogan delivered on the 30th day of July 2018

1. This appeal from the decision of the High Court (Haughton J.) raises complex questions relating to the construction of a settlement

agreement and the court’s power of rectification. In a comprehensive judgment delivered on the 19th February 2016 Haughton J. held

for the plaintiff on the construction of the agreement, ruling that a particular option conferred on the parties by that agreement was

not operable until the year 2042: see Knockacummer Wind Farm Ltd. v. Cremins [2016] IEHC 95. The defendants (or, perhaps, more

strictly, the first defendant) has now appealed to this Court against that decision.

2. I should say at the outset that this judgment deals only with the issues of contractual construction and rectification. So far as the

other issues arising in this appeal are concerned, I agree with the judgment which Peart J. has just delivered. I also agree with the

judgment which Whelan J. will shortly deliver regarding the construction of s. 82(1)(b) of the Land and Conveyancing Law Reform Act

2009 (“the 2009 Act”) and the findings concerning Ms. O’Connell, but I regret that I cannot agree with her conclusions regarding the

interpretation of the contract and the rectification issue.

The background to the proceedings

3. As the title of the plaintiff (“Knockacummer”) implies, it operates a renewable energy business, including Knockacummer Wind Farm

in Co. Cork. The wind farm itself is situated on some 375 acres which were previously owned by the defendants in circumstances I

shall now proceed to describe. Purely for reasons of convenience I propose to refer to the lands which are at the heart of the dispute

as the Cremins lands.

4. At some stage in late 2002 or early 2003 these lands were identified as being suitable for the development of a wind farm.

Knockacummer’s predecessors, SWS Energy Ltd. and SWS Knockacummer Wind Farm Ltd. (collectively “SWS”), entered into a joint

venture agreement with the defendants in 2003 to develop the wind farm. Planning permission was obtained for this purpose in 2005.

The permission is for a period of twenty years from the date of commissioning of the turbines. As commissioning occurred in December

2014, this planning permission is due to expire in 2034. The wind farm consists of 29 turbines in total, 9 of which are located on the

Cremins lands.

5. It is accepted that since 2003 the relationship between the plaintiff and its predecessors and the first named defendant (“Mr.

Cremins”) has become acrimonious. Matters first came to a head in May 2009, when Mr. Cremins instituted two sets of proceedings:

in the first he sought an equity stake in the wind farm and in the second injunction proceedings brought under s.160 of the Planning

and Development Act 2000 he sought certain orders restraining the operation of the windfarm on the ground that it was operating in

breach of its planning permission.

6. Both sets of proceedings were compromised by written agreement dated the 25th November 2009 (“the 2009 Settlement

Agreement”). Pursuant to the 2009 Settlement Agreement, the defendants agreed to execute leases in favour of SWS in respect of

the Cremins lands. In return SWS agreed to pay to the defendants an annual rent in the amount of €200,000. The defendants also

warranted that they had all the necessary consents to grant the leases and that there was nothing prohibiting them from doing so.

They also agreed that they would not do, or permit, anything which could cause damage to or interfere with the development or the

operation of the wind farm. Each of the parties furthermore agreed with the other that they should mutually “act in good faith in

carrying out and performing the terms of this agreement”.

7. Following the execution of the leases the defendants were asked to furnish evidence that their mortgagee, Bank of Scotland

(Ireland) Ltd. (“B.O.S.I.”) had given appropriate consent for this purpose. When the defendants approached B.O.S.I., it appears that

they were told that the bank’s consent was conditional on the defendants assigning to it the rental payments under the leases. It

appears that the Cremins were unwilling to do this.

8. SWS then initiated proceedings in the High Court in July 2011 seeking to compel the defendants to perform the 2009 settlement

agreement and, specifically, to secure the B.O.S.I. consent. A trial date was fixed for the 13th December 2011, and the parties

agreed to separate the issue of liability and damages. The liability issue was opened to the Court on that day, and, in the afternoon,

a partial settlement was reached with the result that Dunne J. made an order by consent requiring the Cremins:

“by immediate execution and return of the facility letters … and the immediate execution and return of the assignment in

respect of the rent due under the said leases to B.O.S.I. and to otherwise take all steps and do all things necessary to

procure said consent”.

9. The defendants provided the B.O.S.I. consent on the 11th May 2012. The trial of the remaining issues between the parties

commenced on the 15th May 2012, and ran for five days. On the fifth day of the hearing the parties entered into a settlement

agreement dated the 22nd May 2012 which provided, inter alia, for the payment of €6m. to the defendants for the sale of the lands

to SWS:

“subject to: (a) a buy-back option after thirty years in favour of the defendants for €1.00 and (b) (should the defendants

exercise such buy-back option) an option in favour of SWS for a twenty-five year lease of the lands” (“the option

agreement”).

10. The parties had agreed that the option agreement was itself to be formalised by way of a written agreement. The option

agreement was executed in June 2012 and it became effective on the 31st August 2012, being the date of completion of the sale of

the lands by the Cremins to SWS. It is necessary to draw attention to this date at this juncture, because it has a significance to

which I will later refer.

11. The delay in completion was occasioned by title issues involving Mr. Cremins’ brother, Mr. Patrick Cremins. This in turn

necessitated the issue of proceedings by SWS against Mr. Patrick Cremins, but these were resolved on the 8th August 2012, when

Patrick Cremins confirmed that he had no right, title, estate or interest in the Cremins lands.

12. To anticipate somewhat, the present dispute relates to the construction of the option agreement. Specifically, are the Cremins

entitled to exercise the option to purchase at any stage after the commencement of the provision? Or may the option be exercised

only at certain relevant dates in 2042 (i.e., 30 years after the commencement of the agreement)?

13. This issue arose relatively shortly after the execution of and the later commencement of the agreement. By notice in writing

dated the 14th March 2013 the solicitors on behalf of Mr. Cremins, O’Connell & Clarke, purported to exercise the defendants’ option to

buy-back the Cremins lands pursuant to clause 2 of the option agreement. Haughton J. summarised what happened next thus:

“This notice was served on the plaintiff at its registered office in Cork and was stamped as being received on 19th March

2013. As it was served by post, pursuant to clause 11.5.2 of the option agreement, if it was a valid purchase option

notice it was [then] deemed to have been given “two business days after same shall have been posted”, and accordingly

was deemed to have been served on 16th March 2013. If the purchase option notice was valid, then under clause 5.3.2.

the plaintiff had fourteen days from 16th March 2013, in which to serve a lease option notice seeking to exercise the

lease option - to take a twenty-five year leases of the lands, commencing in 2042. By letter/notice in writing dated 27th

March 2013, addressed to the defendants at “Meeganarie, Knocknagoshel, Co. Kerry” the plaintiff purported to exercise

the lease option. It is not disputed that on the afternoon of 27th March 2013 the envelope containing that notice was

hand delivered by Mr. Ulick Devane to the defendants’ son, Michael Cremins, then fifteen years of age, but it is disputed

whether this occurred on the public road close to the defendants’ dwelling house, or somewhat further away in the

neighbouring farm yard of Mr. Patrick Cremins. In either event the defendants assert that the service was not good in

law, and that Michael Cremins mislaid the envelope and it never reached them. In addition to hand delivery, on 28th

March, 2013, Messrs. A & L Goodbody solicitors acting on behalf of the plaintiff sent by email and enclosed a copy of the

lease option notice to O’Connell & Clarke solicitors for the defendants, with a covering letter stating “We enclose a copy

of the lease option notice served by hand on your client yesterday.”

14. The defendants have since claimed that the lease option notice was not properly served on the defendants and that it is,

accordingly, invalid. The plaintiff has brought these proceedings to determine that issue and related issues concerning the proper

construction of the option agreement.

15. As I have already indicated, the plaintiff maintains that the option agreement should be construed as only permitting the service

of the purchase notice in 2042. In the alternative, they seek rectification to bring it into conformity, they say, with the 2012

settlement agreement. The plaintiff also claims that the purchase notice served was not a proper exercise of the buy-back option

because it was sent on behalf of Mr. Cremins alone and not jointly on behalf of both defendants. As a further alternative the plaintiff

asserts that time was not of the essence of the exercise of the lease option. They also assert that the lease option notice was

served on the defendants in compliance with the option agreement, or, alternatively, that the delivery of a copy by email and post to

Messrs. O’Connell & Clarke should be deemed to be good service.

The construction of the option agreement

16. The first issue that arises is whether, or upon the true construction of the option agreement, the defendants had any entitlement

to exercise the purchase option prior to 2042. The general scheme of the option agreement envisaged that the defendants might

exercise the purchase option which would give rise to a contract for the sale back of the lands to the defendants for €1.00, and,

secondly, the exercise thereafter within fourteen days by the plaintiff of the lease option for twenty five years commencing in 2042,

should it elect to do so.

The provisions of the 2012 settlement agreement

17. It is next necessary to set out some of the relevant provisions of the 2012 settlement agreement.

18. Certain definitions are set out in clause 1.1 of the option agreement that are relevant in this context:

“Acceleration Notice- means a written notice served by SWS on Cremins requiring them to confirm in writing within 60

days whether they shall exercise their Purchase Option on the Purchase Option Date which Acceleration Notice may be

served by SWS on Cremins at any time following the date hereof..

Lease Option - means the option to be granted by Cremins to SWS to take a lease (or leases at the election of SWS) of

the Option Property which SWS may exercise in the manner set out in clause 5 hereof;

Lease Option Date - means the date upon which the Purchase Option has been exercised...

Purchase Option - means the option granted by SWS to Cremins to purchase SWS’ interest in the Option Property for the

Purchase Price on the Purchase Option Date which Cremins may exercise in the manner set out in Clause 2 hereof;

Purchase Option Date- the earlier of (i) [22 June] 2042 or (ii) in circumstances where SWS serves an Acceleration Notice,

the date which is 150 days after the date of service of the Acceleration Notice...”

19. The agreement then contains a footnote attached to the date in bold and square brackets in the definition of the purchase option

date. The footnote reads: ‘insert date which is 30 years from closing date of sale of land.” As the closing date was 31st August 2012,

it would seem that the date which was intended be inserted here was 31st August 2042. I propose to return to this question at a

later stage of the judgment.

20. Clause 2 of the agreement provided for the purchase option.

“2.1. Consideration for the Purchase Option

In consideration of the payment of the sum of €1.00 (one euro) by Cremins to SWS (the receipt whereof SWS hereby

acknowledges), SWS hereby grants to Cremins the Purchase Option on the Purchase Option Date.

2.2. Pre-Condition to completion/Lease Option

In the event that:-

(i) Cremins exercises the Purchase Option in accordance with the provisions of Clause 2.4 of this Agreement and

(ii) SWS exercises the Lease Option in accordance with the provisions of Clause 9 of this Agreement, Completion

shall be strictly subject to Cremins simultaneously granting and delivery of the executed Lease to SWS.

2.3. Lapse of Purchase Option

The Purchase Option can lapse (if not already exercised) on:-

(i) [23 April] 2042 or

(ii) In circumstances where Acceleration Notice has been served by SWS, the date which is 61 days after the date

of service of Acceleration Notice.”

21. There is another footnote beside the date in bold and square bracket which reads “insert date which is one day after the date

referenced in the definition of ‘purchase option date’. As the sale closed on the 31st August 2012, it would seem that this date was

intended to refer to 1st September 2042, i.e., thirty years and one day after that closing day. Again, I propose to return to this issue

later in the judgment.

22. Clause 2.4 then provides for the exercise of the purchase option.

“2.4 Exercise of the Purchase Option

2.4 SWS hereby grants to Cremins the option to purchase SWS’ interest in the Option Property for the Purchase Price on

the Purchase Option Date subject to compliance with the following conditions:-

2.4.1. The receipt by SWS not less than 90 days prior to the Purchase Option Date of written notice of intention to

purchase SWS' interest in the Option Property and the notice shall be effective and the Purchase Option shall be

deemed to be exercised at the time at which the notice is deemed to be delivered to SWS pursuant to Clause 11.4.

2.4.2. The notice, once served pursuant to Clause 2.4.1, shall be irrevocable without the written agreement of

SWS.”

23. Clause 2.5 goes on to provide that immediately upon exercise of the purchase option there will automatically arise between the

parties an agreement for SWS to sell and Cremins to purchase the lands, and clause 3 provides that the terms and conditions that are

to apply are those set out in the Second Schedule, which sets out the variations to apply to the General Conditions of Sale, 2009

edition published by the Law Society.

24. Clause 4 is headed “Completion”. Clause 4.1 provides:-

“4.1. Completion of the sale of the option property shall take place at the offices of SWS’ solicitors on the later of (i) the

purchase option date and (ii) in circumstances where the lease option has been exercised, 14 days after the lease has

been settled in accordance with Clause 6 below (or the next business day in the event that such day is not a business

day).”

25. Clause 4.5 provides that upon completion the option property: “... shall be sold and bought on an ‘as is’ basis and SWS shall give

no warranties as to the title, planning, condition or otherwise in respect of the Option Property save as set out in the Second

Schedule.”

26. Clause 5 then deals with the lease option and it is appropriate to set it out in full:-

“5.1 Consideration for the Lease Option

In consideration of the payment of the sum of €1 (one euro) by SWS to Cremins (the receipt whereof Cremins hereby

acknowledges), Cremins hereby grants to SWS the Lease Option on the Lease Option Date.

5.2. Lapse of the Option.

The Lease Option shall lapse (if not already exercised) on the date which is the earlier of (i) the day after the date of

Completion and (ii) the date of the lapse of the Purchase Option pursuant to Clause 2.3 above.

5.3. Exercise of the Option

Cremins hereby grants to SWS the option to take (or to nominate nominee/nominees to take) a lease (or leases at the

option of SWS or its nominee(s)) of the Option Property on the Lease Option Date subject to compliance with the

following conditions:-

5.3.1. the Lease Option shall not be exercisable until and unless the Purchase Option has been exercised;

5.3.2. the receipt by Cremins not more than 14 days after the Lease Option Date of written notice of intention to

take a lease (or leases at SWS’ option) of the Option Property and the notice shall be effective and the Lease

Option shall be deemed to be exercised at the time at which the notice is deemed to be delivered to Cremins

pursuant to clause 11.4; and

5.3.3.The notice, once served pursuant to clause 5.3.2, shall be irrevocable without the written agreement of

Cremins.

5.4. Binding Agreement

Immediately upon the exercise of the Lease Option there shall arise automatically between Cremins and SWS a binding

agreement for Cremins to grant and SWS to take a lease (or leases at SWS’ option) of the Option Property in the form of

the Lease and otherwise as set out in this Agreement.

27. It is next necessary to consider the terms of Clause 6, as these terms are central to the plaintiff’s arguments:

“6. TERMS OF THE LEASE

If SWS shall exercise the Lease Option then the following terms and conditions shall have effect:-

6.1. No later than 7 days after the exercise of its Lease Option, SWS shall procure that its solicitors furnish a draft

Lease to Cremins and each of SWS and Cremins covenant and undertake to adhere to the following timetables:-

6.1.1. Within 14 days of receipt of the draft Lease, Cremins shall procure that their solicitors shall reply to SWS’

solicitors setting out all of the amendments which Cremins requires to be made to the draft lease, and Cremins

hereby acknowledge and agree that should there be any failure to deliver a note of all of the required amendments

to SWS’ solicitors within such timeframe, Cremins shall be deemed to have accepted the draft lease as furnished

and shall be obliged to execute and deliver same to SWS on Completion

6.1.2. Within 7 days of receipt of Cremins’ solicitors’ comments on the drat Lease, SWS shall confirm in

writing which of Cremins’ amendments are acceptable and to the extent that any provisions of the lease

remain to be agreed between the parties, such dispute or difference shall be determined in accordance

with Clauses 6.3 or 6.3 below (as appropriate).

6.1.3. On the determination of any dispute or difference relative to the draft lease in accordance with

Clauses 6.3 or 6.4, SWS shall procure that the lease is engrossed for execution and Cremins and SWS

hereby agree to execute the lease in duplicate (and same shall be held in escrow by SWS’s solicitors to

be delivered on completion).

6.2. The terms of the lease shall mirror the commercial terms contained in the 2009 leases save

(i) that the rent payable thereunder shall be agreed between the parties (or in default of agreement

between the parties in accordance with the terms of Clause 6.3 below);

(ii) that the landlord termination clauses contained in the 2009 leases shall not be incorporated in the

lease; and

(iii) as may be required to be amended or updated to comply and accord with

(a) changes in relevant legislation,

(b) current landlord and tenant practice and

(c) market standard provisions for leases in the windfarm industry as at the date of the grant of

the lease.”

28. Clause 6.3 then provides that if there is a dispute as to quantum of “the market rent then payable for leases of lands upon which

wind turbines are …erected” it may be referred to an expert valuer for a final and binding determination to be issued within 30 days.

Clause 6.4 then provides that in relation to any other terms of the lease that may be disputed these may be referred to the

determination of an expert (or appointed by the President of the Law Society), which determination is to be made within 30 days and

is also to be final and binding.

29. It is finally necessary to refer to Clause 7 which is headed “Completion of Lease”. Clause 7.2 obliges the Cremins to deliver to

SWS such documentation as may be necessary to affect the grant of the lease and such other documentation “as shall be in

accordance with standard conveyance/landlord and tenant law custom and practice at that time.”

The construction of the settlement agreement: at what point can the purchase option be properly exercised?

30. In any consideration of the proper construction of the agreement, it must be accepted that it does not contain any express

provision addressing the date on which the purchase option may first be exercised. While with the benefit of hindsight one may agree

that it might have been better had the agreement expressly addressed this issue, we must nonetheless take the agreement as we

find it and construe it objectively according to its own terms, employing for this purpose standard principles of construction.

31. There is, accordingly, no express provision which would have prevented Mr. and Mrs. Cremins exercising the purchase option at

any point between September 2012 and certain relevant dates in 2042. (As I have already indicated, I will address presently what

those dates in 2042 might be). It follows, therefore, that the defendants were, in principle, at least entitled to serve the purchase

notice in March 2013 unless the agreement contains an implied prohibition preventing the exercise of that right prior to that date.

32. The argument of the Kockacummer is to urge the application of the principle of noscitur a sociiis (“a word is known by its

companions”) to the construction of the contract. It contends that what are the general words of clause 2.4 dealing with the

purchase option must be read in the light of the context of the rest of the agreement. Specifically, it maintains that the specific

provisions contained in clause 6 negative what might otherwise be regarded as the natural meaning of these general words. The

argument here, in effect, is that the provision of clause 6 serve to create an implied prohibition in relation to the date on which the

purchase option might be exercised where none is expressly found in clause 2 or, indeed, elsewhere in the agreement.

33. The principle of noscitur a sociis is, of course, a well recognised method of construction of any document, whether it be a statute

or a contract. It really is no more than an application in the context of a written contract of the general principle that the document

must be read as whole. This approach was well expressed by Black J. in The People (Attorney General) v. Kennedy [1946] I.R. 517,

536, albeit admittedly in the context of a statute:

“A small section of a picture, if looked at close-up, may indicate something quite clearly; but when one stands back and

views the whole canvas, the close-up view of the small section is often found to have given a wholly wrong view of what

it really represented.

If one could pick out a single word or phrase and, finding it perfectly clear in itself, refuse to check its apparent meaning

in the light thrown upon it by the context or by other provisions, the result would be to render the principle of ejusdem

generis and noscitur a sociis utterly meaningless: for this principle requires frequently that a word or phrase or even a

whole provision which, standing alone, has a clear meaning, must be given a quite different meaning when viewed in the

light of its context.”

34. While the underlying legal issues presented in Kennedy - involving as they did the jurisdiction of the Supreme Court to hear a

criminal appeal – are quite remote from the facts of the present case, the principles of interpretation illustrated by that decision are

not. In fact, Kennedy illustrates perfectly the contention urged by the plaintiff in the present appeal in that it provides an apt

example of where the general - and “perfectly clear” - words of one part of a document (i.e., in this instance, the general words of

clause 2) are cut down by what Black J. described as the process of checking those words with reference to the context of other

parts of the document.

35. In Kennedy a majority of the Supreme Court concluded following a review of the provisions of the Courts of Justice Act 1924 that

the general words “may appeal” a decision of the Court of Criminal Appeal to the Supreme Court did not include an appeal taken by

the Attorney General on behalf of the prosecution. (This decision was delivered long before the establishment of the office of Director

of Public Prosecutions). While the Court agreed that the bare words of s. 29 of the 1924 Act were broad enough to include such an

appeal, a consideration of the overall structure and context of the rest of that Act negatived this general construction. Thus, for

example, the fact that s. 29 permitted the Attorney General to grant a certificate of leave to appeal in addition to the power which

had also been granted for this purpose to the Court of Criminal Appeal was itself inconsistent with the contention that the right of

appeal extended to the Attorney General in his or her own right qua prosecutor. As Murnaghan J. observed ([1946] I.R. 517, 530):

“It would… be a curious practice if the Attorney General could apply to the Court of Criminal Appeal and then, possibly,

being refused, could himself grant a certificate in order to appeal against an order of acquittal.”

36. In essence, therefore, the principle of construction upon which the plaintiff has relied is that the (apparent) meaning of the

general words of one part of a document cannot prevail if such an interpretation is would either be incongruous or inconsistent with

the remainder of the document when read as a whole. Applying the words of Black J. in Kennedy, it might seem “perfectly clear” from

a perusal of the general words of the agreement that it contains no specific date regarding the exercise of the commencement

option, but this apparent meaning must be “checked” by reference to “the light thrown upon it by the context or by other provisions”

of the agreement and, specifically, by reference to the detailed provisions of clause 6.

37. In his judgment Haughton J. concluded following a close review of the provisions of clause 6 in particular that the entire context

of the agreement presupposed that the purchase option could only be exercised in 2042.

38. For my part, I can only agree with this reasoning and analysis. Clause 6.1 requires the delivery of a draft lease 7 days after the

exercise of the lease option, which in turn has to be exercised 14 days after the purchase option (clause 5.3.2). Clause 6.2 expressly

envisages that the terms of the lease, while mirroring in commercial terms those contained in the 2009 leases, were:

“... required to be amended or updated to comply and accord with:

(a) changes in relevant legislation

(b) current landlord and tenant practice and

(c) market standard provisions for leases in the windfarm industry as at the date of the grant of the lease.”

39. Clause 6(2)(c) is, I think, a critical provision because there is no doubt at all but that if there was to be a new lease, it could

take effect only in 2042 after the lands had been sold back to the Cremins (assuming the purchase option were exercised). The terms

of the lease would accordingly have to contain market standard provisions for leases in the windfarm industry as of that date.

40. The very existence of this clause, however, presupposes that the purchase option could be exercised only in 2042. The

interaction of clause 6.1 and clause 5.3.2 is such that a new draft lease would have to be prepared within 21 days of the notification

of the purchase notice. These provisions further presuppose that the drafter of the lease would be sufficiently familiar with the

standard clauses in windfarm leases as they may exist in 2042 such that the lease could be readily and quickly drafted.

41. There is no doubt, however, that the preparation now of such clauses to be included in a draft lease would present even the

most skilled and experienced commercial conveyancer and drafter with insuperable difficulties, irrespective of whether the drafter was

presented with that challenge in 2013, 2018 or even 2033. As Haughton J. observed

“No one could possibly anticipate what changes may take place in landlord and tenant legislation between this and 2042.

What may be “market standard provisions” for wind farm leases now are likely to change over time.”

42. This conclusion is also underscored by the provisions of clause 6.4 for the resolution of disputes in relation to ‘other’ terms. This

exercise would require consideration by the appointed “expert” of changes in relevant legislation, current landlord and tenant practice

and market standard provision for leases in the windfarm industry “as at the date of the grant of the lease”, as stipulated in clause

6.2. As Haughton J. put it pithily:

“It would be impossible for this provision to operate prior to 2042, yet the expert is expected to give a determination

within 30 days of appointment.”

43. One might also observe that clause 6.3 makes it clear that the rent in the new lease is to “... equate to the market rent then

payable for leases of lands upon which turbines are to be erected by the lessee...” (emphasis supplied). It then provides for a

mechanism for this to be determined in the event of a dispute by a valuer appointed by the President of the Society of Chartered

Surveyors Ireland. The words “then payable” can only refer to 2042, because the lease cannot be concluded and granted until 2042

once the Cremins lands have been conveyed to the defendants and clause 2.2 expressly stipulates a condition requiring simultaneous

completion and exchange of the purchase and the lease-back. As Haughton J. observed:

“clearly the market trend could not be established until 2042, or close proximity to 2042, and the dispute mechanism

envisaged in clause 6.3 could not be invoked until 2042.”

44. All of these provisions rest on the assumption that the drafter and the expert and valuer (as the case may be) will be discharging

their respective functions in 2042. No valuer could begin even to hazard an opinion as to what rental values for such wind farms might

be in 2042 and any person who was foolish enough to venture such a prediction – whether in 2013 or in 2018 or even in 2033 – would

quickly lose their status as an expert.

45. The present case is accordingly almost a paradigm example of where the principle of noscitur a sociis comes into play. There is,

admittedly, no express prohibition in the agreement on the exercise of the purchase option prior to 2042. Yet as it is clear that the

detailed provisions of clause 6 – referring as they do to standard clauses in windfarm leases in 2042 and the market rent for such

leases in 2042 - are only operable in the year 2042, it necessarily follows that these provisions serve to create an implied prohibition

on the exercise of this right to exercise the purchase option prior to 2042.

46. One can equally arrive at the same result through the application of the principle of generalia specialibus non derogant: the

principle that the general words of an agreement are not to derogate from the special provisions of a particular clause. As Henchy J.

said of this principle of interpretation in Welch v. Bowmaker (Ire.) Ltd. [1980] I.R. 251, 255:

“In plain English, when you find a particular situation dealt with in special terms, and later in the same document you find

general words used which could be said to encompass and deal differently with that particular situation, the general

words will not, in the absence of an indication of a definite intention to do so, be held to undermine or abrogate the

effect of the special words which were used to deal with the particular situation. This is but a commonsense way of

giving effect to the true or the primary intention of the draftsman, for the general words will usually have been used in

inadvertence of the fact that the particular situation has already been dealt with.”

47. In the present context, the details of clause 6 really amount to the special provisions of the agreement in this sense, dealing as

they do with the mechanics of the grant of the lease consequent upon the exercise of the purchase option. Accordingly, the general

provisions of the rest of the agreement cannot properly be interpreted such as to derogate from these special provisions of clause 6,

even if, in Henchy J.’s words, read literally, “they encompass and deal differently with that particular situation” by not expressly

prohibiting the exercise of the purchase option prior to 2042. The plain fact of the matter is that this question is by implication

addressed in clause 6 and, as I have already indicated, that clause must be interpreted as impliedly precluding the exercise of the

purchase option prior to 2042 as these provisions would otherwise be rendered unworkable and inconsistent with the rest of the

agreement.

48. These conclusions are also re-inforced by a consideration of the provisions relating to the triggering of an acceleration notice in

the agreement by Knockacummer. Clause 1 of the agreement expressly permits the service by the plaintiff of an acceleration notice

at anytime such as would enable it to exit the option agreement early. As Haughton J. explained:

“The plaintiff might plausibly wish to use this exit provision for any number of reasons. For example, the 2005 planning

permission provides that it will expire 20 years from date of commissioning. As the commissioning of the wind farm

occurred in December, 2014, the planning permission is due to expire in 2034. Depending on the circumstances, such as

profitability or capital cost, the plaintiff might decide not to seek to renew it. Alternatively the plaintiff might be refused

permission, or it might obtain a permission with conditions that were too onerous. In such circumstances the plaintiff

could, if it wished, serve an Acceleration Notice requiring the defendants to confirm in writing within 60 days whether

they “shall exercise their purchase option on the purchase option date”. If the defendants indicated that they intended to

exercise their purchase option, then the purchase option date became “150 days after the date of service of the

acceleration notice”. In other words the option agreement envisaged that, without cause shown, the plaintiff could at

any time bring forward a 90 day (or slightly longer) period during which the defendants could exercise the purchase

option.”

49. Of course, it should be observed that the plaintiff only may exercise the purchase option and as Haughton J. observed:

“Two points may be made in relation to this: firstly it is consistent with the plaintiff’s contention that the purchase option

was not to be exercised until 2042 unless [an] acceleration notice was served earlier by the plaintiff. Secondly, there

was no similar provision expressly conferring on the defendants the right to exercise the purchase option prior to 2042.

The option agreement therefore envisaged the plaintiff alone having the power to accelerate the date of exercise of the

options.”

50. All of this is to say that if it had been intended that the Cremins could exercise the purchase option prior to 2042, it is curious

that the agreement did not expressly so provide given that the provisions in relation to an acceleration notice are in such explicit

terms. If, moreover, it had been intended that the purchase option could have been exercised by the defendants at any time prior to

2042, why did the drafters consider it necessary to specify that the plaintiff could serve an acceleration notice “at any time” after

the execution of the agreement? The structure and content of the provisions in relation to the service of an acceleration notice lend

further support to the contention that the agreement provides for an implied prohibition on the exercise by the defendants of the

purchase option prior to 2042.

51. For all of these reasons, therefore, I find myself in agreement with the conclusions of Haughton J. regarding the construction of

the agreement. I consider, therefore, that the option to purchase could only properly be exercised on the relevant dates in 2042.

Whether the agreement should be rectified

52. I turn now to a consideration of what these relevant dates in 2042 actually are. The Court has been invited by Knockacummer for

this purpose to rectify the agreement. Rectification may be defined as “a discretionary equitable remedy which allows for the

correction of an instrument which has failed to record the actual intentions of the parties to a contract”: see Delany, Equity and the

Law of Trusts in Ireland (Dublin, 2016)(6th. ed.) at 762. Rectification does not involve the re-organisation of the contract, but rather

the correction of the wording of the contract. As Griffin J. put it in Irish Life Assurance Co. Ltd. v. Dublin Land Securities Ltd. [1989]

I.R. 253, 260: “…rectification is concerned with defects in the recording, not in the making, of an agreement.”

53. The two dates of the 22nd June 2042 and the 23rd April 2042 - which are contained in square brackets in clause 1 and clause 2.3

respectively - are prime candidates for rectification. It is clear from the footnotes which attend these dates that the parties clearly

intended dates based or referable to the actual closing date of the original purchase by Knockacummer of the Cremins lands. It will be

recalled that the parties originally envisaged a June 2012 closing date, but this was delayed by reason of the events I have earlier

described to the 31st August 2012.

54. In the High Court Haughton J. appeared to think that it was not necessary for him to address this issue, presumably because he

found for Knockacummer on other grounds. For my part, I would differ slightly from the views of the High Court on this point because I

consider that without an order for rectification the provisions of the agreement are still potentially confusing and are apt to cause

difficulties in the longer term. More fundamentally, it is plain that as the two footnotes clearly indicate, the dates in square brackets

in the agreement simply do not reflect the intentions of the parties. Just as importantly, the dates which were in fact intended by the

parties can be readily determined by reference to these two footnotes.

55. I will therefore direct the rectification of the date contained in the definition of the purchase option date in clause 1 of the

agreement from the 22nd June 2042 to the 31st August 2042, i.e., the date which is thirty years after the closing date of the sale of

the lands. I will similarly direct the rectification of the date for the lapse of the purchase option (if not already exercised) contained in

clause 2.3.i from the 23rd April 2042 to the 1st September 2042, i.e., one day after the purchase option date which itself is thirty

years after the closing date for the original sale of the property on the 31st August 2042. If the agreement is rectified in this manner,

then the potential discrepancies in relation to both the purchase option date, the date on which this option will otherwise lapse and

the ninety day notice requirement which were all identified by Haughton J. in his judgment simply disappear.

56. There is, moreover, another intensely practical reason for the making of a rectification order. Rather unusually, the present

contract concerns a contract which is to be performed in twenty-four years time. It is best that there be absolute certainty as to

what the contract actually provides and that should this be done unequivocally through a formal court order, rather than one resting

simply on the interpretation of a much earlier court judgment delivered in July 2018 when by that stage in 2042 memories concerning

this litigation will inevitably have dimmed and when the all personnel associated therewith – whether they be legal professionals,

registrars, judges – will inevitably either have moved on or may well be deceased.

Conclusions

57. In summary, therefore, I have come to the following principal conclusions:

58. First, the 2012 agreement contains what amounts to an omission in that it does not in terms address the question of when the

purchase option may be exercised. In these circumstances the task of the court is to seek to give the agreement an objective

interpretation and to construe it as a whole, employing for this purpose standard principles of construction.

59. Second, while the 2012 agreement contains no express prohibition on the exercise of the purchase option by the defendants prior

to 2042, this is nevertheless implied by the provisions of clause 6 and, in part, clause 6.2.3 and clause 6.3. Any other conclusion

would render these special provisions inoperable, since they pre-suppose a knowledge of both market practice and prevailing rents for

windfarm leases as they will obtain in 2042. This implies that the purchase option (and the corresponding lease back option) cannot

be exercised by the defendants prior to that date.

60. Third, the only exception to this is where the plaintiff exercises its right to issue an acceleration notice prior to that date and

then only by reason of an express provision which permits it do it at any time prior to 2042. The very fact that the plaintiff has been

given such an express right and no such right is given to the defendant with regard to the purchase option re-inforces the conclusion

that the defendant may only exercise the purchase option in 2042.

61. Fourth, I would, however, vary the order of Haughton J. and grant an order of rectification in respect of clause 1 from the 22nd

June 2042 to the 31st August 2042. I will similarly direct the rectification of the date for the lapse of the purchase option (if not

already exercised) contained in clause 2.3.i from the 23rd April 2042 to the 1st September 2042. If the agreement is rectified in this

manner, then the potential discrepancies in relation to both the purchase option date, the date on which this option will otherwise

lapse and the ninety day notice requirement identified by Haughton J. in his judgment simply disappear.

62. Subject to this variation, I would otherwise affirm the decision of the High Court in respect of the construction of the agreement.

As I have already indicated, so far as the other issues arising in this appeal are concerned, I agree with the judgment which Peart J.

has just delivered. I also agree with the judgment which Whelan J. will shortly deliver regarding the construction of s. 82(1)(b) of the

2009 Act and the findings concerning Ms. O’Connell, but I regret that I cannot agree with her conclusions regarding the interpretation

of the contract and the rectification issue.