Lymington Marina Ltd v MacNamara & Ors [2006] EWHC 704 (Ch) (04 April 2006)

Lymington Marina Ltd v MacNamara & Ors [2006] EWHC 704 (Ch) (04 April 2006)

Clause 3(k)(ii) of the licence agreement does not prohibit the grant of successive sub-licences, provided each sub-licence is for a period of not less than one month and not more than twelve months and the sub-licensee is approved by LML. LML's discretion to withhold consent is not absolute and must be exercised in good faith, not arbitrarily or for collateral purposes. The refusal of consent in this case was not justified by the terms of the licence agreement.

Citation
[2006] EWHC 704 (Ch)
Parties
Claimant: Lymington Marina Limited; First Defendant: Bingham Macnamara; Second Defendant: John Macnamara; Third Defendant: Rory Macnamara
Jurisdiction
England and Wales
Judgment Date
04 April 2006
Procedural Posture
Chancery Division Contractual Dispute / Judgment After Trial
Outcome
Claim dismissed
Legal Topics
Construction of Licence Agreements, Sub Licensing Rights, Discretion to Withhold Consent, Assignment of Contractual Rights
Contract Law Property Law Construction of Licence Agreements Sub Licensing Rights Discretion to Withhold Consent Assignment of Contractual Rights

Case Brief

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Parties

Lymington Marina Limited

Claimant

Bingham Macnamara

First Defendant

John Macnamara

Second Defendant

Rory Macnamara

Third Defendant

Procedural Posture

Chancery Division Contractual Dispute / Judgment After Trial

Legal Issues

  1. 1 Whether the claimant (LML) was entitled to refuse consent to the grant of successive sub-licences under the marina licence agreement.
  2. 2 Proper construction of clause 3(k)(ii) of the licence agreement regarding sub-licensing rights.
  3. 3 Scope of LML's discretion to withhold consent to sub-licensing.

Ratio Decidendi

Clause 3(k)(ii) of the licence agreement does not prohibit the grant of successive sub-licences, provided each sub-licence is for a period of not less than one month and not more than twelve months and the sub-licensee is approved by LML. LML's discretion to withhold consent is not absolute and must be exercised in good faith, not arbitrarily or for collateral purposes. The refusal of consent in this case was not justified by the terms of the licence agreement.

Court Disposition

Claim dismissed

Orders

  • LML's refusal to consent to the sub-licences was not justified and is set aside.
  • LML is required to consider future applications for sub-licences in accordance with the proper construction of the licence agreement and the principles set out in the judgment.