Importance of Rock v. MWB [2018] UKSC 24 as Explained by Lord Sumption

Michael Trim

Wednesday 7 August 2019

“

Why is

Rock v MWB

[2018] UKSC 24 at [1] and [14] per

Lord Sumption important

”

So why is MWB important? (1)

•

MWB operated serviced offices.

•

Rock Advertising took out a licence for 12 months.

•

After about 6 months Rock was about 4 months in

arrears.

So why is MWB important? (2)

•

Allegation that variation agreed on the phone.

•

That was disputed. The “boss” of the person who agreed

it rejected what was discussed by phone.

•

MWB locked Rock out and sued for arrears.

•

Rock claimed it could not because the contract had been

varied by the discussion.

So why is MWB important? (3)

•

At first instance, Judge Moloney QC found that there had

been an oral agreement to vary and that the agent on

the phone had ostensible authority to make it.

•

But – it was found to be ineffective because it was not in

writing, as was required by clause 7.6 of the contract.

So why is MWB important? (4)

•

Clause 7.6 provided that:

“

This License sets out all of the terms as agreed between

MWB and Licensee. No other representations or terms

shall apply or form part of this Licence. All variations to this

Licence must be agreed, set out in writing and signed on

behalf of both parties before they take effect

”

So why is MWB important? (5)

•

The Court of Appeal overturned the decision and stated

that the oral agreement amounted to an agreement to

dispense with clause 7.6.

•

The Court of Appeal found that MWB were therefore

bound by the variation and could not claim the arrears at

the time.

So why is MWB important? (6)

•

The Supreme Court allowed the appeal and restored the

original decision.

•

Lord Sumption, with whom Lady Hale, Lord Wilson and

Lord Lloyd-Jones agreed, stated:

“

In my opinion the law should and does give effect to a

contractual provision requiring specified formalities to be

observed for a variation

”

So why is MWB important? (7)

•

The decision analyses the previous Australian authorities

and other international decisions.

•

It also analyses the previous English position, which was

said to have been equivocal.

•

Paragraph 12 contains a powerful analysis of why such

clauses should be upheld.

So why is MWB important? (8)

•

Paragraph 13 contains a strong rejection of the reasons

to the contrary.

•

Paragraph 14 makes it plain the reasoning ought apply

equally to entire agreement clauses that regulate pre-

contractual representations.

So why is MWB important? (9)

•

Relax – I am nearly finished (last slide!).

•

How does this sit with Australian law?

•

What effect is it likely to have?

•

Submit that renewed support for such clauses is likely

and consideration of the issue at the highest level seems

warranted given the conflicting positions.

Michael Trim

T +61 7 3008 3920

MICHAEL.TRIM@QLDBAR.ASN.AU

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The case of Rock v. MWB [2018] UKSC 24 holds significant importance due to the ruling by Lord Sumption and the Supreme Court's decision regarding contract variations. It revolved around a dispute between MWB, a serviced office provider, and Rock Advertising over alleged contractual variations made orally. The case highlighted the necessity of adhering to formalities outlined in a contract for any variations to be valid. Ultimately, the court upheld the contractual provision requiring specified formalities for variations, setting a legal precedent.

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Presentation Transcript

Why is Rock v MWB [2018] UKSC 24 at [1] and [14] per Lord Sumption important? Michael Trim Wednesday 7 August 2019 Liability limited by a Scheme approved under professional standards legislation

>> So why is MWB important? (1) MWB operated serviced offices. Rock Advertising took out a licence for 12 months. After about 6 months Rock was about 4 months in arrears.

>> So why is MWB important? (2) Allegation that variation agreed on the phone. That was disputed. The boss of the person who agreed it rejected what was discussed by phone. MWB locked Rock out and sued for arrears. Rock claimed it could not because the contract had been varied by the discussion.

>> So why is MWB important? (3) At first instance, Judge Moloney QC found that there had been an oral agreement to vary and that the agent on the phone had ostensible authority to make it. But it was found to be ineffective because it was not in writing, as was required by clause 7.6 of the contract.

>> So why is MWB important? (4) Clause 7.6 provided that: This License sets out all of the terms as agreed between MWB and Licensee. No other representations or terms shall apply or form part of this Licence. All variations to this Licence must be agreed, set out in writing and signed on behalf of both parties before they take effect

>> So why is MWB important? (5) The Court of Appeal overturned the decision and stated that the oral agreement amounted to an agreement to dispense with clause 7.6. The Court of Appeal found that MWB were therefore bound by the variation and could not claim the arrears at the time.

>> So why is MWB important? (6) The Supreme Court allowed the appeal and restored the original decision. Lord Sumption, with whom Lady Hale, Lord Wilson and Lord Lloyd-Jones agreed, stated: In my opinion the law should and does give effect to a contractual provision requiring specified formalities to be observed for a variation

>> So why is MWB important? (7) The decision analyses the previous Australian authorities and other international decisions. It also analyses the previous English position, which was said to have been equivocal. Paragraph 12 contains a powerful analysis of why such clauses should be upheld.

>> So why is MWB important? (8) Paragraph 13 contains a strong rejection of the reasons to the contrary. Paragraph 14 makes it plain the reasoning ought apply equally to entire agreement clauses that regulate pre- contractual representations.

>> So why is MWB important? (9) Relax I am nearly finished (last slide!). How does this sit with Australian law? What effect is it likely to have? Submit that renewed support for such clauses is likely and consideration of the issue at the highest level seems warranted given the conflicting positions.