CA-2024-002472 - [2025] EWCA Civ 1407

Mr Riley submitted that, irrespective of whether URE actually knew or should be taken to know its express contractual rights, the judge was wrong to find that it did not have such knowledge through an ‘obviously available’ means, that is to say by looking at the terms of the contract and/or seeking legal advice. He relied on Lord Justice Rix’s reference to knowledge being ‘obviously available’ in Kosmar Villa Holidays Plc v Trustees of Syndicate 1243 [2008] EWCA Civ 147, [2008] Bus LR 931. After referring to the judgment of Mr Justice Mance in Insurance Corpn of the Channel Islands v Royal Hotel Ltd [1998] Lloyd’s Rep IR 151, 162-3, Lord Justice Rix continued (emphasis added):

‘74. That was said in a case concerned with an established area of true election, the affirmation of an insurance contract which an insurer is entitled to avoid for non-disclosure. I take this analysis as relating to what in that context needs to be objectively available to the non-electing party. I do not think that it is saying that in cases of election the party with the choice will be bound by sufficiently clear appearances even in the absence of any informed choice. That is a potentially difficult subject: on the whole it is necessary for the election to be exercised and to be exercised with sufficient knowledge. It is only in the case of estoppel that the representee is entitled to rely on an apparent promise or choice conveyed by the representation irrespective of the actual knowledge and decision of the party with the choice: see Chitty on Contracts, 29^th ed, 2004, Vol I at para 24-008. However, there will be some circumstances where, even in the absence of an actual election, the party with the choice created by relevant knowledge, actual or obviously available, will be regarded as having exercised it after a reasonable time has passed: see Lord Goff in The Kanchenjunga at 398 LHC, and Clough v. L & N W Ry (1871) LR 7 Ex 26 at 34/35. This is, I think, part of the rationale of a doctrine which seeks to give a pragmatic response to parties in contractual relations who need to know where they stand. …’

I do not think that the words ‘obviously available’ provide any support for the submission that something less than actual or ‘blind eye’ knowledge will suffice. They refer more naturally to ‘blind eye’ knowledge, where a party deliberately chooses not to discover something which is obviously available to it. In the present case the judge rejected NHG’s case that Mr Ensor had ‘blind eye’ knowledge of URE’s contractual right to terminate the contract in the event of an amalgamation.

In fact, on the judge’s findings, Mr Ensor had no reason to investigate whether the amalgamation of Notting Hill and Genesis gave URE any right to terminate the contract until the parties’ relationship deteriorated in October and early November 2018. At the time when the amalgamation occurred, Mr Ensor did not in fact know that it gave URE any right to terminate and, as he was quite content to deal with the amalgamated entity, would have had no reason to scrutinise the contract or ask for legal advice about it to find out whether URE had any such right. That meant that, unknown to Mr Ensor, there was a risk that URE’s continued performance would give rise to an estoppel, if there was detrimental reliance by NHG, but means that there could be no election by URE as it did not have the necessary knowledge of its rights.

I would therefore reject ground 1(c).