Case Law and Precedent in Property Construction
Domain 5 - Case Law and Precedent in Property Construction
This domain tests how you use authority: identifying the ratio, separating obiter, applying hierarchy, and explaining why a later case changes the construction of a deed or statute.
Stare decisis and ratio
A court is bound by the ratio decidendi of a superior court in the same hierarchy. The ratio is the legal rule necessary to the decision on the material facts, not every remark in the judgment. Obiter dicta are persuasive but not binding. A later court may distinguish a case where the material facts differ, overrule it where it is wrong, or reverse it on appeal. Per incuriam decisions lose authority where the court overlooked a relevant statute or binding authority.
Construction authorities
The modern line is useful: Investors Compensation Scheme v West Bromwich Building Society established contextual construction, including the factual matrix and commercial common sense. Chartbrook v Persimmon allowed correction of a clear drafting mistake, but Arnold v Britton warned against rewriting a bad bargain in the name of commercial sense. Wood v Capita requires an iterative check of rival meanings against the whole instrument. These are not a licence to ignore words; they are a sequence for testing meaning.
Worked example
A lease provides for a 99-year term with rent doubling every 10 years. The tenant argues that an apparently harsh review clause should be read down because it produces an uncommercial result. A court applying Arnold v Britton will enforce the clear words unless there is a clear mistake. Chartbrook is distinguishable because there the words, read against the background, could only have borne one corrected meaning. The ratio of Arnold is caution, not literal absolutism: context still matters, but the court does not improve the bargain.
Traps
Do not cite a dissenting judgment as binding. Do not quote a vivid sentence as the ratio without stating the material facts. Do not treat a first-instance decision as binding on co-ordinate courts. Do not ignore a later Supreme Court decision that qualifies an earlier test. Do not confuse overruling with reversing.