The UK Court of Appeal had to decide whether the word “private” in the phrase “private placement, offering or other sale of equity instruments” in an engagement letter only qualified “placement” or alternatively qualified “offering or other sale” as well. The court found it qualified all the nouns listed.
While there is no firm grammatical rule to the effect that an adjective or determiner at the start of a list of nouns qualifies them all, the nature of the list may well indicate that it does. Unless something in the content of the list or another adjective or determiner within the list suggests otherwise, the reader will naturally tend to assume that an adjective or determiner at the start of a list qualifies the entirety of it. This is not a point of law but an aspect of the ordinary meaning of words used, which includes their placement within a phrase or sentence.
In the wording of the engagement letter the parties did nothing to counter that natural interpretation, whether by omitting the word “private”, including the word “public”, changing the order of the list or otherwise.
The court, relying on a previous decision, held that commercial commonsense should not be invoked to undervalue the importance of the language of a provision which is to be construed. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract. The parties would have been specifically focusing on the issue covered by the provision when agreeing the wording.
Other wording used in the engagement letter supported the finding.
Lists are always difficult. Besides the question whether an adjective covers one or more of the listed matters, there is the debate whether it is an open list or a closed list. The placement of punctuation can be all-important. Care must be taken when lists are used.
[Cantor Fitzgerald & Co v YES Bank Limited [2024] EWCA Civ 695]