A dispute over delay to the completion of the £100m-plus sale of a Windsor shopping centre today reached the Court of Appeal.
Sellers Analytical Properties and Analytical Portfolios are challenging a ruling that buyers British Overseas Bank Nominees and WGTC Nominees are entitled to damages for the month-long delay, caused by failure to provide emergency lighting certificates (ELCs).
The sellers brand a March high court ruling to the effect that they were obliged to provide the ELCs and complete on the contractual completion date of 17 December 2013 clearly wrong, and inconsistent with business sense.
In March, deputy judge Richard Sheldon QC ordered an inquiry as to the buyers’ losses resulting from the delay to the sale of the King Edward Court shopping centre.
However, launching the appeal today, Timothy Fancourt QC said that it raised a single issue – whether his clients were obliged to provide ELCs by the contractual date and complete on that date, or to provide them “as soon as practicable”.
Clause 37 of the sale agreement states that, as a pre-condition to completion the seller shall obtain (and supply true copies to the buyer) all of the Emergency Lighting Certificates as soon as practicable and in any event prior to the date of actual completion.
Mr Fancourt said the judge’s conclusion was to the effect that “actual completion means completion date”, but continued: “We say that that is plainly wrong on the unambiguous meaning of the words of clause 37. We also say it produces a result inconsistent with good business sense.”
The sellers failed to supply the ELCs until 14 January 2014 and failed to complete until 17 January 2014.
The high court judge said that the purchase price was £104,737,973 less a “rental top-up deduction” but that the sellers maintained that their obligation was to obtain the ELCs as soon as practicable and that this obligation was a condition precedent to both the buyers’ and their respective obligations to complete. In other words, they claimed, neither they nor the buyers could be required to complete until the ELCs were obtained.
However, the judge said that he reached the “clear view” that this was not correct, finding that the key clause was introduced for the buyers’ protection and that the sellers’ obligation was to obtain and provide the ELCs “by actual completion”.
Under an interim freezing injunction ordered by David Richards J, £615,000 of the purchase price was preserved in the hands of the sellers’ solicitors, and the judge ordered that the injunction should remain in place pending the inquiry as to damages.
The Court has reserved judgment.
British Overseas Bank Nominees Ltd and anr v Analytical Properties and anr Court of Appeal (Longmore, Patten and Vos LJJ) 17 December 2014
Rupert Reed QC and Michael Ashdown (instructed by CMS Cameron McKenna LLP) for the claimants/respondents
Timothy Fancourt QC and Mark Sefton (instructed by Olswang LLP) for the defendants
