British Overseas Bank Nominees Ltd and another v Analytical Properties Ltd

2014 EWHC 802 (Ch)IN THE HIGH COURT OF JUSTICE     Claim No:HC14D00270 CHANCERY DIVISIONDate: 21 March 2014 Before :RICHARD SHELDON QC (sitting as a Deputy Judge of the High Court) (1) BRITISH OVERSEAS BANK NOMINEES LIMITED(2) WGTC NOMINEES LIMITED Claimants and (1) ANALYTICAL PROPERTIES LIMITED(2) ANALYTICAL PORTFOLIOS LIMITEDDefendants    APPROVED JUDGMENT Rupert Reed (instructed by CMS Cameron McKenna LLP) for the ClaimantsTimothy Fancourt QC (instructed by Olswang LLP) for the Defendants     Hearing date: 12 March 2014   I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.   Richard M Sheldon QC21 February 2014 Richard Sheldon QC (sitting as a Deputy Judge of the High Court): Introduction 1. In this action, the Claimants (“the Buyers”) seek damages for the delay of the Defendants (“the Sellers”) in completing a contract made on 13 December 2013 (“the SPA”) for the sale and purchase of a shopping centre, King Edward Court, Windsor (“the Property”). Two alternative claims are advanced by the Buyers, which may be summarised as follows: a. A claim that, on the true construction of the SPA (and in particular clauses 8 and 37), the Sellers were obliged to provide Emergency Lighting Certificates (“ELCs”) and to complete the SPA on the contractual completion date of 17 December 2013 and in breach of such obligations failed to supply the ELCs until 14 January 2014 and failed to complete the SPA until 17 January 2014, a month late (“the Primary Claim”). b. In the alternative, if the Sellers were not required to provide the ELCs and complete by the contractual completion date, they were required under Clause 37 to provide the ELCs “as soon as practicable” and failed to do so (“the Secondary Claim”). 2. The two applications before the court, and to which this judgment relates, are: a. the return date of the Buyers’ application dated 17 January 2014 for the extension of an interim freezing injunction ordered by Mr Justice David Richards on short notice to preserve £615,000 of the purchase price in the hands of the Sellers’ solicitors; and b. the Buyers’ further application dated 25 February 2014 for summary judgment under CPR r 24.2 on the Primary Claim, and if necessary for an account or inquiry as to the Buyers’ losses on such claim, together with an order for an interim payment. 3.  It is logical and convenient, following the form of the argument as addressed to me orally, to deal with these applications in reverse order. As to the application for summary judgment, all parties are agreed that the point of construction which arises on the Primary Claim should finally be determined by the Court at this stage as a preliminary issue, and not merely on the basis that one or other interpretation is arguable or not arguable. If the Buyers succeed on this issue of construction, it appears that the relief which should follow is not in dispute. If the Sellers succeed on this issue of construction, there is a further issue which arises, namely whether there is an arguable case on the Secondary Claim for continuing the freezing injunction. The Primary Claim – the point of construction. 4. The point of construction on the Primary Claim turns principally on the following provisions of the SPA. a. Clause 8 (headed “Completion”) states:“Completion of this Contract shall take place on the Completion Date.” (Clause 8.1) b. “Completion Date” is defined by Clause 1.2 and the Particulars to mean “17 December 2013 subject to clause 20” c. Clause 20 (headed “Landlord’s Consent”) made provision for various consents of the landlord to be obtained, incorporating and modifying Condition 10.3 of the Standard Commercial Property Conditions (2nd Ed) (see also Clause 24.1). Clause 20.3 modified Condition 10.3.5 to read as follows: “If any required consent has not been obtained by the original completion date:(a) the time for completion is to be postponed until two (where consent is obtained before 20 December 2013) or five (in all other cases) working days after the seller gives written notice to the buyer that the consent has been given or the court has declared that the consent has been unreasonably withheld (which notice the seller shall give to the buyer as soon as reasonably practicable after receipt);(b) the postponed date is to be treated as the completion date.” By Clause 20.4, modifying Condition 10.3.6, provision was made for either party to rescind if consents had not been given by 9 April 2014. d. Clause 37 (headed “Emergency Lighting Certificates”) states: “37.1 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 (the Seller carrying out any remedial work necessary at its own cost in order to ensure that it is able to comply with its obligations in this Clause 37).” The relevant defined terms used in Clause 37 appear from Clause 1.1 as follows: “Actual Completion completion of the sale and purchase of the Properties, whether or not it occurs on the Completion Date”; “Emergency Lighting Certificates valid certificates obtained from a reputable contractor pursuant to BSEN50172 and BSEN5266 that all of the emergency lighting at the Properties (save that within any unit demised under a Tenancy) has been tested and found to be in good working order.” 5. I should record that it was common ground that the draft of the SPA, other than Clause 37 and accompanying definition of ELC, was prepared by the Sellers’ solicitors. Clause 37 and accompanying definition was drafted by the Buyers’ solicitors on 3 and 4 December 2013, the Buyers having become aware and told the Defendants that there were no emergency lighting certificates for the common parts of the Property, which drafting was then accepted by the Sellers. 6. Exchange of the SPA took place on 13 December 2013 which was a Friday. The purchase price was £104,737,973 less the “Rental Top-Up Deduction”. The contractual “Completion Date” was 17 December 2013 (subject to Clause 20), which was the following Tuesday. By that date, the requisite consents under Clause 20 had been obtained and there were no grounds for postponement under that clause. The ELCs were only obtained on 14 January 2014 and completion took place on 17 January 2014. It is common ground that the ELCs were the cause of the postponement of completion. 7. In summary, the Buyers contend that on the true construction of the SPA, and in particular Clauses 8 and 37, the Sellers were thereby in breach of their obligations under the SPA. They say that Clause 8 and 20 provided that the parties were obliged to complete on 17 December 2013, subject to a postponement only where there was a delay in obtaining landlords’ consents – that was the only “fault-free” circumstance in which the SPA provided for postponement of the Completion Date. Clause 37 was inserted for the Buyers’ protection and obliged the Sellers to provide the ELCs as soon as practicable and in any event by the date of completion. The Sellers’ provision of the ELCs was a condition precedent to the Buyers’ obligation to complete but Clause 37 did not affect the  Sellers’ obligation to complete under Clause 8 or give the Sellers any further entitlement to postpone that obligation beyond the postponement provided for in Clause 20. 8. In summary, the Sellers deny there has been any breach of the SPA. They say that Clause 37 has three functions: (a) to impose an obligation on the Sellers to obtain the ELCs as soon as practicable, and in any event before Actual Completion; (b) to impose an obligation on the Sellers to carry out the requisite remedial works at their own expense to enable the obligation in (a) to be complied with; (c) to delay the obligation to complete until ELCs were provided. The Sellers accept that the provision of the ELCs was a condition precedent to the Buyers’ obligation to complete but say that this was also a condition precedent to the Sellers’ obligation to complete. In other words, neither the Buyers nor the Sellers could be required to complete until the requirements set out in Clause 37 were satisfied. 9. Both parties relied on a number of matters of fact which were said (a) to form part of the relevant background or factual matrix; (b) to show that their respective arguments made more commercial sense. I have already referred to certain uncontroversial aspects of the factual matrix (see para 5 above) and will deal with these matters in more detail later in this judgment. Principles of construction10. There was no dispute about the relevant principles of construction. My attention was drawn to the following. 11. The task of construing or interpreting a written agreement involves ascertaining what a reasonable person in the position of the parties would have understood the words to mean.“Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”. Chitty (31st edn), vol 1, para 12-043; Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, at 912 per Lord Hoffmann. 12. The starting point is that the parties have intended what they have in fact said, so that their words must be construed as they stand.  That is to say the meaning of the document or of a particular part of it is to be sought in the document itself, by reference to the ordinary meaning of the words used: “[o]ne must consider the meaning of the words used, not what one may guess to be the intention of the parties”. Chitty, para 12-043. 13. This does not mean that the process of construction is a detached and literal exercise in semantics.  The words of the contract must be read and construed in the context of the matrix of surrounding fact insofar as known to the parties: “The courts will, in principle, look at all the circumstances surrounding the contract and available to the parties (usually described as the “factual matrix” or “available background”) which would assist in determining how the language of the document would have been understood by a reasonable person in their position.”Chitty, para 12-043. Although the factual matrix in principle “includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man”, it is subject to the controlling requirement that it should have been “reasonably available to the parties”, and to the exclusion of an examination of the parties’ previous negotiations: see Investors Compensation Scheme Ltd at 912-3. 14. Even if the immediate object of inquiry is the meaning of an isolated word or clause, the Court must read the document as a whole with a view to ensuring the consistency of that word or clause with all other relevant provisions of that document: Chitty, para 12-063; 15. Where there are two possible constructions of the relevant agreement, the Court may prefer that which is more consistent with business common sense: Rainy Sky SA v. Kookmin Bank [2011] UKSC 50; [2011] 1 WLR 2900 [15]-[21]; 16. However, the Court will depart from the ordinary meaning of the words in an appropriate case where it is clear that there has been some linguistic mistake: Chartbrook Ltd v. Persimmon Homes [2009] UKHL 38; [2009] 1 AC 1101.  As Chartbrook makes clear, the Court can only ignore the plain meaning of the words on the basis of this principle (that something has gone wrong with the language) if it is clear not only that a mistake has been made but also what correction ought to be made to cure the mistake: see at [22] citing from Brightman LJ in East v Pantiles (Plant Hire) Ltd (1981) 263 EG 61, and at [25]: “All that is required is that it should be clear that something has gone wrong with the language and that it should be clear what a reasonable person would have understood the parties to have meant.” 17. Where there is ambiguity which brings business common sense into play, Briggs J observed: “Questions of commercial common sense falling short of absurdity may however enable the court to choose between genuinely alternative meanings of an ambiguous provision. The greater the ambiguity the more persuasive may be an argument based upon the apparently greater degree of common sense of one version over the other.”LB Re Financing No 3 Ltd v Excalibur Funding No 1 Plc [2011] EWHC 2111 (Ch) at [46]. Discussion 18. I shall start by considering the words actually used in the SPA. The central thrust of the Sellers’ argument is that under Clause 37, when read in conjunction with Clause 8, the supply of ELCs was a condition precedent to both parties’ obligations to complete on the Completion Date. Mr Fancourt QC, who appeared for the Sellers, developed this argument by submitting that the provision of the ELCs is stated in Clause 37 to be a “pre-condition to completion”.  “Pre-condition”, he says,  is a term that conveyancers use when they want to make clear that something is a pre-condition to some other obligation and not just an independent obligation, in contrast to the use of “condition” which may be ambigouous.  Mr Fancourt referred to the following passages of Lord Reid in Schuler (L) A.G. v Wickman Machine Tool Sales [1974] AC 235 at 250-1:“In the ordinary use of English language “Condition” has many meanings, some of which have nothing to do with agreements. In connection with an agreement it may mean a pre-condition: something which must happen or be done before the agreement takes effect……..Schuler maintain that the use of the word “condition” is in itself enough to establish this intention [sc. ability to terminate the contract for breach].  No doubt some words used by lawyers do have a rigid inflexible meaning.  But we must remember that we are seeking to discover intention as disclosed by the contract as a whole.  Use of the word “condition” is an indication – even a strong indication – of such an intention but it is by no means conclusive”. 19.  Mr Fancourt submitted that the use of the word “pre-condition” avoids ambiguity. He further submitted that if the parties had intended to produce the result for which the Buyers contend (namely that it was a pre-condition only of the Buyers’ obligation to complete), there would have been no need to include the phrase “as a pre-condition to completion”. That follows, so Mr Fancourt says, because the Buyers would not have been obliged to complete in any event if the Sellers then still had an outstanding obligation to perform. (The Sellers might also be liable for breach of that obligation). Mr Fancourt relied on the following passages in the judgment of Dillon LJ in Wood v Berkeley Homes Ltd (1992) 64 P&CR 311, where the seller had not proved title in the manner agreed by the terms of the sale and purchase agreement. Having found that the seller was in breach, Dillon LJ said (at p 318):In these circumstances I reach… the same conclusion as the judge that the notice to complete was not effective. It was not effective because the vendors were not, when it was given, ready and willing to fulfil their own outstanding obligations. They had failed to provide the abstract of title to which the purchasers were entitled, namely the office copy of the entries. If they did not then have the office copies, they were not ready to supply them; if they had them but chose not to supply them at that juncture, they were not willing to supply them and thus were not willing to fulfil their outstanding obligations under the contract. It follows that the insistence by the vendors that the contract was at an end because of the failure of the plaintiffs to comply with the notice to complete was not justified because the notice to complete was not effective. Passages to similar effect appear in the judgments of Steyn LJ at p 319 and Sir Christopher Slade at p 320. 20. Despite the attractive and persuasive way in which Mr Fancourt put his argument, I have reached the clear view that, as a matter of the meaning of the words used, they cannot bear the meaning for which he contends. My reasons are as follows. a. It is clear that Clause 37 was introduced for the Buyers’ protection. It placed an obligation, or obligations, on the Sellers, not the Buyers, to obtain and provide ELCs, which could only be waived by the Buyers. Whilst these matters provide strong support for the Buyers’ case, they are not necessarily determinative. b. Mr Fancourt placed emphasis on the practical issues which are recognised in the language used in Clause 37 surrounding the obligation to supply the ELCs and carry out any remedial works for that purpose and submitted that the underlying obligation of the Sellers was to obtain and provide the ELCs “as soon as practicable”. However, the Sellers’ proposed construction of Clause 37 gives no effect to the phrase “and in any event by Actual Completion”. Mr Fancourt accepted that this phrase was not strictly necessary on his interpretation. As a matter of language (I consider surrounding facts and commercial business sense later), this phrase was in my view clearly intended to have some effect and content. If the Sellers had simply been under an obligation to obtain and provide the ELCs as soon as practicable this additional phrase would not have needed to be included. The Sellers were under an obligation to obtain and provide the ELCs as soon as practicable, but in any event by the date of completion, the latter operating in effect as a long stop date for the Sellers’ obligation to be complied with. c. Had the Sellers’ obligation simply been to obtain and provide the ELCs “as soon as practicable”, the argument of Mr Fancourt which I have summarised in the preceding two paragraphs of this judgment would have had some force. But the argument appears to me to break down if effect is given to the additional phrase “and in any event by Actual Completion”. Giving effect to this phrase, the Sellers’ argument would involve construing the clause in essence as follows: as a pre-condition, or condition precedent, to the Sellers’ (and Buyers’) obligation to complete, the Sellers are obliged to obtain and provide ELCs by the date of completion. (It will be recalled that “Actual Completion” is defined as “completion of the sale and purchase of the Properties, whether or not it occurs on the Completion Date”.) That does not seem to me to be a tenable interpretation of Clause 37. d. Mr Fancourt’s argument that the language of pre-condition which was used (“As a pre-condition to completion”) is unnecessary on the Buyers’ construction, because the Buyers would not have been obliged to complete in any event if the Sellers then still had an outstanding obligation to perform, has more force. Mr Reed, who appeared for the Buyers, did not seek to argue that, if the phrase had been omitted, the Buyers would have been obliged to complete if the Sellers were then still under an outstanding obligation. However, he did point out that the case relied on by Mr Fancourt, Wood v Berkeley Homes Ltd, involved a fundamental obligation on completion, namely proof of title, whereas it was not clear, without that phrase, that the Buyers had the protection that they were not required to complete if the Sellers’ obligation to obtain and provide the ELCs had not been performed. I consider that there is some force in the latter point. Moreover, it is not that unusual for the legal consequences to be spelt out in a document, even if not strictly necessary. In any event, I do not consider that this point is of itself sufficient, taking in to account also my other reasons, to interpret the use of the phrase as creating a pre-condition, or condition precedent, to the Sellers’ obligation to complete. e. The only “fault-free” circumstance in which the SPA clearly provided for postponement of the Completion Date appears from its definition, namely Clause 20, which provides for the obtaining of landlords’ consents. It would have been relatively straightforward as a matter of drafting to amend the definition of Completion Date by referring also to Clause 37 (or incorporating Clause 37 into Clause 20) had it been intended to enable completion to be postponed until the ELCs had been obtained and provided. I accept Mr Fancourt’s submission that this point is not determinative bearing in mind that Clause 37 was introduced by the Buyers’ solicitors after the original draft had been provided by the Sellers’ solicitors, and that purity of drafting style is often lost when draft contracts are amended at a late stage to accommodate new issues. Nevertheless, the drafting was accepted by the Sellers. Without being determinative, I consider that this point lends further support to the Buyers’ case. f. There was some argument before me about the reference to “Actual Completion” rather than “the Completion Date” in Clause 37. If, so it was said by the Sellers, it had been intended that they were to obtain and provide ELCs by the Completion Date, it would have been so stipulated: Actual Completion is a defined term which is used throughout the SPA, signifying the date on which actual completion takes place. The Buyers suggested that if there is any ambiguity, clause 37 should be construed to refer to the Completion Date rather than to Actual Completion. I do not consider that there is any such ambiguity, nor do I attach particular significance to the use of the phrase “Actual Completion” rather than “Completion Date”. At least in the context of Clause 37, “Actual Completion” means the same as “completion”, the timing of the obligations as to which are to be determined by reference to other terms of the SPA, and in particular Clause 8.1. The term “Actual Completion” appears to be used elsewhere in the SPA in a similar sense (eg Cl 8.2, 15.1, 15.2, 16.1, 19.1, 36.2, 38 etc) in recognition of the fact that a contract for the sale and purchase of land might not, for various reasons, actually complete on the contractual completion date. 21. The parties each submitted that the construction for which they contended was supported by the admissible factual background and that the construction for which the other party contended produced an uncommercial result. Before considering those submissions I should set out the matters which were common ground: (1) Failure to comply with the British Standards referred to in the definition of ELC carries a significant risk to a landlord, in the event of any failure of emergency lighting and resulting injury or death, of occupier’s civil liability and/or criminal guilt for corporate manslaughter; (2) The maintenance of emergency lighting complying with those British Standards is consistent with the principles of good estate management. (The Buyers also referred to Clause 15.1 of the SPA but I do not consider that this casts any light on the issues between the parties, not least because it only came into effect on signing of the SPA); (3) By early December, both parties were aware that the testing required by those British Standards had never been carried out at the Property, and that there were accordingly no emergency lighting certificates for the common parts of the Property. (4) Clause 37 (and accompanying definition of ELC) was drafted by the Buyers’ solicitors and sent to the Sellers’ solicitors on 3 and 4 December 2013, and accepted by the Sellers. 22. The Sellers submitted that the following strongly supported their case and produced an uncommercial result if the Buyers’ case were correct: (1) The contractual completion date was only one clear working day after exchange. (2) Obtaining the ELCs depended on tests and repairs being done by independent contractors, and the SPA recognised that that was a practical issue which could or would mean that completion did not take place on the Completion Date, the parties knowing that ELCs had not been obtained previously for the Property. (3) It would therefore have been expected that there was a greater likelihood of significant failure than if emergency lighting tests had been done and certificates had been obtained in previous years. (4) The work that was likely to be needed, testing from scratch and doing repairs, was recognised as being substantial and likely to take “a considerable time” (according to the Sellers’ evidence) or “a few weeks” (according to the Buyers’ evidence). (5) The extent of failure was unknown until the initial tests were carried out. (6) The week or so before Christmas is generally known to be a difficult time at which to engage contractors to do urgent work. (7) In all these circumstances the Sellers would not have signed up to a contract which produced the result contended for by the Buyers: the work involved in testing and repairing the emergency lighting system was unknown yet a failure to complete at the time contended for by the Buyers would have exposed the Sellers to potentially huge damages for loss of bargain. 23. At first sight these submissions appear to carry significant force. However: a. Whilst both parties knew that no emergency lighting testing had been carried out, there is no evidence before the court which suggests that, prior to the signing of the SPA, both parties knew that significant repairs needed to be carried out in order for the ELCs to be obtained. b. The evidence relied upon by the Sellers to support a number of the points referred to in paragraph 22 above is a witness statement of Mr Steve William Armitage. He sets out in paragraph 8 the steps that the Sellers “would have to complete” in order to comply with the obligations set out in Clause 37. His evidence does not suggest that the process of testing was particularly time consuming, although the carrying out of remedial works potentially might have been. However, his evidence does not disclose any facts known by both parties about the actual state of the emergency lighting system in the common parts of the Property or about the extent of the repairs that were in fact required in order for the ELCs to be obtained. His evidence does nevertheless make the point which would have been in the reasonable contemplation of both parties that since they knew that testing had not been previously been carried out, the failure rate could be anticipated as being higher than normal. c. There is no evidence before the court that both parties knew, as at the date the SPA was entered into, that it was in fact not reasonably practicable to obtain the ELCs by 17 December 2013. The Sellers invite me to infer this from Mr Armitage’s witness statement as to the work that “would have been required” which he says “would be likely to take some considerable time”. However, the issue of the ELCs was first raised in early December 2013. In her witness statement, Abi Labett, instructed by the Buyers as a property manager, says that when this issue was raised: “I recommended that the [Sellers] instruct testing of the emergency lighting to be carried out immediately and certification to be provided before completion. I believed this could be carried out within a few weeks.” (Witness statement para 13, which largely reflects what she said in an email dated 3 December 2013). Thus, while she anticipates that the work would take “ a few weeks” she believed it could be carried out prior to completion. This contrasts with her approach to “5 yearly electrical testing” which she identified as also posing a separate serious risk to the Buyers but which she recognised could not as a practical matter be carried out before completion. d. The Sellers have produced no evidence as to when contractors were in fact instructed to carry out the emergency lighting testing. However, in response to an email from the Buyers’ solicitors dated 17 December 2013, the Sellers’ solicitors, by an email response of the same date, stated that “the testing commenced last week” (ie the week ending 13 December 2013, the date on which the SPA was signed). From this response, it is possible that the testing in fact commenced after the SPA was signed, although had that been the case I would have expected the response to be more specific. At the very least it shows that contractors had been lined up and undermines the Sellers point referred to in paragraph 22(6) above. e. I have already commented on the lack of evidence from the Sellers as to what they in fact knew about the state of the emergency lighting system beyond the fact that it had not been tested (which suggested that the failure rate might be higher than normal). Mr Fancourt nevertheless accepted that it was part of the relevant background that: (i) failure to comply with the British Standards carried a significant risk to a landlord, in the event of any failure of emergency lighting and resulting injury or death, of occupier’s civil liability and/or criminal guilt for corporate manslaughter; and (ii) that the maintenance of emergency lighting complying with those British Standards was consistent with the principles of good estate management. That indicates to me that the Sellers were not aware of any particular problems with the emergency lighting: had they been, something would likely have been done about it. Such background would also be consistent with the Sellers commencing steps to obtain the ELCs before they were contractually obliged to do so under the terms of the SPA, the issue having been raised some time before the SPA was signed. f. I also need to bear in mind that when looking at the admissible factual background I need to take into account facts and matters that would reasonably have been known to both parties. The Buyers’ evidence does not suggest that they considered that the obtaining of the ELCs by 17 December 2013 was not reasonably practicable. I have already commented on Ms Labett’s evidence. Although I need to be wary of straying into the parties’ negotiations, there is nothing elsewhere in the evidence before me which is inconsistent with that evidence. When the draft of Clause 37 was sent to the Sellers’ solicitors by Mr Benzecry of the Buyers’ solicitors on 3 December 2013, he stated: “You will see that I have also inserted a provision regarding the emergency lighting certificate. I need chapter and verse as to the exact statutory provisions that need to be complied with here. I am sure that we are both hopeful that the issue can be dealt with as simply as the Gas Certificates seem to have been.” The response from Mr Karsberg of the Sellers’ solicitors states: “Noted – chapter and verse awaited asap”. (The drafting identifying the relevant British Standards was sent the following day. The reference to Gas Certificates was a matter which had been referred to in an email from Mr Karsberg to Mr Benzecry dated 2 December 2013 where the former stated that gas inspections had been and were being carried out “so hopefully updated certificates will follow very shortly”). 24. For all these reasons, I do not consider that the construction contended for by the Buyers produces an uncommercial result, or such an uncommercial result as would require me to reconsider my interpretation of the words used in the SPA. 25. Accordingly, as regards the Primary Claim I find that that the construction contended for by the Buyers is correct. At the hearing, I invited the parties to agree the wording of a preliminary issue. They were unable to agree and provided slightly different formulations, but I believe the answer to both formulations is clear from my earlier findings. The Sellers formulated the issue as: Whether, on the true construction of clauses 8 and 37 of the SPA, the supply of ELCs was a condition precedent to both parties’ obligations to complete on the Completion Date or only to the Buyers’ obligations to complete on the Completion Date In view of my earlier findings, I answer the issue as so formulated as:On the true construction of clauses 8 and 37 of the SPA, the supply of ELCs was a condition precedent only to the Buyers’ obligations to complete on the Completion Date. It does seem to me that the Sellers’ formulation of the issue is adequate and appropriate, and that it is strictly unnecessary for me also to decide the issue as formulated by the Buyers which is arguably less satisfactory. However, for the sake of completeness I will also answer the issue as formulated by the Buyers, namely:Whether on the true construction of clauses 8 and 37 of the SPA, the supply of ELCs was a condition precedent to both parties’ obligations to complete on the Completion Date, so that Clause 37 provides a free-standing conditional right to postpone the Completion Date for the benefit of either party. My answer to the issue as so formulated is “No”. 26. I do not understand the consequences of my findings on the Primary Claim to be in dispute. As I understand the position, it is accepted by the Sellers that it follows that they are liable in damages for breach of the SPA, that the Buyers’ damages are to be assessed by the taking of an account or inquiry and that an interim payment on account of 50% of the losses claimed be paid by the Sellers to the Buyers. The interim injunction granted by Mr Justice David Richards should continue pending the taking of the account, with any variation as may be necessary to take into account the interim payment. Should the parties be able to agree the form of order which I should make, their attendance will not be necessary when I hand down this judgment. If they are not so able to agree, I will hear further argument about the form of order when I hand down judgment. The Secondary Claim 27. In view of my findings on the Primary Claim, it is not necessary for me to decide the issue on the Secondary Claim. However, since I heard argument on the issue I should deal with it, albeit briefly. The Sellers submitted that there is no arguable case on the Secondary Claim for continuing the freezing injunction 28. The Buyers submitted that there is, at the least, an arguable case on the evidence that the Sellers did not in fact provide the ELCs as soon as practicable. As summarised in the Buyers’ skeleton argument, it is said that the Sellers through the contractors they had appointed, having been close to certification before Christmas, suspended work on site over the Christmas and New Year holiday period. A number of emails are referred to by the Buyers which I can summarise as indicating that, on and shortly after 17 December 2013 the Sellers were intimating that the ELCs were on the verge of being provided. In the early afternoon of 19 December 2013, the Buyers were told by the onsite contractors that the problem was more significant than they had previously been led to believe and that about half the lights had failed. Evidence served on behalf of the Buyers suggests that no work was carried out between Christmas and the New Year. The ELCs were only provided by the Sellers on 14 January 2014. The Buyers say that the Defendants have provided no explanation of what was done to obtain the ELCs and when. There is no explanation for why there was a downing of tools between Christmas and the New Year. 29. The Sellers say that the Buyers have provided no particulars of breach and that there is nothing in the evidence which supports the assertion that the ELCs were not obtained as soon as practicable. The lapse of time, and in particular in the period between Christmas and the New Year when the matter is said not to have been progressed, does not constitute such evidence, nor can any inference of breach be drawn from the facts relied on by the Buyers. 30. Having considered the rival submissions, as summarised above, I find that there is an arguable case on the Secondary Claim. I consider that it is striking that the Sellers have produced a witness statement from Mr Armitage as to the process that “would have been involved” in obtaining the ELCs but no evidence has been produced by the Sellers to say what in fact was done. The delay, including that caused by the downing of tools over the holiday period, does, it seems to me, call for an explanation. 31. Accordingly, had I found in favour of the Sellers on the Primary Claim, I would have ordered that, in principle, the freezing injunction be continued in support of the Secondary Claim.