Building contract — Construction — Hotel development — Contract requiring appellant developer to give eight weeks’ notice of date upon which its contractual obligations would be fulfilled — Whether letters sent by appellant complying with notice requirement — Appeal dismissed
The appellant property developer entered into a contract to develop an hotel for the first respondent; the hotel was to be run by the second respondent. The contract price of £28m was to be payable on the completion date, defined as the date upon which both a statement of practical completion and a certificate of operability had been issued. The latter was to be issued pursuant to para 13(1) of schedule 2 to the agreement, which stated that the appellant was to give to the second respondent at least eight working weeks’ notice of the date by which it would have complied with all its obligations under the contract.
The appellant subsequently sought to rely upon two letters as being the requisite notice under para 13(1), and brought proceedings for a declaration that it had given such notice. The first letter, addressed to the second respondent, stated that the certificate of practical completion would be issued within the next few days, and requested that the respondents put in motion the procedures for obtaining a certificate of operability. The second letter stated that the appellant had complied with all its obligations under the contract. The judge found that neither letter amounted to the requisite notice, and dismissed the claim accordingly. The appellant appealed.
Held: The appeal was dismissed.
Paragraph 13.1 required the appellant to give a date by which it would have fulfilled its contractual obligations, and that date had to be at least eight working weeks from the date of the notice. The first letter, as construed by a reasonable recipient, was not a para 13(1) notice, but was merely a request to begin the procedure for obtaining a certificate of operability. Moreover, it did not give notice of an event occurring within eight weeks. The second letter was apparently intended to be a para 13(1) notice. However, it failed to give a date, eight weeks away, upon which the appellant would have complied with its obligations. A reasonable recipient would have been perplexed by the absence of any date. It was not a minor error because it was important for the manager to make preparations to run the hotel.
John Blackburn QC and Simon Henderson (instructed by Taylor Wessing) appeared for the appellant; Jonathan Acton Davis QC (instructed by Eversheds, of Birmingham) appeared for the respondents.
Sally Dobson, barrister
