Ropemaker Properties Ltd & Anor v Bella Italia Restaurants Ltd & Anor [2018] EWHC 1002 (Ch)

Case No HC-2017-002678[2018] EWHC 1002 (Ch)IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONPROPERTY TRUSTS AND PROBATE LISTVenue Royal Courts of Justice, Strand, London, WC2A 2LLDate 2 nd May 2018
Before
MR JUSTICE FANCOURT
Between
Ropemaker Properties LimitedClaimant(2) The Churchmanor Estates Company plcClaimantBella Italia Restaurants LimitedDefendantCasual Dining LimitedDefendant
Mr Tim Calland (instructed by Birketts LLP) for ClaimantsMr Patrick Rolfe (instructed by Freeths LLP) for DefendantsHearing Hearing dates: 18 th April 2018
JudgmentMr Justice Fancourt :
[1]The issue in this claim is whether an agreement for lease made between the predecessors of the claimants as developer/landlord and the defendants as tenant/guarantor (“the Agreement”) has been validly terminated by the first defendant (“Bella”) or whether the agreement for lease is unconditional and binds the defendants. It gives rise to some very technical issues concerning the validity of notices given under the Agreement.[2]The Agreement, which was made in writing on 11 November 2014, relates to a new development at Stane Park, London Road, Stanway, Colchester, of which the second claimant (“Churchmanor”) was the developer. The first phase of the development was to include two new, adjoining retail units, known as Unit 1 and Unit 2. Unit 1 was the subject of the Agreement and Unit 2 was the subject of a similar agreement for lease made a few days later on 22 November 2014 with Nando’s Chickenland Limited (“the Nando Agreement”).[3]Both the Agreement and the Nando Agreement were subject to conditions precedent to the obligations to build and then to grant and take the leases. The Conditions Precedent, identified by clause 2.1 of the Agreement, are the occurrence of all the Unconditional Dates, which are (in essence) the date on which a Satisfactory Planning Permission is obtained and no longer open to challenge (Planning), the date on which a satisfactory premises licence is granted (Licensing) and “the date upon which the Landlord or Developer serves notice pursuant to clause 12.3 that the Neighbouring Unit Condition has been satisfied” (“NUC”). Thus, once all those dates have arrived, the Agreement becomes unconditional.[4]Clause 2.3 of the Agreement provides that: “The Landlord and Tenant may only waive the Condition Precedent by agreement in writing”.[5]It is common ground that the Planning Condition and the Licensing Condition were duly satisfied in the case of Unit 1 under the Agreement. The matters in dispute relate to whether or not the NUC was satisfied or waived. It is necessary to set out clauses 13 and 14 of the Agreement in full as several interpretative disputes arise under them: “13.1 This Agreement is entered into subject to and conditional upon the Neighbouring Unit Condition being satisfied in accordance with this Agreement. 13.2 The Neighbouring Unit Condition is the satisfaction of all of the Neighbouring Unit Conditions Precedent and the Developer or the Landlord giving written notice to that effect to the Tenant and for the avoidance of doubt, the Neighbouring Unit Condition shall be satisfied upon the service of such notice. 13.3 The Landlord or the Developer shall give the written notice to the Tenant referred to in clause 13.2 as soon as reasonably practicable after the satisfaction of the last of the Neighbouring Unit Conditions Precedent. 13.4 The Landlord and/or the Developer may waive the Neighbouring Unit Condition in its absolute discretion at any time before a notice is served under clause 15.3. 13.5 In this clause 13:-13.5.1 ….13.5.2 “The Neighbouring Unit Conditions Precedent” means the conditions precedent to which the letting of the Neighbouring Unit is subject and conditional upon and which are the same in all material respects the Conditions Precedent. 14 If either:-14.1 the Unconditional Date (Planning) has not occurred by the Planning Long Stop Date; or14.2 any of the Unconditional Dates have not occurred by the Agreement Long Stop Date then either the Landlord or the Tenant may at any time after the Planning Long Stop Date (where clause 14.1 applies) or the Agreement Long Stop Date (where clause 14.2 applies) (but only before an Unconditional Date) give written notice to the other and the Guarantor to determine this Agreement”. 13.5.2 “The Neighbouring Unit Conditions Precedent” means the conditions precedent to which the letting of the Neighbouring Unit is subject and conditional upon and which are the same in all material respects the Conditions Precedent. 14.1 the Unconditional Date (Planning) has not occurred by the Planning Long Stop Date; or 14.2 any of the Unconditional Dates have not occurred by the Agreement Long Stop Date[6]The reference in clause 13.4 to clause 15.3 is a mistaken reference. There is a dispute as to whether that is properly to be understood as a reference to clause 13.3 or to clause 14.2.[7]The effect of clause 13 as a whole is that the Agreement could not become unconditional until the equivalent conditions precedent to the letting of Unit 2 under the Nando Agreement had been satisfied and the Landlord had given notice to Bella to that effect. It is common ground that there had to be satisfaction of the Nando Conditions Precedent, not just a notice claiming such satisfaction, and that the Nando Conditions Precedent could be satisfied within the meaning of clause 13 by their having been validly waived under the terms of the Nando Agreement.[8]As regards the termination provisions of clause 14, the Agreement Long Stop Date is 11 November 2016. It is now common ground that clause 14.2 requires a Tenant’s notice of termination after that date to be given in writing to both the Landlord and the Guarantor, even though the Guarantor (the second defendant) is in the same group of companies as Bella. In other words, Bella accepts that clause 14.2 cannot be interpreted so as to take away the requirement for written notice to be given also to the Guarantor.[9]The terms regulating such written notices are contained in clause 45 of the Agreement. Clause 45.1 requires such a notice to be:
“ … in writing and shall be delivered personally, or sent by pre-paid first class post or special delivery or by commercial courier, to each party required to receive the notice or communication as set out below …”
[10]What is set out below in the case of a notice to the Guarantor is: “c/o the Property Director Bella Italia Restaurants Limited at its registered office from time to time and at the same time copied to the Tenant’s Conveyancer quoting its reference”.[11]Exactly the same details are given for a notice to the Tenant, Bella.[12]Clause 45.3 stipulates that a notice required to be given under the Agreement “shall not be validly given if sent by e-mail or fax”.[13]In order to determine, for the purpose of clause 13.2, whether all of the Neighbouring Unit Conditions Precedent were satisfied at a relevant time, it is necessary to consider the slightly different terms of the Nando Agreement. Before doing so, it will be helpful to summarise the relevant facts so far as the giving of various notices at various times is concerned. This relates both to notices of termination served by Bella under clause 14.2 and notices of satisfaction of all the Neighbouring Unit Conditions Precedent given by the Landlord under clause 13.2.[14]On 30 August 2016, the Landlord gave written notice to Bella’s solicitors of satisfaction of the NUC. On the same date, the Landlord gave an equivalent notice to Nando’s solicitors relating the satisfaction of the equivalent conditions in the Nando Agreement.[15]It is accepted by the claimants that this first notice was invalid because it was not given in writing to Bella itself, in compliance with the notice requirements of the Agreement. The defendants argue that it was also invalid for other reasons relating to non-satisfaction of the Nando Conditions Precedent (viz. the Planning Condition and the Licensing Condition). It was therefore a notice purportedly given pursuant to clause 13.2 but invalid.[16]On 16 May 2017, Bella sent written notice to the Landlord to terminate the Agreement pursuant to clause 14.2. This was given on the basis that the Agreement Long Stop Date had passed and the NUC had not been satisfied. No equivalent notice was sent to the Guarantor, but the defendants argue that sufficient notice of intention to terminate the Agreement was given in writing to the Guarantor by means of board minutes of the defendants’ parent company, Casual Dining Group Limited (“CDGL”), some time in early 2017. Alternatively, they argue that the Guarantor waived the requirement for such written notice. It is common ground that the Guarantor was entitled to waive the requirement that the Tenant give it written notice of termination, as being a provision of the Agreement inserted solely for its benefit. However, the claimants dispute that any such waiver occurred.[17]If the defendants’ contention about notice given to the Guarantor, or the waiver of the requirement for such notice, is correct, the claimants’ claim must fail, regardless of the further notices subsequently served. That is because Bella’s notice dated 16 May 2017 had the effect of terminating the Agreement.[18]On 26 May 2017, the Landlord sent to Nando’s solicitors a notice waiving the Neighbouring Unit Condition in the Nando Agreement. On the same date, the Landlord sent Bella a notice pursuant to clause 13.2 of the Agreement stating that the NUC had been satisfied (as a result of the Nando Neighbouring Unit Condition being waived). The defendants contend that this notice was ineffective because the planning permission condition and the licensing condition had not in fact been satisfied under the Nando Agreement, and accordingly the Neighbouring Unit Conditions Precedent as defined in the Agreement had not been satisfied. This contention by the defendants repeats the further arguments deployed as to why the first notice dated 30 August 2016 was invalid (as referred to in paragraph 15 above).[19]On 1 August 2017, the Landlord served a further notice on Bella to the effect that it waived the NUC under clause 13.4 of the Agreement and that therefore all of the Neighbouring Unit Conditions Precedent had been satisfied (by reason of such waiver). The defendants contend that, having previously served purported clause 13.2 notices (albeit they were each invalid), the Landlord had no entitlement under clause 13.4 to waive the NUC. Its right to do so ended with the service of the first purported clause 13.2 notice on 30 August 2016.[20]On 7 August 2017, the Guarantor wrote to Bella referring to its termination notice dated 16 May 2017 and stating:
“in so far as necessary we confirm that the requirement to serve a termination notice on us, as Guarantor under the agreement for lease, was waived at the time you served the notice on the Landlord and such requirement remains waived.”
[21]On 26 September 2017, Bella served on the Landlord and on the Guarantor written notice pursuant to clause 14.2 of the Agreement to terminate it. It is common ground that this notice was valid if the Agreement had not previously become unconditional as a result of any of the notices served by the Landlord.[22]The first issue that I must decide is accordingly whether Bella’s notice to terminate dated 16 May 2017 was valid and effective. The only question is whether the Guarantor was effectively served with such notice or had waived the requirement to do so. The notice given by Bella to the Landlord was posted and addressed in accordance with the requirements of the Agreement. No copy was sent by Bella to the Guarantor.[23]Almost five months before the date of that notice, CDGL held a board meeting on 14 December 2016. The directors present included the two directors of both Bella and the Guarantor. In attendance for property matters was Phil Darbyshire, who until January 2017 was the Property and Development Director of the Guarantor. As from January 2017, David Lodge became the Property and Development Director. Mr Darbyshire presented a proposal to withdraw from the acquisition of nine new sites that the board had previously approved, including Unit 1. The minutes record that “the Board approved the termination of the leases”.[24]Mr Lodge’s evidence is that the board meetings of CDGL are where corporate decisions of Bella and the Guarantor are also taken: they have no separate board meetings. The directors of the Guarantor were therefore also present. The resolution at that meeting took effect as a resolution of Bella and notice of it was “personally delivered to the Directors of [the Guarantor] in writing when the minutes of the Board Meeting on 14 December 2016 were approved at the subsequent Board Meeting.” There are no minutes of that subsequent Board Meeting in evidence, nor is it stated whether Mr Darbyshire or Mr Lodge were themselves present at it (neither of them is a director of CDGL).[25]The defendants argue that notice of Bella’s resolution to terminate the Agreement was thereby given to the Guarantor personally some time in January 2017 (or whenever the next Board Meeting took place).[26]In advancing that argument, Mr Rolfe, on behalf of the defendants, suggested that clause 45.1 of the Agreement should be interpreted as permitting personal delivery of a notice to a party without further requirements; that is to say, in the case of the Guarantor, without having to be addressed as such to the Property Director of Bella and without having to copy the written notice to the Tenant’s Conveyancer, quoting its reference. I cannot accept that argument. It seems to me that the requirements following the words “as set out below” in clause 45.1 apply to all means of delivering the requisite notice. The words “to each party required to receive the notice or communication as set out below” qualify both “shall be delivered personally” and “sent by pre-paid first class post or special delivery or by commercial courier”. A written notice delivered personally to the Guarantor would therefore have to be given to the Property Director; make clear on its face that it was a notice to the Guarantor, and be copied to the Tenant’s Conveyancer.[27]The minutes of the 14 December 2016 Board Meeting of CDGL, available to the Directors of the Guarantor (Messrs. Richards and Doubleday) at the following Board Meeting of CDGL, do not satisfy these requirements. In any event, the minutes of CDGL’s (and, if it be the case, Bella’s) resolution to terminate the leases of nine new sites, including Unit 1, is not a written notice to determine the Agreement within the meaning of clause 14.2. Following the Board’s resolution, a written notice to determine would need to be prepared, for the purpose of service on the Landlord (and the Guarantor). In the event, it took nearly five months to achieve this. This is not so surprising. CDGL would have instructed its lawyers, who would first have had to consider and advise whether or not the Landlord’s notice dated 30 August 2016 was valid. It is, in my judgment, unrealistic to argue that the Board minutes of CDGL were written notice to anyone to determine the Agreement. In any event, there is no evidence that the Board minutes were given personally to Mr Lodge (or Mr Darbyshire before January 2017), or copied to Freeths, who by then were the Tenant’s Conveyancer.[28]The alternative argument advanced by Mr Rolfe is that an email dated 16 May 2017 from Freeths to Mr Lodge was sufficient notice to the Guarantor in that it or its deficiencies were waived by the Guarantor. The email is also sent to Mr Havenhand at CDGL and to two lawyers at Freeths. The subject is “RE: Bella Italia, Colchester”. It reads:
“David and Jonathan Please see the attached for your records, which will be sent by Special Delivery in tonight’s post. Once served tomorrow I shall email copy to the landlord’s lawyers.”
Once served tomorrow I shall email copy to the landlord’s lawyers.”[29]A further line has been redacted on grounds of legal professional privilege. The attached, as referred to, is the letter dated 16 May 2017 from Freeths to the Landlord giving notice under clause 14.2 of the Agreement. The Defendants accept that this communication, not addressed to the Guarantor and sent only by e-mail, was not itself valid service on the Guarantor.[30]Mr Lodge’s evidence is that this notice was delivered personally to him in his capacity as Property and Development Director of the Guarantor, and that the attached letter was “placed into my possession on 16 May 2017”. Paragraph 33 of his witness statement gives the following evidence:
“Given that Directors of each of [Bella] and [the Guarantor] had resolved to terminate the Agreement and had received notice of that resolution, and that Steve Richards had authorised service of the First Terminate Notice and I had actually received it, the additional service of the First Termination Notice by sending it to [the actual Guarantor] was not necessary. Hence the letter from Steve Richards to the first defendant dated 7 August 2017 … confirming that ‘… the requirement to serve a notice on [CDL] as Guarantor under the [Agreement], was waived at the time [the First Defendant] served the notice on [the Third Claimant] and such requirement remains waived’.”
[31]The letter dated 7 August 2017 referred to is the letter confirming waiver at the time of service of the notice, from which I quoted in paragraph 20 above. However, in an earlier letter dated 5 June 2017, Bella’s solicitors, Freeths, had responded to the claimants’ contention that the clause 14.2 notice given on 16 May 2017 was invalid, by reason of non-service on the Guarantor, by arguing that the point was entirely misconceived with nothing to commend it, and in particular:
“Our client did not serve a copy of its termination notice on the Guarantor, but for the simple reason that it did not have to do so. On a natural interpretation of the termination right in clause 14.2, and also as a matter of commercial commonsense, the requirement to serve a termination notice on the Guarantor only applied where your client is exercising its right under clause 14.1 or 14.2, not our client.”
[32]No argument based on waiver was advanced. This is somewhat surprising if, as the letter of 7 August 2017 suggests, the requirement “was waived at the time you served the notice”. The inference is that the waiver argument was something of an afterthought.[33]In any event, in my judgment, the waiver argument cannot succeed. There is no suggestion that anything was said by the Guarantor to waive its entitlement to notice. Waiver by conduct must therefore be relied upon. There is no evidence to suggest that the Guarantor was aware that it had a right to waive its entitlement to notice. As the letter of 5 June 2017 makes clear, the Guarantor’s state of mind (if it had one at all, in relation to the Bella’s notice) was that no such notice was necessary as a matter of interpretation of the Agreement. The email dated 16 May 2017 was not a formal notice to the Guarantor but an email from solicitor to client, attaching “for your records” a copy of the letter posted to the Landlord. The client was either CDGL or Bella. There is no evidence and nothing to suggest that the Guarantor was aware of its right or did anything with a view to waiving its right. It is not sufficient to say that if Mr Lodge had realised that the issue existed he would have either directed Freeths to serve notice on the Guarantor or alternatively waived its entitlement to notice. There is nothing that the Guarantor did that can be said to amount to waiver by conduct of its right to be given notice in accordance with the terms of the Agreement.[34]Accordingly, in my judgment, Bella’s notice to terminate dated 16 May 2017 was not validly given because it was not given to the Guarantor as well as the Landlord, nor did the Guarantor waive its right prior to 7 August 2017 to receive notice. In reaching this conclusion, I am conscious that non-service of a hard copy of a separate notice on a sister company of Bella, when the Property Director of Bella had a soft copy of the notice sent to the Landlord, is a very technical and unattractive basis on which to invalidate that notice. However, once it is accepted (as the defendants accept) that clause 14.2 on its true interpretation requires a notice given by Bella to be given to the Guarantor too, and that the unilateral right to determine the Agreement requires compliance with the terms of clause 14.2, any failure to comply will invalidate the notice. It makes no difference that the requirements were substantially complied with or had no apparent purpose or benefit: see Siemens Hearing Instruments Ltd v Friends Life Limited [2014] EWCA Civ 382; [2014] 2 P&CR 5.[35]The Agreement not having been terminated by Bella’s notice dated 16 May 2017, the opportunity remained for the Landlord to give further written notice under clause 13.2 of satisfaction of all Neighbouring Unit Conditions Precedent when indeed they were satisfied. It is common ground that a prior invalid clause 13.2 notice does not prevent the service of a later valid clause 13.2 notice. However, the defendants argue that a prior invalid clause 13.2 notice (such as was given on 30 August 2016) precludes the Landlord and/or the Developer (Churchmanor) from exercising their right under clause 13.4 to waive the NUC thereafter. If that is right then the notice given by the Landlord to Bella dated 1 August 2017 was invalid, because it depended on an effective waiver of the NUC. It would then be necessary to decide whether the notice of claimed satisfaction of the Neighbouring Unit Conditions Precedent given on 26 May 2017 was validly given. On the other hand if the right to waive the NUC still existed on 1 August 2017, the defendants accept that the notice of that date was effective to make the Agreement unconditional. It is therefore appropriate to determine first whether the defendants’ interpretation of clause 13.4 is correct, namely that the right to waive the NUC is lost once an invalid clause 13.2 notice has been given.[36]The difficulty with interpreting clause 13.4 arises from the incorrect reference it contains to clause 15.3. No notices fall to be served under clause 15.3, but clauses 13.3 and 14.2 each provide for notices to be served. To which of those clauses are the words “under clause 15.3” in 13.4 to be taken to refer?[37]The effect of a valid notice pursuant to clause 13.3 is that the Unconditional Date (Neighbouring Unit) is achieved and – if the Unconditional Date (Planning) and the Unconditional Date (Licensing) have previously been achieved – the Agreement becomes unconditional and no termination notice can be served thereafter. If one of the other Unconditional Dates has not yet been achieved, the Agreement remains conditional but the Unconditional Date (Neighbouring Unit) is achieved with effect from the date of the notice. It is therefore not obvious why clause 13.4 would expressly seek to limit the Landlord and/or the Developer’s right to waive the NUC to the period of time before the NUC is satisfied. There would be no occasion to waive the NUC thereafter.[38]The effect of a valid termination notice under clause 14.2 is that the Agreement terminates. It is therefore equally unclear why clause 13.4 should seek expressly to exclude the possibility of waiving the NUC after the Agreement has terminated. Mr Calland, for the claimants, submits that this might have been to exclude a possible argument that the NUC can retrospectively be waived so as to achieve satisfaction of all the Neighbouring Unit Conditions Precedent before the service of the termination notice. Although this is theoretically possible, mere satisfaction of the Neighbouring Unit Conditions Precedent would not suffice: for the NUC to be satisfied there is also the requirement for notice under clause 13.3.[39]On balance, I consider that clause 13.4 is more likely to be referring to a notice given under clause 13.3. Although this exposes the words “at any time before a notice is served under clause 15.3” to a criticism of being surplusage, the purpose of clause 13.4 is to emphasise that, instead of actually satisfying all the Neighbouring Unit Conditions Precedent, the Landlord or the Developer may waive the NUC at any time.[40]The defendants contend that some meaning can be given to the words “before a notice is served under clause 15.3” if that is taken to refer to a notice served under clause 13.3, whether validly or invalidly served. The effect of that interpretation – which happens to suit the defendants’ case – is that the right to waive would be lost as a result of the Landlord or the Developer serving an invalid notice under clause 13.3. The notice might be invalid because, in fact, not all the Neighbouring Unit Conditions Precedent had been satisfied, or because the formalities for giving notice were not complied with. When asked what commercial purpose might underlie such an interpretation of clause 13.4, Mr Rolfe advanced the following argument.[41]First, clause 13.4, which confers a unilateral right to waive a condition precedent, is by way of derogation from the terms of clause 2.3 of the Agreement, which require agreement of the parties to waive the Conditons Precedent. Second, the NUC is not just for the Landlord/Developer’s benefit but also for Bella’s benefit. This claimed benefit is certainty that Bella’s Unit and Nando’s Unit will be developed together and open at the same time. Third, the right to waive the NUC cuts down the benefit to Bella. Fourth, because Bella had no knowledge of the exact terms of the Nando Agreement or the circumstances relating to Nando, satisfaction of the NUC is something of which Bella is unlikely to have any knowledge at the time and must therefore rely on the Landlord. Fifth, the potential loss of the right to waive the NUC therefore operates so as to moderate the Landlord’s understandable desire to claim satisfaction of the NUC at the earliest time, possibly before it is in fact satisfied.[42]Attractively though this argument was developed, I cannot accept that it is the proper interpretation of clause 13 of the Agreement. It is, of course, common ground that the clause must be interpreted objectively, as it would reasonably be understood by an informed person in the position of the parties at the date when the Agreement was made: Chartbrook Limited v Persimmon Homes Limited [2009] UKHL 38; [2009] 1 AC 1101 at [14], per Lord Hoffmann and Arnold v Britton [2015] UKSC 36; [2015] AC 1619 at [15], per Lord Neuberger of Abbotsbury. It is common ground that satisfaction of the NUC includes a case where the NUC is waived under clause 13.4. There is, therefore, no relevant distinction between satisfaction of all the Neighbouring Unit Conditions Precedent followed by written notice and waiver of the NUC followed by written notice. It would, on the face of it, be extremely odd, against that background, for the Landlord to be able to correct an erroneous clause 13.3 notice, by serving a further notice, but not to be able to correct an erroneous notice by waiving the NUC. Although the Landlord should, doubtless, take care in serving formal notices under clause 13, it is easy for genuine mistakes to be made and not clear why that should lead to the loss of an important commercial protection for the Landlord.[43]In my judgment, the NUC is for the Landlord’s benefit and not for Bella’s benefit. This is demonstrated by the fact that the Landlord and/or the Developer can waive the NUC under clause 13.4. Were they so minded, they could do so before the ink on the Agreement was dry, or at any time thereafter (even on the defendants’ case, at least until it first considered that the NUC was satisfied). Further, the dispute resolution provisions of clause 12 of the Agreement do not contemplate the possibility of dispute about satisfaction of the NUC, though they do contemplate possible dispute about satisfaction of the Planning Condition and the Licensing Condition. It seems rather unrealistic, in those circumstances, to suggest that the reasonable reader of clause 13 would understand that a careful distinction was being drawn in terms of the Landlord’s and the Developer’s rights between a correct and an incorrect claim that the Neighbouring Unit Conditions Precedent had all been satisfied.[44]Accordingly, in my judgment, in agreement with the defendants, the reference in clause 13.4 is properly understood as a reference to a notice under clause 13.3 but, contrary to their argument, only to a valid notice that has effect under clause 13.3. In my judgment, therefore, the Landlord retained its right to waive the NUC, prior to termination of the Agreement, irrespective of the invalid notice given under clause 13.3 on 30 August 2016 and (if it be the case) another invalid notice under clause 13.3 given on 26 May 2017.[45]There is no challenge as such to the formal validity of the letter dated 1 August 2017, stating that the Developer waives the NUC and that as a consequence the NUC has been satisfied and the Unconditional Date (Neighbouring Unit) has occurred. The effect of that, with the Planning and Licensing conditions having already been satisfied, was that the Agreement became unconditional on 1 August 2017 at the latest, when all the Unconditional Dates were achieved. Bella could not thereafter give written notice under clause 14.2 to determine the Agreement.[46]By way of summary, the position reached is as follows: i) The Landlord’s notice under clause 13.3 dated 30 August 2016 was invalid; ii) Bella’s notice to terminate under clause 14.2 dated 16 May 2017 was invalid; iii) By 1 August 2017 at the latest, all the Unconditional Dates had occurred and so the Agreement became unconditional; and iv) Bella’s second notice to terminate dated 26 September 2017 was therefore ineffective.[47]In case I am wrong in my interpretation of clause 13.4 of the Agreement and accordingly wrong in holding that the waiver of the NUC on 1 August 2017 was effective, I should state briefly the conclusions that I would have reached in relation to the Landlord’s notice dated 26 May 2017.[48]That notice was given at the same time as notice to Nando waiving the Neighbouring Unit Condition under the Nando Agreement. If clause 13.4 of the Agreement excludes the Landlord’s right to waive the NUC after an invalid clause 13.3 has been given, then the same conclusion must be reached in relation to substantially identical terms in clause 12 of the Nando Agreement. The Landlord having served an invalid notice under clause 12.3 of the Nando Agreement on 30 August 2016, the Landlord could not on 26 May 2017 waive the Neighbouring Unit Condition in the Nando Agreement. That being so, the clause 13.3 notice served on Bella on 26 May 2017 was only valid if in fact all of the Neighbouring Unit Conditions Precedent were satisfied.[49]The defendants contend that the Planning Condition was not satisfied because the Developer did not notify Nando in writing whether or not a condition imposed on the Planning Permission was a Developer’s Unacceptable Condition, as required by the Nando Agreement. It did not do so because it notified Nando by email, which does not amount to valid notice by reason of clause 43.3 of the Nando Agreement. The effect of that, if it is right, is that under clause 6.4 of the Nando Agreement the Planning Permission is deemed to contain one or more Developer Unacceptable Conditions.[50]I would have rejected that argument. It is clear from the email correspondence between the Landlord, the Developer and Nando that those parties were mutually accepting the validity and satisfactoriness of the planning permission obtained. There was no issue under the Nando Agreement as to satisfaction of the Planning Condition. Were the defendants right in their argument, the effect would be that, for the purposes of the Agreement the Developer could never satisfy the Planning Condition in the Nando Agreement, and that by virtue of the loss of the ability to waive the NUC under the Agreement, the Agreement could never become unconditional. It cannot, in my judgment, be right that Bella can argue for the purposes of the Agreement that Planning and Licensing Conditions in the Nando Agreement were not satisfied, on account of a formal irregularity only, when under the Nando Agreement they have been mutually treated as satisfied without question.[51]The Licensing Condition under the Nando Agreement was satisfied by Nando waiving the Licensing Condition. The defendants argue that, for the purpose of the Agreement, the Nando Licensing Condition should be taken to be unsatisfied because there is no provision in the Agreement for Bella to waive the Licensing Condition in the Agreement. That is said to be material because of the definition of Neighbouring Unit Conditions Precedent in clause 13.5.2. Mr Rolfe argues that this means that the Nando Conditions Procedent are to be assumed to be no different from the Conditions Precedent in the Agreement, and must therefore be assumed not to include a right for Nando to waive the Licensing Condition. In my judgment, that goes too far as a matter of interpretation of clause 13.5.2. The definition simply identifies the relevant conditions precedent in the Nando Agreement by describing them as those that are in all material respects the same as in the Agreement, that is to say the Planning Condition, the Licensing Condition and the Neighbouring Unit Condition. It does not require the actual conditions precedent in the Nando Agreement to be read differently, for the purpose of the rights of the parties to the Agreement. In any event, the presence of a unilateral right to waive the Licensing Condition does not mean that the condition itself is not in all material respects the same as the Licensing Condition in the Agreement. The condition is the same, but Nando has the additional right to waive the condition.[52]Had it been necessary to decide the point, I therefore would have held that on 26 May 2017 the Neighbouring Unit Conditions Precedent were in fact satisfied and that the notice of satisfaction of the NUC on that date was also valid.

Cited in 1 later judgment