Embankment Place Hotels (Blackfriars) Ltd. v Blackfriars Hotels Ltd. & Anor

A contractual notice provision requiring at least eight working weeks’ notice of the date by which specified obligations will have been performed requires the notice to identify a particular date at least eight working weeks after service. A request to begin preparatory procedures, or a statement that obligations have already been performed, does not satisfy that requirement without the necessary date or period. Contractual notices are construed purposively and objectively, by reference to the agreement and the understanding of a reasonable recipient. An omission is not a minor error where it leaves the recipient perplexed about an important date needed for operational preparation.

The parties entered into a development agreement for the conversion of office premises into a hotel. The developer relied on letters dated 4 January and 11 April 2002 as notices under paragraph 13.1 of Schedule 2, which required at least eight working weeks’ notice to the manager of the date by which the developer would have complied with the relevant obligations.

Forbes J rejected the developer’s claim for declarations that valid notice had been given. The developer appealed. The central issue was whether either letter, construed objectively and in its contractual context, complied with paragraph 13.1.

Appeal dismissed. Aldous LJ delivered the principal judgment, and Rix LJ agreed.

1. Paragraph 13.1 required the developer to give the manager notice of the date by which it anticipated having complied with the relevant obligations. That date had to be at least eight working weeks after the notice. The requirement was important because the manager was not closely involved in the development and needed to prepare to operate the hotel.
2. The notice provision served several related purposes. It triggered the inspection and certification procedures, alerted the manager to prepare for operation, and facilitated the certificate of operability. That certificate was an essential element of completion, which affected payment and the developer’s licence to remain on the premises.
3. The letters had to be construed purposively and objectively, asking how a reasonable recipient would understand them in the contractual context. The letter of 4 January was a request to start the procedures leading to the certificate of operability. It gave no date by which the developer would have complied and, in any event, did not give eight working weeks’ notice.
4. The letter of 11 April was capable of being read as an intended paragraph 13.1 notice, but it stated that the developer had complied with its obligations and did not identify a future date or period. The possible inference that the relevant date was eight weeks after the letter was insufficient. The omission was material, not a minor error, because the date mattered to the manager.
5. Mannai Investment Co Ltd v Eaglestar Life Assurance Co Ltd [1997] AC 749 did not assist the developer. That case concerned a different situation in which the intended date was sufficiently clear and there was only one possible meaningful date. Here, the notices were defective and uncertain.

The appeal was dismissed. The appellant was ordered to pay the respondents’ costs assessed at £35,139. Permission to appeal to the House of Lords was refused.

1. Court of Appeal (Civil Division): In [2003] EWCA Civ 588, the appeal was dismissed unanimously.
2. High Court of Justice, Queen’s Bench Division: Forbes J rejected the claim for declarations that the developer had given a valid paragraph 13.1 notice.