Gregory Projects (Halifax) Ltd v Tenpin (Halifax) Ltd & Anor

A contractual condition concerning planning permission is satisfied when permission with the required characteristics is granted by the contractual deadline. Procedural machinery requiring subsequent notification and an opportunity to object does not, without clear wording, make compliance with that machinery a condition precedent to satisfaction of the substantive condition. The court must interpret the agreement as a whole and may imply terms only as part of that interpretative exercise. Contractual headings cannot alter the meaning where the agreement expressly provides that they do not affect interpretation.

Gregory Projects agreed to grant Tenpin a lease for a bowling alley within a proposed development. The agreement was conditional on, among other matters, the acquisition of the site, a cinema letting, licences and planning permission. Planning permission was granted before the contractual End Date, but Gregory did not send Tenpin the written decision until after that date.

Tenpin purported to rescind under clause 4.1, arguing that the planning condition had not been satisfied because the notification and ten-working-day objection procedure in clauses 2.5 to 2.10 had not been completed. Gregory contended that the condition was satisfied upon the grant of qualifying planning permission.

1. Construction. The agreement was to be construed by asking what it would convey to a reasonable person with the relevant background knowledge. The court could not improve the bargain or make it fairer. Any implication of terms remained an exercise in interpretation, consistent with Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988.
2. Planning condition. The phrase “the obtaining” of planning permission referred to the grant of planning permission, viewed from the grantee’s perspective. Accordingly, the Planning Condition was satisfied when qualifying permission was granted, provided that occurred on or before the End Date.
3. Procedural machinery. Clauses 2.5 to 2.10 required prompt notification and gave each party a defined period to identify unacceptable conditions. They helped resolve disputes and promote equality between the parties, but they did not state that the Planning Condition could not be satisfied until the procedure had been completed. The relevant judgment process could therefore take place after the End Date. The word “properly” in clause 4.1 did not justify importing such a condition precedent, particularly given the clause’s poor drafting and obscurity.
4. Headings. Clause 1.1.8 expressly provided that headings did not affect interpretation. Respect for party autonomy therefore prevented the heading “Conditionality” from altering the substantive meaning of clause 2. The divided authorities, including SBJ Stephenson Ltd v Mandy [2000] FSR 286, Doughty Hanson & Co Ltd v Roe [2009] BCC 126 and Orleans Investments Pty Ltd v MindShare Communications Ltd [2009] NSWCA 40, did not alter that conclusion.
5. The Unconditional Date had occurred before the End Date. Tenpin was not entitled to rescind. Declarations were made accordingly and the Part 20 claim was dismissed. An adjournment sought to investigate a speculative late argument about the planning conditions was refused.