BDW Trading Ltd v Opticlife Ltd

A contractual completion notice is effective only when the contractual conditions for completion have been satisfied. Where completion depends on planning requirements, written approval or agreement required by those requirements cannot be replaced by oral assurances or an expectation of later formal approval. A deeming clause may operate as the definitive mechanism for determining contractual completion, rather than merely as a fallback route. An unauthorised departure from specification is a breach, but does not automatically invalidate notices for every property. Completion may nevertheless be resisted where the breach makes the particular property substantially different from what was agreed.

BDW Trading Ltd agreed to construct and sell 59 flats to Opticlife Ltd. Opticlife paid a deposit of £1.476 million. BDW served completion notices, followed by notices to complete, and then terminated the agreement and forfeited the deposit when Opticlife failed to complete.

Opticlife contended that the completion notices were invalid because pre-occupation planning requirements had not been satisfied and because the flats departed from the contractual acoustic insulation specification. BDW claimed that the departure was authorised and that the planning requirements had effectively been satisfied. The central issues were whether the completion notices were valid and, if not, whether BDW was entitled to terminate and retain the deposit.

1. Planning requirements. Conditions 11 and 17 required written approval or agreement by Barnet before the flats could be occupied. The planning officer’s email and any oral assurances did not amount to that approval or agreement. Nor could an officer without delegated authority give the required approval. Formal written approval was not given until 26 January 2009: paras [39]-[47].
2. Completion notices. Clause 3.4 was a definitive provision identifying when a flat was to be treated as complete for contractual purposes. It required the Buildmark Cover Note, satisfaction of the pre-occupation planning requirements, and installation of the specified fixtures, fittings and contents. The completion notices served on 3 November 2008 were therefore premature and invalid: paras [50]-[60].
3. The notices to complete were consequently invalid because the contractual completion dates had not arrived. BDW’s purported termination and forfeiture constituted a repudiatory breach, which Opticlife accepted. BDW’s claims failed and Opticlife was entitled to repayment of the deposit with accrued interest: paras [61]-[62], [120].
4. Alternative findings. The substitution of isorubber for the specified screed and sound-absorption quilt adversely affected the value of the flats and was not an authorised variation under clause 3.2(d). The value question was assessed by reference to a hypothetical bulk purchaser of all 59 flats, assumed to know the nature of the variation but not the parties’ dispute: paras [104]-[111].
5. An unauthorised variation did not automatically invalidate completion notices for every flat. However, completion could be resisted where the breach made the particular flat substantially different from what Opticlife had agreed to buy. Those conclusions were unnecessary to the result because clause 3.4 had already failed: paras [113]-[119].