Kingerlee Holdings Ltd v Dunelm (Soft Furnishings) Ltd

Summary judgment may be granted on a complex contractual construction issue where the court reaches a clear view and a trial has no realistic prospect of producing materially different evidence or conclusions. Contractual obligations to give a tenant notice and an opportunity to make representations before certification do not necessarily constitute conditions precedent to the validity of a practical completion certificate. Their character is determined by construction of the agreement. A planning or signage breach postpones rent only where it prevented the tenant from lawfully opening the premises for trade. A breach affecting retained land, but not the demised premises or the tenant’s lawful trading, does not have that effect.

The claimant, the proposed landlord, sought summary judgment, a declaration of the rent commencement date and specific performance of an agreement for lease concerning a retail unit under construction. The defendant resisted the application, contending that the claimant had not procured a valid practical completion certificate because it had failed to provide the contractual notices and opportunity to make representations. It also contended that an over-height advertising totem delayed satisfaction of the agreement’s planning requirements and postponed the rent commencement date.

The central questions were whether the notice and participation provisions were conditions of valid certification or practical completion, and whether the non-compliant totem prevented the defendant from lawfully opening its premises for trade.

1. Summary judgment. The court had jurisdiction to determine the construction issues summarily. Although the agreement was complex, there was no material factual dispute affecting construction and no realistic prospect that a trial would produce relevant additional evidence. The approach stated by Toulson LJ in BBC Worldwide Ltd v Bee Load Ltd [2007] EWHC 134 (Comm) was applied.
2. Practical completion certificate. The provisions requiring the developer to procure notice of the intended inspection and an opportunity for the tenant to make representations imposed obligations on the developer. They did not make those steps conditions precedent to the validity of the certificate or to practical completion. The certificate was the certificate issued under the building contract, not a parallel certificate under the agreement for lease. The contractual machinery allowed the tenant to challenge the certificate before an independent expert. The expert could postpone the rent commencement date, but could not set aside the certificate.
3. Planning requirements. The signage permission fell within the agreement’s definition of a necessary consent and therefore within the planning requirements. However, those requirements applied only to matters required before the tenant could lawfully open its premises for trade. The over-height totem stood on the developer’s retained land and did not make the defendant’s trading unlawful. It therefore did not postpone the rent commencement date.
4. The defendant had no sustainable defence on the issues argued. Specific performance was granted, and a declaration was made that the rent commencement date was the date contended for by the claimant.