Oakley & Ors v Harper MckAy Developments Ltd

A party serving a notice to complete must be ready, willing and able to complete, but need not have every administrative document prepared. The party must have resolved all substantive matters required for completion. A contractual obligation to assign intellectual property rights is substantive, although the relevant rights may be provided by their owners rather than by the seller itself. A course of correspondence may waive strict compliance with the contractual form of performance. An access clause confined to commencing conversion works does not ordinarily extend to access for prospective funders where the contract separately addresses assistance to lenders. A term will not be implied where the contract remains commercially coherent without it.

The claim arose from a contract under which the claimants agreed to sell Norfolk House to the defendant for redevelopment. Completion was extended to 7 September 2015. The claimants served a notice to complete on 11 September and rescinded the contract on 12 October after the defendant failed to complete.

The claimants sought declarations concerning the completion date, copyright obligations, rescission and a unilateral notice. The defendant disputed rescission and pursued a counterclaim, initially for specific performance and later in principle for damages. The central issues were whether the claimants were ready, willing and able to complete, whether they had breached the access obligation, and whether any such breach caused the defendant's failure to complete.

1. Rescission. The claimants were entitled to serve the notice to complete and to rescind the contract when the defendant failed to complete within the contractual period. The claim was therefore determined in the claimants' favour.
2. The test is whether the party serving notice was poised to complete and able to set in motion the administrative arrangements needed for completion: [2006] EWCA Civ 756. Formal documents need not already have been prepared, but unresolved matters of substance prevent readiness. The copyright obligation was substantive, not administrative.
3. The words requiring the seller to assign copyright required assignment by the claimants if they owned the rights, or procurement of assignment by the rights owners if they did not. The relevant copyright owners had provided transferable, non-exclusive licences rather than assignments. However, the defendant repeatedly objected only to dating and scope, and never objected to the licence form or supplied draft assignment wording. In those circumstances the defendant waived its right to insist on assignments.
4. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 governs express variations of material terms, but does not prevent waiver of a contractual right. The court followed Courtney v Corp, whose reasoning on waiver was ratio, and treated the contrary observation in Dudley Muslim Association v Dudley MBC as obiter.
5. Clause 14.1 required access for physically commencing conversion works. It did not require access for prospective funders. Clause 23 separately required reasonable assistance with lenders' reasonable enquiries, and the contract was coherent without implying a wider access term. In any event, lack of access did not cause or materially contribute to the failure to complete.
6. The unilateral notice was removed by consent. The counterclaim fell away because the claimants were entitled to rescind.

First-instance decision. The judgment records that Master Teverson dismissed both summary judgment applications on 11 September 2017, save for a declaration that the claimants were not required to assign intellectual property rights before completion. The remaining issues were determined at trial.