Performance Retail (General Partner) Limited v Wagamama Limited

A contractual notice is valid only if it conveys the information required by the agreement. The reasonable-recipient approach in Mannai Investment Company Limited v Eagle Star Life Assurance Company Limited applies only after the court has construed the contract to identify that information. Where an agreement distinguishes between satisfaction by performance and satisfaction by waiver, a notice stating merely that conditions have been satisfied is inadequate. It must identify the relevant basis of satisfaction, including which alternative contractual method has occurred. Commercial context may show that the recipient has a legitimate interest in knowing whether conditions were performed or waived.

The claimant, owner of Eastbourne Arndale Centre, entered into an agreement for lease with the defendant concerning a unit in a proposed extension. The agreement was conditional on several matters, including site assembly, highways and road closure orders, pre-letting, finance, possession and licensing.

On 19 December 2016 the claimant’s solicitors notified the defendant that the conditions had been satisfied and that the agreement was unconditional. The defendant later served notice terminating the agreement, contending that the notification failed to identify how the conditions had been satisfied. The central issue was whether the 19 December notice complied with the agreement and brought about the satisfaction date.

1. Claim dismissed. The 19 December 2016 notice was inadequate. The defendant’s termination notice was effective because the satisfaction date had not occurred by the Conditions Long Stop Date.
2. The question whether a contractual notice must contain particular information depends on the construction of the contract. The objective reasonable-recipient test in Mannai Investment Company Limited v Eagle Star Life Assurance Company Limited does not remove requirements imposed by the agreement.
3. The agreement was professionally drafted and its schedules distinguished between different methods of satisfying the conditions. Some conditions could be satisfied by performance, some by waiver, and some by either performance or notice of waiver. The contractual language therefore required notices to identify the relevant basis of satisfaction.
4. A notice stating only that all conditions had been satisfied did not tell the defendant whether the conditions had been performed or waived, or which alternative method had been used. It therefore failed to convey the requisite information and did not make the agreement unconditional.
5. The court rejected the submission that the tenant was interested only in knowing whether the agreement had become unconditional. The reasonable-endeavours obligations, information provisions and the possible effect of waiver on the viability, timing and progress of the development showed that the tenant had a commercial interest in the basis on which the conditions were satisfied.
6. The court did not need to decide the alleged sequence in which the anchor tenants’ agreements had to become unconditional, or the dates on which notices to other tenants had been served.