Menolly Investments 3 Sarl v Cerep Sarl (Rev 1)

There are two actions before me. The first is an action by Menolly Investments 3 S.a.r.l. (“Menolly”) seeking declaratory relief against Cerep S.a..r.l. (“Cerep”) in relation to a number of certificates of practical completion in respect of the Works described below. The second is an action by Cerep against Menolly and its subsidiary Menolly Homes Ltd (“Menolly Homes”) seeking different declarations in relation to the same certificates. The two actions are two sides of the same coin. There are perfectly good reasons why there are two separate actions which I do not need to go into. Essentially this is the result of the extreme time-pressure under which the parties have been acting following the grant of interim relief by me on 20 February 2009. There are, in any case, now composite pleadings covering both actions. Menolly Homes is joined in order to ensure that it is bound by any decision as between Menolly and Cerep.

The core issue in the two actions is whether a building at 107 Cheapside, London (“the Building”) has been validly certified as complete for the purposes of the Building Contract and the Share Sale Agreement (“the SPA”) described below.

The dispute arises out of a contract dated 22 December 2006 (“the Share Sale Agreement”) made between Menolly and Cerep, under which Menolly is to purchase the issued shareholding in CEREP Cheapside S.a.r.l (“Cerep Cheapside”) and two other companies. Menolly Homes is also a party to the Contract in order to guarantee Menolly’s obligations under the Contract. The Building is owned by Cerep Cheapside. Completion of the SPA is dependent on, among other matters, on practical completion of certain building works in relation to the Building.

Those building works are the subject of a building contract dated 28 November 2008 (“the Building Contract”) made between Cheapside GP (II) Ltd (acting in its capacity as general partner of the Cheapside Limited Partnership) referred to as the Employer and ISG InteriorExterior plc referred as the Contractor. The Building Contract is referred to in the SPA. A certificate of practical completion under the Building Contract has an important part to play in the SPA since completion of the SPA is dependent upon practical completion of the Works as defined in the Building Contract and the issuing of an appropriate certificate under the Building Contract.

A number of Certificates of Practical Completion as defined in Schedule 5 to the SPA have been issued. The principal question for me is whether any of those Certificates is valid. If the answer is Yes, the SPA falls to be completed.

I start by referring to some, at least, of the relevant provisions of the Building Contract. It is a JCT Standard Form of Building Contract with Contractor’s Design 1998 edition; it incorporates certain amendments and provisions unique to this particular contract. It is to be noted that this is a contract under which the Contractor is responsible for design as well as construction.

The Building Contract is one which envisages sectional completion under which for separate parts of the Works, practical completion can be subject to separate certification. This is dealt with by Article 8 which provides for certain Modifications to the standard form to apply. These are introduced by the following provision:

“Where article 8 (sectional completion) applies the modified clauses and other provision reproduced in these Modifications are incorporated in this Contract in place of the unmodified clauses and other provisions. The modifications are shown by deletions and insertions with the words ruled through deleted and the words underlined inserted. The insertions in clause 1-3 (Definitions) include an additional definition; and in clause 16 (Practical Completion and Defects Liability Period) an additional sub-clause.

Article 1 provides for the Contractor to complete the design for the Works and carry out and complete the construction of the Works. The Works is a defined term, the precise wording of which is not material although the scope of the Works is material. In that context, I need to record that the Works included part demolition of an existing building and the stripping out of the rest of it; the construction of a new building and works of renovation to what remained of the existing building.

Certain functions under the Building Contract are to be carried out by the Employer’s Agent; that is a company called Second London Wall Project Management Ltd. The company was previously called GVA Second London Wall Project Management Ltd but had changed its name well before the date of the Building Contract.

Pursuant to Article 2, the “Employer’s Agent” is Second London Wall Project Management Limited (which I will refer to as SLW).

The following definitions in Clause 1 are to be noted:

The Employer’s Requirements and the Contractor’s Proposals are referred to in the First and Second recitals respectively. The First recital appears in the form modified pursuant to the Modifications referred to in Article 8. The Works are briefly described as:

“The strip-out and partial demolition of the existing 8 storey building with its 3 levels of basements, separation from the adjacent buildings to the east, refurbishment and strengthening of part of the existing buildings and addition of a 9^th floor, construction of a new 9 storey steel framed building connected to the existing retained building, fit-out of upper office floors to category A and completion of retail areas to shell and core development in phased sections at 107 Cheapside, London EC2, for which works he [the Employer] has issued to the Contractor his requirements (hereinafter called “the Employer’s Requirements”);….”

Article 4 states that the Employer’s Requirements (among other things) have been signed by the parties and are identified in Appendix 3 to the Conditions. I will need to mention a few provisions of the Employer’s Requirements in due course. The Contractor’s Proposals are the same as the Employer’s Requirements together with some other works concerning stone replacement which are of no relevance.

Article 6 provides for any dispute or difference to be referred to adjudication in accordance with clause 39A. Article 6B then provides for final resolution of disputes in the absence of agreement by legal proceedings.

Clause 2 (as modified by the Modifications) sets out the Contractor’s obligations. Clause 2.1 relates to design as well as construction. Construction is to be completed by Sections. Its material provisions are as follows:

“The Contractor shall upon and subject to the Conditions carry out and complete by Sections the Works referred to in the Employer’s Requirements, …, the Articles of Agreement, these Conditions and the Appendices in accordance with the aforementioned documents and for that purpose shall complete the design for the Works….”

Clause 6.1 deals with compliance with statutory requirements. The Contractor must comply with and give all notices required by any Act etc and any byelaw or regulation of a local authority which has any jurisdiction in relation to the Works.

Clause 6A casts various obligations on the Employer in relation to compliance with the CDM Regulations. Where the Contractor is not the Planning Supervisor, as in the present case, information must be provided to the Planning Supervisor as he reasonably requires for the preparation of the health and safety file required by those Regulations.

Clause 16 concerns Practical Completion and Defects Liability Period. In their form as modified by the Modifications, clauses 16.1 and 16.5 provide as follows:

“16.1

When a Section has reached practical completion and the Contractor has complied with clause 6A.5.1, or has complied sufficiently with clause 6A.5.2, whichever clause is applicable, the Employer shall give the Contractor a written statement to that effect, which statement shall not be unreasonably delayed or withheld, and practical completion of such Section shall be deemed for all purposes of this Contract to have taken place on the day named in such statement.

……..

16.5

When practical completion of all the Sections has been achieved, and the Contractor has complied with clause 6A.5.1 or has complied sufficiently with clause 6A.5.2, whichever clause is applicable, in respect of all the Sections, the Employer shall give the Contractor a written statement to that effect and Practical Completion of the Works shall, for the purpose of clause 30.5.1 be deemed to have taken place on the day named in such statement.”

Clause 16.1 has been further amended by the insertion of additional words and the addition of a new sub-paragraph. The additional words are added after the words “whichever clause is applicable” they read “and has complied with clause 5.5.1”. I will come to that clause in a moment; it relates to documentation concerning health and safety. The same words are added in clause 16.5 again after the words “whichever clause is applicable”. Clause 16.5 is not material to the matters before me but I mention it for completeness in relation to the structure of clause 16. Clause 16.1, I would underline, applies to each Section separately. As will be seen, Menolly’s payment obligations under the SPA are dependant upon practical completion of both Sections.

There is a point of construction which arises under clause 16.1 which is of relevance and which I would mention (without deciding) at this stage. Clause 16.1, in referring to the written statement, uses the words “to that effect”. It is not immediately apparent whether or not the written statement must include on its face a statement to the effect that clauses 6A.5.1 (or clause 6A.5.2) and 5.5.1 had been complied with. It is common ground between the parties that the written statement does not need to include a statement to that effect; each party has an argument in its favour based on that conclusion. I am not sure that that common ground is correct. This is relevant to issues concerning the validity of certificates relating to Section 2.

Clause 5.5.1, an added provision, relates to health and safety documentation:

“The Contractor shall, by no later than the date of practical completion of each Section or the date on which the Employer takes partial possession of any part of the Works pursuant to clause 17 (hereinafter referred to as “the relevant parts of the Works”) and without further charge to the Employer, supply to the Employer 3 hard copies and 1 electronic copy on CD Rom of a full and complete health and safety file which shall have been prepared in accordance with the DCM Regulations and the Employer’s Requirements in relation to the relevant Section or the relevant part of the Works, together with 3 hard copies and 1 electronic copy on CD Rom of all working drawings and draft information showing or describing the relevant Section or the relevant part of the Works as-built and concerning the maintenance and operation thereof (including any installations comprised in such Section or the relevant part of the Works) as may be specified in the documents named in clause 5.1, such draft information to be reasonably complete and in sufficient detail to enable the relevant Section or the relevant part of the Works to be fitted out and to enable its safe occupation, use and maintenance and to include all commissioning records and test data.”

The Employer’s requirements are further referred to in Article 4, referring the reader to Appendix 3 which in turn refers the reader to the attached Schedule. That is a reference to a document dated November 2006. In that document, the Employer’s Requirements are described as being comprised in a number of documents listed. They include “Architectural Specifications and Drawings”, referring the reader to a six-page document schedule entitled “Employer’s Requirements – Documents and Drawings List”. That six-page list itself contains a reference to documents entitled “Building Specification”, “Planning Condition Log” and “Building Regulations Log”, all produced by John Robertson Architects.

Under the Building Specification, provision is made at paragraph 1.3 for Specification and Occupancy Standards. Paragraph 1.3.1 reads as follows:

“All new construction and, where practicable, alterations and additions to the retained parts will comply with all relevant statutory regulations current at the date of the relevant consent including the current Building Regulations, appropriate British Standards/British Standard Codes of Practice and CIBSE recommendations. The recommendations including in the British Council for the Offices Specification have been used as guide in the preparation of this design.”

At paragraph 1.3.4 it is provided that:

“Retail units are provided on the Cheapside frontage either side of the office entrance. The units will be offered at “shell” status with sleeves for incoming Utilities by tenant and capped off connection for drains”.

The clear internal heights from the floor slab to underside of the first floor slab in each unit is as follows” with heights being specified.

At paragraph 6 provision is made about “Internal Finishes to Retail Units (Shell and Core)”; in particular paragraph 6.1 provides as follows:

“The retail units will be finished to Shell and Core status to include the following finishes:-

Floors Concrete slab to a light tamp finish to receive a floor screed and finishes by tenant. NB. Some slabs are existing

…………..”

Someone has written on the copy in the court bundle the word “as” before “existing” although who and why I do not know. The sense is perfectly clear without that addition when it is remembered that not all of the Works concerned the new build. Some at least of the retail units were to be provided in the existing construction (as refurbished) where slabs already existed.

The Building Specification refers to a number of drawings which are to be read in conjunction with the specification. It is to be noted that there is no drawing which deals with “level access” (as explained later) to the Retail units. Nor is any express reference made to such access in the Building Specification or any other document.

Also emanating from John Robertson Architects is a schedule called “Building Regulations 2000: Conditions Log”. The status of this document is not entirely clear to me. Mr Friedman describes it as a checklist; Mr McGhee says that it is effective to impose design and construction obligations on the Contractor. There is a box against each entry in a column headed “Submittal Required”. One can get the flavour of the document by considering the first three entries under the heading “Part A – Structure”. Entry 1 states that full structural details shall be submitted together with design calculations; the submittal box is ticked. Entry 2 requires submittal of details and calculations in respect of external enclosures; this entry is ticked too. Entry 3 states that all internal non-bearing walls shall have adequate restraining to ensure stability; the submittal box is not ticked. Entries 1 and 2 are ticked because their wording requires submittal and the tick indicates that this requirement of submittal must be complied with. Entry 3 is not ticked, no doubt because the entry does not require submittal of anything but relates to the provision of restraints. The absence of a tick does not mean that it is unnecessary to provide adequate restraints. However, Entry 3 does not indicate what internal non-bearing walls have to be provided: it merely requires compliance with a standard in respect of that which does have to be provided.

A similar analysis applies, it seems to me, to each of the entries. Where there is a tick, the text of the Entry refers to submittal of something. In other cases, the Entry refers to the standard or testing of work to which the entry relates. It seems to me clear that the requirements set out in an Entry form part of the Employer’s Requirements. Many (if not most – I do not know) of the Entries which do not require submittal relate to the standard or conditions or work which falls within the scope of the Works rather than defining that scope.

One section of the document is headed “Part M Access to and Use of Buildings” under which appears the following in a box:

“Reasonable provisions shall be made with respect of the following, in accordance with Approved Document M.

All references in the following conditions to provisions, Tables, Diagrams, Sections and paragraphs relate to Approved Document M

The objectives and design considerations with Approved Document M should be addressed in all proposals.”

Those words do not identify any actual proposals: there is simply a requirement that the requirements of Approved Document M are to apply to “the following”. It is also provided that where the (unidentified) proposals depart from the guidance given in Approved Document M, and Access Statement should be submitted as described in 0.20 to 0.28 of the General Guidance. I have not been taken to that material.

Indeed, I have not been taken to any part of Approved Document M. Mr McGhee tells me it is a reference to Part M to Schedule 1 of the Building Regulations which deal with level access. I understand that to be compliant with those regulations, level access must be provided. This is particularly important in relation to the Retail Units where a prospective tenant will naturally want to know how the regulations are to be complied with.

The only substantive requirements concerning access are found in Entries 58 and 59. Entry 58 deals with the level approach from the boundary of the site and car parking “to the principle [sic] entrance”. Entry 59 relates to handrails to internal steps, stairs and ramps.

The Planning Condition Log also comes from John Robertson Architects. It is noted at the top of the first page of the document, in manuscript, that it is the responsibility of the Employer is responsible to obtain all necessary planning consents. The planning log also has a column headed “submittal required”; these relate to submittals of applications or documents to statutory authorities. Otherwise, the entries list the planning conditions which are to be complied with. Condition 22 (which is ticked in the Submittal Required column) reads as follows:

“Access and egress to the building shall be provided and maintained for the life of the development for disabled persons in compliance with the provisions of Section 4 of the Chronically Sick and Disabled Persons Act 1970. Details of the provision shall be submitted to and approved in writing by the Local Planning Authority.

REASON: To ensure that the development will be accessible for people with disabilities in accordance with the following policies….”

With that description of the relevant parts of the Building Contract I turn to the SPA. In this document, “Completion Date” is defined as the tenth business day following the “Condition Compliance Date”. In turn, the Condition Compliance Date is defined as the later of (a) the “Certificate Date” relating to the final section of the Works to achieve practical completion and (b) the earlier of (i) the grant of the “City Lease”, or the waiver of conditions relating to the grant of the City Lease pursuant to clause 2.5 of the SPA. I am concerned only with paragraph (a) since it is common ground that the City Lease was granted on 6 February 2009.

The main provisions with which I am concerned are found in Schedule 5. But I should mention two provisions in the main list. First, clause 17.9 provides for amendment etc of the SPA or any of the documents referred to in it but only in writing; and similarly, a waiver of any terms etc has to be made in writing. Secondly, clause 18 which provides for the giving of notices in connection with the SPA. So far as concerns a notice to Menolly, this must be in writing and left at, sent by post to or faxed to Menolly at 4 Main Street, Lucan, County Dublin, Ireland, or faxed to a specified number, for the attention of Bryan Higgins.

The Certificate Date is defined earlier in the SPA as having the meaning given to it in Schedule 5. It relates to the final section of the works to achieve practical completion. Before looking at Schedule 5, I should just mention clause 2.2 which provides a long stop date. If the Conditions have not occurred by 16 March 2009 then the Vendor (Cerep), as soon as reasonably practical thereafter, may serve a written notice, the “Delay Notice”, upon the Purchaser (Menolly) specifying the date being its best estimate of when they shall occur. Clause 2.3 then gives the Purchaser the option to accept the date of the Delay Notice, or to elect to terminate the agreement.

Schedule 5 expressly refers to the Building Contract. It contains a number of relevant definitions as follows:

Practical Completion as defined is concerned with the Works ie with building works; compliance with clause 5.5.1 forms no part of this definition. It seems to me that the actual issue of written statement under clause 16.1 depends on two matters both of which – practical completion and compliance with clause 5.5.1 – should be complied with before the Employer’s Representative issues his certificate. Practical Completion refers to the first of those; it does not subsume the second. In other words, Practical Completion as defined occurs when the building works have reached a stage where the Employer’s Representative would not be justified in withholding a written statement under clause 16.1 of the Building Contract on the basis that further work needed doing; but he might still be justified in refusing to give the written statement because clause 5.5.1 had not been complied with. Practical Completion could thus occur at a time when clause 5.5.1 had not yet been complied with and thus at a time before the Employer was obliged to issue to the Contractor a written statement under clause 16.1 of the Building Contract.

In contrast, a Certificate of Practical Completion means a certificate of practical completion to be issued under the Building Contract by the Employer’s Representative. I wish to make two points in relation to that definition.

It also needs to be noted that the Certificate Date for the final section to achieve practical completion, on which completion of the SPA depends, relates to the date of the certificate of Practical Completion and not the date (if different) as of which that Certificate certifies the section to be practically complete.

It would appear from all of this that a “Certificate of Practical Completion” in relation to a Section is more than a certificate that Practical Completion (as defined) of that Section has occurred. It is also a certificate which ought to be given only in accordance with the terms of the Building Contract and thus only once the provisions of clause 5.5.1 have been complied with; it might therefore be argued that a Certificate of Practical Completion is also a certificate that clause 5.5.1 has in fact been complied with and is not just a certificate that Practical Completion has occurred.

From this chain of definitions, it can be seen that completion of the SPA is fixed by reference to the Certificate Date for the final section, that is to say the written statement to be provided under clause 16.1 of the Building Contract in relation to the final section. The Purchaser’s obligation is to pay the purchase price ten working days thereafter.

Paragraph 5 requires Cerep to procure that the Employer shall use all reasonable endeavours to procure that the Contractor shall proceed with the Works with due speed in accordance with the Documents.

Clause 6.5 provides for Cerep to procure that the Employer will not, without the prior consent of Menolly, terminate, waive, compromise or jeopardise any rights or powers which it may have against the Contractor if Menolly is or may be prejudiced by such action.

Paragraph 10 of Schedule 5 to the SPA is of some importance. Its relevant provisions are as follows:

“10.1

The Vendor shall procure that the Employer shall keep the Purchaser informed as to the progress of the Works and every anticipated Certificate Date and shall use its reasonable endeavours to give to the Purchaser at least ten business days notice of every anticipated Certificate Date. The Purchaser’s consent shall be required for any partial possession, such consent not to be unreasonably withheld or delayed.

10.2

Without prejudice to the generality of paragraph 9.1 the Vendor shall procure that the Employer shall procure that the Employer’s representative gives to the Purchaser not less than five business days written notice of the Employer’s Representative’s intention to inspect the works for the purpose of establishing whether Practical Completion of a section has occurred. A representative of the Purchaser and a representative of the Purchaser’s lender shall have the right to accompany the Employer’s Representative on the inspection and the Purchaser’s representative shall have the right to make representations which the Vendor shall procure the Employer’s Representative to take into account (but without prejudice to the Employer’s Representative’s independent discretion in deciding whether to certify practical completion).

10.4

The Certificate of Practical Completion for each section shall be final and binding on the parties and shall be conclusive evidence for all purposes of this Schedule that Practical Completion for the relevant section has been reached save only in the case of manifest error or fraud.”

Paragraph 10.4 is concerned, as can be seen, with the “Certificate of Practical Completion” and not just with “Practical Completion”. As I have explained, the former definition is concerned with more than simply certification of Practical Completion (as defined). It is also concerned with compliance with clause 5.5.1. I say “concerned with” deliberately since the “final and binding” effect of paragraph 10.4 depends to a large extent on precisely what it is that the written statement under clause 16.1 of the Building Contract actually requires.

There are two inter-related issues. The first (which I have already mentioned) is whether a written statement under clause 16.1 has to refer expressly to compliance with clause 5.5.1. The second is whether compliance with clause 5.5.1 is a condition precedent to the issue of a certificate under clause 16.1. These are matters to which I will return when considering the validity of various certificates of practical completion given in relation to Section 2, if I need to (see paragraph 181 and 182 below).

A number of certificates of practical completion have been issued.

In relation to Section 1 (retail units), a certificate was issued on 4 December 2008 (“Certificate 7”). It is numbered 7 because it came to light so far as Menolly is concerned only after the validity of 6 certificates relating to Section 2 had come into issue in these proceedings. Menolly only learned of Certificate 7, and saw it for the first time, following disclosure in the last couple of weeks. It purports to certify Practical Completion for Section 1 (Retail Areas) as at 26 September 2008. Its validity is challenged by Menolly on a number of grounds.

The evidence given by Mr Ramsey of SLW who has signed all of the certificates with which I am concerned is that the failure to send a copy of this certificate to Menolly at the time was an oversight. I accept that evidence and have no reason to think – and it is not suggested – that there was a deliberate decision to withhold this certificate.

Menolly contends that Certificate 7 is invalid for a number of reasons. These include the following:

In order to get the point out of the way, I deal now with the allegation that Certificate 7 was issued by the wrong issuer. The SPA requires the Certificate of Practical Completion to be issued by the Employer’s Representative ie SLW. Certificate 7 was issued by an entity described as “GVA Second London Wall Project Management Ltd” whose address is given as 10 Stratton Street, London, W1J 8JR. It is signed by Mr Ramsay on behalf of “the issuer described above”.

As a matter of fact, there was not at the time of Certificate 7, a company having that name. SLW’s name was (and remains) “Second London Wall Project Management Ltd” ie the same as that of the issuer with the omission of GVA. SLW’s registered office was in Birmingham at the same address as that of another company, GVA Grimley Ltd. It appears that GVA Second London Wall was a trading name of GVA Grimley Ltd although there is some suggestion that it was also used as a trading name of SLW. In relation to that trading name, Mr McGhee points out that at the top Certificate 7 appear the words GVA Second London Wall and immediately underneath it in smaller type-face the words Project Management.

My attention is also drawn to emails in which the address of “GVA Second London Wall” is shown at the Stratton Street address.

Significantly, SLW was previously named GVA Second London Wall Project Management Ltd, that is to say the same name as the issuer. It is also to be noted that the Employer’s Agent under the Building Contract was SLW, named correctly as Second London Wall Project Management Ltd.

There are three possible ways in which “GVA Second London Wall Project Management Ltd” in Certificate 7 might be read:

I have no doubt that the first of those possibilities is correct. I reach that conclusion for the following reasons:

It follows that there can b no effective challenge to Certificate 7 on the ground that it was issued by the wrong entity.

Cerep contends that Certificate 7 was valid. Alternatively, it says that Menolly is estopped from taking the point, or has waived the point, that Certificate 7 is invalid having proceeded since about September 2008, and having allowed Cerep to proceed from about then and in particular since the date of Certificate 7, on the footing that Section 1 was practically complete, with it being understood that any dispute concerning level access would be dealt with by financial compensation.

There have been a number of certificates issued in relation to Section 2. The first certificate (“Certificate 1”) is dated 4 February 2009. When the matter came before me on an interim basis on Menolly’s application for an injunction to restrain Cerep from acting on the basis that Certificate 1 was valid, it was the only certificate which had been issued in relation to Section 2. Its validity was challenged on a number of grounds. It remains subject to challenge on grounds which may be briefly stated as follows:

Further certificates were issued following my judgment on the interim hearing to address the possible defects in Certificate 1. Cerep does not accept that Certificate 1 was invalid, but issued these further certificates, without prejudice to their contention that it was valid, in case they should be wrong. Those certificates were challenged too. The result has been a continuing ping-pong of challenges followed by further certificates to meet the objections as the hearing proceeded before me. On last Thursday, 12 March 2009, there was an inspection of the entire Building for the purpose of issuing Certificates of Practical Completion in relation to both Sections. It is accepted by Menolly that proper notice of the inspection was given. Following that inspection, Mr Ramsey has issued further Certificates of Practical Completion in respect of both Sections, again without prejudice to the validity of the earlier certificates. Menolly now accepts that a valid certificate has been given in respect of Section 2.

It also accepts that, subject to one issue, a valid certificate has also been given in respect of Section 1. It does not, however, accept that Certificate 7 (in relation to Section 1) is valid and continues to challenge it on a number of grounds. Cerep continues to assert the validity of Certificate 7. It also continues to assert that Menolly is estopped from taking the point, or has waived the point.

Accordingly, whether or not the SPA must be completed by Menolly turns on practical completion of Section 1. That turns on (a) whether the “level access” issue precludes the issue of a valid certificate and (b) if it does whether Menolly is nonetheless estopped from taking the point or has waived it. The validity or otherwise of the certificates in relation to Section 2 is relevant only if Cerep is successful in relation to Section 1 since, if it fails, Menolly will not have to complete the SPA at all.

If Cerep succeeds in establishing the validity of Certificate 7 or succeeds on its estoppel/waiver case, then the correct Completion Date will depend on the date of the earliest valid certificate in respect of Section 2 and it will be necessary for me to resolve a number of issues in deciding which is the earliest valid certificate. In contrast, if Cerep succeeds only in relation to Certificate 10 so far as concerns Section 1, the Completion Date runs from Friday 13 March 2009 and nothing turns on whether there was a valid certificate in relation to Section 2 before that date.

The certificates in relation to Section 2 are as follows:

In addition to Certificate 7, further certificates have been issued as follows in relation to Section 1:

At this stage of my judgment, I propose to consider briefly some of the relevant legal principles concerning (i) the effect of certification where there is “final and binding” provision and (ii) the meaning of manifest error.

Mr McGhee has referred me to one authority (in the House of Lords and in the Court of Appeal) concerning the meaning of the words “practical completion”: Jarvis & Cons v- Westminster Corpn. [1970] 1 WLR 637 at 646 E to F. He cites Viscount Dilhorne who considered the test to be as follows:

“One would normally say that a task is practically completed when it was almost but not entirely finished, but “practical completion” suggests that that is not the intended meaning and that what is meant is the completion of all construction work that has to be done.”

In the Court of Appeal in the same case, Salmon L.J analysed the words in these terms ([1969] 1 WLR 1448, at 1458 D to F):

“The obligation upon the contractors under clause 21 to complete the works by the date fixed for completion must, in my view be an obligation to complete the works in the sense in which the words "practically completed" and "practical completion" are used in clauses 15 and 16 of the contract. I take these words to mean completion for all practical purposes, that is to say, for the purpose of allowing the employers to take possession of the works and use them as intended. If completion in clause 21 meant completion down to the last detail, however trivial and unimportant, then clause 22 would be a penalty clause and as such unenforceable…..”

Mr McGhee relies on these passages in support of his proposition that, without more, the phrase “practical completion” as ordinarily used in a standard form contract now means and is accepted by common usage to mean “complete for all practical purposes”. I think that is consistent with what Mr Friedman says: Practical completion is indistinguishable from substantial completion, citing Big Island Contracting v Skink (1990) 52 BLR 110 (Hong Kong CA), as to which Keating on Construction Contracts (2006) states at paragraph 4-009:

“One test to be applied is whether the work was ‘finished’ or ‘done’ in the ordinary sense, even though part of it is defective. And ‘it is relevant to take into account both the nature of the defects and the proportion between the cost of rectifying them and the contract price’.”

He draws my attention also to paragraph 19-113 where it is stated:

“Practical Completion is perhaps easier to recognise than to define. No clear answer emerges from the authorities as to the meaning of the term.”

Quite so.

I bear all of that in mind. One question in the present case is whether the works which Mr McGhee has identified as incomplete means, as he contends, that the Works were not practically complete in that sense or whether, as Mr Friedman contends – assuming he needs to since, on his case, this is a matter for Mr Ramsey - that they were practically complete.

There is a substantial body of learning on the meaning of “final and binding” in provisions of the type in issue in the present case. There is no doubt that they are effective, well-recognised and are interpreted strictly.

Perhaps the best-known case in this area is Jones v Sherwood Computer Services Plc [1992] 1 WLR 277. The headnote accurately summarises the decision when it describes the correct approach in this way: where parties had agreed to be bound by the report of an expert, the report, whether or not it contained reasons for the conclusion in it, could not be challenged in the courts on the ground that mistakes had been made in its preparation unless it could be shown that the expert had departed from the instructions given to him in a material respect. Of course, fraud always allows matters to be re-opened and if, as in the present case, there is an exception for manifest error, that too can form a ground on which to challenge the expert’s (or certifier’s) determination. In the course of his judgment (with which Balcombe LJ agreed) Dillon LJ said this at p287

“On principle, the first step must be to see what the parties have agreed to remit to the expert, this being, as Lord Denning M.R. said in Campbell v Edwards [1976] 1 WLR 403, 407G, a matter of contract. The next step must be to see what the nature of the mistake was, if there is evidence to show that. If the mistake made was that the expert departed from his instructions in a material respect—e.g., if he valued the wrong number of shares, or valued shares in the wrong company, or if, as in Jones (M) v Jones (RR) [1971] 1 WLR 840, the expert had valued machinery himself whereas his instructions were to employ an expert valuer of his choice to do that — either party would be able to say that the certificate was not binding because the expert had not done what he was appointed to do.”

He went on to express his conclusion in this way:

“If the parties to an agreement have referred a matter which is within the expertise of the accountancy profession to accountants to determine, and have agreed that the determination of the accountants is to be conclusive, final and binding for all purposes, and the chosen accountants have made their determination, it does not seem appropriate that the court should rush in to substitute its own opinion, with the assistance of further accountants' evidence, for the determination of the chosen accountants. When the parties provided in appendix I to the sale agreement for a third firm of accountants—in the event, Coopers—to act as the expert in the event of disagreement between Peats and Deloittes, they cannot have had in mind merely disagreements between Peats and Deloittes on simple arithmetic—the adding up of the figures of the sales”.

The authorities were again reviewed in Homepace Ltd v Sita South East Ltd [2008] EWCA Civ 1, [2008] 1 P. & C.R. 24. In that case, L granted T a 999-year lease of a disused quarry intended for waste disposal, and adjacent land intended for quarrying. The lease provided for the suspension of part of the rent, if “the Minerals” were either exhausted or not economically recoverable within 10 years, if the tenant provided an independent surveyor's Mineral Exhaustion Certificate confirming one of those alternatives, and gave 12-months' notice. “The Minerals” were defined as “all minerals within the land excluding for the avoidance of doubt the Reserved Minerals”. In 2004 a surveyor produced a Mineral Exhaustion Certificate on the basis that “the Minerals” were not economically recoverable within 10 years. However, he explained in subsequent correspondence that he had made his determination on the assumption that “the Minerals” excluded all limestone suitable for use as building walling and/or rockery stone and/or stone tiles and roofing slates. The judge held that the expert had wrongly interpreted the meaning of the Minerals, and that the certificate was invalid.

The appeal was dismissed. The Court of Appeal held that, in considering whether an expert's determination was binding, it was necessary to consider (1) the scope of the expert's authority, ie what the parties had agreed he should decide; (2) whether his determination fell within the scope of that authority, ie what he had in fact decided; and (3) if his determination fell within the scope of his authority, whether, under the terms of the parties' agreement, that determination could nevertheless be challenged. In determining whether the expert's decision had been within the scope of his authority, regard could be had not only to the determination itself, but also to any explanations or clarifications of his reasoning given in subsequent correspondence.

In the course of his judgment, Lloyd LJ (with whom Smith LJ and Waller LJ agreed) cited the passages from Jones v Sherwood Computer Services Plc which I have set out and, after observing the Court was bound by that decision, went on to refer to three other cases where that decision had been applied, or referred to namely Norwich Union Life Insurance Society v P&O Property Holdings Ltd [1993] 1 E.G.L.R. 164, National Grid Co Plc v M25 Group Ltd [1999] 1 E.G.L.R. 65 and Mercury Communications Ltd v Director General of Telecommunications [1996] 1 W.L.R. 48.

In the Norwich Union case, the parties to complex contractual arrangements to do with the development of a new shopping centre were in dispute as to whether the “completion date” was the same as the date on which the architect had issued a certificate of practical completion. It was clear, as a matter of construction, that the contract itself provided for a dispute about that matter to be referred for determination to a nominated arbiter. The relevant provision applied where there was a “dispute as to whether the date of practical completion can also properly be regarded as the completion date”.

It is hardly surprising that, applying the approach of Jones v Sherwood Computer Services Plc, the Vice-Chancellor, Sir Donald Nicholls, and the Court of Appeal concluded that the matter was one for the arbiter and not the court. As the Vice-Chancellor pointed out, the matter in dispute was of the proper construction of the agreement, the question sought to be put to the court is an issue within the scope of the matters remitted to the nominated arbiter, then (by definition) the parties have chosen, for better or for worse, to have the question determined by a tribunal other than the court.”

In contrast, there is the National Grid case. As Lloyd LJ summarises it this was

“another pre-emptive proceeding for a declaration as to matters affecting the expert's determination, where no determination had yet been made, was held to have been properly brought. The determination in question was of a rent review, and was required to be arrived at in accordance with directions in the lease, including certain disregards. On the facts, there was a serious dispute, with potentially major effect on the valuation, as to what matters ought to be disregarded as a result of these provisions. Mummery L.J. followed the approach set out in the Norwich Union case, but reached a different conclusion because of the different contractual provisions.”

In the National Grid case, Mummery LJ agreed with the dissenting judgment of Hoffmann LJ which was upheld by the House of Lords. It is worth quoting again the passage quoted by Mummery LJ from Hoffmann LJ's judgment:

“So in questions in which the parties have entrusted the power of decision to a valuer or other decision-maker, the courts will not interfere either before or after the decision. This is because the courts' views about the right answer to the question are irrelevant. On the other hand, the court will intervene if the decision-maker has gone outside the limits of his decision-making authority.

One must be careful about what is meant by “the decision-making authority”. By “decision-making authority” I mean the power to make the wrong decision, in the sense of a decision different to that which the court would have made. Where the decision-maker is asked to decide in accordance with certain principles, he must obviously inform himself of those principles and this may mean having, in a trivial sense, to “decide” what they mean. It does not follow that the question of what the principles mean is a matter within his decision-making authority in the sense that the parties have agreed to be bound by his views. Even if the language used by the parties is ambiguous, it must (unless void for uncertainty) have a meaning.

Accordingly, if the decision-maker has acted upon what in the court's view was the wrong meaning, he has gone outside his decision-making authority.”

Mummery LJ then noted that, in the House of Lords, Lord Slynn took the same approach: see [1996] 1 WLR 48 at pp58C-59B. Lloyd LJ, too, referred to Mercury Communications in his judgment in Homepace, citing in full the passage referred to by Mummery LJ.

In Homepace itself, Lloyd LJ then identified the questions for the court as follows:

“The first question, therefore, is what the agreement has entrusted to the expert. The second is whether that is what he has decided. If so, the third is whether it can be shown that he has made a mistake which vitiates his decision.”

That, it seems to me, is the approach I must take in the present case. I will examine that question in a moment.

It is common ground that “manifest error” means oversights and blunders so obvious and obviously capable of affecting the determination as to admit of no difference of opinion: see for example the judgment of Simon Brown LJ in Veba Oil Supply & Trading GmbH v Petrotrade Inc [2001] EWCA Civ 1832 at paragraph [35] (a decision which also contains a review of the authorities leading to the clear distinction between a case where the expert has gone outside his instructions and where he has gone wrong in carrying out those instructions).

That approach was followed by Cresswell J in Halifax Life Ltd v The Equitable Life Assurance Society [2007] 1 Lloyds Rep 528, at paragraph 43 adding at paragraph 44 that:

“If a decision is issued in a dispute where it is binding ‘save for manifest error’ a party wishing to challenge the decision may face insuperable difficulties if the expert is not obliged to give reasons and fails to set out the reasons for his decision.”

In Try Build v Blue Star Garages Ltd [1998] EWHC 283 (TCC) the judge, HH Judge Humphrey Lloyd QC, held, at paragraph 25 of his judgment, that a manifest error “must be an error which is plain and obvious on the face of the decision – here the certificate or which might be shown to be plain and obvious by looking at what the decision or the certificate was supposed to represent”. In the light of the approach of the Court of Appeal in Homepace, that might be thought to be too strict an approach. Thus, in the context of what evidence the court should take into account, Lloyd LJ referred to Invensys Plc v Automotive Sealing Systems Ltd [2002] 1 All E.R. (Comm) 222. In that case the agreement between the parties was that an expert's determination as to the final consideration payable under a sale agreement would be final and binding except in the case of manifest error. However, in contrast with the present case, it was provided that the determination would be set out in a written report giving a summary of the reasoning for the decision, on the basis of evidence and arguments submitted by the parties so it was perhaps not altogether surprising that the judge, Thomas J, should have considered the amplified and clarified reasoning given by the expert after delivery of his determination and not just the reasons originally given. I do not consider that Invensys or Homepace provide any warrant for extending the scope of the evidence which may be taken into account in discovering whether there is manifest error whatever may be the position in relation to the question whether an expert has gone outside his instructions.

That is not to say that the only evidence admissible is the certificate itself. The certificate must, after all, be construed against the background of the contract under which it is given and its subject matter, as well as in the context of the factual matrix against which manifest error is to be judged. Mr McGhee gives the example of the complete absence of an extra storey which the contractor has promised to build. This of course is a fanciful example; if a certifier were actually to certify the building as practically complete in such a case, it is obvious that something serious has gone wrong and that the certificate cannot stand. But the point is that it is only possible to say that something has gone wrong if (a) reference is made to the contract (which includes provision of the extra storey) and (b) the position on the ground ie that the extra storey has not been built. It cannot be the case that the obvious error must be apparent on the face of the certificate itself.

Now, it may be that the reason why the certificate is invalid is not that there is a manifest error but rather that the certifier has gone outside his instructions and given a certificate where he was not authorised to give one at all. The certifier would not, on any objective assessment, be giving a certificate of practical completion of the works in relation to which it was his function to give or refuse a certificate if something as major as an additional storey was missing; rather, he would be giving a certificate in relation to some different works. The case would be akin to a valuer who values the wrong property.

In contrast, if an insignificant part of the contracted works is missing, the works as a whole may still be practically complete. Consider the case of a new house under which the contractor has contracted to include a small porch over the front door. It would be entirely unsurprising to find an expert who took the view that the absence of the porch did not prevent practical completion being attained even though it was an express term of the contract that the porch be provided. It would be possible to occupy and enjoy the house, the absence of the porch being only a minor inconvenience. It could not be maintained that a certificate of practical completion was not valid because the certifier had certified the “wrong” works, certifying the house rather than the house and porch.

So there is a difference between the missing storey and the missing porch. It seems to me that that difference is one of fact and degree. It is part and parcel of the question of what it is that the certifier has to certify. It is part of the first question which Lloyd LJ raises in Homepace namely, what the agreement has entrusted to the expert. In the case of the missing storey, the certifier has not been entrusted with the task of certifying as complete the works designed to provide a building with an extra storey. The building which the contractor contracted to provide simply does not yet exist. In the case of the missing porch, the certifier has been entrusted with the task of certifying the house as practically complete. The absence of the porch does not necessarily mean that the house itself is not fit for occupation or not practically complete; that will be a matter for the certifier to determine.

When it comes to considering the issue of level access, it will therefore be necessary to determine whether its provision formed part of the obligations of the contractor and if so whether the absence of that provision means that it was outside the scope of the authority of the Employer’s Representative to certify that Section 1 (the Retail Units) were practically complete.

As I have mentioned, Menolly now accepts that subject to one challenge, Certificates 10 and 11 are effective to trigger the Completion Date. That challenge relates to the provision of “level access” to the Retail Units. In relation to that challenge, the first issue is whether such provision falls within the scope of the Works at all.

In the context of this discussion, the phrase “level access” is used to denote access to the retail units which is compliant with the provisions of the Chronically Sick and Disabled Person Act 1970 and/or the Disability Discrimination Act 1995. It is common ground that such access is a legal requirement. In the absence of level access, the retail tenants will not be able to use the Retail Units which do not have level access for retail purposes; in practice, a tenant is not likely to take a unit without the landlord providing level access at its expense or the tenant carrying out the necessary works as part of its fit-out, obtaining financial recognition for doing so.

Mr Wallbank’s evidence was the provisions for level access do not form part of the base level construction contract in the dispute. He accepts that the Building must comply with the law, but considers that the level access would be part of the retail fit-outs and is a retail tenant’s concern, not relevant for Practical Completion and not part of the Works at this stage. He states that where the internal ramps are positioned in the building (and the consequent structural alterations which are subsequently required for the internal ramps) is entirely a matter for the tenants and landlord and depends on the retail space. Mr Wallbank as least explains clearly the position of Cerep on this issue. But his evidence on what he considers the contract to mean is not relevant: the extent of the Works is a question of construction which is, in the first place, for me. If I accept Mr McGhee’s construction, issues will then arise about whether it is within the scope of Mr Ramsey’s functions to decide for himself, in giving or refusing a Certificate of Practical Completion, what the Building Contract means.

It is, I think, common ground that there are two ways of providing level access. One is to lower the entire slab; the other is to provide internal ramps. The first of those would be, to use Mr Ramsay’s words, an extreme solution. It would also create problems in relation to ceiling height in the level below. In reality, the only way to provide level access is through the provision of internal ramps. There are many different ways in which level access could be provided through such ramping. It is clear from the evidence of both Mr Ramsay and Mr Wallbank, which I accept in this issue, that the range or work- from very little to a great deal - would depend on what is done; and what is done depends on the requirements of the particular tenant. A third solution, the provision of external ramps, is not available on this site because the necessary consents could not be obtained.

Both Mr Ramsay and Mr Wallbank (of the architect’s firm) accepted that some structural alteration to the slab would be needed in order to provide level access. But Mr Ramsay’s evidence was that it would be relatively minor structural works if there were a very simple ramp; it would be relatively straightforward works. Such works, he said, would need to be very specifically designed to suit the tenant that moved in. Mr Wallbank accepted that some structural work would be required at the east side and readily accepted that such works would not be expected of a tenant as part of the fitting-out works. But he was equally clear that it would not be possible to know what works should be carried out in relation to the provision of level access until one knew the requirements of an incoming tenant. One can see the sense in that. It would be possible, I suppose, for the Contractor to provide the bare minimum which complied with the relevant statutory provisions; but if that access was not suitable to a particular tenant which Menolly hoped to attract, it would make provision of such access a waste of time and money. In that context, Boots was at one stage a potential tenant and its requirements were much stricter than those of another potential tenant, Vodafone.

Menolly’s pleaded case relies in particular on the following provisions of the various documents:

Next, it is said that, contrary to paragraph 2 of Schedule 5, the Vendor has failed to procure that the Employer applies for and uses its reasonable endeavours to obtain the Necessary Consents as may be appropriate throughout the course of the Works in that no details of the level access has been provided to the Local Planning Authority; Condition 22 has not been fulfilled in relation to the Retail units. Closely allied to this submission is a further submission that, contrary to paragraph 5.1.4 of Schedule 5 to the SPA, there has been a failure to procure an alteration to the existing floor slabs on the ground floor in order to comply with Condition 22.of the planning permission.

It is then pleaded that the lack of level access is a “patent failure” to construct the Building in accordance with the Building Contract which, accordingly, could not be said to be practically complete so that each of the Certificates (in relation to Section 1 I add) was invalid, reference being made to clauses 2, 6.1.1.1 and 6.1.1.2. The difficulty here is that each of those clauses refers to the Works; the very point in issue is the extent of those Works.

Although reference is not made in the pleading to the Building Regulations Log, Mr McGhee did rely on it in his submissions. I have set out the relevant provisions already. I deal with that first.

In my judgment, Entries 58 and 59 in the Buildings Regulation Log do not impose any obligation on the Contractor to provide level access to the Retail units. As I understand it, the principal entrance (see Entry 58) has nothing to do with access to the Retail units. Further, the provision of handrails (see Entry 59) is not in issue: what is in issue is the provision of ramps which do not already exist. The introductory rubric (under “Part M Access to and Use of Buildings) does not purport to impose any general obligation but only refers to “the following” that is to say that which is to be found in later numbered Entries.

I now return to clauses 2, 6.1.1.1 and 6.1.1.2 of the Building Contract. These must be taken together with paragraph 1.3.1 of the Building Specification and Condition 22 of the Planning Condition Log. Condition 22 and indeed the Planning Condition Log generally are of the most significance in this respect. The Works are defined to include the works referred to in Employer’s Requirements. The Employer’s Requirements are comprised in the Architectural Specifications and Drawings which include the Planning Condition Log. The conclusion must be that reference must be made to the Planning Condition Log to see what, if any, works are referred to in it. The Planning Condition Log is principally concerned with conditions surrounding the execution of works for which planning permission has been given. For instance, Condition 1 refers to the commencement of the development before a certain date: that Condition says nothing about the scope of the works but only something about their execution. The Contractor has to comply with that Condition both because he is bound to do so under clause 6.1.1.2 of the Building Agreement since the works (whatever their extent) which the Contractor is to undertake fall within the scope of the development. The Contractor would be in breach of the planning consent if commencement were delayed beyond the date specified in Condition 1.

To take another example, Condition 3 requires the provision of the refuse collection and storage facilities shown on the approved drawing. It may be that that drawing is comprised in the list of drawings contained in the Architectural Specifications and Drawings. But even if that is not so, this provision is clearly a requirement of the Employer; it is part of the works “referred to in the Employer’s Requirements” for the purposes of the definition of the Works. The Contractor is therefore responsible with the Building Contract for the design and construction of this facility (but not, of course, its maintenance, albeit that that is a requirement of the planning consent).

Similarly, Condition 22 refers to the provision of access and egress to the building complying with the statutory provisions referred to. This condition imposed by the planning authority is clearly referring to all parts of the building to which those provisions apply; it would obviously not be sufficient to provide access to the atrium and lifts but not to the Retail units. Accordingly, Mr McGhee argues that the provision of access and egress in accordance with Condition 22 is within the scope of the works which are referred to in the Planning Condition Log. It is therefore within the scope of the Employer’s Requirements and forms part of the Works as defined.

There is a difference, however, between that work and the work referred to in Condition 3. There are two material points. First, unlike the work referred to in Condition 3, no detailed approval had been obtained for level access and there were no drawings or specifications. Secondly, it was for the Employer to obtain such consents; this appears from the manuscript addition at the top of the first page of the Planning Condition Log at least so far as clauses 6 and 25 are concerned.

As to the first of those differences, Mr Friedman argues that the Planning Condition Log is simply a checklist of matters which need to be taken account of; it adds nothing to the other specifications, in particular the Building Specification and the drawings referred to. If an item is not mentioned in the specification or shown in a drawing, an obligation to provide it cannot be brought in by a reference to a planning condition mentioned in the checklist. He says, in any case, that it is odd to see the Planning Condition Log listed as one of the documents containing the Employer’s Requirements.

As to the second of those differences, the fact that the Employer is responsible for obtaining detailed approvals might suggest that the work to which the approval relates is not within the scope of the Works as defined.

I reject these differences, whether separately or cumulatively, as leading to the conclusion that provision of level access is outside the scope of the Works. The fact of the matter is that the Planning Condition Log is specified as one of the documents containing the Employer’s Requirement and I see no good reason for concluding that works referred to in that document are to be ignored when it comes to identifying the Works. Moreover, the access and egress requirements of Condition 22 relate to the shell and core Retail units which it is the obligation of the Contractor to produce. It is entirely unsurprising that an obligation to observe planning requirements (relevantly, Condition 22) should cast on the Contractor an access and egress obligation in relation to the building which it is its responsibility to produce.

So far as concerns the manuscript addition on the first page of the Planning Condition Log, that seems to me to be of no assistance. Indeed, it would suggest that where an item in the Log requires a further approval (such as the work required under Condition 22), the work to which that approval will relate is indeed part of the Works otherwise there would be no need to qualify clauses 6 and 25 in the way that is done. Of course, the manuscript amendment goes wider than just Condition 22 and may therefore be seen to have some scope for application even if level access is not within the scope of the Works. The provision is, at best from Cerep’s point of view, neutral and that is the way I regard it.

In my judgment, the works necessary to provide level access are within the definition of Works.

It was suggested during the course of the hearing that this would produce a term of manifest uncertainty which would not be enforceable; I disagree. In practice, one would expect the Employer and the Contractor to reach an agreement about what should be undertaken. But failing that, the Contractor could design a compliant level access and submit that to the Employer for approval; or (as may have happened for all I know) discussions could take place leaving the matter to be dealt with when the tenants had been identified and their requirements ascertained. The Contractor might require, in those circumstances, practical completion to be certified disregarding the need for level access. If I am right in my interpretation of the Building Contract, such arrangements between the Employer and the Builder might require an agreement between them; as between Cerep and Menolly, the provisions of paragraph 6.5 of Schedule 5 to the SPA would apply.

Accordingly, in my judgment Mr McGhee is correct in his contention that the provision of level access does form part of the Contractor’s obligations.

Mr Ramsay and Mr Wallbank both take a different view. Whether they have always done so, I do not know. It is not, therefore, surprising that the Contractor has neither designed nor built the necessary level access. I have no evidence of any discussions between the Employer and the Contractor on this issue or whether it has ever been the Employer’s position that level access did not need to be provided. One can see that the Employer might have taken the same view as that which I have reached and yet acknowledged that it would make no sense to construct the level access until the tenants’ requirements were known. Adjustments would then need to be made to the Building Contract to reflect that acknowledgement. But as I have no evidence on this, and I cannot properly speculate, I can only proceed on the basis that there is an obligation on the Contractor to provide level access.

The next question which then arises is whether SLW, through Mr Ramsay, is entitled to determine the meaning of the Building Contract. In other words, is the present case the Norwich Union side of the line or the National Grid side of the line?

Mr Ramsay’s function is to decide whether he should give a certificate for the purposes of clause 16.1 of the Building Contract. He has to decide whether a Section has reached practical completion. A Section is one of the Sections into which the Works have been divided. It is clear that, assuming the correctness of the view which I have expressed about level access, the obligation to provide level access to the Retail units form part of Section 1. It should be remembered that, under the Building Contract itself, there is no “final and binding” provision – certainly not one which would entitle the Employer, vis a vis the Contractor to determine what the Building Contract means. Any dispute about that between those parties would be referred to adjudication and then, if necessary, to the court.

However, as between Cerep and Menolly, paragraph 10.4 of Schedule 5 to the SPA would normally make Mr Ramsay’s decision binding subject to manifest error or fraud. There is nothing in the SPA equivalent to the provision in Norwich Union which gave the expert the task of deciding a particular point of construction. In my judgment, Mr Ramsay is not entitled to decide points of construction in a way which binds the parties. He can, indeed may well need, to form a view about what it is he has to certify. But his view, if it becomes known, is open to challenge in the same way that the view of the expert in Homepace was open to challenge.

I am not persuaded to the contrary by Mr Friedman’s attractive argument. He says that this is a complex commercial contract where difficult points of construction may arise just as it was in Norwich Union. Matters of this sort require speedy decisions and are best left to the certified rather than being referred to the court. He might say that it cannot be right that every little dispute about meaning in such a contract could, potentially, be a matter for reference to the court. That of course is a practical approach and no doubt the parties could have agreed it if they had wanted to do so.

In my judgment, however, there is insufficient in the SPA (and there is certainly nothing in the Building Contract) to suggest that the parties to the SPA had agreed that SLW and Mr Ramsay – whose expertise lies in project management and an understanding of the construction industry without having any particular expertise to bring to the interpretation of documents – should have it within the scope of their authority to determine the meaning of the Building Contract. Mr Ramsay is to decide whether Section 1 is practically complete, not whether some other works are complete. I can understand that if the scope of what is disputed as being within the scope of works is insignificant, he may have that authority. But I do not think that the same can be said in relation to level access.

Further, without placing reliance on it, I am fortified in that conclusion when I consider the position under the Building Contract itself where, as I have said, interpretation is ultimately a matter for the court. It would be odd for Mr Ramsay’s view as certifier to be final and binding as to interpretation for the purposes of the SPA but not the Building Contract. It might be said that that is bad point because the same could be said in relation to certification of practical completion where Mr Ramsay’s certificate clearly is binding for the purposes of the SPA but not for the Building Contract. But closer examination shows that not to be so. In relation to practical completion, the issue could only ever arise when the Employer (through Mr Ramsay) was withholding a written statement under clause 16.1 when the Contractor considered it should be given. If the Employer considered the certificate should not be given, it can simply instruct SLW as its agent not to give it: under the Building Contract, the giving of the statement is a matter for the Employer not for the Employer’s Representative. If the Employer gives the statement when it is not due, the Contractor is hardly likely to complain.

Accordingly, I conclude that Mr Ramsay does not have the authority to determine the issue of construction and to give a Certificate of Practical Completion on that basis for the purposes of the SPA. This is a National Grid case rather than a Norwich Union case.

As did the judge in Homepace, I have the evidence of the certifier, in the present case Mr Ramsay. It is clear that he took the view that level access was not a requirement of the Building Contract when he issued Certificate 7. It is clear that he gave Certificate 7 on that basis. That remained his view up to the time when he was giving evidence and, for what it is worth, it is Mr Wallbank’s view and the view of Cerep. Since Certificate 10 was given after the time when Mr Ramsay gave his evidence, I cannot be certain that he has not changed his mind or, more importantly, that he might have given Certificate10 on the basis that he considered practical completion to have been achieved even if level access was included in the Works. However, Mr Ramsay was not recalled – an application could easily have been made – to explain that he was giving Certificate 10 on a different basis from Certificate 7. It is right, in my view, that I should assume that he gave Certificate 10 on the same basis as Certificate 7 namely that level access was not included in the Works and was therefore irrelevant to whether practical completion of Section 1 had been reached.

So far as what Mr Ramsay might have done had he taken a different view, this exchange between him and Mr McGhee is informative.

“Q. Mr Ramsay, had you taken the view that the building contract required the contractor to provide level access to the retail units you would not have certified the retail as having been practically completed, would you?

A. I don't know. The matter didn't arise. I didn't consider that.

Q. I appreciate that. I'm asking you a hypothetical question?

A.

I think it would depend on the circumstances. If it was an issue that the -- I really don't know, because it's -- the question didn't arise. There are -- it was also down to the extent of the demolition. There are many different ways of trying to arrange level access; and each solution would depend very much on a bespoke solution from each tenant and how many tenants were involved. The work might be quite small, it might be quite large. The scope would be entirely driven by the tenant. I did not know the scope or the split of the tenancies. In that respect, I don't know. It could be something that could be done over a weekend, it could be something that would take lot longer. I simply do not know.”

In the light of those answers, it is not possible to construct from the evidence a certificate provided on the correct basis. Certificate 7 simply cannot be seen, in the alternative, as a Certificate which Mr Ramsay would have given even if he had taken the same view of the Building Contract as I have done.

I would not be justified in treating Certificate 10 differently in the absence of evidence that either Mr Ramsay had changed his mind about construction or that he should be taken as seeing Certificate 10 as appropriate even if his view was wrong and that of Menolly correct. Whether that would be his evidence I do not know.

As a fall-back position, Cerep maintains that Menolly is estopped in a number of ways from relying on the absence of a valid certificate for Section 1. To arrive at that conclusion it variously alleges

Starting perhaps at the wrong end of the debate, Mr McGhee’s position is straightforward. He relies on the following:

Mr McGhee submits that these documents show quite clearly that Menolly was all along asserting that level access had to be provided. There is nothing in them, he says, to suggest that Menolly had accepted that the absence of level access would not prevent valid certification of the Works as practically and complete, being left simply to a financial remedy. Mr Friedman submits that a very different message should be taken from these documents. I will come to that in a moment.

It will not have escaped notice that Certificate 7, although issued on 4 December, certified practical completion as of 26 September 2008. In order for that to be valid, proper notice should have been given under paragraph 10 of Schedule 5 to the SPA. Mr McGhee says, correctly, that no formal notice was given and that the Certificate is therefore invalid. That gives rise to a legal issue which I will deal with at once.

The absence of a notice under paragraph 10.1 does not mean that the Employer is unable, vis a vis the Contractor, to give a written statement under clause 16.1 of the Building Contract. If that written statement is given by the Employer’s Representative and there can be no challenge to it as a valid statement as between those two parties, it would appear to fall within the definition of a Certificate of Practical Completion in Schedule 5 of the SPA. I am not sure that that appearance is correct. But even if it is, it seems to me clear that a breach of paragraph 10.1 and/or paragraph 10.2 precludes Cerep from relying on the final and binding nature of the Certificate provided for in paragraph 10.4. Given my conclusions that Certificate 7 is invalid anyway, this does not perhaps matter much. I make the point in case I should be found to be wrong in my interpretation of the Building Contract. Even so, Menolly would, in the absence of notice, have lost its right to make representation to the Employer’s Representative; such representation might have influenced Mr Ramsay and led the Employer’s Representative to refuse to issue a certificate. One cannot know for sure, which is one reason why it must be right that, absent notice under paragraph 10.2, the provisions of paragraph 10.4 do not bite. I would, however, reject the proposition that service of proper notice is a condition precedent to the issuing of a notice which is capable of being a Certificate of Practical Completion.

On that basis, it seems to me that nothing turns on whether proper notice of the inspections leading to Certificate 7 was given. Certificate 7 would be valid as between the Employer and the Contractor and it would be a Certificate of Practical Completion within Schedule 5 of the SPA. It would not be final and binding for the reasons I have just given; instead, any challenge would be determined by the court. Once the court had ruled on the challenge, the absence of notice would have no further relevance. On the facts, the only challenge to Certificate 7 apart from lack of notice is the absence of level access. If that challenge were to fail – whether because I am wrong in the decision I have reached that provision of level access is included in the Works or because Menolly is estopped from relying on the level access point – then the absence of notice of the inspections would not prevent Certificate 7 from taking effect according to its terms.

However, in case I am wrong about that, I ought to deal with Mr Friedman’s submissions in relation to notice of the inspections. His primary point is that proper notice was given; his secondary point is that Menolly is estopped from taking the point.

In that context, the Rejoinder served by Cerep on 11 March 2009 in 27 paragraphs contained in paragraph 2(2) numbered (i) to (xxvii) sets out a long history to show that adequate notice was given. It is an impossible task for me to deal in detail with each of those paragraphs in the limited time available. I have however read each paragraph and each of the documents referred to and I will refer to some of them.

Paragraphs (i) to (xii) show that CBRE was being kept well-informed of progress and Mr Ramsay’s hope that he would be able to certify sectional completion. I do not consider that there is anything in paragraphs (i) to (xi) which could be taken as sufficient notice of the inspection on 26 September 2008. In any event, CBRE had been stood down between June and August 2008 so an issue might arise whether emails to them were effectively brought to the attention of Menolly. However, paragraph (xiii) refers to material which, according to Mr Friedman, does amount to such notice. It refers to the minutes prepared by Mr Ramsay of a meeting on 10 September 2008 which was attended by, among others, Mr Higgins and Mr Ingram Evans. Mr Ramsay’s note of that meeting recorded

“ISG to advise on revised date for inspection of retail areas sectional completion not achieved on 30^th June.

Specific issues arising from the meeting were noted as follows:

…………….

4)

ISG to provide a detailed programme for retail sectional completion (issue of snag list with date for completion of each snag and sign off by all consultants, O&M Manual signed off by consultants, Plowman Craven survey, fire separation and watertight sign off) and date for offering this for Sectional Completion”.

At the end of these minutes it was stated that there would be a site inspection at 9am on 26 September 2008, immediately preceding the Contract Meeting which was scheduled to take place on that day at 10am. It was also recorded at item 2.2 that “ISG to issue consultants comments and close out O&M Manuals for Retail Sectional Completion.” It was also recorded at item 2.3 that “CBRE, Vector Build [Menolly’s contractors], pcm and ISg have reviewed and agreed in principle H&S arrangements for implementation on Retail Area Handover.” These minutes were sent to Menolly and CBRE after the meeting.

It is Cerep’s case that Mr Ramsay then contacted Menolly and CBRE to inform them that he was proposing to inspect Section 1 of the Works on 16 September 2008, with a view to granting Practical Completion, as had been discussed on 10 September 2008. It is said that neither Menolly nor CBRE objected that inadequate or insufficient notice of such an inspection had been given by the Employer's Representative.

It seems clear that Mr Ramsay must have informed Menolly and CBRE of the intended inspection since, on 16 September 2008, various individuals from ISG, Mr Ramsay, Mr Higgins, Mr Ingram Evans and Mr Bisgrove inspected the Section 1 Works. Curiously, the only note of this inspection – which one might think was a significant inspection if it was intended to be an inspection within paragraph 10.2 of Schedule 5 to the SPA – in a manuscript note made by Mr Ramsay on a single sheet of paper. His note does not record any mention of level access.

However, given the attendance of Mr Higgins as well as two representatives from CBRE, this inspection must have been perceived as significant; it must have been that it was seen by everyone as an inspection with a view to certifying practical completion. It needs to be remembered that this inspection did not come out of the blue; at this stage, Menolly itself was looking to take possession and that practical completion had been under discussion. There is no suggestion that objection has ever been taken that there was no, or insufficient, notice of the inspection or that paragraph 10.2 of Schedule 5 was not complied with. Even though Menolly did not know of the certificate actually given (in December) until recently, it did know that Mr Ramsay would be making his decision on whether or not to certify on the basis of this inspection. In my judgment, the notice of the 16 September 2008 inspection coupled with the actual attendance of Menolly and CBRE is sufficient to comply with the provisions of paragraph 10.2 of Schedule 5 to the SPA.

It is an unfortunate aspect of the rush in which this case has had to be heard that the relevance of the 16 September meeting was only appreciated very late in the day. Mr Ramsay was cross-examined about the giving of notice but not about what occurred at the meeting itself. The Claimant’s witnesses did not deal with this aspect in their own evidence and were not cross-examined about it. It is all a consequence of the point about notice itself being taken very late in the day. All I can do is decide the issue on the basis of the evidence which I do have and that is what I have attempted to do.

There were, I must mention, further inspections prior to and on the date as of which Mr Ramsay eventually gave Certificate 7, namely 26 September 2008.

Thus, on 23 September 2008, Mr Kingdon inspected Section 1 with Mr Ramsay. He produced a snagging list which he sent to Mr Ramsay on 26 September “following our inspection on Tuesday 23 September and todays project meeting”. He noted Mr Ingram Evans’ absence due to a family matter so that the list was subject to review on his return to work. It is not suggested that that inspection was one undertaken with a view to the issuing of a certificate of practical completion. The reference to the meeting on 26 September needs to be explained.

On that date, there was a further inspection of the Section 1 Works and a meeting. This was an ordinary monthly Contract Meeting. Mr Kingdon and Mr Bisgrove were present, but not Mr Higgins or anyone else from Menolly. At that meeting, as Mr Kingdon’s evidence confirms, Mr Ramsay stated that he took the view that the Section 1 Works had achieved practical completion and that he intended to issue a certificate of practical completion for the Section 1 Works, subject to a consideration of the documents which had been provided by ISG that day. It is said that Mr Kingdon, did not dispute that practical completion of the Section 1 Works could now be certified (subject only to Mr Ramsay being satisfied with the documents) and it is further contended that all parties proceeded on that basis that they were satisfied that practical completion of Section 1 of the Works had been achieved and that the Section 1 Works could be certified. Mr Ramsay’s evidence, which I accept, is that all those in attendance understood that he would be issuing the certificate on the basis of inspection which had already taken place.

Mr Kingdon has a different perspective of what happened. He was there in place of Mr Ingram Evans who was on leave as I have explained. Mr Kingdon saw the meeting as simply an ordinary monthly contract meeting and the inspection was simply an ordinary walk round which took place before such meetings. He does accept, however, that SLW (Mr Ramsay) did state that practical completion of the retail units was imminent. He does not suggest that he objected that practical completion could not be certified because of the level access issue.

Since he became aware at the meeting that there was an intention to certify practical completion for the retail units that day, he did two things.

First, he made a further inspection of the property. He did so, according to his answers in cross-examination, for the purposes of seeing whether the works were practically complete. Whether it was appropriate for him to do that I do not answer: it might be said that the whole purpose of paragraph 10.2 is to ensure that Menolly has notice of a relevant inspection; it would not be right to “spring” an inspection on 26 September 2008 and then to say, that because Mr Kingdon was there and actually carried out an inspection after the meeting, Menolly is estopped from denying that notice was given, especially given Mr Kingdon’s relatively recent involvement and his more junior position in the CBRE hierarchy. But that is not the point: the point is that Mr Kingdon’s further inspection did not lead him to question the conclusion which had been reached following the 16 September 2008 inspection that practical completion of the retail units had been reached.

The second action which Mr Kingdon took was to phone Mr Ingram Evans at home. They decided to send a letter to Mr Ramsay highlighting their outstanding issues with the retail units. I will return to that and other evidence from Mr Kingdon and Mr Ingram Evans when considering the question of estoppel and waiver in relation to the level access. For present purposes (ie in relation to notice) it is enough to note that Mr Kingdon and Mr Ingram Evans knew that Mr Ramsay was intending to certify practical completion in reliance on the inspection of 16 September 2008 attended by, among others, Mr Higgins and Mr Ingram Evans. And yet neither of them made any objection at the time that there had been insufficient notice of any inspection nor did they do so in the letter nor did anyone do so thereafter until shortly before this trial.

It is not surprising that Mr Ingram Evans did not at the time suggest that proper notice of an inspection for the purposes of issuing a certificate of practical completion had not been given. That is not surprising because an inspection on which Mr Ramsay was relying had been held on 16 September and was attended by Mr Higgins and Mr Ingram Evans himself. It is clear that Mr Ramsay – rightly or wrongly – considered that practical completion had been achieved by that date and that, subject to the provision of certain documentation, he could and would issue a certificate. The further inspection of 23 September with Mr Kingdon was not a further inspection of which notice needed to be given; it identified only complaints which were clearly snagging issues and not ones which would impact on practical completion. Similarly, the inspection on 26 September was, as Mr Kingdon suggests, only a normal walk-round. There is nothing to suggest that Mr Ramsay relied on any change in the position on the ground between 16 and 26 September in issuing the certificate which he eventually did issue.

In my judgment, therefore, there can be no effective challenge to Certificate 7 on the ground of inadequate notice of inspection. Accordingly, if I am wrong in my interpretation of the scope of the Works so that provision of level access is not included, then Certificate 7 is valid, subject to one point which I identify in paragraph 186 below.

I turn now to what Mr Friedman has to say about estoppel and waiver in relation to level access.

There is a preliminary matter which I want to deal with. One way in which Cerep’s case is put is that Menolly did nothing to suggest that practical completion of Section 2 could not be certified because of the level access issue. I do not, I confess, really understand this way of putting the argument. The issue of level access goes only to the validity of the certificate in relation to Section 1. It does not follow from the fact that there is no valid certificate in relation to Section 1 that a certificate cannot be given in relation to Section 2: whether or not Section 2 has reached practical completion has nothing to do with whether Section 1 has done so and, so far as I can see, there is nothing in the Building Contract to prevent Section 2 being certified before Section 1 if that is the order in which the relevant parts of the Works are in fact completed. It is therefore unnecessary, in my judgment, for Cerep to seek, as it does in the Rejoinder, to raise an estoppel preventing the validity of any of the Certificates in relation to Section 2 being challenged on the basis that Certificate 7 is invalid.

The important estoppel/waiver which Cerep seeks to establish relates to Certificate 7. It is said that Menolly cannot now be allowed to challenge the validity of that Certificate. Although this is put on the basis that Certificate 7 cannot be challenged on any basis, the only ground of challenge actually raised is the level access issue, since I have rejected the challenge based on lack of notice.

Putting the argument in my own words, and briefly at that, it is as follows:

I do not propose to enter into a detailed examination of the law of estoppel or waiver. It is enough to observe that there are two possible types of estoppel which may be of relevance: promissory estoppel and estoppel by convention. For promissory estoppel, Cerep must show that it has acted to its detriment in some way; secondly, it must be shown that Menolly was responsible for Cerep acting in this way either because it was induced to do so by Menolly's representations by word or conduct or by failing to correct Cerep’s mistaken belief that Section 1 was “done and dusted” in circumstances where Menolly was under a duty to speak out.

Estoppel by convention arises out a common understanding between the parties about the basis on which they conduct their relationship. Although often relevant to the terms on which parties contract, I see no reason why a convention should not arise during the course of a contract about how the relationship is to proceed. Accordingly, if it can be shown that Cerep and Menolly both had a shared assumption that practical completion of Section 1 had been achieved, that ought to be enough to bind them to that shared assumption at least unless and until one of them seeks to resile from it in circumstances where it would not be inequitable to allow it to do so. However it is said that a mere common assumption is not enough to give rise to an estoppel by convention but that it must be shown that there was an agreement or convention by which the parties regulated their dealings.

Waiver is also relevant in the sense of waiver of contractual terms: it can be argued by Cerep that Menolly has waived the requirement that level access be provided before a Certificate of Practical Completion can be issued. This type of waiver is really an aspect of estoppel.

Before returning to the matters relied in the Rejoinder and the evidence, I do have to remark again that the level access point has not only come late in the day; it came at a time when Menolly had applied to the court of injunctive relief. The point was not raised or hinted at in the submissions made to me. It was clear that at that stage, those representing Menolly – and I see no reason to think that Mr Higgins had a different view – clearly thought that the issue of a valid Certificate of Practical Completion for Section 2 would have the result that Cerep would, after 10 business days, be entitled to draw-down on the letter of credit drawn on the Bank of Ireland and to receive the deposit which had been put into an escrow account. It is simply inconceivable to my mind that, if Menolly and its advisers had thought that there was no valid certificate in relation to Section 1, that would not have been drawn to my attention. The failure to raise the point is not only an indication that Menolly thought that a valid certificate in relation to Section 1 had been given, but also that it was common ground, and had been for a considerable period, that a valid Section 2 certificate would lead inexorably to completion of the SPA. I have no doubt that Menolly was by this time, at the latest, under a duty to speak out.

I have already touched on some of the facts and matters relied on in the Rejoinder in the context of notice of inspection. I now need to look at what more is said by Cerep in the Rejoinder and the evidence about level access. As well as the matters referred to in the Rejoinder, Counsel for Cerep have prepared a Note at my request following the hearing identifying many – and I suspect not all - of the documents which assist in showing what Menolly considered the position to be and what it communicated to others. Since I propose to take account of those documents, it is only right that I should say something about them. It is one of the few advantages of the computer over the quill pen that it is possible for me to lift, with due acknowledgement, relevant parts of Counsel’s notes direct into this judgment. I attach them as an Annex. In italics will be found the submissions in highly attenuated form which would have been made. This is perhaps an unconventional way to proceed; but time constraints have made it quite impossible for me to allow Mr Freidman to develop these submissions orally by referring to each and every document. I should not, by taking this course, be taken as accepting as correct every submission which is included in the Annex. In particular, the regular occurrence of “Menolly accepted that level access are works for it to undertake” would more accurately read “Menolly proceeded on the footing that it would in practice itself undertake level access”. I do not overlook the fact that some of these documents are not communications with Cerep and that their contents would be unknown to Cerep. They cannot of themselves therefore give rise to an estoppel or waiver. They are, however, relevant in demonstrating Menolly’s own approach and understandings and are relevant in assessing any suggestion that Menolly and its advisers considered that level access was and remained relevant to practical completion of Section 1.

As I have said, paragraph (i) to (xii) of paragraph 2(2) of the Rejoinder refer to a number of meetings and emails by which CBRE were kept informed of, and indeed involved in, progress towards what everyone thought would be practical completion of Section 1. I say everyone, although it must not be overlooked that Cerep and Menolly were in dispute about level access. The possibility that this issue had simply been “parked” with all other matters being dealt with as if the matter were heading towards practical completion subject to that parked issue.

It is clear that a meeting and inspections did take place on 16 September 2008 which I have already addressed; it was an inspection for the purposes of certifying practical completion of Section 1 attended by Mr Higgins as well as Mr Ingram-Evans. There is nothing to suggest that the question of level access was raised as an objection to the issuing of such a certificate or, indeed, at all. Following his inspection of 23 September 2008, Mr Kingdon made no reference to level access. It may, as he says, be the case that this issue was a matter of discussion between his client and Cerep; but if it is the case that level access remained an issue in relation to practical completion rather than just financial adjustment, it is surprising that he did not raise it. Perhaps this is explained by his comparatively recent involvement in the project and the need to refer and defer to Mr Ingram Evans and Mr Higgins.

Matters moved on. There followed the meeting on 26 September, followed by Mr Kingdon’s further inspection, his conversation with Mr Ingram Evans and his letter to Mr Ramsay on 26 September: I say his letter since he signed it, but it was the product of his and Mr Ingram Evan’s discussion. That letter, I might add, was re-sent in a slightly amended form on 1 October 2008. The letter is as important for what it does not contain as much as for what it does. It does not contain any reference to level access. Whilst it may well be possible to understand why Mr Kingdon did not himself see fit to make any reference to level access for the reasons he gave, there is no explanation about why Mr Ingram Evans did not ask him to include something in the letter. The reason one suspects is because, for one reason or another, the absence of provisions of level access was not seen as a reasons for refusing to issue a certificate of practical completion notwithstanding that there was a dispute between Cerep and Menolly about whether such provision was included in the Works.

The letter did include a list of snagging items. At the end, it stated as follows:

“We would appreciate these items being considered prior to practical completion for the retail space”.

Mr Friedman suggested to Mr Kingdon that this was in effect an invitation to issue the certificate of practical completion with which Mr Kingdon agreed. Whether he intended to issue that invitation is another matter; but it does seem to me that on any objective reading of the letter, it is being recognised that Section 1 has achieved practical completion.

Mr Ingram Evans returned to work. He attended a monthly meeting with Mr Bisgrove. At that meeting it was reported that “ISG have written with documentation which they advise should close out Retail Sectional Completion outstanding documentation actions.” This related to documentation to be provided pursuant to 5.5.2 of the Building Contract. This does not appear to have provoked any reaction from Mr Ingram Evans – no longer perhaps distracted by his family responsibilities – that the absence of level access meant that practical completion could not be certified.

Then on 30 October 2008, in an email sent by Mr Ingram Evans to Mr Ramsay, and copied to Mr Higgins, Mr Ingram Evans wrote: “Retail - CBRE is awaiting confirmation that all outstanding snagging is completed before we re-inspect for handover”. This can only be read as a recognition that only snagging items were preventing hand-over; that is inconsistent with the proposition that the absence of level access prevents practical completion having been achieved.

On 4 November 2008, Mr Kingdon emailed Mr Ramsay. I have already set out the material parts of this letter. As I have already noted, Mr McGhee says that this email does not recognise that level access is not relevant to practical completion: quite the contrary he would say. Cerep plead that this email makes clears that level access was not relevant to practical completion. Mr Kingdon agreed (“I suppose so”) with this proposition. For my part, I find it difficult to read the later part of the email as qualifying the first part. The first part recognises that practical completion had been achieved subject to account being taken of the snagging list. The second part recognises that it may not be possible to impose the provision of level access on the Contractor so that the matter would then be a matter between Cerep and Menolly. It does not suggest that this matter would affect practical completion as between the Employer and the Contractor or, therefore, the question whether a Certificate of Practical Completion could be given for the purposes of the SPA.

Cerep pleads in paragraph 24 of its Rejoinder that the parties attended subsequent inspections in December 2008, January 2009 and on 4 February 2009 which is correct. It is said that the parties

“conducted themselves and communicated with each other, on the basis that all that remained to be certified was Section 2 of the Works (and such a certification, if issued, would lead to Completion of the Contract) and that the Section 1 Works had now been certified.”

Examples are given in the form of Mr Ingram Evans’ emails dated 29 January and 30 January 2009. But these are relied on only to show that there was no suggestion that the absence of certification of Section 1 was an impediment to the certification of practical completion of Section 2. I am not sure that that is really the point which is being made: rather, the email does not suggest that the absence of certification of Section 1 would be an impediment to Completion if Section 2 were certified as having achieved practical completion. A similar point is made in relation to inspections which took place up to and including 4 February 2009.

It is correct, as a matter of fact, that level access was not raised at any of the relevant meetings as a matter of concern. It was not suggested that the absence of such provision meant that Section 1 could not have been or was not certified as having achieved practical completion. It is clear, without rehearsing a lot of evidence given by him, that Mr Ingram Evans was making representations to Mr Ramsay at the meetings on 30 January and 4 February about works he expected to see carried out some of which were clearly snagging but some of which he was saying prevented Mr Ramsay from issuing a certificate in relation to Section 2. He accepted that it was his job on behalf of his client to raise all issues in relation to practical completion of the building which could be taken; but he dealt only with Section 2 which was the focus of the inspections and meetings but forgot about Section 1. I do not criticise him for that since all the evidence suggests that he, at least, considered Section 1 to be done and dusted.

There are further allegations in paragraph 24 that representations were made at those meetings premised on the fact that the inspections were of Section 2 of the Works and that those inspections could lead to practical completion being certified. At each of these inspections the stance of Menolly and CBRE was that the certification of practical completion of Section 2 of the Works should not occur simply because practical completion of those Works had not as a matter of fact occurred. I am sure that that is right. But as I see it, that is not to the point since it has never been suggested by Menolly that a certificate in relation to Section 2 could be given only if a certificate in relation to Section 1 had been given. It is not the giving of the certificate in relation to Section 2 which in issue: it is the consequence in terms of Completion of the SPA.

Thus paragraph 25 identifies the point correctly, as does the passage quoted from paragraph 24, in pleading this:

“Accordingly Menolly knew and/or assumed (as did all other relevant parties, who came to so know and assume on the basis of the stance adopted by Menolly) that Section 1 of the Works had been validly certified and all that remained was the certification of Section 2 of the Works.”

Apart from the contents of the Rejoinder and the matters referred to in the Annex to this Judgment, there are one or two other matters to mention.

On 25 November 2008, Mr Ingram Evans sent an email to Mr Ramsay. Mr Ingram Evans was taken through this and a number of associated documents to show that Menolly was in the process of design of works to the retail units including the provision of level access. Although there may have been a dispute as to whether Menolly should be compensated for having to deal with those works, he agreed with Mr Friedman when he asked “it was not being suggested, was it, that they [these works] were relevant to questions about the completion of section 1?”. To the same effect was his answer to a question when he was being taken through the Contractor’s monthly reports. He was asked in relation to level access: “So there was a dispute, but it wasn’t something that was regarded as preventing practical completion, was it” to which he answered “No” by which he meant that he agreed, as he made clear. He also accepted that, as between the parties to the Building Contract, the matter was done and dusted.

As to the matters referred to in the Annex, the entry for 31 December 2008 is of relevance in showing what those in the Menolly team thought the position to be. Mr Ingram Evans was under the impression that Menolly had reached an agreement with Carlyle “and therefore the purchase will go ahead”. In other words, Section 1 was seen as having achieved practical completion and once works including snagging on Section 2 had been dealt with, the SPA would be completed. His understanding has obviously turned out to be incorrect, or if correct at that time, the agreement did not come to fruition. But this does suggest strongly that Menolly recognised that, as between the Employer and the Contractor, practical completion should be treated as having been achieved with the result that there could be a valid Certificate of Practical Completion under the SPA there could be leaving any point about level access to be dealt with by way of financial adjustment.

The entry for 5 January 2009 refers to a communication from CBRE to Vodafone, copied to Mr Higgins. This email was sent in the context of an email chain which showed that practical completion of Section 2 had been expected on 15 December 2008. This had been delaying Menolly commencing works on the “retail enabling project” which included provision of level access. It is clear that those involved in this email chain considered that subject to a certificate in relation to Section 2, that project would commence. It is wholly inconsistent with that approach that practical completion of Section 1 had not been achieved. I therefore agree with the submission made in the Annex: “Clear that CBRE/Menolly proceeding on the basis that level access not an impediment to pc of whole”.

The entry for 19 January 2009 is consistent only with the view on the part of CBRE that practical completion of Section 1 had been achieved.

The first entry for 29 January 2009, a communication from Mr Dibley of CBRE to Vodafone, is significant. It refers to practical completion of the Building. There is no focus in this communication on simply Section 2 and no suggestion that the level access issue has prevented practical completion of Section 1 already taking place. The second entry is also important. It shows that the inspection fixed for Section 2 the following day would, if satisfactory, result in sufficient certainty to allow Vector Build to start the retail works including level access. That can only be seen as a recognition by Mr Kingdon to Mr Dibley that practical completion for Section 1 had been, or was accepted as having been, achieved. A similar message can be taken from the emails at the entries for 2 and 3 February 2009, the latter being copied to Mr Higgins.

In his email dated 4 February 2009 to Mr Ramsay, Mr Higgins raises no point that level access is an impediment to the issue of a certificate. This is in relation to Section 2. But the thrust of the email is quite clearly that it is only the outstanding works in relation to Section 2 which is preventing Menolly from getting “a properly finished building”. It is clear to me that Mr Higgins was proceeding on the basis that Menolly would carry out the necessary works to provide level access and that there was no outstanding issue in relation to Section 1 so far as practical completion was concerned.

In relation to the three documents relied on by Mr McGhee (which I considered at the beginning of this section of my judgment), far from agreeing with Mr McGhee, Counsel for Cerep submit that they actually assist Cerep’s case. The first of those is the letter dated 28 August 2008 from Menolly’s solicitors. However, as the reply from Cerep’s solicitors points out, what is said in that letter is at variance with what was happening on the ground in discussions between their respective clients. These points were not raised again by Menolly’s solicitors until their letter of 12 December 2008 where level access was again mentioned as one of several significant problems. But, as the rehearsal of events discussed at length above shows, the question of level access was not being viewed by anyone as an impediment to practical completion rather than being a matter for financial adjustment. In any case, Cerep’s solicitors responded on 15 December 2009 seeking further details of the problems which had been listed. There was no follow up on that; indeed, the next letter from Menolly’s solicitors on 18 December 2008 did not mention level access and referred to different points. Quite apart from that, the parties acted after that in the way described in the discussion in preceding paragraphs of the section of my judgment.

As to the email dated 4 November 2008, I do not agree with Mr McGhee’s analysis. The first paragraph is clearly dealing with snagging and is written in a way which suggests that there has indeed been sectional completion (ie practical completion of Section 1). The longer paragraph dealing with level access appears to me to recognise that it may be impossible to impose any obligation to provide level access on the Contractor and thus will need to be dealt with between Menolly and Cerep. That cannot be read as indicating that the absence of level access would prevent certification of Section 1. That approach is entirely consistent with what had gone before.

Level access was not mentioned again between the parties until the point was taken shortly before this matter opened before me.

It can be seen therefore that there are two interrelated strands to the estoppel/waiver argument. The first is that Menolly is estopped from relying on the absence of provision for level access as a ground for disputing the validity of Certificate 7 (or I suppose Certificate 10 if I am wrong on the notice point) or has waived the need for such provision. The second is that Menolly is estopped from asserting that some valid certificate in relation to Section 1 had been given some time before 4 February 2009 since the parties were proceeding on the common assumption that the issuing of a certificate in relation to Section 2 would trigger Completion under the SPA.

In my judgment, the evidence which I have addressed in this judgment in as much detail as time has allowed me – I have of course read more as well as gone through the transcripts of the evidence – leads me to the conclusion that Menolly is estopped in both the ways just indicated. First, by the time Mr Ramsay came to give Certificate 7, he was entitled to proceed on the basis that level access was not an impediment to the issue of a certificate. Whether he thought that level access was included in the Works or not does not therefore matter since, provided that he was satisfied that practical completion of everything else had been achieved (as he was and as Menolly accept), he could issue Certificate 7. Menolly cannot now turn round and assert that the basis on which he gave it was wrong. Secondly, by the time Mr Ramsay came to give Certificate 1 on 4 February 2009 and at all times thereafter, Cerep was proceeding on the basis that Section 1 was “done and dusted”.

In my judgment, all of the factors listed in paragraphs a. to k. of paragraph 154 above are made out. As to paragraph l, prejudice, it is, in my judgment, clearly prejudicial to Cerep that it has not had the opportunity to meet the level access point in good time. If the point had been raised in say early January, Cerep would have had the option of actually providing level access; alternatively, it could have made an urgent application to the court to ascertain the scope of the Works under the Building Contract – a rather shorter point than the ones I am currently addressing – leaving it time to provide the minimum access necessary to comply with Condition 22. I do not decide – it is not necessary for me to do so – that had Menolly raised the level access issue at an early stage it would be estopped from doing so: there are arguments either way, especially in relation to the actual issue of Certificate 7 as a valid certificate. In my view Menolly was under a duty to speak out to disabuse Cerep of its clear understanding, known to Menolly that Section 1 had achieved practical completion. It should have done so at the very latest by 4^th February 2003.

I would only add in relation to estoppel that the material to which I have referred resulting in an estoppel in respect of the level access issue would also establish an estoppel in relation to the notice issue if I am wrong in my conclusion that adequate notice was not given or to be treated as given.

There is one qualification to all of this. It is that Certificate 7 does not on its face refer to Clause 5.5.1. It might be argued that the estoppel/waiver only goes this far, namely to prevent Menolly from asserting that Mr Ramsay was not entitled to issue a certificate in relation to Section 1 notwithstanding the absence of provision of level access; in this case, Menolly could argue that he still needed to issue an actual certificate and that there is nothing which estops Menolly from challenging Certificate 7 within a reasonable time of being provided with it on the basis that it did not contain a reference to Clause 5.5.1. Certificate 7 has not in fact been challenged on that basis; indeed both sides agree, as I have already noted, that a certificate under clause 16.1 does not need to refer expressly to clause 5.5.1. I have accordingly addressed the issues which do arise for decision on that basis and, in spite of my own doubts about it, I have refrained, at this stage at least, from making any decision on it. If, however, Certificate 7 were open to challenge on this point, then it may be that Cerep would have to rely on Certificate 8 or 10. I have no doubt that if Certificate 7 is invalid for that reason, Cerep would be entitled to rely on Certificate 8. But note paragraphs 188 and 189 below.

My main conclusions are as follows:

In the light of the urgency for a decision on the validity of Certificate 7, I have dealt with that as a priority. I have not been able in the time available since the hearing to address the other questions which arise. I will do so in a subsequent judgment. These matters go to establishing which of the certificates given in relation to Section 2 is the earliest valid certificate. On that turns the correct Completion Date and the amount of interest payable on the purchase price. In reality, the certificates were challenged principally in the hope on Menolly’s part that it would thereby escape completion of the SPA. Certificate 11 brought that hope to an end so far as a failure to achieve practical completion of Section 2 is concerned.

I will, of course, produce a further judgment on the outstanding matters if the parties wish. I would hope, however, that Menolly having lost the war, they will be able to settle the outstanding financial questions. These will include not only the question of interest which I have just mentioned, but the question of financial adjustment in relation to level access in the light of my judgment concerning the meaning of the Works. In this context, Menolly may seek to argue that Certificate 7 is invalid because Clause 5.5.1 was not referred to so that reliance must be placed instead on Certificate 8. Whether that argument remains open to them is a matter which I will address if it is ever sought to raise it by way of supplemental submissions or otherwise. There must come a limit, even in a case as procedurally unusual as the present case, on the extent to which additional material and submissions can be introduced. That can be taken as the attitude with which I would initially approach any attempt to raise the point formally.