Completion Notice in UK Law

Since the statutory fusion of law and equity in 1875 it has been enacted (Supreme Court of Judicature Act 1873, Section 25 (7) now re-enacted in slightly different language in the Law of Property Act 1925, Section 41) that stipulations of a contract, as to time or otherwise, which according to rules of equity are not deemed to be orto have become of the essence of the contract are also to be construed and have effect at law in accordance with the same rules, The third parties rely on Section 41 on the point of construction.

Why should a party who has not completed in compliance with the terms of a contract he has entered into, be entitled to yet longer time before he can be given notice to perform it?

He had submitted that, in the absence of binding authority in this court, the issue of burden of proof should be decided by reference to “fairness, justice and common sense”. He relied on the general principle that “he who asserts must prove”. A completion notice under condition 6.8.1 contains an implied assertion by the giver that he is ready to complete, and accordingly, where that assertion is put in issue, it is for him to prove it.

Under the applicable condition the right to serve a completion notice is given to a party “who is ready, able and willing to complete”. The service of such a notice can be said therefore to carry with it an implicit assertion to that effect. Although the judgment of Blackburne J in Aero Properties contains statements suggesting that the burden of proof lies on the recipient of the notice, there does not appear to have been any argument on that point, as a distinct issue of law.

I can, for my part, see no reason for drawing any such distinction. In my judgment, notices to complete served under Condition 23, if they are to be valid, must be sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate.

Repudiation is a drastic conclusion which should only be held to arise in clear cases of a refusal, in a matter going to the root of the contract, to perform contractual obligations.

In my judgment, where there is a provision for the purchase of shares upon payment by a stated date, it is to be presumed, in the absence of any contrary indication, that the parties to such a contract have impliedly stipulated and mutually intend that the time of payment shall be of the essence of the contract.