Following the failure of waterproof coating on the top deck of a car park, the owner of the car park, Crosslands, sought to recover the repair costs against the occupier, Apcoa. Under the agreement between the parties, Crosslands would appoint a main contractor and a professional team to carry out the works. Then following satisfactory completion, Apcoa would take a 25-year tenancy. The agreement contained provisions to ensure that the works were undertaken to an appropriate standard. The project manager had to carry out inspections before issuing the practical completion certificate and the certificate of making good of defects. Further, before the issue of the defects certificate, Crosslands had to give Apcoa at least 10 working days’ notice that the project manager intended to carry out the final inspection of the works. Apcoa was also entitled to attend the final inspection on site and to make representations about any additional works to be carried out or any defective works to be remedied before the final certificate was properly issued. If either Crosslands or Apcoa contended that the final certificate had not been properly issued, it could refer the matter for determination by an independent chartered surveyor.
On 15 June 2012 Sweett issued the defects certificate. Apcoa said that there had been no final inspection meeting and it only saw the defects certificate for the first time after it raised proceedings in 2015. Crosslands said that Apcoa had received the collateral warranties and Sweett had issued the defects certificate. Thus, Crosslands had no further liability. While Apcoa and Crosslands had a voice in the certification process, Sweett had the primary role; the parties intended that it should act as the independent certifier and determine whether the works were satisfactory. Apcoa was not left without a remedy; it could pursue claims under the collateral warranties. Apcoa submitted that as there had been no final inspection and Apcoa had not received the defects certificate, the contractual scheme had not been followed.
Lord Woolman referred to the issue of the defects certificate as being a significant event in the contractual arrangements: it was the “tipping point of liability”. Once issued, it had a decisive effect on the parties’ relations. Apcoa could not make a new claim against Crosslands in respect of the works. However, it was clear that the parties’ intention at the time of their bargain had been that Apcoa was supposed to have been given an opportunity to check the construction works, particularly at the stage of completion. Apcoa was entitled to participate in the certification process. If that was not done, there could be no valid defects certificate and no exclusion of Crosslands’ liability. It was therefore entitled to raise an action against Crosslands in respect of the works.