#6674 - Hunslow London Borough Council V. Twickenham Garden Developments - Commercial Remedies BCL

Hunslow London Borough Council v. Twickenham Garden Developments

Facts

The motion is brought by the plaintiff, the London Borough of Hounslow; I shall call it "the borough." The defendant is a company named "Twickenham Garden Developments Ltd.," a subsidiary of the Turriff Construction Corporation Ltd. The defendant company carries on the work of building contractors, and I shall call it "the contractor." The dispute arises over a building site in Hounslow of some 27 acres called the Ivybridge site; and on this site it is proposed to construct rather over 1,000 dwelling units, mostly in the form of flats and maisonettes, including four tall buildings. The land was formerly owned by the parent company, but by a contract dated November 17, 1964, that company agreed to sell it to the Borough of Heston and Isleworth (a predecessor of the borough) for 1,000,000, the purchaser giving the parent company a letter of intent under which the parent company was to carry out the development of the site.

In the event, the borough entered into two separate contracts with the contractor, the first dated August 9, 1966, in respect of the substructure, and the second dated February 10, 1967, in respect of the superstructure. I shall refer to these contracts respectively as "the substructure contract" and "the superstructure contract.

Dispute regarding the substructure contract: The issue before me arises out of the substructure contract, which continued in force despite the termination of the superstructure contract. With the end of the strike, the contractor resumed work on the site under the substructure contract at the beginning of July, 1969. However, this resumption, says the borough, was not sufficiently vigorous; and this is one of the main factual bones of contention. The performance of the substructure contract was affected to some extent by an "Instruction Order," numbered 245 and dated July 16, 1969, given to the contractor by the architect.

Repudiation notice by the Borough: By a letter dated December 15, 1969, the architect purported to give notice bringing condition 25 (1) of the contract into operation. I shall call this the "borough's notice." The reply from the contractor's solicitors on January 20 said that there was no justification for the borough's notice, that it constituted a repudiation of the contract, and that the contractor would defer a decision whether or not to accept the repudiation. After some further correspondence, on February 9 the solicitors again wrote to the borough, saying that the contractor would not accept the repudiation of the contract and elected to proceed with the work in accordance with the contract.

Borough’s claim: Finally, on March 3, the borough issued the writ and on the same day served the writ and notice of motion. The writ claims damages for breach of the superstructure contract based on wrongful refusal to perform it. The notice of motion claims an order restraining the contractor until judgment in the action or further order from "entering, remaining or otherwise trespassing" on the site or any part of it, or from "interfering in any way" with the borough's lawful possession of the site.

Holding

The Contractor’s Argument: Apart from any question of specific performance, Mr. Neill strongly contended that the contractor had not merely a right to refuse to accept the borough's alleged repudiation of the contract as determining it, but also a right to insist upon continuing to perform the contract, despite the protests of the borough. He based his contention on White and Carter (Councils) Ltd. v. McGregor [1962] A.C. 413, a striking decision of the House of Lords.

The question is whether, as Mr. Neill claims, this principle applies to the case before me, so that if the borough has not lawfully terminated the contract but has repudiated it, the contractor can insist on retaining possession of the site and completing the contract.

Lord Reid in White & Carter

Accordingly, I must turn to the speech of Lord Reid. Although it was his voice, with the voices of Lord Tucker and Lord Hodson, that carried the day, two important limitations appear in Lord Reid's speech.

First, he pointed out that the peculiarity of the case was that the agents could perform the contract without any co-operation by the proprietor.

The other limitation, cautiously expressed at p. 431, was that "it may well be" that if a person has no legitimate financial or other interest in performing the contract rather than claiming damages, "he ought not to be allowed to saddle the other party with an additional burden with no benefit to himself": and this principle might apply to the example of the expert report. However, no such absence of a legitimate interest in the agents had been established, and so the possible principle did not apply.

Cooperation Restriction

It seems to me that the decision is one which I should be slow to apply to any category of case not fairly within the contemplation of their Lordships. The case before me is patently one in which the contractor cannot perform the contract without any co-operation by the borough. The whole machinery of the contract is geared to acts by the architect and quantity surveyor, and it is a contract that is to be performed on the borough's land. True, the contractor already has de facto possession or control of the land; there is no question of the borough being required to do the act of admitting the contractor into possession, and so in that respect the contractor can perform the contract without any "co-operation" by the borough. But I do not think that the point can be brushed aside so simply. Quite apart from questions of active co-operation, cases where one party is lawfully in possession of property of the other seem to me to...