Gold Group Properties Ltd v Bdw Trading Ltd (formerly Known as Barratt Homes Ltd)
| Jurisdiction | England & Wales |
| Judgment Date | 01 July 2010 |
| Neutral Citation | [2010] EWHC 1632 (TCC) |
| Docket Number | Case No: HT 09—464 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 01 July 2010 |
[2010] EWHC 1632 (TCC)
Before: Deputy High Court Judge Mr Stephen Furst Q. C.
Case No: HT 09—464
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Mr Jonathan Acton Davis Q. C. (instructed by Field Seymour Parkes) for the Claimant
Mr Nicholas Dennys Q. C. (instructed by Osborne Clarke) for the Defendant
Hearing dates: 25 th, 26 th May and 3 rd June 2010
Deputy High Court Judge Mr Stephen Furst Q. C.:
Introduction
Following a hearing on 5 th February 2010 of an application for summary judgment, Mr Justice Coulson, by order dated 16 th March, gave conditional leave to defend upon the Defendant paying into Court the sum of £500, 000. The order further provided that there be a trial of the remaining issues of liability if payment was made. That sum was paid into Court and accordingly the trial on the remaining issues of liability proceeded before me.
The learned Judge identified the remaining issues of liability in his judgment dated 3 rd March 2010 ( [2010] EWHC 323 (TCC)) but in order to understand them it is necessary to set out the background and the Judge's reasoning leading to him giving the Defendant conditional leave to defend.
Background and Judgment on Summary Judgment Application
This dispute concerns a Development Agreement dated 10 th August 2007 relating to land at Gadoline House, Godstone Road, Whyteleafe, Surrey entered into between Gold Group International Limited (“GGIL”), as the freeholder owner of the land, and the Defendant (“Barratt”), as the developer. The Agreement was novated to Gold Group Properties Limited, the Claimant in this action, on 18 th December 2007. I refer to both Gold companies as “Gold” without further differentiation.
The Development Agreement required Barratt to develop the site by building approximately 100 houses and flats for private sale, 16 flats for social or affordable housing and a primary care unit (“PCFU”) all of which would then be sold by Gold on long leases, with Gold and Barratt sharing the revenue generated by the sales. In the event the site was not developed by Barratt, leading to the present dispute.
On the hearing of the summary judgment application the Judge held that Barratt was in breach of the Development Agreement. In particular that it breached:
5.1. Paragraph 7.1 of the Second Schedule in failing to commence work on the development no later than early June 2008;
5.2. Paragraph 7. 3. 7 of the Second Schedule in failing to proceed with the work with due diligence;
5.3. Clause 5. 2 and Paragraph 7. 2 of the Second Schedule which required Barratt to complete the work within 30 months of commencement i. e. early January 2011. By January 2009, with demolition incomplete and no building work having been carried out, that date was simply unachievable.
In the light of these breaches the Judge found that “It is clear beyond doubt that Barratt were in breach of contract by 12th January 2009. This was not ultimately disputed by Barratt. “
The Judge went on to consider whether these breaches were repudiatory of the Development Agreement. He stated:
“106. On the face of it, Barratt wrongfully repudiated the Agreement no later than 12th January 2009, and possibly before. They failed to comply with their critical obligations under the Agreement, namely their obligations to commence, carry out and complete the building works on site. Those were conditions, not intermediate terms, because they were so important. In my judgment, Barratt's failure to comply with them went to the root of the contract. Thereafter, on 12th January 2009, they wrongly treated the contract as frustrated and did not carry out any further works on site. Two months or so later they put the keys through the letterbox on the hoarding, a sure sign that they did not intend to comply further with this Agreement. “
The learned Judge also considered whether Barratt was not in breach of contract because the achievement of the minimum prices set out in Schedule 4 was a condition precedent to Barratt's obligation to carry out the work and secondly whether, because those minimum prices were most unlikely to be achieved, the Development Agreement was frustrated. Both those contentions were rejected. I put the matter in that way because Barratt contended before me that it did not put forward the first of these arguments.
Although he rejected those arguments the Judge considered that it was arguable that Gold was in breach of contract in failing to renegotiate the minimum prices and that for this reason it was arguable that Gold were also in breach of the terms of the Development Agreement as at 12 th January 2009. He noted that in order to decide this would require further evidence than was available to him on the application.
The Judge summarised the position in this way:
“97. I consider that the following matters, which are in evidence, demonstrate an arguable breach on the part of Gold. Their letter of 17th December 2008 over-stated their contractual position and expressly failed to appreciate that the Schedule of Minimum Prices was not included in the Development Agreement solely for their benefit. It does not seem that they were aware of the principle that they were required to consider proposed changes to the Fourth Schedule. Furthermore, Barratt had made one proposal (albeit to amend the revenue apportionment) because of the gloomy forecast and, so it seems to me, it must at least be arguable that Gold's refusal to come back with any financial counter-proposal of any sort, given the co-operation clauses and the underlying nature of the Agreement, might constitute a breach of the Agreement.
98. I accept, as far as it goes, Mr Acton Davis' submission that Gold cannot be criticised for failing to agree to lower minimum prices, because such minimum prices had not even been suggested by Barratt. But I have already made the point that this Agreement envisaged much closer co-operation between the parties than an ordinary arm's length contract for the sale of land. It is plain that Barratt were proposing changes because of the drop in the market and, even if a change to clause 10 itself was not warranted, it might be argued that Gold should have been more proactive in their dealings with Barratt so as to ensure that the Agreement continued to operate..
99. Accordingly, it seems to me that, at least arguably, Gold were also in breach of the terms of the Development Agreement as at 12th January 2009. A final decision would require further evidence about the events between the end of October 2008 and 12th January 2009. This would in turn allow Barratt to search for the files of Barratt Thames Valley, and to interview Mr Tuthill (although it is unlikely that he will be able to offer much assistance, given that it was apparently Mr Lees-Uff who was dealing with Gold during the relevant period).
….
108. However, I have concluded that, although it is slender, there is one possible argument open to Barratt which I cannot at this point describe as fanciful. That is their argument to the effect that, because Gold were in breach of the Agreement (because they did not renegotiate or even contemplate renegotiation in November/December 2008), it was actually Gold who wrongfully repudiated the Agreement.
109. I do not regard this argument as having a strong chance of success. It seems to me that, if the problem was simply the need to agree lower prices, Barratt should have proposed them; they should not, without more, simply have treated the Agreement as being at an end. However, I have already said that I require further evidence as to the detail of the negotiations during that period and, until that evidence is considered, it is difficult for me to say whether or not Gold were in breach and, if they were, whether or not that breach could be said to be repudiatory.
110. For those reasons, although on the face of it Barratt were in repudiatory breach of the Agreement by 12th January 2009, I consider that there is one last element of their defence to that allegation still open to them which would require evidence to determine. In those circumstances, the alleged repudiation by Barratt ought not to be the subject of a judgment on liability under CPR Part 24. However, because of my doubts about the strength of this remaining defence, I would only grant Barratt conditional leave to defend the repudiation claim brought against them.”
There was an additional problem. In short it was unclear as to whether and if so when Gold accepted Barratt's repudiatory breach, assuming it remained capable of acceptance after the 12 th January 2009:
“111. The other reason why I am not presently prepared to give summary judgment on the repudiation element of the case is the muddle which exists, on the face of the documents, from 12th January 2009 onwards. Although it is clear that Barratt were no longer prepared to do any work on site, which would in normal circumstances give rise to the clearest possible evidence of repudiation, Gold's acceptance of that repudiation is surprisingly unclear. I note in particular:
…..
112. Accordingly, it seems to me that the events both before and after the letter of 12th January 2009 are not clear enough to warrant summary judgment on the repudiation claim. Barratt have also raised the point that, even if they were in repudiatory breach of contract, that repudiation was not accepted by Gold and that, on the contrary, Gold affirmed the continuing nature of the Agreement. I am again unable to resolve that issue without evidence. “
Thus the remaining issues of liability were “whether Barratt or Gold (or both) were arguably in repudiatory breach of contract and, if so,...
To continue reading
Request your trial
-
Essex County Council v UBB Waste (Essex) Ltd
...Ltd v. Qatari Diar Real Estate Investment Co. [2010] EWHC 1535 (Ch), at [240]–[246]; Gold Group Properties Ltd v. BDW Trading Ltd [2010] EWHC 1632 (TCC), at [89]–[91]. In Paciocco v. Australia and New Zealand Banking Group Ltd [2015] FCAFC 50, at [288], in the Federal Court of Australia, ......
-
BP Gas Marketing Ltd v La Societe Sonatrach and Another
...a party to surrender contractual rights — see the judgment of Stephen Furst QC (sitting as a Deputy High Court Judge) in Gold Group Properties Ltd v BDW Trading Ltd [2010] EWHC 1632 (TCC). In that case he referred to Automasters Australia Pty Ltd v Brunbess Pty Ltd [2002] WASC 286 in which......
-
Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Ioannis Kent (Aka John Kent)
...Group Ltd v Qatari Diar Real Estate Investment Co [2010] EWHC 1535 (Ch), paras 240–246; Gold Group Properties Ltd v BDW Trading Ltd [2010] EWHC 1632 (TCC), paras 89–91. In Paciocco v Australia and New Zealand Banking Group Limited [2015] FCAFC 50, para 288, in the Federal Court of Austral......
-
DVB Bank SE v Shere Shipping Company Ltd and Others
...or to surrender freely negotiated financial advantages deriving from the contract: see Chitty on Contracts §1–048 and Gold Group Properties Ltd v BDW Trading Ltd [2010] EWHC 1632 (TCC) at [91]. I should add that in my view it would be a rare case in which the reasons for the exercise of a ......
-
COVID-19 And Duties Of Good Faith Under English Law
...NHS Trust v Compas Group UK and Ireland Ltd (t/a Medirest) [2013] EWCA Civ 200. 7) Gold Group Properties ltd v BDW Trading Ltd [2010] EWHC 1632 (TCC), at 8) Bristol Rovers (1883) Ltd v Sainsbury's Supermarkets Ltd [2016] EWCA Civ 160. 9) Ibid at [90]. 10) CPC Group Ltd v Qatari Diar Real Es......
-
COVID-19 and Duties of Good Faith Under English law
...NHS Trust v Compas Group UK and Ireland Ltd (t/a Medirest) [2013] EWCA Civ 200. 7) Gold Group Properties ltd v BDW Trading Ltd [2010] EWHC 1632 (TCC), at 8) Bristol Rovers (1183) Ltd v Sainsbury’s Supermarkets Ltd [2016] EWCA Civ 160. 9) Ibid at 90. 10) CPC Group Ltd v Qatari Diar Real Esta......
-
Commercial Law Updates - An Analysis of Cases from June 2010
...of a Duty of Good Faith to Refuse to Consider Changes to Agreed Revenue Share Gold Group Properties Limited v BDW Trading Limited [2010] EWHC 1632 (TCC) Gold Group entered into an agreement with BDW (formerly Barratt Homes) under which BDW was to construct dwellings on land owned by Gold Gr......
-
Table of cases
...139 II.12.98 Gold Group Properties Ltd v BDW Trading Ltd [2010] BLR 235 I.3.51, II.9.143 Gold Group Properties Ltd v BDW Trading Ltd [2010] EWHC 1632 (TCC) I.3.145 Goldlion Properties Ltd v Regent Enterprises Ltd (2009) 12 HKCFAR 512 I.3.82, I.3.83, I.3.158 Goldmile Properties Ltd v Lechour......
-
Contract terms
...was anticipated: Churchill Falls (Labrador) Co Ltd v Hydro-Québec , 2018 SCC 46. 608 Gold Group Properties Ltd v BDW Trading Ltd [2010] EWhC 1632 (TCC) at [88]–[91], per DhCJ Furst QC. ContraCt tErMS an obligation on the parties to cooperate to achieve the contractual objectives; compli......