St Martins Property Corporation Ltd and and Another v Sir Robert Mcalpine and Sons Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STAUGHTON,SIR MICHAEL KERR,LORD JUSTICE NOURSE |
| Judgment Date | 13 February 1992 |
| Judgment citation (vLex) | [1992] EWCA Civ J0213-10 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 92/0162 |
| Date | 13 February 1992 |
[1992] EWCA Civ J0213-10
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
OFFICIAL REFEREE'S BUSINESS
(HIS HONOUR JUDGE BOWSHER Q.C.)
Royal Courts of Justice
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
OFFICIAL REFEREE'S BUSINESS
(HIS HONOUR JUDGE JOHN LLOYD Q.C.)
Royal Courts of Justice
Lord Justice Nourse
Lord Justice Staughton
Sir Michael Kerr
Lord Justice Nourse
Lord Justice Staughton
Sir Michael Kerr
92/0162
and
MR HUMPHREY LLOYD, Q.C., and MR DAVID WESTCOTT, instructed by Messrs Stephenson Harwood, appeared for the Appellants (First and Second Plaintiffs).
MR RICHARD FERNYHOUGH, Q.C., and MR MARCUS TAVERNER, instructed by Messrs Glovers, appeared for the Respondent (Defendant).
MR ANTHONY SPEAIGHT, instructed by Messrs Jaques & Lewis, appeared for the Appellants (Plaintiffs).
MR JUSTIN FENWICK, instructed by Messrs Masons, appeared for the Second Respondents (Second Defendants).
MR ELLIS MEYER, instructed by Messrs Portner and Jaskel, appeared for the Third Respondents (Third Defendants).
These appeals were heard consecutively, because they raise two important questions of law on facts which are broadly similar, although there are some significant differences. This is a combined judgment on both (or more accurately all three) appeals. The main issues are:
-
(1) whether a term in a contract that it shall not be assigned without consent has the result that a purported assignee may not sue upon the contract, if he has not obtained consent;
-
(2) whether the contracts in this case had that result;
-
(3) whether an original contracting party, or his assignee, can recover substantial damages for breach of contract, when the original party's loss has subsequently been made good to him by somebody other than the defendant; and
-
(4) whether an assignee of the benefit of a contract can recover damages for loss which he has suffered as a result of a breach occurring after the assignment.
So far as the present appeals are concerned, I have treated the claims as based wholly in contract. No separate argument has been addressed to us about claims based on tort, save as to one point raised by Ashwell Construction Co. Ltd, which will be mentioned towards the end of this judgment.
In both cases building works were carried out, under a contract with somebody who had a proprietary interest in the building when the contract was made. The contractors are said to have failed to achieve proper performance. The original employers transferred their interest in the building to others, and also purported to assign the building contract. But it is said to have contained a term that the employers would not assign the contract without the consent of the contractors; the need for consent was overlooked, and it was never obtained.
One important difference between the two cases lies in who are plaintiffs. In the Linden Gardens case, only Linden Gardens Trust Ltd, the assignees, sue. Their assignors were a company which has been referred to as Stock Conversion, although it changed its name from time to time. Stock Conversion were at one time plaintiffs in the action, but are no longer.
By contrast, in the St Martins case both the assignors (St Martins Corporation) and the assignees (St Martins Investments) are parties as plaintiffs. They are associated companies, owned by the state of Kuwait. We were told that the motive for the transfer from one to the other was the avoidance of tax, since St Martins Investments were not a trading company. But we were also told that there was nothing reprehensible in that, because it represented a welcome investment of overseas capital in the United Kingdom. We were reminded (and I hope to be forgiven for saying that this was scarcely necessary) that they are separate legal entities; just as some profit by the corporate veil, others may find it a hindrance.
With that introduction I set out a summary of the relevant facts, substantially drawn from the judgments of the two Official Referees who tried these issues. Naturally many of the facts were assumed rather than proved, since the trial in each case was of preliminary issues. Having said that, I shall not hereafter attempt to distinguish between what was admitted or proved, and what was merely assumed at this stage.
The facts in the Linden Gardens case
Stock Conversion were the lessees of the third, fourth, fifth and sixth floors of a building at 130 Jermyn Street in London. There was a problem about the presence in the building of blue asbestos, which had to be removed. On 11th June 1979 Stock Conversion entered into a contract with Lenesta Sludge Disposals Ltd, the first defendants. It was an agreement between Stock Conversion as employers and Lenesta Sludge as prospective sub-contractors. But now it is only of historic interest, to explain the presence of Lenesta Sludge in the title to the action. For one reason or another, they do not now participate.
On 19th July 1979 Stock Conversion entered into an agreement with McLaughlin and Harvey Plc, the second defendants, as main contractors. It was on the standard form of the Joint Contracts Tribunal, for use with approximate quantities private edition, being the 1963 version revised to July 1975. In clause 17 there were these important terms:
"(1) The Employer shall not without the written consent of the Contractor assign this Contract.
(2) The Contractor shall not without the written consent of the Employer assign this Contract, and shall not without the written consent of the Architect (which consent shall not be unreasonably withheld to the prejudice of the Contractor) sub-let any portion of the Works.
Provided that it shall be a condition in any sub-letting which may occur that the employment of the sub-contractor under the sub-contract shall determine immediately upon the determination (for any reason) of the Contractor's employment under this Contract."
One should also notice clause 25(1):
"Without prejudice to any other rights or remedies which the Employer may possess, if the Contractor shall make default in any one or more of the following respects, that is to say:-
(a) If he without reasonable cause wholly suspends the carrying out of the Works before completion thereof, or
(b) If he fails to proceed regularly and diligently with the Works, or
(c) If he refuses or persistently neglects to comply with a written notice from the Architect requiring him to remove defective work or improper materials or goods and by such refusal or neglect the Works are materially affected, or
(d) If he fails to comply with the provisions of clause 17 of these Conditions,
then the Architect may give to him a notice by registered post or recorded delivery specifying the default, and if the Contractor either shall continue such default for fourteen days after receipt of such notice or shall at any time thereafter repeat such default (whether previously repeated or not), then the Employer may within ten days after such continuance or repetition by notice by registered post or recorded delivery forthwith determine the employment of the Contractor under this Contract, provided that such notice shall not be given unreasonably or vexatiously."
In clause 26, which deals with determination by the contractors, there is no similar reference to clause 17.
The work proceeded, and the architect certified practical completion on 25th March 1980. I do not know whether and if so what other work was involved, but the relevant task for present purposes was the removal of asbestos. It is said that this was not achieved.
By January 1985 further asbestos had been found in the building, and Stock Conversion entered into a contract for its removal with Ashwell Construction Company Ltd, the third defendants, on 6th February 1985. This was also on a standard form, and contained these terms:
"3.0 Control of the works
Assignment
3.1 Neither the Employer nor the Contractor shall, without the written consent of the other, assign this Contract.
Sub-contracting
3.2 The Contractor shall not sub-contract the works or any part thereof without the written consent of the Architect/Supervising Officer whose consent shall not unreasonably be withheld."
Practical completion of Ashwell Construction's works was certified on 16th August 1985.
Meanwhile there had started on 1st April 1985 a series of transactions by which Stock Conversion assigned all their proprietary interest in the third to sixth floors of the building. This was completed on 12th December 1986. It is not suggested that Stock Conversion received anything less than the full market value of their interest in the building, or that any allowance was made for the possibility that asbestos might still remain in the building after practical completion by Ashwell Construction. Also meanwhile, the writ in this action was issued on 3rd July 1985; at that stage it was between Stock Conversion as plaintiffs and Lenesta Sludge Disposals as defendants.
A little later, on 14th January 1987, Stock Conversion executed a deed of assignment in favour of Linden Gardens Trust. This recited the...
To continue reading
Request your trial