Where it is impossible to comply with a contractual obligation, neither specific performance nor damages in lieu will be ordered.
The High Court has considered this in Freeman & Ors v Home Farm Ellingham Ltd [2025] EWCH 878 (Ch).
The case concerned the sale of land at Home Farm, Ellingham, Chathill, Northumberland, by the claimant to the defendant for £1,140,000 in July 2017. The land had the benefit of two planning permissions each for the development of 10 houses to be constructed around a cul-de-sac. An initial stretch of road would be constructed from the local highway to adoptable standards with the first development to the north. The second, to the south, would be from a spur off the initial stretch of road.
In discussions for the first planning permission, the claimant’s agent represented to the local authority that it would not seek for the roads of the development to be adopted. The planning statement for the second planning application stated the cul-de-sac would be a shared surface not proposed for adoption.
The transfer provided that the land was to be developed in accordance with the planning permissions within five years and that the defendant would procure the adoption of the access roads and pathways – which included the initial stretch of road and the two cul-de-sacs – as soon as reasonably practicable.
The developments were constructed and all 20 properties sold but the access roads were not adopted by the local authority. The claimant sought an order for specific performance to enforce the obligation regarding road adoption, arguing the failure diminished the value of its retained land.
The court found the defendant was bound by the relevant covenant in the transfer: there was no common mistake in the transfer nor any estoppel. However, the local authority had consistently refused to adopt the roads because the layout, design of the surfaces and lack of public utility did not accord with its standards for highways for adoption. Since the claimant had made clear during the planning process that adoption of the roads would not be sought, there was no need for the authority to flag such issues.
So it was impossible for the defendant to perform its contractual obligation. Specific performance of the clause and damages in lieu of performance had to be refused. The claimant had only pleaded a claim for general damages at common law. Since it had provided no evidence of loss, it was only entitled to nominal damages of £1.
Louise Clark is a property law consultant
