Firm of surveyors — Development and other services provided for client — Client obtaining finance — Condition that further finance available if client instructs new firm — Original surveyors dismissed — Claim for damages for procuring breach of contract
The appellants are a firm of surveyors that have provided development and architectural services to a Mr Alan Pulver, and his companies, over a number of years. Prior to 1979 they held his instructions, and those of one of his companies, to provide architectural services in connection with the development of a property in London. The development was delayed by the property collapse in the 1970s and when the market improved in 1979, the respondents, who had provided finance for the purchase of the property, agreed to provide the necessary further finance for the property’s development on condition that the appellant firm should be replaced by a different firm of the respondents’ choice.
Although there had been no complaint of the competence or skill of the appellant firm, they were dismissed. Their action against the respondents for damages for procuring a breach of contract with their clients was dismissed by Rose J (July 31 1987), who found, inter alia, that the respondents had acted reasonably at the time to protect their own interests bearing in mind the rights they enjoyed under the legal charges they held over the property.
Held The appeal was dismissed. Although the respondents had remedies under their legal charge of the property which they could have exercised, and which would have interfered with the appellants’ contract, they were not bound to exercise those remedies in defence of their rights. It would be illogical if they could exercise those remedies, such as by the appointment of a receiver to complete the development and who would then have a right to appoint new architects, but not provide further finance for the mortgagor to perform the same task. It would be undesirable if the law were to insist that a mortgagee should have to exercise his strict legal rights to justify an interference with contracts between the mortgagor and third parties.
There was justification for the interference with the appellants’ contractual rights and this was based upon an equal or superior right which the respondents held. Such a right may derive from property real or personal or from contractual rights.
Read v Friendly Society of Operative Stonemasons
[1902] 2 KB 88 considered and
Winters v University District Building Loan Association
(1932) 268 I11 App 147 referred to.
Igor Judge QC and Richard Davies (instructed by Rowe & Maw) appeared for the appellants; and Colin Smith QC and Andrew Onslow (instructed by Titmuss Sainer & Webb) appeared for the respondents.
