Sale contract — Purchaser entering into resale contract — Whether contractual obligation to carry out refurbishment works assignable — Whether purchaser under resale contract obliged to accept performance of assignee — Appeal by purchaser allowed
By an agreement dated January 23 1989 the respondents, Southway Group Ltd, contracted to sell premises known as Sentinel Square, Hendon, to Brandgrange Ltd for £1.2m. A notice to complete on March 5 1990 was given by the respondents on November 17 1989. By a contract (“the resale contract”) dated December 21 1989 Brandgrange Ltd agreed to sell the property to the appellant trustees for £2.9m. As vendor Brandgrange contracted to carry out works to the property described in an annexed specification. Brandgrange failed to complete the January 1989 contract on March 5 1990 and, following a new contract and the assignment to Southway of Brandgrange’s rights under the resale contract, it failed to complete under the further contract.
Southway decided to complete the works under the resale contract notwithstanding the clear warnings by the appellant trustees of the need for strict compliance. On November 30 1990 Mr Terence Cullen QC (sitting as a deputy judge of the Chancery Division) upheld Southways claim for declarations. The trustees appealed contending that the resale contract must be treated as at an end because it involved performance by Brandgrange for which they had been selected and the trustees were not bound to accept performance of the works by any other party.
Held The appeal was allowed.
On the evidence there was complete confidence reposed by the trustees in Brandgrange and the architect personalities behind that company. A building contract is one which of itself suggests some degree of selection. Brandgrange were not entitled to unilaterally delegate the contractual obligation to carry out the works. Accordingly the trustees were not bound to accept performance by Southways.
Jules Sher QC and John Martin QC (instructed by Teacher Stern Selby) appeared for the appellants; and David Neuberger QC and Leslie Michaelson (instructed by David Alterman) appeared for the respondents.
