Civil Engineering Reference
In-Depth Information
Southway Group Ltd v. Wolff
COURT OF APPEAL (CIVIL DIVISION)
(1991) 28 Con LR 109
The plaintiffs (Southway) carry on business in the manufacture of fitted kitchens. In
1989 they owned and occupied a property in Hendon which consisted of a warehouse
and a small amount of adjoining land. In January 1989 they contracted to sell the
property to Brandgrange Ltd (Brandgrange). Brandgrange was a shell company wholly
owned by Initiative Co-Partnership Ltd, which was in turn owned as to 49 per cent by
a Mr Ormonde and as to 51 per cent by Initiative Developments Ltd, a company owned
by a Mr Obermeister and his wife. Mr Obermeister was an architect; Mr Ormonde
was a property developer with particular expertise in devising and financing develop-
ment schemes, obtaining property ripe for development and obtaining planning
permission.
Under the contract of sale completion was to be on 30 April 1990, or earlier on 28
days' written notice, not to be given earlier than 5 December 1989. A notice, which was
accepted as good, was given on 17 November 1989 to complete on 5 March 1990.
By a contract dated 21 December 1989, Brandgrange agreed to sell the property to
the defendants (the trustees), who were mother and son and the trustees of the Wolff
Charity Trust, for £2.9 m. This resale contract contained undertakings by Brandgrange
to carry out redevelopment to the property. The redevelopment was described in a
specification attached to the contract which was skeletal in the extreme.
Brandgrange failed to complete on 5 March and Southway served notice to complete
under clause 22 of the National Conditions of Sale. On 21 March Southway and
Brandgrange entered into a deed of assignment by which a new completion date of 17
April was substituted, time being of the essence, and Brandgrange assigned to Southway
the benefits of their resale contract with the trustees. Southway gave notice of this
assignment to the trustees.
Brandgrange failed to complete on 17 April. On 19 April Southway treated this failure
as a repudiation and terminated the contract.
Southway then determined to carry out the redevelopment works under the resale
contract themselves. The trustees indicated that this was not acceptable to them and
Southway sought a declaration that if they carried out work which complied with the
specification within the time provided by the resale contract and tendered a valid
transfer of the building, they would be entitled to the purchase price under the contract
between Brandgrange and the trustees.
Held:
The contract between Brandgrange and the trustees was one which called for personal
performance by Brandgrange, and vicarious performance by Southway or contractors
employed by Southway was not permitted.
BINGHAM LJ: It is in general permissible for A, who has entered into a contract with B,
to assign the benefit of that contract to C. This does not require the consent of B, since in
