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England and Wales High Court (Technology and Construction Court) Decisions
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Cite as:  EWHC 1632 (TCC)
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL
Date of Draft Judgment: 28 June 2010
B e f o r e :
| Gold Group Properties Limited
|- and -
|BDW Trading Limited (formerly known as Barratt Homes Limited)
Mr Nicholas Dennys Q. C. (instructed by Osborne Clarke) for the Defendant
Hearing dates: 25th, 26th May and 3rd June 2010
Crown Copyright ©
Deputy High Court Judge Mr Stephen Furst Q. C.:
Background and Judgment on Summary Judgment Application
5.1. Paragraph 7.1 of the Second Schedule in failing to commence work on the development no later than early June 2008;
5.2. Paragraph 7. 3. 7 of the Second Schedule in failing to proceed with the work with due diligence;
5.3. Clause 5. 2 and Paragraph 7. 2 of the Second Schedule which required Barratt to complete the work within 30 months of commencement i. e. early January 2011. By January 2009, with demolition incomplete and no building work having been carried out, that date was simply unachievable.
"106. On the face of it, Barratt wrongfully repudiated the Agreement no later than 12th January 2009, and possibly before. They failed to comply with their critical obligations under the Agreement, namely their obligations to commence, carry out and complete the building works on site. Those were conditions, not intermediate terms, because they were so important. In my judgment, Barratt's failure to comply with them went to the root of the contract. Thereafter, on 12th January 2009, they wrongly treated the contract as frustrated and did not carry out any further works on site. Two months or so later they put the keys through the letterbox on the hoarding, a sure sign that they did not intend to comply further with this Agreement. "
"97. I consider that the following matters, which are in evidence, demonstrate an arguable breach on the part of Gold. Their letter of 17th December 2008 over-stated their contractual position and expressly failed to appreciate that the Schedule of Minimum Prices was not included in the Development Agreement solely for their benefit. It does not seem that they were aware of the principle that they were required to consider proposed changes to the Fourth Schedule. Furthermore, Barratt had made one proposal (albeit to amend the revenue apportionment) because of the gloomy forecast and, so it seems to me, it must at least be arguable that Gold's refusal to come back with any financial counter-proposal of any sort, given the co-operation clauses and the underlying nature of the Agreement, might constitute a breach of the Agreement.
98. I accept, as far as it goes, Mr Acton Davis' submission that Gold cannot be criticised for failing to agree to lower minimum prices, because such minimum prices had not even been suggested by Barratt. But I have already made the point that this Agreement envisaged much closer cooperation between the parties than an ordinary arm's length contract for the sale of land. It is plain that Barratt were proposing changes because of the drop in the market and, even if a change to clause 10 itself was not warranted, it might be argued that Gold should have been more proactive in their dealings with Barratt so as to ensure that the Agreement continued to operate..
99. Accordingly, it seems to me that, at least arguably, Gold were also in breach of the terms of the Development Agreement as at 12th January 2009. A final decision would require further evidence about the events between the end of October 2008 and 12th January 2009. This would in turn allow Barratt to search for the files of Barratt Thames Valley, and to interview Mr Tuthill (although it is unlikely that he will be able to offer much assistance, given that it was apparently Mr Lees-Uff who was dealing with Gold during the relevant period).
108. However, I have concluded that, although it is slender, there is one possible argument open to Barratt which I cannot at this point describe as fanciful. That is their argument to the effect that, because Gold were in breach of the Agreement (because they did not renegotiate or even contemplate renegotiation in November/December 2008), it was actually Gold who wrongfully repudiated the Agreement.
109. I do not regard this argument as having a strong chance of success. It seems to me that, if the problem was simply the need to agree lower prices, Barratt should have proposed them; they should not, without more, simply have treated the Agreement as being at an end. However, I have already said that I require further evidence as to the detail of the negotiations during that period and, until that evidence is considered, it is difficult for me to say whether or not Gold were in breach and, if they were, whether or not that breach could be said to be repudiatory.
110. For those reasons, although on the face of it Barratt were in repudiatory breach of the Agreement by 12th January 2009, I consider that there is one last element of their defence to that allegation still open to them which would require evidence to determine. In those circumstances, the alleged repudiation by Barratt ought not to be the subject of a judgment on liability under CPR Part 24. However, because of my doubts about the strength of this remaining defence, I would only grant Barratt conditional leave to defend the repudiation claim brought against them. "
"111. The other reason why I am not presently prepared to give summary judgment on the repudiation element of the case is the muddle which exists, on the face of the documents, from 12th January 2009 onwards. Although it is clear that Barratt were no longer prepared to do any work on site, which would in normal circumstances give rise to the clearest possible evidence of repudiation, Gold's acceptance of that repudiation is surprisingly unclear. I note in particular:
112. Accordingly, it seems to me that the events both before and after the letter of 12th January 2009 are not clear enough to warrant summary judgment on the repudiation claim. Barratt have also raised the point that, even if they were in repudiatory breach of contract, that repudiation was not accepted by Gold and that, on the contrary, Gold affirmed the continuing nature of the Agreement. I am again unable to resolve that issue without evidence. "
The Terms of the Development Agreement
The Freeholder [ Gold ] appoints Barratt:
3.1 to procure the design and build of the Development in accordance with this Agreement; and
3.2 as the agent to market the Property in accordance with this Agreement. "
"5. 1 The principal services to be carried out by and at the cost of Barratt to be more particularly described in the remainder of this Agreement are:
5.1.1 The co-ordination superintendence and supervision of the carrying out of the Development;
5.1.2 Advising on promotional and marketing campaigns for the Disposal of Units at the Property and exchanging Agreements for Sale for the Disposal of Units at the Property as agent of the Freeholder each Agreement for Sale being at no less than the Minimum Price for that Unit; and.....
5. 1. 4 The maintenance and management of the Property to include the establishment and operation of any Management Company (including the payment of all outgoings until the Disposal of all the Units has occurred).
5. 1. 6 To do all such acts and matters and things as may be consistent with necessary for or incidental to the attainment of the foregoing services and to maximise the value of the Development.
5. 2 Barratt shall procure that the Development is begun and completed in accordance with the Development Plan, Requisite Consents and the requirements of all lawful authorities within 30 months from commencement of the Development
5. 5 In carrying out its obligations Barratt shall: -
5.5.1 comply with the Development Obligations in the Development Plan;
5.5.2 keep the Freeholder informed of the progress of the Development;
5.5.3 comply with the Marketing Plan;
5.5.4 keep the Freeholder informed of the progress of the marketing of the Units; and
5.5.5 in any case have due regard to the proper and reasonable requirements and representations of the Freeholder...."
"7. THE BUILDING WORKS
7.1 Barratt will commence and proceed diligently with the Building Works as soon as is reasonably practicable and in any event within 12 weeks from the grant of vacant possession.
7.2 Barratt will complete the Building Works as soon as reasonably practicable but in any event within 30 months after the commencement date set out in paragraph 7. 1 of this Schedule.
7.3 Barratt will procure that the Building Works are carried out at its own cost:
7.3.1 In a good and workmanlike manner and in accordance with good building practice;
7.3.2 With good and suitable materials;
7.3.7 With due diligence... "
".. all works of demolition clearance remediation and construction on the Property and all other works constituting the Development in accordance with the Relevant Planning Permission and the Requisite Consents and in accordance with the Development Plan together with all necessary ancillary works. "
"6. 1 Following the approval of the detailed specification for the Development in accordance with the provisions of paragraph 4 of the Second Schedule Barratt will update the Development Plan to include a detailed programme of works and cash flow and projected dates for the issue of the certificates of sectional completion of the PCFU and will provide a copy to the Freeholder for their approval (such approval not to be unreasonably withheld provided the revised Development Plan is consistent with the Development Plan attached to this Agreement.
6. 4 Following the approval of the detailed specification for the Development in accordance with the provisions of paragraph 4 of the Second Schedule Barratt will produce a Marketing Plan for the Units to include a detailed programme of sales strategy for each phase or block within the Development the range of sale prices and the proposed Financial Incentives the timing of the sales campaign and will provide a copy to the Freeholder for their approval (such approval not to be unreasonably withheld). "
"7 GENERAL DUTIES AND RIGHTS OF THE FREEHOLDER
7.1 The Freeholder will where necessary and appropriate co-operate with Barratt to enable Barratt to discharge its duties, and the Freeholder will respond promptly to requests properly made by Barratt for approvals, instructions, information or assistance.
7.2 The Freeholder hereby appoint Barratt as its agent to:
7. 2. 1 Sign and exchange Agreements for Sale SUBJECT TO the Net Revenue of each Unit being no less than the Minimum Price for such Unit
7.3 For the avoidance of doubt Barratt may commit the Freeholder to provide Financial Incentives in respect of Units SUBJECT TO this not resulting in the Net Revenue for any unit being less than the Minimum Sale Price for such Unit...."
"10 FINANCIAL PROVISIONS
10.1 In consideration of the services provided to the Freeholder by Barratt pursuant to this Agreement the Freeholder shall pay to Barratt on each Completion Date
10.1.1 45% of the Net Revenue of each Unit and the PCFU received by the Freeholder for its services as contractor under clause 3. 1 of this Agreement plus a further 5% of the Net Revenue of each Unit and the PCFU received by the Freeholder for its services as agent under clause 3. 2 of this Agreement until such time as the aggregate payment of the Net Revenue of each Unit and PCFU equals £18, 000, 000
10.1.2 55% of the Net Revenue of each Unit and the PCFU received by the Freeholder for its services as contractor under clause 3. 1 of this Agreement plus a further 5% of the Net Revenue of each Unit and the PCFU received by the Freeholder for its services as agent under clause 3. 2 of this Agreement while aggregate payment of the Net Revenue and the PCFU equals a sum between £18,000,000 and £19,500,000
10.1.3 95% of the Net Revenue of each Unit and the PCFU received by the Freeholder for its services as contractor under clause 3. 1 of this Agreement plus a further 5% of the Net Revenue of each Unit and the PCFU received by the Freeholder for its services as agent under clause 3. 2 of this Agreement while aggregate payment of the Net Revenue of each Unit and the PCFU equals a sum between £19, 500, 000 and £26, 000, 000 ...."
"The parties mutually covenant and agree that:
11.1 during the continuance of this Agreement all transactions entered into between the parties shall be conducted in good faith and on the basis set out in this Agreement or if not provided for herein on an arm's length basis;
11.2 each of them shall at all times act in good faith towards the other and use all reasonable endeavours to ensure the observance by themselves of the terms of this Agreement and the agreements referred to in, or contemplated by this Agreement; and
11.3 neither will seek to increase its profit or reduce its loss at the expense of the other."
If any of the provisions of this Agreement is found by the Expert or court or other competent authority to be void or unenforceable, it should be deemed to be deleted from this Agreement and the remaining provisions shall continue to apply. The parties shall negotiate in good faith in order to agree the terms of a mutually satisfactory provision to be substituted for the provision found to be void or unenforceable."
"... the Freeholder may, by notice in writing served on Barratt, serve notice of its intention to terminate this Agreement and in the event that Barratt does not remedy the breach complained of within 20 Working Days following service of such notice this Agreement shall terminate absolutely, the licence granted pursuant to clause 7.4 shall determine and Barratt shall vacate the Property. Any determination of this Agreement by the Freeholder shall be without prejudice to any right or claim that either party may have in relation to any antecedent breach by Barratt of its obligations under this Agreement. "
"Dear Mr Gold
Gadoline House, Godstone Road, Whyteleafe
Further to our meeting yesterday afternoon, I would like to confirm this Company's interest in the purchase of the above site and would further confirm that while I am happy to increase my offer of £7,700,000 to £8,000,000 (eight million pounds), subject to contract, this offer would be subject to vacant possession being available on completion.
I understand this might cause a tax problem, given that you have Ann Summers in occupation and likely to stay in occupation until alternative premises can be found/built.
As discussed I am happy to make the following proposal.
1. The Gold Property Group retains the freehold of the property and enters into a development agreement with Barratt Homes. Instead of a straightforward land purchase when one would normally exchange on such a purchase, Barratt Homes would enter into an Option to enter into the development agreement, the only condition being vacant possession.
2. On vacant possession, Barratt would complete the development agreement and would, under licence, construct on behalf of the Gold Property Group the properties with the benefit of the detailed planning permission.
3. In return for constructing the properties, the Gold Group of Companies would pay Barratt Homes:
45% of the first £18,000,000 of revenue and 5% of the first £18,000,000 as an agency fee for selling the properties
A further 55% of the next £1,500,000 of revenue for constructing the properties and 5% for sales and marketing
For revenues of £19,500,000 to £26,000,000 Barratt would be paid 95% of the revenue for constructing the properties and 5% for selling the properties
For any revenue beyond £26,000,000 Barratt would be paid 55% of the revenue for constructing the properties and 5% for selling the properties
In summary, the above proposal would enable the Gold Property Group to retain £9,000,000 from the first £18,000,000 of revenue, £600,000 from the next £1,500,000 of revenue and a 40% share of any revenue in excess of £26,000,000; therefore on current estimates the share to the Gold Property Group would total £9,600,000. Our current estimate of revenue from both the private residential, the affordable residential and the doctor's surgery is £25,600,000. In addition, the Gold Group would retain the freehold of the buildings and our estimation of the value of the ground rents for the private residential at £200 per annum for a one-bedroom flat and £300 per annum for two-bedroom flats, would be at 17 times (the current multiple that we are achieving for a standard Barratt lease) and would produce a further £457,000. The overall amount from this development, assuming sales only reach £19,500,000, would be £10,057,000.
The sums that we are working on assume that the social housing and the doctor's surgery will produce a combined income in excess of £2,500,000, giving private revenue of £23,000,000 or thereabouts. Therefore, not to achieve a total revenue of £19,500,000, the private housing revenue would have to drop from an estimated £23,000,000 to £17,000,000 (28%), a dip even the most pessimistic commentators would have trouble justifying.
As discussed at our meeting, the concept behind the above is that there is a perceived risk to the freeholder. However, as you can see from above we have tried to minimise the risk and of course you are at no risk to building cost overruns as the potential share is based entirely on revenue and not profit.
I trust that the above is of interest and look forward to hearing from you in due course."
"(a) any work of construction in the course of the erection of a building;
(aa) any work of demolition of a building;
(b)the digging of a trench which is to contain the foundations, or part of the foundations, of a building;
(c)the laying of any underground main or pipe to the foundations, or part of the foundations, of a building or to any such trench as is mentioned in paragraph (b) "
"It is plain that, at about the time the building works should have been starting in the Spring of 2008, the recession was beginning to bite. Barratt were particularly badly affected. The evidence shows that, in May 2008, the Barratt Group reported a 33% decline in the amount of sales agreed each week compared with the previous year. In June 2008, the Group's value fell from £488 million to £213 million in a week. This was accompanied by advice from some City brokers not to buy shares in the Group at any price. Mr Champion admits at paragraph 6 of his statement that, at this time Barratt "was in negotiations with its bankers to reschedule its borrowings."
"Agents within the Whyteleafe area have indicated that property prices in the area have been affected by at least 20% in the last six months alone with the majority of reductions being seen to have a major impact on flatted and apartment schemes.
With regard to apartments in the area, agents have agreed that they would expect to achieve in the region of £160,000 - £165,000 for a one bedroom apartment and between £200,000 - £210,000for a 2 bedroom apartment. "
"At our meeting on 4th November 2008 you tabled a proposal in that the project should be put on hold as a result of the current financial uncertainty. From memory you suggested that the decision to commence construction should be revisited in 2010. You kindly agreed to write to us setting down your proposal in detail for our consideration.
For the purposes of clarification and for the avoidance of doubt would you please clarify:
1. The precise events that you propose would trigger the commencement of the project.
2. Whether a phased scheme (PCT unit plus affordable housing) is workable.
3. The contractual basis of your proposal.
You will be aware of our extreme disappointment at the prospect of incurring considerable holding costs in the intervening period, not to mention not realising any profit from the scheme for an undefined period, and therefore I would greatly appreciate it if we could reach a firm understanding within the next ten days.
I look forward to receipt of your email and should there be any aspect which you may wish to discuss then please give me a call. "
"With regards to the market, of which our recent marketing report was tabled, it is clear that at present the sales values are considerably below that of the contracted minimum values. This would result in a loss making project in the event that the proposal was to be progressed at present and it was suggested that the build be delayed until at least December 2010, unless mutually agreed to commence earlier as a result of the market improving.
Bradley also raised the importance of obtaining a return from the site sooner by way of phasing. The possibility of bringing forward the PCT and Housing Association units, being a likely first phase has been investigated. The fundamental issues with regard to building out the PCT and Social units is the fact that £125,000 section 106, costs have to be paid prior to commencement of development, cost of the building itself including the remediation, services, and highways etc total £2,422,000. The current anticipated revenue for the PCT unit and social units currently totals £2,972,720. This sum would be split 50/50 in line with the existing development agreement and Barratt would receive a total of £1,486,360, which would give us a further loss of £1,060,640.
Unfortunately the expenditure in cash considerably outweighs the income to Barratt Thames Valley and therefore we are unfortunately unable to bring forward this first phase of the scheme.
The alternative which Barratt would be happy to explore would be to bring the build forward now by reviewing the current payment terms on the following basis
Gold Group to receive 30% of the first £15m of revenue (£4,500,000) Gold Group to receive 40% of the next £5m of revenue (£2,000,000) Gold Group to receive 10% of the next £2.3m of revenue (£230,000) Gold Group to receive 90% of the next £3.2m of Revenue (£2,880,000)
Any revenue over and above £25.5m to be split 50/50.
The above split would provide the Gold Group with its original land value of £9.6m if the Gross development value returns to the original expected revenue of £25.5m prior to the units being marketed in the later part of2009 and early 2010.
I trust that the revised payment term proposal would be acceptable in order to bring the development forward and to avoid the project being delayed as we have already discussed.
I look forward to hearing from you in order for us to clarify the way forward that has resulted from these unfortunate economic issues we are encountering."
"Regarding the prevailing market conditions.
We are of course aware of the current adverse market conditions and are very sympathetic to the effect that these are having on the development industry in particular. However you must also appreciate that we are suffering from the same market conditions. Irrespective of how and when the scheme goes forward we are already incurring significant holding costs and will inevitably experience a considerable delay in accessing the sales revenue.
You appear to be making the case that as the projected sales values fall below the contract minimum values then this gives you a valid and contractual reason not to build out. This is not the case as the benefit of the contract with regards to the minimum sales figures is solely for ourselves.
An early return
It is disappointing that Bradley's suggestion of building out parts of the scheme in advance of the remainder was not supported by yourselves. We had seen this as a positive suggestion to which we would have given full consideration in order to assist you in these difficult times. Upon reflection and in view of your own comments this is not now a route which we would wish to pursue.
Proposed review of the payment terms.
Under the circumstances and for the reasons amplified below we do not consider this suggestion to be appropriate.
While your letter does not appear to give any proper regard of the contractual position we are pleased to note that Steven Brownlie's covering email does allude to the salient points. These are briefly as follows:-
Firstly that you should commence work on site within 12 weeks of the granting of vacant possession (clause 7.1).
Secondly that you should proceed diligently with the Works (clause 7.1).
Thirdly that the Works should be completed within 30 months of the date of commencement (clause 7.2)
You have made a belated start on site in demolishing the main warehouse this past autumn. However in reality this was pre-empted by a fire and we note that the other buildings remain standing. In any event you clearly have failed to proceed diligently with the Works and appear to have little intention to complete within the stated 30 months.
There are of course various other actions and reports which ought to be undertaken and submitted to us on a regular basis but I do not see the need to go into these in detail at this stage.
In summary we wish to formally record that you are in breach of your contractual obligations and that this situation is causing, and will continue to cause us substantial losses. We hereby give you notice that we insist that this breach is remedied by 12th January 2009. To this end, and as an absolute minimum, we would expect by this date:-
1. Receipt of confirmation by yourselves that going forward you intend to fully commit to this project and honour your contractual obligations.
2. The demolition contractor to recommence work.
4. Preparation of a fully detailed construction programme, to be submitted to us for our approval, which demonstrates an intention to recover as much of the lost time as is possible.
Please be assured that we are most disappointed to feel it necessary to write this letter and it is still our wish to continue to proceed on an amicable and co-operative footing. However should you decide not to positively address this situation then we shall have no alternative but to consider taking this matter further.
We look forward to receipt of your comments. "
"We have advised Barratt that the Agreement is at an end and is therefore unenforceable. There are two alternative legal bases on which the Agreement has been brought to an end, both relating to the provisions of the Agreement as regards the Minimum Price for the leasehold units that were to be sold.
Firstly, it is very clear from the Agreement that the parties were proceeding on the common assumption that the future market value of the units would not be less than the minimum prices in Schedule 4. This common assumption as to future value made at the time the Agreement was entered into was mistaken and it is that mistaken assumption that has given rise to a mutual mistake between the parties. The legal effect of this mutual mistake is to render the Agreement void and unenforceable.
The alternative basis, which is equally compelling, is that the Agreement has been discharged by frustration. Frustration has arisen here because a supervening event, being a fall in property market values, has occurred which now renders performance of this fundamental part of the Agreement impossible as the parties are unable to sell the units at the minimum prices now or in the foreseeable future. This fall in the property market was not the fault of either party and the risk of such a fall is not catered for in the drafting of the Agreement. Consequently, as it is impossible for this contractual obligation to be performed, the Agreement has been frustrated and the parties' obligations under it discharged.
The result of either of the scenarios set out above is the same - the agreement is at an end (either as it is void or it has been discharged) and it is therefore unenforceable against our client.
It follows that we completely reject your statement at the top of the second page of your letter that the benefit of the contract as regards the minimum sales figures is solely yours as the Agreement does not provide for this. Clause 10 of the Agreement assumes that all of the units can be sold at the minimum prices and as they cannot the Agreement is frustrated.
Breach of Agreement by Barratt
We note the allegations of breach by Barratt under the heading "Contractual Position " in your letter. We reject entirely any such claims as the Agreement is unenforceable for reasons already stated.
Proposed Review of Payment Terms
Our client has a continued desire to build this development and sell these units for you but as the Agreement currently stands this is impossible. In this context the proposed review of payment terms set out in our client's letter of 19 November was a constructive proposal to find a way forward rather than our client just walking away from the Agreement as it is entitled to do.
Notwithstanding your rejection of those proposals, they remain on the table for discussion if you are open to proceeding with this project on new payment terms. However, the only way forward is a new payment structure to reflect current market conditions and current values for the units to be constructed, and so if you are not willing to discuss a revised payment structure our client will have no option but to treat the Agreement as at an end on the grounds set out above
The only way for our client to work with you in relation to the proposed development at the Property envisaged by the Agreement, is on new payment terms as clearly set out above. Our client is therefore ready to sit down to discuss this with you at the earliest opportunity so we await your response. If you do not respond positively to this offer to discuss revised proposals then our client's position is clear. In such circumstances our client will be seeking to recover damages from you equivalent to the value of any benefit you have received, or enhancement in the value of your interest in the Property, arising out of steps our client has previously taken under the Agreement in relation to the Property."
Gold Group Properties ("GGP") does not agree that the Agreement is at an end and/or unenforceable by reason of any of the grounds cited in your letter of 12 January 2009. GGP holds the opinion of Leading Counsel who concurs with GGP's view that the grounds on which Barratt seek to rely are wrong as a matter of construction and in law.
Leading Counsel has advised that Barratt stands in material breach of the Agreement and that GGP is entitled to pursue a number of remedies in consequence. Currently, GGP is considering which of its remedies it will pursue, including the possibility of seeking declaratory relief under a declaration in the High Court by way of summary judgment.
Before taking steps to enforce its rights under the Agreement GGP has decided to make one final attempt to resolve the matter amicably. You will be aware that a meeting has been arranged between Mr Bradley Gold ("Mr Gold") of GGP and Mr Tuthill of Barratt which will take place on 31st March 2009.
In the event that the meeting does not identify a resolution to the matter, then GGP intends to pursue its remedies under the Agreement to the fullest extent.
For the avoidance of any doubt whatsoever, the claims made in your letter of 13 March 2009 are rejected in their entirety. The agenda for the meeting between Mr Gold and Mr Tuthill will be to identify a resolution under which either Barratt performs its obligations under the Agreement or, alternatively, tenders a financial offer acceptable to GGP to bring the Agreement to an end. Mr Tuthill should attend the meeting with this agenda in mind. "
"2. Remedy of Breach
2.1 Without prejudice to GGP's contention that BDW's letter of 12th January 2009 amounted to a repudiatory breach of the agreement which GGP was entitled to accept (and has accepted), GGP is prepared to allow BDW an opportunity to remedy its breach of the
Agreement identified in paragraph 1.7 above within 20 working days of the date of this letter.
2.2 Provided either the breaches are remedied within 20 working days or BDW demonstrates itself willing to remedy and confirms it will honour and perform the other terms of the Agreement, then GGP is prepared to allow BDW to complete the development within a reasonable period and for both GGP and BDW to perform the other terms of the Agreement within an adjusted timescale.
2.3 In the event BDW does not remedy the breaches within 20 working days of the date of this letter then that failure will have the consequences set out in clause 24 of the agreement. To the extent necessary, this letter is notice in writing under Clause 24 of the Agreement because BDW is in material breach of its obligations under the Agreement as set out above.
2.4 In the event that the Agreement has already terminated or terminates as a consequence of BDW's failure to remedy pursuant to paragraph 2.1 and 2.2 above, then GGP intends to commence proceedings in the High Court against BDW for breach of contract and to recover damages for its losses.
"The pre action letter written to your clients on 14 August 2009 allowed your client a period to remedy their breach(es) of the Development Agreement in accordance with the provisions of Clause 24 of the Agreement. They have failed to take up that opportunity. Additionally, your letter of 2 September makes it plain that your client has no intention of performing the Development Agreement and that it continues to consider the Agreement to have already ended by reason of mistake and/or frustration of contract. Accordingly, the Development Agreement has now terminated absolutely and I have written to your client confirming that to be the case. This will assist in crystallising GGP's claim for damages.
Breach of Contract by Barratt
Agreement by 12th January 2009. Apart from the matters set out in Section 7 of the earlier judgment I would draw attention to:
73.1. Barratt's letter of 19th November 2008 which recorded that even by that date they had not commenced the development;
73.2. The fact that that letter strongly indicated that Barratt were not prepared to proceed with the development unless the revised payment proposal was agreed;
73.3. The assertion in the letter of 12th January 2009 that the Agreement was at an end (on two bases, one of which was not argued in these proceedings and the other found to be without substance) coupled with the statement that the only way in which in the development could proceed would be if new payment terms were agreed.
Judgment giving rise to an estoppel
"If a claim has been explicitly determined in previous concluded proceedings between the same parties, that claim cannot be raised again, other than on an appeal, unless there is fraud or collusion. If a necessary element of a claim has been explicitly determined in previous concluded proceedings between the same parties, that issue cannot be raised again, if, as is likely but not inevitable, it would be an abuse to raise that issue again. This may also extend to an implicitly necessary element of the previous determination. The previous determination may include a settlement. If a claim or issue has not been determined in previous concluded proceedings between the same parties, there may nevertheless be circumstances in which, as a matter of public and private interest on a broad merits-based procedural judgment, it would be an abuse for a party to raise that claim or issue. Such circumstances may, depending on the facts, exist where the litigant could and should have raised the matter in question in earlier concluded proceedings. There may in particular cases be other elements of abuse, including oppression of another party; but abuse of process is a concept which defies precise definition in the abstract. The court will only stop a claim as an abuse after most careful consideration. "
(Specialist Group International Ltd v Deakin  EWCA Civ 777 at .)
"Although a wide range of materials can be looked at to determine what was necessarily decided, in a previous case the House of Lords has emphasised the danger of looking too carefully for estoppels based on matters which were not in issue, or not fully argued and decided. The cautious approach the House of Lords inculcated has since been accepted in Spens v IRC where Megarry J. observed that "a doctrine of estoppel per incuriam is one which I would regard with some caution", and that "one must inquire 'with unrelenting severity' whether the determination on which it is sought to found the estoppel is 'so fundamental to the substantive decision that the latter cannot stand without the former. Nothing less than this will do'. " This cautious approach is also applied to default judgments. "
conditional leave to defend, it is clear that the question of the inter-relationship between Clause 10, on the one hand, and Clauses 8.1 and 11.2, was not decided.
Agreement of Minimum Prices
"... .to observe reasonable commercial standards of fair dealing in accordance with their actions which related to the Agreement and also requiring faithfulness to the agreed common purpose and consistency with the justified expectations of the First Claimant. "
"It must be accepted that the party subject to the obligation is not required to subordinate the party's own interests, so long as pursuit of those interests does not entail unreasonable interference with the enjoyment of a benefit conferred by the express contractual terms so that the enjoyment becomes (or could become) ... 'nugatory, worthless or, perhaps, seriously undermined' ... the implied obligation of good faith underwrites the spirit of the contract and supports the integrity of its character. A party is precluded from cynical resort to the black letter. But no party is fixed with the duty to subordinate self- interest entirely which is the lot of the fiduciary ... The duty is not a duty to prefer the interests of the other contracting party. It is, rather, a duty to recognise and to have due regard to the legitimate interests of both the parties in the enjoyment of the fruits of the contract as delineated by its terms."
Alleged Breach by Gold
minimum prices whilst insisting upon retaining the revenue sharing arrangements set out in Clause 10.
111.1. Barratt was in repudiatory breach of the Development Agreement in the respects set out at paragraphs 5 and 73 above;
111.2. Gold was not in breach of the Development Agreement in refusing to accept or negotiate on the basis of Barratt's offer as set out in the letter of 19th November 2008;
111.3. Whilst the views expressed by Gold in its letter of 17th December 2008 as to the minimum price were not correct they had no causative effect;
111.4. Gold terminated the Agreement by letter dated 21st September 2009 both pursuant to the Agreement and by its acceptance of Barratt's repudiatory breach.