Last edited 02 Oct 2013

Ampurius Nu Homes Holdings Ltd v Telford Homes (Creekside) Ltd (2012) EWHC 1820

High Court (Chancery Division) (England and Wales) 2012

The claimant and the defendant (a construction company) entered into a contract for the construction and grant of long leases on a development scheme for which the defendant acquired the freehold. The defendant was required under the contract to proceed with 'due diligence' and to 'use reasonable endeavours' to complete the works by the target date. However, the defendant ran into financial difficulties ceased work.

The claimant alleged that this was a repudiatory breach, but did not terminate the contract for 11 months. It was the defendant who repudiated the contract.

Judgment was given in favour of the claimant.

In so doing, The court held that the defendant was in breach of the term of the contract requiring due diligence by failing to carry out the works assiduously or expeditiously. It was also held that although the breach may not have been repudiatory at the outset, it could become so over time if it deprived the innocent party of the benefit of a significant part of the contract. Negotiation over the course of the breach did not mean the claimant had affirmed the contract.

Court of Appeal (Civil Division) (England and Wales) 2013

In 2013 this decision was overturned by the Court of Appeal. It was not disputed that Telford had been in breach of contract, but the court held that an 18 month delay on a 999-year lease was not sufficient to constitute a repudiatory breach (a breach that it indicates one party no longer intends to accept its obligations under the contract, allowing the innocent party to terminate the contract and to sue for damages) and so did not entitle Ampurius to terminate the contract.

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