Telford Homes (Creekside) Limited v Ampurius Nu Homes Holdings Limited [2013] EWCA Civ 577
The claimant, Ampurius entered into a contract to take long leases of the commercial floors in a large development in Greenwich. The contract required completion of the leases in two phases and Telford, the developer, agreed to use reasonable endeavours to meet the target dates for the respective blocks and to use due diligence in the construction of the development. Shortly after agreement for lease, the markets were hit by the failure of Lehman Brothers and Telford had difficulty obtaining the funding it was expecting to build out the development. It therefore put phase 2 on hold for several months. Ampurius gave notice in November 2009 that this amounted to a repudiatory breach of the agreement and it reserved its right to terminate the contract. However, it was not until October 2010 that Ampurius purported to give notice terminating the agreement. By then, things had changed, in that Telford had obtained further funding and work had started on phase 2.
Roth J. held that in stopping work on phase 2, Telford was in repudiatory breach of contract and therefore Ampurius to terminate the agreement. On appeal, Telford did not challenge the finding that it was in breach of contract, but argued that the breaches were not sufficiently serious to entitle Ampurius to terminate the contract. The Court of Appeal agreed, allowing the appeal. It was held that the Judge failed to consider the benefit of which Ampurius was deprived by the cessation of works for several months. Although the development would be completed later and the gap between completion of the two phases would be greater, that did not deprive Ampurius of substantially the whole benefit it was intended to receive from the agreement. In addition, it was held that the Judge had applied the test at the wrong date: he should have asked the question as at the date when Ampurius purported to terminate the agreement.
Jonathan Gaunt QC and Adam Rosenthal acted for the appellants, Telford Homes (Creekside) Limited.
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