Sheffield City Council v Scotfield Group Ltd & Anor [2023] EWHC 990 (Ch) (15 May 2023)

Sheffield City Council v Scotfield Group Ltd & Anor [2023] EWHC 990 (Ch) (15 May 2023)

A term must be implied into the contract requiring the First Defendant to provide evidence of a bona fide arm's length building contract within a reasonable time after the contract became unconditional. The First Defendant failed to comply with this implied obligation within a reasonable time, constituting a substantial breach. The Claimant was entitled to terminate the contract under clause 29(a) and to forfeit the deposit. There were no exceptional circumstances justifying the return of the deposit.

Citation
[2023] EWHC 990 (Ch)
Parties
Claimant: Sheffield City Council; First Defendant: Scotfield Group Limited; Second Defendant: Camstead Limited
Jurisdiction
England and Wales
Judgment Date
15 May 2023
Procedural Posture
Part 8 Claim and Counterclaim (high Court, Chancery Division) / Judgment After Trial
Outcome
Claim allowed; counterclaim dismissed
Legal Topics
Implied Terms, Termination of Contract, Specific Performance, Forfeiture of Deposit, Construction Contracts, Section 49 Law of Property Act 1925
Contract Law Property Law Implied Terms Termination of Contract Specific Performance Forfeiture of Deposit Construction Contracts Section 49 Law of Property Act 1925

Case Brief

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Parties

Sheffield City Council

Claimant

Scotfield Group Limited

First Defendant

Camstead Limited

Second Defendant

Procedural Posture

Part 8 Claim and Counterclaim (high Court, Chancery Division) / Judgment After Trial

Legal Issues

  1. 1 Whether a term should be implied requiring the buyer to provide evidence of a building contract within a reasonable time after the contract became unconditional
  2. 2 Whether the right to terminate under clause 29 could be exercised after the contract became unconditional
  3. 3 Whether the buyer was in breach of the implied obligation and if so, whether the breach was rectified

Ratio Decidendi

A term must be implied into the contract requiring the First Defendant to provide evidence of a bona fide arm's length building contract within a reasonable time after the contract became unconditional. The First Defendant failed to comply with this implied obligation within a reasonable time, constituting a substantial breach. The Claimant was entitled to terminate the contract under clause 29(a) and to forfeit the deposit. There were no exceptional circumstances justifying the return of the deposit.

Court Disposition

Claim allowed; counterclaim dismissed

Orders

  • Declaration that the contract was terminated by notice dated 18 November 2021 under clause 29(a)
  • Declaration that the Claimant is entitled to forfeit and retain the deposit under condition 10.2 of the Standard Commercial Property Conditions (3rd edition)