Liberty Mercian Ltd v Cuddy Civil Engineering Ltd & Anor [2013] EWHC 4110 (TCC) (19 December 2013)

Liberty Mercian Ltd v Cuddy Civil Engineering Ltd & Anor [2013] EWHC 4110 (TCC) (19 December 2013)

Specific performance is appropriate where damages are not an adequate remedy, especially when the defendant is a company without assets and the obligations concern provision of a performance bond and warranties. The court will not refuse specific performance merely because of alleged impossibility unless the defendant has shown, using best endeavours, that performance is truly impossible. The existence of arrangements between CCEL and CDDL, and the lack of full disclosure on funding, mean CCEL cannot rely on impossibility or lack of assets as a defence at this stage.

Citation
[2013] EWHC 4110 (TCC)
Parties
Claimant: Liberty Mercian Limited; Defendant: Cuddy Civil Engineering Limited; Defendant: Cuddy Demolition and Dismantling Limited
Jurisdiction
England and Wales
Judgment Date
19 December 2013
Procedural Posture
Commercial Construction Contract Dispute / Post Trial Judgment on Specific Performance
Outcome
Interim order for best endeavours; final decision on specific performance deferred
Legal Topics
Specific Performance, Performance Bonds, Warranties, Adequacy of Damages, Impossibility of Performance
Contract Law Equity Construction Law Specific Performance Performance Bonds Warranties Adequacy of Damages Impossibility of Performance

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Parties

Liberty Mercian Limited

Claimant

Cuddy Civil Engineering Limited

Defendant

Cuddy Demolition and Dismantling Limited

Defendant

Procedural Posture

Commercial Construction Contract Dispute / Post Trial Judgment on Specific Performance

Legal Issues

  1. 1 Whether specific performance should be ordered for provision of a performance bond and warranties under a terminated construction contract
  2. 2 Whether damages are an adequate remedy for non-provision of bond and warranties
  3. 3 Whether impossibility or lack of assets is a valid defence to specific performance

Ratio Decidendi

Specific performance is appropriate where damages are not an adequate remedy, especially when the defendant is a company without assets and the obligations concern provision of a performance bond and warranties. The court will not refuse specific performance merely because of alleged impossibility unless the defendant has shown, using best endeavours, that performance is truly impossible. The existence of arrangements between CCEL and CDDL, and the lack of full disclosure on funding, mean CCEL cannot rely on impossibility or lack of assets as a defence at this stage.

Court Disposition

Interim order for best endeavours; final decision on specific performance deferred

Orders

  • CCEL is ordered to use its best endeavours to obtain both the performance bond and the warranties for Liberty Mercian and Waterman.
  • The matter of impossibility and further evidence to be reviewed at a subsequent hearing.