Liberty Mercian Ltd v Cuddy Civil Engineering Ltd & Anor [2014] EWHC 3584 (TCC) (30 October 2014)

Liberty Mercian Ltd v Cuddy Civil Engineering Ltd & Anor [2014] EWHC 3584 (TCC) (30 October 2014)

The court held that CCEL had used its best endeavours to obtain a performance bond but it was impossible to secure one in the required form due to market conditions and contract termination. The court determined that substituted performance by payment into court of £420,000 was appropriate and within its procedural jurisdiction. Specific performance was granted for the provision of collateral warranties from Quantum, as the obligation survived contract termination and Quantum had no valid defence, despite its insolvency. Costs were allocated based on success and procedural conduct.

Citation
[2014] EWHC 3584 (TCC)
Parties
Claimant: Liberty Mercian Limited; Defendant: Cuddy Civil Engineering Limited; Defendant: Cuddy Demolition and Dismantling Limited
Jurisdiction
England and Wales
Judgment Date
30 October 2014
Procedural Posture
Commercial Contract Dispute / Post Trial Judgment on Specific Performance and Costs
Outcome
Specific performance granted in part; substituted performance ordered; costs allocated.
Legal Topics
Specific Performance, Performance Bonds, Collateral Warranties, Costs Orders, Substituted Performance
Contract Law Equity Construction Law Specific Performance Performance Bonds Collateral Warranties Costs Orders Substituted Performance

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 12 Party arguments 2 Amounts and remedies 7
Sign in to unlock

Parties

Liberty Mercian Limited

Claimant

Cuddy Civil Engineering Limited

Defendant

Cuddy Demolition and Dismantling Limited

Defendant

Procedural Posture

Commercial Contract Dispute / Post Trial Judgment on Specific Performance and Costs

Legal Issues

  1. 1 Whether specific performance should be ordered for provision of a performance bond
  2. 2 Whether specific performance should be ordered for provision of collateral warranties
  3. 3 Whether substituted performance by payment into court is permissible

Ratio Decidendi

The court held that CCEL had used its best endeavours to obtain a performance bond but it was impossible to secure one in the required form due to market conditions and contract termination. The court determined that substituted performance by payment into court of £420,000 was appropriate and within its procedural jurisdiction. Specific performance was granted for the provision of collateral warranties from Quantum, as the obligation survived contract termination and Quantum had no valid defence, despite its insolvency. Costs were allocated based on success and procedural conduct.

Court Disposition

Specific performance granted in part; substituted performance ordered; costs allocated.

Orders

  • CCEL to pay £420,000 into court as substituted performance for the performance bond, to be held on terms equivalent to the bond.
  • CCEL to use best endeavours and enforce obligation to obtain collateral warranties from Quantum for Liberty Mercian and Waterman.