Durley House Ltd v Firmdale Hotels Plc

Durley House Ltd v Firmdale Hotels Plc

The Claimant is entitled to a money judgment for the Relevant Rent as damages for breach of contract and/or indemnity, even though it has not paid the Lessor, because in equity the indemnified may recover from the indemnifier before payment to the creditor. The Settlement Agreement does not discharge the Claimant's liability to the Lessor until proceeds are paid over, so loss is not avoided. The Claimant is also entitled to interest on the Relevant Rent as damages. Amendment of pleadings is allowed as it causes no substantive prejudice. Specific performance is not appropriate given the money judgment and the Settlement Agreement's terms.

Parties
Claimant: Durley House Limited; Defendant: Firmdale Hotels PLC
Jurisdiction
England and Wales
Judgment Date
25 July 2014
Procedural Posture
Civil (contract/indemnity) / Post Judgment Consequential Orders
Outcome
Judgment for the Claimant (Durley House Limited) for £932,386.88 plus interest; judgment for Defendant (Firmdale Hotels PLC) on counterclaim for £170,963.11 plus interest; costs order for Claimant (70% up to 23 December 2013).
Legal Topics
Indemnity, Damages, Specific Performance, Interest, Costs, Amendment of Pleadings
Contract Law Equity Landlord and Tenant Indemnity Damages Specific Performance Interest Costs +1 more

Case Brief

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Parties

Durley House Limited

Claimant

Firmdale Hotels PLC

Defendant

Procedural Posture

Civil (contract/indemnity) / Post Judgment Consequential Orders

Legal Issues

  1. 1 Whether the Claimant is entitled to a money judgment for indemnity or damages for unpaid rent under a management agreement and licence, despite not having paid the Lessor;
  2. 2 Effect of a settlement agreement between Claimant and Lessor on the Claimant's entitlement to damages or indemnity;
  3. 3 Whether specific performance can be ordered for payment directly to the Lessor;

Ratio Decidendi

The Claimant is entitled to a money judgment for the Relevant Rent as damages for breach of contract and/or indemnity, even though it has not paid the Lessor, because in equity the indemnified may recover from the indemnifier before payment to the creditor. The Settlement Agreement does not discharge the Claimant's liability to the Lessor until proceeds are paid over, so loss is not avoided. The Claimant is also entitled to interest on the Relevant Rent as damages. Amendment of pleadings is allowed as it causes no substantive prejudice. Specific performance is not appropriate given the money judgment and the Settlement Agreement's terms.

Court Disposition

Judgment for the Claimant (Durley House Limited) for £932,386.88 plus interest; judgment for Defendant (Firmdale Hotels PLC) on counterclaim for £170,963.11 plus interest; costs order for Claimant (70% up to 23 December 2013).

Orders

  • Defendant to pay Claimant £932,386.88 plus interest as determined by the Possession Action Order referable to Relevant Rent.
  • Defendant to pay interest on the counterclaim sum of £170,963.11 at 6% per annum from 15 November 2011.