Citation: [2026] EWHC 2003 (TCC)
Mr Justice Constable has refused a freeholder’s application for reverse summary judgment on a claim that its termination of a Building Safety Act remediation agreement was unlawful. The judgment is a useful corrective to the assumption that the statutory backdrop of a remediation order makes delay easier to characterise as repudiatory. It does not.
The dispute
Centrillion Point in Croydon was converted from offices into flats by Durkan Estates Ltd (“Durkan”) in the late 2000s. Wallace Estates Ltd (“Wallace”) acquired the freehold in 2014. In January 2024 the First-tier Tribunal made a remediation order under s.123 of the Building Safety Act 2022 (“BSA”) requiring Wallace to remedy relevant defects by 31 May 2025.
Durkan — an entity against which Wallace could have sought a remediation contribution order under s.124 — agreed instead to carry out the works at its own cost. The resulting Agreement, dated 1 July 2024, set a completion date of 19 September 2025 “or such other date as is agreed as part of the Plans and Specifications”. That date was already later than the deadline in the remediation order, a point which came to matter.
By June 2025 no Gateway 2 application had been made to the Building Safety Regulator, without which the works could not begin. Wallace applied to the FTT to vary the remediation order deadline. The application was refused on 24 June 2025, the Tribunal holding that it could not fix a completion date by reference to an unfixed future event. In resisting the leaseholders’ criticism at that hearing, Wallace told the Tribunal that terminating the remediation agreement was “not the panacea” it was portrayed to be, and that Wallace was “reasonable in allowing Durkan to continue at this point in time”. Its witness statement recorded that engaging a replacement contractor “would simply lead to a longer delay”.
Two days later, Wallace served a termination notice.
Wallace then sought a remediation contribution order against Durkan and its parent for £13,586,797.02. Durkan issued in the TCC in February 2026 seeking declarations that the termination was unlawful. Wallace counterclaimed and applied for reverse summary judgment on the whole claim.
The application
The application was expressly confined to common law termination. Wallace did not pursue the contractual route under the Agreement’s “Substantive Breach” provision, notwithstanding that the termination notice had relied on it. Its case was that Durkan had not merely failed to complete by the completion date but had failed even to reach the point at which works could start, and that this deprived Wallace of substantially the whole benefit of the agreement. This was all the more so because delay exposed Wallace’s directors to committal proceedings for non-compliance with the remediation order.
Durkan resisted on three main grounds: that time had become at large, by agreement or by estoppel by convention; that delay where time was not of the essence, absent any notice or complaint, could not meet the repudiation threshold; and that Wallace had affirmed the Agreement at the FTT hearing two days before termination.
The decision
The application was dismissed in its entirety.
The BSA context does not alter the test. Wallace admitted that time was not of the essence and no notice had been served to make it so. Constable J accepted that the statutory context and the existence of a remediation order “materially increase the importance of timely performance”, but held that they do not of themselves alter the test for repudiation or convert a non-essential time stipulation into a condition. He added a point of some bite: on Wallace’s own contractual case, it had signed up to an agreement whose completion date already postdated the remediation order deadline, and so had itself accepted the very committal risk it now relied upon.
Estoppel can outflank contractual machinery. Wallace’s construction argument — that the completion date could only be varied through the clause 4 approval procedure, and that meeting minutes circulated by email were excluded from the definition of “Writing” — was described as potentially powerful. It did not, however, meet Durkan’s alternative case that the parties had proceeded on a shared assumption that the September 2025 date would not be met and that completion would run 68 weeks from Building Safety Regulator approval. Cases in which estoppel overrides clear contractual machinery are not straightforward, but they are not summarily determinable either, particularly where disclosure is likely to bear on the shared assumption.
Unpleaded contractual defences will not do the work. Much of Wallace’s oral argument relied on specific clauses said to answer Durkan’s evidence of prevention and delay — the allocation of responsibility for the building control application, the access licence, the extension of time machinery. None of it was pleaded. The Court held that the familiar plea that a party will rely on the agreement as a whole is insufficient to raise specific contractual defences to specific allegations of prevention. The facts relied upon, including the fact of the clauses and their effect, had to be pleaded so that Durkan could respond — for instance by raising an estoppel. Raising them for the first time in oral argument on a summary judgment application was not open to Wallace.
Critically, the point was not merely procedural. Constable J held that even if the clauses had been pleaded, they would not have permitted summary disposal. Where the obligation is to do something within a “reasonable” time, what in fact caused delay may inform what a reasonable time was, irrespective of where contractual risk sits. And the fact that a party is making an effort to perform makes a fundamental breach intrinsically difficult to establish, whatever the allocation of risk.
The contractual termination regime informs the common law analysis. A common law right to terminate does not render the contract’s own termination provisions irrelevant. Where the parties have agreed that specified defaults are to be met with notice and an opportunity to cure — as clause 3’s definition of “Substantive Breach” did — that machinery forms part of the circumstances to be weighed, and conduct the parties designated as remediable is not readily characterised as abandonment.
Non-waiver clauses are not a complete answer to affirmation. Wallace relied on a clause providing that no election to affirm would be effective unless in writing. The Court held it reasonably arguable both that the clause’s opening words were directed at delay in exercising rights rather than at election at all, and that written submissions to a tribunal, made to the knowledge of the counterparty, may constitute affirmation in writing. Durkan’s representative had been present at the FTT hearing. Disclosure of Wallace’s internal communications in the 48-hour window between the hearing and the termination notice was described as crucial — no explanation for the volte-face having been offered in the Defence or in evidence.
The judgment leaves open, expressly, whether a renewed right to terminate might have arisen two days after affirmation by reason of continuing delay. That will depend on the facts found at trial.
Evidence reasonably expected at trial. The Court adopted the approach in Okpabi v Royal Dutch Shell Plc [2021] UKSC 3: the question is not whether there is a clear prospect that new material will emerge, but whether there are reasonable grounds for believing that disclosure may materially add to or alter the evidence going to real prospects of success. On the facts — an unexplained reversal of position, a live dispute about causes of delay, and an estoppel case turning on contemporaneous conduct — there plainly were.
Points for practitioners
- The BSA does not create a bespoke repudiation standard. Parties to remediation agreements who want certainty as to timing must build it in: make time of the essence expressly, or provide for liquidated damages, or serve notices. Regulatory urgency is not a substitute.
- A completion date defined by reference to a process the parties then conduct informally is vulnerable. Where the contractual variation machinery is not operated but the parties behave as though the date has moved, estoppel by convention is squarely in play.
- If contractual provisions are said to answer allegations of prevention, plead them. A general reliance plea will not carry the point, and the omission cannot be cured in submissions.
- Contractual cure regimes are relevant to repudiation arguments even where the terminating party abandons the contractual route and pursues common law remedies.
- Statements to a court or tribunal are not made in a vacuum. A party which tells one forum that it intends to continue with a contract should expect that to be deployed against it in another.
Alice Sims of Keating Chambers, instructed by Mayer Brown International LLP, appeared for Durkan Estates Ltd.
