North East Lincolnshire Borough Council v Millenium Park (Grimsby) Ltd

On a Part 24 application, the court must ask whether the opposing party has a real prospect of successfully defending the claim. It must not conduct a mini-trial or finally determine a genuinely arguable issue of impossibility on affidavit evidence.

Specific performance of construction works on land belonging to the claimant is ordinarily unavailable where the claimant can undertake the works and recover quantified damages. It may be granted only in exceptional circumstances. Whether such circumstances exist is ordinarily unsuitable for summary determination where the evidence discloses a substantial dispute about funding, planning, commercial viability or the claimant’s intention to build.

Millenium Park (Grimsby) Ltd appealed against a Part 24 summary judgment given by Pumfrey J in favour of North East Lincolnshire Borough Council. The order required the company specifically to perform its obligation under a section 278 agreement to construct a roundabout on the Council’s land.

The wider development had stalled amid unresolved planning reservations, difficulties in securing prelettings and forward sales, and the withdrawal or unavailability of proposed funding. The company argued that it had no available finance and that specific performance was inappropriate because the Council owned the land and could construct the roundabout itself. The central issue was whether those defences had no real prospect of success.

1. Appeal allowed. The Court of Appeal held that Pumfrey J had applied the wrong approach on the issue of impossibility of performance. The relevant question under Part 24 was whether there was a real or reasonable prospect of success in a defence based on impossibility, not whether the judge was finally satisfied that performance was impossible.
2. A court dealing with summary judgment must avoid a mini-trial on affidavit evidence. Where there is a real and non-fanciful case that contractual performance is impossible, the court cannot resolve the issue summarily by deciding whether the evidence proves impossibility rather than mere difficulty. The evidence that P & O would not fund the works and that the company lacked other funds was sufficient to raise such an arguable case. The possibility of alternative funding did not justify finally rejecting the defence.
3. The Court of Appeal also indicated that there was force in the submission that specific performance of construction works would not ordinarily be ordered where the claimant owned the land and could employ another contractor, leaving damages as an adequate remedy. Such relief was exceptional. The decision in Greene v West Cheshire Railway was arguably confined to a wilful breach involving a personal breach of faith and did not readily apply where the breach arose amid wider planning, funding and commercial difficulties.
4. The court further considered that the Council’s intention to construct the roundabout, and the adequacy of damages, were themselves arguable because the roundabout would provide little benefit unless the wider development, spur road and railway bridge proceeded. These issues also could not properly be determined summarily.
5. Lady Justice Arden agreed that a trial was required. Lord Justice Thorpe agreed with both judgments. The appeal was allowed with costs, subject to the stated costs allocation; permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): appeal from the summary judgment of Pumfrey J in the Chancery Division, allowing specific performance of the roundabout works. Appeal allowed: North East Lincolnshire Borough Council v Millenium Park (Grimsby) Ltd [2002] EWCA Civ 1719.