Nordic Insulated Doors Ltd v Land Resources Ltd

A contractual termination date is effective according to the parties’ agreement unless a valid extension is proved. A party asserting an oral variation must establish agreement; unilateral communications and silence do not suffice. Consequential loss caused by non-payment must satisfy contractual remoteness rules and be supported by evidence. An unassignable option cannot ordinarily support an assignment-based loss. A property-development joint venture agreement is not thereby a contract for the sale or disposition of an interest in land under the Law of Property (Miscellaneous Provisions) Act 1989, although an extension of an option requires writing.

The claimant and defendant entered into a joint venture agreement for the renovation and disposal of a property. The agreement allocated profits and ended on 1 August 2012, after which the claimant had no vested interest in the site. The property was sold on 2 August 2012. The claimant alleged an oral extension and claimed its share of the proceeds, together with consequential damages for non-payment. The defendant denied any extension and advanced allegations of breach and damages. The issues were whether an extension had been agreed, whether the claimant retained any entitlement after the termination date, and whether the damages claims were recoverable.

1. The claim was dismissed. No agreement had been reached to extend the joint venture agreement. The claimant’s emails sought confirmation but received no reply. They did not establish agreement or create an estoppel.
2. The termination provision operated according to its terms. Since the sale completed after the contractual termination date, the claimant had no entitlement to the proceeds.
3. Even if an extension had existed, the damages claim would have failed. The alleged opportunity was speculative and unsupported. The option prohibited assignment, applying Linden Gardens Trust Limited v Lenesta Sludge Disposal Limited [1994] 1 AC 85. The alleged loss was too remote under Hadley v Baxendale [1854] 9 Exch. 341. The court also referred to Sempra Metals v IRC [2008] AC 561.
4. Obiter, section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 applied to the option and its extension, but not to the wider joint venture agreement.
5. The defendant’s damages claim was inadequately particularised and unsupported and would also have been dismissed.

not stated in the judgment.