BARKBY REAL ESTATE DEVELOPMENTS LIMITED v CORNERSTONE TELECOMMUNICATIONS INFRASTRUCTURE LIMITED

Where a contract for services fixes no completion date, the supplier must perform within a reasonable time. The assessment is fact-sensitive and may take account of what actually occurred, including responsibility for delay and the supplier’s conduct after a problem was identified.

A competent designer may be required to obtain adequate information about site conditions before finalising a design. Industry custom does not determine responsibility where the resulting design is unsuitable.

Contract damages are recoverable where the type of loss was an objectively serious possibility at the time of contracting, having regard to the defendant’s knowledge. Financing costs and additional professional fees may satisfy that test.

Barkby Real Estate Developments Limited engaged Cornerstone Telecommunications Infrastructure Limited to relocate telecommunications equipment obstructing the development of a trade park.

The engagement proceeded in design and acquisition, followed by build, phases. The replacement foundation design proved unsuitable because the ground conditions below the trial excavation were not adequately investigated. The works were completed substantially later than expected, delaying practical completion and the sale of the development.

The issues were whether Cornerstone had failed to perform within a reasonable time under the parties’ contract, whether the delay was contractually attributable to it, and whether the claimed financing and project-management costs were recoverable or too remote.

1. Liability. The claim succeeded in part. Cornerstone was contractually responsible for the material delay to completion of the telecommunications works.
2. Contract and reasonable time. The build-phase contract was formed when Cornerstone acknowledged receipt of payment on 5 September 2019. Section 14 of the Supply of Goods and Services Act 1982 implied a term requiring performance within a reasonable time because the contract fixed no completion date. What constituted a reasonable time was a question of fact.
3. Responsibility for delay. A 1.2-metre trial excavation identified services but did not establish the ground conditions necessary to support the proposed three-metre foundation. Given the site’s proximity to the sea, a competent designer would have obtained a geotechnical survey before finalising the design. Cornerstone remained responsible for the design despite its preparation during the earlier phase. It also failed to act with reasonable expedition after the foundation problem emerged, and compounded the delay by releasing the ordered mast and allowing the fibre order to lapse.
4. Causation and loss. The delay prevented handover after 30 June 2020. Applying the principles restated in Attorney General of the Virgin Islands v Global Water Associates Ltd [2020] UKPC 18, loss is recoverable where its type was reasonably contemplated as a serious possibility at contract formation, assessed objectively by reference to the defendant’s knowledge. Cornerstone knew that the mast had to be removed for completion of a short development which had been forward sold. Financing costs were therefore not too remote. Earl’s Terrace Properties Limited v Nilsson Design Limited [2004] EWHC 136 (TCC) provided additional support.
5. Order. Barkby recovered the August monthly finance fee, interest incurred after 21 July 2020 until redemption, and £15,000 for additional project-management work. The claim for rent-free periods had been abandoned, and the claim for new tarmac was not pursued.