Weston Homes PLC v Henley Developments 211 Limited & Anor

A contractual presumption that a party should not benefit from its own breach is a tool of construction, not an independent rule overriding the parties’ words. It may be displaced by a clear contrary intention gathered from the contract as a whole.

Where carefully drafted provisions give either party an unconditional right to terminate upon specified factual events, the court should not add a restriction based on the cause of those events unless the contract requires it. The prevention principle concerns a different situation and is not a substitute for the breach-of-contract construction principle. An implied term cannot modify or contradict properly construed express terms.

Weston agreed to purchase commercial property from Henley, with the Second Defendant acting as guarantor. The contract provided that either party could terminate if the Compliance Date had not occurred by the end of the Relevant Period, after which the deposit was repayable.

The relevant planning permission had not been obtained by the expiry of the Relevant Period. Weston served notice under clause 23.2.1 and sought summary judgment for repayment of its deposit. Henley alleged that Weston’s own breaches had caused the delay and argued that Weston could not rely on its default to terminate, either by construction or through an implied term.

The central issues were the proper construction of clauses 23.2 and 23.2.1, the continued existence and scope of the breach-of-contract principle, and whether summary judgment was appropriate.

1. Summary judgment. The court could determine the construction and implication issues summarily because the material facts were undisputed and no realistic prospect existed of further evidence affecting the contractual matrix. The factual issue of whether Weston’s default caused the delay remained for trial.
2. Breach-of-contract principle. The principle that a contracting party cannot ordinarily take advantage of its own breach continues to exist as a presumption of construction. It is distinct from the prevention principle. Law Debenture Trust Corporation PLC v Ukraine and Duvall v 11 to 13 Randolph Avenue Ltd concerned conduct implicitly precluded because it prevented contractual performance and did not alter the separate breach-of-contract principle.
3. Construction. The presumption is only an aid to identifying objective contractual intention. It yields to a clear contractual intention gathered from the express provisions and the contract’s context. The language of clause 23.2.1 was clear and unequivocal. It focused on whether the specified factual event had occurred, rather than why it had occurred.
4. The contract reinforced that conclusion. Clause 23.2 preserved claims for antecedent breach; clause 23.2 contained carefully specified limits on termination but no exclusion where the terminating party’s breach had contributed to the relevant event; and clause 23.2 served a different purpose from clause 23.1. It provided either party with a clean break where contractual progress had been delayed or prevented, while preserving accrued rights.
5. The general significance of a land deposit as security for performance, and Condition 10.2(a) of the Standard Commercial Property Conditions, did not alter the result. The latter concerned rescission and was incorporated only insofar as consistent with the contract; on the proper construction it was inconsistent and therefore did not apply.
6. The Sainsbury’s Supermarket decisions concerned different contractual terms and contexts and provided no meaningful guidance. The proposed implied term also failed: implication cannot modify or supplant express terms as properly construed.
7. Weston was therefore entitled to repayment of the deposit. Judgment was entered for Weston in respect of that claim.