Henley Developments 211 Limited & Anor v Weston Homes PLC

By an Appellant’s Notice dated 7 February 2025 the Appellants, Henley Developments 211 Ltd and Henley Property Investments (UK) LLP (together “Henley”) applied for permission to appeal against the judgment of Master Bowles [2024] EWHC 3286 (Ch), (sitting in retirement) (the “Judge”) dated 19 December 2024, (the “Judgment”) and his subsequent order dated 16 January 2025 (the “Order”). In the Judgment, he held that Henley had no real prospect of defending the claim brought by the Respondent, Weston Homes PLC (“Weston”), for the return of a deposit of £870,000 and in the Order he granted summary judgment and ordered the return of the deposit together with interest and costs.

By an agreement dated 21 June 2022 (the “Agreement”) and made between Henley Developments 211 Ltd as seller, Henley Property Investments (UK) LLP as guarantor and Weston as buyer, Henley agreed to sell freehold property at the Market Centre Alkerden Village Ebsfleet Kent (the “Property”) to Weston for a purchase price of £14,500,000 (subject to certain adjustments). The Agreement was conditional upon a number of conditions precedent and the parties agreed that Weston would pay a 5% deposit plus VAT to be held by Henley’s solicitors as stakeholders.

The Agreement provided for the return of the deposit if the conditions precedent had not been satisfied within six months of the submission of a joint application for planning permission by both Henley and Weston and the issue which the Judge had to decide was whether this provision continued to apply where Weston brought about the failure to satisfy the conditions precedent by its own breach of contract and, in particular, a “reasonable endeavours” obligation to obtain a satisfactory planning condition. There was (and remains) a factual dispute between the parties whether Weston was in breach of the relevant obligation but Weston applied for summary judgment on the basis that this was irrelevant and it was entitled to the return of the deposit whether or not it was in breach of contract.

The Judge accepted the submissions of Mr Timothy Morshead KC (who appeared for Weston) and rejected the submissions of Mr Clifford Darton KC (who appeared for Henley) and held in Weston’s favour on the basis that the well-known principle of contractual construction that a party may not take advantage of its own wrong had no application (or limited application) in the present case. By Order dated 21 July 2025 Adam Johnson J granted permission to appeal on the basis that Henley had a real prospect of success and that the Appeal raised an issue which might have some wider importance.

On 6 October 2025 Weston served a Respondent’s Notice and on 5 November 2025 I heard the Appeal at which Mr Darton also appeared for Henley and Mr Morshead for Weston. In summary, Henley advanced four Grounds of Appeal and Weston advanced two alternative Grounds for upholding the Judgment and Order (together the “Grounds”). I set out the Grounds in sections V and VI although I have modified them slightly to incorporate the defined terms and abbreviations which I have used below.

General Definitions

In the Agreement, Henley Developments 211 Ltd was described as the “Seller” and Weston as the “Buyer”. Clause 1.1 also set out a number of detailed definitions which it is also necessary for me to repeat. The term “Application” was defined as an application by both the Seller and the Buyer for reserved matters approval for the “Buyer’s Development” and it is apparent that Weston had already obtained outline planning permission because the term “Outline Consent” was defined as an outline planning permission dated 28 March 2018 granted by Ebbsfleet Development Corporation. The term “Application Date” was defined as the date on which the Application was submitted to the planning authority.

The Conditions

Clause 3.1 of the Agreement incorporated the Standard Commercial Property Conditions Third ed (2018) (subject to certain minor variations) and they were defined in clause 1.1 as the “Conditions”. Condition 10.1 provided that a material misdescription entitled the buyer to damages but an error or omission only entitled the buyer to rescind where it resulted from fraud or recklessness or where the buyer would be required to accept property differing substantially in quantity, quality or tenure from what the error had led it to expect. Condition 10.2 then provided as follows:

“If either party rescinds the contract: (a) unless the rescission is as a result of the buyer’s breach of contract the deposit is to be repaid to the buyer with accrued interest (b) the buyer is to return any documents it received from the seller and is to cancel any registration of the contract (c) the seller’s duty to pay any returned premium under condition 8.2.2(e) (whenever received) is not affected.”

The Conditions Precedent

Clause 1.1 also identified five individual “Conditions Precedent” which are largely self-explanatory: (1) the “Outline Variation Condition”, (2) the “Planning Conditions Precedent”, (3) the “Works Condition”, (4) the “Implementation Condition” and (5) the “Restriction Condition”. For present purposes it is enough to set out the definition of the second condition:

“"Planning Conditions Precedent" means:

FIRST the grant of a Satisfactory Planning Permission; and

SECONDLY either the expiry of the Review Period without the institution of Review Proceedings or (if Review Proceedings be commenced during the Review Period) their final determination leaving in place a Satisfactory Planning Permission; and

THIRDLY the completion of all Planning Agreements free from any Adverse Condition.”

Clause 4.1 of the Agreement provided that the sale and purchase of the Property was conditional upon the Conditions Precedent being wholly fulfilled and clause 4.2 expressly provided that the Seller and the Buyer would observe and perform “the conditions and their respective obligations as set out in Schedules 1 and 4. Schedule 1 was headed: “Matters Relating to Planning Conditions Precedent” and it imposed the following obligations upon the Buyer:

“1.1

The Buyer will use all reasonable and commercially prudent endeavours to procure the fulfilment of the Planning Conditions Precedent at its own cost as soon as practicable and (without limiting the generality of the foregoing) will:-

1.1.1

forthwith appoint such consultants in relation to the Application upon such terms as shall in each case first be approved in writing by the Seller;

1.1.2

as soon as reasonably practicable and in any event within four months and ten Business Days from the date of this contract deliver to the Seller or its solicitors a draft of the Application for the written approval of the Seller (such approval not to be unreasonably withheld or delayed and the requirement for the Seller's approval shall be limited to matters affecting the Commercial Space) and within five Business Days from the date of such written approval and subject to the Seller approving the Application (insofar as it relates to the Commercial Space) and in any event within five months after the date of this contract or such later date as the Seller and the Buyer (both acting reasonably) may agree (in particular so that the Buyer shall have at least five Business Days from receipt of the Seller's approval of the Application or longer if the amendments proposed are significant) will submit the Application in the approved form to the Planning Authority in the joint names of the Seller and the Buyer and will diligently pursue the Application and will if requisite or desirable and subject to obtaining the prior written approval of the Seller (which will not be unreasonably withheld or delayed) enter into discussions or negotiations with the Planning Authority. Prior to the Buyer delivering the draft Application to the Seller for approval the Buyer and the Seller shall liaise in relation to the preparation of the Application and the Buyer shall keep the Seller informed as to the proposed form and content of the Application to be submitted for approval;

1.1.3

pay and indemnify the Seller against all fees costs and expenses of and incidental to the Application and any Appeal Proceedings and Review Proceedings and against any award of costs against the Seller;

1.1.4

promptly and at its own expense supply to the Seller copies of all documents plans drawings correspondence and minutes relating to the Application and any Appeal Proceedings and/or Review Proceedings and a detailed schedule of accommodation showing the net and gross areas for all areas and uses within the proposed scheme and keep the Seller its solicitors planning consultants and surveyors fully informed from time to time as to the progress of the Application and any Appeal Proceedings and/or Review Proceedings;

1.1.5

give reasonable prior notice to the Seller of any proposed meetings in connection with the Application and any Appeal Proceedings and/or Review Proceedings (including meetings with the Planning Authority and any consultants and any conferences with Counsel) and procure that the Seller its solicitors planning consultants and surveyors (or any of them) may attend all such meetings;

1.1.6

provide not less than monthly updates as to as to the progress of the Application and any Appeal Proceedings and/or Review Proceedings and hold progress meetings with the Seller at monthly intervals at the Property or at some other convenient location;

1.1.7

procure that no application for planning permission in respect of the Property or any land other than the Property which might in any way prejudice the Application or diminish the prospect of the grant of a Satisfactory Planning Permission is made or pursued by the Buyer or any company which is from time to time a member of the same group (within the meaning of section 42 of the Landlord and Tenant Act 1954) as the Buyer or any company or individual which or who is from time to time directly or indirectly associated or connected with the Buyer;

1.1.8

not support (and procure that no support is given by any company or individual which or who is from time to time directly or indirectly associated or connected with the Buyer) any application for planning permission in respect of the Property (or any land other than the Property where the Application may be prejudiced) other than the Application;

1.1.9

where appropriate diligently and expeditiously lodge and pursue objections to the relevant draft local development documents and/or the relevant draft regional spatial strategy.”

Schedule 1, paragraph 1.2 provided that the Buyer could amend or withdraw the Application in order to obtain a satisfactory planning permission subject to the consent of the Seller (not to be unreasonably withheld) and paragraph 2 imposed an obligation of mutual cooperation on both parties (subject to a proviso which is not relevant):

“The parties hereto will co-operate with each other in all respects necessary to secure the fulfilment of the Planning Conditions Precedent (but save as expressly mentioned in this contract the Seller will not be obliged to do anything or take any action which would oblige the Seller to incur any financial expenditure of any kind other than fees payable to the Seller's own professional advisers]) and (without prejudice to the generality of the foregoing) will for such purpose provide or enter into such Planning Agreements and in such form as may be reasonable in the circumstances PROVIDED THAT….”

Sale and Purchase

Clause 5 provided that the Seller would sell and the Buyer would buy the Property at the Purchase Price of £14,500,000 (and in consideration for the grant of some commercial space) in accordance with the terms of the Agreement. Clause 1.1 defined the term “Compliance Date” as the date on which all of the Conditions Precedent were wholly fulfilled and clause 6 provided that subject to the Compliance Date having occurred, completion of the sale and purchase of the Property was to take place on the “Second Completion Date” as defined in the “Seller’s Purchase Agreement” which was a separate agreement for the purchase by the Seller of Parcel 2 Alkerden Eastern Quarry Alkerden Ebbsfleet.

The Deposit

Clause 1.1 defined the term “Deposit” as 5% of the purchase price together with a sum equal to VAT at 20% (producing a total sum of £870,000). Clause 7.1 provided that the Buyer was to pay the Deposit to the Seller’s Solicitors as stakeholders and clause 7.2 provided that upon the satisfaction of the last Condition Precedent (the Restriction Condition) the Deposit was to be released to them as agents for the Seller.

Termination

Clause 23 was headed “Termination” and clause 23.1 provided that the Seller was entitled to terminate the Agreement as a result of the breach of contract by the Buyer or for a number of analogous reasons. It also provided that in each case the Deposit was to be retained by the Seller apart from the situation set out in clause 23.1.8 (below) in which case clause 23.4 provided that it was to be returned to the Buyer. Clause 23.3 also imposed a number of consequential obligations upon the Buyer:

“If:- 23.1.1 there is any breach of the obligations of the Buyer under this contract which (if capable of remedy) is not remedied by the Buyer within such reasonable period as the Seller shall stipulate; or

23.1.2

there is a Planning Refusal within the Relevant Period in respect of which no Appeal Proceedings or Review Proceedings are instituted following the issue of a notice by the Seller pursuant to paragraph 3.1 or paragraph 3.4 respectively of schedule 1 (save where the Seller or the Buyer issues a notice not to institute the relevant action in accordance with the provisions of paragraph 3 .5 of schedule 1); or

23.1.3

the Buyer (being a body corporate): (a) has a meeting of its members convened for the purpose of considering a winding-up resolution or such a resolution is passed ( otherwise than in connection with a member's voluntary winding-up for the purposes of an amalgamation or a reconstruction that has the prior written approval of the Seller); or (b) has a meeting of its directors convened for the purpose of considering a resolution to seek a winding up order or an administration order or the appointment of an administrator or such a resolution is passed; or (c) presents or its directors present or it has presented against it a petition for a winding up order or an administration application is made or a winding-up or administration order is made; or (d) issues or its directors or the holder of a qualifying floating charge ( as defined in Schedule B1 of the Insolvency Act 1986) issues a notice of appointment or of intention to appoint an administrator; or (e) is the subject of a proposal for or becomes subject to any voluntary arrangement or its directors take steps to obtain a moratorium (whether under Part I of the Insolvency Act 1986 or otherwise); or

23.1.4

the Buyer being one or more individuals in partnership (whether alone or together with others): (a) has a notice issued to convene a meeting of the partners for the purpose of considering a winding up resolution or such a resolution is passed (otherwise than in connection with a voluntary winding-up for the purposes of an amalgamation or a reconstruction that has the prior written approval of the Seller); or (b) has a meeting of the partners convened for the purpose of considering a resolution to seek a winding up order or an administration order or the appointment of an administrator or such a resolution is passed; or (c) makes an application or presents a petition for a winding up or joint bankruptcy order or makes an administration application or a petition for a winding up or joint bankruptcy order is made or presented or an administration application is made against it or such an order is made; or (d) is the subject of a proposal for or becomes subject to any voluntary arrangement or the partners take steps to obtain a moratorium under Part I of the Insolvency Act 1986 as applied by the Insolvent Partnerships Order 1994; or

23.1.5

the Buyer being one or more individuals (whether or not in partnership together) and where the Buyer comprises one or more individuals any one of them: (a) makes an application or presents or has a petition for a bankruptcy order presented against him or such an order is made; or (b) makes an application for an interim order or a proposal for a voluntary arrangement is made under Part VIII of the Insolvency Act 1986; or

23.1.6

The Buyer in any case: (a) has a receiver (administrative or otherwise) appointed over all or part of its or his assets; or (b) takes part in any action (including entering into negotiations) with a view to the readjustment rescheduling forgiveness or deferral of any part of its or his indebtedness; or (c) proposes or makes any general assignment composition or arrangement with or for the benefit of all or some of its or his creditors; or (d) suspends or threatens to suspend making payments to all or some of its or his creditors;

23.1.7

any analogous or equivalent proceedings actions or events to those referred to in sub-clauses 23.1.3 and/or 23.1.4 and/or 23.1.5 and/or 23.1.6 of this clause are instituted or occur in any jurisdiction other than England and Wales;

23.1.8

the Buyer has not submitted the Application in the approved form to the Planning Authority in the joint names of the Seller and the Buyer by the date that is five months from the date of this contract

THEN and in any such case the Seller may by notice in writing to the Buyer at any time after then terminate this contract (without prejudice to any right or remedy of any party in respect of any antecedent breach of this contract and to the rights of the Seller under clause 23.3) and, unless clause 23.4 applies, the Deposit shall be released to the Seller.”

Clause 23.2 conferred a “two way” right on both the Seller and the Buyer to terminate the Agreement where the Conditions Precedent had not been satisfied within six months of the Application being submitted or the Seller’s Purchase Agreement had not been completed by 31 January 2024 (and no action to appeal or review an unfavourable planning permission had been taken in the meantime):

“23.2

If:- 23.2.1 the Compliance Date has not occurred by the expiry of the Relevant Period; or

23.2.2

the Seller or the Buyer issues a notice not to institute or to discontinue or withdraw from the relevant action in accordance with the provisions of paragraph 3 .5 of schedule 1; or

23.2.3

completion of the sale and purchase of the Property under the Seller's Purchase Agreement has not occurred by 31 January 2024; or

23.2.4

the Seller's Purchase Agreement is terminated prior to the Second Completion Date,

THEN either the Seller or the Buyer may by notice in writing to the other at any time (but in the case of clause 23.2.1 not after the occurrence of the Compliance Date and in the case of clause 23.2.3 not after completion of the sale and purchase of the Property under the Seller's Purchase Agreement) determine this contract (without prejudice to any right or remedy of any party in respect of any antecedent breach of this contract and to the rights of the Seller under clause 23. 3) and the Seller shall within ten Business Days of such determination repay the Deposit to the Buyer.”

Clauses 23.3 provided for the consequences of termination (or rescission) either as a result of the default by the Buyer or otherwise. Clause 23.4 also provided that the Buyer was entitled to the return of the Deposit if the Agreement was terminated under clause 23.1.8 (above):

“23.3

Following any termination rescission or determination of this contract due to the default of the Buyer or otherwise the Buyer will:-

23.3.1

if so requested by notice from the Seller assign to or procure for the Seller the benefit of any appointments or engagements by the Buyer of consultants in relation to the Application and the Buyer hereby irrevocably appoints by way of security the Seller to be the attorney of the Buyer with full power to do all acts and things and execute and deliver in the name of the Buyer all deeds and documents necessary to give effect to this clause;

23.3.2

use reasonable endeavours to grant (or to procure the grant) to the Seller of a royalty-free, non-exclusive and irrevocable licence to use and reproduce any and all of the planning documents prepared in support of the Application, and the designs contained in them in connection with its ownership of the Property and which licence will be freely assignable to third parties and carry the right to grant sub licences; and

23.3.3

immediately return all title and other documents furnished to it and remove any notice caution or land charge entry registered in respect of this contract.

23.4

Where determination of this contract is pursuant to clause 23.1.8 then the Seller shall within ten Business Days of such determination repay the Deposit to the Buyer.”

The Breach of Contract Principle

It is a familiar principle of contractual construction that a party may not be permitted to rely upon its own breach of contract in order to take advantage of a contractual right of termination. In Cheall v Association of Professional Executive Clerical and Computer Staff [1983] AC 180 (“Cheall”) Lord Diplock referred to the “well-known principle of construction” to be derived from the decision of the House of Lords in New Zealand Shipping Co Ltd v Societe des Ateliers et Chantiers de France [1919] AC 1 and stated that principle as follows at 188H-189B:

“[E]xcept in the unlikely case that the contract contains clear express provisions to the contrary, it is to be presumed that it was not the intention of the parties that either party should be entitled to rely upon his own breaches of his primary obligations as bringing the contract to an end, i.e. as terminating any further primary obligations on his part then remaining unperformed. This rule of construction, which is paralleled by the rule of law that a contracting party cannot rely upon an event brought about by his own breach of contract as having terminated a contract by frustration, is often expressed in broad language as: "A man cannot be permitted to take advantage of his own wrong." But this may be misleading if it is adopted without defining the breach of duty to which the pejorative word "wrong" is intended to refer and the person to whom the duty is owed.”

I adopt Mr Darton’s terminology and refer to this principle as the “Breach of Contract Principle”. In Cheall the House of Lords held that it had no application to a breach of the “Bridlington principles” which had been agreed between a number of trade unions not to poach staff from each other. As Lord Diplock pointed out, APEX owed no duty to individual members and could not be prevented from terminating the membership of a poached member simply because it had poached him from another union in the first place: see 189B-G.

In Alghussein Establishment v Eton College [1988] 1 WLR 567 (“Alghussein”) Eton College as landlord entered into an agreement for a lease with a developer as tenant under which the developer agreed to use best endeavours to commence and complete the development of a block of flats on a development site on terms that once the development was completed the landlord would grant a 99 year lease at a ground rent. Clause 4 of the agreement provided that if for any reason “due to the wilful default of tenant” the development had not been completed by a certain date, the lease would be completed on the terms of the draft lease annexed to the agreement for lease.

The developer assigned its rights under the agreement to the plaintiff, which failed to commence the development works. When the landlord sought to terminate the agreement, the tenant purported to exercise the right under clause 4 and called for the completion of the lease. Sir Nicolas Browne-Wilkinson V-C, the Court of Appeal and the House of Lords all agreed that it was not entitled to do so. Lord Jauncey (with whom the other members of the panel agreed) traced the Breach of Contract Principle as far back as 1817 before considering the New Zealand Shipping case and Cheall in detail. He then set out his reasons for rejecting the tenant’s submissions that the express words of clause 4 should displace the principle at 595B-H:

“On a literal construction a tenant who has failed to complete or even to start the development due to his wilful default by 29 September 1983 is entitled to demand that a lease be granted to him, whereas a tenant who B has done his best to complete but has failed through no fault to do so would not on that date be entitled to a lease. This is, to say the least of it, a bizarre result. If the obligation to complete the development in clause 3(b) were not to be implied in any lease so granted but were to remain, as the literal reading of the words might suggest, an obligation under the agreement the matter would be even more bizarre because the landlord would have no remedy under the lease for failure to develop during its currency and would be left with the limited remedy of damages under the agreement. Even if it were appropriate to imply the provision of clause 3(b) into any lease to be granted under the proviso to clause 4, and I make this assumption without deciding the matter one way or the other, there remains the question whether in the words of Lord Diplock in the Cheall case [1983] 2 A.C. 180, 189 the agreement contains clear express provisions to contradict the presumption that it was not the intention of parties that either should be entitled to rely on his own breach in order to obtain a benefit. I find no such clear express provision. Although the proviso refers specifically to the wilful default of the tenant it does not state that the tenant should be entitled to take advantage thereof. It is one thing for wilful default of a party to be made the occasion upon which a provision comes into operation but it is quite another thing for that party to be given the right to rely on that default. Furthermore it is not disputed that a lease granted under the proviso which contained no covenant to build would render the whole scheme unworkable. In that situation it is reasonable to assume that if the parties had intended in this extraordinary proviso to displace the presumption they would have expressly imported clause 3(b) into any such lease rather than leaving it to possible but uncertain implication.

All in all I have no doubt that the terms of the proviso were not apt to displace the rule of construction and I consider that the Vice-Chancellor and the Court of Appeal were correct in concluding that the appellants were not entitled to invoke the proviso to clause 4. It only remains to refer to the respondents' argument that there is an absolute rule of law and morality which prevents a party taking advantage of his own wrong whatever the terms of the contract. My Lords I do not find it necessary to deal with this. For my part I have no doubt that the weight of authority favours the view that in general the principle is embodied in a rule of construction rather than in an absolute rule of law. However, that is not to say that there cannot be situations such as self-induced frustration, to which Lord Diplock referred in the Cheall case, where an absolute rule exists. It is neither necessary nor would it be profitable to explore the matter further in this case.”

Mr Morshead submitted that Alghussein provides the high water mark of the Breach of Contract of Principle. It is clear from Lord Jauncey’s speech that he clearly considered that something had gone wrong with the contract and that clause 4 had not been intended to have the effect of its literal wording and I agree with Mr Morshead that today this drafting error might have engaged the doctrine of rectification by construction. However, the Breach of Contract Principle provided a convenient means by which to prevent the tenant from relying on the express wording to obtain a windfall by its own breach of contract.

By contrast, BDW Trading Ltd v JM Rowe (Investments) Ltd[2011] EWCA Civ 548 (“BDW”) provides an example of contractual wording which was sufficiently clear to displace the Breach of Contract Principle. In that case, the seller sold commercial premises which were subject to a lease, which required it to carry out separation works in the event that it exercised a redevelopment break clause. The contract for sale contained detailed provisions for ensuring that those works were performed. In particular, clause 6.2 provided that the buyer would be entitled to refuse to complete until six very detailed provisions had been complied with. The last, clause 6.2(vi) also required the seller to make certain payments to the tenant.

Patten LJ (with whom Aikens and Arden LJJ agreed) set out clause 6.2 in full at [10] together with the proviso to that clause which was of critical importance. It had been amended in manuscript at the last minute to include the words set out below in italics:

“Provided That the Vendor or the Purchaser shall be entitled to rescind this contract by serving written notice on the Vendor at any time if the matters referred to in paragraphs (i)-(vi) above have not occurred within 5 months of the date hereof (save wherethe party purporting to serve such notice is in default of its obligations under this clause 6.2) whereupon this Agreement shall automatically determine (and the Deposit shall be returned to the Purchaser).”

On 25 November 2008 the buyer purported to rescind the contract because the seller failed to make the payments in clause 6.2(vi) within 5 months of the contract. The buyer accepted that it had committed a number of historic breaches of clause 6.2 but there was a dispute whether it was in breach of a reasonable endeavours obligation at the date of the notice. Patten LJ held that the buyer was entitled to rescind for the seller’s failure to comply with clause 6.2(vi): see [23] to [27]. He then went on to consider the Breach of Contract Principle. He stated at [31] that it was a rule of construction before going on to apply the principle at [37] to [39]:

“31.

Although there has been a certain amount of academic discussion as to whether the principle has the status of a rule of law which is imposed upon the parties to a contract almost regardless of what they have agreed, it is now clear as a matter of authority that the application of the principle can be excluded or modified by the terms of the contract and that its scope in any particular case will depend upon the construction of the relevant agreement.”

“37.

It seems to me that when the parties in clause 6.2 have positively selected the breaches of contract which will debar them from being able to rescind the contract and have indicated in the language used that the qualification is an exhaustive one, it is difficult to attribute to them an intention to include some wider provision. We were referred by Mr Barnes to the decision of the Privy Council in New Zealand Shipping Co Ltd v Société des Ateliers et Chantiers de France [1919] AC 1 as providing an example of a contract in which the right of the shipbuilders to terminate the contract due to their inability to complete the vessel by the agreed delivery date was construed as not including a case where their failure to complete the construction in time was due to their own default.

38.

I do not find this of much assistance in the present case. It concerns very different contractual provisions and the different question of whether the automatic termination of the contract in the event of delayed completion should be read as including delay due to some unjustifiable failure on the part of the shipbuilders. Here the question is whether an express exclusion of the right to rescind in the event of a particular type of breach of contract should be treated as exhaustive. That question has to be answered in the context of the contract under consideration.

39.

The Contract is a commercial agreement negotiated and drafted with the benefit of legal advice over a period of time. It seems to me that the reasonable man reading the document with a knowledge and understanding of the transaction to which it relates would regard the words contained in parenthesis in the proviso to clause 6.2 as comprising the only circumstances in which either party could be precluded from exercising its right to rescind based on a breach by them of the Contract. The irresistible inference is that had any wider qualification been intended, it would have

been spelt out expressly. The opening words “save where” are inconsistent with the implied term for which Rowe contends and it cannot, in my view, be accommodated within clause 6.2.”

Patten LJ went on to conclude that the breaches of clause 6.2 by the buyer were not the cause of the seller’s default, that the buyer was entitled to serve the notice of rescission or termination and that the buyer had not elected to affirm the contract. The conclusion that the Breach of Contract Principle was displaced by the proviso to clause 6.2 clearly formed part of the ratio decidendi of the decision and the critical steps in Patten LJ’s reasoning are set out at [37] to [39] (above).

Sainsbury’s Supermarkets Ltd v Bristol Rovers (1883) Ltd [2015] EWHC 2002 (Ch) (“Sainsbury’s”) also involved a conditional contract for the purchase of land in similar terms to the Agreement in the present case. Clause 3.1 provided that if certain conditions precedent had not been satisfied by the “Cut Off Date” then either party was entitled to terminate. Proudman J held that those conditions had not been satisfied, that Sainsbury’s was not in breach and that it had validly exercised the right to terminate. However, she went on to consider what the position would have been if she had held otherwise:

“151.

Does Sainsbury’s have the right to terminate the Agreement even if, contrary to my primary findings, it was in breach of the Agreement, or does it not? Mr Wonnacott puts his case neatly in his closing submissions:

“The right to terminate for non-satisfaction of a condition precedent is unconditional break: for the contract expressly provides that the right to terminate is ‘without prejudice to the rights of any one party against the other for any antecedent breach’ of the terms of the Agreement (cl.3.1). The only inquiry, on exercise of the break, is whether the Conditions have occurred or not; the remedy of the innocent party is in damages only.”

Thus even if it had been Sainsbury’s fault that all the remaining conditions remained unfulfilled, he submits that the Club’s only remedy would have been in damages.

152.

Mr Matthias says that Sainsbury’s is precluded from relying on its own breach, in other words, it is precluded from exercising the contractual right to terminate the Agreement if that right has accrued as a result of its own breaches. This is an implied term of the contract: see BDW Trading Limited v. JM Rowe (Investments) Limited [2011] EWCA Civ 548 at [28]-[31], New Zealand Shipping Co Limited v. Societe des Ateliers et Chantiers de France [1919] AC1, Cheall v. Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 and Alghussein Association v. Eton College [1988] 1 WLR 587.

153.

Such a term is to be implied unless there is a clear intention to the contrary; there is a presumption that the implied term forms part of the Agreement and the burden is on Sainsbury’s to rebut that presumption.

154.

He submits that the language of Clause 3.1 is concerned with the effects of service of the Termination Notice and not with the circumstances in which a party acquires the power to serve it. Thus the provision in clause 3.1 that “any termination shall be without prejudice to the rights of any one party against the other for any antecedent breach of the terms of this Agreement” is a mere saving device preserving antecedent causes of action for breaches of contract in circumstances in which the contract is determined, e.g. for non-causative breaches. It has nothing to do with the implied term preventing termination of the contract where the Conditions are not met before the Cut Off Date (or the Termination Date) because of causative breaches.

155.

The beneficial effect of such cases as BDW Trading would be nullified if Mr Wonnacott’s submission were correct and I find for Mr Matthias on this point.”

The Court of Appeal dismissed an appeal against Proudman J’s decision: see [2016] EWCA Civ 160. However, it was unnecessary for the Court to consider the scope and application of the Breach of Contract Principle and Floyd LJ (who gave the leading judgment) did no more than record the contractual terms and that the appeal was argued on the basis that the principle applied: see [25].

In Al-Subaihi v Al-Sanea [2022] EWCA Civ 1349 (“Al-Sanea”) Sir Ross Cranston held at first instance that, as a matter of construction, two lawyers were entitled to recover legal fees from Mr Al-Sanea under a “Final Clearing Agreement” and dismissed all of the client’s defences including allegations of duress, undue influence and breach of fiduciary duty. He gave permission to appeal on the issue of construction and the Court of Appeal upheld his decision. It was unnecessary for the Court of Appeal to decide whether the Breach of Contract Principle applied. But Carr LJ (as she then was) made a number of observations about the principle upon which Mr Morshead relied. She summarised the principles of construction at [32] and [33] before referring to Cheall at [35] and [36]:

“35.

On the facts of the case in Cheall, the relevant breach related to a duty owed to a third party, and not the contractual counterparty. In those circumstances, the “rule” namely that a person may not take advantage of their own wrong - which I will call “the wrongdoer presumption” - did not prevent the wrongdoer from relying on their own breach. As the Judge identified at [202], the wrongdoer presumption has been applied in many subsequent cases.

36.

A number of observations can usefully be made:

i)

The phrase “clear express provisions to the contrary” needs to be treated with caution. As was said in BDW Trading Ltd (t/a Barratt North London v JM Rowe (Investments) Ltd [2011] EWCA Civ 548 (at [34] to [36]), they should not be read as meaning more than a clear contractual intention to be gathered from the express provisions of the contract;

ii)

The authorities universally recognise, in line with Cheall, that the wrongdoer presumption is not an immutable rule (see by way of example only Davenport at 129; Quesnel at 227; Law Debenture at [189(v)]);

iii)

The wrongdoer presumption is not a rule of law; rather it is an aspect of the principle of interpretation that leans against interpretations that produce unreasonable or absurd consequences that could not have been intended. The contractual intention is still to be decided by reference to the ordinary principles applicable to the interpretation of contracts. (See the helpful discussion in Lewison on the Interpretation of Contracts, 7th Edn, at 7.110 and 7.118.)

It is also instructive to consider how Carr LJ applied the Breach of Contract Principle or, as she called it, the wrongdoer presumption. The principal issue between the parties was whether Mr Al-Sanea had accepted a primary obligation to pay the debts of his father and his father’s companies. But assuming that he had, Carr LJ went on to consider the application of the principle or presumption at [51] and [52]:

“51.

First, the wrongdoer presumption is no more than an aid to construction. At the end of the day it is always a question of assessing the objective intention of the parties on the facts of the case in accordance with the well-established principles of construction referred to above. Secondly, it follows that comparison with the outcome on the facts of other cases is unlikely to be of material assistance. The observation of this court in Hawley v Luminar Leisure Ltd [2006] EWCA Civ 18; [2006] PIQR P17 at [102] is apt: context is so important on issues of interpretation. The cases to which reference has been made here are set in the very different land of long leases, production agreements and shipbuilding.

52.

That said, assuming (contrary to my conclusion above) that Mr Al-Sanea had accepted a primary obligation to pay under clause 6, it would seem counter-intuitive for the parties to be taken to have intended that he would nevertheless escape any liability if he were to breach it. One would expect there to be very clear indications in the FCA of such an intent if such a surprising result were to have been envisaged. On such hypothesis, the wording of clause 4 would be readily open to interpretation in the manner contended for by Dr Al-Subaihi, namely that the FCA would in those circumstances be voidable at their election.”

Finally, in King Crude Carriers SA v Ridgebury November LLC [2024] EWCA Civ 719, [2025] KB 311 (“King Crude”) the Court of Appeal had to consider whether there is a general principle to be derived from the well-known decision in Mackay v Dick(1881) 6 App Cas 251 that a party may not rely on the failure to satisfy a condition precedent as a defence to a claim in debt where that party brought about the failure by its own breach of contract. In King Crude a contract for the sale of three tankers required the buyer to pay a 10% deposit for each ship into an escrow account and the provide the necessary documentation to enable it to be opened. The buyer failed to provide the documentation, the account was never opened and the deposits were never paid.

Dias J held that the buyer was not liable in debt for the deposits and that the seller’s remedy was a claim for damages. The Court of Appeal overruled her decision and held that the buyers were liable in debt. Popplewell LJ (with whom Nugee and Falk LJJ agreed) held that a general principle could be derived from the authorities and rejected the argument that its recognition interfered with freedom of contract. He formulated the principle as follows:

“83.

For these reasons I am unable to accept Mr Eaton’s argument that the principle interferes with freedom of contract. It is a principle which gives effect to contractual intention, not one which frustrates it. If a contrary intention is sufficiently clearly expressed or can be implied from the circumstances of the case, the principle will not apply.

84.

This accords with the approach to the maxim that a party should not be entitled to take advantage of their own wrong in the contractual field more generally. As I have explained, it has regularly been applied as a matter of construction since at least the early 18th century, but it has always been treated as a principle of construction, not of law, and as subject to a sufficiently clearly expressed contrary intention: see, for example, Cheall [1983] 2 AC 180, 188H—189A, Alghussein Establishment v Eton College [1988] 1 WLR 587, 595G and BDW Trading Ltd (trading as Barratt North London) v JM Rowe (Investments) Ltd [2011] EWCACiv 548at [31].

85.

I would therefore formulate the principle as being that an obligor is not permitted to rely upon the non-fulfilment of a condition precedent to its debt obligation where it has caused such non-fulfilment by its own breach of contract, at least where such condition is not the performance of a principal obligation by the obligee, nor one which it is necessary for the obligee to plead and prove as an ingredient of its cause of action, and save insofar as a contrary intention is sufficiently clearly expressed, or is implicit because the nature of the condition or the circumstances of the case make it inappropriate.

86.

Such a principle does not cut across contractual principles applicable to claims for damages such as causation, remoteness or mitigation. It does not apply principles which are applicable to claims for damages because a

claim for damages is not what the parties have bargained for; they have bargained for a right in debt and impliedly agreed that in the circumstances

in which the principle applies, the obligee should have the benefit of that

bargain, namely a claim in debt.”

Nugee LJ gave a concurring judgment in which he contrasted the standard terms for the payment of a deposit under a contract for the sale of a vessel and under a contract for the sale of land. But he provided the following rationale for the payment and forfeiture of a deposit under both types of contract at [102] and [103]:

“The purpose and effect of requiring a buyer to pay a deposit is well known. As it is put in the cases, the deposit is an “earnest of performance”

(The Griffon [2014] 1All ER (Comm) 593at para 13 per Tomlinson LJ), or

more fully “an earnest of the purchaser’s ability and intention to complete

the purchase in due course” (Myton Ltd v Schwab-Morris [1974] 1 WLR 331, 336C per Goulding J). Or as clause 2 of the MOAs here puts it the deposit is paid as “security for the correct fulfilment of this agreement” (see para 6 above). If the buyer completes it operates as part payment of the price. But if the buyer defaults and the contract is never completed, the seller forfeits the deposit and keeps it. A deposit therefore operates as a powerful disincentive to a buyer from signing a contract unless he both genuinely intends, and is confident of being able, to complete; and an equally powerful disincentive to a buyer who has signed a contract from defaulting on the purchase. For the seller it operates to reassure him that the buyer is serious about completing; and also as a fixed sum which he can keep in the case of the buyer’s default in completing without having to prove what damage he has suffered, and very often without having to take proceedings at all. For a purchase to go off after a contract has been signed can often have a number of practical disadvantages which may be real enough even if they cannot be readily quantified and compensated for in damages. The right to forfeit the deposit is the seller’s protection against being, for want of a better term, messed around by a buyer, and represents a careful allocation of the risks and consequences of the buyer defaulting on the purchase.

103 There is nothing obscure or technical about this. Nor of course is it peculiar to the sale of ships. It has long been standard practice on the sale of land, and I would have thought it was readily understood by almost every vendor and purchaser of ordinary domestic property, where the system usually operates smoothly without any difficulty or the need for litigation.”

The Prevention Principle

In King Crude the buyer prevented the opening of the escrow account by committing a breach of an express obligation to provide the necessary documentation. The seller was, therefore, able to rely upon the Breach of Contract Principle. But in certain circumstances the Court may also imply a term that one party will not prevent the fulfilment of a condition precedent or the occurrence of some other contingency. Mr Darton described this in his Skeleton Argument as the “Prevention Principle” and I am content to adopt that term in this judgment.

There is a considerable overlap between the Breach of Contract Principle and the Prevention Principle as King Crude itself illustrates. Moreover, the underlying juridical basis for both principles are the same, as Popplewell LJ stated at [81]. However, it is important to keep them separate as a matter of analysis because the Breach of Contract Principle is a principle of construction or interpretation and the Prevention Principle is based on the implication of a term. Both parties accepted this (subject to the alternative argument which the Respondent raised in the Respondent’s Notice). In Duval v 11-13 Randolph Crescent Ltd [2020] UKSC 18, [2020] AC 845 Lord Kitchin JSC confirmed that the Prevention Principle is based on the implication of terms and summarised its development at [44] to [47]:

“44.

It is well established that a party who undertakes a contingent or conditional obligation may, depending upon the circumstances, be under a further obligation not to prevent the contingency from occurring; or from putting it out of his power to discharge the obligation if and when the contingency arises. The principle was explained in these terms by Lord Alverstone CJ in Ogdens Ltd v Nelson [1903] 2KB 287, 296:

“It is, I think, clearly established as a general proposition that where two persons have entered into a contract, the performance of which on one or both sides is to extend over a period of time, each contracting party is bound to abstain from doing anything which will prevent him from fulfilling the obligations which he has undertaken to discharge; further, that, where a person has undertaken to carry on a business, out of the profits of which he has undertaken to pay certain moneys as a consideration for the contract to the other party to the contract, he must not by his own act or default disable and incapacitate himself from further carrying on such business.”

45.

The principle is well illustrated by cases involving breaches of contracts to marry. In Short v Stone (1846) 8QB 358 the defendant agreed to marry the claimant within a reasonable time after request. He broke that agreement by marrying somebody else before the request had been made, and in that way put it out of his power to comply with the request, if it were made. In Caines v Smith (1847) 15 M & W 189 the defendant acted in breach of his promise to marry the claimant by marrying another woman, and it was no answer that the claimant had not asked the defendant to fulfil his promise before issuing proceedings.

46.

In Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701, 717 Lord Atkin characterised the principle as “a positive rule of the law of contract that conduct of either promiser or promisee which can be said to amount to himself “of his own motion” bringing about the impossibility of performance is in itself a breach. If A promises to marry B and before performance of that contract marries C, A is not sued for breach of an implied contract not to marry anyone else, but for breach of his contract to marry B.”

47.

Founding herself on these authorities, Dr Duval sought to characterise as a rule of law the proposition that, where two persons have entered into a contract, the performance of which on both sides is to extend over a period of time, each contracting party is bound to abstain from doing anything which will prevent him from fulfilling the obligations he has undertaken to discharge; and similarly, the proposition that, where one party has undertaken a contingent obligation, he will do nothing to prevent the contingency occurring, or from putting it out of his power to comply with the obligation when the contingency arises. In my view, however, propositions such as these are, at least in general, more properly regarded as implied terms because, where appropriate, they involve the interpolation of terms to deal with matters for which the parties themselves have made no express provision.”

In BDW one reason which Patten LJ gave for refusing to apply the Breach of Contract Principle was that the implied term for which the seller had contended was inconsistent with the express terms of the contract: see [39] (above). In Sainsbury’s Proudman J also described the Breach of Contract Principle in terms of implying a term: see [154] (also set out above). Finally, in London Trocadero (2015) LLP v Picturehouse Cinemas Ltd [2025] EWHC 1247 (Ch) (“Trocadero”) Jonathan Richards J also expressed the view that the Breach of Contract Principle could be expressed by using the language of implied terms. After citing Alghussein he stated at [259] that the “clear theme” in Algussein is “a principle of contractual interpretation which could also be expressed as an articulation of an implied term.” However, he held that the principle was not engaged and did not consider it further (whichever formulation applied).

Neither party contended as their primary case that a term should be implied into the Agreement either to give effect to the Breach of Contract Principle or to displace it. Mr Darton’s fall-back position before the Judge was that if the principle did not apply as a matter of construction, then a term ought to be implied to give effect to it. Mr Morshead relied on the doctrine of implied terms for the opposite effect. He argued that if the Breach of Contract Principle depends on the implication of a term, then I should uphold the Judge’s decision on the alternative basis that neither of the tests for the implication of a term was satisfied.

The Judge set out the relevant background, the terms of the Agreement and the relevant authorities in the Judgment at [1] to [51]. He then directed himself as to the appropriate way in which to approach the construction of the Agreement at [52] to [57] which I set out in full:

“52.

In that context, that is to say, in the context of establishing and applying a principle which accorded with established tenets of contract law, it is, I think, abundantly clear that the court had no intention of moving away from what are now very well established principles of construction, or of creating a special regime in respect of circumstances where the presumption upon which Mr Darton KC relies might be applicable. The presumption in question is, as already stated, simply one of the tools available to the court in testing and determining the objective intention of the parties in respect of their contract, or in respect of a particular provision, or provisions, of their contract.

53.

Looked at generically, in isolation and without context, one can readily see that, as a starting point, the presumption that parties to a contracts are unlikely to intend, or to have agreed, that one or other of them be entitled, as in this case, to terminate the contract without penalty, or otherwise take an advantage under the contract, where that entitlement, or advantage arises from their own contractual default, is one that makes everyday good sense

54.

The question, in this case, however, is whether, allowing, as I do, that the ‘Breach of Contract’ presumption applies at the outset, that presumption survives and has effect following a principled analysis of the relevant contractual provisions, in the context and within the framework of the contract entered into between Weston and Henley. If that is not the case and if, properly construed, clauses 23.2 and 23.2.1 take effect according to their literal language, then, subject to some consideration of Henley’s avowedly fall-back position, based upon a possible implied term, Weston will have made out its case.

55.

The starting point, in respect of the construction of the relevant provisions, is the language of the provisions themselves. The contract in this case is a substantial and professionally prepared document, designed to give effect to a large-scale and complex transaction. In that context and where, as here, a contract has been carefully crafted by the parties, the meaning of a particular provision, as it would be understood by a reasonable reader, is, as explained by Lord Neuberger, in Arnold v Britton [2015] AC 619 at paragraph 17, best to be found by the language used by the parties who drafted the provision in question.

56.

In this case the language used by the parties is clear and entirely unequivocal and provides, straightforwardly, that either party to the contract may terminate the contract in the circumstance, existing in this case, that the Compliance Date had not occurred before the Relevant Date. The provision is not caveated, in any way, such as to preclude reliance if the reason for the Compliance Date not occurring before the Relevant Date is the default, under other provisions of the contract, of the party seeking to terminate the contract. As such, taken literally, the relevant provisions are, in themselves, inconsistent with the presumption upon which Henley places reliance.

57.

The question, then, given the clear and unequivocal language used, is whether there is anything to suggest to the reasonable person reading the provisions in question, in context, that the parties did not mean what they said and, in accordance with the presumption, intended, rather, to limit, contrary to its express terms, a party’s right to terminate the contract pursuant to clause s 23.2 and 23.2.1, in circumstances where that right arises out of the party’s own breach.”

Having asked this question, the Judge then answered it. He held that there were a number of “indicators” which showed that the parties did not intend to limit the application of clause 23.2.1: see [58]. Although the language of this paragraph is complicated, it is fairly clear what it means:

“58.

It does not seem to me, standing in the shoes of the reasonable person reading the contract, that that was what the parties intended. There are, as it seems to me, a number of indicators, such as to show that the parties did not intend to limit the applicability of clause 23.2.1 in circumstances when its availability arose from the default under the contract of the party seeking to rely on the clause in question, but, simply, intended, rather, that the provision should apply as written.”

The Judge then ran through the relevant provisions beginning with clause 23.2 itself. He considered that the clause expressed a clear contractual intention to exclude the Breach of Contract Principle for three reasons: first, because the right to terminate was expressed to be “without prejudice to any right or remedy of any party in respect of any antecedent breach of this contract and to the rights of the Seller under clause 23.3”; secondly, because the parties did not expressly qualify the right to terminate by stating that it did not apply where a party was in breach; and, thirdly, because they agreed that neither party would be entitled to terminate until after the expiry of the Relevant Period. He set out those reasons at [59] to [61]:

“59.

The first such indication is that contained in clause 23.2, itself, namely the provision that the exercise of the right to terminate the contract, pursuant to clause 23.2.1, as well as the other provisions of the contract to which clause 23.2 applies, is, as set out in paragraph 4 of this judgment, ‘without prejudice to any right or remedy of any party in respect of any antecedent breach of (the) contract’.

60.

The significance of that provision is not that it is, in itself, inconsistent with the presumption, or that the presumption could not operate alongside, or in tandem with, the provision. It could, for example, operate in circumstances where a party, not in breach, elected, rather than exercising rights of termination, in respect of breach, under clause 23.1.1, as discussed later in this judgment, to exercise the termination provisions of the contact, under clause 23.2.1, while reserving its right to bring subsequent proceedings, in respect of breaches by the party against which termination was sought. The significance, rather, is that, in the drafting of clause 23.2, thought was, evidently, given to the operation of the provision, in circumstances of potential breach of contract and, yet, the parties did not, as they could have done, limit the availability of termination under clause 23.2 to circumstances in which the party electing to terminate was not in breach. The implication arising from the foregoing is that the parties did not intend such a limitation to apply.

61.

That intention seems to me to be confirmed by a consideration of another aspect of clause 23.2. That provision, as set out in paragraph 5 of this judgment, limits the circumstances in which notice can be given, pursuant to clause 23.2.1, to the situation where the Compliance Date has not occurred before the Relevant Date and where, at the date of the notice, that remains the case. The relevance of that limitation, for current purposes, is that it indicates that, in drawing up the contract and in determining the circumstances in which rights of termination under clause 23.2.1 might arise, the parties actively considered the limitations to be attached to those rights and yet elected not to include an exclusion, or limitation, upon those rights, in circumstances where the availability of those rights arose from the contractual default of the party purporting to exercise those rights. The implication, again, as it seems to me, is that this was an intended omission.”

The Judge also considered that this conclusion was supported by the wider context and contrasted clause 23.2 with clause 23.1: see [62] to [64]. He then went through each of the four grounds for termination in clause 23.2 before expressing the conclusions at [70] to [72] that they were intended to deal with “fact situations” and that the right of termination was intended to enable the parties to achieve a “clean break”. He then expressed his overall findings at [74] and [75]:

“70.

In the context of those provisions, it seems clear to me that the intended purpose of clause 23.2, was to ensure that, if , as demonstrated by the existence of one, or other, of the ‘fact situations’ set out in the clause, the parties’ expected progress towards the contract becoming unconditional, or being completed, could no longer be achieved, or if that progress was seen as not being achievable within the time scales envisaged and provided for by the parties, then either the buyer, or the seller could bring the contract to an end, with the parties being returned, by the termination of the contract and the repayment of the deposit, to the status quo ante, but without prejudice to any rights that either party might have achieved during the lifetime of the contract.

71.

In short, the intent of the provision, where the relevant ‘fact situations’ applied, was to enable the parties to make a clean break from the contract, rather than remaining bound by the terms of the contract, in circumstances where either the contract would not come to fruition, or where there was no clarity as to when the contract would either become unconditional, or complete.

72.

Given that intent, or purpose, it seems to me, consistently with that purpose, that the parties’ intention as to the scope of the provision was exactly as specified in the language they used, namely that, where the circumstances laid down in the various limbs of clause 23.2 were met, the buyer, or seller, could, without more, bring the contract to an end, and achieve a clean break from the contract.”

“74.

In that context and given that intent, there is, as I see it, no scope for the application of the presumption relied upon by Mr Darton KC, or, put another way, the intention, of the parties, as derived from the contract, is such as to displace any application of the presumption. The application of the presumption, with the consequent requirement, in any case, to consider the reasons for, or causes of, a particular ‘fact situation’, far from allowing, as intended, the parties a clear and straightforward escape from the provisions of a contract, where the performance of the contract had either been frustrated, or unacceptably delayed, leaving questions of and liability for cause to subsequent determination, would, at least potentially, embroil the party seeking to escape the contract in a debate as to whether its conduct was responsible for the existence of a particular ‘fact situation and, thus, negate the intention underlying clause 23.2.

75.

In the result, I am satisfied that, in this case and for the reasons given, the presumption relied upon by Mr Darton is inapplicable, or is displaced by the clear words of the contract and the clear intentions of the parties, as conveyed both by the language they have used (or failed to use) and by an analysis of the scope and purposes of clause 23.2 and that, in consequence clauses 23.2 and 23.2.1 should be read and applied in accordance with the clear and plain language agreed by the parties.”

The Judge then dealt with a number of discrete points. He rejected Henley’s argument that his construction of clause 23.2 was inconsistent with the Buyer’s right to terminate in clause 23.1.1 and with Condition 10.2: see [77] to [80]. He also rejected Henley’s argument that his construction paid too little weight to the function and purpose of a deposit in a contract for the sale of land and that the present case was on all fours with Sainsbury’s: see [81] and [82] to [86]. Finally, he rejected the fall-back argument which Mr Darton advanced, namely, that a term giving effect to the Breach of Contract principle should be implied into the Agreement. He dealt with this argument briefly at [87] and [88]:

“87.

There remains to consider Mr Darton KC’s fall-back position, as to the implication of a term, corresponding to and having the same effect as the construction which, by way of the presumption of construction discussed in this judgment, he has sought to advance in this case.

88.

Given my findings on construction, there can be no basis for the implication of such a term. As is axiomatic, an implied term can supplement the terms of the contract either to provide business efficacy, or because it was always an obvious element in the overall contractual arrangements. What an implied term cannot do is to modify, or alter, the

express terms of the contract, as properly construed and, thereby, supplant those terms. That, in view of my conclusions as to the proper construction of the contract, in this case, is what the implication of any term along the lines suggested and pleaded, by Henley would do.”

neither of these clauses expressed an intention to exclude the Breach of Contract Principle and were entirely consistent with the application of this principle