English High Court refuses reverse summary judgment on lawfulness of building safety remediation termination

A High Court judge has ruled that a developer's claim challenging the lawfulness of a termination notice served under a Building Safety Act (BSA) remediation agreement has a real prospect of success and must go to trial. The judgment in Durkan Estates Ltd v Wallace Estates Ltd [2026] makes clear that the BSA does not introduce a bespoke standard for repudiation.

The dispute

The dispute concerned a remediation agreement entered into in July 2024 between the claimant, Durkan Estates, and the defendant Wallace Estates, relating to Centrillion Point in Croydon. The building had been converted from offices into residential units by Durkan in the late 2000s. Durkan was the original landlord; Wallace had owned the freehold interest since 2014.

Earlier in 2024, the First-tier Tribunal (FTT) made a remediation order (RO) under section 123 of the BSA against Wallace, requiring relevant defects to be remediated by 31 May 2025. Wallace and Durkan subsequently entered into a remediation agreement on the basis that Durkan, as a party against which Wallace could seek a remediation contribution order (RCO) under section 124 of the BSA, would instead carry out the remedial works at its own cost. The completion date under the agreement was 19 September 2025, which was later than the completion date for the remedial works under the RO of 31 May 2025. 

Works were delayed and by June 2025, no "Gateway 2" application in respect of the works had been made to the Building Safety Regulator (BSR). Wallace applied to vary the RO compliance deadline, which the FTT rejected on the basis that it could not fix a completion date by reference to a point unfixed in time; namely, a period after approval by the BSR. Importantly, at the RO deadline hearing, Wallace submitted that it had taken the view that"it should continue working with Durkan to progress the remediations", that termination was not a "panacea" and appointing a replacement contract would possibly only delay matters.

Two days after its application was rejected, Wallace served a notice purporting to terminate the agreement, alleging both contractual entitlement and a common law right to terminate. Wallace then commenced an application in the FTT for an RCO against Durkan and its parent. Durkan sought a declaration that the termination was unlawful. Wallace applied for reverse summary judgment on the claim and summary judgment on its counterclaim in the FTT, confining its application to the question of whether Durkan was in repudiatory breach at common law. 

Application dismissed

Durkan resisted the application on three main grounds, which ultimately persuaded the court that the matters were not suitable for summary judgment and that Durkan was entitled to explore them at trial.

Time at large

Durkan argued that the original completion date had been amended by agreement of the parties so that it was at large for both the design element and approval of the same by the BSR. Alternatively, Durkan pleaded that Wallace was estopped from relying on the contractual completion date on the basis that there was a convention between the parties that time would run from approval by the BSR. 

Mr Justice Constable noted that Wallace's contractual analysis in response to the first ground was "potentially powerful". Estoppel could override clear contractual machinery and whether it had done in this instance was not possible to determine summarily, depending largely on factual evidence as to the conduct of the parties. 

Delayed performance not repudiatory

The parties were not in dispute that time was not of the essence, and Durkan submitted that a delay in performance without notices of warning was therefore not repudiatory. In those circumstances, Wallace would have to meet the high bar of establishing that the delay was so prolonged that it deprived it of substantially the whole benefit of the remediation agreement. Mr Justice Constable made it clear that while the statutory context of the BSA and the RO "materially increase the importance of timely performance, they do not of and in themselves alter the test for repudiation nor convert a non-essential time stipulation into a condition". 

It was also relevant that the agreement's original completion date was already after the date for compliance in the RO, meaning Wallace was at risk of facing committal proceedings without achieving an extension of the RO even if Durkan met the original completion date. The court held that the repudiation assessment required factual investigation, including into the causes of delay. Such causes were in dispute, as Durkan contended Wallace was itself responsible for elements of the delay, the matter was not suitable for summary judgment. The court also criticised Wallace for raising contractual defences in oral submissions that were not pleaded, reiterating that reliance on "the entire agreement at trial" was not sufficient.

The court noted that whether the replacement contractor that had been appointed by Wallace following the termination of the remediation agreement took longer to submit a compliant design to the BSR than Durkan would have done had the termination notice not been issued was relevant to a determination on whether Wallace had been deprived of substantially the whole benefit of the agreement.  

Affirmation of remediation agreement

Durkan contended that Wallace had affirmed the agreement by giving clear statements that it wished to continue working with Durkan. Those included discussions in March 2025 during which Durkan provided factual information in support of Wallace's application to extend the RO deadline, and later by a clear statement to the FTT in Durkan's presence during the subsequent hearing. Durkan argued that the decision to terminate was a reaction to the FTT rejecting its application to extend the RO deadline, rather than Durkan's failure to meet the original completion date, and that disclosure of Wallace's internal communications would likely bear on the waiver and affirmation issues in dispute.

The court found that each of these issues would require factual investigation and determination at trial and dismissed Wallace's application in its entirety accordingly. 

Osborne Clarke comment

Although this case falls squarely within the bracket of claims arising out of the new building safety regime, it is in fact a reminder that established principles of law still apply within that context. A couple of points stand out for practitioners, and contractors and employers and are worth noting.

• Contractual machinery is part of repudiation analysis. Where an agreement contains an opportunity to cure a breach, that machinery is not bypassed by invoking a common law right to terminate. Terminating parties should be alert to this even when relying on common law rather than contractual rights to terminate.
• The BSA does not alter the test for repudiation. Mr Justice Constable was clear in this judgment that the statutory backdrop created by the BSA does not alter the established framework governing common law principles such as repudiation. Where timely performance is crucial to the contracting parties (in this case, one party has time obligations under a separate agreement), it should be expressly built into the contract; for example, by making time of the essence or including a liquidated damages regime.

Following the dismissal of its application, Wallace agreed to joint case management of the FTT and TCC proceedings. This has resulted in the first joint hearing of the FTT and TCC, and the resulting first-of-its-kind judgment sets out a blueprint for coordinated case management of concurrent building safety proceedings.