Case Law: Liberty Mercian Ltd v Cuddy Civil Engineering Ltd - The Issue of Specific Performance Post-Termination

Citation: [2013] EWHC 4110 (TCC)
Judgment on


The case of Liberty Mercian Ltd v Cuddy Civil Engineering Ltd & Anor [2013] EWHC 4110 (TCC) revolves around a dispute arising from a development project contract. The case brings forth key legal issues concerning the adequacy of damages as a remedy, the ability to perform contractual obligations post-termination, and the court’s discretion in granting specific performance. These issues are meticulously analyzed by The Hon Mr. Justice Ramsey, whose judgment provides valuable insights into the circumstances under which specific performance can be deemed an appropriate remedy.

Key Facts

Liberty Mercian Ltd (“Liberty Mercian”) entered into a contract with Cuddy Civil Engineering Limited (“CCEL”) which required CCEL to supply a parent company guarantee, performance bond, and warranties from Quantum (GB) Limited. Disputes arose concerning the formation of the contract, the correct contractor party, and if those obligations survived the termination of the contract.

In a previous judgment, it was determined that the contract was formed with CCEL and not with Cuddy Demolition and Dismantling Limited (“CDDL”), and that CCEL’s obligations did survive the contract’s termination. The central issue in this judgment is whether specific performance should be ordered to enforce CCEL’s obligations to provide a performance bond and warranties post-termination.

Several legal principles underpin the judgment in this case, including:

  1. Adequacy of damages: The Court of Appeal’s decision in Evans Marshall & Co Limited v Bertola SA delineates the potential inadequacy of damages, emphasising situations where damages are difficult to estimate or where the defendant’s solvency is in question.

  2. Difficulty and impossibility: Specific performance may not be granted when an obligation has become impossible due to the defendant’s actions or there is no method to compel a third party to fulfill the contractual terms (as suggested by Halsbury’s Laws and Wroth v Tyler).

  3. Continuous supervision: Concerns arise when a contract involves continuous acts that would need the court’s ongoing oversight (Halsbury’s Laws again provides guidance here). Recent case law, however, suggests a willingness to enforce contracts requiring supervision if the work to be done can be sufficiently defined.

  4. Third-party rights: If a vendor cannot secure the requisite third-party concurrence, but the court can enforce it upon proper case being shown, this intermediates the situation between where a vendor can secure a concurrence as of right and where he cannot by mere persuasion.

  5. Financial disclosure: In cases where the defendant claims impossibility of compliance due to lack of financing, full financial disclosure is typically required to substantiate such a claim, as seen in Matila Limited v Lisheen Properties Limited.


Mr. Justice Ramsey made the following key findings:

  • Performance bond: Damages were deemed not an adequate remedy for a performance bond not being provided and specific performance was contemplated, subject to addressing the question of feasibility post-termination.

  • Warranties: It was similarly found that damages were not an adequate remedy for the failure to provide warranties by CCEL. Specific performance was once again considered, again dependent on the possibility of post-termination compliance.

  • Best endeavours: The court ordered CCEL to use its best endeavours to secure both the performance bond and the warranties. This created an opportunity for CCEL to prove the impossibility defense at a subsequent hearing.


The Hon Mr. Justice Ramsey, in the case of Liberty Mercian Ltd v Cuddy Civil Engineering Ltd & Anor, carefully applies legal principles to the specific circumstances of the case. He balances the adequacy of damages and the nuances of performance obligations post-termination with the parties’ ability to fulfill those obligations. This case underscores the importance of contract drafting, the necessity of financial transparency in disputes, and the courts’ adaptability in enforcing equitable remedies such as specific performance. The case also reveals the evolving judicial approach towards supervisory orders, especially in situations where the court must grapple with the practicalities of impossible performance and adequate remedy post-contract termination.