[2017] EWHC 1763 (TCC)

ICI alleged that MMT had committed a number of breaches that evinced an intention by MMT not to be bound by the terms of the contract; in other words, these were repudiatory breaches. By a letter dated 17 February 2015, ICI wrote to MMT accepting what was said to be the repudiation of the contract by MMT, and thereby terminated MMT’s employment under the contract. A party alleging repudiatory breach is not restricted to reliance on breaches known about at the date of the acceptance of the purported repudiation. However, here, the Judge did not consider that any of the claims were made out.

For example, determining the number or proportion of welds that were defective when considered against the agreed contract terms was difficult for ICI because the contemporaneous reports proceeded on the basis that the specification against which the welds were to be measured was that contained in the British Standard, testing performed by radiography. They were not comparing the welds against the contractual standard agreed with MMT. Therefore the determination of “defects” was flawed. This was not a repudiatory breach. In fact the Judge commented that:

“This attempt to particularise repudiatory breaches by MMT appears as though someone has simply trawled through the entirety of the project correspondence, and any passing reference to any matter (such as the isolated references to the welder working on different welds to that for which he was qualified) has been elevated to the status of being a repudiatory breach or breaches. The experts opined on this – and qualification is important – but the factual evidence is that this was simply not an issue at the time. ICI seek to elevate it to a greater importance than it merits to bolster a thin case on repudiatory breach by MMT.”

As the Judge dismissed all the alleged breaches relied upon by ICI, this meant that the 17 February 2015 letter was not the exercise of a contractual right to terminate, but was itself a repudiation of the contract by ICI. Here, the Judge also referred to a request made by ICI, also on 17 February 2015, for the production of documents. The Judge noted that this request was “couched in an unrealistically short time frame” such that it could not possibly have been complied with. The letter was received at 2.40 p.m. and compliance expected by 5 p m. MMT could not be considered to be in breach of the contract term by failing to comply with the request because it simply would not have been possible for MMT to have produced the documents within the period of time stated. The word “forthwith” has to be considered in the light of all the circumstances at the time. MMT was entitled to a reasonable period of time, first to take legal advice, and then to prepare and copy the documents.

Accordingly, ICI was itself in repudiatory breach of contract by instructing MMT to leave site on 17 February 2015.