Radford v De Froberville (Lange Third Party) 28 Mar 1977 [1977] 1 WLR 1262, Ch D

A purchaser covenanted to build a wall on her land adjoining the vendor's but failed to do so. The court held that the correct measure of damages was the cost of building the wall, not the lesser amount by which the vendor's property value was diminished.

Facts

The plaintiff sold a plot of land, part of his larger property, to the first defendant. A term of the sale, included as a positive covenant in the conveyance, required the defendant to build a brick wall of a specified type on the boundary between the plot sold and the plaintiff’s retained land. The defendant obtained planning permission for a house on the plot but subsequently sold the land to a third party without having built the wall. The plaintiff brought an action against the first defendant seeking damages for breach of covenant.

Issues

The central legal issue was the correct measure of damages to be awarded for the breach of the covenant. The court had to decide between two alternative measures:

1. The cost of actually constructing the wall as specified in the covenant (the ‘cost of cure’), which was agreed to be £3,400.
2. The diminution in the market value of the plaintiff’s retained land resulting from the absence of the wall. The defendant argued this loss was nil, as the presence of a new house on the adjoining plot meant a wall would not increase the plaintiff’s property value.

Judgment

Oliver J, sitting in the Chancery Division, delivered a judgment in favour of the plaintiff, awarding damages based on the cost of cure.

Reasoning of the Court

The judgment was founded on the fundamental principle of contract damages: to place the innocent party, so far as money can, in the same position as if the contract had been performed. The defendant’s failure to build the wall meant the plaintiff had not received what he had bargained for.

Oliver J rejected the defendant’s argument that damages should be limited to the diminution in value. He held that a plaintiff who has contracted for a particular outcome is entitled to the financial equivalent of performance, not merely compensation for any consequential financial loss. He articulated this principle clearly:

If he contracts for the supply of that which he thinks serves his interests—be they commercial, aesthetic or merely eccentric—then if that which is contracted for is not supplied by the other contracting party I do not see why, in principle, he should not be compensated by being provided with the cost of supplying it himself or by a third party.

The judge distinguished this case from situations where the cost of cure would be unreasonable or where the plaintiff had no genuine interest in performance. Here, the evidence showed that the plaintiff genuinely wanted the wall built for reasons of privacy and a clear demarcation of the boundary, and he intended to use the damages to construct it. The plaintiff’s loss was not the diminution in his property’s value, but the cost of achieving the desired result which the defendant had failed to provide.

The court concluded that the plaintiff had a real, non-pecuniary interest in the performance of the covenant. Therefore, the appropriate measure of damages was the sum required to have the work done, which was assessed at £3,400.

Implications

The case is a leading authority on the measure of damages for breach of contract, particularly in the context of building contracts and positive covenants. It establishes that the ‘cost of cure’ can be the appropriate measure of damages even where it significantly exceeds the ‘diminution in value’. The decision affirms the importance of the ‘performance interest’ in contract law, meaning the law protects a claimant’s right to receive the performance they contracted for, not just their financial position. The ruling underscores that a claimant’s genuine intention to use the damages to rectify the breach is a relevant factor in determining whether the cost of cure is a reasonable and appropriate measure.

Verdict: Judgment for the plaintiff. The court awarded damages in the sum of £3,400, representing the cost of building the wall.

Source: Radford v De Froberville (Lange Third Party) 28 Mar 1977 [1977] 1 WLR 1262, Ch D