Bellway ordered to pay damages to Persimmon over Glasgow development site

  Persimmon Homes Ltd has won a ruling from the Scottish Court of Session that Bellway Homes Ltd has breached a contract of sale for a £4m development site on the outskirts of Glasgow.   Lord Drummond Young rejected Bellway’s claim that it was entitled to another chance at offering Persimmon an alternative development site under the contract, after it proved unable to complete vital roadworks for the site at Broomhouse, Glasgow, in time. He ordered Bellway to pay damages, to be assessed at a later hearing.   In 2006, Bellway agreed to sell the 6.6 acre site to Persimmon for £4,160,000, subject to deductions for groundworks, and the agreement required Bellway to carry out works, including the installation of roads, footpaths and other services, the upgrading and realignment of the nearby Boghall Road, and the construction of a roundabout at the junction of Boghall Road and Baillieston Road, by 15 December 2007.   In the event, that the Broomhouse site was not available by that date, and Bellway was obliged to offer an alternative residential development site within Central Scotland of comparable size and value.   When Bellway failed to complete the roadworks by the key date, it offered an alternative site in Airdrie, but Persimmon rejected it, took steps to rescind the agreement and claimed damages for breach of contract.   In a ruling last September, the Court of Session found that the Airdrie site was not of comparable value to the Broomhouse site.   However, Bellway claimed that this did not constitute breach of contract, and argued that it was entitled to offer an alternative site to Persimmon.   Now though, Lord Drummond Young has rejected this argument, and found that Bellway was in breach.   He said: “I am of opinion that the contract has been validly rescinded. The pursuers are entitled to damages for breach of contract.”   He added: “On the defenders’ arguments, the contract would have limped along for four years without fulfilling its crucial purpose, namely to provide the pursuers with an alternative site for development.”   Persimmon Homes Ltd v Bellway Homes Ltd Outer House, Court of Session (Lord Drummond Young) 3 April 2012   Young, QC (instructed by Lindsays) for the pursuers   Martin QC and McIlvryde (instructed by Gillespie Macandrew LLP) for the defenders