The Technology and Construction Court (TCC) recently handed down a significant judgment in Durkan Estates Ltd v Wallace Estates Ltd [2026] EWHC 2003 (TCC). This case, involving a dispute over a remedial works agreement for a building under the Building Safety Act 2022 (BSA), provides essential guidance for building owners and developers navigating the complex regulatory landscape of high-rise building (HRB) remediation.
The building falls within the scope of the BSA. In January 2024, the First-Tier Tribunal (FTT) issued a Remediation Order (RO) against the owner of the building, Wallace, requiring it to remedy specified defects by 31 May 2025. Following negotiations to avoid a Remediation Contribution Order (RCO), Wallace entered into the remedial works agreement with the original owner and developer, Durkan, which required Durkan to complete the remedial works by 19 September 2025.
However, progress was slow. By June 2025, no Gateway 2 application had been made to the Building Safety Regulator (BSR), a prerequisite for commencing works. On 24 June 2025, the FTT rejected Wallace’s application to extend the RO deadline. Two days later, Wallace issued a notice terminating the remedial works agreement, alleging Durkan was in "Substantive Breach" and had repudiated the contract at common law (rather than relying on contractual termination provisions). Wallace subsequently applied for a RCO of over £13.5m against Durkan in the FTT. Durkan commenced High Court proceedings seeking a declaration that the termination was unlawful.
The Court emphasised that because time was not of the essence, Wallace had to prove the delay was so prolonged that it deprived Wallace of substantially the whole benefit of the remedial works agreement. The judge noted that this involved looking at the financial loss caused by the delay, the benefit already received and whether the breach was remediable.
Perhaps the most striking argument was Durkan’s claim that Wallace had affirmed the contract only 48 hours before terminating it. At the FTT hearing on 24 June 2025, Wallace’s counsel argued that terminating the agreement was "not a panacea" and that Wallace was "reasonable in allowing Durkan to continue" because they were close to a Gateway 2 application.
Durkan argued that the delays were partially Wallace's fault (e.g. due to delays in Wallace appointing its own consultants) and that Durkan was still "making an effort" to perform. The judge observed that where a party is still trying to perform, it is "intrinsically difficult" to establish a fundamental breach. Furthermore, Durkan produced expert evidence suggesting the Gateway 2 submission could have been finished within 8-10 weeks of the termination date. This raised a "real prospect" that the breach was remediable, which would conflict with a right to terminate at common law.
Mr Justice Constable’s dismissal of a summary judgment application highlights the "high bar" for establishing repudiatory breach due to delay, particularly when regulatory hurdles like the BSR are involved. For professionals, the case serves as a cautionary tale regarding fixed deadlines, the necessity of meticulous record-keeping and the evolving procedural landscape for BSA claims.
Practical advice: Navigating BSR Gateways and completion dates
A central tension in Durkan v Wallace was the mismatch between statutory deadlines and the reality of the BSR’s Gateway 2 approval process. Wallace was under a FTT RO to complete works by May 2025, yet the remedial works agreement with Durkan set a completion date of September 2025. Crucially, by the time Wallace attempted to terminate the agreement in June 2025, no Gateway 2 application had even been submitted to the BSR.
For building owners:
- Acknowledge regulatory uncertainty: Owners should recognise that the BSR Gateway process is an "unfixed point in time". Setting a rigid completion date in a remedial works agreement while a RO looms can create a liability gap.
- The "Time of the Essence" trap: In this case, Wallace admitted time was not originally of the essence. If a building owner requires strict adherence to a date, the remedial works agreement should contain clear provisions dealing with the consequences of late completion, rather than relying on common law termination rights.
For developers:
The power of the paper trail: meeting minutes and estoppel
The judgment demonstrates how contemporary records can come to a party’s rescue. Durkan’s defence against the allegation of repudiatory breach relied heavily on records from meetings held between October 2024 and January 2025.
Lessons in record-keeping:
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Recording common assumptions: Durkan pointed to emailed meeting notes recording that "Timescale does not have calendar date" and that dates could not be confirmed until scope and BSR submission were concluded. These records supported a "realistic" prospect of establishing estoppel by convention – namely the idea that both parties were proceeding on the shared assumption that the September 2025 date was no longer contractually significant.
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Evidence of "making an effort": The Court noted that establishing a fundamental breach for delay is "intrinsically difficult" if the defaulting party is "making an effort" to perform. Durkan’s records of ongoing technical meetings and fire engineering sign-offs in June 2025 provided evidence of this effort, even if the "Substantive Breach" threshold was technically met.
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The "non-waiver" clause limitation: Wallace relied on clause 11.2 of the remedial works agreement, which stated that no affirmation of the contract would be effective unless in writing. However, the Court found that Wallace’s written submissions to the FTT – which stated that terminating the agreement was "not a panacea" and that Wallace was "reasonable in allowing Durkan to continue" – could constitute "affirmation in writing".
Meeting minutes should not just record actions but also capture statements of intent or acknowledgments of delay. If a party accepts that a date will not be met without protest, as Wallace’s team reportedly did, they may find themselves estopped from later relying on that delay as grounds for termination.
The evolving TCC Framework and parallel proceedings
While Durkan v Wallace focused on the law of termination, it is a harbinger of the "new normal" under the BSA. The case highlights the increasing intersection between the TCC and the FTT.
- The new TCC Guide: The latest TCC Guide provides specific protocols for BSA claims, encouraging early disclosure and expert engagement on technical defects. The Court in this case emphasised that the "acutely fact-sensitive" nature of BSA remediation – where reasons for delay and the adequacy of proposed works are in dispute – makes these cases generally unsuitable for summary disposal.
- Parallel claims (TCC and FTT): A significant procedural shift is the move towards having the same judge hear parallel claims in the TCC and FTT concerning the same building. In Durkan, Wallace had applied for a RCO of £13.5m in the FTT while defending a declaration of unlawful termination in the TCC.
- Judicial consistency: By using the same judge to sit across both jurisdictions, the Court avoids the risk of conflicting findings. This "dual-hatted" approach is intended to streamline BSA litigation and reduce the burden on parties involved in multi-front disputes.
Conclusion
Durkan v Wallace serves as a reminder that the BSA has not rewritten the fundamental principles of contract law; it has simply applied them to a higher-stakes, more regulated environment. For building owners, attempting to terminate a contract for alleged repudiatory breach following a FTT setback is a high-risk strategy. For developers, the Gateway 2 bottleneck must be proactively managed through flexible drafting and robust record-keeping.