Tuesday 22nd – Wednesday 23rd June 2021
1st Defendant’s appeal, against part of the Order of Mr Justice Foxton, permission having been granted by his order dated 10 June 2020.
In 2009, the Isle of Wight Council (the Council) approved a request by the Governing Body of Christ the King College (the College) to expand its age range and open a sixth form. This decision fell to be implemented against the background of the budgetary constraints which impacted the public sector in the wake of the financial crisis, which significantly reduced the funds available for capital projects. The solution which the College ultimately adopted in the face of that dilemma was to enter into what was described as a hire contract (the Contract) for the construction and hire of a modular building and associated equipment (the Building).
The Building was provided and assembled by a company called Built Offsite Limited (BOS), a specialist in modular construction. The transaction was structured so that BOS sold the Building to BOSHire Limited (BOSHire) (a joint venture company in which BOS held a 50% interest), who in turn entered into the Contract to lease the Building to the College. Subsequent assignments led to School Facility Management Limited (SFM) and then GCP Asset Finance1 Limited (GCP) obtaining the right to payments made by the College under the Contract.
Against the background of an increasing budget deficit, the College failed to pay the annual instalment under the Contract which fell due in September 2017. The present proceedings followed a year later, in the course of which the legal characteristics of the Contract, and the process by which it came to be entered into, came under much greater scrutiny within the College and the Council than they had received when the College signed the Contract, and the Council signed a letter supportive of the Contract, back in 2013.
Both the College and the Council now allege that the Contract was beyond the capacity of the College and outside the authority of those who signed the Contract on a wide range of grounds. The College resists the claims for debt and damages under the Contract, and seeks to recover the amounts it has already paid in unjust enrichment. In response, the Claimants contend that the Contract was binding on both the College and the Council as the College’s principal, but in the alternative advance claims in misrepresentation, misstatement and unjust enrichment. The College and the Council also bring contingent claims against each other.
Lower Court Judgments: