Citation: EWHC 3275 (TCC) (contract/no contract issues)
Nature of case: London Pleasure Gardens (“LPG”) secured funding, in the form of a loan, from the London Borough of Newham (“LBN”) for the development of a site near the Olympic Park prior to the London 2012 Olympics. Events held on site were expected to generate significant revenue for LPG, who engaged Squibb to complete various works. That contract was one which, under the terms of the loan from LBN to LPG, was required to be in a form agreed by LBN, and required LBN’s approval for any payments under it in excess of £10,000. Squibb completed the work on time and applied for payment under the contract. LPG made only one payment, following which representatives of LPG, LBN and Squibb met to discuss terms of payment. Two further payments were made to Squibb after LBN released funds for that purpose. Thereafter, LPG went into administration, leaving outstanding the loan from LBN and various payments to Squibb.
Squibb brought a claim against LPG and LBN, arguing that, on the basis either of their original contract or the meetings which followed the first payment, there was a collateral contract between Squibb and LBN, obliging LBN to release all necessary funds to enable LPG to make payments to Squibb.
On the facts, Stuart-Smith J rejected both basis for the collateral contract, and dismissed the claim.
