Durkan v Wallace: Delay, Termination and Building Safety Remedial Works

Background

In Durkan Estates Ltd v Wallace Estates Ltd [2026], the Technology and Construction Court considered whether Wallace Estates Ltd, the owner of a residential building in Croydon, was entitled to terminate a remediation works agreement with developer Durkan Estates Ltd because of delays in progressing remedial works.

The dispute arose in the context of the Building Safety Act 2022. Following a Remediation Order made by the First-tier Tribunal, Wallace was required to address fire safety defects at the building. Durkan agreed to carry out the necessary remediation works at its own cost under a remediation agreement entered into in July 2024.

By June 2025, the works had not started and key approvals had not yet been obtained. Wallace therefore terminated the agreement and argued that Durkan's delays were so serious that it was entitled to bring the contract to an end. Durkan disagreed and claimed the termination was unlawful.

The view of the TCC

Wallace applied for summary judgment, arguing that Durkan had no realistic prospect of succeeding at trial. The court refused.

A central issue was that, although the project had been delayed, the contract did not make the agreed completion date strictly essential. The court also noted that the parties appeared to have continued working together on the basis that the original timetable was no longer realistic.

Wallace's position was that the project had fallen so far behind that it was entitled to terminate the agreement. However, the contract itself contained a mechanism for dealing with performance issues, including giving notice and an opportunity to remedy certain breaches. The court suggested that a party cannot easily bypass any such contractual processes and simply rely on a general right to terminate.

Importantly, the TCC was not dealing with a straightforward case of a contractor simply failing to get on with the job. Durkan alleged that the delays were caused, at least in part, by the way the project was being managed by Wallace and its consultants, as well as the challenges involved in developing the design. Durkan also relied on the challenges associated with finalising the design and progressing the Building Safety Regulator approval process. Given that those issues remained in dispute, the court was unwilling to conclude by way of a summary judgment that the delays justified termination.

A practical lesson on termination

Perhaps the most interesting aspect of the case is what it says about the risks of terminating a contract too quickly.

Just two days before serving its termination notice, Wallace had argued before the Tribunal that replacing Durkan would probably cause even more delay and that continuing with Durkan remained the most sensible option.

The court considered that those earlier statements could in fact be relevant when deciding whether Wallace had effectively accepted the ongoing delays and chosen to continue with the contract. This is an issue that will ultimately be determined at trial.

The decision is a reminder that a party's actions often matter as much as the wording of the contract. If a party continues working collaboratively, supports revised programmes (and openly expresses confidence in the contractual relationship) it may become harder later to argue that the other party's performance was so serious a failure that termination was justified.

Key Takeaways

• Delay alone does not automatically give a party the right to terminate a contract.
• The court will look at the wider commercial context, not just missed deadlines and delays.
• A party's own conduct may undermine its later attempt to terminate.
• Businesses facing project delays should think carefully before concluding that termination is the best or safest option.

While the case arises in the context of a building safety dispute, its significance extends beyond this. Building safety remedial works projects are often complex and dependent on third parties, consultants and, of course, BSR (and other) approvals. Programmes can evolve as the true scope of defects emerges through PCSA investigations and as designs are developed. 

Against that backdrop, the decision is a reminder that courts may be reluctant to characterise delay alone as fundamentally undermining a contract, particularly where the parties continue to collaborate and the works remain capable of being delivered. 

For those  negotiating  remedial works agreements, the judgment also highlights the importance of clear provisions dealing with programme risk, regulatory approvals and the consequences of delay, rather than relying on general termination rights when projects encounter difficulties.