Valilas V. Januzaj Case Study

Case Name and Citation

Valilas v Januzaj [2014] EWCA Civ 436

Court and Judges

Court of Appeal (Civil Division): Arden, Underhill and Floyd LJJ

Parties

Appellant/Defendant: Valdet Januzaj. Respondant/Claimant: Ioannis Valilas.

Material Facts

Both parties are dentists. The Defendant ran a dental practice (“the Practice”) that provides the facilities for treating patients. The Claimant was in an agreement with the defendant. The arrangement was that in return for the right to make use of the premises and equipment and the services he would pay the Defendant each month 50% of his receipts. Underhill LJ [3]

Claimant treated patients through the National Health Service (NHS), and he received payment for this work from a Primary Care Trust

Underhill LJ (at 33) claimed that the obligation to pay was the Claimant’s primary obligation. As a response to Underhill LJ, Floyd LJ (at 45, 46 and 48) considered the “root of the contract” test employed by Sachs LJ in Withers v Reynolds (1831) 2 B & Ad 882 and by Buckley LJ in Millars’ Karri and Jarrah Co (1902) v Weddel, Turner & Co ((1908) 100 LT 128 at 129). Floyd LJ (at 57) decided that the breach did not go to the root of the contract and therefore was not repudiatory.
After consideration of the obligation’s and the breach’s nature, Lords and Lady Justice followed to consideration of circumstances and consequences of the breach.
Underhill LJ was the only Lord Justice who expressly paid attention to the Defendant’s warning to terminate the facilities contract in the case of the Claimant’s failure to sign the offered associate contract. Underhill LJ (at 39) claimed that the Defendant had not done anything that would entitle the Claimant to depart from his contract obligations but despite of that fact the claimant had chosen to do that (Underhill LJ at

Arden LJ argued (at 68) that the Claimant did not plan to stop performing the contract. Underhill LJ (at 34) agreed that the Claimant intended to fulfill his obligations but inconsistently and that substantially inconsistent fulfillment of the contract constitutes a repudiation. Floyd LJ (at 52 and 53) agreed that substantially inconsistent performance “…may amount to a renunciation…”. At the same time, Lord Justice argued that not all such breaches entitled the other party to terminate the contract; the nature of the contract and the consequences of the breach should be evaluated. In reason to evaluate it and with reference to Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA (2007) 82 AJLR 345 Floyd LJ offered (at 53, 54 and 55) some test. According to Floyd LJ, (i) it was obvious that the Defendant would receive everything; (ii) the payment was not the only source of the Defendant’s income; and (iii) the Defendant’s representative “…did not draw attention to the consequences that the non-payment would have on…” his client. As a result, Floyd LJ did not find the breach