Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1993] UKHL 4
Contract – Building – Assignment – Prohibition on assignment without consent – Entitlement to damages for breach
Facts:
A lessee of part of a building entered into a standard form contract with the second defendants to remove asbestos from the building. The contract stated that the contract could not be assigned unless there had been written consent of the contractor. The second defendants subcontracted the work to Lenesta. After the work was completed, more asbestos was found which should have been removed. The lessee contracted with the third defendants to remove the asbestos and also assigned its leasehold interest to Linden Gardens. The second defendants were not asked and did not consent to the assignment. More asbestos was found and Linden had work carried out for its removal at their own expense and sued all of the defendants for a breach of contract. Initially, the plaintiff was able to recover damages as the assignment was deemed effective. The defendants appealed.
Issues:
Whether the assignment was valid and if so, whether the defendants could be held liable for damages.
Held:
The appeal was allowed by the defendants. The clause of the contract prohibiting assignment without the consent of the contractor was interpreted and upheld literally within its meaning. The original lessee had failed to seek the contractor’s consent. As such without that consent, any benefit of the contract and the assignment of any entitlement to a cause in action was not passed on to Linden. The court held it would be contrary to public policy to allow an assignment of rights where no consent had been given and was expressly required. Thus, the assignment of contractual rights was ineffective and Linden was unable to take advantage of these.
Updated 19 March 2026
This case summary remains broadly accurate. Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 (decided by the House of Lords in 1993, reported in 1994) continues to be good law and is regularly cited as authority for two important propositions: first, that a contractual prohibition on assignment without consent will be construed strictly, rendering an unauthorised assignment of the benefit of the contract ineffective; and second, for the related “narrow ground” principle (developed alongside St Martins Property Corporation Ltd v Sir Robert McAlpine Ltd, heard together) concerning a promisee’s ability to recover substantial damages on behalf of a third party who has suffered loss.
One point worth noting for readers: the article focuses on the assignment issue but does not address the equally significant “broad ground” versus “narrow ground” debate on third-party loss that arose from the conjoined appeals. The narrow ground (that a party contracting in the knowledge that property will be transferred can recover substantial damages for loss suffered by the transferee) has been confirmed and developed in subsequent cases, including Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518, which significantly qualified its scope. Students researching this area should read Linden Gardens alongside Panatown for a complete picture of the current law on recovery of damages for third-party loss in construction contracts. No statutory changes have affected the core principles discussed in the article.
