St Martin's assigned their property interest and the benefits of the contracts to a new owner after the works were completed, without the contractor's consent.

Because of the specific contractual provision that rights of action were not assignable without the defendants' consent, the parties could properly be treated as having entered into the contract on the basis that the first claimants would be entitled to enforce against the defendant's contractual duties on behalf of all those third parties who would suffer from defective performance of the contract but were unable to acquire rights under it, subject to causation, limitation periods and quantum.

Lord Browne-Wilkinson adapted the concept of Lord Diplock in The Albazero[1] that there is an exception applicable to contracts of carriage: "that the consignor may recover substantial damages against the shipowner if there is privity of contract between him and the carrier for the carriage of goods; although, if the goods are not his property or at his risk, he will be accountable to the true owner for the proceeds of his judgment.

"[2] The Court of Appeal applied the decisions in Darlington Borough Council v Wiltshier Northern Limited in 1994 because the circumstances in this case, which also involved defective construction work, fell "within the rationale" of the Linden and St. Martin's rulings.

The Court noted that the construction work took place on council-owned land and was obviously undertaken for the benefit of the Council, with the special purpose company having no long-term interest in the building.