Case Histories - Commercial Property

COMMERCIAL PROPERTY CASE HISTORIES

COMMERCIAL PROPERTY CASE HISTORIES

 

Dispute between a retailer developer and subsoil holder

The client contracted to buy a site for development and discovered that the registered title it had contracted to buy did not include the subsoil. The holder of the subsoil brought proceedings for an injunction restraining the proposed development. With the help of our advice and representation those proceedings were satisfactorily settled on the basis of a contribution by the client’s conveyancing solicitors.

Dispute between a unit trust fund and a commercial tenant

The client was the owner of a town centre retail estate of some 20 acres which it wished to redevelop. As a first phase of that development it constructed a multi-storey car park and let it to an operator. The crash of 2008 meant that the remainder of the development had to be postponed and the car park operator argued that the client was thereby in breach of various implied obligations under the lease and agreement for lease. Proceedings were begun and settled with our assistance on the basis of a restructuring of the car park lease in line with our client’s commercial objectives.

Dispute between a retailer/developer and an adjoining landowner

The client entered into a complex arrangement with a neighbouring landowner to buy land from a third party with funds provided by the client. The adjoining landowner was to hold the land and be obliged to transfer most of it to the client upon the grant of a satisfactory planning permission and the building of alternative premises for the adjoining owner according to that planning permission. Owing to a mistake by the client’s professional team the planning permission obtained differed slightly from the contractual requirements and the adjoining landowner took advantage of this to refuse to release the land. Proceedings were brought and a settlement reached which involved the transfer of the development site to the client.

Dispute between a retail tenant and a landlord

The client and its landlord under a long lease (a local council) had a dispute over the complex wording of a geared rent review provision and its interaction with an unauthorised alteration the client had undertaken, with a potential value of several millions of pounds over the lifetime of the lease. The dispute was settled by agreement after representations made by us to the council.

Janet Reger International Ltd v Tiree Ltd*

Representing the Defendant landlord, Tiree Limited, in connection with a claim by the tenant for specific performance and damages for breaching a covenant to maintain, repair and renew the structure of demised premises. The Claimant took a lease of the premises following substantial reconstruction of the building in 2000. The Defendant acquired its interest in the building after the lease was granted.

It was argued by the Claimant that the Defendant’s breach had caused damage to the basement of the premises as a result of damp. Expert evidence indicated that the damp was caused by a defectively installed damp-proof membrane. It was agreed that this formed part of the structure. The Defendant was successful in arguing that as the damp-proof membrane had been defectively installed it was not in disrepair and therefore the Defendant was not in breach.1

Dispute between an investor, a freeholder and solicitors

An investor client took a long lease of a large office building for over £70 million. Its solicitors left the registration of the leasehold title in the hands of the mortgagee’s solicitors. The title was not registered within the priority period. Outside the period and before registration the freehold changed hands for £5,000 and the new freeholder claimed to be entitled to the freehold free of the lease, which at the time was worth over £90 million.

We acted for the client in proceedings against the new freeholder and the solicitors which resulted in a settlement with the new freeholder (including registration of the leasehold title) funded entirely by indemnity insurers.

Dispute between retailer lessee and the landlord

The client was a large retailer which had taken an assignment of a lease of a superstore and sought consent for an extension. The freeholder had delayed in dealing with the application and the client had gone ahead and built the extension. The landlord was seeking to rentalise on review the improvements which the client had paid for, a difference in annual rental of some £60,000 a year over five years, and going forward for the remainder of the lease. As a result of our advice the client maintained that it had been entitled to proceed with the extension and succeeded in persuading the landlord that the extension should not be rentalised.

Tesco Stores Limited and anor ats Crestfort Limited and ors*

The client was a retailer which had taken a 25 year lease of a warehouse many years ago and long since disposed of it. The most recent tenant went into liquidation and the client, as original tenant, was forced to meet the obligations under the lease. The landlord refused consent to a proposed underletting and the client, believing this to be unreasonable, had completed the assignment anyway. We were instructed during the course of the proceedings that followed and in the subsequent dilapidations claim. The court found that the landlord had been reasonable and ordered the surrender of the underlease. A subsequent licence to the same undertenant to occupy a substantial part of the building could not be attacked by the landlord.2

Dispute between property fund landlord and substantial tenant

Representing landlord of Docklands office block in a claim that the lessee had unlawfully sublet part of the block by agreeing a sub-rent below market value. This would have significant implications on the rent review and capital value of the building. Relief claimed in the proceedings included injunctions requiring a surrender of the sub-lease. The case settled.

Paragon Finance plc v City of London Real Property Company Limited*

Representing Paragon in relation to a right of light claim in respect of one of Land Securities’ flagship office developments in the City of London. An interim injunction was obtained which halted the development and led to a satisfactory settlement. 3

Dispute between building owner (BO) and contractor

This was a dispute about unpaid building costs between our client, BO, and the claimant contractor. It was referred to arbitration and the BO was represented by costs consultants. Although it was not admitted there was evidence that the consultants were working on a contingency basis. Proceedings were taken and a declaration obtained that the BO should not be liable for any costs that the contractor might claim in the arbitration because this would be a breach of the indemnity principle. The arbitration stalled.

Dispute between a developer and a landowner

We represented the developer. The parties had entered into a conditional contract to buy and sell land for £11m at a date in the future. The seller wanted to avoid the contract to sell at a higher price, and claimed that the contract had been repudiated. Proceedings started but settled before trial.

Claim by a bank against a firm of solicitors for breach of undertaking

We represented the bank in its claim against solicitors for damages in the region of £2m. The solicitors had given an undertaking that they would procure the surrender of a lease and pay the rent in the meantime. The benefit of the undertaking was assigned to the bank and a claim was made against the solicitors. The case also involved representations to the Law Society in an attempt to have it dealt with as a matter of conduct. The claim was settled for a substantial sum following mediation shortly before trial.

Dispute between a developer and landowner

Representing a developer in a dispute with a landowner in relation to an overage payment of £850,000.00. The dispute arose because the terms agreed between the parties were not reflected in the final agreement, and this in turn gave rise to a claim against the developer’s solicitors. The case was settled by a payment from the solicitors to the landowner at no cost to our client.

Dispute between a tenant and a local authority landlord

Representing the tenant in a dispute with a local authority landlord about the demolition of a store held on a long lease. Representations made on behalf of the landowner. Proceedings were never commenced.

Dispute between retail tenant and landlord

Representing a retailer in a dispute with the owner of a retail park about an alleged infringement of a right of way. The landowner alleged excessive use and claimed damages of £700,000.00. Proceedings threatened but not taken.

Dispute between adjoining landowners

Representing a claimant in relation to its claim against a local authority about the latter’s failure to use reasonable endeavours to procure the removal of a caution over land acquired by the claimant. Proceedings commenced and injunction obtained.

Dispute between a developer and landowner

Representing a developer in dispute over the sale of land where there was also a connected solicitors’ negligence claim. In order to secure the seller’s right to an overage payment a restrictive covenant had been included in the transfer. The agreement was that if planning permission was obtained the overage payment would be made, and the covenant released. However, the agreement did not deal with the situation that would arise, and in fact did arise, if permission was not granted. The developer was forced to pay the seller £100,000.00 to release the covenant. It recovered its losses from its solicitors.

Commission for New Towns and Smith and Evis*

Representing the Commission in a dispute about whether displaced occupiers were entitled to disturbance payments under the Land Compensation Act 1973 where there was an entitlement to compensation under the Landlord and Tenant Act 1954. Claims settled prior to appeal to the Court of Appeal. 4

Hennelly ats AIB*

Representing Hennelly in a claim by AIB for possession of office premises and judgment for capital and interest of about £800,000.00. Defending the claim for possession on the basis that the security documentation was completed in escrow and that by paying part of the advance to an associated company AIB had not complied with a necessary condition. AIB obtained judgment at trial and held it on appeal.5

Holt and Payne Skillington*

Representing the Holts in a solicitors’ negligence claim for about £4m. PS had acted for the Holts in their purchase of freehold residential property in London W1, which the Holts intended to use for lettings of less than 90 days. The solicitors failed to advise that the property did not have planning permission or an established use certificate. Liability was decided in favour of the Holts at trial and a settlement as to quantum was reached following mediation.6

References

1 Janet Reger International Limited v Tiree Limited (2006) Ch D
2 Crestfort Ltd (1) Halepoint Ltd (2) Yorkstream Properties Ltd (3) v Tesco Stores Ltd (1) Magspeed Ltd (2) (2005) Ch D
3 Paragon Finance plc v City of London Real Property Co Ltd (2002) Ch D
4 (1) George Evis (2) Godfrey Richard Smith v Commission for New Towns (2001) Lands Tribunal
5 AIB Group (UK) plc v Hennelly Properties Ltd (in administrative receivership) & Ors (2000) CA
6 Holt & Anor v (1) Payne Skillington (a firm) (2) De Groot Collis (a firm) 1995 CA