1) Berkeley Community Villages Ltd 2) Berkeley Group Plc v 1) Fred Daniel Pullen 2) Kathleen Marguerite Pullen 3) Alan John Pullen

JurisdictionEngland & Wales
JudgeMR JUSTICE MORGAN
Judgment Date07 June 2007
Neutral Citation[2007] EWHC 1330 (Ch)
Docket NumberCase No: HC07C00908
CourtChancery Division
Date07 June 2007
Between
1) Berkeley Community Villages Limited
Claimants
2) Berkeley Group Plc
and
1) Fred Daniel Pullen
Defendants
2) Kathleen Marguerite Pullen
3) Alan John Pullen

[2007] EWHC 1330 (Ch)

Before

Mr Justice Morgan

Case No: HC07C00908

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Derek Wood QC and Wayne Clark (instructed by Ashurst) for the Claimants

Christopher Pymont QC and Andrew Ayres (instructed by Hallett & Co) for the Defendants

Hearing dates: 14 th, 15 th 16 th & 17th May 2007

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

MR JUSTICE MORGAN MR JUSTICE MORGAN

The issue

1

The Defendants are the freeholder owners of Chilmington Green Farm, Great Chart, Ashford, Kent. Their farm comprises some 840 acres. By an agreement dated 12 th December 2003 (“the Agreement”), the Defendants agreed with the First Claimant that the First Claimant would use its property development expertise to maximise the potential of a substantial part (some 520 acres) of the Defendants' land for development; in return the First Claimant would receive a fee in certain specified circumstances. The issue which arises in this case is whether the Defendants are free to sell the part of their farm which is the subject of the Agreement or, as the First Claimant contends, a sale of that part of the farm by the Defendants would be an actual or an anticipatory breach of the express and/or implied terms of the Agreement.

The Claimants

2

Berkeley Group Plc is an established property developer in London and the South East. It has over twenty five years' experience of providing quality residential and mixed use developments. It has a subsidiary, Berkeley Residential Limited, which itself has subsidiaries, including Berkeley Strategic Land Limited and Berkeley Community Villages Limited. The First Claimant is Berkeley Community Villages Limited and it was the contracting party in the Agreement. The Second Claimant is Berkeley Group Plc. The Second Claimant does not assert any cause of action but was joined as a claimant so as to give an undertaking to support an application for an interim injunction sought, and obtained, by the First Claimant.

The Defendants

3

The three Defendants are, respectively, father, mother and son. The father is now aged eighty five, the mother is aged eighty seven and the son is in his fifties. The Defendants are dairy farmers and own about 840 acres of land at Chilmington Green. The Defendant who was principally relevant, in relation to the negotiations which led up to the making of the Agreement, was the Third Defendant, John Pullen. John Pullen's awareness of the planning background and planning opportunity is disclosed by his Witness Statement. His personal involvement in planning matters potentially affecting the land went back to 1989. Around that time, the Defendants were advised by a chartered surveyor and by planning consultants. His Witness Statement describes further events in the long planning history in 1991, 1998 and 1999 but I need not recite the detail of those. By 2000, the Defendants were being advised by the firm of Hobbs Parker, Land and Estate Agents, in Ashford. That firm suggested to the Defendants that they arrange for interested developers to present proposals to the Defendants. Over two days in September 2000, the Defendants were given presentations as to the development potential of their land by the Berkeley Group and by two other house builders. Between 2000 and 2002, there were negotiations with the Berkeley Group and with another house builder, but in August 2002 the Defendants decided to wait and see how the planning process evolved. Negotiations appear to have been revived in December 2002. From this time until the making of the Agreement, the Defendants were advised by Mr Lightfoot of Hobbs Parker and in the later stages had the benefit of legal advice from a Mr McDonald, a solicitor and partner in the firm of Hallett & Co of Ashford.

The planning background to the Agreement

4

I have some evidence as to the planning background prior to the making of the Agreement and a great deal of detailed evidence as to planning events which have occurred since the date of the Agreement. I do not propose to rehearse in this judgment the detail of the events which have occurred since the date of the Agreement. Those events had not, by definition, happened when the parties entered into the Agreement. Mr Wood QC (who appears with Mr Clark on behalf of the Claimants) submitted to me that I should look at the post-Agreement events because I would be able to hold that the events which actually happened were, more or less, the events which the parties would have predicted would happen if they had made their prediction as at the date of the Agreement. I agree with Mr Wood that the parties' expectations as at the date of the Agreement are a material part of the background facts but I do not believe that I can simply look at what actually happened and equate that, even more or less, with what the parties would have expected would happen. In so far as it is relevant to consider the parties' expectations at the date of the Agreement, those matters ought to be determined by reference to the events leading up to the making of the Agreement.

5

I was told that the relevant local plan was the Ashford Local Plan which was to govern the position in the period 2000–2006. At the date of the Agreement, the land in question was zoned for agriculture in that local plan. Further details as to the planning background are given in the Witness Statement of Gerald Allison, FRICS. In summary, he stated that Ashford had been an area of expansion since the mid 1950s and Central Government had given policy support to the idea of expansion through the South East Regional Plan, the Kent Structure Plan and the Ashford Local Plan. The Office of the Deputy Prime Minister had nominated Ashford as one of three growth areas in the South East region. Under the Sustainable Communities Plan, Ashford was destined to double in size with 31,000 new dwellings and 28,000 additional employment opportunities by 2030. In 2003, the Office of the Deputy Prime Minister created a new body called “Ashford's Future”. This body was made up of a large number of authorities and other bodies including Ashford Borough Council, English Partnerships, the Environment Agency, Kent County Council, Central Government Departments and others. The new body was charged to deliver growth in Ashford by co-ordinating development and infrastructure. This body sought to act by agreement and on the basis that private developers would provide new homes and business accommodation and contribute towards the cost of the infrastructure needed to support the expansion in the area.

6

Some further evidence as to the planning background was given in the Witness Statement of Mr Brown of 2 nd May 2007. Mr Brown is a Director of the First Claimant. Mr Brown referred to the Sustainable Communities Plan with its target figures for homes and jobs. He stated that this plan required a change to the pre-existing Regional Guidance contained within RPG 9 in relation to the Ashford growth area in respect of the period to 2016. Proposed Alterations to the Regional Guidance, South East, were first published in July 2003 for consultation; the final version was published after the Agreement was entered into. The Proposed Alterations did not define the immediate area in which the Defendants' land was situated as a Growth Area. In September 2003, a company in the Claimants' group of companies submitted representations in relation to the Proposed Alterations. Mr Brown stated that the Claimants' group was invited to attend the examination in public of the Proposed Alterations to RPG 9 and, in November 2003, the Claimants' group submitted a statement for use at the examination in public, which was scheduled to take place on the 15 th December 2003.

7

Mr Brown also described that, at around the same time, in November 2003, the deposit draft Kent & Medway Structure Plan had been published for public consultation. This plan was to provide the strategic planning framework for the period to 2016 within the county of Kent. The Claimants' group submitted representations in relation to the draft Structure Plan in November 2003.

8

The various emerging planning documents to which I have referred were prepared in accordance with the provisions of the Town and Country Planning Act 1990. The relevant provisions of that Act in force at the time were sections 29–54, 70 and the definition of “development plan” in section 336 (1).

9

In July 2002, the Office of the Deputy Prime Minister announced revisions to the system of structure and local plans and these changes were enacted in the Planning and Compulsory Purchase Act 2004, the relevant part of which was brought into force in relation to England, after the date of the Agreement, on 28 th September 2004. The relevant provision of the 2004 Act is section 38.

10

Because it was known in 2002 and 2003 that major changes to the development plan system were in prospect, the Office of the Deputy Prime Minister gave advice as to the implications of the proposed changes for work on development plans that was then in progress. This advice was given in a letter of 5 th December 2002 and further advice was given in a letter of 13 th June 2003.

The negotiations prior to the Agreement

11

I will next refer to some of the steps in the negotiations which took place between 16 th December 2002 and the making of the Agreement on 12 th December 2003. Although I was shown a number of documents which recorded the negotiating position from time to time and although some of these documents were of some limited value in...

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