Brooke Homes (Bicester) Ltd v Portfolio Property Partners Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Hugh Sims |
| Judgment Date | 11 November 2021 |
| Neutral Citation | [2021] EWHC 3015 (Ch) |
| Docket Number | Case No: PT-2018-000933 |
| Court | Chancery Division |
[2021] EWHC 3015 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (ChD)
Rolls Building
Fetter Lane
London
EC4A 1NL
Mr Hugh Sims QC SITTING AS A DEPUTY JUDGE OF THE HIGH COURT
Case No: PT-2018-000933
Michael Jefferis (instructed by HA Law) for the Claimant
Kirk Reynolds QC and Julia Petrenko (instructed by Underwood Solicitors LLP) for the Defendants
Hearing dates: 6, 7, 8, 11, 12, 13, 14, 15 and 18 October 2021
APPROVED JUDGMENT
Mr Hugh Sims QC:
INTRODUCTION
Land to the North-West of Bicester, in Oxfordshire, was designated for the building of a zero-carbon “eco-town” in 2009. Four eco-towns were then announced by the UK government, but Bicester is the sole survivor of that concept, and much of it is still yet to be built.
The overall master plan for North-West Bicester, drawn up by Farrells Architects, included the development on some 1,000 acres of land of c. 6000 units of zero-carbon homes, with a mix of affordable housing, infrastructure, schools and leisure facilities. The North-West Bicester site was the largest single strategic site allocated in the adopted Cherwell District Council (“CDC” or “the Council”) local plan, and central to its housing targets being met.
One part of the land has been developed as part of the “Exemplar” phase, now called Elmsbrook, built by a developer called A2 Dominion (“A2D”). This claim arises out of the proposed development of another part of the land, including land at Himley Farm, which is yet to be built, though it was the focus of a joint venture involving some of the parties to this litigation.
The claim is for an order for specific performance of a contract for the sale of as much as 500 acres of land, or in any event for c. 100 acres of land, and/or for declaratory relief that a “ Pallant v Morgan equity”, or constructive trust, arises over certain of the land, and/or for equitable compensation, or a claim for damages, in excess of £500 million, in lieu of an order for specific performance and/or by reason of alleged breaches of contract and/or misrepresentation.
I shall now trace out some of the more relevant parts of the background to the claim. These facts are, uncontroversial, or substantially so. Any significant disputes of fact are addressed later in this judgment, when I analyse the issues.
THE BACKGROUND FACTS
Stephen Nardelli, an entrepreneur, caused the First Defendant company, Portfolio Property Partners Limited (“PPP”), to be set up on 22 June 2009, with a view to collecting in a portfolio of the land for development for the eco-town. It was envisaged it would be a parent company for the “P3 Group” and other companies were set up, including the Second Defendant, P3 Eco (Bicester) Himley Limited (“P3 Eco”), which was incorporated on 31 August 2010. In the event whilst described as a group, PPP was not a shareholder in the “subsidiaries”, such as P3 Eco, though they were controlled by the same directors. Mr Nardelli is the principal shareholder in, and a director of, PPP, and he is also a director and shareholder in P3 Eco. Whilst not strictly a group, where I refer to the P3 Group below that should be taken to include references to PPP and P3 Eco so far as the context requires. References to the P3 parties below is to both the first and second defendants. I should also add that the parties referred in their evidence, and in submissions, to P3 as shorthand for some or all of the P3 Group, PPP and P3 Eco. As a result on occasion below references, quotations or summaries which refer to P3 also include references to PPP and/or P3 Eco, though I shall endeavour to maintain the distinction in this judgment.
Mr Nardelli began the process of gathering in the land portfolio for development, after incorporation of PPP and P3 Eco, by approaches to the local landowners. The land in question is predominantly agricultural land, owned by various farming families. One of the options which was secured in relation to the Exemplar Site was with the Phipps family. There are two other options which concern the land relating to this dispute.
The first of those is identified in an option agreement entered into on 3 November 2010 between the following parties: (1) Rosemary Louise Henson; (2) Julian Francis and Catharine Rachel Murfitt; and (3) P3 Eco (“the Murfitt Henson Option”). This covered about 220 acres of freehold land with registered title at HM Land Registry under two title numbers: ON245151, being land at Himley Farm, Chesterton, Bicester, and ON245153, being land lying to the West of Howes Lane, Bicester. This was subsequently varied on more than one occasion, including to extend the first exercise option date until 6 months after grant of planning permission. The option price for the first option was £150,000 per acre. It was also subsequently recognised as including an option over title ON318263, known as land at Himley Barns, Chesterton, Bicester, though this did not appear in the original text.
On 2 November 2011 P3 Eco, but not PPP, entered into an Amendment and Restatement Agreement with a developer, A2D, and various other parties. As recorded in that agreement A2D was the selected registered provider for the provision of affordable housing in the project, as defined in that agreement, and as provider of private sale plots in the Exemplar site, and having an option to provide up to 10 per cent of other private sale units.
On 29 October 2014 a further option agreement was made between (1) Philippa Maria Aline Pain and Georgina Maria Pain and (2) PPP (“the Pains' Option”). This is the second option which is relevant to this claim, and covered about 30 acres of freehold land with registered title at the Land Registry under title number ON237022, being land at Middleton Stoney, Bicester. This provided for an option period of 4 years, a deposit of £2m to be paid within 28 days of confirmation of a resolution to grant, and a price of £5m (or 80% of a market price to be determined in accordance with a formula). On a pro rata basis (and assuming a 30 acre site) this was £166,666 per acre, so a little more expensive than the Murfitt Henson Option, which no doubt reflected the more advanced progression of the project by this time.
The P3 parties then held options to purchase some 250 acres, part of the land which is in issue in this case. Having secured rights to acquire some of the land over which the eco-town was to be built, the P3 parties needed to obtain outline planning consent. This required them and the Council (and Oxfordshire County Council) to agree, and enter into, a section 106 agreement (under the Town and Country Planning Act 1990). On 31 December 2014, the P3 parties applied for outline planning consent for development of 227 acres of the land comprised in the Murfitt Henson and Pains Options (application no. 14/02121/OUT). This sought permission for development to provide up to 1,700 residential dwellings (Class C3), a retirement village (Class C2), flexible commercial floorspace (Classes A1, A2, A3, A4, A5, B1, C1 and D1), social and community facilities (Class D1), land to accommodate one energy centre and land to accommodate one new primary school (up to 2FE) (Class D1). Such development was to include provision of strategic landscape, provision of new vehicular, cycle and pedestrian access routes, infrastructure and other operations (including demolition of farm buildings on Middleton Stoney Road). The entirety of the 227 acres was referred to in the planning application as the proposed “Himley Village”. I shall refer to it as that below, albeit noting it has yet to be built.
Having started the planning application process the P3 Group was also interested in finding a developer who would be suitable for the project, and which could develop the land. This is where the Claimant comes in.
John Holleran has worked for many years in the utilities sector and set up the Holleran group of companies, a utilities and groundworks contractor, operating in that sector. By 2004 he had started Brooke Homes Limited (“BHL”). He set up BHL in order to capitalise on their position as a utility contractor, as various utility providers were keen to sell land. Land was purchased by Mr Holleran, via his corporate vehicles, at Deal and later Chatham, both in Kent, as a result of these connections. Mr Holleran had set up Brooke Homes Developments Limited (“BHDL” or “Brooke”) for the acquisition of the land at Chatham, a former Southern Water depot. This had planning permission for 110 residential units and BHDL intended to develop the site in accordance with a planning permission using a modular housing concept. The Brooke companies had acquired BOPAS accreditation for modular housing and had an association with Adston, who constructed modular housing units in Ireland. They had a factory facility in Ashford, Kent. A third party identified that Brooke/Mr Holleran might be a suitable developer on the project at Himley Village, with modular housing being compatible with the eco-town concept, and made the introduction to the P3 Group/Mr Nardelli in or about early 2015.
A meeting was held between those parties, attended by, amongst others, Mr Holleran, Mr James Costello and Mr Paddy Doyle, on the Brooke side, and by Mr Nardelli and Graham Johnson, on the P3 Group side, at which they discussed the possibility of Brooke...
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