Groveholt Ltd v Alan Hughes and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice David Richards |
| Judgment Date | 21 March 2012 |
| Neutral Citation | [2012] EWHC 686 (Ch) |
| Docket Number | Case No: HC04C00899 |
| Court | Chancery Division |
| Date | 21 March 2012 |
[2012] EWHC 686 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Rolls Building
Royal Courts of Justice
Fetter Lane,
London EC4A 1NL
Mr Justice David Richards
Case No: HC04C00899
Mr Neil Kitchener QC and Mr Zachary Bredemear (instructed by Jones Day, 21 Tudor Street, London EC4Y 0DJ) for the Claimant
Mr Pav Korpal represented the First Defendant
Introduction
The issue in this case is the amount, if any, which was secured by a legal charge dated 16 September 1998 over land at Cawdor Quarry, Matlock, Derbyshire in favour of the first defendant Alan Hughes. The charge, so far as relevant, was over that part of the property known as the Phase One Residential Land. It secured overage payments due to Mr Hughes as vendor of the property on the grant of specified planning permissions. The charge itself was released by an order of the court made on 10 June 2004 and replaced by a payment into court of £3.4 million
It is common ground that the maximum amount secured by the charge, before interest and costs, was £3 million. That amount is subject to reduction to the extent that site assembly and infrastructure costs, as defined, exceeded £4.5 million. Mr Hughes challenges many of the costs asserted by the claimant, Groveholt Limited (Groveholt), either as not relating to items falling within the relevant definitions of site assembly or infrastructure works or on a variety of other grounds specific to those particular costs. He also claims that the costs were greatly increased by delays, principally in obtaining planning permission and in the site assembly process, which constituted breaches of the relevant agreements. It is the claimant's case that there was nothing secured by the charge, while Mr Hughes argues that it secured the full amount of £3 million.
The sale contract containing the relevant provisions for the overage payments and the deduction of costs was made on 9 April 1998 between Mr Hughes as vendor and Chelverton Limited (Chelverton) as purchaser. The charge was created in accordance with the agreement. By an agreement made in December 2000 and completed in July 2001, the land was sold, subject to the charge, by Chelverton to Groveholt. Mr Hughes and Groveholt have not at any time been in contractual relations, but it is common ground that the amount, if any, secured by the charge is governed by the agreement between Mr Hughes and Chelverton and that Mr Hughes is entitled to rely for these purposes on any matter which was or would have been breach of the agreement by Chelverton.
The relevant contractual arrangements, the facts and the procedural history are complex. There have been a number of decisions on the meaning and effect of the contracts, including two by the Court of Appeal in 2005 and 2010.
The structure of this judgment is as follows:
The trial
| Subject | Paragraph |
| The trial | 6 – 19 |
| The proceedings to date | 20 – 24 |
| Backgrounds facts | 25 – 33 |
| Central issues | 34 – 35 |
| The relevant contracts | 36 – 73 |
| Earlier court decisions | 74 – 78 |
| Defences based on construction of the contracts | 79 – 104 |
| Issues on the facts: summary | 105 – 109 |
| Planning issues | 110 – 178 |
| Site Assembly | 179 – 234 |
| Infrastructure Works | 235 – 304 |
| Other defences | 305 – 306 |
| Conclusion | 307 – 311 |
The trial of these proceedings took place over a protracted period. Both sides called witnesses of fact and expert witnesses in the fields of planning and quantity surveying. There was a large amount of documents before the court. There were 21 days in court in July, October and November 2011 (21–22, 25–29 July, 10–14, 17–21, 24 and 27 October, and 1 November) which were for the most part taken up with evidence. The substantial closing submissions were made principally in writing, and were delivered on 26 October 2011 (Groveholt's closing), 25 November 2011 (Mr Hughes' closing, with a short supplement on 16 December 2011) and 20 December 2011 (Groveholt's reply).
The complexities of the case are such as to make legal representation of both parties, to put at its lowest, highly desirable in the interests of the parties and the court. While the claimant has throughout these proceedings been represented by solicitors and leading and junior counsel, Mr Hughes did not have legal representation at the trial.
At the start of the trial, I was asked to permit Mr Hughes to be represented by Mr Pav Korpal, a friend of Mr Hughes and his family. This application was not opposed by the claimant and I acceded to it. Mr Hughes is 72 years old and suffered a heart attack two years ago. Having seen him give evidence, I am entirely satisfied that he would have been unable to represent himself.
Mr Korpal has assisted Mr Hughes with this case over the last eight years. He told me that he had no legal training or prior court experience, except appearing for Mr Hughes on some applications in the present case. The pressure on Mr Korpal was considerable but he proved himself to be an effective advocate for Mr Hughes, both orally and in writing. He is intelligent and quick-witted, and was quick to learn courtroom techniques. While no doubt his cross-examination of, at any rate, the first of Groveholt's witnesses took longer than would have been the case if Mr Hughes had been represented by an experienced advocate, he soon developed a more economical style. While putting Mr Hughes' case with appropriate force, he at all times behaved with courtesy and restraint and accepted my rulings without complaint.
The time allowed for written closing submissions was to accommodate Mr Korpal, who faced a large task assimilating the documents and transcripts of oral evidence, and, so far as the claimant's substantial reply was concerned, to accommodate counsel's other commitments.
There were suggestions from time to time by the claimant that Mr Hughes had dispensed with solicitors and counsel not because he could not afford them but as part of what the claimant sees as a long policy on his part of obstructiveness and non-cooperation. The ability to pay for legal representation would have been a relevant factor in the decision whether to allow other representation, but I repeat that the application was not opposed and there was no investigation into Mr Hughes' financial position to gainsay his position that he could not afford legal representation. I am entirely satisfied that Mr Korpal sought only to provide representation for Hughes and did not try to obstruct or delay the trial.
Mr Korpal has complained in his closing submissions of a lack of disclosure in certain respects. This repeats complaints made on two applications during the trial. I rejected both applications. There are no grounds for concluding that Groveholt has not given proper disclosure.
Witnesses
Groveholt called four witnesses of fact. Eifion Phillips is a development consultant who was engaged by Chelverton and then Groveholt to manage the development on their behalf through its many stages. He was very familiar with all aspects of the project from an early stage. Richard Kilkelly is a quantity surveyor. His involvement with the project began when he was employed by a firm of project managers engaged by Chelverton. When he left that firm in 2000, he continued to work on the project, assisting Mr Phillips, particularly on the technical aspects. John Lean is a solicitor and as a partner in Lawrence Graham acted for Chelverton and then Groveholt in respect of all or most of the various agreements and negotiations. Ian Holt is a quantity surveyor who, as a partner in a firm of quantity surveyors, was engaged by Sainsbury and was involved in the project from about 2002.
For the defendant, Mr Hughes himself gave evidence. His planning expert, Mr Yarwood, was involved as head of the local planning authority until June 2001 in the planning process for Cawdor Quarry. His evidence was therefore partly evidence of fact and partly expert evidence.
This is not a case which turns to a great extent on the recollections of the witnesses. It is not necessary to spend much time on the credibility or reliability of the oral evidence. I am satisfied that none of the witnesses was seeking to deceive the court. Mr Holt, who was of course independent of the parties, was a particularly impressive and helpful witness. He had a good recollection of most of the matters about which he was asked and gave explanations which were clear and dispassionate. Mr Phillips was a loquacious witness who tended to inflate his answers with arguments on the case and to speculate about matters when his recollection was not clear. Nonetheless, there was a good deal which he could recall and I am satisfied that his evidence was honestly given. Mr Kilkelly, perhaps learning from the example of Mr Phillips, kept his answers generally short and, unless he was absolutely sure he could remember a matter, he would not give evidence on it.
In his closing submissions, Mr Korpal has alleged that Mr Phillips gave deliberately false evidence as to his knowledge of and involvement in some pre-sales of residential plots in 2004, which were not an issue in the trial. Mr Phillips denied more than passing knowledge of these pre-sales but Mr Korpal submits that this was wrong by reference to documents which were not put to Mr Phillips. There is no proper basis on which I can find that Mr Phillips' evidence on this was untruthful. I should add that Mr Korpal made similar submissions based on other...
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Groveholt Ltd v Alan Hughes and Another
...handed down judgment on the claim of Groveholt Limited (Groveholt) against the first defendant, Alan Hughes, in these proceedings: see [2012] EWHC 686 (Ch). 2 One of the issues still outstanding at that stage was a counterclaim by Mr Hughes. The parties had agreed that consideration of the ......