Land Securities Plc & Others v Fladgate Fielder ( A Firm)
| Jurisdiction | England & Wales |
| Judge | Bernard Livesey QC |
| Judgment Date | 25 March 2009 |
| Neutral Citation | [2009] EWHC 577 (Ch) |
| Date | 25 March 2009 |
| Court | Chancery Division |
| Docket Number | CLAIM NO. HC 08 C00177 |
[2009] EWHC 577 (Ch)
IN THE HIGH COURT OF JUSTICE
Bernard Livesey QC Sitting as a Judge of the Chancery Division
CLAIM NO. HC 08 C00177
CHANCERY DIVISION
Mr Alan Steinfeld QC and Mr Tom Leech, instructed by Barlow Lyde & Gilbert LLP, of London EC3, acted for the Defendants.
Mr Christopher Nugee QC and Mr Jonathan Evans, instructed by Linklaters LLP, London EC2, acted for the Claimants.
APPROVED JUDGMENT
Deputy Judge of the High Court
th March 2009
This is a claim by the claimants 1 to recover damages in the region of £17 million on the grounds that the defendant (“Fladgate”) has committed against them the tort of abuse of process. In short, they allege that Fladgate made an objection to an application made by the claimants for planning permission to develop two properties, for the improper and collateral purpose of seeking to procure from the claimants a collateral benefit in money or money's worth.
In this application Fladgate seeks to strike out the claim under CPR 3.4(2)(a) on the grounds that it does not disclose a reasonable cause of action and under CPR 3.4(2)(b) on the grounds of abuse of process; alternatively it seeks summary judgment pursuant to CPR Part 24 (2).
Background Facts in Brief:
The background facts in brief are as follows: the claimants are companies in the well-known property group. The second and third claimants are subsidiaries of the first claimant (“LS”), and are engaged in property developments at Wilton Plaza Victoria, London, SW1 (“Wilton Plaza”) and at Park House in Oxford Street, London W1 respectively.
Fladgate is a firm of solicitors whose principal offices are at 25 North Row, London W1, which it owns and occupies by virtue of a lease expiring in March 2013. North Row is perversely on the south side of, and parallel to, Oxford Street and Fladgate's premises are directly opposite the proposed development site at Park House.
By the end of 2005 Fladgate's management committee had decided to make plans for the future expansion of the firm into larger and newer premises with a longer term. On the 10 th January 2006 they gave instructions to property agents to take steps to arrange the disposal of the residue of their existing lease and find those other premises.
Out of the blue, on or about the 6 th February 2006, Fladgate received notice that application had been made by the third claimant for the demolition of Park House and the erection of a new building comprising two basements and 10 floors above ground level; the work of demolition and reconstruction was expected to take in the region of 3 years following which fitting out was to take place.
The view taken by Fladgate was that this would be “three years of hell”; that the prospect would immediately affect adversely the marketability and value of the residue of their lease and would frustrate their plans for relocation; that the dust and noise would seriously damage the amenity of those working at the firm; and that its turnover could be reduced by anything up to 25% while the work was in progress. Fladgate has made no secret of the fact that, while the redevelopment of the site might have merit (and they had no hostility in principle to the proposed scheme) they were hostile to it taking place while they were adjacent to the works.
The first step Fladgate took was to arrange for a planning partner to inspect the planning file in relation to Park House at Westminster Council's offices. He there discovered that, in addition to the application by the third claimant in relation to Park House, the second claimant had on 13 th August 2005 made an application for the development of land at Wilton Plaza, which he judged to have a link or connection with the Park House application. In an email entitled “Planning Objection – Strategic Issues” dated 22 nd February 2006 to the Managing Partners he explained the link, stating so far as material as follows:
“What I would like to discuss in particular tomorrow is the possibility of taking judicial review proceedings in the High Court in respect of the planning application for the redevelopment of Wilton Plaza Victoria. The link between this scheme and Park House concerns the issue of affordable housing. In brief a certain percentage (usually approximately 30 per cent) of affordable housing must be provided on site in connection with any residential development. Land Securities is proposing however that no affordable housing should be provided on site at Park House. Instead LS is intending to “over-provide” affordable housing at the Wilton Plaza development and get the Council to agree that the “over-provision” represents a credit which could be used to offset the failure to provide affordable housing on other Land Securities schemes, such as Park House.
I believe that we should give serious consideration to attacking this for the following reasons:
1. The idea of an affordable housing credit is novel and I believe that there may be reasonable grounds for challenging this in the High Court;
2. The concept is important in connection with the proposed development of Park House. If affordable housing will have to be provided on site at Park House the profitability of the scheme will be significantly affected.
3. The idea of the affordable housing credit is strategically important for a developer such as Land Securities who would seek to use it in connection with other schemes also.
4. It is an early shot across the bows of Land Securities and would give a firm signal of our intentions.”
The notes which he attached to the email showed that he considered possible actions including making a planning objection to both Wilton Plaza and the Park House applications; that he thought a nuisance action was unlikely to succeed but would “cause delay and cost”. On the strategic front he considered that LS would ultimately get a consent if they persisted but could face potential problems from delay and changes to the plans which would make the development less valuable for Fladgate; he therefore thought there was a “need [to] persuade LS that (1) we can cause problems they can avoid.” A decision was made to put in a holding objection to the Park House application, to work up detailed objections on selected areas and present detailed objections to LS before submitting. It was his judgment that the assisted housing credit scheme was “key to Park House development and strategically important to LS generally”. The final point stated: “Note – Don't collaborate with other objectors – makes deal more difficult”.
Fladgate took advice from Mr Lockhart-Mummery QC who expressed the confident opinion that the approach of the claimants and the planners was “extraordinary” and advised on 13 th March 2006 that the formulation of the land banking policy (which is later herein referred to as the “Credit Resolution”) was unlawful in that it was a policy formulated not as a general land use strategy but to benefit exclusively one individual and was anyway an unlawful departure from the established processes for making land use policy. He advised that an application for judicial review was appropriate.
The Critical Meeting:
On 31 st March 2006 Fladgate arranged for a meeting to take place with a representative of the claimants at Fladgate's offices on 5 th April 2006 and sent them a copy of the Opinion of Leading Counsel “relating to the proposed development at Wilton Plaza, Victoria, which is linked to the Park House Scheme … in the hope that this will lead to a positive discussion when we get together.”
A meeting took place on 5th April 2006 between Messrs Cohen, Harnett and Goreing of Fladgate and Mr Hussey of LS. It lasted some 20 or 30 minutes. It is an important meeting because what was said there lies at the heart of the claimants' allegations in this case.
It is pleaded in the Particulars of Claim that Mr Cohen, after referring to the feared impact on the defendant's business of the proposed development:
a. “Stated that the proposed development at Park House looked fine;
b. Wished the claimants well with [it];
c. Indicated that the defendant wished to relocate from its current premises at North Row;
d. Stated that the Defendant's opposition to the Second Claimant's application for planning permission in relation to Wilton Plaza was purely a business transaction;
e. Stated that the Defendant would do anything necessary to secure a move away from its current premises, including if necessary a challenge to the proposed development of Wilton Plaza;
f. Stated that the Defendant's purpose in challenging the grant of planning permission for the development at Wilton Plaza was to delay that development and thereby possibly delay the Park House development;
g. Stated that, … the Defendant's other option would be to object to the application for planning permission in relation to the Park House development and to be “very difficult all of the time”;
h. Stated that he saw the applications for planning permission made by the Second and Third Claimants as the Defendant's best opportunity to force the Claimants to the negotiating table to effect a relocation of the Defendant's business to alternative premises;
i. Stated that if the Claimants did not put forward a proposal to the Defendant within the next few days, the Defendant would make the matter public and would issue an application for judicial review.”
Witness statements served by each side from those who attended the meeting show similarities to a significant degree but some differences, mainly of emphasis. There is one seemingly...
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