Land Securities Plc v Fladgate Fielder (A Firm)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Etherton,Lord Justice Moore–Bick,Lord Justice Mummery |
| Judgment Date | 18 December 2009 |
| Neutral Citation | [2009] EWCA Civ 1402 |
| Docket Number | Case No: A3/2009/0810 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 December 2009 |
[2009] EWCA Civ 1402
Lord Justice Mummery
Lord Justice Moore–bick and
Lord Justice Etherton
Case No: A3/2009/0810
HC08C00177
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
DEPUTY JUDGE LIVESEY
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Christopher Nugee QC and Mr J Evans (instructed by Linklaters LLP) for the Appellants
Mr Alan Steinfeld QC and Mr Tom Leech (instructed by Barlow Lyde & Gilbert) for the Respondents
Hearing dates : 21 and 22 October 2009
Lord Justice Etherton :
Introduction
This is an appeal from an order dated 25 March 2009 of Mr Bernard Livesey QC, sitting as a Deputy Judge of the Chancery Division, by which he gave summary judgment for the Defendants against the Claimants under CPR 24.2 and dismissed the action.
The Claimants allege that the Defendants are liable for substantial damages in tort for threatening and bringing proceedings against Westminster City Council (“Westminster”) for Judicial Review of the grant of planning permission for development of a site in Victoria, London, SW1 (“The Wilton Plaza Development”). The essence of the claim is that the Defendants' predominant purpose for threatening and bringing those proceedings was not to obtain relief against Westminster by quashing the permission, but in order to put pressure on the Claimants to assist the Defendants to relocate their offices. The issue before the Deputy Judge, and on this appeal, is whether the Claimants' claim is sufficiently arguable to be allowed to proceed to trial.
The Facts
The Claimants (“LS”) are part of a group of property development companies. It is not necessary, for the purpose of this appeal, to distinguish between them.
The Defendants are a firm of solicitors, practising from offices at 25 North Row, just south of Oxford Street, London. At the material time the Defendants occupied the offices under a lease dated 5 April 1988 for a term of 25 years from 25 March 1988, and so expiring on 24 March 2013, at an annual rent of £820,000. By the end of 2005 the Defendants' management committee had decided to make plans for the future expansion of the firm into larger and newer premises with a longer term. In January 2006 they decided to instruct property agents to arrange disposal of the residue of their existing lease and to find those other premises.
Opposite the Defendants' offices, on the other side of the road, which was a narrow one, was a 1960s retail and residential block with a prominent tower, called Park House. On 31 January 2006 LS applied for planning permission to develop Park House by the erection of a modern retail, office and residential block with two basements and 10 floors above ground level. The work of demolition and reconstruction was expected to take in the region of three years, following which fitting out was to take place.
The Defendants received notice of that application in early February 200They were concerned that the proposed development would adversely affect the marketability and value of the residue of their lease, and would frustrate their plans for relocation.
A planning partner of the Defendants, Mr Harnett, inspected the planning file in relation to Park House at Westminster's offices. He discovered that, in addition to the application for the development of Park House, LS had on 13 August 2005 made an application for the Wilton Plaza Development. He considered that there was a connection between the two developments concerning affordable housing. In an email to the Defendants' managing partners, he explained that a certain percentage (usually approximately 30 per cent) of affordable housing must be provided on site in connection with any residential development. LS were proposing, however, that no affordable housing should be provided on site at Park House. They were intending to “over-provide” affordable housing on the Wilton Plaza Development, and to secure Westminster's agreement that the “over-provision” would be used to offset the failure to provide affordable housing on other schemes of LS, such as Park House (“the housing credit policy”). Mr Harnett said in the email that he would like to discuss the possibility of taking Judicial Review proceedings in respect of the planning application for the Wilton Plaza Development. He continued:
“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.”
Mr Harnett attached to the email a note on strategy (“the Strategy Note”) in which he said that he thought that LS would ultimately obtain a consent, but that a planning objection and Judicial Review, with an attack on the housing credit policy, would cause potential problems with the development of Park House, including delay and making the development less valuable because of the need to accommodate more low value elements, such as social housing and community facilities. The Strategy Note included the statements: “Need persuade LS that… we can cause problems they can avoid”, and “the AH credit scheme key to Park House development and strategically important for LS generally – it is novel and believe prospect could be declared unlawful – prospects moderate”, and “Note – Don't collaborate with the other objectors – makes deal more difficult”.
On 23 February 2006 Westminster's Planning Committee resolved to grant permission for the Wilton Plaza Development. The resolution included a paragraph specifically agreeing the housing credit policy (“the Credit Resolution”). The broad effect intended to be achieved by the Credit Resolution is reflected in the following passage of the planning officer's report:
“A high proportion of affordable housing is proposed, above normal policy requirements. The applicant, Land Securities, is requesting that the increase in both market units (over and above the floorspace in the previous permission on this site) and affordable units proposed, form a “residential credit” under a “land banking strategy” to be used against other mixed use/commercial/housing schemes by Land Securities in the future (subject to planning), where it is not viable /feasible to provide the full requirement of market housing and/or affordable housing sought under mixed use policies on site. The principle of a “credit” has been accepted by the Council on previous occasions”.
The Defendants took advice from Mr Lockhart-Mummery QC. He advised in writing on 13 March 2006 that he could see no basis on which the Credit Resolution could possibly be lawful, and set out the grounds for an application for Judicial Review. He summarised the position in paragraph 12 of his Opinion as follows:
“For the above reasons, it is my opinion that the formulation of the land banking strategy is unlawful. The essential grounds for any application for judicial review would, in brief, be (1) that it is unlawful to formulate such a planning strategy which is not a general land use strategy but one designed to benefit exclusively one individual, and (2) that in any event, the substance of the strategy, and the process by which it is evolving, constitutes an unlawful departure from established processes for the making of land use policy.
On 31 March 2006 LS applied to Westminster for permission to develop Park House, intending to make use of the Credit Resolution.
At the end of March 2006 the Defendants approached LS for a meeting. Before the meeting the Defendants sent LS a copy of Mr Lockhart-Mummery's Opinion. A meeting took place on 5 April 2006 between Messrs Cohen, Harnett and Goreing of the Defendants and Mr Hussey of LS. What was said at the meeting forms a critical part of LS's allegations.
Witness Statements of those who attended the meeting show similarities to a significant degree, but also some differences of emphasis. Mr Cohen said in his witness statement:
“I also said that the firm was anticipating three years of “hell” while the development was under construction. Mr Hussey asked me what we wanted. I remember him saying “Do you want money?” to which I replied: “Absolutely not”.
I suggested that one way out would be for Land Securities to take an assignment of our lease. I said that this would enable us to “slip away” with Land Securities' assistance. Otherwise an alternative would be to delay the development of Park House until the end of our lease in 2013. ……… Mr Goreing asked Mr Hussey if Land Securities had any stock in W1 (which would have enabled us to swap our existing building for other premises)”.
Mr Hussey said in his witness statement, however, that he thought that the Defendants were looking for a financial payment and a windfall. He said:
“My view is that the financial co–operation they sought, whilst unidentified, was intended by them to go beyond assistance in their plans to relocate, although it was...
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