Redrow Homes Ltd v Martin Dawn (Leckhampton) Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Hodge |
| Judgment Date | 13 April 2016 |
| Neutral Citation | [2016] EWHC 934 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: C30MA390 |
| Date | 13 April 2016 |
[2016] EWHC 934 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY
Manchester Civil Justice Centre
1 Bridge Street West
Manchester M60 9DJ
His Honour Judge Hodge QC
(Sitting as a Judge of the High Court)
Claim No: C30MA390
Mr Edward Bartley Jones QC (instructed by Redrow Homes Limited Legal Department) for the Claimant.
Mr David Holland QC (instructed by Taylor Wessing LLP) for the Defendant.
His Honour Judge Hodge QC:
This is my extemporary judgment on the hearing of an application for summary judgment by Redrow Homes Limited against Martin Dawn (Leckhampton) Limited (claim no. C30MA390).
On the hearing of this summary judgment application the claimant (and applicant) is represented by Mr Edward Bartley Jones QC. The defendant (and respondent) is represented by Mr David Holland QC. Both have submitted detailed written skeleton arguments which I have had the opportunity of pre-reading. Mr Bartley Jones addressed me in opening for about an hour. Mr Holland responded for about 45 minutes. Mr Bartley Jones then addressed me in reply for a little under 15 minutes. I adjourned just after 12.35 until 1.45 and I am now proceeding to deliver this extemporary judgment.
By a claim form issued in the Manchester District Registry of the Chancery Division on 31 st March 2016, the claimant (to which I shall refer as "Redrow") seeks an order for specific performance of the defendant's contractual obligations under clause 15.9 of a legal charge dated 10 th February 2014 and made between the defendant (as chargee) and the claimant (as chargor) to execute an agreement under section 106 of the Town and Country Planning Act 1990 to be entered into between Redrow and Tewkesbury Borough Council as the local planning authority for a development site at Leckhampton.
The application for summary judgment was issued at the same time. It is supported by a witness statement of Mr Iain Mason, a solicitor and the legal director of Redrow, dated 22 nd March 2016. Mr Mason exhibits various documents to his witness statement as exhibits IM/1 through to IM/11.
The application for summary judgment and supporting documentation was received electronically from Redrow by the defendant during the course of Monday 4 th April 2016. Hard copies of all of the documents were received on the following day, 5 th April.
The defendant has filed evidence in opposition to the summary judgment application in the form of a witness statement from Mr Ronald Martin dated 11 th April 2016 to which are exhibited various documents as exhibits RM/1 and RM/2.
The background to the application can be taken from the particulars of claim which are dated 22 nd March 2016 and are verified by a statement of truth from Mr Mason. They were settled by Mr Bartley Jones. By a written contract dated 9 th December 2013 and made between the defendant (as seller) and Redrow (as buyer), Redrow agreed to purchase from the defendant approximately 45 acres of freehold land on the west side of Farm Lane and the north side of Church Road, Leckhampton. That contract was completed by the transfer of the property from the defendant to Redrow on 10 th February 2015. The contract required Redrow to enter into a first legal charge over the property and also required Redrow, on completion, to enter into an overage deed with the defendant. Those documents were duly entered into.
For the purposes of its terms, the contract divided the property into three parcels: the red land, the blue land and the green land. At the date of the contract, only the red land was allocated for residential development, and had been so allocated since at least the adoption, in March 2006, of the Tewkesbury Borough Local Plan. Subsequent to the date of the contract, the blue land also became allocated for residential development. It was this that led, on 30 th September 2014, to Redrow and the defendant entering into a deed of variation of the contract, one of the effects of which was to subsume the blue land into the red land for the purposes of the terms of the contract. On completion of its purchase of the property on 10 th February 2014, Redrow duly paid the defendant the basic purchase price payable under the terms of the contract of £3.6 million (plus VAT). Under the terms of the contract, there was also provided to be paid a further sum defined as the "TVG Deferred Instalment". That was duly paid by Redrow to the defendant on 23 rd June 2014 in the sum of £2.4 million. The sale contract also provides for the making of a deferred payment by Redrow to the defendant. That sum is to be calculated in accordance with the provisions of schedule 1 to the contract. That uplift in price is to be calculated only in respect of the red land by multiplying £831,640 by the "Net Developable Area" of the red land (as defined in the contract).
In addition to the deferred payment, there are also sums potentially payable under the original overage deed. Following the allocation of the blue land for residential development, on 30 th September 2014 the defendant and Redrow entered into the deed of variation of the contract, replacing the original overage deed with a revised form of overage deed, and varying the provisions for instalment payment of the deferred payment so as to allow for the issue of an avalised promissory note in the sum of £5.475 million in favour of Mr Ronald Martin. That promissory note was issued to him on 30 th September 2014.
The legal charge, as entered into by Redrow with the defendant on 10 th February 2014, contains a provision (in clause 3) whereby Redrow, with full title guarantee, charged the property to the defendant by way of first legal mortgage as a continuing security for the payment or discharge of the "Secured Amounts". It contained (in clause 1.1(cc)) a provision whereby the "Secured Amounts" were defined for the purposes of the legal charge as meaning (i) "all present and future monies owed" by Redrow to the defendant under the provisions of the contract or the legal charge itself including (without limitation) the Deferred Payment and the TVG Deferred Instalment; and (ii) each Planning Overage Payment (as earlier defined), and (iii) all VAT and interest in accordance with the provisions (as applicable) of the contract, the legal charge itself and the original overage deed.
Clause 15.9 of the legal charge is in the following terms: "The Chargee will at the cost of the Chargor co-operate in the dedication or adoption of land contained within the Property and required for infrastructure or services and shall upon request by the Chargor consent to or join in the creation of any Planning Agreement [defined as including a section 106 agreement] with the Chargor and the relevant local planning or highway or utility authority and the grant of wayleaves or other easements required by the relevant highways authority, drainage authority and/or utility providers or as may be deemed necessary by the Chargor in order to procure the grant of any planning permission relating to the Property or to procure the construction, maintenance, dedication and (if applicable) the adoption of all roads, sewers, service media and ancillary infrastructure serving or intending to serve the Property Provided that in the case of documents to which the Chargee is requested to be joined as a party any such agreement or other document expressly provides that the Chargee is joined as a party only for the purposes of consenting to the arrangement and that the Chargee is not required by the terms of such agreement or document to enter into any covenants or other obligations until such time (if any) as the Chargee as mortgagor may be a mortgagor in possession."
It is said in the particulars of claim that Redrow has to date paid to the defendant under the contract (as varied) sums greatly in excess of the agricultural value of the land, that is to say, the true value of the land if planning permission for residential development were not to be granted.
The grant of planning permission for the residential development of the property is said to have been controversial and difficult. However, planning permission for residential development is now available if, but only if, agreements under section 106 of the Town and Country Planning Act 1990 are entered into with both Gloucestershire County Council and Tewkesbury Borough Council. Both of those authorities initially required the defendant, as mortgagee, to be a signatory to the section 106 agreements. However, Gloucester County Council has agreed to remove the defendant as a signatory, and the Gloucester section 106 agreement was executed on 2 nd March 2016. Particulars of those allegations are then provided under paragraph 18 of the particulars of claim.
It is said that a further complexity arises from an inquiry into the Joint Core Strategy Area, for the purposes of which it is said to be vital for Redrow to show to the Joint Core Strategy Area inspector that the red (including the old blue) land is immediately deliverable for residential development. It is said that Redrow has negotiated and agreed to the terms of the section 106 agreement with Tewkesbury Borough Council, which has accepted those terms. On execution of that section 106 agreement by each of Redrow and the defendant, Tewkesbury Borough Council's resolution of 29 th September 2015 to grant full planning permission for the development of 377 dwellings on the land will be carried into effect by Tewkesbury Borough Council's officers under and in accordance with the delegated...
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