Venulum Property Investments Ltd v 1) Space Architects Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Edwards-Stuart |
| Judgment Date | 17 December 2013 |
| Neutral Citation | [2013] EWHC 3948 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 17 December 2013 |
| Docket Number | Case No: HT-13-143 |
[2013] EWHC 3948 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
London EC4A 1NL
Mr. Justice Edwards-Stuart
Case No: HT-13-143
Miss Anneliese Day QC (instructed by Dentons UKMEA LLP) for the Claimant
Mark Sefton Esq (instructed by Field Fisher Waterhouse LLP) for the 1 st to 4 th Defendants
Richard Harrison Esq, (instructed by Wilkins Beaumont Suckling Ltd) for the 5 th and 6 th Defendants
Hearing dates: 15 th and 22 nd November 2013
Introduction
This is an application by the Defendants to strike out the claim on the grounds that it discloses no reasonable cause of action or has no realistic prospect of success. The Defendants fall into two groups. The First to Fourth Defendants have been referred to, in the face of mild protest, as the Developer Defendants. I shall, for convenience, adopt that term. The Fifth and Sixth Defendants are a chartered surveyor, Mr. Ungemuth, and a company that he controls. They have been referred to collectively as the Agent Defendants.
There were also before the court submissions by the Developer Defendants and the Agent Defendants opposing what they understood to be an application by the Claimant for relief from sanctions (because it had not served its Particulars of Claim in time). For reasons which I gave at the hearing, I allowed the Claimant a further extension of time in which to serve the Particulars of Claim. Very briefly, I came to the clear conclusion that the Claimant had made an application which was the subject of a consent order (extending time to 18 April 2013) that was before the court at the hearing on 11 April 2013. At that hearing I expressly, and advisedly, declined to make or approve the consent order, including the giving of necessary directions, pending the outcome of the application relating to the other defendants that was then currently before me. Through what I think was probably a misunderstanding, the Claimant did not serve its Particulars of Claim within the time to which the Defendants had agreed, which resulted in it making an application on 28 June 2013 for a further extension of time, and so the only prejudice upon which the Defendants could have relied was as a result of the few weeks that elapsed between 18 April 2013 and the actual date of service of the Particulars of Claim in June 2013. Apart from the omission of the word "draft", the Particulars of Claim was served in its original form. No-one suggested that any of the defendants had been caused any prejudice by this additional delay, and so in those circumstances I concluded that the position adopted by the Developer Defendants and the Agent Defendants was misconceived.
The Claimant is a regulated mutual fund incorporated in Grand Cayman, Cayman Islands, licensed by the Cayman Island Monetary Authority. It is said that it operates as an open ended investment fund for private client personal pension funds. Investors buy shares in the company, which in turn invests in properties held and developments managed by Venulum Capital Ltd, a British Virgin Islands licensed investment manager. Mr. Giles Cadman is the director and principal driving force behind the Claimant. The main investors are high net worth individuals based in the United States of America.
The claim relates to a potential, but as yet unrealised, residential property development, known as Enterprise Square, Bective Road, Northampton ("the Site").
The background
The Developer Defendants were not in any contractual relationship with the Claimant. The proposal was that the Claimant would purchase the Site from Realacre Limited ("Realacre") and then provide the funding for it to be developed by a team supplied by the Defendants. The majority shareholder in Realacre was a company known as MRP Developments Limited ("MRPD"). Realacre and MRPD were originally named as defendants in these proceedings but I was told that the claim against them is no longer pursued because both companies have been dissolved and no longer exist. Realacre and MRPD were in turn owned or controlled by Mr. Willmott and Mr. Anderson, the Third and Fourth Defendants, respectively. Mr. Willmott is an architect.
In 2005 the First Defendant ("Space"), which carries on practice as architects, prepared plans for the development of the Site on behalf of Realacre, allegedly using the plans prepared by a consultant architect previously retained by the Claimant. Those plans were based on there being 152 apartments with 171 parking spaces but, by November 2005, it was proposed that there would be 155 apartments with a basement car park containing 176 car parking spaces.
On 11 November 2005 Space made a planning application to West Northamptonshire District Council on the basis of these drawings. On 28 February 2006 it submitted amended plans. On 27 June 2006 planning permission for 155 units was granted. It was a condition of the grant of planning that "… the parking space(s) and/or garage(s) shown on the submitted plan shall be constructed prior to the first occupation of the buildings hereby approved and retained thereafter". The permission was subject to 18 conditions and to the conclusion of a section 106 Agreement.
The Second Defendant ("MRPDS") is a company that carried on business as architects and was owned or controlled by MRPD. Space was associated with MRPDS. It was anticipated that the architects that Space employed who had prepared the drawings (or their services) would at some stage be transferred to MRPD. MRPD was said by the Claimant to have been retained by Realacre.
The Agent Defendants were engaged by the Claimant directly and, indeed, Mr. Cadman and Mr. Ungemuth had apparently had a working relationship going back to about 1995. Since about 2005 Mr. Ungemuth has acted as the Claimant's property agent, identifying proposed building projects and investments. It is alleged that, in the course of that role, he proposed the purchase of the Site by the Claimant.
On 20 July 2006 Mr. Willmott, acting on behalf of Space, wrote to Mr. Ungemuth enclosing a revised RIBA SAFA 99 Standard Form of Agreement for the Appointment of an Architect for the purposes of 24 months post-planning architectural services, noting that the "architectural corporate vehicle will be MRP Development Services Ltd" and that the architects working on the project for MRPDS would be those, or some of those, who had worked for Space.
The subsequent events are set out in my judgment dated 22 May 2013. In short, on 7 September 2006 the Claimant entered into a contract for the purchase of the Site, planning consent for which had been given in principle for the development of 155 flats together with 171 parking places. Final planning permission had not then been granted because the precise terms of the section 106 Agreement remained to be agreed. It was a term of the contract that if planning permission was not granted by 31 December 2006, either party would be entitled to rescind the contract and the deposit would be repaid to the Claimant with interest.
It is important to explain precisely how this contract worked because it is an aspect to which great importance has been attached. It was divided into two parts, Part A and Part B. Part B did not come into effect unless a certain condition was fulfilled. That condition was the grant of planning permission before 31 December 2006. Under the terms of Part A the Claimant's only obligations were: a) to pay the deposit of some £450,000; and b) to do what was reasonably required to assist the seller, Realacre, in obtaining planning permission. If the condition was fulfilled, the Claimant was then obliged to complete the contract.
Planning permission was granted on 1 November 2006 (at least, no earlier). The Claimant issued proceedings on 31 October 2012, more than six years after it entered into the contract on 7 September 2006. However, if time under the Limitation Acts started running on the date when the planning permission was granted and the condition fulfilled, the Claimant is just in time. This is common ground.
The approach
The principles relating to an application to strike out or for summary judgment by a defendant against the claimant were very clearly set out by Lewison J (as he then was) in the case of Wetherspoon v Van de Berg & Co [2007] EWHC 1044 (Ch), where he said, at paragraph 4:
"Both the application to strike out and the application for summary judgment are summary applications. The application for summary judgment is made by defendants against a claimant, which is less usual than an application by a claimant for judgment against a defendant. The authorities deal mainly with applications by claimants. The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success: Swain v Hillman [2001] 2 All ER 91;
ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]
iii) In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v...
To continue reading
Request your trial
-
Raayan Al Iraq Company Ltd et Al v Trans Victory Marine Inc. et Al
... ... judgment of Mr Justice Edwards-Stuart in Venulum Property Investments Ltd v Space Architecture ... ...
-
Geoffrey Hobson v West London Law Solicitors
... ... acted for the Claimant in relation to a property development loan that was entered into for the ... 24 Venulum Property Investments Limited v. Space ... failures pre-date the Jackson Reforms and others post-date them. As appears from the remarks of ... ...
-
Table of cases
...Investments Ltd v Space architecture Ltd [2013] EWhC 1242 (TCC) III.26.171 Venulum property Investments Ltd v Space architecture Ltd [2013] EWhC 3948 (TCC) III.26.49 Veolia ES Nottinghamshire Ltd v Nottinghamshire County Council [2010] EWCa Civ 1214 I.4.17 Veolia Water Solutions & Technolog......
-
Litigation
...BLR 90 at 95, per Saville LJ. he damage must be more than contingent: see Venulum Property Investments Ltd v Space Architecture Ltd [2013] EWHC 3948 (TCC). 168 Limitation Act 1980 (UK) section 2; Limitation Act 1969 (NSW) section 14(1)(b); Limitation Ordinance (Cap 347) (HK) section 4(1)(a)......