The strict meaning of “commercial use” of land has been the focus of a High Court case, which has ended with the judge deciding that it can include housing development.
The dispute was over land at Arleston, near Telford in Shropshire, close to junction 6 of the M54. The site was sold to Castlemore Securities for £25,000, with a proviso that if it later sold it on for commercial use, it would pay the original sellers 50% of anything it received in excess of the original £25,000 sale price.
The land was later sold to Harwood House (Midlands) for £265,000 for housing development, but Castlemore claimed that this did not render it liable to pay the extra 50% to the original sellers. It argued that the contract term “any commercial use” did not include residential development.
However, the judge ruled that it was wrong and that under the terms of the contract it was liable to pay 50% of the excess to the original sellers of the land.
Castlemore Securities Ltd v Wellings, Chancery Division (Parker J), December 3 1998
John Male (instructed by Wragge & Co) appeared for the plaintiff; David Stockill (instructed by Lanyon Bowdler, of Telford) appeared for the defendant.
PLS News 04/12/98