Sale of property — Terms of agreement — Clause requiring vendor to provide satisfactory evidence that building not listed — Purchaser arguing that vendor failing to comply with obligation — Vendor seeking declaration of entitlement to moneys held in escrow — Whether purchaser acting reasonably — Claim allowed
The claimant purchased a four-storey property for development. The property was not listed but it was adjacent to a church, school and priory that were Grade II listed and were occupied by an order of hermit friars. A question arose as to whether the property was within the curtilage of the adjoining listed building.
The defendant agreed to purchase the property from the claimant for £2.6m. By clause 4.5 of the sale agreement, the claimant was required to provide to the defendant, prior to completion, satisfactory evidence that the property was not listed within the Planning (Listed Buildings and Conservation Areas) Act 1990. If such evidence was not provided, the purchase price was to be reduced by £200,000.
A dispute arose as to whether the claimant had provided satisfactory evidence that the property was not listed. A supplemental agreement was therefore entered into, whereby the £200,000 would be held in escrow to be paid to the claimant upon confirmation from the local planning authority that listed building consent was not required or a final determination by the court that the claimant had provided satisfactory evidence that the property was not listed. The claimant subsequently applied to the court for a declaration that it was entitled to the moneys in escrow.
The question for the court was whether the defendant had acted reasonably in contending that the claimant had not provided satisfactory evidence that the property was not listed, notwithstanding that the claimant had provided: (i) an expert report that concluded, on the merits and on consideration of published planning policy guidance, that the property was not a listed building; (ii) correspondence with English Heritage that concluded that the property was not listed within the Act; and (iii) a statutory declaration by one of the trustees of the order of friars that stated that the order had ceased to use the property in 1987 and did not intend to re-establish that use.
Held: The claim was allowed.
On the construction of clause 4.5, no purchaser, acting reasonably, could have adopted the position taken by the defendant. The evidence to be provided was not required to achieve certainty. It was impossible to put the matter beyond reasonable doubt until a final determination of the issue by the court or by the planning authority when they came to address the question of planning permission.
The defendant was seeking to apply a test to the evidence that was not required by clause 4.5. To require the claimant to provide conclusive evidence would be to import an obligation into the agreement that was not in the minds of the parties when they entered into the sale agreement. The claimant had produced evidence of relevance and quality that could be deployed to persuade a planning authority that the property was not listed.
Thus, the claimant had complied with clause 4.5 and was entitled to the £200,000 held in escrow.
Wayne Clark (instructed by Halliwells) appeared for the claimant; Benjamin John (instructed by Kirkpatrick & Lockhart Nicholson Graham LLP) appeared for the defendant.
Eileen O’Grady, barrister