A judge has given what is believed to be the first ruling in a dispute over properties sold at a sales fair.
Deputy judge Nicholas Strauss rejected a bid by the purchasers of four aparthotels in the Park Plaza Westminster Bridge Hotel to tear up their contracts and reclaim more than £250,000 in deposits paid in 2005 and 2006.
He did, however, allow a claim by a couple who paid a £78,750 deposit for a fourth, ruling that the wife never became a contracting party to the agreement made by the husband in their joint names.
The unsuccessful claimants will now seek to argue at stage two of the proceedings that their contracts with developer Marlbray Ltd were unconscionable bargains mis-sold by Marlbray’s representatives to them as “financially naive and inexperienced” buyers. They will argue that the contracts should be rescinded and their 25% deposits repaid.
However, at this preliminary stage, the judge rejected claims by Dr B. Rabiu, who paid a total of £98,875 in deposits in respect of two aparthotels; Dr O Majekodunmi and Mrs B Majekodunmi, who paid £78,750; and Mr B Olajide, who paid £76,250, that there was no contract in each case, or that the contracts were void for uncertainty or non-compliance with section 2 of the Law of Property (Miscellaneous Provisions) Act.
He dismissed their claims that they had been advised in a “negligently cursory way” by the developer’s representatives at sales fairs at the River Bank Park Plaza in October 2005 and February 2006.
He allowed the claim by Dr M Laditi and Mrs O Laditi, finding that there was no valid contract in their case as Dr Laditi had entered into the agreement on his own at the October 2005 fair.
He said that he accepted their evidence that, throughout the day, she was looking after their two young children, was outside the hotel for most of the time, was paying little attention when she was inside, and was “anxious to get away, having other plans for the day and no intention of staying so long”.
He added that Mrs Laditi never authorised her husband to enter into a contract on her behalf, nor did she know he was doing so, and that all she knew was that her husband had paid £1,000 on the day to reserve a unit in the hotel – and, he said, she was “quite annoyed about that”.
“It is clear from both [Dr and Mrs Laditi’s] evidence that she was angry about the whole thing from the start, and increasingly so when she learned, as she did, that further and more substantial deposits had to be paid, for which she had to make some contribution,” he said.
He found that, whilst a binding contract was purportedly entered into by Dr Laditi on behalf of both of them, it failed because he had no authority to enter into it and Mrs Laditi never ratified it.
In his written ruling, the judge said: “Sales fairs are held to launch sales of property developments consisting of many units, such as a large development of flats, by securing concluded contracts on the same day. This is achieved by having gone through the process of pre-contract enquiries with a firm or firms of solicitors, well in advance of the launch, and reaching agreement with them as to the appropriate contract terms.
“They are then present at the sales fair, available to represent prospective purchasers and to enter into contracts on their behalf, by exchanging with the developer’s solicitors on the same day at the sales fair.
“Sales fairs have been common events since at least the 1990s but so far as I am aware no such event has resulted in a dispute, or at least not one involving a reported decision.”
The 1,021 room Park Plaza Westminster Bridge was marketed by Galliard Homes, as agent for Marlbray, in 2005 as a “magnificent new UK landmark aparthotel overlooking Big Ben and the Houses of Parliament” with a guaranteed 6% nett income return. Galliard managed the sales fairs, at which Howard Kennedy Fsi solicitors represented the developer, and Lucas McMullen Jacobs abd Alan Winter Peace represented the various claimants.
Rabiu and ors v Marlbray Ltd Chancery (Deputy judge Nicholas Strauss QC) 28 October 2013
M Stevens-Hoare QC and Lina Mattsson (instructed by Berry & Berry LLp) for the claimants
Philip Rainey QC and Carl Fain (instructed by Howard Kennedy Fsi LLP) for the defendant
