Appellant purchasing land for development — Appellant and respondents entering into overage agreement — Appellant selling car-parking spaces independently from housing units — Whether prices of parking spaces to be included in aggregate sales price for purpose of calculating overage — Appeal dismissed
The appellant purchased land from the respondents for the purpose of developing the land for, inter alia, housing. The respondents were entitled to overage based upon the achieved sale prices of the residential units in the development. The units were not all to be sold with car-parking spaces, and, as a result, a dispute arose as to the formula whereby the overage was to be calculated. The respondents maintained that, for the purposes of the agreement, the aggregate sale price for the residential units included sums paid in respect of parking spaces. The appellant maintained that the parking spaces were marketed separately to the flats, which meant that the revenue from those sales was to be treated separately and not as part of the global figure.
At first instance, judgment was given for the appellant, but this decision was overturned on appeal. The appellant maintained, inter alia, that the appeal judge had erred in considering its entitlement to deduct the overage on the basis of events subsequent to the contract.
Held: The appeal was dismissed.
On the evidence, the appellant had always intended to sell the car-parking spaces to the occupiers of the residential units, which meant that they did form part of the global price of the property. The price of one residential unit included items that were not, in ordinary terms, part of the property, such as the right to use common parts and other communal facilities, and the “gross sale price” referred to in the agreement would therefore have included the price of such a “bundle of rights” over and above the sum paid for the bricks and mortar. There appeared to be no more reason to deduct the value of the right to a car-parking space than the right to a terrace or the use of other ancillary facilities.
The appeal judge had been correct in substance, although he had erred in formulating his judgment on the basis of correspondence and actions undertaken subsequent to the contract.
Jonathan Seitler QC and Jonathan Small (instructed by DLA) appeared for the appellant; James Thom QC (instructed by Watson Farley & Williams) appeared for the respondents.
Vivienne Lane, barrister
