Colliers’s property co-investment subsidiary Deanwater Estates has won a High Court dispute with the freeholder of its former Watling Street offices to avoid a final schedule of dilapidations.
Deanwater was defending a £400k damages claim, for failure to deliver up in repair, on the basis of an agreement with the building’s previous owner, Lionbrook Property Partnership.
In 1980, the 10,936 sq ft offices at 73 Watling Street, London EC4, were leased to Deanwater, formerly known as Gooch Webster, for 25 years.
However, in 2001, Lionbrook decided to recover possession of the ground and basement floors to enhance its own adjacent retail development.
Lionbrook therefore agreed that if Deanwater surrendered that part of the building it would be granted a new five-year lease over the rest of the building and would not face a final schedule of dilapidations at the end of that term.
In December 2004, Deanwater exercised a break clause and the lease came to an end.
In February 2005, the property was sold to Business Environment Bow Lane Ltd (BE), which served a final schedule of dilapidations on Deanwater.
Refusing the claim, Briggs J said that he had found “on the narrowest of balances” that the claim must be dismissed on the basis of the prior agreement.
BE was granted permission to appeal.
Business Environment Bow Lane Ltd v Deanwater Estates Ltd Chancery Division (Briggs J) 5 December 2006.
Mark Warwick (instructed by Howard Kennedy) appeared for the claimant; Jonathan Ferris (instructed by Michael Conn Goldsobel) appeared for the defendant.
References: EGi Legal News 06/12/06
