A London-based residential property developer is seeking more than £900,000 in damages from its lawyers after a legal dispute with a rival developer allegedly blighted its development.
Kavanagh Homes alleges that it was given negligent advice by Stringer Saul on the purchase of a development site in Arlesey, Bedfordshire. This led to a dispute with David Wilson Homes (DWH), which owned a neighbouring site, concerning access to the site and allegedly caused significant delay to the completion and sale of the homes.
In August 2000, a development site called Weaver’s Orchard, Arlesey, was transferred to DWH for the purpose of residential development.
It was allegedly envisaged that following completion, DWH would expand the development onto an adjoining site called Church Farm.
However, no agreement was reached and, in March 2004, Kavanagh began negotiations to secure the Church Farm site for its own development.
Kavanagh appointed Stringer Saul to act on its behalf in purchasing the site.
Stringer Saul allegedly confirmed to Kavanagh that it would have “full and unrestricted access” to the site over the DWH land and that it would have all necessary rights in respect of services to be installed as part of the development.
In April 2004, Kavanagh bought the site for £1.54m; the construction of 18 homes commenced and the properties were marketed.
However, in November 2005, DWH informed Kavanagh that it had no rights over its land and that Kavanagh must cease trespassing.
Owing to that threat, works allegedly ceased until February 2006, when DWH granted Kavanagh a right of access to the site and allowed services to be installed.
Kavanagh now claims that owing to that delay, completion of the development was delayed, it was unable to complete an intended refinancing of the development and was forced to enter into a company voluntary arrangement with creditors in October 2006 and the properties had become more difficult to sell because of widespread public knowledge of the dispute.
Kavanagh alleges that had Stringer Saul correctly advised it as to the situation regarding the DWH land, the issue would have been resolved before purchase and the delay would not have occurred.
Accordingly, in a High Court claim, Kavanagh is seeking lost profits of £824,000, the £61,000 costs of the legal dispute with DWH and the £20,000 costs of the CVA.
Stringer Saul, which merged with Canadian law firm Fasken Martineau to form Fasken Martineau Stringer Saul in February 2007, declined to comment.
