Property development: damages claims must be comprehensively pleaded

The Commercial Court has considered claims for damages arising from an aborted development near Bolton in Raja and others v Holden and others [2022] EWHC 3085 (Comm), reinforcing the need for claims to be comprehensively pleaded if they are to succeed. The claimants purchased two of five plots on the development. Planning permission for the site, obtained prior to the defendants’ acquisition of it, involved extending an existing farmhouse, demolishing outbuildings and erecting four new houses. In 2016, the claimants entered into contracts for the purchase and construction of plots: Elendra and Piral Raja for plot 1; and Peter and Alison Thompson for plot 5 – a new house in place of the farmhouse. However, the site was not developed in accordance with the planning approval: the new houses were larger in footprint and volume than permitted and transgressed the lawful baseline of development. The farmhouse was demolished and plot 5 comprised a new house. The defendants submitted an application for planning permission to retain the houses, but this was refused. In June 2018, the council served an enforcement notice requiring demolition of the houses and they were demolished. The claimants argued that the contracts for sale of plots 1 and 5 formed part of a development package incorporating an overarching development contract in respect of each plot with express or implied terms that each plot would be constructed in accordance with planning controls. Those terms had been breached and the claimants sought damages to put themselves in the position they would have been in had they not entered into the contracts. A misrepresentation claim encompassed representations by the individual defendants: (1) that the claimants could design their own dwelling; (2) that everything was in place in terms of planning controls; and (3) that building contractors would not start work before planning permission was received. The claimants also pleaded an assumed duty of care to provide accurate information which the individual defendants had breached. By the date of trial, the claims against the third and fourth defendants had been compromised. The court was satisfied that the defendants acquired the land for development pursuant to a joint venture in the wider sense but there was no overarching development contract with the claimants. The Rajas’ claim for misrepresentation failed: the first and third representations were not statements of fact, more in the nature of a promise, and there was no sound evidential basis for the second representation having been expressly or impliedly made to them. The Thompsons succeeded. It was crucial to them that they were entitled to demolish the farmhouse and build a new house on plot 5 without breaching planning control. They successfully established that they relied on the second representation in entering into the contracts for plot 5 and would not have done so without it. They were entitled to damages.  The claim for breach of duty in negligence failed: the putative information was not described and no details were pleaded as to the first defendant’s personal responsibility for it or the claimants’ reliance on it. Louise Clark is a property law consultant and mediator