Sheffield City Council has won a legal battle with a property developer that, in its opinion, didn’t develop a plot of land fast enough.
The council agreed to sell a plot at Hoyle Street, Sheffield, to developer Scotfied Group Ltd in 2019 for £2.5m.
According to a judgment handed down today, the land was to be used for housing, commercial and retail space. Trial judge Judge Kelly said the council had “had difficulties with other developers in respect of previous land sales”.
Therefore, the council wanted to ensure the agreed development scheme would actually be built. In the past the land had been sold on, or the agreed development had been changed by developers. As a result, it negotiated terms that gave it more control of the development.
As part of the agreement, the developer was obliged to obtain planning permission for the development and provide evidence of a “building contract” to prove the development would take place.
While developer did obtain planning permission, 17 months after the sale agreement, it still hadn’t provided evidence of a building contract, so the council sought to exercise the terms of the agreement and re-conveyance the land back, while also keeping the deposit paid for the land.
The case ended up in a legal dispute with the developer saying the council hadn’t given it enough time, and lawyers for both sides arguing about the nature of the contract.
In a ruling handed down today in Leeds, the judge backed the council.
He ruled that 17 months was “more than reasonable time” for the the developer to provide evidence that building was going to take place.
He also said there were no exceptional circumstances that mean the council should return the deposit to the developer.
He terminated the sales contract and declared that the council is entitled to keep the deposit. The judgement didn’t give the value of the deposit.
Sheffield City Council v (1) Scotfield Group Ltd (2) Camstead Ltd
High Court Business and Property Courts sitting in Leeds (HH Judge Kelly) 15 May 2023
