Supermarket chain Lidl was today taken to court over claims it exploited a joint venture agreement with a developer to secure a £6.5m site in Brentwood, Essex.
Lawyers representing Generator Developments launched its claim that the German retailer had abandoned the joint venture deal agreed prior to Lidl’s acquisition of the site in 2014.
Generator claims that it is entitled to a share of the land under a “Pallant v Morgan” constructive trust – named after a 1953 case.
The developer says that the law is simple, and that such a trust applies where parties agree to acquire property for their joint benefit, and one of them refrains from attempting to acquire the property in reliance on that agreement.
Generator claims that it and Lidl agreed a joint venture, under which the supermarket chain would rely on the developer’s expertise in obtaining planning permission for mixed use on a site that was zoned for residential.
Generator claims it negotiated the purchase for an unconditional price, when the seller had actually received higher offers that were conditional on grant of planning permission. However, for reasons that are subject to some debate between the parties, the site was bought in Lidl’s name.
Lidl has declared an intention to bring the site to market, but Generator hopes to win the opportunity to seek and obtain planning permission, which would considerably increase the site’s value, then take a share in the profits on eventual sale.
Lidl is fighting the action, which is being heard over five days by deputy judge Nicholas Lavender QC.
