Nordic Insulated Doors Ltd v Land Resources Ltd
2014
CHANCERY DIVISION
United Kingdom
CORAM
- THE HONOURABLE MR JUSTICE PETER SMITH
Areas of Law
- Property and Real Estate Law
- Contract Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
The case revolves around a dispute under a Joint Venture Agreement related to property development. The court held that the Claimant was not entitled to any share of the profits due to the JVA terminating before the sale and no valid extension being made. Additionally, the Claimant's damages claim for lost profits was dismissed. The decision emphasized the necessity of adhering to the contract terms and the legal requirements for written agreements in property transactions.
Judgment
Peter Smith J:
INTRODUCTION
This is a trial of a dispute between the parties under a Joint Venture Agreement (“the JVA”) entered into between the parties on 31 st August 2011 in relation to the development of a property situated at St Lukes Court Willerby Hull (the “Property”). In addition, the Claimant seeks a substantial amount of damages which it contends it has lost by reason of the Defendant’s failure to pay the sum due under the JVA.
The Claimant is owned and controlled by a Mr P J Finn and the Defendant is owned and controlled by Mr Frank Maguire and his wife. In essence the dispute is between Mr Finn and Mr Maguire.
They had entered into previous development opportunities before. The relationship was that Mr Finn would provide the expertise to renovate and/or improve the relevant properties and Mr Maguire would put in the finance. That was the same in respect of the JVA.
TERMS OF THE JVA
The JVA (like homemade wills) suffered from having been drawn up by the parties without legal advice.
The dispute is in respect of the split of any profits made on the sale of the Property clause 3 provides as follows:-
“3. The first 600k of profit after legal costs will go to LR. After 600k all income will be split 50-50. All income will include income from plot sales, parking, freehold.”
There was a dispute initially as to the meaning of this clause. It was contended by the Defendant in correspondence and repeated in its Defence (paragraph 6 (viii)) that the Defendant was entitled to the first £600,000 of profit i.e. after repayment of the expenses that it had put in to the JVA. Those expenses were considerable. It purchased the Property for approximately £440,000 and according to clause 3 would invest £100,000 (although it contended at trial it actually invested £160,000).
In the present case the Property was sold for a gross price of £900,000. On that analysis those funds would be allocated in accordance with clause 4 which provided:-
“4. On completion of plot sales once the 600k has been repaid the profit will be distributed 50-50 on presentation of an invoice by ND to LR.
5. Once the 600k is repaid and there is money due to ND from sales ND will have the option to buy the following units at the following prices.”
That would produce repayment of the Defendant’s funds (between £550,000 and £600,000). Then it would receive the first £600,000 of profit and then only would there be a 50/50 split. That argument leads to a conclusion that on