19 January 2022
Red alert - Winter 2022 – 2 of 6 Insights
Brook Homes (Bicester) Limited v Portfolio Property Partners Limited and Others  EWHC 3015 (Ch)
The High Court awarded damages of £13.4 million to a property development company after negotiations to develop an eco-town in Bicester broke down.
The award was made as a result of a breach of contractual obligations, including to use all reasonable endeavours, with damages award on the basis of loss of chance.
The Defendants benefited from various options over development land near Bicester and entered into agreements with the Claimant which included obligations on the parties to, among other things, ‘use all reasonable endeavours’ and ‘act in good faith’ concerning entering into a conditional sale agreement under which some of the development land was to be sold to the Claimant. The obligations also extended to structuring the overall transaction to the parties’ mutual commercial and financial benefit.
The parties failed to reach an agreement and the Claimant brought a claim seeking more than £500 million by way of damages and other various proprietary remedies.
The various categories of endeavours are:
The Court further fleshed out what is expected from an obligation to use all reasonable endeavours, stating that:
By applying this to these facts, the Court held that various incidents including failing to advance negotiations and refusing to provide a red line plan of part of the land to be sold. Consequentially, the Court made an order for damages of £13.4 million to be payable to the Claimant for loss of chance.
Landowners and developers should pay close attention before agreeing to obligations to use all reasonable (or best) endeavours, particularly where this is fortified by additional obligations such as to act in good faith.
This case confirms that an obligation to use all reasonable endeavours certainly has teeth and is closer to that of best endeavours, depending on the context.
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