No payout for property developer despite court ruling

(John Stillwell/PA Wire)

Property developer Christian Candy came away empty handed from the High Court today after a judge ruled on his multimillion-pound claim over the Chelsea Barracks development in London.

Mr Justice Vos found Mr Candy's Qatari partners in the project breached the terms of their agreement by withdrawing planning permission after the intervention of the Prince of Wales.

But the judge said Mr Candy's company, CPC Group, was not entitled to the early payment of £68.5 million under the terms of the contract.

He said he would consider the issue at a later hearing if CPC seeks damages for the breach of the contract.

Mr Justice Vos said both CPC and Qatari Diar Real Estate, the partners in the development, "were faced with a very difficult position once the Prince of Wales intervened in the planning process".

"His intervention was, no doubt, unexpected and unwelcome."

The judge was told at a hearing last month that the Qatari company had withdrawn the planning application for the modernist development after Charles wrote to the chairman of Qatari Diar, who is also the prime minister of Qatar, saying that his "heart sank" when he saw the design by architect Lord Rogers.

Lord Grabiner QC, representing CPC Group, said: "He urged Sheik Hamad bin Jasim to reconsider the plan before it was too late and attached a scheme by a different, classical architect he preferred.

"Prince Charles and Lord Rogers had form in the way that they had previously crossed swords and Prince Charles's opposition to modern architecture is notorious."

Sheik Hamad is the cousin of the Emir of Qatar, who had been invited by Charles to a meeting in London when the Emir was said to have been "surprised" by Lord Rogers' designs for the barracks site and would have them changed, said Lord Grabiner.

The 12.8-acre barracks site is in one of London's most expensive residential areas and was sold by the Ministry of Defence for £959 million to Qatari Diar and CPC Group.

Mr Candy claimed the Qatari company breached the terms of their contract and must make a payment that was due if the scheme by Lord Rogers was approved by the planners.

The planning application was for 638 homes, a luxury 108-bedroom hotel, restaurant, community hall, sports centre, shops and park with a cafe.

By the Sale and Purchase Agreement in November 2008, CPC sold its interest in the site to QD for £37,917,806 with a further payment totalling a maximum of £81 million depending on the success of the planning application.

QD promised to use "all reasonable, prudent endeavours" to secure the best terms for the deferred payment and both parties agreed to owe each other a duty to act in good faith.

Mr Justice Vos said Charles first wrote to Sheikh Hamad in March last year "expressing his dislike" for the Chelsea Barracks design.

After the Emir met Charles in May that year, Sir Michael Peat, the prince's private secretary, prepared a note of the meeting "that the Emir was surprised by the Rogers design" and would have it changed.

On June 12, QD withdrew the planning application.

The judge said: "The Mayor of London, Mr Boris Johnson, at various stages, both personally and through his officers at the Greater London Authority, expressed his concerns about the proposals.

"The Mayor's concerns were not the same as the Prince of Wales's concerns. The Mayor thought the scheme was repetitive and lacked variety, whilst the Prince disliked its modernity and was looking for something more traditional."

Mr Candy had alleged "bad faith" by the Qataris and the judge said he had to decide on the evidence from both sides.

He said he had found Mr Candy "a broadly truthful witness" and his answers "mostly disarmingly candid".

But he said Ghanim bin Saad Al-Saad, QD's chief executive officer at the time, was "not a reliable witness".

"He was plainly motivated by a desire to keep both the Emir and Sheikh Hamad out of the picture."

The judge found that QD was acting in the best way it could in "a very difficult political situation" to secure planning permission in the shortest possible time.

"It was making the best of a bad job."

But he said by withdrawing the application, it had breached the terms of the contract.

"QD was not withdrawing because it wanted to, or because it wanted to stop CPC getting its money.

"It was between a rock and a hard place, and was doing the best it could in difficult circumstances."

He said CPC would in theory be entitled to damages for the breach but was not entitled to an early settlement of the deferred payment.

Mr Justice Vos concluded: "It would be commendable if the outcome of this judgment were that the parties, even at this late stage, started to work collaboratively together to achieve the best possible planning permission, as they had envisaged they would under the terms of the SPA."

A spokesman for QD said after the ruling: "CPC's aim in bringing this action was ultimately about money.

"They wanted early payment of a sum potentially due to them under a contract and they have failed."

Neil Kitchener QC, acting for Mr Candy, told the judge today that CPC would be seeking costs of the case to take into account his finding that there was a breach of contract.

"Despite QD's behaviour, CPC is taking very seriously the judge's observation that it might not be too late for CPC to once again work in collaboration with Qatari Diar."

Mr Candy, who was in court to hear the ruling, declined to comment.

Ruth Reed, president of the Royal Institute of British Architects, commenting on the judgment, said: "The evidence presented to the High Court during this trial details the inappropriate behind-the-scenes methods used by the Prince of Wales to object to the original design for the Chelsea Barracks scheme, which effectively derailed a project which had been proceeding through the planning system.

"The UK has a democratic and properly constituted planning process: any citizen in this country is able to register their objections to proposed buildings with the appropriate local authority.

"The Prince of Wales, like any individual, is entitled to raise concerns about architecture, but we regret that, on this occasion, he failed to engage with the planning process entirely openly and appropriately.

"The message that this affair sends to overseas investors considering working on UK projects is very concerning; it is vital that we promote the UK as a world-class country where the best quality architecture can be invested in, and built.

"We value The Prince of Wales' interest and experience in the built environment and the excellent work of The Prince's Foundation, but one person in a position of considerable influence in public life should not be able to exert undue influence on democratic decision-making."