BL-2025-000402 - [2025] EWHC 2974 (Ch)

In November 2018, W&S ceased to act for Powis and was replaced by Forsters in December 2018.

On 7 April 2019, the new solicitor for Powis, Mr Jonathan Ross (who, now at Keystone, still acts for Powis) emailed Mr Pilling to share his concerns regarding the claim. His view was that a five-year overage period in and of itself was not necessarily insufficient; the problem had been that the boundary dispute (caused by Cradick’s negligence in drawing up plans) had slowed the otherwise expected progress of the development, and then the ultimate developer, Laxcon, had held back on starting sales. Mr Ross said:

“The real failure of Wallace as I see it was to not include in the Overage Schedule any obligation on the Developer to carry out the works and use reasonable endeavours to complete sales within the 5 year period. …

So I think my main points for discussion are as to whether we have focussed on the right claims against the Defendants (and Wallace in particular) in this regard and whether we can make them good re causation if it was Laxcon who delayed the works to avoid liability.”

Mr Ross’ focus was therefore that there might be a better way of putting the claim against Wallace. He had no questions or observations to make about the way the claim against Cradick was pleaded. Mr Pilling’s response engaged with Mr Ross’ concerns about the claim against Wallace.

At some point after that email, however, Powis instructed new leading counsel, Mr David Halpern KC. Privilege has not been waived in relation to the instructions given to and advice received from Mr Halpern, but in any event on 25 July 2019 Powis applied to amend the Underlying PoC.

On 21 May 2021, Deputy Master Smith heard Powis’ application to amend and granted some but not all the proposed amendments. The amendments not allowed are characterised by Powis as the claims which Mr Pilling negligently failed to plead. The Court decided that these claims were each statute-barred and new claims not satisfying the conditions referred to in CPR r.17.4(2)”. The proposed amendments were in almost identical terms to the sub-paragraphs of paragraph 38 of the Particulars of Claimin this action which sets out what Powis describes as “the Relevant Claims”. The Relevant Claims against Cradick in broad terms relate to (a) a failure to include a best endeavours provision in the Heads of Terms and (b) a failure to advise Powis as to the risks of the Overage Period running from exchange of contracts rather than completion:

“(1)

Failed to negotiate with Dagmar to include in the Heads of Terms a provision requiring Dagmar (or its successor in title) to use all reasonable endeavours to undertake and complete the development and sell the residential units within a reasonable time and/or within the overage period; alternatively Cradick failed to advise Powis directly or through Wallace that such a provision should be included;

(2)

On the contrary, despite knowing that Powis wished to include an obligation to build, negligently advised that it was "very doubtful" that Dagmar, or indeed any purchaser, would agree to such a provision …

(3)

Failed to advise Powis that the overage period (if any) should run from the date of actual completion or alternatively the Effective Date under the Dagmar Contract and not from the date of exchange of contracts

(4)

Failed to advise Powis that the consequence of starting the period from the date of exchange was that it would effectively be significantly less than five years, because of the length of time which it would take to obtain planning permission (including the necessary S.106 Agreement) and then to await the expiry of the Judicial Review period prior to completion;

(5)

Failed to advise Powis that there was a significant risk that the overage period drafted by Wallace would expire before the date when the development might reasonably be expected to have been completed and the residential units sold, especially if (i) there was no obligation on Dagmar as set out in sub-paragraph (1) above and (ii) the overage period was as short as five years from the date of exchange of contracts”

Trial witness statements were exchanged in January 2023. Mr Cradick’s evidence stated that he suspected that once the Heads of Terms were considered by the solicitors, the need for an overage period was picked up, and Dagmar came back and negotiated that point with him; that he would then have taken instructions from Powis on the point over the telephone; and he would then have instructed Wallace to include the overage period. Mr Khalastchi’s witness statement on behalf of Powis states that he was the main contact between Powis and Cradick and Wallace in relation to the Dagmar Contract and continued to maintain (at 28(i)) that there had been no discussion of the Overage Period with Powis in 2011.

By a Settlement Agreement dated 23 April 2023, Powis settled its claims against Cradick and Wallace, pursuant to which Wallace agreed to pay Powis £1,050,000 and Cradick agreed to pay Powis £740,000 in addition to an earlier payment by it of £125,000.

Powis says if these claims pleaded by Mr Halpern had been in the original draft of the Underlying PoC, then Cradick would have settled not for £865,000 but for “at least” £3,600,000, together with a further £565,185.79 in respect of Powis’ costs of the Underlying Claim.