[2023] UKUT 217 (LC)

There has been a public house on the site since the mid-19^th century. What became the Cheshire Lounge was originally known as the Nag’s Head Inn and was operated by Bass brewery. It was sold to Whitbread and had been run as a pub/restaurant under the ‘Brewers Fayre’ trading style. Mr Hunter had worked for Whitbread between 1989 and 2004, initially with responsibility for pubs in the North of England, including this one. He referred to a period of successful trading but explained that after 2005/2006 Whitbread had divested itself of its standalone estate to concentrate on its hotel business. The Brewer’s Fayre portfolio was sold to Mitchells and Butler in 2008.

In all, the Cheshire Lounge appears to have changed hands seven times since 1993 (although some transactions may have been between related companies). Notable sales were from Nobel House Inns and Taverns to Stanford Pubs Limited in May 2004 when the price achieved was £822,500 and the 2009 acquisition by DT Investments from Punch Partners where the price was £600,000. It had last been operated by a tenant, Cheshire Lounge Ltd, under a lease for a term of 21 years from 2005 at an annual passing rent of £84,000. By 2014 it had ceased to trade as the Cheshire Lounge Wine Bar and its operating company had been placed into voluntary liquidation in July 2014. The building later became derelict, and in 2015 it suffered from flooding and water ingress, but it was agreed that in November 2014 it was capable of being re-opened and operated.

In October 2014 Mr and Mrs Ramsbottom were alerted by a property developer contact that DT might be seeking a purchaser for the site. DT was represented by Peter Vinden of the Vinden Partnership.

Negotiations for the acquisition of the site were held in March 2015. Meetings were attended for the claimant by Mrs. Ramsbottom and her husband James Ramsbottom, the managing director of Elle R Leisure Ltd, the group's operating company, and by David Knowles of DT and Peter Vinden. Agreement in principle was reached for the acquisition of the site at a figure of £1,332,500. Over the next six months detailed planning inquiries were made as the claimant sought comfort about the scale of development which would be permitted and whether the planners would insist that the profile of the proposed building should be lowered so that a basement would be required.

In September 2015 Mr Vinden wrote to Mr Ramsbottom to explain that his client would be seeking other options if the claimant was not in a position to formalise the agreement. Mr Knowles also disclosed to Mr. Ramsbottom that he was in discussion with other potential purchasers and that one option being explored was to obtain planning permission for a hotel on the site. Nevertheless, by February 2016 a compromise had been agreed so that the purchase price of the site would be reduced by £100,000 if the planning authority required a basement. Solicitors were then instructed to prepare a conditional contract.

A further six months elapsed before contracts were exchanged between the claimant and DT. The contract was conditional on a satisfactory planning permission. It was also agreed that if National Highways' proposals for the new access would materially affect the use and enjoyment of the site the claimant could withdraw from the transaction.