Lidl remains “optimistic” over the outcome of a High Court case between it and a developer over the future of an £6.8m development site in Essex.
The discounter’s insistence came despite Lidl regional property director Robert Beaumont saying in court on 22 January that its director of property and development, Ingo Fischer, had instructed “a u-turn” on a lockout agreement with vendor Sans Souci Enterprises in 2013.
This agreement had named Generator Developments as Lidl’s development partner in the purchase of the 2.4-acre site in Wates Way, Brentwood. Generator subsequently alleged that Lidl cut it out of the project.
The mixed-use developer claimed Lidl picked up the site, earmarked for a Lidl store and 80 homes, for substantially less than the highest bid on the strength of Generator’s reputation - one personally known to the vendor and trusted to deliver.
Generator gave evidence that Lidl had given no warning of its changed intentions and continued to encourage it to expend time and money on a joint venture.
Beaumont confirmed contacting housebuilder Crest Nicholson, without Generator’s knowledge, on the next working day after Lidl had exchanged contracts to buy the site.
Asked whether Lidl should have been “open and honest” at an earlier stage, Beaumont answered: “Looking back, that probably may have been something that we should have done or could have done.”
Fischer did not appear in court last week to explain his actions.
Generator argues that Lidl now holds the site on “a constructive trust” under principles established in 1953 known as a Pallant v Morgan equity.
The precedent allows one party to sue for a share in a property when the other agreed to acquire it on behalf of them both, but then fails to honour that agreement.
This rule applies even when no contract has been signed. If breach of trust is proved then Lidl will be forced to sell the site to the highest bidder, potentially losing their site to a rival supermarket.
The case concluded on Tuesday but it could take up to two months to announce the judgment.
“The decision to commence legal proceedings was not one we took lightly and we desperately tried to avoid it. I telephoned Lidl’s MD, Ronny Gottschlich, and emailed him, but he refused to engage with me. We had no choice.”
“I feel totally vindicated by the evidence given in court during the past week. Lidl had a sound deal on the table from us and it is now clear that they threw it away without having anything to gain. No one was offering them more than we were offering,” said Generator Developments managing director Paul Isaacs,
He said Lidl could have been cutting the ribbon on a new supermarket by now and instead it might find it had to be sold to a competitor supermarket.
A spokesman for Lidl insisted: “Negotiations were subject to contract and subject to both companies’ board approvals and did not result in a concluded deal. We are optimistic about the outcome of the hearing and await the judgment in due course.”
No comments yet