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Rigalian Properties V. London Dockland Development Board Notes

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RIGALIAN PROPERTIES V. LONDON DOCKLAND DEVELOPMENT BOARD FACTS The defendant, London Dockland Development Corp (LDDC), is a corporation created in 1981 by the London Docklands Development Corporation (Area and Constitution) (Amendment) Order 1981. The two plaintiffs, Regalian Properties plc and Regalian Homes Ltd, which are companies in the same group, carry on the business of property development. In 1986 LDDC owned four pieces of land in Wapping which it wished to see developed by the building of houses and flats. They were known as 'Hermitage Basin', 'Hermitage Wall', 'Orange Court' and 'Hermitage Riverside I'. The developer would pay a capital sum for the grant of the licence, which would include a provision (referred to as an 'overage' provision) whereby any amounts ultimately realised by the developer from the sale of units in the development over sale prices, to be specified in the building licence, would be shared between the developer and LDDC as to 30% to the developer and 70% to LDDC. Regalian's bid was accepted by a letter dated 25 July 1986 from LDDC to Mr Lee Goldstone of Regalian. The letter was headed 'Subject to contract'. Regalian produced designs drawn by a firm of architects, which it proposed should be the architects to design the whole development. LDDC was not particularly impressed by this firm's proposals for the two Riverside sites, on which LDDC understandably wished to see a particularly prestigious development. As a result LDDC persuaded Regalian to use two other firms of architects recommended by LDDC in addition to the firm originally chosen by Regalian. I accept Regalian's allegation that this change of architects did have the effect of increasing the cost to Regalian of the production of final designs for the whole Hermitage development. Regalian had in effect no option but to accept LDDC's suggestions as to the architects to be instructed, since LDDC was not only owner of the land, but also the relevant planning authority, and, as was apparent from the terms of LDDC's acceptance letter to which I have referred, Regalian had to satisfy the requirements of LDDC both as landowner and planning authority before it would succeed in obtaining a building licence of the development site.... Indeed, as time went by Regalian found itself spending ever increasing sums of money on fees paid to experts of one sort or another both for the purpose of producing detailed designs for the proposed

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