Whilst this case doesn’t appear to have been widely reported I think it is interesting from many angles.
In brief, Dudley Muslim Association bought a derelict site from Dudley Metropolitan Council upon which they intended to build a mosque. The legal documents contained a provision that if the mosque had not been built within a certain time period the council would have a right to require the property to be transferred back.
Unfortunately for Dudley Muslim Association the planning arm of the same council refused permission for the mosque to be built (even though there was a recommendation of approval from the planning officer) and although permission was eventually granted on appeal too much time had elapsed and the council attempted to exercise its right to take the property back.
The case ended up in the Court of Appeal which held at the end of 2015 that the council was entitled to require the transfer of the property back into its ownership.
Amongst other grounds the Dudley Muslim Association argued that there was an abuse of power, especially as delays in the planning process has been caused by the council itself. However the Court of Appeal found in favour of the council saying that public law principles such as abuse of power do not apply to the private law of contracts and the council was entitled to insist that the strict terms of the contract be adhered to.
This seems like a harsh judgement and it’s not surprising that the association says it now needs time to reflect after losing its 10 year legal battle.
Perhaps the lesson we can all heed is that taking time to properly consider the potential ramifications of terms we are agreeing at heads of terms stage could pay dividends in the future. Deals are often concluded in a rush with parties keen to move on to the next stage but it really does pay to consider carefully before signing on the dotted line!
The legal hearings have centred on a contractual dispute dating back to 2005, when the council transferred the land at Hall Street to the DMA.
A clause in the contract stated that the land would transfer back to the council if the proposed development was not completed by the end of 2008.
Lawyers for the association had fought to stop the council seizing back land, where an empty factory stands alongside Duncan Edwards Way.
But the DMA had suffered a blow last year when the High Court blocked an appeal against an earlier ruling.