Legal Updates

Commercial – Remuneration Dispute – Commercial Property -  Property Development

The case of Blue Station Ltd v Kamyab [2007], concerned a dispute over remuneration. In November 2002, D was introduced to the defendant and M, who were seeking a partner to provide capital for a number of their proposed property developments. Such developments were being carried out by two companies, one of which was the claimant.

A project for the development of some flats, which was to involve substantial reconstruction, was to be carried out by the claimant. D purchased a 40% holding in the claimant, becoming a director shortly afterwards and later acquiring the remaining 60% of the shares.

The defendant alleged that a meeting took place on around the 14th of April 2003, where it was agreed that he would pay SCL (the building contractor responsible for the works) whatever sums might become due on behalf of the claimant, by whom he would be entitled to be reimbursed.

Between late March and early July, payments totalling £100,000 were made, mainly by cheque, by the defendant to SCL. On the 12th of July 2004, the claimant paid £103,000 to the defendant by a cheque which had been filled out by the defendant and signed by himself, M and D.

The claimant brought proceedings, seeking the repayment of the £103,000. The issues which arose to be considered by the court included whether the agreement of the 14th of April 2003 had actually been made, and whether the payments to SCL were covered and authorised by it. If this was the case, then there would be a right to reimbursement on the part of the defendant.

The claim was allowed. It was held that on the evidence, the £100,000 payments could not have been made in discharge of any indebtedness of the claimant to SCL as envisaged by the alleged agreement of the 14th of April 2003. Given that conclusion it was unnecessary to decide whether the parties had made that agreement at all.

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© RT COOPERS, 2007. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

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