Dandara Holdings Ltd v Co-Operative Retail Services Ltd & Anor

A claimant seeking damages for loss of a chance must establish a real or substantial chance of obtaining the benefit, rather than a merely speculative possibility. The breach must also be an effective cause of the lost chance. A breach which merely enables a third party to make an offer will not cause loss where the defendant would independently have abandoned the transaction and remarketed the property. Contractual confidentiality provisions concerning the terms of an agreement do not ordinarily prohibit disclosure of its general existence, unless the contract makes that existence confidential. An indemnity for costs incurred in carrying out purchaser due diligence does not extend to unproved planning advice or negotiations with the vendor.

The claimant agreed with CRS to purchase Sandbrook Park, subject to contract, and obtained an exclusivity period while due diligence and contractual negotiations proceeded. During that period, agents connected with Airtours viewed the property and Airtours later offered a higher price. CRS and CWS ultimately abandoned the proposed sale to the claimant and sold the property to Airtours.

The claimant alleged breaches of the Exclusivity Agreement, claiming damages for loss of the chance to acquire and resell the property at a profit. It also claimed an indemnity for costs incurred under the due-diligence clause. The central issues were breach, causation, loss-of-chance damages and the scope of the costs indemnity.

1. Disposition. The damages claim failed because the breaches of the Exclusivity Agreement caused no loss. The claimant recovered £22,502.77 under the costs indemnity, subject to interest.
2. The claimant had to show a real or substantial chance of acquiring Sandbrook Park, not merely a speculative chance. The principle applied whether the hypothetical act was that of a third party or of the defendant itself, as in Chaplin v Hicks [1911] 2 KB 786. The present case was distinguishable in its factual structure from the recent authorities concerning hypothetical third-party conduct, including Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602 and Coudert Brothers v Normans Bay Ltd [2004] EWCA Civ 215.
3. Providing a sales brochure to an agent breached clause 2.4 because it formed part of the marketing process. It did not breach clause 2.2, and the February events did not breach clause 2.5. Disclosure that an exclusivity agreement existed, and identification of the claimant’s agents, did not disclose its terms contrary to clause 6. Disclosure of the exclusivity period would have breached clause 6, but occurred too late to matter.
4. The February breach had no causal effect. The agents already knew of the property, and CWS would probably have decided, even without the Airtours offer, to abandon the proposed sale and remarket Sandbrook Park. The later March breaches occurred after the Airtours offer and therefore could not have caused the alleged loss. The concurrent-causation argument based on Heskell v Continental Express [1950] 1 All ER 1033 was rejected.
5. Clause 7 covered costs properly and reasonably incurred in complying with clause 3.1. The claimant failed to prove that the planning advice fell within that obligation. Negotiating the vendor’s leaseback was a contractual negotiation, not a search or enquiry within clause 3.1, and was irrecoverable.

The judgment was a first-instance decision. It records an earlier Part 24 liability judgment and an order by District Judge Gosnell concerning payment on account, but no appellate decision is stated.