Winton v Rosenthal & Anor

Formal agreements, especially a document executed as a deed, will ordinarily be binding where their language and commercial context show an intention to create legal obligations. A reference to a joint venture does not itself establish personal liability for an individual who operated through a company. The court must identify the parties by construing the documents as a whole.

Where an agreement expressly requires a company to carry out a development, a term excusing performance because the project has become commercially unattractive will not be implied if the proposed term is uncertain or inconsistent with the bargain. The company may refuse performance, but may then be liable in damages. Loss may be assessed through a separate inquiry where the evidence at trial is insufficient.

Paul Winton invested in a property development involving Marc Rosenthal and Millennium Developments Limited. The development was not pursued, and the property was sold. Mr Winton claimed damages, alleging that written agreements required Millennium to complete the development and that Mr Rosenthal was personally liable under those agreements or under a wider joint-venture arrangement.

The principal issues were whether the written documents were binding, who were their parties, whether Millennium had an obligation to complete the development, whether that obligation was qualified by commercial viability, whether the investors consented to the sale, and what loss resulted from the breach.

1. Binding effect. The September 2007 documents were intended to be binding. Their formality, the commercial context, the absence of the words “subject to contract”, and execution of the longer document as a deed all supported that conclusion. The agreement with Mr Winton was not conditional on a corresponding agreement with Mr Mann.
2. Parties. The deed was between Mr Winton and Millennium. The short agreement was also between Mr Winton and Millennium. Mr Rosenthal’s name in the signature block and in brackets after Millennium’s name did not make him an additional contracting party. The reference to a joint venture was only a loose description of the arrangements conducted through Millennium.
3. No personal joint-venture obligation. The earlier discussions and the August email did not create a binding obligation on Mr Rosenthal personally. The references to trust, commitment, “I” and “we” were loose commercial language and did not establish a significant personal liability. Any earlier rudimentary arrangement was superseded by the September agreements.
4. Obligation to develop. Clause 4 of the deed imposed a binding obligation on Millennium to commence and complete the development. No term excusing performance when the project became commercially unviable could be implied. The proposed term was too uncertain and inconsistent with the bargain. Nor was a general reasonableness qualification justified. Millennium could decline to perform, but would then be liable for damages assessed by reference to the position if the development had been carried out.
5. The later planning permission resulted in an implied variation, substituting the development covered by that permission for the development under the original permission.
6. The investors had not agreed to discharge or vary the obligation by consenting to the eventual sale. The sale therefore constituted a breach.
7. The evidence was inadequate to assess loss at trial. Damages were consequently to be determined on a separate inquiry.