In 2009, Colin Gwyer & Associates Ltd v London Wharf (Limehouse) Ltd was a significant court case in the UK.
The case involved a dispute over a contract for the sale of a development site in London.
The court ultimately ruled in favor of the buyer, London Wharf (Limehouse) Ltd, who had claimed that the seller, Colin Gwyer & Associates Ltd, had breached the contract by failing to disclose certain facts about the site.
This decision had important implications for the construction industry in the UK.
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Court Ruling
The court ruling in this case was a significant blow to London Wharf. The board meeting was found to be validly convened and quorate, but the resolution accepting the settlement was deemed invalid.
Leslie Kosmin QC held that the two directors who passed the resolution were in breach of fiduciary duty. They had a duty to act in good faith for the interests of London Wharf, which they failed to do.
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The directors' failure to consider creditors was also a major issue. Since insolvency was imminent, they had a duty to act in the interests of company creditors, but they didn't.
The fact that London Wharf's articles of association allowed Mr Howell to vote on a resolution in which he had an interest was not enough to relieve him of his general duty to act in good faith.
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Parties Involved
Colin Gwyer & Associates Ltd was the landlord of the London Wharf development, which included a block of flats and a number of commercial units.
The landlord was responsible for maintaining the common parts of the development, including the lift and the fire alarm system.
London Wharf (Limehouse) Ltd was the freeholder of the development, but it had granted a lease to a company called Limehouse Developments Ltd.
The lease was for a period of 125 years, with a break clause after 25 years.
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Limehouse Developments Ltd was responsible for maintaining the interior of the building, including the flats and commercial units.
The landlord, Colin Gwyer & Associates Ltd, was responsible for maintaining the exterior of the building, including the walls and roof.
The freeholder, London Wharf (Limehouse) Ltd, was responsible for maintaining the common parts of the development, but it had delegated this responsibility to the landlord.
The landlord had also delegated some of its responsibilities to other companies, including the maintenance of the lift and fire alarm system.
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