For instance, in Connolly [2007], noted previously, an overage agreement was successfully challenged on the basis of deceit (the argument being that the other side’s surveyors had deliberately put forward valuation figures that were excessively high). We now have another case involving deception. In essence, a football club was virtually bankrupt; a deal was reached with a local developer so the club got £1.3m plus 50% of the increase in value once residential planning consent was obtained (ie an overage agreement). In the meantime, the club was given a lease for five years (which could be terminated earlier if planning consent was obtained). But, the club got into further financial difficulties and negotiated with the developer for the buy-out of its potential overage payment. However, the developer’s project manager wrote to the club’s surveyor saying there was a potential for 130 homes (with 50% being affordable housing). Against their surveyor’s advice, the club proceeded and sold out. But, it subsequently emerged that the project manager had made a deliberate misrepresentation: the potential was for more than 200 homes (and only 30% affordable housing). The court took the view that this was deception, and that the nature of the transaction was such that it was sufficiently like a joint venture to require the parties to act in good faith and not to conceal relevant information. Accordingly, the overage sale was set aside.

Needless to say, these are fairly extreme circumstances. But, as we pointed out in our earlier note on Connolly [2007] it is possible to overnegotiate; if you deliberately pull the wool over the eyes of the other side, and put forward submissions that you know are untrue, then you do run the risk of being liable in damages for deceit, or of having the transaction set aside. Ross River v Cambridge City FC [2007] EWHC 2115 (Ch) (Property Week 2 November 2007).  © Practical Lawyer