Court finds breach in property sale agreement

Background

The High Court of Justice, Chancery Division, recently ruled on a dispute involving Peter Savva, the claimant, and Cuckoo Hill Limited and Marios Stylianides, the defendants. The case revolved around a property sale agreement and subsequent financial dealings that led to allegations of breach of contract and financial mismanagement.

The Sale Agreement

In June 2014, Peter Savva agreed to sell his property to Cuckoo Hill Limited, a company solely directed by Marios Stylianides, for £600,000. The agreement stipulated that payment would be made from the proceeds of two houses to be constructed on the property. However, the payment was not made upon the sale of these houses.

Financial Arrangements

Alongside the sale agreement, an interest agreement was made, requiring monthly payments to Savva. Despite the sale of the houses generating over £1.6 million, Savva claimed he was not informed of the sales and did not receive the full amount owed under the agreements.

Legal Proceedings

Savva filed a claim in September 2022, seeking the unpaid £600,000 from Cuckoo Hill Limited and additional sums from Stylianides under the interest agreement. He also sought damages under the Insolvency Act 1986, alleging financial mismanagement and inducement of breach of contract.

Defendants' Defence

The defendants argued that an oral agreement allowed them to reinvest the funds in a development project in Maidstone, which they claimed failed, resulting in the loss of Savva's investment. They also claimed the contractual claim was barred by limitation.

Court's Findings

The court found no evidence of the alleged oral agreement and determined that the defendants failed to inform Savva of the property sales, constituting deliberate concealment. The court inferred that funds were mismanaged for the defendants' benefit, breaching their contractual obligations.

Judgment

The court ruled in favour of Savva, awarding him £600,000 plus interest from Cuckoo Hill Limited and additional sums from Stylianides. The court also found Stylianides liable for inducing breach of contract and financial mismanagement under the Insolvency Act.

Conclusion

This case highlights the importance of transparency and adherence to contractual obligations in property transactions. The judgment underscores the court's role in addressing financial mismanagement and protecting the interests of victims in such disputes.

Learn More

For more information on shareholder law, see BeCivil's guide to Shareholder Law.