Wetherspoon set for High Court in property row

Pub chain JD Wetherspoon has won the right to bring a High Court damages claim against property finders who it claims made "secret profits" at its expense when locating ideal new pub properties, including two in Canterbury and Folkestone.

JD Wetherspoon is suing Van De Berg & Co , and three of its directors,

Christian Braun, Richard Harvey and George Aldridge accusing them of breach of contract, negligence, breach of duty and deceit in respect of a number of transactions completed before 1998.

What is said is that, instead of informing JD Wetherspoon hat a particular freehold was available for sale, Van De Berg, Mr Braun and Mr Harvey advised JD Wetherspoon to enter into a lease of the property in question, while at the same time arranging for the freehold to be acquired by other business associates or clients.​Mr Justice Lewison

Now top judge Mr Justice Lewison has dismissed moves by Van De Berg, Braun and Harvey to have the case against them thrown out without the need for a full trial.

The pub giants' claims against them will now proceed to a full hearing, along with its claim against Aldridge, who made no attempt to bring related proceedings against him to an early end.

The judge said that it is alleged that, after they were retained as property advisers and finders, Van De Berg and its directors "made secret profits behind JD Wetherspoon's back".

He said: "The typical pattern that is alleged relates to the acquisition of interests in vacant property suitable for conversion into a pub.

"What is said is that, instead of informing JD Wetherspoon that a particular freehold was available for sale, Van De Berg, Mr Braun and Mr Harvey advised JD Wetherspoon to enter into a lease of the property in question, while at the same time arranging for the freehold to be acquired by other business associates or clients.

"The effect of a grant of a lease to JD Wetherspoon turned a vacant property into a valuable investment with a relatively secure cash flow, and thus substantially increased the freehold value. This in turn enabled the acquirer of the freehold to make a quick and substantial profit, in some cases by selling the freehold to JD Wetherspoon itself."

He said that it is alleged that, through this means, a company named

Nickleby Holdings was able to buy a long lease of 5/9 Burgate in Canterbury for £950,000 in December 1996, simultaneously grant an under lease to JD Wetherspoon for £120,000 a year, then sell its interest for £1.3million.

"Thus within the space of five months, Nickleby Holdings had made a profit of £350,000," he said it was claimed.

He said that another allegation focused on an unnamed property in

Folkestone, bought by a company called Peachey for £150,000 in October 1997 and simultaneously sold to JD Wetherspoon for £400,000 - "an immediate profit of £250,000".

Two of the other properties involved are in Leamington Spa and Chingford, he said.

He added: "The nub of the complaint is that JD Wetherspoon's trusted agents acted behind their backs in that, rather than arranging for JD Wetherspoon to acquire a freehold or long lease at a favourable price, they instead arranged for the interest to be acquired by a business associate or another client, and got JD Wetherspoon to take a rack rented lease instead.

"They did this, at least in part, by concealing the true state of affairs from JD Wetherspoon and in some cases by telling lies to third parties in that they falsely represented that they were making offers on behalf of JD Wetherspoon when in fact they were not.

"Although JD Wetherspoon cannot at this stage point to a smoking gun, they strongly suspect that the defendants have profited from the deals at least by receiving commissions, if not greater rewards."

Ruling that these allegations should proceed to a full trial, he said that the facts alleged, if true, "are capable of amounting to a breach of duties".

He said that the defences raised that JD Wetherspoon's claim is barred by the 1980 Limitation Act were "not so clear a to warrant the summary dismissal of the claim".