Tangent Properties (North) Ltd v Evans Homes (Skelton) No 2 Limited

This case grew out of a property project that ran for decades. The Skelton Site near Leeds was a large former mining site assembled for development through arrangements involving British Coal, Yorkshire Water and a joint venture developer. Over time, the project changed shape. It started as a proposed business park and later became a substantial housing-led scheme.

Mr Nigel Chambers, through Tangent, said he had helped explain the site's development potential and had been promised 10% of the profits from developing it. He said that promise was first made in 1996 and later carried forward in 2005 when the project company structure changed.

By the time the dispute reached court, the site had become commercially valuable. Phase 1 land had been prepared and sold to housebuilders, Phase 2 was being marketed and Phase 3 was expected to follow. Tangent said the project was now producing profits and that the 10% share had become payable.

The defendant denied that any binding profit-share contract existed. It said the alleged arrangement had never become an enforceable agreement and that the people relied on by Tangent did not have authority to bind the company in the way claimed.

The site's history mattered because the alleged bargain sat across changing ownership structures and changing development plans. In 1996, British Coal and Yorkshire Water agreed to sell their parts of the site to White Rose Developments Ltd under the Tripartite Agreement. Later, in 2001, Skelton Business Park Ltd became the owner of the site and took on the relevant obligations.

The planning story also changed. The site was originally allocated and pursued as a business park. Planning permission for that scheme was granted in 2006, but the project did not move forward into completed development and sale. Later, the Aire Valley Leeds Area Action Plan allocated the site for housing, and outline permissions followed for a large residential scheme.

Tangent's case was that Mr Chambers had earned a 10% profit share by helping bring the project forward and that the later company had agreed to honour the earlier arrangement. The defendant said there was no binding contract and no basis for a declaration that Tangent was entitled to a share of profits from the modern housing development.

The judge said that, in broad terms, he had to decide whether a binding contract came into existence in 1996 or 2005, or whether the defendant was estopped from denying that it did. If Tangent failed on those points, the court also had to decide whether it was entitled to be paid for the services Mr Chambers had provided and, if so, on what basis.

This was not just a dispute about whether useful work had been done. It was a dispute about whether the work had been rewarded by a very specific commercial bargain: a 10% share of profits from a major development. That meant the court had to look closely at the documents, the wording used at the time, the role of board approval and whether the parties had really intended to be legally bound then and there.

The authority point was important, but it needed careful framing. The judgment rejected actual authority. It also found that once Mr Chambers knew board approval was required, he could not treat the company as already bound. In relation to the 2005 meeting, the judge also found there was no binding effect on SBPL because Mr Bell made clear that any agreement needed board approval and there was no evidence of board ratification.

Mr Justice Leech dismissed Tangent's claims for a declaration that it was entitled to a 10% profit share, for a declaration based on estoppel, for an account and for damages for breach of contract. In practical terms, Tangent lost the case that it had a contractual or estoppel-based right to a slice of the development profits.

The judge held that the alleged profit-share arrangement had not been proved as a binding contract in the way Tangent alleged. The references to board approval were central. The court found that the board did not approve an immediate binding contract on the terms claimed. Instead, the board approval in 1996 was treated as approval in principle so that solicitors could prepare and negotiate a formal contract.

The judge also held that Mr Bell and Mr Goodwill had no actual authority to enter into a binding contract with Mr Chambers in 1996. As for 2005, the judge held that Mr Bell had no actual authority to enter into a binding contract or make binding representations on behalf of SBPL and that any agreement would in any event have required board approval.

The estoppel case also failed. The court accepted the legal framework in principle, but Tangent still had to prove a clear and unequivocal representation with the necessary certainty and effect. On the facts, it did not do so.

One of the clearest practical lessons in the judgment is about authority. Tangent relied on discussions with senior individuals involved in the project. But the court found that actual authority to commit the company to a 10% profit-share arrangement had not been proved.

The wording around board approval mattered a great deal. The judge found that Mr Chambers accepted that any agreement was subject to board approval. Once that was clear, he knew that any agreement reached at the meeting could not be binding immediately, even if the person speaking was a managing director or a director within the wider group structure.

The court's findings on authority were narrower and more specific than a general statement that senior people can bind a company. In 2005, the judge found there was no evidence that SBPL's board ratified any agreement or representation made by Mr Bell. The judgment also says there was no pleaded case that SBPL held Mr Bell out as having authority, and the judge found that he did not hold himself out as having that authority after making clear board approval was needed.

Tangent also argued that, even if there was no enforceable contract in the ordinary sense, the defendant should be estopped from denying the profit-share arrangement. The judgment reviews the legal principles and accepts that, in the right case, a representation about contractual effect can support an estoppel.

But that did not rescue Tangent here. The court emphasised that the representation relied on had to be sufficiently clear and unqualified, and that the alleged obligation had to be certain enough for the court to give effect to it. On the facts, Tangent did not establish the kind of clear and unequivocal representation needed.

For businesses, the point is simple. Estoppel is not a reliable substitute for a properly documented commercial bargain. If the arrangement is important enough to affect development profits, it is important enough to be written down clearly and approved properly.

Although Tangent lost the profit-share case, the judgment did not close off every possible route to payment. The judge said that, subject to limitation, he would be prepared to grant relief on the unjust enrichment claim for a reasonable fee for the work Mr Chambers carried out on the Skelton Site project.

The judge said he would order an inquiry to establish the amount of that fee by reference to the number of hours worked, a reasonable fee for those hours and any out-of-pocket expenses. He also said expert evidence could be used to establish what a reasonable rate would have been during the relevant period.

That is commercially important because it shows the difference between two very different claims. A profit-share claim seeks the upside of the project. A reasonable-fee claim seeks payment for accepted services. Even where the first fails, the second may still remain live. But it is usually a much narrower outcome.

The judge did not finally award that fee in this judgment. He said further argument was needed on limitation, including when the unjust enrichment cause of action accrued.

This case is especially relevant to property developers, land promoters, consultants, introducers and SMEs involved in long projects where value may not appear for years. Early enthusiasm often produces broad promises about future upside. When planning changes, land values rise or plots are sold, those old promises can become the centre of a major dispute.

The court's approach was practical and document-focused. It looked at whether there was a real contract, whether the company had actually approved it, and whether the later conduct truly showed a binding commitment. It did not treat a long relationship or useful work as enough to prove a profit-share bargain.

If your business uses success fees, profit shares or development upside arrangements, define the deal early. Cover the project scope, the trigger for payment, the profit calculation, the treatment of finance and recycled proceeds, and what happens if the scheme changes from one land use to another. If you leave those points open, the upside can become the dispute.