A London college has been accused of “unjust enrichment” and holding “secret negotiations” with rivals by two property developers in a £6.6 million High Court claim.
South Bank Colleges (SBC), part of London South Bank University (LSBU), is being sued by 45 CCS Limited and Vauxhall Development London Limited, which allege the college walked away from an agreed redevelopment of its Clapham and Vauxhall campuses after the firms had already spent millions on planning and design work.
In documents filed at the High Court, the developers claim the college encouraged them to pursue the project while knowing it was negotiating separately with another company, and has since been “unjustly enriched” by the work they carried out.
SBC denied the allegations, stating the firms were aware they were liable for all costs before a signed contract and said it “lost confidence” in the claimants’ ability to finance the project.
Both claimant companies are subsidiaries of Lambeth Property Group Ltd.
‘Naked in the park’
According to the developers, senior SBC staff gave them repeated verbal assurances that they would get a binding contract for a “mixed-use” redevelopment of the sites, including a new college building, nursery, housing and temporary teaching facilities.
London South Bank University’s group director of estates, Rychard Scrase-Field, is said to have told the developers he would “jump out of the window” if the project didn’t go ahead with them, and later reassured them by saying the university had “come too far to deal with anyone else”.
In another exchange, Scrase-Field allegedly assured a director of the developers that he would “run around Wandsworth Park naked” if the deal didn’t go through.
When the developers questioned whether an alternative firm was interested in the project, they were allegedly told by another university estates director, “all is ok, relax.”
The claimants say they went on to secure planning consents and worked up designs based on those assurances.
These have “enriched” SBC, the claimants say, because “the value of the sites has been substantially increased” because of the secured planning permissions, and SBC “has been saved the cost of otherwise preparing the sites for redevelopment.”
The college is being sued for over £6.6 million in “quantum meruit” damages to recover those costs.
Non-binding opinions
In June 2024, around three years after initial heads of terms were agreed between SBC and the claimants, the university was “secretly negotiating” with another firm, Legal and General, to redevelop the sites without the claimants.
Then, that August, the claimants were told the university had decided to work with other partners.
But SBC denied any liability, insisting it had no binding contract with the claimants, who were aware that their costs were at their own risk prior to the contract being signed.
SBC said the assurance comments made by senior staff “in so far as they happened, were no more than opinions expressed by individuals as to SBC/LSBU’s current position”.
Defence lawyers say the claimants “knew at all times the individuals alleged to have given assurances had no authority to bind SBC to contract or make payments not contracted for or vary any prior agreement or understanding on behalf of SBC.”
“All and any statements made by such individuals were at all times subject to board approval and that was known by [the claimants].”
Its defence states the developers acted at their own risk, with the initial heads of terms making clear no party would be liable for costs until final contracts were signed.
Enrichment denied
SBC added it was entitled to walk away after losing confidence in the claimants’ ability to secure finance with their proposed funder, Legal and General.
SBC further denied it had been “unjustly enriched”. Its defence said it was SBC that secured outline planning permission, which increased the value of the sites, and accused the claimants of “acting unconscionably in delaying the progress of the development of the sites unreasonably and entirely for their own benefit in seeking to give themselves more time to improve their position, particularly with regard to funding.”
In reply, the claimants maintain they had funding in place, and blame SBC for delays. They claim the college was negotiating directly with a third party, Legal and General, “without their knowledge”, and which they allege caused the collapse of the project.
Lawyers representing the claimants and London South Bank University both declined to comment. A date for trial has not yet been set.
Your thoughts