MORBAINE Ltd, Widnes-based property developer, has overturned a controversial decision affecting many areas of commercial dealing following a three-year legal battle.

In a complicated case relating to what amounts to confidential information, the relationship between a principal, fiduciary agent and a third party and the doctrine of causation, Lord Justices Nourse, Schiemann and Brooke overturned an earlier court ruling of July 1997.

The original case was brought against Morbaine by Kuldip Singh Dhillon's Cheltenham-based company, Satnam Investments Ltd, which wase in the process of assembling a development site in Stockport when the company went into receivership.

Satnam's agents, Dunlop Heywood, approached other potentially interested parties, including Morbaine, with a view to continuing with the development of the site.

Morbaine subsequently acquired an integral and vital part of the site. Satnam came out of receivership in 1996 and instigated legal proceedings against both Morbaine and Dunlop Heywood.

Mr Justice Chadwick declared that Morbaine held the land it acquired on constructive trust and should transfer it to Satnam and that equitable compensation be paid.

The Court of Appeal in London dismissed the imposition of a constructive trust on Morbaine and stated it would be inequitable and contrary to commercial good sense to allow Satnam to have a judgement against Morbaine simply because there was a degree of confidentiality in the information disclosed to Morbaine on an unsolicited basis.

In a case where the legal costs incurred by all the parties are estimated to be in the region of £4 million, the Court of Appeal ordered Satnam to pay all Morbaine's legal costs.

The court also ordered that there should be a re-trial between Satnam and Dunlop Heywood.

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