Von Essen Hotels loses at Appeal Court over Cotswold hotels

Von Essen Hotels has failed in a challenge to a High Court decision last year thwarting its £165,000-plus damages claim against a couple over the £13m sale of four Cotswolds hotels.

Last December, Lord Roy and Lady Daphne Vaughan won a declaration from a judge that Von Essen’s claim against them could not proceed because it failed to serve the claim upon them properly within the time limit set down in the agreement between them.

However, the luxury hotel chain took its fight for the right to bring a £165,171 claim for various breaches of warranties under the agreement to the Appeal Court.

It hoped to persuade Lord Justice Mummery, Lord Justice Hughes and Mr Justice David Richards to overturn the High Court ruling.

But today the Appeal Court judges backed the earlier ruling, and said: “Von Essen have not demonstrated that the judge’s construction of the notice provisions in the agreement was wrong.”

In September 2003, Von Essen had agreed to purchase the entire share capital of Courtlands Country House Hotels – a collection of four Cotswolds properties - for £13m.

However, the parties fell into dispute, were unable to agree the completion accounts, and Von Essen ultimately brought a claim that the Vaughans were in breach of warranties contained in the agreement.

The agreement stipulated that any such claim must be brought before 30 September 2005, and that service of any notice or document required it to be sent by first-class post to the Vaughans’ home and a copy sent to their solicitors.

Von Essen claimed it posted notice of its claim to the Vaughans on 14 September 2005, when they happened to be on holiday, and provided a copy to the solicitors then acting for the couple, Paul Davidson Taylor, on 15 September.

However, the couple successfully argued at the High Court that they never received the letter, and that failure to serve the notice to the correct claim was fatal to Von Essen’s claim.

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By court reporter

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