Design And Planning Company Fails To Deliver

A company which provided a design service for building conversions - and latterly a design service specifically for planning development applications which had previously been refused - has been wound up in the High Court.

This followed an investigation by the Companies Investigation Branch of The Insolvency Service.

Between April and October 2007, Spacewithin Developments Limited entered into Design and Build contracts with six customers to prepare plans for proposed building conversions, lodge the required development planning application with the relevant Council, obtain development approval for the works from the Council and then have the work undertaken by sub-contracted builders.

After October 2007, the company solely provided a design service specifically for planning development applications which had already been refused by a Council. Due to this change in business activity the company name was changed to Urbea Ltd.

Potential clients for these services were found by reviewing Government online portals and identifying cases where planning permission had been refused. A letter was then sent by the company to those individuals stating Urbea specialised in such cases and offering to improve the design or application submission to gain approval.

This letter claimed that the company was able to produce building designs which achieved a high level of success following a thorough discussion of each case with the appointed planning officer and if it failed to gain planning permission with a design that met the customer's approval, no fee would be charged.

Between October 2007 and October 2008, the company entered into no fewer than 33 such Design and Planning Contracts where an initial payment was made by the customer on signing the contract, which would be refunded if the agreement was cancelled or if the company failed to gain planning permission for the proposals.

At the winding up hearing the Court heard that four customers who had Design and Build Contracts were in dispute with the company due to its failure to lodge the required planning applications, failure to obtain the required development approval, failure to purchase items for which upfront payment had been made, failure to pay sub-contacted builders despite payments having been received from the customer and failure to complete the works.

A number of clients who had signed Design and Planning contracts and paid initial fees had requested information about the progress of their planning applications and in some cases a refund of their deposits.

Despite the company's refund policy, it has failed to refund any deposits to customers' whose planning applications have failed or who have cancelled their contracts.

There was little evidence of the company having either prepared draft plans and planning applications or submitting the required planning applications to Councils.

(JM/BMcc)