Tynwald Mills’ owners have lost a breach of contract case in the high court over the abandoned sale of the shopping centre.

The sale of the St John’s retail complex was announced in January. But by June it had emerged that the sale had fallen through.

Now in a judgment, Millstreams has been ordered to return the advance of £165,000 that it had been paid by Channel Islands-based SandpiperCI ahead of the possible purchase.

It has also been ordered to pay costs.

An agreement dated December 22 last year was drawn up for the purchase by Sandpiper CI of the entire share capital of the Mill Shop Ltd, which runs Tynwald Mills.

The court heard that the agreement could be rescinded by either party if the accounts showed profit levels of less than the expected £600,000.

But when the audited draft accounts were received by the would-be buyer, they showed a figure of £585,000 - and the deal fell through.

SandpiperCI argued that the figure of £585,000 had been agreed by both sides and no independent accountancy review was required to rescind the agreement.

The court heard that it had been astonished when the £165,000 advance was not repaid and Millstream’s boss Stephen Bradley sought to bring in an independent accountant to determine the draft accounts.

In a statement, SandpiperCI said it was delighted that the high court has found in its favour.

A spokesman said: ’It was never Sandpiper’s desire to end up in litigation but our efforts to resolve matters in a sensible way were rejected on the part of Millstreams.

’The decision not to proceed with the acquisition was based purely on profit levels being materially below those advised and anticipated.’

Deemster Andrew Corlett said it appeared the advance was designed as some form of compensation for Tynwald Mills if the deal did not go through. But it made no difference what the advance was designed to deal with because the agreement made it perfectly clear that the advance was repayable in full to the would-be buyer, within three business days, if the accounts showed earnings of less than £600,000.

Deemster Corlett struck out Millstreams’ counterclaim and awarded judgement to Sandpiper CI.

He said: ’In my view there is no ambiguity whatsoever in the contractual provisions.

’The merits are all one way and are in favour of the claimant. This is not a case which should be allowed to go to trial.’