Dudley Muslim Association v Dudley Metropolitan Borough Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Treacy,Lady Justice Gloster |
| Judgment Date | 05 November 2015 |
| Neutral Citation | [2015] EWCA Civ 1123 |
| Docket Number | Case No: A3/2014/0745 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 November 2015 |
[2015] EWCA Civ 1123
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
MR DAVID HALPERN QC (SITTING AS A HIGH COURT JUDGE)
CH20120240
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lewison
Lord Justice Treacy
and
Lady Justice Gloster
Case No: A3/2014/0745
MR David Matthias QS & MS Isabella Tafur (instructed by The Wilkes Partnership LLP) for the Appellant
MR Timothy Morshead QC & MS Galina Ward (instructed by Sharpe Pritchard LLP) for the Respondent
Hearing dates: 28 & 29 October 2015
This is a sad story. What is ultimately at issue on this appeal is whether the dispute between the parties should be allowed to go to trial, or should be stopped at this stage. Both Master Marsh and Mr David Halpern QC, sitting as a deputy judge of the Chancery Division, thought that the dispute should be stopped at this stage. I agree with the Master and, subject to one point which does not affect the overall outcome of the case, with the judge. Accordingly for the reasons that follow I would dismiss the appeal.
The Dudley Muslim Association Ltd ("DMA") occupy a mosque at a site in Castle Hill, Dudley. That site is inadequate for the needs of the community; and they have been trying to build a new mosque in Dudley for the last twenty years. They acquired a site for that purpose, which they eventually exchanged with the Dudley Metropolitan Borough Council ("the Council") for the site with which we are concerned at Hall Street, Dudley. On 16 May 2003 the Council granted a 99 year lease of the Hall Street site to the DMA starting on 16 May 2003. The site did not have planning permission for the new mosque. The rent payable was a peppercorn; and the lease contained a number of covenants relating to the proposed construction of the new mosque. Clause 2 (3) (a) said that "in addition to any necessary planning and other consents" that might be required, the tenant was required to submit plans and elevations "for approval by the Council's Director of Urban Development or other duly authorised officer." Clause 2 (3) (b) required the development to be completed "with all practicable speed and in any event within five years from the date hereof". Clause 2 (3) (c) said that if the development had not been completed within five years the lease would become null and void. Clause 7 of the lease gave the DMA an option to acquire the freehold. Clause 17 stated that if the option were exercised the transfer would contain a number of covenants. These included a covenant to carry out the development "to the satisfaction of the Council's Director of Urban Development in accordance with the approved plans" and "with all practicable speed and in any event before 31 December 2008". Another covenant to be contained in the transfer required the DMA to vacate the property and retransfer it to the Council if the development had not been completed by the due date.
The DMA submitted an application for planning permission to the Council (which was the local planning authority) in May 2003. Consideration of that application was considerably delayed. However, despite that fact, as recorded in a letter from their solicitors on 18 August 2004, the DMA decided to "press ahead with the purchase of the freehold". At the same time the DMA asked for removal of the covenant about the time scale for development, because it needed to raise funds for the development. The Council turned down that request but in September 2004 the DMA decided to proceed anyway. Their solicitors' letter of 7 September recorded that the DMA were "aware the Council cannot relax the covenants." Nevertheless in October 2004 Dr Ahmed, the chair of the DMA, wrote to Mr Polychronakis (then the Council's Director of Law and Property) drawing attention to the tightness of the timetable and asking for an extension of time until the end of 2013. Two days later the DMA's architects also wrote to Mr Polychronakis but the extension of time that they requested was until December 2012. The Council replied in a letter headed "Subject to contract" on 21 October. The Council was willing to extend time from 16 May 2008 to 31 December 2008 which, they said, would "give your client ample time to complete the development." Since the option clause already envisaged a long-stop date of 31 December 2008, this was in reality no extension at all. The DMA thus committed themselves to the purchase of the freehold despite the lack of planning permission and despite the Council's refusal to concede any meaningful extension of the development timetable; and in the knowledge that the Council's position was that it could not relax the covenants.
A transfer of the freehold was executed on 17 March 2005. It contained the development covenants envisaged by clause 17 of the lease with the long-stop date of 31 December 2008. Planning permission had still not been granted, so the maximum time for completing the development was less than four years. In the following month the Council asked the DMA to withdraw their planning application which had generated considerable political debate in Dudley. Council elections were due, and the Council did not want the application to become a political football. In a letter to Dr Ahmed of 14 April 2005 Mr Sparke (then the Council's chief executive) referred to the development timetable and commented:
"Meeting a 2008 deadline is more difficult given the loss of some 18 months through the current planning process and I undertook to explore if the Council would be prepared to extend the deadline to 2010, if not 2012 as you desire."
Mr Sparke and Dr Ahmed met in August of the following year. After the meeting Mr Sparke wrote on 13 September 2006. In his letter he said:
"There have been a number of delays over the last three years due to factors beyond your control and the original deadline for completing the development which was December 2008, now looks unrealistic. Accordingly, the Council accepts that a new target date needs to be set once planning permission is resolved."
On 16 January 2007 the DMA resubmitted the application for outline planning permission. Why it took so long to resubmit the application, given that the elections had taken place in May 2005 and the DMA had carried out many studies and produced many reports in connection with the first application, has not been explained. The officers advised the committee that although the proposed development was contrary to the development plan, there were good reasons to depart from the development plan. However, although they recommended approval, at their meeting on 27 February 2007 the Development Control Committee (which consists of elected members) decided to refuse on the ground that the proposed use was contrary to the development plan. The refusal was issued in March 2007. On 5 April 2007 the DMA's architects wrote to the council. They said that the DMA was considering an appeal and continued:
"In addition we understand from a copy of the an [sic] Andrew Sparke (Chief Executive) letter to the DMA dated the 14 th April 2005 that he was going to explore the possibility of extending the current deadline of 2008 for the land transfer to 2010 if not 2012. Could you please confirm what the present situation is."
This letter was copied to Dr Ahmed among others. Mr Polychronakis replied on 8 May. He confirmed that "the deadline is currently the 31 st December 2008". He went on to say:
"We deferred a decision on a subsequent request to extend the deadline pending the outcome of the planning application. Since the decision of the Development Control Committee was to refuse the application, we do not think that it would be appropriate to revise the timetable bearing in mind that the original decision to impose a development timetable was based on the need to avoid having a sterile and undeveloped site in an important part of Dudley Town Centre.
The Council will, of course, listen to any submission that you wish to make on this issue but, as you may know, there is already interest in the site from at least one other developer."
Despite that letter, and without any further correspondence, the DMA pressed on with the appeal and a public inquiry took place in June 2008. The DMA were represented at the public inquiry by counsel, instructed by the Barton Wilmore Planning Partnership. In the course of the appeal, as recorded in paragraph [30] of the inspector's decision letter of 17 July 2008, the DMA confirmed that they were not pursuing a case of estoppel and that the planning appeal was not the appropriate forum for advancing a case based on legitimate expectation. The outcome was that the appeal was allowed for reasons given in the decision letter. In essence the inspector agreed with the DMA that there were good reasons for departing from the development plan. The inspector attached conditions to the grant of permission, one of which was a requirement to seek approval for reserved matters within three years of the date of the decision letter (i.e. by 17 July 2011). The Council then applied to the Administrative Court to challenge the inspector's decision. But the application failed on 28 July 2009.
By then, of course, the long-stop date for completion of the development had long since passed. Discussions then took place between officers of the Council and the DMA but these concerned the possible development of the existing site of the mosque and the possibility of alternative sites for the mosque. There is no allegation (and no evidence) that the question of an extension of time for completing the development of the Hall Street site formed part of those discussions; nor is there any allegation (or evidence) that at any time following the successful...
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