Elvanite Full Circle Ltd v Amec Earth & Environmental (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr. Justice Coulson |
| Judgment Date | 24 May 2013 |
| Neutral Citation | [2013] EWHC 1191 (TCC) |
| Docket Number | Case No: HT-11284 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 24 May 2013 |
[2013] EWHC 1191 (TCC)
The Honourable Mr. Justice Coulson
Case No: HT-11284
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Peter Susman QC (instructed by Birkett Long LLP) for the Claimant
Anneliese Day QC and Richard Liddell (instructed by Weightmans LLP) for the Defendant
Hearing dates: 4, 5, 6, 7, 12, 13 and 25 March 2013
INTRODUCTION
The claimant is a demolition and recycling contractor. Since September 2007, it has owned a plot of two acres within an area of industrial land at Haven Quay, Haven Road, Colchester, Essex ("the site"). Two months before the claimant acquired the site for £561,000, it instructed the defendant, a company which (amongst other things) advises about planning matters concerning waste management sites, to make a planning application seeking permission for waste recycling at the site.
The intention was that the planning application would be made at the end of November 2007. For reasons which form part of the underlying disputes in this case, the planning application was not made until 3 April 2008. Following comments on the application by, amongst others, Essex County Council ("ECC"), Colchester Borough Council ("CBC"), and the Environment Agency (" EA"), the defendant was working towards the resolution of that application by about 25 July 2008. However, on 15 July 2008, the claimant withdrew the planning application and sacked the defendant. Thereafter, on 4 September 2008, the claimant, using different consultants, made a fresh planning application. That application was not granted by ECC until seven months later, on 25 March 2009. However, notwithstanding this eventual grant of planning permission, the claimant has not been able to sell the site.
The claimant now claims damages for breach of contract and/or negligence arising out of the timing and content of the defendant's original application for planning permission. First, it is said that the application should have been made by the end of November 2007 and that the defendant was in breach of contract in failing to complete the application by that date. Secondly, it is said that, even when the application was made in April 2008, it was deficient in numerous respects. The claimant's suggestion is that, if it had not been withdrawn in July, it would have been refused by ECC.
The claimant's pleaded case as to how and why these deficiencies led to loss is very specific. It is alleged that, if an "appropriately complete" planning application had been made by the end of November 2007, planning permission would have been granted by the end of April 2008 (see paragraph 12.5 of the Amended Particulars of Claim, set out at paragraph 230 below). The claimant then says that, if planning permission had been granted, they would have sold the site in April/May 2008 to a well-known waste contractor, SITA, for £1,350,000. The claimant maintains that the market then declined with the result that, even though planning permission was subsequently granted in March 2009, they have failed to find a buyer at an acceptable price. The claimant therefore claims damages by way of loss of profit, calculated by reference to the £1,350,000 figure, less the sum of £561,000 paid for the site in September 2007.
The defendant denies negligence and/or breach of contract both in respect of delay and the alleged deficiencies in the application. Further and in any event the defendant disputes the claimant's case on causation, saying that the planning application was unconnected to the negotiations for the sale of the site to SITA, and the reasons why those negotiations fell through. The defendant also says that, but for their sacking, and the withdrawal of the planning application, planning permission would have been granted by ECC in July 2008. If SITA had wanted to buy the site, they could have done so then, but the defendant avers that, in truth, SITA would never have bought this site, and certainly not for £1.35 million. Further, the defendant has a number of other defences arising out of the express terms of the contract.
I propose to deal with the formation of the contract in Section 2 below and the contract documents and the contract terms in Section 3. In Section 4, I deal with the events up to December 2007. In Section 5, I address the allegations of delay up to mid-December 2007 and consider why the planning application was not complete by the end of November 2007.
In Section 6, I deal with the events between December 2007 and April 2008, together with their legal consequences. In Section 7, I summarise the documents comprising the planning application made by the defendant on 3 April 2008. Thereafter, in Section 8 I deal with the events up to the termination of the defendant's contract in July 2008, and in Section 9 I outline briefly the events thereafter. In Section 10, in the light of all the information, I consider whether or not the defendant's planning application was deficient or otherwise in breach of contract.
In Section 11, I consider all the various issues of causation and in particular whether or not the claimant is right to say that, but for the defendant's default, planning permission would have been granted at the end of April 2008 and that, in consequence, SITA would have bought the site immediately thereafter. I deal with quantum at Section 12 below. In Section 13, I address the various additional defences based on the express terms of the contract and, in Section 14, I deal with the defendant's counterclaim. There is a short summary of my conclusions in Section 15 below. This is an appropriate moment to convey my considerable thanks to counsel for the clarity and thoughtfulness of their written and oral submissions.
THE BACKGROUND AND FORMATION OF THE CONTRACT
The Original Agreement
The claimant company is owned and run by Mr Ralph Bailey, a hands-on, no-nonsense businessman. His evidence demonstrated a decisive man who talked a good deal but was not so good at listening; who wanted things done his way and to his timetable and could not understand when things did not go according to (his) plan; and who made instant decisions based purely on instinct and emotion. He put next to nothing in writing. His recollection of the relevant events, as was demonstrated on a number of occasions during his cross-examination, was patchy and inherently unreliable. However, I make clear that, at root, he was an honest witness and, if his answers were often unhelpfully monosyllabic, this was in part due to his exasperation with the planning process and the subsequent litigation in which he has found himself embroiled.
The claimant had owned the site in the past, before selling it to a third party. It consisted of an area roughly two acres square with a long strip leading to it which connected to the site to Haven Road. To the north west of the site was a large plant occupied by Anglian Water; to the south east of the site was land occupied by Silverton Aggregates. In time, a further strip of land immediately adjacent to the road that connected the site to Haven Road, and also owned by the claimant, would become part of the SITA offer. This strip was not part of the original two acre site and was, like the land used by Silverton Aggregates, always owned by the claimant.
Mr Bailey spoke to Mr Baker, the technical director of the defendant, on 3 July 2007, and asked him to meet him at the site on 17 July and advise on planning matters. Thereafter Mr Baker would attend a meeting at ECC to discuss planning matters and the possible future use of the site. The fees for this original limited engagement were not to exceed £500. Mr Baker said that, at this time, he did not know that the claimant did not own the site. Although Mr Bailey denied not telling Mr Baker that he did not own the site, it seemed clear to me that he did not mention it; the failure to pass on this information was consistent with Mr Bailey's basic approach to those he engaged for advice. He only ever told them what he thought they needed to know. So for the avoidance of doubt, I find that at no time before the principal contract was made ( Section 2.2 below) did the defendant know that the claimant did not actually own the site (but was in the process of buying it back).
The meeting on 17 July went well. On 23 July, Mr Baker wrote to Mr Bailey outlining what had been said at the meeting and noting that Claire Tomalin, the senior ECC planner present, was "convinced that waste use of the site is not only acceptable, but desirable". The letter then went on to summarise the issues that would need to be addressed in any planning application, and the Assessments that ECC would require. These included a Flood Risk Assessment ("FRA"); a Transport Assessment ("TA"); and predictions of cumulative noise impacts. In addition, Mr Baker stressed the need for the claimant to prepare a proposed site layout, "including any additional buildings, fixed plant, parking, circulation areas and site access," an element of the process which was to assume particular significance over the next few months. This letter, however, marked the conclusion of the original agreement, and it is not alleged that the defendant was in breach of its terms.
The Principal Contract
The defendant's letter of 23 July offered to carry out the work in connection with the planning application. It informed Mr Bailey that if he wanted the defendant to start work he should let them know and that, in the meantime, he should prepare his sketch proposals for the site and work up his ideas on the nature and scale of the recycling operations that he envisaged. It was said that, if...
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