Hargreaves Transport Ltd v Lynch

In this case Hargreaves Transport Ltd. entered into a contract to buy a piece of land, subject to the condition that they would receive planning permission to develop it for their transport business.Outline permission was received, but detailed permission was refused. The question is whether the condition was satisfied by receipt of outline permission only. The facts are these:

There used to be two old cotton mills at Farnworth in Lancashire called Oak Mill and Egyptian Mill. They have been pulled down. The site is scheduled in the development plan for industrial purposes. On 17th December, 1965, Mr. David Lynch, a demolition contractor, made an application for outline permission for this site. He asked for permission for "the erection of a new transport depot for the service, maintenance and garaging of lorries and administrative buildings". Whilst that application was still pending, Mr. Lynch on 28th January, 1966, agreed to sell the site to Hargreaves Transport Ltd. for £49,000. The agreement provided that the deposit of £4,900 was to be paid on the signing of the agreement on 28th January, 1966, "and the balance shall be paid on 1st day of April, 1966 (providing that the conditions hereinafter mentioned shall have been complied with) at the offices of the Vendor's Solicitors when the sale and purchase shall be completed and vacant possession of the said property shall be given to the Purchaser," The material condition was Condition 9: "The said property is sold subject to the following further conditions:- (a) That the Purchaser shall receive permission from the appropriate planning authority (i) to use the said property as a transport depot, and (ii) to develop the said property by the erection of buildings, and carrying out such works and using the property In such manner as is appropriate for a transport depot and the carrying on of the Purchaser's business of road-haulage contractors in the manner in which it is customary according to modern practice in this type of business. For the purpose of this Agreement planning permission shall not be deemed to be received if such planning permission is subjectto a condition which the Purchaser reasonably considers to be unacceptable".

Although the completion date was 1st April, 1966, nevertheless by that time things were not ready and impliedly the parties agreed to extend the time. On 5th or 6th April the Farnworth Council gave outline planning permission for the development of this site, and the formal document was issued on 14th April. It set out in Part I the Particulars of Application:

"Development forming the subject of the application

Use as a Transport Depot".

Then in Part II it set out the Particulars of Decision:

"The Farnworth Borough Council, as agents for the Lancashire County Council, the local planning authority for the Administrative County of Lancaster, hereby give notice that Permission for the carrying out of the development referred to in Part I hereof in accordance with the application and plans submitted has been granted, subject to the following conditions:- That satisfactory detail plans, sections and elevations of the proposed buildings showing their siting, design and external appearance and any existing or proposed means of access thereto shall be submitted to and approved by the Local Planning Authority before any development is commenced."

That was an ordinary outline permission. It was given subject to approval of details later. It was given under section 5 of the General Development Order, 1963. No development was to take place, not a brick was to be laid or a trench dug, until approval had been given to the details.

Soon after that outline permission had been given, the local people got to know about it. There was an outcry by the residents in the neighbourhood. They complained bitterly of the prospect of having a transport depot next to them with great lorries coming in and out, and danger to the children running about in the street. The local newspapers came out with headlines such as "Planning decision a blunder' and "Benyon's folly". (Mr. Benyon was the Chairman of the Planning Committee.)

This campaign had its effect. On 1st April, 1966., Hargreaves Transport Ltd. submitted detailed plans for approval, On 7th June, 1966, the details came up for approval before the Council. The Divisional Planning Officer reported In favour of them. The Council engineer thought they were all right. But the Council themselves would not have them. They refused to approve the details. On 13th June formal notices of refusal were Issued, giving the reasons for the refusal:- "(1) Development in accordance with the detailed plans submitted would be detrimental to the visual amenities of the occupiers of dwellinghousee in the vicinity of the site, (2) This is a prominent site at the junction of two busy classified roads and the detailed plans submitted do not show a satisfactory external appearance".

So, whilst one may think that the Council were influenced by the public campaign, nevertheless, on the face of the notice they refused because they did not think the detailed plans were satisfactory, Hargreaves Transport Ltd. tried to get more information about the reasons for refusal, but without success. Nothing more was forthcoming. On 14th June, in view of the refusal of approval of details, Hargreaves Transport Ltd. claimed to rescind the contract to purchase the site. They wrote a letter to the solicitor for the vendor in these words:

"……. We hereby give you notice that we rescind this Contract forthwith and claim the return of £4,900 being the amount of the deposit paid to you as stakeholders at the time of making the Contract. There are a number of reasons for taking this steps

The Farnworth Borough Council have rejected our application for detailed planning permission, despite a favourable recommen dation from the County Planning Office, and in terms so broad, that the implication that they do not want this project to proceed is inescapable.