Minerva (Wandsworth) Ltd v Greenland Ram (London) Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Rose |
| Judgment Date | 23 June 2017 |
| Neutral Citation | [2017] EWHC 1457 (Ch) |
| Court | Chancery Division |
| Date | 23 June 2017 |
| Docket Number | Case No: HC-2015-000954 |
[2017] EWHC 1457 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Rose
Case No: HC-2015-000954
Nicholas Dowding QC and Mark Sefton (instructed by Mishcon de Reya LLP) for the Claimant
David Elvin QC and Charles Banner (instructed by Ashurst LLP) for the Defendant
Hearing dates: 8 – 10 February, 13 – 16 February, 20 – 23 February, 6 April 2017
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
| I. INTRODUCTION | 1 |
| II. BACKGROUND | 11 |
| (a) The planning process | 11 |
| (i) Section 73 of the TCPA | 12 |
| (ii) Section 106 agreements and affordable housing contributions | 14 |
| (iii) Different ways of appraising the financial merits of a planning proposal | 17 |
| (b) The parties and witnesses at the trial | 23 |
| (i) Minerva | 23 |
| (ii) Greenland | 27 |
| (iii) The expert witnesses | 32 |
| (c) The extant planning permission and the Original 106 Agreement | 35 |
| III. THE SALE AGREEMENT | 47 |
| IV. THE EVENTS FOLLOWING THE SALE AGREEMENT | 72 |
| (a) The initial plan to add 10 storeys to the Tower | 72 |
| (b) The plan to add two storeys and the requests for consent | 80 |
| (c) The negotiation with Wandsworth over the Revised 106 Agreement | 125 |
| V. WAS MINERVA ENTITLED TO SUBMIT THE PLANNING APPLICATION ON 18 JULY 2014? | 141 |
| (a) The absence of the viability appraisals from the requests for consent | 142 |
| (b) Were the requests for consent in accordance with the provisions of Schedule 6? | 151 |
| (c) Was the first request on 8 July 2014 too informal to be a valid request pursuant to the Sale Agreement? | 158 |
| (d) Did Greenland act unreasonably in refusing its consent to the first request? | 162 |
| (i) The law | 162 |
| (ii) Greenland's pleaded case regarding the reasons for refusing the first request | 168 |
| (iii) The reduction in floor to ceiling heights of the residential units in the Tower | 172 |
| (iv) Reduction in ceiling zones | 188 |
| (v) Amendments to the central core layout | 196 |
| (vi) Reduction in the floor to ceiling height of the duplex apartments | 199 |
| (vii) Reduction in the floor to ceiling height of the commercial units | 202 |
| (viii) Additional reasons for refusal relied on by Greenland at trial | 204 |
| (e) Did Minerva waive its right to rely on the unreasonable refusal on 9 July 2014? | 213 |
| (f) Was there a deemed consent to the second request? | 218 |
| VI. WAS GREENLAND OBLIGED TO ENTER INTO THE REVISED 106 AGREEMENT? | 227 |
| (a) Did Minerva's alleged breach of its duties to inform and consult mean that Greenland was not "reasonably required" to enter into the Revised 106 Agreement? | 229 |
| (b) Was the obligation in the Revised 106 Agreement 'proportionately no more onerous' than the Original 106 Agreement? | 231 |
| (c) Did Montagu Evans fail to use reasonable endeavours to minimise the affordable housing contribution? | 255 |
| (i) Limiting the appraisal to the two additional floors rather than reappraising the whole Tower | 261 |
| (ii) Use of Land Registry published data for updating sales values | 284 |
| (iii) Starting with £1.4 million instead of £1.08 million and the speed of the negotiation | 285 |
| (iv) The cost of the crane cleaning system | 291 |
| (d) Conclusion on the Revised 106 Agreement | 297 |
| VII. QUANTUM OF DAMAGES | 299 |
| VIII. CONCLUSION | 300 |
I. INTRODUCTION
In December 2013 the Claimant ('Minerva') obtained planning permission from Wandsworth Borough Council for a large and complex building regeneration scheme for an area in the borough known as the Ram Brewery. The Ram Brewery ceased operating 2006 and the site it occupied, together with adjacent land was earmarked for development. The site, which is located in London about 7 miles south west of the city centre, was acquired by the Claimant in 2007 or 2008.
The scheme for which planning permission was granted included the demolition of many existing buildings and the construction of several new buildings including a tower, referred to in the plans as Block 5, which would be 34 storeys high ('the Tower'). It would have retail units at the ground floor level and then floors of apartments including some duplex apartments on the top two floors. The proposal sought consent for retail and residential uses together with a small-scale brewery and a museum. The plans also included the creation of public areas and a river walkway by the River Wandle that cuts through the site. As a condition for obtaining the planning permission of December 2013, Minerva had entered into an agreement with Wandsworth pursuant to section 106 of the Town and Country Planning Act 1990 ('TCPA'). That section provides that any person interested in land in the area of the local authority may enter into an enforceable planning obligation to do something on the land or to pay the authority a sum of money. Under this agreement ('the Original 106 Agreement') Minerva took on various obligations including an obligation to build a certain number of affordable houses on the site (not as part of the Tower) and to pay up to an additional £1.2 million as an affordable housing contribution if the sales of the accommodation they planned to build sold for more than was expected.
Shortly before they had obtained this planning permission, which I will refer to as the "extant planning permission", Minerva had sold the whole site to Greenland Holding Group Overseas Investment Company Ltd for £135,735,800. Minerva hoped to be able to improve on the extant planning permission by adding extra storeys to the Tower. The agreement between the parties for the sale of the site therefore incorporated terms the effect of which was that Minerva was entitled and obliged to apply for an enhanced planning permission for the site. If Minerva achieved a resolution by Wandsworth for an enhanced planning permission before 20 October 2014 then, if certain conditions were satisfied, Greenland would have to pay Minerva overage of £200 psf of additional saleable space. Under the sale agreement, Minerva had to submit its plans for the changes to the Tower to Greenland for its consent before applying for enhanced planning permission from Wandsworth. That consent from Greenland was subject to a tight timetable and could not be unreasonably withheld.
Between January and March 2014 Minerva pursued the idea of adding an additional 10 storeys to the Tower. This was abandoned because Wandsworth was unlikely to approve such a major increase in the height of the Tower in the period just before local elections were being held in May 201Later Minerva drew up plans to seek approval from Wandsworth for only two additional storeys to be added to the Tower, something which would generate additional revenue for Greenland but be less controversial from the Council's point of view.
Minerva say that they made two requests to Greenland to approve the submission of an enhanced planning application to Wandsworth. The first request was made by email on 8 July 2014 and was refused by Greenland by an email on 9 July 2014. Minerva contend that the refusal was unreasonable. Minerva made a second more formal request by letter sent on 11 July 2014. Greenland replied to that on 17 July 2014 saying that it would need at least four weeks to consider the request. Minerva contend that that reply is to be treated as a failure by Greenland to respond so that according to the sale agreement, Greenland was deemed to have consented to Minerva making the application.
Despite the absence of Greenland's consent, Minerva submitted an enhanced planning application to Wandsworth on 18 July 2014. A resolution to grant the enhanced planning permission for the two extra floors to be added to the Tower was passed by Wandsworth just before the deadline set in the sale agreement.
However, Greenland later refused to enter into the additional agreement pursuant to section 106 TCPA with Wandsworth upon which the actual grant of planning permission depended ("the Revised 106 Agreement"). The Revised 106 Agreement required Greenland to make an affordable housing contribution of £1.75 million in addition to the contribution already agreed for the extant scheme. Because the Revised 106 Agreement was not signed by Greenland, the planning permission that Wandsworth had resolved to grant was never granted and the resolution lapsed.
Minerva contend that Greenland's refusal to enter into the Revised 106 Agreement with Wandsworth was a breach by Greenland of the sale agreement. They therefore claim in these proceedings damages for breach of contract in the sum of the overage they would have earned had planning permission being granted.
Greenland dispute this claim. They argue that only one request for approval for their consent to the submission of the enhanced planning application was made but that this request was invalid because it was not accompanied by the documents which Greenland needed to be able to assess whether to give its consent or not. They further argue that their reasons for refusing consent to the first request were good reasons under the contract. They say that Minerva was itself in breach of its obligations under the sale agreement because it failed to keep Greenland informed of the consultations and discussions taking place between Minerva and Wandsworth and between Minerva and its various building project consultants in the lead up to the request for Greenland's consent. This meant that Greenland was bounced into having to decide...
To continue reading
Request your trial
-
Rosa Raffermati v Capello Hair Designs Ltd and Another
...Limited v Commissioners for Her Majesty's Revenue and Customs [2016] EWCA Civ 376, at [20], per Lewison LJ, and Minerva (Wandsworth) Limited v Greenland Ram (London) Limited [2017] EWHC 1457 (Ch), at [206], per Rose J, in support of the proposition that a case should be clearly and comprehe......
-
Seadrill Ghana Operations Ltd v Tullow Ghana Ltd
...obligation have done to try to obtain the planning permission” or to minimise the affordable housing; see Minerva v Greenland Ram [2017] EWHC 1457 (Ch) per Rose J. That is an objective 87 Where a long term contract for the sale and purchase of the output of a North Sea gas field provided t......
-
ENDEAVOURS CLAUSES IN SINGAPORE CONTRACT LAW
...Sdn Bhd [2014] 2 SLR 905 at [47], and reproduced at para 33 above. 45 See also Minerva (Wandsworth) Ltd v Greenland Ram (London) Ltd [2017] EWHC 1457 (Ch) at [255]. 46 See also Rhodia International Holdings Ltd v Huntsman International LLC [2007] 1 CLC 59 at [35] and Mactaggart & Mickel Hom......