Mr Jean-François Clin v Walter Lilly & Company Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Carr,Lord Justice Lewison,Lady Justice Asplin |
| Judgment Date | 08 February 2021 |
| Neutral Citation | [2021] EWCA Civ 136 |
| Date | 08 February 2021 |
| Docket Number | Case No: A1/2019/1062 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 136
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT
Mr Justice Waksman
HT2015000219
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lewison
Lady Justice Asplin DBE
and
Lady Justice Carr DBE
Case No: A1/2019/1062
Vincent Moran QC, James Maurici QC and Tom Coulson (instructed by Eversheds Sutherland LLP) for the Appellant
David Thomas QC, Rupert Warren QC and Matthew Finn (instructed by Pinsent Masons LLP) for the Respondent
Hearing date: 21 January 2021
Approved Judgment
Introduction
This appeal raises a question of planning law in the context of a contractual construction dispute between the Appellant property owner, Mr Jean-François Clin (“Mr Clin”), and the Respondent contractor, Walter Lilly & Co. Limited (“Walter Lilly”), a specialist in the renovation of prime residential properties. Specifically, the issue for consideration is the correct approach to be taken in determining when construction works are to be treated as amounting to demolition for the purpose of s. 74 of the Planning (Listed Buildings and Conservation Areas) Act 1990 (“s. 74”) (“the PLBCAA”), thus requiring conservation area consent (“CAC”). Its resolution requires consideration of the principles identified by the House of Lords in Shimizu (UK) Limited v Westminster City Council [1997] 1 WLR 168 (“ Shimizu”) (in the context of listed building consent).
Mr Clin is the owner of residential property now known as 50 Palace Gardens Terrace, London W8 4RR (“the Building”). In September 2012 he contracted with Walter Lilly to carry out demolition, refurbishment and reconstruction works to form a single residence out of Nos 48 and 50 Palace Gardens Terrace (“the Works”) (“the Contract”). The Works commenced in March 2013 but were suspended in August 2013 after the relevant local authority, the Royal Borough of Kensington & Chelsea (“RBKC”), expressed the view that CAC, which had not been sought by or on behalf of Mr Clin, was required. The Works recommenced in August 2014, Mr Clin having by then applied for and obtained the relevant permission. The parties are now in dispute as to where contractual responsibility for the one year's delay in progress of the Works properly falls. As set out more particularly below, the issue of whether or not CAC was lawfully required for the proposed Works is key to answering that question.
In a judgment dated 17 April 2019 ( [2019] EWHC 945 (TCC)) (“the Judgment”), Waksman J (“the Judge”) held that the Works amounted to demolition such that CAC was required. By an order dated 2 May 2019 he granted declaratory relief as follows:
“1. [Mr Clin] breached his implied contractual obligation to [Walter Lilly] to use all due diligence to obtain in respect of the Works any permission, consent, approval or certificate required under, or in accordance with, the provisions of any statute or statutory instrument for the time being in force pertaining to town and country planning and to that extent and in that way [Mr Clin] was in breach of his implied contractual obligation to [Walter Lilly] not to hinder or prevent [Walter Lilly] from carrying out its obligations in accordance with the terms of the Contract or from executing the Works in a regular and orderly manner and to co-operate with [Walter Lilly] in so far as necessary for [Walter Lilly] to discharge its obligations.
2. As a consequence thereof:
a) A Relevant Event or Relevant Events have occurred within the meaning of clause 2.29 of the Contract.
b) [Walter Lilly] is entitled to an extension of time to the Date for Completion of 53.2 weeks.
c) [Walter Lilly] has no liability to [Mr Clin] for liquidated damages for delay in respect of that period.
d) A Relevant Matter or Relevant Matters have occurred within the meaning of clause 4.24 of the Contract.”
(“the Order”).
Mr Clin appeals against the Judgment and the Order. It is said that the Judge was wrong to conclude that CAC for the Works was required. Three grounds are raised, in summary as follows,:
i) The Judge ought to have concluded, by reference to the underlying purpose of the statutory scheme relating to the establishment of conservation areas, that it was appropriate to consider whether the demolition to the Building involved a significant and/or substantial impact on the “character and appearance” of the conservation area (see ss. 69, 72 and 74 of the PLBCAA) (“Ground 1”);
ii) The Judge erred in law and fact in concluding that the retention of a “box” (ie the party walls with adjoining properties, together with most of the front elevation and a large part of the rear elevation) did not preclude a conclusion that there was demolition for the purpose of s. 74. As a matter of law, applying the test in Shimizu, the site was never cleared (“Ground 2”);
iii) The Judge's conclusion that there was substantial demolition for the purpose of s. 74 was based on a series of considerations or reasons so fraught with error as to undermine that conclusion (“Ground 3”).
It is submitted that, applying the correct principles, the Judge would or ought to have concluded that CAC was not required for the Works.
The appeal is resisted by Walter Lilly which contends:
i) On Ground 1: Questions relating to character and appearance are irrelevant to the issue of whether a building is to be demolished. Provided that the qualitative assessment to which a local planning authority must pay heed under s. 72 of the PLBCAA is carried out when deciding whether or not to grant CAC, effect is given to the purpose and intent of the PLBCAA. The anterior question of whether or not CAC is required in the first place is entirely distinct and purely quantitative;
ii) On Grounds 2 and 3: There is no basis on which to interfere with what were findings of fact by the Judge, following the hearing of contested evidence, that the Works amounted to demolition of the Building.
In any event, even if Mr Clin's complaints are well-founded, it is said that the Judge would and ought to have found that CAC was nevertheless required. By a Respondent's Notice Walter Lilly argues further that it is in any event entitled to the relief obtained in the Order because of RBKC's insistence that the proposed Works could not proceed until CAC was obtained.
The financial value of the dispute (incorporated as part of an ongoing Final Account dispute between the parties) is around £3 million (excluding legal costs): following the Judgment Mr Clin repaid some £924,000 to Walter Lilly (in respect of liquidated damages payments) and Walter Lilly has an outstanding loss and expense claim in respect of the relevant period of delay of some £2.1 million.
The parties were originally agreed that, in the event that any ground of appeal were to be upheld, this court should not remit the matter but rather should determine the substantive outcome by reference to its own substituted assessment on the evidence. As the hearing developed, however, Walter Lilly stepped back from that position and submitted that there would have to be remission to the High Court for further evidence, in particular in relation to the character and appearance of the conservation area in question.
The court was assisted by helpful written and oral submissions on both sides, Mr Clin being represented by a team led by Mr Moran QC (who did not appear below) and Walter Lilly being represented by a team led by Mr Thomas QC (who did appear below).
The relevant facts in summary
The Building consists of what was once two adjoining houses (Nos 48 and 50 Palace Gardens Terrace) and is located within a conservation area in RBKC. Mr Clin had owned No 50 for some time and then purchased No 48 with a view to combining the two. This was to involve the removal of the entire interior and parts of the front and rear elevations of both properties which were to be rebuilt as a single dwelling with six floors and a large swimming pool at the rear. All the windows at the rear were to be changed and aligned with a new five-panel window opening onto a new terrace, with aligned cornicing at roof level. No such alignment was to be carried out at the front elevation.
During the course of 2010 and 2011 Mr Clin, by his architect PTP Architects London Ltd (“PTP”), made a series of applications to RBKC for planning permission for the Works. Following his application on 13 June 2011, he was granted a certificate of lawful development (“CLOPUD”) pursuant to s. 192 of the Town and Country Planning Act 1990 (“the TCPA”) on 17 August 2011. This confirmed the lawfulness of amalgamation (but did not provide permission for any demolition or building works). Some limited breaking-through work was carried out to implement the CLOPUD in or around September 2011.
Further multiple planning permission applications followed in 2011 and 2012 (and indeed beyond into 2013). As outlined in the Judgment, it appears that Mr Clin (or those acting on his behalf) did not disclose to RBKC the full extent of the overall scheme and, in particular, the full extent of proposed demolition. Mr Clin and his advisers had been put clearly on notice by RBKC in pre-planning advice given in March 2011 that it was considered highly likely that the proposed works would involve substantial demolition requiring CAC.
Mr Clin and Walter Lilly entered into the Contract on 25 September 2012. The Contract was in the standard form...
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