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Issue 66 – October 2009

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Discounts
Cases

*Seele Austria GmbH Co v Tokio Marine Europe Insurance Limited

Practice – Amendment. Queens Bench Division, Technology and Construction Court, held that the claimant was, in the absence of special circumstances, issue estopped from amending its pleadings in an ongoing matter as the amendments sought to reopen an issue which had already been decided in trial and by the Court of Appeal. Further, it would also have been contrary to Henderson v Henderson to have permitted the amendments as it would be oppressive for the defendant to be faced with proceedings in relation to the same issue on which it had previously been successful.


Citation: [2009] All ER (D) 41 (Sep)
Alternative citations: [2009] EWHC 255 (TCC)
Hearing date: 17 February 2009
Court: Queen's Bench Division, Technology and Construction Court
Judge: Coulson J
Representation: Adrian Williamson QC and Marcos Dracos (instructed by Bryan Cave) for the claimant. Paul Reed and Jeffrey Thomson (instructed by Kennedys) for the defendant.

Keywords: Practice – Amendment – Statement of claim – Claimant claiming indemnity under insurance contract underwritten by defendant – Claimant subsequently applying to amend claim – Whether issue previously addressed by Court of Appeal – Whether claimant issue estopped from amending particulars of claim – Whether allowing amendment would amount to Henderson abuse.

Summary: The judgment is available at: [2009] EWHC 255 (TCC)
The claimant was a specialist curtain wall and glazing contractor. The defendant was an insurance underwriter who underwrote a project policy of insurance in relation to work at Paternoster Square, London. The claimant designed and installed glazing at the development site which was defective and had to be repaired. In June 2006, the claimant commenced proceedings against the defendant under the policy of insurance in respect of various costs and losses incurred, seeking an indemnity or, alternatively, damages. In June 2007 the claimant's claim was dismissed (see [2007] All ER (D) 230 (Jun)). That decision was reversed by the Court of Appeal in May 2008 (see [2008] All ER (D) 68 (May)). The Court of Appeal held that workmanship deficiencies to each window, rather than design faults, represented a separate occurrence/event, and permitted the defendant to apply the retained liability (deduction) of £10,000 to each repaired window. In the Autumn of 2008, the proceedings were transferred to the Technology and Construction Court. The claimant sought to amend its particulars of claim.

The amendments to the particulars of claim sought by the claimant included, inter alia, that the majority of the defects in the windows were due to bad design, rather than bad workmanship, and so should have been treated as a series of occurrences arising from one event with the result that the total deductibles under the insurance totalled £10,000 and not £10,000 per window. The defendant submitted that the Court of Appeal had already ruled that the cause of the defects in the windows was bad workmanship and that such a ruling was not capable of being reopened. In the alternative, the issue should have been raised for determination in either the court of first instance or at the Court of Appeal and it would have been an abuse of process for the issue to have been raised in the instant proceedings.

The court ruled:
It was established case law that when an issue had already been decided by a court of competent jurisdiction, it could not subsequently be re-litigated. A party who sought to demonstrate issue estoppel had to show that the claim raised an issue which: (i) had already been litigated; (ii) had already been decided; and (iii) was a necessary ingredient in the cause of action that was advanced. Re-litigation might have been permitted if special circumstances applied. Issue estoppel applied to the determination of preliminary issues or interlocutory matters decided earlier in the same action between the parties. The parties could not subsequently, in the same proceedings, advance arguments or adduce further evidence directed to showing that the issue in question had been wrongly determined. The court would not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward as part of the issue which was under discussion, but which was not brought forward, only because they had, from negligence, inadvertence or accident, omitted part of their case (see Henderson v Henderson). The fact that the issue could have been raised before, but was not, did not, of itself, amount to Henderson abuse.

 A finding that an issue could have been raised was not the same as whether it should have been raised. There was no reason why, in principle, Henderson abuse could not have been applicable to the later stages of the same action (see [16] - [19], [21], [24], [27] of the judgment).
The claimant was issue-estopped from amending its particulars of claim. The issue as to whether the defects were a matter of workmanship or design was an issue before the trial judge and was determined by him in favour of the defendant (having determined that the defects were a matter of workmanship). Further, the relevant part of the judgment was subsequently accepted by both the claimant and the Court of Appeal and was not appealed by the claimant. In the absence of special circumstances, the judge's finding could not have been opened up by the claimant amending its claim to allege that the majority of defects were design issues. The matter was subsequently before the Court of Appeal and was determined by them; again, in the absence of special circumstances, the question of issue estoppel arose to bar the claimant from amending its particulars of claim. Therefore, the claimant's single event argument failed. Additionally, the 'design v workmanship' issue could and should have been raised and determined at the previous hearings. Failure by the claimant to have raised the design issue was not outside the claimant's control. The fact that the point arose in on-going proceedings did not affect the decision of the court (see [69] - [77], [81], [94], [98] - [106] of the judgment).

The claimant's design amendments would not be allowed because they sought to reopen an issue which had already been determined and because it would have been contrary to the principles of Henderson abuse to have allowed the amendments (see [96], [97] of the judgment).
Henderson v Henderson 3 Hare 100 applied; Thoday v Thoday [1964] 1 All ER 341 applied; Fidelitas Shipping Co Ltd v V/O Exportchleb [1965] 2 All ER 4 applied; Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2), Rayner and Keeler Ltd v Courts [1967] 1 AC 853 applied; Arnold v National Westminster Bank plc [1991] 3 All ER 41 applied; Dexter Ltd (in administrative receivership) v Vlieland-Boddy [2003] All ER (D) 221 (Jan) applied; Tannu v Moosajee [2003] All ER (D) 283 (Jun) applied; Aldi Stores Ltd v WSP London Ltd [2007] All ER (D) 433 (Nov) applied.

Charlotte Hennessey, solicitor
Published date: 08/09/2009
 
*Hart v Smith and another

Building contract – Adjudication. Queens Bench Division, Technology and Construction Court, held that the adjudicators decision would be enforced, but that the court would not make any further ruling outside the decision of the adjudicator.

Citation: [2009] All ER (D) 29 (Sep)
Alternative citations: [2009] EWHC 2223 (TCC)
Hearing date: 3 September 2009
Court: Queen's Bench Division, Technology and Construction Court
Judge: Toulmin J
Representation: Stuart Kennedy (instructed by Michelmores LLP) for the claimant.Patrick Clarke (instructed by Ashfords LLP) for the defendants.

Keywords: Building contract – Adjudication – Award – Enforcement – Two awards from adjudication – Defendants seeking to claim liquidated damages further to award made in their favour - Whether damages payable as a consequence of adjudicator's award - Housing Grants Construction and Regeneration Act 1996 ss 107, 108

Summary: The judgment is available at: [2009] EWHC 2223 (TCC)
In March 2006, the parties entered into an agreement for the claimant to carry out works on behalf of the defendants for the conversion of three agricultural barns into four dwelling houses. The contract was on the JCT standard building contract with quantities 2005 edition, and so was an agreement within s 107(2) and (4) of the Housing Grants Construction and Regeneration Act 1996. Section 108 of the 1996 Act gave the parties the right to refer any dispute to adjudication. Two separate adjudications took place between the parties. Under the first adjudication in May 2009, which was brought by the claimant in respect of unpaid sums, an award was made in favour of the claimant against the defendants. A second dispute was referred to adjudication in June by the defendants.

The defendants alleged that the claimant failed to complete the works by the due dates and that they were therefore entitled to a certificate of non-completion and to deduct/or be paid liquidated and ascertained damages. Resulting from the second adjudication, an award was made in favour of the defendants against the claimant that a repayment ordered by the contract administrator be repaid by the claimant and a smaller sum than that claimed by the defendants was awarded in respect of a notice of withholding issued by the defendants relating to a collapsed wall. The adjudicator did find that the defendants were entitled to the certificates of non-completion but did not order that liquidated damages be paid. The adjudicator made clear that the defendants could not require payment of liquidated damages until the certificates of non-compliance had been issued. In July, the defendants wrote to the claimant claiming liquidated damages in addition to payment of the sums awarded by the adjudicator.  Two applications were made in July and August 2009 seeking enforcement of the decisions of the adjudicator.

The issue under consideration was, inter alia, whether the specific sum claimed by the defendants followed logically from the adjudicator's decision in the second adjudication.

The court ruled:

When considering the law of adjudication, the starting point was the 1996 Act. The purpose of the 1996 Act was to introduce a mechanism for the prompt settlement of disputes in construction contracts on a provisional basis. It was well established that decisions of adjudicators should be enforced promptly pending final determination of the dispute by litigation, arbitration or agreement. The decision of the adjudicator should be given effect in a way which was consistent with providing a quick and effective remedy on an interim basis and without consideration of arguments relating to other provisions in the contract. There were only limited grounds for refusing to enforce immediately an adjudicator's award setting out sums which had been found by the adjudicator to be due to a party in an adjudication.  H S Works v Enterprise Managed Services established four issues to be addressed in matters where two adjudicators' decisions were to be enforced: (i) whether both decisions were valid; (ii) if yes, wether both decisions were enforceable; (iii) if yes, the court should give effect to both decisions but in a way which did not favour one party over another; and (iv) how each decision was to be enforced was a matter for the court exercising its discretion to act fairly (see [33] - [37] and [39] of the judgment).

The defendants were not entitled to enforce their claim for liquidated damages against the claimant. Section 108(3) of the 1996 Act gave the court jurisdiction to enforce the decision of the adjudicator. It followed from the adjudicator's decision that the contract administrator should have issued the certificates of non-compliance and nothing more. It could not be taken from the adjudicator's decision that liquidated damages were payable by the claimant. Whether the defendants were entitled to liquidated damages was not within the court's jurisdiction for enforcement of the adjudicator's award (see [46] and [47] of the judgment).

Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] All ER (D) 143 applied; Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2000] All ER (D) 1132 applied; VHE Construction plc v RBSTB Trust Co Ltd (as trustee of the Mercury Property Fund) [2000] All ER (D) 23 applied; Levolux AT Ltd v Ferson Contractors Ltd [2003] All ER (D) 172 (Jan) applied; Balfour Beatty Construction Ltd v Serco Ltd [2004] All ER (D) 348 (Dec) applied; Interserve Industrial Services Ltd v Cleveland Bridge UK Ltd [2006] All ER (D) 49 (Feb) applied; William Verry Ltd v Camden London Borough Council [2006] All ER (D) 292 (Mar) applied; HS Works Ltd v Enterprise Managed Services Ltd 124 ConLR 69 applied.

Charlotte Hennessey, solicitor
Published date: 04/09/2009
 
*William Hare Limited and another v Shepherd Construction Limited

Building Contract – Term. The Queens Bench Division, Technology and Construction Court, held that on the true construction of a 'pay when paid' clause in a sub-contractor agreement, and taking into account all the background events to the entering into of the agreement, a failure to include all types of employer insolvency events as introduced into the Insolvency Act 1986 by the Enterprise Act 2002 meant that those insolvency events were not anticipated by the clause and the defendant contractor was bound to pay the sums owed to the claimant sub-contractor.

Citation: [2009] All ER (D) 01 (Sep)
Alternative citations: [2009] EWHC 1603 (TCC)
Hearing date: 25 June 2009
Court: Queen's Bench Division, Technology and Construction Court
Judge: Coulson J
Representation: Sean Brannigan QC (instructed by Addleshaw Goddard) for the first claimant. Alexander Nissen QC (instructed by Gosschalks, Kingston-upon-Hull) for the second claimant. Stephen Furst QC and Kirsta Lee (instructed by Wragge & Co) for the defendant.

Keywords: Building Contract – Term – Construction – Defendant employed by developer – Claimant sub-contractor employed by defendant – Sub-contract containing 'pay when paid' clause' – Sub-contract containing definition of insolvency of developer - Developer going into self-certified administration - Whether defendant can rely on pay when paid clause - Housing Grants (Construction and Regeneration) Act 1996, s 113(1) – Insolvency Act 1996 – Enterprise Act 2002.

Summary: The judgment is available at: [2009] EWHC 1603 (TCC)
Section 113(1) of the Housing Grants (Construction and Regeneration) Act 1996 effectively outlawed 'pay when paid' clauses in construction contracts except when the ultimate employer had become insolvent. The claimant was a sub-contractor engaged in December 2008 by the defendant contractor to fabricate and erect steelwork at a large development in Wakefield. The defendant was employed by a developer, T.
The sub-contract contained a clause (cl 32) which was in similar terms to s 113 of the 1996 Act under which T's insolvency was defined by reference to four alternate situations: an administration order made by the court; the appointment of an administrative receiver; insolvent liquidation; and the making of a winding up order by the court (see [19] of the judgment). Clause 29 of the sub-contract (addressing the insolvency of the claimant) included the words: 'under the Insolvency Act 1986 or any amendment or re-enactment thereof'. No such words were contained within cl 32. In March 2009, T went into self-certifying administration through a process introduced by the Enterprise Act 2002 that amended the Insolvency Act 1986. Clause 32 made no reference to self-certifying administration. The claimant had legitimate claims in respect of work done, against which the defendant issued withholding notices, relying on T's insolvency under cl 32. The claimant commenced proceedings against the defendant seeking judgment for the unpaid sums plus interest and an order that payment be made.

The claimant submitted that because none of the four insolvency events identified in cl 32 had occurred, T was not insolvent within the meaning of that clause and the withholding notices were therefore invalid. The defendant submitted that it would not be correct for the sub-contract to be construed as having ignored the subsequent amendments to the legislation and that all routes to administration under the 1986 Act, as amended, were covered by the wording of cl 32.
The application would be allowed.

It was established case law that where there was a dispute about the meaning and effect of a particular contractual provision, the starting point was to assess the words used and the natural and ordinary meaning of those words. Care was to be taken to ensure that the words were not interpreted too literally or at the expense of business common sense. Where a contract incorporated the provisions of a statute, there was no presumption either way as to whether the reference was to the law in force at the relevant time. The answer depended upon the proper construction of the words of incorporation in the context in which they were used (see [27], [28], [30] of the judgment).
 
The words of cl 32, as drafted, gave rise to a coherent result and a commercially sensible outcome. It was not correct to say that there was no longer such a thing as an administration order under Part II of the 1986 Act. A court imposed administration order might have had some advantages over the self-certifying options. Scrutiny of a self-certified company happened after it went into administration. This might have made a difference to creditors, such as those in the instant case, because under the court sanctioned regime, the court could have heard representations from the creditors before the order was made. In the circumstances, cl 32 would not be re-written to allow for the amendments to the 1986 Act made by the 2002 Act; consequently only one of the administration routes was anticipated by cl 32.

That conclusion was based on the construction of the plain meaning of the words used. There was no reason to believe that the parties did not intend to use those words or that they had made a mistake in including those words in their formal sub-contract. Secondly, cl 32 endeavoured to identify the circumstances in which the claimant would not be paid for work done under the sub-contract. It attempted to pass to the claimant the risk that the defendant would not be paid under its contract with T in respect of the sub-contract work. It was therefore a form of exclusion clause. The court was required to ensure that the defendant was kept within its bargain with the claimant and that a clause of the nature of that in the instant case was not re-written to expand the circumstances in which the claimant might have found itself significantly out of pocket because of an event further up the contractual chain. Finally, the sub-contract in the instant case was made over five years after the 2002 Act came into force, but cl 32 made no reference to those amendments. It was common ground between the parties that they ought to have known of the prohibition on 'pay when paid' clauses and the changes to the administration regime under the 2002 Act. In the circumstances, it was appropriate to view the failure to amend cl 32 as a deliberate decision to include only one particular method of administration but not the self-certifying alternatives offered by the 2002 Act (see [38], [41], [42], [44], [45], [47] - [50] of the judgment).

On the true construction of cl 32, the clause only came into effect if T were the subject of an administration order under Part II of the 1986 Act. As T was not the subject of such an order, the defendant's withholding notices were invalid and the claimant was entitled to the sums sought (see [57] of the judgment).

Brewers' Co v Viewplan plc [1989] 45 EG 153 applied; Youell v Bland Welch & Co Ltd [1992] 2 Lloyd's Rep 127 applied; Sirius International Insurance Co (Publ) v FAI General Insurance Ltd [2004] All ER (D) 24 (Dec) applied; Ellse v Hill-Pickford [2006] All ER (D) 328 (Dec) applied.

Charlotte Hennessey, solicitor
Published date: 01/09/2009
 
*North Midland Construction plc v AE & E Lentjes UK Ltd

Building contract – Construction. Queen's Bench Division, Technology and Construction Court: Where the claimant sought declarations relating to two enabling works contracts and two civil engineering works contracts it had entered into with the defendant, neither the enabling works nor the civil works fell within the definition in s 105(2)(c)(i) of the Housing Grants and Construction and Regeneration Act 1996; however, they were construction operations as defined in s 105(1) of the Act.

Citation: [2009] All ER (D) 194 (Aug)
Alternative citations: [2009] EWHC 1371 (TCC)
Hearing date: 18 June 2009
Court: Queen's Bench Division, Technology and Construction Court
Judge: Ramsey J
Representation: Simon Lofthouse QC and Peter Land (instructed by Browne Jacobson LLP) for the claimant. Stephen Furst QC (instructed by Pinsent Masons) for the defendant.

Keywords: Building contract – Construction – Civil engineering and enabling works – Disputes arising between parties as to final account of technical specification – Claimant seeking declarations against defendant in respect of contracts – Whether contracts constituting construction contracts - Housing Grants and Construction and Regeneration Act 1996, ss 105(1), (2).

Summary: The judgment is available at: [2009] EWHC 1371 (TCC)
Section 105 of the Housing Grants and Construction and Regeneration Act 1996, so far as material, provides: '(2) The following operations are not construction operations within the meaning of this Part--(a) drilling for, or extraction of, oil or natural gas; (b) extraction (whether by underground or surface working) of minerals; tunnelling or boring, or construction of underground works, for this purpose; (c) assembly, installation or demolition of plant or machinery, or erection or demolition of steelwork for the purposes of supporting or providing access to plant or machinery, on a site where the primary activity is--(i) nuclear processing, power generation, or water or effluent treatment, or (ii) the production, transmission, processing or bulk storage (other than warehousing) of chemicals, pharmaceuticals, oil, gas, steel or food and drink; (d) manufacture or delivery to site of--(i) building or engineering components or equipment, (ii) materials, plant or machinery, or (iii) components for systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or for security or communications systems ...'.
 
In August 2006, the defendant entered into four agreements with the claimant; two enabling works contracts, and two civil engineering works contracts. The contracts were in similar terms and related to two power stations. The power stations fell under the requirements of European Parliament and Council Directive (EC) 2001/80 (on the limitation of emissions of certain pollutants into the air from large combustion plants). In order to meet the emission limits for sulphur dioxide set in the Directive it was necessary to provide flue gas desulphurisation (FGD) units to each of the power stations. The defendant was appointed as the turnkey contractor for the work and the defendant then sub-contracted parts of the work. The work to provide the FGD units required enabling works and civil works before the FGD units and other associated parts of the system could be installed or completed.

Each of the four contracts was in materially the same form consisting of a purchase order agreement which incorporated conditions of contract which were materially the same. Each contract also incorporated various specifications, bills of quantities, schedules, drawings and other documents. Disputes arose between the parties as to the final account of the technical specification for the enabling works and the civil works. Accordingly, the claimant issued a Pt 8 claim seeking declarations against the defendant in respect of the application of the Housing Grants and Construction and Regeneration Act 1996 to the four contracts and also declarations in relation to the enabling works and the civil works. The claimant sought a finding that the provisions of the Act applied so that the four agreements were construction contracts within the meaning of the Act. The defendant contended that the works were not construction operations, that the agreements were not construction contracts and that the Act did not apply.

The issues were, inter alia, whether the works were excluded 'construction operations' as defined by s 105(2)(c)(i) of the Act; and whether the works came within the exception in s 105(2)(c)(i).

The court ruled:

Section 105(1) of the Act contained a very wide definition of construction operations and s 105(2) contained specific exclusions. In those circumstances, where s 105(2) had intentionally been drafted in terms of specific limited exclusions, a narrower approach to the construction of s 105(2) would generally be appropriate. If the intention had been to exclude all construction operations on a site where the primary activity was power generation then that could easily have been done or if it had been intended to exclude all preparatory activities, then a sub-section similar to s 105(1)(e) could have been added. The narrow construction of s 105(2) was to be preferred (see [49], [53] of the judgment).

The intent of the Act was that it should generally apply to construction operations within s 105(1). A broad construction would deprive the Act of effect in many cases and would lead to a strained construction of the words 'assembly, installation ... of plant or machinery.' On the other hand, a narrow construction would give effect to the Act by applying it only in cases where the work was assembly or installation of plant or machinery (see [53], [66] of the judgment).

On a narrow construction of s 105(2)(c)(i), it was not possible for the enabling works to be described as 'assembly, installation or demolition of plant or machinery'. The works could only come within that description if the works as a whole on the project were very broadly defined rather than just considering the operations which were the subject of the enabling works contract between the parties. Section 105(2)(c) could not be construed so broadly. Accordingly, the enabling works were construction operations within s 105(1) and were not excluded operations under s 105(2). Moreover, the works under the civil works contracts were construction contracts which were not excluded as they were not assembly or installation of plant machinery under s 105(2)(c) (see [71], [72], [82] of the judgment).

Neither the enabling works nor the civil works fell with the definition in s 105(2)(c)(i) but were construction operations as defined in s 105(1) so that the provisions of the Act applied to enabling works contracts and the civil works contracts (see [108] of the judgment).

Palmers Ltd v ABB Power Construction Ltd [1999] All ER (D) 1273 approved; ABB Power Construction Ltd v Norwest Holst Engineering (2000) 77 ConLR 20 considered; Comsite Projects Ltd v Andritz AG [2003] All ER (D) 64 (May) adopted.

Jade Campbell, barrister
Published date: 26/08/2009
 
*R (on the application of Woolley) v Cheshire East Borough Council

Town and country planning – Permission for development. Queen's Bench Division, Administrative Court (Manchester): The court gave a ruling on the approach which a planning authority should take in connection with deciding whether to grant planning permission where reg 3(4) of the Conservation (Natural Habitats, &c) Regulations 1994, SI 1994/2716, was a relevant consideration. The authority, in the instant judicial review, had breached reg 3(4) in granting planning permission for a development on a site on which a bat roost was present.

Citation: [2009] All ER (D) 166 (Aug)
Alternative citations: [2009] EWHC 1227 (Admin)
Hearing date: 5 June 2009
Court: Queen's Bench Division, Administrative Court (Manchester)
Judge: Judge Waksman QC sitting as a judge of the High Court
Representation: Richard Harwood (instructed by DLA Piper) for the claimant.Martin Carter (instructed by Cobbetts LLP) for the authority.The interested party did not appear and was not represented.

Keywords: Town and country planning – Permission for development – Material consideration – Regulation requiring authorities to have regard to Habitats Directive when discharging its functions - Defendant authority granting planning permission for development on site in which bat roost present - Claimant taking issue with grant – Whether authority breaching regulation – Approach authority should take where regulation a material consideration - Council Directive (EEC) 92/43 – Conservation (Natural Habitats, &c) Regulations 1994, SI 1994/2716, reg 3(4).

Summary: The judgment is available at: [2009] EWHC 1227 (Admin)
Regulation 3(4) of the Conservation (Natural Habitats, &c) Regulations 1994, SI 1994/2716, provides: 'Without prejudice to the preceding provisions, every competent authority in the exercise of any of their functions, shall have regard to the requirements of the Habitats Directive so far as they may be affected by the exercise of those functions.'

The interested party submitted an application for planning permission to the defendant local authority for the demolition of a property known as 'Bryancliffe' and its replacement by a larger property consisting of three apartments. It was well known that the area surrounding the site on which the development was intended to be located had been designated as an 'area of special county value', although the site itself did not have that status. The application was refused, and an appeal against that decision was dismissed by a planning inspector. A second application was made, however that was later withdrawn after an adverse committee report. In August 2007, the interested party submitted a third application.

The claimant, an owner of a property adjoining the site, made representations, objecting to the proposed development. In mid-October, a report was produced by a planning officer, under which the planning application was recommended for approval (see [7]-[13] of the judgment). On 24 October, the authority's planning sub-committee resolved to grant permission subject to conditions and the making of a s 106 agreement. Planning permission was granted by way of a letter dated 15 February 2008. The claimant applied for judicial review of that decision.

One of the issues which arose for consideration was whether there had been failures in respect of the Council Directive (EEC) 92/43 (on the conservation of natural habitats and of wild fauna and flora) (the Directive), it having been common ground that the development, as was proposed in the third application, would have an impact on the bat roost which was present on the site, and the bat population in the immediate area. The particular provision under consideration was reg 3(4) of the Conservation (Natural Habitats, &c) Regulations 1994, SI 1994/2716 (the 1994 Regulations), which implemented the Directive into domestic law. The authority claimed that the only duty imposed under reg 3(4) was for the authority at the planning stage to note the existence of the Directive and the 1994 Regulations and to note the existence of the relevant bats; the claimant contended that that approach did not go far enough.

The application would be allowed.

The approach which a planning authority should take in connection with deciding whether to grant planning permission where reg 3(4) of the 1994 Regulations was a relevant consideration was as follows: if it was clear or very likely that the requirements of the Directive could not be met because there was a satisfactory alternative or because there were no conceivable other imperative reasons of overriding public interest then the authority should act upon that, and refuse permission; if, on the other hand, it seemed that it was likely that the requirements could be met, then the authority would have discharged its duty to have regard to the requirements and there would be no impediment to planning permission on that ground; if, however, it was unclear to the authority whether the requirements would be met, the authority would have to take a view whether in all the circumstances it should affect the grant or not (see [27] of the judgment).

In the instant case, the authority was in breach of reg 3(4). Indeed, it had not even been suggested that the authority had embarked upon the kind of exercise which was required. The planning officer's report had made no mention of the Directive or the 1994 Regulations. The officer should have had specifically raised the rather specialised duty upon the authority in his report so that the planning sub-committee could then seek to discharge it. As there was no reference to any of the relevant materials it was hardly surprising that the authority had given them no consideration (see [29], [31] and [32] of the judgment).

In those circumstances, the planning permission would be quashed (see [35] and [78] of the judgment).

Berkeley v Secretary of State for the Environment [2000] 3 All ER 897 considered.

Robert Chan, barrister
Published date: 21/08/2009
 
R (on the application of Sargeant) v Essex County Council

Town and country planning - Permission for development. Queen's Bench Division, Administrative Court (London): The court dismissed the instant judicial review of the decision by the defendant minerals planning authority to approve a scheme of restoration in respect of land leased to the claimant by the interested party. The approval was lawful, as was a particular planning permission which was called into challenge by the claimant.

Citation: [2009] All ER (D) 149 (Aug)
Hearing date: 19 August 2009
Court: Queen's Bench Division, Administrative Court (London)
Judge: David Elvin QC sitting as a deputy judge of the High Court (Judgment delivered extempore)
Representation: Paul Stinchcombe (instructed by Foskett Marr Gadsby & Head LLP, Epping) for the claimant. The authority did not appear and was not represented.Robert Fookes (instructed by Eversheds LLP) for the interested party.

Keywords:Town and country planning – Permission for development – Planning obligation – Claimant extracting certain minerals from land subject to lease obtained from interested party – Extraction being carried out pursuant to planning permissions - Defendant minerals planning authority approving scheme of restoration – Claimant taking issue with lawfulness of approval and scope of certain permission - Whether challenged permission lawful - Whether approval lawful.

Summary: The instant proceedings for judicial review concerned a decision by the defendant minerals planning authority to approve a scheme of restoration in respect of a site in its administrative area (the Romp consent). The decision was made with reference to a number of other sites in the locality, namely 'the priory site' and 'the Martin's Farm site'. It was common ground that the material planning permissions granted in respect of those two sites were for the 'winning and working of sand and gravel and purposes ancillary thereto...' on those sites. The claimant was the long leaseholder of the sites, and was responsible for extracting the minerals therefrom. The interested party was the freehold owner of the sites and the surrounding land. By the time of the instant hearing, the restoration work had not been completed, contrary to the terms of the Romp consent which had required the same to be completed by 31 December 2008.

Four issues arose on the application. The first concerned the scope of the '1965 permission', the principal permission which had been granted in respect of the priory site. The claimant's challenge in relation to that permission was that it had consequences in respect of what was to be permitted in the restoration; in particular, it was contended that restoration to water only was permitted. The second, third and fourth issues related to the lawfulness of the authority's approval of the scheme. The claimant's specific complaints were: (i) that the authority had unlawfully omitted to refer to three matters which had been agreed by the interested party in communications that had taken place before the granting of the Romp consent, and that such matters should have been included as part of the approval; (ii) that the application for the scheme was defective having regard to, inter alia, the timetable for the implementation of the restoration process; and (iii) that the Romp consent was unlawful on the basis that it, purportedly, permitted the use of materials for restoration works which were not permitted by the earlier permissions.

The application would be dismissed.

In the circumstances, the 1965 permission did not restrict the terms of the restoration. Further, there was no basis upon which it could be concluded that the 1965 permission was unlawful. In respect of the other issues, and the claimant's specific complaints in respect of them, none had any substantive merit. The authority had omitted to refer to three particular matters, as alleged by the claimant, however, that did not make the approval by the authority unlawful. In any event, those matters were covered by other means. There was also no basis upon which it could be said that the application for the scheme was defective. The authority had been entitled to approve the scheme in the way that it had. Finally, the claimant's complaint relating to permitted materials was not well-founded. The terms of the Romp consent had to be read in context. That context was the permissions which had been granted in respect of the priory site and the Martin's Farm site. Taking those permissions into account, together with the Romp consent, it was clear that the use of materials deposited onto the site at issue could be used in the restoration works. The relevant requirement for the use of 'on-site indigenous material' was not to be limited to the types of material as contended for by the claimant. Accordingly, the approval of the restoration scheme was lawful.

Robert Chan, barrister
Published date: 19/08/2009

Legislation

Building and Approved Inspectors (Amendment No 2) Regulations 2009

SI 2009/2465: Changes to hot water supply regulations postponed to 6 April 2009

LNB News 15/09/2009 28
Published date: 15 September 2009
Jurisdiction: England; Wales; European Union
Enactment citation: SI 2009/2465
Commencement date: 30 September 2009
Legislation affected: SI 2009/1219, SI 2009/2397 amended
Enabling power: Building Act 1984, ss 1, 3, 34, 35,  35A(2), 47, Sch 1, paras 1, 2, 4, 4A, 7, 8, 10

Summary: Amend the Building and Approved Inspectors (Amendment) Regulations 2009, SI 2009/1219, and the Building (Amendment No 2) Regulations 2009, SI 2009/2397, to postpone their coming into force. Their commencement dates have been changed from 1 October 2009 to 6 April 2010. Provide time to consider a potential conflict with Community law. SI 2009/2397 and SI 2009/1219 go further than required in regulating hot water supplies which may contravene a specific requirement not to restrict the marketing of appliances meeting Community directives governing gas-burning appliances and pressure equipment.
 
Statutory instruments

Planning Act 2008 (Commencement No 2) Order 2009

SI 2009/2260: Infrastructure Planning Commission to be applied to for development consent from 1 October 2009

LNB News 09/09/2009 12
Published date: 9 September 2009
Jurisdiction: England; Scotland; Wales
Enactment citation: SI 2009/2260
Enabling power: Planning Act 2008, s 241(3), (8)
Summary: Brings into force on 1 October 2009 the Planning Act 2008, ss  1-4, 37-40, 41-50, 51-54. 56-59 in relation to England  and Wales and, to the extent specified in s 240(4), to Scotland,  so far as they are not already in force.
These provisions introduce:

  - the Infrastructure Planning Commission, with the requirement  for it to issue a code of conduct for its Commissioners which it  is to keep under constant review;
  - the ability for the Secretary of State to make regulations  for the Commission to charge fees for its work;
  - the requirement for an application for orders granting  development consent, combined with the ability for the Secretary  of State to make model provisions for a draft order. A register  is to be maintained by the Commission of applications  received;
  - an obligation on an applicant to consult with the local  community and publicise proposed applications;
  - the power for the Commission to authorise entry onto land for  surveying and taking levels in connection with an application; and
- the form of notice required to obtain information about  interests in land.
- 
The provisions apply to Scotland only so far as required for the purpose of the construction (other than by a gas transporter) of an oil or gas cross-country pipe-line with one end in England or Wales, and the other in Scotland.
S 190(1)-(3), (5), (6) is brought into force for England and Wales, and inserts a new  Town and Country Planning Act 1990, s 96A, providing local planning authorities with the power to make non-material changes to planning permissions in certain prescribed circumstances. Includes the ability to insert new conditions as well as alter or remove existing conditions.
S 200 is brought into effect for England only, and inserts a  new  Town and Country Planning Act 1990, s 303ZA to allow  regulations to be made on the fee for appeals to the appropriate  authority with requirements for any such regulations to be  approved by both Houses of Parliament.
 
Infrastructure Planning (Applications: Prescribed Forms and Procedure) Regulations 2009

SI 2009/2264: Infrastructure Planning forms available from 1 October 2009

LNB News 09/09/2009 27
Published date: 9 September 2009
Jurisdiction: England; Scotland; Wales
Enactment citation: SI 2009/2264
Commencement date: 1 October 2009
Enabling power: Planning Act 2008, ss 37, 42, 48, 51, 56, 58, 59, 232

Summary: Establishes the Infrastructure Planning Commission and provides for the granting of development consent for certain types of nationally significant infrastructure projects. These regulations prescribe various matters in connection with the making of an application for development consent.
Set out the procedural requirements for publicising a proposed application, and deal with the making of the application itself and provides for an application form which is set out.
Set out the procedural requirements for publicising the application once it has been accepted by the Commission and what needs to be done when an order requires compulsory acquisition of land. Sets out the procedure that must be followed when the Commission gives advice, and sets out the procedural matters for applications made prior to 1 October 2011 where consultation has commenced between October 2007 and October 2009.
 
Infrastructure Planning (Environmental Impact Assessment) Regulations 2009
   
SI 2009/2263: Procedural requirements for the environmental impact assessment of nationally significant infrastructure projects set out

LNB News 09/09/2009 47
Published date: 9 September 2009
Jurisdiction: England; Scotland; Wales
Enactment citation: SI 2009/2263
Commencement date: 1 October 2009
Enabling power: European Communities Act 1972, s 2(2)

Summary: Implement, in relation to nationally significant infrastructure projects under the Planning Act 2008, Council Dir 85/337/EEC on the assessment of the effects of certain public and private projects on the environment, as amended by Council Dir 97/11/EC.

Impose procedural requirements, in particular, the carrying out of environmental impact assessment (EIA) in relation to applications for development consent and in relation to applications for subsequent consent, which are applications for the approval of requirements imposed by orders granting development consent (subsequent applications). EIA is a procedure that comprises the preparation of an environmental statement, the carrying out of consultation and publicity on that statement and its submission to the authority to which it falls to determine the application in question.

Prohibits the grant of development consent for EIA development unless the authority taking the decision has first taken account of the environmental information. Development is categorised as EIA development if either an applicant notifies the IPC that an environmental statement will be submitted, or the Commission or Examining authority adopts a screening opinion to that effect. In the case of a subsequent application, the authority must take account of the environmental information before determining the application unless it has issued a screening opinion to the effect that an updated environmental statement is not required. The environmental information is comprised of the environmental statement (or in the case of a subsequent application, the updated environmental statement), any representations made as part of the consultation and publicity on the statement and any other information that has been provided by the applicant during the EIA process.
Set out procedures for determining whether development is EIA development or whether an updated environmental statement is required for determining a subsequent application. This procedure is known as screening.

Enables a person to seek an opinion from the Commission or the relevant authority (a scoping opinion) on the information to be included in an environmental statement (or updated environmental statement). Requires the Commission or the relevant authority to notify the consultation bodies of an application that requires an environmental statement (or an updated environmental statement).
Make provision for consultation on and publicity of proposed applications for development consent which arise from the requirements of the Planning Act 2008, ss 42, 47, 48. Provides for where publicity and consultation of an accepted application have not been carried out properly or at all. Also provides for the procedure to be followed where there has been a defective screening opinion, or the environmental statement submitted with the application is incomplete.

Sets out the documents that must be submitted with a subsequent application where the relevant authority requires an updated environmental statement or the applicant has notified the relevant authority that it will provide one. It sets out the publicity, consultation and certification requirements.
 
Building (Amendment No 2) Regulations 2009

SI 2009/2397: Methodology to be used for calculating the water efficiency of new dwellings is updated
LNB News 09/09/2009 44

Published date: 9 September 2009
Jurisdiction: England; Wales
Enactment citation: SI 2009/2397
Commencement date: 1 October 2009
Legislation affected: SI 2000/2531 amended
Enabling power: Building Act 1984, ss 1, 3, 34,  35A(2), Sch 1, paras 1, 2, 4, 4A, 7, 8, 10

Summary: Amend the Building Regulations 2000, SI 2000/2531 as follows:

- provide an updated reference to the newest edition of the document "The Water Efficiency Calculator for New Dwellings";
- omits reg 22A, which has been superseded with effect from 22 September 2008 by virtue of amendments to the  Building Act 1984, s 35A, made by the Housing and Regeneration Act 2008, s 317;
- adds to the list of work that is exempt from the requirement to give a building notice or to deposit full plans when carried out by specified persons; and
- preserve the extension of the time limit for the prosecution of certain contraventions of building regulations where the contravention occurred before 22 September 2008.
 
Planning (Listed Buildings and Conservation Areas) (Amendment) (England) Regulations 2009

SI 2009/2262: Administrative burden on applications to replace an existing planning consent for a listed building or conservation area reduced

LNB News 09/09/2009 51
Published date: 9 September 2009
Jurisdiction: England
Enactment citation: SI 2009/2262
Commencement date: 1 October 2009
Enabling power: Planning (Listed Buildings and Conservation Areas) Act 1990, ss 10(3), (4), (5), 91(1), 93

Summary: Amend the Planning (Listed Buildings and Conservation Areas) Regulations 1990, SI 1990/1519, to remove the requirement for a design and access statement, and additional copies, where applications to replace an existing consent meet specified criteria.

Require the application to be:
  - for an application for listed building or conservation area  consent; and
  - related to SI 1995/419, art 10B(1)(b), where a development  has not begun and permission was granted on or before 1 October  2009.
 
Town and Country Planning (General Development Procedure) (Amendment No 3) (England) Order 2009

SI 2009/2261: Applications for non-material changes to planning permission must be made on a standard form

LNB News 09/09/2009 17
Published date: 9 September 2009
Jurisdiction: England
Enactment citation: SI 2009/2261
Commencement date: 1 October 2009
Legislation affected: SI 1995/419 amended
Enabling power: Town and Country Planning Act 1990, ss 59, 62, 71, 74(1),  96A, 333(7)

Summary: Amends the Town and Country Planning (General Development Procedure) Order 1995, SI 1995/419, to implement the Planning Act 2008, s 190. Prescribes the application procedure for non-material changes to planning permission for the purposes of the new  Town and Country Planning Act 1990, s 96A, as inserted by the Planning Act 2008, s 190. Requires that applicants apply on a standard form, must notify other owners, and notice of a decision must be given within 28 days.
Modifies the consultation requirements of the applications procedure under the Town and Country Planning Act 1990, s 73 for permission to develop land without conditions previously attached.
Introduces a new procedure for dealing with applications to replace an existing planning permission, granted on or before 1 October 2009, which meets certain criteria.

 
Journals

Medieval relic causes a modern hangover

Estates Gazette, 5 September 2009: Why chancel repair liability can no longer be disregarded as an irrelevant medieval anomaly

LNB News 16/09/2009 35
Published date: 16 September 2009
Author: Juliana Mocatta
Journal name: Estates Gazette
Journal date: 5 September 2009
Journal citation: Estates Gazette, 5 September 2009, 104
Jurisdiction: England; Wales

Summary: suggests that chancel repair liability needs to be taken into  account in all property transactions. Chancel repair liability originated from the tithe system that was used to finance church  repairs. The liability was transferred with the land when it was acquired by laymen and still exists today, affecting around 5200  churches in England and Wales.

Whipping up a storm

Estates Gazette, 5 September 2009: How can service charge disputes over items 'beyond economic repair' be avoided?

LNB News 16/09/2009 33
Published date: 16 September 2009
Author: Vivien King
Journal name: Estates Gazette
Journal date: 5 September 2009
Journal citation: Estates Gazette, 5 September 2009, 106
Jurisdiction: England; Wales

Summary: Considers the issues involved in service charge provision  disputes over items that are beyond economic repair. The replacement of specified service charge items that are beyond  economic repair can be contentious. Questions need to be asked  about when an item needs replacing and who should make that  decision.

A new approach to exemptions

Estates Gazette, 5 September 2009: How recent changes embody a new approach to exemptions for the enfranchisement of house leases

LNB News 16/09/2009 37
Published date: 16 September 2009
Author: James Driscoll
Journal name: Estates Gazette
Journal date: 5 September 2009
Journal citation: Estates Gazette, 5 September 2009, 103
Jurisdiction: England; Wales

Summary: Considers the new enfranchisement rules for house leases. New  amendments to the rights of house leaseholders to enfranchise  came into force on 7 September. From this date, the low-rent test  is virtually repealed and the principles that govern  shared-ownership leases that do not qualify for enfranchisement  are also modified.

Keeping a lid on costs

Construction Law Journal, September 2009: While dispute costs are generally proportionate, there have been several suggestions for improvement

LNB News 07/09/2009 37
Published date: 7 September 2009
Author: James Pickavance
Journal name: Construction Law Journal
Journal date: 1 September 2009
Journal citation: (2009) 20 7 Cons.Law 20
Jurisdiction: England; Wales

Summary:Considers what findings from Lord Justice's Jackson's Report on the costs of litigation are relevant to construction. Key points include moving the pre-action protocol requirements until after the action has commenced and getting a grip on disclosure early and penalising frivolous or irrelevant disclosure applications. Witness statements should be shorter and focus on disputed issues and the court ought to become more involved in managing costs during the action.
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