Plaintiffs wanting to buy property – Property had been farmhouse – Plaintiffs not intending to use property as farmhouse – Solicitors acting for plaintiffs – Original planning permission containing agricultural occupancy condition – Solicitors acting for plaintiffs – Local authority interpreting original planning permission as excluding occupation of property as other than a farmhouse – Whether solicitors should have advised plaintiffs that local authority might so interpret planning permission – Damages
In order to finance the purchase of a property to use as a home, the plaintiffs decided to borrow the money and then sell the public house which they owned and managed after completing the necessary modernisation works. They intended to use the proceeds of that sale to pay for the property and its modernisation and live off the remainder. The defendants were instructed to act for the plaintiffs on the purchase of the property and completion took place in December 1990. In June 1991 the plaintiffs were told by the local planning authority that the original planning permission for the property was for a farmhouse only and was subject to an agricultural occupancy condition. It could not be converted or occupied as the plaintiffs wished. The plaintiffs postponed carrying out any works.
The local authority refused the defendants’ request to lift the condition. On the advice of the defendants the plaintiffs then applied to have the restriction lifted, but that application was also refused. The defendants then instructed a specialist planning consultant and in April 1992 the local authority finally granted the application. The plaintiffs completed the works and then sold the property having never occupied it, having continued to live in their public house. The plaintiffs issued proceedings against the defendants claiming damages for professional negligence in failing to obtain details of the relevant planning permission and failing to warn the plaintiffs that the local authority might interpret the planning permission so as to exclude occupation of the property as other than a farmhouse. The defendants admitted they had been negligent in failing to obtain the planning permission, but disputed that they were negligent in failing to establish the local authority’s interpretation of the planning permission.
Held Judgment for the plaintiffs.
1. Although the planning permission was unusual and would have caused any reasonable practitioner difficulty in its interpretation the defendants were negligent because they ought to have warned the plaintiffs that there was a substantial risk that the local authority might seek to prevent them using the property for non-agricultural purposes and that such an attempt would not be doomed to failure.
2. The defendants had not been under a duty to instruct a specialist planning consultant immediately after the discovery of the planing permission. They had acted with reasonable competence in seeking to negotiate with the local authority, making an application and finally instructing a specialist planning consultant
3. The defendants were not entitled to damages for the interest paid on the loan for the purchase price for the period starting from completion to June 1991, when the planning problem had emerged, because they would have had to pay that interest even if they had not sustained the wrong. However, they were entitled to damages for the period from June 1991 to the time the planning permission was lifted because it was foreseeable that any delay to the works to the property would result in a delay of the sale of the public house and therefore, a delay in paying back the money borrowed to purchase the property. Therefore the defendants were liable for the interest charges incurred in that period: see GK Ladenbau Ltd (UK) v Crawley & de Reya [1978] 1 WLR 266 and Hayes v Dodd [1990] 2 All ER 815.
Michael Norman (instructed by Laceys, of Bournemouth) appeared for the plaintiffs; Oliver Ticciati (instructed (instructed by Blake Lapthorne, of Fareham) appeared for the defendants.
