Negligence — Surveyors giving planning advice — Whether defendants liable in negligence — Whether period of limitation expired before issue of writ
On November 15
1973 the Secretary of State granted full conditional planning permission for
the extraction of silica, stone and sand from land at Moel Findeg, Maeshafn,
Mold, Denbighshire. On May 20 1976 the plaintiff, F G Whitley & Sons Co
Ltd, purchased the site with the benefit of that planning permission and on
July 1 1976 it instructed the first defendants, Cooke Leathes & Bickerton,
chartered surveyors, to prepare and submit to the county council an application
for the approval of the detailed matters contained in the conditions to the
planning permission. On July 20 1977 the first defendants submitted detailed
plans and specifications with a view to seeking agreement as to a scheme of
working pursuant to one of the conditions. The county council delayed dealing
with the submitted proposals until a meeting on October 25 1978. On that day,
against the advice of the county planning officer, the subcommittee resolved
that the scheme proposed ‘be not approved’. On November 10 1978 the second
defendants, Robert Moore & Sons, solicitors for the plaintiff, requested
the county council that either the matter be submitted to the Secretary of
State or that an extension of the time-limit be agreed. By letter of November
15 the county council refused to ask the Secretary of State to settle the
scheme and rejected any course of action which would involve the planning committee
considering a further application by the plaintiff before November 30. The
county council also stated that if works were started before November 30
without a scheme having been settled by the Secretary of State then enforcement
action might ensue. On November 21 1978 the second defendants wrote to the
Secretary of State asking him to determine the submitted schemes of working. On
November 22 1978 the plaintiff terminated the first defendants’ retainer and
instructions. On November 28 1978 the plaintiff commenced the development on
the site by setting out boundaries to an access road, stripping topsoil and
vegetation off the site and excavating silica, sand and overburden. On November
30 1978 Charles F Jones & Co, chartered surveyors, purported to appeal to
the Secretary of State against the non-determination by the county council of
the working schemes and a related planning application. On December 1 1978 the
second defendants also wrote to the Secretary of State asking him to determine
the submitted schemes of working. By letter dated May 10 1982 the Secretary of
State determined the scheme without prejudice to the question of the validity
of the planning permission and its survival after November 30 1978. On May 5
1983 the plaintiff commenced further quarrying operations at the site and on
December 2 1983 the county council purported to serve a valid enforcement
notice in relation to the works on the basis that they had been undertaken
without planning permission and that the 1973 planning permission had lapsed on
November 30 1978. The plaintiff appealed against the enforcement notice, and
further appealed to the High Court against the Secretary of State’s decision
upholding the enforcement notice. It was agreed that the outcome of a further
appeal to the Court of Appeal did not affect the preliminary issue to be
decided in the present action. In March 1984 the third defendants, Walker Smith
& Way, were retained by the plaintiff as solicitors and that retainer was
terminated on November 23 1984. The writ in the action was issued on November
28 1984. At the trial of a preliminary issue as to when the plaintiff’s cause
of action arose against the first and third defendants.
a contractual and tortious duty of care and the particulars relied on were that
the first defendants failed to appeal to the Secretary of State against the
county council’s non-determination of the scheme in sufficient time for the
Secretary of State to determine it for work to start before November 30 1978,
and in failing to apply to the county council for the removal or modification
of condition 11 in sufficient time for an extension to be granted. Although it
mattered not when the breach of contract occurred, because any claim in
contract was statute-barred, it was essential to the process of arriving at the
date of actual damage in tort to see when the breach was because the breach of
contract and the breach of the duty of care happened at the same time. The
breach of contractual duty occurred on December 1 1977 and at the same time the
first defendants were in breach of their duty of care. This date was
appropriate having regard to the implacable opposition of the county council to
mining development on the site, the right of the holder of planning permission,
within a reasonable time of submission of the scheme to the council for
approval, to ask the Secretary of State to determine the scheme and the
comprehensive conditions as to the details of the scheme which had to be
considered. The cause of action in tort accrued when actual damage was
sustained by the plaintiff, which, in the present case sustained damage at and
from the time of the breach. From the end of November 1977 anyone valuing the
site would know that it was probable that the scheme would not be determined by
the Secretary of State in time for development to begin by the end of November
1978. Accordingly, the cause of action in tort arose on December 1 1977.
The following
cases are referred to in this report.
Baker v Ollard & Bentley (1982) 126 SJ 593
Bell v Peter Browne & Co [1990] 2 QB 495; [1990] 3 WLR 510;
[1990] 3 All ER 124, CA
Forster v Outred & Co [1982] 1 WLR 86; [1982] 2 All ER 753, CA
Moore (D
W) & Co Ltd v Ferrier [1988] 1 WLR 267;
[1988] 1 All ER 400, CA
Whitley
(FG) & Sons v Secretary of State for Wales
(1989) 60 P&CR 185; [1990] 2 PLR 44; [1990] JPL 678
This was a
trial of a preliminary issue arising in an action by the plaintiffs, F G
Whitley & Sons Co Ltd, against the first to third defendants, Cooke Leathes
& Bickerton, Roberts Moore & Son and
contract and in tort.
Robert
Griffiths and Paul Stinchcombe (instructed by Clement Jones & Co, of
Holywell) appeared for the plaintiffs; Nicholas Nardecchia (instructed by
Barlow Lyde & Gilbert) represented the first defendants; Richard Clegg QC
(instructed by Weightman Rutherfords, of Liverpool) represented the third
defendants; the second defendants did not appear and were not represented.
Giving
judgment, DOUGLAS BROWN J said: In this action the plaintiffs, F G
Whitley & Sons Co Ltd (FGW), who are public works and civil engineering
contractors, sue Cooke Leathes & Bickerton, chartered surveyors, as first
defendants (CLB), Roberts Moore & Son (RMS) as second defendants and Walker
Smith & Way (WSW), as third defendants. The second and third defendants are
solicitors. In each case the defendants are sued for professional negligence
both in contract and in tort. The proceedings arise out of the employment of
CLB to advise and assist FGW in and about the implementation of a planning
permission granted in 1973 to extract silica, stone and sand from land owned by
FGW. The action was begun by a writ issued on November 28 1984 against the first
and second defendants and amended on February 15 1989 to bring in the third
defendants. On May 4 1989 Mars-Jones J ordered that the following matter be
tried as a preliminary issue: did FGW’s cause or causes of action against CLB
arise at:
(a) October 25 1978 — when the county council
refused to approve the scheme of working submitted by first defendants; or
(b) November 22 1978 — when FGW dismissed CLB; or
(c) November 30 1978 — when (if at all) the
planning permission of November 15 1973 expired; or
(d) some other date?
The plaintiff
appealed to the Court of Appeal and on October 23 1990 that appeal was
dismissed. The preliminary issue to be tried was varied by the consent of all
parties by an order made by District Judge Harrison on May 20 1991, by which it
was ordered:
1. That WSW
have leave to be heard at the trial of the preliminary issues to limitation.
2. That such
trial of the preliminary issues to limitation raised by CLB should extend to
and include the limitation issue raised by WSW. Such preliminary issues to be
heard together at the same time.
RMS have taken
no part in the trial of the preliminary issue.
I have heard
no oral evidence, but by agreement the material I have considered consists of:
(1) the pleadings; (2) a statement of facts agreed between FGW and CLB; (3) a
bundle of documents agreed between the same parties; (4) an affidavit in
support of the application for the trial of the preliminary issue by Mr Allan
Speechley [FRICS], partner in CLB; and (5) an affidavit from Mr Graham Bolton,
chartered town planner and development consultant on behalf of WSW.
All three
defendants by their original defence admitted that the duty of care alleged by
FGW arose in contract and in tort. Before the hearing began before me, I gave
leave to WSW to amend their defence to withdraw that admission in so far as it
related to potential tortious liability. That considerably increased the scope
of the trial of the preliminary issue but, by agreement, any argument as to
whether and, if so, when a cause of action in tort arose in relation to WSW was
deferred until after the trial of the preliminary issue as envisaged by
Mars-Jones J and District Judge Harrison’s orders.
Before dealing
with the issues and counsel’s submissions I refer to the history and factual
background to this litigation. In 1968 the then owner of land at Moel Findeg,
Maeshafn, near Mold, Denbighshire, applied to Denbighshire County Council for
permission to extract silica, stone and sand. The application was refused on
the grounds of harm to the landscape and the amenities of local residents. An
appeal to the Secretary of State for Wales was unsuccessful after a public
inquiry where there was considerable opposition from local residents, but at
that time no objection from the local authority. Almost immediately, in April
1971, a second planning application was submitted, which was refused on amenity
grounds identical to those given for the first refusal. In March 1972 another
public inquiry was held and, on this occasion, the local planning authority
joined with local residents in opposing the appeal. In August 1972 the
Secretary of State dismissed the appeal, but suggested that a fresh application
might be submitted in relation to a reduced area. It was that suggestion which
led to a further application, the result of which was the permission which lies
at the heart of this litigation. Because of continued local objections, the
Secretary of State called in the application and dealt with the matter by way
of written representation.
On November 15
1973 the Secretary of State granted full conditional planning permission for
the extraction of silica, stone and sand from the Moel Findeg site. It is
material to consider the nature of a number of the conditions:
2. No working
shall take place except in accordance with a scheme to be agreed with the local
planning authority or, failing agreement, as shall be determined by the
Secretary of State and scheme shall among other matters include provision for:
(a) the order, direction depth and method of
working, including the arrangement for and times of blasting operations where
they may be necessary;
(b) the preservation of the ridge along the
western boundary of the site;
(c) the stripping and storing of top soil and
overburden separately until disposal as required by condition 3 below;
(d) the location and height of any heaps of
topsoil, overburden or other excavated materials;
(e) adequate measures for cleansing the wheels of
vehicles leaving the site.
3.
Progressive restoration of the site shall take place in accordance with a
scheme to be agreed with the local planning authority or, in default of
agreement, to be determined by the Secretary of State, such scheme to be agreed
or determined before working takes place, and the scheme shall, among other
matters, include provision for:
(a) the even spreading and disposal into the
excavation of the overburden and topsoil stripped and stored in accordance with
condition 2;
(b) the grading of the finished slopes of the
excavation;
(c) the final levels of the restored land.
. . .
5. The access
road to the working area shall be constructed and the junction of the access
road with the county road shall be laid out in accordance with a scheme to be
agreed with the local planning authority or, in default of agreement, to be
determined by the Secretary of State.
. . .
11. The
development hereby permitted shall be begun on or before 30 November 1978.
On May 20 1976
FGW purchased the site with the benefit of that planning permission. On July 1
1976, FGW instructed CLB to act as surveyors on their behalf in preparing and
submitting to Clwyd County Council successors to Denbighshire County Council
(the county council) an application for the approval of the detailed matters
contained in conditions 2, 3 and 5. CLB carried out the work and entered into
discussions with the county council and, on July 20 1977, submitted to the
planning authority detailed plans and specifications with a view to seeking
their agreement to them as a scheme of working pursuant to condition 2.
Thereafter,
despite the efforts of CLB though meetings and correspondence, the county
council delayed in dealing with the proposal submitted, from the date of submission
until April 1978 and then the planning authority merely sought further
information. CLB provided that further information in July 1978, but the matter
did not go before the county planning subcommittee until September 13 1978 when
it was deferred by that committee to a further meeting on September 21 when
again it was deferred to a meeting on October 25 1978. On that day, against the
advice of the county planning officer, the members of the planning subcommittee
resolved that the scheme proposed by FGW ‘be not approved’.
On November 2
1978 Mr David Charles [FRICS], another surveyor acting for FGW, asked the
Secretary of State by letter to take action to determine the application or
begin that process by November 30, when by condition 11 the life of the
permission expired. On November 10 1978 RMS wrote to the county council
suggesting that either the matter be submitted before the Secretary of State or
that an appropriate alternative course of action be taken and an extension of
the time-limit of November 30 be agreed. The county council, by a letter of
November 15, refused to ask the Secretary of State to settle the scheme and
rejected any course of action which would involve the planning committee
considering a further application by FGW before November 30 1978. The county
council also stated that if works were started before November 30 without a
scheme having been settled by the Secretary of State, then enforcement action
might ensue. On November 21 1978 RMS also wrote to the Secretary of State asking
for him to determine the submitted schemes of working. On November 22 1978
CLB’s retainer and instructions were terminated.
On November 28
1978 FGW in actual or purported compliance with condition 11 commenced
development on the site by:
(a) setting out approximate boundaries to the
access road to the site;
(b) stripping topsoil and vegetation off the
site;
(c) excavating silica, sand and overburden from
the site and removing it by lorry.
On November 30
1978 Charles F Jones & Co, chartered surveyors who replaced CLB, purported
to appeal to the Secretary of State against the non-determination by the county
council of the working schemes and a related planning application. Last, on
December 1 1978, RMS also wrote to the Secretary of State asking for him to
determine the submitted schemes of working.
The Secretary
of State began the process of determining the scheme on June 13 1980, having in
the meantime engaged in prolonged correspondence with the parties on the
subject of the survival of the planning consent after November 30 1978. After
extensive consultation, written representations and a visit to the site by an
inspector, the Secretary of State determined the scheme by letter dated May 10 1982,
without prejudice to the question of the validity of the planning permission.
On May 5 1983
FGW commenced further quarrying operations at the site and, on December 2 1983,
the county council purported to serve a valid enforcement notice in relation to
the works commenced in September on the basis that the same had been undertaken
without planning permission. It was asserted that the 1973 planning permission
lapsed on November 30 1978. FGW appealed against the enforcement notice to the
Secretary of State and after an inquiry on October 26 1988 the Secretary of
State dismissed FGW’s appeals, upholding the enforcement notice. On October 18
1989, FGW’s appeal to the High Court under section 246 of the Town and Country
Planning Act 1971 [section 289 of the Town and Country Planning Act 1990]
against the Secretary of State’s decision was successful and the matter was
ordered to be remitted to the Secretary of State for determination and
rehearing. The decision in that matter of Sir Frank Layfield, QC (sitting as a
deputy judge of the Queen’s Bench Division) is reported at F G Whitley &
Sons v Secretary of State for Wales [1990] JPL 678. An appeal to the
Court of Appeal by the county council from the deputy judge’s order is due to
be heard shortly. It is agreed at the bar that the ultimate decision in that
litigation does not affect the question I have to decide, although it would
clearly be material to any assessment of damages that takes place. In March
1984 WSW were retained by FGW. That retainer was terminated on November 23
1984.
On those facts
Mr Nardecchia, for CLB, accepted that any claim under the contract is
statute-barred. Any contractual cause of action must have arisen before CLB’s
services were dispensed with on November 22 1978, more than six years before
the issue of writ on November 28 1984.
The cause of
action in tort arises upon actual damage being sustained by the plaintiff. He
contends that FGW have suffered actual damage by or on October 25 1978 at the
latest when the county council refused to approve CLB’s submitted scheme. By
that date there was no time left for the Secretary of State to consider and
determine the scheme in time for development to take place by November 30.
Without conceding that, on the facts, it was remotely possible, even if I took
the view that the county council might have been amenable to requests to
reconsider the matter, the letter of November 15 firmly shut the door and in
the five weeks remaining it was inconceivable that the Secretary of State could
carry out the extensive process of determination on any reasonable and lawful
basis.
Mr Robert
Griffiths, for the plaintiffs, contends for November 30 1978, the date of
expiry of the permission, as the earliest date on which the plaintiffs
sustained any damage.
Mr Richard
Clegg QC, for the third defendants, made submissions supporting Mr Griffiths in
relation to the date of November 30 1978 being the date for the accrual of the
plaintiffs’ damage. That was after the date on which WSW’s retainer was
terminated. Against the event that I rejected Mr Griffiths’ argument and was
considering either of the dates canvassed by Mr Nicholas Nardecchia, for the
first defendant, Mr Clegg had an alternative solution based on the view
contained in Mr Bolton’s affidavit, unchallenged by any other evidence, that to
have any chance of securing a determination from the Secretary of State by
November 30 1978, a scheme would have to have been submitted to the Secretary
of State at the latest by the end of November 1977 and, as it was not so submitted,
that was the date that the plaintiffs sustained damage and that was the date
his cause of action therefore accrued.
Turning to
these contentions in more detail, Mr Nardecchia submitted that the
ascertainment of actual damage was largely a question of fact. The researches
of all counsel had not discovered a similar case but there was help from
authorities which provided useful analogies. The principle he contends for is
that it is frequently the case on the authorities that actual damage will arise
before actual financial loss accrues. The cases mainly involved solicitors but
the principles equally applied to chartered surveyors and other professional
men. The main authorities were all decided in the Court of Appeal and are: Baker
v Ollard & Bentley (unreported May 12 1982 Court of Appeal (Civil
Division) transcript no 155 of 1982); Forster v Outred & Co
[1982] 1 WLR 86; Moore (DW) & Co Ltd v Ferrier [1988] 1 WLR
267; and Bell v Peter Browne & Co [1990] 3 WLR 510.
Of the cases
he cited I refer to Bell v Peter Browne & Co to illustrate Mr
Nardecchia’s argument. The facts of that case are conveniently stated by
Nicholls LJ at p513:
This appeal
raises some short points concerning the date of accrual of the plaintiff’s
causes of action for breach of contract and in tort, arising out of his
solicitors alleged negligence. The facts as pleaded lie in a very small
compass. In October 1977 Mr Barry Bell, the plaintiff, consulted the defendant
firm regarding the breakdown of his marriage. One of the points he discussed
with his solicitors concerned what was to happen to the matrimonial home . . .
The house was registered in the joint names of the plaintiff and his wife . . .
It was worth about £12,000, and subject to a mortgage for about £8,000. So, if
the house had then been sold, the plaintiff would have received about £2,000;
that is about one-sixth of the gross proceeds. The plaintiff was agreeable to
the house not being sold for the time being, but he was to receive one-sixth of
whatever might be the gross proceeds when a sale did take place. Meanwhile the
house would be transferred into the sole name of the wife. This would help him
to obtain a mortgage to buy other accommodation for himself. His continuing
interest in [the matrimonial home] would be protected by a trust deed or a
mortgage.
These
arrangements were agreed by the plaintiff and his wife and their respective
solicitors. On 1 September 1978 the plaintiff executed a transfer of the house
into his wife’s sole name. But no steps were taken by the plaintiff’s
solicitors to protect his one-sixth share of the proceeds of sale. No
declaration of trust or mortgage was prepared or executed. No caution was
registered at the Land Registry. The parties were divorced in the following
year.
In December
1986 the plaintiff learned from his former wife that she had sold the property
in July 1986 for £33,000, that is, almost eight years after the property had
been transferred into her sole name. She had spent all the proceeds. Thus the
plaintiff had lost his one-sixth interest in the proceeds of sale.
So the
plaintiff brought this action against his former solicitors for damages for
professional negligence. The writ was issued on 20 August 1987. The sole issue
arising on the appeal was whether the action was bound to fail because it was
statute-barred.
On p515,
dealing with the claim in tort, the lord justice posed the question: when did
the plaintiff first sustain damage by reason of his solicitors’
negligence? He distinguished between two
failures: (a) to see that the parties’ agreement was recorded formally in a
suitable declaration of trust or other instrument; and (b) to protect the
plaintiffs’ interest in the house or the proceeds of sale by lodging a caution.
As to failure (a) Nicholls LJ said at p515:
. . . clearly
the damage, such as it may have been, was sustained when the transfer was
executed and handed over. At that point the plaintiff parted with title to the
house, and he became subject to the practical inconveniences which might flow
from his not having his wife’s signature on a formal document.
Accordingly,
Nicholls LJ rejected the plaintiff’s argument that the damage occurred only
when the former wife sold the unencumbered property and spent the proceeds. The
plaintiff had suffered prejudice when the transaction was completed without his
having the protection of a formal document and he continued at p516:
The extent of
that prejudice depended on the attitude adopted thereafter by his former wife.
All that we know is that, according to the pleadings and the plaintiff’s
affidavit evidence, when she sold the house she disposed of all the proceeds
and did not account to her former husband for his agreed one-sixth share. But
the uncertainty surrounding her future intentions goes only to the quantum of
the loss the plaintiff sustained when the transfer was executed without him
having the same degree of protection as would have been provided by a formal
document. Likewise in the decision in the Court of Appeal in Baker v Ollard
& Bentley . . . cited in DW Moore & Co Ltd v Ferrier
. . . There the plaintiff acquired a share in property rather than as she ought
to have received, the security of a long lease of one floor of the property.
The amount of her loss depended on the attitude of her co-owners. But, even so,
the damage was held to be suffered by the plaintiff at the time of the
conveyance, when she received her precarious interest.
Nicholls LJ
went on to deal with failure (b) in relation to the failure to make an
appropriate entry in the land register. That was clearly different from failure
(a), because it was within the plaintiff’s own power to remedy the failure so
long as the house continued to belong to his former wife. Nicholls LJ held that
that was not a material difference and continued at p516G:
I am unable
to accept that remediability puts failure (b) on the other side of the line
from failure (a). The solicitors’ breach of duty in 1978 was remediable by the
plaintiff, but that was only possible after he had become aware that there had
been a breach of duty. Apart from any other consideration, to treat the
plaintiff’s ability to remedy the breach himself without the concurrence of his
wife as a ground of distinction between this case and cases such as Baker
v Ollard & Bentley . . . would be to disregard the unlikelihood in
practice of the plaintiff ever being in the position to remedy the breach.
Mr Nardecchia
accepted that on November 30 1978 the plaintiff sustained damage because no
scheme had been determined by that date and the land ceased to have the clear
benefit of an unexpired planning permission. But, he says, that was further
damage and that actual damage had been sustained before that date.
If there was
negligence, and that had to be assumed, arguably that had occurred in late
1977; it is even arguable that the date might be some time in 1976, that
argument being based on the actual period taken by the Secretary of State to
determine the scheme, namely two years. Land with a full planning permission
has an enhanced value by reason of that permission, but if there are conditions
which are difficult of performance then the value is reduced. When it is
impossible to comply with the conditions, the enhanced value disappears and if
that is brought about by negligence actual damage is suffered On the material
before me that had happened by October 25 1978 at the latest. In the autumn of
1978, there were two avenues of approach to FGW.
(1) The avenue through the county council which
they attempted to go down. However, it is plain from the letter of November 15
1978 that the county council refused to co-operate in waiving the time-limit
and completely refused to co-operate in reconvening a special committee meeting
before November 30 1978 to consider or reconsider the working scheme. Whatever
the views of the county planning officer, the members of the council were
taking a hard line and it was inconceivable that they would change their minds.
(2) The route via the Secretary of State; it was,
as Mr Nardecchia put it, crystal clear to anyone experienced in town and
country planning matters that the plaintiff was not going to get a decision
from the Secretary of State on a matter of such complexity in the five-week
period from October 25 1978 to November 30 1978. Mr Nardecchia submitted
finally that the nearer one got to November 30, the more hopeless the
plaintiffs’ case became. Even if the Secretary of State had been sent the
documents and plans with the clearest and fullest explanation of the scheme, it
is inconceivable that any determination would have been made by the expiry of
the permission. As it happens, as a matter of fact — and the documents
establish this — the Secretary of State was not put in a position to make any
determination because he was not fully furnished with the necessary
documentation. Neither the letter from Mr Charles nor from RMS enclosed any
details of the proposed scheme and without those the Secretary of State could
not begin to consider the matter. Even on November 30 the new surveyors’
application does not seem to have been accompanied by full details of the
scheme. Mr Griffiths made three principal submissions:
(1) A greater prospect of harm is not harm.
Notional damage or damage arising on a contingency is not damage. There is, he
said, no reported decision supporting the proposition that where no damage is
caused, but, where it is inevitable that damage will be caused in the future,
the cause of action arises at an earlier date. In the cases relied on by Mr
Nardecchia, each case the tort was complete at the date of, eg the execution of
the document or of the negligent advice. In Forster v Outred the
plaintiff could have sued immediately after the execution of the mortgage deed
encumbered with a legal charge. She was subjected to a liability which might
mature into a future loss. Actual damage accrued at the outset notwithstanding
that she did not become liable for the repayment of the loan until a demand was
made some years later. Her cause of action against her solicitors was complete.
In the other cases cited, the cause of action was complete with accrued damage
and Mr Griffiths referred to part of the judgment of Bingham LJ in D W Moore
& Co Ltd v Ferrier [1988] 1 WLR 267. In that case solicitors
advised and drafted documents for directors of a company to deal with the
situation, inter alia, which might arise if a fellow director and
employee left the company. One of the documents drafted was a covenant against
competition after he left. At just below ‘G’ Bingham LJ said:
On the
plaintiff’s case, which for the purposes of this issue may be assumed to be
wholly correct, the covenants against competition were intended and said by the
defendants, to be effective but were in truth wholly ineffective. It seems to
me clear beyond argument that from the moment of executing each agreement the
plaintiffs suffered damage because instead of receiving a potentially valuable
chose in action they received one that was valueless.
By contrast Mr
Griffiths said the tort in the instant case was not complete until November 30
1978. The cause of action did not accrue before then because events up to that
date could have extinguished the cause of action. The county council, for
example, might have changed their mind and heeded the advice of the county
planning officer. The scheme might have been approved or the condition varied
to extend the expiry date. The Secretary of State might have moved with
considerable speed and urgency and determined the scheme. If it was
theoretically possible that those events could happen, then actual damage could
not occur before November 30. There is, he said, no such thing as a provisional
cause of action which lasts only until some new event has happened which
extinguishes it. Once a cause of action accrues, it survives until extinguished
by the Limitation Act or dealt with by judgment.
(2) By contrast with Mr Nardecchia’s approach,
which is arbitrary and imprecise, Mr Griffiths’ test for the accrual of damage
is based on a precise ascertainable date. The statutory framework of limitation
is based on a precise ascertainable date so that prospective plaintiffs and
defendants know where they stand. Mr Nardecchia’s argument did not lead to any
one date, eg he canvasses a date prior to October 25, October 25 itself and
November 15. Why not, said Mr Griffiths, November 16 or any time up to the 59th
minute of the 11th hour before the permission runs out? That cannot be the right way to decide the
date of accrual of a cause of action following a claim for loss of a planning
permission. In the end, he relied on Forster v Outred and the
other cases and said the damage here was similar to the damage in those cases.
The status of the land up to November 30 was land with planning permission;
that status changed on that date and there was at that point actual damage.
(3) Finally, in answer to the main argument
advanced by Mr Nardecchia, that damage had occurred earlier because of the
recognisable inevitability of loss of the planning permission, Mr Griffiths
referred to the way the plaintiffs’ claim was pleaded against the first
defendant. It was alleged in para 27 of the amended statement of claim that FGW
had suffered and would suffer loss and damage particularised in this way.
(A) If 1973 planning permission lapsed and no
planning permission is granted upon appeal:
(i) Diminution in the value of the Moel Findeg
site because of the loss of planning permission for mineral extraction, or
alternatively the loss of profits therefrom;
(ii) particular loss arising from FGW’s inability
to supply particular contracts from is own quarry;
(iii) professional fees and other expenses incurred
in making any subsequent planning applications and pursuing them to appeal;
alternatively the same are claimed as reasonable expenses incurred in an
endeavour to mitigate loss.
(B) If 1973 permission lapsed and planning
permission is granted on appeal:
(i) deferment of profits from quarrying between
December 1978 and the date quarrying commenced pursuant to such permission.
(ii) As above
(iii) As above
After
mentioning that it was possible for him to argue that actual damage did not
accrue until December 2 1983 when the second enforcement notice was served by
the county council, Mr Griffiths stood by November 30 as the earliest date. His
argument ran in this way — in the first place the court must identify what
damage was suffered. Damage in this case consisted of the loss of the right to
implement the planning permission. The loss of the right cannot be any less
than the loss of the legal right to implement the planning permission. That is
a different matter from the essentially practical question of when it became
inevitable that planning permission could not be implemented before it lapsed.
The planning permission conferred a right on the conferee to do something
within a prescribed period of time and that right was lost only when that
period expired. That is that date of accrual of the damage. A diminution in the
value of the land before November 30 would be a different claim. It is not
the claim raised by the plaintiff in the pleading. The claim as pleaded is not
based on the inevitability that damage would be caused but on actual damage. He
made submissions, which I need not refer to in detail, based on the
correspondence as to the possibility of agreement as to the scheme by the county
council or determination of the Secretary of State before the expiry date. None
of the facts precluded the possibility that either the county council or the
Secretary of State could have approved the scheme before that date. Between
November 15 and 30 there was a possibility of determination by the minister,
there was no fixed statutory procedure which bound the Secretary of State —
what had to take place was ‘quasi arbitration’. From the date of Mr Charles’
letter of November 2, there was even more time before the planning permission
ran out for the minister to act. Mr Nardecchia’s approach of looking at what
happened after the permission expired was misconceived. The two-year period
between June 1980 and May 1982 was no guide as to what might have happened in
the autumn of 1978 if the minister had acted as a matter of urgency.
The advantage
of November 30 1978 is that it was a fixed date, no other investigation was
required and the time of accrual of the cause of action should not depend on
assessments of dates of risk because certainty was needed.
As I have
indicated, Mr Clegg did not seek to persuade me that Mr Griffiths was wrong but
in case he was, Mr Clegg in the course of his cogent and succinct submissions
argued that the evidence was overwhelming and pointing in only one direction.
There came a point in time about a year before the permission expired when it
would not have been possible for the Secretary of State to determine the
submitted scheme and accordingly the damage accrued at that time, leaving a
precise date to be arrived at by me.
In deciding
this matter I return to the order for the preliminary issue, as amended, which
defines the issue in this way: when did the plaintiffs’ cause or causes of
action against the first and third defendants arise?
As between FGW
and CLB it is admitted that CLB owed FGW both the contractual and tortious duty
of care. The allegation of breach of contract and negligence, which I must
assume are well founded, are pleaded in para 26 of the amended statement of
claim. No distinction is made in relation to the breach of contract or the
breach of common law duty of care, and the particulars relied on are common to
both. CLB were in breach of contract and in breach of their duty of care:
(1) By failing to appeal to the Secretary of
State against the county council’s non-determination of the scheme, in
sufficient time for the Secretary of State to determine it for work to start
before November 30 1978. There is also a complaint as to the lack of advice on
taking that step;
(2) In failing to apply to the county council for
the removal or modification of condition 11 in sufficient time for an extension
to be granted and similarly a complaint is made in relation to the lack of
advice in that regard.
The parties
have concentrated on accrual of damage as the starting point for tortious
liability. However, I have to determine when the cause of action in contract
arose. It is not only an inescapable duty under the terms of the order but it
is an essential starting point for any consideration as to when actual damage
was caused. It may not matter greatly to the parties because whenever the
breach of contract occurred any claim in contract must be statute-barred, but
it is in my view essential to the process of arriving at the date of actual
damage in tort to see when the breach was. The breach of contract and the
breach of the duty of care happened at the same time.
The breach of
contract could not be before July 20 1977 when CLB submitted their details of
the scheme proposed to the county council. There is no easy identifiable date,
such as the date of execution of a mortgage deed or the date when a negligently
drawn agreement is entered into. The difficulty is caused by the allegation,
which I must assume to be correct, that CLB did not act ‘in sufficient time’.
What period amounts to sufficient time?
It is not a matter altogether easy to determine on the trial of a
preliminary issue and I have some residual doubts as to whether it is an exercise
that the court should be engaged on. Nevertheless, I have to decide that in
order to ascertain the date of the breach on the material I have. In arriving
at the view I have formed I have taken into account three principal matters:
(1) The planning history, the most obvious
feature of which was the implacable opposition of first Denbighshire County
Council and then Clwyd County Council to mining development in this prominent
rural site;
(2) The right given to the holder of the planning
permission, within a reasonable time of submission of the scheme to the county
council for approval, to ask the Secretary of State to determine the scheme.
The time-limits provided for by the Town and Country Planning Act 1990 were not
in operation, of course;
(3) The comprehensive conditions as to the details
of the scheme which had to be considered and a considerable amount of work
involved in assessing and appraising the proposed scheme.
In all these
circumstances, the longer the Secretary of State had to consider the matter,
the more likely it was that he would determine the scheme to enable work to
start by the end of November 1978. I have the advantage of knowing how long it
did take the Secretary of State to determine this scheme. In effect, he began
on June 13 1980 and finished by making his determination on May 11 1982, having
carried out a lengthy consultation process with interested parties. I cannot
say that it would have taken the length of time before November 30 because the
assumed breach of contract carries also the assumption that there would have
been sufficient time between the submission to the county council on July 20
1977 and the end of November 1978. FGW and CLB provided no evidence on the
question of sufficient time. I have, however, been referred to Mr Bolton’s
affidavit which contains this opinion evidence:
the first
defendant should have appealed by December 1977 at the latest, otherwise the
Secretary of State would not in all probability have had time to determine this
proposal by 30th November 1978.
On the
material before me I hold that the breach of contractual duty occurred on
December 1 1977 and therefore the cause of action in contract accrued at that
date. At the same time CLB were in breach of their duty of care to the
plaintiffs, or so I must assume. The next question which arises is: when did
the cause of action in tort accrue? It
is common ground that that would be when actual damage was sustained by the
plaintiffs — whether the plaintiffs knew of the damage or not.
I am grateful
to counsel for their analysis of the three reported cases, Forster v Outred;
DW Moore v Ferrier and Bell v Peter Browne & Co.
Those cases establish or restate, it seems to me, a clear line or authority
that: (1) the question is a question of fact in each case; (2) if at the time
of the defendants’ negligence the plaintiff suffers some actual damage it
matters not that at a later stage events might occur which would increase that
damage. The cause of action accrues at the outset at the time of negligence if
actual damage is caused as opposed to presumed or assumed damage. In all those
cases and in Baker v Ollard & Bentley there is an easily
ascertainable date for the breach and for the damage. The fact that that date
is more difficult to ascertain in the instant case does not alter the general
principle and the court’s duty is to ascertain the date if it can. Mr
Nardecchia was correct when he submitted that FGW had suffered actual damage by
the latest at October 25 1978. It was plain to anyone with appropriate
knowledge and skill, such as a valuer, that the planning permission was going
to lapse or would be put at risk in legal proceedings and that the owner of the
land would be open to action from the local planning authority. As Mr
Nardecchia put it, the FGW’s interest in the land was encumbered by insecurity,
and that had inevitably an effect on the value of the interest and caused
damage — real damage as opposed to assumed damage, although at that stage
perhaps not immediately quantifiable. The tort was complete and the plaintiffs
could sue. I am assisted in this context by another passage from the judgment
of Bingham LJ in DW Moore & Co v Ferrier [1988] 1 WLR 267,
where at C he says at p280:
The matter may
be tested. It is common ground, on the assumption that the plaintiff’s pleaded
case is correct, that the defendants were in breach of contract when they
negligently advised and settled documents in 1971 and 1975. A cause of action
then arose. Suppose, per impossible, that the plaintiffs had sued at once and
before the later difficulties with Mr Fenton (the departing director) arose.
They would have been bound to succeed. If of the opinion that the plaintiffs
had suffered no damage, the judge would have awarded them nominal damages. But
it seems to me plain that the judge would not have done that on these facts. He
would have assessed as best he could on the available evidence the loss fairly
and reasonably flowing in the usual course of things from the defendants’
breach of contract, reaching a figure that might have been large or small but
would not have been nominal. I think that the plaintiffs were in argument
inclined to accept that. If, in a contractual claim for negligence, the Court
would have awarded other than nominal damages, I do not see how it can be said
that an action in tort based on the same negligence would have been bound to
fail for want of any damage as an essential ingredient of the cause of action.
I do not
think that there is, on straightforward application of familiar principles, any
escape from these conclusions. I am not therefore surprised to find that other
Courts have also reached the same conclusions.
And he then
referred to Forster v Outred & Co; Baker v Ollard
& Bentley and two first instance decisions and continued:
It is pointed
out, necessarily correctly, that the facts of those cases are different from
those of the present, and in some the damage suffered by the claimant at the
time of the execution of the agreement in question is perhaps more obvious than
in the present case. Each of the cases is, however, in my view inconsistent in
principle with the plaintiffs’ contention in this case that they suffered no
damage in 1971 and 1975.
Mr Griffiths
urged upon me that the task of ascertaining the date on Mr Nardecchia’s basis
was so difficult that the court should not embark on it, but decide the
preliminary issue on the basis of the one certain date of damage, ie the date
the planning permission on the face of it expired.
Although the
reported cases are all concerned with easily ascertainable dates, in Bell
v Peter Browne & Co Beldam LJ envisaged on the facts of that case
the cause of action accruing at a time which had to be assessed by a judge. At
p523 he said:
I consider
therefore that the plaintiff’s cause of action arose when he parted with the
property
— an
identifiable date —
or at the
latest at the time when the careful solicitor would have effected registration
either of the charge or of a caution.
The
alternative clearly envisages judicial appraisal of evidence as to when the
prudent solicitor should have acted. In the instant case, I have unchallenged
evidence as to when the prudent chartered surveyor should have acted.
Mr Griffiths’
attractive argument was that the cause of action could not have arisen before
November 30 because events might overtake it and, in effect, ‘cancel’ the cause
of action. That is because if the cause of action arose before that date, the
determination of the scheme by the Secretary of State or a change of mind and
heart by the county council would bring it to an end. It would not have that
effect but would reduce perhaps to a nominal amount the damages recoverable. If
Mr Griffiths is wrong, the question remains: when was actual damage
caused? I can understand why Mr
Nardecchia concentrated upon October 25 as being the date up to which it was
possible the county council would approve the scheme as the county planning
officer recommended they should. Thereafter it was obvious, if it was not
obvious before, that the elected councillors were unmovable in their opposition
to mineral extraction on this site; and equally obvious that the time remaining
available would not permit the Secretary of State to determine the scheme.
However, the Secretary of State had had insufficient time from a much earlier
date. I am persuaded by Mr Clegg that the plaintiff sustained damage at and
from the time of the breach. In the early years of the planning permission any
valuer assessing the value of the site would do so in the knowledge of the
nature of the permission and the condition and with the knowledge that time was
passing, but from the end of November 1977 anyone valuing the site would know
that it was probable that the scheme would not be determined by the Secretary
of State in time for development to begin by the end of November 1978.
On the facts
of this case, where clearly in my view on the contractual claim for negligence
more than nominal damages would have been awarded, I do not see that it can be
said that the action in tort based on the same negligence would have been bound
to fail for want of any damage as an essential ingredient of the cause of
action.
I bear in mind
that FGW’s claim in negligence is based not only on the failure to apply to the
minister for a determination but also in a failure to apply to the county
council for an extension of the life of the permission. This second limb did
not receive from counsel the same close attention as the first and no separate
arguments were addressed upon it. However, it seems to me that if it was
imprudent and negligent not to apply to the Secretary of State at a point a
year away from expiry, it was equally imprudent and negligent not to ask for an
extension of the life of the permission at the same time. I must again assume
that it was negligent not to make this application and the statement of claim
makes the same allegation that it was not done in sufficient time. It falls
then for me to determine first, in relation to breach of contract when that
breach took place, and I would hold it took place at the same time as the
breach in relation to application or appeal to the minister. Any valuer would
ask the obvious question: have you applied for an extension? And a negative answer to that question would
inevitably have some effect on the value of FGW’s interest. What effect that
would have on the assessment of damages is difficult to say and it would depend
upon valuation evidence but it would be more than nominal and, accordingly, I
answer the question raised in the preliminary issue in relation to the cause of
action in tort in this way, that it arose on December 1 1977.
I have not
dealt with the limitation issue as between FGW and WSW as envisaged by the
district judge’s order. No submissions were made by counsel on this and Mr
Clegg was content to act within the first part of the order which gave him
leave to be heard on the issue between FGW and CLB. As my determination of that
preliminary issue removes any possibility of liability on the part of WSW, no
need arises for any consideration of the limitation period in the FGW/WSW
litigation.
