Lingfield Properties (Darlington) Ltd v Padgett Lavender Associates

Mr Justice Tugendhat :

1. By a judgment delivered on 10 December 2004 [2004] EWHC 3185 (QB) Mitting J made a declaration that a planning permission (“the planning permission”) granted to the claimant on 25^th February 1991 had lapsed. The planning permission was in respect of land in Darlington (“the site”). Reserved matters approval was given on 14^th December 1994, and the permission was due to lapse unless development commenced within two years, that is by 14^th December 1996. The reason Mitting J gave for his conclusion (at pras 48 and 51) was that, on 11 and 14 December 1996, at the time when operations on the development commenced, conditions precedent to the development had not been discharged, with the result that the operations were not lawful and so were not effective to preserve the planning permission. The proceedings before Mitting J are referred to as “the Declaration Proceedings”.

2. In the present proceedings the Claimant seek what is in effect an alternative claim, namely damages for professional negligence against its planning consultant the Defendant (“PLA”). This is a two partner firm in Bishop Auckland. Mr John Lavender was one of the partners in PLA, the other being Mr Padgett. The claimant alleges that the fact that the planning permission lapsed was the result of the negligence or breach of duty of Mr Lavender. It is common ground that PLA owed the claimant a duty of care to exercise reasonable skill and care in the provision to the claimant of his services as a planning consultant. The duty arose in both contract and tort, but since there is an issue of limitation, and in relation to that issue the claimant could succeed in tort when it could not succeed in contract, it is submitted for PLA, and I accept, that consideration of the duty in tort adds nothing in this case.

3. The claimant’s case is that, both before and after the grant the of outline planning permission, Mr Lavender was retained, first to take such steps as were necessary to obtain permission, and, once it was granted, to take such steps as were necessary to ensure that the conditions attached to the permission were satisfied, so that the permission did not lapse.

4. The complaints against Mr Lavender can be summarised under two main heads. First, it is alleged that Mr Lavender was negligent in failing to submit (or to inform Mr Hepker of the need to submit) for approval by 14^th December 1996 a scheme of landscaping as required by condition (iv) (this was the most significant of the conditions precedent) and what was needed to fulfil conditions (xii) and (xiii), or to advise the claimant that such approvals had to be obtained by that date if the permission was not to lapse. Second, it is alleged that up to 11^th October 1996 Mr Lavender on several occasions orally informed Mr Hepker of the claimant that all necessary consents and approvals required by the permission had been obtained, but that in a telephone conversation on 11^th October 1996 for the first time he informed Mr Hepker that he had not submitted the scheme of landscaping required by condition (iv). It is alleged that in response to that suggestion Mr Hepker instructed Mr Lavender that he had better get on with it and make sure that the landscaping was done, and that Mr Lavender agreed to do what was required, but nevertheless failed to do it.

5. Mr Lavender denies that the retainer required him to ensure that all necessary consents and approvals were in place by the December 1996 deadline unless he was instructed to do so specifically, which he says he was not. He denies telling Mr Hepker that all conditions had been satisfied or that all approvals were in place. While it is common ground that on 11^th October 1996 Mr Lavender did tell Mr Hepker that a scheme of landscaping was required, Mr Lavender denies that Mr Hepker gave him instructions to submit such a scheme, or that he agreed to do that.

6. For PLA it is submitted that the central issue on liability is confined to the questions arising out of the telephone conversation between Mr Lavender and Mr Hepker on 11^th October 1996: did Mr Hepker instruct Mr Lavender to prepare and submit a scheme of landscaping? Did Mr Lavender agree to do so? Mr Lavender did not in fact submit such a scheme. It is denied that Mr Lavender was in breach of any duty before that date, but whether he was or not cannot affect the outcome of this case, because it is common ground that the value of the site was not reduced on 11^th October 1996, because there was at that date sufficient time to satisfy the conditions precedent that remained outstanding. Nevertheless, I must consider the period up to 11^th October 1996 in some detail, because the history of the matter is material which assists me in reaching my findings as to what happened on that date. There was some dispute between the parties as to the precise scope of Mr Lavender’s retainer, PLA contending that his duties were limited to acting on specific instructions, if any, when they were given. That too does not need to be resolved, given that the omission, if any, on and after 11^th October 1996 is the only omission that gives rise to any damage.

7. Alternatively, the defendant’s case is that the claim is statute barred. PLA contend that by 28^th November 1996 (the date six years preceding the issue of the Claim Form), the claimant had already suffered significant damage, in that there was by then no longer sufficient time before the 14^th December deadline to submit a scheme of landscaping (which the defendant contends would have taken three to four weeks to prepare), that the conditions precedent in fact required approval to have been given before the deadline (not just submission), and that that would have taken a further two weeks. The claimant denies that damage had been suffered by 28^th November 1996, contending that only submission, not approval, was required by the deadline, and that submission could have been achieved within the period between 28^th November and 14^th December. For the purposes of this issue, the experts in land valuation agreed, and the parties accept, that the planning permission added value to the site, and the added value would have significantly reduced if not disappeared, once it was appreciated that the permission could not be saved, or was likely to be lost. Alternatively, the claimant contends that the limitation period did not run from 28^th November 1996, but from some later date, because Mr Lavender concealed from the claimant the fact that he had not submitted a scheme of landscaping.

8. The damages claimed in the Claim Form amounted to some £16 million, being the alleged difference between the value of the land with the planning permission (£18m) and the value once it had lapsed (£2m). By the time the experts on land valuation had met and produced the joint report dated 27^th November 2007, it was agreed between the parties that the open market value of the land as at 14^th December 1996 with the benefit of the planning permission, and subject to the reserved matters approval, was £1,125,000. The remaining difference between the parties was confined to the value of the land on that date without the benefit of the planning consent. The land was at all times available for business and industrial use, although it was not in fact so used. The claimant contends that without the planning permission the land was worth in the region of £250,000, and PLA contends it was worth £700,000. The issue on damages thus came down from £16 million, to a maximum claim of £875,000, against a minimum claim of £425,000.

9. A significant feature of this case, which is material to understanding the issues of negligence and quantum, is that the proposal to develop the site was closely linked to a proposal of Durham County Council (and now Darlington Borough Council as a unitary authority) to turn a disused railway line running along the North edge of the site into a new road, from which there would be very much better access to the site than there was before. The new road, joining the A1 West of Darlington to the A66, was originally known as Cross Town Route (CTR), and had been expected to be built in 1994. However, the funding was withdrawn, as it happens on 15^th December 1994, the day after the reserved matters approval had been given. The road is at the time of the trial before me in the course of being built under a new name, the Eastern Transport Corridor (“ETR”). But the ten year delay in commencing work on that road is part of the explanation of why this case covers so long a timescale. In October 1996 the claimant and a prospective purchaser of the site were contemplating making an application under the Town and Country Planning Act 1990 s.73 for an extension of time, and they did in fact make such an application, albeit that it was unsuccessful. Unless otherwise stated, all further references to a section of a statute are to the Town and Country Planning Act 1990. The works that were done to the site on 11^th and 14^th December 1996 were no more than was thought to be the minimum to ensure that the permission did not lapse (in the event that the application made for an extension of time were to prove unsuccessful). Interest in the site revived in 2001, and in June 2002, Darlington did not accept that the planning permission was still valid. At that time the point first taken by Darlington in support of their position was to question whether the works done by the claimant on the site in 1996 were in law sufficient for the purpose of keeping the planning permission extant (see para 156 below).

Events up to February 1994

10. I gratefully adopt Mitting J’s account of many of the facts. I reproduce that with only minor alterations, and make such additions as are necessary to explain the present action. The facts found by Mitting J are now undisputed, save in so far as they relate to Mr Hepker’s evidence in relation to Mr Lavender.

11. The site is about 19.41 hectares on either side of a now disused tobacco factory in McMullen Road on the eastern edge of Darlington. The western segment was at all material times owned by DIN Ltd., a wholly owned subsidiary of the Arab Bank, the previous owners having gone into receivership.

12. In 1989 three planning applications were submitted by John Lavender on behalf of the claimant under its former name, Brencham Properties (Darlington) Ltd. John Lavender Associates was the style under which Mr Lavender then carried on his profession of Architect and Town Planning Consultants, before he joined with Mr Padgett to form PLA. Nothing turns on the difference in name. The claimant company had been acquired in 1988 by Oakdean Properties Ltd, which was in turn owned by the Hepker Children’s Trust. The claimant changed its name in July 1989. In 1989 and 1990 it had a significant turnover, and the directors were Mr Hepker, Mr Cartwright and Mr Martin Smith.

13. The first application was not determined within eight weeks, and the second and third were refused by Darlington as Local Planning Authority. The claimant appealed. A public inquiry was held. The inspector recommended that the appeal be allowed. The Secretary of State for the Environment accepted the inspector’s recommendation and, by a decision letter of 25^th February 1991, granted outline planning permission for retail development of the eastern part and office development of the western part subject to 20 conditions.

14. The conditions relevant to this claim are (i) to (iv), (vi) and (xii) and (xiii) and read as follows:

(i) approval of the details of the siting, design, and external appearance of the buildings, the means of access thereto and the landscaping of the site (hereinafter called ‘the reserved matters’) shall be obtained from the Local Planning Authority,

(ii) application for approval of the reserved matters shall be made to the Local Planning Authority before the expiration of three years from the date of this permission.

(iii) the development hereby permitted shall be begun either before the expiration of five years from the date of this permission, or before the expiration of two years from the date of approval of the last of the reserved matters to be approved, whichever is the later,

(iv) no development shall take place until there has been submitted to and approved by the Local Planning Authority a scheme of landscaping which shall include indications of all existing trees and hedgerows on the land, details of any to be retained together with measures for their protection in the course of development, and details of the type and number of trees to be planted and their size at the time of planting. … The scheme required by this condition shall include the provision of:

(i) a planted mount with fence to act as a noise and visual buffer between the Cross Town Route and houses on Red Hall Estate, and

(ii) tree planting along the eastern boundary to reduce the visual impact of the retail development when viewed from the A66 trunk road, ….

(vi) development shall not begin until details of all roads and vehicular means of access have been submitted to and approved by the Local Planning Authority

….

(xii) development shall not begin until details of all means of enclosure on the site have been submitted and approved by the Local Planning Authority,

(xiii) development shall not begin until details of car and pedal cycle parking and of provision for loading and unloading vehicles have been submitted to and approved by the Local Planning Authority.”

15. “Outline planning permission” was defined by Article 1(2) of the Town and Country Planning General Development Order 1988 as:

“a planning permission for the erection of a building, which is granted subject to a condition requiring the subsequent approval of the local planning authority with respect to one or more reserved matters”.

16. “Reserved matters” were also defined in Article 1(2) as:

“in relation to an outline permission, or an application for such permission, means any of the following matters in respect of which details have not been given in the application, namely: (a) siting, (b) design, (c) external appearance, (d) means of access, (e) landscaping of the site”.

17. Section 92(2) of the Town and Country Planning Act 1990 lays down the time within which building or other operations must be commenced pursuant to a grant of outline planning permission:

“(2) Subject to the following provisions of this section, where outline planning permission is granted for development consisting in or including the carrying out of building or other operations, it shall be granted subject to conditions to the effect:

(a) that, in the case of any reserved matter, application for approval must be made not later than the expiration of three years beginning with the date of outline planning permission; and

(b) that the development to which the permission relates must be begun not later than

(i) the expiration of five years from the date of the grant of outline permission; or

(ii) if later, the expiration of two years from the final approval of the reserved matters or, in the case of approval on different dates, the final approval of the last of such matters to be approved.”

18. Conditions (ii) and (iii) thus followed the statutory requirements exactly. Condition (i) mirrored the statutory provisions in the General Development Order. Therefore to comply with and so to preserve the planning permission, the claimant had to submit an application for the approval of reserved matters by 25^th February 1994.

19. The decision letter was addressed to Healy & Baker, the very well known and large firm in London. From April 1990 the claimant had retained that firm for the purposes of the appeal. In 1990 PLA continued to be instructed, but wrote letters drafted by Healy & Baker and performed other tasks locally when instructed.

20. On 1^st October 1990 Mr Nicholas Peet, who was then giving instructions on behalf of the claimant, wrote to Mr Lavender, thanking him for his efforts, and asked him to render what he called Mr Lavender’s final account. On 8^th October 1990 PLA rendered an account in the sum of £533.97 for which the narrative was:

“Continuing services in connection with the proposals for the development of land at Lingfield Estate Darlington, including liaison with Messrs Healy & Baker on preparation of public inquiry, and provision of information and drawing in connection with the proposed scheme and ownership boundaries”.

21. That account was paid in full by the claimant, but not before May 1991. The claimant had fallen out with Mr Peet. On the next day, 9^th October 1991, Mr Hepker wrote to Mr Lavender telling Mr Lavender to apply to Mr Peet for payment, saying “In the event that you do not receive payment from him, kindly revert to us so that we can consider our position”. Mr Lavender reluctantly did as he was asked. There was in fact no basis for the claimant to dispute their liability for PLA’s fees, and the purpose of the request and the delay was to use PLA as a means to get evidence in their dispute with Mr Peet.

22. On 1^st March 1991 Mr Lavender received a copy of the decision letter from Healy & Baker. On the very same day he wrote to Mr Hepker. He asked for his outstanding fees, as he had on a number of previous occasions. He then referred to the time when his firm was originally instructed, saying that it was then on the basis that should a planning permission be achieved, his firm would be retained to advise on further stages of the scheme. Although his fees remained unpaid, he was still keen to continue to work for the claimant. He remained keen throughout the time with which I am concerned. This led to him taking the initiative, that is taking steps without prior specific instructions, more often than may have been required to fulfil the claimant’s requirements, although the claimant was generally (but not always) content with his having spent time for which he subsequently sent invoices.

23. Mr Lavender wrote to the claimant and spoke on the telephone to Mr Cartwright on a number of occasions in the following two years, mainly to keep him up to date with information from the Darlington area. In October 1992 Darlington had advanced a new proposal for access to the site from a roundabout on the CTR, which differed from the access arrangements in the planning permission. The proposal was viewed by Mr Lavender and the claimant as disadvantageous to the claimant, and there followed a number of meetings with representatives of Darlington, at which Mr Lavender represented the claimant, acting on the instructions of Mr Cartwright. At this time it was thought that work on the CTR was likely to commence in the autumn of 1994. The claimant was considering an application for renewal of the planning permission.

24. On 26^th November 1992 PLA submitted an invoice in the sum of £1,054.17 for the period end of September 1990 to the week ending 13^th November 1992. It was for 22 hours of Mr Lavender’s time, and 2.5 hours for the time of an assistant. That invoice was paid promptly. The narrative started:

“Continuing monitoring of the planning situation since our last invoice dated 8^th October 1990, with particular regard to the progress of the proposed [CTR]…”

25. On 25^th March 1993 Mr Lavender wrote to Mr Cartwright, following telephone conversations he had had with both Mr Cartwright and Mr Hepker. The purpose of the letter was to summarise where matters stood in relation to the site, and Darlington’s proposed new roundabout and the CTR. It is a long letter, and towards the end Mr Lavender reminded the claimant that the planning permission would expire on 24^th February 1994 unless reserved matters applications were submitted by that date. He added that such an application could be for the roundabout and access arrangements. During this time Mr Lavender was also receiving and passing on to the claimant information about prospective purchasers of the site, and, on instructions from the claimant, dealing with a problem relating to the boundaries of the site.

26. On 24^th June 1993 Mr Lavender wrote to Mr Cartwright a long letter of advice on how to keep the planning permission extant. It included:

“As we have discussed and agreed previously, it would be a sound tactical move on our part to prepare a Reserved matters application for the construction of the roundabout on the [CTR], as it would send a very clear message to the County and Borough Councils that you have no intention of foregoing your permission won on appeal… As we also agreed, this application should be made sooner rather than later, and to this end, I have discussed the proposal with the firm of Simpson Coulson and Partners, who have submitted a quotation for undertaking the necessary design work for the roundabout. A copy of their letter … is enclosed [it was for £1,550 plus VAT]… and I would be pleased to receive your further instructions as soon as possible”.

27. At the same time Mr Lavender was acting for the claimant jointly with a Mr Petch, who wanted to develop a car showroom on part of the business park site, concerning an application for planning permission for that. Also on 24^th June 1993 Mr Lavender wrote to Mr Cartwright for approval of counsel’s fees to be incurred in that connection.

28. On 19^th July 1993 Mr Cartwright wrote to Mr Lavender confirming that it was the claimant’s wish to seek a buyer for the site at the earliest feasible time. He said that Mr Hepker had asked him to approach Healy & Baker with a view to marketing the land hopefully to secure a sale at not less than £1 million. He asked Mr Lavender for his views on marketing, and how he envisaged the timetable of outstanding matters evolving over the next few months.

29. On 31^st July 1993 PLA sent a further invoice to the claimant in the sum of £923.62, for 20.75 hours work from 14^th April to 31^st July 1993. The narrative started with the same words as in the previous invoice, and referred to a number of meetings with third parties, and occasions of liaison with the claimant.

30. On 4^th August 1993 Mr Lavender met Mr Hepker, Mr Martin Smith and Mr Cartwright in London to consider future courses of action. On 9^th and 11^th August 1993 Mr Lavender asked for the instructions he had previously sought to enable him to make the reserved matters application. He received instructions. On the same day, 13^th August, he himself instructed Simpson Coulson and Partners and submitted to Darlington an application for the renewal of the outline planning permission. Renewal would, if granted by Darlington, be a cheaper way of extending the planning permission than making a reserved matters application.

31. Discussions with Darlington proceeded, but Mr Lavender remained cautious as to what Darlington would do. He advised that there be a contingency arrangement for submission of a reserved matters application if necessary. By December Mr Lavender was becoming concerned. He wrote to Darlington that the claimant might appeal against the non-determination of their renewal application submitted on 13^th August, or submit reserved matters applications on the outline planning permission of 1991. He reminded Darlington that either course would be expensive for both parties. Nothing was heard, and on 17^th January 1994 Mr Lavender discussed the situation with Mr Hepker by telephone. They spoke again on 20^th and 21^st January 1994. Mr Hepker gave instructions to Mr Lavender proceed with the Reserved matters applications. On 25^th January 1994 Mr Lavender wrote to Mr Hepker confirming the fees involved, being the £1,550 quoted by Simpson Coulson and Partners in June, PLA’s fee of £10,000 and the planning application fee of £7,000.

32. Mr Hepker was very displeased with Darlington’s conduct, which he considered had led to him having to incur unnecessary expense. He sent them an angry fax dated 3^rd February, using expressions such as dereliction of duty and threatening an application for Councillors to be personally surcharged.

33. It was in these circumstances, and at the very last moment, that PLA applied for approval of reserved matters by a letter dated 24^th February 1994 the relevant parts of which read:

“Further to recent discussions between Messrs. L. Mulrine and J. Smith of your department and Mr. J. Lavender of this practice, we now enclose for your attention four sets of a Reserved matters application for the above development. This application is submitted in accordance with the outline planning permission granted on appeal and dated 25^th February 1991, and it relates specifically to the outline planning permission which included within the overall scheme a retail food store. …

From the Inspector’s decision letter of 25^th February 1991 it is noted in Condition (i) that the matters reserved for the Local Planning Authority’s consideration are:

1. The details of the siting, design and external appearance of the buildings.

2. The means of access thereto.

3. The landscaping of the site.

Condition (ii) of that letter requires that an application seeking approval of the reserved matters shall be made before the expiration of three years from the date of the outline planning permission. This timescale has been complied with in the submission of this application, and the drawings enclosed deal with the three areas of reserved matters listed above ….

Whilst details of roads, accesses and landscaping are submitted as required for reserved matters purposes, it is acknowledged that further levels of detail will be required as set out in the various conditions attached to the outline planning permission, but such details will be required, for example, before development is commenced on site, or before buildings are occupied, according to the wording of the conditions.”

34. On the same day Mr Lavender sent a copy of that letter to Mr Hepker. For the claimant it is submitted that that letter does not make clear that the conditions precedent are not all covered by the reserved matters application. However, what is clear is that that letter does not state that the requirements of the other conditions have been covered.

35. On 8^th March 1994 Mr Lavender submitted PLA’s invoice for the agreed sum of £10,000 plus VAT. Mr Lavender lodged an appeal against the failure of Darlington to determine the application to renew.

The reserved matters application and the judgment of Mitting J

36. In his judgment Mitting J said:

9. An application form of even date in Form RM1 accompanied the letter. It is headed “Application for approval of reserved matters”. It referred to 17 drawings submitted with the application numbered 393/01-15, drawn by PLA and 14773/01 and 02 drawn by Simpson Coulson & Partners, Consulting Engineers. Drawings 393/01 and 02 were amended and supplemented in August 1994 by versions 01A and 02A.

10. The PLA plans contained details of site layout and elevations of buildings and the number and location of car parking spaces. The Simpson Coulson drawings were a location plan for a road to be built along the northern boundary of the site by Durham County Council and a scale drawing of a new roundabout. It is not, and could not reasonably be suggested, that the letter, form and drawings were, when submitted, anything other than an application for approval of reserved matters only, in fulfilment of conditions (i) and (ii). Their timing and express wording leave no room for any other interpretation for the following reasons.

(1) They contain no reference to the remaining conditions of the planning permission other than to state that further details will be required before the development can begin.

(2) The references to the matters specified in conditions (iv), (vi), (xii) and (xiii) are vestigial and incomplete. In particular :

(a) the drawings of the western part do not indicate existing trees or hedgerows or details of any to be retained. Photographs produced this morning indicate that there are in fact a number of trees on the western part.

(b) the drawings of both the east and western parts do not specify the number and type of trees to be planted. There is only a general indication of landscaping of parts of each segment.

(c) the notes against the areas to be landscaped at the borders of both the east and west parts of the site state “Details of planting scheme to be submitted and approved before development commences” and in the car parking areas “Tree-shrub planting to be approved by the Local Planning Authority”.

11. It is arguable that the drawings would be capable of satisfying conditions (xii) and (xiii), if lodged with the Local Planning Authority for that purpose. The conditions do not require means of enclosure of the office development; and the details of the means of enclosure of the retail units are briefly, but arguably, adequately, specified in the relevant drawings and, although details of the car parking, such as bay size, turning areas and pedestrian access could have been required before the Local Planning Authority’s approval was given, the drawings did specify the numbers and locations of loading and car parking spaces. Though unlikely to be approved without more detail, they were capable of being approved.

12. But, beyond question, the drawings did not satisfy condition (iv), for the reasons given. Mr. Miller the officer in charge, says that in his discussions with Mr. Lavender of PLA, Mr. Lavender told him that the drawings referred only to reserved matters and that he would deal with other matters — the remaining conditions — in subsequent submissions. I have no reason to doubt the word of Mr. Miller, who impressed me as a conscientious planning officer and an honest witness.

13. The [claimant]s contend that however matters started, Darlington did in fact agree that the reserved matters application and drawings should be treated as an application for approval of the details of conditions (iv), (vi), (xii) and (xiii) and did in fact approve them. This requires an analysis both of the actions of both sides and a brief review of the relevant law…

16. Thus, it is in my view clear, that although the law requires no formality other than the making of an application, ordinarily in writing, it does require that such an application is made and does require that it is made in such a way that the Local Planning Authority understands that it is an application for matters other than reserved matters.

37. On 20^th April 1994 PLA sent a further invoice to the claimant in the sum of £1,522.22 for 36 hours work over the eight months period from 31^st July 1993 to 31^st March 1994. The narrative again started with the words “Continuing monitoring of current planning position…” and referred to the particular matters in which Mr Lavender had been engaged: the potential development of adjacent land to the East, discussions with Darlington and

“Discussions with the clients to agree procedures to be adopted to maintain planning status of development land, and submitting a renewal application in August 1993 on the outline permission granted on appeal in 1991”.

38. On 6^th May 1994 Mr. Lavender wrote to Darlington, a copy of which was also sent to Mr Hepker, as follows:

“In all respects, and this was confirmed by Messrs. Mulrine and Miller, the Reserved matters application is entirely in accordance with the requirements and conditions laid out in the outline planning permission, and given that all technical requirements have also been met, there is no reason why the Reserved matters should not be recommended for approval, and in due course, approval should be granted by the Council.”

39. Mitting J said in relation to this letter:

“Again Mr. Lavender made it clear in that letter that the application which had been made was for reserved matters approval…. ”

40. The claimant points to two other passages in that letter. As to the first passage, the claimant submits that what it states is that there were no other matters to be dealt with if reserved matters approval were granted. The passage reads:

“Once Reserved matters approval is granted, it means that even if the County Council at a late date, decided not to build the [CTR] our clients’ site could be developed in accordance with the original outline planning permission”.

41. In my judgment that passage does not add anything. It does not say that the outline planning permission contains no other conditions to be addressed.

42. The second passage in the letter of 6^th May 1994 to which the claimant refers is as follows:

“On confirmation of the County Council’s scheme proceeding on site, or perhaps on the letting of the contract, our client’s scheme would be amended in layout terms to cater for the revised accessing arrangements, and Mr Mulrine felt it would be appropriate at that time to submit a fresh Reserved matters application. As agreed with Mr Mulrine, we believe it to be the case that a number of Reserved matters submissions can be made on the strength of an ongoing outline planning permission”.

43. The point the claimant makes in relation to that passage is that it demonstrates a mistaken view of the legal position put forward for Darlington by Mr Mulrine and apparently agreed to by Mr Lavender. It is said that Mr Lavender shared this mistake, and that it led to him acting or omitting to act, and misinforming Mr Hepker subsequently. The mistake is that by May 1994 the time for making reserved matters applications in relation to the planning permission had expired. The application then being considered had been submitted just before the deadline. So while in principle it is the case that a number of reserved matters submissions can be made on the strength of an ongoing outline planning permission, that was no longer the position with this planning permission. As will appear, there are some later statements made by Darlington which could be said to be confused or confusing, but to what extent, if at all, Mr Lavender was confused is a different point to which I shall have to return.

44. A question of major importance to both parties and the subject of both conditions (i) and (vi) was the means of access to the site. The original scheme envisaged that access to the eastern part would be gained via a roundabout on the proposed new road at the north eastern corner of the eastern part. Durham County Council proposed that the roundabout should be resited to the north west corner. The claimants were content to adjust the development to accommodate this change and, in due course, proposed a section 106 Agreement to ensure that it would be. Darlington eventually agreed.

45. Meanwhile, Mr Lavender advised Mr Hepker that it would be unwise as he put it “to constrict further thoughts on the detailed design of the development land”. At that stage it was not known who the developer of the land might be. By letter of 8^th June 1994 Mr Lavender advised Mr Hepker of the options available to him, one of which was a s.106 agreement, the other being to hold the reserved matters application in abeyance with the agreement of Darlington, and he asked for an opportunity to discuss the options. This discussion was held promptly, and by letter of 14^th June 1994 Mr Lavender was able to report to Darlington that he had instructions to proceed by way of a s.106 agreement. Before sending that letter Mr Lavender sent a draft to Mr Hepker for his approval.

46. Relations between Darlington and the claimant continued to be poor. On 22^nd July 1994 Mr Lavender wrote complaining of procrastination on the part of Darlington.

47. There were a number of exchanges between Mr Lavender and Darlington on the proposal for a s.106 agreement, including PLA’s letter of 15^th August 1994. This enclosed drawings and also referred to landscaping proposals. The relevant parts of it read:

“2. Regard [sic] the landscaping proposals, and given the additional condition contained in the outline planning permission concerning the submission of landscaping details, we agree that a further submission of such details will be made, and we accept a wording on the Reserved matters approval to that effect.”

48. The additional condition referred to is condition (iv). For the claimant it is submitted that the inclusion of that paragraph is evidence that Mr Lavender did not understand there to be any distinction between condition (i) and condition (iv). It is said that if these conditions are to be understood as separate, then there would be no need for such a paragraph. Mr Lavender explained to me that the purpose of that paragraph was to make clear to Darlington that what had been submitted was what he called a “bare bones landscape proposal – just enough for the reserved matters application” and not the final solution. This letter was not copied to Mr Hepker, and so had no impact on his understanding of the position at the time.

49. On 24^th August 1994, in a document drafted a few days before by Mr. Miller, he reported to the planning applications Sub-Committee, to whom the decision on reserved matters was referred because of the size of the development. The report stated:

“Planning Policy Background

The application is for the approval of reserved matters and as such there are no policy issues to be addressed …

Planning issues

The main issues to be considered in the determination of this application are whether the proposed layout, access, design, appearance and form of building are acceptable, these are considered in turn. …”

50. The building designs were considered satisfactory. Under the heading “Floorspace and layout”, Mr. Miller observed:

“The floor area of the proposed business park and car parking provisions is acceptable …. Whilst large areas are set aside for landscaping, the landscaping within the car parking areas is not satisfactory and the applicants have stated that they will be willing to discuss these details further.”

51. Two pages of text were then devoted to the means of access and the alterations required by the shifting of the site of the proposed roundabout. Mr. Miller recommended that the Sub-Committee authorise him to negotiate a section 106 agreement to deal with it. His recommendations concluded:

“(b) That upon the satisfactory completion of the said Agreement and the submission of additional satisfactory landscaping details, the Director of Development Services be granted delegated authority to issue an approval for the submitted reserved matters.”

52. The Sub-Committee accepted his recommendations without amendment and produced a resolution to that effect.

53. In relation to these documents Mitting J said this:

26. The text of Mr. Miller’s report makes it clear beyond doubt that what the Sub-Committee were being invited to, and did in fact approve, were reserved matters only. The report said as much and the Sub-Committee’s resolution gave the Director of Development delegated authority “to issue an approval for the submitted reserved matters”.

27. The reference to “the submission of additional satisfactory landscaping details” in the recommendation and resolution was ambiguous taken in isolation; but, in the context of the paragraphs in the report headed “Floorspace and layout” its meaning is clear: it refers to landscaping within the car parking areas. The context in which that was said to be unsatisfactory is that of the area of such landscaping. It is contrasted in the same sentence with the “large areas set out for landscaping” in the site as a whole. The report does not state or imply that the scheme of landscaping required by condition (iv) would be dealt with as part of the reserved matters.

28. The letter sent by an administrative officer to the [claimant] notifying them of the subcommittee’s decision on 26^th August 1994 states:

“I wish to inform you that the Planning Application Sub-Committee at its meeting on 24^th August 1994 resolved to approve the details for the proposed development, subject to certain planning conditions and subject also to an agreement being entered into between yourself and the Local Planning Authority under section 106 of the Town and Country Planning Act 1990, to cover other aspects of the proposed development.”

29. Mr. Miller says, and I accept, that the letter adopted standard wording. It did not purport to nor, as a matter of law, could it, alter the effect of what the Sub-Committee had in fact resolved.

54. A draft section 106 agreement was sent by the Borough Solicitor to PLA on or about 5^th September 1994. Preamble (4) stated:

“The Council has decided to grant approval for the details subject to certain conditions and subject to the making of this agreement which shall constitute a planning obligation within the meaning of section 106 ….”

55. Mitting J observed in relation to this:

31. The reference to “the details”, though ambiguous, cannot alter the effect of the Sub-Committee’s resolution. Mr. Miller was unable to say what the “certain conditions” were. The most likely explanation is that it was simply a repetition of the words which appeared in the standard notification letter of 26^th August 1994 and so had no significance.

32. The [claimant]s were anxious nevertheless that the words should be removed and in due course they were. Mr. Hepker, for the [claimant], asserts in his witness statement and in evidence that the removal of these words was of cardinal importance to him and was one of the matters which led him to believe that Darlington, by then, accepted that all conditions relating to the submission and approval of details had in fact been fulfilled. I am unable to accept that contention. The letter written to him by Mr. Lavender on 18^th November 1994 made the position clear:

“As I explained when we spoke on Thursday, 17^th November, I have met with the Borough Solicitor to amend the wording of the agreement to exclude the reference in (4) of the preamble to any planning conditions, as none are to be attached to the reserved matters approval.”

33. All that the removal of the offending words meant was that the approval of reserved matters would not be subject to conditions. It had no bearing on satisfaction of conditions other than condition (i).

56. The evidence before me includes a number of documents. There is a draft of the s.106 agreement sent by Darlington to Mr Lavender on 31^st August 1994, both of which Mr Lavender faxed to Mr Hepker on 5^th September 1994. The next day Mr Hepker faxed back to Mr Lavender a draft letter to be sent to Darlington’s solicitor. It covered more than one page with eleven drafting amendments. None of the suggested amendments related to Recital (4). On 21^st September 1994 Mr Lavender duly sent a letter including the draft of Mr Hepker. On 10^th October 1994 Mr Hepker sent a copy of the draft to Mr MacGeagh, who was acting for prospective purchasers of the site. On 20^th October 1994 Darlington sent to Mr Lavender a revised version of the agreement drawn up to include Mr Hepker’s amendments. Mr Lavender forwarded it to Mr Hepker. On 25^th October 1994 Mr Hepker faxed Mr Lavender saying that the draft was acceptable, subject to two further minor amendments. These included amendments to Recital (4), but not to the words “subject to certain conditions” in the first and second lines of that paragraph.

57. On 14^th November 1994 Darlington sent a further draft of the agreement. It is at that point that a point was raised on the words “subject to certain conditions” in the first and second lines of Recital (4). In Mr Hepker’s written statement he stated that Mr Lavender advised that those words be deleted, in order that there should be no further conditions to be satisfied, and that the development could proceed subject only to obtaining Building Regulations approval. He said rather more in cross-examination, adding that he said to Mr Lavender that he should have those words removed because he wanted a clean and usable permission and not one subject to conditions. He also added that he did not fully understand the conditions himself. Mr Lavender states that the removal of the words was suggested by Mr Hepker. Mr Lavender states that he requested the removal of the words simply because there were not conditions attached to the reserved matters approval, only to the planning permission, and so there were no conditions to which the words in question could refer. He states that the omission of these words was thus a drafting point and no more. It was not because Mr Hepker understood that he would get a clean certificate. He said the phrase “clean certificate” is not one he would use, and he did not accept that Mr Hepker thought that he had such a thing: he was fully aware of what consents he had. Mr Hepker states that in fact Mr Lavender reported the removal of the words as a great success.

58. On 18^th November 1994 Mr Lavender wrote two letters on the topic, one to Mr Hepker and one to Mr MacGeagh, each of which enclosed the final version of the agreement. In the letter to Mr Hepker Mr Lavender wrote:

“As I explained when we spoke on Thursday 17^th November, I have met with the Borough Solicitor to amend the wording of the agreement to exclude reference in (4) of the preamble to any planning conditions, as none are to be attached to the Reserved matters approval”.

59. In the letter to Mr MacGeagh Mr Lavender wrote:

“You will see that there is no reference to any further conditions – the reference has been deleted as there are no new conditions, the only relevant conditions being those attached at the grant of the outline planning permission in February 1991”.

60. Meanwhile, in the light of the measure of agreement already reached with Darlington, Mr Lavender requested a postponement of the Inquiry in respect of the claimant’s appeal. The Planning Inspectorate granted a postponement to 14^th December 1994.

61. The section 106 agreement was executed and reserved matters approval was given on 14^th December 1994. Recital (4) stated:

“The Council has decided to grant approval for the details subject to the making of this Agreement which shall constitute a planning obligation within the meaning of section 106 of the Act of 1990 … by a document of even date (hereinafter called ‘the Planning Permission’) enclosed as an Appendix.”

Clause 1(b) provided:

“This Agreement shall not come into effect and the covenants on the part of the Company contained in Clause 2 shall not be enforceable unless and until the planning permission has been granted and the development has been commenced by taking material steps in accordance with section 56 of the Act of 1990.”

62. Clause 2 set out the terms of that covenant which, in summary, was to construct an alternative access road linking up with the roundabout proposed by Durham County Council rather than the one originally shown on the submitted plans.

63. The “planning permission” referred to in both preamble (4) and clause 1(b) of the section 106 Agreement was the reserved matters approval of 14^th December 1994. It reads:

“Notice of Approval of Reserved matters

Your application dated 24^th February 1994 and amended by details received on 11^th and 16^th August 1994 on behalf of Lingfield Properties Limited, 1 East Street, Tonbridge, Kent,

For details of siting, design and external appearance, means of access and areas to be landscaped for retail park, business park, related commercial development, roads and non-food retail park, business park related commercial development and roads and land at Lingfield Estate, McMullen Road, Darlington,

and submitted pursuant to Planning Permissions won on appeal, reference numbers” — they are then set out — “on 25^th February 1991, is hereby approved.”

At the foot of the notice the following words appear:

“Please ensure that you have all necessary consents before commencing the development, including any necessary approval under the Building Regulations 1991.”…

64. As to this Mitting J observed as follows:

38. Mr. Hepker contends, and I have no doubt firmly believes, that the wording of the section 106 Agreement, in particular recital (4) and of the stamp on the drawings signifies that Darlington (in planning language) “discharged” conditions (iv), (vi), (xii) and (xiii). His contention lays particular emphasis on the deletion of the words “subject to certain conditions” and the contrast between the wording of the stamps “Details approved following outline permission” and on the report to the Sub-Committee of 24^th August 1994 and on other documents “areas of landscaping”. In short, he contends that they indicate a change of approach by Darlington to the application for reserved matters approval: having treated it initially, as such, they accepted it as an application to discharge the remaining conditions.

39. While I do not doubt the genuineness of Mr. Hepker’s belief, the change in wording does not bear the weight that he puts upon it for reasons which I have already explained and I am satisfied that the notice of approval of reserved matters was just that and no more. I am also satisfied that the wording of the stamps on the drawings meant nothing more than that their details were approved as reserved matters. Further, Mr. Hepker’s contention also rests on the belief, also genuinely held, that Mr. Lavender did, at some time between 26^th August 1994 and 14^th December 1994, procure the agreement of Mr. Miller and his superiors to treat the reserved matters application as an application to discharge the other conditions.

40. As far as condition (vi) is concerned, his belief is well-founded. Darlington clearly accepted the section 106 Agreement in place of, and so in discharge of, condition (vi); but there is no firm evidence that Mr. Lavender negotiated on that footing in respect of the other conditions, let alone procured Darlington‘s agreement to do so. The only evidence from him is a statement typed and signed by him, dated 27^th July 2001 which reads:

“I am of the opinion that in the form of discussions and correspondence involving officers of the Local Planning Authority and myself, all reserved matters submissions arising from the appeal allowed on 25^th February 1991 were satisfactorily submitted to Darlington Borough Council on 24^th February 1994 and duly approved on 14^th December 1994 subject to a section 106 Agreement. Furthermore, through those discussions preceding the approval of reserved matters, all conditions arising from the appeal decision were properly considered and addressed, it being accepted by the Local Planning Authority that details required by those conditions were substantially incorporated into the reserved matters submission, and subsequent areas of minor detail would remain to be addressed during the course of development of the land.”

41. That statement is studiously ambiguous. It is flatly contradicted by Mr. Miller’s sworn evidence — that Mr. Lavender did not give him any indication that he was dealing with planning conditions other than reserved matters and condition (vi) and that he agreed with Mr. Lavender that PLA would come back with additional details to satisfy condition (iv) after the reserved matters had been approved. I have already indicated that I believe Mr. Miller to be a truthful and reliable witness. What he says is consistent with the documentary evidence and with the background to his dealings with PLA. Once reserved matters were approved, the [claimant] had two years in which to submit and secure approval of details of landscaping.

42. Mr. Clarkson QC, for the [claimant], submits that there was a powerful practical compulsion to resolve all matters, not just reserved matters, on 14^th December 1994. Durham County Council required the [claimant]’s land to build a roundabout and a new road. Government money, it was anticipated, would be committed by April 1995.

43. I accept that there was a degree of practical compulsion in the matter and some urgency. I accept that Durham County Council and Darlington required to be certain in practice that the [claimant] would make land available for the new roundabout and road without the need for a compulsory purchase order which would have delayed the development of the road well beyond April 1995. I am also willing to accept that the [claimant]s required to be certain that the reserved matters should be approved before they entered into the section 106 Agreement which committed them to an altered means of access. However the section 106 Agreement did not require the [claimant] to make land available for the road. The compulsion to do so was, as it had always been, practical, for without the road there could be no development. On the other side, the compulsion upon Darlington not to be unreasonably obstructive about the discharge of the remaining conditions was also practical. The reality was that the [claimant] had two years in which to procure the discharge of conditions (iv) and, if necessary, (xii) and (xiii), and no reasonable scheme to do so could reasonably have been refused. If it had been, there was ample time to secure the overriding of such a refusal.

44. For those reasons, although I accept that there was, in the background, a degree of practical compulsion to get the reserved matters approved, I do not accept that there was any practical compulsion on either side to secure discharge of the remaining conditions.

45. Two ancillary questions arise about the reserved matters approval. First, as far as the mound to the north of the site is concerned, Darlington could not reasonably have required any scheme different from that already approved by Durham County Council on 8^th March 1994. In practice, therefore, compliance with the fourth of the conditions within condition (iv) could never have proved an obstacle and had that been the only matter standing in the way of completed planning permission available to the [claimant]s, then the outcome of this ruling might have been different.

46. Secondly, the note at the foot of the reserved matters approval does not assist Darlington. It clearly is a standard note which draws attention to the need to obtain building regulation approval and, in appropriate cases, listed building consent.

47. In the event, events followed rapidly the one upon the other because on 15^th December 1994 the Government announced that it would not fund the Cross Transit Route; without it the site could not be developed. Mr. Hepker was, however, alive to the need to preserve the planning permission by carrying out a material operation on the site before 14^th December 1996. He first of all checked with Mr. Lavender that the necessary preconditions for doing so had been satisfied. In paragraphs 11 and 12 of the particulars of claim dated 13^th and 14^th October 2003, verified by Mr. Hepker and served in proceedings against PLA to protect the [claimant]’s position in the light of the imminent expiry of the limitation period, the [claimant] stated:

“11. Up to the said conversation on 11^th October 1996, Mr. Lavender on behalf of the defendant had on several occasions orally informed Mr. Hepker on behalf of the claimant that all necessary consents and approvals required by the said permissions had been obtained. He also informed Mr. Hepker orally and in writing that no planning conditions were to be attached to the reserved matters approval. Mr. Lavender on the part of the defendant informed Mr. Hepker on behalf of the claimant that the defendant had not submitted to the Council for its approval a scheme of landscaping containing all the detail required by condition (iv) of the conditions. Mr. Lavender went on to suggest to Mr. Hepker that that might provide a way of extending the planning permission by means of submitting such a scheme of landscaping to the Council as a reserved matter and, thereby, securing a further two years to begin the development from when that scheme of landscaping had been approved.

12. In response to that suggestion, Mr. Hepker instructed Mr. Lavender that the defendant had better get on with it and make sure that the scheme of landscaping was done and Mr. Lavender stated words to the effect that that was fine and that he, on the behalf of the defendant, would get on with it.”

48. Mr. Hepker said that he believed that Mr. Lavender did in fact make such an application. I have seen no evidence of it and do not accept that it was made. If it had been, I would be both surprised and disturbed that Darlington had not produced it in the course of these proceedings. It follows that when work was undertaken to peg out and excavate the line of a road on the site between 11^th and 14^th December 1996, not all of the conditions imposed by the planning permission had been discharged.

65. The evidence before me was different from the evidence before Mitting J. As Mr Hepker pointed out, the matter came before Mitting J under CPR Part 8, and there was not the disclosure that has taken place in this action. More significantly, Mr Lavender declined to give evidence before Mitting J, and declined even to make in proper form a witness statement based upon what he had written in his document dated 27^th July 2001 (to which I shall return). The document dated 27^th July 2001 has no heading or other words such is to be expected of a statement to be used in court proceedings.

66. Moreover, Mr Miller gave evidence before Mitting J, but not before me. A witness statement was given by Mr Miller to Mr Lavender for use in the present proceedings, but Mr Lavender chose not to adduce it in evidence. The claimant did not seek to rely on any evidence from Mr Miller.

67. The facts found by Mitting J in his judgment which are in dispute in the present action relate to Mr Hepker’s evidence as to what he believed and what had passed between himself and Mr Lavender, in particular as set out in paras 38, 39, 47 and 48.

68. Having considered the point myself, I respectfully agree with the finding of Mitting J in paras 39 and 40 of his judgment that:

“the change in wording does not bear the weight that he puts upon it for reasons which I have already explained and I am satisfied that the notice of approval of reserved matters was just that and no more. I am also satisfied that the wording of the stamps on the drawings meant nothing more than that their details were approved as reserved matters… As far as condition (vi) is concerned, … Darlington clearly accepted the section 106 Agreement in place of, and so in discharge of, condition (vi)….”

69. I also respectfully agree with what Mitting J said in his paragraphs 43, 44 and 45. But whatever Mr Hepker’s state of mind was at the time he gave evidence before Mitting J, and notwithstanding Mitting J’s findings in relation to that, on the evidence before me I find that Mr Lavender did not believe that the s.106 agreement had the effect that there were no further conditions to be fulfilled before development commenced, and he did not tell Mr Hepker that it did have that effect. If Mr Hepker believed that there were no further conditions to be fulfilled, that was not a belief induced by Mr Lavender. At best it was a case of Mr Hepker being confused.

70. The progress of the negotiations on the form of the s.106 agreement, as set out above, give no basis for a finding that the deletion of the words in Recital (4) was linked in any way to an attempt by Mr Lavender to discharge condition (iv). Mr Lavender’s evidence before me is consistent with the evidence Mr Miller gave to Mitting J on this point (see para 41 of Mitting J’s judgment). He told me that he had never received instructions in 1994 to make a further submission to satisfy condition (iv). He explained that the reserved matters application was made for the purpose of keeping the planning permission alive, and not because the claimant was intending to commence the development. In order to satisfy condition (iv) it would have been necessary to engage a landscape architect. I shall have to return later to what satisfying condition (iv) would have involved. The letter from Mr Lavender to Mr Hepker of 18^th November 1994 contains no suggestion that the revised wording related to conditions attached to the planning permission. While the letter of 18^th November 1994 to Mr MacGeagh was not sent to Mr Hepker, and so cannot be evidence of his state of mind, it is evidence of Mr Lavender’s state of mind. In that letter he does distinguish between new conditions (none being attached to the reserved matters approval) and conditions attached in 1991. Mr Lavender’s statement of 27^th July 2001 does not say that the latter conditions were discharged by the Reserved matters approval. Mr Lavender is a careful and thorough letter writer. If he had been intending Mr Hepker to understand that the effect of the s.106 agreement was that there were no further conditions to be satisfied, it would have been surprising that he did not put that important information in writing, whether to Darlington or to Mr Hepker.

71. It is the claimant’s case that at some point Mr Lavender stated to the claimant that all consents and approvals necessary for the valid implementation of the permission had been obtained. I do not so find. There is, of course, nothing in writing to this effect. Mr Hepker has been unable to identify the date or occasion. The documents that do exist do not lend support to such a finding. I find that Mr Lavender was not himself confused as to the scope of the reserved matters approval and did not conflate condition (i) with condition (iv).

The position following the grant of Reserved matters Approval

72. In early 1995 Mr Lavender exchanged correspondence with Darlington about what would have been part of the work required to fulfil condition (iv), namely the mound referred to in sub-condition (i) of condition (iv). Darlington had obtained planning permission to reposition the roundabout and other works on the CTR. The building of the mound was a condition of that permission and Darlington confirmed to Mr Lavender that the mound would be constructed by them as part of the roadworks contract. Mr Lavender was also dealing with points arising on the boundaries of the site.

73. On 7^th March 1995 the claimant entered into an agreement with Priory Estates (Glasgow) Ltd (“Priory”) for the sale of the site for £2.275 million subject to the satisfaction of conditions precedent. One of the conditions precedent was that finance be irrevocably committed for the CTR (except for an amount up to £2.5m to be contributed by Priory) such that direct access to the site could be available (without the consent of any third party) when the retail units to be constructed on the site were to be open for trading.

74. Ten days later on 17^th March 1995, Priory entered into a related agreement with La Sande (Holdings) Ltd (“La Sande”) for the sale of the land to La Sande. La Sande in turn entered into joint venture agreement with Taylor Woodrow. La Sande were not happy with the proposed layout of the development for which the planning permission made provision. They proposed a development with a substantial element of leisure of facilities, upon which they entered into discussions with Darlington.

75. On 31^st March 1995 PLA invoiced the claimant in the sum of £1,599.64 for 35 hours work in the period 1^st October 1994 to 31^st March 1995. The narrative started with the words: “Continuing advice and assistance to the client with regard to the planning position and potential future development…” of the site. Particular work referred to included the work on the boundaries, “negotiations with … Darlington … to successfully secure section 106 agreement and release of Reserved matters approval”, and other liaison with Darlington.

76. There had been another invoice submitted on 20^th October 1994, which is not in the bundle, but for which Mr Lavender wrote requesting payment on 7^th April 1995. On 19^th April 1995 Mr Hepker responded that the invoice of October 1994 was “considerably higher than we had anticipated”. He added:

“Without wishing in any way to deny the attentiveness of your professional service, you appeared to have spent rather more time than we had wished on matters which were peripheral to our central concerns… The sheer size of your invoice created a difficulty for us in that it had not been included in our cash flow projections with our bankers.”

77. Mr Hepker enclosed a cheque for £1,599.64 in settlement of the most recent invoice and four cheques in the sum of £1,348.69 dated 19^th May, June, July and August 1995 (total sum of £5,394.76), adding “These will clear our indebtedness to you in as short a period as our cash flow enables”.

78. It is difficult to know what to make of Mr Hepker’s reference to “cash flow projections with our bankers”. I consider below the financial position of the claimant company, which apparently had no income. But the Hepker family was not in a financial position that would have made it difficult to fund the expenses of the claimant, as in fact it did. I do not doubt that those members of the family interested in the claimant could have found the £5,394.76 required to pay PLA’s invoice promptly, and were not constrained by the limited cash flow referred to. This episode, and the earlier delay in paying his fees referred to above, left Mr Lavender with the impression that the claimant was reluctant to spend money on the site. The case advanced at trial was that Mr Lavender did not understand, or ought not to have understood, that there were financial constraints on what should be done in relation to the site. Nevertheless, I find that Mr Lavender did form that view, and reasonably so, in the light of Mr Hepker’s reference to cash flow as a reason for not paying the invoice promptly. On 6^th July 1995 he wrote to Mr Hepker about the boundary matter, asking for instructions. He explained: “I have no wish to incur unnecessary expenditure on your part…”

79. The last year for which the accounts of the claimant show any income other than interest is the year ending 30^th March 1990. For that year there is shown a rental income of £167,014. For the year ending 30^th March 1991 there is shown income by way of interest of £1,125,671. Mr Martin Smith resigned as a director on 31^st October 1991. In the period ending 30^th March 1992, and all subsequent years with which I am concerned, there is nil shown for turnover. Mr Hepker resigned as a director on 24^th November 1994, and two of his children, JL and HB Hepker were appointed directors on 17^th November 1994. Mr Cartwright resigned as a director, and Mr Hepker became Company Secretary. From then on Mr Hepker was the only person through whom the claimant acted. He acted with the authority of the board. There is nothing to indicate from what resources the claimant was then able to continue to discharge its obligations. I was informed that the expenses of the claimant were funded by the Hepker family. Communication with the claimant was at Mr Hepker’s personal address, at that point in Lancaster Stables, London NW3, and, from March 1996, at Avenue Road, London N6.

80. Except for the exchanges about PLA’s invoice and the litigation with Mr Peet, Mr Lavender had very little to do with or for the claimant in 1995 until 20^th September. On that date he wrote giving some information relevant to the site. And on 30^th September 1995 he sent an invoice in the sum of £975.66 for 19.5 hours work from 1^st April 1995 to 30^th September 1995. The narrative starts “Continuing advice and assistance to client with regard to matters arising in connection with future development of” the site. The invoice refers to the work on the boundary and adds: “This area of work ceased on instructions from the client on 10^th July 1995”. This invoice was not paid until the end of May 1996.

81. In 1996 Mr Lavender had no involvement until the telephone call from Mr Hepker of 11^th October. This was not because nothing was happening. On 17th April 1996 a company called Ellkington Developments Ltd wrote to Mr Hpker confirming discussions about a joint development. The letter included a reminder (if Mr Hepker needed one) as follows:

“In order that [the planning permission] remain extant following [13^th December 1996], material operations must be held to have been commenced on site, and those operations must relate to the development approved in the Reserved matters submission”.

82. In June 1996 Mr Hepker was in communication with a Mr Adrian James of Barton Willmore Planning Partnership, who were acting for clients who had an interest in the site. Mr Hepker was also in communication with Mr Dunn and Mr Aykroyd of Bradstead Ltd, another company with an interest in the site. Mr Lavender was aware that things were going on, but not of any role he might have. On 9^th July 1996 he wrote to Mr Dunn saying that he had contacted Mr Hepker in the hope of receiving confirmation of his appointment in relation to land in Faverdale, which is to the North West of Darlington, at the other end of the CTR, but had heard nothing.

83. It is the claimant’s case that Mr Lavender ought, before 11^th October 1996, to have given Mr Hepker clear and unequivocal warning that the conditions needed to be fulfilled and to give clear advice as to how much time it would take to fulfil those conditions. Mr Ullstein pointed to the advice that Mr Lavender had given to Mr Cartwright on 25^th March 1993 as to the need to apply for reserved matters approval before 24^th February 1994, and to the advice that Mr Lavender later gave to Mr Hepker on 27^th November 1996 on the need to commence work on the site.

84. Mr Lavender’s explanation for not doing this was that he thought that what Mr Hepker knew about the deadline was sufficient. If the claimant is right that there was such a duty, then they do not have to establish a reason why it was not fulfilled. In fact the case put forward for the claimant was that Mr Lavender was himself confused. I have not so found.

85. Mr Hepker has a number of qualifications. He lists them at the head of his correspondence as BA LLB LLM Barrister FInst D. Although he taught law as a young man, he has not practised as a barrister. His expertise was in tax law. I have no evidence as to his more recent business or other experience, except in relation this case. Mr Lavender referred to Mr Hepker as being knowledgeable in planning matters. There is no evidence as to what Mr Hepker’s knowledge of planning matters was. And the documents show confusion and misunderstanding on Mr Hepker’s part at a number of points, which suggests to me that Mr Hepker’s expertise was not in planning matters. I have not been addressed by the parties in any detail as to the scope of the duty of care in this case. For reasons given above, it has not been necessary. Nevertheless, I bear in mind that the scope of the duty of a professional adviser may vary depending on the characteristics of the client, in so far as they are apparent to the adviser. A youthful client, unversed in business affairs, might need explanation and advice that it would be pointless, or even sometimes an impertinence, for the adviser to offer to an obviously experienced businessman. Whatever his knowledge of planning law, Mr Hepker was plainly not unversed in business affairs, and had (by the expenditure incurred in 1991) shown that he had access to substantial resources, and the ability to instruct such a well known London firm as Healy & Baker. He did not appear to Mr Lavender, nor should he have appeared to Mr Lavender, as a man who generally needed to have explained to him legal documents about planning matters.

86. Mr Hepker has drafted a high proportion of the documents in this case. While this may have had the effect of saving solicitors’ fees, that was not the primary reason for Mr Hepker acting in this way. Rather it reflected his wish to apply his own skills. He wrote not only the numerous letters from the claimant signed by him, but also other documents, including letters to be sent by solicitors acting for the claimant. In July 1995 he drafted a witness statement to be made by Mr Lavender in proceedings which the claimant was involved in against a Mr Peet, the former director of the claimant through whom Mr Lavender was first instructed by the claimant. In December 1996 Mr Hepker drafted instructions to counsel to advise. He has also carried out a number of tasks in the course of the present proceedings which are commonly carried out by solicitors, including copying documents and approaching witnesses and reviewing drafts of their witness statements.

87. In my judgment the deadline can be easily derived by a lawyer without specialist planning expertise, such as Mr Hepker, from a reading of the 1991 letter communicating the planning permission. There was no requirement upon Mr Lavender to spell things out in more detail than he did, at any rate before October 1996.

88. Mr Hepker and Mr Ullstein raised the question why it would have been reasonable not to have satisfied the outstanding conditions, either at the same time as the reserved matters approval or in any event before October 1996. It was suggested that there was no good reason for not doing so. Mr Ullstein points to the large investment that had been sunk into the site, mainly in winning the appeal in 1991, and again in 1994, when a figure of the order of £18,500 was incurred in fees for obtaining the Reserved matters Approval. It is argued that all that would inevitably be wasted if the permission lapsed.

89. In my judgment that overlooks the reality of the situation. The investment sunk into the site might be lost in any event, if the CTR were not built. When the reserved matters application was made it was still uncertain whether or when the CTR would go ahead. It was uncertain whether the claimant would itself carry out the development, or whether it would sell the land with the benefit of planning permission. In my judgment, up to October 1996, a reasonable view could have been that a scheme of landscaping was as likely as not to be a waste of money. If the development was to be carried out at all (which was uncertain so long as the CTR was not built) it was to be carried out long after the planning permission had been obtained, and quite likely by a developer other than the claimant. In those circumstances a scheme submitted before October 1996 might well not have been appropriate to the development, (if it was ever going to be carried out at all). Moreover, the time and expense involved in preparing such a scheme is relevant to consideration of this point. The evidence as to this was called, and I consider it, in relation to the limitation point. Moreover, so long as the claimant was looking for another developer to be involved, there was a real possibility that the costs of the scheme of landscaping might not have to be borne by the claimant. This is what happened when the works were carried out in December 1996. The claimant did not bear those costs.

11 October 1996 – introduction

90. There is no dispute that Mr Hepker telephoned Mr Lavender on 11^th October 1996. And there is no dispute that in the course of that call Mr Lavender informed Mr Hepker that no scheme of landscaping (as opposed to indication of the areas to be landscaped) had ever been submitted to the Local Planning Authority.

91. Mr Hepker’s account of what else was said is as follows. Mr Hepker told Mr Lavender that he had received a fax from potential purchasers or partners relating to a suggestion for getting an extension for conditions (i) and (ii) (as he then thought) of the planning permission. Mr Lavender told him that all reserved matters had been definitely approved and condition (ii) had been satisfied. Mr Lavender said that the reserved matters approval had definitely been obtained within the three years specified in the condition. But he went on to say that approval included landscaping, and you could look at it differently and say the condition was not satisfied, because condition (iv) was not satisfied in that a scheme had not been submitted. Mr Hepker said the note dated 11^th October 1996 (set out below) was a contemporaneous note. Mr Hepker said that Mr Lavender said that there was no problem with the conditions so far as the planners (that is Darlington) were concerned, but we could use to our advantage the fact that no scheme had been submitted. You could have as many reserved matters applications as you liked (this said to echo the mistake referred to in para 44 above). Mr Hepker said he was quite shocked to hear for the first time that there was a part of the reserved matters that had not been submitted. He said that he said to Mr Lavender that it did not make sense that you should be able to make as many reserved matters applications as you liked. That would make no sense of the 14 December 1996 deadline. Mr Hepker said that Mr Lavender said that we would have to submit a landscaping scheme saying that that was the last of the reserved matters to be submitted. Mr Hepker said that he said to Mr Lavender that Mr Lavender had better get on with it, and that Mr Lavender said fine. Mr Hepker said that it was a memorable conversation, and that he was shaken up by it, because Darlington had always been difficult. He said that he asked Mr Lavender if there was any chance of Darlington using this against them, and that Mr Lavender had said that if we put in a submission Darlington would have to be reasonable. The call lasted 15-20 minutes.

92. In cross-examination Mr Hepker said that the purpose of the conversation had been to raise with Mr Lavender the suggestion of an application under s.73 and ask his advice. He said that what Mr Lavender had told him was that we had satisfied all the conditions, that everything was fine, but we could use the device of treating condition (iv) as a reserved matter, and the fact that the “scheme” had not been submitted. Mr Hepker said that that information did not disturb his view that all conditions had been satisfied. He assumed that something must have been submitted. He said that Mr Lavender said that the Darlington planners believed that all reserved matters had been satisfied, and that included the conditions. He said that at that time he did not understand the difference between reserved matters and conditions. What Mr Lavender told him was that all reserved matters had been satisfied, and that the only one that remained to be satisfied was the scheme of landscaping. Condition (iv) used the term “scheme” and technically there had been no scheme. We could use that to our advantage. Mr Lavender had said that approval of the scheme would automatically give us two years, and that only Timothy Comyn of counsel had disabused him of that (ie at the conference on 5 December 1996). Mr Hepker then said that Mr Lavender told him that all the reserved matters were satisfied, but did not say that the conditions were satisfied.

93. This account of the conversation is not easy to follow because, as both sides now agree, it assumes a mistaken understanding of the legal position. Mr Hepker stated that it is obvious that Mr Lavender was mistaken.

94. Mr Lavender’s account of what else was said on the telephone on 11^th October 1996 is as follows. Mr Hepker asked him what information had been submitted to Darlington. Mr Lavender said that the reserved matters application had been approved and there remained certain conditions to be satisfied, principally landscaping. Mr Lavender said he said there was an urgency to deal with that. He said he was advised by Mr Hepker that he was looking for ways to extend the life of the planning permission. Mr Lavender did not recall the conversation lasting long. He estimated two to three minutes. He said no details were mentioned of how they were to extend it, and s.73 was never mentioned. Mr Hepker did not ask Mr Lavender to do anything and he is sure he did not agree to do anything.

95. There are a number of contemporaneous, or near contemporaneous, documents which assist me in my findings as to what was said. These include: a memorandum from Darlington’s Head of Development Services, Mr Miller, to the Borough Solicitor, dated 1^st October 1996 (which was not known to Mr Hepker in 1996, but which became significant in 2001, as described below); a letter dated 3^rd October 1996 sent by Darlington to Mr Parkington and Mr Smith and faxed on to Mr Hepker (subsequently included by Mr Hepker in his instructions to counsel as part of document 59); a fax dated 9^th October 1996 to him from Brian Smith consisting of one sheet of a fax from Bill Parkington to Brian Smith (subsequently included by Mr Hepker in his instructions to counsel as document 57); a brief note dated 11/10/96 handwritten by Mr Hepker on two post it notes (although the defendant does not accept that this is a contemporaneous document); a fax sent on 11^th October 1996 by Mr Hepker to Brian Smith (subsequently included by Mr Hepker in his instructions to counsel as document 58); a fax sent by Brian Smith to Mr Hepker consisting of a memo sent by Mr Parkington to Bill Smith dated 14^th October 1996 (subsequently included by Mr Hepker in his instructions to counsel as part of document 59); a letter dated 17^th October 1996 from Mr Parkington to Darlington (subsequently included by Mr Hepker in his instructions to counsel as document 60); parts of a memo dated 7^th November from Mr Parkington to Brian Smith (subsequently included by Mr Hepker in his instructions to counsel as document 61); two letters dated 19 November 1996 from La Sande to Darlington (subsequently included by Mr Hepker in his instructions to counsel as document 62); a memo dated 22 November 1996 from Mr Parkington to Brian Smith (subsequently included by Mr Hepker in his instructions to counsel as document 63); a memo dated 27 November 1996 from Mr Parkington to Brian Smith (subsequently included by Mr Hepker in his instructions to counsel as document 65); a letter written by Mr Lavender to Mr Hepker on 27^th November 1996 (to which there was no reply); instructions to counsel (Mr T Comyn) drafted by Mr Hepker for counsel to advise at a conference on 5^th December; Mr Hepker’s notes of that conference.

96. In the memorandum to the Borough Solicitor, dated 1^st October 1996, Mr Miller wrote: “There is a detailed planning permission … which runs until 14^th December 1996. All ‘reserved matters’ are approved with the exception of strategic landscaping”. These words appear to conflate conditions (i) and (iv). This memorandum was written by Mr Miller because he had received a letter from Mr Parkington of La Sande following a meeting between them. In it Mr Parkington had noted that Mr Miller had suggested that no further reserved matters application could be submitted as the time limit in the planning permission had expired. Mr Parkington wrote that “our advice” was different, and that there is nothing which prevents a subsequent further application. He said the point was fundamental to La Sande’s decision whether to continue with the scheme, and to the CTR, because “if the existing approval layout is the only one which can be implemented then the scheme as a whole is effectively dead”.

97. What led to Mr Hepker making the telephone call of 11^th October 1996 was the communication on 9^th October 1996 to him from Brian Smith enclosing the one sheet of a fax from Bill Parkington to Brian Smith. In the faxed sheet Mr Parkington set out conditions (ii) and (iii) of the Planning Consent, and attached a letter described as being from Darlington which was not included or copied to Mr Hepker. In the document that was faxed to Mr Hepker Mr Parkington describes a proposal from Darlington that the life of the Planning Consent might extended by the making of an application under s.73, to vary condition (ii). The variation would be to allow an application for reserved matter consent to be made within a period of a further 6 to 12 months, and that “this would extend the life of the consent itself by the same length of time”. Brian Smith then added his comments. He said that he thought that Darlington’s proposal was wrong, and that the proposed variation of condition (ii) alone would have the effect that “the consent would automatically be extended by two years from the date of the approval of the reserved matters granted pursuant to the variation of condition (ii)”. Mr Parkington asked which, if either, of those two views was correct. He also asked if there might be disadvantages in following the course suggested by Darlington, such as giving them the opportunity to impose additional conditions.

98. The note of 11^th October 1996 in Mr Hepker’s handwriting reads:

“John Lavender 11/10/96. Darlington planners believe that all Reserved matters have been submitted. So the condition has been satisfied. The only one remaining to be submitted was landscaping. This may be a means of extending the consent further”.

99. The note does not record that Mr Hepker gave any instructions to Mr Lavender. In so far as it is controversial, it is the last sentence of the note that is most in dispute, Mr Lavender saying that that was not a suggestion from himself, and Mr Hepker saying that it did come from Mr Lavender. Mr Lavender said that he did not say that, and that it was a misunderstanding which he had not been under. Mr Lavender also considers the first sentence of Mr Lavender’s note to be curious in using the word “believe”. He said the Darlington planners knew, they did not believe.

100. The significance attached by Mr Ullstein to the first and last sentences of the note was that if Mr Lavender did say what is in those sentencea, then that shows he thought there was no real urgency in fulfilling the landscaping condition. That in turn would be an explanation for why Mr Lavender did not carry out the instructions that Mr Hepker claims to have given on 11^th October. This conclusion is said to be supported by the fact that in the case of Mr Petch certain conditions of a planning permission Mr Lavender had obtained for him had not been fulfilled before the commencement of the works.

101. The fax from Mr Hepker to Brian Smith of 11^th October 1996 contains a number of errors in the references to paragraph numbers in the planning consent, and some of the paragraphs of the fax are mis-numbered or not numbered. Mr Hepker stated in evidence that spoken by telephone to Mr Smith about Darlington’s proposal, and that he gained a mistaken impression that the proposal had been to extend condition (i) and not condition (ii). Mr Hepker’s misunderstanding is reflected in what he wrote. Corrections of these errors, and numbers inserted, by me are shown in square brackets. It reads, omitting words about the confusion of numbering, as follows:

“Thank you for sending me a sheet drawn from the fax to you from Bill Parkington…

As to the views expressed in that sheet concerning the effect of an application under s.73 for the variation of Condition (i) [it should be (ii)] of the Planning Consent of 25^th February 1991, my comments (on behalf of Lingfield Properties (Darlington) Ltd (“LPDL”) are as follows:

1. It does not make sense for LPDL to apply to vary Condition [(ii)] without varying Condition [(iii)] because there can be no doubt that application for reserved matters approval was made by LPDL before 24^th February 1994. This is recited in paragraph (2) of the preamble to the S.106 Agreement executed by Darlington Borough Council on 14^th December 1994; and was the specific subject of a Notice of Approval of Reserved matters of that date, attached as a schedule to the S.106 Agreement. I cannot therefore see how they can now argue that they have the power to re-impose this Condition. [I interpose to say that Darlington were not suggesting that they have power to re-impose this Condition, but were suggesting that more than one reserved matters application may be made, provided that they are made within the prescribed period.]

2. Instead what they might do is to agree (and this would have to be by deed) that the existing S.106 Agreement and Reserved matters Approval should be replaced by a fresh S.106 Agreement and Reserved matters Approval in identical terms, in which case the life of the existing consent would be extended by 2 years from the date of the fresh Agreement and Approval.

3. In answer to Bill’s specific question this does mean that, if no separate extension of time were granted, the life of the planning consent would not be extended merely by the local authority agreeing a variation of Condition [(ii)]. Legally, this might be something of a minefield, since if the local authority had encouraged someone to apply for such a variation on the basis that the variation would have that effect, the local authority might (in legal jargon) be estopped from denying the validity of its assertion. In other words, it might be held to its promise. I suggest that it would not be desirable for our fate to depend upon a tricky legal doctrine such as estoppel; and that it would be preferable to have a fresh S.106 Agreement and Approval.

4. A more promising line lies in the wording of the said paragraph (2) and Notice, which both refer to “details of siting, design and external appearance, means of access and areas to be landscaped…” This contrasts with the wording in Condition (i) [the reference is correct at this point], which refers to “details of … the landscaping”; and with Condition (iv), which requires with a large degree of precision a “scheme of landscaping” to be submitted to and approved by the Local Planning Authority before development can take place. The question arises whether Condition (iv) is an independent condition or whether it is a specification of what is called for in Condition (i) [the reference is correct at this point], i.e. whether or not Condition (iv) is one of the Reserved matters requiring approval. The better view seems to be that it is. If this is right, the difference in wording becomes highly material because in fact no scheme of landscaping (as opposed to an indication of the areas to be landscaped) has ever been submitted to the Local Planning Authority. (I checked this point today with our architect John Lavender, who submitted our Reserved matters Application). This means that it may now be open to LPDL to submit a scheme of landscaping to the Local Planning Authority, the approval of which would trigger off a further two years, since this would become “the last of the reserved matters to be approved” within Condition [(iii)].

4 [A] In summary, the best course of action would appear to be to agree with the Local Planning Authority a s.73 application to vary Condition (ii) [it seems likely that the reference is correct at this point] so as to extend the life of the consent for an agreed period. (My view, though I am not certain, is that this would extend the life of the consent by 2 years, whatever the period agreed, because approval of the last of the Reserved matters would be deemed to have been given on the date of approval of this application).

[5] The next best course of action would be to submit a scheme of landscaping for urgent approval, preferably obtaining the express agreement of the local authority to treat this as the last of the reserved matters to be approved.

[6] If there was any doubt that either of the above would be effectuated before 14^th December 1996, and then LPDL should make a commencement of material development, say early November.

[7] Least favoured would be the suggestion of the local authority, that Condition [(ii)] be varied by a s.73 application but that Condition [(iii)] be left intact.

[8] In any event, it may be prudent, if there is any doubt that any of the above might run beyond 14^th December 1996, to submit an application under Regulation 3(3), making it clear that this is purely an alternative to one of the above and only to be pursued in the event that it does not materialise by 14^th December.”

102. Mr Hepker’s fax of 11^th October 1996 calls for a number of observations. Para 4 shows that it was written after the call to Mr Lavender. The reference to him (“I checked this point today with our architect John Lavender”) is in terms that would suggest to me that all Mr Hepker checked with Mr Lavender was that no scheme of landscaping (as opposed to an indication of the areas to be landscaped) had ever been submitted. The wording is not what would be expected if it had been Mr Lavender who had raised the question whether Condition (iv) is an independent condition or whether it is a specification of what is called for in Condition (i), or if it was Mr Lavender who had said that it was the better view that it was. Rather that question is presented as arising from a lawyer-like analysis of the wording of paragraph (2) of the Notice. Further, paragraph [5] of the fax is in terms that suggest that submission of a scheme of landscaping is not something that Mr Hepker has already given instructions for, but an alternative course (to the course in para 4[A]) for consideration. Finally, para [6] of the fax is difficult to follow. If there was to be commencement of a material development it would not be an alternative to submitting a scheme of landscaping: submitting a scheme of landscaping was a condition precedent to an effective commencement.

103. The memo sent by Mr Parkington to Brian Smith dated 14^th October 1996 refers to “your” (that is Brian Smith’s) recent comments. But there are no comments in the file from Brian Smith. Mr Parkington also apologises for confusion about the numbering. But that is a point made by Mr Hepker in his comments to Brian Smith. It seems likely that Mr Parkington was sent a copy or summary of Mr Hepker’s fax of 11^th October 1996 and that he is responding to that. The last paragraph appears to be a response to the last three lines of para 4 of Mr Hepker’s fax of 11^th October 1996. It reads:

“So far as using the argument that all the reserved matters applications have not yet been approved and hence that the two year period has not yet begun to run, from my discussions with Darlington they appreciate that this is an arguable point…”

104. Questioned about this, Mr Hepker said that the document dated 14^th October came to him much later than its date, and that it had no impact upon him on 11 October 1996. I note that in the memo dated 3^rd October 1996 from the Borough Solicitor it is stated: “It may be arguable that a variation of a reserved matter application which has already been approved within the timescale can be made outside the three year period, but I think that the better interpretation is that this is not possible”. Mr Hepker was not sent a copy of the memo of 3^rd October (the letter of 3^rd October from Darlington, which Mr Hepker was sent, does not include a reference to the argument). What these two documents sent to Mr Hepker dated 3^rd and 14^th October 1996 appear to show is that shortly before and after Mr Hepker’s telephone conversation of 11^th October with Mr Lavender, the Darlington Borough solicitor had been writing about an argument that all reserved matters application had not yet been approved, and Mr Parkington had discussed that with Darlington.

105. By the letter of 17^th October Mr Parkington for La Sande wrote to Darlington referring to the letter of 3^rd October and subsequent discussions, and enclosed La Sande’s application under s.73 for an extension of the time within which reserved matters could be applied for. Mr Lavender was not asked to take any part in this and did not do so.

106. The part of the memo of 7^th November (from Mr Parkington to Brian Smith) that was sent to Mr Hepker includes a list of things needed to develop a site including: (1) planning permission, (2) no outstanding planning conditions and (3) an unblemished title. The document then explicitly addresses the first and third of these three, but at least part of the document which might be expected to include a discussion of point (2) is missing, and the different lengths of the two surviving sheets of paper would be consistent with about one inch of the second sheet having been cut off. Mr Hepker explained in evidence that that is how he received the document, and that he had not himself removed any part of it.

107. Meanwhile it appears that Darlington changed their stance, and made clear to La Sande that the s.73 application would not be considered before 14^th December. On 15^th November planning consultants GMA Planning wrote to Mr Lutton of La Sande, having already spoken to Mr Parkington, who had heard of the change of stance from Darlington. Also on 15^th November Mr Lutton wrote to Darlington complaining of their change of stance. GMA Planning’s letter to Mr Lutton had continued with the following advice:

“The only other option would be to commence implementation. However, as noted in our letter of 26 September [which is not before the court], you are not, and are now unlikely to be, in a position to do so because you have not satisfied conditions (iv) … which require submission and approval of various details prior to the commencement of the development”.

108. On 19 November 1996 La Sande wrote separate letters to different departments of Darlington trying to persuade them that the s.73 application could be entertained by Darlington. These two letters were provided to Mr Hepker and included by him in his instructions to counsel as document 62.

109. The memo of 22^nd November 1996 from Mr Parkington to Mr Smith includes:

“In relation to planning one matter Mr Hepker may be able to help us with is that although reserved matters consent was obtained the planning consent was also conditional on details being submitted and approved for a whole range of other matters such as landscaping … etc etc. We are told by Darlington that these consents were not obtained – but they would say that wouldn’t they! Can Mr Hepker shed any light on this. It is important as if we were to attempt commencement of the development before the existing consent expires (14^th December) then if these approvals have not been approved then we would be in breach of the planning conditions and this could have (serious) repercussions”.

110. This document demonstrates clearly that by 22^nd November 1996 Darlington had taken the point that the conditions had not all been satisfied, and that Mr Hepker came to learn that fact before he drafted the instructions to counsel for the conference on 5^th December 1996. Asked about this, Mr Hepker said he saw this document in late November or the beginning of December and that he read it. He put it to counsel, but that because Darlington had been difficult there was scepticism. He said it contradicted what Mr Lavender had told him, and that he was not duly concerned about it. I observe that if that were so, and if Mr Hepker had (as he claims) given instructions to Mr Lavender to get on with submitting a scheme of landscaping, I would have expected him to be sufficiently concerned to check with Mr Lavender whether he had done that, and, if he had done that, then to make sure that the true position was clear to himself and to Darlington.

111. The memo of 27^th November (from Mr Parkington to Brian Smith, document numbered 65 by Mr Hepker) notes that Darlington had by then accepted verbally that that s.73 application by La Sande was a valid application, and sets out eight matters which remained unresolved. The last of these reads:

“There is an outstanding argument as to whether all the ‘reserved matters’ were applied for and granted. Apparently the landscaping proposals were not complete although the decision notice clearly includes ‘landscaping’. It is our view that the ‘reserved matters’ obligation has been complied with but it may still be necessary to submit further details in order to comply with a separate planning condition in due course but that is not subject to any time limit”.

112. The memo then continues raising the question whether, bearing in mind the problems with the existing consents, “should we be looking once again at commencing work on the existing scheme before the consent runs out in December”? Mr Parkington notes the problem of what would constitute a meaningful start. He then goes on, in a passage which includes some words which I omit, to make the following observation: “we will inevitably be in breach of a number of other planning conditions such as submission and approval of landscaping details… Can these breaches be viewed as negating a start on site being made”.

113. This passage is a reference to condition (iv) (amongst others). Asked about it in evidence, Mr Hepker said that the paragraph is confused (this is an understandable comment in relation to parts I have omitted). He also said that he did not take it seriously, but drew it to the attention of counsel. He said he thought that Mr Parkington had received information of dubious reliability to the effect that conditions had not been satisfied. Mr Hepker said that he did not doubt what Mr Lavender had told him, and that Mr Parkington had not got this information from himself. I make the same observation in relation to this document as I did in para 110 above.

114. The letter from Mr Lavender to Mr Hepker dated 27^th November is signed by Mr Padgett “pp J Lavender”. It read as follows:

“I trust you will not mind my sending this short letter to note that on 14 December 1996 the Reserved matters approval expires for the retail park site at Lingfield Estate, Darlington. I know from our conversation some weeks ago that you were investigating certain angles with regard to extending the life of the permission, so I hope you will not be offended by this reminder. If the life of the permission cannot be extended by some technical or legal device, is it possible for some form of limited works to be undertaken on site to effectively implement the permission and thereby argue that works have been commenced on site?”

115. Mr Hepker mistakenly understood it to be a letter from Mr Padgett and not from Mr Lavender. In chief Mr Hepker said that he read it as suggesting that the claimant should proceed with works which they were planning to commence in any event in December. In cross-examination he said that when he received it he was planning to go to counsel Mr T Comyn for advice on what to do in any event. Mr Lavender was not involved in the conference with counsel (who also advised that works be commenced). On 6^th December, the day after the conference Mr Hepker did contact Mr Lavender to ask him to attend to witness the works to be undertaken on 11^th December.

116. Mr Hepker gave evidence that he spoke to Mr Padgett in November 1996. He at first linked the conversation to the date of the letter, but he kept no note and in evidence accepted that he could not be sure of the date. It is common ground that they had spoken to one another by telephone from time to time in the past when Mr Hepker wished to pass a message to Mr Lavender. Mr Hepker said that on this occasion the conversation was about s.73. Mr Hepker said the he said that Priory were going to make a s.73 application and that PLA should assist. Mr Hepker said that he did not discuss landscaping, and simply asked if everything was OK, or if everything had been done. His evidence was that he assumed that that included landscaping. Mr Hepker’s evidence is that Mr Padgett said that he could not be sure, he had not spoken to Mr Lavender, but that he thought that Mr Lavender had done everything. Mr Hepker’s evidence is that he assumed that everything was fine and that Mr Lavender had submitted a landscaping scheme and would help with the s.73 application.

117. It is PLA’s case that Mr Hepker invented the November telephone conversation with Mr Padgett. Mr Padgett gave evidence that he could not recall a conversation with Mr Hepker such as Mr Hepker describes.

118. Both Mr Hepker and Mr Lavender agree that there was no contact between them from 11 October to 27 November, or from 27 November until 6 December. Mr Lavender did not in that time do anything towards satisfying the conditions which had yet to be satisfied. PLA does not offer the services of landscape architects. If Mr Lavender had been going to satisfy condition (iv) he would have had to instruct a landscape architect, and to get instructions approving the landscape architect’s, and his own, fees (as he had in 1993 in relation to Simpson Coulson and Partners: see para 26). Mr Lavender, of course, knew what would be required for a scheme of landscaping, whereas Mr Hepker did not. I heard evidence of what would be required in relation to an issue on limitation (see below). Even on the claimant’s case, a scheme of landscaping would have required significant time and cost, which I would have expected to require the giving of further instructions by Mr Hepker. The letter says nothing about these matters. Further, Mr Lavender refers to the tone of the letter as deferential, which it is. He explains that, saying he did not know at the time who Mr Hepker was dealing with in his investigations to extend the life of the permission, but that Mr Hepker did not ask him for advice on that point. In cross examination Mr Lavender accepted the suggestion that in so far as the letter suggested that works be undertaken without the conditions of the planning consent having been fulfilled then it did not make sense. It was also suggested to him that his advice to commence works without fulfilling the conditions was totally pointless, but he did not accept that. I observe that in the light of Whitley v Secretary of State for Wales [1992] 3 PLR 72, the suggestion that it would have been totally pointless is not well founded.

119. He was cross-examined upon the case of his client Mr Petch, who had earlier obtained planning permission for a car showroom subject to conditions, and who commenced works on his site before all the conditions had been fulfilled. In that case Darlington did not take Enforcement Proceedings, and it was suggested to Mr Lavender that he was trying to get away without fulfilling the conditions in the claimant’s case, as he had in Mr Petch’s case. Mr Lavender explained that there were differences between the two cases. It seems to me there were differences between the two cases, not least that in the Petch case the works were commenced and completed, and Darlington was favourable towards the development of the car showroom. But what the case of Mr Petch shows to my mind is that at least in some cases it is far from pointless to commence works without having fulfilled the conditions of a planning permission, although it may, of course, carry adverse risks such as Enforcement Proceedings.

120. The Instructions to Counsel drafted by Mr Hepker cover ten pages. The history is recited. Mr Hepker referred to the grant of planning permission on 25^th February “subject to an extensive list of conditions”, and to the two reasons why it could not in practice be implemented: the boundary problem and the delay on the CTR. He referred to there being two potential purchasers, Priory and Bradstead. In relation to Priory Mr Hepker wrote:

“… Mr Smith has assembled a high powered team to hand the development, consisting of La Sande (NW) Ltd, planning and development experts, whose principal representative is a chartered surveyor called Bill Parkington, and Taylor Woodrow, the builders. This team has been in negotiation with Darlington Borough Council and with the various highways authorities with a view to substituting the food consent on the Land for a leisure consent in consideration of their contributing £4.3m to the CTR. They would ideally hope to start construction of the CTR in May 1997 and of the retail and leisure units in September 1997”.

121. I observe that there is no suggestion in the instructions that Mr Lavender was involved at that stage.

122. The instructions included documents listed in 100 descriptive paragraphs. The documents referred to above dated on and between 9^th October 1996 to 27 November 1996 and exchanged between Mr Hepker and Mr Smith and Mr Parkington (but not any documents relating to Mr Lavender) are listed in paras 57 to 65. Mr Hepker sought counsel’s advice as follows:

“(1) Principal Matter

1. What is the best way of keeping the planning consent of 25^th February 1991 alive beyond 14^th December 1996? (see in particular documents 57 to 64)

(2) Subsidiary Matters

…

5. Should a commencement of material development be made before 14^th December 1996 (See the memo dated 22^nd November 1996 from Bill Parkington to Brian Smith).

6. Since the two years run from the date of approved [sic] of the last of the reserved matters to be approved, and since details of landscaping have not been approved (or have they?), could it be argued that the two years have still not started to run? (Consider para 4 of the letter dated 11^th October 1996 from M Hepker to Brian Smith; and the memo dated 22^nd November 1996 from Bill Parkington to Brian Smith)”.

123. Mr Hepker’s evidence was that in question 6 the words “or have they?” reflected doubt as to whether Mr Lavender had carried out the instructions he claims he gave on 11^th October 1996 to submit a scheme of landscaping. I do not so read it. Para 4 of the fax of 11^th October 1996 does not refer to any such instructions. What para 4 and the words “or have they?” refer to is the question whether approval of the details under condition (i) was final, or whether condition (iv) remained a reserved matter to be approved, not to whether recent scheme of landscaping had been submitted and was awaiting approval.

124. The advice was given by counsel in conference, and a detailed note made by Mr Hepker. In that note it is recorded in relation to question 5 that there is a difficulty in that condition (iv) is a separate condition and there can be no development until a scheme of landscaping is approved. Nevertheless counsel advised the claimant to begin development (as defined by s.56). He referred to Whitley v Secretary of State for Wales [1992] 3 PLR 72, saying commencement without approval of condition (iv) would not be lawful. He added “So have the conditions been satisfied? If not, enforcement proceedings might be taken against us. But since we are not sure, DO SOMETHING … DIG A TRENCH PUT IN A FOUNDATION”. Mr Hepker noted that counsel cautioned that there was “no guarantee” that this would work because it “may be in conflict with conditions” or may be considered a “colourable argument”. I observe that there is no note of any discussion at the conference about whether or not a scheme of landscaping should be submitted as contemplated in para [5] of the fax of 11^th October 1996. Although counsel advised that “commencement without approval of condition (iv) would not be lawful”, there can be no doubt that he would also have had in mind exactly what the court had explained that meant. Woolf LJ (as he then was) had explained what it meant in terms that make clear that it would not have been pointless to commence the works without having first fulfilled the conditions precedent. Darlington might not take enforcement proceedings (and in the event did not take them) and could have given approval after the event. Woolf LJ said at page 305:

“…the developer by commencing operations before obtaining approval would be taking risks. He would be taking a risk that he might not obtain approval and a risk that the authority could for example serve a stop notice or take other enforcement action. However, if the developer is prepared to take these risks then the purpose of the legislation is achieved by permitting the permission to be lawfully implemented irrespective of whether or not the approval is before the commencement of the operations.”

125. Next to question 5 Mr Hepker noted: “that does not run”.

126. On 6 December (a Friday), in the telephone conversation Mr Hepker asked Mr Lavender to check whether the s.73 application was on the agenda at Darlington for a meeting on Wednesday. Mr Hepker also asked Mr Lavender to attend the site to witness the works to be done. By fax at 9.30 am Mr Lavender, acting with characteristic promptness, informed Mr Hepker that it was not on the agenda.

127. Mr Hepker gave evidence that in the conversation of 6 December he reported to Mr Lavender what counsel had advised, and that he had assumed that all conditions had been satisfied. Mr Hepker’s evidence is that Mr Lavender reassured him that that was not a problem, or that that was fine, or words to that effect. Mr Lavender’s evidence is that nothing of the kind was mentioned. If counsel had assumed that all conditions had been satisfied, that fact is not apparent from Mr Hepker’s note of the conference.

128. On 12^th December 1996 Mr Hepker sent to Darlington a fax referring to the s.73 application by La Sande, stating that the purpose of his fax was to clarify that the application was to vary both condition (ii), by extending the time under which reserved matters approval shall be made, and (iii). By then the works were being carried out by Taylor Woodrow, witnessed by Mr Lavender and others, including Mr Lutton and Brian Smith (Mr Miller also visited the site to see what was done and to take photographs). Mr Hepker stated that the works were paid for, but there is no evidence of what they cost or who bore the cost. I have seen no invoice from Taylor Woodrow for the works. Taylor Woodrow have premises very near the site, and they had the arrangement with La Sande to which I have referred above.

129. Apart from one communication irrelevant to the matters I have to decide, the next communication between Mr Lavender and Mr Hepker was PLA’s invoice dated 30 April 1997 to the claimant. This was, in the event, PLA’s last invoice to the claimant for services as a planning consultant. There is a covering letter dated 21^st May 1997. That refers to “time spent on keeping an overview in your interests on the land at Darlington”. The total was £307.01 for 4.5 hours and some small disbursements totalling £13.79. It covered the previous eighteen month period since 30^th September 1995. On any view that figure would have been wholly inadequate to cover the cost fulfilling conditions (xii) and (xiii), and still less of submission of a scheme of landscaping. The narrative said nothing about the submission of a scheme of landscaping, nor even anything about giving advice about such a scheme, although it did speak of witnessing the commencement of works. Mr Hepker stated that he had not noticed when he received the invoice that it included nothing for fulfilling conditions (iv), (xii) and (xiii). What the narrative included was:

“Matters arising from time to time … in dealing with planning position regarding development site at Lingfield Estate, including attendance on site when excavating of proposed roadway took place and liaising with prospective purchasers of site”.

130. I have no hesitation in preferring the evidence of Mr Lavender and Mr Padgett and in rejecting the evidence of Mr Hepker where it conflicts with theirs.

131. Mr Lavender had not been asked by the claimant to address his mind to the 1991 planning permission for a considerable time before 11^th October 1996. Had Mr Hepker been seeking his advice, or had Mr Lavender been proffering advice on the relationship between conditions (i) and (iv), I would have expected either some preparation for the call, or some follow up. Mr Lavender would have surely written a letter, as he had in the past, setting out what he considered the options to be, and, in this case, asking for instructions as to what to do (I refer to a letter such as the ones he wrote on 9^th August 1993, 25^th January 1994 and 25^th February 1994). Mr Hepker’s manuscript note of 11^th October is very brief, and not what would have been required to record the detail that he subsequently stated was discussed. What Mr Hepker did write on the same day after the call, namely his long fax, does not support what he says Mr Lavender said on the telephone. If Mr Lavender had said what Mr Hepker attributes to him, I would have expected it to be in the fax of the same day, written just after the call. For reasons given above, the fax does not support Mr Hepkers’ evidence. I would also have expected Mr Lavender to have written an entirely different letter from the one he did write on 27^th November 1996. The letter he did write makes sense if he had been given no instructions, not if he had been given instructions which he was not carrying out. Mr Hepker explains his lack of a written enquiry or complaint to Mr Lavender during the period up to 14^th December 1996 saying that he assumed Mr Lavender was getting on with it. But he had no good reason to make any such assumption. Mr Lavender had indeed done many things in the period up to the end of 1994 on his own initiative. But in 1995 and 1996 he had not done anything of this significance, and when he had taken steps with serious financial implications, such as the reserved matters approval application, he had sought instructions and confirmed them in writing. Mr Lavender regarded the claimant as an important client. If he had received instructions to do work for them in October 1996, he would have been as keen to carry out the work then as he had been to carry out work for the claimant at earlier times.

132. The documents that I have summarised above demonstrate that there was before and in October some discussion between Mr Parkington and Darlington, and some of the statements made by Darlington appear to relate to the matters Mr Hepker has noted. Two points arise. First, Mr Hepker did not involve Mr Lavender in those discussions. He was content to leave that side of matters to La Sande. Of course, it is possible that, being as close to Darlington geographically as he was, and having contacts with them on other matters (as I assume he did), Mr Lavender might have come to learn of the way Darlington was thinking. That is the suggestion of the claimant, which they relate back to the letter of 6^th May 1994. It is not necessary for me to find from where Mr Hepker might have got the information in the note, including the idea that relationship between conditions (i) and (iv) might be a means of triggering a further extension of the planning permission. But it cannot be said that Mr Lavender was the only possible, or even, in my view, the most likely source. I find it to be as least as likely that Mr Hepker’s ideas reflect in part what he understood, or perhaps misunderstood, what Mr Parkington had been saying, (not directly to himself, since there is no evidence of contact between them at that time), but indirectly through Mr Smith. Unhappily, Mr Smith died recently, and did not give a statement. There was a statement from Mr Parkington, but he was not called. I cannot speculate on what he might have said. I do no more than conclude that Mr Lavender was not the only possible source for these ideas. I make no finding as to whether the note was written before the conversation with Mr Lavender, or after. But it makes more sense as a note of Mr Hepker’s views as to the use to which the information could be put.

133. It is not necessary for me to find why no instruction was given by Mr Hepker that the outstanding conditions precedent be satisfied. But I do not find the omission so surprising that I should think it likely that he did give instructions. The factors discussed in para 89 above were still relevant. It does not appear from Mr Hepker’s note of the conference with counsel whether the advantages and disadvantages of making a late submission of a scheme of landscaping were discussed. The absence of a reference in the note proves nothing either way. But for the reasons given by Woolf LJ in Whitley, it would not have been pointless to make a late submission. So whatever the reason for the omission, it was not because by the time of the conference it was too late. He may have decided that the s.73 application followed by the commencement of the works by Taylor Woodrow was all that was either necessary or worthwhile by way of measures to keep the permission extant, coupled with a willingness to take the risk, based on Whitley, that non fulfilment of the conditions precedent might not be fatal. As Mr Hepker accepted in cross-examination, submitting a scheme of landscaping would have carried a further risk of waste at this stage. The claimant and La Sande were unwilling to make a commencement of the works that would satisfy the subjective test for compliance with s.56 which at that time was considered a possible interpretation of that section. It was not until the decision in Riordan three years later that that uncertainty was removed (see para 141 below).

134. I also note that the suggestion that Mr Hepker had given instructions to Mr Lavender on 11^th October 1996 to submit a scheme of landscaping came late. It is not necessary to lengthen this judgment by a recital of the pre-action exchanges and citations from the pleadings. The instruction is first set out in the Particulars of Claim of 14 October 2003.

135. I find that Mr Hepker gave no instructions to Mr Lavender to submit a scheme of landscaping on or after 11^th October 1996, and that absent such instructions, Mr Lavender owed no duty to the claimant to do so. I am fortified in this conclusion by my findings as to the events that occurred subsequently. I find that Mr Lavender was a careful, conscientious and efficient in the performance of his services to the claimant. That had been the view of each of Mr Cartwright and Mr Martin Smith in the period in which they had dealings with him. It remained the position, in my judgment.

Events after 1996

136. The next communication between Mr Lavender and Mr Hepker was a year later, in a letter Mr Lavender wrote on 1^st May 1998. Mr Lavender reported that he had been contacted by the new owners of the plot of land immediately to the West of the claimant’s, the Marchday Group plc, who had asked Mr Lavender to act as planning consultant. Mr Lavender was informing Mr Hepker of this as a matter of courtesy, and added that he would be “pleased as always to assist in any way I can, always assuming that no conflict of interest will arise in my capacity of acting for the Marchday Group”. Mr Hepker replied that he had no objection, and in evidence explained that he had in fact recommended Mr Lavender to the Marchday Group. At that time he had no complaints about the service which Mr Lavender had provided.

137. There was no further contact between Mr Lavender and Mr Hepker for nearly five years from the events of late 1996 that is until 2001.

138. The doubts about whether the works done in December 1996 would satisfy s.56 continued in the minds of Priory and La Sande for some years. But La Sande in due course formed the view that matters had changed. On 9^th April 2001 Mr Hepker responded to a call from Mr Lutton with a fax confirming his, Mr Hepker’s, view that there appeared to be “some substance to Bill Parkington’s suggestion that a commencement of material development may have taken place before expiry of the relevant … period”. Referring to the work done in December 1996, he wrote that

“it was undertaken pursuant to memos and correspondence from inter alia Bill Parkington to Brian Smith in November 1996 warning him that the 3 year period was about to elapse. I too was aware of the fact and had been in touch with both Brian Smith and John Lavender to arrange the work”.

139. On 19^th April 2001 Mr Elkins sent a letter to Mr Hepker on behalf of La Sande. Mr Elkins had been a project manager with Taylor Woodrow, and had represented that firm in providing assistance to La Sande, when the two companies were jointly interested in developing the claimant’s land in partnership with Priory. In April 2000 Mr Elkins ceased working for Taylor Woodrow and commenced working for La Sande as a consultant.

140. Mr Elkins wrote that he had been asked by Brian Smith to provide a précis of the situation regarding the planning consent. He stated that in early 1997 it was considered that although works had been carried out they were not considered sufficient to be material steps as required by s.56, and that some conditions which should have been satisfied prior to the start of the works had not been fully satisfied. But he referred to recent case law on s.56 which may put a different interpretation upon the works that had been done. La Sande instructed their planning consultants, RPS Chapman Warren, to investigate the matter and they were proposing to seek counsel’s opinion.

141. On 20^th April 2001 RPS Chapman Warren wrote to Mr Elkins. On the question whether the conditions had been satisfied, they raised only two queries, namely whether conditions (xii) and (xiii) had been satisfied. On the s.56 point they referred to the recent case of Riordan v Secretary of State for the Environment ([2000] JPL 594 decided on 2^nd December 1999). They also raised the question whether the fact that Mr Petch’s car showroom had been built on part of the site in the meantime might satisfy s.56. In Riordan David Vaughan QC sitting as a Deputy High Court Judge had considered a number of cases decided in 1997 and subsequently, and decided that in order to satisfy s.56 an objective test was to be applied, and it was not necessary that there should have been any subjective intention to complete the works.

142. On 27^th April 2001 Mr Hepker telephoned Mr Lavender. They discussed Mr Petch’s application, which Mr Lavender said was a new application. They also discussed the works done in December 1996, and Mr Hepker asked Mr Lavender to send papers to RPS Chapman Warren. With his customary promptness, on 4^th May 2001 Mr Lavender did send drawings and other documents. There is an issue as to whether he was asked to send file notes. He did not send them, and states that he was not asked to do so. Nothing turns on this. On 10^th May 2001 Mr Lavender wrote to Mr Hepker confirming that he had sent the documents to RPS Chapman Warren, explaining that Mr Petch’s application had not depended upon the claimant’s 1991 planning permission, and giving his recollection of events when he attended the site in December 1996.

143. In May 2001 RPS Chapman Warren prepared a very detailed document for counsel to advise as to whether the 1991 planning permission was still extant, and in particular whether the conditions of the outline approval had been complied with (or if not whether that mattered), whether there was a material start, and whether the implementation of the car showroom had kept the planning permission alive.

144. On 26^th June 2001 Mr Hepker telephoned Mr Lavender. Mr Lavender returned the call shortly afterwards. Mr Hepker referred to a conference with counsel the day before, and spoke of the conditions of the planning permission and what had been submitted to Darlington. The next day Mr Lutton’s secretary rang to arrange the meeting which took place on 10^th July 2001 at the Blackwell Grange Hotel in Darlington.

145. On 5^th July 2001 Mr Elkins sent a fax to Mr Hepker referring to the conference with Mr Keith Lindblom QC the previous week. He wrote that certain items needed nailing to the mast at the meeting with Mr Lavender the following Tuesday 10^th July 2001. He referred to a number of items, and ended saying that he would try to sort out some details regarding the landscaping for the meeting.

146. On 27^th July 2001, Mr Lavender wrote three documents. The first was a letter to Mr Hepker referring to the meeting he described as having been attended by himself and Eileen Wilson of PLA and by Mr Hepker and Howard Elkins and John Lutton of La Sande. The other documents he referred to as “two statements”. One of these describes Mr Lavender’s attendance to witness the works in December 1996. They are both in the same form, that is without any heading or other indication of the purpose for which they are prepared. The second document is headed “Statement by John G Lavender BSc MRTPI”, is signed by him, and is otherwise as set out in para 40 the judgment of Mitting J set out in para 64 above.

147. The point made in relation to the statement is twofold. Mr Hepker relied upon it in support of his contentions in the Declaration Proceedings, as appears from the judgment of Mitting J. And in the light of that judgment, and of the fact that no scheme of landscaping was in fact submitted, it is the claimant’s case that the statement is a lie and that it covered up the true situation. It is said that this is relevant both to Mr Lavender’s credibility, and to the issue of limitation.

148. For his part Mr Lavender said that he felt intimidated by the threat of professional negligence proceedings that was then made to him, that he understood that Mr Hepker wanted a statement for the purpose of any legal case with Darlington and for his dealings with La Sande, but that at the same time he was not prepared to lie and state that applications to satisfy the conditions precedent had been obtained when they had not been. He stated that he tried to find a form of words which might have been of some assistance to Mr Hepker, but not at the expense of the truth. He recognised that the statement of 27^th July 2001 was incomplete in that it did not state expressly that there remained outstanding conditions precedent, but he said that to his mind the statement was not incorrect, and he assumed that others would read it carefully and work out what it did not say. He believed when he wrote it that it was accurate so far as it went and that it was lawful.

149. The evidence is conflicting as to the meeting of 10^th July 2001. For the claimant the evidence was given by Mr Hepker, Mr Elkins and Mr Lutton. Mr Hepker said the purpose of the meeting, as he explained to Mr Lavender, was to get information from Mr Lavender’s files. He said he told Mr Lavender that there was no reason why he and Mr Lavender should not make common cause: if the claimant was to get a declaration against (or admission from) Darlington, that would be in everyone’s best interest. It wanted evidence of the satisfaction of the conditions. Mr Hepker and Mr Elkins stated that Mr Elkins went through each of the conditions with Mr Lavender saying why, in his view, each one was satisfied, and that Mr Lavender did not indicate dissent. Mr Hepker said that Mr Lavender said that he had done nothing wrong, and had done everything that he should have done. Mr Hepker stated that he took Mr Lavender to be saying what Mr Hepker claims Mr Lavender had said in 1994, namely that the reserved matters approval covered not just the reserved matters but all the conditions. Mr Hepker said that when, later, he started the Declaration Proceedings he asked Mr Lavender to give evidence, but Mr Lavender declined to do so. Mr Elkins said he believed that condition (iv) could be part of condition (i), and that he put that to Mr Lavender who did not dissent, although he appeared embarrassed, and said yes. Mr Elkins said that he was trying to help Mr Lavender off the hook.

150. Mr Lavender stated that at the meeting Mr Hepker wanted him to state that the conditions precedent had been fulfilled, and he simply responded by saying that he had done all that he had been asked. He said that his response was clearly not what Mr Hepker had wanted him to say, and he was threatened with the present proceedings.

151. On 5^th November 2001 Mr Lindblom sent his written Opinion to La Sande’s solicitors. He summarised the effect of Riordan and stated that he was in no doubt that the works done in December 1996 would be capable of amounting to a material operation under s.56. But Mr Lindblom went on to refer to the memorandum from Mr Miller dated 1^st October 1996 referred to in para 96 above, and to Mr Lavender’s letter of 24^th February 1994 set out in para 33 above. Mr Lindblom observed that Mr Miller may have been merely suggesting that, notwithstanding the approval of reserved matters including ‘landscaping’ condition (iv), the outline consent remained to be satisfied. In any event, he went on to advise that, in the light of Whitley, condition (iv) would have had to be satisfied before any works to begin the development could lawfully be carried out. He then referred to the statement of Mr Lavender dated 27^th July 2001, emphasising the last sentence, and to Mr Hepker’s fax of 11^th October 1996, para 4, that the landscaping details required by condition (iv) had never been submitted. He concluded his opinion stating that the question whether the conditions had been satisfied was of critical importance in determining whether the development authorised by the planning permission was begun lawfully so as to enable it to be lawfully completed. On the material before him he was unable to conclude that it had been lawfully commenced.

152. On 12^th November 2001 Mr Lutton of La Sande sent a copy of Mr Lindblom’s Opinion to Mr Lavender. Mr Hepker followed that up with a telephone call on 15^th November with Mrs Wilson, and a legible copy of the Opinion was sent.

153. On 15^th January 2002 Mr Elkins went to Darlington to meet Mr Lavender. He was attempting to achieve what he had not succeeded in achieving in July 2001, that is to obtain evidence in support of the claimant’s case in the Declaration Proceedings. Mr Lavender refused to speak to him about his evidence. Mr Elkins considered he had wasted his time.

154. On 24^th April 2002 Darlington gave notice to La Sande that the s.73 application for an extension of the time limit submitted on 21^st October 1996 was refused.

155. On 15^th May 2002 the claimant’s then planning consultant, David Collins FRICS, expressed the view that it was not difficult to arrive at a value for the site at £20m, if the planning permission was still valid. Much now turned on the question whether it was valid. I was informed that on 10^th June 2002 Standard Life proposed a purchase of the site, conditional on confirmation of the planning consent of 1991, at a price of about £18m.

156. In June 2002 Mr Hepker attended a meeting with Darlington, who were represented by Mr Miller. Mr Hepker confirmed the substance of the meeting in a letter dated 19^th June 2002. Mr Miller had expressed the view that the 1991 planning permission had lapsed, and gave as his reason that there had been no material development within s.56. He also expressed the view that circumstances had changed and that a varied scheme would not be approved.

157. Mr Hepker recorded in the letter that he had said that the claimant’s view differed from Mr Miller’s “in that we consider that our planning consent is valid and extant”, and he set out the reasons for the view which he said he held. He said that when the news of the Eastern Transport Corridor had received funding came through in 2001, the resumption of implementation of the planning consent once more became a realistic possibility, and so they had consulted leading counsel. He then quoted two paragraphs from Mr Lindblom’s Opinion including the statement that “as a matter of principle, I am in no doubt that those works would be capable of amounting to a ‘material operation’” under s.56. It appears that neither side had made any mention of the conditions that had to be satisfied.

158. On 27^th August 2002, following a further meeting with Darlington, Mr Hepker wrote confirming that the claimant was by then contemplating the proceedings by way of a claim for a declaration, which were in fact determined by Mitting J.

159. In September 2002, following a further meeting with the claimant, Darlington sought the advice of counsel. By letter dated 7^th October 2002 Darlington wrote to the claimant that counsel’s opinion was favourable to Darlington. But this time the reason given was that “operations carried out in 1996 were not ‘comprised in the development’”. The point relied on was no longer s.56. Counsel had seen the point that the conditions had not all been satisfied, which is the point that Darlington had made in November 1996.

160. In October 2002 Mr Hepker sent an e-mail to Mr Lavender, and from 11^th December 2002 correspondence on his behalf was conducted through his solicitors. Mr Hepker continued to write correspondence on behalf of the claimant.

161. On 28^th November 2002 these proceedings were commenced.

162. On 12^th January 2004 Mr Elkins entered into an agreement with the claimant. Mr Elkins made the agreement as principal, not on behalf of La Sande. It referred to the proceedings against Darlington and PLA (defined as the Declaration Proceedings and the Negligence Proceedings), with Mr Elkins being referred to as “HE”. The substantive terms of this agreement are:

“2.1 The purpose of the Agreement is to provide HE with a success fee in return for his using his best endeavours to assist [the claimant] with the Declaration Proceedings and the Negligence Proceedings.
2.2 The success fee shall be payable if either (contingency A) there is a Consent Date [defined as the date on which there is a binding declaration or acknowledgement by Darlington that the planning permission is valid] or (contingency B) there is no Consent Date but [the claimant] succeeds in the Negligence Proceedings in being awarded and actually receiving damages in excess of £1,250,000…

2.4 The amount of the success fee in respect of contingency A shall be 4% of the Receipts if there is a Consent Date on or before 15^th February 2004, 3.5% if there is a Consent Date on or before 31^st March 2004; 3% if there is a Consent Date on or before 15^th May 2004, and 2.5% if there is a Consent Date thereafter.

2.5 The amount of the success fee in respect of contingency B shall be 2.5% of the damages received by [the claimant] provided that the amount of the damages received is in excess of £1,250,000.

2.6 … it is acknowledged that there is no contractual arrangement or agreement between [the claimant] or any other Lingfield company and La Sande (Holdings) Ltd or Mr John Lutton.

2.7 All moneys paid by La Sande (Holdings) Ltd to Lester Aldridge in respect of legal fees regarding the Declaration Proceedings incurred at any time after 28^th February 2002 shall be reimbursed to HE by [the claimant] on the signing of this agreement. HE hereby agrees to procure that no further payments of legal fees shall be made to Lester Aldridge unless and until the bills rendered by Lester Aldridge to La Sande (Holdings) Ltd have been scrutinised by both HE and [the claimant] using their best endeavours to reduce the amount payable to Lester Aldridge to the lowest amount which is reasonably justifiable. Provided that this is done and the amount to be paid to Lester Aldridge is agreed by HE and [the claimant], or imposed by a court of competent jurisdiction, such further payments of legal fees shall be borne by [the claimant]”.

163. On 10th December 2004 Mitting J handed down his judgment.

164. Again I have no hesitation in preferring the evidence of Mr Lavender to that of Mr Hepker and Mr Elkins, where there is a conflict. In fact there is little conflict on the important issues as to what was said at the meeting of 10^th July 2001. Mr Lavender did feel intimidated by the threat of these proceedings, and with good reason. That is not to say that Mr Hepker or anyone else made any other threats to Mr Lavender. They did not.

165. During the proceedings Mr Evans-Tovey asked for a ruling that the evidence of Mr Elkins was inadmissible by reason of the agreement set out above. He referred to a number of authorities, including SPE International Ltd v Professional Preparation Contractors (UK) Ltd [2002] EWHC 881 (Ch). I stated that I would consider that matter in my judgment, after I had heard the evidence. In the event I do not need to make a ruling and will not do so. The effect of the agreement is to cast serious doubt upon the weight to be attached to the evidence of Mr Elkins. That is all that I need say in the circumstances of this case.

Limitation

166. In the light of the findings that I have made, no question of concealment on the part of Mr Lavender arises. So I do not need to consider the Limitation Act 1980 s.32, which the claimant invokes. Nor do I need to consider s.14A of that Act. Mr Hepker was aware from the memo dated 22^nd November 1996 (which he saw before 5^th December 1996) that Darlington were saying that there were unfulfilled conditions precedent. He had counsel’s advice on 5^th December 1996 that the conditions precedent had to be fulfilled by 14^th December 1996. And Mr Hepker was not, in my judgment misled in any way by Mr Lavender’s statement of July 2001. The purpose of that statement was to provide Mr Hepker with what Mr Lavender thought was the nearest thing that he could provide to what Mr Hepker and Mr Elkins wanted. It was plain to Mr Hepker that it did not go as far as he would have wished, and that is why he and Mr Elkins subsequently sought to persuade Mr Lavender to say more. It is plain from that statement that Mr Lavender had made no submission of a scheme of landscaping, and did not consider that the conditions precedent had in fact been satisfied. If he had felt able to say otherwise, he would have had every reason to do so.

167. I shall deal briefly with the question whether damage had been suffered before 28^th November 1996. In my judgment significant damage had been suffered before that date, and so the claim is time barred.

168. As noted above, the experts in land valuation agreed, and the parties accept, that the planning permission added value to the site, and the added value would have significantly reduced if not disappeared, once it was appreciated that the permission could not be saved, or was likely to be lost.

169. It follows that the question is not whether with great effort and good fortune a scheme of landscaping could have been submitted (or submitted and approved) by 14^th December 1996. The question is whether by 28^th November 1996 it was appreciated that the permission could not be saved, or was likely to be lost. It might have been appreciated that the planning permission was likely to be lost at a time when there still remained a small possibility that it might not be lost.

170. In the event I find that the planning permission was not doomed to be lost until some time after 1996. Even on 14^th December 1996 there were the possibilities that the s.73 application might be granted and, as Lord Woolf LJ contemplated in Whitley, that Darlington might grant a late approval if he asked. It was not more than a possibility, because Darlington had lost few opportunities to demonstrate their willingness to frustrate the proposed development of the site, since their original refusal of planning permission. But circumstances can change, and I cannot find that the possibility was so remote as to be insignificant.

171. I heard evidence from Mr Tweedale for the claimant and Mr Perry. I have no hesitation in preferring the evidence of Mr Perry that three to four weeks would be a reasonable period for the preparation and submission of a scheme. That is not to say that it could not have been done in less time, but I find that compressing the period to the days between 28^th November and 14^th December involved such risks of failure that it was unlikely that the submission would have been successfully made in time.

172. Mr Tweedale gave evidence in the most unfavourable circumstances. His report was not in the form now required by the CPR. Although he stated, correctly, that he understood that his duty was to the court, he was not aware of the provisions of CPR Part 35, not having given expert evidence in court before. He had been instructed not by the claimant’s solicitors, but directly by Mr Elkins and Mr Hepker’s daughter, who is a director of the claimant, and they did not draw his attention to the relevant provisions of the CPR. Nor did they draw his attention to the only issue upon which his evidence was permitted to be called, namely the time required to submit a scheme of landscaping. He volunteered his opinion on other aspects of the case, and was shown to have formed his opinion on an incorrect basis, and to have done so for no good reason. He criticised Mr Lavender for failure to comply with provisions of the professional code of practice which were not in force at that time Mr Lavender was acting.

173. It is sufficient that I say that Mr Perry’s evidence is carefully structured, with each step required listed and he gave a time he estimates was required. Moreover, Mr Perry practised in an area which gave him knowledge of Darlington, whereas Mr Tweedale did not. Mr Perry had been involved in the development at Faverdale which gave him direct experience on a site which adjoined the CTR at its North West end.

174. No evidence was called as to how long it would have taken for approval to be granted. While it was not necessary, following Whitley, that approval be given before the deadline if the planning permission were to have a chance of remaining extant, the value of the site would, in my judgment, have been affected if the scheme were submitted so late that there would be insufficient time for approval before the deadline. That was the position as I find it to have been.

Damages

175. The issue of damages does not arise, but again I shall state briefly the reasons for the conclusions that I would have reached.

176. The expert for the claimant was Mr John Irwin Frics of Storey Sons & Parker. He served a twelve page report. The expert for PLA was Mr Peter Smith FRICS of GVA Lamb & Edge. Experts reports are not to be evaluated on their length, but in this instance the report of Mr Smith does reflect much greater investigation into the issues than Mr Irwin’s. Two opinions had in the past been given on the site by Mr Irwin’s former partner, Mr Battle, who also unhappily died a short while ago. In his report Mr Irwin referred to the advice of Mr Battle given in 1990 and 1995, but he showed considerable reluctance to disclose the reports. They were eventually disclosed after tenacious applications by the solicitors for PLA. I was left with the impression that Mr Irwin’s approach to this aspect of the case did not give the weight to his duty to the court that is to be expected.

177. Mr Smith arrived at his valuations of the land as follows. For the valuation without planning permission for retail use he used the comparison method utilising land values for business/industrial use because evidence exists of land transactions in the nearby vicinity. For a theoretical valuation of the retail park, he used the residual method as a scheme had been drawn up with relevant information, and he relied upon comparable evidence for rental values and yields. To arrive at the valuation for the land with the 1991 planning permission, he had regard to the value without planning permission for industrial use, and uplifted it to allow for the speculative value which would have been associated wit the planning permission and the theoretical value and he discounted it significantly because of factors present in December 1990.

178. Although technically the land was farmland in 1996, Mr Smith did not value it as such because at the time it was designated in the local plan as being for employment uses, and had an application been made in December 1996 for permission for employment use, he had no doubt that it would have been granted.

179. The comparisons that he made were of small areas of land which were the subject of transactions in September 1995 and December 1998. He considered that it would have been most unlikely that a developer would have purchased the whole site of 24 acres in one tranche, but given that he was required to value the whole site, he considered it right to apply a reduction of 15% to take account of the size. So his valuation of £700,000 for business use purposes was arrived at by taking 24 acres at £35,000 per acre less a discount of 15%.

180. Mr Irwin also took the rate for industrial land at £35,000 per acre, and considered that it had to be discounted. His conclusion was that an investor or property speculator would have taken the view that the road would eventually be constructed, and

“would have been prepared to offer a sum of around £240,000 for the 24 acre site with the prospect of perhaps giving some clawback or overage payment if the access was secured within a time limit of 10 or 15 years. The price would reflect an uplift from agricultural land values rather than a reduction from industrial land values”.

181. Mr Irwin did not mention agricultural land values in his report, introducing a figure of £3,000 per acre in his oral evidence. This reasoning in the report is sparse. There is no indication of what the value would have been, in his opinion, without a provision for clawback or overage payment, nor of the value of the clawback or overage payment. So to that extent it is not a valuation of the site at all, but only one step towards a valuation.

182. In the joint statement Mr Irwin expressed the view that the value would take account of a significant deduction from employment land values to reflect lack of demand, size, infrastructure costs and better sites elsewhere as well as an uplift from agricultural land values to reflect the hope value for future enhanced use. He then expressed the view that the Open Market value was in the region of £250,000.

183. I prefer the opinion of Mr Smith, and conclude that the value of the land without planning permission was £700,000.

Conclusion

184. The claim fails because Mr Lavender and PLA were not in breach of their duty of care. The claim would in any event have been time barred.

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