Lease – Construction – Planning permission – Appellants granting respondents lease of gravel pit for disposal of waste in course of business – Lease containing clause that tenant to use all reasonable endeavours to obtain planning permission and site licence for landfill activities — Whether clause constituting broad obligation on respondents to make necessary applications to ensure continued use of site for landfill purposes
The appellants were the landlords of a worked-out gravel pit that the respondents occupied on a 99-lease. The purpose of the lease was to enable the respondents, in the course of their business, to deposit waste in the cavity created by the gravel workings.
By clause 8(6)(d), the respondents had to apply for and use all reasonable endeavours to obtain “a Planning Permission and Site Licence to enable [them] to carry out the Landfill Activities to the highest practicable contours”.
The parties did not dispute the fact that that clause required the respondents to apply for planning permission. However, they disagreed over whether: (i) (as the respondents claimed and the judge held: see [2010] EWHC 242 (Ch)) the respondents had satisfied that obligation by obtaining a variation of the planning permission and site licence that were in force at the date of the lease so as to enable the landfill to continue upwards to the highest practicable contours of the site; or (ii) (as the appellants claimed) the clause imposed on the respondents a wider and continuing obligation to apply for planning permissions that would ensure the continued use of the site for landfill purposes.
The appellants appealed.
Held: The appeal was dismissed.
Clause 8(6)(d) obliged the respondents to apply for a variation of the existing planning permission so as to raise the limits of the restoration contours. The question then arose as to whether: (i) that was the limit of the operation of the subclause; or (ii) it also imposed the wider obligation on the respondents of the continuing nature as asserted by the appellants.
The court had not been persuaded that the language of clause 8(6)(d), read in the context of clause 8(6) in particular and of the lease as a whole, justified the wider interpretation. Clause 8(6)(d) did not expressly indicate that a wider interpretation was intended and, once its obvious function had been identified, there was no justification for reading one such an interpretation into its words. Although the use of the indefinite article in clause 8(6)(d) was not necessarily conclusive that the parties were referring to the obtaining of a single planning permission and site licence, none of the other provisions in the lease could justify interpreting clause 8(6)(d) as referring to multiple planning permissions and site licences. The exercise that the appellants were asking of the court remained one of interpretation and that required the relevant language to be interpreted in its context: Martin v David Wilson Homes Ltd [2004] EWCA Civ 1027; [2004] 3 EGLR 77; [2004] 39 EG 134 and Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 3 EGLR 119 considered.
Once it had been established that clause 8(6)(d) referred to the obtaining of an alteration to the existing planning permission, the context made it plain that the subclause focused only on obtaining a single planning permission directed at that particular end. Although the reason why the clause also referred to an obligation to obtain a site licence was apparent, since a modification of the existing site licence was not required to fill the cavity to a higher level, that feature of the subclause did not require a fundamental reassessment of the limits of its reach. It might have been included as a caution should the contours require the licence to be modified.
Furthermore, the judge had correctly concluded that if clause 8(6)(d) had been intended to do the major work that the appellants claimed to derive from it, it would not have been tucked away as a subclause, in a context and in language that showed that its function was limited to qualifying the clause 8(6)(c) obligation by applying for a variation of a condition relating to the existing permission. When faced with a question over the interpretation of a document, the court had to view with caution such arguments as “had the parties intended the clause to mean that, they would have written it differently”. In the instant case, it was impossible to infer that the parties had intended to inject into the words of clause 8(6)(d) the broad and continuing obligations for which the appellants contended.
Adam Rosenthal (instructed by Osborne Clarke, of Bristol) appeared for the appellants; David Hart QC (instructed by Dundas & Wilson LLP) appeared for the respondents.
Eileen O’Grady, barrister
