Planning Permission: Who's Responsible For It?

The recent case of Jean-François Clin v Walter Lilly & Co. Ltd [2018] EWCA Civ 490 confirms that, without express terms to the contrary in the contract, the employer will usually be responsible for obtaining planning permission for the works it wants carried out. However, for certainty, you should expressly allocate risk under a construction contract. Leaving the courts to decide whether certain risks were allocated to certain parties is a risky business, not to mention time consuming and costly.

Background

Mr Clin owned two adjoining properties within the Kensington Palace Conversation Area. He entered into a JCT Building Contract with Quantities 2005 edition incorporating Revision 2 (2009) with Walter Lily on 25 September 2012 (the "Contract"). The works consisted of demolition, reconstruction and refurbishment to the buildings to create a single dwelling-house (the "Works").

A dispute arose between the parties after the Royal Borough of Kensington and Chelsea Council sent a letter to Walter Lily on 17 July 2013 asserting that the Works amounted to "substantial demolition" requiring conservation area consent. The Works were then suspended. Planning permission (for a revised proposal) was granted on 19 June 2014 and the Works began on 26 August 2014. On 22 May 2015 Walter Lily issued a claim seeking a 53.2 week extension of time and loss and expense.

The case first went to the Technology and Construction Court ("TCC"). Questions were then raised by both parties on appeal and cross-appeal to the Court of Appeal ("CA"). This article focuses on whether there was an implied term that the employer was responsible for applying for any relevant and requisite planning approvals and, if so, how was the implied term framed and what was its affect on the allocation of risk between the parties?

Implied term that the employer was responsible to applying for planning permission in the absence of an express term

The Contract did not expressly impose on either party any obligation to apply for, let alone obtain, planning permission or conservation area consent. However, the parties accepted, in principle, than an appropriate term should be implied into the contract to allocate the responsibility.

An application for planning permission may be made by anyone, whether or not the person owns an interest in the land to which the proposal relates. However, the CA found that the employer will generally bear the responsibility of obtaining the necessary planning...