Jolley v Carmel Limited [2000]

On 8 August 1998 the parties exchanged contracts for the purchase by the defendant of a property owned by the claimant. Under the contract, completion was to take place on the expiry of a specified period after “satisfactory detailed planning permission for a minimum of 16 residential units… has been granted to the Buyer”; there was no longstop date. The claimant alleged that there were two implied terms in the contract: that the defendant would obtain planning permission within a reasonable time, and that it would make reasonable efforts to do so. The claimant contended that the defendant had breached the first term by failing to obtain permission, and the second by wrongly making an application, in October 1998, for a modernist design, rather than a traditional design, which would have stood a better chance of success, and by failing to pursue the application between November 1998 and June 1999. By March 1999 the claimant was considering a scheme of a different design with the local planning authority; this was submitted in June 1999. In August 1999 the claimant wrote to the local planning authority saying that the defendant had no contractual agreement with him and that they should not consider the application. The local planning authority refused to grant planning permission, and an appeal was made in October 1999, to be heard in June 2000. The claimant contended that there had been breaches of the contract and that, because of lapse of time, it was no longer in force. The defendant counterclaimed that the claimant had breached the contract by writing to the local planning authority.

Held: The claimant's claim was dismissed. At the date of the claim form, the contract remained in force. It was plainly contemplated that it would be the responsibility of the buyer to obtain planning permission. It was necessary to imply a term by which the buyer would pay the planning fee; the submitted documents would be sufficient to enable the application to be considered; the buyer would not withdraw the application or cause it to be refused and would deal with any requests from the local planning authority. A term could be implied that the submitted plans would not be amended. The minimum obligation on the part of the buyer did amount to an obligation to use reasonable efforts to obtain planning permission within a reasonable time.

Provided a buyer had not acted negligently or unreasonably, any delay in obtaining permission that was attributable to causes beyond the buyer's control would not be a breach of the implied term. The implied term was not necessarily a condition of the contract, breach of which would be repudiatory; it was an innominate or intermediate term, breach of which might or might not amount to repudiation, depending upon the gravity of the breach and its consequences. As an obligation to take reasonable steps to obtain planning permission could be performed in a variety of different ways, the choice of which method to use, and whether an appeal should be made, was for the buyer. The contract did not require the implication of a term specifying the period of the reasonable time within which planning permission was to be obtained; it was not possible to say that the parties would unhesitatingly have agreed to the contract going off if permission had not been obtained by some arbitrary date. So long as the buyer was complying with its obligation to use reasonable efforts to obtain permission, the condition was still capable of fulfilment. If, contrary to the view of the court, a date had to be determined, it would be appropriate to allow 20 months from the date of the planning application for any appeal process. There was no breach of the implied term; it was not wrong to have made the application in respect of the modernist scheme at the time it was made, and it was reasonable to abandon the first scheme in favour of the second. In respect of the counterclaim, the claimant was wrong to have written to the local planning authority.

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