Winwood & Anor (Trustees of the E.E.Marsh Land Settlement) v Biffa Waste Services Ltdo & Anor

A contractual obligation to obtain planning permission or a site licence must be construed from the words used, read in the context of the whole agreement and its factual matrix. A clause requiring applications to enable landfill activities to proceed to the highest practicable contours does not, without clearer language, impose a continuing obligation to pursue every permission or licence needed to keep operations open for as long as possible. The clause’s wording, position within the lease and relationship with neighbouring provisions may indicate a specific commercial purpose, such as enlarging the site’s landfill capacity. A reasonable-endeavours obligation would not ordinarily require pursuit of an application where it was reasonable to expect that the resulting operations would be unprofitable.

The claimants, trustees and proprietors of a worked-out gravel pit, leased the site to the first defendant for waste disposal and landfill operations. The lease required the tenant, at its cost, to use all reasonable endeavours to obtain planning permission and a site licence enabling landfill activities to be carried out to the highest practicable contours.

After the site licence was restricted to earlier landfill phases, and later regulatory changes required further permissions and permits, the claimants alleged that the clause imposed a continuing duty to obtain whatever permissions and licences were needed to keep landfill activities operating for as long as possible. The preliminary issues concerned whether the clause was capable of requiring four specified applications or variations.

1. Construction. The court applied the ordinary principles of contractual interpretation: the words had to be read in the context of the lease as a whole and the background knowledge forming the relevant factual matrix. The relevant approach was summarised in Chartbrook Limited v Persimmon [2009] UKHL 38, referring to Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 896.
2. Scope of clause 8(6)(d). The words requiring an application for planning permission and a site licence to enable landfill activities to continue to the highest practicable contours were not capable of imposing the broad, continuing duty alleged by the claimants. The words referring to the highest practicable contours would be unnecessary if the clause were intended merely to require every future regulatory application needed to keep landfill operations open.
3. The clause appeared among practical provisions dealing with extraction, compaction, restoration and radioactive waste. Its wording and position were more consistent with the defendants’ explanation that it addressed enlargement of the cavity and landfill capacity. Clause 8(5)(a), concerning an initial application to expand the types of waste permitted, did not support the wider construction.
4. Accordingly, clause 8(6)(d) was incapable of obliging the first defendant to undertake any of the applications or variations identified in preliminary issues 17(a)–(d). It was unnecessary to decide issues 18(a) and (b).
5. Obiter. Had a continuing duty existed, reasonable endeavours would not have required pursuit of a site-licence application where it was reasonable to suppose that the conditions or limitations attached to the licence would make the resulting operations unprofitable.