Elvanite Full Circle Ltd v AMEC Earth & Environmental (UK) Ltd

A contractual completion date may be extended where delay is caused by the other party’s acts or omissions and falls beyond the consultant’s reasonable control. A party must co-operate so that an agreed date can be met.

A planning consultant is judged by the standard of a reasonably well-informed and competent consultant. The fact that another expert would have adopted a different approach does not establish negligence, and a consultant does not guarantee planning success.

Loss of profit from a later sale of land may be indirect loss where the contract concerned preparation of a planning application rather than the land or a profit-making asset. Such loss may be excluded by a properly incorporated and reasonable exclusion clause.

The claimant engaged the defendant to prepare and submit a planning application for waste recycling use of an industrial site. The contract referred to submission in November 2007. The application was submitted in April 2008 after the claimant introduced SITA, a prospective purchaser whose requirements affected the proposed layout and supporting material.

The claimant alleged delay, defective planning advice, breach of contract and negligence. It claimed loss of profit based on an anticipated sale to SITA. The defendant denied breach and causation, relied on contractual exclusions and limitations, and counterclaimed additional fees.

The issues included the contractual completion date, responsibility for delay, the standard of competent planning advice, causation, contractual exclusions, and the counterclaim.

1. Claim. The substantive claim failed. The defendant committed two minor breaches by failing to finalise the flood risk and noise assessments and to obtain a transport assessment by the original date. Those breaches were not the critical cause of delay and caused no recoverable loss.
2. Time for performance. Submission by the end of November 2007 was a contractual term, not an aspiration. It was qualified by an implied term permitting extension where delay resulted from the claimant’s acts or omissions beyond the defendant’s reasonable control. The claimant’s unresolved and repeatedly changing site requirements were on the critical path. The subsequent involvement of SITA caused further unavoidable delay. The parties thereby extended or varied the date, alternatively waived any right to insist on the original date and were estopped from doing so.
3. Standard of planning advice. The defendant was required to exercise the skill and care of a reasonably competent planning consultant. A different professional preference was not enough to establish negligence. The court rejected the criticisms concerning flooding, drainage, noise, vehicle movements and ecology. On the balance of probabilities, the original application would probably have received permission in late July 2008 if it had not been withdrawn.
4. Causation and quantum. Even assuming breach, the claimant failed to prove that permission would have been granted by April 2008 or that SITA would then have bought the site. The negotiations failed principally because of the claimant’s response to proposed transfer terms and because SITA’s commitment was uncertain. The claimant also failed to prove loss of profit; implementation costs would have eliminated any enhancement in value.
5. Contractual terms. The exclusion and limitation clauses were reasonable under the Unfair Contract Terms Act 1977. Clause 11 required a properly particularised letter of claim within one year and barred recovery. Clause 10 excluded the claimed indirect loss of profit. In any event, liability would have been capped at £13,987.20.
6. Counterclaim. The counterclaim was dismissed except for £3,500 plus VAT for additional work caused by SITA’s involvement. The parties were directed to draw up an order. Consequential matters, including interest and costs, were not determined.