Minerva (Wandsworth) Ltd v Greenland Ram (London) Ltd

A contractual consent requirement must be construed in its commercial and documentary context. A request for consent need not include material which the contract does not expressly require, and an informal request may be valid where the agreement prescribes no particular form. Consent cannot be unreasonably withheld. A party does not waive its right to rely on an unreasonable refusal merely by making a further request while attempting to resolve the dispute. Where the contract provides for deemed consent within a specified period, the consenting party cannot extend that period by stating that it will not decide within it. A requirement that revised planning obligations be proportionately no more onerous is assessed by comparing the commercial profitability of the existing and enhanced schemes. Reasonable endeavours require an objective assessment of what a reasonable and prudent party would have done in its commercial interests.

Minerva sold the Ram Brewery development site to Greenland under an agreement containing provisions for pursuing enhanced planning permission and earning overage. Minerva proposed adding two storeys to the Tower and sought Greenland’s consent before submitting a section 73 application.

Greenland refused the first request, asserting that the proposal reduced quality and value. It did not decide the second formal request within the contractual period. Wandsworth resolved to grant the enhanced permission, but Greenland refused to enter into the revised section 106 agreement required for the permission to take effect.

The issues were whether Minerva was entitled to submit the application, whether Greenland’s refusal was reasonable, whether consent was deemed to have been given, whether Greenland had to enter into the revised agreement, and the resulting damages.

1. Consent to submit the planning application. The first request was valid. The Sale Agreement prescribed no particular form, and the email identified the application and expressly sought approval. The request was not invalid because it omitted viability appraisals. The contract required submission of the draft application, not every document later relevant to negotiating the affordable housing contribution. Nor did alleged breaches of Minerva’s duties to inform and consult invalidate the requests or operate as conditions precedent to overage.
2. Reasonableness of refusal. Greenland’s reasons for refusing consent were not reasonable. The material showed that the typical residential floor-to-ceiling heights were maintained or marginally increased, the relevant ceiling zones were not reduced, and the changes were not shown to diminish the value of the duplex or commercial units. Greenland’s technical concerns were not shown to have influenced its decision and could have been addressed by seeking clarification or expert advice within the contractual period.
3. Waiver and deemed consent. Minerva did not waive its right to rely on the unreasonable refusal by making a further request. Its conduct was consistent with preserving its rights while trying to resolve the dispute commercially. Greenland’s response to the second request stated that it would need at least four weeks. Since clause 1.15 required a decision within 10 business days, Greenland could not rely on the possibility of deciding later. Consent was therefore deemed to have been given.
4. Revised section 106 agreement. The requirement that the revised agreement be proportionately no more onerous was assessed by comparing developer appraisals of the existing and enhanced schemes, using Greenland’s actual acquisition price rather than a hypothetical land value. The enhanced scheme produced substantially greater profit, while the additional section 106 cost was proportionate. Minerva also used reasonable endeavours to minimise the affordable housing contribution. Greenland’s refusal breached paragraph 2.4 of Schedule 6.
5. Outcome. Minerva succeeded in its claim and was awarded £3,786,400, with contractual interest from 13 January 2015.