Walter Lilly & Co Ltd v Clin

Whether works amount to substantial demolition is a question of fact and degree. It is not necessary that every part of a building be removed. Removing enough of the existing building to clear the site for redevelopment may suffice. The assessment does not depend on whether the removed elements contribute to the character or appearance of a conservation area. That consideration belongs to the later question whether consent should be granted. Temporary demolition intended to facilitate construction and later reinstatement remains relevant. Where a proposed scheme presents a real risk of requiring conservation area consent, the employer’s obligation to use all due diligence requires a timely application for consent.

The claimant building contractor sought an extension of time and compensation for a 53.2-week delay after stopping work when the local planning authority stated that conservation area consent was required for substantial demolition. The defendant employer resisted the claim, arguing that no consent was required and that, in any event, there had been no breach of the implied contractual term concerning planning permissions and consents.

The court determined whether the proposed internal and external demolition amounted to substantial demolition, whether conservation area consent was required, and whether the employer had used all due diligence to obtain it.

1. Conservation area consent was required. Under section 74(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990, demolition in a conservation area required consent. Applying Shimizu v Westminster City Council [1997] 1 WLR 168, demolition did not require removal of every part of the building. The question was one of fact and degree.
2. The proposed works involved complete internal demolition, removal of the party wall, substantial removal at the rear elevation, demolition of the mansard roof and temporary removal of the front bay window. Viewed as a whole, they cleared the site for redevelopment and constituted substantial demolition. The fact that parts of the façades and adjoining party walls remained did not alter that conclusion.
3. The court rejected the approach that the need for consent depended on the contribution made by the elements removed to the character or appearance of the conservation area. That question was relevant to whether consent should be granted, not whether consent was required. The temporary nature and intended reinstatement of the access works were likewise immaterial to that threshold question.
4. The employer was bound by the implied term requiring him to use all due diligence to obtain the necessary planning permissions and consents. This included making a timely application, ensuring sufficient information was provided and co-operating with the local planning authority. The contractor’s access works fell within that obligation, whether as ancillary to piling works within the contractor’s designed portion or because they did not go beyond the employer’s requirements.
5. The scheme was sufficiently likely to require conservation area consent by March 2011, yet no application covering the works as a whole was made before the July 2013 letters. The employer therefore breached the first limb of the implied term. It was unnecessary to decide the second and third limbs or the alternative statutory-requirement arguments.
6. The breach constituted an act of impediment, prevention or default under clauses 2.29(6) and 4.24(6) of the Contract. The claimant was entitled to the declarations sought, an extension of time of 53.2 weeks and compensation for loss and expense. The employer had no entitlement to liquidated damages.

The judgment records that Edwards-Stuart J decided preliminary issues on 24 February 2016, with parts amplified on 5 May 2016. The Court of Appeal allowed the appeal in part and formulated the relevant implied term. The present judgment determined the remaining issues at first instance.