Activity on a construction site was suspended for more than a year after the local planning authority told the contractor that work to a rear wall required conservation area consent. The scheme design was changed, planning permission for the revised scheme was eventually granted and the work re-started. The contractor said that a Relevant Event and Relevant Matters, as defined in the contract, had occurred and claimed a 53 week extension of time. But whose job was it to obtain the necessary permissions? Was there an implied term that the employer should apply for any required planning approvals and, if so, just how should that obligation be worded? And would such a term affect the parties’ contractual risk allocation?
In ruling on preliminary issues, the Court of Appeal said that, if an express contract term does not deal with obtaining planning permission, the employer is not always responsible for obtaining necessary planning approvals, or ensuring that they have been obtained, before work begins. But the cases provide some support for the proposition that the employer will generally bear this responsibility, as carrying out the work would otherwise be unlawful. In this case the parties agreed that the employer had primary responsibility for obtaining planning permission but the key issue was just how strict that obligation was – to ensure it was obtained or a more limited obligation? The Court ruled that, although the implied term should require the employer to be responsible for seeking planning permission and conservation area consent, it could not realistically extend to an obligation to ensure that it was granted, or granted within a particular time. The Court’s wording for the implied term said that the employer would “use all due diligence” to obtain any required permission or other approval. This requirement would extend to an obligation to make a timely application, or ensure one was made on their behalf, for this permission or approval, to ensure sufficient supporting information was provided to the planning authority, and to co-operate with the authority in this process. A timely application would be one that assisted each party in performing its contract obligations, and with a view to avoiding any delay to the Works. And no further implied terms were required to adjust the contractual allocation of risk.