In Mr Jean-Francois Clin v Walter Lilly & Co. Limited  EWCA Civ 136, the Court of Appeal considered the correct approach to be taken when determining whether or not construction works amount to demolition for the purpose of s.74 of the Planning (Listed Buildings and Conservation Areas) Act 1990 (the “PLBCAA”) and thus requiring conservation area consent (“CAC”).
In September 2012, Mr Clin entered into a contract (the “contract”) with Walter Lilly & Co. Limited (“Walter Lilly”) for the latter to carry out extensive demolition, refurbishment and reconstruction works to the former’s residential property that comprised two adjoining terraced houses (the “property”). The contract was an amended JCT Building Contract with Quantities (2005, incorporating Revision 2 (2009)) with Contractor’s Designed Portion.
The works were commenced in March 2013, but were suspended several months later following the relevant local authority’s advice that the works as a whole amounted to demolition and therefore required CAC (which had not been obtained in respect of the works). Mr Clin subsequently obtained CAC, but as a result the works were delayed by a year.
A dispute then arose as to which party was contractually responsible for the delay. At the heart of the dispute was the issue of whether or not the works constituted demolition such that CAC was required under s.74 PLBCAA. Disposition of this issue, in turn, depended on whether the works were to be assessed on:
(i) a qualitative basis, which included a consideration of the extent to which the elements to be removed contributed to the character and appearance of the conservation area (as argued by Mr Clin); or
(ii) a quantitative basis, which was purely a question of fact and degree that only took into account the extent of the demolition (as argued by Walter Lilly).
The judge at first instance held that the works amounted to demolition such that CAC was required. Mr Clin had breached his implied contractual obligation to use all due diligence to obtain the requisite consent in relation to the works and had breached his implied contractual obligation not to prevent Walter Lilly from executing the works. Walter Lilly was therefore entitled to a full extension of time, along with compensation for loss and expense, and had no liability for delay liquidated damages for that period.
Mr Clin’s grounds for appeal
Mr Clin appealed against the decision on the following three grounds:
Ground 1: The judge at first instance should have concluded that, where a substantial part of a building is to remain intact, it was appropriate to consider whether the demolition to the property involved significant and/or substantial impact on the character and appearance of the conservation area. In support of this, Mr Clin referred to s.72 PLBCAA, which he argued had the effect of requiring that special attention be paid to the impact of the demolition on the character and appearance of the conservation area in determining whether CAC was required.
Ground 2: The judge erred in law and fact in concluding that the retention of a “box” (i.e. the party walls with adjoining properties, together with most of the front elevation and a large part of the rear elevation of the property) did not preclude a conclusion that there was demolition for the purpose of s.74 PLBCAA.
Ground 3: The judge’s conclusion that there was substantial demolition for the purpose of s.74 was based on a series of considerations or reasons so fraught with error as to undermine that conclusion.
The Court of Appeal’s decision
In relation to ground 1, Carr LJ, who gave the leading judgment, held that s.72 PLBCAA did not require a planning authority (or court), when determining whether or not CAC is required, to carry out a qualitative exercise by reference to considerations of character and appearance of the conservation area in question.
As to grounds 2 and 3, Carr LJ noted that these involved challenges against either the trial judge’s findings of fact and/or evaluative findings. She went on to outline the reasons for (and authorities underlying) the reluctance of the appellate courts to interfere with findings of fact by trial judges, as well as the high bar for overturning any finding of fact (which must be “plainly wrong”). On this basis, she was not persuaded that there was any proper basis for interfering with the trial judge’s finding on the facts that the works amounted to demolition of the property for the purpose of s.74 PLBCAA.
The appeal was therefore dismissed.
On the facts, the Court of Appeal’s decision is perhaps unsurprising given, among other things, the extent of the demolition involved (e.g. removal of the entire interior of the two adjoining housing that were to be amalgamated to form the property) and the fact that both parties’ experts agreed that the relevant local authority’s opinion as to the need for CAC was not unreasonable.
The judgment is, however, helpful in its clarification as to how s.74 PLBCAA, and more specifically the term “demolition”, should be interpreted. In considering ground 1 of the appeal, Carr LJ drew a clear distinction between the following issues to be addressed in the context of s.74:
(i) whether a building in a conservation is to be demolished such that CAC is required; and
(ii) if it is, whether or not CAC should be granted.
Having delineated these two separate issues, she held that, whilst special attention must be paid to the desirability of preserving or enhancing the character or appearance of the conservation area when deciding whether or not to grant CAC, no such consideration was required when determining the need for CAC.
One reason for this, she went on to say, was that such qualitative assessment was “wholly unrealistic” and “difficult, if not impossible” for a developer to carry out to any degree of certainty. Carr LJ also referred to the case of Shimizu (UK) Limited v Westminster City Council  1 WLR 168, which confirmed that whether or not demolition of a building is involved is a question of fact and degree to be assessed on a quantitative basis (i.e. by reference to the extent of the demolition). In this regard, for there to be “demolition” of a building, it is not necessary for every part of the building to be removed, and works involving the removal of so much of the old building as to clear a site for development can amount to demolition.
Practical implications of the Court of Appeal’s decision
The Court of Appeal’s decision is likely to have limited application to more recent developments in England following the planning regime changes that took effect from 1 October 2013, which removed the need for conservation area consent to be obtained for the total or substantial demolition of an unlisted building in a conservation area in England.
However, the requirement for conservation area consent remains in place in Wales. To this extent, the clarification provided by the Court of Appeal should be welcome for employers/developers as it removes any doubt as to the need for employers/developers themselves to carry out a complex qualitative assessment of planned works to determine whether CAC is required.
More generally, this case serves as a reminder of the importance of clearly allocating risk and responsibility within a construction contract, and the possible time and cost consequences for the employer (although potentially for either party depending on the circumstances) of failing to address expressly in the contract key obligations such as the obtaining of planning consents.