Planning


Certificates of lawful use - change of use - industrial use - use classes

Winchester City Council v (1) Secretary of State for Communities and Local Government (2) Wickham Laboratories Ltd: QBD (Admin) (Judge Mole QC): 20 September 2007

The applicant local planning authority applied under section 288 of the Town and Country Planning Act 1990 to challenge a decision of the first respondent secretary of state's inspector, allowing an appeal against the authority's refusal to grant the second respondent (W) a certificate of lawful use or development.



W, having identified a need for disease-free eggs to be used in the production of human and animal live viral vaccines, had converted a conventional poultry and egg-producing agricultural unit into isolated units for the production of specific pathogen-free eggs. That use had continued without enforcement action for more than ten years, and so became lawful. W sought a certificate of lawful use or development on the basis that the site was used for an 'industrial process' for the purposes of class B1(c) of the Town and Country Planning (Use Classes) Order 1987. By article 2 of the order, an 'industrial process' was defined as a process for or incidental to the making of any article or part of any article, and were the use of the site to fall within class B1(c), by article 3(4) of the order, use within class B1(b) would also be lawful.



The authority refused to grant the certificate and W appealed against that decision. The secretary of state's inspector found that the specific pathogen- free eggs were produced for, and were thus incidental to, vaccine production taking place elsewhere; that the production of a vaccine was an industrial purpose; and that the order imposed no geographical limit on where the process took place. He therefore concluded that the authority's refusal to grant a certificate was not well founded, and set that decision aside. The authority contended that the inspector had been wrong in law because use could not be for or incidental to the making of an article when it took place at a different planning unit; the incidental and primary use had to be together on the same unit.



Held, in classifying use of a site, the appropriate exercise was simply to look at the planning unit and the question for the decision-maker to ask was whether its use was for or incidental to the making of an article. The answer had to involve the normal English meaning of the words 'incidental to', and an assessment of fact and degree of all the use on the planning unit considered. If the answer was in the affirmative, then what happened on the unit was a process for or incidental to the making of an article, and the fact that it might involve a different planning unit was of no concern. It did not matter that the site to which the land in question was incidental to was distant or that there was more than one such site. In this case, what had taken place on W's site had been incidental to the making of an article, namely vaccines, and the specific pathogen-free egg production was an industrial process within the relevant business class. The inspector had applied the correct and normal construction of words and looked at the circumstances as a matter of fact and degree, and there could be no valid criticism of his decision.



Application refused.



Rory Clarke (instructed by the local authority solicitor) for the applicant; Paul Brown (instructed by the Treasury Solicitor) for the first respondent; Malcolm Spence QC (instructed by Graeme Quar & Co) for the second respondent.





Penology



Discretion - life prisoners - open prisons - Parole Board

R (on the application of HILL) v Secretary of State for the Home Department: QBD (Admin) (Mr Justice Irwin): 19 September 2007
The claimant life prisoner (H) applied for judicial review of the decision of the respondent secretary of state, refusing to accept the recommendation of the Parole Board that he be moved to an open prison. In 1980, H, then a serving soldier, murdered his homosexual partner as he had threatened to inform the army of their relationship. H was sentenced to life imprisonment with a tariff of 12 years. In 2004, the Parole Board recommended that H was moved to an open prison, and the secretary of state accepted that recommendation. H was subsequently removed from open-prison conditions because of staff concern at his behaviour. The following year, the Parole Board again recommended a move to an open prison but the secretary of state refused to accept the advice. H objected to the decision on the basis that the secretary of state had not considered the expert oral evidence at the Parole Board hearing or the board's decision. The secretary of state agreed that his decision was flawed and reconsidered the matter on two further occasions, but again rejected the advice.



Held, for practical purposes a spell in an open prison was a prerequisite of release. Under the relevant legislation and regulations, the Parole Board gave advice and the secretary of state had a discretion whether to accept that advice. It was clear from statistical evidence that when the Parole Board refused to recommend a transfer to an open prison, the secretary of state accepted that advice in the overwhelming majority of cases. In the past, there had been a pattern of general acceptance of the Parole Board's advice recommending transfer. However, in the year to March 2007 there had been a marked increase in the number of times the secretary of state had rejected the Parole Board's recommendation, and an inference could be drawn that a change of policy had been adopted by the secretary of state.



The secretary of state's approach to the exercise of his discretion in H's case had not been rational or even-handed. If the secretary of state was to keep his discretion, he had to be even-handed in his approach. Given there had clearly been a change of policy, the secretary of state should either accept the Parole Board's advice every time, save in exceptional circumstances, or he could look carefully at every piece of advice, whether it was positive or negative. Furthermore, the secretary of state's reasoning was not clear and did not reflect the oral evidence or the views of the Parole Board. The decision was irrational and was quashed, R (on the application of Clift) v Secretary of State for the Home Department [2006] UKHL 54, [2007] 1 AC 484 distinguished.



Application granted.



Sam Grodzinski (instructed by Bhatt Murphy) for the claimant; Nicola Greaney (instructed by the Treasury Solicitor) for the defendant.





Insurance



Construction projects - economic loss - indemnities - private nuisance - public liability insurance - tortious liability

Tesco Stores Ltd v David Constable (sued on his own behalf and on behalf of all other members syndicate 386 at Lloyd's) & 7 ors: QBD (Comm) (Mr Justice Field): 14 September 2007
The court had to determine preliminary issues on the interpretation of the public liability section of an insurance policy. The claimant (T) took out public liability insurance as part of a standard project insurance package, in relation to a project to enclose a section of railway by installing concrete tunnel sections over a cutting, and then build a supermarket on top.



The insuring clause gave T an indemnity against 'all sums for which shall be liable at law for damages in respect of (a) death of or bodily injury to or illness or disease of any person; (b) loss or damage to material property... ; (c) obstruction, loss of amenities, trespass, nuisance or any like cause'. An extension covered liability assumed by T under contract or agreement. The public liability cover was extended by excess policies. The railway track and surrounding land were owned by Network Rail. Before the commencement of the project, T gave the train operating company (C) a very wide contractual indemnity under a deed of covenant. A section of the tunnel collapsed on to the railway lines. No property belonging to C was damaged, but the railway line was closed for 51 days. C made a claim under the deed for loss of passenger revenue. T settled that claim and maintained that it was entitled to an indemnity under the public liability insurance in respect of the sums it had agreed to pay C.



The defendant underwriters (D) of the excess policies disagreed. D contended that the public liability section of the underlying policy only covered the liability of T to third parties, which as a result of the carrying on of the project works had suffered the kind of harm that would give rise to an action in tort, and that C had suffered no such harm because it lacked a sufficient proprietary interest in the track to ground an action in tort whether in negligence or nuisance, and its damage had been pure financial loss recoverable only in contract under the deed.



Held, public liability insurance policies were generally regarded as not affording cover against liability in contract for pure economic loss, James Longley & Co Ltd v Forest Giles Ltd [2001] EWCA Civ 1242, 85 Con LR 124, and Bartoline Ltd v Royal & Sun Alliance Insurance Plc [2006] EWHC 3598 (QB), [2007] 1 All ER (Comm) 1043 considered. It was inappropriate to focus on particular words in the insuring clause such as 'liable at law' or 'all sums'. Instead, the clause had to be read as a whole and 'all sums' and 'liable at law' had to be construed in their setting within the clause, which in turn was contained in a public liability policy which was part of a standard insurance package, M/S Aswan Engineering Establishment Co v Iron Trades Mutual Insurance Co [1989] 1 Lloyd's Rep 289 distinguished. Paragraphs (a) and (b) of the insuring clause plainly contemplated harm for which there was liability in tort. In paragraph (c), 'nuisance' was a well-recognised tort and it was clear that a claim in private nuisance could only be brought by a person who had an interest in the land affected. 'Trespass' too was a recognised tort actionable only by someone with an interest in the land. 'Obstruction' and 'loss of amenities', construed in their setting, referred respectively to a particular type of actionable nuisance, and to loss of or impairment to such amenities as the quiet enjoyment of possession of land and easements actionable in tort. 'Any like cause' meant a cause that shared the essential characteristic of the other 'causes' identified in paragraph (c), namely some injury or prejudice to an interest protected by the law of tort, James Budgett Sugars Ltd v Norwich Union Insurance Ltd [2002] EWHC 968 (Comm), [2003] Lloyd's Rep IR 110 considered.



In context, the core meaning of the words 'all sums for which the insured shall be liable at law' was all sums for which the insured was liable at law in the torts of nuisance and trespass, and such torts as provided compensation for the harm identified in paragraphs (a) and (b) and the balance of (c). The insuring clause was to be construed as covering liability in contract which was co-extensive with the liability in tort comprehended by paragraphs (a), (b) and (c). Any other construction would be uncommercial. The contractual liability extension was to be construed as doing no more than extending cover to an insured who was liable in contract for a tort comprehended by (a), (b) or (c), which had been committed by another party in the course of the project. Since none of the loss for which C was to be compensated under the deed was loss for which C would be entitled to be compensated in tort, T was not entitled to be indemnified by D.



Preliminary issues determined in favour of defendant.



Justin Fenwick QC, Mark Cannon (instructed by Berwin Leighton Paisner) for the claimant; Colin Edeleman QC, Richard Harrison (instructed by Davies Lavery) for the defendants.





Employment



Knowledge - reasonableness - time-limits - unfair dismissal

(1) Northumberland County Council (2) Governing Body of Choppington First School v D Thompson: EAT (Mr Justice Silber): 14 September 2007
The appellant local education authority (X) appealed against a decision that the respondent (T) was entitled to bring an unfair dismissal claim against it, notwithstanding that her claim was brought outside the three-month period prescribed for bringing such claims.



T had been dismissed from part of her job as a classroom assistant. More than four months later, she contacted a union official who recommended that she should pursue the internal grievance procedure. Discussions then took place between the parties, which resulted in a compromise agreement. T subsequently rejected the agreement and contacted another official who advised her that she could not present her complaint to the employment tribunal yet. It was not disputed that it was not reasonably practicable for T to have presented her claim within the initial three-month period. More than 11 months after her dismissal, T issued proceedings against the local authority. The governing body of the school was joined as a party to the action. The tribunal held that, in view of T's ill-health and the messages she had received from her union and X, she could not reasonably have been expected to issue proceedings before she did and, therefore, section111(2) of the Employment Rights Act 1996 did not prevent her claim from proceeding. X contended that the tribunal had erred in considering it reasonable under section 111(2)(b) of the Act for the claim to have been presented between the end of the three-month period after the effective date of dismissal until the proceedings were issued, and that the tribunal had failed to identify any act or omission that had any impact on T's ability to launch her claim for unfair dismissal about which she must have known from at least the date when she had contacted her union. X argued that where the trade union of an employee gave bad advice or failed to give good advice, that did not enable the employee to rely on it for justification for making a late claim. X further contended that the tribunal had erred by joining the governing body as a party.



Held, both the tests of what was 'reasonably practicable' and what was 'reasonable' in section 111(2)(b) embraced, although in different ways, the concept of reasonableness. That section should be given a liberal interpretation in favour of the employee. An employment tribunal considering and applying the words 'within such period as the tribunal considers reasonable', should follow the approach on reasonable practicability, dealing with the reasonableness aspect, rather than the 'practicable' aspect of that definition. That exercise entailed consideration of not merely what the employee knew, but also what knowledge the employee should have had if he had acted reasonably in all the circumstances, Marks & Spencer Plc v Williams-Ryan [2005] EWCA Civ 470, [2005] ICR 1293, and London International College v Sen [1993] IRLR 333 applied. In this case, the tribunal had failed to consider not only what T knew about the right to make a claim for unfair dismissal, and of the time limit for making such a claim, but also what knowledge T should have had had she acted reasonably. That failure constituted a serious omission. The case was remitted to a different employment tribunal, which should also deal with the issue of joining the governing body as a party.



Appeal allowed.



G Clarke (instructed by the local authority solicitor) for the appellant; M Hay (instructed by Beecham Peacock) for the respondent.





Contracts



Cargo - FOB contracts - frustration - implied terms - risk allocation

CTI Group Inc v Transclear SA: QBD (Comm) (Mr Justice Field): 14 September 2007
The appellant buyer (C) appealed against an arbitrator's award holding that two free on board (FOB) contracts for the sale of cement had been frustrated.



C was a company specialising in cement trading worldwide. It embarked on a strategy designed to break the cartel operated in the Mexican cement market by a company called Cemex. The plan was to acquire a large quantity of cement and ship it in a vessel that could be used as a floating silo. This would be moored off the Mexico coast and from which cement could be supplied into the Mexican market.



C concluded the first contract with the seller (T) to buy the necessary cement cargo FOB Indonesia. However, T's Indonesian supplier would not provide the cargo because its parent company was 25 per cent owned by Cemex. C and T then entered into a second FOB contract for shipment from Taiwan. T's intended supplier in Taiwan again came under pressure from Cemex and declined to supply a cargo to T. The arbitrators held that the performance of the substance of the contracts had become commercially impossible, as a result of the pressure placed by Cemex on potential suppliers, and that the parties had impliedly agreed that the contracts should be terminated if provision of a cargo for C's projected use turned out to be impossible. C submitted that the arbitrators had failed to apply the fundamental principle that a party was not entitled to the benefit of the doctrine of frustration if the supervening event on which he relied resulted from his own fault; that T's inability to perform the contract was due to the decision of its suppliers not to make the necessary supply when it was physically and legally possible; and that the suppliers' fault was to be attributed to T because the suppliers had become T's delegate for the performance of the FOB contracts.



Held, before the default of a supplier could be attributed to a seller, the supplier must have been legally obligated to the seller, or to another supplier in the chain, to make the supply. If a supplier who failed to make a contemplated supply was not legally bound to make the supply, he could not be said to have been at fault and thus there was no relevant fault to be attributed to the seller. In this case, no legally binding contract had been made with the potential suppliers, Lebeaupin v Richard Crispin & Co [1920] 2 KB 714 and Atisa SA v Aztec AG [1983] 2 Lloyd's Rep 579 considered.



Having found that the FOB contracts were impossible to perform, the arbitrators were correct to say that the key question was whether the risk of the failure of supply was on the sellers or on the buyers. The situation was different from cases where performance of the contract was not impossible, but its achievement involved actions and/or expense that were radically different from what had originally been contemplated. In this case, the performance of FOB contracts with narrow loading windows had become impossible through supplier failure, and the question was whether the risk of such an occurrence was on the buyer or the seller. As a matter of law, the risk was on the seller. Where a seller made an unqualified promise to sell, he bore the risk of a failure of his contemplated source of supply where that source was not the specified source or the goods were not specific goods and the supplier was not excused by frustration, because it was physically and legally possible for the supplier to make delivery but he chose not to do so. That was because there was always a risk of supplier failure, and as between the buyer and the seller it was the seller who was in a position to guard against the risk, either by making an enforceable contract with the supplier or by protecting himself by making his promise conditional on the goods being available for delivery. The arbitrators had erred in finding that the FOB contracts were frustrated. Since the risk of supplier failure was on T, there was no basis for an implied term discharging T from the contract because of a refusal by the suppliers to supply because of the intervention of Cemex. The arbitrators had erred in finding any such implied term.



Appeal allowed.



Julian Kenny (instructed by Hill Dickinson) for the claimant; Michael Nolan (instructed by Salans) for the defendant.





Education



Natural justice - reinstatement - school exclusions

R (on the application of D) (claimant) v Independent Education Appeal Panel of London Borough of Bromley (defendant) & governing body of the Coopers Technology College (interested party): CA (Civ Div) (Lords Justice Thorpe, Longmore, Maurice Kay): 18 September 2007
The appellant parents appealed against a decision refusing their application for judicial review of a decision of the respondent education appeal panel of a local authority, refusing to reinstate their son (D) in school. D had been involved in two incidents at his school that had resulted in his exclusion. He had threatened to burn the tyres of a teacher and had pushed his hands into the hair of a member of the school's support staff on two occasions, which the school suggested was racially motivated.



The decision to exclude D was upheld by the school governors, and the parents appealed. The panel held that, when viewed separately, neither incident warranted exclusion but that it was not in the best interests of D or the school to order reinstatement. D's parents unsuccessfully applied for judicial review of the decision. The parents contended that the panel's decision had breached the rules of natural justice, as the school had never stated any reasons for objecting to reinstatement, and there had been no evidence of any exceptional circumstances or other reasons for refusing reinstatement. The panel contended that there was no obligation on the school to make separate submissions on the basis that the exclusion was unjustified, and there had been no unfairness in fact as it was obvious from the issues that the reasons for objecting to reinstatement were the same as the reasons why D had been excluded.



Held, it was clear that the panel had dealt with questions of the justification for exclusion and reinstatement together. There was nothing wrong with that approach, but it gave rise to two separate issues that should have been separately addressed. If the issues were not separately addressed, the parents could not know what case they had to meet on the question of reinstatement, which natural justice required. The panel had held that allegations of racial discrimination were not proved and that neither incident justified exclusion. In those circumstances, it would be normal to order reinstatement, unless there were exceptional circumstances or other reasons that justified the continued exclusion under regulation 6 of the Education (Pupil Exclusions and Appeals) (Maintained Schools) (England) Regulations 2002. The panel should have asked the school the reasons for objecting to D's reinstatement if the exclusion was not upheld and then D's parents would have known what reasons they had to address. Accordingly, the decision was quashed and the matter was remitted.



Appeal allowed.



Denis Edwards (instructed by Streetwise Community Law Centre) for the appellant; Peter Oldham (instructed by the local authority solicitor) for the respondent; Akhlaq Choudhury (instructed by Berry & Berry) for the interested party.