Sydney Mitchell LLP
When a property development involving a building that is listed or in a conservation area is undertaken, it is reasonable for the contractor employed to do the work to assume that the employer has used due diligence to obtain the necessary planning consents.
In a recent case, a contractor was retained to undertake extensive works to a building, including the construction of a basement-level swimming pool.
The building is in a conservation area and the works involved an element of demolition of the existing building, which in turn meant that Conservation Area Consent (CAC) needed to be sought.
Although the various planning permissions were obtained, no application for CAC was made and the local council in due course sent a letter requiring that works be discontinued and stating that the continuation of the demolition and building work would constitute a criminal offence.
Obtaining the CAC so that the work could continue took more than a year and the contractor applied for damages to compensate it for its losses as a result of the delay.
The owner of the building denied that the delay was his fault, because he held that CAC was not in fact necessary for the building project.
The first question that arose was whether the employer had used 'all due diligence' to obtain all the required permissions, as the contract bound him to do.
The question turned on what constitutes 'demolition', and the judge stated that 'for there to be "demolition" of a building it is not necessary that every part of it is removed; works involving the removal of so much of the old building as to clear a site for its redevelopment can amount to demolition'.
In a lengthy judgment that described some of the expert evidence as 'absurd', the judge ruled that the property was subject to demolition, that CAC was required and that the contractor was entitled to damages.
Says Adam Oleskow, Partner at Sydney Mitchell LLP: "If you live in a property in a conservation area or which is listed, taking legal advice is essential before you become committed to building works.
In this case, the architect the employer retained had an incorrect view of when CAC might be required, which ultimately led to the problem.
The council's building control department was not under an obligation to warn the property owner of the need for CAC. The result was delay as well as substantial legal costs."