Gregory Projects (Halifax) Ltd v Tenpin (Halifax) Ltd and another

Agreement for lease – Defendant to take lease in premises forming part of claimant’s development – Agreement conditional on obtaining planning permission – Requirement for claimant developer to notify defendant of planning permission and forward copy of planning authority’s written decision – Parties entitled to rescind if condition not fulfilled by end date – Permission granted but copy not forwarded to defendant – Whether planning condition fulfilled – Whether defendant entitled to rescind agreement – Claim allowedThe claimant proposed to carry out a multi-level retail, commercial and leisure development, which included a tenpin bowling alley. In February 2007, it entered into a conditional agreement to grant a lease to the defendant bowling alley operator of that part of the development. The agreement was subject to various conditions, including the obtaining of an acceptable planning permission. The claimant was to apply for permission, notify the defendant of the outcome and forward to it a copy of any relevant decision notice. The parties were to notify each other within 10 days thereafter as to whether they considered the permission to be acceptable within the terms of the agreement. The main provisions of the agreement would become unconditional once the conditions were fulfilled. An end date of February 2009 was specified for that purpose, failing which, by virtue of clause 4, either party could thereafter rescind the agreement by written notice.In October 2008, the relevant local planning authority granted planning permission subject to various conditions. The claimant informed the defendant that permission had been granted but did not forward a copy of the written decision. The other conditions were duly fulfilled. Meanwhile, the defendant changed its mind about entering into the lease. In February 2009, it served notice purporting to rescind the agreement, pursuant to clause 4, on the ground that the planning condition had not been fulfilled by the end date.The claimant sought a declaration that the defendant was not entitled to rescind. It contended that the planning condition was fulfilled by the grant of a planning permission with the relevant characteristics before the end date, which had occurred. The defendant argued that, in order to fulfil the planning condition, the claimant had also to serve the defendant with a copy of the planning decision not less than 10 days before the end date to enable it to decide whether the permission was acceptable, whether the agreement had become unconditional and, if not, whether to exercise its rights under clause 4.Held: The claim was allowed. The agreement for lease stated that the planning condition would be satisfied on “the obtaining” of planning permission of a particular kind. Since that event might render the agreement unconditional and start the clock ticking for the development timetable, one would expect it to be a single and readily ascertainable moment. That moment was the grant of the permission; “obtaining” was the other side of the coin from “granting” and merely reflected the same act from the point of view of the grantee rather than the grantor. If acceptability of the permission was disputed, and an arbitrator subsequently determined it to be acceptable, it would retrospectively have been an acceptable planning permission fulfilling the planning condition as from the date of the grant. A natural reading of the agreement was that the planning condition could be satisfied at any time up to the end date. What mattered was whether a planning permission with the requisite characteristics had been granted on or before the end date. The resolution of the question of whether any particular permission had those characteristics did not have to be initiated, let alone concluded, before the end date. Consequently, the defendant had not been entitled to rescind when it purported to do so.Jonathan Gaunt QC (instructed by Addleshaw Goddard, of Leeds) appeared for the claimant; Anthony de Garr Robinson QC (instructed by Herbert Smith) appeared for the defendants.Sally Dobson, barrister