Developer wins court battle with landowner over breach of “reasonable endeavours” obligation to help secure planning consent

In the event Romal gained planning consent only for a smaller scheme of 330 rather than the original 646 apartments and blamed Peel for this.

In a judgment running to 77,432 words, Mr Justice Fancourt found Romal had lost the opportunity to make the substantially greater profits that would have flowed from a larger development.

Commenting on the case, Joanne Wicks KC and Emer Murphy of Wilberforce Chambers - who acted for Romal together with Lord Banner KC of Keating Chambers - said: “Property developer Romal successfully established that Peel had breached contractual obligations requiring it to use all reasonable endeavours to assist Romal with securing planning permission for a development of more than 600 apartments on the plot. In the end, Romal managed to secure consent for a substantially smaller scheme.”

Wilberforce said the judgment contained “an illuminating example of how to approach a ‘loss of a chance’ claim where there are number of hypothetical outcomes and a number of chances lost, as well as a useful discussion on the different ways of valuing a business’s lost profit”.

Romal claimed for damages for breach of contract, while Peel argued that Romal did not satisfy preconditions in their agreement, and so the relevant obligations on it to support Romal’s planning application never arose.

It also said there had been no realistic prospect of planning permission for Romal’s larger scheme being granted.

Fancourt J said: “The principal difficulty in this case arises from the complexity of the planning policies and considerations applying to the Central Docks area in Liverpool, which is one part of a larger area of disused dockland that is subject to an outline planning permission (the Liverpool Waters Outline Planning Permission) obtained by Peel in 2013.

“Part of the Central Docks was, at the relevant times, part of the Liverpool City Centre World Heritage Site. These policies continued to evolve over the period from 2013 to June 2021 (the latest time at which Romal contends that it would have obtained a more valuable planning permission but for Peel’s breaches of contract).”

He divided the case into three groups of issues, in all of which he ultimately found in Romal’s favour.

The first concerned alleged breaches of contract by Peel to help Romal gain planning consent for the 646 apartments scheme.

Amongst other breaches, the judge found that Peel had put “its relationship with the planning officers of the city council ahead of its obligation to use reasonable endeavours to assist Romal to pursue planning permission for a development of at least 600 apartments”.

In the second group issues concerned the meaning of the obligations Peel had to cooperate with Romal, and the third causation issues.

Peel said there was no realistic prospect of planning permission being granted for either 646 flats or a slightly smaller alternative scheme for 538 because of height and massing objections.

Fancourt J said the two sides differed on the assessment of Romal’s lost profits, with the main differences in the assessment of profit for the 646 apartments scheme being “over £14 million (more than 10%) difference in gross development value (GDV), with a consequential difference on sales and marketing costs; nearly £2.4 million difference on professional fees, about £5.9 million difference on funding costs, which is principally the result of the much longer timeline for the development project…”

He allowed Romal’s claim for damages and said he would enter judgment for a sum to be calculated.