Mr Justice Coulson:
INTRODUCTION
- This Judgment concerns issues of liability, causation and loss arising out of allegations of professional negligence against the defendant, Mace and Jones ("MJ"), a firm of solicitors, who rendered advice to the Claimant ("DM") in respect of a quarry site in Cheshire known as Bold Heath Quarry ("BHQ"). BHQ fell within the area of the St Helens Metropolitan Borough Council ("SHMBC"). It is said that MJ, acting through a partner, Mr Lawrence Downey ("Mr Downey") failed to sort out the difficulties created by the original planning permission, granted by SHMBC as long ago as 1990, and, in particular, failed to give advice that would have led DM to make a fresh application for planning permission earlier than they actually did, in January 2002. The claim for damages is in excess of £40million, with the vast bulk of that figure made up of a claim for loss of profits.
- Until very shortly before the trial, DM maintained a parallel claim in these proceedings (albeit involving a much wider and more detailed range of allegations) against leading counsel, Mr John Hoggett QC ("JH"). That claim has recently been settled, without any admission of liability, in the total sum of £2.6 million, inclusive of costs. There are no contribution proceedings. Whilst the existence of that separate claim, and its settlement, is now only directly relevant to the assessment of damages, and the need to ensure that there is no double recovery, the nature of the case against MJ, and their defence to a number of those allegations (to the effect that they reasonably relied on JH's advice), inevitably mean that he plays an important part in the story. The parties agreed that JH's lengthy witness statement was admissible at the trial, although the weight to be attached to it would ultimately be a matter for me.
- Although the trial bundle ran to over 50 lever arch files, and each side called three experts (the relevant disciplines being planning, mineral surveying, and accountancy) many of the underlying issues were clear-cut, with some (particularly in relation to causation) depending very much on my conclusions as to the credibility of DM's main witness of fact, Mr Denis Morgan. The essence of the dispute between the parties can be summarised in these eight propositions:
a) The planning permission and the conditions of 12th June 1990 (which DM played no part in obtaining) appeared to be in respect of quarrying only, permitting extraction down to 13m AOD. However, in 1993, when DM acquired rights in relation to BHQ, they were much more interested in using the void created by the quarrying for landfill/tipping purposes. Their difficulty was that there was no express reference to landfill or tipping on the face of the permission or the conditions.
b) DM's strategy, supported by consultants, was to argue that, in order to comply with the planning conditions as to the restoration of the site, landfill was required at BHQ. JH originally advised in 1993 that, in accordance with the principle in Irlam Brick v Warrington BC (1982) JPL 708, such landfill was impliedly permitted by the conditions, albeit that the precise nature of the fill would have to be the subject of a separate approval by SHMBC. This seemed to suggest that DM could tip waste at BHQ without having to make any sort of fresh planning application, thereby avoiding environmental justification, public scrutiny and local opposition.
c) However, this strategy was complicated by two potentially irreconcilable imperatives. The first was that, although the planning permission of June 1990 made no reference to it, it became apparent that the permission had been granted on the basis of something called the Manstock scheme, a low level restoration scheme which expressly stated that there would be no importation of waste onto BHQ. This promise had formed no part of the first planning application in 1987, which had been rejected precisely because it involved tipping waste. Thus the promise of no waste was designed to improve the chances of obtaining planning consent, which is what happened in 1990. But the conflict was that DM were only interested in the landfilling element of the project, and had their own plans (known as the Cass scheme) for a high level restoration plan which involved the importation of 5 or 6 million cubic metres of waste onto BHQ. Moreover, the nature of that proposed waste is now a hotly disputed issue.
d) Although the officers at SHMBC did not like the Manstock scheme, they liked the Cass scheme even less, principally it seems because of its scale. They said that, to implement the Cass scheme, DM would have to make a fresh planning application. DM refused, saying that they already had (implied) permission, as per JH's 1993 advice. The competing positions remained at stalemate for four years, between 1994 and 1998 and, although SHMBC made some effort to be reasonable, they became concerned that the quarrying was going on without any restoration at all, which put DM in breach of the planning conditions. Eventually, by an agreement reached between the parties in 1998/1999, it was decided that, when SHMBC served their enforcement notice (which had been threatened for some time), the parties would then allow the subsequent appeal to be used as a vehicle for the ventilation and resolution of the real issues between them. Whether it was an appropriate forum for such a resolution is another major issue in these proceedings. But there was never any doubt in anyone's mind during the enforcement notice proceedings that DM were in breach of the planning conditions, because they had excavated a larger area than permitted, without carrying out any restoration work.
e) In November 1998, JH advised that, as a result of the express terms of the planning consent, 'there is now no right to bring waste on to the site'. There is a major issue as to whether this was inconsistent with his 1993 advice and, if so, what (if anything) Mr Downey should have done about it. JH also advised that an application should be made under s73 of the Town and Country Planning Act 1990, to amend the terms of the planning permission so as to allow the planning conditions to be varied, and thereby move away from the Manstock scheme. No such application was in fact made, and the reason why not is another issue for me to determine. Instead, the focus of DM and its advisors was to use the enforcement proceedings to discredit the Manstock scheme on its merits, and to demonstrate that it could not work without the importation of large quantities of fill, as per the Cass scheme. At the first hearing of the appeal, in April 2000, there was an adjournment of 20 months to allow DM to put in both a s73 application and an Environmental Statement. It is common ground that, immediately after this first hearing, JH advised that, if the s73 application ran into problems, a fresh planning application should be made.
f) Unfortunately, nothing happened at all until the autumn of 2001. The Environmental Statement and the s73 application were not provided until the very end of November, with the resumed appeal due to be heard on 8th January 2002. Responsibility for that delay is another matter for me to decide. The delays in the production of the Environmental Statement inevitably meant that it had not been advertised in time and could not therefore be used at the hearing in January 2002. Furthermore, JH advised immediately before the resumed hearing that the terms of the original application (no waste) meant that the Inspector could not grant permission for the Cass scheme instead of the Manstock scheme. By necessity, the focus then became the attack on the latter, but the weak evidence given by Mr Cass on behalf of DM during the resumed hearing in January 2002 persuaded the Inspector that, contrary to the advice given to DM throughout by Cass (and other planning consultants), the Manstock scheme could be implemented in accordance with the conditions and without the importation of fill. Thus, there was not only no defence to the enforcement notice, but the Inspector also found that there was also no practical problem with implementing the Manstock scheme. DM's strategy in the appeal had failed.
g) Some of these difficulties had been anticipated in advance of the second hearing, and in January 2002, just before the resumed appeal, DM made a fresh application for planning permission, based on a revised version of the Cass scheme, but still based on the importation of about 5 or 6 million cubic metres of landfill on a 40 hectare site. In December 2002 this proposal was significantly reduced in scale and a revised application was made in respect of some 17 hectares. The nature of the waste was, for the first time, identified as being strictly inert (i.e. non-contaminated) waste. The application was further revised in 2003 to reduce the depth of extraction and landfill from 13m AOD to 15m AOD. The revised application was eventually allowed, only after an appeal, in September 2009.
h) Although there are two allegations against MJ relating to the Environmental Statement, at the heart of DM's claim is the allegation that MJ should have questioned JH's advice of November 1998, and were negligent in failing to do so. It is said that if they had questioned it, different advice would or should have been given to the effect that only a fresh application for planning permission would provide DM with the consent to tip that they sought. DM then argued that, had such advice been given, it would have been relied on immediately; that such an application would have been made in 1999 or 2000, and would have been very quickly allowed, without an appeal, and on much more advantageous terms to DM than the eventual permission in 2009. The claim for damages is in three parts: the claim for the wasted costs involved in the appeal process in 2000-2002 (£300,000 odd); the claim for additional costs, including the cost of complying with certain conditions of the 2009 permission which, so it is said, would not have been imposed if permission had been sought earlier (£4 million odd); and the claim for lost profits arising from the delay between 2000 and 2009 (£37 million odd), a period which was largely made up of the 7½ years after January 2002 when neither MJ nor JH were involved, and when progress on the revised planning application(s) was, on any view, leisurely.
- This Judgment seeks to answer the Issues agreed between the parties in the following way. At Section B below, I make some general observations on the factual evidence. Thereafter, at Section C below, I set out the relevant events. Because those extend over a period in excess of 20 years, that Section is longer than I would have liked, but I have, where appropriate, made particular findings of fact in this Section, to which I refer back in subsequent Sections. I then move on to address the allegations of negligence, causation and loss. In Section D I deal with the five allegations of negligence against MJ by reference to the pleaded issues, and the relevant principles of law. At Section E I deal with causation, again by reference to the pleaded issues, and the relevant principles of law. This Section involves a consideration of the two distinct limbs of causation in this case: whether (but for the alleged breach of duty) advice would (or on DM's case) should have been given that only a fresh planning application would give DM the consent which they sought; and, if so, if, when and how DM would have relied on that advice, and what difference (if any) it would have made.
- Thereafter, at Section F below, I deal with the recoverability and quantum issues in respect of the three categories of loss which are claimed, namely wasted costs (Section F2); additional costs, including expenditure on items allegedly required by the new planning conditions which would not have been required if the application had been made earlier (Section F3); and loss of profits (Section F4). There is a short summary of my conclusions at Section G below. I should, at this stage, express my gratitude to all counsel and solicitors for the efficient presentation of the issues at the trial, despite the real difficulties created by the absence of a comprehensive chronological bundle of documents amongst over 60 full lever arch files. The openings, closings and (particularly) the cross-examination of the witnesses were models of their kind; the trial bundle was not.
B. GENERAL OBSERVATIONS ON THE WITNESSES OF FACT
B1. Mr Morgan
- The principal witness of fact called by DM was Mr Denis Morgan, its Managing Director and principal shareholder. No decisions were made by DM without Mr Morgan's involvement and express approval. As a result, his evidence was very important, particularly on the critical issues of causation. It was principally through Mr Morgan's evidence that DM sought to demonstrate that, on the balance of probabilities, if the legal advice had been different, a fresh planning application to permit a significant amount of land filling at BHQ would have been made in early 1999 and granted the following year. There were many hotly disputed features of this claim; amongst others, there was a real issue as to whether the hypothetical application would have given rise to any problems with SHMBC, the Environment Agency and other statutory consultees, it being DM's case now (which MJ contest) that they only ever intended to tip strictly inert (ie non-contaminated waste) at BHQ. There are also issues as to how long and in what circumstances it would have taken to resolve the issues about scale and depth of working, and environmental concerns such as groundwater and the rising water table. There was also a major dispute as to whether, even if the legal advice had been different, DM would have made a fresh application at any time before they actually did, in January 2002. Mr Morgan's evidence was central to all these issues because DM's hypothetical case as to causation depended upon a number of factual assumptions which in turn relied heavily – if not exclusively – on his evidence.
- By any estimation, Mr Morgan was no shrinking violet. This was properly recognised in DM's opening, where at paragraph 2 it was noted that both parties "would invite the court to conclude that he was a shrewd and successful businessman, with a strong grasp of the commercial realities of the businesses which he operates." But thereafter, the parties' differing views of Mr Morgan could not be starker. It is DM's case that Mr Morgan was a truthful witness who relied at all times (and was entitled to rely), on JH and MJ's advice. It was MJ's case that, certainly in relation to the hypothetical case (namely what DM might have done if the advice it received had been different), he was not telling the truth and had blatantly tailored his evidence so as to maximise DM's damages claim.
- It is always important for a judge faced with a loud and forceful witness like Mr Morgan to think long and hard before concluding that, in important respects, his evidence is unreliable. A judge should always be aware that the witness's natural desire to ensure that his story is told can sometimes get in the way of a clear answer to a straight question. More widely, a judge cannot be too naïve when considering documents generated in commercial transactions; it is a fact of commercial life that, on occasion, businessmen will embroider and exaggerate in pursuit of their commercial interests, and will sometimes say things which do not necessarily represent their true position.
- However, even after making every possible allowance for Mr Morgan's personal style, and the uncomfortable position in which he sometimes found himself, when giving oral evidence by reference to scores of files whose contents darted about all over the place, I was driven to conclude that, on many important matters, he was indeed an unreliable witness. The main reasons for that conclusion are as follows:
a) He regularly failed to answer the question put, even when it was repeated two or three times. On occasion, in an attempt to keep the trial to its timetable, I was obliged to intervene to request an answer, again with only limited success.
b) He failed to confine his answers to his own knowledge and, despite warnings, sought to argue what he knew (or thought he knew) was DM's case, often by reference to meetings and correspondence in which he himself had played no part.
c) He repeatedly referred to particular passages in the statements of Mr Downey and JH as supporting what he was saying. On checking these references, it became apparent that they did no such thing, and either related to a different event altogether, or set out a position which was the very opposite of that adopted by Mr Morgan. On further investigation, not a single reference to these statements that was made by Mr Morgan during his oral evidence actually supported what he was saying, and most were directly contrary to his evidence.
d) He repeatedly latched on to one sentence in a contemporaneous document that he thought helped DM's case, whilst ignoring the paragraphs around it which were contrary to what he now maintained, and which formed the basis of the questions that he was being asked. This meant that he effectively sought to rewrite numerous contemporaneous documents in a way that suited his present claim. To take one of many examples: DM's current planning permission, the product of lengthy negotiations extending over 7 plus years, permits them to infill at BHQ using strictly inert (i.e. non-contaminated) waste. In order to maintain his large claim for loss of profits, Mr Morgan needed to demonstrate that, in early 1999, he would have made an application for similarly limited permission. Yet document after document in the period between 1993 and 2002 made plain that DM were not willing to limit their landfill proposals in this way, and that they were instead commissioning their own consultants to explore the consequences of tipping a much wider range of waste material at BHQ. He was driven repeatedly to say that these contrary documents were variously 'wrong', or 'a mistake', or written 'without my knowledge', or 'without my instructions'. In view of his tight control of all letters and reports produced on DM's behalf, such explanations were just not credible.
e) In similar vein, on numerous occasions during his evidence, Mr Morgan was obliged to say that particular passages in letters and reports which he had either written, approved or knew about (many of which again suggested, contrary to their case now, that DM wished to tip a wider range of fill material than that for which they now say they would have applied, or were contrary to DM's case in some other way), were either there solely for commercial reasons, or as part of a 'negotiating ploy', or were knowingly incorrect or misleading for other, often obscure, reasons.
f) One such example was a Proof of Evidence prepared and used by Mr Youngs, DM's Environmental Compliance Manager for a Planning Inquiry in relation to a related site owned by DM. That proof contained some important evidence about the absence at the relevant period of any actual need for inert waste sites (such as DM now say they wanted to make BHQ), and the possibility of using DM's related site for contaminated waste, for which there was such a need. Since this evidence was contrary to his case here, Mr Morgan said that, in effect, Mr Youngs' evidence was deliberately misleading, but that somehow this did not matter, because Mr Youngs had simply been 'making a case' to the Inspector. The inference was plain: even in a Proof of Evidence, which Mr Youngs would have told the Planning Inspector was true, it did not really matter to Mr Morgan if the contents were true or not, provided it helped DM's case.
- Mr Morgan was in the witness box as he is in commercial life: a very successful man closely controlling every aspect of his business and used to getting his own way. No-one was going to tell him what to do if he had conceived a different strategy, even if that meant that important documents contained statements which were untrue or misleading. As will be seen from my analysis of the documents and the evidence in Section C below, Mr Morgan's cavalier attitude to the accuracy of important documents was so pervasive that I was driven to conclude that, on many important aspects of this case, his evidence could not be relied on.
- Unhappily, Mr Morgan's influence on DM's case was not limited to his own evidence. There were a number of aspects of the claim (and the damages claim in particular) where contemporaneous documents, other records, figures and margins were said to be 'unavailable'. Sometimes the experts were simply told that the answer was x or y, without any supporting material at all. Usually, that information had been provided to DM's experts by Mr Morgan himself. As noted in Section F below, the difficulties created by Mr Morgan's credibility cut across important aspects of the damages claim, particularly the claim for loss of profits.
- Of course, in a professional negligence claim like this, the mere fact that the claimant's principal witness is unreliable in important respects does not mean that the claim must automatically fail: far from it. It still remains necessary for the court to consider the detailed allegations to see whether or not the alleged breaches of duty can be made out, and thereafter to go on to consider questions of causation and loss. But, in a case where much turned on what DM would or might have done in different circumstances, and on the veracity of what Mr Morgan told his own experts (both in the original Inquiry and in these proceedings), then the evidence (and what I consider to be the flaws in that evidence) provided by Mr Morgan takes on a greater significance.
B2. Mr Richard Cass
- As we shall see from the narrative in Section C below, Mr Cass was a witness at the second hearing of the Inquiry in January 2002 which led to an unsatisfactory result for DM. At the time, Mr Cass' performance when giving evidence on that occasion was universally blamed as being one of the principal causes of that outcome. The main purpose of his evidence before me appeared to be an attempt to demonstrate that, contrary to this prevalent view, the collapse of DM's case in January 2002 was not his fault but that of JH and MJ, and the lack of a coherent strategy.
- In some ways, Mr Cass' evidence before me was of limited value on the real issues between the parties. However, at paragraphs 272-275 below, I find that, when he gave evidence in January 2002, Mr Cass was curiously confused on a number of important issues. In many ways, that confusion has remained to this day. By way of example, I note that the critical sentence in his witness statement in this trial was his statement that, because of a last minute change of strategy by JH just before the January 2002 hearing, "I had no grounds on which to attack Manstock". This seemed an odd statement, given that for years the whole basis of his advice and evidence had been a detailed critique of the Manstock scheme, and it was on that very issue that he had been advised to concentrate at the consultation with JH the night before the hearing in January 2002. In his examination-in-chief, before he was even cross-examined, he volunteered the information that this vital sentence in his own statement was "misleading and therefore not true".
B3. Other Aspects of the Claimant's Factual Evidence
- There are three other aspects of the DM's factual evidence which have caused me some concern. The first was their failure to call Mr Robert Smith, the planning consultant who acted for DM both before and after the ill-fated hearings in 2000 and 2002. It seems to me that he could have shed a good deal of light on some of the matters which remained in issue between the parties, particularly the long slow gestation period of the scheme proposed in 2002 which was eventually accepted, in a heavily revised form, in 2009. In a case where the claimant is saying that its extensive damages claim should be worked out by reference, not to the actual period that it took to obtain planning permission, but a much shorter hypothetical period, it is important to see just why that actual period was so much longer than the hypothetical. In my judgment, Mr Smith was in a perfect position to assist on that topic. No explanation was given for his absence.
- Mr Smith's centrality was also demonstrated by the ongoing difficulties with DM's disclosure. Important documents relating to the period between 2002 and 2007, which were in Mr Smith's possession, were not disclosed until after the trial had started, despite MJ's repeated efforts to obtain such documents and the court orders made earlier in the year. The enquiries arising out of that unfortunate occurrence led to the revelation that DM had never searched for any documents held by their many third party advisors. It was also apparent that DM's solicitors operated a system whereby no documents were disclosed without Mr Morgan's involvement (see paragraph 11 of Mr Ives' statement dated 20th October 2010). I am obviously troubled by the implications of both the inadequate searches and the apparent control of the disclosure process by Mr Morgan, the latter being an echo of something I said at the hearing on 23rd March 2010 (see paragraphs 316 and 318 below).
- The difficulties with DM's disclosure were not limited to the late provision of documents from Mr Smith. Both the minerals surveying experts and the accountant experts called by MJ identified important elements of their work which were hampered by the absence of particular documents or verifiable information from DM. As a result, in place of what might be called primary evidence (for instance, relating to DM's contracts and/or other sites dealing with inert fill, their costs, margins etc), the experts were forced to make assumptions and do theoretical calculations based on other material of questionable relevance, such as the costs/profits of third party companies in a similar line of work. Whilst I accept that, in general terms, a court has to do its best with the evidence that it is given, there was an overriding impression here that primary information had either been kept back from the experts (and thus the court), or did not exist at all. Whatever the reason for the absence of such direct evidence, the fact that it was not available cast doubt on the veracity of many of DM's underlying claims. I give a number of detailed examples in Section F below.
B4. Mr Laurence Downey
- Mr Downey was the solicitor at MJ who dealt with DM's affairs and was in repeated contact with Mr Morgan. For the reasons explored below, I believe that criticisms can be made of some aspects of Mr Downey's general conduct, particularly his apparent willingness to go along with Mr Morgan's suggestions and opinions, without always thinking each through carefully, and his failure to make regular attendance notes of his many conversations and meetings with Mr Morgan. However, I consider that Mr Downey was essentially an honest witness. Thus, on the occasions when there was a conflict of evidence between Mr Morgan and Mr Downey, I generally preferred Mr Downey's evidence. Of course, once again, that finding has little bearing on whether or not Mr Downey fell below the standard to be expected of a reasonable solicitor, or on the causation issues raised by the claim.
C. THE RELEVANT EVENTS
C1. The Site and The Inter-Relationship Between The Various Parties
- BHQ is a large site with a permitted quarrying area of about 40 hectares. It has been used since 1990 as a quarry for sand and sandstone. It is a sensitive site in many ways; not only is it close to the large urban sprawl of Warrington, St Helens and Merseyside, but it also sits on top of an aquifer which forms an important part of the water supply for that part of the country.
- BHQ was and is owned by R and C Love Limited ("Love"), a farming company. After a number of failed attempts to obtain planning permission to quarry sand at BHQ (outlined in Section C2 below), planning permission to extract sand and sandstone was eventually granted to Love on 12th June 1990. It is that planning permission that gave rise to so many of the problems in this case.
- Love leased the extraction rights to Walter J Wallington Ltd ("Wallington") by a lease dated August 1991. Wallington's managing Director was Peter Hobbs. It appears that, by late 1992, Wallington were in financial difficulties. Following negotiations in which Mr Morgan exploited their problems, Wallington assigned their lease to DM in January 1993. However, DM were not principally interested in the extraction rights and so they immediately sub-let those rights back to Wallington pursuant to an underlease which terminated in December 1995. Even after the expiry of that lease, pursuant to a licence granted by DM, Wallington continued to extract sand at BHQ until they went into liquidation in January 1997, when DM took over that operation.
- DM were much more interested in the potential for tipping waste at BHQ. In accordance with that commercial objective, in July 1993, DM entered into a tipping agreement with Love which gave DM the right to tip a mixed range of waste at the site, including both contaminated and uncontaminated waste, on condition that, within three years, DM obtained permission for such tipping. That three year period was subsequently extended to January 2000.
C2. The Original Applications and The Planning Permission of 1990
- In April 1987, Love had made their first planning application. The proposal was to extract sandstone and sands from the site and then to return it to agricultural use. Limited infilling would occur by way of inert waste. That application was refused in October 2007, mainly because North West Water (at that point the relevant water authority) objected to the importation of restoration material due to the threat to the aquifer. Although an appeal was lodged, it was subsequently withdrawn.
- On 28th October 1988, Love reapplied for planning permission. That was supported by a statement drafted by Manstock Geotechnical Consultants Service Ltd ("Manstock"). The Manstock scheme was a low-level scheme which proposed that part of the void `created by the quarrying would be backfilled "with compacted excavated material from the central ridge".
- The Manstock scheme also contained these important paragraphs:
"3.5 Protection of Aquifer and Groundwater
By removing the proposal for a lake and by consequently removing the need for the import of any infill whatsoever onto the site, we believe that we have fully addressed the problems of pollution stated in the refusal documents.
3.6 Waste Disposal
Within this present proposal, the site would be totally reinstated using material from the site. There will therefore be no need whatsoever to consider the importation of fill. There is no requirement whatsoever for a waste disposal aspect to be considered."
- It appears that, because there was to be no lake and no imported material, North West Water had no objection in principle to the new scheme. Despite that, the Planning Committee met on 3rd August 1989 and refused the application, against the advice of its officers. It was at that meeting that a new drawing prepared by Manstock, called Figure E, was first tabled. Love again appealed against the refusal, and a public enquiry to hear the appeal was listed for 10th July 1990. However, SHMBC were advised by leading counsel, Mr Andrew Gilbart QC, that they would lose the appeal and that advice led to further discussions between SHMBC and Love. As a direct result of those discussions, Love made a third application on 2nd May 1990. That third application was very similar to the second application and incorporated a revised version of the Manstock Scheme. It was that application which was the subject of the planning permission granted on 12th June 1990. Of course, this obviated the need for any appeal hearing.
- The planning permission contained a total of 31 conditions. For present purposes it is only necessary to set out Conditions 3, 5, 11, 15 and 17.
"3. After-care of each restored area shall be carried out to the satisfaction of the Local Planning Authority for a period of five years from completion of each phase of the restoration works referred to in Conditions 2 and 17 below in accordance with an aftercare scheme to be submitted to and approved by the Local Planning Authority in consultation with the Ministry of Agriculture, Fisheries and Food.
The scheme shall set out steps to be taken as may be necessary to bring the land to a standard fit for use for agriculture and such scheme shall be submitted to the Mineral Planning Authority within a period of 24 months from commencement of site works. The aftercare scheme and programme shall contain details of:-
a) The method of cultivation and maintenance of the site;
b) Frequency and requirements for analysis of soil and spoil samples;
c) The fertilisation and liming of the soils of the site;
d) Provision of field drainage and
e) The seeding and crop management activities.
This scheme and programme shall, after approval by the Mineral Planning Authority, be varied only in accordance with proposals submitted to and approved by the Mineral Planning Authority in writing and such variations shall be deemed to be incorporated in the approved scheme and programme…
5. The development shall not be carried out otherwise than in accordance with a working scheme and programme to be submitted to and approved by the Mineral Planning Authority before any development or other operations commence on site other than those works associated with the formation of the access road to the site in accordance with details agreed in these conditions. This scheme and programme shall contain details of:-
a) The order, sequence, direction, maximum extraction depth, and method of working the minerals and restoring the site;
b) the area of land which may be exposed, worked and unrestored at any one time which shall not exceed 9 hectares (including plant and vehicle compound);
c) the provisions for landscaping the site including the maintenance for a period of 5 years of all trees, shrubs and seeded areas;
d) drainage measures;
e) the provision of fencing to protect the working areas, lagoons and areas of unstable ground;
f) the area to be used for repair, maintenance and fuelling of all plant, equipment and vehicles and the method of preventing the escape of spilled fuels, oils etc;
g) the area and dimensions of storage mounds and periods for which soils will be stored;
h) the location, size, and external appearance, including colour, of any fixed plant, equipment, means of illumination, structures or buildings in relation to the level of the adjacent ground;
i) location, size and method of construction of silt ponds, lagoons or other water catchment areas;
j) details of the type, make and specification of wheel washing facility together with details of its position in relation to the haul road;
k) the size and location of any material stockpiles or temporary discard dumps;
The scheme and programme shall be carried out to the satisfaction of the Local Planning Authority…
11. No materials other than restoration materials approved by the Mineral Planning Authority shall be imported to the site…
15. Extraction of minerals shall not take place below 13 metres Above Ordnance Datum [AOD]…
17. The restoration of the site shall be carried out in accordance with the following:-
a) All buildings, plant, machinery and structures shall be demolished and foundations, haul roads and hardstandings shall be removed from the site;
b) The surface of the site shall be graded into the adjacent land in such a manner that there is drainage of surface water from the site;
c) Top soil and sub-soil are to be replaced to their original depths or as agreed by the Council as Mineral Planning Authority;
d) Prior to topsoiling, the subsoil shall be limed at a rate to be agreed with the Mineral Planning Authority and ripped twice to a depth of 700mm with winged tines to relieve compaction, the direction of the first ripping shall be at right angles to the second;
e) No running of loaded earth scrapers or other heavy wheeled plant shall take place over ripped areas;
f) A soil covering layer of a minimum of 300mm thick of topsoil shall be laid over the site in a dry condition and graded evenly avoiding all depressions and low areas which would retain surface water. No heavy wheeled plant shall run over replaced soil."
- An issue that was to emerge subsequently was that, although the conditions were lengthy, the planning permission itself made no express reference to the Manstock scheme. But on 21st December 1990, SMHBC wrote to Wallington (who by that stage were in negotiations with Love to quarry at BHQ) asking them, in connection with Condition 5:
"Please check that the submitted scheme and programme accurately reflects your own intentions and confirm in writing. Any modifications you require will need the prior approval of the Council as Local Planning Authority"
Wallington replied on 22nd January 1991 to say:
"Yes, the scheme of working is still the same from the submitted planning. If there is any required modification we will seek your approval."
It was common ground at the trial that this exchange of correspondence referred to the Manstock scheme. However, it is also important to note that neither the critical parts of the Manstock scheme, nor these letters, were seen by Mr Morgan or Mr Downey until some time in 1998.
C3. The Relationship Between DM and LD
- Before considering the detail of the involvement in the relevant events of DM (and Mr Morgan in particular) on the one hand, and MJ (and Mr Downey in particular) on the other, it is appropriate to record the nature of the relationship between the two men. This was dealt with in detail by Mr Downey on Day 5, at pages 41-42, and 58-60 of the transcript. Mr Downey confirmed that he had known Mr Morgan for most of his professional life. This started in about 1986/1987 on a relatively peripheral basis but, from 1991 onwards, involved a considerable amount of work on Mr Downey's part on behalf of Mr Morgan. Mr Downey confirmed that, over the course of those years, he got to know Mr Morgan well.
- Mr Downey first became involved with BHQ in the early 1990's. He confirmed that no retainer or client care letter was sent to mark the start of his work in relation to BHQ, partly because of the closeness of the relationship between MJ and DM, and partly because such letters were much less common in those days than they are now. Thereafter, as Mr Downey explained, he became the main point of contact with DM. His relationship with Mr Morgan was described as 'cheerful' and it plainly involved a certain amount of banter, as recorded in their lengthy correspondence.
- As to the nature of the advice that Mr Downey gave Mr Morgan over the years, he made it clear that it would include general corporate advice, conveyancing (including the commercial aspects of conveyancing transactions), and alertness to planning issues. Mr Downey said (Day 5/61) that Mr Morgan knew that he was not a specialist planning lawyer and that his normal practice was that, when serious planning issues arose, Mr Downey would rely very heavily on counsel. That was not disputed by any evidence from Mr Morgan. Mr Downey said that, during the ten year period which he was the principal point of contact, MJ took advice from 7 QC's and 4 juniors in relation to planning matters involving DM. He said that, in essence, he provided to Mr Morgan a general commercial view as opposed to a specialist opinion (Day 5/63). In his closing submissions (paragraph 44 of section 2), Mr Davidson rightly described Mr Downey as "a generalist solicitor".
- As set out below, there were many letters concerned with BHQ written on behalf of DM by Mr Downey. He explained (Day 5/65-66) that these letters would, in draft form, pass back and forth between himself and Mr Morgan and often ran to half a dozen drafts before they took their final form. Mr Downey said that this demonstrated "the very close interest that Mr Morgan took in ensuring that letters written by the firm on his behalf reflected what he wished them to say." He went on to confirm that he would not write something simply because Mr Morgan wanted him to say it, and that he would exercise his own independent scrutiny on any drafts provided to him by Mr Morgan.
- Finally, in this connection, Mr Downey accepted that his practice as to the making of file or attendance notes was "variable" (Day 5/75). He said that sometimes he would make a file note, although he would not do so if what had happened or what was said was 'fairly routine'. He said that if there was anything significant or important happening in the case or transaction, then he hoped that there would be a file note to reflect it. He accepted that if advice of significance was not recorded, either in a file note or in a letter, then it would cast doubt on whether such advice had actually been given.
C4. JH's 1993 Advice
- Sometime in the latter part of 1992, DM started negotiations with Wallington to acquire the mineral rights lease which they had been granted by Love. On 15th September 1992, DM made a formal offer for that lease in the sum of £500,000. It appears that this was on the assumption that tipping rights were involved. On 8th October 1992, DM instructed MJ to act on its behalf in this transaction.
- On 31st December 1992, Mr Downey wrote to DM to point out that, contrary to what Mr Hobbs had told Mr Morgan, the lease actually reserved to Love the right to tip waste in any part of the quarry where sand extraction had been completed. As Mr Downey pointed out, that meant that DM could find itself extracting from one part of the site at the same time as Love (or a third party) was depositing waste in another part. Mr Downey realised that this would not be acceptable to DM because, as he had pointed out in any earlier part of the same letter, he was "aware that your interest in BHQ is related more to its potential to waste disposal than to the extraction of minerals from the quarry. Mineral extraction is simply a means to an end." That was confirmed by Mr Morgan's letter to Mr Downey on 4th January 1993. In that letter Mr Morgan said that the motivation to secure the mineral lease had largely disappeared because he had now negotiated tipping rights directly with Love, without Wallington's involvement.
- On 11th January 1993, Mr Downey wrote to the solicitors acting for Wallington. That letter made clear that what was of most interest to DM was the potential for tipping at BHQ. The letter went onto say that the acquisition of the minerals extraction lease would not put DM in the advantageous position which it had expected for the purposes of participating in, or negotiating, tipping rights. Following this letter, on 10th January 1993, at a meeting between the two men, Mr Hobbs gave Mr Morgan a part of the Manstock report. It is not clear what part; certainly Mr Morgan attached no real importance to it, although it led Mr Downey, on 12th January 1993, to ask Wallington's solicitors for sight of all of the documentation relevant to the 1990 planning permission, including a full copy of the Manstock Report. The letter also referred to a report which had concluded that BHQ was "a sensitive site for tipping because of its position above the aquifer and that the NRA would require the site to be lined even for the deposit of inert non-leachate producing waste." It appeared from Mr Morgan's evidence (Day 2, pages 9-19) that this report was a desk top study which he had commissioned. No copy of this report was disclosed in these proceedings (possibly because of the restrictions DM placed on their own disclosure, noted above). This was an unfortunate omission.
- As a result of these events, Mr Downey wrote to Wallington's solicitors on 13th January with revised proposals. One of the most important of those revisions was that DM were now agreeing to pay Wallington just £250,000 for the rights at BHQ. There was also a term that Wallington would use their reasonable best endeavours to supply the planning documentation which had been sought by Mr Downey in his letter of 12th January.
- On the following day, Mr Morgan wrote to Mr Hobbs personally. This letter, which was the subject of Mr Morgan's cross-examination (Day 2, pages 9-19), contained two statements of importance. One was the suggestion that there was a problem of subsidence at the site, which meant that, in Mr Morgan's words, he would have "to demonstrate to the NRA [National Rivers Authority] that the problem no longer exists, or can be accommodated when engineering the site with a geotextile or clay liner, or a multi liner consisting of both as the NRA specify." The second, related point was that, again in Mr Morgan's words, "the sensitivity to this matter is such that under new Ground Water Protection Policies, the quarry would not get a Planning Consent today for extraction. Now that subsidence is known to have occurred across this site, it is vital to assess the prospect of subsidence prohibiting this quarry being suitable for inert fill."
- In his oral evidence, Mr Morgan admitted that there was in fact no subsidence problem at the site, and that he was building on a reference that he had found to a potential problem with one CEGB pylon on the site that might suffer from subsidence in order to create "a negotiating position" (Day 2/11); "a negotiating ploy" (Day 2/13); and "a negotiating tactic" (Day 2/16). Furthermore, Mr Morgan admitted that, although the letter stated that there was a waste disposal report which recommended the provision of a liner, he confirmed that he had not even seen the desktop study (referred to above) which, he said, was the only report that then existed.
- Mr Morgan candidly admitted that this subterfuge was designed to put pressure on Wallington because of their weak financial position, and was a strategy which had been worked out in collusion with Mr Downey. Mr Downey was emphatic in his own evidence that such an explanation was untrue. There was, of course, no such reference to subsidence and the like in Mr Downey's letter to Wallington's solicitors, written just the previous day. I find that Mr Morgan acted, as he was to act throughout in this matter, with little regard for the facts if they got in the way of his commercial interests, and that his attempt to deflect criticism by saying that it was a tactic worked out with Mr Downey (again, a not uncommon feature of his oral evidence) was a deliberate untruth.
- During this part of his cross-examination Mr Morgan was also asked about his firm statement that the site was sensitive and that, as at 1993, DM would not get planning consent for extraction (and therefore, by extension, would not get permission for tipping either, since if there was no extraction, there would be no void which would need to be infilled). This was the first of many similar references to the sensitivity of the site and the difficulties surrounding both extraction and tipping. They relate to an important part of the case, because it is an integral part of DM's claim in these proceedings that, but for the alleged negligence, they would have made a planning application to tip waste, which would have been quickly successful, years before they did. Mr Morgan said that the statement in his letter was not his view and again the inference was that this was all part of the negotiating pressure he was exerting on Wallington. However, it seems to me that it was more than that: all of the subsequent evidence, explored below, demonstrates that, not only was this a sensitive site, and not only had the extraction permission taken three attempts to obtain (and only then on the back of a promise not to import waste), but also that the environmental considerations and the concerns about DM were changing throughout the 1990s such that a fresh application for extraction from such a large site (let alone the separate issue of infilling with waste) may well have led to a very different answer in 1993 if permission had not already been obtained.
- Doubtless as a result of these tactics, in conjunction with Wallington's financial difficulties, the agreement between the parties was quickly resolved. On 21st January 1993, DM acquired the mineral rights lease from Wallington and, a week later, on 28th January 1993, they sublet those rights back by way of underlease which expired on 21st October 2015. This arrangement demonstrates that DM was never interested in the extraction; what mattered to them, as Mr Morgan said in a subsequent personal letter to Mr Hobbs, was the removal of large volumes of sand with "large volumes of tipping space left behind". This was also confirmed in the nature of the agreement between the parties, pursuant to which the money DM paid to Wallington was calculated by reference to an 'earn-out' arrangement. Wallington were paid if they hit extraction targets, but not otherwise. As Mr Morgan said in his witness statement, the arrangement was that Wallington would obtain a financial reward if sufficient tipping capacity was "speedily created by mineral extraction in a short period, but would achieve nothing if the targets were missed by even a single tonne…if WJW missed its target by even a very small amount, then nothing would be payable, but DM would still have a very big hole to accept inert tipping."
- DM then needed to obtain the tipping rights from Love because, of course, the minerals lease confirmed no such rights. In a letter dated 1st April 1993, Mr Morgan wrote to Love and recognised the need to convince the NRA that land filling was possible, in principle, over the aquifer. This was an important letter because it contained a summary of matters which were, at that time, of concern to Mr Morgan. He noted that the principle of landfilling over the aquifer "is a fundamental issue which is yet to be established" and that the NRA policy relating to "potential pollution problems" would need to be examined, particularly in the context of a proposal to increase the depth of extraction "closer to the water table". Mr Morgan stressed that all this would need to happen whilst "at the same time not compromising the future landfill potential of the site". Mr Morgan proposed to Love that royalties would be paid to them for tipping. Different royalties were identified for "inert material" on the one hand and "contaminated material" on the other. The letter also said that, whilst it was not envisaged that putrescible waste (the most troublesome kind of waste in view of the aquifer) would be acceptable to the NRA, if it was then a 25% payment would be paid to Love.
- On its face, this letter is only consistent with DM's intention that, at least at that point, they would tip a wide range of fill material at BHQ, including both inert and contaminated waste. It also shows that even at that early stage, DM were conscious of the potential "engineering requirements for landfill" which, in the light of all of the rest of the evidence that I heard, can only be a reference to some form of liner or geological barrier. That was, of course, consistent with what Mr Morgan had been telling Wallington would be necessary at BHQ a few months earlier. However, when he was cross-examined on this letter, Mr Morgan denied that he contemplated wishing to import contaminated material to site and said that these references were there at the insistence of Love's solicitor, who wanted split incomes for different types of waste. This explanation was not borne out by the documents themselves, because the first reference to the potential for using BHQ for contaminated waste came from Mr Morgan, not Love or their solicitors. Mr Morgan's answer also made no commercial sense: if tipping contaminated material was simply not a part of DM's proposals in April 1993, then they would have said so, and there would have been no need to make an offer in respect of royalties payable for tipping it, and no need to draw up a complex agreement which envisaged the tipping of such waste.
- Mr Morgan accepted that, on his case now, all these reference to contaminated material were entirely academic (Day 2/19-27, particularly 22), because this was not what DM intended to tip at BHQ. I find that Mr Morgan's explanation lacked any credibility and that the reason for the references to contaminated fill and putrescible waste in the agreement was because Mr Morgan envisaged at least the possibility of using BHQ for the tipping of such waste. Mr Morgan did accept that further investigation was going to be necessary, particularly in relation to ground water problems, and that this would have to be completed before any approach was made to the planning authority for permission to tip.
- During his cross examination on this letter, Mr Morgan made the first of what were numerous references to the NRA policy and how, because this was a Zone II site, he only ever contemplated tipping inert material in accordance with the NRA policy. The NRA policy was in these terms:
"B.2 The NRA will object to a new proposal for mineral extraction where there will be demonstrable harm to water resources and the water environment, unless measures to mitigate any effects can be agreed within planning controls.
… Of specific concern are operations below the water table where dewatering takes place. The hydrogeological study should include details of the proposed water management and reuse.
The unsaturated zone is vital to both the quality and quantity of water resources. Water percolating through this zone can be purified by the filtration of suspended solids and the breakdown of pollutants by oxygenation and biological action. The unsaturated zone can act as a buffer which delays and attenuates flood peaks and makes an important contribution to dry weather flows. The NRA will require a developer to demonstrate that removal of mineral from the unsaturated zone and any subsequent restoration will not lead to a significant reduction in the quality or quantity of water resources …
C WASTE DISPOSAL TO LAND
…However, the greatest threat to ground water from waste disposal operations is posed by landfilling activities. In view of this major pollution risk the following policy statements relate mainly to waste disposal to land. The matrix following the policy statements refers only to landfill …
C3 The NRA will normally object to landfilling within Zone II (Outer Source Protection) unless it is satisfied that the waste materials do not contain significant biodegradable or other potentially polluting matter and that the site will have acceptable operationable safeguards.
There is a presumption against land filling in Zone II unless it can be shown that the waste itself is non-polluting. This covers essentially inert, naturally occurring excavated materials, but construction and demolition waste may be acceptable depending on its origin, the local conditions and the proposed method of operation of the landfill …
C6 The NRA will normally object to waste disposal activities which extend to or below the water table in Source Protection Zones. Elsewhere the presence of an unsaturated zone will normally be required but a landfill, operated on containment principles, may be considered on a site specific basis.
Wastes deposited below the water table will quickly generate leachate in groundwater ingress is not impeded. This may present operational difficulties and lead to rapid contamination of groundwater. The presence of an unsaturated zone gives an opportunity for attenuation to occur and leads to a delay in any impact on the water environment. The engineering of quarries excavated significantly below the water table will be difficult and expensive to achieve successfully in permeable strata. In such cases the NRA is likely to object to the deposition of potentially polluting waste below the water table unless it considers the engineering methods effective."
- The matrix referred to in the policy showed that, for Zone II, landfills accepting construction, demolition, industry wastes and similar were regarded as having "medium pollution potential" and that such waste was "acceptable subject to evaluation on a case by case basis and adequate operational safeguards. Material with a low pollution potential was regarded as "acceptable only with adequate operational safeguards". However, material with a high pollution potential, which were landfills accepting domestic, commercial and industrial waste, were not acceptable in Zone II.
- I find that, if it had been DM's intention to tip only strictly inert material at BHQ (which the NRA described as having "low pollution potential"), then they would have made that clear, both in the letter of 1st April and in their subsequent letters to everyone else, particularly SHMBC. Not only did this letter say the opposite (because it was referring to other kinds of waste, including contaminated waste) but when, in late 1993, DM had the opportunity of stating expressly what sort of material they wished to tip at the site, they did not say that they wished to use only inert material and they conspicuously made no mention of the NRA policy.
- On 21st June 1993, MJ sent a draft tipping agreement to the solicitors acting for Love. Then, on 23 June 1993, Mr Youngs, then DM's General Manager, and later their Environmental Compliance Manager, wrote to MJ raising, for the first time, the point that was to dominate Mr Morgan's thinking for the next nine years. The letter enclosed a copy of the 1990 planning permission. Mr Downey was asked whether he agreed that condition 11 (SHMBC approving the restoration materials) permitted the importation of materials to BHQ. The letter went on to make clear that, in Mr Youngs' opinion, the planning permission "is also a consent for the importation of restoration materials to facilitate infilling of the quarry back to at least the original ground levels and more likely to at least the three metres height of the perimeter screen bunds and that no further planning application for infilling this quarry need be applied for".
- In the context of this case, it is difficult to underplay the importance of this letter and what it reveals about DM's long-term commercial aims for BHQ. This was a site where DM had obtained extraction rights (which Mr Morgan had said might not be granted if they had not already been obtained), and where he was in negotiation for the much more valuable tipping rights. He had a planning consent, which on its face, made no reference to any consent for tipping waste material but which, by reference to condition 11, seemed to accept the possibility that some tipping might be permitted. This possibility was of huge interest to DM and Mr Morgan. If it were right, it would mean that, instead of having to make a separate application for planning permission to SHMBC for permission to tip waste material, with all the concomitant difficulties that such an application would face (which Mr Morgan had already spelled out to Love: see paragraph 41 above), there was the possibility of circumventing the whole process by arguing that the existing planning consent already allowed the tipping of waste material at BHQ.
- At the same time, DM were receiving advice from environmental consultants, Robinson Fletcher. On 1st July 1993, they sent a fax to DM which contained details of a meeting they had had on DM's behalf with the NRA. The advice was to the effect that the NRA would oppose any attempt to use BHQ for landfill. Mr Robinson went on:
"Whist I am quite prepared to fight for this site I have to say that they are very determined that it will not become a landfill – certainly not for leachate-producing wastes, although inert from known sources (such as specific tested and proven excavation from specific construction contracts) is a possibility.
The NRA are adamant that it would be "irresponsible" for them to permit even a multi-lined site in this location as it is so important for their ground water supply quality."
On the face of it, this was relatively downbeat advice, because Mr Robinson was recording that the NRA were very determined that the site would not become a landfill and that, in effect, the only possibility for infill was inert material from known sources (a more limited type of waste than inert material generally). This is again consistent with a strategy whereby Mr Robinson, on behalf of DM, was exploring the possibility of using BHQ for tipping a wide range of waste material.
- Although Mr Downey had not yet answered the letter of the 23 June, Mr Morgan himself wrote to Mr Downey on 8 July to repeat the point about Condition 11 and to repeat the question (albeit in a slightly different form). It is likely that the downbeat nature of the Robinson Fletcher advice had only served to highlight the importance of the possible argument that permission to tip had already been granted. Mr Morgan said in the letter:
"My understanding of these conditions is that the Local Authority in Condition No 11 will approve the importation of materials suitable for achieving the restoration of this site i.e., they will allow landfill …
Because in the Planning Application there is apparently no mention by the applicant of landfilling in the excavated quarry, just what is the status of the Planning Consent and in particular the Planning and Legal Status of conditions No's 11 and 17b?
My question is as follows:
If as we are now doing, we prepare a scheme of restoration in accordance with conditions No 2 – 17 of the planning consent for the subsequent approval of the planning authority, is the planning authority duty bound (legally and under the Town & Country Planning Act) to consider a scheme of restoration which achieves landfilling to backfill all of the quarry excavated so as to achieve compliance with Condition No 17(b) - such compliance being facilitated by condition No 11?
Furthermore if this turns in to a political hot potato and the Local Authority refuse to approve the scheme of restoration that we are preparing – within the statutory time period … then what chance have we of winning an appeal based on back filling the excavated quarry by landfilling, to achieve compliance with condition No 17(b)."
- In cross-examination, when Mr Morgan was asked what he meant by the phrase "political hot potato", he said that he meant simply that some applications go through the process very easily but others are very difficult "and it was either one of the other". He confirmed that that the phrase referred to the situation where there were objections from wider interests to his proposals. He accepted that those sorts of objections had the potential to feed in to any decision which was made by the planning authority. This answer was disingenuous, and designed to avoid the only obvious conclusion: that, at least from July 1993 onwards, Mr Morgan was well aware that any attempt to obtain or even confirm the right to tip waste at BHQ was going to be politically difficult. Indeed, given the number of applications that it had taken to get planning permission just for extraction, there can have been no doubt in anybody's mind that any public battle to obtain permission to tip waste at BHQ would have been very controversial. So it proved to be. That was one major reason why Mr Morgan was so keen to find out whether, in fact, he already had permission for tipping.
- Mr Downey said (Day 5/102) that he had understood the last paragraph of Mr Morgan's letter to say that, if SHMBC "were to refuse to approve the Cass scheme of restoration, then there would be no chance of winning an appeal presumably on a subsequent planning application." He said that the passage starting 'what chance have we…' was not a question for him to answer; he said, "I think it's rhetorical".
- Because the important question raised in the original letter from Mr Youngs, and the subsequent letter from Mr Morgan, was a point of planning law, in accordance with the practice referred to in paragraph 31 above, Mr Downey recommended taking the advice of JH on the matter. That was agreed. The instructions sent a copy of the planning conditions but did not send a copy of the Manstock scheme (because neither Mr Downey nor Mr Morgan was in possession of it)[1]. The instructions identified the question being whether DM 'required a new planning permission for the deposit of the waste, or whether the terms of the existing planning permission might be so construed as to permit such deposit already'. In his letter to Mr Morgan sending him a copy of those instructions, Mr Downey said that it had occurred to him that Wallington must have submitted a scheme for approval pursuant to condition 5, and he wanted to be sure that that scheme did not prevent DM from submitting an alternative scheme. Mr Downey accepted in cross examination (Day 5/94) that this was him effectively spotting the point that there needed to be a restoration scheme in place, a point which JH advised on four years later, in 1998. This point was raised, albeit in slightly oblique terms, in the first instructions to JH.
- Just pausing there, immediately before JH's first advice of July 1993, it is important to highlight a wider point in the story, which was the subject of evidence from Mr Downey on a number of occasions, but particularly on Day 5 between pages 76 – 87 of the transcript. That was Mr Downey's clear evidence that, throughout the relevant period between 1993 and 2002, Mr Morgan was adamant that, if he had to go through the process of obtaining planning permission for tipping, particularly if that involved any form of environmental assessment, he would not get it. Mr Downey said that he did not think that this view, which he said was repeated to him on a number of occasions, was based on whether or not the waste being tipped was contaminated or inert. I accept that this was Mr Downey's understanding of Mr Morgan's instructions throughout the relevant period, a point confirmed by Mr Downey's subsequent file note of October 1998 (paragraphs 141-142 above).
- On a related topic, Mr Downey also said that, by reference to the strategy of arguing that permission already existed by reference to condition 11, he always felt that Mr Morgan "knew something that I didn't, and that what he knew made the transaction [with Love] a more profitable one from his point of view that it might appear to be on the face of it". In support of that contention, Mr Downey referred to the letter of 8th July (paragraph 52 above) and the use of the expression "consent", which he suggested showed some other knowledge on the part of Mr Morgan. Mr Downey accepted that this was not a point which he had raised expressly with Mr Morgan at the time. His evidence can be summarised by reference to the transcript of Day 5 pages 86-87 and in particular:
"… again I can only say what I said earlier, that my impression was that he knew something that I did not and whether that is - was the belief that he already had a planning permission or that he could get a planning permission, I'm not able to say … I think the obtaining of an environmental assessment, the production of an environmental assessment to the planning authority was a significant issue at that time. I think that is a very important factor in the view expressed in my statement that Mr Morgan though that he would not get a planning permission.
Part of the exercise, as I understood it, part of the reason, a very significant part of the reason for wanting to – I use the word 'browbeat' in my statement, but to advance the most forceful arguments possible to the planning authority as to the existence already of a permission to infill the site, was that that would not lead to an environmental statement, an environmental assessment, being necessary."
- On the evidence before me, I am unable to say whether or not Mr Morgan knew something which Mr Downey did not. But I do find as a fact that Mr Morgan was acutely aware, from no later than early April 1993 onwards (see paragraph 41 above), that any fresh application for landfilling at BHQ would be fraught with difficulty and might very well be unsuccessful, and that by far his best tactic was to put pressure on SHMBC to accept that such permission had already been granted in 1990. That remained his position, as evidenced in numerous documents identified below, for the next 8½ years. Provided that it was arguable that there already was permission, Mr Morgan would not contemplate the obstacles inherent in any other approach.
- It was in this context that JH produced his advice of 23 July 1993. That advice was in terse terms. The key paragraphs are at 4 and 5;
"4. Generally, the importation of material would itself require planning permission in these circumstances as an engineering operation. However, it is clear from the authorities that where positive conditions require works to be carried out then the condition itself grants planning for the works required (Irlam Brick v Warrington BC (1982) JPL 708).
5. It follows that, provided the necessary consent is obtained (see condition 11) waste may be imported to this site for the purpose of restoration without a further grant of planning permission."
Although the Instructions to JH suggested that this advice might subsequently be provided to SHMBC, it does not appear that the advice itself was in any way 'tailored' for that audience, as Mr Davidson suggested in closing. That had never been suggested before, and there is no evidence to suggest that this was anything other than JH's considered view.
- The parties in this trial were agreed that this was very important advice. Indeed, as we shall see, on the basis of these very short passages, both Mr Morgan and Mr Downey believed for the next 8½ years that what I shall call the Irlam Brick principle allowed DM to tip waste material at BHQ. This advice is the subject of specific allegations of negligence raised by DM against JH (but not MJ). In that context, therefore, it is worth noting that, at the time, both SHMBC's solicitor (in a memorandum of advice dated 5 April 1994) and Mr Andrew Gilbart QC (in an advice dated 26 June 1994) seemed to agree with the Irlam Brick principle set out in JH's advice, although these advices were apparently written without sight of the documents that made up the Manstock scheme.
- It seems that JH's advice was faxed to DM. Mr Morgan said, and I so find, that he relied on that advice when, on the 22 July, DM entered into the tipping licence with Love. The licence was expressed to be conditional upon the grant of planning permission no later than three years following the date of the agreement. The agreement also dealt with the tipping of both inert and non-inert waste. Again, I find that this was consistent with DM's general strategy, which was to seek permission, one way or another, to tip as wide a range of waste at BHQ as was possible.
- Given that JH had advised that, subject to the consent of SHMBC as to waste types, the existing planning permission allowed the importation of fill to BHQ, the question arose as to why the agreement with Love presupposed that no such planning permission existed. The answer was plain. As Mr Downey confirmed (Day 5, 90-92), "It would have of course have given the game away to Love's if it had been otherwise, if there had been any indication that there might be a belief that a planning permission for waste already existed." As to the other terms of the conditional tipping licence, Mr Downey agreed (Day 5/98-101) that the agreement committed DM to pay £100,000 (whether they obtained planning consent or not) and that they were also committed not only to make such an application but to appeal an unsuccessful application for consent. DM would also be liable for the costs of the application and any appeal. Mr Downey said, and given Mr Morgan's business acumen I have no reason to hold otherwise, that "the client fully understood the potential risk to which he exposed himself by entering into this agreement." But it was also the case, at least at this point, that Mr Morgan (and Mr Downey) believed that, as explained by JH, permission to tip waste at BHQ already existed.
C5 Later Events in 1993
- At paragraph 108 of his witness statement, Mr Morgan gives the impression that, as a consequence of JH's advice, DM "could get on almost immediately with using the quarry to receive the inert demolition and construction waste which we were then generating from our civil engineering operation." Although in cross-examination Mr Morgan did not accept that this was optimistic, there can be no doubt that it was. First, by reference to the fax from Mr Robinson of 1st July 1993 (paragraph 51 above), the negotiations with the NRA were in their infancy and, as I have already noted, the NRA's position was that they were opposed to landfill at all. Secondly, there was the reality that the proposal to tip was a 'political hot potato' (paragraph 52 above), and would therefore need very careful handling. Thirdly, DM would have needed to identify the sort of waste that it intended to bring on to site so as to seek the approval of SHMBC and the NRA in respect of particular waste types pursuant to condition 11. That was not something that DM ever did. And fourthly, as Mr Morgan accepted, DM would have had to have obtained a waste management licence, something for which DM have never applied, let alone obtained, even now.
- The documents generated shortly after the conditional tipping licence was agreed in July 1993 only support the conclusion that, even on the basis of JH's advice, actually getting consent to use BHQ as a landfill site was going to be a long and arduous process. By way of example, Mr Robinson's fax to Mr Youngs on 20th September 1993 confirmed that, although this was a Zone II site, it was still anticipated "that the NRA will strongly oppose development of a leachate-producing landfill, but may accept a light contaminated soil landfill with some engineering protection as previously discussed." The natural reading of the letter is that DM, in pursuit of their policy of seeking consent to tip as wide a range of waste material at BHQ as was possible, wanted an indication about the nature of the landfill that might be accepted by the NRA. The proposal at that time obviously included "a light contaminated soil landfill": otherwise there would have been no need for Mr Robinson to raise that type of waste with the NRA and advise that this was at any rate a possibility, at least "with some engineering protection" (i.e. a liner). That is consistent with his earlier fax of 1st July (paragraph 51above): if DM had wanted to limit the waste to what the NRA might accept then, by reference to the earlier fax, they would have been seeking permission to use only "inert fill from known sources", as had been suggested by the NRA at their first meeting with Mr Robinson.
- Although the foregoing is, in my judgment, the only proper reading of this fax, Mr Morgan, when cross-examined about it (Day 2/30-32) sought essentially to rewrite the document, saying that by September 1993, the NRA had confirmed that the site was suitable for inert non-polluting, non-leachate-producing waste. On any analysis, this letter says no such thing. Furthermore, although Mr Morgan said that DM did not intend to use the site for light contaminated soil, I am obliged to conclude that this was because such a stated intention was inconsistent with his case now, rather than the true position at the time. He also referred again to the NRA policy and DM's wish to comply with it, an intention that was singularly absent from the contemporaneous documentation emanating from DM or Robinson Fletcher, either in September 1993 or subsequently.
- The exchanges during the latter part of 1993 between Mr Morgan and Mr Downey also indicate that, in reality, Mr Morgan was aware that obtaining consent, in whatever form, might be difficult. For example, in answer to a question raised by Mr Morgan in a letter of 12 August 1993, Mr Downey replied on 18 August to warn Mr Morgan that if the tipping licence was already unconditional (because JH was right and the planning consent included the implied right to tip), then DM would be liable to pay the royalties to Love as set out in that agreement "no matter what difficulties you might encounter in obtaining the local planning authority's approval of the restoration material".
- On 18 October 1993, DM wrote to Barclays Bank plc. This important letter was not disclosed by DM until recently, and only then because their expert, Mr Barry, sought to rely on it. The letter stated in terms that DM wished "to apply for term finance in respect of the following additional investments". This included BHQ, which was the first site referred to in section 2 of the attachments to the letter. DM told the bank that BHQ was a sandstone quarry "and it also has a planning consent permitting waste disposal". The importance of BHQ was stressed: it was said that, at 6 million cubic metres, the size of BHQ dwarfed all other facilities under the control of DM and its related company Brock plc. The cash flow set out in that section was said to be based on a figure of 7 million cubic metres of waste disposal void space. The letter went on:
"From the forecasts, it can be seen that the earnings and profit potential for the company are enormous. We intend to open up the site to receive a mix of low level contaminated and inert wastes in classes A, B, C and D."
- This was a reference to what were known as the Kelly categories of waste material. Soil Class A was 'uncontaminated soil'; Class B was 'slightly contaminated soil'; Class C was 'contaminated soil'; Class D was 'heavily contaminated soil'; and Class E was 'unusually heavily uncontaminated soil'. Thus, this letter was saying in unequivocal terms that DM's intention was that a wide mix of fill material would be used, including both inert and contaminated fill. Indeed, every possible category of fill was intended except for Class E, the most contaminated form of fill possible.
- The letter went on, under a heading 'Strategic Importance of Landfill Developments/Investments', to say that DM and Brock (a related company) "have gone through an uncomfortable period where we have had no 'in-house' contaminated land waste disposal facilities… This situation will be resolved now as all the sites identified in both sections 1 and 2 (including the vast potential space at BHQ) becomes available." The letter said nothing about any need for uncontaminated land waste disposal facilities.
- This letter plainly posed all sorts of difficulties for Mr Morgan when he was cross-examined (Day 2, pages 34-49), because it was so contrary to the case he now wished to advance, namely that DM always intended to use BHQ for strictly inert waste only. His attempts to avoid the clear words used in the letter were many and various. For example, at one point he suggested that the letter had been written by an accountant who was not aware of DM's intentions for the site (page 42 lines 14-15), although he subsequently accepted that certainly the part of the letter relating to BHQ noted above (including the statement of intent to tip Classes A, B, C and D contaminated waste at the site) was written by him (pages 49-50). He then sought to deny that the letter was an application for term finance (although that is what it clearly said it was, and it was on that basis that Mr Barry had sought to rely on it) and had a long and frankly convoluted story about a new bank manager and the writing of what he called "dummy proposals". He repeatedly denied the stated intention to use BHQ for contaminated fill, despite the clear words of DM's letter to its own bank. Furthermore, his explanation was contrary to DM's schedule of loss attached to the pleading, and signed by Mr Morgan himself, where he said that the scheme subsequently put forward on his behalf by Cass Associates "superseded the application for bank funding" as set out in this letter.
- I was left in no doubt that Mr Morgan's oral evidence about this letter amounted to no more than a desperate attempt to contradict the clear statements of intent made by DM at the time, because they were inconsistent with his claim for damages in this litigation. The letter to the bank is clear. It is also entirely consistent with the other contemporaneous documents, noted in the preceding paragraphs, which leave the reader in no doubt that, for entirely understandable commercial reasons, DM wanted to maximise the commercial value of this site and therefore wanted to try and use it for the tipping of the widest possible range of waste types. The whole thrust of the letter was in relation to contaminated land waste disposal facilities, and the strategic importance of BHQ in that analysis. There was, as Mr Morgan accepted, nothing in the letter about uncontaminated land waste disposal facilities.
- As noted in paragraph 66 above, the other important document generated towards the end of 1993 was the production by Cass Associates of a restoration and aftercare scheme for BHQ. The instructions to Cass Associates have not been disclosed, which is an unfortunate omission, given that the scheme which they produced was the principal vehicle by which DM hoped to carry out landfill operations at BHQ under the existing planning permission, and was relied on up to January 2002. It was, therefore, an extremely important part of the story and it would have been of assistance to see what Cass Associates were told by DM when embarking on their task. The subsequent evidence demonstrated that the scheme itself was not devised by Mr Cass but by one of his associates, a Mr Wake.
- Although the Cass scheme was prepared on behalf of DM, it was submitted by Wallington to SHMBC on 24 November 1993. It sought "the approval of [SHMBC] to bring the site to a standard fit for commercial woodland linked with amenity facilities, car parking and public footpaths as an alternative to agricultural restoration." It is fair to say that the issue of tipping is not addressed up front in the Cass scheme at all. Indeed, the only real reference to it is at paragraph 5.10 where, in relation to condition 11, it is said that "to achieve this restoration, approval is sought for materials arising from works of construction, demolition, landscaping/reclamation to be covered with 1.2 metres of subsoil and topsoil to allow for future installation of a piped drainage system if required."
- The first point to note is that the Cass scheme – the only place before 2002 where DM made a formal statement as to the type of waste it intended to use as infill at BHQ – did not state that the infill materials would be inert waste only (which is what Mr Morgan claimed throughout his evidence). Neither did it propose the possible waste type which the NRA had suggested to Mr Robinson ("inert from known sources, such as specific tested and proven excavation from specific construction contracts"; see paragraph 51 above). On the contrary, it referred to a proposal to tip "materials arising from works of construction, demolition, landscaping/reclamation" which, as explored in paragraphs 77-81 below, was not only not within the narrow category that had been suggested by the NRA as potentially acceptable, but was a type of waste which, to DM's own knowledge, was defined as including contaminated material. Again, therefore, the only conclusion that one can reach is that the Cass scheme was very careful not to limit DM as to the type of waste that might be tipped at BHQ. If DM had truly intended to restrict themselves to inert or strictly inert or uncontaminated waste only, then this was the perfect place for that statement to be made. Instead, a much wider range of waste was identified. Mr Morgan's only explanation in cross-examination was that the absence of any express reference to contaminated materials as such meant that, in some way, this reference had to be taken to mean non-polluting inert material. It appears to be a point made by reference to what is not referred to in the Cass scheme, as opposed to what is. In my view, that is not a proper approach to such an important statement of intent. It is a convoluted explanation which is contrary to the clear words of the Cass scheme itself. It was in any event contradicted by the subsequent evidence of Mr Youngs, to which I refer below.
- Another important point that arose subsequently was the scale of the Cass scheme. Unlike the Manstock scheme, the Cass scheme was a high-level restoration scheme. It was in that way that the amount of space for tipping was maximised, for DM's commercial benefit. And yet nowhere in the Cass scheme was the volume of imported fill material ever identified, let alone calculated. Subsequently, a range of figures of 5, 6 and even 7 million cubic metres of waste material was used as the total amount of waste encompassed by the Cass scheme. In my judgment, this omission was as deliberate as the carefully open-ended reference to the materials to be used for infill. I have no doubt that, if Cass had stated up front in their scheme just how much infilling would take place at BHQ, they knew that their scheme would have been automatically rejected. Unfortunately, this then meant that it was only by way of subsequent calculation that the true scale of the tipping operation envisaged by the Cass scheme became apparent. This rather underhand way of proceeding was not, so it seems to me, the best way of ensuring a co-operative attitude from SHMBC.
- Certainly, a co-operative attitude was not forthcoming as a matter of fact. On 21 February 1994, SHMBC wrote to Wallington to say that the Manstock scheme had long been approved and that there was no requirement for any further submission. The letter went on:
"Your latest proposals for the Bold Heath Sand Quarry differ radically from the approved restoration scheme. Should you wish the Council to consider an amendment to the approved scheme, in view of the nature and scale of the proposals and the inclusion of waste infill, which was specifically excluded from the determined application, a new planning application including an environmental impact assessment will be required." (My emphasis)
The battle lines were being drawn.
- It is convenient to deal here with some of the evidence given during the trial about events on other sites operated by DM and Brock. The evidence of what happened on these sites during this same period is of some relevance in trying to divine DM's strategic and commercial interests at BHQ. One such site was at Hapsford. Mr Morgan confirmed that that was originally licenced for inert wastes only but, after the licence had been granted, Robinson Fletcher designed and engineered a containment landfill scheme to accommodate a wider range of materials. The site eventually acquired a modified licence for contaminated soils in Classes A-E of the Kelly scale. Thus DM were well aware that a process of 'creep' – applying for limited permission and then subsequently widening it – could be successful.
- The other site was at Ewloe. That was another site where DM sought to broaden the scope of their planning permission so as to tip a wider range of waste materials. The application to extend the range of permitted materials was unsuccessful, and there was an appeal. For the purposes of the appeal hearing, Mr Youngs prepared a proof of evidence. In that proof he said this:
"In our experience analysis of materials leaving typical construction projects has placed these earths in categories C to D, which classes them as contaminated or heavily contaminated.
It is a fact that almost all excavations in urban areas produce class C to E materials.
Much of this material in the past has been disposed of at 'inert' sites, it is only the new Duty of Care legislation which has led to careful analysis of all waste materials that has highlighted the fact that most materials do have raised contamination levels.
… as already stated, it is currently the practice of Waste Regulatory Authorities to insist that levels of contamination above grade B [i.e. C, D, and E] can only be disposed of at engineered sites and it is for this reason that we wish to engineer the Ewloe site to accommodate these materials…
Conclusion
The Duty of Care legislation has led to a reclassification of waste materials which together with the reclamation of clean materials has resulted in a large reduction and shortfall of inert materials to infill and restore suitable areas of land." (My emphasis)
- The passages as to soil types are crystal clear: the sort of construction and demolition materials which DM wished to tip at BHQ were, according to DM's own compliance officer, in Classes C and D (and even sometimes E) and were, by reference to Kelly, contaminated and heavily contaminated soils. Again that was contrary to DM's case now. Therefore, when this proof was put to Mr Morgan (Day 2, pages 63-71), he sought to reinterpret what Mr Youngs had said by reference to a whole series of matters which were not in Mr Youngs' statement. At one point he even sought to argue that Mr Youngs was only referring to hard materials, and not soft materials, which was plainly wrong, given the references to "soils" in Mr Youngs' written statement. In the end, on this important point, Mr Morgan was driven to say that Mr Youngs was simply "making the case out here for a planning inquiry for contaminated materials into this site".
- Further, in respect of Mr Youngs conclusion that there was a shortfall of inert materials for infilling, Mr Morgan said that this was incorrect and was again explained by Mr Youngs' "making a case out" for DM in the appeal on Ewloe. It was inherent in both these answers that Mr Morgan was saying that Mr Youngs' statement, which he had apparently adopted when he gave evidence at the Ewloe appeal hearing, was deliberately misleading but, because it was designed simply to improve DM's case on the Ewloe appeal, that deception was somehow acceptable. He was asked whether the misleading nature of the Proof was a matter of regret to him, a question which, at Day 2, page 72, he did not answer.
- In my view, either Mr Youngs' statement must be taken at face value, which would provide yet further confirmation for the conclusion that DM were looking at BHQ as a site for a wider range of infill than simply inert fill (of which there was, at that time, a shortage, according to Mr Youngs) or, as Mr Morgan would have it, Mr Youngs was prepared to give evidence in a planning appeal which he knew to be incorrect and misleading. It was regrettable that Mr Morgan was so cavalier about the accuracy of the evidence given in a Public Inquiry by one of his employees. I confirm that, in my judgment, the former is the only possible conclusion that I can draw. I find that Mr Youngs' statements were correct and accurate. They were also consistent with the other documents that I have previously referred to, which makes them inconsistent with DM's case now.
C6 The Impasse: 1994-1998
- As noted in paragraph 76 above, on 21st February 1994, SHMBC turned down the Cass scheme in clear terms. Between 1994 and 1998, whilst the quarrying continued at BHQ, the position in relation to the planning situation was not advanced at all. There was a four year impasse, the first of three separate periods of delay for which DM were solely or principally responsible. On this occasion, the delay occurred because it was not high on DM's list of commercial priorities to obtain a resolution of the planning dispute that had arisen. Had it been, they would have taken action years before they did (and even then, in 1998, they only reacted because of the threat from SHMBC of enforcement proceedings). Instead, DM pressed on full speed with the quarrying, whilst adopting a 'softly softly' approach to the waste issue, trying to get the statutory bodies like the NRA and the Environment Agency on board, in part by undertaking careful, and slow, monitoring exercises and other investigations at the site. It was what Mr Morgan subsequently described as 'our technical approach'.
- On 11th March 1994, Cass Associates replied to SHMBC's refusal to consider their scheme. The letter was drafted by Mr Morgan. Amongst other points, he raised the issue of "the approved scheme of restoration" and questioned what that was. Eventually, it would become apparent that this was a reference to the Manstock scheme. On 14th April 1994, Mr Morgan wrote to Mr Downey to say that Mr Hobbs of Wallington had been in regular contact with Mr Molloy, one of the officers at SHMBC. Although Mr Morgan had had no involvement in those conversations, and was therefore repeating what he had been told by Mr Hobbs, he said in his letter that SHMBC "now accept that they have granted a consent for infilling at least to surrounding ground level and that waste disposal is a permitted activity". In truth, there was nothing which independently supported any such concession, which had not been and never would be made by SHMBC. This was one of a number of similar examples of Mr Morgan's forceful personality: he always looked at things from an optimistic – and sometimes over-optimistic - viewpoint, as if he could, by force of will alone, turn aspiration into reality.
- The real issue in the letter was the reference to SHMBC's belief that they should determine waste types under condition 11 and that they did not agree that it was ultra vires for them to do so. Mr Morgan said:
"The problem is that I have 'no right of appeal' if they are restrictive in their approval. This is a significant potential problem. Is there a way around this issue?"
Again on its face, this question appears to be prompted by the fact that DM was proposing to bring on to site a wide range of waste materials and were concerned that SHMBC might be restrictive in operating the condition 11 approval process, so as to prohibit the importation of potentially contaminated material. Of course, because that was contrary to his claim in these proceedings, Mr Morgan said in evidence that actually there was no problem about the type of fill, because it would just be non-polluting inert materials (which was not what had been said in the Cass scheme) and that his worry was that the Waste Regulation Authority should deal with it rather than the NRA. I reject that explanation for his stated concern; the issue about which body would approve the material type was a separate issue expressly raised by the last question in the letter, and was nothing whatsoever to do with Mr Morgan's worry about 'the restrictive approach' of SHMBC under condition 11. In re-examination, Mr Morgan purported to say that his worry was that SHMBC might refuse everything. But that was inconsistent with paragraph 1 of the same letter, which was to the effect that SHMBC had agreed that waste disposal was a permitted activity. Again, I found Mr Morgan's attempt to explain away a document that was contrary to his claim in these proceedings to be unconvincing.
- Again, in accordance with his practice, Mr Downey asked JH to advise on the issue of whether SHMBC could approve waste types. Mr Downey accepted that his instructions to JH were specific and limited to the powers of SHMBC to reserve to themselves, pursuant to condition 11, the right to approve restoration materials. The Cass scheme itself was not sent to JH, although the letter of 11th March (paragraph 79 above) was sent to him.
- Again, JH's advice was crisp. He said:
"3.Although this permission is not and is not capable of being an outline permission where the General Development Order 1988 specifically allows the reservation of matters for subsequent approval, it has now been decided that such conditions are lawful in other types of permission. [R v Newbury DC ex parte Stephens [1992] JPL 1057].
4. Condition 11 is therefore valid.
5. If the Authority refuse their approval, there is a right of appeal to the Secretary of State [see section 78(1)(b) of the Town and Country Planning Act 1990]."
No allegations arise against either JH or MJ in respect of this advice.
- It appears that Mr Morgan raised a query on JH's advice in relation to section 78, because that was the subject of a subsequent letter from Mr Downey to Mr Morgan dated 18th May 1994. Mr Downey said:
"The section refers to the refusal of an application for any consent or approval, and certainly will encompass an application for approval of waste types. It seems to me that it will apply equally whether the planning authority declines to approve any type of waste, or one particular type."
Again, it seems to me that this letter is only consistent with a continuing concern on the part of Mr Morgan, evidenced by his question to Mr Downey, that SHMBC may be restrictive as to which waste types they accepted and which they did not. That was more likely to be of concern if DM wished to tip a wide range of fill at BHQ, rather than if, as Mr Morgan now claims, they wanted only to tip inert waste.
- On 14th July 1994, SHMBC reiterated the point about condition 5 and the restoration scheme in their letter to Wallington. They said:
"The restoration scheme for the Bold Heath Quarry was an integral part of the planning application. Confirmation of this scheme is implicit in your confirmation of the scheme and programme of working contained in your letter dated 22nd January 1991, and as required under condition 5. Significant amendments to this approved restoration scheme, such as that submitted, will require planning permission. I enclose therefore a set of application forms for your use. …
You will be aware, following the meeting of 22nd March, that the scale of the existing proposed landfill is likely to be unacceptable, and I would recommend therefore that a further meeting to discuss the content of any revised restoration scheme, prior to the submission of a planning application, would be advisable." (My emphasis)
The letter also confirms that condition 11 was valid and that SHMBC had received counsel's advice to that effect.
- Mr Morgan was asked questions about this letter (Day 2/87-92) and was asked, on a number of occasions, why he was unwilling to submit a planning application on the basis of the Cass scheme. He gave a number of different answers to this question. For the avoidance of doubt, I find on the basis of all the evidence noted above and below, that whilst there was even the smallest chance of being able to tip waste at BHQ without embarking on a fresh application for planning permission, DM (and Mr Morgan) did not want to make any such application. In other words, it was only if they were advised that a fresh planning application represented the sole mechanism by which consent to tip could be achieved that DM would have embarked on such a course.
- There then began a lengthy cycle of correspondence in which the same points were restated, in slightly different terms, by SHMBC on the one hand, and Wallington/DM on the other. It is unnecessary to set out all of these exchanges: one example will suffice. On 20th July 1994, Wallington referred to Irlam Brick in a letter to SHMBC and said that it followed that materials could be imported to the site for the purpose of restoration, satisfying condition number 17, without any further grant of planning permission. In SHMBC's response of 22nd August 1994, they referred again to the approved restoration scheme; that the permission was not sufficiently flexible to allow amendments to the restoration scheme and that any amendments would require planning permission; and that, whilst the permission did allow the importation of material for the purposes of restoration, the nature of any such fill could be a material planning consideration.
- In this letter, SHMBC also noted that the original application "specifically excluded the importation of waste". This of course was a reference to paragraphs 3.5 and 3.6 of the Manstock scheme (paragraph 25 above), although it seems that at this stage, neither Mr Morgan nor Mr Downey had yet seen a complete copy of the Manstock scheme and its express disavowal of the importation of waste. SHMBC also noted that the current restoration proposals (ie Manstock) left the site in a depression which was not free-draining and required continual pumping which, Mr Molloy frankly accepted, was "a situation [which] is far from ideal". The letter again invited pre-application discussions. In relation to this letter, in answer to the question as to why DM did not simply make an application, as requested by SHMBC, Mr Morgan said that he had been advised that he already had planning consent for infilling, which was, of course, only half the story (see paragraphs 47, 58 and 89 above).
- On 8th December 1994, Mr Morgan wrote to Mr Downey in relation to condition 17, seeking to draw a distinction between the aftercare scheme and the restoration requirements. That letter suggested, for the first time, the possibility of judicial review, although precisely what it was that was to be reviewed was, and always remained, unclear. The letter appended a detailed briefing document which set out Mr Morgan's own analysis of the planning position, and which stated in unequivocal terms that DM already had planning permission for infill. On 20th December, Mr Morgan informed Mr Downey that he needed what he called "a legal letter" advising Mr Hobbs in relation to the planning conditions. He drafted that letter, on the basis of his earlier briefing document, and asked Mr Downey to sign it.
- In addition to Cass, DM/Wallington had retained agricultural consultants, ADAS. Mr Morgan hoped that they would provide an independent review of (and support for) the Cass scheme which would then persuade SHMBC to change their minds. ADAS produced a draft report in February 1995 which was considered and amended by Mr Morgan. The report, when dealing with aftercare, stated that:
"Aftercare may include measures designed to control leachate and landfill gas where control wastes have been deposited as part of the reclamation. However these measures can be required only during the aftercare period … whilst the generation of leachate and landfill gas will often continue well beyond this."
Of course, this was again consistent with the possibility of tipping a wider range of waste at BHQ than simply inert material. Mr Morgan said that the paragraph noted above was of no relevance to BHQ, so that these measures were not required but, if that were right, it made no sense to include the passage in a report dealing specifically with BHQ.
- Other documents at this time were also consistent with DM's policy/intention that a wider range of waste might be deposited at BHQ, as opposed to strictly inert fill. On 2nd March 1995, Robinson Fletcher sent to Mr Morgan the relevant part of the Waste Management Licensing Regulations, 1994, concerned with groundwater. Regulation 15, which is concerned with the issue of a waste management licence, stated that, prior to any such licence being considered, the proposed activities must be the subject of prior investigation, which would include examination of the hydrological conditions of the area concerned, the possible purifying powers of the soil and sub-soil, and the risk of pollution and alteration of the quality of the groundwater from the discharge. The investigations would also establish whether the discharge of substances into the groundwater was a satisfactory solution from the point of view of the environment. Mr Morgan confirmed that this document was sent to him in the context of addressing how DM might go about obtaining a waste management licence for BHQ, a task which Robinson Fletcher were subsequently set by Wallington in their letter of 28th March 1995.
- In their reply to Wallington of 3rd April, Robinson Fletcher confirmed that assistance in obtaining a waste management licence was very much their line of business. Amongst other things, the letter identified understandable confusion on the part of Robinson Fletcher as to the scale of the Cass scheme, referring to the available volume at BHQ as '7,000,000 plus cubic metres'. The letter also contained this paragraph:
"An engineering 'containment' concept should be discussed with the Waste Regulation Authority, including control and disposal of leachate and if necessary, dependent upon the waste types, a landfill gas monitoring control system. These 'engineered' designs are in common use on many landfills around the country and are all matters for site licensing. It is undoubtedly the case that a wide range of waste types including biodegradable material will need inputting to restore this quarry in an acceptable timescale and a fully contained landfill will be required at least for part of the area. It is our opinion that the restoration of the quarry would be impracticable if material types were restricted to non-leachate-producing inert material as the volumes are not available. Government policy presently encourages the recycling of such inert materials, rather than disposal and the effect of the proposed landfill levy may further reduce the supply of inert fill."
- This passage is contrary to DM's claim in two ways: again, it is talking about containment, monitoring systems and the like, at least some of which would have been unnecessary if, as Mr Morgan now claims, DM were only interested in tipping strictly inert waste at BHQ. It is entirely in keeping with the documents reviewed above, which make plain that DM were intending to tip a wider range of waste at BHQ. In addition, Robinson Fletcher were making plain that a policy of tipping only inert waste was implausible and impracticable because the volumes of inert material were simply not available. That was the very same point that Mr Youngs had made in respect of the Ewloe appeal (paragraphs 78-80 above).
- Notwithstanding those obvious difficulties, when Mr Morgan was cross-examined about this document (Day 2/100-107), he endeavoured to avoid the clear effect of the words. In particular, he said that he disagreed with Mr Robinson's advice about the lack of availability of inert material. In fact, references to this issue, that sufficient volumes of inert material were simply not available for landfilling purposes, had not only been made by Mr Youngs, but can be found in a number of the subsequent documents, identified below.
- In the summer of 1995, the Merseyside Waste Disposal Authority ('MWDA') advised Wallington that, because of the aquifer, the acceptability of landfill at all, and the type of waste and the level of containment engineering required if any landfill was accepted, would depend "very much" on the NRA view. In consequence, DM began sinking water-monitoring boreholes in and around the BHQ site to investigate the water table (which was rising) and related matters. During the latter part of 1995, nine such boreholes were installed. In 1996, DM sank two further boreholes on neighbouring land. As noted above, this kind of investigation was one of the steps necessary pursuant to Regulation 15 of the Waste Licensing Management Regulations 1994 (see paragraph 94 above), the results of which had to be ascertained before an application for a waste management licence could be made, let alone considered and granted.
- Also during the summer of 1995, discussions continued between Mr Hobbs and Mr Molloy of SHMBC. It does not appear that Mr Molloy was convinced by the ADAS report and so the representatives of ADAS met Mr Molloy direct. They advised on 2nd August 1995 that SHMBC would prefer a scheme to be submitted in the form of a planning application for waste infill, with a final landform lower than that presently proposed. Mr Molloy's support for a scheme of infilling with inert material was noted, subject to the proviso that such a scheme was reasonable. In their letter ADAS said that they had pointed out to Mr Molloy that the local population would oppose any such application and that as a result the councillors would turn it down. This is further confirmation of the political and public opposition that DM were trying to avoid by arguing that they already had permission to infill. ADAS noted that Mr Molloy said that any infilling of the quarry without a new planning permission "will result in enforcement proceedings". They described the position as "an impasse".
- It seems to me plain from these (and earlier) documents that SHMBC's officers were concerned, not about the principle of infilling with waste material (provided that it was not contaminated and proper engineering safeguards were put in place, such as a liner), but about the scale of the Cass scheme. They did not like it, not because it involved infilling with waste, but because it involved so much waste potential. The clear invitation to scale down Cass was never taken up by Mr Morgan, because he was not prepared to compromise on this issue; after all, the bigger the restoration scheme, the bigger DM's profit from the landfill operation. It also seems clear from this letter that SHMBC were concerned to ensure that any scheme was properly scrutinised: hence their desire for a fresh planning application. They were obviously aware that even a lesser landfill scheme would be unpopular and politically controversial. The potential unpopularity of a large scale tipping operation at BHQ was put to Mr Morgan, who denied that he was worried that any proposed scheme for inert infill would be unpopular. He said that the letter simply involved ADAS "exploring the options". Again, that seems to me to be wholly implausible, given this clear contemporaneous reference to the unpopularity of Mr Morgan's plans.
- In addition, Mr Morgan purported to explain in his evidence that what Mr Molloy was saying at the meeting (which Mr Morgan did not even attend) was that there were no grounds for turning down an application to tip waste on this site, and that even if the application was turned down, an appeal would certainly be granted. That is a complete rewrite of what Mr Molloy was reported by ADAS to have said, as set out in this document. The letter says, in terms, that Mr Molloy wanted a different, lesser scheme; he wanted infilling with inert material only; and that he would be supportive of a scheme "provided it was reasonable". To suggest, as Mr Morgan did in his evidence (Day 2/110), that somehow this represented a green light from SHMBC for a landfill scheme which had not even been proposed is, I am afraid, fanciful. It did, however, illustrate the lengths to which Mr Morgan was prepared to go to advance his claim in these proceedings.
- The limited concessions made by Mr Molloy on behalf of SHMBC at the meeting with ADAS did not advance the position because, in the subsequent correspondence, MJ (on behalf of DM) adopted the stance that the existing permission allowed Wallington to import material to infill and restore the site and that the Manstock scheme was not compliant with condition 17. SHMBC said on 5th September 1995 that Wallington was entitled to import materials onto the site for the purposes of the approved restoration scheme, as long as those materials had been approved by the mineral planning authority and they invited Wallington to submit details for approval. That invitation was ignored. In MJ's response of 7th September, they merely reiterated the condition 17 point. As ADAS had advised, an impasse had been reached so, on 18th September 1995, Mr Downey suggested to Mr Morgan that the time had come for a detailed discussion with JH. The same suggestion was made to Hobbs. Unfortunately, the suggestion was not taken up and it was a further four years before such a consultation took place.
- Instead, MJ sought full information from SHMBC and copies of the relevant documents. SHMBC were happy to make their records available for inspection but refused, as they were entitled to do, to provide copies. In December 1995 Mr Downey suggested to Mr Morgan that somebody on his behalf should go through the relevant documentation. In fact, that inspection was eventually carried out by Mr Morgan himself, but not until 1997.
- Nothing happened on the planning side in respect of BHQ between December 1995 and June 1996. This long period of inactivity was put to Mr Morgan and, although he denied it, there was no evidence of any specific event, letter, meeting or telephone conversation relating to BHQ during this time. In fact, it appears that matters only became urgent in June 1996 because, pursuant to the tipping licence with Love, the condition in respect of planning permission had not been fulfilled and there was a risk that Love would, as Mr Morgan put it, 'walk away with his £100,000 and DM would have nothing to show for it'. Therefore, DM needed to get an extension of the tipping licence. Accordingly, at pretty much the last minute, Mr Morgan activated Mr Downey. The two men met or spoke on 19th June 1996 and Mr Downey made a detailed note of that discussion. That manuscript note was then used as the basis for the letter that Mr Downey wrote to Love's solicitors on 21st June 1996.
- The letter referred to JH's advice as to planning permission for waste disposal at BHQ and then dealt in some detail with how and why, in DM's view, what were called "the present objections to waste disposal" could be overcome in the not-too-distant future. Of course, as already noted, Mr Molloy of SHMBC was not expressly objecting to inert fill, so it would again appear that this letter was more concerned with the objections, which have been noted above, to the use of a wider range of fill. That is supported by the following passage in the letter:
"There is little doubt that the existence and proximity to the site of the water abstraction borehole does prejudice the use of the site for waste disposal purposes. At one time it was thought that the water taken from that borehole was saline, and of little use in the general water supply, but that has now been found not to be so. There is therefore a current presumption against waste disposal within the quarry, and to overcome that presumption it will be necessary either:-
(1) to purchase and decommission the borehole (which I understand is not in fact an available option) or
(2) to evidence by hydrogeological investigation that waste disposal within the quarry will not have an adverse environmental effect on the aquifer."
The letter then referred to the boreholes commissioned by DM in accordance with Regulation 15, and noted that the water table was rising "and theoretically could rise above the existing base of the quarry". The letter went on to refer to another DM site, Sandy Lane in Macclesfield, where DM were negotiating to overcome the Environment Agency's policy of protecting ground water within certain zones, in relation to specific waste types. At Sandy Lane, DM were seeking (and eventually obtained) permission to tip waste up to and including Kelly Class C (contaminated soil). The letter said that it was expected that these negotiations would be successful and that it would then be DM's intention to use Sandy Lane as a precedent for BHQ.
- The letter went on:
"Further, at the company's Hapsford site – and with Bold Heath in mind – it has been found that leachate derived from wastes including contaminated earths and up to 5 percent by volume of industrial paper wastes has proved to be acceptable for discharge directly to the public sewer. It can therefore be demonstrated, by the evidence of that site, that the risk of pollution to the aquifer from the same waste types is low.
Accordingly, strategy which my client would now propose for the Bold Heath site is to prepare an application for a waste management licence using for that purpose all the information obtained from the site assessment, and using my client's experience from other sites, thereby demonstrating that Bold Heath can be engineered to control leachate and that leachate from contaminated earths is not highly pollutant…… "
The letter ended with this statement:
"To repeat, it is my client's firm view that putting in an inadequately prepared application for planning permission now, merely to meet the requirements of the current agreement, would be extremely prejudicial. The better way forward is undoubtedly as described above, and my client remains confident that a successful outcome can be achieved. However, we do need a demonstration of your client's confidence in D Morgan PLC by a renewal of the agreement."
The letter sought an extension of the tipping licence of 5 years.
- Two points are plain from the letter. The first is that DM was planning to use the BHQ site for landfilling with contaminated earths: that is what the letter says. And that was what they were also seeking at Sandy Lane, which could then act as a precedent. The second is that, because of the ongoing investigation and monitoring works, referred to throughout the letter, DM were simply not in a position to make any sort of planning application (even if they had wanted to) or to make an application for a waste management licence. Of course, although these conclusions arise from the words used by Mr Morgan in the letter, they are again contrary to DM's case in these proceedings.
- The letter was the subject of another attempt by Mr Morgan to rewrite the contemporaneous documents (Day 2/120-135). He described the contents of the letter as "a negotiating tactic". He said that he wanted to encourage Love to believe that they would get a higher range of values for the material tipped at BHQ. He said that, despite the clear terms of the letter, it was not true that DM wanted to get contaminated soils into BHQ. Although he was obliged to say that this letter, written on DM's behalf, was neither true nor correct, I am again unable to accept that proposition. This was a detailed solicitor's letter setting out a whole range of information, predicated on the clear assumption that DM intended to tip a mixed range of waste at the site. It is fanciful to suggest that what the letter said about BHQ was entirely false; that would have been in no-one's interests, particularly not DM's.
- Furthermore, the letter achieved its desired effect because, after further exchanges of correspondence and negotiation, the tipping licence was indeed renewed, albeit the extension was for 3.5 years rather than the 5 years originally sought. Furthermore, Mr Morgan maintained the same approach during the final stages of the negotiations, writing letters to Mr Downey which, far from suggesting that what was being said to Love's solicitors was untrue, made plain that both the detailed investigations and the possibility of tipping a wide range of waste was precisely his object. Thus, by way of example, in his letter of 13 September 1996 to Mr Downey, which described BHQ as a sensitive location where there would be a large penalty in commercial terms if DM failed to obtain a waste regulation licence (because of the extremely large volume of void space), Mr Morgan said:
"I am obviously not prepared to compromise our 'technical' approach by rushing a result at Bold Heath, which result has a high risk of failure.
I will seek to apply these principles at BHQ already tested out with the EA elsewhere at other sensitive locations under our control, coupled with our acknowledged successful track record in negotiating with the EA in securing waste management licences, subject to planning…
As explained, I am advised that having first proved the suitability of the quarry for waste disposal (to the satisfaction of the Environment Agency, to remove their prejudice which Robert Love is already aware of), I must first go to the High Court for a declaration that the existing planning permission already permits waste infilling.
If however, I am unsuccessful in the High Court, I must immediately prepare a planning application for waste infilling, which politically stands a good chance of rejection, resulting in my pursuing an appeal.
The timing of an appeal must by necessity be a consequence of the consultation and decision making process first with the Environment Agency, then the High Court and finally, possibly with the Planning Authority …
I repeat the point that our actions are driven by the consequences of consultation and in this respect it has already been explained that DM needs another Winter (this Winter) of on-site borehole monitoring before it can even assess the consequences of a rising or falling water table with respect to:
(i) the existing quarry depth
(ii) determination of an unsaturated zone, in providing a buffer between waste and the aquifer
(iii) a three-dimensional ground water model with then be commissioned followed by proposals to engineer the quarry for waste, which engineering design process will have regard to the Regulation 15 Assessment, which will determine the risk of pollution to the aquifer."
In the penultimate paragraph of the letter Mr Morgan reiterated that he wanted to avoid "an ill-conceived case [which would result] in refusal [which] will for all time prevent waste being infilled in this quarry".
- I find that this letter was again only consistent with DM's policy of doing all it could to achieve consent for tipping a wide range of waste at BHQ without making an application for fresh planning permission. In addition, where the letter talked about a planning application for waste infilling which "politically stands a good chance of rejection", I find that this was no more than an accurate reflection of the reality of the position throughout the 1990's of which both SHMBC and Mr Morgan were acutely aware. Mr Morgan's plan, set out in the letter, was to make a fresh application only if there was no other alternative, and his preferred strategy was to work with the EA to persuade them of the technical merits of his case.
- Not unnaturally, Mr Morgan was asked a good many questions about this letter in cross-examination (Day 2/136-147). First, he was asked about his comment that he would first need to prove "the suitability of the quarry for waste disposal (to the satisfaction of the Environment Agency, to remove the prejudice which Robert Love is already aware of)". Mr Morgan confirmed that the prejudice was against the wider range of waste (i.e. including the higher value contaminated material). It was therefore put to him that he was saying that it was his objective to prove the suitability of the quarry to take those higher value wastes. He agreed, but said that that was what he and Mr Downey had discussed "as the tactic for him to say", possibly forgetting that this was not a letter being sent to the other side for negotiating purposes, but a letter which Mr Morgan himself was writing to his own solicitor. It is plain therefore from this letter that Mr Morgan's objective was to prove the suitability of the quarry to take the higher value wastes.
- Secondly, as to the clear statement that the planning application for waste filling politically stood a good chance of rejection, Mr Morgan sought to elide this with the possibility that the application would follow on from an unsuccessful claim in the High Court, and it was only the fact of the lost court case that would make the scheme unpopular. I am unable to accept that explanation: not only is it not what the words say, but, as I have already said, the reference to the political difficulties faced by any application to tip waste at BHQ can be found scattered throughout the contemporaneous documents, and long before either court proceedings or the appeal against the enforcement notice. Those political difficulties were not created simply because, on this scenario, Mr Morgan would have lost an action in the High Court as to the meaning of the planning consent; they were a fact of life for Mr Morgan for the best part of 20 years.
- Thirdly, although the letter on its face appears to make plain that there was a good deal of work still to be done before a waste management licence could even be applied for, Mr Morgan said that actually such work was not necessary, and that the references to groundwater levels were somehow irrelevant because the water table was "hundreds of metres down" and it would take years before it got back up to the level at the bottom of the quarry. Again, there was therefore a large gap between the words in the letter and Mr Morgan's version of it in 2010. I prefer to rely on the words that were actually used, not the rewrite. But Mr Morgan's dismissive stance as to the groundwater and water table issues becomes important in Section E below, when I consider what stance he would have taken on the hypothesis that different advice had been given by JH about the need for a fresh planning application.
- Fourthly, in relation to the reference to the hydrogeological groundwater risk assessment, which Mr Morgan accepted was not necessary for inert non-polluting materials, he again said that this was only necessary because Love wanted the agreement to cover the wider range of waste. But again, that answer simply makes no sense: DM would not have proposed carrying out, at their own expense, a detailed modelling exercise if in fact such an exercise was unnecessary for the strictly inert fill which it is now claimed DM wished to tip. Again, Mr Morgan was driven to say that the letter was "a commercial negotiation" (Day 2/145, line 5) but in my judgment, in circumstances where this letter was in fact being written to Mr Morgan's own solicitor, it would, or must be taken to, have contained the truth.
- The tipping licence variation was agreed some time in late 1996. It was again conditional, with the conditions precedent stated in these terms:
"2.1 The rights and liberties granted by this capital deed shall be conditional upon either:-
2.1.1 SHMBC giving written confirmation that the planning consent numbered 0590/102 granted to the Licensor on 12 June 1990 permitting the extraction of sand from the site ("the company extraction company consent") constitutes a planning permission for the disposal of waste; or
2.1.2 In the absence of such confirmation the obtaining of an order at the High Court pursuant to judicial review or other legal process at the expense of the licencee to the same effect; or
2.1.3 A new planning permission for the disposal waste being granted underneath by no later than 22 January 2000 (as to which time shall be of the essence)…"
Mr Downey confirmed that, as a result of this, although the clock had been reset, it was still ticking as far as Love was concerned and that if, in January 2000 DM required an extension of time, Love would have at least 'a bargaining position' in relation to DM. Mr Downey also confirmed that by this stage judicial review had been raised as a possibility.
- Other than the negotiations with Love, very little happened at BHQ or in the discussions with SHMBC during the latter part of 1996, or during 1997 and the first half of 1998. The documents suggest that this was at least in part because DM had prioritised other matters, including their negotiations with the Environment Agency in respect of their other sites, such as the one at Sandy Lane in Macclesfield. It seems that, if DM obtained an advantageous waste disposal licence for one of their sites, they were quick to use that to seek to improve the terms of their licences at other sites. We have already seen that by reference to the application for Ewloe (which referred to and relied on the broadening of the terms at Hapsford). During this period it appears that DM set much store by the site at Sandy Lane in Macclesfield, in order to be able to argue by analogy for better terms in relation to BHQ. What was sought and eventually obtained at Sandy Lane was permission to tip waste types A, B and C on the Kelly scale.
- Thus, during late 1996, 1997 and the first half of 1998, very little happened at BHQ, beyond the continued extraction of the sand and sandstone. Indeed, during this period, Mr Downey chased Mr Morgan for instructions (such as his letter of 20 November 1996) rather than the other way round. In early 1997, Wallington went into liquidation and DM took over the extraction operations at BHQ. In May 1997, Mr Morgan finally undertook the inspection, suggested 18 months before, of the files at SHMBC's offices and found, amongst other things, an advice of Mr Andrew Gilbart QC, which appeared to provide some support for JH on the Irlam Brick principle. Other than that, nothing happened in relation to BHQ until July 1998. Although Mr Morgan did not accept that there was no advancement of the planning situation with SHMBC during this lengthy period, the documents made plain that, in relation to the planning situation, nothing was happening at all. However, because the extraction was still going on at BHQ, this meant that, at some unknown point during this period, DM breached the conditions of the planning permission, because they went over the 9 hectare limit without carrying out any restoration.
C7 The Threat of an Enforcement Notice
- During the second half of 1998, there were two different narrative strands. The first concerned the advice which Mr Downey was giving to Mr Morgan about SHMBC's threat to issue enforcement proceedings; and the second concerned the dealings between DM (and Mr Downey) and SHMBC in relation to that threat.
- As to the advice been given by Mr Downey, the matter resumed after its long lull at the end of July 1998 when, on the 29th, Mr Downey wrote to Mr Morgan, commenting on a draft letter which Mr Morgan had prepared to be sent to SHMBC. That letter was itself prompted by SHMBC's threat to issue enforcement proceedings because the area being worked at BHQ now exceeded 9 hectares, but no restoration work had been done. The letter did no more than repeat points that had been made on numerous previous occasions. Mr Downey then went on to 'offer some random thoughts'. These included the following:
"* You have told me that St Helens has approved a low level scheme of restoration submitted by Robert Love. I think it could have been submitted only for the purposes of Condition 5 of the Permission. However, because that low level scheme does not enable the site to be restored in accordance with the other Conditions of the Permission, I think that it is arguable that the approval of it was unlawful. Any threatened enforcement action would seem to be on the grounds that the development is not being carried out in accordance with the approved working scheme and programme, but if there is no approved working scheme and programme (because it is unlawful) then it is difficult to see how that can form the basis of an Enforcement Notice…
* If an Enforcement Notice is issued then (save in the way I have suggested above) I do not think that any of the grounds specified in the Town and Country Planning Act afford a legal defence to it. I think that you will have to rely on the embarrassment which will be caused to the Authority over the way in which they have conducted themselves being enough to cause them not to want this all to come out in the open.
* There is no subsisting right of appeal in respect of the Authority's failure to approve or reject the high level scheme submitted in December 1993….
* ….the substitution of a new high level scheme should perhaps correctly be treated as an application for Permission for the development of land without complying with Conditions – a section 73 Application. It would be somewhat disingenuous, but St Helen's might argue that a section 73 Application has not been properly made and therefore they were not bound to consider it, but if that is their case, I think they were under a duty to say so a long time ago.
If the worst comes to the worst, it is open to D Morgan PLC to submit its own section 73 application to substitute the new high level scheme of restoration. An appeal would lie against the refusal of that application, or the failure of the Authority to deal with it within the prescribed time….."
- In evidence, Mr Morgan agreed that in the last paragraph of this letter, Mr Downey was advising him that, if SHMBC said that the Cass scheme could not be treated as a section 73 application (an application to avoid/amend existing planning conditions), then DM could submit their own s73 application[2]. He was asked what the problem was with such a course. His answer (Day 3, pages 12-17) was unclear, since it seemed to rely on subsequent correspondence and JH's advice in November 1998. Since that advice also suggested the making of a s73 application, this evidence left me none the wiser as to why Mr Morgan had not followed the advice in Mr Downey's letter. I can only conclude that, at least at this stage, Mr Morgan was reluctant to make his own s73 application, because that would then bring into the public arena, with the possibility of a public inquiry, the scale of the Cass scheme, the possible need for an Environmental Statement, and the precise nature of the range of waste which DM wanted to import. That is consistent with my earlier finding that Mr Morgan did not want to make any fresh application of any kind if he could avoid it, because that would have constituted a tacit admission that the planning conditions of June 1990 did not give him the permission to tip that he claimed.
- There was a further letter of advice from Mr Downey dated 3 August 1998. This letter reiterated Mr Downey's view (from which he never wavered) that DM did not have a defence to any proposed enforcement notice because they had excavated more then nine hectares of the site without carrying out any restoration. Mr Downey said:
"D Morgan Plc finds itself in some technical difficulties, and as I said in my last letter may not have a legal defence to enforcement actions. But the Mineral Planning Authority is faced with much more significant difficulties. At the end of the day a high level restoration is the only one which will comply with conditions 17(b) and, one way or another they will have to approve such a scheme."
Mr Morgan accepted that Mr Downey had advised him that there were technical difficulties in relation to any defence which DM might want to run in responding to any enforcement action. Mr Downey confirmed (Day 5, pages 120-121) that "at this point I've advised on at least one previous occasion, and perhaps more, that I had significant reservations about being able to defend any enforcement action."
- Finally, in relation to the advice given by Mr Downey in the summer of 1998, there was his letter of 7 August 1998 which, for the first time, sought to address the point which SHMBC had been making for some time, namely that there was a particular scheme (which we now know to be the Manstock scheme) which they had expressly approved as part of the planning consent of 1990. At this point, neither Mr Morgan nor Mr Downey were confident that they had all of the documents relating to the Manstock scheme but it appears that, in this letter, Mr Downey had realised that the specific contents of the scheme may be important. He also advised, for the first time, that, even if the documents that formed part of the submitted scheme could not have been approved (because of the argument that condition 5 anticipated the submission of the scheme after planning consent had been granted and not before) "its subsequent adoption by Wallington could change that."
- This was the first reference that I have been able to find in the advice from Mr Downey to Mr Morgan that the December 1990/January 1991 correspondence between Wallington and SHMBC (paragraph 28 above) might have legal significance. Mr Downey repeated the point that the important thing was that, if the scheme did not comply with all the conditions attached to the permission, its approval was "in my view unlawful and a nullity". He then went on to reiterate that "this does not, in my view, afford a legal defence to the enforcement proceedings or a stop notice." Mr Morgan was asked about this letter and the repeated advice from Mr Downey that there was no defence to the enforcement proceedings. Mr Morgan, as was his way, preferred to dwell on the advice that the approval was unlawful and a nullity. He did, however, accept that Mr Downey had advised him that there was no legal defence to any enforcement proceedings.
- Of course, what was behind this flurry of advice letters from Mr Downey to Mr Morgan was SHMBC's desire to do something about DM's breach of the planning conditions in excavating more than 9 hectares without carrying out any restoration work. Following inspections of the site, they had given notice on 7th July that, because of the breach, DM had to put restoration proposals into effect and if they did not do so, SHMBC would seek the cessation of excavation and exporting of material. In DM's reply of 22nd July (written before Mr Morgan had sought the advice of Mr Downey, as he confirmed at Day 3, page 10), Mr Morgan relied on the fact that the legal advice given to SHMBC (as to the Irlam Brick principle) was the same as the advice that DM had received from JH.
- Subsequently, on 11th August 1998, DM sent SHMBC a lengthy report. This report was principally drafted by Mr Morgan, although there was some input from Mr Downey. The document was very much in Mr Morgan's style, with those parts which he considered to be important underlined. It argued by reference to the legal advice which he knew SHMBC had received. It was the fullest exposition of Mr Morgan's position: that he already had permission to carry out infilling at the site and that, for all the reasons previously noted, that was the approach which he wished to pursue, rather than running any risk of any public inquiry into waste-tipping at this sensitive site. The basic thrust of the 15 page report was to say that SMHBC "may wish to reconsider its position with a respect of the threat of enforcement proceedings, including the threat of serving a stop notice, in recognition of the authority's responsibility in itself failing to resolve the dilemma of the low level restoration scheme being unenforceable and not complying with conditions 17(b) or 3….".
- Mr Morgan's awareness of the political aspect of his intention to carry out infilling at BHQ was recorded on page 4 of the report when, by reference to the earlier failed application for planning permission in 1990, he referred to those refusals as being by reason of "political resistance", which had exposed SHMBC to a costs risk. When he was asked about the political position in 1998/1999, Mr Morgan denied there was any political resistance by that stage and said that it had "evaporated". That was simply untrue. I have already referred to the 'political hot potato' that Mr Morgan had said that BHQ represented even before it was known to a wider public that DM intended to tip waste at the site, and to SHMBC's advice that a fresh application might fail for political reasons (respectively, paragraphs 52/53 and 99 above). Furthermore, once the possibility of tipping did become known, the political/public opposition to it was as widespread as predicted. Although Mr Morgan's claim in these proceedings is that, in 1998/1999 he could have somehow obtained planning permission to use BHQ as a waste disposal site almost at the click of his fingers, that hypothetical case simply does not reflect the reality of the situation.
- Indeed, the difficulties that might be created for DM in relation to BHQ were apparent from Mr Morgan's own letter to Mr Downey, also dated 11 August 1998, which asked him to review what the documentation said in relation to DM selling the site on to a third party. This was the first of a number of such references over the years, which indicated that, at various times, doubtless for sound commercial reasons, Mr Morgan was thinking of cutting his losses in relation to BHQ and selling such rights at the site that he had. Mr Downey advised on 12th August that the site could be assigned but only subject to a number of conditions, and that the rights to waste disposal could not be assigned within ten years of 22nd July 1993.
- I have, in earlier parts of this section of the Judgment, made findings that DM intended to use as infill a wide mix of waste, not limited to strictly inert fill, at BHQ. That intention remained in place as at 2nd September 1998, when Mr Morgan notified Mr Downey that:
"We also need an option to extend the quarry see plan for the purpose of being able to provide a low level leachate collection and treatment area. If we haven't got the benefit of the option – then we can't discuss the alternative for leachate treatment with the Environment Agency which will then rule out any leachate generating waste being deposited within the existing quarry void as we will be unable to drain it into a low level collection area."
In my judgment, this paragraph could not be a clearer statement of DM's intention to use BHQ for a wide range of waste. It was consistent with all of the previous contemporaneous documents to the same effect. Although Mr Morgan sought to deny the clear and obvious inference to be drawn from the words used (Day 3, pages 28-29) his reasons were inconsistent: first, he said that the paragraph went nowhere because Mr Downey did not put in an option, then he said it was something to do with the commercial negotiations with Love. Both were wholly implausible. The paragraph of the letter can only be read as evidencing DM's intention to use the site for a wide range of waste.
- Also in relation to DM's plans for BHQ at this point, reference should be made to Mr Morgan's letter of 10 September 1998 to Mr Downey which dealt with a variety of matters. One was concerned with progressive restoration and the possibility of a formal variation to condition 5. Although Mr Morgan thought that the downside of such a proposal was that he would have to go to committee (confirming that his concern was about public scrutiny and public opposition), he went on to say that "perhaps we are left with no choice in the matter for the reason that it may now take several years to obtain a waste management licence to enable us to commence phased restoration…". Although Mr Morgan seemed to accept when he was asked about this (Day 3, pages 32-34) that the obtaining of a waste management licence would take years as at September 1998, he also appeared to suggest that everything turned on the legal advice, and made no mention of the other things that would be necessary to obtain a licence, including the detailed discussions necessary with the regulators.
- In September 1998, Mr Morgan decided that another way of putting pressure on SMHBC was to lodge an application for judicial review 'of the Council's stance and conduct'. On the 16 September he instructed Mr Downey, completely out of the blue, 'to immediately lodge' such an application at court. Whilst such a stance was consistent with Mr Morgan's strategy of putting as much pressure as possible on SMHBC, so that they gave in on his underlining point that he had permission to tip waste at BHQ, there was a complete lack of clarity as to which SHMBC decision would be the subject of this application for judicial review.
- Mr Downey's evidence was that he told Mr Morgan that such an application was problematic because it was out of time, uncertain and would be expensive. Mr Morgan claimed that this was untrue and purported to refer to paragraph 69 of JH's witness statement to support his stance that no such advice was given. Not for the first time, on going to the paragraph of that statement identified by Mr Morgan, it turned out that JH was dealing there with something completely different, namely what might happen if a s73 application was made and then rejected by SHMBC. Since such an application had not even been made at this point, JH's statement, which was in any event dealing with his October 2001 advice, was simply of no relevance. Again, Mr Morgan had made a claim - this time, that Mr Downey had not given negative advice about judicial review in September 1998 – by reference to somebody else's evidence dealing with a completely different time period and a completely different point.
- In fact, it is clear that Mr Downey must have given negative advice about the instructions to lodge a judicial review application immediately because such an application was not made, and, instead, on 18 September 1998, MJ wrote to SMHBC a lengthy letter which repeated many of the earlier points and concluded that, if SHMBC did not consider the Cass scheme submitted in 1993 immediately, "we can see no way of overcoming the result and impasse other than way of judicial review of the council's conduct, with obvious cost implications". This was a much milder threat than the stance originally taken by Mr Morgan, and was put in that form by Mr Downey because of his (correct) advice that, after four years of inactivity on DM's part (save in respect of the unpermitted extraction), an application for judicial review would, without more, have been very unlikely to succeed.
- For reasons which were not clear to me, Mr Morgan was very anxious to persuade me that the letter of 18th September was, in some way, written by Mr Downey without his instructions and that he had not agreed to water down the threat of judicial review. He said that there were none of the usual drafts or redrafts of the letter of 18 September (Day 3, pages 43-44). However, there are at least three drafts in the bundle, passing backwards and forwards between Mr Downey and Mr Morgan. Mr Morgan was therefore obliged to backtrack and accept that there had been contact between them. I find that it is inconceivable that Mr Downey did anything other than write the letter of 18 September on Mr Morgan's instructions. When he gave evidence himself (Day 5/115-118 and Day 6/13), Mr Downey confirmed both his reservations as to the judicial review course of action, and the fact that he had received instructions to put the letter in the form noted above. Mr Downey said that he had told Mr Morgan that it was not going to put pressure on SHMBC to threaten judicial review "if in reality judicial review is a non-starter".
- In his closing submissions, in support of his contention that Mr Morgan would generally have followed different (hypothetical) legal advice had it been given, Mr Davidson relied on these events as demonstrating Mr Morgan's willingness to listen to and follow the advice from Mr Downey. Up to a point, that is quite true; but that is only because I have rejected as false Mr Morgan's own evidence that Mr Downey did not advise him that JR was unlikely to be successful, together with his evidence that he did not see or approve the letter of 18th September which watered down the threat.
- On 21st September 1998, DM sought a variation of its planning permission so as to be allowed to increase the working area from nine to twenty four hectares. The suggestion was that they had been unable to restore the site owing to SHMBC's failure to approve the 1993 Cass scheme. Although there was a suggestion during Mr Downey's cross examination that this demonstrated the flexibility of Mr Morgan and his desire to find a way round the difficulties with SHMBC, I am bound to say that I do not quite see it like that. Since the variation was expressly based on the Cass scheme, which SHMBC had been repeatedly refusing to consider for the last four years, there was simply no way in which SHMBC were going to agree to triple the size of the unrestored working area at BHQ, particularly on the stated basis (that they were responsible for the difficulties because they had not approved the Cass scheme). Unsurprisingly, therefore, SHMBC's position remained unchanged. On 2nd October 1998, they said (for the umpteenth time) that "any new restoration scheme would require a fresh planning application." Further letters written by Mr Morgan on 12th October and 21st October 1998 did not alter that situation.
- By the middle of September 1998, it had been resolved that JH's further advice would be sought. For reasons which are explored below, that advice was not provided until early November 1998. In the meantime, DM kept up the process, which Mr Downey described on Day 6 as "applying as much pressure as possible so that the request will be granted." The correspondence with SHMBC during this period is repetitive and it is unnecessary to set it all out here. On 12th October 1998, Mr Morgan himself wrote to SHMBC again referring to judicial review and saying that he could think "of no other solution to resolving this matter relating to the Council's public duty to apply planning law other than for the courts to be asked to intervene…" When asked about this, Mr Downey said there was a distinction between DM's willingness to take court action, and their readiness to threaten it. He said that DM were taking the latter course, although "the Council was intended to believe that the threat was a serious one." He said whether such JR proceedings would actually have been started depended upon counsel's advice.
- Accordingly, we have arrived at the point in the story just prior to advice being sought from JH for a third time. Since it is only thereafter that the acts/omissions said to amount to negligence on the part of MJ are said to have occurred, it is worth summarising the position at this time as follows:
a) For their own commercial reasons, DM had not sought to obtain any resolution of the planning or the waste disposal position between 1994 and 1998. Other than extraction, and negotiating an extension with Love, nothing else of any significance happened during this period. BHQ was obviously not a priority for DM at this time.
b) However, because DM had, during this period, continued to extract sand and sandstone from the quarry, without carrying out any restoration work, by 1997-1998 they were in breach of the conditions of the planning permission.
c) In addition, DM had not sought approval from SHMBC for any particular waste types, nor sought a Waste Management Licence. Nor had they even considered reducing the scale of the Cass scheme, despite that being SHMBC's principal concern.
d) The flurry of activity in the summer and autumn of 1998 was entirely triggered by SHMBC's threat that, because of the breach of the planning permission, they would issue enforcement proceedings. DM were reacting; they were not proactively seeking a solution to the problems.
It was in all those circumstances that, as Mr Downey agreed (Day 5/121-124), further advice was required from JH.
C8 JH's 1998 Advice
- In 1993, JH had advised that there was implied planning permission for waste to be imported at BHQ, by reference to the decision in Irlam Brick (paragraph 59 above). Following JH's advice in 1998, both Mr Downey and Mr Morgan believed that this advice remained unchanged, namely that there was such implied permission. JH, on the other hand, maintains that his advice of November 1998 made plain that there was no permission to tip waste at BHQ. In his cross examination (Day 6/1-3) Mr Downey accepted that he was now aware of this difference, and went on to say that "if in 1998, Mr Hoggett had been saying that his previous advice in relation to Irlam Brick no longer held good, then the entire course of events thereafter would have been quite different." In view of the potential importance of this issue, therefore, it is necessary to set out the background material in a little detail.
- In mid-September 1998, Mr Downey prepared instructions for JH to advise. The instructions included a copy of the planning consent and a copy of Mr Downey's letter to SHMBC dated 18th September 1998 (paragraph 132 above). The instructions noted that "as can be seen from the correspondence enclosed with these instructions it is the opinion of the Council that the application included a scheme of restoration which was approved by the permission itself. There is no reference in the planning permission to such an approved scheme of restoration. Neither does the permission make any direct reference to the planning application." JH was asked to advise as to the status of the two schemes submitted to SHMBC (that is to say the Manstock scheme and the Cass scheme) and "if Counsel agrees with the arguments put forward by instructing solicitors, as to the remedies available to the Company." These instructions were first seen by Mr Morgan before they were passed on to JH.
- On 28th September, JH requested copies of the 1990 application for planning permission and the report to the committee. On 2nd October 1998, Mr Morgan sent Mr Downey what he called "a copy of the second planning application". The letter referred, amongst other things, to paragraphs 3.5 and 3.6 of the Manstock scheme (paragraph 25 above) and its reference to "no imported wastes". On the same date, 2nd October, MJ asked SHMBC for copies of the planning application, the report to the committee and the minutes of the committee meeting.
- In the early part of October, Mr Downey went on holiday and his colleague Mr McAllister assumed temporary responsibility for the BHQ file. There is a useful file note summarising Mr Downey's thinking at the time. Amongst other things, this recorded what Mr Downey said was always his understanding of what Mr Morgan had told him, namely that "we do not wish to be in a position to have to [submit] a new planning permission as it will almost certainly refuse the importation of waste." Mr McAllister's handwritten note of the same discussion stated "new PP required but will be refused?"
- In examination in chief, Mr Downey said that although, contrary to his original recollection, these notes do not come from a meeting with Mr Morgan, they reflected Mr Morgan's instructions to him which he was passing on to Mr McAllister. In cross examination, when Mr Downey was asked about the different degree of probability in relation to the new planning application, he reiterated Mr Morgan's instructions that he did not wish to submit such an application "because there was an expectation that it would be refused, insofar as it was an application, which would be, for the importation of waste." It seems to me that this file note, prepared solely to act as an aide memoire for Mr McAllister, was an entirely reliable guide to Mr Morgan's instructions to Mr Downey at the time. It demonstrates beyond doubt what I have found to be apparent in the other contemporaneous documents: that Mr Morgan did not want to make a fresh planning application if there was another route open.
- On 26 October 1998, MJ wrote to JH passing on to him the documents that had been requested and subsequently received from SHMBC. At the same time, on 3 November, Mr Downey wrote to SHMBC to say that he was confused by the documents which had been supplied, the confusion arising because the same application (number 0590/102) was apparently both granted and refused by the same development committee. The letter sought a copy of the minutes of the committee meeting of 31 May 1990. This letter was passed on to Mr Morgan on the same date.
- On 10 November 1998, JH sent out his (third) advice. Although the advice is actually dated October, since it was not sent out until November, I shall refer to it as "the first November advice". The advice referred to the Manstock scheme at paragraphs 3 and 4, noting that "it is clear that the restoration of the site was to be by overburden and that no materials were to be imported onto the site for the purposes of restoration. At this stage, I have to assume that ground levels made this feasible despite the quantities of materials to be excavated." Paragraph 5 of the advice set out the terms of the permission. Paragraph 7 then set out SHMBC's position, namely that the Manstock scheme was approved by them and therefore constituted the restoration scheme for the purpose of the permission, whilst Paragraph 8 summarised DM's position: that SHMBC could not lawfully have approved the original restoration proposals because they did not conform with condition 17b; that it was open to SHMBC to approve the Cass scheme under the existing permission; and that since the conditions required restoration, DM had permission to bring necessary materials onto site under the Irlam Brick principle. In relation to this, JH also noted that SHMBC maintained that, on the contrary, the fresh application would have to be accompanied by an Environmental Statement. When Mr Downey was taken through this advice in detail (Day 6/27-56), he confirmed that he had no difficulty with understanding its first nine paragraphs.
- Paragraph 10 of the first November advice set out what JH called "The Structure of the Planning Permission". Amongst other things, JH noted that a condition 5 scheme had to include restoration proposals but not aftercare. As to that, Mr Downey said in evidence that "we always had some questioning of what condition 5 did require" and he referred to condition 5 and what was meant there by 'the method of …'. Mr Downey reiterated that one of his doubts arising from the advice was in relation to condition 5, the point being that condition 5 appeared to suggest the provision of the restoration scheme after planning permission had been granted, rather than being approved as part of the planning permission itself. Other than that, Mr Downey confirmed that he did not have any other difficulties with paragraph 10 or with paragraph 11 of the advice, in which JH stated his view that the Manstock scheme was capable of being "a scheme and a programme" pursuant to condition 5. As to paragraphs 12-15 of the advice, where JH dealt with whether or not the scheme had been approved, Mr Downey confirmed his understanding that, based on the letters of the 21st December 1990 and 22nd January 1991, the working assumption was that approval had been given for the Manstock scheme, and was to be presumed unless the contrary could be shown by evidence.
- At paragraph 15 of his advice, JH said:
"If the contrary is shown or if approval could not have been given because of non-compliance with condition 17(b) … then this permission has lapsed [because of the part of condition 5 which said that a scheme had to be approved within one year and if it were not the extraction part of the condition could not be lawfully implemented] and the extraction of sand is unlawful. Therefore, this would not seem to be a productive argument from the point of view of the company."
There can be no doubt that this was important advice: it was warning that, if the Manstock scheme had not been and could be approved, the permission to quarry sand had lapsed and the operation was unlawful. Mr Downey accepted that this was clear advice, although he added that he thought that this was still a matter which was worthy of further exploration. Thus he said that, whilst he was aware of the advice that, if Manstock had not properly been approved then, as Mr Davidson put it in cross examination, "the argument proved too much because it destroyed the mineral extraction permission", that was subject to any further clarification that might be requested from JH. It was what led to a subsequent exploration as to whether there were elements of the Manstock scheme that could be severed (for the purposes of separate analysis and amendment) without bringing about the lapse of the entire permission. Mr Downey denied that he had missed the significance of the advice at paragraph 15 at the time.
- Paragraphs 16-18 of the advice dealt with the status of the aftercare submission and Mr Downey confirmed that there are no difficulties in understanding what JH had said. This included his advice that:
"17…condition 3 requires the submission of an aftercare proposal i.e. one which relates to 'steps… to bring the land to the required standard… for agriculture'… A proposal which does more than that i.e. proposes entirely different restoration proposals is at best hybrid. If it is impossible to sever the aftercare part of the application from the revised restoration proposals, then in my view, the total package does not comply with condition 3. [SHMBC] could refuse to consider it on that ground alone…
18. Nor on the scheme of the conditions can I construe condition 5 as allowing an amendment of the restoration package during the course of the permission. The scheme is quite clear that the restoration proposals are to be agreed before sand extraction starts and thereafter carried out. Serial applications for restoration are inconsistent with the first sentence of condition 5."
- The critical part of JH's advice for present purposes was in these terms:
"Can Waste Be Brought on the Site Without Further Permission
19. The clear answer is no. Any implied permission must be subject to the express terms of the permission. It is clear that the authority has not approved any materials to be brought onto the site. Page 25, para. 3.6 of the Supporting Statement makes this absolutely clear. The importation of waste material must be a breach of condition and unpermitted development."
I deal below, when considering the specific allegations of negligence made against MJ, with the clarity and effect of this paragraph of the first November advice. As a matter of fact, it appears that both Mr Morgan and Mr Downey read this as saying that there was still an implied permission to import waste, albeit that it was subject to the approval process referred to condition 11 of the permission. It is JH's case that this paragraph made plain that no waste could be brought on to the site, whether by express or by implied permission. And it is DM's case in these proceedings that this paragraph did indeed resile from JH's earlier advice as to the Irlam Brick principle.
- Under the heading 'What Steps Are Available to the Client', JH advised:
"20. An application could be made under s.73 to amend condition 5 to insert words to the effect of "or such amended scheme and programme as shall be approved during the currency of this permission". I would wish to consider the precise wording of the proposed amendment before any such is submitted. The grant of such an application would then enable the company to submit a further application for restoration.
21. An application under s.73 need not be accompanied by Environmental Statement [Article 2(1) Environmental Assessment Regulations 1998].
22. If an application were made under s.73, [SHMBC] could not consider revoking the permission"
Mr Downey was not asked about this part of the advice. For the avoidance of doubt, I find that it was entirely clear: JH was advising that DM should make an application under s73 to amend the existing planning conditions so as to allow SHMBC to consider the Cass scheme in place of Manstock. Mr Downey confirmed (Day 6/53-54) that that was what JH was suggesting.
- At paragraph 23 of the first November advice, JH summarised the position as follows:
"(a) on the face of it condition 5 appears to have been discharged;
(b) if it has not the present extraction would be unlawful;
(c) the so-called aftercare submission [Cass] is probably not an aftercare application within the meaning of the permission. I re-emphasise that this advice is given without having seen the application;
(d) it is still open to [SHMBC] to refuse the application, but I doubt whether any court would now compel it to determine the application if only because of the lapse of time. In the absence of an express refusal there is now no right of appeal to the Secretary of State;
(e) there is now no right to bring waste on the site;
(f) the permission does not allow the submission of a further application for restoration;
(g) for this purpose it would be necessary to make an application under s73. There is no guarantee that such an application would be successful or, if it were, that any further application to amend the restoration scheme would be successful."
- Mr Downey was taken through this last part of the advice (Day 5/51-56) and he reiterated that he saw no inconsistency between paragraph (e) and his belief that, subject to the approval of SHMBC, waste could be brought on to the site. As to the s73 application he said:
"Yes, indeed, and no such application was made. This advice was passed on to Mr Morgan, and I do not know why Mr Morgan still did not wish to make a s73 application along the lines proposed by Mr Hoggett but it clearly was the case that he did not wish to do so."
- It was put to Mr Downey in cross-examination that this was "downbeat, uncomfortable" advice. Mr Downey confirmed that it was uncomfortable and disappointing but reiterated that "it was advice that required further exploration to see just what it did mean." He said that it was not "a worse position than DM had been in at the time it had acquired the mineral lease from Wallington." As noted above, Mr Downey was of the view that paragraph 19 of the advice meant that the implied permission argument survived.
- As for Mr Morgan's understanding of (and reaction to) the advice, that is set out in detail in his witness statement, which he confirmed as correct in both examination in chief and cross- examination. The relevant paragraphs are 175-181 inclusive. Mr Morgan said that JH advised that any implied permission must be subject to the express terms of the planning permission and that it was clear that SHMBC had not approved any materials to be brought onto the site. As noted above, one of the issues in this case is whether JH had in fact given any advice as to the continuing existence of any implied permission, but it was clear that this was Mr Morgan's understanding of the advice. Mr Morgan also said that JH clearly considered that the Manstock scheme was not incorporated into the permission, which was not, on any view, an accurate reflection of what JH had said in his first November advice.
- At paragraph 180 of his witness statement, Mr Morgan said expressly that he did not consider that the advice contradicted what JH had said before and he did not read it (paragraph 181) as an abandonment of the Irlam Brick argument. At paragraph 182, Mr Morgan said this:
"It is my belief now that JH had realised that the advice that he had originally given was wrong, but he did not want to say so in clear terms and explain why he was then of a different view. I now believe that this later advice was deliberately unclear in an attempt to conceal the fact of and reason for his change of mind."
There is nothing whatever to support Mr Morgan's allegation that the first November advice was deliberately unclear, or that this was part of a conscious (and necessarily dishonest) plan on the part of JH to cover up his change of mind. On the contrary, if JH is right and that he was now saying that the Irlam Brick principle was not open to DM, he could easily have explained that change of position by reference to the greater detail available to him in 1998, including sight of the full Manstock scheme and the 1990/1991 exchange of letters.
- On 10th November, on receipt of the first November advice, Mr Downey wrote to Mr Morgan enclosing a copy of it and saying that "I am not at all sure that I fully understand the advice." The letter suggested the possibility of having a conference with JH and asked Mr Morgan if he wanted him to arrange one. Mr Morgan was clear that there was nothing which he did not understand. Accordingly, there was no consultation, and when Mr Downey asked Mr Morgan to look at the further instructions to JH to see if there were any specific questions that Mr Morgan wanted to put to JH, he said that, whilst there were points that were troubling Mr Downey that he wanted JH to clarify, there was nothing further which he, Mr Morgan, wished to raise.
- Mr Downey was taken through his further instructions to JH (Day 6/58-65). It was put to him that each of the points raised in the further instructions were, contrary to Mr Downey's assertion in his witness statement, not matters set out in the first November advice that required clarification or explanation, but were instead simply further matters or questions arising out of that advice. In many instances the matters raised were possible arguments that might get around some of the difficulties that JH had identified, and in some instances they were providing specific instructions on the facts. Mr Downey accepted (Day 6, page 61) that the points he raised were "exploring the implications of the advice". I find that that is what they were, and I agree with the summary at paragraph 32 of section 1 of DM's closing submissions. They were not, as Mr Downey had originally said to Mr Morgan, questions of clarification arising out of any alleged ambiguity in JH's first November advice.
- Endeavouring to find ways around the implications of JH's advice was not a task limited to Mr Downey. On 13th November 1998, Mr Morgan wrote to Mr Downey and, amongst other things, sought to find a way around the argument that, if condition 5 had not been fulfilled, the permission had lapsed. In cross-examination, Mr Downey appeared to accept that they were both looking at ways of overcoming that particular point. At the same time, on 18th November, SHMBC wrote to say that they had obtained legal advice which supported their stance. The letter went on to say to Mr Morgan:
"I understand that you have also sought and obtained legal advice and are now no doubt in a better position to decide whether you wish to now instigate restoration works in accordance with the permission, and should you still feel it desirable, submit a planning application or test your position through enforcement proceedings."
- The letter offered a meeting and said that the service of the enforcement notice would therefore be delayed for a short period. Mr Morgan accepted in cross-examination that he understood SHMBC's position and what they were saying. Mr Downey said the same thing and acknowledged that there was a fourth possibility, not mentioned by SHMBC, namely seeking a declaration as to the effect of the 1990 planning permission.
- On 25th November, JH sent out his second November advice. At paragraph 2, he reiterated that condition 5 meant that, if no restoration scheme was approved within one year, there was no permission for extraction. He said that the fact that a road had been built on the site in consequence of the permission did not affect this analysis. He went on to say that SHMBC could bring enforcement proceedings 'alleging development ie. extraction, without permission', and that DM would have to argue 'that permission should be granted and rely on the 1990 permission as a material factor in support'.
- JH said that he could not directly advise on the question about whether condition 17(b) (drainage of surface water) clashed with the Manstock scheme. That was because it was a matter of expert technical evidence as to what might or might not comply with condition 17(b). JH advised as best he could in these terms:
"6. I cannot directly advise on the question asked about condition 17(b). On its face it requires one thing only i.e the site should be graded into the adjacent land so that there is surface water drainage. If the only way of achieving this is that the extraction site level should be higher than the surrounding ground, then the condition can properly be argued to require some land raising on the extraction site. However, it would only require some land raising to the extent necessary (and to that extent only) to achieve the necessary drainage. It would not require or permit general land raising.
7. In giving advice, I am hampered by not knowing what the client's particular restoration aims are.
8. If the working scheme approval does not comply with condition 17(b), I am asked to advise whether any part of the approved restoration scheme was unlawful and whether it can be severed if unlawful.
9. I find it very difficult to answer this question in the abstract…
10. If the restoration scheme is such as necessarily to require breach of condition 17(b), then it is arguable that the Authority could not lawfully have approved the restoration scheme or that part of it if capable of severance.
11. The Authority approved a scheme and prima facie that scheme is valid unless set aside by the court. It is now 7-8 years since the scheme was approved. I cannot see the court setting aside such a scheme, long acted on, at this remove in time. Such an application can not be described as prompt. In any event, a total scheme has to be approved within one year.
12. If there is a necessary and unavoidable conflict between the scheme and condition 17(b), I would expect the court to state that condition 17(b) 'prevailed'. That is to say, condition 17(b) relates to the carrying out of the scheme and after many years the scheme may need to be modified in practice to achieve the condition 17 results.
13. I advise that the advice in paragraph 12 depends upon the words underlined being satisfied. If they are satisfied that does not give carte blanche for general land raising; it would only permit a departure from the approved plan to the extent, and to that extent only, required to adapt the approved scheme to achieve the results.
14. I construe condition 5(a) as requiring "details of…restoring the site". Overall it seems clear to me that extraction works were not to start until the future of the site including its restoration had been approved by [SHMBC].
15. As I have indicated, it is very difficult to answer questions in the abstract. It may be that a consultation would be a more helpful way of dealing with the matter."
- Mr Downey was cross-examined about the second November advice (Day 6/70-76). Having been taken carefully through it, he confirmed that there was nothing in it which would have struck him as wrong. When he sent the advice on to Mr Morgan, his covering letter of 25th November correctly stated that JH did not like the argument that SHMBC had not approved the scheme or that the scheme which it had approved was unlawful and that, since if a scheme had not been approved the extraction part of the permission had lapsed, "there would appear to be little merit in pursuing that line of argument." Mr Downey also noted that at paragraph 12 of the second November advice, JH said "that a court might hold that the scheme which has been approved needs to be modified to achieve the condition 17 results." What he did not say in the letter was that there was any part of the second advice which was either unclear or wrong.
- At the end of his letter of 25th November, Mr Downey also recorded that JH had suggested a consultation and he said that that would be "a more satisfactory way of exploring the issues". In giving that advice he was only reiterating what Mr Downey had said after receipt of the first November advice (paragraph 155 above). In the event, no such consultation took place.
- What happened next was this. On the morning of 26th November 1998, Mr Morgan, having received JH's second November advice, rang Mr Downey. During that conversation, Mr Morgan obviously expressed reservations about JH's advice and, so it seems, suggested that the second November advice was wrong. This is plain from Mr Downey's letter to Mr Morgan of the 26th November which refers to their telephone call and says:
"I share your reservations about the Advice received from John Hoggett, although it would take a brave man to suggest that he is wrong. But for practical purposes that is, I think, the presumption that we will make. In particular, I share your view that the working scheme submitted for approval in accordance with condition 5(a) was not intended to be a restoration scheme and the permission does not in fact call for a restoration scheme to be approved. Any purported approval by the authority of that scheme as a restoration scheme would therefore be a nullity simply because it goes beyond what the authority was empowered to approve in accordance with the terms of the permission. I see no reason why that should have any impact on the approval of the scheme for the proper purposes of condition 5(a). We must remember, however, that John Hoggett may not agree with any of this."
- Mr Morgan was asked what his reservations were (Day 3/53-54). He said that his reservation concerned the condition 5 argument (of which both Mr Morgan and Mr Downey were so fond), namely that the Manstock scheme had not been approved and could not be approved as a restoration scheme, particularly because it could not achieve condition 17b). Rather surprisingly, when giving evidence, Mr Downey (Day 6/77-84) said that he was unclear as to what the reservation was, although subsequently (Day 6/100-101), it appeared that it was this very point: that the words in the permission seemed to suggest that the scheme would only be approved after the permission had been granted, and could not be approved as part of the permission process itself, particularly if it conflicted with another condition. Although Mr Davidson sought to make much more of this initial uncertainty in his final submissions, I find that there can be no doubt that this was the only matter on which it was ever suggested that JH was 'wrong'.
- It is, however, important to note that, even if Mr Morgan and Mr Downey disagreed with JH as to the strength of the condition 5 point, the remedy was clear to everyone. During the cross-examination of Mr Morgan on Day 3, pages 54-55, there was this exchange:
"Mr Hart: So let's just see where we are on this. If there was a problem in the condition 5 point as per Mr Hoggett, the remedy, as you understood it, was a section 73 application wasn't it?
A: Yes, sir.
Q: And a section 73 application, in order to vary condition 5, so that a further…a restoration scheme, a Cass or Cass-type scheme, could then be put to the Council and they could be asked to approve that scheme?
A: John Hoggett was saying: go down the Section 73 route.
Q: That's right. And you understood his advice as telling you that that was a way of doing it if there was a condition 5 problem?
A: That's what…yes."
Mr Downey gave the same evidence. Although he accepted that, in this letter, he had referred to the presumption that JH was wrong, that was in relation to the condition 5 point only, and certainly not in relation to the next step to be taken by DM. He said:
"I did not express a view that a section 73 application was not appropriate, as I have previously indicated. Mr Morgan did not wish to pursue such an application, for reasons of his own" (Day 6, page 85).
- The rest of Mr Downey's letter of 26th November 1998 was described as an aide memoire and set out six numbered paragraphs. The important parts are as follows:
"1. You are currently in breach of the planning permission in that more than 9 hectares of the site have been worked without being restored. It may be the fault of the Mineral Planning Authority that this is so because they have not dealt with the revised restoration scheme, but as we have said in our own discussions the permission does not require approval of a restoration scheme as such. In any event, this failure on the part of the Authority does not provide you with a formal defence to any enforcement action brought against you in respect of this breach.
2. I believe that restoration of the site – even low level restoration – will require the importation of some fill material. That material cannot be imported unless it has been approved by the authority. The first step to be taken, therefore, is to seek the authority's approval of the restoration material that you wish to bring into the site.
3. If the Authority refuses to approve your proposed restoration material or fails to deal with your application for approval, you will have the right of appeal against that refusal or failure. In line with what I said in paragraph 1 above that refusal or failure will not provide you with a defence against enforcement action. But if you have to make an appeal against the non-approval of restoration material and also against enforcement action by the Authority, I would expect that both appeals would be heard by the same inspector, and even if he might find in favour of the Authority I would hope that his decision would allow a sensible period of time for making good the breach of planning control by restoring the exposed parts of the site in excess of 9 hectares.
4. What this appeal procedure will not decide is the final form of restoration (i.e contours) for the site. It seems to me that this will not be a relevant question in the context of the issues to be decided at the appeal, unless the depth of fill material would itself determine the type of material.
5. Once the type of restoration material has been approved (whether by the Authority itself or on appeal) it will be open to you to commence restoration without further reference to the Authority. This is because either the permission does not require a restoration scheme to be approved or the Authority has already approved one.
6. Whatever might actually be the case the Authority will almost certainly take the view that restoration of the site must be at the level shown in the scheme which (we say) was submitted for approval as a working scheme only and which (they say) has been approved as a restoration scheme. It is likely that once you place restoration material above those levels the Authority will consider that a breach of planning control has occurred and will start enforcement proceedings. It is at this point, in your appeal against those proceedings, that it will finally be decided whether the permission requires, and therefore permits, restoration of the site above the level of adjacent grounds so as to comply with condition 17(b)."
- Thereafter, Mr Downey made plain the practical difficulties with this outline of possible the future:
"One of my principal concerns in all of this is the time that it might take to get to the position under paragraph 6 above, and particularly the consequences of that for your contract with Robert Love."
The letter concluded with this paragraph:
"You tell me that the Authority has indicated a willingness to frame an enforcement notice in agreed terms so as to enable the issues to be decided on appeal. As I have indicated above, I do not think that the real issues can be decided until you actually begin to restore the site above the levels which the Authority thinks it has approved. Perhaps one way of getting to that point more quickly would be for the Authority not to be difficult over approval of restoration material, but actually grant its approval quickly on the basis that you will then quickly exceed the 'approved' restoration levels and enforcement action will then be taken. But I am not sure that the Authority is likely to be this co-operative!"
- It seems to me that this letter did rather more than tell Mr Morgan, yet again, that DM were likely to have no defence to the threatened enforcement proceedings. It was demonstrating in clear terms that any way of addressing the problem, short of making a s73 application, was fraught with difficulty. Mr Morgan himself confirmed that there was no doubt about Mr Downey's advice as to the lack of a defence (Day 3/55-56) and agreed that Mr Downey was being 'very cautious' about any enforcement proceedings and the circumstances in which those proceedings might get Mr Morgan the result which he wanted, which was approval of the Cass scheme for restoration (Day 3/57). Mr Morgan also expressly accepted (Day 3/58) that Mr Downey was suggesting that it was pretty unlikely that, out of this process, DM would quickly get to a point where the necessary issues would be decided on appeal.
- Mr Downey (Day 6/86-89; 90-96) said that the whole tenor and purpose of the letter was to express his doubts about the efficacy of the course of action which Mr Morgan (without any reference to Mr Downey) had already discussed with Mr Molloy of SHMBC. I accept that evidence. I also accept Mr Downey's evidence that what he was doing was setting out "the hypothetical way in which enforcement proceedings might bring about a consideration of the issues that he needed to have resolved. But of course, it was something that never happened." Mr. Downey said that he saw no discrepancy between his view that JH might be wrong about condition 5 and the difficulties of the possible route mapped out here. I agree with him: they were two entirely separate matters, which did not conflict with one another.
- The informed observer of these events, even without the benefit of hindsight, would doubtless have been puzzled by a number of things. First, although both JH and Mr. Downey had independently advised DM that a consultation was necessary, no consultation took place. Mr. Downey said that this was because Mr. Morgan told him that he did not want one (Day 6/89). Although that was not recorded in Mr. Downey's letter of 26th November, as it should have been, it was the only real evidence as to why the consultation did not occur. Moreover, Mr Morgan's refusal of JH's suggested consultation was consistent with his earlier refusal of Mr Downey's suggestion to the same effect (paragraph 155). Although DM's closing submissions hint (paragraph 40, section 2) that this was a decision in which Mr Downey had participated in or even agreed, there was no evidence from Mr Morgan to that effect and any such evidence would have been contrary to the contemporaneous documents. And although it is difficult to be certain, it seems to me more likely than not that Mr Morgan, having received advice he liked in 1993, and aware of the consequences if that advice was altered, decided that DM's best interests were served in keeping his cards close to his chest, a strategy that might be undermined by a detailed consultation. After all, he could have provided the information requested by JH in the second November advice in any number of ways without having a consultation, but he chose not to[3].
- Secondly, the question arises as to why no s73 application was made, despite the clear terms of JH's advice and Mr Morgan's understanding of it. Mr. Downey said repeatedly that Mr. Morgan did not wish to make such an application and had his own reasons for not doing so (see, for example, paragraph 151 above). This point was therefore put to Mr. Morgan (Day 3/64). He suggested that, although he knew that he had received clear advice that he needed to make an s73 application, because that advice had not been separately repeated by Mr. Downey in his letter of 26th November, he made no such application. That explanation simply lacks any credibility. Advice on a specific planning problem had been taken from specialist leading counsel and leading counsel had advised in unequivocal terms that a s73 application should be made. But all of the correspondence emanating from Mr. Morgan to Mr. Downey appears to have been motivated, in one way or another, by a desire to avoid making such any such application. In line with the findings set out above, I can only conclude that no application was made because of Mr Morgan's awareness of the difficulties, the environmental position and the degree of political opposition and public scrutiny to which even a s73 application would be subjected. As long as there remained the possibility of arguing that permission already existed, coupled with the technical approach with the EA (paragraphs 109-110 above), that was the course that Mr Morgan wanted to pursue.
- Thirdly, the question arises – at least theoretically - as to why no fresh planning application was made. Again, Mr. Morgan sought to say that it was because Mr. Downey had not so advised him. Again, I do not accept that explanation. It was quite clear that everyone knew that making a fresh application was the safest, the most certain, option available for DM. It was the suggestion that SHMBC had been making for years, and it was referred to, in precisely that context, by Mr Morgan in his letter to Mr Downey of 13th September 1996 (paragraphs 109-114 above). A s73 application, which was a halfway house between the argument that the permission already covered infilling with waste and a fresh application, had been recommended to but rejected by Mr. Morgan. In those circumstances, I find that DM would not even have considered making a fresh application for planning permission, because all of the problems that a s73 application would have caused them (in particular the environmental and public scrutiny points), would apply with even more force to an entirely fresh planning application.
- Before leaving this period, it is worth just catching up on the technical evidence and DM's intentions as to waste management at BHQ. On 14th December 1998, Mr. Morgan sent MJ an updated report from ADAS. This contained technical material as to why low-level restoration was inappropriate, in part because it would not satisfy the drainage requirements of Condition 3 or Condition 17(b).
- The following month, January 1999, Mr. Morgan wrote again to Mr. Downey saying that the Environment Agency ("EA") had been of considerable assistance to DM in its dispute with Cheshire County Council regarding the interpretation of planning conditions relating to DM's site at Sandy Lane in Macclesfield. Mr. Morgan wanted to get the EA on board in relation to his ongoing dealings with SHMBC in relation to BHQ. To this end, Mr. Morgan wrote a long letter to the EA on the 14th January 1999 in relation to an intended application that DM wanted to make "for an exemption from Waste Management Licensing". In cross examination (Day 3/72) Mr. Morgan accepted that he was trying to achieve two things from this letter: one was an exemption from Landfill Tax (because that was the heading of the letter) and the second was support from the EA in his ongoing problems with SHMBC. Although Mr. Morgan then sought to backtrack on both of those answers, it seems plain from the letter that that was what he was doing. As Mr. Morgan pointed out, he might have got an exemption from a Waste Management Licence if the material was from construction or demolition work, but only if he intended to tip twenty thousand cubic metres per hectare or less, and at BHQ DM would be tipping much more. The letter also made clear that DM "will apply to the Agency for a Waste Management Licence after the October date". This was because of a proposed change in the tax position. Mr. Morgan confirmed as at January 1999, DM had no intention to apply for a Waste Management Licence until after October 1999.
- It was put to Mr. Morgan in cross examination that, having obtained the Waste Management Licence on Sandy Lane (for contaminated soils down to Class C), he was now going through the same process for BHQ, sounding out the EA about the Waste Management Licence on BHQ and the terms on which it might be granted. It seems to me that that conclusion was inescapable from the content of his letter to the EA. Although Mr. Morgan sought to deny it, his answers were a jumble of references to other documents which did not answer the point put to him.
- Also at this time there was correspondence between Mr. Morgan and Mr. Downey about other aspects of BHQ. Mr. Morgan had been seeking compensation from the CEGB on the basis that the pylons extending across the site denied him the right to extract minerals from the land in the area of the pylons. Mr. Downey had advised that compensation was only payable if the pylons prevented 'building'. Morgan's letter to Mr. Downey of 20th November 1998 said that this was 'disappointing' advice, and he could not understand why such compensation was limited only to the loss of the ability to build upon the land, rather than to extract from it. He sought to argue that a landfill site was designed and then constructed with building techniques having an engineered base, engineered sides and an engineered cap and he could not see why that was any different to simple building on the land. Of course, that reference was consistent with DM putting in contained landfill at BHQ following engineering works (liners etc). Mr. Morgan denied that that was his intention at BHQ although, if that was right, the argument advanced in his letter was either meaningless or misleading.
- Of course, these references were relevant to the type of waste which DM eventually hoped to tip at the BHQ site. I have already noted the many letters in which DM's stated intention was to tip a wide range of waste materials, which were debated in detail with Mr Morgan. This was a matter taken up much more briefly with Mr. Downey in his own cross examination (Day 5/55-58). He said that he was dependent on what Mr. Morgan told him on this topic, and he did not have an understanding about the differences between inert and strictly inert waste. For example, when he instructed Peacock and Smith that the type of waste being tipped on the site was 'inert' (paragraph 193 below), he said that that instruction had come expressly from Mr. Morgan. I accept that evidence: on all technical matters, Mr Downey was entirely dependent on what Mr Morgan told him.
C9 The Enforcement Notice Proceedings
- Despite JH's clear advice about making an application under s.73, and despite Mr. Downey's gloomy prognosis as to the chances of getting what he wanted from the enforcement proceedings appeal, it was that latter route which Mr. Morgan chose to embrace. Of course, whether or not there were going to be enforcement notice proceeding was not in DM's gift; that was entirely a matter for SHMBC. They had said in terms that they were going to issue such proceedings. Thus the only thing that Mr Morgan could influence was the extent to which they were dealt with in a co-operative spirit, in an effort to address the real issues between DM and SHMBC. To this end, as noted in the last paragraph of Mr Downey's letter of 26th November (paragraph 167 above), Mr Morgan had already been in discussion with SHMBC about such a process, and had agreed on a way of dealing with the proceedings with Mr Molloy. On 3rd December 1998, Mr. Downey wrote to SHMBC setting up a meeting with Mr. Molloy for the following month to discuss the details. Mr. Morgan said (Day 3/60-61) that the information in the letter came from him. The most important element of that information was in the last paragraph:
"Mr. Molloy has also indicated a willingness to discuss the terms in which any enforcement notice might be framed. While we would, of course, hope that enforcement action can be avoided - and that is a further purpose of the proposed meeting - we, too, feel that a discussion of such terms might be productive. We hope you will agree that the object of any enforcement action would be not only to correct any existing breach of planning control but also, and equally important, to address so far as possible the substantive issues, pertaining to the permission. So far as we are aware the only alleged breach of planning control at the present time, and therefore the only matter which can be the subject of enforcement action, is that the area of land now exposed worked and unrestored exceeds 9 hectares. To take that matter to appeal would shed no light on the other more fundamental questions which arise in respect of the permission, such as whether the Council have properly and lawfully approved a low level scheme of restoration, and we believe that we should consider, jointly, how these questions can be brought before an appropriate forum for determination"
- The conversations, in which Mr Molloy had indicated his willingness to adapt the enforcement notice process in an attempt to resolve the real issues between DM and SHMBC, had been between Mr Morgan and Mr Molloy. Mr. Downey had played no part in them. This was because, as Mr Downey said, this entire exercise was Mr Morgan's idea (see also paragraphs 167, 169 and 178 above). Mr Downey agreed in cross examination that the final paragraph indicated that he was not wedded to the idea of the enforcement notice and that he remained open-minded as to how the matter could be brought forward for resolution.
- On 25th January 1999, SHMBC identified the breaches about which they complained (which were, as previously noted, the quarrying in excess of nine hectares without carrying out any restoration, and the failure to provide an aftercare scheme for approval which was in accordance with the approved restoration scheme). On 29th January 1999 there was a meeting attended by Mr. Morgan and Mr. Downey, as well as Mr. Molloy and SHMBC's solicitor. At that meeting, the typed note of what was said made clear that Mr. Downey yet again voiced his reservations about whether the status of the Manstock scheme could be considered by an Inspector in the context of an appeal against an enforcement notice. It was also recorded that it was because of this reservation that "the Council proposes to couch its enforcement notice in terms that it has not received for approval an aftercare scheme which addresses the approved restoration scheme."
- Importantly, the note also made clear that, at the meeting, a possible s73 application was discussed. The note said that it was agreed that, given the intention to proceed with the enforcement notice route as quickly as possible, "no purpose would be served by DM submitting an application to vary the existing conditions." In other words, because it was thought at that time that the argument as to the Cass scheme would be resolved quickly, the s73 application (the application to amend the existing conditions which JH had advised) could await the outcome of the enforcement appeal. Finally, the note of the meeting revealed that, even if SHMBC were successful at the appeal, Mr. Molloy was supportive of an application to infill the quarry, although such an application would necessarily involve a full environmental assessment.
- In cross-examination, Mr. Morgan was asked about this meeting note which, as noted above, clearly set out Mr. Downey's reservations about whether the appeal against the enforcement notice could lead to the sort of decision that both parties were looking for. He was asked whether Mr. Downey had indeed voiced those reservations at the meeting, in accordance with the note. Mr. Morgan chose not to answer the question on the first two occasions that it was put, but eventually confirmed at the third time of asking that Mr. Downey had expressed those reservations (Day 3/67). Mr. Downey was also asked about the note (Day 6/103-108). He confirmed that a s73 application was probably going to have to be made at some point, and that there was a certain degree of support from SHMBC although, as Mr. Downey pointed out, they considered that any such application would involve a full environmental assessment, which was contrary to paragraph 21 of JH's first November advice.
- This meeting marked the start of SHMBC's enforcement notice process. Mr. Downey confirmed that JH had not been asked to advise on that process as a means of achieving the objective of obtaining a planning permission in a suitable form, and it was put to him that he should have gone back to JH for further advice. Mr Downey said that the enforcement notice route was not one that he had recommended and was instead one that had already been discussed and agreed between Mr. Morgan and the local authority. He said that there was nothing at that point to go back to JH about (Day 6/108-112). He described the enforcement notice process "as a course of action that I think Mr. Morgan was set upon". It was a course of action that SHMBC were set upon too, and they were its instigators.
- On 13th April 1999, in accordance with the agreement reached at the meeting, SHMBC served on MJ a copy of the draft enforcement notice. The agreed nature of the process can be seen in the fact that the draft was provided for MJ's comment. The breaches that were alleged were those that had been canvassed previously, namely the failure to carry out restoration works at the site; the exceeding of the 9 hectares limit; and the failure to provide to SHMBC an aftercare scheme for approval which addressed the approved restoration scheme. The notice required DM to commence restoration works in accordance with the approved restoration scheme (i.e. Manstock) and to restore, to a standard fit for agricultural use, sufficient land so that no more than 9 hectares was exposed, worked or unrestored. On 21st April 1999, Mr. Downey responded saying that "The draft enforcement notice appears to us to bring out all the issues which need to be addressed, and accordingly we have no further comment to make on it." The formal version of the enforcement notice was served on 15th June 1999 in the same form as the draft.
- On 20th July 1999, MJ responded, enclosing a copy of their letter of that same date to the Planning Inspectorate and a copy of the enforcement notice appeal. The notice of appeal worked on a 'tick box' system. The following had been ticked by Mr. Downey:
a) That planning permission should be granted for what was alleged in the notice;
b) That the breach of control alleged in the enforcement notice had not occurred as a matter of fact;
c) That there had not been a breach of planning control;
f) That the steps required to comply with the requirements of the notice were excessive, and lesser steps would overcome the objection;
g) That the time given to comply with the notice was too short.
- Accompanying the notice of appeal was a document called the statement of reasons. This detailed document restated DM's case as to the impossibility of the Manstock scheme and the centrality of the Irlam Brick principle. Amongst other things, the statement of reasons said:
"12 … the only way of achieving the required agricultural end use without employing mechanical means of drainage (which are prohibited by Condition 12) is to restore the Site above the adjacent ground levels…
15… (b)… It will be noted that this exchange of correspondence [the December 1990/January 1991 exchange referred to at paragraph ? above] contains no reference whatsoever to restoration…. In short, the aftercare scheme which is required by Condition 3 cannot address what is claimed to be an approved restoration scheme and also meet the explicit requirements of Condition 3, namely that it should set out steps to be taken as may be necessary to bring the land to a standard fit for use for agriculture."
DM's case as to the conditions attached to the planning permission was summarised as follows:
"19. Condition 2:
No obligation is imposed on the Appellant by Condition 2 to carry out any restoration works at any given time or within any given time limit, save at the end of extraction operations (which situation does not apply in the present case). The simple failure to carry out any progressive restoration works (progressive being an expression which is not defined) is not of itself a breach of planning control, unless it is a breach of another condition. It is denied, therefore, that there is any breach of planning control in respect of Condition 2.
20. Condition 3:
The Council has had before it for approval since December 1993 an aftercare scheme [the Cass scheme]. It sets out proposals to bring the site to a standard fit for use for agriculture as required by Condition 3. That scheme was prepared in consultation with MAFF as required by Condition 3, and MAFF has accepted the scheme as an appropriate aftercare scheme for the site. ADAS Consulting has independently reviewed that aftercare scheme and also concluded that it is appropriate…
Condition 3 also expressly requires that the aftercare scheme should 'set out steps to be taken as may be necessary to bring overland to a standard fit for use for agriculture'. The scheme cannot do that if it is to be fettered by the supposedly approved restoration scheme.
It is the explicit requirements of Condition 3 which have to be addressed by the aftercare scheme, not the scheme which the Council purports to have approved as a restoration scheme under Condition 5. If they are incompatible then it is the expressed provisions of Condition 3, which are entirely supported by Conditions 2 and 17, which must prevail.
21. Condition 5:
…It is acknowledged that the site currently has more than nine hectares of land exposed, worked and unrestored. A breach of planning control in respect of paragraph (b) of Condition 5 is therefore admitted.
Note, however, that at the time of submission to the Council of an aftercare scheme (December 1993) there was no subsisting breach of Condition 5 (b); that breach has arisen as a direct consequence of the Council's misconceived and wilful failure to address that aftercare scheme, having regard to the requirements of Conditions 2, 3 and 17, and the operational imperative to continue working the quarry…"
- A clue as to the attraction of this enforcement notice appeal procedure to Mr. Morgan can be found in his letter to Love dated 1st February 1999, describing the impending enforcement notice process. In that letter, Mr. Morgan stressed that the matter would proceed by way of a hearing, rather than a public inquiry because, as he saw it, "the matters in dispute concern a matter of factual interpretation of planning conditions and do not touch upon wider issues involving the general public." I find that this letter confirms what I have already found to be a vital part of Mr. Morgan's strategy throughout this period: the attempt to tip waste at a politically and environmentally sensitive site by avoiding public scrutiny altogether. It explains why, despite the advice to that effect, DM made no s73 application at this time.
- That same approach can also be discerned in Mr. Morgan's subsequent letter to Mr. Downey of 1st July 1999, which was concerned with the procedure to be adopted in the appeal. On this occasion, Mr. Morgan was anxious to avoid even a public hearing, and for the matter to be dealt with in writing. He said:
"Lawrence, I know this goes against the grain and I appreciate more than anyone what a successful outcome will mean to the company BUT I just cannot see any underlying reason why we don't invite the authority to deal with this matter on the basis of written representations."
Again, that was only consistent with the strategy to which I have previously referred. If SHMBC could be persuaded to agree to DM's proposed way of dealing with the appeal, a public hearing would have been avoided altogether. Mr Morgan accepted in cross examination (Day3/88-89) that this was the most informal way in which the matter could be dealt with. He also acknowledged that SHMBC's contrary submission, that the matter be dealt with by way of public inquiry, was the most formal and the option ultimately chosen by the Planning Inspectorate.
- One of the first steps taken to prepare for the hearing of the public Inquiry was the preparation by Mr Downey of instructions to JH to advise on the merits of DM's case generally (and particularly as set out in the statement of reasons) and the powers of an Inspector to remedy the conflict between the Manstock scheme and condition 17 (principally the drainage issue). On this occasion, there was a consultation, which took place on 4th November 1999. The advice provided on that occasion as to the basic position was summarised in Mr Downey's manuscript note in these terms:
'(a) Both Wallington and SHMBC treated the Manstock scheme as having been submitted for the purposes of Condition 5;
(b) The Manstock scheme was approved as was evidenced by the letters of December 1990/January 1991;
(c) It was arguable that SHMBC had no lawful power to do so but it was too late to challenge that decision by way of judicial review;
(d) Condition 5(a) did require a restoration scheme;
(e) The Cass scheme did not satisfy condition 3 because it proposed forestry not agriculture.'
There was no suggestion that JH's advice about condition 5 was wrong, and it does not appear that the condition 5 arguments were even raised by Mr Morgan or Mr Downey. The alleged error on the part of JH (paragraphs 163-164 above) had apparently been long-forgotten.
- As to the approach to be adopted, JH advised that the enforcement notice appeal should be treated as a planning appeal, not an enforcement appeal, in view of the wide powers of the Secretary of State under s177 of the Town and Country Planning Act. Section 177 provided as follows:
"177 Grant or modification of planning permission on appeals against enforcement notices.
(1) On the determination of an appeal under section 174, the Secretary of State may—
(a) grant planning permission in respect of the matters stated in the enforcement notice as constituting a breach of planning control, whether in relation to the whole or any part of those matters or in relation to the whole or any part of the land to which the notice relates;
(b) discharge any condition or limitation subject to which planning permission was granted;
(c) determine whether, on the date on which the appeal was made, any existing use of the land was lawful, any operations which had been carried out in, on, over or under the land were lawful or any matter constituting a failure to comply with any condition or limitation subject to which planning permission was granted was lawful and, if so, issue a certificate under section 191.
(1A) The provisions of sections 191 to 194 mentioned in subsection (1B) shall apply for the purposes of subsection (1) (c) as they apply for the purposes of section 191, but as if—
(a) any reference to an application for a certificate were a reference to the appeal and any reference to the date of such an application were a reference to the date on which the appeal is made; and
(b) references to the local planning authority were references to the Secretary of State.
(1B) Those provisions are: sections 191(5) to (7), 193(4) (so far as it relates to the form of the certificate), (6) and (7) and 194
(2) In considering whether to grant planning permission under subsection (1), the Secretary of State shall have regard to the provisions of the development plan, so far as material to the subject matter of the enforcement notice, and to any other material considerations.
(3) The planning permission that may be granted under subsection (1) is any planning permission that might be granted on an application under Part III.
(4) Where under subsection (1) the Secretary of State discharges a condition or limitation, he may substitute another condition or limitation for it, whether more or less onerous.
(5) Where an appeal against an enforcement notice is brought under section 174, the appellant shall be deemed to have made an application for planning permission [in respect of the matters stated in the enforcement notice as constituting a breach of planning control].
(5A) Where—
(a) the statement under subsection (4) of section 174 specifies the ground mentioned in subsection (2) (a) of that section;
(b) any fee is payable under regulations made by virtue of section 303 in respect of the application deemed to be made by virtue of the appeal; and
c) the Secretary of State gives notice in writing to the appellant specifying the period within which the fee must be paid,
then, if that fee is not paid within that period, the appeal, so far as brought on that ground, and the application shall lapse at the end of that period.
(6) Any planning permission granted under subsection (1) on an appeal shall be treated as granted on the application deemed to have been made by the appellant.
(7) In relation to a grant of planning permission or a determination under subsection (1) the Secretary of State's decision shall be final.
(8) For the purposes of section 69 the Secretary of State's decision shall be treated as having been given by him in dealing with an application for planning permission made to the local planning authority."
JH's advice that s.177 could be used to alter the existing terms of the permission was therefore entirely consistent with his advice the year before as to the making of an application to amend the conditions under s.73 of the same Act.
- The rest of the advice given on 4th November was concerned with the evidence that would be required for the hearing. There were essentially two strands to that evidence. The first was a technical analysis of the Manstock restoration scheme, in order to demonstrate that the scheme could not have been achieved anyway, was a bad way of restoring the site to agriculture, required pumping in perpetuity, and did not comply with condition 17 (b). The second strand was to demonstrate the merits of the Cass scheme. Detailed advice was given as to the evidence necessary for this approach. The draft proofs were to be prepared by the end of November 1999 with a further conference in early December. JH advised the use of an expert with whom he had worked before, Mr Rob Smith of Peacock and Smith, Planning Consultants.
- It is perhaps important to note the various things which JH did not say. He did not say there was no implied right to tip waste at the site and that his earlier advice as to the Irlam Brick principle had been superseded. Nor did he say that the enforcement notice/appeal route that was being pursued was in some way wrong or misconceived. Instead he said that it should be treated as a planning appeal, which was what Mr Downey had always hoped it could be. In his evidence Mr Downey said that from this moment on JH "was absolutely taking the lead in devising the strategy for the inquiry" (Day 6/114), which is borne out by the subsequent documents.
- On 8 November 1999, Mr Downey wrote a formal letter of instruction to Mr Smith. The letter is important for two reasons. First, it set out Mr Downey's understanding of the advice given by JH. He said:
"[JH] says that if the appeal is to succeed the Appellant must rely upon the argument that planning permission should be granted and upon the wide powers vested in the Secretary of State in such cases. Essentially, the Secretary of State is invited to re-write the existing planning permission in such a way that the inherent contradictions presently contained within are removed, and permitting restoration above the level of adjacent land."
The other passage in the letter, on which Mr Morgan placed considerable reliance, was the reference to the fact that, that if DM was successful, it would involve the importation of such 6 million cubic metres of restoration material and that "only inert fill is contemplated." Mr Downey said that this information was given to him by Mr Morgan and there is no reason for me to doubt that answer. So this is what Mr Morgan told Mr Downey to tell Mr Smith for the purposes of his preparatory work for the Inquiry. It would of course have assisted DM's position in the Inquiry to play down the nature of the waste that they proposed to infill at BHQ. However, as we shall see, they were not ultimately able to do so.
- On 10th January 2000, Mr Smith wrote to Mr Downey. This letter too is important for two separate reasons. First, it demonstrated that both JH and Mr Smith were of the view that DM should not rely wholly on the argument that no approved restoration scheme existed. On the contrary, the letter made plain that they both thought that the Inspector would regard Manstock as the restoration scheme, and that the better point was that it would be entirely inappropriate in planning terms to enforce such a scheme, because the low level restoration scheme which it comprised was acknowledged, even by SHMBC, as being "far from ideal" and there was no provision for pumping in perpetuity. Mr Smith said that he was comfortable with the argument that the Manstock scheme would fail to achieve the original objective of agricultural restoration, and that it would result in the creation of a lake for which no maintenance or aftercare provision would be in place.
- The second point was even more important. Mr Smith said that, whilst he was "entirely happy and confident that positive policy and site-specific arguments can be advanced in favour of the alternative restoration scheme", it seemed to him that SHMBC was "technically correct in arguing that the proposed importation of inert waste had not been subject to any meaningful assessment, and that no details have been provided regarding (for example) possible effects on the aquifer, or other environmental impacts". Mr Smith was clear in his advice that an Environmental Impact Assessment was required. He went on:
"The view which I expressed to John Hoggett was that whilst my instructions emphasise the importance of seeking to try to resolve this issue by recourse to the deemed planning application, its seems to me in the circumstances questionable as to whether such a consent will be granted, bearing in mind the above issues. There must a question mark about the willingness of the Inspector to recommend that this matter can be dealt with through the imposition of fresh conditions, if the potential environmental impact of these conditions has not been assessed.
In our telephone conversation, John suggested that I should raise this issue with you and our client, and that we should consider the practical implications of commissioning the necessary work, with a view to presenting evidence on these matters to the enquiry."
The letter was copied to Mr Morgan.
- I find that the advice in this letter was clear. I therefore find that, from this point on, both Mr Downey and Mr Morgan knew that, whatever arguments were advanced about condition 5, and whether or not it could be said that the Manstock scheme was a restoration scheme which had been approved, the argument was unlikely to be successful and that DM's commercial interests were best served by attacking the Manstock scheme on its merits. Secondly I find that it was clear that, from a planning perspective, an Environmental Impact Assessment (later an Environmental Statement) was necessary.
- Of course, an Environmental Statement was just what Mr Morgan had hoped to avoid, because that would involve assessing the environmental impact of using BHQ as a tip for 5, 6 or 7 million cubic metres of unspecified fill. As Mr Smith had pointed out, that assessment had not yet happened, and Mr Morgan was clearly aware of the potential problems that this would create for him. Therefore, just three days later, on 13th January 2000, Mr Morgan wrote to Mr Downey to say that Mr Smith was "tripping him self up" on some issues, and in particular on the perceived weakness of there not being an Environmental Statement. The letter then sets out a detailed argument, on technical grounds, as to why Mr Morgan was adamant that no Environmental Impact Assessment was required. Mr Morgan also said:
" … It is a nonsense and has been a nonsense that D Morgan PLC has had to contend with and endure for some six years now (as has its predecessor Walter J Wallington Ltd) the Council's continued suggestion that an environmental assessment is required together with a planning permission for importation of restoration materials. That planning permission is extant – it already exists."
- Accordingly, Mr Morgan refused to accept the advice from his own consultant that an Environmental Impact Assessment was necessary. When cross-examined about it (Day 3/96-101), he admitted that he felt strongly that no such Assessment was required. Initially, he sought to argue that this was because of the advice that JH had given in his first November advice of 1998 that an Environmental Statement was not required but that was obviously wrong for three reasons: first, according to Mr Smith's letter, it was JH who had expressly told Mr Smith to raise the question of the Environmental Impact Assessment with Mr Downey; secondly, JH's advice was in connection with the legal requirements of the s73 application (which had in any event not been made), whilst Mr Smith's concerns were about maximising DM's chances of success on the broader issues arising in the appeal; and thirdly, there was no mention anywhere in Mr Morgan's detailed letter of JH's advice.
- It seems to me plain that, in truth, Mr Morgan was completely opposed to producing an Environmental Assessment for the same reasons that he had always been against it: that such a document would be expensive and time-consuming to prepare, and would have to deal with highly controversial issues on which there was little prospect of success. A failed attempt for new permission was, as Mr Morgan's correspondence made clear, a worse option than clinging to the possible argument that permission had already been granted. Moreover, I find as a fact that, even if Mr Morgan had known that the Irlam Brick principle was not available to him, he would still have resisted the suggestion that an Environmental Impact Assessment should be provided. For the wider reasons noted above, he was – as he admitted in cross-examination – adamantly opposed to such a course.
- Mr Downey was also asked about this letter (Day 6/112-114) and he was asked whether it would have been a good idea if the matters being raised by Mr Smith had been teased out a substantial time earlier. Mr Downey denied that. He pointed out that, when JH had given his advice about the Environmental Statement in November 1998, it was on the basis that no such Statement was required, because the instructions from Mr Morgan were that there was no substantial environmental impact arising out of the breach of condition, or the proposed Cass scheme. At all events, it appears that, following this vehement opposition from his client, Mr Smith changed his mind and thought that the matter could be dealt with without an Environmental Assessment.
- In the early part of 2000, it was discovered that the level envisaged within the detailed documents that made up the Manstock scheme (83 metres above the site datum or ASD) was not the same level as the maximum level of extraction permitted by the 1990 conditions (13m above AOD). There was a misalignment between the AOD and ASD figures: the Manstock restored level of 83 m ASD translated into a figure of about 19.5 metres AOD. That gave rise to the prospect that SHMBC would argue that the maximum depth of extraction was governed by the Manstock scheme itself, rather than the 13 metres AOD identified in condition 15. Indeed, when alerted to it, they promptly took that point on 8th March 2000. On this analysis of the Manstock scheme, the amount of voidspace available for tipping would be significantly reduced. However, on site, DM continued to excavate to 13 metres AOD, apparently on the basis that the excavation had always been to that depth and that SHMBC had not previously forbidden them to go down that far.
- The Public Inquiry was advertised for April 2000. Just as Mr Morgan (and SHMBC) had foreseen, there was a good deal of local opposition to the proposal to tip waste at BHQ. His suggestion in evidence, that the political opposition to his proposals had 'evaporated', was demonstrated to be plainly wrong. I have seen the numerous letters of objection that were lodged which included objections from the local MP, North West Water, the local Parish Council, and most important of all, the Environment Agency. Accordingly Mr Morgan's hopes, that the matter could be addressed without significant public controversy, were dashed.
- On 2nd February 2000, MJ lodged DM's Rule 8 Statement, which summarised DM's case to be advanced at the Inquiry. That document was largely a repetition of the statement of reasons, and it is unnecessary to set any of it out in detail. It is, however, to be noted that, at paragraph 6.12, there was again an express reference to and reliance upon the principle in Irlam Brick. At no stage was this reference, or the similar reference in the statement of reasons (paragraph 186), queried or challenged by JH.
- For the purposes of the hearing in April 2000, a good deal of evidence was prepared. I have already referred to the work being done by Robert Smith. In addition, there was a report from ADAS dealing with drainage. This report concluded that the Cass aftercare scheme was entirely practicable and that the Manstock low level restoration strategy was inappropriate to achieve an agricultural end use, and was therefore inconsistent with the planning conditions. In this way, the ADAS report was consistent with the strategy outlined by JH at the consultation in November 1999 to show that, even if the Manstock scheme had been approved under condition 5, it was on its merits an entirely undesirable scheme, which would leave the site with a large, unfilled, non-draining hole in the ground.
- In addition, there was a proof of evidence from Richard Cass. He explained to me that, because he had not actually had any involvement in the scheme which bore his name, he had had to prepare this proof from scratch. The proof dealt with the possible restoration schemes and identified a total of four: the Manstock scheme, the 1993 Cass scheme, the 2000 Cass scheme (which was a re-worked version of the 1993 scheme with minor variations), and the SHMBC position in 2000 which reduced the potential for tipping still further because of the discrepancy as to depth and the position set out in the Manstock scheme, which translated to 19.5m AOD (paragraph 201 above). This proof was the very first time that detailed calculations had been done about the volumes involved in the various schemes. It showed that the Manstock scheme involved 2.9 million cubic metres of restoration material, whilst the 1993 Cass scheme involved a total of 6.9 million cubic metres, and the Cass 2000 scheme involved only slightly less, at 6.27 million cubic metres. For SHMBC's 2000 position Mr Cass arrived at a figure of 1.2 million, because of the reduction in depth.
- Beyond that, Mr Cass' proof was largely a recitation of the technical reasons why the Manstock scheme was a poor one and why the 1993/2000 Cass scheme should be preferred. Mr Morgan (Day3/103-104) confirmed that the proof was there to show the defects of Manstock (and SHMBC's 2000 version of Manstock), and the merits of the Cass scheme. Mr Cass also said in his proof that the proposed import of the restoration material in order to carry out the Cass scheme would not introduce activities which were of a sufficiently new or different nature from those that had been taking place on the site, and could have been reasonably envisaged by the SHMBC, at the time of the planning consent in 1990. For this reason, Mr Cass confirmed that, in his view, a formal Environmental Assessment was not required (Day 5/12).
- There was also a proof of evidence, dated March 2000, from Alex Albon, who worked for AIG Consultants. He was an environmental consultant. Amongst the other views summarised in the first part of his proof were these:
" • The site is located within a Ground Water Source Protection Zone (Zone II) referable to a North West Water Ltd pumping station. However, Environment Agency policy for the protection of ground water resources confirms that landfilling operations can take place within Zone II, provided that imported wastes present a medium to low polluting potential and that operational safeguards are implemented during the land filling activities.
• Approved restoration materials will satisfy the Environment Agency's policy and a case study is presented for a licenced landfill site operated by D Morgan Group which is also located with source protection Zone II."
The supporting 'case study' was the Sandy Lane site in Macclesfield which was over an aquifer and was within a Source Protection Zone II, and where the water table was high and close to the base of the existing sand quarry void. The argument in Mr Albon's statement was that, by reference to Sandy lane, BHQ ought also to be granted a waste management licence for the disposal of non-leachable restoration materials including demolition materials. The suggestion at paragraph 6.4 was that these would be down to Kelly Class C and therefore include contaminated soils.
- Other important points in Mr Albon's proof included a reference to the fact that the Environment Agency hydrographs clearly showed rising ground water levels, and that during a meeting with AIG, the Environment Agency suggested that natural ground water levels in the BHQ area could rise as high as 15 metres AOD. Importantly, his proof exhibited a letter from the EA to AIG dating back to 8th April 1997, in which a number of specific concerns were raised about the rising groundwater table and which was itself a reflection of a similar concern raised by the EA at a meeting with AIG on 8th January 1997, where the possible groundwater level of 15m AOD was expressly identified. Later, because of this specific concern on the part of EA, excavation and tipping were indeed limited to 15 metres AOD. As to the interaction between waste and the protection of ground water, Mr Albon said that the Sandy Lane licence was a typical source protection Zone II management licence, and that a similar waste management licence would be appropriate for BHQ. Such a licence would be required before restoration materials could be imported to BHQ, and Mr Albon acknowledged that such an application would have to be considered in terms of "assessing whether the facility would cause pollution to the environment, harm to human health or be seriously detrimental to the amenity at the locality". On its face, this seems to confirm Mr Smith's earlier advice, which Mr Morgan had rejected, that an Environmental Statement was required.
- Mr Morgan was asked about this document, and in particular the equation made by Mr Albon between construction and demolition waste and 'medium to low polluting potential'. Mr Morgan seemed to suggest that Mr Albon's information came from Mr Downey (which could not possibly be right, given its detailed technical nature), and he endeavoured to reject Mr Albon's evidence that construction and demolition wastes had a medium pollution potential, notwithstanding the fact that, as noted in paragraphs 78-81 above, that was precisely how they were defined by Mr Youngs in his Ewloe proof, as well as the Kelly Scale.
- As to Mr Albon's repeated use of Sandy Lane as a case study (where a wide range of waste was tipped, down to Class C) Mr Morgan was obliged to say that this proof, which he saw before the hearing, was somehow mistaken and that Mr Albon should not have made this comparison. He purported to say that this was why Mr Albon was subsequently sacked although, as noted below, following the hearing in April 2000, Mr Albon together with all the other consultants was circulated with Mr Morgan's new strategy. The evidence as to 'a mistake' seems implausible, given that many others (including Mr Morgan himself) had sought to use Sandy Lane as a comparator for BHQ.
- Finally, Mr Morgan was asked about Mr Albon's recommendation "that solid materials derived from industrial and commercial sources possessing a 'low to medium pollution potential' could also be imported to BHQ for restoration purposes." That was Mr Albon's evidence to the Inquiry in April. It was plain that he was advancing a case that a wider range of waste could be imported to BHQ than the strictly inert types of waste for which DM now contend. Mr Morgan therefore had to argue (again) that Mr Albon's evidence was wrong and he did not agree with it. Again, I concluded that Mr Morgan's answers were designed to fit solely with his claim now; I find that not only was Mr Morgan entirely aware of what Mr Albon was saying at the time, but that also what Mr Albon was saying was entirely consistent with the strategy which I have already found DM were pursuing, namely to endeavour to tip a wide range of waste material at BHQ.
- What is more, that view is also borne out by the letter from the Environment Agency to SHMBC dated 5 April 2000, written shortly before the hearing. The letter made plain that the EA would object to the disposal of anything but non-polluting material at BHQ because it fell within the Zone II category. The EA also said that they needed to be adequately assured that the disposal of even non-polluting material could be accomplished, especially in the light of the rising groundwater levels which might affect the site and might saturate the waste material. The EA said that they needed to consider the significance of the immediate catchment of inert wastes, which included areas where land contamination was common. They also said that, given there were few mitigating factors, their view was that "the only infill that could ensure protection of the water supply is inert, naturally occurring excavated material." It seems to me that, once again, this letter is consistent with everyone's general perception that DM were trying to tip more than strictly inert waste at BHQ. Even Mr Morgan accepted (Day 3, page 124) that construction and demolition waste (which was still the only type of waste that had actually been identified by DM) was a much wider category than "inert, naturally occurring excavated materials" as required by the EA.
- Mr Albon provided Mr Morgan with a copy of his briefing note to JH, two days before the hearing, on 10 April 2000. In the note, Mr Albon maintained the comparison with Sandy Lane and said that the groundwater levels set out in his proof were considered a 'worst case'. Mr Morgan was asked why, if he considered it to be erroneous, Mr Albon was still making the comparison with Sandy Lane. He had no coherent answer. For the same reasons noted before, I find it inconceivable that, if Mr Morgan did think that the comparison was untenable, it would have been maintained by his own expert at DM's appeal.
- Later that same day, Mr Albon provided an additional briefing note to Mr Downey which he said he had discussed with Mr Morgan. Mr Albon's note as to the range of waste for which DM was seeking permission was clear:
"The Appellant [DM] should not seek to exclude any non-putrescible and non-polluting materials on purely physical characteristics and source definition and should additionally consider those materials which would be permissible under the Environment Agency's PPPG and those which are classed as 'qualifying material' by HM Customs & Excise in being exempt from Landfill Tax."
This was a clear indication that more than inert material, let alone strictly inert material, was being envisaged or, at the very least, not being ruled out. That is apparent in Mr Albon's suggested amendment to condition 5 which referred to the importation of fill materials:
"….of a solid non-putrescible, non-biodegradable nature derived from works of construction, demolition, landscaping/reclamation (comprising sub-soils, sands, silts, clays, gravels, brick, concrete, stone or similar and other non-leachable materials) ……"
Mr Morgan was asked on three separate occasions to confirm that this was broadening the scope of the materials. He denied it by saying that, whatever else, "nothing must come out of it [the waste]". He did not address the categories or definitions of waste at all.
- At the same time, JH was also turning his mind to the precise amendments to the conditions. That is apparent from his fax to Mr Downey dated 7th April. One of the amendments was in these terms:
"Notwithstanding any scheme or programme for the restoration of the site previously approved by the Mineral Planning Authority and notwithstanding Condition 11, the restoration of the site, including the importation of fill materials of soils, clays, brick and stone shall take place in accordance with the scheme and programme described and illustrated in paragraphs 4.1 to 4.19 of Cass Proof of Evidence, appendices 15 and 20 thereto and CD 23 or in accordance with any further scheme submitted to the Authority and approved in writing."
It was suggested to Mr Downey (Day 6/114-115) that it might have been a good idea to sort out this amendment rather earlier than four days before the hearing. Mr Downey said that JH was:
"…absolutely taking a lead in devising the strategy for the inquiry and I don't think that I gave any thought as to the time at which it would or might be appropriate to have some draft conditions available. I think that this is not inconsistent with what happened subsequently. I seem to recall that in the 2002 inquiry, draft conditions were appearing at quite a late stage. So it is not something that I did then or particularly now have a view."
- At the same time, Mr Downey was advising Mr Morgan as to the possible outcome of the Public Inquiry. In his letter of 5 April, he said that, in view of the agreement between SHMBC and DM as to the enforcement notice route:
"I do not think that we have much chance in succeeding in any claim that it was not expedient to issue this enforcement notice at the outset."
In answer to a point raised by Mr Morgan about the Manstock scheme not being a restoration scheme, Mr Downey was even more emphatic in this letter, telling Mr Morgan that he did not believe that he was right,
"…having regard to the advice given by JH. He has said on several occasions that the scheme which is required by condition 5 of the planning permission is a scheme which includes restoration, and condition 5 itself is therefore a restoration condition. It is legitimate for the Authority to refer aftercare to that condition, and the scheme approved under that condition."
- In my judgment, this was an important letter, although its significance was not perhaps fully picked up during the trial. What Mr Downey was doing here was advising that the condition 5 argument – on which Mr Morgan had thought that JH was 'wrong' in November 1998, a view with which Mr Downey had said he agreed – would fail, and reminding him of JH's advice to that effect. That provides further confirmation that, to the extent that Mr Downey had originally agreed that JH had been wrong in his second November advice, that had long since been forgotten, and that the strategy in the enforcement notice appeal did not depend in any way on this possibility.
- Mr Downey was more optimistic about the fact that SHMBC were relying on a scheme which itself required pumping, which they had no power to impose. He noted that SHMBC had refused to consider how the required restoration might be achieved in the absence of pumping or to consider whether the planning permission itself allowed a restoration scheme to be implemented which did not rely on pumping. He described that as unreasonable and said that he thought that SHMBC had 'got into a complete muddle'. When asked about that in cross-examination, Mr Downey said that both Mr Morgan and he believed at that time that there was implied planning permission under the Irlam Brick principle and that what SHMBC had been insisting upon amounted to a denial of that. He said: "that did seem a muddle".
- The appeal hearing started on 11 April 2000. JH opened the appeal and dealt, amongst other things, with whether or not an Environmental Statement was required. He gave reasons as to why it was not necessary and that DM invited the grant of permission for what had happened in breach of the planning consent, there being no harm arising out of the breach. He also said that it was open to the Inspector to amend the planning conditions.
- In the afternoon, Mr Albon gave evidence. In cross-examination by Mr Gilbart QC, as recorded by Mr Downey's manuscript notes, Mr Albon gave away DM's position on the Environmental Statement. He admitted that the Cass Scheme had not been discussed with the Environment Agency, and that the importation of waste would require a new working plan. He agreed that the planning permission did not permit DM to do what they wanted to do. He agreed there was potential for continuity between the base of the fill and the aquifer. He was referred to guidance which suggested that an Environmental Statement was required, and confirmed that there was no reason for the Inspector to deviate from national policy. He was then taken to the Waste Management Regulations and he was asked whether he had conducted a Best Practice Environmental Option (BPEO) exercise for this site. Mr Albon admitted that he had not. He also admitted that, in the absence of lining or engineering, there would probably be a need to remove some water from the site.
- There can be no doubt that Mr Albon's evidence wrecked Mr Morgan's strategy because, having set his face against the production of an Environmental Statement, Mr Albon effectively accepted that one was required. That was confirmed in Mr Albon's re-examination when he was asked whether there was information now available which would lead him to advise DM that there was a reasonable prospect of satisfying Environmental Agency requirements. He answered in the affirmative. After that, an adjournment in order to prepare such a Statement became the best that DM could hope for.
- Curiously, when he was cross-examined about it, (Day 3/128-130) Mr Morgan did not accept that it was as a result of Mr Albon's evidence that the hearing was adjourned for the preparation of an Environmental Statement. Mr Morgan's evidence was to say that Mr Smith had been right originally to suggest that such a Statement was required under the Regulations, which was an answer that appeared to have forgotten that it was he, Mr Morgan, who persuaded Mr Smith to take a contrary view.
- In any event, on the second day, 12th April 2000, JH told the Inspector that he sought an adjournment of the inquiry. He gave an undertaking that DM would submit an application under s73 to vary the planning conditions, supported by an Environmental Statement, within 12 months, and if SHMBC refused the application under s73, or failed to deal with it, then the appeal against that refusal/failure would be brought back to the Inspector to be dealt with together with the enforcement notice appeal. The note of what JH said comes from Mr Downey's manuscript note, as does the record of what Mr Gilbart QC said in response, which was that SHMBC did not concede that the Inspector had the power to grant permission for either of the Cass schemes.
- In many ways, however, the best record of the reasons for the adjournment is set out in the Inspector's own note which was in these terms:
"3. Mr Hoggett for the appellants said that in the light of the evidence which had been presented during the first day, the appellants had decided that it would not be professional to argue that an Environmental Statement would not be required in this case. It was accepted that should either the appellants' scheme 3 or 3a (both of which involved the restoration of the appeal site by the importation and deposit of inert wastes) to be pursued, such an investigation would be necessary. It was also acknowledged that conditions on the present planning permission could not be amended in the manner desired by the appellants, in the absence of an Environmental Statement…..
4. In the alternative it was suggested that the inquiry should be adjourned for a duration. The Appellants would then undertake to submit the application under section 73 for a variation of the conditions which had been imposed in 1990, which would be accompanied with and supported by a proper and full Environmental Statement. Discussions could commence immediately with the local planning authority towards this end. Such an application would then be lodged within a period of 12 months, provided only that the appellants were not prevented or hampered in this intention by the failure of other interested parties (such as the Environment Agency) to make relevant contributions within this time scale. However the appellants would use their best endeavours to meet this timetable.
……"
The Inspector also noted Mr Gilbart's position that SHMBC did not concede that the present inquiry possessed the power to grant permission for the Cass scheme and had requested a fresh application as long ago as 1994, but that, even so, SHMBC was prepared to support the request to adjourn, subject to the above reservations. The Inspector adjourned the inquiry for a period of 20 months, as noted in the last paragraph of his report, the precise date of resumption to be agreed between the parties.
- The undertaking given by JH, namely that a s73 application would be made within 12 months and would be accompanied by an Environmental Statement, were therefore recorded by the Inspector, and by Mr Downey in his manuscript note of the hearing. So too was the 20 month period of the adjournment, to allow proper time for the s73 application and the Environmental Statement to be fully considered, and to allow DM to take stock if the application ran into difficulties. These periods are also confirmed in the witness statements of JH and Mr Downey. Although the latter was asked in cross-examination about Mr Gilbart's reservation of SHMBC's position, no other questions were put in cross-examination as to any mistake or misunderstanding in the undertakings given. Accordingly, it was with some surprise that I noted that Mr Morgan, who had been present at the hearing, sought to argue that it was his understanding that he had the whole 20 months in which to make the s73 application (Day 3/129-143). He sought to support that version of events by reference to a paragraph in JH's witness statement which, on analysis, was dealing with a completely different event. As noted, the right paragraphs of JH's statement made clear that everybody understood that the section 73 application was going to be made within 12 months, which was confirmed in the evidence of Mr Downey and the Inspector's written decision. I was driven to conclude that, in the light of the almost total inactivity on DM's part during the next 20 months, dealt with below, Mr Morgan was telling a deliberate untruth, designed to spread the blame around for what was plainly and obviously DM's own default.
- Immediately after the hearing was adjourned, there was a meeting on the balcony of the Town Hall where the inquiry had taken place. It was common ground that Mr Morgan asked JH if he should make a full application for planning permission rather than using s73. JH said words to the effect that, off hand, he could see no reason why DM should not proceed down the s73 route, but that if there were problems with that application, DM could make a full application for planning permission. That was what Mr Morgan said happened (Day 3/148-149); that was what Mr Downey said JH had said (Day 6/118-120); and it was confirmed by JH in his witness statement. Although Mr Morgan suggested that he did not understand this advice (Day 3/149-150), he sought no clarification, and his subsequent explanation made plain that he fully understood the advice that he had been given by JH. There was, in truth, nothing very complicated about it.
- In addition, Mr Downey said that, either during that conversation or at some time around then, it became clear to him that, as between a s73 application and a full planning application, Mr Morgan favoured the s73 route. As Mr Downey put it (Day 6/120), Mr Morgan "was determined to explore every other possibility before doing that [making a fresh application for planning permission]." That chimes with JH's witness statement, where he says that Mr Morgan had said, with a slight smile, that he had his reasons for not making a fresh application for planning permission. Although Mr Morgan denied saying that (Day 3/150-151), it seems to me that this is one of those occasions where, there being a direct conflict in the evidence, I am bound to prefer the evidence of Mr Downey and JH. And of course, for the reasons set out in the preceding paragraphs, Mr Morgan did indeed have very good reasons for not making a fresh application for planning permission. As long as there was even a remote possibility that Mr Morgan could start tipping 5 or 6 million cubic metres of waste at BHQ without having to go through the difficult and politically sensitive business of making a fresh planning application, then that was going to be his preferred route.
C11 Events between 2000 and 2001
- For the next 14 months (April 2000 to August 2001) almost nothing happened. For the reasons set out below, that default was wholly the responsibility of DM and Mr Morgan. His forlorn attempts in the witness box to blame others did the general credibility of his case, and his own evidence in particular, no favours at all. Moreover, this lengthy delay (just like the delay between 1994 and 1998, and the delays after 2002) arose because DM had more important priorities than sorting out the planning position at BHQ, a constant feature of the evidence which DM's hypothetical claim for damages purports to ignore altogether.
- The day after the hearing, 13th April 2000, Mr Smith of Peacock & Smith sent Mr Morgan a fax, with copies to Cass, Albon, Downey and JH. This attached a preliminary note in relation to the Environmental Statement. It set out what Mr Smith considered was necessary for that Statement, which would accompany the proposed s73 application. It was quite clear that there was a lot of work to be done. Mr Morgan studied Mr Smith's note, and, in a letter to Mr Downey of 19th April 2000, (which was also copied to all other members of the team, including Mr Albon, but not JH) he set out DM's strategy in relation to that major exercise:
"The Company will appoint any additional necessary consultants whilst retaining the services of all those representing the Company at the recently adjourned inquiry.
Written instructions will be forwarded from the Company for any technical assistance in providing the appropriate content within the E.S.
The Company will itself proceed with setting out the 'style' and format of the environmental statement into which the content will be inserted. I say this because the Company has developed 'expertise' in formatting environmental statements relevant to mineral workings and Periodic Reviews which is now a statutory requirement applicable to all mineral permissions. The first periodic review at BHQ must take place in 2005 and for this reason the Company will now carry out the requirements of the periodic review in assessing any significant impact arising from its site activity against the background of a formal environmental statement….
It is my intention to work up the E.S. to an advanced preliminary document for internal consultation with Mace and Jones, Peacock Smith, Cass Associates and any comments will be considered in finalising a draft which I then intend to use as a discussion document for consultation with Steve Molloy of SHBC for the Council to review and comment upon. I intend to achieve a position where no reasonable authority could consider it to be either
(i) invalid
(ii) otherwise deficient
(iii) and that the conclusions are properly evidenced and valid and if possible agreed….
I anticipate that by December of this year the Company and the Council with the benefit of a 'final' draft E.S. will be narrowing down their differences and focussing on any remaining areas of disagreement or focussing on the need for any further information."
- In my judgment, that was as clear a statement of intent as Mr Morgan ever made in this case. DM – and for practical purposes that meant Mr Morgan – was going to be solely responsible for putting together the Environmental Statement, which was itself the critical element of the s73 application which JH had undertaken on their behalf that DM would make within 12 months. Moreover, the proposed timetable was entirely in accordance with the 12 months maximum period which Mr Morgan tried to tell me was not what he had understood. Despite all this, as noted below, Mr Morgan did not start work on this exercise until August/September of 2001, a delay which gives rise to the principal allegation of contributory negligence against DM. Given the terms of this letter, how could DM/Mr Morgan fail to accept sole responsibility for that delay?
- Such answer as there was could be found in Mr Morgan seeking to say (Day 3/151-155) that Mr Downey immediately rang him up, and said that DM could not use what they had done for periodic reviews for the purpose of the Environmental Statement. Mr Morgan said that he felt chastened for writing the letter, and was made to feel "like a naughty schoolboy". He twice avoided the question that he was to blame for the subsequent delay. It appeared that his case was that, after this alleged telephone conversation, full and total responsibility for organising the Environmental Statement had somehow been passed to Mr Downey. Mr Downey, for his part, refuted the suggestion that there had been any such call (Day 7/10-15) saying that it was 'absolutely untrue'. He said that, following the balcony conversation and, in particular, after Mr Morgan's letter of 19th April, there was nothing for MJ to do. He said he would have commented if there had have been anything particularly unsuitable in the approach proposed by Mr Morgan, but there was not. He suggested that what Mr Morgan may have been referring to was a conversation which took place a year later, when Mr Downey explained his concern to Mr Morgan that nothing had happened for a year or more.
- I find as a fact that there was no such telephone conversation in April 2000. I consider that this was another deliberate untruth on the part of Mr Morgan, motivated by his realisation that otherwise there would be a lengthy period of delay for which only he was responsible, and which delay would sit very uncomfortably with DM's hypothetical case on causation which postulated that, if the legal advice had been different, this was the very time when huge resources would have been expended by DM on a fresh planning application for BHQ. I accept Mr Downey's evidence that the alleged call did not happen. It was not recorded or referred to anywhere. And Mr Downey could not have known that the work for the periodic reviews was inappropriate for the Environmental Statement: that was a matter of expert input.
232A Moreover, I consider that Mr Downey's oral evidence was further confirmed by his letter of 25th April 2000, which referred to Mr Morgan's letter of 19th April, made no mention of any alleged telephone conversation, and said, "I will be happy to provide whatever input I can to the development of the Environmental Statement." That was only consistent with Mr Downey waiting to be asked to undertake any specific tasks in relation to the Environmental Statement, but not being responsible for its production. I accept Mr Downey's evidence in cross-examination (Day 7/15) as follows:
"If I had, on 20th April or thereabouts, assumed a responsibility for doing anything in relation to the preparation of the Environmental Statement, it is frankly inconceivable that I would have written this letter of 25th April in these terms, saying I would be happy to provide whatever input I can. There was no such conversation."
- In their closing submissions, DM were clearly aware of their difficulties on this part of the case, and its potential consequences for their causation arguments. So at paragraph 54b of section 2 of those submissions, it is alleged that Mr Downey 'failed (as any competent solicitor would have done) to set out in writing what was to be done, by whom and when.' This new criticism is not pleaded against MJ as a particular of negligence. And even if it had been, in circumstances where the client (DM) had set out precisely 'what was to be done, by whom and when', I consider that it is an absurdity to criticise Mr Downey for not duplicating that effort.
- The only notable event that occurred shortly after the hearing was a letter from Bold Parish Council to the Planning Inspectorate dated 3 June 2000. That letter noted that, whilst the Council were pleased that DM were going to produce an Environmental Statement, they were concerned that DM's obvious failure "to observe the conditions of the planning consent to date", which they said "suggests a willingness to operate in a somewhat less than professional manner." Mr Morgan complained about the potentially defamatory nature of this statement and, on 15 June 2000 it was expressly withdrawn. This episode shows two things: the continuing local hostility to the proposal, and DM's willingness to threaten legal proceedings if they considered it to their advantage to do so, an attitude that may go some way towards explaining the wariness with which they were treated by SHMBC and others.
- On 4th December 2000, the Planning Inspectorate wrote to MJ and SHMBC seeking their views in relation to paragraph 13 of the Inspector's letter of 27th April, and the potential withdrawal of the enforcement appeal. On 13th December, Mr Young expressed his puzzlement to Mr Downey about the letter but it appears that Mr Morgan was away and no instructions were given to respond. It was certainly not suggested by Mr Youngs (or Mr Morgan when he returned from holiday) that, in some way, MJ were dealing with the next steps to be taken. SHBMC, on the other hand, did respond on 14th December pointing out (correctly) that:
"…since the adjournment of the Public Inquiry, the necessary works to remedy the breach have not been undertaken, nor has the Council received a planning application, nor has it been approached regarding a scoping exercise for the necessary EIA. Under the above circumstances the Council would wish to see the public inquiry reconvened at the end of the 20 month period."
- Importantly, Mr Downey wrote to Mr Youngs on 18th December expressing his own concern about the delays. He said:
"The Council's letter to the Inspectorate is correct in setting out the rationale of the adjournment, namely that it would allow time for the preparation of a full environmental impact assessment to accompany a formal planning application. As I understood it, those matters were left to be dealt with by Denis (and/or yourself) and Rob Smith. My recollection is that it was estimated that the work involved could take 9 months – which means that we are still a month or so away from when it was expected to be concluded – but I have received no information as to progress."
This was Mr Downey, very gently, ringing the first alarm bell, that 8 months had gone by and it appeared that no progress of any sort had been made. There was no reply to that letter; it was certainly not suggested that Mr Downey's understanding of the position, as set out in the proceeding paragraph, was incorrect, or that he was in fact responsible for the Environmental Statement. Mr Morgan's response, that there was no reply because he did not see the letter at the time because he was on holiday, is facile, given Mr Morgan's close control of every aspect of the applications relating to BHQ.
- On 2nd January 2001 the Planning Inspectorate chased MJ for an answer to their December letter. This was provided on 4th January in the terms of a holding response ("we presently await some more detailed information from our clients"). In the letter Mr Downey said that it had been estimated that a period of at least 9 months would be required before a planning application could be lodged, so it was no surprise that such an application had not yet been received by the Council. In the absence of any instructions from DM, that was the only thing Mr Downey could do.
- The matter then went to sleep again. On 9th April, SHMBC wrote to the Planning Inspectorate to confirm that they had not received a planning application, nor had they been involved in a scoping exercise in support of an Environmental Impact Assessment, as part of the required application. They sought a fresh date for the appeal. Mr Downey's evidence was that this letter, which was copied to Mr Morgan, made Mr Morgan realise that he had done nothing about the Environmental Statement and that he needed to get on with it, but by then, a whole year later, he had forgotten what he was supposed to be doing (Day 7/19-20). This is borne out by Mr Morgan's letter to Mr Downey of 30th April 2001, which confirmed that Mr Morgan had decided to appoint yet another firm of consultants, Barris Liptrott, "to co-ordinate the preparation of documents/application." Mr Morgan asked Mr Downey "to set out our requirements in respect of what was agreed at the adjourned public inquiry and what is now necessary". Mr Morgan accepted that the letter made plain that "the ball was in his court" and that he intended to instruct Mr Liptrott to co-ordinate. He agreed that it was not for somebody else, like Mr Downey, to do any of that (Day 3/158-159). That was also Mr Downey's evidence (Day 7/20-21).
- Mr Downey said that he considered it likely that, following Mr Morgan's letter of 30th April, there had been a telephone conversation between the two men in which he had criticised Mr Morgan for not having made any progress with the Environmental Statement. He could not recall that, but he thought that that was a reasonable assumption. He thought he would have questioned whether DM had the resources to carry out the work for the Environmental Statement. Following that conversation, Mr Downey wrote to Mr Morgan on 24th May. The letter made plain that Mr Downey had been able to speak to Mr Smith, who was happy to co-ordinate the preparation of the Environmental Statement which would support the s73 application. Just to underline that nothing had happened for 13 months, Mr Downey enclosed a copy of Mr Smith's memo dated 13th April 2000 (paragraph 229 above) which set out the detail work required for the Environmental Statement.
- Still Mr Morgan, did not undertake any of the co-ordination responsibility which he had taken upon himself in his letter of 19th April 2000. He confirmed in cross-examination, (Day 3 page 161) that he did nothing in response to Mr Downey's letter to him of 24th May. He said that this was because he did not think that he needed to do anything which, in view of the terms of the correspondence over the previous year, was not an answer which I can accept. Whatever else Mr Morgan was doing, it is plain that BHQ was, at that time, very low on his list of priorities. Indeed, it appears that, at this stage, Mr Morgan had in mind at least the possibility of divesting himself of any further interest in BHQ. Writing to Mr Downey on 11th June 2001, he said that the new Aggregate Tax would penalise DM's operations at BHQ to such an extent that "it may no longer be a viable operation". He asked Mr Downey as to what the lease said about surrendering it and whether there was a penalty. It is clear that Mr Morgan's concern about the new Tax was at least one of the reasons why the s73 application and the Environmental Statement were not a priority for DM at all.
- Also in June 2001, the Planning Inspectorate confirmed that the Secretary of State had directed that the appeal would be determined by himself rather than by an Inspector, as the appeal related to significant alleged development in the Green Belt. On 14th June, the Planning Inspectorate notified MJ that the resumed inquiry was to be held on 8th January 2002. This was all passed on to Mr Morgan by Mr Downey but there was no response or reaction.
- By August 2001, the position had become critical. On 13th August 2001 Mr Downey wrote a letter to Mr Morgan in which he expressed his "increasing concern" about the lack of progress at BHQ. The letter said that "unfortunately" JH was available for the hearing on 8th January 2002 and the Inquiry was in his diary because Mr Andrew Gilbart QC, a member of the same chambers, was appearing for SHMBC[4]. Mr Downey advised there was no real prospect of obtaining an adjournment and that any period of adjournment would in any event be fairly brief. He went on:
"That being so, we need to consider whether the work required to prepare a full environmental statement in support of a planning application, and the proper consideration of that application, can be done in the time available. It must be extremely unlikely…
What then do we do about the current appeal and the inquiry? As things presently stand, it seems to me that the position is exactly as it was when the inquiry was adjourned 16 months ago, and we agreed an adjournment then because we faced the prospect of losing. If that is still a realistic prospect then we have to consider whether there is any merit in running up the very considerable cost that will be involved in going back to the inquiry.
I recognise that to withdraw the current appeal would leave you having to argue the restoration case on its merits, but is that very different to the position in which you now find yourself anyway?"
The letter suggested a conference with JH in September and sought instructions on that point.
- This was an important letter because it made plain that, in view of the delay, DM's options at the forthcoming hearing would be extremely limited. And Mr Morgan's response was perhaps typical: he sought to do everything in a rush at the last minute, in order not to abandon the appeal and thus keep alive the prospect of not having to make a fresh planning application. In his oral evidence he sought to say that he was shocked that Mr Downey was saying "that the case has got to be argued on its own merits" (Day 3/162-163). That answer illustrates that one thing that Mr Morgan was keen to avoid was any decision on his real plan for BHQ "on its own merits".
- On 15th August 2001 there was a discussion between Mr Downey and Mr Morgan which was referred to in Mr Downey's subsequent letter of 16th August 2001. Mr Downey reiterated that the first Inquiry had been adjourned to enable an application to be made under s73 for a variation of the existing planning conditions, to be accompanied by an Environmental Statement. He went on:
"3. The planning authority would then have the opportunity to determine that application (for variation of conditions). It was anticipated that if that application were approved then the Enforcement Notice would be withdrawn. However, if permission for that variation was refused a further appeal could be lodged against that refusal and that appeal could be combined with the Enforcement Notice appeal and the two heard together by the same Inspector….
5. It is therefore the case that if permission is to (be) achieved for a high level restoration scheme, whether it be achieved by way of a s73 application or by a variation of conditions by the Inspector, it will depend upon
(a) its own planning merits; and
(b) the justification for it within the Environmental Statement…
7….it is arguable that your position will not be prejudiced by abandoning the present appeal and relying upon the right which you will have to appeal against any refusal by St. Helen's of your section 73 application. But we do need to consider carefully the possible merits and drawbacks for continuing with or abandoning the present appeal."
- The letter then set out various other matters, including a point which had arisen in a number of the preceding letters, concerned with Landfill Tax. It appears that Mr Morgan believed that there might be a difference in treatment for Landfill Tax purposes of a variation effected by the inspector in the enforcement notice appeal, and one resulting from a separate s73 application. The former might have been more advantageous to DM than the latter. That was a matter that Mr Morgan said he was looking into. It appears that the effect of the new tax (and the aggregates levy) on DM was a factor in their progress (or lack of it) at BHQ (see Mr Morgan's evidence at Day 4/56-58).
- Mr Downey's letter of 16th August pulled no punches as to the effect of the delay. Mr Downey said that he did not believe that DM's case ("by which I really mean the Environmental Statement") could be properly and thoroughly prepared to meet the new inquiry date of 8th January 2002. He went on to say that if the case was not properly prepared "there must be a significant risk of losing" and that, in such circumstances, an application for costs might be made by SHMBC. He said that DM's exposure as to costs "will be very significantly increased if we go into a resumed inquiry and are not able to present a proper case".
- Mr Morgan wrote back to Mr Downey on 29th August 2001. That letter did not seek to blame Mr Downey for the position that DM was now in; instead, Mr Morgan accepted that "we are embarrassed in having had the best part of 18 months available". The letter then went on to provide a reason (of sorts) why DM had delayed, referring to the fact that all 13 of DM's quarry locations had had to be assessed by reference to Regulation 32 which came into force on 1st January 2001. The delay was said by Mr Morgan to have been caused by these assessments "taking up considerable amount of the company's and consultants' resources" That was a clear statement that DM were responsible for the delay, but had their own reasons/excuses for it. Mr Morgan accepted in his evidence (Day 4/page 2) that "that's where I had been spending my time. I have got a business to run….I had a very, very heavy workload and that's what I was explaining that I had been doing and I was really embarrassed that this had not been taken any further." The letter and these answers were therefore wholly contrary to Mr Morgan's suggestion (Day 4/1-2) that the embarrassment was somehow because Mr Downey had not taken things further. Responsibility for this delay, and its baleful consequences, clearly belonged solely to DM and Mr Morgan.
- Notwithstanding Mr Downey's firm advice on the point, Mr Morgan's letter sought to suggest the possibility of an adjournment. In his reply of 30th August, Mr Downey made plain that he was reluctant even to raise the issue without addressing more fundamental matters. Mr Morgan had indicated that the s73 application and the Environment Statement would be submitted by the end of December, and Mr Downey said that this was a very tight timetable. He also said that SHMBC would need to be assured that an adjournment was not simply an exercise "in playing for time" and that there would not be a further application for another adjournment.
- At all events, on 31st August, Mr Downey wrote to SHBMC to acknowledge that DM alone was responsible for the failure to submit the s73 application, but then set out some extenuating circumstances, in particular the quarries regulations work which had, of course, been raised by Mr Morgan as the reason for the delay. Mr Downey went on to point to further demands in relation to other outstanding applications by DM for approval of conditions under the Environment Act 1995, appeals and legal challenges, all of which "overlapped to the detriment of the preparation of the section 73 application in this case". None of those matters concerned BHQ. The letter invited SHMBC to agree to an adjournment.
- It was plain that the information in the letter came from Mr Morgan, as Mr Downey said in his evidence. Indeed, much of it came from Mr Morgan's own letter of 29th August (paragraph 247 above). It was therefore surprising to hear Mr Morgan suggest (Day 4/3-5) that he had nothing to do with the letter whatsoever and that in some way this information had not come from him. Again, I am bound to conclude that that was simply untrue. On 18th September 2001, perhaps unsurprisingly, SHMBC refused the request for an adjournment, pointing out that BHQ was still being worked and no restoration had taken place.
C12: The Preparation for and the Hearing in 2002
- On 31st October 2001, there was a consultation with JH. In addition to Mr Morgan and Mr Downey, Mr Youngs was also present, together with all of the various external consultants. This included Nigel Robinson of TerraConsult, the replacement for Mr Albon. The bulk of the discussion was given over to the Environmental Statement. Mr Robinson confirmed that water levels at BHQ were rising and that those rising water levels "may dictate that the working base of the quarry rises progressively, and that consequently mineral will be extracted from a wider superficial area". It was also recorded that "the nature of the proposed fill material and the location of the site on the aquifer dictate that a liner will be required."
- The advice was that a properly worked out Environmental Statement and restoration sequence were required to demonstrate that the proposed scheme (Cass 2000) was feasible. The proposed use of BHQ following restoration was woodland, as per the Cass Scheme, although evidence of the agricultural quality of the restored site was nevertheless required. A similar analysis was required of the Manstock scheme. As to need, it was noted that there was a reducing need for landfill sites at that time, with public statistics indicating that, if the government's target of reduction in the use of landfill was met, the Merseyside and Mid-Mersey regions would have a need for landfill capacity of only 75,000 tons a year. Not for the first time (see paragraph 95-96 above), Mr Morgan said at the consultation that this contrasted with DM's own experience of currently receiving inert waste at other sites amounting in aggregate to 600,000 tons per year.
- As to strategy, under the heading 'Section 73 application' there was this note of the discussion:
"John Hoggett questioned why a section 73 application was to be made, rather than a full planning application. He advised that a planning permission incorporating revised conditions granted pursuant to a section 73 application would be a new planning permission. Denis Morgan confirmed that he wished to pursue the matter in this way."
There was no dispute that Mr Morgan had confirmed that he wished to pursue the section 73 application in preference to making a fresh planning application. That statement was entirely consistent with my findings in paragraphs 47, 58, 89, 109-110, 140-142, 171-172, 187, 188 and 227 above: Mr Morgan's preferred strategy was always to do anything other than make a fresh application.
- Mr Morgan in cross examination (Day4/6-10) sought again to distance himself from what his consultants were saying. Although, as noted in paragraphs 43, 109-113, 218 and 212 above, everyone knew that the rising water levels was going to be a difficulty for the EA, Mr Morgan attempted to laugh that off on the basis that it would take over 70 years for the water level to rise close to the bottom of the quarry. In fact as we shall subsequently see, the EA were sufficiently concerned about the water table that they concluded that excavation should not go down to 13 AOD but should stop at 15 AOD. More importantly, Mr Morgan sought to distance himself from Mr Robinson's advice that the nature of the proposed fill material was one of the factors that led to the need for a liner. That statement of course was consistent with DM's desire to bring a wide range of mix to the site (and makes something of a nonsense of DM's claim in these proceedings for £2.5 million by way of damages, on the basis that a planning application considered at this very stage would not have required a liner), so Mr Morgan tried to argue that in some way the consultants were not sticking to their brief. He also tried to blame Mr Downey for this, saying "Lawrence was in control of all of these consultants" (Day 4/8), an argument which I simply do not accept, it being contrary to all the evidence noted above. Furthermore, Mr Morgan had to try and explain away the problem created by the advice that, on a wider basis, there was just no need for a site where the landfill was limited to inert waste, and he attempted to do so by raising various points to challenge the advice which had not been raised at the consultation. Mr Hart's cross examination of Mr Morgan on this topic suggested to me that, on 31st October, DM's statement of their own experience (600,000 tons of inert waste per year) was grossly overstated. It was never justified by supporting documents.
- Following the consultation, Mr Smith co-ordinated the preparation of the s73 application and the supporting Environmental Statement. These documents were sent to MJ on 28th November 2001 and served on SHMBC on 29th November. The Environmental Statement sought a variation of conditions 1, 2, 3, 5, 11, 17, 18, 24, 26 and 27. On the 6th December 2001, SHMBC rejected the s73 application as invalid. They said that this was because:
• "The proposal would introduce an element that was specifically excluded from the regional application, by the applicant, in order to overcome a previous refusal.
• The proposal is for development which is not currently authorised, the acceptance of which would fundamentally alter the existing permission.
• A proposal of the scale and nature proposed, including as it does an Environmental Impact Assessment, cannot be dealt with as a variation to a condition. This is consistent with the stance taken by the Council since 1993, which has on many occasions been repeated to the site operator.
In view of the above you are requested to re-submit the application in an appropriate manner. I will retain the Environmental Statement for re-use, should you feel it still addresses the proposed development adequately, but you may wish to provide a supplementary statement. I have not read the Statement, so cannot at this stage assess whether it would be acceptable in its current state." (My emphasis)
- SHMBC were not the only people who were very concerned about the proposals. The Bold Heath Action Group had written to the planning inspectorate the previous month, on 22nd November 2001, objecting to the scheme to import and fill BHQ with inert waste materials. Their lengthy letter identified a whole series of objections, particularly in relation to dust emissions and the like, complaining that during the 10 years of the life of the quarry, DM "have made little or no effort to improve any of these working practices". Points were also taken about whether or not the waste material would be free from contamination. The letter set out all the sorts of issues which Mr Morgan must have known would be raised at some stage in any public inquiry and which, for years, he had tried to avoid addressing. When cross examined about it, Mr Morgan's evidence (Day 4/26-31) was that, by 2009, all of these points had been addressed. That of course missed the point, which was that, as at November 2001, these were real concerns being raised by the local residents who were objecting to the proposal to use BHQ for landfill purposes. Dust, amongst other matters, was plainly an issue at this time, a fact which was reflected in the appeal decision of 29th September 2009 where, at paragraph 47, the Inspector recorded those concerns and confirmed that, even 8 years later, sand was still being dropped and spread all along the road leading to the quarry.
- On 14th December, Mr Downey replied to SHMBC's rejection of the s73 application, pointing out that they had known for 20 months that it was DM's intention to submit such an application and that this was the first occasion on which it had been suggested that such an application would be inappropriate. Mr Downey also said that he strongly disagreed with the SHMBC's stance and made a number of points in response, in particular the fact that the Manstock scheme, upon which SHMBC were still purporting to rely, was, in Mr Molloy's own words, "far from ideal". On 19th December, SHMBC responded to Mr Downey's letter, saying that at no point had they ever accepted that a s73 application was an appropriate way to proceed. They reiterated that it had been their case throughout that permission had been granted for mineral extraction only, not infilling. They said that "infilling is fundamentally different from the development that was granted planning permission and it cannot be allowed by way of a section 73 application to a mineral extraction permission. MJ replied on 2nd January 2002.
- The various experts then geared up for the second hearing. Mr Cass told me (Day 5/13) that he regarded the consultation with Mr Hoggett at the end of October as his re-instruction in the case. However, his proof of evidence was, he said, not very different from his original proof. It essentially consisted of an attack on the Manstock scheme and a reiteration of why the Cass Scheme of 1993 (as amended in 2000), was an appropriate scheme in all the circumstances. Mr Knapman also produced a proof for the hearing. One of his principal points was concerned with need and DM's experience that there was a need for landfill sites. He repeated their case in general terms, but there was no supporting evidence or documentation. As he had done before, he repeated the comparison with Sandy Lane. Mr Morgan confirmed that the Sandy Lane capacity was included in Mr Knapman's asserted DM need figure of 650,000 tons per year (Day 4/12), although of course this was not comparing like with like, because Sandy Lane had a licence to take contaminated fill, and was not therefore a strictly inert site.
- Mr Robinson also produced a draft proof of evidence. It was dated 10th December 2001. Amongst other things, at paragraph 7.4, Mr Robinson said that, on behalf of DM, because there was no natural attenuation available, and because the site was on relatively permeable aquifer rocks, there was a need to incorporate an artificial barrier. The specification of that liner "will relate to the category of imported materials and therefore the risks." In paragraph 7.7 Mr Robinson said that the management of the waste at BHQ would be under the Integrated Pollution Protection and Control Regulations (IPPCR) where there was much more emphasis on risk assessment than the previous licensing regime. Again, that was only consistent with an intention to tip a wider range of waste at BHQ, strictly inert material did not involve the IPPCR.
- In similar vein was a letter of the 7th January 2002 from the Environment Agency to SHMBC which said:
"We would reiterate the particular risk that waste disposal into this site would pose to the adjacent ground water abstraction especially if the lower parts of the waste at least are to become saturated. Whilst we do not object to the importation of materials it is essential that these materials are non polluting. The applicant has not presented any specific detail on the means by which the waste quality will be assured. There is reference also to the placement of a geological barrier. The presence of such a feature below the waste does offset comments in the letter of the 5th April 2000 regarding the suitability of the general waste types proposed. Whilst it would be a matter for risk assessment under the PPC permit to determine the suitability of the incoming materials in conjunction with appropriate options for the design of a geological barrier it is important to note that any placement of materials below the geological barrier should be of naturally occurring excavated material.
A Waste Management Licence would appear to be required for the in-fill of the quarry void with inert waste, as defined in Council Directive 1999/31/EC on the Landfill of Waste. If any non-inner waste, as defined above, is disposed of, then an IPPC permit would be required." (My emphasis)
DM's failure to set out how the waste quality could be assured – the same issue raised years before by the NRA as to the need to identify where the waste came from – is again only consistent with a desire to keep the application broadbrush, and not to pin themselves down to a potentially limited class of waste, for which – at least at this time - there appeared to be no need.
- Although that letter appears to make clear that DM had a choice between applying for a waste management licence or an application for an IPPC permit (for non-inert waste) Mr Morgan originally disputed that (Day 4/14), before eventually accepting it. That distinction, namely a waste licence on the one hand or an IPPC permit on the other, was made at paragraph 7.1 of Mr Robinson's proof. That also suggested that DM were still keeping their options open as to the precise nature of the material to be deposited. Mr Morgan accepted that a liner was going to be necessary and the specification of the liner/barrier would depend on what materials went into the landfill (Day 4/18 & 19).
- Mr Robinson also supplied a supplemental proof for the second hearing. That made the point that, under the Landfill Directive, the definition of 'inert waste' was under severe scrutiny and would leave most demolition, construction and excavation waste with either relevantly unregulated 'exempt' status, or alternatively classified as 'non-hazardous waste'. Mr Robinson said in his supplemental proof that DM was very specific "in wanting to place non-polluting demolition, construction and excavation materials in this site because that was its major business, and was prepared to construct the appropriate geologic barrier as required by the Environment Agency after the Regulations were in place and after permitting by the Agency". Mr Robinson also said that the permitting procedure would include "a very detailed IPPC assessment that includes quantitive risk assessment of a range of potential pollution, including ground water pollution." Mr Robinson's proof stated that, although no leachate management method was provided, that was because "none should form", but he accepted that monitoring would be required to demonstrate no pollution.
- In evidence, Mr Morgan accepted that Mr Robinson had advised him that an IPPC assessment would be required for the sorts of waste that DM wanted to deposit (Day 4/22). Mr Morgan also accepted that a liner would be required; although he attempted to say on several occasions that this was because of the new Regulations (Day 4/24) it is plain from the documents considered earlier – see in particular paragraphs 36, 38, 41, 43-44, 95-96, 176 and 207 above – that a liner would always have been either offered or required for this sensitive site.
- On 4th January 2002 a further conference took place with JH. Mr Cass was not there because he was snowed in in Scotland, but Mr Downey and Mr Morgan were. Unfortunately, there is no note of this conference, but there was agreement between Mr Downey and Mr Morgan that they were shocked when JH advised that permission could not be granted for more than that which had been sought in the original planning application. JH justified this advice by reference to the decision in a case called Wheatcroft. It was common ground that this advice had never been given by JH before and that it was only on that occasion that both Mr Morgan and Mr Downey realised that the Irlam Brick principle could no longer be relied on (because here the 1990 application promised no waste disposal). It was put to Mr Downey that, as a result, DM was in a desperate situation and that, other than hoping that something might turn up at the hearing, all was lost. Mr Downey accepted that it was "certainly an unfortunate situation" but he did not accept that all was lost. He said (Day 5/45):
"…JH still believed that there was a reasonable chance of persuading the Inspector that the Manstock scheme of restoration was so fundamentally flawed that the enforcement notice could still be quashed, and that the quashing of that notice and the rejection of Manstock by the Inspector that would be inevitably implied in the quashing of the notice, would then cause the local planning authority to be inevitably receptive to a new planning application."
- It seems to me that JH's advice created rather more than the "unfortunate situation" to which Mr Downey referred. It made plain both to Mr Downey and Mr Morgan that the Irlam Brick principle, on which they had relied for so long, was not open to them. It also made plain that, because the Inspector could not grant the planning permission sought in respect of the Cass scheme, any benefit to DM arising out of the forthcoming hearing would be limited. But I do accept Mr Downey's evidence, noted above, that there was still the reasonable belief that, if the Manstock scheme could be demonstrated to be so technically flawed that it should not be supported by the Inspector, there was still a clear benefit to DM to be derived from the forthcoming hearing.
- On 7th January 2002, the day before the hearing, a number of things happened. First there was a conference at which DM's junior counsel went through Mr Cass' proof with him, identifying those parts of his proof (namely, where he had extolled the virtues of the Cass Scheme) which were now irrelevant for the hearing, and emphasising those parts of the proof which remained important, namely those parts in which Mr Cass had criticised the Manstock scheme for various technical reasons and had demonstrated how, in his view, it did not comply with the planning conditions. The manuscript notes on Mr Cass' proof of evidence make plain that, whilst the references to the Cass schemes were being deleted, the attack on the Manstock scheme remained and that indeed, Mr Cass was being invited "to concentrate" on the deficiencies of Manstock. Mr Cass expressly accepted that (Day 5 18-24). That proof, and thus that attack, was taken as read at the Inquiry the following day.
- That the continuing attack on the Manstock scheme was the undoubted focus of JH at the renewed hearing can be demonstrated by the fact that his written opening - made available on 7th January - largely consisted of that attack. Amongst other things he said:
"Our case is that the Manstock scheme is so defective that it ought not to be carried out and certainly ought not to be carried out yet if there is a reasonable prospect of a sensible alternative emerging…. We say it would be wrong as a matter of planning policy to require the implementation of a scheme so singularly lacking in long-term merit. That would be all the more so when there is a prospect, and I put it no higher, of a sensible restoration scheme which guarantees the long-term future of the land."
- Also on 7 January 2002, the last day before the inquiry, Mr Downey on behalf of DM provided SHMBC with a formal application for planning permission. This application relied on the Environmental Statement that had been provided at the very end of November 2001, and was effectively based on the Cass scheme, in its slightly revised 2000 form.
- Finally on 7 January 2002, Mr Morgan wrote an important letter to Love in which, amongst other things, he told them about the relevance of Wheatcroft and the principle that permission could not be granted for more than was applied for. As a result, he said a full planning application was required. Mr Morgan then set out JH's strategy which was to attack the Manstock scheme so that, if the attack was successful, the enforcement notice would be quashed. Mr Morgan went on to say:
"11. This will be a powerful position to achieve as an outcome to this public inquiry as the Inspector will condemn and label the Manstock low-level restoration scheme as unacceptable (and unworkable) and compel the Council to look positively and favourably on an alternative restoration to remove the vacuum."
- Attached to that letter was a document, which was also sent to Mr Downey, entitled Summary of Options. I regard that document as important, not because it was in reality a summary of the options then available to DM (as Mr Morgan confirmed in re-examination, it was not) but as an insight into Mr Morgan's strategy over the previous years and what he hoped to gain from the forthcoming Inquiry. I therefore set it out in full:
"Summary of Options
1. Had DM sought to comply with the Enforcement Notice (and not opposed it) then the Quarry must be restored in accordance with the approved low level Manstock restoration scheme with no waste importation.
2. Had DM plc submitted a FULL planning application for infilling the quarry with waste material to St Helens Council between 1993 and prior to commencement of Enforcement proceedings in 1999 and had the Council subsequently REFUSED to grant planning permission for infilling the quarry void with imported waste then the Quarry would be restored in accordance with the approved low level Manstock restoration scheme. I would be reluctant to Appeal a refusal of an application to import waste materials because in my opinion such a REFUSAL would be couched in reasons justifying the refusal including no doubt objections from the Environment Agency because of a perceived "high risk" of pollution of the aquifer which would be next to impossible to overcome once the Environment Agency had confirmed such a position, backed up with a REFUSAL of planning permission.
3. The present strategy chosen by DM plc in opposing the Enforcement Notice and resisting the imposition of the "approved" low level Manstock restoration scheme and refusing to carry it out forcing this Public Inquiry to take place into the "approved" Manstock scheme (which hopefully the Inspector will condemn as unworkable) is in my opinion the only strategy with a realistic chance of compelling St Helens Council to grant a planning permission for infilling the Quarry (since we now acknowledge that the Enforcement Appeal Inspector cannot himself do so) and is in the best interests of both R & C Love Ltd and DM should the Inspector at this week's Public Inquiry into the Enforcement Notice reject and condemn the "approved" Manstock low level restoration scheme on the basis that it cannot achieve agricultural restoration of the Quarry.
4. If the Inspector does reject and condemn the "approved" Manstock scheme the Council cannot then impose it upon us and must then consider our FULL planning application submitted today for importing waste material (non-polluting construction and demolition waste) in the context of the Inspector's decision.
5. The cross examination this week of Steve Molloy before the Inspector as the Council's chief witness on whether the approved Manstock restoration scheme will achieve the necessary standard of agricultural restoration should be interesting. On his own written admissions he is on record confirming that the approved Manstock restoration scheme is "far from ideal"; will flood and will require pumping in perpetuity, which is a requirement no planning permission can impose. We believe the Inquiry will now take 2 days, Tuesday & Wednesday.
6. May I suggest a meeting once the Inspector's decision is received, hopefully within 6 weeks of the close of this week's Public Inquiry.
Note: I will forward a full copy of our Planning Application & Environmental Impact Assessment"
- Mr Morgan was asked about both the letter and the Options document. He confirmed that his understanding was that because of the attack on Manstock, the enforcement notice would be quashed and the matter "would be left in a vacuum" (Day 4/31-37). As to the Options document, it was put to Mr Morgan that this document set out his then thinking and demonstrated at least some of the reasons why he had throughout been reluctant to make a fresh planning application. Although Mr Morgan did not accept that, his explanation was frankly incomprehensible (Day 4/36) and seemed to rely on what subsequently happened at the Inquiry and what Mr Love thought, which of course had nothing to do with the question that he was asked. For the avoidance of doubt I find that the Options document was an extremely good guide to what Mr Morgan had always been worried about: that a fresh planning application would lead to a refusal, which would mean that BHQ could never be used for waste infill. That is what the document said in terms, and I have no reason to believe that Mr Morgan would have lied on this important matter either to Mr Love or to Mr Downey (to whom the document was also sent).
- The hearing started on 8 January 2002. JH expressly abandoned the attempt to amend the conditions, referring to the failure to prepare/publicise the Environmental Statement. I have set out above part of the opening which JH made, and in particular the concentration of his fire on the Manstock scheme. But disaster struck early. Mr Cass was cross-examined about the technical deficiencies in the Manstock scheme and wholly failed to come up to proof. Indeed, in the end, he accepted that it was possible to carry out the Manstock scheme without infilling. The last remaining benefit to DM from the enforcement notice appeal had therefore been lost.
- In a later letter dated 28th January, Mr Cass attempted to blame JH for this failure. It will be remembered that, in his witness statement in these proceedings, Mr Cass had said that, because of the change of focus at the consultation on 7 January, "I had no grounds on which to attack Manstock". He retracted that bizarre assertion even before he was cross-examined in this trial, and his cross-examination demonstrated (Day 5/31-34) that he had had all of the same opportunities to attack the Manstock scheme from a technical point of view as he had always had. The only thing that was different was that he could not advance an alternative scheme. The real problem was that Mr Cass simply failed to come up to proof, which was manifestly nobody's fault but his own. Furthermore, although he endeavoured to argue before me that he was not re-examined, he made plain that this criticism was based on his expectation that he would be re-examined by JH on matters on which he had received no cross-examination (see Day 5/31-32), which betrayed a complete lack of understanding of the process of re-examination.
- On 9 January 2002, JH said that, in the light of Mr Cass' evidence, to the effect that Manstock was possible, DM had no option but to abandon the appeal.
- On 18 January 2002, Mr Downey wrote to Mr Morgan, summarising the position as he saw it. It is unnecessary to set this letter out in any great detail. It reiterated JH's advice and the failure to refer to the Wheatcroft principle until shortly before the second hearing. It identified the revised strategy that was then formulated (namely to concentrate the attack on Manstock) and Mr Cass' disastrous evidence on that topic, which suggested that it would be appropriate for the Inspector to uphold the enforcement notice. Mr Downey identified three factors that he said had caused or contributed to the withdrawal of the appeal and the collapse of the strategy to discredit Manstock. They were the failure to publicise the Environmental Statement, which meant that it could not be put before the Inspector in support of DM's case; the late advice from JH that the Inspector did not have the power to consider the deemed application; and the concessions made by Mr Cass under cross-examination so that the Inspector did not need to consider the deficiencies of the Manstock scheme to any meaningful extent. Mr Downey then set out a variety of matters which are akin to many of the points advanced in his defence at this trial.
- On 30th January 2002, the Inspector provided a copy of his decision. He referred to the concession about the Environmental Statement and the consequent withdrawal of the application to amend the conditions of the original planning permission. He noted therefore that the Inquiry was concerned only with the merits of the enforcement notice. He said that "both main parties accepted that the approved scheme referred to in the conditions of the 1990 permission was the Manstock scheme, and that this could be carried out without having to import significant additional materials." This was an express reference to the concessions made by Mr Cass. He then dealt with the remaining (limited) appeal grounds and rejected each of them.
- Also on 30th January 2002, the Inspector dealt with the application by Redrow Homes, an interested party, for its costs of the appeal. Redrow's submissions, which were set out in the decision, were to the effect that DM had behaved unreasonably and referred to "their perverse and persistent pursuit of the unattainable" which amounted to exceptional circumstances necessary to justify an award of costs. In his conclusions, the Inspector referred to the late withdrawal of most of the grounds of the appeal and said that that was "not only unreasonable but exceptionally so. Moreover, to ask for and receive a very generous 20-month adjournment and then not to carry out, until the last few weeks of the allotted time, the actions for which the adjournment was granted seems to me to be unreasonable to an even greater extent. No explanation of this egregious conduct has been given by the Appellants and, bearing in mind the unpredictable course taken by these proceedings almost from the outset, I entirely understand Redrow Homes' wishing to protect their interests by seeking to be heard at both parts of the inquiry." For these reasons, the Inspector made a costs order against DM.
- There can be little doubt that the outcome of the enforcement notice appeal was an expensive failure for DM, perhaps even Mr Morgan personally. And whilst some of the important reasons for that outcome, such as the inactivity during the 20 month adjournment, were nobody's fault but his own, Mr Morgan was obviously entitled to feel let down by his advisers. The question for me, dealt with in Section D below, is whether and to what extent MJ were amongst those who could be legitimately criticised for their role in the process.
C13 Subsequent Events and Eventual Planning Permission
- The evidence as to what was happening (and what was not) during the period after January 2002 is regrettably scanty. This is partly because of the disclosure problems identified in paragraphs 16 and 17 above, and partly because the critical witness who could have assisted on these matters was Mr Smith, who was not called to give evidence. What follows in this Section, therefore, is by necessity much briefer than ought to have been the case.
- The first important document in this sequence is the Environment Agency's File Note of 25 February 2002. This was a note of a discussion principally between Mr Jemett and Mr Thewsey of the EA Groundwater Team. It shows a generally hostile attitude to the use of BHQ as a landfill site, regardless of the type of waste. It was the subject of evidence from Mr Stephenson, DM's expert planning consultant. I deal with the contents of the note together with Mr Stephenson's evidence, point by point.
- Paragraph 1 of the File Note was in these terms:
"MT stated he was yet to open the EIA. Even without reading its content his view was that due to the proximity of the Quarry to a major aquifer and within a source protection zone is highly undesirable. However, due to the EA groundwater location policy the EA could not preclude a clean and safely monitored scheme in policy terms."
Mr Stephenson said "safely engineered" was a reference to a geological barrier and that monitoring meant both the monitoring of the waste that was going in, and also the monitoring of the boreholes, for the purposes of both groundwater pollution and water levels. Mr Stephenson confirmed that the necessity of groundwater monitoring at BHQ went back for many years.
- Paragraph 3 of the File Note stated:
"The original planning condition to avoid any importation of materials was an EA condition to protect G/W resources. EA would have been happy with wet restoration if the quarry held water."
Mr Stephenson confirmed that, from the EA's point of view, this meant that they had no difficulty with the Manstock scheme, even if it was wet. Mr Stephenson accepted that this paragraph also demonstrated that the EA were generally not enthusiastic about having BHQ restored with waste.
- Paragraph 4 of the File Note said:
"The larger to volumes of material imported the greater the proportionate risk to the G/W resources and nearby extraction. EA has a duty to protect this licence. This is a finite long term resource that is a national asset and should therefore be protected."
Mr Stephenson confirmed that this meant that the greater the volume of material tipped, the greater the risk of pollution or contamination, and that that meant there would possibly be a problem with the volumes (5 million cubic metres plus, as per Cass) proposal in DM's application. After a bit of fencing, Mr Stephenson accepted that the EA would have had the same view in 1999.
- An additional concern about volume was referred to at Paragraph 7 of the File Note:
"The greater the volumes of soil and silt imported the more clogging of the free draining land will arise and the greater the potential for contamination."
Again Mr Stephenson accepted that this was another volume-related concern of the EA and that this would also have arisen had they been considering an application in 1999.
- Paragraph 5 of the File Note was of particular importance because it related to DM generally. It said this:
"The operator has an extremely poor record therefore the only way to satisfy the L/F location policy is to ensure that all materials are monitored and tested before they reach the site. Lower hazard sites tend to get lower rates of monitoring. EA would not be happy with a condition that required importation materials to be stockpiled in a compound, then inspected and placed in the void. This is because of dust issues and concerns about the operator."
Mr Stephenson accepted that this represented what he described as "a fairly strong judgment" and that, had he been advising DM at the time, he would have seen this as an obstacle that he would have to get over if he wanted to achieve planning consent to tip. He said that more detail would have been required as to the nature of the 'extremely poor record' to which reference was made.
- This paragraph of the File Note is consistent with the other evidence in two ways. First, there was a general perception that DM did not do all they could to minimise the environmental consequences of the BHQ site, such that complaints about dust and the like continued to arise both before and after the application for planning permission was made. In essence, they were not trusted by the EA or SHMBC, a major difficulty for DM to overcome. Secondly, the reference to the monitoring and testing of material before it reached the site only takes up, in a slightly different form, the point made by the NRA years before, namely that the fill used at BHQ ought to be, not only inert, but also from clearly identifiable sources. This was always a way in which DM could have minimised the controversy over the plan to tip waste at BHQ, but, doubtless because of the desire to keep vague the precise nature of the material to be tipped, it was never properly spelt out, either in the Cass scheme (which just referred to construction and demolition waste), or in the application of January 2002 (which recorded that the waste would need IPPC consent, and was therefore potentially polluting).
- Paragraph 6 of the File Note addressed the issue of need. It said:
"The planning case should perhaps be based on the need arguments. Several quarries in the area are struggling to find enough CDEW [Construction Demolition Excavation Waste] to fill and implement restoration schemes. Therefore EA would expect the LPA to seriously question the need argument. It is known that the operator uses sand from the BHQ to fill voids in Cheshire. This is largely due to the impact of the aggregates tax (levy)"
Mr Stephenson was not able to say whether or not this would have been an objection in 1999. I am confident that precisely the same point would have arisen in 1999. I have already referred above to the various occasions on which the need for inert landfill waste was questioned by a number of DM's own advisers and employees (see paragraphs 69, 78-80, 95-96, 252, 254, and 258 above). This paragraph is entirely consistent with the impression created by those documents that there was no real need during the 1994-2005 period for a large site like BHQ to take strictly inert waste. It must be noted that, from about 2007, that position changed, at least as a matter of generality, as is evidenced by the reports and other documents referred to at paragraph 187g -187j of section 2 of DM's closing submissions.
- Paragraph 8 of the File Note said this:
"Location of the water table is a key issue and has not been resolved by the applicant. 13m AOD is probably very close to the water table and leaves little room for error."
Mr Stephenson agreed that this was clearly a problem for the EA and that, had he been advising Mr Morgan, he would have told him that in light of this paragraph , it was 'pretty unlikely' that DM were going to get permission to tip waste down to 13 metres AOD.
- The final paragraph of the File Note said this:
"9. Conclusion – the application is likely to be determined on impact to the local community (dust and traffic) and on the basis of need arguments. In theory CDEW should not need to go to landfill and if it did it could prejudice other restoration schemes in the region. This could open the door to longer term applications for other types of waste/ non consented waste to comply with the restoration conditions."
Mr Stephenson said that, at least in theory, CDEW could be re-used and recycled although, as a matter of fact, not all of it could be. He also said that he could understand the logic of the last two sentences, which was a concern that, if the EA consented to this application, they might find that such waste in the area that fitted into the CDEW category was spread too thinly between the other restoration schemes (because there was not very much of it), with the result that an applications might be made subsequently to tip a wider range of waste at this and other sites.
- ON 25th July 2002 Mr Smith had a meeting with Mr Molloy of SHMBC. Mr Morgan confirmed to me in his evidence that he was not there. Accordingly, it is difficult to be sure precisely what was said. However it seems that on this occasion, Mr Smith floated with Mr Molloy – for the very first time - the prospect of a more modest tipping scheme. The proposal was based on extraction and infilling in an area that was just under half of the total site, and reduced the sort of volumes seen in the Cass scheme to about 2.4 million cubic metres. On one view, this was an acceptance of the total volume anticipated in the Manstock scheme (see paragraph 205 above). Mr Molloy seemed keen on this proposal.
- On 7th August 2002, Mr Smith wrote to Mr Molloy to follow up this meeting. Having referred to their meeting, Mr Smith said that DM had been engaged in a comprehensive review of the overall position in regard to BHQ. Mr Smith said DM believed "that an entirely fresh approach should now be adopted." Having noted that everyone agreed that the Manstock scheme was of poor quality, Mr Smith's letter went on:
"I explained that my clients have reached a similar conclusion, and in the light of the outcome of the Public Inquiry and the terms of the January 2002 Enforcement Notice, the Company can see no advantage to either itself or the Council in continuing to promote what is agreed as being an inadequate quarrying/restoration scheme.
Against this background, Mr Molloy and I discussed the Company's revised proposals, as indicated on Plan 1, a copy of which I attach for reference.
This indicates a reduction in the quarrying area from 40 ha (100 acres) as approved under the Manstock scheme to about 16.7 ha (41 acres) in the northern area of the site, i.e. incorporating the existing void. My client's proposal is that this reduced area should be quarried to the existing void depth of 13m AOD i.e., effectively a continuation of the maximum depth permitted in, but restricted to, Manstock Phase 1.
… for the avoidance of doubt, the proposed revisited extraction area shown on Plan 1 results from the approach of seeking to maintain the previously approved volume of 2.6 million cubic metres."
The reference to the figure of 2.6 million was a reference to the volume calculated by reference to the Manstock scheme.
- Although this letter made plain that the proposal had come from DM as part of what was called their 'comprehensive review' of the position relating to BHQ, when Mr Morgan gave evidence (Day4/38-41), he endeavoured to contend that these were not DM's proposals at all, and that instead the proposals had come from SHMBC, with Mr Smith simply responding to them. I reject that evidence; it is contrary to the letter itself. Since Mr Morgan had not been at the meeting, and Mr Smith was not called, DM cannot gainsay the clear indication in the letter that the proposal came from Mr Smith. I also reject Mr Morgan's other attempt to distance DM from this proposal, which was the suggestion that it was not based on his instructions. I reiterate the point that, in view of his tight control of all aspects of DM, no proposal of this sort could possibly been made without Mr Morgan's clear endorsement.
- Mr Stephenson was asked whether the reduction was a sensible suggestion by Mr Smith (Day 8/74-77). He said that he would have regarded this as 'a fall back position'; he would have tried to go for the full area to start with, but with this fallback position in place "if we were not receiving good vibes …this obviously seems to have been the compromise which the parties found acceptable. In other words the same volume but over a smaller area."
294 On 15 August 2002 SHMBC wrote to Mr Smith to advise "that in addition to the usual issues expected within an Environmental Impact Assessment, that detailed consideration is given to those controversial issues that have emerged from the Public Inquiry and the years of ongoing correspondence, particularly the need for inert tipping capacity, traffic and hydrology." The letter also made plain that the phased restoration was long overdue and that SHMBC was not prepared to accept yet another delay. The letter went on:
"I obviously can not prejudge or even indicate the Council's likely reaction to the draft scheme indicated at the July meeting. However, it is clear that there is a conflict between the scheme agreed at the public inquiry to rectify the breach, and the current draft proposals. Should the Company wish to pursue the draft scheme, it may be prudent to reverse the current direction of excavation on the site, so that the material to raise the quarry floor, is sourced not from the south east quarter of the site, but from the north west, thereby working anti-clockwise. By doing so the draft proposals, should they eventually be found to be acceptable, would not be adversely affected by the operations now required to remedy the breach. Such an amendment would require permission, so please keep me informed of any deliberations."
- When he gave evidence about this letter, Mr Morgan (Day 4/41-44) agreed that this would reverse the direction of working set out in the Manstock scheme, and would mean going anti-clockwise rather than clockwise. A number of the consequences of this suggestion formed part of the claim in these proceedings, including the costs of moving the quarry road and moving soil. Mr Morgan accepted that all those claims flowed from the subsequent decision of DM to follow the advice of Mr Molloy in August 2002 and to reverse the direction of working.
- Mr Stephenson also gave evidence about this document (Day 8/79-83). He agreed that the letter identified various breaches of the 1990 planning permission. He said that, even if he had been considering matters in late 1998, he would have been considering a position where the 9 hectare acre limit already been exceeded, so he would have wanted DM to have come up with proposals which mitigated the effect of the breach. He accepted that, by requesting a reversal of the current direction of excavation, SHMBC were suggesting one possible way in which those mitigating effects could be addressed. Mr Stephenson also said that, had he been advising DM to pilot their new scheme through SHMBC, he would have wanted to come across to them as responsible as possible in respect of the existing breaches under the old scheme.
- The proposal foreshadowed by Mr Smith in July was formalised in December 2002 when DM made a further application for planning permission based on the smaller area of 17.9 hectares. The application still sought permission to extract to 13m AOD. This further application was accompanied by a new Environment Statement. This time, and for the first time in 9 years, DM specified that they would use inert, non-polluting waste at BHQ. Even then, that specification was not regarded as sufficiently specific, and more detail was subsequently sought by SHMBC/EA, as could have been anticipated from the documents already referred to.
- On 7th March 2003 the EAS (Environmental Advisory Service), one of the statutory consultees, wrote to SHMBC setting out their outline response to the new application. This letter made a number of points which echoed matters that had been raised over many years earlier. It dealt head-on with the question of need. The EAS said that they were not convinced by the need argument set out in DM's Environmental Statement. They made the valid point (which had been apparent every time the need argument had arisen before) that DM were looking at the question of need from their own perspective as an operator of several sites in the vicinity, and had not taken into account the effect of other operators in the sub-regional supply chain of aggregate supply, re-cycling and waste management. In relation to wider environmental matters, the EAS noted that the proposal posed "some risk to the aquifer which is a strategic resource" and went on to say that the only pre-abstraction measurement of ground water was for approximately 13m AOD and that this had been used in the ES "as the conclusive resting groundwater level." It expressly warned that the ground water level could be higher. Mr Stephenson agreed that this was consistent with concerns that the EA had previously expressed.
- The letter also advised SHMBC:
"to seek a legal opinion as to whether the track record of the Quarry operator was a material consideration in the determination of this planning application. We are aware of several instances of enforcement action including breaches of conditions and PPC permits on other sites operated by this company and subsidiary companies in the North West."
This was, of course, a reflection of the previous year's concern about DM's "poor track record". It showed that the concerns about DM were not based on what had happened previously at BHQ (and the appeal process in particular) but on their reputation (or lack of it) as a responsible contractor in the region.
- On 17 July 2003 Mr Smith wrote to Mr Morgan following a meeting with a Mr Weetman and Mr Fisher of SHMBC. The letter included these paragraphs:
"Weetman then referred, as a main issue, to the need for 2.6 million tonnes of non-polluting infill material, and indicated that several objectors had expressed concern regarding the availability of such materials, bearing in mind increasing levels of recycling etc. You explained that in reality, limited demand for re-cycled materials often means that material is not recycled, or it ends up in landfills anyway, following recycling.
Weetman then referred to the consultation response from the Environment Agency, and whilst he noted that the Agency does not object, serious concern is expressed at the depth of extraction, and therefore infill close to the potential groundwater rest level which should be addressed if possible …
At this point of the meeting, Weetman suggested that if the application could be amended to provide a higher base working level (i.e. above 13m AOD), then this would serve to alleviate the concerns of the Environment Agency, and would represent a significant step forward. Interestingly, he immediately made it clear that he was not talking about a return to the 19.5m AOD level approved under the Manstock scheme.
My reaction to Weetman's action was that he was putting a possible compromise on the table. Not only would his suggestion ease the Council's position with the Environment Agency, any reduced volumes of infill material would reduce concerns regarding 'need', and lower traffic volumes would assist the position with regard to the neighbouring Boroughs of Halton and Warrington. I made these points to him, and he did not disagree.
… As I indicated following the meeting, this is the first positive reaction that we have had received from the Council in two years, and I believe that it would be in the interests of D. Morgan plc to consider a compromise solution very carefully indeed."
- When he gave evidence about this letter, Mr Morgan made it plain that he had not taken part in the discussion and said that this was an agreement between Mr Smith and Mr Weetman and that "they came up with this level as a result of Mr Weetman's concerns" (Day 4/46). Mr Morgan said that Mr Smith was talking about a compromise solution and that he was consulted about it and agreed to it. Mr Stephenson (Day 8/8-90) agreed that it was clear that, given that the EA remained concerned about the rising ground water level, this would address that concern.
- As foreshadowed by Mr Morgan in his evidence, on 13th August 2003, Mr Smith wrote back to Mr Weetman to say that DM had considered the possibility of amending the depth and would be willing to change their proposals to provide for a maximum working depth of 15m AOD. This was a further reduction in the scale of the proposed infilling. I find that this was precisely the sort of reduction in scale which SHMBC has always wanted. I have referred earlier in this Section C to the repeated references by SHMBC that the Cass scheme was objectionable because, amongst other things, it was just on too great a scale. It also seems to me that Mr Hart was right to submit that making the scope of the permitted extraction accord with the volumes envisaged in the original Manstock scheme was a straightforward way of rendering any changed proposal for BHQ palatable to everyone.
- DM then provided a revised Environmental Statement in November 2003. That was sent out for consultation. However, there is no evidence of any progress whatsoever in relation to the planning application between November 2003 and February 2005, when a second supplemental Environmental Statement was provided. The correspondence that took place during 2004 addressed, in a relatively desultory way, issues relating to groundwater pollution, and need. I find that no one, certainly not Mr Morgan, who controlled everything, was pursuing this application with any vigour at all during this period.
- Even after the provision of the second supplemental Environmental Statement, speed did not pick up. The following month (March 2005) the Environmental Advisory Service said that, whilst the second supplemental Statement went some way towards providing the basis of the preparation of an Operational, Restoration Aftercare Plan ("ORAP"), all relevant details should be provided in the form of a comprehensive ORAP. Again progress was very slow. On 26 May 2005 Mr Morgan wrote to Mr Smith, saying that he was beginning "to sense confusion brought on by anxiety" and said that what was needed was 'a step-by-step plan of action and timescale'. This letter did not appear to have any discernible effect: no such plan was prepared and progress continued to be fragmentary. In September 2005, Mr Robinson at TerraConsult prepared a hydrogeological Risk Assessment which, as Mr Morgan accepted, was prepared as part of the response to SHMBC's request made in March 2005. Again, however, there was no apparent urgency. It seems that the Risk Assessment was never actually provided to SHMBC. The reasons why not are unexplained.
- Thereafter, lethargy took hold again. Although Mr Morgan denied that nothing happened between September 2005 and late 2006, there were simply no documents to indicate that any progress was being made at all. Thus, SHMBC chased Mr Smith on 29 September 2005, complaining about the delays, and nothing happened until SHMBC chased again, over a year later, in November 2006. There were then the usual holding responses. The ORAP itself, first requested in February 2005, was not provided by DM until March 2007. Furthermore, as already noted, the ORAP did not incorporate the hydrogeological risk assessment of September 2005.
- As noted in the section dealing with the slow progress of the litigation (Section C14 below) various reasons were advanced for the slow progress of the planning application over this self-same period. In a witness statement dated 30 October 2006, and designed to justify the delays that had occurred in pursuing the litigation, Mr Ives (DM's solicitor) set out what he called "the reasons why the December 2002 planning application has been delayed". He said that he had taken instructions from Mr Morgan to explain the delays. The principal cause of the delay was said to be Mr Morgan's "extremely trying personal circumstances connected with the breakdown of his marriage…" There was also a reference to the nature of the planning application itself.
- I also take into account what Mr Morgan said about this delay when he gave evidence (particularly Day 4/74-80). I accept Mr Morgan's evidence that he did not go slow deliberately because of a perceived advantage to him in the financial settlement on his divorce. However it is plain that, as Mr Ives said in his statement and as Mr Morgan confirmed in his oral evidence to me, everything at DM went through Mr Morgan and he was the only person in the office who had the necessary knowledge to comment upon or approve any important step in the planning application at BHQ. Mr Morgan expressly accepted that if he was not there (and he agreed that during this period he was regularly absent for several weeks at a time) then progress simply could not occur.
- I should add at this point (although I deal with it in greater detail below) that, to the extent that it is suggested that these significant delays had anything to do with the legislative changes relating to waste disposal, I reject that submission. Mr Stephenson tried to make that point in his evidence but in cross examination he admitted that, not only was he not an expert in waste disposal, but also that the list of legislative and regulatory changes to which he had referred in his most recent expert's report had actually been prepared by somebody else (it turned out to be Mr Robinson) for the purposes of Mr Ives' statement dealing with delay in 2006, and he had not even looked at most of those statutes or regulations himself (see paragraphs 445-450 below). With one possible exception, he was unable to point to any which had or could have had any material effect on the progress of the actual or hypothetical applications for planning permission to tip waste at BHQ.
- Following the provision of the ORAP in March 2007, and the acceptance of the revised proposal by the officers, the application for planning permission was rejected by SHMBC on 5th December 2007. It appears that, just as had been anticipated, the rejection was based on local objections, particularly dust and traffic. As Mr Stephenson explained, "members are political at the end of the day and they react to the public". He accepted that dust was one of the reasons for the refusal. It seems to me unsurprising that the application failed, in view of the whole history of this site and DM's conduct going back to 1993. The application for waste infill had failed in 1989, and it failed again eighteen years later. I note that the planning experts are agreed that an appeal was always a likely event in this case.
- There were discussions with the officers at SHMBC following the refusal and some revisions were made to the application. The revised application was formally submitted on 29th August 2008 and was accompanied by a further revised Environmental Statement. However, as might have been predicted, that second application was also refused by SHMBC on 20th January 2009. That was again following the officers' recommendation to grant permission. This time, DM did appeal. On appeal, permission was finally granted in September 2009.
- As to the current position at BHQ, Mr Morgan gave evidence about that (Day 2/4-5). He said that DM were putting in the haul road three metres below the quarry rim, so related extraction had started. However, he confirmed that no infill had yet gone into BHQ. He agreed that he did not have a permit from the Environment Agency which would permit DM to infill at the site, and he confirmed that DM had not yet made an application for such a permit. He said that they were currently taking advice about whether or not such a permit was necessary. Thus a matter that had first arisen some fifteen years ago (paragraph 94 above) has still not been resolved.
C14 The Progress of the Litigation
- In is unnecessary to set out in any detail the lamentably slow progress of this litigation. However, I make brief reference to it for two reasons. First because, as the statement sworn by Mr Ives to which I have previously referred (paragraph 306 above) made plain, it shows that Mr Morgan exerted a tight control over all aspects of the events at BHQ, including this litigation, and that if he was unavailable or otherwise engaged for any reason, nothing happened. That included the preparation of experts' reports. Secondly the delays in the litigation, many of which comprised breaches of Court Orders, demonstrate that nothing short of an immovable timetable, like the Public Inquiry fixed for 8th January 2002 which could not be adjourned, or the Unless Order which I made in this case earlier this year, would motivate DM to take action if their instinct or interest was to delay. In a case where the periods of delay represented by the glacial speed of this litigation are exactly the same as those which are the subject of a £37 million loss of profit claim, it seems to me that these are not irrelevant considerations.
- This litigation was originally started in the Chester District Registry on 1st April 2003. I said during the hearing in March 2010, and repeat here, that I regard it as a scandal that this large claim for professional negligence has been allowed to meander so aimlessly for seven and a half years before coming to trial. The principal cause for the delay was the repeated requests by DM to stay the claim in the Chester District Registry. In this way, a claim which, certainly as against JH, went back to events in 1993, went nowhere for 5 years. Although DM were eventually ordered by the District Registry to serve a Schedule of Loss on 29th February 2008, the document that was served in accordance with that order was a wholly inadequate pleading of loss and damage.
- On 1st October 2008, 5½ years after it started, the action was transferred to the Royal Courts of Justice in London. On 14th February 2009, Master Rose made a number of orders, requiring DM to serve a proper Schedule of Loss and to file a forensic accountant's report by 29th July 2009. DM failed to comply with either part of that order and although time was extended, DM did not meet the extended date either. When a revised Schedule was eventually served on 26th October 2009, it was again wholly inadequate. There was still no forensic accountant's report, despite the fact that the particulars of loss of profit contained no detail at all, and instead promised that all would be revealed by way of such a report. In other words, the revised Schedule had ducked the only important part of the exercise, by saying that the particulars would be in an as yet unformulated report. It was still impossible for MJ to know the loss of profits claim that they had to meet.
- On 12th January 2010, Ramsey J transferred the action to the TCC. He ordered the provision of the accountant's report by 26 February 2010 and made various other consequential directions. DM failed to comply with that order as well. On 23rd March 2010, the matter came before me on the application by MJ and JH for an Unless Order in respect of the accountant's report. In granting the order sought, I noted that "the proper pleading of the claimants' loss of profit claim has gone completely awry, as a result of the numerous delays for which the claimants are responsible. It is not appropriate for a pleading to be advanced solely by reference to an expert's report, which may or may not be provided in the future". Having considered the material before me and the submissions made by the parties, I made an Unless Order that the forensic accountant's report had to be provided no later than 4:00pm on 21 April 2010, together with a properly pleaded claim for loss of profits.
- I made three other observations at the time, recorded in my Judgment at [2010] EWHC 697 (TCC) which are of some relevance now:
a) I noted that, although Mr Ives had advanced numerous different reasons for DM's repeated delays and failures to comply with court orders, stretching back over years, these reasons were contradictory, unsustainable and, in one instance at least, "seriously misleading".
b) I noted that DM's case, which I did not accept, was that Mr Morgan personally "was a vital link to the forensic accountants, and that without him the expert was wholly incapable of undertaking any sensible work." I expressed my grave concern "about the possibility of extensive interference by Mr Morgan in the accountant's work."
c) I said that "only the making of an unless order will motivate the claimants into complying with the court's direction as to the service of this vital expert's report…this is a potentially huge claim for loss of profit. It has been around in an inchoate form for a long time, and the moment has now arrived for that claim to be properly set out and supported, or put out of its misery."
- DM complied with the Unless Order, although it must be noted that, in my absence on circuit in June/July of this year, Ramsey J was obliged to hear a number of subsequent applications in this case in which both defendants sought further material from DM and/or their experts in relation to the damages claim, particularly the large claim for loss of profits. This included the important affidavit of Mr Morgan dated 6th July and exhibit DM 44, referred to in more detail in paragraphs 542 and 543 below. There can be no doubt that DM have not always been cooperative in the court process. This has led to the delays to which I have previously referred, and also to the difficulties as to disclosure and the like, outlined in Section B above.
- Many, if not most, of those difficulties have stemmed from Mr Morgan's control of this litigation on behalf of DM. I have already referred to Mr Ives' witness statement in which Mr Morgan's divorce was blamed for the considerable delays that occurred in obtaining planning permission. On the application before me in March, the only excuse for the delays in the litigation in late 2009/2010 that was put forward on behalf of DM was Mr Morgan's illness. I demonstrated, in the judgment that I gave on that occasion, that the illness had not actually been causative of the failure to comply with the orders of Master Rose, but that does not detract from the point that, on DM's side, if Mr Morgan was not giving the matter his attention, there was nobody else there who could or would. I also expressed concern on that occasion about the unusually detailed control that Mr Morgan appeared to be exercising on what was supposed to be an independent expert's report. As noted in Section F below, it has transpired that those misgivings were well-founded.
- Accordingly, not only has this litigation taken an unconscionable time to reach trial, but the vital elements of the damages claim (namely the schedule of loss and the supporting expert's evidence) were only provided very recently as a result of an Unless Order[5]. I find that this approach was consistent with many of the wider aspects of DM's conduct over the twenty years which I have reviewed in this Section of my Judgment. Nothing happened without Mr Morgan's involvement and consent; and nothing happened at all if, for whatever reason, Mr Morgan was devoting his undoubted energies to other matters.
D. LIABILITY
D1 General Principles
D1.1 Reasonable Care & Skill
- A solicitor owes his client the duty set out in s13 of the Supply of Goods & Services Act 1982:
"In a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the services with reasonable care and skill."
This mirrors the common law position, summarised by McNair J in Bolam v Friern Hospital Management Committee [1957] 1WLR 583 at 587:
"I myself prefer to put it this way, that he is not guilty of negligence if he has acted in accordance with the practice accepted as proper by a reasonable body of medical men skilled in that particular art…. Putting it the other way round, a man is not negligent, if he is acting in accordance with such a practice, merely because there is a body of opinion who would take a contrary view."
- In relation specifically to solicitors, the standard to be applied is that of the reasonably competent solicitor. In Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384, Oliver J said that a solicitor should not be judged by the standard of a "particularly meticulous and conscientious practitioner….the test is what the reasonably competent practitioner would do having regard to the standards normally adopted in his profession…" Beyond these general statements of principle, it is unnecessary to set out further authorities dealing with the scope of a solicitor's duty. In similar vein, at paragraph 11-081 of Jackson & Powell on Professional Liability, Sixth Edition (2007), the editors observe that the question of whether a defendant solicitor has made a mistake in any given case is usually capable of a definitive answer and, in borderline cases, the question of whether that mistake was negligent or not 'is unlikely to be decided by the mere citation of authority'. I respectfully agree with that.
D1.2 Reliance on Counsel
- One of the principal underlying themes in this case is MJ's reliance on JH. Traditionally, a solicitor could not be held to have been negligent if he relied on counsel's advice, no matter how outlandish that advice might have been. That position was modified by the Court of Appeal in Davy-Chiesman v Davy-Chiesman [1984] Fam 48 where, although the Court reiterated that, save in exceptional circumstances, a solicitor could not be criticised when he acted on the advice of properly instructed counsel, that did not amount to an immunity, and the solicitor was obliged to exercise his own judgement in relation to the matters on which the advice had been sought. He was not entitled to rely blindly, and with no mind of his own, on counsel's views.
- The current state of the law can be summarised by reference to two more recent decisions of the Court of Appeal. In Locke v Camberwell Health Authority [2002] Lloyd's Rep PN 23 at 29, the Court said:
"(1) In general, a solicitor is entitled to rely upon the advice of counsel properly instructed.
(2) For a solicitor without specialist experience in a particular field to rely on counsel's advice is to make normal and proper use of the Bar.
(3) However, he must not do so blindly, but must exercise his own independent judgement. If he reasonably thinks Counsel's advice is obviously or glaringly wrong, it is his duty to reject it."
In Ridehalgh v Horsefield [1994] Ch 205 at 237G, the Court stressed that the solicitor did not abdicate his own professional responsibility when seeking the advice of counsel, but went on to note that "the more specialist nature of the advice, the more reasonable is it likely to be for a solicitor to accept it and act on it."
- There have been numerous reported cases in which the solicitor's attempt to rely on counsel's advice as a defence to a claim in negligence has failed for one reason or another (such as Estill v Cowling [2000] Lloyd's Rep PN 378, where the solicitor failed to give himself sufficient knowledge of the subject to instruct tax counsel properly) and equally, many such cases where that defence has been successful (such as Firstcity Insurance Ltd v Orchard [2003] PNLR 9, where the solicitors were found to be entitled to rely on counsel's advice). The relevant authorities are summarised at paragraphs 11-120 and 11-121 of Jackson & Powell. Save to note that, in very general terms, the more specialised the area of practice under review, the greater the prospect of such a defence being successful, it is impossible to discern any real pattern in those cases: they turned on their own facts.
D1.3 The Dangers of Hindsight
- A claim against a solicitor for negligence must be considered in the light of the circumstances at the time that the advice was given: see Bell v Strathairn & Blair [1954] 104 L.J.618. It is for the reason that I have set out the relevant circumstances in such detail in Section C above. The temptation of looking at MJ's conduct with the benefit of hindsight is strong because, on the face of it, little advantage was apparently derived by DM from the events between November 1998 and January 2002, and the urge is to think that, because MJ were DM's solicitors at that time, they must somehow have been at fault. But, as Megarry J (as he then was) put it in Duchess of Argyll v Beuselinck [1972] 2 Lloyds Rep 172 to 185, "hindsight is no touchstone of negligence".
D2 The Allegations Against JH
D2.1 Relevance
- As noted above, the claims against JH have recently been compromised. Despite that, it is impossible to consider and determine the remaining allegations of negligence against MJ without having some regard to the allegations against JH. It is necessary to analyse the way in which the allegations against JH fit into DM's case as a whole, and it is also important to investigate the extent to which MJ were entitled to rely on JH's advice, in accordance with the principles noted above.
- The pleaded case against JH was considerably more substantial than that against MJ. There were 16 separate allegations of negligence against JH, as against the five pleaded against MJ. Moreover, those allegations covered the entire period up to 2002 noted in Section C above, and included important allegations of default in relation to the 1993 advice, and the first November 1998 advice, which are not made against MJ. In addition, the allegations against JH in the Substituted Particulars of Claim ("SPoC") are pleaded first, before the pleading goes on to set out the allegations against MJ. This is because the latter are consequential upon, and subsidiary to, the former. An informed reader of paragraphs 56 to 66 of the SPoC would inevitably conclude that DM's principal claim lay against JH, and that the allegations against MJ were of considerably more limited compass.
- In particular, there are three specific allegations made against JH which form no part of the pleaded case against MJ, but which I consider to be of great significance to any consideration of what went wrong between 1993 and 2002. It is impossible to consider the pleaded case against MJ without first analysing those three allegations against JH. They concern the original advice about Irlam Brick in 1993; the advice in 1998 and thereafter that DM should seek to amend the planning conditions pursuant to s73 of the Town & Country Planning Act 1990; and the failure to give the advice about Wheatcroft until January 2002. It seems to me that those three allegations, dealt with in turn below, lie at the heart of the story between 1993 and 2002. None of these allegations are made against MJ, presumably because it is (or must be) accepted that they were each specific matters of planning law on which Mr Downey was entitled to rely on JH.
D2.2 Irlam Brick
- Irlam Brick Company v Warrington Borough Council [1982] JPL 708, is an ex tempore judgment of Woolf J (as he then was), in which a contractor was seeking a declaration that the Council's notice preventing tipping at the site in question was unlawful. The contractor's application failed for reasons of effluxion of time, which are unconnected to the present case. However, along the way, one of the contractor's arguments was that, pursuant to the original planning conditions, there was an implied permission to tip. In that case, condition 2 provided that "any workings from which extraction of raw materials has ceased shall be made available as a tip, subject to such tipping charges as the undertaker shall from time to time determine". The judge, following the decision of the Court of Appeal in R v Derbyshire County Council ex parte North East Derbyshire District Council (18th January 1979) had no doubt that the particular condition in that case "granted an implied planning permission to carry out the operation of tipping." The editors of the JPL noted with approval that Woolf J had stressed that such an implication should only be made where it was 'absolutely necessary'.
- In 1993, JH had advised (paragraph 59 above) that, pursuant to the principle set out in Irlam Brick, and provided that consent was obtained under condition 11 from SHMBC, "waste may be imported to this site for the purposes of restoration without a further grant of planning permission." At paragraph 56 of the SPoC, it was said that this advice was negligent because such implied permission depended on all the circumstances of the case and, in particular, the other conditions of the planning permission. The importance of this allegation was obvious: it took the hypothetical case against JH right back to 1993.
- Although it is unnecessary for me to determine conclusively whether or not the allegation at paragraph 56 of the SPoC is correct, I should say that, in my judgment, JH's terse advice in 1993 placed a remarkable degree of reliance on what I consider to be a very slender thread. There are a number of reasons for that view. First, I myself doubt whether Irlam Brick is really authority for any principle at all. It was, after all, an ex tempore judgment, in which the judge's remarks as to the issue of the implied condition were plainly obiter, and where the judge followed, as he was bound to do, a decision of the Court of Appeal. Secondly, Woolf J's conclusion that there was an implied right to tip in Irlam Brick, because of a condition which expressly envisaged tipping in the void created by the workings, seems to me to be unremarkable in the circumstances. That is very different to the present case, where there was no reference in the planning conditions to any kind of tipping at all.
- Thirdly it seems to me that, in every case of this sort, any alleged implied permission can only be ascertained by reference to a detailed and proper analysis of the relevant express conditions. I note that, in the current Encyclopaedia of Planning Law & Practice, at paragraph P72.27, this is precisely the point that is made about implied permission. It is here that there is a passing reference to Irlam Brick. That seems to me to be right, because only after such an analysis is it possible to say whether or not the implication was 'absolutely necessary'. There was such an analysis in the first November 1998 advice, where (at least according to JH) he advised that there was no such implied permission. But it must be very doubtful whether JH's brief advice in 1993 involved any such analysis.
- Accordingly, I have some sympathy with the allegation made against JH at paragraph 56 of the SPoC. Although in his final submissions, where he was naturally keen to play down JH's role and emphasise Mr Downey's conduct, Mr Davidson sought to suggest that (contrary to DM's pleaded case) JH's advice in 1993 was technically correct, I do not accept such a conclusion: on the face of it, in 1993, JH failed to go through the sort of analysis of the conditions which I would have expected and which he was to do almost 5 years later.
- It is impossible to over-emphasise the importance of the few lines that made up the 1993 advice (paragraph 59 above). It was as a result of that advice that both Mr Downey and Mr Morgan believed that there was a good prospect of being able to argue that DM did not need to make a fresh planning application, because they already had permission to bring waste onto the site. That shared belief was based on their reasonable reliance on JH's advice, and as a matter of fact it lasted up to 1998, and beyond (when JH says that he changed his advice to say that Irlam Brick was no longer arguable), and right up to January 2002. That reliance is apparent from the correspondence between the two men and indeed, in DM's statement of reasons and Rule 8 statement in the enforcement notice appeal, both of which expressly referred to DM's case by reference to, and in reliance upon, the Irlam Brick principle. There can be no doubt therefore that the 1993 advice, which I think can be legitimately criticised for the reasons which I have explained, played a critical role in the formulation of DM's strategy in 1993 and onwards.
D2.3 A Section 73 Application
- Section 73 of the Town & Country Planning Act 1990 provides as follows:
"73. Determination of applications to develop land without compliance with conditions previously attached.
(1) This section applies, subject to sub-section (4), to applications for planning permission for the development of land without complying with conditions subject to which a previous planning permission was granted.
(2) On such an application the local planning authority shall consider only the question of the conditions subject to which planning permission should be granted, and –
(a) if they decide that planning permission should be granted subject to conditions differing from those subject to which the previous permission was granted, or that it should be granted unconditionally, they should grant planning permission accordingly, and
(b) if they decide that planning permission should be granted subject to the same conditions as those subject for which the previous permission was granted, they shall refuse the application.
(3) Special provision may be made with respect to such applications –
(a) by regulations under Section 62 as regards the form and content of the application, and
(b) by development order as regards the procedure to be followed in connection with the application.
(4) This section does not apply if the previous planning permission was granted subject to a condition as to time within which the development to which it related was to be begun and that time has expired without the development having been begun."
- In his first November 1998 advice, JH advised that an application should be made pursuant to s73 to amend the planning conditions. The amendment which he proposed was very general (paragraph 149 above), and he said that he wanted to see the detail of the amendment before the application was made. Subsequently, in the run-up to the hearing in April 2000, JH maintained that advice and drafted the necessary amendments (paragraph 215 above). After the adjournment of the first hearing, he reiterated his advice that a s73 application should be made (paragraph 226 above), but emphasised that, if the application ran into difficulties, a fresh application for planning permission could then be made instead, well before the resumed hearing of the appeal. In fact, because of the delays which are solely referable to DM (paragraphs 228 to 250 above), the s73 application was not made until the end of November 2001 and because of the failure to produce the Environmental Statement (on which the application was based) until the same date, the s73 application had to be abandoned at the start of the second hearing in January 2002.
- At paragraph 58(iv) of the SPoC, DM's pleaded case against JH refers to the 1998 advice that an application could made under s73 and goes on:
"This advice was simply incorrect. It was not legally possible to amend condition 5 to allow the importation of waste for tipping, as this would have fundamentally changed the development that was permitted under the 1990 permission."
This important allegation – that it was legally impossible for a s73 application to work - was not addressed in any detail in either side's closing written submissions. In answer to a specific question from me, Mr Davidson asserted that the rather limited nature of the words in s73 could not provide an appropriate vehicle for an application for permission to tip waste where none previously existed. No authorities were provided in support of that submission. In his written closing submissions, he had accepted (paragraph 24 of section 1) that such an application was, at least in theory, open to DM. And that is also the basis of DM's pleaded case on causation: see paragraph 386 below. In my view, these contradictory statements emphasise the difficulties inherent in this critical element of DM's case.
- I would be most reluctant to determine this aspect of the case against JH because, not only have I heard no representations from him, but (as I have indicated) neither of the parties at trial have made detailed submissions as to the efficacy or otherwise of the s73 route in these circumstances. I have some sympathy with Mr Davidson's general point: on the face of it, it might be said that s73 envisages deletions or amendments of a rather less fundamental nature than those contemplated here. On the other hand, it is plain that this section can be used to amend existing conditions, and the issue of whether it is an appropriate vehicle in a particular case would appear to be a matter of fact and degree which would turn on the expert evidence. In the absence of any analysis of the authorities under s73, I am not able to conclude that the s73 application (when it was eventually made) was misconceived in law. It seems to me that such an application was difficult – and possibly more difficult than JH indicated, either in 1998 or subsequently - but I do not find that it was doomed to fail.
- Again, there can be no doubt that JH's advice as to s73 was very important, even though, for the reasons outlined in paragraphs 228-250 above, DM failed to rely on it and make that application until three years after they had first been advised so to do. Both Mr Downey and Mr Morgan reasonably believed that the s73 route was available to them and provided DM with a way of getting the necessary permission without having to launch a full-blown planning application. There is no allegation against MJ in the same terms that are summarised in paragraph 337 above. Moreover, although paragraph 60 of the SPoC contains three further allegations against JH in relation to his repeated advice about making a s73 application in April 2000, none of those allegations are pleaded against MJ. Again, on the face of the SPoC, it would appear to be accepted by DM that MJ were entitled to rely on JH's advice about the availability of s73. Even if that were not accepted, it would be the only fair conclusion to which I could come.
D2.4 Wheatcroft
- In January 2002, immediately before the resumed hearing, JH told Mr Downey and Mr Morgan that the Irlam Brick argument was not open to them. This bombshell, which I accept is what it was, was explained to them by reference to the decision in Bernard Wheatcroft Limited v Secretary of State for the Environment and another (1981) Property and Compensation Reports 233. In truth, rather like Irlam Brick, the reader has to look rather hard at the judgment in Wheatcroft in order to find the alleged principle that might have any relevance to the present dispute. However, JH's alleged failure to advise about Wheatcroft is the third important part of the pleaded case against JH which finds no echo in the allegations against MJ.
- In Wheatcroft, the developer's original planning application was for 420 dwellings on 35 acres. The application was refused and the developers appealed. In the course of that appeal, they indicated that they had an alternative proposal for 250 dwellings on 25 acres. On appeal, the Secretary of State refused to consider the alternative case as a matter of principle. On an application for judicial review, Forbes J concluded that there was no principle of law that prevented the Secretary of State from imposing conditions that had the effect of reducing the permitted development below the development applied for. The decision was therefore quashed. Along the way, the judge noted that both counsel were agreed that a reduction in the scope of the development originally proposed in the application was legitimate "so long as it does not alter the substance of the development for which permission was applied for." The judge therefore added what he called a rider to his judgment in these terms:
"The true test is, I feel sure, that accepted by both counsel: is the effect of the conditional planning permission to allow development that is in substance not that which was applied for? … The main, but not the only, criterion on which that judgment should be exercised is whether the development is so changed that to grant it would be to deprive those who should have been consulted on the changed development of the opportunity of such consultation…"
- In January 2002, JH apparently advised that Wheatcroft was authority for the proposition that planning permission could not be granted for more than had been applied for. The suggestion was that, because the application for planning permission in 1990 had relied on the Manstock scheme, and the Manstock scheme had said that there would be no waste disposal at BHQ, Wheatcroft meant that it was impossible for the 1990 permission to be turned into a permission to import waste for tipping. That is certainly the assumption that is made in the allegation against JH at paragraph 58(iii) of the SPoC, where it is alleged that JH was negligent in not giving that advice years earlier. But it is difficult to pick out this alleged principle from the actual decision in Wheatcroft. The ratio in Wheatcroft was on an altogether different point, namely whether, as a matter of principle, the Secretary of State could consider a reduced scheme on appeal, when that reduced scheme had not been considered and commented on by the Planning Authority and anyone else entitled to be consulted. That has no application to the present case. And even if the point in the rider to the judgment (about altering the substance of the original application) is relevant here, that would be, on any view, a question of fact and degree, not a fixed rule that if something (no matter how trivial) was not in the original application for planning permission, it automatically fell to be discounted.
- In addition, it must be noted that Wheatcroft was not a case where an applicant was seeking to amend under s73; nor was it a case in which the applicant was seeking to rely on the wide powers of the Secretary of State under s177 of the Town and Country Planning Act, which permitted the Secretary of State a broad leeway to amend and alter conditions (see paragraph 190 above), a matter on which JH had also expressly advised at the consultation in October 1999. On the face of it, therefore, the actual decision in Wheatcroft seems to me to have had little relevance to the underlying dispute between SHMBC and DM, save that it was the vehicle by which Mr Morgan and Mr Downey found out that there was no implied permission. Be that as it may, I again note that the allegations against JH involving Wheatcroft are not made against MJ. There is no equivalent to paragraph 58(iii) in the pleading against MJ, nor in my judgment, is there anything which comes close to it.
D2.5 Conclusions as to the pleaded case against JH
- The three allegations against JH analysed above cover what are, on DM's case, the essential features of the legal advice between 1993 and 2002. Mr Morgan was told that he could rely on Irlam Brick which would avoid the need to make a fresh application for planning permission at all; and that if he had to make any sort of application it was under s73 (and/or s177) to amend the existing conditions, rather than making a full application for fresh permission. Both of those critical features of the legal advice given by JH are now said by DM to be negligent. What is more, the Wheatcroft point, which is again referable solely to JH and his alleged failure to advise about the effect of the original application until the very last minute, takes the relevant events right up to the eve of the resumed hearing in January 2002.
- The case against MJ, which in the SPoC comes after the pleaded case against JH, is much more limited in time and in scope, largely focusing on specific failings to go back to JH for further advice in late 1998/early 1999. For the reasons that I have indicated, I find this unsurprising: the thrust of DM's pleaded case is, and always was, against JH alone, because he was providing the specialist planning advice on which, in ordinary circumstances, both Mr Morgan and Mr Downey were entitled to rely. But it is important to keep this in mind because, particularly in his closing submissions, Mr Davidson sought repeatedly to elide the different cases against MJ and JH, with the result that numerous criticisms are made of Mr Downey which are not pleaded against MJ, and which - if they lie against anyone at all - lie against JH alone.
D3 The Factual Framework
- The detailed factual framework against which the allegations against MJ need to be considered is that set out in Section C above. There are, however, a number of overarching themes which I summarise as follows:
(a) Everyone knew that the only certain way in which DM could obtain planning permission to tip 5 million cubic metres of waste at BHQ was to make a fresh application for such permission. That is what DM thought they were going to have to do before the possibility of implied permission arose for the first time in July 1993. That is what they were legally obliged to do pursuant to the tipping agreement with Love entered into that month (paragraph 61 above). And that is what SHMBC repeatedly told them that they should do. DM had been aware of the risks involved in such a course from the outset (see paragraph 41 above).
(b) However, in July 1993, DM were advised by JH that there was implied planning permission. The advantages of having such implied planning permission were plain and obvious: it meant that DM could sidestep all of the environmental, political and other objections to their scheme to tip waste at BHQ, set out in Section C above. Those advantages were so great that, as long as there remained a prospect of such implied permission being acknowledged or confirmed, DM (and Mr Morgan in particular) would pursue that course rather than any other: see paragraphs 47, 58, 89, 109-110, 140-142, 171-172, 187, 188, 227, 258 and 270-271 above.
(c) In 1998, DM were told in terms to make a s73 application, to amend the existing planning conditions so as to allow DM to tip waste. The inference inherent in that suggested course of action was that the existing conditions, as they stood, did not permit DM to tip waste, either expressly or impliedly. It was therefore a much less attractive course for DM to take. I find that this was the principal reason why DM did not act on that advice.
(d) Even after the adjourned hearing in April 2000, DM still did not make either a s73 application, or a fresh application for planning permission, despite JH's advice to that effect (paragraphs 228-250 above). This was because DM themselves said they had other priorities at the time (paragraphs 247-250 above). The delay between April 2000 and August/September 2001 effectively scuppered the chances of any application getting off the ground so as to be considered at the resumed hearing in 2002.
(e) Moreover, even when DM belatedly made an application to SHMBC in the autumn of 2001, Mr Morgan expressly stated that he preferred to make an application to amend the existing conditions rather than a fresh application for planning permission (see paragraph 253 above). I find that this was because, in Mr Morgan's mind, an application to amend the existing conditions was perceived to be less difficult, and closer to the implied permission argument, than seeking to address all of the environmental, political and other obstacles that would be raised in opposition to a fresh application for planning permission.
(f) An application for planning permission was made in January 2002, immediately after JH had advised that, in the circumstances which had then arisen, there was no other way in which DM would achieve planning permission to tip waste at BHQ.
D4 The Allegations of Negligence against MJ/ The 1998 Advice
D4.1 Introduction
- There are three allegations against MJ arising out of JH's first November 1998 advice. They are pleaded at paragraph 64 of the SPoC as follows:
"64 Mr Downey of the First Defendant was negligent in respect of the Second Defendant's advice of October 1998 in the following way:
PARTICULARS
(i) He should have realised that there was a possibility that the Second Defendant had changed his mind[6] since the earlier advice and believed that his earlier advice was wrong. He should have made specific enquiries of the Second Defendant to find out exactly what his position was on the original advice that had been given, and he should have confirmed with the Second Defendant exactly what he meant by his paragraph 20, and what the significance was of that meaning. [Allegation 1]
(ii) The First Defendant should have realised that the advice was unclear as to what form of application needed to be made and why; and he should have asked specific questions as to what was needed and why. [Allegation 2]
(iii) Further, the advice that no Environmental Statement was needed if an application was being made to allow the importation of waste, whether under s73 or by some other route, was so improbable that the First Defendant should have questioned the advice and subject to the response to the question if necessary advise the Claimant that the advice on this point was not safe to follow. [Allegation 3]"
Allegation 1 at paragraph 64(i) – the alleged change of mind about Irlam Brick and what Mr Downey should have done about it – is dealt with in Section D4.2 below; Allegation 2 at 64(ii) – the lack of clarity as to the form of the application to be made by DM – is dealt with in Section D4.3 below; and Allegation 3 at 64(iii) – the need for an Environmental Statement – is dealt with in Section D4.4 below.
D4.2 Allegation 1: The Change of Mind
- There is no dispute that JH's 1993 advice told DM that they had implied planning permission to bring waste on to the site pursuant to the so-called principle in Irlam Brick. JH's defence says of the first November 1998 advice that it "was clear that it was no longer the Second Defendant's opinion that the principle in Irlam Brick applied and/or that there was implied permission to tip or bring waste on to the site." The defence goes on to refer to paragraph 19 of the first November 1998 advice (set out in paragraph 148 above) and paragraph 23(e) of that same advice, which reiterated that "there is now no right to bring waste on the site". Although JH's witness statement on this topic is rather more opaque, it appears that he also maintains there that it was clear from his first November advice that he was saying that the implied permission argument could not work.
- In circumstances where leading counsel is saying that his advice clearly meant X, whilst his instructing solicitor and his knowledgeable client both believed that it meant Y, it must always be a real possibility that the advice was unclear or open to more than one interpretation, and therefore required clarification. In such circumstances, it would be the solicitor's responsibility to sort out that potential confusion. The real issue for me, therefore, in relation to Allegation 1, is whether or not, when reading the 1993 and the 1998 advices together, a reasonably competent solicitor would have thought that there was at least the risk of uncertainty or a lack of clarity in what was being said.
- In my view, taken on its own, there was no lack of clarity in JH's first November 1998 advice. That advice clearly said, in terms, that waste could not be brought onto the site: see paragraph 19 and paragraph 23(e). The potential for confusion was brought about solely by a consideration of that advice in the context of the earlier advice of 1993, which said the very opposite: that DM had an implied entitlement to tip waste at BHQ. Even if, in 1998, the focus was on the issue of which scheme was the more appropriate (Manstock or Cass), not the existence or otherwise of permission to tip, the difference between the two advices was stark. The Irlam Brick/implied permission argument was not expressly addressed in paragraph 19 of the 1998 advice, which was otherwise dealing with permission to tip; therefore, at the very least, Mr Downey ought to have gone back to JH for clarification on that topic. I consider that Mr Davidson was right to submit that Mr Downey's letter to Mr Morgan of 18th January 2002 (paragraph 275 above) and his oral evidence on Day 6/48-50 both came close to admitting this failure. In any event, in my view, there was too big a gap between the potential effect of the advice in 1993, and the potential effect of the first November advice in 1998, for the matter to be left where it was. Mr Downey should have seen the potential for confusion and conflict and should have sought clarification from JH. I consider that his failure to do so was negligent.
- I accept that JH's first November advice is not as clear as it ought to have been. For example, he was wrong to say in paragraph 19 that the implied permission must be subject to the express terms of the permission: as a matter of basic principle, it must work the other way round. The express terms are what matter and the implied permission will only operate as a matter of construction of the express terms, and even then only if implication is necessary. Furthermore, I consider that it was potentially misleading to refer to the implied permission at all if, as JH now says, he was advising that the Irlam Brick principle no longer applied. Having referred expressly to DM's reliance on the Irlam Brick argument in paragraph 8 of his advice, JH should have said expressly at the end of the advice that, for the reasons he had given, the argument could not be sustained. In addition, I consider that the third and the fourth sentences of paragraph 19 do not follow on from each other. The third sentence states that SHMBC had not approved any materials to be brought on to the site, which must be a reference to condition 11, and therefore a reference to post-permission events. But the fourth sentence, which states that this lack of approval is made "absolutely clear" by paragraph 3.6 of the original Manstock scheme, is referring to a pre-permission statement and a completely different matter of both fact and law.
- But none of that can excuse Mr Downey's failure to clarify the advice as to the existence or otherwise of permission. Whatever the criticisms that can be made of paragraph 19, its basic thrust was plain: that there was no permission to import waste. If, as Mr Downey and Mr Morgan say that they believed, this was simply another way of saying that there was implied permission to import waste but it was dependent on SHMBC approving the types of waste under condition 11, then the whole paragraph should have been worded very differently. On one view, the answer at the start would have been Yes, not No. In my judgment, it is very difficult to tease out of paragraph 19, or paragraph 23(e), advice that the implied permission, in the terms in which JH had expressed it in 1993, was still extant. Furthermore, because in his first November advice JH was advising that the best course was for DM to make an application under s73 to amend the existing conditions, that should have been seen as confirming his view that the existing conditions, as they stood, did not get DM home, and that instead they needed to be amended. I believe that that was, again, only consistent with a view that the implied permission argument did not work, and that something more was going to be necessary.
- It is perhaps of limited value to speculate as to why Mr Downey fell into error in this regard. But I suspect that it may have been because of Mr Morgan's tendency (previously noted at paragraph 83 above), which unhappily sometimes rubbed off on Mr Downey, to see everything through over-optimistic eyes; never to contemplate that DM might be wrong or that another, less satisfactory position, may be the correct one. After all, Mr Morgan had had very satisfactory advice in 1993, which, on one view, had not been expressly negated by the first November advice in 1998. He had no reason to upset that applecart by making further enquiries into the basis of that advice. Mr Downey, on the other hand, who appears to have been rather too close to Mr Morgan at this time (as evidenced by his ill-considered agreement with Mr Morgan that the second November advice, on a different topic, was wrong) had every reason to raise the issue, but negligently failed so to do.
- For what it is worth, although it makes no difference to my conclusions, I should add that I do not accept Mr Davidson's submission that, by analogy with Mathew v Maughold Life Assurance Co Ltd (1987) 3 PN 98, this advice (or the advice of 1993, come to that) constituted 'one technician talking to another': on the contrary, this was advice which was intended for a non-specialist solicitor and his knowledgeable client.
- Before leaving Allegation 1, I ought to deal with one final point which was argued by Mr Hart but which, so it seems to me, is irrelevant to this part of the case. On behalf of MJ, Mr Hart argued that paragraph 19 of JH's first November advice could not be read as somehow revealing, albeit in heavily disguised terms, the so-called Wheatcroft principle. He said that Mr Downey would have had no way of knowing that that is what paragraph 19 was seeking to do. I agree with that: paragraph 19 of the first November advice cannot be read as some sort of revelation of Wheatcroft three and a bit years before it was expressly referred to by JH at the last consultation before the resumed hearing in January 2002. But it was no part of Mr Davidson's submissions that it was any such thing, and whilst there was a suggestion in JH's defence that that is what he was seeking to do, I have no doubt that such a suggestion is quite wrong. Paragraph 19 was not concerned with the effect of the original application on the permission granted. However, for the reasons noted above, that conclusion makes no difference to my view that Allegation 1 has been made out against MJ.
D4.3 Allegation 2: The Form of Application
- This allegation is that Mr Downey should have seen that, not only did the first November advice render the implied permission point uncertain or unclear, but that there was also something unclear about the form of application that JH was advising that DM should make. For the reasons set out below, I consider that this allegation, which was not pushed particularly hard in either the opening or in closing submissions on behalf of DM, is unsustainable.
- Paragraph 20 of JH's first November advice of 1998 comes under the heading 'What Steps Are Available to the Client' (paragraph 149 above). It advised that an application under s73 be made to amend condition 5. The terms of the amendment are proposed, although JH made clear that he wanted to see the precise wording before the application was submitted. This advice, as to what DM should do next, is not qualified, nor are any alternatives steps indicated. It does not clash or conflict with the 1993 advice because that contained no advice about the steps that DM should take. Furthermore, for the purposes of this allegation, it is not suggested that Mr Downey should have known that an application under s73 was, in some way, legally flawed, or that the advice in paragraph 20 was glaringly or obviously wrong. The allegation is simply that the advice in paragraph 20 was unclear and that Mr Downey should have gone back to JH to clarify what steps DM should take and why.
- For the same reasons that led me to accept that Allegation 1 has been made out, I reject Allegation 2. JH's advice as to the continuing existence of an implied permission was unclear because the 1993 advice had been in the affirmative, whilst the first November 1998 advice had arguably been in the negative. But, for Allegation 2, because the 1993 advice was irrelevant, paragraph 20 of the first November advice has to be considered on its own terms. Is it in any way unclear or uncertain? The answer is plainly No. JH was advising that a s73 application, to amend condition 5, should be made. The proposed amendment would then allow DM to submit the Cass scheme as a more appropriate scheme for restoration. There was no doubt or difficulty about that advice therefore this was not an issue on which Mr Downey needed to go back to JH.
- The undoubted clarity of JH's advice as to what steps should be taken can be demonstrated in a number of ways. First, there is the evidence of Mr Morgan and Mr Downey. I have already set out, at paragraph 165 above, Mr Morgan's unequivocal evidence that he was fully aware that what JH had advised was the making of a s73 application to amend condition 5. Mr Downey gave evidence to the same effect. Secondly, there is the evidence about JH's subsequent advice, which was entirely consistent with what he had said in the first November advice. In particular:
a) In November 1999, when dealing with the forthcoming hearing in the enforcement notice process, JH talked about using it as a planning appeal and referred to s177 (see paragraph 190 above), which is the section that gives the Secretary of State wide powers to amend and add planning conditions on an appeal. That seems to me to be entirely consistent with JH's original advice about s73.
b) On the balcony after the hearing in April 2000 (paragraph 226 above), JH again reiterated that, in his view, the starting point was a s73 application, with a full application to be made if the s73 application ran into difficulties.
In this context, these subsequent advices only serve to confirm the clarity of the advice that he gave in his first November advice to the effect that the right course was to make a s73 application.
- For these reasons, I therefore reject the suggestion that the advice as to DM's next step was in any way unclear or uncertain. That is the only basis on which Allegation 2 has been pleaded. It must therefore fail. For the reasons noted in Section D2.3 above, I reiterate that any suggestion that the s73 route was misconceived in law, and should have been recognised as such, is not an allegation made against MJ, and not one on which I can accept. It is, however, a matter to which I am obliged to return in Section D5.4 below.
D4.4 Allegation 3: The Environmental Statement
- The allegation is that, although JH had advised, at paragraph 21 of his first November advice (paragraph 149 above) that no Environmental Statement was required, Mr Downey should not have blindly followed this advice because it should have been obvious to him that such advice was likely to be wrong. This allegation was not dealt with in DM's opening and was something of a footnote in closing. For the reasons set out below, I reject Allegation 3.
- JH's advice had referred to the Environmental Assessment Regulations 1988. Those Regulations stated that no schedule 1 or schedule 2 application could be made without an Environmental Statement. It is accepted that an application for consent for quarrying or landfilling was potentially within schedule 2. However, article 2(1) of those Regulations defined a schedule 2 application, and that definition expressly excluded an application made pursuant to s73. Accordingly, when he gave advice in November 1998, not only was JH not wrong, but he was quite correct to advise that a s73 application did not have to be accompanied by an Environmental Statement.
- The law changed in March 1999, on the introduction of the 1999 Regulations. From then on, a s73 application did require an Environmental Statement, but only if the proposed scheme was likely to have significant effects on the environment. The need for such a Statement therefore became a matter for expert and technical opinion, rather than a pure matter of law. Doubtless, it was for this reason that Mr Smith, in early 2000, advised that an Environmental Statement should be provided (paragraph 195 above), a position from which he resiled in the face of Mr Morgan's spirited opposition (paragraph 197-198 above). Of course, once Mr Albon had agreed at the first hearing in April 2000 that the Cass scheme could have a significant effect on the environment, such that an Environmental Statement was necessary, the hearing had to be adjourned to allow such a Statement to be prepared.
- Accordingly, it seems to me that Allegation 3 against MJ fails at every level. JH's advice was quite correct at the time that it was given. On any view, it could not be said to be obviously or glaringly wrong. After the law changed, the provision of an Environmental Statement became a matter of technical expertise rather than law: did the particular scheme in question have a significant effect on the environment? That was an issue on which, for his own reasons, Mr Morgan persuaded Mr Smith to change his mind, but which the evidence of Mr Albon meant could only be resolved by the provision of an Environmental Statement. Accordingly MJ were entitled to rely on JH's advice, and subsequently, on the views of the consultants. Any difficulties in the subsequent history of the Environmental Statement were nothing whatsoever to do with MJ. Allegation 3 is therefore rejected.
D5 The Allegations of Negligence Against MJ/1999-2001
D5.1 Introduction
- Although this was a lengthy period of 3 years, in which a number of important things happened (and failed to happen), there are only two allegations of negligence against MJ in relation to the entirety of the 3 years. Again, that is in contrast to the number and scope of the allegations made against JH. Allegations 4 and 5 against MJ are pleaded in the SPoC as follows:
"65. First Defendant devised the scheme of asking the Council to serve an enforcement notice and then appealing it to an inspector without advice from the Second Defendant. This scheme was misconceived because the inspector on any appeal could not grant planning permission on an appeal against an enforcement notice alleging breach of condition for development which was in substance different from that which was allowed under the planning permission. It should have been plain to the First Defendant that what was required in order to obtain planning permission for the importation of waste was an application for a fresh planning permission together with an Environmental Statement, and the First Defendant was negligent in failing so to advise the Claimant. [Allegation 4]
66. Further, the First Defendant was negligent in failing to advise the Claimant that the Environmental Statement had to be properly advertised [Allegation 5]"
I deal with these allegations in turn below.
- However, I should say at the outset that Paragraph 65 (Allegation 4), is, in my judgment, an unsatisfactory pleading of a particular of professional negligence[7], and it needs to be unpacked so as to see precisely what is being alleged and why. It seems to me that there are three aspects to it: the factual assumptions which underpin the allegation, which I address in Section D5.2; the allegation concerning the enforcement notice process itself (Section D5.3 below); and the more fundamental allegation as to whether DM could only have obtained permission to import waste to BHQ by making a fresh planning application (Section D5.4 below).
D5.2 Allegation 4: The Factual Framework
- The first factual assumption made in paragraph 65 is that MJ "devised" the enforcement notice process. As set out in paragraphs 119, 167, 169 and 178-179 above, that assumption is wholly incorrect, for two reasons. First, the enforcement notice route was triggered by SHMBC because of DM's disregard of the planning conditions, and its initial implementation had nothing to do with Mr Downey or even Mr Morgan; secondly, the way in which that process was pursued, which did involve a certain degree of co-operation between the parties, was agreed between Mr Morgan and Mr Molloy of SHMBC, and again had very little to do with Mr Downey.
- As to the second factual assumption, although it is right that JH was not asked to advise in early 1999 in relation to the enforcement notice process, it does not seem to me that anything turns on that. First, since the activation of the enforcement notice process was in the gift of SHMBC, there was nothing in substance for JH to advise about. Secondly, when JH saw the papers in the autumn of 1999, at the start of the lead-up to the first inquiry in April 2000, he did not say that the enforcement notice process was in some way flawed or should be abandoned. On the contrary, he gave advice as to how it could be used to further DM's interests (the s177 point, as set out at paragraphs 189-190 above). Thus, in my view, it was irrelevant that JH did not advise about the enforcement notice process earlier. For the avoidance of doubt, if it is suggested that it was negligent not to ask JH to advise about it in early 1999, rather than later in that same year, I reject the allegation. I accept Mr Downey's evidence (paragraph 183 above) that, on the enforcement notice process, there was, in late 1998/early 1999 nothing, to go back to JH about.
- At paragraph 38 of his closing submissions, Mr Davidson complains that, in November 1998 Mr Downey "encouraged him [Mr Morgan] to go against leading counsel's advice". That is, with respect, a significant exaggeration. Mr Downey agreed with Mr Morgan that there was an error in the second November advice on the condition 5 argument, but the error (in truth, nothing more than an indication that Mr Morgan and Mr Downey did not like JH's rejection of their argument) went nowhere and informed no subsequent decision which either man took. The second November advice is not alleged to have been negligent, and no allegation is pleaded against MJ arising out of it. Crucially, Mr Downey did not encourage Mr Morgan "to go against" JH's advice about the s73 application. On the evidence, it was Mr Morgan alone who delayed in following that advice, even when it was repeated in 1999 and 2000.
- In my view, Allegation 4 needs to be considered and decided by reference to the correct underlying factual position, summarised at Section D3 above. In particular, the following findings need to be emphasised:
a) Although they had continued to extract sand and sandstone at BHQ between 1994 and 1998, DM had done nothing else. They had not even prepared an application under condition 11 in relation to the types of waste, let alone reconsidered the scope of the Cass scheme, despite SHMBC's repeated complaints that it was the scale of the Cass scheme, rather than anything else, which was at the heart of their objection (see, for example, paragraphs 76, 88, 99-100 and 255 above). In those circumstances, the planning conditions had been breached, because there was no aftercare scheme approved, and more importantly, the quarrying had extended beyond the 9 hectare limit.
b) In such circumstances, SHMBC had decided that they had no viable alternative but to issue an enforcement notice. At all times, they explained their position plainly to DM (see paragraphs 119, 167, 169, 179 and 180-182 above). Thus, the commencement of the enforcement notice proceedings themselves was not within DM's or MJ's control. It was up to SHMBC to decide whether or not they wanted to issue such proceedings. From the summer of 1998, they made plain that they did. Thus, far from being devised by Mr Downey (or Mr Morgan for that matter), the decision to start the enforcement notice process was entirely a matter for SHMBC.
c) Where SHMBC were prepared to be co-operative was as to the timing and the form of the notice, so as to try and ensure that the real issues between themselves and DM were addressed on any appeal. This was a concession on the part of SHMBC; since they were resolved to issue enforcement notice proceedings, they did not have to be as helpful as in fact they were.
d) SHMBC's co-operation was obtained by Mr Morgan in his regular meetings/conversations with Mr Molloy again (see paragraphs 119, 167, 169, 179, 180-182 above). It is clear that it was Mr Morgan who persuaded Mr Molloy to use the enforcement notice proceedings as a means by which the underlying disputes between the parties could be resolved. No criticism can attach to anybody for that attempt at co-operation. But it is quite clear from the documents that a major element in Mr Morgan's motivation was his belief that it was much better for DM to deal with the issues in this way than, for example, by making a fresh application for planning permission (paragraphs 47, 58, 89, 109-110, 140-142, 171-172, 187, 188, 227, 253 and 270-271 above).
e) At every stage of the enforcement notice process, and particularly at the outset, Mr Downey cogently expressed his reservations as to whether or not the process could or would lead to a resolution of the real issues between the parties. Those reservations were extensive and repeated (paragraphs 119-120, 121, 166-169, 180-182 and 216 above). The letter of 26th November 1998 was the most notable expression of Mr Downey's scepticism about the whole process. What is more, as also noted above, his doubts were well understood by Mr Morgan, as he accepted in his evidence.
- It is also important, in considering the enforcement notice process and Allegation 4, not to be too influenced by hindsight. It is clear that all parties believed that the enforcement notice process was going to be a quick (and thus inexpensive) way of getting a resolution of the matters in dispute between them. It was for that reason that, early on in the process, the possibility of a s73 application was raised and then put on the backburner (see paragraph 181 above). The fact that the process took as long as three years was principally the responsibility of DM, and Mr Morgan in particular, because of his erroneous rejection of Mr Smith's advice about an Environmental Statement (see paragraphs 195-200 above, where amongst other things I found that Mr Morgan would have adopted precisely the same hostile attitude to the Environmental Statement, even if he had known that he could not rely on Irlam Brick), and his subsequent failure to do anything at all to progress matters between April 2000 and August/ September 2001.
- I have not forgotten that it is DM's case that the commencement of the enforcement notice process roughly coincided with the suggestion by Mr Morgan, which was accepted by Mr Downey, that JH's second November advice was wrong, and that, as a result, the process itself was embarked upon "in a fog". But a certain amount of caution is necessary when considering this point. No pleaded allegations are made against either JH or MJ in relation to the second November advice, and it is not said that Mr Downey's letter of 26th November 1998 (paragraphs 163-164 above) was negligent. Neither is it said that any decisions were taken on the basis of either that letter, or the perception of the alleged error.
- I agree that Mr Downey should not have accepted Mr Morgan's suggestion of error without giving it further thought. This was another example of Mr Downey's occasional failure to stand up to the views of a forceful client. But it seems to me that, as Mr Downey said in evidence, the exchanges about JH's alleged error (paragraphs 163-164 above) in failing to agree with DM's condition 5 argument, and the attempt to get SHMBC to adopt a cooperative stance in the way in which the enforcement notice process was to be operated, were entirely separate matters, with no causative link between them. The alleged 'error' was JH's refusal to agree with the restoration/aftercare/condition 5 argument, which both Mr Morgan and Mr Downey continued to raise, despite its rejection by everyone else. That had nothing to do with whether or not SHMBC were going to issue an enforcement notice or, if they did, the way in which that process could be finessed to DM's advantage. Neither Mr Morgan nor Mr Downey ever took any step on the basis that JH was wrong in his second November advice, or acted in any way differently to how they would have acted if they had not had that belief. The possible error was quickly forgotten (see paragraphs 189, 216-217 above) in any event. In Mr Davidson's capable hands, this was a good (if unpleaded) forensic point but, on analysis, it does not affect any of the other findings that I have made.
D5.3 Allegation 4: The Enforcement Notice Process Itself
- There was a suggestion that, from DM's perspective, the enforcement notice process was a complete waste of time and effort and that, in some way, Mr Downey should have known and advised that it was never going to lead to a satisfactory outcome for DM. I consider that that allegation is based entirely on hindsight; on a proper analysis of what Mr Downey did and/or should have done at the time, the allegation against MJ is unsustainable.
- As I have pointed out above, the enforcement notice process was entirely a matter for SHMBC. Once they had served the enforcement notice then it was open to DM, if they had chosen to do so, simply to admit the breaches and issue a different kind of application. But instead DM sought to obtain the maximum benefit from SHMBC's enforcement notice route. That was sensible, and not a matter for which anyone can now be criticised. In the event, of course, the process was ludicrously drawn out, and DM did not obtain any tangible benefit from the process. But was the unsatisfactory outcome in 2002 reasonably foreseeable in early 1999, and was it Mr Downey's fault that it was not foreseen? In my view, the answer to both questions is in the negative.
- First, Mr Downey had been at pains to point out, on numerous occasions and at some length, that he was very doubtful that the enforcement notice process would give rise to an answer to the underlying issues (see paragraphs 119-120, 121, 166-169, 180-182 and 216 above). Mr Morgan accepted that Mr Downey had repeatedly advised him as to the real risks that the process would not lead to where he wanted to go. Unlike on some other topics, this was an issue where Mr Downey properly gave advice which Mr Morgan (who had hatched the plan to use SHMBC's process for his own purposes) would not have wanted to hear. It cannot now be said that Mr Downey was negligent because he was not more emphatic about his reservations as to the whole process.
- Furthermore, both Mr Downey and Mr Morgan reasonably believed that the enforcement notice process might well produce tangible benefit for DM; if nothing else, it gave them the opportunity to criticise the Manstock scheme and to persuade the Inspector that he should not enforce the notice if that meant enforcing Manstock, which even SHMBC had said was "far from ideal". In addition, both men believed, because that is what they had been advised by JH, that they could use the enforcement notice route in conjunction with a s73/s177 application to amend the planning conditions.
- Thus, Mr Downey cannot be criticised merely because, in the end, for three separate reasons, the enforcement notice process did not have any beneficial effect. One difficulty, the inability to use the s73/s177 route as part of that process, was the direct result of the delay in making the application and the delay in the preparation and provision of the Environmental Statement which supported it, neither of which were Mr Downey's responsibility. The second difficulty arises if, which I do not accept as a matter of principle, the s73 application was doomed to fail, because the amendments were too fundamental or went beyond the original application (the Wheatcroft point). In those circumstances, for the reasons that I have already explained in Section D2 above, that might have been JH's responsibility for failing to advise on the point before 2002, but it was not Mr Downey's, because he was entitled to rely on JH's advice. Indeed, it is not alleged otherwise. The third problem, the unsuccessful attack on the Manstock scheme, which was the remaining part of the strategy as at 8th January 2002, failed because of the evidence of Mr Cass.
D5.4 Allegation 4: A Fresh Planning Application
- The critical underlying element of Allegation 4 against MJ is the suggestion that, in some unspecified way, it should have been plain to Mr Downey that what was required was an application for fresh planning permission; that he should have known that nothing else would do; and that he should have advised accordingly. But, as I put to Mr Davidson in the course of final argument, that begs the question. Why should all this have been apparent to Mr Downey, particularly when it had emphatically not been the advice of JH?
- JH advised that the right course was to make a s73 application. If it is said (which I do not accept) that, as a matter of law, a s73 application could never have led to the planning permission required, then it is not alleged against Mr Downey that he ought to have known that. On the contrary, given the advice of JH and the principles of law summarised in Section D1.2 above, Mr Downey was entitled to rely on JH's advice. It has not been suggested, nor in my judgment could it have been suggested, that JH's advice that a s73 application should be made was so glaringly and obviously wrong that Mr Downey should not have relied on it, and no authorities were cited in support of such an argument. Similarly, contrary to paragraph 24 of Mr Davidson's closing submissions, it cannot be suggested that Mr Downey should have known that a fresh application was required because of the limitations imposed by the original application (the so-called Wheatcroft point) because it is not alleged that Mr Downey should have known about Wheatcroft and advised on it when JH did not. Mr Downey was again entitled to rely on JH's advice.
- In those circumstances, if (which I do not accept) the only way forward was a fresh application for planning permission, and that nothing else would do, there was no reason why Mr Downey should have known and advised that. That was not what JH had advised. Of course, just like Mr Morgan and everyone else who was involved, Mr Downey would have known that the safest or most certain course was to make an application for planning permission, but that carried with it a whole raft of disadvantages for DM, as Mr Morgan had made clear throughout. As JH put it at paragraph 47 of his witness statement, s73 "was the only available route which might result in DM being permitted to restore the site to a high level and import waste as part of the restoration scheme, other than by a fresh full planning application which DM would not make". If, as JH advised later in 1999, the application under s73 could be tied into the enforcement notice process, then that would have seemed a perfectly acceptable – if not straightforward - way of arguing DM's case without having to make a fresh application.
D5.5 Summary on Allegation 4
- For all these reasons, I conclude that Allegation 4 against MJ has not been made out. The strategy that was worked out to deal with SHMBC's enforcement notice was clear and coherent. It was never a strong position, as Mr Downey made abundantly clear on numerous occasions. On DM's own case, it failed because of errors by JH (particularly if DM are right that a s73 application was misconceived in law in these circumstances and/or that Wheatcroft was fatal, neither of which I accept). On my findings, it failed because of Mr Cass' poor performance under cross-examination, and the lengthy delays on the part of DM, which meant that the advantage of the 20 month adjournment was simply thrown away. The strategy did not fail because of any error on the part of Mr Downey.
D5.5 Allegation 5: Publication of Environmental Statement
- This allegation is again something of makeweight, and was not referred to in either DM's opening or closing submissions. It seems to me to be unsustainable on the facts: the Environmental Statement was not ready until the very end of November 2001, for reasons which were not MJ's responsibility, and therefore could not be publicised in time for the hearing in January 2002. Furthermore, no-one suggested that DM, or anyone else, was relying on Mr Downey for detailed advice as to the Environmental Statement, or what to do with it when it was finally produced. These matters were the responsibility of the planning consultants, in particular Mr Smith. For these reasons, Allegation 5 against MJ is rejected.
D6. Summary on Liability
- For the reasons set out in Section D4.2 above, I find that Allegation 1 is made out against MJ. For the reasons set out in Sections D4.3, D4.4 and D5 above, I find that Allegations 2, 3, 4 and 5 are not made out against MJ and are therefore rejected.
E CAUSATION
E1 The Pleaded Case
- The pleaded case on causation against JH in the SPoC is very clear and detailed, covering paragraphs 67-72. It deals with what would have happened, but for his default, from 1993 onwards. In further confirmation of my view that DM's principal case lay against JH and not MJ, the SPoC is altogether silent on the alleged case in causation against MJ. That case had to be requested, and was subsequently provided by way of a document entitled "Particulars of Causation". The pleaded case there is that, if Mr Downey had gone back to JH on the terms of his first November 1998 advice, he would either have said that his earlier advice was wrong or
" …would have given serious thought to the issue of the need for planning consent for the importation of fill material and would have correctly come to the conclusion and advised that there was no effective planning consent in force that would permit the importation of fill material … [and] the probability is that a new application for planning consent would have been made in early 1999 with the result that the necessary consent would have been obtained earlier and the wasted expenditure and damages after October 1998 would have been avoided."
It is worth pointing out that, even on DM's own hypothetical case, this pleaded timetable was unrealistic.
- DM also provided Further Information in relation to their case on causation, following a request from MJ. This pleading does not suggest that the only proper advice was a fresh application for planning permission, which accords with the conclusion I have reached at Sections D2.3 and D5.4 above. At paragraph 4, it states that:
"If JH had been made to confront the fact that his earlier advice had been incorrect, he would probably have advised an approach under s73 to amend the approved Condition 5 scheme, followed by a planning application for infill restoration; or he would have advised that a new application would have been made for a new planning permission to permit the importation of fill."
JH did indeed advise in his first November advice that a s73 application could be made; for reasons explored in paragraphs 228-250 above, DM did not follow that advice until late November 2001. Moreover, JH also subsequently advised in April 2000 that if the s73 application got into difficulties, a full planning application could be made, advice that was again not followed by DM.
- As for the hypothetical timetable relied on by DM, paragraph 20 of the Further Information suggested that, if an application had been made in early 1999, infilling would have commenced in "mid to late 1999". Again, for reasons which are explored below, that is hopelessly optimistic, even on DM's own evidence. In more recent instructions to DM's expert accountant, the assumption was made that a planning consent would have been granted on 1st July 2000. In my view, this rather inconsistent approach to the pleading of causation betrays the nature of the difficulties inherent in DM's case against MJ (as opposed to their case against JH) as to what, if anything, might have happened differently.
E2 Elements of Causation
- There are two separate elements of causation that need to be considered in respect of each alleged breach of duty in this case. The first element or question is whether, if there had been no breach, DM would (or, on their case, should) have been advised that only a fresh application for planning permission would result in consent to tip waste at BHQ. The second element or question is, if DM had been so advised, whether they would have followed that advice and, if so, when and how. They need to show, not only that they would have followed that advice, but that they would have done so in such a way that the eventual planning consent of September 2009 would, on the hypothetical basis, have been granted earlier. The burden is on DM to prove their case on the balance of probabilities on both these limbs of causation.
- Accordingly, having set out in Section E3 below some well-known principles relating to causation, I then address in Section E4 below the first limb of causation in relation to Allegation 1, the only allegation of negligence which I have upheld. Then, for the avoidance of doubt, I also deal with the first question on causation by reference to the other two Allegations (2 and 4) which could have had an impact on the planning timetable (Sections E5-E6 below). I then address the second causation limb, again by reference to Allegations 1, 2 and 4 (Section E7 below). Also for the avoidance of doubt, I address briefly the separate causation issues that arise out of the two failed allegations in respect of the Environmental Statement (Allegations 3 and 5) at Section E8 below.
E3 Relevant Principles on Causation
- It is necessary for the claimant, DM, to establish whether or not the breach of duty was the cause of the alleged damage: the burden of proof is on DM to prove causation. The breach is not the cause of the damage if it would have occurred in any event: see Sykes v Midland Bank Executor and Trustee Co Ltd [1971] 1QB 113. That said, the courts are assiduous in guarding against a defendant solicitor's arguments that later events, sometimes the actions of subsequent firms of solicitors, should have unfolded in a different way so as to avoid the loss that flowed from the defendant firm's negligence: see Vision Golf Ltd v Weightmans (a firm) [2005] EWHC 1675 Ch
- In considering causation, it is sometimes necessary to consider what would or should have happened if a different course had been taken at the outset. The most common example of this occurs in medical negligence cases, where a breach (such as the non-attendance of the doctor or an initial misdiagnosis) is established, and it is then necessary to see what would or should have happened if the doctor had attended the patient or correctly diagnosed the symptoms. In Bolitho v City & Hackney Health Authority [1998] AC 232, the claimant suffered a second episode of acute respiratory difficulty which the nurse reported to a doctor by telephone. The doctor did not attend and the child apparently recovered, but collapsed again and suffered a cardiac arrest. The judge at first instance held that the doctor had been in breach of duty by failing to attend but that, even if she had attended, she would not have arranged for the child to be intubated, which is what the claimant claimed would or should have happened. For the purposes of determining whether a failure to intubate would have been negligent, so as to analyse whether the breach of duty in failing to attend caused the injury suffered, the judge applied the test in Bolam (see paragraph 320 above) and held that, since there was expert evidence that intubation would not necessarily have been appropriate, a hypothetical decision by the doctor not to intubate was not negligent. Thus the claim failed. That was upheld by both the Court of Appeal and the House of Lords.
- In discussing causation in Bolitho, Lord Browne-Wilkinson adopted the analysis of Hobhouse LJ (as he then was) in Joyce v Merton, Sutton and Wandsworth Health Authority[1996] 7 Med LR1. In that case, Hobhouse LJ said:
"Thus a plaintiff can discharge the burden of proof on causation by satisfying the court either that the relevant person would in fact have taken the requisite action (although she would not have been at fault if she had not) or that the proper discharge of the relevant person's duty towards the plaintiff required that she take that action. The former alternative calls for no explanation since it is simply the factual proof of the causative effect of the original fault. The latter is slightly more sophisticated: it requires the factual situation that the original fault did not itself cause the injury but that this was because there would have been some further fault on the part of the defendant; the plaintiff proves his case by proving that his injuries would have been avoided if proper care had continued to be taken."
In other words, in a sequential case, there are two alternative routes. Once the claimant has established the initial default (in Bolitho, the failure to attend) then either the claimant must show that, on the balance of probabilities, something would have been done to avoid the injury or loss (regardless of whether it should have been done or not) or alternatively that something should have been done to avoid the injury or loss. As Lord Browne-Wilkinson made plain at page 204C, this latter route is to avoid the possibility of the defendant escaping liability by proving that he or she would have failed to take a subsequent course which a competent doctor would have adopted. As he said, "a defendant cannot escape liability by saying that the damage would have occurred in any event because he would have committed some other breach of duty thereafter."
- In this line of authorities I was also referred to the decision of the Court of Appeal in Gouldsmith v Mid Staffordshire General Hospitals NHS Trust [2007] EWCA Civ 397. There, in a case where the claimant's case was that she should have been referred to a specialist hospital where surgery would have saved the fingers of her left hand, the judge at first instance found the initial breach (the failure to refer) but found that it had not been shown that surgery would have resulted if a reference had been made. The Court of Appeal held that the judge at first instance had failed to adopt the Bolitho approach and concluded on the evidence that the tertiary hospital would have operated. I did not derive particular assistance from this case because it seemed to have arisen and been determined on the 'would' approach which, as recorded below, is not the real point of controversy here. I also note that it was a majority decision, Maurice Kay LJ dissenting.
- As to subsequent events, the authorities generally identify three different types. An intervening act or omission on the part of the claiming party, if amounting to a break in the chain of causation, will result in the failure of the claim (see, by way of example, Simmons v Pennington [1955] 1WLR 183). On the other hand, if the intervening act was that of the defendant then, as a matter of public policy and common sense, the defendant could not rely on its own intervening negligence to break the chain of causation: see Normans Bay Ltd v Coudert Brothers [2004] EWCA Civ 215. Thus, in Bolitho, if the doctor should have intubated, that second negligent act could not act as a defence to the claim arising from the first.
- Finally, if the intervening act is an act of a third party, then that may break the chain of causation or it may give rise to a claim for the loss of a chance: see Jackson and Powell, paragraphs 11.261 and 11.263. The best known example of this last situation is Allied Maples Group Ltd vSimmonds & Simmonds [1995] 1WLR 1602, where the solicitor's negligence deprived the claimants of an opportunity to negotiate with a third party. The Court of Appeal held that, provided the claimant could prove on the balance of probabilities that, if different advice had been given, they would have negotiated with the Gillow Group, they could recover substantial damages, because there was a significant chance that they might have succeeded in those negotiations. The value of the damages was the value of the lost chance.
- The situation which arises here, at least on one way in which DM's case was put, is one where the subsequent hypothetical act would have been that of counsel (namely changing his advice as to the correct next step to take). I am aware of no authority, and certainly none was cited to me, in which the Bolitho approach has been applied in a case where separate (and different) claims have been made against solicitors and counsel.
E4 The First Causation Question/Allegation 1
- I have found (in Section 4.2 above) that Mr Downey should have gone back to JH after the first November 1998 advice to seek clarification as to whether or not the Irlam Brick principle was still open to DM. The first causation question, therefore, is to ask whether, if he had done so, JH would (or, on DM's case, should) have advised that, not only was there no implied planning permission, but that the only way to obtain the necessary consent was to make a fresh planning application, as opposed to an application under s73.
a) Why does DM have to show that JH would (or should) have advised that only a fresh application would lead to permission to tip?
- In my judgment, DM has to show that, if Mr Downey had gone back to JH, he would (and on DM's case, should) have given unequivocal advice that only a fresh application for planning permission would have given rise to permission to tip waste at BHQ, and that – despite what was said in the first November advice – anything else, such as an application under s73 (or s177) would be doomed to fail. This is because, for the reasons set out in Section C above, and particularly paragraphs 47, 58, 89, 109-110, 140-142, 171-172, 187, 188, 227, 253 and 270-271 above, I am in no doubt that DM would only have made an application for fresh planning permission if they had been advised in terms that they had no other alternative. As both Mr Downey and JH said in their witness statements, and as the contemporaneous documents prove beyond any doubt, Mr Morgan was anxious to avoid making any such application if he could avoid it. If DM were advised that any lesser alternative was arguable, no matter how difficult that argument might have been, Mr Morgan would have eagerly followed that course. This was in part rooted in Mr Morgan's keen awareness that fresh planning permission might very well be refused, which was a concern that went right back to 1993 (see in particular paragraphs 38, 41 and 56, as well as those paragraphs noted above).
- This stance was the critical feature in DM's conduct throughout the relevant period. It can be seen in each of the documents set out in the paragraphs to which I have referred above. It can also be seen in Mr Morgan's contemporaneous answer to the very question inherent in causation question 1, when, at the consultation on 31st October 2001 (paragraph 251 above), he said that he preferred to try and amend the existing conditions rather than make a fresh planning application.
- Further confirmation of this finding can also be found in Mr Downey's letter of 18th January 2002 (paragraph 275 above), on which DM relied so heavily during their closing written submissions (see, for example, paragraph 58 of section 1 and 54d of section 2). In that letter, written in the aftermath of the second Inquiry, Mr Downey said of JH's advice:
"I do not recall that he ever made it clear that this [a new planning application] was the only way in which the Inspector could be empowered to grant the planning permission which the company sought. Had he done so I am sure that you would have given much greater attention to the submission of that further [application] in a timely manner …"
In other words, Mr Downey recognised in January 2002 that, if JH's advice had been that only a fresh application was appropriate, things might have been very different. He said the same in his oral evidence (Day 6/120).
- For all these reasons, therefore, I am confident that, for causation purposes, it is only if JH would/should have advised that only such a fresh planning application would bring the permission that DM sought that the causation argument even gets off the ground.
b) What Would JH Have Advised?
- Mr Downey should have gone back to JH (Allegation 1). But that would only have been in respect of the Irlam Brick principle, because that was the only matter on which JH's advice was unclear. If Mr Downey had gone back to him on that topic, I consider that it is probable – indeed, highly likely – that JH would have said exactly what he has said in his defence and in his witness statement: that, for a variety of reasons, the implied planning permission point was no longer arguable. Thus JH would have clarified expressly the point which both he and Mr Davidson now contend was plain, namely that there was no implied planning permission to tip.
- But, applying the causation test noted more fully in paragraph 451 below, I am also confident that such clarification would not have caused JH to give any different advice about the steps that DM should take. How could it have done? JH would have confirmed his advice was that there was no implied planning permission, and that therefore something had to be done to alter the existing conditions. He would doubtless also have pointed out that this was the reason why, in paragraph 20 of the first November advice, he was suggesting that the conditions should be amended, in order to pave the way for the consent to tip waste which DM wanted to obtain (and which, in their unamended form, the conditions did not provide). Thus, getting JH to spell out in terms something which he thought was clear anyway would not have affected his advice as to what steps should be taken, because he had already given that advice, and that advice – to amend the existing conditions – was only consistent with the view that the Irlam Brick principle was no longer open to DM. In other words, his advice as to remedy followed on from his view that the existing planning consent did not allow (whether expressly or impliedly) the tipping of waste. In this way, the clarification (or, as JH would have seen it, the restatement) that there was no existing permission would have led to the restatement that a s73 application should be made.
- That proposition can also be demonstrated by reference to the later events. JH subsequently reiterated his advice as to the making of a s73 application, in particular on the balcony after the first hearing in April 2000. He regarded the s73 application as the most appropriate course for DM to take (because, as he correctly says in his statement, he knew Mr Morgan did not want to make a full application if he could avoid it) and that was the advice he reiterated at that critical stage. The full application was seen as a fall-back.
- It is therefore wholly unrealistic to suggest that if, in 1998, Mr Downey had gone back to JH on one aspect of his advice ('Is X now the position on implied permission?'), JH would have radically altered a completely different part of that same advice ('The right course to adopt is Y'), particularly in circumstances where Y was based on X being correct. That is confirmed by DM's own pleading (paragraph 386 above) which accepts that a reiteration of the s73 advice would "probably" have happened, and by the fact that eighteen months later, JH expressly reiterated the advice that a s73 application was appropriate. Accordingly, I am in no doubt that, if Mr Downey had gone back to JH in 1998, JH would have given precisely the same advice as to the appropriate step to take as he did in the first November advice, and which he repeated in 2000. Accordingly, the allegation of negligence that I have upheld (Allegation 1) leads nowhere; although Mr Downey should have gone back to JH on the Irlam Brick point, it would not have made any difference as to the remedy which JH would have advised. Allegation 1, therefore, does not get past the first causation question.
- In this context, in his closing submissions, Mr Davidson referred to Mr Downey's acceptance of the proposition (Day 6/3) that the clarification of the advice about Irlam Brick called for a complete reappraisal. So it would have done; but it would have been a complete reappraisal of DM's oft-repeated stance that they already had planning permission, after years of aggressive communications with SHMBC, and others, to that effect; it would not have been an appraisal of what to do next, because JH had already advised (and would simply have repeated) that an application under s73 should be made to alter the existing planning conditions in order to obtain the permission that DM did not, after all, possess.
c) What Should JH Have Advised
- Mr Davidson was plainly aware of the likelihood of my finding that JH would not have given any different advice about the next steps to be taken. It was doubtless for that reason that his main argument on this first causation issue was that, in accordance with the alternative approach set out in Bolitho, if Mr Downey had gone back to JH, he should have advised that only a fresh planning application was appropriate and that, in those circumstances, there was at least a loss of a chance claim open to DM. That submission was carefully made (if not pleaded) but, on analysis, I have concluded that it should be rejected for two quite separate reasons.
- First, I do not accept that JH should have advised that only a fresh planning application would lead to permission to tip waste. Of course, as everyone was aware, that was the only certain way in which such consent could be obtained, but for the reasons already explained above, that was not an attractive course for DM, and one which Mr Morgan wanted to avoid if that were possible. The real question is whether the s73 route was so hopeless or wrong in law that JH should not have advised that it was even arguable. I have already explained in Sections D2.3 and D5.4 above that, on the material before me, I am unable to conclude that the s73 route was hopeless or wrong in law. I can see no reason in law why an application to amend might not have been at least arguable, provided that all the other necessary steps were taken, in particular the proper preparation of the application itself and the supporting Environmental Statement, and the presentation of powerful and persuasive expert evidence as to the deficiencies in the Manstock scheme. Unhappily, neither of things eventuated, but neither JH nor Mr Downey were responsible for that. And for the avoidance of doubt, if it is suggested that the so-called Wheatcroft principle is of any relevance on this point, I do not find that JH should have advised that, in law, Wheatcroft meant that that any application to amend would fail. Wheatcroft is a case about fact and degree, not fixed principle, and is not concerned with s73 at all.
- Accordingly, on the material before me, and the authorities cited during closing, there is nothing which would lead me to conclude that JH should have advised that, as a matter of law, any s73 application was doomed to fail in this case, and that the only way in which consent for tipping could be obtained was by making a fresh planning application.
- Secondly, and more fundamentally, I am not persuaded that a slavish adoption of the two-stage approach in Bolitho is appropriate in a case of this sort anyway. This is not strictly a case where the negligent act or omission (the failure to go back to counsel) created an unknown or hypothetical situation, such as the failure to attend in Bolitho giving rise to the argument about whether or not intubation should have occurred, or, as in Gouldstone, leading to the question whether the failure to refer to a specialist hospital may have deprived the claimant of proper treatment at that later stage. In the present case, actual advice as to the appropriate steps had already been given by counsel and, for the reasons I have already explained, that advice would not have altered if counsel had been asked to clarify another matter altogether.
- It seems to me to be wrong in principle to conclude that, because a solicitor should have gone back to counsel on one point, in order for counsel to clarify that one point, the case on causation against the solicitor is made out because, on this assumption, counsel should have reconsidered the whole case and given completely different advice on a completely separate point, despite the fact that the original advice on that separate point was not unclear, and the solicitor cannot be criticised for not querying it. Taken to its logical conclusion, this would mean that, if counsel had advised on points 1-20 inclusive, and the advice on point 1 was unclear and the advice on point 20 was negligent (but not obviously or glaringly so), the solicitor would become liable for counsel's negligence on point 20 merely because he or she did not go back to counsel to clarify point 1. That would, as Mr Hart pointed out in his closing submissions, result in a solicitor who should have sought clarification on one topic losing his ability to rely on the rest of the advice of counsel and make him automatically liable for the errors in the rest of that advice, whether glaringly obvious or not. I regard that as contrary to the principles set out in Section D2.1 above.
- It might have been different, and a loss of a chance argument may have been available to DM, if it had been shown that:
a) There was a direct link between the clarification of the Irlam Brick principle and the appropriate next steps to be taken (ie, if the absence of implied permission somehow meant that a s73 application was doomed to fail as a matter of law).
b) JH should have advised on that direct link and should therefore have altered his advice about taking the s73 route.
But neither submission can be sustained here. There was no link at all between the failure of the Irlam Brick principle and the inappropriateness of the s73 application, and JH had no reason in law to alter his advice about s73.
- For all these reasons therefore, I conclude that neither the would nor the should causation route is open to DM. Mr Downey, had he sought clarification, would have been told, as JH's first November advice had already made plain, that the right course was a s73 application. Alternatively if (which I do not accept) the 'should' route in Bolitho is applicable in principle, it has not been shown that JH should have advised – either originally or on reconsideration - that only a fresh planning application was appropriate.
- In reaching these firm conclusions, I have not overlooked Mr Downey's general answer to the question that he was asked at the start of Day 4 (paragraph 138 above), with its acceptance that things would have been different if JH had advised in 1998 that Irlam Brick was not available to DM. It was an answer which Mr Davidson unsurprisingly relied on in his closing submissions, describing it as an admission against interest and a simple answer to the first causation question. But I do not believe it can be elevated to such a status. It was not an admission against interest, but a criticism of JH. It was not based on any sort of analysis, but was a general impression, given in answer to a general question asked at the start of a day's cross-examination. I have considered it carefully, but I have concluded that such a general answer cannot displace the detailed analysis of all the evidence which I have set out above.
E5 The First Causation Question/Allegation 2
- In Section D4.3 above, I have rejected the suggestion that Mr Downey was negligent because he failed to seek clarification as to the next steps recommended by JH. This was because there was no doubt about what JH was advising; it did not need clarification. But if I was wrong about that, and the advice about s73 did require clarification, so that Mr Downey should have gone back to JH, he would have given precisely the same advice as to the next step to take, namely that DM had to make an application under s73. Thus, even if (contrary to my view) Allegation 2 had been made out, any clarification sought by Mr Downey would have been in the same terms as set out in the first November advice. The same analysis as to the would and should questions, noted above, is relevant again. Thus DM's claim under Allegation 2 also fails the first causation hurdle.
E6 The First Causation Question/Allegation 4
- It is sensible to deal next with the last substantive allegation of negligence, namely Allegation 4 (the enforcement notice claim). For the reasons set out in Section D5 above, I have rejected the suggestion that Mr Downey was negligent in the advice that he gave DM in connection with the enforcement notice process. But let us assume that I am wrong about that and that, for instance, Mr Downey should have gone back to JH in early 1999 to explain what SHMBC and Mr Morgan had agreed between themselves and to seek his endorsement (or otherwise) of that approach. What would have happened? There can be no doubt that JH would have reiterated his view that the best course was to try and seek to amend the existing conditions under s73, because that was the advice he had given in November 1998, and that was the advice that he reiterated at the consultation in November 1999. He would therefore have said, whenever he had been asked, that the appeal against the enforcement notice should be treated as far as possible as a wider planning appeal, which is precisely what he did say on 4th November 1999, when he referred to the wide powers of the Secretary of State under s177. It is not suggested in the SPoC, or anywhere else, that this advice was negligent. As noted at paragraph 190 above, s177 gave the Secretary of State wide power to amend the condition on appeal, in just the same way as JH had envisaged originally by reference to s73.
- Accordingly, so it seems to me, JH's advice as to the appropriate strategy was all of a piece: what was required was a vehicle, namely the appeal on the enforcement notice, which would allow, in some form or another, DM's argument to be heard that the original planning conditions should be amended. Thus, even if JH's advice had been sought at an earlier stage in 1999, it would have made no difference at all, because he would have given precisely the same advice as he did in November 1999 (and again in April 2000). Further and in any event, Allegation 4 cannot get over the first causation hurdle because, for the reasons that I have already stated (Section D2.3 and 5.4 above), DM have not demonstrated that JH's advice about s73 was itself negligent, because they have not shown that a s73 application was doomed to fail. To that extent, the analysis of the would/should questions set out above is relevant again.
- For these reasons, even if (contrary to my view) Allegation 4 had been made out, DM's claim would have failed the first question on causation.
E7: The Second Causation Question: If DM had been advised that only a fresh application for planning permission would have given them the permission that they required, would they have followed that advice, and if so, when and how?
E7.1 Introduction
- For the purpose of this section of the Judgment, I shall assume that, contrary to my view, MJ were negligent in relation to Allegations 2 and 4, as well as Allegation 1. I must also assume (again, contrary to my conclusion at Sections E4-E6 above) that, but for this negligence, DM would/should have been advised by JH that only a fresh application for planning permission would give them the permission to tip waste that they needed. On those assumptions, I turn to address the second causation question, on which DM need to show that, not only would they have followed that advice, but they would have followed it in such a way and at such a time that their new application for planning permission would have be made earlier than it was and/or that the eventual planning consent would have been granted earlier than it was.
- During his closing submissions, Mr Davidson referred on more than one occasion to this issue coming down to the a choice for the court between a finding that DM, and Mr Morgan in particular, would have acted "sensibly" (by relying on the hypothetical advice), or alternatively a finding that they would have acted "irrationally" (by failing to rely on the advice given). Not unnaturally, he warned of the dangers of the court concluding that DM would have acted irrationally and he referred, amongst other things, to the recent decision in Levicom Internationl Holdings BV v Linklaters (a firm) [2010] EWCA Civ 494. At paragraph 284 of the judgment of the Court of Appeal, Jacob LJ said:
"When a solicitor gives advice that his client has a strong case to start litigation rather than settle and the client then does just that, the normal inference is that the advice is causative. Of course the inference is rebuttable – it may be possible to show that the client would have gone ahead willy-nilly. But that was certainly not shown on the evidence here. The Judge should have approached the case on the basis that the evidential burden had shifted to Linklaters to prove that its advice was not causative. Such an approach would surely have led him to a different result."
This was a paragraph which the other two members of the Court of Appeal both expressly adopted.
- However, it seems to me that, on a proper analysis, this is not a paragraph which is of particular relevance to the case before me. This is not a case where the analysis as to what would have happened has to wrestle with whether or not DM would have relied on the hypothetical legal advice noted above. I find that, if DM had been advised that the only way in which they could get planning consent to tip waste at BHQ was to make a fresh application for such permission, then they would have relied on that advice and would, at some stage, have made such an application. The Levicom point therefore does not arise here. What matters in the present case is when DM would have followed that advice, and how they would have gone about it. Nobody is suggesting that DM, and Mr Morgan in particular, would have ignored advice to the effect that only a fresh planning application was appropriate; the issue for me is whether, in reliance on that hypothetical advice in late 1998/early 1999, DM would have made a planning application before the one which they actually made in January 2002 (as amended in December 2002), and/or whether DM would have acted in such a way that the eventual planning consent of 2009 would have been granted earlier.
- I am in no doubt that, whilst in these hypothetical circumstances DM would have made an application for fresh planning permission, that application would not have been made any more promptly than the application that was in fact made, and/or would not have led to planning consent being granted significantly or any earlier than it actually was. Accordingly, DM's case fails in its entirety on the second causation question. I have reached that conclusion following a consideration of the hypothetical timetable(s), which I consider to be unrealistic, principally because they do not reflect the actual events or the likely narrative (Sections E7.2 and E7.3 below). My conclusions as to the most likely sequence of events, based on all the circumstances, are set out in Section E7.4 below.
E7.2 Hypothetical Timetables Generally
- One version of the hypothetical reasonable timetable ("the basic hypothetical timetable") agreed between the planning experts, taking no account of any particular facts or events that actually occurred or might have occurred in the present case, was as follows. If the starting point for the hypothetical advice to make a fresh planning application was 1st January 1999, then both experts agreed that they would have advised that the application should not be made until there had been detailed negotiations with SHMBC's officers. To allow for these negotiations, the date of the actual application was put at between 12 and 18 months after 1st January 1999 (between 1st January and 1st July 2000). The application would have been determined by SHMBC between 6 and 18 months after it was made (therefore at the earliest by 1st July 2000 and at the latest by 1st January 2002). Assuming an appeal, which the planning experts agreed was likely, that would have taken between 12 and 24 months. Thus, on this basis, the shortest possible time that permission would have been granted following an appeal was 30 months after 1st January 1999 (1st July 2001), whilst the longest would have been 60 months (1st January 2004). The middle course - 45 months - would give a hypothetical consent date of 1st October 2002 (45 months after 1st January 1999).
- As was repeatedly stressed in the evidence, this timetable was entirely hypothetical. It was on the stated basis of 'all other things being equal'. It took no account of any of the particular features of this case, nor any of the actual events during the relevant period. It assumed that the application would have been for strictly inert (ie non-contaminated) waste. I consider, for the reasons noted in Section E7.3 below, that it is a fundamentally unreliable guide to what would have happened if different legal advice had been given in late 1998, particularly in the light of the specific factual evidence available to me. It also ignores what I consider to be the most likely sequence of events (Section E7.4 below).
- In his closing submissions, Mr Davidson said that Ms Heasman, MJ's planning expert, accepted the basic hypothetical timetable. So she did, but only on the basis that the actual events which occurred were to be ignored, so that the questions put to her were, as Mr Davidson made plain when asking them, "purely hypothetical". Her answers were also based on the key assumption that she was asked to make, namely that a very different application for planning permission would have been made by DM in 1999 compared to the application made in January 2002. In my judgment, all of the oral evidence demonstrated the unreliability of the basic hypothetical timetable and its over-dependence on/sensitivity to particular assumptions.
- It is only necessary to take one example of the difficulties inherent in approaching this part of the case by relying too heavily on hypothetical timetables which ignore the facts. Ms Heasman's supplemental report advanced a different hypothetical timetable, which assumed everything else was equal (ie ignoring the facts and DM's own delays), but which also assumed that the hypothetical application for planning permission in 1999 would have been on the same basis as the one made in January 2002. For the reasons set out in Section E7.4 below, I consider that to be an entirely proper assumption to make, making this, for what it is worth, the least unreliable hypothetical timetable in play. Her subsequent calculations on this basis led to a date for planning consent in about October 2006, a delay of 3 years. Mr Davidson's only criticism of this timetable was the assumption on which it was based (see paragraphs 87-88 of section 2 of DM's closing submissions), which criticism, as I have said, I reject. On that basis alone, the delay would be just 3 years, and the loss of profits claim, currently put at £37 million would be reduced, on DM's own figures, to a maximum of about £7 million[8]. Furthermore that delay of 3 years is the equivalent or the reflection of the 3 year delay in commencement (hypothetical application early 1999; actual application, early 2002). In other words, there would have been a simple 3 year 'shunt'. Only half of that delay period can be ascribed to MJ, because 18 months of it was DM's sole responsibility (see paragraphs 228-250 above). Thus - on this hypothetical basis and assuming DM's figures – the analysis would reduce the claim still further to a maximum of about £3.5 million. This demonstrates the hyper-sensitivity of the hypothetical timetables to just one changed assumption, and confirms my concerns about their utility in this case.
E7.3 The Fundamental Flaws in the Basic Hypothetical Timetable
- The fundamental flaws in the basic hypothetical timetable all stem from the fact that it bears no relationship to what we know actually happened. During the course of his final submissions, Mr Hart said that it was 'a puzzle' why the basic hypothetical timetable was a sprint, whilst the actual timetable was a dawdle. I do not consider that to be a puzzle at all: the difference is explained by the fact that the basic hypothetical timetable takes no account of the events that actually occurred in connection with BHQ, and which would inevitably have rendered the basic hypothetical timetable inapplicable. I illustrate that by demonstrating five ways in which I consider the basic hypothetical timetable to be wholly unrealistic. The first is an obvious flaw in the timetable itself; the second addresses the core assumption on which it is based; the third concerns the period before the first actual application for fresh planning application in January 2002; the fourth concerns the period after that date, and the fifth is by reference to the permission date which it produces.
(a) The Timing of the Application itself
- The planning experts agreed that, if they had been advising DM, they would have said that the best course would be to negotiate with SHMBC's officers before putting in the application, because in that way some of the sticking points may have been ironed out before the formal application was made. That seems to me to be reasonable advice. But there are a number of reasons why that makes the basic hypothetical timetable based on that assumption an unrealistic guide to what would have happened. The first is that I am in no doubt at all that Mr Morgan would not have followed that course, for the reasons set out in detail in Section E7.4 below.
428A. Secondly, this assumption has skewed the basic hypothetical timetable. If there had been negotiations, the experts say that the application would not have been made for 12 to 18 months, and SHMBC would have considered it for between 6 and 18 months before deciding it. But the planning experts are also agreed that, if the application had been made straightaway (ie without negotiation), it would have taken just 6 - 9 months to put together, because there would have been no need to liaise with SHMBC. But they have agreed that the next stage, namely SHMBC's deliberations, would have taken 6-18 months, the same range as before. Thus, on this scenario, no additional period has been allowed for the extra time that it would subsequently have taken SHMBC to deal with the much greater volume of objections and difficulties that an unseen/unegotiated application would have created. So, although on this hypothesis the sticking points would not have been ironed out in advance of the application, creating the potential for months and indeed years of endless to-ing and fro-ing between DM and SHMBC (which is what in fact happened), the subsequent part of the hypothetical timetable makes no allowance for that at all and retains the 6-18 month period. This has the bizarre consequence that an unnegotiated, unseen application would have been approved more quickly than a negotiated application, which cannot be right.
(b) The Core Assumption
- The core assumption on which the basic hypothetical timetable is based is that the hypothetical application in 1999/2000 would have been "a strictly inert waste proposal". But I find that it manifestly would not have been: the documents and findings at paragraphs 43-45, 48, 51, 61, 64, 67-71, 74, 84, 7, 93, 94, 95-96, 105-108, 109-111, 114, 128, 175, 207-211, 212, 214, 254, 260, 261, 262-263 and 286 above all demonstrate beyond doubt that it would not have been until December 2002 at the earliest that DM would finally have made a proposal that could be considered to be a strictly inert waste proposal. Up until then, and certainly as at January 2002, they would have wanted to keep their options open to tip a wider range of waste at BHQ. The core assumption is therefore a false one, rendering the basic hypothetical timetable on which it is based unrealistic and unreliable.
(c) Pre-Application
- As set out in paragraphs 149 and 226 above, DM were advised in 1998 and again in 2000 to make an application pursuant to s73, to amend the existing planning conditions. Whilst as a matter of law there may be a difference between an application under s73 and a fresh application for planning permission, there was no real difference in practical terms. A detailed exercise was still required to explain how and why the Cass scheme should be permitted in place of the Manstock scheme. That, after all, was the whole purpose of both the s73 application and, ultimately, the fresh application for planning permission. In addition, at least from March 1999, an Environmental Statement was necessary.
- However, although the advice as to s73 was given in November 1998, and although it was reiterated in April 2000, no s73 application was made by DM until the end of November 2001. That was a three year delay for which MJ cannot be blamed and which (for the reasons set out in Section C) was principally DM's responsibility. There is therefore no basis on which I can conclude that that delay, or something very like it, would not also have occurred if the advice had been to make a fresh application, as opposed to an application to amend. The same exercise – the preparation of reports and the Environmental Statement – was required by both the actual and the hypothetical advice. Yet there is no allowance for this lengthy delay in the basic hypothetical timetable.
- To make the point even clearer, let us focus on the period between April 2000 and September 2001, the eighteen month standstill to which I have referred at paragraphs 228-250 above. During that time, although DM were aware that both an Environmental Statement and a s73 application were required – and the Inquiry had been expressly adjourned on the basis that those documents would be provided – no progress whatsoever was made in relation to either document. As noted in the paragraphs referred to above, not only was that delay entirely the responsibility of DM, but they sought to justify the delay by reference to their other priorities (the detailed assessments and evaluations of their existing quarries which, they said, meant that BHQ had not been progressed at all). Those same priorities would still have existed in the hypothetical situation of different advice having been given in relation to BHQ in late 1998. And yet, according to the basic hypothetical timetable, this is assumed to have been a critical period for the making of the fresh planning application by DM and its consideration and determination by SHMBC. That is simply unrealistic.
- In my view, it is wrong in principle for the court to conclude that, hypothetically, during 2000 and 2001, DM would have been leaving no stone unturned in pursuit of their application for planning permission and the preparation of the accompanying Environmental Statement, whilst in the real world DM were doing absolutely nothing at all for eighteen months to progress the application to amend the existing conditions and the preparation of the selfsame Environmental Statement. The same imperatives applied to the preparation of both the actual documentation and the hypothetical documentation. Since DM ignored any timetable requirements during this period as a matter of fact, I am bound to conclude that they would have adopted the same hypothetical course, even if the advice had been to make a full application, as opposed to an application to amend.
(d) Post-Application
- As set out in Section C13 above, once the application for planning permission was made in January 2002, it took seven and three-quarter years for that application to be resolved in DM's favour (January 2002 – September 2009). Even if one takes the period between the modified application in December 2002 and the successful appeal, it is a period only just under seven years. That was far in excess of the period envisaged in the hypothetical timetable. What are the reasons for this huge difference?
- Any answer to that question that I provide must be prefaced with a warning that, in the absence of any evidence from Mr Smith, and in view of what was obviously inadequate discovery by DM of the documents generated over this long period, there may be other reasons, unknown to the court, for these delays. But in essence they appear to boil down to what might be classified in this case as the usual reasons:
i) DM's attempts to maximise the commercial advantage of the tipping rights. This meant that, for instance, any concessions made by DM during the application process, as to area, depth, liner etc, were not made promptly or uniformly, but rather dribbled out, months and even years apart.
ii) Changes of mind on the part of DM, and the intermittent possibility that they would simply sell their interest at BHQ.
iii) The priority accorded to other matters, and other sites, which seems to be the only reason for the lengthy periods of inactivity between 2004 and 2007.
iv) The wariness that SHMBC and the other consultees had when dealing with DM, given DM's conduct since 1993 (see paragraphs 439-445 below). This made an appeal inevitable (thus dragging out the process). The councillors' manifest distrust and dislike of DM was always a factor: the 'political hot potato'. DM's submissions at paragraphs 72-80 of section 1 of their closing submissions as to how the councillors should have behaved, another important element of the basic hypothetical timetable, are wholly unrealistic, given the controversial nature of the proposal to tip waste at BHQ, going back to 1987 and the first failed application. The councillors in fact turned down the application to tip three times, in 1987, 2007 and 2009.
v) Mr Morgan's personal circumstances (his divorce and his illness, to name two that I know about), as noted in paragraphs 306 and 307 above, meant that his presence in the office was at best intermittent. Since, as he confirmed, if he was not there, nobody else could deal with it, this was a clear and obvious reason for delay.
- In the circumstances, it seems to me that those reasons for delay, which are of course nothing to do with MJ, cannot now be ignored – as they are in the basic hypothetical timetable - in any analysis of what would have happened if different advice had been given in late 1998.
(e) The Permission Date
- The lack of reality and plausibility in the basic hypothetical timetable can also be demonstrated by reference to the averaged permission date of 1st October 2002 (see paragraph 423 above) That hypothetical date comes immediately after the 18 months of inactivity (sub-paragraph c) above) and at a time when DM were dealing in a very slow and intermittent fashion with the points being raised by SHMBC. They had not even made the first change to their application (that happened in December 2002). It is again contrary to common sense to say that, if the process had begun earlier, it would have been completed by 1st October 2002, in circumstances when, both before and after that date, DM actually did nothing or very little in relation to their application to tip at BHQ.
(f) Reasons for Post-Application Delay
- It is convenient here to deal with the only two reasons that I could discern in the evidence which were put forward on behalf of DM to justify the delays after January 2002 and which were suggested, directly or indirectly, to relate back to the case against MJ (and JH). They were therefore part of DM's defence of the reasonableness of the hypothetical timetable. They were the alleged effect of the failed enforcement notice process, and changes in the Landfill legislation. On analysis, neither reason stands up to scrutiny.
- As to the enforcement notice point, the argument I think is that, because DM's appeal against the enforcement notice had failed, this created a much more acrimonious climate in their dealings with SHMBC, and thus explained why matters were so much more protracted. It seems to me that this contention fails at every level.
- First, there was no evidence of any such acrimony, or any change in the nature of SHMBC's dealings with DM after the hearing in January 2002. On the contrary, Mr Molloy and Mr Wheetman of SHMBC, and the statutory consultees such as the EA, were making the same points as they had been making before and during the enforcement notice process, and being as conciliatory as they could be in the circumstances. There is no evidence of any difference in attitude as a result of the unsuccessful enforcement notice appeal. Mr Smith might have been able to give evidence about a change which is not apparent from the documents, but he was not called.
- Secondly, there is simply no reason why the failed enforcement notice appeal should have made any difference to DM's dealings with SHMBC. As noted above, issuing the enforcement notice was SHMBC's right, because DM had wilfully ignored the terms of the planning conditions. Throughout the process, SHMBC had indicated a willingness to be constructive, and that extended to their acceptance that DM would fight the enforcement notice and endeavour to get what they regarded as the real issues resolved on appeal. SHMBC accommodated that process and, once DM's appeal had failed, they continued in precisely the same vein as before. It was not as if the appeal had led to any embarrassing revelations about SHMBC's conduct, or had given rise to aggressive cross-examination of SHMBC's officers. The appeal had had no detrimental effect on them at all: why would they not therefore continue to be as reasonable as possible in their dealings with DM?
- Furthermore, to the extent that there was a wariness in the post-January 2002 dealings on the part of SHMBC and the statutory consultees, that had nothing to do with the appeal itself, and was instead rooted in DM's earlier conduct. The wariness that SHMBC and the EA had about DM was entirely justified, given its conduct since 1993. Particular features of that conduct which are relevant to this issue include the bombastic nature of Mr Morgan's correspondence; his repeated threats of court or other proceedings (including threats of judicial review and the like); DM's wilful breaches of the original planning conditions and their refusal, over a course of many years, to compromise on any aspect of the flawed Cass scheme; and the widespread local and political hostility to DM's proposals for BHQ and their operations generally. Accordingly, Mr Davidson is right to say (paragraph 71 of his closing submissions) that the officers' patience and support had been tried, but that did not have anything to do with the failed appeal; it all had to do with the underlying nature and character of DM, and Mr Morgan in particular.
- It is instructive to take just two examples of DM's obdurate stance and its consequences over this period. As was noted in DM's closing submissions (paragraph 75 of section 2) the 9 hectare breach could have been very easily remedied "within a matter of days by replacing top/subsoil on the stripped areas". Yet DM wilfully decided not to take this simple step of remediation, presumably as part of their aggressive stance with SHMBC. Certainly no other explanation for this failure was offered.
- Secondly, there is the important EA File Note of February 2002, when the EA considered in outline the new application for planning permission. The File Note is identified at paragraphs 280-289 above. That document made no reference to the unsuccessful appeal; nor can any acrimony or other adverse consequence of that appeal be detected in its paragraphs. Instead, the EA were making plain their objections on technical and environmental grounds. Many of the points had been made numerous times before. They also referred to the poor reputation of DM. If this cautious attitude to DM was a cause of delay, and I believe that it was, it was not linked to the unsuccessful appeal and was instead synonymous with a much wider problem and more deep-seated problem.
- Ms Heasman, MJ's planning expert, accepted in cross–examination that the history before 2002 did have some effect on events post-2002. Her evidence (Day 8/30-32) was general in nature. Importantly, it was not specifically about the effect of the appeal; the questions were about "the history of events before the submission of the planning application in 2002" In other words, it was not possible for anyone to pick out from the conduct and attitude of the SHMBC officers and statutory consultees after 2002 any specific consequences of the appeal process. Any wariness on their part was, I find, much more likely to be the result of Mr Morgan's relentless and aggressive attitude going back to 1993 than the appeal, which at most would have been seen as just one manifestation of that combatative style.
- The other suggestion as to why the actual process took so much longer than the hypothetical, was made by Mr Stephenson, DM's planning expert, who said that it was because of changes in the legislation relating to landfill after 2002. In his supplemental report, he appended an impressive-looking schedule of all the changes to the legislation, including the Landfill Regulations of 2002, to support his point. Ms Heasman disagreed. I am in no doubt that Ms Heasman's evidence is to be preferred.
- First, on planning issues generally, I preferred the evidence of Ms Heasman to that of Mr Stephenson. There were a number of reasons for that. First, Ms Heasman had the necessary expertise in waste disposal matters which Mr Stephenson frankly accepted he lacked (Day 8/10-11). Secondly, there was at least one important issue – whether it was ever likely that permission would have been given to infill below 15m AOD - on which I felt Mr Stephenson was seeking to resile from the agreed CPR 35.12 statement, which said in terms that this was not likely (see his evidence on Day 8/13-20). Thirdly, there were a number of matters where I felt that Mr Stephenson's supplemental report was being used by DM as a blatant vehicle to advance their case, by reference to documents which, on analysis, Mr Stephenson had never even considered. This particular schedule is the best example of that.
- In cross-examination (Day 8/22-51), it became apparent that this schedule had not been prepared by Mr Stephenson, and it was subsequently found to have been prepared years before by Mr Robinson for the purposes of the statement sworn by DM's solicitor in the proceedings in 2006, for another purpose altogether. Mr Stephenson accepted that he had not even looked at most of the alleged changes noted in the schedule. When he was taken through them one by one he was, with one exception, wholly unable to identify any change in the legislation that had or could have had any relevance to the planning application at BHQ: see, by way of example only, the passages at Day 8/22 and 26. In the end, he said that he had not asked for the schedule, which had been sent to him (presumably with an instruction to include it in the supplemental report) by DM's solicitor (Day 8/51). In my judgment, this was a thoroughly bad point and it should never have been advanced in this way.
- The possible exception was Schedule 2, paragraph 3(4) of the Landfill Regulations 2002 which, even for inert waste, required a liner of a specified permeability, to be provided either naturally or via an artificial geological barrier. The suggestion was, therefore, that before these Regulations came into force, a liner was not required. However, on the facts here, that was not a material change, because the evidence shows that not only were liners becoming increasingly common in the late 1990's, even for inert waste, but also (as noted in paragraphs 36, 38, 41, 43-44, 95-96, 176, 207, 254, 259 and 260 above) that from 1993 onwards, a liner was always envisaged at BHQ. It would either have been offered or required.
- In addition, it seems that Mr Stephenson originally thought that DM might have got away without a liner if they had applied for planning permission earlier, because he understood that the EA were not concerned about the groundwater and the water table until about April 2000. In fact, that understanding was wrong, because he had not considered all the evidence (Day 8/25-29); as set out in paragraphs 43, 109-113, 208, 212, 254, 259 and 260 above, this was a concern from 1993 and certainly by April 1997 (see paragraph 208 in particular, and the reference there to the EA letter to AIG of 8th April 1997).
- For these reasons, I conclude that neither the effect of the failure of the enforcement notice appeal, nor the changes in the Landfill legislation, can be regarded as having any causative effect on the events between January 2002 and September 2009. The reasons for the delays ultimately came down to DM (paragraphs 434-437 above). Again, in my view, such delays cannot be ignored when endeavouring to ascertain what timetable would have eventuated but for the failure to give appropriate advice in late 1998.
E7.4 What Are DM Likely To Have Done and How Long Would That Have Taken?
- For the reasons that I have noted above, I reject the basic hypothetical timetable because I consider it to be wholly unrealistic. I am not persuaded that any hypothetical timetable which ignores what actually happened is an accurate way of arriving at an answer to the issue of delay in this case. Instead, I set out below my findings as to what DM were likely to have done if different advice had been given, and how long various things would have taken to be resolved, by reference to all the circumstances. In carrying out that exercise, I have had regard to the following helpful guidance:
a) Where the issue is what the claimant would have done if different advice had been given, that is determined on the balance of probabilities. "There is no discount because the judge considers that the balance is only just tipped in favour of the plaintiff; and the plaintiff gets nothing if he fails to establish that it is more likely than not that the accident resulted in the injury": see Stuart-Smith LJ in Allied Maples at page 1610B);
b) The same judge also said, at page 1610D, that "causation depends, not upon a question of historical fact, but on the answer to the hypothetical question, what would the plaintiff have done if the equipment had been provided, or the instruction or advice given? This can only be a matter of inference to be determined from all the circumstances." That approach seems to me to be the opposite of the basic hypothetical timetable, which ignored almost all the circumstances.
c) The need to treat with caution evidence from witnesses as to what they would have done in a situation which, in fact, they never faced, was highlighted by Chadwick LJ in Alliance & Leicester Building Society v Paul Robinson (Court of Appeal, 4th May 2000) at paragraphs 29-31. He said that, in the absence of a policy or guidelines, such a witness "can do no more than speculate as to what he would have done in circumstances which he had never previously met".
I should add that, although I was also taken to a passage from Lord Hoffmann's speech in Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] 1 AC 191, it did not add anything to the guidance that I have already noted above, being more concerned with the particular difficulties in respect of surveyors' negligence cases.
- The assumption underlying this section of the Judgment is that, contrary to the conclusions that I have reached above, MJ were negligent in such a way that, but for their breach, JH would have advised in late 1998 that the only way of achieving the desired result was to make a fresh application for planning permission. The second causation issue is, on the basis of that assumption, and by reference to all the relevant evidence, what would DM have done in consequence of that advice and how long would that have taken?
452A. If that advice had been given, Mr Morgan's first concern would have been about the complete change in JH's advice since 1993. He would have been angry that the very public stance that DM had adopted since July 1993, in reliance on JH's 1993 advice, had proved to be erroneous. His likely anger is confirmed by the evidence he subsequently gave about a non-existent cover-up on the part of JH (see paragraph 150 above). He would doubtless have required a detailed explanation as to how that situation had come about, and he may well have changed his legal advisors thereafter. He might also have asked for a second opinion, and would definitely have done so if he had changed his legal team. All that would have taken the timetable into 1999.
- In my judgment, at that point, once Mr Morgan had calmed down, there is no doubt at all that he would have decided to make a planning application in accordance with the new advice. On this hypothesis, he would have seen that, whatever the position may have been in the past, he was now in a position where only a fresh application for planning permission was going to allow him to fight for the permission he needed. He would, reluctantly and after taking a little time to adjust to it, have accepted that advice and relied upon it. To that extent, therefore, I accept Mr Morgan's evidence that he would have followed the legal advice he was given (summarised at paragraphs 50-53 of DM's closing submissions), subject of course to the proviso that such advice would have had to have been to the effect that only a fresh application was appropriate.
- He would then have arranged for the necessary steps to be taken to prepare the application. The first question that he would have had to decide was the timing, nature and scope of that application. I am in no doubt that Mr Morgan would have said that the application needed to be made as soon as possible, and was to be based on the entirety of the Cass scheme, namely a proposal to tip 5 plus million cubic metres of widely defined waste material, over a 40 hectare site, going down to a depth of 13 AOD. As to that last point, it must be remembered that in early 1999, it had not yet even been realised that there was a possible discrepancy between the 13 AOD and the detail of the Manstock scheme.
- In other words, I am confident that DM's hypothetical application for fresh planning permission would have been based on the maximum commercial advantage that they could have obtained from their tipping rights at BHQ. It would have been the same as the application in January 2002. Throughout the relevant period between 1994 and 2002, Mr Morgan never wavered from his strategy, as set out in the Cass scheme, to maximise the volume of waste to be tipped at BHQ and to remain studiously vague as to the precise nature of that waste. He would have known that SHMBC had consistently taken the point that the Cass scheme was on too large a scale (see paragraphs 76, 88, 99-100 and 255) but he had always ignored that objection. There is no reason to conclude that, if DM had had to make a fresh application in early 1999, Mr Morgan would have not followed precisely the same course.
456. Secondly, because of the volte face brought about by the hypothetical advice in late 1998, I am in no doubt that DM would not have wanted to waste any further time in making the fresh application. Mr Morgan would have felt that he was on the back foot in his dealings with SHMBC, because the point about implied permission that he had been reiterating to them for so long (in upwards of 30 letters extending over 4 years) had suddenly been snatched away from him. He would have been very concerned that he had lost the initiative, and he would have wanted to wrest it back as soon as he could. In those circumstances, whilst he would have reluctantly agreed that a fresh application was required, he would have been even more determined to ensure that that application was made as soon as it could be. He would have felt that it would only have emphasised his weakness to delay further whilst negotiating with and making concessions to SHMBC, and that his only option was to make his formal application for permission to tip 5 million cubic metres of waste promptly, and then wait for SHMBC's reaction.
- It is also plain that, in making his fresh application in early 1999, Mr Morgan would not have included an Environmental Statement. For the reasons set out in paragraphs 195-200 above, Mr Morgan would have been adamant that no Environmental Statement was to be prepared. Thus in the first part of 1999, Mr Smith (or whichever planning consultant DM had appointed) and Mr Morgan would probably have had the discussion which they actually had a year later and, just as happened then, Mr Morgan would have persuaded Mr Smith that no Environmental Statement was necessary.
- Accordingly, it seems to me that in, say, February or March 1999, Mr Morgan would have followed the hypothetical legal advice and made a fresh application for planning permission. It would have been quite alien to him not to press ahead, and instead to wait and discuss the application in detail with SHMBC first. The application that would have been would have been on the basis of the full Cass scheme, and would not have included an Environmental Statement. Accordingly, I reject DM's suggestion (paragraph 85 of section 1 of DM's closing submissions) that Ms Heasman's assumption to this effect was artificial; on the contrary, it is the only proper assumption that could be made on the facts. Paragraph 91b of section 2 of those same submissions is wrong: Ms Heasman did not say that an application in 1999 "would have been completely different" to the application in 2002, and no part of the evidence set out in paragraphs 88-90 supports such an assertion. I am confident that, for the reasons given, it would have been the same.
- Equally, there can be no doubt that within a few months, the officers at SHMBC would have knocked back that application. There would have been a variety of fundamental objections as far as they were concerned. The first would have been the size and the scale of the Cass scheme, a point which they had repeatedly made to DM in the previous correspondence. It is probable that, on this hypothesis, the discrepancy as to the depth to which quarrying and/or filling should be permitted would also have become apparent at this stage, which would have provided a further ground on which SHMBC would have objected to the proposals set out in the Cass scheme. Indeed, it is worth noting that, in the claim letter sent to MJ, DM's current solicitors allege that the application of January 2002 went 'far beyond' what had been permitted by the original conditions, an acceptance that the 13m AOD excavation had been in breach of the 1990 permission, and that infilling would not be permitted at such a depth.
- Secondly, SHMBC, and the statutory consultees such as the EA, would also have objected to the lack of clarity as to the nature of the waste that DM proposed to tip at BHQ, and the risk that at least some of that waste would have been contaminated. I have set out at paragraphs 43-45, 48, 51, 61, 64, 67-71, 74, 84, 87, 93, 94, 95-96, 105-108, 109-111, 114, 128, 175, 207-211, 212, 214, 254, 260, 261-263 and 286 above my reasons for concluding that, throughout the 1993-2002 period, DM were not willing to be tied down to a detailed specification of inert waste, which was the very most that the NRA, and subsequently the EA, might have been prepared to accept. That unwillingness was apparent from the fact that the Cass scheme did not refer to inert waste at all, but instead proposed to tip demolition and construction waste, which on any view could have included heavily contaminated soils. I find that this general stance would have been maintained by DM because, even in 2002, the waste which they were proposing to tip was the sort of contaminated waste that required a permit pursuant to the IPP. I am in no doubt that the open–ended nature of the waste referred to in the documents analysed above would have been part of DM's hypothetical proposals in 1999 and thereafter, and thus the subject of an objection from SHMBC and from the EA.
- Allied to this would have been a debate about the need for a waste management licence. Between January and May 1999 Mr Morgan was seeking to persuade the EA and others that he did not need such a licence. He is currently engaged in precisely the same exercise (see paragraph 311 above). There is no reason to believe that the same debate would not have occurred in the context of the hypothetical timetable in 1999, thus creating a yet further source of delay.
- Thirdly, there would have been other environmental concerns, not least the issue of the rising groundwater (paragraphs 43,109-113, 208, 212, 254 and 288 above). Of course, at this point, DM were still monitoring the situation by way of their borehole investigations, and they had repeatedly made plain that they did not want that technical approach to be rushed. Thus this facet of the application alone would plainly have taken some time to sort out in 1999/2000 and would have led to the EA's opposition to the excavation and infilling extending down below 15m AOD.
- Fourthly, the EA (and other objectors) would have made the point which arose on a regular basis between 1994 and 2009, namely that it was highly doubtful that there was any need for a large scale site taking inert waste infill only (see paragraphs 69, 78-80, 95-96, 252, 254, 258, 287 and 289 above). The issue as to need – which DM never addressed satisfactorily at the time or during the trial – would have constituted a major obstacle to the hypothetical application in 1999. The evidence shows that it only ceased to be an issue much more recently, when the volume of the proposal had been significantly scaled down, and there was some evidence of a national/regional need.
- Fifthly, I consider it inevitable that the officers would have been wary of doing anything other than opposing the application in the first instance, because of the local hostility to DM and the political ramification of tipping waste at the this sensitive site. That is why the experts agreed that an appeal would always have been needed. I have already noted above the local opposition to the proposals and DM's awareness of the political difficulties created by any hypothetical application: see paragraphs 52-53, 100, 112, 126, 129, 187, 188, 234, 256, 286, and 289 above.
464A. All the matters noted in the proceeding paragraphs would have provided a range of reasons for SHMBC's rejection of the application, or at the very least a requirement that DM carried out detailed further work before reconsideration. And that leads on to the sixth and final reason why this process would have taken so long: in mid-1999, SHMBC's officers and the EA would have insisted that, in the absence of an Environmental Statement, not only could the application not be properly be considered, but that, without such a document, the application was doomed to fail.
- Negotiations on all these matters would then have taken place. It is likely, that if the application had been knocked back in the middle of 1999, these negotiations/discussions (on depth, size, nature of waste, groundwater and the water table, need, local opposition and the Environment Statement, amongst other things) would have gone on for the rest of the year and into 2000. That hypothetical period can perhaps be measured by reference to how long the discussions on these matters actually took, which was a period of 5 years starting in January 2002 and extending at least until 2007. It is difficult to say precisely when any resolution would have been achieved but the process would certainly not have been very far advanced by April 2000.
- I am confident, however, that, by the end of 1999 or early 2000, Mr Morgan would at least have reluctantly accepted that an Environmental Statement needed to be prepared. Mr Smith's advice, and that of Mr Albon, would have led him to decide that further resistance to this suggestion was futile. The question then becomes: leaving aside all the other points of contention noted above, would such a Statement have been prepared quickly enough so as to lead to a quicker resolution of the hypothetical planning application as opposed to the actual?
- In my view, the answer to this question is in the negative. That is because it was just at this period (April 2000 – November 2001) that an Environmental Statement was known by DM to be required but, for reasons which were wholly their responsibility, took eighteen months to be prepared: paragraphs 228-250 above. In the hypothetical situation, it would be absurd to conclude that the preparation of an Environmental Statement over this self-same period would have taken any less time. Why should it have done? The same factors which actually caused the delay during this period would have caused the same delay in the preparation of the hypothetical Environmental Statement during the same period. Accordingly, there is every reason to conclude that the Environmental Statement would not have been ready before late 2001[9].
- Furthermore, given the complete lack of actual progress during this period in relation to BHQ, it is impossible to say that any substantial hypothetical progress would have been made during the same period if DM had been involved in negotiating with SHMBC on other matters such as the nature of the fill, groundwater, scale of the scheme etc. DM did not even progress the Environmental Statement during this period, so it is absurd to suggest that, in the hypothetical situation, not only would they have progressed the Statement, but they would also have taken steps to resolve all the other objections during this same period. Thus, even on the hypothetical version of events, I conclude that no significant progress would have been made on the detail of the planning application in 2000-2001.
- Accordingly, on this hypothesis, by early 2002, DM would have made a planning application for the full scheme, to which objection would have been taken, and DM would also have recently prepared an Environmental Statement to back up that full application. And that, of course, is precisely the position that DM were actually in, in January 2002. There is therefore no difference between the actual and the hypothetical timetable, and thus no delay caused by MJ's alleged negligence.
- For these reasons, I conclude that, even if Allegations 1, 2 and 4 had been made out (only one allegation of which I accept), and if, but for that negligence, JH would or should have advised that only a fresh planning application was appropriate (which I do not accept at all), there would have been no faster progress in relation to the hypothetical planning application than there actually was. Put another way, there was too much in issue, and DM's other non-BHQ priorities were too pressing, for progress on BHQ to have been significantly faster than it actually was in the critical period between early 1999 and early 2002.
- This conclusion is not altered if I assume (which seems to me to be contrary to all the evidence) that Mr Morgan would not have made a planning application at all until some time in 2000, following a certain amount of negotiation with SHMBC. On this basis, DM would need to show either that the negotiated application would have been made before April 2000 (because after April 2000 DM were otherwise engaged and would not have made even an negotiated application until early 2002, for the reasons already noted), or that, if this hypothetical route had been followed, they would somehow have been ahead of where they actually were in January or December 2002.
- In my view, it is wholly unrealistic to suggest that a negotiated application, containing all or even most of the concessions that DM eventually made, would have been made before April 2000. Indeed, that would have been quite impossible. There are two reasons for that.
- First, it would have taken a considerable length of time – probably measured in many years - for Mr Morgan to concede that an Environmental Statement was necessary; that the area of tipping at BHQ should be reduced by more than half; that the waste would not be tipped down to 13 AOD; and that only strictly inert and non-polluting waste specifically identified, with a method for identification, would be tipped at BHQ. I am confident of that because I know that, in reality, it took over five years, from January 2002 to September 2007, for Mr Morgan to make all those concessions and for DM to provide an updated Environmental Statement and ORAP which supported their altered position. Thus, if the suggestion is that all these matters should or would have been agreed with SHMBC before a formal application was made, then it is plain that those steps would not have been anywhere near completed by April 2000.
- That means that, because of DM's other priorities and the effective freeze on progress between April 2000 and late 2001, the negotiated application would not have in fact been made until some time after January 2002. Indeed, on the material before me, it seems to me to be likely that, in those circumstances, a limited application containing some concessions (the size of the area to be worked, for example), albeit not as limited as was eventually approved, might have been made towards the end of 2002. Since an application limited by area was actually made by DM in December 2002, that again suggests that, in all the circumstances, a delayed application, to take into account (at least in some respects) of the objections of SHMBC and the EA, would not have been made any earlier than it actually was.
- Secondly, it is important to note the range of matters which SHMBC and the statutory consultees would have required DM to address as part of the application process. They are summarised at paragraphs 459-464A above. It is again unrealistic to suggest that all those matters would have been resolved before April 2000, when DM's other priorities became paramount. They would therefore have been the subject of further debate when the application was resumed again after the freeze in late 2001/early 2002.
- Accordingly, even if I assume (which seems to me to be wholly unrealistic) that Mr Morgan would not have made a prompt application in 1999, and would have instead endeavoured to negotiate as much as he could before making a formal application, the hypothetical progress of that application, on the particular facts of this case as we know them to be, would have not been any quicker and certainly not significantly quicker, than the actual progress that was achieved.
- For these reasons, therefore, it seems to me that, whichever assumption the court makes as to whether or not the application would have been made before or after some negotiation with SHMBC, DM have failed to demonstrate that, on the hypothetical basis, progress on the planning application – as opposed to an application to amend the conditions, which was intended to have the same effect - would have been any quicker than it actually was.
E8 Causation /Allegations 3 & 5
- The causation issues which arise in relation to the two allegations about the Environmental Statement (Allegations 3 and 5) are rather different, and it is convenient to deal with them briefly at this stage. I obviously do so on the basis that, contrary to my conclusions at Sections D4.4 and D5.5 above, these allegations of negligence have been made out against MJ.
- It cannot be suggested by DM that, but for the original failure to advise that an Environmental Statement was needed, and/or the subsequent alleged failure to advise that the Environmental Statement needed to be publicised, that a different course would have been adopted and/or that a fresh application for planning permission would have been made. These alleged failures had no causative effect on the central element of DM's case.
- In particular, these alleged failures did not have any effect on the critical path. As to Allegation 3, let us assume that, notwithstanding JH's advice that no Environmental Statement was needed, it had been for Mr Downey to question that advice, and to say that forthcoming changes to the Regulations meant that such a Statement might become necessary, depending on the environmental impact of the proposals. Such advice, had it been given, would have made no difference to what happened because, when Mr Smith gave precisely that advice in early 2000, he was persuaded by Mr Morgan that, in the circumstances, no Environmental Statement needed to be provided (paragraphs 195-200). So even if, contrary to my view, Mr Downey had been negligent in 1998 in relation to the Environmental Statement, it was not causative of any delay or loss whatsoever.
- During the closing submissions, there was a faint suggestion that Mr Morgan's opposition to an Environmental Statement arose solely out of his belief that he already had implied planning permission. That was not his evidence (see paragraph 198 above). And, in any event, I do not accept that suggestion. The evidence is clear that Mr Morgan knew that an Environmental Statement would be a very difficult exercise, and he set his face against it. I find that he would have adopted the same attitude, even if he had known that the Irlam Brick argument was not available (paragraph 199 above). In addition, I also find that he would have known that, even in the erroneous belief that he had implied planning permission, an Environmental Statement – if it said the right things and reached the right conclusion - would have been an important weapon in his battle with SHMBC to accept the Cass scheme in place of Manstock. Mr Morgan therefore made a commercial decision that the preparation of the Statement was just too much of a risk.
- The alleged failure to advise that the Environmental Statement needed to be publicised (Allegation 5) was also not causative of loss. If (contrary to my view) this had been a matter for Mr Downey, then he would have advised DM that, once the Environmental Statement was prepared, it had to be publicised. However, because the Environmental Statement was not even complete until the very end of November 2001 (which was not, and is not alleged to be, Mr Downey's fault), there was no realistic time for it to be publicised before the second hearing on 8 January 2002. Accordingly, even if, contrary to my view, this was an allegation of negligence that was made out against MJ, it went nowhere. The problem with the Environmental Statement was not the failure to publicise it well before the Inquiry, but the fact that it was not available at all, to anyone, until four weeks before the resumed Inquiry. For the reasons set out in paragraphs 228-250 above, that was entirely the responsibility of DM.
- Accordingly, Allegations 3 and 5, even if they had been proved as particulars of negligence, did not cause or give rise to any loss, whether as alleged or at all.
E9 Summary on Causation
- For the reasons set out in Sections E4-E6 above, DM have failed to demonstrate that, but for Allegations 1, 2 and 4, JH would or should have advised that only a fresh application for planning permission would provide the result which DM wanted.
- For the reasons set out in Section E7 above, DM have also failed to demonstrate that, but for Allegations 1, 2 and 4, and assuming that JH would or should have given such advice, an application for fresh planning permission or alternatively consent for tipping would have been achieved any more quickly than they actually were. The hypothetical sprint, based on 'all other things being equal' was a fundamentally unrealistic way of looking at what might have happened in this case. The actual events cannot be disregarded and, when they are taken into account, they point overwhelmingly to the conclusion that, even on the hypothetical basis, there was no delay. Accordingly, the claim fails on the second causation question as well.
- Even if Allegations 3 and 5 had been made out, for the reasons explained in Section E8 above, they were not causative of loss.
- Accordingly, DM's case fails on both limbs of the causation issue and must be dismissed. That would normally mark the end of a Judgment of this length. However, because I heard detailed argument on quantum, and because I formed some clear conclusions about many aspects of DM's damages claim, I consider it appropriate to deal briefly with such matters in Section F below. I do so on the basis that, contrary to my conclusions, there was a period of delay referable to MJ's negligence.
F RECOVERABILITY and QUANTUM
F1 Introduction
- There are three Heads of Claim: the wasted costs, which principally relate to the enforcement notice process; the additional costs, which largely turn on the argument that, if the application had been made earlier, certain conditions would not have been imposed or concessions sought by SHMBC; and lost profits, which assumes a lengthy delay in tipping at BHQ because of the delay in making an application for fresh planning permission. I deal with each in turn below.
F2 The Wasted Costs
F2.1 The Relevant Assumptions
- In assessing recoverability and quantum under this Head of Claim, the relevant assumptions are:
(a) that MJ were negligent (which, save in one respect, I reject);
(b) that, but for MJ's negligence, advice would or should have been given that only a fresh planning application was appropriate (which I also reject);
(c) that, in consequence of the failure to give that advice, costs were incurred in connection with the appeal process which would not otherwise have been incurred. That assumption too is false, for the reasons explained in paragraph 490 below.
F2.2 The Individual items
(a) Costs Paid to Third Parties
- The costs payable to SHMBC and Redrow following the failed appeal hearing in January 2002, were £55,030. No issue arises on the quantum of those costs. However, this claim can only succeed if it is assumed that, in the light of their breach of the planning conditions, DM would have accepted the enforcement notice and would not have sought to challenge it by way of the appeal process. In my view, it is simply inconceivable that DM would have simply agreed to the enforcement notice. Even if they had been advised that the only way in which they would get permission to tip was by issuing a fresh application for planning permission, Mr Morgan would still have maintained his separate challenge to the enforcement notice, even if the only possible benefit (which is still what was hoped in January 2002) was to obtain the Inspector's support for DM's attack on the Manstock scheme. By late 1998/early 1999, Mr Morgan had come too far, and invested too much, in his battle with SHMBC, merely to surrender limply at the first active step taken by the other side. He would have accepted the hypothetical advice to make a fresh application, but he would also have continued a simultaneous fight against the enforcement notice. This was for the reasons that Mr Morgan himself had explained in his summary of options document, set out at paragraph 270 above. Accordingly, in my judgment, these costs would always have been incurred.
- If, contrary to that view, these costs were wasted, then that was for the reasons given by the Inspector in his decision (paragraph 277 above). At the heart of that was his view that DM had behaved unreasonably, principally because they had been granted an adjournment of 20 months, and failed to utilise it as they had promised, or at all. That "egregious conduct" – to use the Inspector's phrase - was DM's responsibility; these costs are therefore their responsibility too.
(b) Professional Fees
- The underlying assumption behind this item is that all the work done for the hearings in April 2000 and January 2002 was wasted, hence the claim for £223,517.84. That pre-supposes that there would have been no appeal process, which I do not accept for the reasons given above. In any event, it is plain that not all of the work was wasted, albeit that – on this assumption - some of it would have been. Accordingly, if (which I do not accept) there would not have been an appeal process following the enforcement notice, it seems to me that DM would only have been entitled to the wasted or abortive costs incurred as a result. Miss Heasman's most recent analysis puts that figure in the sum of £158, 460.22 and it seems to me that, in the round, this is the appropriate figure.
(c) The Fawcett Aftercare Scheme
493. This is the cost (£14,011.10) of the aftercare scheme which was put together in 2002 to comply with the requirements of Manstock. It was not ultimately used. It is DM's case that, if there had been no appeal, these costs would not have been incurred.
- I reject that submission for two reasons. First, there would always have been an appeal, for the reasons previously given. It is simply unrealistic to suggest that whatever advice might have been given about a fresh planning application, Mr Morgan would not have fought the enforcement notice. Secondly, these costs would have always had to have been incurred (whether there was an appeal or not), because this aftercare scheme was required by condition 3 of the 1990 planning permission. When SHMBC issued the enforcement notice, they again required the provision of this aftercare scheme[10]. Thus, if DM had wished to avoid the enforcement proceedings altogether, as this item of claim assumes, then DM would have had to have incurred these costs to remedy the breach. For the avoidance of doubt, DM cannot argue that these costs would not have been incurred if a different planning process had been adopted, because this failure to comply had occurred long before November 1998, and on the balance of probabilities, I find that SHMBC would not have granted DM any further indulgence, whenever the hypothetical application for permission to tip had been made. Accordingly, this item must fail.
- At paragraph 108 of DM's closing submissions, the fallacy in DM's case is revealed. It is contended there that DM was compelled to submit the aftercare scheme as a result of the Inspector's decision in January 2002. That is wrong; they were compelled to submit the aftercare scheme as a result of the planning conditions of 12 years previously. There is no causative link between the alleged negligence and these costs.
(d) Cass Fees
- This is a claim for £60,316.77 paid to Mr Cass. On the assumption (which I do not accept) that the appeal process would or should never have happened, then the fees payable up to 15 May 2000, in the sum of £26,212.20, would be recoverable. But in my judgment, no additional fees could be recoverable by Cass Associates, given that Mr Cass' woeful performance at the Inquiry in January 2002 removed the last hope of obtaining any advantage from the appeal process. For the reasons that I have already indicated, that was entirely Mr Cass' fault.
- Furthermore, not only are Cass Associates not entitled to be paid for this work but I am bound to note that DM were of the same view, both when the fee note was rendered and for a long time thereafter. DM did not pay Cass the remainder of the fees until May 2006, three years after these proceedings were commenced and more than four years after the work had been done and a fee note rendered. In my view, that confirms my conclusion that these sums were not, and were not regarded by DM as being, due and payable, until DM thought that they could recover any money they paid from MJ.
(e) Summary on Wasted Costs
- For the reasons set out above, I do not consider that any of these sums are recoverable because of the various assumptions on which they depend, none of which I find are supported by the facts. The maximum sum otherwise recoverable would be £184,672.42 (the professional fees and the earlier element of the Cass fees), and that is obviously well within the damages already recovered by DM from JH[11].
F3 The Additional Costs
F3.1 The Relevant Assumptions
- Again, this second Head of Claim depends on a variety of assumptions which, in my view, are unwarranted. Not only are there assumptions as to MJ's negligence, and both limbs of causation but, in relation to this Head of Claim, but DM also need to demonstrate that, even if there had been a delay which was referable to MJ, these costs somehow flowed from that delay and/or would have been incurred if the application had been made earlier. In my judgment, they cannot do so: on the contrary, it seems to me plain that the majority of these so-called additional costs would always have been incurred, whenever the planning application was made and whenever it was ultimately allowed. The reasons for that are identified by reference to the individual items, noted below.
F3.2 The Individual Items
(a) Additional Costs and Restoration Bond
(b) The Additional Fees for Planning Application
- Both of these items of claim have now been abandoned.
(c) Certain Rent Payments to Love
- The basis of this claim is that tipping waste would have started in 2000 and that, as a result, DM would have been paying Love royalties, as opposed to Certain Rent, from that date on. This claim therefore assumes that there was delay attributable to MJ and, for the reasons which I have indicated in Section E above, there was not. If I am wrong about that, so this item of claim falls to be valued, it is hopelessly optimistic as it stands because, even on DM's case as to the purely hypothetical timetable, royalties would not have been paid as early as 2002. That is because, on the middle course identified in paragraph 437 above, above, consent would not have been granted until 1st October 2002. Thereafter, a waste management licence would have been required before tipping could begin. Over a year after permission was actually granted in September 2009, no such management licence had even been applied for by DM, let only granted. Accordingly, it is safe to assume that tipping would not have started, even on the hypothetical basis until, say, 1st January 2004 at the earliest. That would reduce the claim to £460,642 (2004-2009). But because in my view the hypothetical timetable set out in Ms Heasman's supplemental report was the least unrealistic of any of these hypothetical timetables (see paragraph 426 above), I find that the maximum period of delay would have been 3 years (which reduces the claim to £234,000 odd) and that even then, for the reasons noted in that paragraph, no more than half of that period could have been the responsibility of MJ, which would reduce this item of claim still further to £117,000.
- Accordingly, this claim totalling £674,441.64 is considerably overstated for the reasons given above. No other point arises on the individual figures since those are a matter of record. Thus, assuming – contrary to my findings - a delay attributable to MJ's negligence, then the maximum sum that can be recovered by reference to this item is not more than about £117,000.
(d) Costs Incurred on the 2009 Planning Appeal
- This item of claim, in the total sum of £30,000 odd can be swiftly dealt with. The planning experts have agreed that any application for planning permission to tip waste at BHQ, whenever made, would have been the subject of an appeal. In view of the environmental and political controversy engendered by the scheme, it seems to me that that agreement was entirely appropriate. These costs would therefore have been incurred in any event.
- Furthermore, I accept MJ's alternative submission that these costs are irrecoverable anyway. DM's costs were £112,501, and SHMBC repaid DM £82,500. This is therefore the claim for the shortfall. But the lesser sum was accepted by DM from SHMBC because they received legal advice that £80,000 "is probably at the upper end of the amount you would expect to recover if this matter proceeded to a court assessment". In circumstances such as these, a claimant is not entitled to recover costs on anything other than a standard basis: see, for example, British Racing Drivers Club v Hextall Erskine [1996] 3 All ER 667, a decision of Carnwath J (as he then was) which, contrary to paragraph 3 of DM's supplemental note, applies to this case. There is no ability to recover costs on an indemnity basis, and therefore no claim that can be properly made against a third party for such costs.
- Thirdly, this claim again assumes that, but for MJ's negligence, there never would have been an appeal process (see paragraph 128 b of Section 2 of DM's final submissions). For the reasons set out in paragraph 490 above, that is an unsupportable assumption on the facts.
- Accordingly, for those three separate reasons, this item of clam must fail in any event.
(e) Costs of Planning Process
- This is a claim for £132,784.44. There was a dispute between the planning experts as to the extent to which the work done from mid-2002 onwards would have been the same or similar to the work that would have been done if an application had been made in 1999. Ms Heasman's analysis concluded that the work was or would have been very similar to that actually done. Mr Stephenson relied on an allowance of £50,000 which he had not calculated and was, he accepted, a generic opinion, which was not 'specific to the sums of costs that had in fact been incurred in this case' (Day 8/94). His attempted support for the figure (Day 8/91-94) was wholly unconvincing. In the light of the experts' agreement that there was, on any view, significant overlap between the actual work and the hypothetical, my general preference for Ms Heasman's evidence in preference to that of Mr Stephenson (paragraph 446 above), and in the absence of any specific evidence as to particular tasks that were carried out after 2002 that would not have been carried out if the application had been made earlier, I consider that Ms Heasman's detailed analysis is a more accurate exercise than the generic allowance of £50,000. Accordingly, I conclude that there was no loss.
(f) Professional Fees
- This is the first of a number of items of claim (down to sub-paragraph (o) below) which arise under the same core assumption, namely that additional costs were caused as a result of the planning conditions imposed in 2009, which conditions would not have been imposed if a fresh planning application had been made in 1999. This item of claim fails, as do all the others in this category because, for the reasons noted below, the conditions imposed would have been precisely the same, whenever the planning application had been made or granted. Furthermore, if any of these items of claim (such as this item of professional fees) was larger than it otherwise would have been because of the protracted period between 2002 and 2009, then, for the reasons which I have already explained, that was entirely DM's responsibility: those delays were their fault. They were certainly nothing whatsoever to do with MJ.
- In relation to this specific item of claim, DM's assertion is that these costs not have been incurred but for MJ's negligence, but there was no evidence which linked the work done by Mr Smith in 2009 with anything which MJ did or did not do a decade previously. These fees were incurred in dealing with 2009 pre-commencement conditions, which is much too remote from MJ's alleged negligence.
- DM also say that if such conditions had been imposed as part of any consent in 2000, they would have dealt with them in-house, so that these fees would not have been incurred at all. That is utterly implausible. On DM's own case that means that the work which they claim they would have been happy and able to do in-house would have been done in the latter part of 2000 and in 2001, the very period when DM were so busy on other projects and other priorities that they were not able to carry out any work at all in relation to BHQ (paragraphs 228-250 above).
- Finally, the work to which this item of claim relates appears to be concerned with SHMBC's costs position relating to the 2007 application, and DM's potential breaches of the pre-commencement conditions. I accept Mr Hart's submission that, on the face of it, none of that had or could have had anything to do with MJ.
(g) Site Liaison Committee
- Setting up and maintaining a Site Liaison Committee for a site such as BHQ was something which, in 1997, DM claimed was its policy and practice. The costs of it can hardly now be laid at MJ's door. Whilst I note that this item was ultimately abandoned by DM, the fact that it was maintained for so long gives an insight into the analysis – or lack of it - underlying DM's damages claim.
(h) Ten Year Aftercare
- MJ argue that it was agreed that this operated as a credit of £3,000 in favour of MJ. DM's closing submissions use it as a springboard to criticise MJ's entire approach to the case (see paragraphs 145-146 of Section 2 of their closing submissions). It is regrettable that the parties were not even able to identify the dispute (if any) arising under this modest item of claim in order to assist the court. In the circumstances, I decline to deal with it further.
(i) SHMBC's Site Visit
- This claim was abandoned when the updated version of the Schedule of Loss was served in September 2010.
(j) Quarry Haul Road
- This is a claim for £120,000 in relation to the new quarry haul road. As noted in paragraphs 294-297 above, the new road was necessitated by SHMBC's suggestion of 15th August 2002, to the effect that, if the direction of working was reversed, that would enable the breaches of the 1990 consent (both in relation to depth and area) to be remedied as part of the initial operations on site. SHMBC's request was entirely reasonable, particularly given that the breaches had been committed by DM many years before. The proposal was accepted by DM and their advisors at the time as being reasonable and immediately formed part of their amended proposal[12]. In those circumstances, this item of claim cannot be recoverable against MJ in any event; even if the planning application had been made earlier, SHMBC would have asked for and obtained the same proposed alteration from DM.
- There was a suggestion that, in some way, this was an enforced change arising from the enforcement notice and the subsequent appeal, and that, but for MJ's negligence, a solution would have been found which obviated the need for this change. But that analysis cannot be right. DM were in breach of the planning conditions by extracting sand and sandstone over a greater area than they should have done and without an aftercare plan. In deliberately deciding to breach the conditions, they ran the risk that there would be enforcement proceedings. Thus the change in direction was nothing whatsoever to do with MJ, or the allegations of negligence (which in any event arose after these breaches of the conditions), and was a suggestion made by SHMBC solely because DM had knowingly acted in breach of the planning conditions, and now had to rectify the results.
- It is asserted by DM that "if a fresh planning application had been made in 1998/1999 … there would have been no need to reverse the direction of working" (paragraph 153 of section 2 of DM's closing submission). That submission overlooks the fact of the breach in 1998/1999 and the need for DM to do something about it. It also overlooks the fact that DM freely agreed to undertake this very work. As Mr Stephenson made clear in his own evidence (paragraph 296 above), this was precisely the sort of proposal to which a contractor would be advised to agree, to demonstrate a responsible attitude. The costs of works freely agreed in this way cannot now be claimed as damages from a third party who had no involvement in the decision to undertake the work.
(k) Transport Costs
- This claim for £95,450 was, as Mr Morgan accepted (Day 4/42) the direct result of DM's decision to change the direction of working in response to the request from SHMBC. Thus, for the same reasons as noted at sub-paragraph (j) above, this item of claim is irrecoverable. In any event, as Ms Heasman noted, these costs arose from standard conditions which were set out in DM's own Environmental Statement of November 2001. They were not additional.
(l) Raising of Quarry Floor
- This is a large individual item of claim, in the sum of £472,420. The assumption on which it relies is that, if the planning application had been made in 1999, it would have been granted on the basis of a depth of 13m AOD rather than 15m AOD, as was eventually agreed. On analysis, that assumption cannot be sustained. The principal reason for that is because the planning experts agreed that planning consent would not have been given to go deeper than 15m AOD (see Mr Stephenson's evidence at Day 8/13-20).
- Secondly, because of the approval of the detailed Manstock scheme, it is arguable that DM never had permission to excavate as deep as 13m AOD, and since SHMBC were aware of that point by 2000 (paragraph 201 above), it is inconceivable that they would have altered the conditions in a way that was more favourable to DM – by allowing them to go down to 13m AOD - than the original 1990 conditions had been. Indeed, as noted in paragraph 459 above, the claim letter accepts and seeks to make a virtue out of the proposition that the 2002 application (based on 13m AOD) went far beyond what had been permitted in 1990.
- Thirdly, as noted in paragraphs 208, 212, 254 and 288 above, the Environment Agency had been concerned since at least April 1997 about the rising groundwater at BHQ. It was they who originally identified the 15m AOD maximum depth. Whilst I accept that both Mr Stephenson (Day 8/20) and Ms Heasman (Day 9/93-95) thought an application might have sought 13m OAD initially, as an option to "see how far you can go", this was a "starting point", nothing more. For the reasons I have given, on the evidence (and particularly in the light of the EA's longstanding concerns) consent would never have been granted for infilling as far down as 13m OAD, whenever the hypothetical application had been made after late 1998.
- There was a suggestion in the evidence that this condition somehow arose out of the Landfill Regulations. That point was never made good, and is not mentioned in paragraphs 157-160 of DM's closing submissions. Ms Heasman, whose evidence on all waste matters I preferred to Mr Stephenson, because of his avowed lack of expertise in that field and her clear experience of that aspect of planning work, made clear there were no such changes. I accept her evidence and repeat paragraphs 446-449 above.
- Finally I ought to note what I consider to be a contradiction inherent in DM's claims for additional costs, which can be illustrated by reference to this particular item of claim. On the hypothetical timetable, DM stressed that their hypothetical planning application would only have been made once all the objections from SHMBC and the statutory consultees had been heard, considered and agreed. And yet this and other items of claim are all premised on the basis that, in 1999 – 2000, DM would have been entitled to dig their heels in and successfully resist many of the points that would inevitably have been taken by SHMBC or the statutory consultees, and on which, as a matter of fact, DM eventually conceded. It seems to me that DM's claim, which seeks to maximise their recovery one way or another, is contrary to the hypothetical reasonable approach which they now say they would have adopted in 1990/2000.
(m) Lining and Capping Membranes
- Although this is the largest single item of claim under this Head (£2,289,175) it can be dealt with shortly. It is, I am afraid, a nonsense to suggest that, if planning permission had been granted in, say, 2000, or at any time thereafter, a liner of the type actually specified would not have been offered by DM, or required by SHMBC and/or the Environment Agency.
- All of the evidence points to that conclusion. At paragraphs 36, 38, 41 and 43-44 above, I have referred to the fact that, from the outset in 1993, Mr Morgan was talking about the need for a liner on this site. Subsequently, there are repeated references to the need for a liner (paragraphs 95-96, 176 and 207). Mr Robinson advised that a liner was necessary in October 2001 at the consultation with JH (see paragraphs 254, 259 and 260 above). Furthermore, in the light of the position of the NRA, and subsequently the EA, to the effect that any landfill was going to be the subject of objection, and that a liner was the bare minimum required, the suggestion[13] that no liner would have either been offered up or required is simply untenable.
- DM's closing submissions are put on the narrow basis that a liner would not have been required until the Landfill Regulations of June 2002. But even that limited argument cannot get off the ground because:
a) Here, a liner would have been offered anyway, for the reasons already noted. For this sensitive site, more than the mandatory minimum would always have been necessary (as Mr Robinson had recognised and advised years earlier);
b) The argument assumes that the waste which was the subject of the application would have been strictly inert waste, with no contaminated soils, which (until December 2002 – after the Landfill Regulations came into force) it was not;
c) Even taking the basic hypothetical timetable (paragraph 423 above) the application/appeal would still have been ongoing in June 2002, and a liner would therefore have been required by the new Regulations (if, which is very unlikely, the point had not been raised before);
- Again, this item of claim runs very close to an unattractive "cake and eat it" approach on the part of DM. The suggestion appears to be that, in some way, a liner would not have been required for an application made in 1999, because hydrogeological issues such as the rising water tables only became manifest thereafter. The suggestion is that DM might have been able to fill the site at BHQ on the cheap, without carrying out any engineering works, before it became apparent to everybody that a liner should have been required after all. This submission is wrong on the facts: the EA's concerns about the water table and the groundwater levels had been in play since no later than April 1997 (see paragraph 208 above). The suggestion made by Mr Stephenson that this concern first arose three years later was accepted by him in evidence to be wrong. It also reflects badly on DM that they now seek to sustain a claim for £2.5 million odd by reference to what, on their own incorrect case, would have been no more than the temporary ignorance of SHMBC and the EA about the likely final water table at the site.
- For all those reasons, this item of claim must fail. In any event, the quantum claim is flawed because it is based on the use and cost of geosynthetic clay whilst, as Mr Morgan admitted, he would not use such clay but would instead use clay from his own quarry at Rixton. Thus this item of claim should have been calculated by reference to the cost to DM of using its own clay to produce the liner. There was no evidence of those costs. Had the item been recoverable in principle, a different quantification exercise would have been necessary.
(o) Dust Action Plan, Wheel Washes etc
- This is a claim for £75,497.14. These items appear to involve the ways in which dust from the site could be minimised, including wheel washes. It is clear that SHMBC would have specified all these things as part of any approval, as happened in 2009. As set out in paragraphs 256, 286 and 289 above, dust and the problems it created at BHQ was an ongoing source of concern to the residents. One of the ways in which that concern was eventually allayed (albeit only on the appeal in 2009) was by DM's promise to carry out these various processes. Again, it seems to me that it is cynical for DM now to claim these costs as damages, on the basis that they would not have been required if the application had been made earlier. I am in no doubt that these measures would always have been required.
(p) Ecology and Restoration Compliance
- This is a claim for £7,000. Compliance reporting would have always been required, even if the planning consent had been provided earlier. DM's argument that this was not in the 1990 planning consent is irrelevant; what matters is what would have been in a consent granted following an application in 1999/2000. Furthermore, I accept MJ's submission that there is no detail as to what was done under this head, and therefore there is no basis on which I could conclude that these items were additional to those which would have otherwise been required.
(q) Summary
- Accordingly, none of these items of claim are recoverable in any event. This entire Head of Claim is dismissed. If that is wrong, and the delay claim in respect of royalties was successful, it would only be in the maximum sum of £117,000 (paragraph 502 above), which, even if it is added to the £184,672 from the first Head of Claim, is also well within the sum already recovered by DM.
F3 The Loss of Profit Claim
F3.1 The Relevant Assumptions
- The pleaded claim assumes that there was a nine year delay (2000-2009) attributable to MJ. In fact, all of the particular delays in this case (between 1994-1998, between 2000-2001, and after 2002) were the responsibility of DM and, for the reasons set out in Section E7 above, I have concluded that there was no delay attributable to MJ. Thus, even if the allegations of negligence were made out, and even if the first limb on causation is also made out, the claim fails on the second limb in any event. But assuming that that too was wrong, and there was a delay attributable to MJ, then when did that delay occur? It could have been from 1st January 2004 to September 2009 (paragraph 501 above) but, for the reasons given in paragraph 426, I prefer Ms Heasman's analysis, which produces a maximum period of 3 years delay, at least half of which was DM's responsibility anyway. That puts the maximum delay attributable to MJ at 18 months. Has a valid claim for loss of profits been made out for that or any other period? This question involves an analysis of the singular methodology that DM has used to calculate their alleged loss of profits in this case.
F3.2 The Methodology Used
- The methodology that has been utilised in calculating DM's claim for loss of profit is as follows. First, totals for the amount of sand/sandstone being quarried at BHQ have been identified from the figures for 1993-1995 only. Secondly, those figures have been increased by additional amounts for an alleged "internal" market provided to Mr Barry (DM's minerals surveying engineer) by Mr Morgan. Thirdly, an average figure has been calculated from the (increased) totals for those three years. Fourthly, that average figure has then been compared to government statistics relating to sand and aggregate extraction in North Wales and the North West, and a percentage of 9% has been calculated to reflect DM's share of the market over those years. Fifthly, that market share percentage of 9% has then been used to calculate figures for the years after 1995, so as to arrive at an estimated figure for sand/sandstone extraction each year in the period when sand and sandstone was not being quarried at BHQ. Sixthly, a percentage (77%) has then been taken of the estimated extraction figure so as to arrive at an estimated amount of fill space available at BHQ for the tipping of waste. Seventhly, the assumption has been made that that available space would have been completely filled with waste. Finally, the price of the incoming fill – and therefore DM's alleged profit - has been calculated by reference to the gate price at a nearby site, Southworth Quarry, owned and operated by another company, but whose figures are available. In reliance upon those third party figures, but adding a premium to reflect what is said to be BHQ's superior location, a lost profit of some £37 million has been calculated, which equates to almost 20% of DM's turnover for the period.
- In my judgment, this convoluted methodology was fundamentally flawed. It appeared to be designed to maximise DM's recovery, whilst requiring them to provide little or no factual or documentary evidence in support of the large sums claimed. I regard it as a wholly unreliable and unacceptable method of presenting a loss of profits claim into this case. Even if I had concluded that there was a period of delay attributable to MJ which justified a claim of this type, I would have been quite unable to measure that claim in the way suggested. Moreover, in the absence of any credible evidence from DM that there was any actual loss of profits at all, I would have been driven to value this claim at nil. I set out the flaws to in the approach in Section F3.3 below.
F3.3 The Flaws in the Methodology
(a) Input not Output
- DM's entire business strategy in relation to BHQ was based on the proposition that the quarrying was, in itself, irrelevant: it only mattered because it would create a large void at BHQ into which the waste could be tipped. It was in the tipping of the waste that DM hoped to make their money. Accordingly, the starting point for any consideration of what (if any) profits may have been lost for the years when, on their case, BHQ was not available to DM for landfill purposes, must be an analysis of what inert fill DM would have had which they were unable to place at BHQ and therefore had to be tipped elsewhere, or what contracts they did not tender for at all because they had no or insufficient other capacity for inert waste. There was no cogent evidence of either. This unhappy starting point is further explored (at sub-paragraph c) below.
- In my view, the methodology started at the wrong end of the process, by looking at the maximum volumes of sand and sandstone that might have been extracted. As Mr Barry (DM's minerals surveying expert) fairly accepted (Day 10/22-26), that was the wrong way round. On a site where the intention was that the money was going to be made from the input rather than the output[14], it was potentially misleading to calculate the profit lost on the delayed input by reference to the quantities of sand that might have been excavated in the same period. If there was no infill to be put into the excavations, the sand and sandstone would not have been excavated in the first place. Extraction depended on the likely amounts of infill, not the other way round.
- The only answer to this critical point (paragraph 181 of DM's closing submissions) was the assertion that "you cannot create a model in which waste is the driving parameter because there is no evidence on which to base it". But if there could and should have been such evidence (again, see sub-paragraph c) below), then DM cannot justify an inappropriate methodology by reference to evidence which they themselves have failed to supply.
- Thus I accept the proposition advanced by MJ on this topic, put with clarity by Mr Whitting in the note which accompanied his cross-examination, that the whole basis of DM's approach to the loss of profits claim was fundamentally flawed. It makes an essential assumption – that any void excavated would have automatically been infilled with inert material - which is not justified by any evidence before the court.
(b) No Demonstrable Need in 1999-2005
- One of the principal reasons why the equation between input and output referred to above cannot just be assumed is the other evidence in the case about need, and the lack of it at the relevant time. As I have already said, by 2009-2010, it is plain that there was/is a need for infill sites in this locality (see the document references at paragraph 187 d) – j) at section 2 of DM's closing submissions). But that is irrelevant to this claim, which is concerned with the 10 years before that. At the critical time, namely between the mid 1990's and say, 2005, the evidence was quite the contrary. Indeed, at paragraphs 69, 78-80, 95-96, 252, 254, 258, 287 and 289 above, I have referred to the number of contemporaneous documents in which the need for large sites to take non-contaminated inert infill was openly questioned by a variety of people, including the consultants advising DM. That doubt existed up to and beyond 2002, and was reflected in the EA File Note of 25th February 2002 (paragraphs 280-289 above). On any fair summary of the position in, say, 2000/2001, the reader of the contemporaneous documents in this case (including the very general references set out at paragraph 187 a)-c) of DM's closing submissions) would have concluded that there was a general concern that there was, in fact, no need for an inert infill site of this size at all.
539A In those circumstances, the court cannot simply assume that, because for a given year (say, 2002), sand and sandstone to the volume of X would have been excavated at BHQ (calculated by reference to a notional market share) that automatically meant that 77% of X would actually have been used for the tipping of inert fill. DM's evidence of need at the relevant time, and particularly the evidence of a dependable source of inert fill was very weak (see for example DM 44, discussed at paragraphs 542-543 below); the evidence that there was no general or specific need for such a facility, at least in the quantities claimed, was considerably more extensive.
(c) No Documents or Other Evidence from DM
- Support for the theoretical equation between output and input, and proper, credible evidence of need during the relevant period, could have been addressed in DM's disclosure and/or other evidence, but in fact, a consideration of these elements of DM's presentation only confirms the fundamental difficulties inherent in DM's loss of profits claim. As I have already indicated, they have provided no cogent evidence to demonstrate, in the relevant period, that they either had quantities of inert fill which they were having to tip elsewhere at a loss (because BHQ was not available), or that they were not tendering for some contracts because of the lack of a capacity to tip inert fill at BHQ. Neither was there evidence from Mr Morgan, or DM's contracts managers or other employees, explaining the practical difficulties for DM created by the non-availability of BHQ for infilling of inert waste. In a case where DM apparently intended to use BHQ as an in-house landfill facility, purporting to charge themselves or their related companies a notional profit or mark-up, that is an extraordinary omission, and one which Mr Barry was quite unable to help with[15]. Although Mr Davidson maintained that there was nothing in this submission because there was no statutory requirement for such records to be kept, that does not begin to meet the point; the issue is whether there was any reliable evidence about the lost opportunities to support a claim for £37 million, and the answer was that there was none.
- The importance of that widespread omission was emphasised still further by two other considerations. First, as noted for example at paragraphs 252-254 above, whenever their own consultants suggested to DM that there might not be a need for a site to take large volumes of inert fill, DM's response was always to the effect that they themselves could demonstrate such a need. On that occasion (31st October 2001), when DM's consultants openly doubted the need for such a site, Mr Morgan referred to DM's annual requirement of 600,000 cubic metres of inert fill which needed to be tipped. Where, one asks rhetorically, are the documents which support that contention? How is that figure made up? Where are the similar documents, generated in later years, which would demonstrate that there was any sort of need which DM were unable to meet over the relevant period because of the unavailability of BHQ? None has been provided.
- Secondly, it is important to note both the circumstances and the content of Mr Morgan's affidavit of 6th July 2010. This affidavit was provided by DM as a result of the order of Ramsey J on 25th June 2010, which order had been prompted by a yet further application by MJ for any documents that might support the large loss of profits claim. Amongst other things in that affidavit Mr Morgan sought to justify the non-production of documents by arguing that the experts had agreed various matters, which was wrong in fact, irrelevant to the task he had been ordered to undertake and an indication of his desire to part with as little information as possible. The relevant exhibit to the Affidavit is DM 44. That purported to be "an indication of the nature of the scale of DM's business", as ordered by the court.
- That document refers to about 150 contracts undertaken by DM between 2004 and 2010. The vast majority of them indicate the type of waste generated; in other words, the type of waste that was or would have been available to tip. Only two contracts – worth a total of £217,500 - are said to have generated inert waste. Thus, on DM's own evidence, the disposal of strictly inert waste appears to have been a tiny proportion of their trading activities over the relevant period. To put it another way, a claim for loss of profits due to the absence of a facility for tipping inert waste, running to many millions of pounds for every year, cannot be sustained in circumstances where the contracts on which inert waste was actually being dealt with themselves contributed no more than £217,500 to DM's turnover. Whilst it is right to say that some inert waste may have been included in the general descriptions of waste generated on some of the other contracts listed in DM 44, neither the Affidavit nor the document itself make that clear, and that does not lessen the point that the volumes of inert waste were, on DM's own evidence, very small.[16]
- For all these reasons, I am very troubled by the nature of the evidence (or lack of it) designed to support the back-to-front method of calculating loss of profit. Mr Barry accepted that the methodology relied on assumption upon assumption, all necessitated by the lack of any hard evidence. Whilst I acknowledge that, in many instances, a court has to do its best to calculate loss on imperfect material, I am afraid that, in this case, so misguided is the methodology, so large is the claim, and so glaring is the absence of any contemporaneous or other evidence that would support the pleaded claim for loss of profit over this period, I am not prepared to accept any part of the claim that has been put forward. In so concluding, I am not overlooking the evidence of Mr Richardson (MJ's expert accountant) at Day 11, page 53, when he accepted that, subject to the point about missing documents, the claim methodology made theoretical sense. I have no doubt that, to an expert accountant, it does, but this is not the issue that I have to decide. I have to decide whether there is a claim for loss of profits properly calculated and supported by cogent evidence, and in the circumstances set out above, I have concluded that there is not.
- Finally on this topic, I should refer back to my Judgment of 23rd March 2010 (paragraph 316 above) to show that these points – the potentially limited relevance of expert evidence and the importance of the contemporaneous documents – are not new. When referring to the loss of profit claim and the expert's report which had still not been provided, at paragraph 19 I doubted how far an expert's report might take us, and said that "the loss of profit claim ought to be a function of the contemporaneous documents, comparing what actually happened with the notional position that would have existed if planning permission had been granted earlier". That seems to me to be an unremarkable proposition but, in failing to provide any contemporaneous documents setting out what actually happened in respect of these allegedly huge quantities of inert fill that needed to be tipped, and relying solely on theoretical accounting, DM have failed to produce a loss of profit claim which can be sustained, even in part.
- Furthermore, if that were not sufficient, I also have grave concerns as to some of the particular steps in the methodology adopted. Those are dealt with at sub-paragraphs (d)-(g) below.
(d) Average Output
- As noted above, the average output, that is to say the quantities of sand and sandstone that would have been quarried at BHQ after 1998, has been calculated by reference to the years 1993, 1994 and 1995. The amounts quarried in 1992, 1996 and 1997 have been ignored. It is impossible to see why those years have not been included. Those years produce significantly lower figures than the average produced by 1993-1995. In my judgment there is no justification for ignoring these figures, which were based on records that were just as valid and reliable as the intervening three years. Mr Barry said that he did not know why 1992 had been excluded and accepted that "potentially" it should have been (Day10/38). As for 1996, Mr Barry said that he had been told by Mr Morgan that the figures were affected by the 9 hectares constraint. He accepted that there was no evidence to support that suggestion (Day 10/41) and, in my view, the evidence demonstrates that there was no such constraint in fact (because DM carried out excavating with no regard for the 9 hectare limit).
- If those three years are taken into account, the average output falls significantly, which means that the market share percentage falls too. This is unsurprising, given Mr Morgan's candid evidence that the purpose of the Wallington earn-out arrangement (paragraph 42 above) was to maximise the amount that was quarried. It seems to me very dangerous to use only the three peak years of that earn-out process and then equate that to the average output at BHQ. I accept Mr Whitting's submission that such figures are necessarily not average figures, because they were generated by a particular financial incentive to make the void as large as possible in as short as time as possible.
(e) The Figures from Mr Morgan
- Not only has the so-called 'average' figure been calculated from an unrealistically high set of three figures only, but the figure has been further inflated by adding 170,000 tonnes a year to reflect 'internal' market figures provided to Mr Barry by Mr Morgan. Mr Morgan gave no evidence about these figures or where they came from. Mr Barry said he simply accepted them from Mr Morgan. He confirmed that there were no contemporaneous documents to support the existence of such figures or the figure claimed (Day 10/44). In view of the unreliability of Mr Morgan's evidence generally, it seems to me wholly inappropriate to allow the average figure to be further inflated in this way. I therefore discount those 'internal' figures market altogether. That reduces the output figure (and thus the market share) still further, and significantly reduces the claim.
(f) The Market Share
- The calculation of the market share is one of a number of ways in which DM have sought to avoid providing their own documents, by relying on government statistics instead. It is not clear to me why the market share would have stayed the same, which is the basis of the calculations: there would inevitably be fluctuations. For the reasons noted above, because the notional market share figure was based on the earn-out figures only, I am in no doubt that the actual market share would have in fact been significantly less.
(g) Profit from Infill
- The last stage in the methodology is in some ways the most remarkable of all. An average figure has been calculated for the output and then, by using the 77% reduction percentage, an annual figure has been calculated for the notional quantity of infill. The 77% was not itself challenged. But, in order to arrive at a lost profit figure, Mr Barry has used the gate price achieved at a completely different quarry, owned by a completely different company, a few miles away, at Southworth Quarry. What is more, he has added a premium to that price to reflect the fact, on DM's case, that BHQ was in a more convenient position than Southworth Quarry.
- It seems to me that this too is a profoundly unsatisfactory way of arriving at a loss of profit figure in this case. DM argue that they would have used BHQ to tip inert fill generated on their contracts. Thus the 'profit' that they claim they would have made would have been be an internal or notional profit, not a profit paid to DM by a third party. MJ argue that such a claim is irrecoverable in principle. It seems to me that, whilst there may not be anything wrong in principle with calculating a loss of profit figure based on such an internal or notional mark-up, such circumstances require cogent evidence that the notional profit claimed from a defendant as damages is appropriate, objectively justifiable, and evidenced as far as possible by contemporaneous documents or other evidence.
- Here, not only is the claim not evidenced by any documents or other contemporaneous evidence at all, but the profit has been calculated, not by reference to other sites operated by DM (of which there are several), and not by reference to inter-company transactions or documents (of which there is some brief evidence on other contracts, but nothing relevant to this claim), but instead by reference to:
i) the open gate price charged by
ii) a completely different company, at
iii) a completely different quarry (Southworth), arising out of
iv) arms-length, third party transactions,
v) to which a premium has been added, on the basis that Southworth is not directly comparable, after all.
The relevance of such figures to this particular claim is therefore hard to discern. None of the first four elements noted above apply or are directly relevant to DM's particular claim here. As the reports of Mr Barry and Mr Marsden (DM's expert accountant) expressly accept, DM would not have received an open gate price because these would not have been arm's length transactions with third parties for the tipping of waste. If DM wanted to claim damages based on their inability to charge themselves or their related companies profit on accepting inert waste at BHQ, they needed to identify what profit they were or are charging themselves or their related companies on other contracts, and how they would have calculated a notional profit for BHQ. They have failed to do either. In those circumstances, the actual (as opposed to theoretical) relevance of the Southworth Quarry figures to DM's likely notional or internal profit has simply not been made out.
- On a related point, I also accept the criticism made by Mr Whitting that, although this is a claim by DM for the loss of profit incurred by that company, no documents (other than the annual accounts) have been provided relating to any of DM's other activities. BHQ has been treated in the entirely artificial way in which I have indicated above, as if it were DM's only revenue stream. Again, it seems to me that this is an inappropriate way of making a loss of profit claim, particularly in circumstances where the alleged lost profit amounted to 20% of DM's whole turnover. Indeed, for some years, the claimed sums would have represented the entirety of DM's profit (ie no profit was in fact made). In normal circumstances, the alleged loss of profit needs to be considered in the context of the company as a whole: it is the company's claim. That cannot be done here because not all the relevant documents have been provided.
(h) Summary
- For all the reasons set out above, I consider that the loss of profit claim is fundamentally flawed and cannot be accepted by the court. This is a particularly disappointing decision to reach in circumstances where it was the loss of profits claim, and the accompanying accountant's report, which DM failed to provide for years, and which was the subject of numerous court orders, including the unless order of March 2010. It seems to me that, given the long delays in its production, and the courts' repeated indulgence to DM in respect of it, a more credible and properly evidenced basis for calculating the loss of profits claim ought to have been provided.
- Even if all of that were wrong, the maximum period of delay attributable to MJ would be a 3 year delay (paragraph 426 above): 3 years delay in applying (January 2002, not January 1999) and thus 3 years delay in obtaining consent (September 2009, not October 2006). That 3 year delay is subject to a further reduction to 18 months because of the delay from April 2000 to November 2001, which was DM's responsibility: again, see paragraph 426 above. On DM's figures, an 18 month delay would be worth a maximum of about £3.5 million and a minimum of about £2 million, depending on which years were taken. Making full allowance for the flaws in the figures which I have set out above, I consider it likely that a claim for loss of profits on an 18 month delay would not exceed a maximum of £1.5 million. That is within the £2 million already recovered from JH, even if the sums referred to in paragraphs 490 and 531 are also included.
F 3.4 Other Matters
- There were a variety of other points advanced that arose in relation to the quantum of this Head of Claim. However, in the light of my conclusion that the whole basis for the loss of profits claim was fundamentally flawed, it is unnecessary for me to consider them further.
F3.5 Standing Back
- I am mindful of Mr Davidson's warning that, since there was widespread agreement as to the excellence of BHQ's location, it would be unrealistic to conclude that any delay would not have caused a loss of profit at all, however calculated. But there are two reasons why that submission is unpersuasive in this case. First, as I have already noted, it takes no account of the fact that this large claim was only ever pleaded in outline for years and years, and was not the subject of a comprehensible formulation until recently, when the detail – such as it was - was only provided following an unless order and a good deal of other cajoling from the court. In such circumstances, it is not appropriate for a claimant to say to the court: 'Well, our huge and very late claim has turned out to be fundamentally flawed, but there must have been some loss somewhere and you must do your best with what we have chosen to give you'.
- Secondly, and even more importantly, it does not follow that the excellence of BHQ as a location means that its inability to take inert waste in the 2000's automatically resulted in a loss of profits. Take the lack of evidence as to 'need' as an example. It was always open to serious question that, at least during that period, there was any need at all for a huge landfill site that was restricted to inert waste only. If – as they so often claimed in the 1990's – DM's experience was different, and there was such a need, then where was the evidence of it? Where was the evidence of the inert waste that was tipped elsewhere, in order to demonstrate that it would be 'unrealistic' to dismiss the loss of profit claim? Where were the contracts with a large waste disposal element that DM did not even bid for because of the absence of tipping facilities? DM44 is the only real evidence, and it wholly undermines the case on actual need. In the absence of any other evidence, there was nothing on which even the basic assertion that there must somehow have been some sort of a loss of profit here, could be made out.
- In any event, even if Mr Davidson was right and, notwithstanding these difficulties, a figure should be ascribed to the loss of profit claim, I cannot put it higher than the £1.5 million referred to in paragraph 556 above. That sum has already been recovered from JH.
G CONCLUSIONS
- For the reasons set out in Section D above, I consider that Allegation 1 (the failure to go back to JH on the Irlam Brick point) has been made out. I reject the remainder of Allegations 2, 3, 4 and 5.
- For the reasons set out in Section E4, I consider that DM have not shown that, but for the negligence comprised by Allegation 1, JH would (or should) have advised in 1999 that only a fresh application for planning permission would achieve the result DM desired. Furthermore, for the reasons set out at Sections E5, E6 and E8, I conclude that, even if (contrary to my conclusions), any of the other allegations of negligence had been made out, DM have also failed to show that such advice would/should have been given.
- Even if all the allegations of negligence had been made out, and even if advice would or should have been given by JH that only a fresh application for planning permission would have given DM the right to tip waste at BHQ, for the reasons set out in Section E7 above, I conclude that progress would have been no quicker on this hypothetical basis than it was in fact. In particular, although I have found that DM would have followed the hypothetical advice, they would have followed it in their own way and at their own pace, and, for the reasons set out in that section, that would not have resulted in the hypothetical planning application being made before it was and/or planning permission being granted before it was.
- Even assuming that DM had got home on negligence and on both the limbs of causation, the vast majority of their damages claim would have failed in any event, for the reasons set out in Section F above. The additional costs claims would have failed because, on a proper analysis (Section F2 above), all the requirements/additions which flowed from SHMBC's conditions in 2009 would always have been offered by DM or imposed by SHMBC, even if the planning application had been made in 1999 or 2000. In my judgment, they were all essential ingredients of a successful application for planning permission at BHQ, whenever it was made.
- As to the claim for loss of profits, I consider that Head of Claim is fundamentally flawed for the reasons set out in Section F3 above. The evidence is such that I cannot simply assume that, in the relevant period, there was or would have been any significant volume of inert fill available to DM which they were not able to tip at BHQ, or that there was any likely loss of profit at all. I consider that the loss of profit claim is a carefully-designed construct which is entirely theoretical, avoiding the provision of proper documents and evidence and maximising the sum claimed.
- And finally, even if all of the above were wrong, and damages were due from MJ to DM, I conclude, also for the reasons set out in Sections F2-F4 above, that the total sum recoverable by way of damages would not exceed the sum of £2 million already recovered from JH.
- For all these reasons, therefore, the professional negligence claims against MJ are dismissed. I will hear the parties separately on all questions of costs.
