Amalgamated Investment and Property Co Ltd v John Walker & Sons Ltd COURT OF APPEAL, CIVIL DIVISION [1976]

3 All ER 509, [1977] 1 WLR 164, 32 P&CR 278, [1976] RVR 268, 239 EG 277, [1976] EGD 166 HEARING-DATES: 2nd, 3rd MARCH 1976 3 MARCH 1976 CATCHWORDS: Contract - Mistake - Common mistake - Existence of mistake at date of contract Building sold for development - Belief of parties at date of contract that buil ding not listed under planning legislation as being of special architectural or historic interest - Provisional list prepared by officials for approval of Secre tary of State - Building unconditionally included in provisional list before dat e of contract - List given legal effect shortly after date of contract - Whether purchaser entitled to rescission of contract on ground of common mistake. Contract - Frustration - Change of circumstances - Building sold for development - Building listed under planning legislation as being of special architectural or historic interest - Building included in statutory list after date of contrac t and before date for completion - Agreed purchase price 1,700,000 - Effect of l isting to reduce value to 200,000 - Whether change of circumstances rendering pe rformance of the contract radically different from what had been undertaken - Wh ether contract frustrated. HEADNOTE: The defendants were the owners of a commercial property which they proposed to s ell. The property was advertised as being suitable for occupation or redevelopme nt. In July 1973 the plaintiffs agreed, subject to contract, to purchase the pro perty for 1,710,000. The defendants were aware at all times that the plaintiffs wished to redevelop the property although they would have to obtain planning per mission for that purpose. In their enquiries before contract the plaintiffs spec ifically asked the defendants whether the property was designated as a building of special architectural or historic interest. On 14th August the defendants rep lied in the negative. Unknown to the parties, however, officials of the Departme nt of the Environment had included the defendants' property in a list of buildin gs which it was proposed should be listed under s 54 of the Town and Country Pla nning Act 1971 as being of architectural or historic interest. On 25th September the parties signed the contract of sale. On 26th September the Department of th e Environment wrote to the defendants and informed them that the property had be en included in the statutory list of buildings of special architectural or histo ric interest and that the list was about to be given legal effect. The list was given legal effect on the following day when it was signed on behalf of the Secr etary of State. In evidence it transpired that the property had been uncondition ally selected for inclusion in the list on 22nd August. The value of the propert y with no redevelopment potential, which it would not have unless the plaintiffs could obtain listed building consent, was 1,500,000 less than the contract pric e. The plaintiffs claimed, in the alternative, rescission of the agreement on th e ground of common mistake or a declaration that the agreement was void or voida ble, and an order rescinding the agreement. Held - The plaintiffs' claims failed for the following reasons -(i) For the doctrine of common mistake to apply, the plaintiffs had to show that the mistake existed at the date of the contract. At that date the property had not been listed but only included in the list of buildings of special architectu ral or historic interest which was only an administrative step toward listing. T

he property had become a listed building on the date the list was signed which w as subsequent to the date of the contract and therefore the parties had not been under any common mistake in believing that the property was not subject to any such fetter on the date they signed the contract (see p 515 e f and j, p 516 a t o c and p 519 c and e, post). (ii) Listing had not prevented the defendants from carrying out their obligation s under the contract according to its terms as the defendants had never warrante d that planning permission could be obtained for the development of the property . There was an inherent risk, of which every purchaser should be regarded as bei ng aware, that any property might become listed. The plaintiffs had been aware t hat that risk existed and it was a risk they had to bear. It could not therefore be said that the performance of the contract that would be called for would, in consequence of the listing, be radically different from that which had been und ertaken by the contract (see p 516 g to p 517 e and p 520 c to e, post); dictum of Lord Radcliffe in Davis Contractors Ltd v Fareham Urban District Council [195 6] 2 All ER at 160 applied. NOTES: For the law relating to mistake and frustration of contracts, see 9 Halsbury's L aws (4th Edn) paras 290-295, 441-470, and for cases on the subject, see 12 Diges t (Repl) 456-514, 3305-3567. CASES-REF-TO: Bell v Lever Brothers Ltd [1932] AC 161, [1931] All ER Rep 1, 101 LJKB 129, 146 LT 258, 37 Com Cas 98, HL; rvsg [1931] 1 KB 557, CA, 35 Digest (Repl) 102, 63. Davis Contractors Ltd v Fareham Urban District Council [1956] 2 All ER 145, [195 6] AC 696, [1956] 3 WLR 37, 54 LGR 289, HL, 12 Digest (Reissue) 507, 3518. Denny, Mott and Dickson Ltd v James B Fraser & Co Ltd [1944] 1 All ER 678, [1944 ] AC 265, 113 LJPC 37, 171 LT 345, HL, 12 Digest (Reissue) 500, 3495. Grist v Bailey [1966] 2 All ER 875, [1967] Ch 532, [1966] 3 WLR 618, Digest (Con t Vol B) 545, 120a. Solle v Butcher [1949] 2 All ER 1107, [1950] 1 KB 671, 209 LT 66, CA, 31(2) Dige st (Reissue) 1042, 8232. INTRODUCTION: Appeal. This was an appeal by the plaintiffs, Amalgamated Investment and Propert y Co Ltd, against the judgment of Plowman V-C on 5th March 1975 whereby on the t rial of an action by the plaintiffs against the defendants, John Walker & Sons L td, which had been consolidated with an action by the defendants against the pla intiffs, it was ordered that the plaintiffs' action should be dismissed and, on the defendant's counterclaim, that an agreement dated 25th September 1973 for th e sale by the defendants to the plaintiffs of certain freehold property known as 33 Commercial Road, London E1 should be specifically enforced and carried into execution. The facts are set out in the judgment of Buckley LJ. COUNSEL: John Balcombe QC and Benjamin Levy for the plaintiffs. H E Francis QC and J M Ch adwick for the defendants. PANEL: BUCKLEY, LAWTON LJJ AND SIR JOHN PENNYCUICK JUDGMENTBY-1: BUCKLEY LJ. JUDGMENT-1: BUCKLEY LJ. This is an appeal from a decison of Plowman V-C on 5th March 1975 re lating to a contract for sale of some land in the Commercial Road, London E1. Th e property was advertised by estate agents, in particulars prepared by them, as being for sale 'For occupation or redevelopment'. It consisted of a site on whic

h stood a large warehouse building which had been purpose-built to be used as a bonded warehouse and bottling factory for the defendant company, who are manufac turers of whisky. They had ceased to use it for that purpose, and it was for sal e vacant. A company called Gladdings had written to the defendants expressing in terest in the property as possible purchasers and mentioning the fact that Gladd ings had an office development permit which might be used in connection with a r edevelopment of the site. The property had been advertised in the press as suita ble for redevelopment and occupation. On 13th July 1973 Gladdings wrote to estate agents acting for the defendants mak ing an offer of 1,710,000, subject to contract, for the freehold with vacant pos session. On the same day the company which is now the plaintiff company in the a ction made an offer of 1,460,000. Five days later the plaintiffs wrote to say th at they had agreed to join forces with Gladdings and associated themselves with the offer of 1,710,000. On 19th July the defendants' agent wrote accepting that offer, subject to contract. Enquiries were made before contract in the ordinary way, and amongst other quest ions asked was this: 'Although the Purchaser will be making the usual searches and enquiries of the l ocal and planning authorities, the Vendor is asked specifically to state whether he is aware of any order, designation or proposal of any local or other authori ty or body having compulsory powers involving any of the following...' Then there are a number of sub-paragraphs, the only relevant one being (iv), whi ch reads: 'The designation of the property as a building of special architectual or historic interest.' A negative answer was given to that question by the vend ors on 14th August. With the approval of Gladdings, it was arranged that the contract should be take n in the name of the plaintiffs, and on 25th September 1973 the contract was sig ned. It incorporated the law Society's General Conditions of Sale (1973 Revision ), which contained, amongst other provisions, a condition that nothing in the co nditions should entitle the vendor to compel the purchaser to accept or the purc haser to compel the vendor to convey (with or without compensation) property whi ch differed substantially from the property agreed to be sold and purchased, whe ther in quantity, quality, tenure or otherwise, if the purchaser or the vendor r espectively would be prejudiced by reason of such difference. On 26th September 1973, that is the day after the contract, the Department of th e Environment wrote a letter to the defendants notifying them that the property, the subject-matter of the contract, had been selected for inclusion in the stat utory list of buildings of special architectural or historic interest compiled b y the Secretary of State, and that that list was about to be given legal effect. The evidence with regard to that is rather startling. It was to this effect: tha t a survey had been made of the neighbourhood by the Department of the Environme nt's survey investigators, and one of their investigators had made a report reco mmending what buildings in this particular area should be listed as being of arc hitectural or historical interest. That report went to the chief investigating o fficer, who forwarded it to a lady, Miss Price, who gave evidence. She is a memb er of the staff of the Department of the Environment dealing with this sort of s ubject, and it was she who prepared the list of buildings to be listed in pursua nce of s 54 of the Town and Country Planning Act 1971. It was her responsibility to decide which of the buildings recommended in the report for listing should b e put into the list. In the course of her evidence she was asked: 'As a matter of practice -- we know when the letter goes out it is the Minister who signs it [That is not in fact quite accurate, because it is not the Minister ; it is the head of the department who signs it on behalf of the Secretary of St

ate. The question goes on:] but who in the Department makes the decision?' That is the decision what the list shall contain. The answer was: 'In the case o f the Tower Hamlets list, I did.' 'Q. We know from the letter which was written on the 26th September 1973 it says that the building "has been selected for inclusion". A. Yes. 'Q. Can you tell my Lord at what point of time you, being the person concerned, had made up your mind this was a proper case for the building to be included in the list? A. There are two stages: Early January 1973, after I had completed an examination of the Survey Report, I gave provisional acceptance of the recommend ations relating to this building. But it is "provisional" because it is subject to a check against any other information that might be on the Section relating t o the building and affecting its interest. From January 1973, throughout the pro cessing of the Report into statutory list form, no information came in on this b uilding which would affect my acceptance of the recommendation to list it. 'Q. Could I just interrupt you there? You said "no information came in". Did you actively seek any information? A. No, no. 'Q. If any information had come in, how might it have come in -- in what sort of circumstances would you expect information to come in, if you do not go out and seek it? A. Information is coming in all the time from local authorities and pr eservation societies, and individual members of the public. In this case, the on ly thing which would affect my acceptance of the recommendation would have been information relating to damage to the building -- if it caught fire, or had been partially altered -- then I would have sought a re-assessment of its merits. 'Q. I am sorry I interrupted you, but I wanted to get that clear, that you had n ot searched out any information. A. No. 'Q. And no information came in? A. No. 'Q. Your selection of this building became unconditional at some time. When was that? A. Towards the end of August 1973, I think it was.' Then she is told she can look at files, and she verifies the date as having been 22nd August 1973. 'Q. Was there any particular reason for the delay of one month, in your view, be tween the decision and your letter going out, or was it simply a question of adm inistrative convenience, finding time to type the letter? A. On the 22nd August I decided which building should be included. The order was given on that date to the typist to produce the final list, and I think there were about 1,500 in thi s list, but because of the amount of work in the typing pool there was a delay. 'Q. I thought so; my question was not intended to convey any sense of grievance or complaint. I thought the explanation of the delay was simply that. A. Yes, it was simply that. 'Q. The other question is this: You sent the letter out on the 26th September, s aying that the property "has been selected", but in fact the list, as I understa nd it, did not take legal form until the following day, the 27th? A. Yes. 'Q. First of all, what precisely was done on the 27th which gave the list its le gal, statutory form? A. It was presented to the Head of Branch to be signed on b ehalf of the Secretary of State, and dated. 'Q. It was just a senior official's signature? A. At a certain level, because it is this kind of document.' Later on she was asked:

'Q. One final question, which is perhaps not germane to the case, but I am inter ested, and perhaps so is my Lord: There are some photographs around. Could you t ell us what are the criteria in relation to this building which decided the Depa rtment that it was a building to be listed as of "historic importance" because p erhaps to an untutored eye, such as oneself, it would not appear to be a buildin g which should be listed? A. I do not know. I have no professional judgment. 'Q.It is purely a matter of interest, and if you cannot answer, then please do n ot. A. I do know we are looking for industrial architecture of the Victoria peri od -- of the better examples.' I say that evidence is a little startling because it seems that the person whose duty it is to determine precisely what properties shall go into the list is som ebody who, in this case at any rate, disclaimed any capacity to make a professio nal judgment in the matter. She acted no doubt on the report of the investigatin g officer, and it would seem that the head of the department signed the list rel ying on Miss Price's judgment in drawing it up. When I mention the figures in th is case in a minute it will be seen that the effect of including the property in the list was one of very great commercial importance, and it does seem rather s trange that decisions of that kind, which may so drastically affect the values o f property, should be taken without rather more careful vetting of what goes int o the list. It is, however, suggested in some of the evidence that in some areas there is a policy which is described in the evidence as 'blanket listing', of l isting a large number of buildings which may be eventually thought to be of arch itectural or historical interest and leaving the merits of their being listed to be determined on a subsequent occasion when an application is made for 'listed building consent', that is to say, when planning permission is sought which invo lves some alteration to or the destruction of a particular building in the list. The judge found as a fact that the value of the property with no redevelopment p otential was probably 1,500,000 less than the contract price. So the effect of t he building being put into the list was this: that so long as it remained listed and 'listed building consent' could not be obtained, the value of the property was depreciated from the 1,700,000 odd, which was the sale price, to something o f the order of 200,000. The judge also found as a fact that the defendants knew at all material times that the purchasers were buying the property for redevelop ment. On 12th December 1973 the plaintiffs issued their writ against the defendants cl aiming rescission of the agreement on the ground of common mistake, a declaratio n that the agreement was void and of no effect and a declaration that the agreem ent was voidable, and an order rescinding the agreement. Those were, of course, alternative remedies. On 14th December the defendants issued a writ against the plaintiffs claiming specific performance of the contract and alternatively a dec laration that the plaintiffs had wrongfully repudiated the contract, and forfeit ure of the deposit and damages, with ancillary relief. Those two actions were co nsolidated on 19th July 1974, and the action came on with Amalgamated Investment and Property Co Ltd as plaintiffs and John Walker & Sons Ltd as defendants. The re was a counterclaim raised by the defendants for the relief sought in their ac tion, specific performance and so forth. The relevant statutory provisions will be found in the Town and Country Planning Act 1971, ss 54, 55, 56 and Sch 11; but I do not think that it is necessary for me to refer in detail to any of these. Plowman V-C held that there was no common mistake. He said: 'In my judgment, however, the issue of mistake does not arise. The relevant even t, in my opinion, was the actual listing of the warehouse and not some prelimina ry step in the process of listing taken within the four walls of the Department,

which might or might not result in executive action, although no doubt it proba bly would.' He therefore treated the building as having been listed on the day when the list was signed by the head of the relevant branch in the Ministry; that is to say, after the date of the contract. So, on that finding, the contract was not entere d into in reliance on any, or under any, common mistake of the parties, for at t he time when the contract was entered into the building was not a listed buildin g. He dealt with the alternative ground of frustration of the contract, which was t aken before him, in this way: 'One therefore starts with this (and I quote Lord Radcliffe n1) "... frustration is not to be lightly invoked as the dissolvent of a contract". Let me then try to apply some of the tests proposed by the House of Lords [he is there referring to Davis Contractors Ltd v Fareham Urban District Council n2] to the facts of t his case. Can it be said that the parties must have made their contract on the f ooting that the warehouse would not be listed in the future? I can see nothing i n the contract to suggest that that must be the case. In my judgment the plainti ffs took the risk under the contract, and it seems to me impossible to maintain that the contract ceased to apply when the property was listed. They could have provided against the risk by an appropriate provision in the contract, but they did not do so. Again, is the contract which the parties made, on its true constr uction, wide enough to apply to the situation which arose when the property was listed? The answer to that must, in my judgment, be yes, and I can see nothing i n the contract to support the contrary view. Would the thing undertaken, if perf ormed, be a different thing from that contracted for? Or, again, can the plainti ffs say, "This was not the bargain we made"? (Non haec in foedera veni.) Not in my judgment. The plaintiffs undertook to purchase 33, Commercial Road, and if th e purchase is completed, they will have done the very thing which they undertook to do, no more and no less. They took the risk under the contract of the proper ty being listed, and it has turned out badly for them, but as Lord Simonds n3 sa id, "... it by no means follows that disappointed expectations lead to frustrate d contracts".'

n1 [1956] 2 All ER 145 at 158, [1956] AC 696 at 727 n2 [1956] 2 All ER 145, [1956] AC 696 n3 [1956] 2 All ER 145 at 150, [1956] AC 696 at 715 So Plowman V-C held that the contract stood and that the purchasers were liable for the full purchase price, and that the contract should be carried out. It has been contended before us that there was here a common mistake of fact on a matter of fundamental importance, in consequence of which the contract ought t o be set aside. Reliance has been placed on the decision of this court in Solle v Butcher n1 and the decision of Goff J in Grist v Bailey n2.

n1 [1949] 2 All ER 1107, [1950] 1 KB 671 n2 [1966] 2 All ER 865, [1967] Ch 532 Counsel for the plaintiffs says that they bought the property as property which was ripe for development and that the defendants sold on the same basis, and tha t by reason of the decision to list the property the property was not in fact ri pe for development. Therefore he says there was a common mistake as to the natur

e of the property, and the purchaser is entitled to rescission. The actual pleading of the common mistake that is alleged is in these terms, to be found in paras 2, 3 and 4 of the statement of claim: '2. At the time of the execution of the Agreement both the Plaintiff and the Def endant believed that the property was suitable for and capable of being redevelo ped, and the said purchase price was determined by the said belief. '3. Unknown to the Plaintiff and to the Defendant the Department of the Environm ent had on or before 25th September 1973 selected the property for inclusion in the statutory list of buildings of special architectural or historic interest co mpiled by the Secretary of State for the Environment. '4. The selection of the property for inclusion in the said list prevents the pr operty from being suitable for or capable of being redeveloped, or alternatively substantially reduces the potentiality of the said property for redevelopment.' So the alleged common mistake was that the property was property suitable for an d capable of being developed. For the application of the doctrine of mutual mistake as a ground for setting th e contract aside, it is of course necessary to show that the mistake existed at the date of the contract; and so counsel for the plaintiffs relies in that respe ct not on the signing of the list by the officer who alone was authorised to sig n it on behalf of the Secretary of State, but on the decision of Miss Price to i nclude the property in the list. That decision, although in fact it led to the s ignature of the list in the form in which it was eventually signed, was merely a n administrative step in the carrying out of the operations of the branch of the Ministry. It was a personal decision on the part of Miss Price that the list sh ould contain the particular property with which we are concerned. But there was still the possibility that something else might arise before the list was signed . Some communication might have been received from some outside body which threw some light on the qualifications of this building for listing, which might have resulted in its being excluded from the list as it was actually signed. Indeed, the head of the department might himself, had he known of the circumstances, ha ve formed a different opinion from the opinion formed by Miss Price or Miss Pric e might, I suppose, herself have changed her mind during the time between prepar ing the list, sending it to the typing pool and eventually laying it before her superior for signature. Although she accepts the responsibility for the decision and says it was her decision, it was (as I say) no more than an administrative step leading to the ultimate signature of the list, just as the obtaining of the information that was eventually included in the report of the investigating off icer was an administrative step or the preparation of the report of the investig ating officer. It seems to me that it is no more justifiable to point to that da te as being the crucial date than it is to point to other earlier dates or later dates. The crucial date, in my judgment, is the date when the list was signed. It was then that the building became a listed building, and it was only then tha t the expectations of the parties (who no doubt both expected that this property would be capable of being developed, subject always of course to obtaining plan ning permission, without it being necessary to obtain listed building permission ) were disappointed. For myself, I entirely agree with the conclusion which the learned judge reached on this part of the case. In my judgment, there was no mut ual mistake as to the circumstances surrounding the contract at the time when th e contract was entered into. The only mistake that there was was one which relat ed to the expectation of the parties. They expected that the building would be s ubject only to ordinary town planning consent procedures, and that expectation h as been disappointed. But at the date when the contract was entered into I canno t see that there is any ground for saying that the parties were then subject to some mutual mistake of fact relating to the circumstances surrounding the contra ct. Accordingly, for my part, I think that the learned judge's decision on that

part of the case is one which should be upheld. We have heard an interesting argument whether Solle v Butcher n1, which I have a lready mentioned, can stand as good law with Bell v Lever Brothers Ltd n2. That is not a matter on which I think it is necessary for us to embark, and I do not propose to say anything about it.

n1 [1949] 2 All ER 1107, [1950] 1 KB 671 n2 [1932] AC 161, [1931] All ER Rep 1 I now turn to the alternative argument which has been presented to us in support of this appeal, which is on frustration. Counsel for the plaintiffs has relied on what was said in the speeches in the House of Lords in Davis Contractors Ltd v Fareham Urban District Council n3, and it may perhaps be useful if I refer to what was said by Lord Radcliffe n4:

n3 [1956] 2 All ER 145, [1956] AC 696 n4 [1956] 2 All ER 145 at 160, [1956] AC 696 at 728 'So, perhaps, it would be simpler to say at the outset that frustration occurs w henever the law recognises that, without default of either party, a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract.' That is a passage which was referred to by Plowman V-C in the course of his judg ment. Then a little later on, after referring to Denny, Mott and Dickson Ltd v J ames B Fraser & Co Ltd n5, Lord Radclifle n6 said:

n5 [1944] 1 All ER 678, [1944] AC 265 n6 [1956] 2 All ER 145 at 160, [1956] AC 696 at 729 'It is for that reason that special importance is necessarily attached to the oc currence of any unexpected event that, as it were, changes the face of things. B ut, even so, it is not hardship or inconvenience or material loss itself which c alls the principle of frustration into play. There must be as well such a change in the significance of the obligation that the thing undertaken would, if perfo rmed, be a different thing from that contracted for.' Now, the obligation undertaken to be performed in this case by the defendants wa s to sell this property for the contract price and, of course, to show a good ti tle and so forth. The defendants did not warrant in any way that planning permis sion could be obtained for the development of the property. No doubt both partie s considered that the property was property which could advantageously be develo ped and was property for which planning permission would probably be satisfactor ily obtained. But there was no stipulation in the contract relating to anything of that kind; nor, as I say, was there any warranty on the part of the defendant s. I am prepared to assume for the purposes of this judgment that the law relati ng to frustration of contracts is capable of being applied in the case of a cont ract for sale of land, though that is not one of the matters which has been deba ted before us. But, making that assumption I have reached the conclusion that th ere are not here the necessary factual bases for holding that this contract has

been frustrated. It seems to me that the risk of property being listed as proper ty of architectural or historical interest is a risk which inheres in all owners hip of buildings. In many cases it may be an extremely remote risk. In many case s it may be a marginal risk. In some cases it may be a substantial risk. But it is a risk, I think, which attaches to all buildings and it is a risk that every owner and every purchaser of property must recognise that he is subject to. The purchasers in the present case bought knowing that they would have to obtain pla nning permission in order to develop the property. The effect of listing under t he sections of the 1971 Act to which I have referred makes the obtaining of plan ning permission, it may be, more difficult, and it may also make it a longer and more complicated process. But still, in essence, the position is that the would -be developer has to obtain the appropriate planning permissions, one form of pe rmission being the 'listed building permission'. The plaintiffs, when they enter ed into the contract, must obviously be taken to have known that they would need to get planning permission. They must also, in my judgment, be taken to have kn own that there was the risk, although they may not have regarded it as a substan tial risk, that the building might at some time be listed, and that their chance s of obtaining planning permission might possibly be adversely affected to some extent by that, or at any rate their chances of obtaining speedy planning permis sion. But, in my judgment, this is a risk of a kind which every purchaser should be regarded as knowing that he is subject to when he enters into his contract o f purchase. It is a risk which I think the purchaser must carry, and any loss th at may result from the maturing of that risk is a loss which must lie where it f alls. Moreover, the planning have not yet established that they will be unable t o obtain all the necessary planning permissions, including 'listed building perm ission'. So it has not yet, I think, been established that the listing of this b uilding has had the drastic effect which the figures I have mentioned suggest th at it may have had. It may well turn out to be the case that 'listed building pe rmission' will be obtainable here and the purchasers will be able to carry into effect the development which they desire. For these reasons I reach the conclusion, as I say, that the necessary facts hav e not been established in this case to found a claim that the contract has been frustrated. For these reasons, I would dismiss this appeal. JUDGMENTBY-2: LAWTON LJ. JUDGMENT-2: LAWTON LJ. I too would dismiss this appeal, and for the reasons given by Buckley LJ. I share his surprise at the way in which this warehouse came to be listed a s a building of architectural or historical interest. Between March 1971 and Jun e 1972 a woman civil servant, whose qualifications do not appear to be known to the parties, wandered around the London Borough of Tower Hamlets looking for bui ldings which she thought (subject to certain criteria which she was given) were of architectural or historical interest. It was part of her instruction that she was not to let either the owners or occupiers of the buildings know that she wa s surveying them from the outside with a view to possible inclusion in the list which she was compiling. The only check on her judgment seems to have been that she had to make a report to the chief investigator. He in turn had to report to Miss Price, another civil servant seemingly without any professional qualificati ons relating to the subject-matter, of the woman civil servant's investigations. Not only was this warehouse listed, but it was listed without any opportunity f or protest being given to the owners. Section 54 of the Town and Country Plannin g Act 1971 empowers the Secretary of State to draw up a list; and he is also giv en power to amend it when it has been drawn up. There does not appear to be any statutory procedure for enabling those who object to having their property liste d to make representations. One presumes that if they do make representations to the Secretary of State, he will consider them. But who he is going to take advic

e from, if any body, when he does so, is unknown. In my judgment, that procedure lacks the appearance of fairness. The facts of this case show what startling financial consequences can follow as a result of a building being included in a list compiled by some unknown civil s ervant. We have got to deal, however, with the facts as they are. This building and the land on which it stood came on the market in May 1973. Towards the end o f May it was extensively advertised in the national press. The advertisements al l seem to have been in the same form. It is worthwhile stating what that was. Th e lay-out was different in the various advertisements. The wording was the same. The headings were all 'E.1'; then, underneath, 'Redevelopment/Occupation'; then , in larger type, 'Freehold warehouse for sale. 72,600 square feet. Site area 1 acre approximately'. Underneath came the name and address of the vendors' agents . It is clear from the evidence in this case that the property interested at least two organisations, Gladdings and the plaintiffs. They knew exactly what was for sale. There has never been any suggestion in this case -- and there could not h ave been -- that what was offered for sale was not covered by the contract for s ale. The interested parties, like all others who buy real property, had to make up their minds what they wanted to use the property for; and, as the interested parties in this case were all commercial organisations, they wanted to know what the profit-making capacity of the property was likely to be. That, under modern conditions, required them to estimate as best they could what their chances of getting planning permission would be. The plaintiffs, with their expert knowledg e of the property market, took a number of steps to find out what their chances of getting planning permission would be. They decided that their chances were go od; but they knew that there was no certainty about their getting planning permi ssion. Anybody who buys property knows, and certainly those who buy property as property developers know, that there are all kinds of hazards which have to be t aken into consideration. There is the obvious hazard of planning permission. The re is the hazard of fiscal and legislative changes. There is the hazard of exist ing legislation being applied to the property under consideration -- compulsory purchase, for example. Amongst the hazards are the provisions of s 54 of the 197 1 Act. That seems now to be a well-known hazard, as is shown by the form of enqu iry before contract which was made by the plaintiffs in this case. They used a p rinted form. The printed form asked whether the property had been listed. Simila rly, when they came to make a search in the local registry of land charges, once again they made specific enquiries whether there had been any listing of the pr emises. All that adds up, in my judgment, to indicating that those who deal in p roperty nowadays appreciate the existence of these kinds of risks. At common law anyone entering into a contract for the purchase of real property had to accept the risk of damage to the property after the contract had been made. Damage to the property nowadays can arise from causes other than fire and tempest. Financi al loss can arise from government intervention. This is a risk which people have to suffer. In my judgment, from the very outset the property company had to take the risk o f the very thing happening which did happen, namely that after the contract had been made the property which was the subject-matter of that contract would be li sted under the provisions of s 54 of the 1971 Act. The matter, for me, is a fair ly simple and straightforward one.The risk existed. In part it has fallen on the property company, but only in part, because under the provisions of s 55 of the 1971 Act, they can apply for 'listed building consent'. What does that mean? It means this, that getting planning permission for the development of property wi ll be more difficult, but not impossible. 'Listed building consent' has become o ne aspect of getting planning permission. The evidence in this case was that the plaintiffs have a strong case for getting planning permission; and, if that be so, how can it be said at this time that t

he contract for the purchase of the land has been frustrated? Like Buckley LJ, I assume that the doctrine of frustration does apply to a contract for the purcha se of real property. There is still, I should have thought, opportunity for the purchasers of this warehouse to get the planning permission which they want. The fact that this court has already in two judgments made some observations about the way that this warehouse came to be listed may not be a further handicap to t hem in getting what they want. These are additional reasons why I would dismiss this appeal. JUDGMENTBY-3: SIR JOHN PENNYCUICK. JUDGMENT-3: SIR JOHN PENNYCUICK. I agree that this appeal should be dismissed. I agree with the conclusions of Plowman V-C and with the judgments delivered by Buckley and L awton LJJ. I would also like at the outset specifically to associate myself with the comments made by Buckley and Lawton LJJ on the way in which the provisions of Part IV of the Town and Country Planning Act 1971 have been operated in the p resent case. I will make summarily my own comments on the two issues involved. 1. Mistake. At the date of the contract, namely 25th September 1973, the propert y had not in fact been listed. The parties were therefore under no mistake in be lieving that the property was not subject to any existing fetter in this respect . Counsel for the plaintiffs accepts that, but contends that there was a common mistake, that mistake arising from the belief of the parties that the property w as ripe for development, i e (as he puts it) suitable for and capable of develop ment, whereas in truth it was not ripe for development because the listing of th e property was then pending and would prevent development. It is certainly true that knowledge that the listing of the property was under consideration in the o ffice concerned would vitally affect the minds of the parties negotiating the pu rchase of the property. There is no need to stop at Miss Price. One can go back to the field officer and perhaps beyond her. The mere possibility that the prope rty would be listed would certainly affect the mind of anybody contemplating a p urchase of the property and considering what price he was prepared to pay. I thi nk, however, that the mere possibility or probability, be it small or great, of some future event occurring is too uncertain to be taken into account in conside ring whether the belief of the parties as to ripeness for development should be treated as mistaken. The purchaser of property takes subject to the risk of futu re events, and it is for him to evaluate these risks in considering whether to b uy and at what price. The possibility of listing is inherent in any building tod ay and represents to my mind precisely such a risk. Of course, in this connectio n, as in many others, future events involve present intention in the minds of so meone or other -- here the officials of the department concerned -- but I do not think it is legitimate to treat future events as present facts on this ground. I agree that this court is bound by the decision in Solle v Butcher n1, and I wi ll not pursue the very interesting discussion whether that decision is or is not consistent with the decision of the House of Lords in Bell v Lever Brothers Ltd n2.

n1 [1949] 2 All ER 1107, [1950] 1 KB 671 n2 [1932] AC 161, [1931] All ER Rep 1 2.Frustration. The contract dated 25th September 1973 is a contract for the sale and purchase of a specified property at a specified price. Certainly the purpos e of the plaintiffs was to develop the property, and the plaintiffs would not ha ve paid a fraction of the price which they contracted to pay if they had known t hat the property would not be available for development. Again certainly, the de

fendants knew the plaintiff's purpose and knew that the price would have been mu ch less if the plaintiffs had known that the property would not be available for development, even if the plaintiffs had been willing to purchase at all. But, o n the other hand, it was not a term or condition of the contract that the proper ty should continue to be available for development at the date of completion; no r, I think, can such a condition be implied into the contract. The subject-matte r of the contract is simply a specified piece of land described in the contract and nothing more. Can it then be said that listing before completion frustrated the contract? We were referred to Davis Contractors Ltd v Fareham Urban District Council n1 in the House of Lords, in particular to the speech of Lord Radcliffe. I will read again the passage already cited from his speech n2:

n1 [1956] 2 All ER 145, [1956] AC 696 n2 [1956] 2 All ER 145, at 160, [1956] AC 696 at 728 'So, perhaps it would be simpler to say at the outset that frustration occurs wh enever the law recognises that, without default of either party, a contractual o bligation has become incapable of being performed because the circumstances in w hich performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do.' In the present case, the contract was one of which, on the date of its signature , specific performance would have been ordered. Consequently, the plaintiffs bec ame, in equity, the owners of the property subject, of course, to the vendors' l ien: see Williams on Vendor and Purchaser n3. The listing struck down the value of the property as might a fire or a compulsory purchase order or a number of ot her events. It seems to me, however, that the listing did not in any respect pre vent the contract from being carried to completion according to its terms; that is to say, by payment of the balance of the purchase price and by conveyance of the property. The property is nonetheless the same property by reason that listi ng imposed a fetter on its use. It seems to me impossible to bring the circumsta nces of the present case within the test enunciated by Lord Radcliffe. One canno t say that the circumstances in which performance, i e completion, will be calle d for would render that performance a thing radically different from that which was undertaken by the contract. On the contrary, completion, according to the te rms of the contract, would be exactly what the purchaser promised to do, and of course the vendor.

n3 4th Edn (1936), p 547 For those reasons, I would dismiss the appeal. DISPOSITION: Appeal dismissed. Leave to appeal to the House of Lords granted. SOLICITORS: Nabarro, Nathanson (for the plaintiffs); Coward Chance (for the defendants).