CA 2024 002410 - [2025] EWCA Civ 1374

This is a summary of the background to this matter. I have taken the facts from the judgment of HHJ Klein and reference should be made to his judgment for more comprehensive details.

Harworth was the freehold owner of the Holiday Park. It was marketed as a holiday park including an area for static caravans known as the “Bowl”. Closed bids were invited. Outline planning permission had been obtained which allowed static caravans to be sited in the Bowl subject to a limit on the number of pitches. Flannigan Enterprises Limited was the successful bidder, offering £3 million. Westfield, an associated company, in which Mr Flannigan was also interested, was the eventual purchaser.

During his investigations, Westfield’s solicitor, Mr Breathnach, discovered that there is a “Zone of Influence” around the heads of the two mineshafts of the former colliery which are within the Bowl. As the judge records at [8] of his judgment, a zone of influence is described in the then Coal Authority Guidance Note (“Mine Entry Zone of Influence Metadata” 9 October 2014) (the “Guidance Note”) as a buffer around a mine entry which could be affected were there a collapse. The Guidance Note refers to each mine entry having a zone of influence buffer around the mine entry “calculated from the same algorithm used in producing a “Mine Entry Interpretative Report””. It also states that the calculation of the area of the zone of influence “takes into account the size of the mine entry entrance, the geological “drift” deposits for the area and the original source from which the mine entry was captured.”” It goes on to state that where “the calculated ZOI is less than 20m then a default value of 20m is used.” The Guidance Note also explains that in designating a zone of influence “local geographical conditions” are not taken into account and that the designation is “mathematical”.

Mr Breathnach spoke to his client, Mr Flannigan, on 7 July 2021. In his attendance note of that conversation Mr Breathnach recorded that he had stated that he would like a Mr Neil Catlow (who provided Mr Breathnach’s firm with advice about historic mining activities) to “advise upon the zone of influence we have to keep clear around the mineshafts . . .” Mr Breathnach contacted Mr Catlow by email and Mr Catlow responded on 8 July 2021 stating, amongst other things, that:

“The Coal Authority require a “zone of influence” around treated mineshafts in which no building can be constructed. On this site though there may be some flexibility and I will ask the CA for their views.”

Having raised the issue with Ms Toolan, who had conduct of the matter on behalf of Harworth, Mr Breathnach spoke to a Mr Parry of the Coal Authority on 29 July 2021. Mr Breathnach’s attendance note of that conversation records the following, amongst other things:

“. . .

He advised that there is a zone of influence comprising a radius of 27 meters [sic] from the centre point of each mineshaft.

. . .

He did go on to say that the zone of influence may be reduced but they would need to consult the surveyor’s abandonment report. This is however contained in the archives in Macclesfield which is currently [inaccessible] due to covid restrictions.

. . . ”

On the same day, Mr Breathnach emailed Ms Toolan and informed her of the Zone of Influence of 27 metres from the centre of each mineshaft and noted, amongst other things, that:

“The net effect is that an area of approximately 4600 sq meters [sic] is undevelopable and this area falls within the zone within which the proposed static caravans can be situated.”

Mr Breathnach emailed Ms Toolan again on 17 August 2021. He mentioned that their respective clients were agreeable to a revised purchase price of £2.6m. He went on: “Should the Zone of Influence prove not to apply and those areas prove developable within 12 months of completion then my client will pay an additional £400,000.” He added:

“This is on the basis that my client has unfettered use of the area currently classified as being a Zone of Influence. In the event that partial use of the Zone of Influence is allowed then my client will pay £10,000 per caravan pitch which can be located with these radiuses up to a maximum of £400,000.”

Ms Toolan took instructions from Mr Massie, Harworth’s asset manager, and responded on 20 August 2021. She stated that she had spoken with her client “on the mechanism” and that they had commented that they were:

“. . . broadly in agreement with this and happy for Katie [Toolan] and Martin [Breathnach] to draft something to reflect this. However, I query the £10,000 per pitch which I think would be hard to quantify in practice, i.e., how many sqm is a pitch?

I calculate the current zone of influence suggested by the coal authority to be 4,580.44m2.

Given the buyer bid £3M in the knowledge that they could not put a caravan directly on top of the cap I have deducted the area of the caps from the calculation . . . .

Total = . . . 4,496.28m2

Therefore my favoured calculation method within the clause would be to include a price for m2 ‘released’ by the Coal Authority. i.e. £400,000/4,496.28 = £88.96 per m2.”

Mr Breathnach replied on 25 August 2021 stating that dealing with the matter on a square metre basis and the formula which had been set out was agreed.

Under the Agreement (dated 14 October 2021), Westfield agreed to pay the Purchase Price of £2.6million and covenanted by clause 2.2 to pay “the Released Land Payment” defined as “a sum of up to £400,000 . . . calculated in accordance with the provisions of Schedule 4 of the Sale Agreement. . .”. Schedule 4, which is incorporated into the Agreement by clause 1.4, contains a number of definitions:

“Long Stop Date” means the date 12 months from the date hereof

“Released Land Value” means the price per m² “released” by the Coal Authority

“Zone of Influence” means an area designated by the Coal Authority as a 27m zone of influence centred on each of the 2 mine shafts at the Property less the area directly on top of the two shafts (which the parties acknowledge is not considered to be suitable position to site a caravan) and being 4,496.28m². . ”

Where relevant, schedule 4 then provides as follows:

“1.1

The Seller has requested the size of the Zone of Influence is reduced by the Coal Authority and continues to make representations to this end.

1.2

The Seller may but is under no obligation to use its reasonable endeavours to engage with the Coal Authority to reduce the Zone of Influence until the Long Stop Date.

. . .

3

Released Land

3.1

If prior to the Long Stop Date the Coal Authority confirm in writing that the Zone of Influence is reduced the Seller will provide evidence of such release to the Buyer and the Released Land Value will be calculated at a rate of £88.96 per m² or part thereof.

. . .

4.

Payment of the Released Land Value

The Released Land Value will be payable by the Buyer to the Seller within 30 days of written demand or of determination of the Released Land Value in the event of a dispute.

5.

Use of the Land within the Zone of Influence

The Buyer will not locate any caravans erect any temporary or permanent buildings or park any vehicles within the Zone of Influence.

. . . ”

Harworth liaised with the Coal Authority in relation to the Zone of Influence through its geotechnical consultants, RSK Geosciences. On 31 May 2022, the Coal Authority wrote to RSK Geosciences, as follows:

“. . .

I can confirm that, as you state, no objection has been raised in regard to the siting of static caravans other than they should not [at] any point infringe on or over the mineshafts protective capping slabs.

We note that you concur with our opinion that any permanent building structures should not be built within the calculated zone of influence, equating here to 25m from the centre of each recorded mine shaft…”

As a result, on 6 July 2022, Harworth’s solicitors demanded payment from Westfield pursuant to clause 3.1 of Schedule 4 of the Agreement. Payment was refused on the basis that there was no confirmation in writing from the Coal Authority that the Zone of Influence had been reduced or that it may be reduced in accordance with clauses 3.1 and 3.2 of Schedule 4.

RSK Geosciences contacted the Coal Authority again and on 15 September 2022, the Coal Authority wrote to RSK Geosciences in the following terms:

“. . . I can confirm that, as you state, no objection has been raised in regard to the siting of static caravans other than they should not [at] any point infringe on or over the mineshafts protective capping slabs.

Following a review of the engineering appraisals completed and as reported in letters dated 1^st October 2021 … and 4^th May 2022 … the Coal Authority are in agreement with RSK that the calculated zone of influence, where temporary structures (i.e. static caravans) cannot be placed, can be reduced. Specifically, we confirm that the zone of influence is reduced from a radius of 27 metres centred on each of the 2 mine shafts at the Property to a zone of influence with a radius of 3.66 metres centred on each of the 2 mine shafts (with 3.66 metres being the radius of the caps).

The agreement to reduce the zone of influence only applies to the siting of static caravans and does not include permanent structures. Caravans should not be placed in the zone of influence areas. Any change of use would require reassessment and Coal Authority Approval …”

(the “15September Letter”).

Mr Breathnach, acting on behalf of Westfield, then emailed Mr Leigh Sharpe of the Coal Authority on 13 October 2022:

“. . .

I have been provided with a copy of your letter to RSK Geosciences dated 15^th September 2022 which has created a bit of confusion here. I read it as possibly alluding to there being two Zones of Influence (i.e. one for permanent structures and one for static caravans). Having looked into this, I understand that there can only be one Zone of Influence and that an area of land is either within the Zone of Influence or it isn’t.

…can you confirm that there is still only one Zone of Influence and that this remains at 27 metres, i.e. it hasn’t been reduced?”

Mr Sharpe responded the same day, as follows:

“. . .

I can confirm that as you state there is essentially just one zone of influence for the shafts which is the 27m radius referred to, this has not been reduced, and reflects the possibility of minor residual settlements could still take place. The 3.66 radius refers to what is best described as an exclusion zone in which no built development should take place including placement of static caravans, temporary or permanent buildings, services or utilities. Beyond this exclusion zone the placement of static caravans is permissible but no permanent structures/buildings can be constructed with the 27m (radial zone of influence).

. . . ”