Town and country planning – Planning permission – Planning obligation – Claimant acquiring land with benefit of conditional planning permission subject to agreement with affordable housing obligation binding on claimant – Claimant seeking declaration that obligation discharged – Defendant applying to strike out claim – Whether claim to be brought by judicial review – Whether claim was abuse of process as brought in parallel with planning appeal – Application dismissed
The claimant acquired land at the rear of Chantreyland, New Road, Chequers Lane, Eversley Cross, Hook, Hampshire with the benefit of conditional planning permission for the construction of six houses. That permission was subject to an agreement, under section 106 of the Town and Country Planning Act 1990, which bound the then owner of the land and any successor in title, including the claimant. Clause 14 of the agreement imposed on the claimant obligations relating to affordable housing. Essentially, two of the dwellings were required to be affordable housing units to be provided before more than two other new dwellings on the land could be sold on the open market.
The claimant was unable to find a buyer for the affordable housing units and wrote to the defendant local authority asserting that, on the proper construction of the section 106 agreement, and in the events which had happened, its planning obligation had been discharged and it was free to market the whole development with no surviving obligation to provide affordable housing. The claimant subsequently appealed to the secretary of state against the defendant’s failure to determine its application for a variation of the section 106 agreement; and issued a claim against the defendant under CPR part 7 seeking a declaration in support of its position that the planning obligation had been discharged, plus damages.
The defendant applied to strike out the claim contending, amongst other things, that: (i) the meaning of the section 106 agreement was an issue of public law which, applying the “exclusivity principle”, should have been raised by a claim for judicial review and not a civil claim under CPR part 7; and (ii) the claim was as an abuse of process, having been brought in parallel with a planning appeal.
Held: The application was dismissed.
(1) The court in a civil action could construe a section 106 agreement at the suit of a private party, i.e. not the local planning authority. The key distinction was between the construction of a section 106 agreement and its validity. The validity of a section 106 agreement was likely to be a question of public law, suitable only for judicial review, save where it was raised as a defence to an ordinary claim by the local planning authority to enforce the agreement. On the other hand, construction of a section 106 agreement was not different in principle from construction of any contract. Whilst arguments about abuse of process might arise in an individual case, there was no strong reason of principle why an issue over the meaning of a section 106 agreement should not be dealt with in the same way as the meaning of any other contract: Stroude v Beazer Homes Ltd [2006] 3 EGLR 115 considered. Trim v North Dorset District Council [2011] 1 EGLR 61 and Milebush Properties Ltd v Tameside Metropolitan Borough Council and another [2011] 2 EGLR 143 distinguished.
The court was fortified in that view by the decision of the High Court in Norfolk Homes Ltd v North Norfolk District Council [2020] EWHC 2265 (QB) where the judge allowed an application under CPR part 8 for a declaration that conditions contained in a section 106 agreement made in connection with an earlier grant of planning permission, properly construed, did not apply to development of the same land under a later grant of planning permission.
The choice of an ordinary civil claim in this case was not an abuse of process. There was a dispute about the meaning of the agreement and/or about whether, on the facts, the claimant had discharged its obligations under the agreement. That being so, a claim under CPR part 7 was an available route.
(2) Nor was there any apparent abuse from the claimant having also lodged a planning appeal. The appeal was against a refusal to vary the section 106 agreement. Although a claim was made in the appeal notice that the effects of clause 14 had been exhausted, the direct relevance of that assertion to the appeal was doubtful, and the main thrust of the appeal was clearly the quite different contention that development subject to the section 106 agreement was not viable. Therefore, whilst there was an overlap of subject matter, the appeal and the claim were different and did not duplicate each other.
(3) The purpose of a section 106 agreement was to make a development acceptable to the local planning authority. By such an agreement, a developer took on a “planning obligation”, performance of which ensured that the development was in accordance with relevant planning policy. In the present case, clause 14.3 contemplated the possibility of the affordable units being transferred to the defendant, but did not state either that the defendant was obliged to take the transfer or that the claimant was discharged from its obligation if the defendant declined.
The court was not persuaded that the claim should be struck out. Whilst it was not obvious that clause 14.3 discharged the obligation if the defendant declined to take a transfer, that was a possible interpretation. Clause 14 appeared to be concerned with what should happen if the landowner had difficulty in finding a provider of affordable housing at a suitable price. It was not obvious that the parties intended that, in that situation, the landowner should effectively be stranded in ownership of developed property which could not be sold. The question whether the claimant’s obligations had been discharged under clause 14 raised disputes of fact as well as law, which should be resolved at trial and not by a summary application. The meaning of clause 14 would need to be explored in light of whatever admissible evidence was adduced: R v East Sussex County Court, ex parte Reprotech [2002] UKHL 8; [2002] 2 PLR 60 considered.
(4) The application would be dismissed and it was not appropriate to transfer the case to the Planning Court to be continued as if commenced under CPR part 54.
Matt Hutchings QC (instructed by Holmes & Hills LLP of Braintree) appeared for the claimant; Saira Kabir Sheikh QC (instructed by Hart District Council) appeared for the defendant.
Eileen O’Grady, barrister
Click here to read a transcript of Aspire Luxury Homes (Eversley) Ltd v Hart District Council
