Excavation of clay — Restoration of site by means of deposit of refuse — Option agreement (for lease and underlease) with local authority governing nature of refuse — Request for variation of covenants refused by authority — Judicial review — Appeal — Whether variation of covenants amount to a ‘disposal of land’ for the purposes of section 233 of the 1990 Act
The
respondents, Blue Circle Industries plc, had applied to Essex County Council
for planning permission to dig for clay in land within the area of the
appellants, Thurrock Borough Council. The appellants were concerned, inter
alia, to ensure that restoration of the site was achieved solely by means
of the deposit of high density baled domestic refuse and such other waste
materials as the appellants might from time to time agree. Furthermore, they
wanted to monitor the restoration of the site by means of the respondents
granting a lease to them and taking back an underlease. It was acknowledged
that the latter aspect was not a matter which was appropriate for planning conditions
or a planning agreement, and on July 20 1983 the respondents and the appellants
entered into an option agreement for a lease and an underlease. On the same day
planning permission was granted. The lease and underlease permitted the deposit
of high density baled domestic refuse and such other waste materials as might
from time to time be agreed between the parties, but contained no provision
that consent to a variation of the relevant covenant should not be unreasonably
withheld.
In 1991 the
respondents sought a variation of the covenant (to permit the deposit of
domestic refuse which was not subjected to high density baling), which would
have resulted in a considerable financial saving to them if accepted. The
appellants, through their senior officers, refused to agree without
consideration being paid for the variation. The respondents applied to the High
Court for judicial review of this decision on various grounds. Their
application was allowed by MacPherson J, who
or of any interest in land and that in those circumstances there was no duty on
the appellants to achieve the best price for the variation: see [1994] 2 PLR 1.
The appellants
appealed.
The option was
acquired by the appellants for planning purposes. The variation sought by the
respondents did not, however, amount to a ‘disposal of land’ within the meaning
of section 233 of the Town and Country Planning Act 1990. The natural and
normal meaning of the word ‘dispose’ was such that a disposal of a right or
interest was a transaction which resulted in the disponer no longer having the
right or interest at all. Assuming, in the present case, that the covenant
created a right over land the variation in the terms of the covenant would
amount to a variation of that right, but the right itself would still remain:
see pp30F-31F.
to in the judgment
Astley v Manchester, Sheffield & Lincolnshire Railway Co (1858)
27 LJ Ch 478; (1858) 2 DE E&J 453
Appeal against
decision of MacPherson J
This was an
appeal by Thurrock Borough Council against the decision of MacPherson J on
March 22 1994 allowing an application by Blue Circle Industries plc for
judicial review of a decision made by the council in respect of a request for
the variation of an option agreement dated July 20 1983 and certain related
documentation: [1994] 2 PLR 1.
QC and Nigel Gerald (instructed by the solicitor to Thurrock Borough Council)
appeared for the appellants.
Beloff QC and Robin Campbell (instructed by Nicholson Graham Jones) appeared
for the respondents, Blue Circle Industries plc.
following judgments were delivered.
GLIDEWELL
LJ: This is an appeal by Thurrock Borough Council
(‘Thurrock’) against a decision of MacPherson J who, on March 23 1994, on an
application by the present respondents (‘Blue Circle’), for judicial review
granted a declaration in terms to which I shall refer.
In order to
understand the declaration it is necessary to summarise the material facts,
which are not in dispute.
Blue Circle
own a large area of land at South Ockenden in Essex. In 1981-82 they wished to
obtain planning permission for the winning and working of clay from a part of
that land and for the refilling and reinstatement of the excavated site. Essex
County Council were both the minerals planning authority, who would decide the
application for planning permission, and the waste disposal authority. Essex
were, however, required to take into account when deciding whether to grant
planning permission any views expressed by Thurrock.
At that time
Thurrock were supporters of a process of waste disposal known as high density
baling. They made it clear that they would object to the refilling of the site
being effected by any other process.
On December 2
1981, after a meeting at Thurrock, Blue Circle wrote that they were
prepared to
meet your member’s preference for using baled refuse.
On December 22
1981, after a further meeting, Blue Circle brought forward specific proposals.
These included the following:
6. Prior to
the commencement of waste disposal in the application area, the company will
grant a lease of the waste disposal area to Thurrock BC on terms that may be
agreed between the parties for the period of the reclamation. Thurrock BC will
in turn grant an underlease to the company for a similar period, again on such
terms as may be agreed between the parties.
7. Waste
disposal will be by baled system or some equivalent technique acceptable to the
Borough Council, the company and the Waste Disposal Authority.
This was
acceptable to Thurrock, who in turn agreed to withdraw their objection to the
application. There followed negotiations about the detailed terms of the
proposed lease and underlease.
On July 20
1983 Essex County Council granted planning permission to Blue Circle for the
extension of clay workings on 220 acres of land at South Ockenden, subject to
conditions which did not specifically require reinstatement to be with baled
refuse. Condition 18 required that:
Any material
deposited on the site for restoration shall be compacted by such means and with
such equipment as has been previously agreed by the Minerals Planning Authority.
Essex and Blue
Circle also concluded an agreement under section 52 of the Town and County
Planning Act 1971.
On the same
date, by an agreement under seal, Blue Circle granted an option to Thurrock to
take a lease of the site of the clay working, or of such part of it as was the
subject of the notice by Blue Circle to Thurrock that the land had been
excavated and was available for restoration. The lease is to be for a term of
25 years at the yearly rent of £ 5 (if demanded). Thurrock are then under an
obligation to grant an underlease back to Blue Circle for the same term at the
same rent. The option provides that the lease and the underlease shall be in
the form of documents annexed to the option.
The preamble
to the proposed lease provides that it is to be entered into:
Pursuant to
the powers contained in Part VI of the Town and Country Planning Act 1971 and
all other powers
which enable
Thurrock to take such a lease. Part VI of the 1971 Act is
Clause 2(e)(i)
of the lease and clause 2(c)(i) of the underlease contain covenants by Thurrock
and Blue Circle respectively in identical terms:
Not to use the
demised land or any part thereof or carry out any operations thereon except
(i) for the deposit of certain waste materials
being high density baled domestic refuse and such other waste materials as may
from time to time be agreed between the parties; . . .
The option has
not yet been exercised and so neither the lease nor the underlease has yet been
executed.
After the
grant of the option nothing material happened for some eight years. Then by a
letter dated April 24 1991 to Thurrock, Blue Circle requested that Thurrock
should:
give
consideration to amending the appropriate clauses to read:
‘not to use the
demised land or any part thereof or carry out operations thereon except for the
deposit of certain waste materials as may from time to time be agreed between
the parties.’
In other words
what Blue Circle were seeking was the deletion from the relevant clauses of
both the lease and the underlease of the words:
being high
density baled domestic refuse and such other waste materials . . .
By letter
dated June 14 1991 Thurrock replied that:
At officer
level, there is no objection to your proposed lease variation subject to
consideration (money or monies worth) being paid by your company. The lease
variation will enable your company to make savings from loose landfill as
opposed to the costs of baled waste. Therefore, please let me know what
consideration you are prepared to offer.
By letter
dated January 26 1993, Blue Circle made it clear that what they had in mind
was:
The disposal
of household waste in crude form (that subject of course to modern on-site
compaction techniques . . .) commercial and solid non-hazardous industrial
wastes, including inert builders’ waste and soils, and incinerator residuals
and asbestos wastes — the range of materials already permitted by Planning and
Site Licence at the active landfill operation.
The letter
sought Thurrock’s agreement to these materials as being:
such other
waste materials as may be agreed between the parties.
To this
Thurrock replied:
The Council’s
position is unchanged; the workings must be filled with high density baled
domestic refuse. The filling with crude waste and the other
The Council
may however be prepared to modify its position and consent to an amendment to
the agreement subject to the resolution of terms.
In a letter
dated February 11 1993 seeking technical advice, Thurrock said:
We have
however let it be known that if we can share in the financial savings realised
from the variation we will reconsider our position.
The dispute
between the parties thus remained unresolved and on April 30 1993 Blue Circle
made their application for leave to move for judicial review of the decision of
Thurrock communicated in the two letters of February 1993. Blue Circle sought
orders quashing Thurrock’s decision, and requiring the council to consider Blue
Circle’s request according to law and a declaration that:
Thurrock is
not entitled to demand money or monies worth as consideration for the variation
of the agreement or for agreeing other materials thereunder.
MacPherson’s
judgment
Before
MacPherson J, Mr Michael Beloff for Blue Circle submitted:
1. The option
agreement with the draft lease and underlease appended was entered into in
order to overcome the objection of Thurrock to the grant of planning permission
for the excavation and refilling of the site. Thus, in considering the request
by Blue Circle for a variation of the terms of the lease and underlease,
Thurrock were bound by the principles of public law and were not entitled to
respond as if they were parties to an agreement subject only to the private law
of contract.
2. It is a
basic principle of public law that a local authority may only use the powers
granted to them by statute for the purpose for which those powers are granted,
not for some unrelated purpose, however desirable that other purpose may be in
the interests of the local authority themselves. Thurrock have made it clear
that they no longer require the site to be refilled with domestic refuse which
has been processed by high density baling. They are prepared to agree to the
alteration of the relevant clauses of the lease and underlease sought by Blue
Circle, thus allowing the deposit of unbaled domestic refuse and of other agreed
specified waste materials, but only in return for a payment. It is clear, and
Mr Joseph Harper for Thurrock does not suggest otherwise, that Thurrock seek to
share in the saving of the additional cost involved in the process of high
density baling. However desirable such a payment may be for Thurrock’s council
tax payers, it is not a purpose for which Thurrock are entitled to use the
rights granted to them by the option agreement.
Before the
judge, Mr Harper, for Thurrock, disputed the submission that in relation to the
variation of the option agreement, his clients are bound by public law
principles. The judge held against him on this issue and Thurrock do not seek
to appeal against this conclusion.
Mr Harper,
however, advanced another argument, on which the judge also decided against
him. It is this part of the judge’s decision which is challenged in this
appeal.
Mr Harper’s
argument is primarily based on section 233 of the Town and Country Planning Act
1990. So far as is material this provides:
233.–(1) Where any land has been
acquired or appropriated by a Local Authority for planning purposes and is for
the time being held by them for the purposes for which it was so acquired or
appropriated, the Authority may dispose of the land . . . in order:
(a) to secure the best use of that or other land
. . .
(3) The consent of the Secretary of State is . .
. required where the disposal is to be for a consideration less than the best
that can reasonably be obtained . . .
The definition
of ‘land’ in section 336 of the 1990 Act includes:
. . . in
relation to the acquisition of land under Part IX, includes any interest in or
right over land.
Section 233 is
within Part IX of the Act. Alternatively, if a local authority acquire land for
purposes other than planning purposes, provisions similar to those in section
233(3) are contained in section 123(2) of the Local Government Act 1972.
The proposed
lease when granted would clearly be ‘an interest in land’ and so would the
option which, though not yet executed, creates an equitable interest. The
covenants contained in clause 2(e)(i) of the lease and 2(c)(i) of the
underlease, Mr Harper argues, create either an interest in land or a right over
land.
An agreement
by Thurrock to the variation of those covenants, as sought by Blue Circle,
would detract from Thurrock’s rights, and thus be the disposal of an interest
in or a right over land, for which Thurrock are not merely empowered but
required by section 233(3) to demand the best consideration which can
reasonably be obtained. Thus, their demand for payment in return for their
agreement to the variation sought by Blue Circle is lawful.
Conclusion
In my
judgment, the option was acquired by Thurrock for planning purposes. I need not
elaborate on this, because Mr Beloff does not argue to the contrary. It
suffices to say that I reach this decision by way of sections 246(1), 227(1)
and 226(1)(a) of the 1990 Act.
The issue
between the parties is, would the agreement and variation sought by Blue Circle
amount to a ‘disposal of land’ within the meaning of section 233 of the 1990
Act?
Blue Circle
are seeking agreement to two different though related matters:
(a) the variation of the relevant covenants in
order to delete the requirement that domestic refuse be ‘high density baled’; and
(b) agreement that the other types of waste
material described in Blue Circle’s letter of January 26 1993 may be deposited
in the excavated site.
As to the
second of these matters, such an agreement is provided for and envisaged by the
terms of the covenant. For Thurrock to agree to such materials being deposited
would not in any way vary or detract from the rights granted to them by the
option and by the proposed lease. Thus, in my view, such an agreement cannot be
described as a disposal of land.
Would the
variation of the covenant to permit the deposit of domestic refuse which was
not subjected to high density baling be a ‘disposal of land’? I do not think it necessary to decide
whether, when the lease and underlease are executed, the relevant covenants
will create a ‘right over land’. It is sufficient to consider whether the
variation would be a disposal.
The word
‘disposal’ is defined in section 336 of the Act of 1990 as:
means
disposal by way of sale, exchange or lease, or by way of the creation of any
easement, right or privilege, or in any other manner, except by way of
appropriation, gift or mortgage, and ‘dispose of’ shall be construed accordingly.
Mr Harper
accepts that the variation of the terms of the covenants would not come within
any of the express words of that definition, but he argues that it would be a
disposal ‘in any other manner’. Mr Beloff counters that a disposal of a right
or interest is a transaction which results in the disponer no longer having the
right or interest at all. To use Mr Beloff’s cryptic phrase, he ‘gets rid of
it’. I agree that this is the natural and normal meaning of the word ‘dispose’.
Thus, I also agree with Mr Beloff that an agreement to vary a right is not
normally a disposal of that right. In this case, assuming that the covenants
would create a right over land, the variation in the terms of the covenant
would amount to a variation of that right, but the right itself would still
remain. Thus, in my judgment, such a variation would not be a disposal of the
right.
I thus agree
with MacPherson J that the variation would not be a ‘disposal of land’. It
follows that, in my judgment, section 233(2) of the Act of 1990 does not apply
to the variation sought by Blue Circle. For these reasons I would dismiss the
appeal.
SIMON BROWN
LJ: The question raised by this appeal is whether
Thurrock’s agreement under clause 2(c) of the underlease to permit the deposit
of ‘other waste material’ than ‘high density baled domestic refuse’ would
constitute the ‘disposal of land’ within section 233 of the Town and Country
Planning Act 1990.
‘Land’ is
defined by section 336 of the Act to include ‘any interest in or right over
land’.
Mr Harper’s
basic argument I understand to be this: such an agreement would indeed
constitute the disposal of an interest in land or a right over land; it would
involve relinquishing and thereby disposing of Thurrock’s absolute contractual
right under the existing covenant to refuse to allow Blue Circle call to
deposit waste materials on the land other than ‘high density baled domestic
refuse’.
Like Glidewell
and Nourse LJJ, I find myself unable to accept that submission. Rather, I
prefer Mr Beloff’s contrary argument that the ‘disposal of land’ involves not
merely the relaxation of contractual rights relating to an aspect of the use of
land but rather some altogether more fundamental surrender of proprietorial
rights.
Given the
width of the definition of ‘disposal’ in section 336, I, for my part, would
decide this appeal on the footing that, whether or not Thurrock’s postulated
agreement would constitute a disposal, it would certainly not be a disposal of
‘any interest or right over land.’
I, too,
therefore would dismiss this appeal.
NOURSE LJ: For the reasons given by Glidewell LJ I agree that Thurrock’s
consent to a variation of the covenant in clause 2(c)(i) of the underlease so
as to permit the deposit of the other types of waste material described in Blue
Circle’s letter of January 26 1993 could not amount to a ‘disposal of land’
within section 233 of the Town and Country Planning Act 1990.
The only real
question is whether a variation of the covenant so as to permit the deposit of
domestic refuse which is not high density baled could amount to such a
disposal. In my view, it is clear that it could not, first, because the
variation would not be a disposal and, second, because the subject-matter of
the variation would be neither an interest in nor a right over land.
By section
336(1) of the 1990 Act ‘disposal’ is defined to mean:
disposal by
way of sale, exchange or lease, or by way of the creation of any easement,
right or privilege, or in any other manner, except by way of appropriation,
gift or mortgage, and ‘dispose of’ shall be construed accordingly.
Here Mr Harper
can rely only on the words ‘disposal . . . in any other manner’ and he has to
show that a variation of the covenant would be a disposal according to the
ordinary legal meaning of that word. That he has failed to do. As the
particular examples given in the definition demonstrate, a disposal is a
transaction by which there is an out and out parting with an asset or, where
there is a context such as is found here, a proprietary interest in an asset.
The relaxation of a right to control the use of land, the right as varied being
retained, is not such a transaction. Although we were referred to no authority
on the point, reference might usefully have been made to the observations of
Lord Chelmsford LC in Astley v Manchester, Sheffield &
Lincolnshire Railway Co (1858) 27 LJ Ch 478, at p481, where he said of
section 128 of the Lands Clauses Consolidation Act 1845:
It seems to
me that this construction of the word ‘dispose’ cannot be maintained. The Act clearly
contemplates by the use of the word the transfer of the land to some other
person, not the application of it by the company to a different purpose.
The definition
of ‘land’ in section 336(1) is:
any corporeal
hereditament, including a building, and, in relation to the acquisition of land
under Part IX, includes any interest in or right over land.
Although Mr
Harper maintained the point, it is, in my view, impossible, in ordinary legal
parlance, to describe a right for a landlord to control the use by his tenant
of the land demised as an interest in the land. Nor, for my part, can I accept
that it is a right over land for the purposes of a definition applicable
indifferently to every provision of Part IX of the 1990 Act. Such a definition
cannot have been intended to go beyond easements, profits a prendre and
other rights over another’s land such as are comprehended in section 62 of the
Law of Property Act 1925; cf the definition in section 270(1) of the
Local Government Act 1972, which would have applied here had the land not been
acquired and held for planning purposes:
‘Land’
includes any interest in land and any easement or right in, to or over land.
I agree with
Mr Beloff that the right here is, at the most, a right in relation to land. It
is not a right over land.
For these
reasons I, too, would dismiss this appeal.
Appeal
dismissed with costs; leave to appeal to the House of Lords refused.
