In Aspire Luxury Homes (Eversley) Ltd v Hart District Council [2020] EWHC 3529 (QB); [2020] PLSCS 232, the High Court held that it was not an abuse of process to bring an ordinary civil claim, rather than a judicial review, concerning the construction of a section 106 agreement under section 106 of the Town and Country Planning Act 1990.
The developer purchased land with the benefit of planning permission granted in 2015 for the construction of six houses. The permission was subject to a section 106 agreement which contained affordable housing obligations restricting the sale of more than two open market units until two of the new dwellings on the land had been provided as affordable housing.
The developer was unable to find a registered provider for the affordable units and the council did not accept the offer to take a transfer of the units themselves. The developer therefore issued a claim seeking a declaration that the affordable housing obligations ceased to apply as the mechanisms under the agreement had been exhausted and the two dwellings earmarked for affordable housing could now be sold on the open market.
The council applied for the claim to be struck out on the basis that the issue was one of public law which can, or should be, raised by way of a claim for judicial review. They argued that the claim should either be struck out or be transferred to the Planning Court and directed to continue as if commenced under CPR Part 54. The council also argued that the claim was an abuse of process.
The judge rejected the council’s argument of the claim being an abuse of process and said that there is a key distinction between the validity of a section 106 agreement and its construction.
The former, he said, is highly likely to be a question of public law, suitable only for judicial review (save where it is raised as a defence to an ordinary claim by the local planning authority to enforce an agreement).
The construction of an agreement, however, is no different in principle to the construction of any contract. The dispute here was about the meaning of the agreement and whether the claimant had discharged its obligations under the agreement, and so a claim under CPR Part 7 is available.
Sejal Patel is an associate solicitor in the planning team at Irwin Mitchell
