Town and country planning — Restrictive covenants overridden following acquisition and development of land for planning purposes — Site being redeveloped for second time — Whether section 237 of Town and Country Planning Act 1990 overrides restrictive covenant on second development
The respondent council acquired the
subject land piecemeal between 1954 and 1959. One area was acquired
compulsorily under section 38 of the Town and Country Planning Act 1947; the
remainder was acquired pursuant to a purchase notice. The second respondents
were granted a building lease and constructed a building on the site. In 1969
the council granted the applicants an area of adjoining land on which stands
their Hall; by the transfer the council covenanted not to interfere with light
or air passing through any of the windows of the Hall. Following an agreement
dated December 22 1995, the building was demolished and planning permission was
granted for the redevelopment of the site. The council contended that
interference with the rights of light and air to the Hall is authorised by
section 237(1) of the Town and Country Planning Act 1990.
237(1) did not cease to apply once the original purpose for which the council
acquired the land had been achieved. The council acquired, and continue to
hold, the site for planning purposes, namely for the purpose of securing its
development and redevelopment, and since the proposed redevelopment of the site
would be in accordance with planning permission, section 237(1) applies and
authorises the interference.
The following cases are referred to in
this report.
Allen v Gulf Oil Refining Ltd [1981] AC
1001; [1981] 2 WLR 188; [1981] 1 All ER 353; [1981] JPL 353, HL
Dowty Boulton Paul Ltd v Wolverhampton Corporation
(No 2) [1973] Ch 94; [1972] 3 WLR 321; [1972] 2 All ER 1073; (1972) 70 LGR
518
Tate & Lyle Industries Ltd v Greater London Council
[1983] 2 AC 509; [1983] 2 WLR 649; [1983] 1 All ER 1159; (1983) 46 P&CR
243; 81 LGR 433; [1983] 2 Lloyd’s Rep 117, HL
This was an application by way of
judicial review challenging the decision of the first respondents, City of
London Council, to proceed with development on their land by the second
respondents.
John Howell QC and Jonathan Karas
(instructed by Speechly Bircham) appeared for the applicant; Jeremy Sullivan QC
and Thomas Hill (instructed by the Controller and City Solicitor) represented
the first respondent; Malcolm Spence QC and Thomas Cosgrave (instructed by
Cannings Connolly) represented the second respondents.
Giving judgment, Dyson J said: This case concerns
section 237(1) and (2) of the Town and Country Planning Act 1990 (‘the 1990
Act’), which provides:
(1) Subject to subsection (3), the
erection, construction or carrying out, or maintenance of any building or work
on land which has been acquired or appropriated by a local authority for
planning purposes (whether done by the local authority or by a person deriving
title under them) is authorised by virtue of this section if it is done in
accordance with planning permission, notwithstanding that it involves —
(a) interference with an interest or
right to which this section applies, or
(b) a breach of a restriction as to the
user of land arising by virtue of a contract.
(2) Subject to subsection (3), the
interests and rights to which this section applies are any easement, liberty,
privilege, right or advantage annexed to land and adversely affecting other
land, including any natural right to support.
It is clear at once that the object of
subsection (1) is to provide local authorities carrying out their statutory
function with a defence to claims by third parties for interference with
certain private law rights. It seems that the true meaning of section 237(1)
(and its statutory predecessors) has not been the subject of previous decision.
Facts
The land to which this application
relates (‘the site’) was acquired piecemeal by the first respondents between
1954 and 1959. In 1954, the first respondents purchased compulsorily land known
as redevelopment unit 4, pursuant to section 38 of the Town and Country
Planning Act 1947 (‘the 1947 Act’). The purchase followed a resolution by the
first respondents on March 25 1954 to accept the recommendation of a report
that the proposals for the land be approved, and that the common council should
resolve that the acquisition of the land ‘is immediately necessary in the
interests of the proper planning of the area’. Section 38 of the 1947 Act
provides, so far as material:
(1) Where any land is designated by a
development plan under this Act as subject to compulsory acquisition by the
appropriate local authority, then if the Minister is satisfied —
(a) in the case of land comprised
in an area defined by the plan as an area of comprehensive development … that
the land is required in order to secure the development or redevelopment of the
said area
he may authorise the council of the
county borough or county district in which the land is situated, to acquire the
land compulsorily in accordance with the provisions of this section.
(2) If during the period before a
development plan has become operative under this Act with respect to any area,
the Minister is satisfied that the
(a) for any purpose which appears
to him to be immediately necessary in the interests of the proper planning of
that area …
he may authorise the council of the
county borough or county district in which the land is situated to acquire the
land compulsorily in accordance with the provisions of this section.
By the City of London (Area No 4)
Compulsory Purchase Order 1954, the first respondents were authorised:
to purchase compulsorily for the purpose
of securing a development, or redevelopment of the area, the land which is
described in the first schedule hereto …
The remaining part of the site was
acquired pursuant to purchase notices under section 19 of the 1947 Act. In
1962, a building lease of Shelley House was granted to the second respondents,
who proceeded to construct Shelley House on the site.
On September 12 1969 the first
respondents granted to the applicants land, which I shall call ‘the Hall’. The
Hall is separated from the site by London Wall and St Olave’s Churchyard. By
the deed of transfer, the first respondents covenanted with the applicants ‘not
to erect or suffer to be erected anything which shall cause any obstruction of
the light or air passing through any of the windows of the Hall’. This covenant
was later modified, but the changes are not material for present purposes.
The first respondents still own the
freehold of the site. It has now been decided by them to redevelop Shelley
House for commercial purposes ‘to improve the quality of the Estate and result
in a substantial increase in the income received’. On December 22 1995, the
first respondents entered into an agreement with the second respondents for the
demolition of Shelley House, and for the redevelopment of the site. Shelley
House is now being demolished. Planning permission has been granted for this
purpose. The redevelopment, which comprises the building of a new Shelley
House, will interfere with the right to light enjoyed by the Hall. The first
respondents have decided that section 237(1) of the Act authorises such
interference, and that the applicants’ consent is therefore not required. The
issue before me is whether, in the circumstances that have arisen, section 237(1)
does have that effect.
Issues
On behalf of the applicants, Mr John
Howell QC submits that section 237(1) does not have that effect since upon its
true construction:
(i) it ceases to apply once the original
purpose for which a local authority acquires the land has been achieved: this
occurred on the facts of this case, he submits, when Shelley House was
completed in the early 1960s; alternatively
(ii) the statutory authority to interfere
with third party rights does not apply where those rights have been granted by
the local authority themselves; the reach of the statutory provision in cases
of acquisition of land is limited to situations where a local authority
acquires land which is already subject to such third party rights.
First issue
Mr Howell submits that section 237(1)
should be construed so as to afford no greater immunity from third party claims
than is reasonably required to achieve the statutory purpose for which
authority is given by the statute to interfere with the third party rights referred
to in subsection (2). He cites Tate & Lyle Industries Ltd v Greater
London Council [1983] 2 AC 509 as illustrative of such an approach to
statutory interpretation in cases such as the present. He argues that, upon the
true construction of section 237(1), the statutory purpose for which authority
is given, is to enable the initial planning scheme for which the land was
acquired or appropriated to be achieved. In the instant case, that purpose was
the construction of Shelley House in the 1960s, and once that purpose was
achieved, section 237(1) could no longer apply to the site. On behalf of the
respondents, Mr Jeremy Sullivan QC and Mr Malcolm Spence QC submit that the
language of section 237(1) is plain and unambiguous. There is no reason to
construe ‘for planning purposes’ as restricted to the initial planning scheme
for which the land was acquired or appropriated. The phrase ‘for planning
purposes’ is quite general. Since the first respondents acquired, and continue
to hold the site for planning purposes, namely for the purpose of securing its
development and redevelopment, and since the proposed redevelopment of Shelley
House would be in accordance with planning permission, section 237(1) applies.
It can be seen that the real difference
between these rival submissions centres on the meaning of the phrase ‘for
planning purposes’. Section 246(1) of the 1990 Act provides:
(1) In this Part —
(a) any
reference to the acquisition of land for planning purposes is a reference to
the acquisition of it under section 226 or 227 of this Act or section 52 of the
Planning (Listed Buildings and Conservation Areas) Act 1990 (or, as the case
may be, under section 112 or 119 of the 1971 Act or section 68 or 71 of the
1962 Act) …
It is sufficient to refer to section 226
of the 1990 Act, which provides:
(1) A local authority to whom this
section applies shall, on being authorised to do so by the Secretary of State,
have power to acquire compulsorily any land in their area which —
(a) is
suitable for and required in order to secure the carrying out of development,
re-development or improvement; or
(b) is
required for a purpose which it is necessary to achieve in the interests of the
proper planning of an area in which the land is situated.
In my judgment, Mr Howell seeks to
construe the words ‘acquired … for planning purposes’ too narrowly. The words
are quite general, and are used to distinguish the case from one where
acquisition (or appropriation) is made for other purposes; for example, where a
local authority acquires land to hold for investment purposes, or for
educational purposes and so on. The language of section 68 of the 1962 Act and
section 226(1) of the 1990 Act is also quite general.
The concept of an initial development,
followed by cyclical redevelopment of the site is hardly esoteric. If
parliament had intended to restrict the application of section 237(1) to the
first development, which may well be the particular development that the local
authority had in mind when acquiring or appropriating the land, then, in my
view, different language would have been used. Support is to be found for the
wider interpretation in the language of the subsection itself. First, it refers
to ‘the erection’ of any building. ‘Erection’ includes ‘re-erection’: see
section 336(1) of the 1990 Act. Second, the use of the unrestricted words ‘in
accordance with planning permission’ indicates that the power is not confined
to the planning permission which underlay the original acquisition; different
planning permissions may be issued as planning policies change over the years.
There is nothing surprising about the
wider interpretation. The statutory objective which underlies section 237 of
the 1990 Act is that, provided that work is done in accordance with planning
permission, and subject to payment of compensation, a local authority should be
permitted to develop their land in the manner in which they, acting bona fide,
considers will best serve the public interest. To that end, it is recognised
that a local authority should be permitted to interfere with third party
rights. A balance has to be struck between giving local authorities freedom to
develop land held for planning purposes, and the need to protect the interests
of third parties whose rights are interfered with by local authority
development. Section 237(1) is the result of that balancing exercise.
Parliament has decided to give local authorities the right to develop their
land and to interfere with third party rights, but on the basis that work is done
in accordance with planning permission (with the protection inherent in the
planning process), and that third parties affected are entitled to compensation
under section 237(4).
It is difficult to see what rational
basis there could be for restricting the operation of section 237(1) to the
first development after acquisition or appropriation. Buildings become
obsolete. Sites have to be redeveloped from time to time. The need for a local
authority to be able to override third party rights is no less when it is
carrying out a
development.
As Mr Sullivan and Mr Spence point out,
it should not be overlooked that section 237(1) also applies where land has
been appropriated by a local authority. Suppose that Shelley House had been
acquired by the first respondents for educational purposes, and 30 years later
they decided that they wanted to redevelop the site as an office block for
purposes of commercial letting. They would appropriate the land for planning
purposes, and there could be no doubt that in those circumstances, subject to
the requirements as to planning permission and compensation, they could
interfere with the rights enjoyed over the land by third parties. It is
difficult to see why parliament should have intended that the first respondents
could override those rights in that situation, but not do so on the facts of
this case, where the site was acquired by the first respondents for the
purposes of constructing Shelley House in the first place.
Furthermore, there is a real practical
difficulty with Mr Howell’s interpretation. It would in many cases give rise to
considerable uncertainty as to how it was to be applied. Sometimes, if land is
acquired by a local authority for planning purposes, there will at that stage
be no definite decision as to the form of the actual development that is to
take place. Sometimes it will be intended that there is to be a development
with a number of phases. It may be uncertain whether it is to be regarded as
part of the initial development, or a later addition or variation of it.
I have already mentioned Mr Howell’s
reliance on the Tate & Lyle case. That was a case in which the
defendants sought to defend a claim in nuisance by relying on statutory authority.
The relevant statutory power permitted the LCC to construct terminals in the
River Thames in accordance with certain plans. The House of Lords construed
this statutory power as giving immunity from an action in respect of the
siltation that was inevitably caused by the works, but not in respect of the
additional siltation resulting from a failure by the LCC ‘to have all
reasonable regard and care for the interests of other persons’. The statutory
provision made no reference to reasonable regard and care for the interests of
other persons.
Mr Howell submits that this decision
illustrates a general principle, namely that a statutory authority should not
be construed as giving greater immunity from private law claims by parties
adversely affected by the exercise of a statutory power than is reasonably
necessary to enable the achievement of the statutory purpose for which the
authority is conferred. I am prepared to accept this as a useful statement of
the broad approach to be applied to the construction of statutory provisions
which confer on statutory bodies immunity from action at the suit of third
parties. But it can be no more than a broad approach. The background against
which the Tate & Lyle case has to be viewed is the well established
position at common law as to the limits of the defence of statutory authority
to an action for nuisance, which were summarised by Lord Wilberforce in Allen
v Gulf Oil Refining Ltd [1981] AC 1001, at p1011. The Tate & Lyle
problem has been expressly provided for by the draftsman of the 1990 Act, since
section 237(7) provides that:
Nothing in this section shall be
construed as authorising any act or omission on the part of any person which is
actionable at the suit of any person on any grounds other than such an
interference or breach as is mentioned in subsection (1).
The starting point for statutory
interpretation must always be the language that has been used by parliament. I
find nothing in the Tate & Lyle case which compels me to accept Mr
Howell’s narrow interpretation of section 237(1) which, for the reasons that I
have given, I am satisfied is incorrect.
Mr Howell also submits that the wider
construction of section 237(1) leads to unreasonable results, which cannot have
been intended by parliament. He points out that the section applies whether
work is done by the local authority or by a person deriving title under a local
authority. He postulates a case where: (a) a local authority acquires land for
a planning purpose, say, building a shopping centre, and builds the centre; (b)
the local authority disposes of the centre to an owner in the private sector;
(c) the new owner grants rights to various shopkeepers within the centre; (d)
the new owner obtains planning permission for a development which will
interfere with the rights which the new owner has granted. If the new owner can
override the rights that he has granted to the shopkeepers in such
circumstances, says Mr Howell, that is a result which is so unreasonable that
it could not have been intended by parliament.
This example also raises the second issue
that arises in the present case, and to which I shall come shortly. But,
leaving that aside, there are a number of comments to be made. As Mr Sullivan
points out, first, the fact that an improbable factual example can be devised
which would lead to an unexpected result is no reason to depart from the clear
wording of an enactment. Second, having acquired the land for a planning
purpose, and built the shopping centre, it is unrealistic to assume that the
local authority in question would not have retained any control over the
rebuilding of the centre, not least because they would remain potentially
liable to compensation claims under section 237(5). Third, if in the
circumstances of the example, the local authority considered it desirable that
the shopping centre should be redeveloped and granted planning permission for
it, in order to bring the centre up to date and preserve its vitality, then
this would be entirely in accordance with section 237.
In my view, there is force in these
points. I am not persuaded by examples of the kind given by Mr Howell that the
wider interpretation may lead to results which are so unreasonable that they
could not have been intended by parliament. Mr Howell placed great emphasis on
the fact that successors in title to the local authority can enjoy the fruits
of section 237(1). I do not have to consider in this case whether, as a matter
of construction, there are any, and if so what, limits to the application of
section 237(1) to those who derive title under the acquiring or appropriating
local authority. My provisional view is that, in order to attract the immunity
conferred by the subsection, the work done (whether by the local authority or
the person deriving title under them) must be related in some way to the
planning purposes for which the land was acquired. That would explain why, even
in cases where the work is done by a person deriving title under a local
authority, parliament has decided that the local authority should have a contingent
liability to pay compensation.
This brings me to the final argument
advanced by Mr Howell, which is based on the facts of the case. He submits
that, since the land was acquired as being ‘immediately necessary in the
interests of the proper planning of the area’, the planning purpose for which
the site was acquired was the development that was recognised as being
immediately necessary, ie the first development, and not any subsequent
redevelopment. He relies on the resolution by the first respondents made on
March 25 1954 to which I have already referred, and which spoke of the
acquisition of the land as ‘immediately necessary in the interests of the
proper planning of the area’. These words echo the language of section 38(2)(a)
of the 1947 Act. The compulsory purchase order, however, makes no reference to
the acquisition being immediately necessary in the interests of the proper
planning of the area. It speaks simply of a purchase ‘for the purpose of
securing the development, or redevelopment of the area’. This reflects the
language of section 38(1)(a) of the 1947 Act. It may be that between the
date of the resolution and the date of the compulsory purchase order, a
development plan had become operative. At all events, it seems to me that I
should look to the terms of the compulsory purchase order itself, rather than
to the resolution that preceded it, to determine the purpose for which the land
was acquired. There is nothing in the language of the compulsory purchase order
that supports Mr Howell’s submission.
Even if I am wrong about that, and the
purpose for which the land was acquired was a purpose which was immediately
necessary in the interests of the proper planning of the area, I would not feel
able to accept Mr Howell’s argument. On this hypothesis, no doubt it would be
right to say that some form of immediate development was necessary, and it was
for the purpose of that immediate development
reason to infer that the first respondents acquired the land only for
the purpose of carrying out that immediate development, and not for the
purpose, if necessary, of later carrying out redevelopment. In the absence of
words making it clear that the first respondents acquired the site only for the
purpose of carrying out the development that was immediately necessary at the
date of acquisition, and no subsequent redevelopment, I would hold that the
purposes for which the site was acquired are not to be construed in this
restricted manner.
Second issue
Mr Howell submits that it is one thing
for the local authority to be able to interfere with third party rights to
which the land was already subject when it acquired or appropriated the land,
but parliament could not have intended that a local authority which had granted
themselves such rights could subsequently override them. There is, he submits,
no reasonable requirement for an owner of land to be able to treat as
ineffective third party rights which he himself has lawfully granted.
Mr Sullivan and Mr Spence submit that the
language of section 237(1) and (2) is plain, and there is no need or
justification for the introduction of words of qualification which, on Mr
Howell’s argument, have to be added. Furthermore, in Dowty Boulton Paul Ltd
v Wolverhampton Corporation (No 2) [1973] Ch 94 it was accepted that a
local authority has power to appropriate land for planning purposes so as to
defeat the rights of a third party, where those rights have been granted by the
local authority themselves. Although the point taken by Mr Howell was not
argued in Dowty, the fact that it was accepted in that case that the
effect of the appropriation would be to override third party rights in such
circumstances strongly suggests that Mr Howell’s argument is wrong.
I cannot accept Mr Howell’s argument. He
is seeking to cut down section 237(1) and (2) by interpreting them as if
additional words were present, which have the effect of excluding from the
scope of the statute rights granted by the local authority themselves. Where
statutory words are clear, and their literal meaning does not lead to an
absurdity, then they are to be given their natural and ordinary meaning. It is
not permissible in such circumstances to read into the statute words that are
not there.
In my view, the words of the statute are
clear and do not lead to an absurdity. It is not absurd that parliament should
have intended to give local authorities the power to override third party
rights granted by themselves, if, acting bona fide, they think that the public
good will be served best by carrying out work on their land, in circumstances
which will require those rights to be overridden. As I have already said,
parliament has provided safeguards in that planning permission has to be
obtained for the work, and compensation is payable.
It is instructive to consider a case of
appropriation. Suppose that while holding land for educational purposes, a
local authority grants rights over the land to third parties; subsequently they
appropriate the land for planning purposes, and obtain planning permission to
develop the land in such a way as would interfere with some of those rights. In
those circumstances, it is difficult to see how it can reasonably be argued
that, if the work were carried out in accordance with the planning permission,
the local authority could not rely on the immunity conferred by section 237(1).
It would be likely in such a case that, when granting the third party rights,
the local authority did not even contemplate the possibility that they might
one day decide to appropriate the land for planning purposes.
Section 237 cannot bear one meaning in
the case of appropriation, and a different one in the case of acquisition of
land. It is clearly intended to apply to both in the same way and to the same
extent.
At first sight, it may seem surprising
that local authorities can override third party rights that they themselves
have granted. I agree with Mr Sullivan that it is no more surprising that a
local authority should be able, with immunity, to override third party rights
that they have granted themselves, than that they should be free to transfer
land to a third party, and then compulsorily repurchase it, in each case,
subject to payment of compensation. I accept that there are differences of
detail in the two cases, as Mr Howell points out. For example, in the latter
case, protection may be afforded to the third party by a compulsory purchase
inquiry. The protection afforded in the former case by the need to obtain
planning permission for the development may not be so effective. But the
essential point is that, in each case, a local authority is prima facie
empowered to take away from a third party a benefit that they have themselves
conferred.
As I have already explained, parliament
has decided that local authorities should be empowered to develop and redevelop
land in the public interest. Since this is the manifest underlying purpose for
which such a power is conferred on local authorities, there is no discernible
reason for drawing a distinction between third parties whose rights were
granted by the local authority themselves, and those whose rights were granted
by others. It is sufficient to say that, if parliament intended to draw such a
distinction, then the distinction would have to find expression either
explicitly or by necessary implication in the language of the statute. It does
not.
Finally, I should say that I agree with
Mr Howell that Dowty‘s case is not binding authority on the point, since
the matter was not raised in argument. Nevertheless, I am fortified in the
conclusion that I have reached on the second issue by the fact that it was
plainly accepted in Dowty‘s case that a local authority is authorised to
override third party rights, even where those rights have been conferred by
themselves.
Conclusion
For these reasons I decide both issues in
favour of the respondents. Accordingly, this application must be dismissed.
Application dismissed. Leave given to
appeal.
For a further case on this subject see p
219