Section 106 agreement — Implication of right of way for purpose of complying with agreement — Whether right arising from concurrent obligations of parties as matter of general law or by implication into agreement — Whether right registrable as easement — Claim allowed
The claimant entered into a land transfer agreement with a company within a consortium comprising the first defendant developer and others, as part of a plan for a residential and business development. The development was to include a bypass, to be constructed partly over a further parcel of land (the disputed land) that was to be acquired from a third party. Outline planning permission was granted for the development, and an agreement was entered into between the various parties and the local planning and highway authorities, under section 106 of the Town and Country Planning Act 1990. That agreement included an obligation on the “Estate Owners”, once the necessary approvals and traffic orders were confirmed, to complete construction of the bypass within a given time frame.
The first defendant subsequently obtained a transfer of the disputed land. The claimant entered a caution against the title, claiming a right to enter upon the land for the purpose of constructing the bypass. The defendants applied to cancel the caution.
The claimant brought proceedings for, inter alia, a declaration that he was entitled, as against the first defendant and its successors, to enter onto the disputed land to perform the joint and several obligations of himself and the defendants to construct the bypass under the section 106 agreement. He argued that: (i) as a matter of general law, either of two persons subject to a concurrent obligation was entitled, as against its co-obligator, to perform it without having to wait to be sued by the obligee; and (ii) a term was to be implied into the section 106 agreement that the claimant was, as against the first defendant, entitled to take all steps required to construct the bypass. He submitted that his rights to enter the land to construct the bypass were proprietary, and were more than “mere” planning obligations.
Held: The claim was allowed.
It was not possible to imply a term as to co-operation between co-obligators simply because it would be sensible and reasonable to do so; the court could enforce co-operation only to the extent necessary to make the contract workable. Any rights and obligations between co-obligators, by reason of their agreeing or covenanting to do something, would arise from similar concepts as those giving rise to implied terms in contracts. Whether it was appropriate to impose mutual rights and obligations upon A and B would depend upon whether their obligations to C were concurrent, in the sense that each undertook the same obligation to C by virtue of the same covenant or agreement. In any given factual situation, it was unlikely to make any difference to that matter whether the covenants were joint, joint and several or only several.
Section 106 agreements were subject to the ordinary rules of contractual construction. The fact that the section 106 agreement in the instant case was designed to create planning and highway obligations, enforceable against the estate owners by the relevant authorities, did not necessarily mean that all other matters were to be dealt with separately, or that the agreement could not, unless it did so expressly, also create rights and obligations as between the estate owners themselves. The estate owners would each, once the necessary traffic orders were in place, be under a concurrent contractual obligation to construct the bypass in accordance with the timetable. Whether by necessary implication in those concurrent obligations, or by an implied term in the section 106 agreement, the claimant had a right to cause the bypass to be built in accordance with the latter agreement.
The claimant’s rights of access for that purpose were not planning obligations only. Although they had arisen because of the estate owners’ concurrent obligations to the planning and highway authorities, they were nonetheless separate rights, proprietary in nature and enforceable by the claimant. Where a right to go onto another person’s property to construct a highway was for the clear benefit of land owned by the right-holder, the right was capable of creating an easement for the benefit of that land, even though the highway, when constructed, was to be a public highway and not a private road. The claimant’s easement was capable of protection by a caution on the register.
Gregory Hill (instructed by Marrons, of Leicester) appeared for the claimant; Timothy Fancourt QC and Edward Peters (instructed by Nabarro Nathanson) appeared for the defendants.
Sally Dobson, barrister
