Aspire Luxury Homes (Eversley) Ltd v Hart District Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bourne |
| Judgment Date | 21 December 2020 |
| Neutral Citation | [2020] EWHC 3529 (QB) |
| Docket Number | Case No: QB-2020-003006 |
| Court | Queen's Bench Division |
| Date | 21 December 2020 |
[2020] EWHC 3529 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Bourne
Case No: QB-2020-003006
Matt Hutchings QC (instructed by Holmes & Hills LLP) for the Claimant
Saira Kabir Sheikh QC (instructed by Hart District Council) for the Defendant
Hearing date: 4 December 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is an application by the Defendant local authority to strike out the Claimant's claim for a declaration and damages.
The facts
On or around 26 January 2018 the Claimant acquired land at the rear of Chantreyland, New Road, Chequers Lane, Eversley Cross, Hook, Hampshire (“the land”) from Oakford Homes (“Oakford”). The land had the benefit of conditional planning permission granted by the Defendant to a previous owner on 24 February 2015 for the construction of six houses. That permission was subject to an agreement, made under section 106 of the Town and Country Planning Act 1990 (“the 1990 Act”), which bound the then owner of the land and also any successor in title, including the Claimant.
A further planning permission was granted to the Claimant in 2019 and, in connection with that grant, the Claimant entered into a variation of the section 106 agreement on 26 March 2019. This application is concerned with the meaning and effect of that varied agreement (“the agreement”), though the variations themselves are not material to this application.
There is no dispute that the agreement imposed obligations relating to affordable housing on the Claimant. Essentially, two of the dwellings permitted on the land were required to be affordable housing units and those units had to be provided before more than two other new dwellings on the land could be sold on the open market.
That obligation is imposed by clause 14 of the agreement, which provides:
“AFFORDABLE HOUSING
14.1 No more than 2 of the Open Market Dwellings upon the Site shall be legally completed by way of sale unless and until:
14.1.1 the Affordable Housing Land has been conveyed/transferred from the Owner to a Registered Provider from the Council's list of Approved Registered Providers (in a Clean Condition together with all Services, Service Installations and Access provided up to at least the boundary of the Affordable Housing Land); or
14.1.2 if the Owner has entered into a contract (approved by the Head of Governance and Monitoring Officer and the Head of Housing Services) with a Registered Provider for the construction by the Owner for that Registered Provider of the Affordable Housing to a standard ready for occupation such agreement shall include provision for the transfer of the Affordable Housing Land (in a Clean Condition and fully serviced and accessed as aforesaid) to a Registered Provider or to the Council where the provisions of clause 14.3 apply
14.2 In the event of an agreement not being reached with the Registered Provider with regard to the transfer of the Affordable Housing Land prior to Commencement of Development of the Affordable Housing Units and/or in the event the parties having used reasonable endeavours to agree a transfer of the Affordable Housing Land to the Registered Provider and such a transfer has not been completed then the Parties shall offer any other Registered Provider approved by the HCA (“Alternative Registered Provider”) in writing to purchase the Affordable Housing Units on the same terms as those offered to the Registered Provider
14.2.1 The offer to the Alternative Registered Provider to purchase the Affordable Housing Units shall remain open to the Alternative Registered Provider for the period of three months.
14.3 If no agreement has been reached with regard to the transfer of the Affordable Housing Land in accordance with Clauses 14.2 the parties shall be at liberty to transfer the Affordable Housing Land to the Council on the same terms as those offered to the Registered Provider.
14.4 The Affordable Housing Units shall be constructed as a minimum in accordance with such specifications and standards as may from time to time be published by the Homes and Communities Agency including the Code of Sustainable Homes up to the relevant Code Level for such Affordable Housing Units applicable at the date of their construction.
14.5 Subject to the foregoing clauses the Affordable Housing Units shall at all times be occupied and managed in accordance with the objectives of a Registered Provider and in accordance with such published housing register and allocation system as may be adopted by the Council from time to time and where the occupant meets the criteria set out in the nominations agreement in place between the Council and Registered Provider
14.6 The Affordable Housing Units will not be used for any other purpose other than as Affordable Housing provided that such an obligation shall not apply to a mortgagee in possession or charge (or to a receiver appointed thereby) of a Registered Provider or housing association or such other affordable housing provider to which the Affordable Housing Land has been transferred or to the successors in title to such persons.”
When the Claimant acquired the land from Oakford, a purchaser, Heylo Housing Ltd (“HHL”) was in negotiations to buy two “shared ownership units” of affordable housing (“SOU”) on the land from Oakland for £624,000. HHL is or was a “registered provider” within the meaning of clause 14, but was not on the Defendant's list of Approved Registered Providers. However, the Defendant had indicated its approval of the proposed purchase by HHL, in particular by an email dated 1 November 2017.
After the Claimant's acquisition of the land, it continued negotiations with HHL for that proposed purchase, but on 30 May 2018 HHL withdrew from the transaction.
Since then, the Claimant has sought an alternative purchaser for the two SOU but no registered provider has made a comparable offer. The best offer received was £482,500.
Meanwhile, on 21 November 2018, the Claimant applied to the Defendant for a variation of the agreement under section 106A of the 1990 Act, based on an assessment of the viability of the development subject to the agreement. Although it seems that that application was never formally determined, the Defendant has not shown any willingness to agree to the variation.
By February 2019 the six permitted dwellings had been built. However, clause 14 prevented the marketing of four of them and continues to do so unless its effects have been exhausted in some way.
On 5 April 2019, a Director of the Claimant wrote to the Defendant, stating:
“Paragraph 14.2 has been invoked in that agreement was not reached with the ‘Registered Provider’, who dropped out. Subsequently, the affordable housing was offered to ‘Alternative Registered Providers’ as identified by the Council. None of the Alternative Registered Providers was able to make an offer '… on the same terms as those offered to the Registered Provider
Hence Paragraph 14.3 has been invoked, with the Affordable housing Land being on offer to the Council '… on the same terms as those offered to the Registered Provider. For the avoidance of doubt, would you make sure, through your housing department, that they are, or are not willing to make an offer ‘… in the same terms …’
Assuming that the Council does not make an offer in the same terms, then it is concluded that there are no Registered Providers, including the Council willing to make an offer for the Affordable Housing in the same terms. Hence the requirement for the Affordable Housing, having dropped through the whole safety net of Section 14.0, must be deemed to be unnecessary, and having satisfied the rigour of the S106 Agreement – hence the requirement can be waived.”
It is common ground that the Defendant has not accepted the invitation to take a transfer of the Affordable Housing Land.
On 19 September 2019 the Claimant's solicitors sent a letter before claim to the Defendant, asserting that the effects of clause 14 had been exhausted. The basis for that assertion is described further below. The letter threatened to bring a claim for a declaration to that effect, plus damages and costs, but without otherwise discussing the type of claim.
The Defendant responded on 9 October 2019, rejecting the Claimant's contentions and asserting the continuing effect of clause 14. The letter enclosed an opinion by counsel putting forward broadly the interpretation of clause 14 on which the Defendant now relies.
On 6 January 2020 the Claimant's solicitors wrote again, this time enclosing draft Particulars of Claim. There was no further response.
In or around June 2020, the Claimant issued a statutory appeal to the Secretary of State against the Defendant's failure to determine its application for a variation (“the planning appeal”). The planning appeal was validated by the Planning Inspectorate on 7 August 2020. The introduction to the appeal document states:
“1.8. The three issues for the appeal to consider are:
1.8.1. 1) the viability of the development and its ability to support affordable housing in the manner prescribed by the S106
1.8.2. 2) the need to withhold any market dwellings from the market to ensure the delivery of affordable housing
1.8.3. 3) the continued effectiveness of the cascade mechanism in Clause 14 of the S106 having regard to the circumstance of affordable housing provision, the willingness of RP's to provide appropriate offer and the appellant's diligence in seeking the same.
1.9. It is concluded that the S106 Agreement...
To continue reading
Request your trial