Hampshire CC v Beazer Homes Ltd
| Jurisdiction | England & Wales |
| Judge | THE HON. MRS JUSTICE SWIFT DBE,The Hon. Mrs Justice Swift DBE |
| Judgment Date | 29 November 2010 |
| Neutral Citation | [2010] EWHC 3095 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ10X00160 |
[2010] EWHC 3095 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Before: The Hon. Mrs Justice Swift DBE
Case No: HQ10X00160
IN THE MATTER OF a claim for a declaration as to the meaning of an agreement made under section 106 of the Town and Country Planning Act 1990
And INTHE MATTER OF a claim under CPR Part 8
Peter Village Qc and James Strachan (instructed by the Chief Executive, Hampshire County Council) for the Claimant
Richard Phillips Qc and Jeremy Phillips (instructed by Davies Arnold Cooper Llp) for the Defendant
Hearing dates: 12 – 13 October 2010
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.
The Hon. Mrs Justice Swift DBE :
Introduction
This is a claim made by the claimant under CPR Part 8 for declaratory relief as to the proper interpretation and effect of certain clauses of a legal Agreement made under Section 106 of the Town and Country Planning Act 1990 (the 1990 Act). The original Agreement, which was dated 30 April 1997, was later amended by Deed of Variation dated 29 September 1999. The amendments to the Agreement were not material for the purposes of this case. I shall refer throughout this judgment to the amended Agreement, which I shall term “the Section 106 Agreement” or “the Agreement”.
The defendant makes a counterclaim for declaratory relief as to the interpretation and effect of the Agreement.
The parties
The claimant is a County Council and is, inter alia, the highway authority for Hampshire. The defendant is a national house builder and recently undertook a major development project on land known as Railroad Heath, situated at Fleet, in Hampshire.
The development project
The development project included the construction of 1,700 homes, together with a primary school, a shopping centre, a community centre and amenities such as playing fields, a sports pavilion, a nature reserve and open spaces. It included provision for land on which to build a railway station and for the construction of a distributor road and the necessary vehicular access. The scale of the development has resulted in a significant expansion of the town of Fleet. On 30 April 1997, Hart District Council, the planning authority for Fleet, granted outline planning permission for the development.
The Section 106 Agreement
As is customary with large-scale developments, the grant of the outline planning permission was subject to a number of conditions to be fulfilled by the owner of the land on which the development was to take place. It was subject also to a number of planning obligations which were the subject of a Section 106 Agreement.
In essence, planning obligations which are the subject of a Section 106 Agreement are intended to enhance the quality of a development and/or to eliminate—or at least ameliorate—some of the undesirable impacts on infrastructure, public services and the environment that might otherwise result from the development. An agreement by a developer to undertake such planning obligations may result in the granting by a planning authority of planning permission for a development in circumstances where, without such agreement, planning permission would have been refused. A common type of planning obligation is an agreement that the developer will fund or contribute to the cost of highway works necessitated by the additional traffic which will be generated as a result of the development.
The parties to the original Section 106 Agreement in this case were the trustees of the Elvetham Estate (as owners of the land on which the development was to take place), Hart District Council (as the local planning authority) and the claimant (as, inter alia, the relevant highway authority). By 1999, when the Deed of Variation was signed, the defendant had acquired ownership of the land and this was reflected in the amendments to the Section 106 Agreement, to which the defendant was a signatory. It is not disputed that responsibility for fulfilling the various planning obligations contained within the Section 106 Agreement lay with the defendant.
The obligations under the Section 106 Agreement
The Section 106 Agreement required the defendant to make financial contributions to the claimant towards the cost of various highway works, schemes and/or improvements which the claimant intended to undertake as a result of the development. The relevant planning obligations were set out at Clause 4.14 and 4.16 of the Agreement.
By Clause 4.14, the defendant covenanted to make a financial contribution towards traffic management measures and improvements to a highway known as Cove Road, which was situated close to the development site. Clause 4.14 provided that the defendant agreed:
“To pay to [the claimant] on occupation of 350 dwellings the sum of £125,000 as a contribution towards traffic management measures in the vicinity of the Development Site and improvements to Cove Road and for no other purpose”.
By Clause 4.16, the defendant covenanted to make financial contributions towards the construction of the Fleet Inner Relief Road, the plans for which had been the subject of discussion and negotiation between the parties. Clause 4.16.1 provided that the defendant agreed:
“(A) To pay to [the claimant] within 14 days of Implementation [a term defined elsewhere in the Agreement] the sum of £200,000 as a first instalment of a contribution towards the Fleet Inner Relief Road (“the Contribution”).
(B) To pay to [the claimant] within two years of Implementation the sum of £900,000 as a second instalment of the Contribution.
(C) To pay to [the claimant] within three years of Implementation the sum of £500,000 as a third instalment of the Contribution.”.
The financial contributions payable pursuant to Clauses 4.14 and 4.16.1 were to be indexed according to an agreed formula.
It is clear that, at the time the Section 106 Agreement was made, the parties contemplated the possibility that the claimant might decide not to build the Fleet Inner Relief Road. Clause 4.16.2 provided for this possibility. It stated that:
”(A) At any time prior to the completion of the Development [the claimant] may elect to use the Contribution or any part thereof towards such alternative transportation improvements in Fleet as [the claimant] considers to be of benefit to the public (“the alternative schemes”) and [the claimant] shall account to [the defendant] for the cost of the alternative schemes PROVIDED THAT in any event the Contribution shall only be used for the Fleet Inner Relief Road or the alternative schemes and no other purpose.”
Clause 4.16.2 (B) provided for the possibility that the Fleet Inner Relief Road project might for some reason be delayed or not pursued. It stated that:
“In the event of works on the Fleet Inner Relief Road not being commenced before the occupation of 1700 dwellings the Contribution paid by [the defendant] shall be refunded save for any part of the Contribution which may have been expended on the alternative schemes.”
Clause 4.16.2 (C) conferred on the defendant the right to the refund of any monies which were left unexpended after the completion of the Fleet Inner Relief Road or any schemes undertaken as an alternative thereto. It provided that:
“[The claimant] shall following the completion of the Fleet Inner Relief Road or the alternative schemes as the case may be provide to [the defendant] such evidence of sums expended as [the defendant] may reasonable require and shall forthwith refund any unexpended balance of the Contribution to [the defendant]”.
It is the interpretation and effect of Clause 4.14 and 4.16 that is in issue in this case.
The progress of the development
Implementation of the development project began in October 1999. In that month, the defendant paid the first instalment of £249,323 (i.e. £200,000 indexed) pursuant to Clause 4.16.1. The first residents moved into their homes on the development site in May 2000. In November 2001, the 350 th home was occupied. That same month, the second instalment under Clause 4.16.1, amounting to £1,224,553 (i.e. £900,000 indexed), was paid by the defendant and the defendant also paid its contribution of £170,077 (£125,000 indexed) pursuant to Clause 4.14. In November 2002, the third instalment of £757,246.65 (£500,000 indexed) was paid by the defendant. That brought the total contributions made by the defendant to £2,231,122.65 (under Clause 4.16.1) and £170,077 (under Clause 4.14). In January 2003, the 750 th home on the development was occupied. In November 2006, the development was completed when the 1,700 th home was occupied.
The highway works
The work on traffic management measures and improvements to Cove Road which had been contemplated by Clause 4.14 of the Section 106 Agreement was undertaken by the claimant and was funded using the contribution paid by the defendant pursuant to Clause 4.14 of the Agreement.
Having considered various options, the claimant eventually decided not to proceed with construction of the Fleet Inner Relief Road. Instead, it chose to undertake, by way of “alternative schemes” as contemplated by Clause 4.16.2(A), a number of improvements to the road transport system in Fleet town centre. In 2002–2003, there was a dispute between the parties about the alternative schemes proposed by the claimant. Having seen information about the proposed schemes, the defendant was concerned that the claimant intended to spend all or part of its contributions under Clause 4.16.1 for purposes other than those specified in...
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R (on the application of Millgate Developments Ltd) v Wokingham BC
...52 In considering this issue, I have had the benefit of a recent decision in Hampshire County Council v Beazer Homes Ltd [2010] EWHC 3095 (QB). This was a case where a s 106 bilateral agreement was in issue and where the defendant in that case had paid sums to the claimant as a "contributio......