Milebush Properties Ltd v Tameside Metropolitan Borough Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery,Lord Justice Moore-Bick,Lord Justice Jackson |
| Judgment Date | 17 March 2011 |
| Neutral Citation | [2011] EWCA Civ 270 |
| Docket Number | Case No: A3/2010/1333 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 March 2011 |
[2011] EWCA Civ 270
The Hon Mr Justice Arnold
Before: Lord Justice Mummery
Lord Justice Moore-Bick
and
Lord Justice Jackson
Case No: A3/2010/1333
HC09C04357
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
Mr Mark Warwick (instructed by JE Kennedy & Co) for the Appellant
Ms Judith Jackson Qc And Mr Alan Johns (instructed by Eversheds LLP) for the Respondent
Hearing date: 12 th January 2011
Lord Justice Mummery:
Introduction and background
This appeal raises a point of some interest on the availability, in private law proceedings between non-contracting parties, of a declaration on the meaning and effect of a planning obligation in a deed made pursuant to provisions in the planning legislation.
Section 106 of the Town and Country Planning Act 1990 (the 1990 Act) governs the enforcement of "planning obligations" entered into "by agreement or otherwise" by any person interested in land in the area of a local planning authority. The obligations, in what are commonly called "s.106 agreements", are "enforceable to the extent mentioned in subsection (3)", which provides that:—
"(3) Subject to subsection (4) a planning obligation is enforceable by the authority identified in accordance with subsection (9)(d)—
(a) against the person entering into the obligation; and
(b) against any person deriving title from that person."
I underline two features of the statutory framework governing the extent of enforceability of a s.106 obligation: first, the subject matter of enforcement is described as "a planning obligation"; and, secondly, the planning authority is identified as the person by whom that obligation is enforceable against the person entering into the obligation, or that person's successor.
Subsection (9) provides that a planning obligation may not be entered into except by an instrument executed as a deed conforming to certain specified requirements. Those requirements are satisfied in this case.
This s106 agreement is dated 15 February 1991. It was entered into between the Local Planning Authority, Hillingdon Borough Council (Hillingdon), which is also the Highway Authority, with developers of a freehold office development on the site, London & Metropolitan Estates Limited and Traffichold Limited. A condition of the planning permission required the construction of a service road. The objective was to provide access for the rear servicing of the High Street properties as part of Hillingdon's pedestrianisation proposals for Uxbridge High Street.
The development, including the service road subject to the s.106 agreement, was acquired by Tameside Metropolitan Borough Council (Tameside) on 18 August 2000 as an investment for its pension fund. Tameside's involvement in the development is as an investor, not as a Planning or Highway Authority. It is common ground that, having derived title from the developers and to the extent provided for in s.106, Tameside can be obliged by Hillingdon to perform the planning obligation in the material clause in the s.106 agreement, as amended, (clause 3.5) for the grant of a right of way over a service road to be constructed on the freehold land now in Tameside's ownership.
The land in question is situated at the rear of properties in High Street, Uxbridge. The properties are referred to in the agreement and in this judgment as "the Authorised Properties." They include 276–280 High Street owned by Milebush Properties Limited (Milebush), the appellant. They are used for commercial and residential purposes and include a covered shopping arcade.
The s.106 agreement was amended by a Supplemental Agreement dated 29 October 1997 inserting the new clause 3.5, which is at the heart of the case. The amended agreement will be called "the Principal Agreement" in this judgment. Clause 8.7 of the Principal Agreement provided that, in the event of any dispute arising between the parties in respect of any matter the subject of the agreement, the same should be referred to a Chartered Surveyor agreed by the parties (with a procedure, in default of agreement, for the outside appointment of a surveyor), who was to act as an expert and not as an arbitrator.
The dispute between the parties to the appeal centres on the construction of clause 3.5 of the Principal Agreement. The parties have been unable to reach agreement on the nature and extent of the right of way to be granted over the service road to provide access for the rear servicing of the Authorised Properties. It would be a mistake to think of this as a run-of-the-mill dispute about a right of way. (Gale on Easements was cited in argument, but does not help to resolve this case).The complication in the legal landscape lies both in s.106 itself and in the fact that these proceedings have not been brought, as contemplated in s106, by Hillingdon as the Planning Authority. Quite the contrary: the proceedings have been brought against Hillingdon by Milebush, which was not a party to the Principal Agreement, and also against Tameside, which was not a party to the Principal Agreement. However, no separate relief was claimed against Hillingdon, who objected that it ought not to have been joined in that action at all. The judge concluded that the reason for the joinder of Hillingdon was an attempt to ensure that it was bound by the judgment on the construction of the planning obligation that Milebush hoped to obtain against Tameside, but, as the judge held, that course was not open to Milebush. He made an order that Milebush pay Hillingdon's costs on an indemnity basis.
For its part Tameside does not dispute, as such, the binding nature of the planning obligation relating to the service road. Its case is that (a) by virtue of s.106(3) of the 1990 Act, Milebush is not entitled to take private law proceedings against it for a declaration on the construction of a planning obligation unenforceable by it and (b) as a matter of construction, the rights over the service road under clause 3.5 are not of the kind claimed by Milebush.
On the construction issue the essential question is whether Milebush is correct in its contention that the right of way to be granted under clause 3.5 covers a pedestrian emergency exit from the rear of the Authorised Properties. Tameside is willing to grant a right of way over the service road to Milebush in more limited terms. In correspondence and in this action Milebush says that the proposed terms are "too restrictive." It asserts that the terms set by Tameside should be amended to confer a wider form of right of way than Tameside is prepared to grant.
The dispute was brought before Arnold J last year in the private law proceedings by Milebush against Tameside and Hillingdon for declarations that Tameside "is obliged to grant to the Claimant [Milebush] the rights of way referred to in clause 3.5 of the Principal Agreement…" and "As to the extent of the rights of way." Tameside applied for summary judgement dismissing the claim. In his judgment [2010] EWHC 1022 (Ch) the judge held that it was unnecessary in the circumstances to consider that application. By his order dated 13 May 2010 he simply dismissed the action. He did so for two main reasons, both of which are covered by his grant of permission to appeal. On both points Milebush contends that the judge's decision was wrong in law.
First, Arnold J rejected the construction of clause 3.5 advanced by Milebush in relation to the pedestrian emergency exit from the rear of its property via the service road. He held that other points in dispute concerning the locking of a security gate and the hours during which the service road could be used were not matters for the determination of the court at all, as they are covered by the provision in the Principal Agreement for determination by an expert in the event of a dispute between Tameside and Hillingdon and there was no such dispute.
Secondly, he accepted Tameside's submission that it was not, in any event, an appropriate case for declaratory relief under CPR r.40.20. Having referred to s106 and a line of authorities on the court's discretion to grant a declaration, the judge accepted Tameside's submission it would be an inappropriate and pointless exercise for the court to make the declaration sought by Milebush.
In brief, Tameside's point is that s106 provides for the enforcement of planning obligations at the instance of the Local Planning Authority: it does not provide for enforcement by a non-party beneficiary of the planning obligation, which is what Milebush claims to be.
Further, subject to judicial review, Hillingdon has the power, in order to further its planning objectives, to release Tameside from the planning obligation to it under clause 3.5, or not to enforce that clause in whole or in part, or to enter into an arrangement with Tameside to vary it. That power was inconsistent with the proper exercise of the court's discretion to grant a declaration as to the construction of clause 3.5. Arnold J concluded:—
"58. …Milebush claims no private law right enforceable against either Tameside or Hillingdon. It seeks declaratory relief against Tameside on the footing that it is directly affected by the interpretation placed upon the Principal Agreement. But why should the court grant Milebush a declaration against Tameside in circumstances where, even if Milebush was right on the construction of clause 3.5 as it presently stands, Hillingdon would retain a discretion not to...
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