The claimant developer had planning permission to build six houses subject to a planning agreement with the local planning authority, under section of the Town and Country Planning Act 1990, which required two of the dwellings to be affordable housing units which had to be provided before more than two other new dwellings on the land could be sold on the open market. After the claimant had tried unsuccessfully to find a buyer for the affordable housing units it wrote to the local authority asserting that, on the proper construction of the section 106 agreement and in the events which had happened, its planning obligation had been discharged and it was free to market the whole development with no surviving obligation to provide affordable housing. The authority insisted that the planning obligation remained in force. The claimant issued a statutory appeal to the Secretary of State against the local authority’s failure to determine its application for a variation of the section 106 agreement and also issued a claim against the authority under CPR Pt 7 seeking a declaration in support of its position that the planning obligation had been discharged, plus damages. The local authority applied to strike out the claim on the grounds, inter alia, (i) that the meaning of the section 106 agreement was an issue of public law which, applying the “exclusivity principle”, could or should have been raised by way of a claim for judicial review and not by a civil claim under CPR Pt 7; and (ii) the claim was as an abuse of process because it had been brought in parallel with a planning appeal.
On the application—
Held, application dismissed. (1) While questions of public law arising from planning obligations would normally be raised by judicial review proceedings, the court could in a civil action construe a section 106 agreement at the suit of a private party where the issue was not one of purely statutory planning rights and liabilities, or the meaning of legislation, but instead concerned obligations which were contractual in nature. The key distinction was between the construction of a section 106 agreement, and its validity. The latter was highly likely to be a question of public law, suitable only for judicial review (save where it was raised as a defence to an ordinary claim by the local planning authority to enforce the agreement), whereas construction of a section 106 agreement was not different, in principle, from construction of any contract. While arguments about abuse of process might arise in an individual case, there was no strong reason of principle why an issue over the meaning of a section 106 agreement ought not to be dealt with in the same way as an issue over the meaning of any other contract. Accordingly, the choice of an ordinary civil claim had not been an abuse of process in the present case, where there had been a dispute about the meaning of the agreement and/or about whether, on the facts, the claimant had discharged its obligations under the agreement. That being so, a claim under CPR Pt 7 had been an available route. It was thus not appropriate to transfer the case to the Planning Court to be continued as if commenced under CPR Pt 54 as a judicial review claim (paras 37, 44, 46–49, 52, 61).
(2) Nor was there any abuse of process from the claimant having also lodged a planning appeal. In that regard, it was relevant that the appeal had been against a refusal to vary the section 106 agreement and, although a claim had been made in the appeal notice that the effects of the planning obligation had been exhausted, the direct relevance of that assertion to the appeal was doubtful and the main thrust of the appeal was clearly the quite different contention that development subject to the section 106 agreement was not viable. Accordingly, while there had been an overlap of subject matter, the appeal and the claim were different and did not duplicate each other (para 53).
Matt Hutchings QC (instructed by Holmes & Hills llp, Braintree) for the claimant.
Saira Kabir Sheikh QC (instructed by Hart District Council) for the local authority.