London Borough of Waltham Forest v Oakmesh Ltd & Anor [2009] EWHC 1688 (Ch)

Case No HC08C02322[2009] EWHC 1688 (Ch)Date 10 th July 2009
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Before
Bernard Livesey QCDeputy Judge of the High Court
Between
THE MAYOR AND BURGESSES OF THEClaimantLONDON BOROUGH OF WALTHAM FORESTClaimantOAKMESH LIMITEDDefendantFAMILY MOSAIC HOUSINGDefendant
Mr Thomas Jefferies, instructed by Directorate of Governance and Law, London Borough of Waltham Forest, appeared for Claimant.Mr Richard Humphreys QC and Andrew Thomas, instructed by Prince Evans, appeared for Second Defendant. for The First Defendant did not appear.JUDGMENT
[1]In these proceedings the Claimant seeks summary judgment on its claim against both Defendants for an injunction to enforce an obligation, contained in an agreement dated 20th December 1996 (“the Agreement”) expressed to be made pursuant to section 106 of the Town and Country Planning Act 1990 (“the Act”).[2]The First Defendant (“Oakmesh”) is a construction company which is financially unsound and did not appear. The Second Defendant (“Family”) is a housing association, run on a not-for-profit basis; it seeks to amend its Defence to advance a new argument that, on its true construction, the Agreement was not one to which section 106 of the Act in fact applied.[3]I propose to set out in some detail the background facts before dealing with the application to amend and, if it fails, the issues raised in the Claimant’s application. The Facts:[4]The case concerns a plot of land known as the former Walthamstow Power Station Site in London E 17. In May 1996 the Claimant resolved that it would grant planning permission for residential development on that site, subject to the completion of a section 106 agreement with the developer to ensure the provision of a footpath link through the development, including the provision of a ramped footbridge link, signage, surfacing and lighting to adoptable standards.[5]On the 20th December 1996 Oakmesh took a transfer of the development site; it also took a transfer from Railtrack of a strip of land adjacent to Walthamstow Queen’s Road Station on which the bridge link was to be constructed, linking the station to the development site. On the same day, planning permission was formally granted for residential development of 86 units on the site and the Agreement was formally entered into by deed between Oakmesh and the Claimant.[6]The obligation in the Agreement [“the Obligation”] was:
“to provide at nil cost to the Council a footpath link through the said land to link Queen’s Road and Walthamstow Central Station, provided that the detailed design of the bridge link to include method of construction, siting, surfacing, boundary treatment and lighting shall be submitted to the Council for approval prior to the construction of the road network serving the footpath link and the footpath link shall be constructed in accordance with the agreed details prior to the first occupation of the final phase of the residential units to be constructed as part of the said development.”
[7]Also on the same day, Oakmesh transferred the site to Family, but not the strip of land acquired from Railtrack, which it has retained. The transfer contained a covenant by Oakmesh that it would perform the Obligation, an authority to enter upon the strip for the purpose of constructing the bridge link and an indemnity if Oakmesh did not fulfil the Obligation.[8]In December 1996 Family entered into a design and build contract with the London Building Company (a subsidiary or associated company of Oakmesh) which included the construction of the bridge link. I am informed by Family that, because the bridge link has not been completed, Family have retained the sum of £21,200 in relation to the then estimated cost of constructing the bridge link. Following a full site investigation and a full site contamination survey, detailed plans were prepared which were submitted to the Claimant which on the 19th May 1998 gave them a formal approval in principle. The Claimant’s engineer stated that he “look[ed] forward to receiving the design calculations, drawings and the design certificate in due course”.[9]On 2nd June 1998 solicitors acting for Oakmesh applied to the Claimant to vary the Obligation by deleting the requirement that the bridge link be constructed “prior to the first occupation of the final phase of the residential units to be constructed as part of the first phase of the said development”. The reason for this was that Family was then about to hand over for occupation the last of the residential units. In order not to impede progress Oakmesh sought to substitute the requirement that the bridge link should be constructed “before 1st January 1999”. The Claimant consented to the release of the condition and the substitution of the amended wording was confirmed by deed executed on 15th June 1998.[10]The 1st January 1999 passed without any sign that works to construct the bridge link were under way and on 2nd February 1999 the Claimant wrote to Oakmesh’s parent company seeking to discover what steps it was taking to comply with the obligation “so that this can be taken into consideration when deciding what further action the Council should be taking in this matter. The Council would not wish to take legal proceedings to secure compliance but will do so if there appears to be no alternative”. This was the first of a number of letters written to Oakmesh in 1999, to which the response was given that Oakmesh was attending to the task, dealing with difficulties and seeking prices. The issue went to sleep for the whole of the year 2000.[11]On 30th November 2000 the Claimant entered into an agreement under section 38 of the Highways Act 1980 to adopt the roads and their footways on their completion as evidenced by the issue of the final certificate. The papers do not record the date on which the final certificate was issued but it is common ground that adoption has taken place.[12]On 19th February 2001 Oakmesh was given “one last chance to comply with its obligations” and was threatened with legal proceedings in the event of default. It replied by undated letter received on 30th March 2001 with an apology and detailed proposals which it hoped would be approved:
“… in order that our consultants can produce finalised details to enable us to obtain tenders for the works. We are aware of our obligations under the section 106 Agreement and trust the enclosed [proposals] satisfied your Engineers requirements and that there is no necessity to seek legal enforcement compliance.”
The submitted plan diverged from the plan which had been approved in principle in May 1998 and was therefore rejected.[13]On 28th September 2001 the Claimant sent to Family a letter before action threatening proceedings if the bridge link was not constructed and on 9th October 2001 required the submission of plans. Family responded that the original developers were scaling down their business and that it was now unfortunately going to be necessary for the consortium to propose an alternative set of contractors and this would obviously take time.[14]On 4th December 2001 Family confirmed that its consultants had investigated a small number of suitable contractors and stated that they: “will be in contact as soon as we have progressed this matter further and can advise you of the association’s programme for the implementation of the section 106 works. Please be assured that every effort is being made to close this matter as soon as possible”.[15]On 24th January 2002 the Claimant indicated that it could not continue to delay taking action without firm evidence from Family as to when the works would commence. On 28th January 2002 Family responded with a full explanation of the steps it had taken, stating that it had sought prices from contractors and promised a programme for construction within 2-3 weeks. The letter continued:
“I hope that the above demonstrates our commitment to instruct and proceed with these works and will continue to persuade the council to pursue them in a reasonable and cost effective manner for all parties.”
[16]On 18th April 2002 Family wrote again with an apology for the delay and raised security concerns which were said to have been expressed by residents; it nonetheless “continue[d] to reassure [the Claimant] that we are doing everything possible to bring this issue to a close and complete the works as the section 106 Agreement requires”.[17]On 6th June 2002 Family indicated that it was going to appoint a consultant to carry out the work[18]On 15th July 2002 Family indicated that the consortium of housing associations occupying the site was not challenging the section 106 obligation but was seeking legal advice to see whether the contractor could be compelled to build the bridge at the cost they first quoted. It also said that it was proceeding to appoint a consultant.[19]Nothing further was heard from Family until after it was sent a further letter before action in February 2004. Eventually Family made a substantive response querying the usefulness of the bridge, their officer stating:
“It appears to me that building this bridge would no longer achieve the Council’s objective and certainly would not serve the interests of local residents. I appreciate that we freely entered into this Section 106 obligation but I wonder whether even at this late stage it would be preferable to reconsider this requirement, and perhaps seek some alternative enhancement that would be acceptable to the Council and of greater benefit to the local community.”
[20]A meeting between Family and the Claimant to discuss the issue was held on 15th April 2004. The Claimant reiterated its desire for the bridge link to be constructed and Family undertook to obtain fresh quotations for the original approved design but with the option to investigate alternative designs, in either case to be completed before 28th May 2004. For its part, Family indicated that, since five years had passed since the section 106 Agreement had been made, it would now proceed to seek to vary the Agreement, in particular the discharge of the obligation to construct the bridge link, taking advantage of section 106A(3) of the Act, which permitted such an application but only after 5 years had elapsed from the date of the Agreement.[21]The application to vary was made formally on 7th July 2004. In its application Family stated that the relevant obligation was the “provision of bridge link”; that it was entered into on 20th December 1996 and that it ought to be discharged because the obligation no longer served a useful purpose. The application was refused by the Claimant on 21st October 2004; Family appealed and, after a public inquiry before an Inspector of Planning, on 16th March 2006 the appeal was dismissed.[22]After further correspondence, solicitors for Family wrote on 12th December 2006 saying that Family would be happy to negotiate a fixed cash contribution to the cost of the footbridge link” and asking if the Claimant would agree to the proposal. The Claimant responded that the full cost had to be borne by the parties bound by the obligation and that the point was not negotiable.[23]These proceedings were issued on 14th August 2008; the Defendants served their Defences in September 2008. The only substantive point taken by Family in its Defence was the contention that the Claimant had a legal interest in part of the development site, as a consequence of its agreement to adopt the roads and pavements as a public highway on 7th December 2000 pursuant to section 38 of the Highways Act 1980 (see paragraph 11 above) and:
“As a consequence it is contended that the Claimant is obliged to provide the Bridge Link … and is not therefore entitled to enforce the covenant or covenants against Family, the Claimant itself being in breach of the said covenant to provide a Bridge Link.”
This has been referred to in argument as “the adoption issue”. I should add that shortly before the hearing Family clarified its position on this plea in that it conceded that the interest which the Claimant thereby obtained did not operate to bar relief; its argument is that the Claimant’s obligation to provide the bridge link was jointly and severally owed (i.e. together with Family and Oakmesh) and, in any event, was a matter going to the discretion to grant the relief claimed. The Application to Amend:[24]It was only some two weeks prior to the hearing that Family gave notice of an application to amend its Defence in order to argue(1) that while the Agreement purported to be made pursuant to section 106 of the Act, it was not in fact an Agreement to which the section applied because of a failure to comply with section 106(9)(b); moreover,(2) that because the Bridge Link was to be constructed over land which was outside the land identified in the Agreement, it was not an obligation to which the section could apply. The two points are closely associated but need explanation.[25]The first point, that the Agreement is not one to which section 106 applies, is based on the fact that a section 106 obligation is required to be entered into with the formality specified in section 106(9) which states:
“A planning obligation may not be entered into except by an instrument executed as a deed which – (a) states that the obligation is a planning obligation for the purposes of this section; (b) identifies the land in which the person entering into the obligation is interested; (c) identifies the person entering into the obligation and states what his interest in the land is; and (d) identifies the local planning authority …”
[26]Mr Richard Humphreys QC, who appeared for Family, made the point that the deed in question does not identify the land in which the person entering into the obligation is interested; that is because the land is inadequately described in the words of description in the Agreement and, in so far as the land is defined by reference to a plan, the plan attached to the Agreement did not include the strip of land, transferred from Railtrack, on which the bridge link was to be constructed. He drew attention to Southampton City Council v Hallyward [2008] All ER (D) 356 where it was held that a section 106 agreement fails to comply with the relevant requirements of the section if the agreement does not “expressly state” the matters required to be stated or identified: in other words, express identification within the Agreement is a necessary pre-condition to the validity of the obligation as a section 106 obligation.[27]Mr Thomas Jefferies, who appeared for the Claimant, while not disputing the correctness of Hallyward, argued that the Agreement was to be construed in its matrix, including the surrounding documents and other documents and agreements reached on the same day; that although there is not a specific description of the land, it is possible to identify the land by certain verbal references and verbal absences - signs detectible to the discerning eye. I do not agree. While I have not the slightest doubt that the parties had a very clear idea in their own minds of the identity of the land in respect of which the obligation was undertaken, it remains the case that the land upon which the bridge link was to be constructed was not identified on the site plan which was annexed to section 106 agreement.[28]The second point taken by Family is that an obligation to which section 106 applies cannot apply to the bridge link. Section 106 states (so far as material) that “(1) Any person interested in land in the area of a local planning authority may, by agreement or otherwise, enter into an obligation (referred to … as “a planning obligation”), enforceable to the extent mentioned in subsection (3)-(a) …(b) requiring specified operations or activities to be carried out in, on, under or over the land;”[29]Mr Humphreys argues that, in so far as the land on which the bridge link is to be constructed, is not included within the envelope of the plan attached to the Agreement, the construction of the bridge link cannot be a specified activity which is to be “carried out in, on, under or over the land” identified in the Agreement.[30]In response, the Claimant contends that Family is not entitled to argue for the amendment to be made because(1) of the rule that it cannot “approbate and reprobate”;(2) it is prevented by issue estoppel,(3) to do so would be an abuse of process, and(4) Family is in any event estopped by representation.[31]As regards the principle that Family should not be permitted to “approbate and reprobate”: the Claimant points out that the application made by Family under section 106A(3) (see at paragraph 20 and 21 above), can be made only by “A person against whom a planning obligation is enforceable”; that the making of the application necessarily involved an acceptance by Family that the Obligation was enforceable against it; there was not any jurisdiction for anyone other than such a person to make it. Family therefore cannot now assert that the Obligation is not enforceable against it because a party cannot “approbate and reprobate”: see per Stocker LJ in Benedictus v Jalaram [1989] 1 EGLR 251 at page 255B-D.[32]That was a case where the tenants of business premises (Jalaram) applied on 1st March 1983 for a new lease under the Landlord & Tenant Act 1954; the landlord objected on a number of grounds and issued its own application for interim rent until the disposal of the tenants’ application. There was some delay in the proceedings and it was in April 1987 that the tenants wrote saying that they were not in occupation of the property, that there were other sub-tenants and therefore they were not entitled to a new tenancy; “your clients therefore must look to the sub-tenants for the rent”. The tenants also abandoned their application to the court for a new lease and responded to the landlord’s application for interim rent with the plea that the court had no jurisdiction to determine an interim rent because they were not in occupation of the premises at any time after the expiry of the original lease. The judge ordered that this plea be struck out on the grounds that the tenants could not be allowed to approbate and reprobate and the Court of Appeal upheld his decision. Bingham LJ stated the principle, at p 256 D-E, in the following terms:
“If in the course of litigation a party (A) accepts the truth of an assertion of fact expressly or impliedly made by his opposing party (B) and founds on that fact formally to claim relief to which he would not be entitled if that fact were not true (A knowing if the fact is true or not, whether or not B knows), and if the litigation is thereafter conducted on the basis of the truth of that fact, A may not thereafter assert the falsity of that fact and retract his acceptance of its truth where the effect would be both to deny B a remedy which would have been available to B had A asserted the falsity of that fact from the beginning and to deny B a remedy to which A’s acceptance of that fact entitled him.”
[33]Mr Humphreys responds that Family did not approbate or reprobate. The most that can be said is that it allowed itself to “blow hot and cold”, which was not found to be impermissible in Newbury District Council v Secretary of State for the Environment [1981] AC 578. Alternatively, what Family did could be described as simply a “procedural mistake”: see Wroe v Exmos Cover Ltd [2000] 1 EGLR 66 per Chadwick LJ at 72B.[34]I do not regard the Newbury District Council case as apposite. The ratio of that decision was that the application for, and implementation of, a fresh planning permission over a piece of land did not, on the facts, extinguish existing use rights. The landowner could therefore rely on existing use rights rather than the newly acquired rights as he wished, thereby “blowing hot and cold”. That is not authority for a general proposition that parties can blow hot and cold with impunity whenever they please.[35]Wroe was a case where the “tenant” was allowed into possession on a licence in writing. On its expiry he applied to the court for a new lease on the basis that he had a tenancy. The landlords initially and emphatically denied he had a tenancy and kept refusing what he tendered expressly as “rent” and there was deadlock. One of the directors of the landlord sent a letter to Mr Wroe, stating inter alia:
“I want to be fair but ….. I am left with no alternative but to get on. To do this apparently we have to accept that [Mr Wroe] is holding over under the Landlord and Tenant Act from 1st October 1997 and now do so …”
The judge held that Mr Wroe occupied by virtue of a licence and did not have a tenancy. Mr Wroe appealed on the ground that the landlord was estopped from arguing that he held under a licence. The court concluded that as a matter of construction, the representation could not have created a tenancy by estoppel; it was not unequivocal and Mr Wroe did not remain in occupation in reliance on the representation and had not otherwise acted to his detriment. After referring to Benedictus v Jalaran Ltd, Chadwick LJ stated “In my view the appellant gains no assistance from the decision in Benedictus v Jalaram Ltd. … On a true appreciation of the position, this is not a case in which it can be said that the respondent company has elected between two inconsistent remedies, nor that it has sought to approbate and reprobate. The most that can be said is that the respondent made a procedural mistake. It should have raised the “licence or tenancy” issue in its answer to the appellant’s application for a new tenancy … … The judge in my view would have been correct to hold that the respondent was not precluded by that mistake from raising the ‘licence or tenancy’ issue.” That conclusion was reached as a matter of construction of a particular letter and on its particular facts. I do not find it helps me resolve the issue.[36]In Benedictus both the approbation and reprobation occurred in the same proceeding. In this case, it is contended that the approbation took place in the planning appeal brought under planning procedures pursuant to section 106A and reprobation in the present proceedings in the High Court pursuant to section 106 (5) and the Civil Procedure Rules. It seems to me that the principle ought to apply where, as here, the statute specifies different proceedings for the different procedures to which the Obligation is subject. Section 106, 106A and 106B are part of a code which provides a strong nexus between the different procedures to which the Obligation in the Agreement is subject. It seems to me appropriate that the principle that one should not be allowed to “approbate and reprobate” should apply here where the Defendant has sought to avoid the sanction authorised by section 106(5) after attempting to discharge it by an appeal under section 106A.[37]However, I have concluded that the Claimant has failed to prove the application of the principle. This is because the application of Bingham LJ’s explanation requires that the effect of the retraction is “both to deny B a remedy which would have been available to B had A asserted the falsity of that fact from the beginning and to deny B a remedy to which A’s acceptance of that fact entitled him”. In the present case, the Claimant would have had a remedy – that is to say rectification and enforcement – had Family asserted the contrary at an earlier stage. As will appear, I do not believe that the Claimant has lost that remedy, however much it may have lost in the passage of time.[38]As regards the argument based on issue estoppel: Mr Jefferies reminded me of the well known passage dealing with the ingredients of issue estoppel in Thoday v Thoday [1964] P. at 181, and referred me to the fact that the House of Lords in Thrasyvoulou v Environment Secretary [1991] 2 AC 273 has held that a planning inspector’s decision on a question of legal right, as opposed to planning policy, can give rise to cause of action or issue estoppel: see esp. at pages 13H to 16 B-D. The conditions which have to be fulfilled were summarised in Watts v Secretary of State for the Environment [1991] 1 PLR 61. They are: firstly, where the issue involves a mixture of fact and law the whole matter must be fairly and squarely before the tribunal; secondly, the tribunal must fully address the matter; thirdly, the tribunal must make an unequivocal decision on that matter; fourthly, the fact that the three conditions are fulfilled should be clear on the face of the decision.[39]Mr Jefferies pointed out that Family had, during the hearing of the section 106A appeal before the Inspector, raised virtually the identical issue to that described in paragraph 29 above. Its argument had been that the Obligation was to construct “a footpath link through the said land”, that the bridge link was outside the “said land” and therefore did not have to be built. The Inspector rejected that contention, concluding that “when read as a whole, the covenant requires the construction of the footpath link, including the bridge link” and that “there is no other correspondence to cause one to doubt that Oakmesh were owners of all the land necessary to allow compliance with the Obligation by the time the Agreement was completed”.[40]Even if the court concludes that issue estoppel does not strictly apply, Mr Jefferies argues that the points raised by the proposed amendment were ones which should have been taken in accordance with the principle in Henderson v Henderson and it is an abuse of process to take them now.[41]As regards abuse of process: Mr Jefferies argued that the Inspector had the choice whether to discharge the Obligation or dismiss the appeal and chose the latter. The determination was a final determination. Section 106B provides as follows:
“(6) The determination of an appeal by the Secretary of State under this section shall be final. (7) Schedule 6 applies to appeals under this section.”
Schedule 6 of the Act, which by paragraph 2(1)(aa) expressly applies to persons appointed to conduct appeals under section 106B, provides as follows:
“(6) Where an appeal has been determined by an appointed person, his decision shall be treated as that of the Secretary of State. (7) Except as provided by Part XII, the validity of that decision shall not be questioned in any proceedings whatsoever.”
Accordingly, argues Mr Jefferies, an amendment to plead that there is no planning obligation is simply not possible.[42]On issue estoppel and abuse of process, Mr Humphreys argues the contrary: that the issue on the appeal was “whether the Obligation no longer serve[d] a useful purpose” so that it should be discharged; all that the Inspector concluded was that it did serve a useful purpose. He was not asked to determine whether the Obligation complied with the requirements of section 106A; that argument was not put to him and would in any event not have been within his jurisdiction to decide as the parties appeared to acknowledge. Moreover, applying the decision in Johnson v Gore Wood & Co [2002] 2AC 1, this was a case where, even if there was re-litigation, it should not be regarded as an abuse where, as here, there has been nothing more than a procedural mistake which was inadvertent. Apart from which, he argues, the non-compliance with the formality required by section 106(9) means that the Agreement is a nullity: if prosecuted on an enforcement notice the point is one that could be taken by the defendant notwithstanding the provisions imposing finality [as set out in paragraph 41 above] because it is non-compliant on its face. Since the power to enforce the Agreement arises only where it is compliant with section 106A, if it is non-compliant and a nullity, the court does not have jurisdiction to enforce it by injunction.[43]I have been shown the skeleton of the arguments presented to the Inspector at the appeal. Family clearly did not argue that the Obligation was a nullity for non-compliance with section 106(9): that argument arose only after the point was taken in Southampton City Council v Hallyward Ltd (op. cit.). Family did argue that the land on which the bridge was to be constructed was not shown to be within the plan annexed to the agreement. This is only slightly different from the way in which the argument is put before me. If all other matters were equal, I would be inclined to hold that there is not a relevant issue estoppel in respect of the non-compliance with the section 106(9) point (and no reason why it should be an abuse of process to present it in these proceedings), but would hold that issue estoppel applied to the “not shown on plan” point and it would be an abuse to raise it again.[44]However, I have come to the conclusion that all other things are not equal: in particular that it would be an abuse of process were Family allowed to dispute the validity of the Obligation where as here it has mounted an appeal under section 106A, which could be brought only by a person to whom the Obligation applied, and received an adverse decision on appeal confirming the validity of the Obligation, a decision which by statute is final and not capable of further challenge.[45]As regards the argument on estoppel by representation: Mr Jefferies argues that it was never in question until a couple of weeks ago that the Agreement was a valid section 106 agreement and the Claimant acted upon the representations made by Family to that effect to its detriment. Family ought not now be entitled to amend to plead the contrary of what it has admitted.[46]Mr Humphreys argues that the point about the Agreement being a nullity on its face, because of obvious non compliance with section 106(9) and section 106(1)(b), and therefore unenforceable [see last two sentences of paragraph 42 above] is that it goes to the jurisdiction of this court to order an injunction.

(D) where I observed:

“I do not see how it can be appropriate for the parties to confer on the court a jurisdiction which it does not have pursuant to a statute which does not confer it by agreement. I find it difficult to envisage a circumstance in which this court would estop a party from taking a point on jurisdiction, so as to confer on the court enforcing the estoppel a jurisdiction which it did not have.”
[47]I do not accept Mr Humphreys’ submission. I do not accept that the rule, in criminal proceedings, that a defendant can take a point, by way of defence to a criminal prosecution, that an enforcement notice is a nullity on its face applies in an equivalent manner to enforcement process in civil proceedings. There is no reason why it should. Nor do I accept that the observations which I made in Edo Corporation apply to the present facts. In Edo Corporation I came to the conclusion that the court did not have jurisdiction to entertain an application brought under section 33 of the Supreme Court Act 1981. The jurisdiction issue was there evident on the face of Edo’s application and the point could have been taken in argument without pleading specifically to it but Edo sought to prevent Ultra from taking the point by arguing that it was estopped from doing so. In the present case, the issue on the validity of the Agreement, and therefore the point on jurisdiction, is not evident either on the face of the Claimant’s claim or in Family’s Defence. Unless the point is pleaded, it is not open to Family to take the point. The question in this case is whether permission to make an amendment to dispute the validity of the Agreement should be given. In these circumstances it is eminently appropriate to consider whether Family is prevented from taking the point by estoppel.[48]On the facts, I am satisfied that estoppel by representation has been established. It is manifestly clear that, in a whole series of letters from at least early 1998, when it presented detailed plans of the bridge link for approval, and February 2004 Family had repeatedly represented in unequivocal terms that it accepted the Obligation including the obligation to construct the bridge link and that the Claimant had changed its position in reliance on those representations and to its detriment. Examples of the Claimant’s change of position include its decision to withhold proceedings for enforcement from 1999 onwards (I am confident that had the Claimant sought to enforce then it would not have been met with the non-compliance point, which derives only from the Southampton City Council v Hallyward Ltd case in 2008); its decision to permit a variation by deed of the date by which the Obligation had to be fulfilled [see at paragraph 9 above]; it also incurred substantial costs in defending the planning appeal brought under section 106A [see paragraph 20 and 21 above]. Mr Jeffries points out that there was never any misunderstanding between the parties as to the identity of the land over which the Obligation was to be performed and, had Family taken the point earlier, the Claimant could quite simply have sought rectification of the Agreement, which would have removed all of the points which Family seeks to raise in its proposed amendments.[49]The Claimant also argues that, if the amendment is permitted, it will be necessary for the present proceedings to be adjourned so that it might have the opportunity to amend its Statement of Case in order to seek rectification of the Agreement, on the grounds that the parties were never in any doubt as to the identity of the land over which the Obligation was to be performed, as evidenced by, inter alia, the matters set out in paragraphs 9 to 19 above.[50]In my judgment, the Claimant’s objection to the proposed amendment is correct. Family’s application to amend is an abuse of process in that its primary effect would be to overturn the result of the adverse appeal. Apart from which, I am satisfied that it is estopped from making such an amendment.[51]Apart from all of this, an application to amend at this stage in the proceedings to allege the contrary of what was accepted over the years is simply too late on a case management basis and contrary to the overriding objective. I therefore reject the application and will proceed to consider on its merits the application of the Claimant for a mandatory injunction to compel the performance of the Obligation. The Application for an Injunction:[52]It is provided in section 106(5) that “A restriction or requirement imposed under a planning obligation is enforceable by injunction”. By sub-paragraph (6) an authority is empowered, as an alternative, to enter the land in question and carry out the operations and recover any expenses reasonably incurred in doing so. It is common ground that injunctive relief is a common and probably the primary means of enforcement. In Avon County Council v Millard [1986] J.P.L. 21 the Court of Appeal saw an injunction as the normal remedy where a council is seeking to enforce a planning obligation, as damages would normally be inappropriate.[53]The prayer at the end of the Particulars of Claim states that the Claimant claims:
“(1) an Order that the Defendants do perform the obligation in clause 4 of the Agreement to construct the Bridge Link in accordance with the Approval in Principle and such further details of the method of construction, siting, surfacing boundary treatment and lighting as shall be approved by the Claimant. And (2) an Order that on completion of the Bridge Link to the reasonable satisfaction of the Claimant the First Defendant specifically perform the obligation in the Agreement to dedicate the Bridge Link as public highway maintainable at public expense, such dedication being at nil cost to the Claimant.”
[54]Family argues that I should not give summary judgment for a mandatory injunction. It argues that a summary disposal is not appropriate because it cannot be said that the adoption point does not have a real prospect of success and, if it is sustained, it will operate not as a bar to the granting of relief but a potent reason against making an order. It also argues that as a matter of discretion the court should not make such an order; it is fairer, Family argues, for the Claimant to do the work itself and recover such part of the cost as is appropriate from Family. It argues that the “adoption point” means that the Claimant is under an obligation to pay a contribution towards the relevant costs and expenses since it itself has (as highway authority) an interest in part of the land subject to the planning obligations and derives its title to that interest from Family.[55]As regards the discretionary considerations: it argues that damages are an adequate remedy; that in the same way as it is inappropriate to order the performance of a building contract (Wolverhampton Corporation v Emmons [1901] 1 KB 515 and Ford Sellar Morris Developments Ltd v Grant Seward Ltd [1989] 2 EGLR 40 esp. per Hoffman J.) that the court should not order the performance of this Obligation; that completion of the works “to the reasonable satisfaction of the Claimant”, as specified in the proposed Order is imprecise and unsatisfactory and “prone to cause debate and uncertainty”; that planning permission would be required for the bridge link and a successful outcome cannot be taken as certain; that Family is not owner of the land on which the bridge link is to be built; that the adoption point means that the Claimant is itself in breach and does not come to court with clean hands. The adoption point:[56]On 30th November 2000 the Claimant entered into an agreement with Family as “owner” of the estate, pursuant to section 38 of the Highway Act 1980, whereby Family agreed to dedicate, and the Claimant agreed to take over and adopt, the roads on the estate as highways maintainable at the public expense. Section 38(3) provides as follows: “(3) A local highway authority may agree with any person to undertake the maintenance of a way –(a) which that person is willing and has the necessary power to dedicate as a highway, or(b) which is to be constructed by that person, or by a highway authority on his behalf, and which he proposes to dedicate as a highway; And where an agreement is made under this subsection the way to which the agreement relates shall, on such date as may be specified in the agreement, become for the purposes of this Act a highway maintainable at the public expense”.[57]By section 263(2) of the Highways Act 1980 it is provided that “every highway maintainable at the public expense, together with the materials and scrapings of it, vests in the authority who are for the time being the highway authority for the highway.”[58]In Tithe Redemption Commission v Runcorn Urban District Council [1954] 1 Ch. 383 the Court of Appeal considered the authorities dealing with the position of highway authorities and Denning LJ stated “The statute … vests in the local authority the top spit, or perhaps, I should say, the top two spits of the road for a legal estate in fee simple determinable in the event of it ceasing to be a public highway”. The interest of the highway authority has been referred to as “a fee simple absolute in possession determinable” by Mann J. in Wiltshire CC & Others v Frazer (1983) 82 LGR 313.[59]Now, section 106(3) of the Act provides that “… a planning obligation is enforceable by the authority –(a) against the person entering into the obligation; and(b) against any person deriving title from that person.”[60]Family therefore argues that, since the title in the highway, which vested in the Claimant by virtue of the section 38 agreement, was derived from Oakmesh via Family, the effect of section 106(3) is to make the Obligation enforceable against the Claimant.[61]I do not accept that argument. Mr Jefferies argues that the Claimant should not be regarded as a person “deriving title under [Oakmesh]” since its title vested in it for the purpose of the performance of its functions as highway authority and by operation of section 263(2) of the Highways Act and that such title was not one “deriving … under Oakmesh” within the meaning of section 106 of the Act.[62]In my judgment that argument has merit. Tithe Redemption was a case which turned on whether the title of the highway authority was a fee simple in possession; it was not concerned with how and from whom it derived title. Although Oakmesh/Family at the time of the Agreement held the fee simple in the land on which the roads were eventually constructed, I have not been shown any authority which compels me to conclude that a highway authority must be regarded as “deriving title” from a prior owner. Moreover, in the section 38 agreement, which I have considered, there were no words of transfer of title from Oakmesh to the Claimant. The agreement was, I understand, in common form and recited the desire of Oakmesh that the ways on the site should become maintainable at public expense and a declaration in the agreement that, on the issue of the final certificate subject to compliance by Oakmesh with certain standards of construction and certain payments, the roads “will become highways maintainable at public expense”. Nothing other than the surface of the highway vested in the Claimant; and it vested only by virtue of the operation of section 263(2).[63]However, I am attracted also to the following two arguments. First of all, the fact is that the local planning authority and the highway authority are one and the same legal person, i.e. the Claimant. Section 106(3) permits the local planning authority to enforce a section 106 agreement against a person deriving title as if the local planning authority were possessed of adjacent land and as if the agreement had been expressed to be made for the benefit of such land. Clearly there is no way that the Claimant can take any enforcement proceedings against itself. That would be a nonsense.[64]Secondly, as a matter of construction of the Agreement itself, in my judgment it is simply not within the contemplation of the Agreement that the Obligation is enforceable against the Claimant itself. That is of necessary implication because the Obligation was required to be performed by the other party to the Agreement and, more particularly, “at nil cost to the Council” and that is inconsistent with an obligation in respect of which the Council has a joint and several liability either to perform the obligation itself or contribute to the cost of it.[65]I turn now to consider the many other powerful arguments by which Family has sought to persuade me not to exercise my discretion. I will take them in turn.[66]I do not consider that the obligation to provide the bridge link is comparable to a building contract. Even if it is, I have seen the plans which were submitted to the Claimant for the purpose of obtaining the Approval in Principle. They were prepared by consulting engineers and are very detailed and were approved by the Claimant without amendment or fuss. Although further detail and structural calculations will be required, I do not accept that this is a matter of great moment. Family is in my judgment exaggerating the potential problems. In the light of the approval in principle, the problems which Family highlights are different in kind or extent from those which existed prior to the Agreement only to the extent that they are much less. The original problems were not sufficient to daunt either party. There is no reason why the court should find the slighter problems which now remain to be daunting now. There is no reason to think that the court will, if it makes a mandatory order now, find itself supervising the works of construction or adjudicating between the parties on what is or is not a reasonable performance of the Obligation. As Lord Hoffman stated in Co-Operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 at 13 D:
“Even if the achievement of the result is a complicated matter which will take some time, the court, if called upon to rule, only has to examine the finished work and say whether it complies with the order… This distinction between orders to carry on activities and to achieve results explains why the courts have in appropriate circumstances ordered specific performance of building contracts and repairing covenants.”
And again at 14 D he stated that the need for precision in the terms of the order is:
“a question of degree and the courts have shown themselves willing to cope with a certain degree of imprecision in cases of orders requiring the achievement of a result in which the plaintiff’s merits appeared strong; …”
[67]It is accepted that planning permission will be required. However, that is not likely to present any problems in practice. That is because it is highly likely that planning permission will be granted, because the construction of the bridge link was an obligation in a section 106 agreement and a planning appeal has recently confirmed the Obligation. On the other hand, in the unlikely event that planning permission were not to be granted, the bridge link could not lawfully be constructed and Family will not be in breach of an order of the court that it should do so.[68]The fact that Family does not own the strip of land on which the bridge link is to be constructed is also of no importance: it has a contractual licence to enter the land and construct the bridge link on it and the owner has offered to convey the land free of charge to it for that purpose.[69]That leaves the argument that the Claimant should be left to its remedy under section 106(6) of the Act, that is to say, entering the land and then recovering “expenses reasonably incurred”; alternatively, that damages in lieu would be an adequate remedy. The Claimant is however unwilling to undertake the work itself: as a local authority operating in a financially hostile environment, it says it does not have the resources, skills or manpower to be able to do so and would not wish to be exposed to the risk of default by Family subsequently. In my judgment that is not an unreasonable position for it to take.[70]In my judgment it is relevant that Oakmesh secured a planning permission on condition that it entered into the Agreement. Had it not been prepared to do so, it may well not have secured the permission. In the Agreement it covenanted that it would perform the Obligation, took the benefit but failed to fulfil its Obligation. Family also took the benefit and repeatedly undertook to perform the Obligation. The fact that the cost to Family now will be many times more than the quotation it received and the money it retained for the work in 1996 is to a substantial extent the consequence of the passage of time for which (as the correspondence in paragraphs 9 to 19 above shows) it is itself responsible. Simple justice would tend to suggest, all other things being equal, that Family should honour its promise to perform the Obligation.[71]The conclusion to which I have come is that this is a proper case for a mandatory injunction to be ordered. The remedy of an injunction is expressly authorised by section 106(5) of the Act. And, at the end of the day, I have had regard to the manner in which Family has persistently messed the Claimant about since December 1996, and reached the conclusion that no other remedy than mandatory injunctive relief will sufficiently bring home to Family the importance of performing the Obligation and provide an appropriate means of enforcement to the Claimant if it does not.[72]I am inclined to think that an order broadly along the lines of that in paragraph 50(1) would be appropriate and that(2) is likely to be unnecessary. I would be content to allow the parties to agree the terms of the order, but will resolve the matter after submissions if agreement cannot be reached.