Section 106s – potted summary of recent cases

by

Meyric Lewis

December 2014

FormalitiesPractical problemsTop tipsEnforcementSome recent appeals/developments

Formalities:Section 106(9) – obligation must:Be executed as a deedState it is a planning oblig for purposes of s. 106Identify land in which person entering is interestedIdentify that person and state what their interest isIdentify LPA by whom enforceable

Southampton CC v. Hallyard Ltd [2008] EWHC 916 (Ch) agreement failed to state interest of the person entering the agreement, s. 106(9)(c).

Not therefore an “obligation” under 106 and so s. 106(3) did not operate to enforce against “any person deriving title”

NB though enforcement in contract?

Drafting issuesUse Law Society precedent?Halsbury’s Encyclopedia of Forms and Precedents?NB though tailoring to specific circumstancesNOT set in stone

NB also (1) triggers for and(2) cessation of liability

Triggers for liability

“occupation” or “ready for occupation”(but is the latter any better?)

DON’T just say ‘shall not be occupied until payment’DO say ‘pay [relevant contrib] before…’

PLUS ‘and no occupation if £ not paid’So court can make order preventing further occupation(esp. if developer has no money)ie ‘milestone’ better than mere positive obligation

“mortgagee in possession”?What if receiver appointed?

Cessation of liability‘No person shall be liable for any breach… after they

have parted with their interest (without prejudice for liability for any subsisting breach)’

Make sure developer/owner caught before all units soldNot v attractive suing purchasers!In any event? ‘This deed shall not be enforceable against

owner-occupiers of dwellings constructed under PP’

Undertaking versus agreementFormer can’t impose obligations on LPA

Payment of LPA’s costs?

Dispute resolution – court or arbitration?- see Hampshire CC v. Beazer Homes Ltd [2010] EWHC 3095 (QB) ‘complex issues of law’

Enforcement of 106s R (Millgate Devs Ltd) v. Wokingham BC [2011] EWCA Civ 1062S. 78 appeal with UU – but Inspector found various obligations not “necessary”.JR declaration sought that s. 106 not enforceableHELD enforceble (but scope for subsequent dispute on reasonableness of amounts of contribs?)(NB conditionality of finding of “necessity”)

R (Renaissance Habitat Ltd) v. West Berks DC [2011] EWHC 242 (Admin)Section 106 agreement based on former SPD – revised by time payment required.JR of decision to issue debt proceedingsHELD not unlawful/unreasonable to enforce (no issue on method of calculation)

Hertsmere BC v. Brent Walker Grp [1994] 1 PLR 1Section 106 agreement based on former SPD – revised by time payment required.JR of decision to issue debt proceedingsHELD not unlawful/unreasonable to enforce (no issue on method of calculation)

cp. JA Pye v. South Glos DC [2001] 2 PLR 66 at 26

Newham LBC v Ali [2013] EWHC 1715 (QB) - enforcement of s. 106 in contract

Mayor and Burgesses of Waltham Forest LBC v. Oakmesh [2009] EWHC 1688 (Ch) -mandatory injunction for construction of foot bridge

NB R (Robert Hitchins Ltd) v. Worcs CC [2014] EWHC 3809 (Admin) – s. 106 unenforceable/diff PP

Appeal decisionshttp://www.planningportal.gov.uk/planning/appeals/online/search/

Varying section 106s:Gleeson/Barnsley (2219676) – AH req’mt removed altogether Hitchins/Lydney Forest of Dean (2215840) – AH requirement reducedSunbury/Newham (2218712) – AH reducedSwindells/High Peak BC (2217720) – appeal dismissed

Section 106s – potted summary of recent cases

byMeyric Lewis