Stratford On Avon Council v David Wilson Homes Ltd.& Ors

In a planning-obligation agreement, references to the “Owners” were construed contextually and included successors in title. Where owners were jointly and severally liable, the council could serve notice only on those owners it intended to pursue.

An alternative community facility could be funded or acquired elsewhere, and the notice form was descriptive rather than prescriptive. A notice was therefore effective despite referring to an agreement being “about” to be entered into. A later voluntary indemnity could not enlarge an earlier indemnity which had ceased to apply when the transferor’s own planning liability ended.

The council claimed £125,000, together with indexation, under a section 106 agreement relating to a residential development. The agreement required payment for a community hall or an alternative community facility in Shipston-on-Stour.

The council served a Community Hall Land Notice on David Wilson Homes Ltd and Peverel Freeholds No 2 Ltd, the current owners it sought to hold liable. The defendants challenged the notice, the proposed alternative Scout hut facility, the timing of service, and David Wilson’s liability in respect of highway land. Indemnity claims arose between associated companies in the ownership chain.

The central issues were whether the notice validly triggered the payment obligation and whether the contractual indemnities covered the liability.

1. Claim against the current owners. The claim succeeded against David Wilson Homes Ltd and Peverel Freeholds No 2 Ltd. The agreement was a planning obligation under the Town and Country Planning Act 1990. Read with its successors-in-title and joint-and-several-liability provisions, “Owners” included successors and did not require service on every person who might technically fall within that description. Service on the owners pursued by the council was sufficient.
2. Construction of the payment mechanism. The agreement permitted the Community Hall Payment to be used for the provision or enhancement of community facilities elsewhere in Shipston-on-Stour. That could involve funding an existing facility and did not require a building contract. Annex 7 was descriptive, not prescriptive. The words “about to be entered into” were not essential to a valid notice, and any inaccuracy in those words was not fatal.
3. Timing and consent. The council established that development commenced no earlier than 24 or 26 February 2003, excluding demolition and site-preparation works. The notice served on 19 February 2009 was therefore in time. Consent from the owners whom the council pursued was sufficient. In any event, the original owners had agreed in principle, or had unreasonably withheld agreement, because their objections were untenable.
4. David Wilson’s liability. The highway exclusion depended on an intention to dedicate land as a public highway, not merely on its later adoption. The small grassed strip was not intended to become highway land, so the exclusion did not apply.
5. Indemnity. The claim against Stoneyfield Management Ltd failed. When PF1 transferred its remaining interest to PF2 without obtaining a mirror indemnity, PF1’s outstanding planning liability ended. PF1’s later voluntary indemnity to PF2 created a new liability and did not fall within Stoneyfield’s earlier indemnity.