Aspire Luxury Homes (Eversley) Ltd v Hart District Council

A dispute about the construction of a section 106 agreement may ordinarily be brought by ordinary civil proceedings. The exclusivity principle in O’Reilly v Mackman principally concerns the validity of public-law acts, and does not require every dispute about the meaning or performance of a planning obligation to proceed by judicial review. The availability of a parallel planning appeal does not itself make civil proceedings abusive where the issues and relief differ. A claim should not be struck out where the contractual wording is capable of the claimant’s proposed interpretation and the issues depend on disputed facts, including the parties’ efforts to find an affordable-housing provider and the effect of a transfer mechanism.

The claimant developer acquired land subject to a section 106 agreement requiring affordable housing and restricting the sale of open-market dwellings until specified steps had been taken. A proposed registered provider withdrew, alternative providers did not make comparable offers, and the defendant local authority declined to accept a transfer.

The claimant sought declarations and damages, contending that the agreement’s cascade mechanism had been exhausted and that the remaining restrictions no longer applied. It also relied on estoppel. The defendant applied under CPR 3.4(2), arguing that the claim was an abuse because the issues were public-law matters requiring judicial review, that it duplicated a planning appeal, and that it had no reasonable prospect of success.

1. Application dismissed. The claim was not an abuse of process and disclosed reasonable grounds. It was not appropriate to transfer the case to the Planning Court for continuation under CPR Part 54.
2. The court distinguished cases concerning the validity of purely public-law planning acts. The validity of a section 106 agreement is ordinarily a public-law issue suitable for judicial review. Its construction is different. A section 106 agreement is not, in principle, different from an ordinary contract for the purpose of construction, and a dispute about its meaning may be determined in a CPR Part 7 claim.
3. The authorities, including Trim v North Dorset DC, T & P Ltd v Sutton LB and Milebush Properties Ltd v Tameside MBC and Hillingdon LBC, did not require a different result because they concerned public-law validity or planning objectives rather than the construction of a contractual obligation. Stroude v Beazer Homes Ltd supported construction of a section 106 agreement according to ordinary contractual principles.
4. The parallel planning appeal concerned variation of the planning obligation, principally on development-viability grounds. It did not duplicate the civil claim, which concerned the meaning and alleged discharge of clause 14.
5. The claimant’s interpretation was difficult but arguable. Clause 14.3, under which the parties were at liberty to transfer the affordable-housing land to the council, had an apparently purposeful but unclear function. It was possible that the clause discharged the obligation if the council declined a transfer. The issues also depended on disputed facts and construction, including whether negotiations with HHL engaged clause 14, the meaning of “offer”, the use of reasonable endeavours, and the effect of clause 14.3.
6. The estoppel issue remained part of the claim, although its prospects appeared remote in light of R v East Sussex CC ex p Reprotech and others. Those matters should be resolved at trial rather than on a summary strike-out application.

First-instance decision. The judgment states that the claimant had also lodged a planning appeal against the defendant’s failure to determine an application to vary the section 106 agreement, but that appeal was not an appeal from the present proceedings.