Milebush Properties Ltd v Tameside Metropolitan Borough Council & Ors

By these proceedings the Claimant (“Milebush”) seeks a declaration that the First Defendant (“Tameside”) is obliged to grant it a right of way over a service road (“the Service Road”) in accordance with clause 3.5 of an agreement dated 15 February 1991 (“the Principal Agreement”) as varied by an agreement dated 29 October 1997 (“the Supplemental Agreement”). The Principal Agreement was made between Tameside’s predecessors in title and the Second Defendant (“Hillingdon”) pursuant to section 106 of the Town and Country Planning Act 1990. Tameside accepts that it is obliged to grant Milebush a right of way over the Service Road, and has offered to do so, but disputes that it is obliged to grant a right of the scope demanded by Milebush. It denies that Milebush is entitled to declaratory relief in any event. It also raises a defence under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Hillingdon supports Tameside’s position with regard to the scope of the right of the way in relation to the main issue raised by Milebush, but not a subsidiary issue. It also supports Tameside’s position with regard to declaratory relief, and adds that it should not have been joined as a defendant anyway. It is neutral on section 2 of the 1989 Act.

Milebush commenced the proceedings by a Part 8 claim form on 18 November 2009. On 8 December 2009 and 11 January 2010 respectively the Defendants applied for summary judgment dismissing the claim. On 18 January 2010 those applications came before Roth J for directions. He made an order expediting the trial of Milebush’s claim and directed that the Defendants’ applications be heard together with the trial.

Milebush is, and has since 3 March 1977 been, the freehold proprietor of 276-280 High Street, Uxbridge. These properties are near to the corner with Vine Street. They are used for both commercial and residential purposes, including a covered shopping arcade.

On 15 February 1991 Hillingdon granted London & Metropolitan Estates Ltd (“L & M”) and Traffichold Ltd (“Traffichold”) planning permission (“the Planning Permission”) for “Development of offices up to a maximum of 6,361 m² floorspace and associated car parking (incorporating provision for a rear service road to the rear of High Street properties)” on a large site on Cricketfield Road, off Vine Street (“the Development”). The Planning Permission was subject to a number of conditions, including the following:

“CONDITION 2

That the development hereby permitted shall not be occupied until the rear service road providing rear access to Nos. 271 and 272 High Street and for its future extension to serve Nos. 273-283 High Street is completed to the satisfaction of the local Highway Department.

REASON

To ensure provision of rear servicing to properties on the south side of the High Street so as not to prejudice the future pedestrianisation of the High Street.”

On the same date L & M, Traffichold and Hillingdon entered into the Principal Agreement. The Principal Agreement includes the following recitals:

“A The Developer is the owner in fee simple of the Application Site.

B The Council is the Local Planning Authority for the area of the London Borough of Hillingdon for the purposes of the Town and Country Planning Act 1990 and a Principal Council for the purposes of the Local Government (Miscellaneous Provisions) Act 1982 for the area within which is situated the Application Site, the Service Road, Cricketfield Road and the area of the Roundabout Works.

C The Council is the Highway Authority for the purposes of the Highways Act 1980 for the area in which the Application Site is situated and has under its control Cricketfield Road partly as a highway and partly as an accommodation road.

D The Developer has applied to the Council for Planning Permission.

E It is the Council’s objective to provide access for the rear servicing of those properties known as 1-5 Vine Street and 271-283 High Street inclusive as part of its pedestrianisation proposals for the High Street Uxbridge and it is the Council’s intention to phase implementation providing rear access to numbers 271-272 High Street and for the further extension of the Service Road to access 273 and 283 (including the new arcade properties) High Street and 1-5 Vine Street as the first phase of rear servicing.

F It is the mutual desire of the parties hereto that the Service Road be provided for the purposes mentioned in recital F [sic] above according to the terms of this Agreement.

G The Developer and the Council have agreed outline design drawings and forms of construction for the schemes for the construction of the Service Road for Cricketfield Road to the rear of the High Street and highway improvement works to the mini roundabout at the south end of Cricketfield Road as provided for in this Agreement.”

Clause 1.1 provides:

“This agreement is made pursuant to Section 106 of the 1990 Act, Section 33 of the Local Government (Miscellaneous Provisions) Act 1982, Section 111 of the Local Government Act 1972, Section 38 and Section 278 of the Highways Act 1980 and all other powers so enabling.”

Clause 2 contains a number of definitions, including a definition of “Developer” as “L & M and Traffichold and their successors in title” and a definition of “Service Road” as follows:.

“The area hatched and cross hatched black on plan 90028/P102B or as the Reserved Matters shall otherwise provide and be approved but in which event shall always link the High Street with Cricketfield Road as herein provided.”

Clause 3 contains provisions relating to the Service Road the details of which do not matter because they were substantially varied by the Supplemental Agreement.

Clause 8.7 provides:

“In the event of any dispute between arising between the Parties hereto in respect of

…

(ii)

any other matter the subject of or arising out of this Agreement the same shall be referred to a Chartered Surveyor to be agreed between the parties hereto or failing agreement as to the same to be appointed upon the application of either party hereto by the President for the time being of the Royal Institution of Chartered Surveyors

PROVIDED THAT any person appointed under this Clause shall be required by the parties to act an expert and not as an arbitrator …”

Subsequently L & M, Traffichold, Hillingdon and Frogmore Estates Ltd (“Frogmore”) entered into the Supplemental Agreement. The recitals to the Supplemental Agreement refer to the Principal Agreement and state that “Frogmore has contracted with L & M and Traffichold to purchase the Application Site (as defined in the Principal Agreement) subject to conditions”.

Clause 1.2 of the Supplemental Agreement substituted for the old definition of “Developer” a new definition, which was “L & M, Traffichold and Frogmore and their successors in title”. Clause 1.3 added some new definitions, including the following:

“‘Authorised Properties’ the properties known as 1-5 Vine Street and 271-283 High Street to be granted rights of access over the Service Road in accordance with the terms of this Agreement.

‘Variation’ the grant of permission to vary the Planning Permission by the removal of condition 3 and the variation of conditions 2 and 4 in the form annexed to this Agreement”.

Condition 2 of the Planning Permission, as varied, states that:

“The Development hereby permitted shall not be occupied until the rear Service Road providing rear access to numbers 271 and 272 High Street and for its future extension to serve numbers. 273-283 High Street is completed as certified by a suitably qualified Highways Engineer.”

Clause 2 of the Supplemental Agreement contains a number of amendments to clause 3 of the Principal Agreement dealing with the Service Road, including adding a new clause 3.5 in the following terms:

“3.5.

The Developer hereby covenants with the Council that it will grant rights of way in fee simple with or without vehicles to inure in perpetuity (but subject to termination if the rights cease to be capable of being exercised for the purpose for which they are granted) over the Service Road for the benefit of Authorised Properties for the purpose of obtaining access for servicing the rear of those properties only and in accordance with the terms of this clause and to be registered against the Developer’s title and the expression ‘rights of way’ whenever used in this clause shall be so construed.

3.5.1

on the later of the date of Substantial Completion of the Service Road and the date when the Development is first occupied the Developer will grant rights of way to the owners of those of the Authorised Properties to which the Service Road is physically capable of providing rear access at that time such rights to be available during normal office hours on Monday to Friday and on such reasonable terms as may be imposed by the Developer for the benefit of the owner and the owner’s assigns; and

3.5.2

on the date when the Council notifies the Developer that vehicular access to the Authorised Properties from the High Street has been materially restricted as part of the Pedestrianisation Works the Developer will grant rights of way in favour of the Authorised Properties to be exercisable at all reasonable times and upon such reasonable terms as may be imposed by the Developer;

3.5.3

without prejudice to the generality of the Developer’s right to impose reasonable terms on the grant of rights of way it is agreed that it shall be reasonable for the Developer to include terms:-

3.5.3.1 providing for each grantee to make a reasonable contribution to the maintenance costs for the Service Road;

3.5.3.2 permitting the Developer to control access to the Service Road by the operation of security barriers;

3.5.3.3 permitting the Developer at a future date to vary the precise route of the Service Road provided that the right of way so varied is no less commodious and is sufficient to provide access for rear servicing purposes; and

3.5.3.4 permitting the Developer at a future date to seek to have the Service Road adopted as a public highway.

3.5.4

it is agreed that it shall not be reasonable for the Developer to require payment for the exercise of the right of way.

3.5.5

it is agreed that under the terms of each grant the Developer shall undertake to keep the Service Road (or such varied right of way created in accordance with clause 3.5.3.3.) in a condition such that it is reasonably fit for the purpose of the grant (to include maintenance and repair of the road, lighting and security apparatus).

3.5.6

PROVIDED THAT:-

3.5.6.1 in the case of both new and varied rights of way granted pursuant to clause 3.5.1 and 3.5.2 the Developer shall be required to grant such rights or such varied rights upon receipt of a written request from the owner of the property entitled to such benefit; and

3.5.6.2 in the case of new rights of way granted pursuant to clauses 3.5.1 or 3.5.2 the Developer shall not be required to grant such rights until it shall first be satisfied that the owner of the property in question has deduced good title both to the freehold thereof and to rights (in fee simple) of way (with and without vehicles) over any intervening land linking the property in question with the Service Road.”

Milebush’s properties are among those falling within the definition of Authorised Properties in the Supplemental Agreement.

On 18 August 2000 Tameside acquired the freehold title to the Development as an investment for its Pension Fund. As stated above, it is common ground that, as a successor in title to L & M, Traffichold and Frogmore, Tameside is obliged to grant the rights set out in clause 3.5 of the Principal Agreement as varied by the Supplemental Agreement.

The Service Road was completed in about 2004 or 2005. It runs from Cricketfield Road alongside the Development parallel to Vine Street and then turns through a right angle towards Vine Street to form an L. The Development was first occupied in about March 2008. This consists of office premises known as Beaufort House with an adjoining covered car park. About half way along the long arm of the L of the Service Road and by the front wall of the car park is a set of security gates. These gates are padlocked and access to the part of the Service Road beyond the gates is controlled by a security guard.

Pedestrianisation and other traffic control works to the centre of Uxbridge have proceeded in stages over the years. Parts of the High Street are now fully pedestrianised. Other parts, including those adjacent to the Authorised Properties, are presently the subject of strict traffic controls.

On 19 May 2009 Hillingdon served a notice on Tameside in the following terms:

“In accordance with clause 3.5.2. of the Supplemental Agreement … you are hereby served with Notice … that vehicular access to the Authorised Properties (being the properties known as 1-5 Vine Street and 271-283 High Street) from the High Street has been materially restricted as part of the pedestrianisation works carried out by the London Borough of Hillingdon. This Notice shall be made available for public inspection with the Section 106 Agreements mentioned above.”

On 21 May 2009 Tameside wrote to Milebush stating that it was prepared to grant Milebush a right of way pursuant to clause 3.5.2 of the Principal Agreement as varied by the Supplemental Agreement on the terms and conditions set out in that letter. These included the following:

“(A)

The right will be granted only for the purposes of allowing [Milebush] access and egress over the service road in order to service the rear of [Milebush]’s property (i.e. loading and unloading of goods). The right of way may not be used as an emergency exit or for any other purpose.

(B)

The right of way may only be used between the hours of 7.30 am and 6.00 pm Monday to Friday.

…

(D)

Access to the service road will be controlled by the operation of the security gate on the service road.”

Milebush contends that Tameside is not entitled to impose conditions (A), (B) and (D) on the grant of the right of way. Although Milebush attacks each of these conditions individually, for reasons that will appear the issues raised by these conditions substantially overlap.

Milebush had sought the grant of a right of way over the Service Road by Tameside even before Hillingdon’s notice dated 19 May 2009. It is clear from correspondence between Milebush and Tameside going back to 26 April 2007 that Milebush’s principal reason for seeking the grant of the right of way is in order to provide a pedestrian emergency exit for a restaurant and wine bar which is presently located at one of its properties. Milebush contends, however, that it has other reasons and that in any event it is entitled to a right of way of the full width specified in clause 3.5, namely “for the purpose of obtaining access for servicing the rear of [the Authorised Properties] only”.

At present none of the other owners of the Authorised Properties have sought a right of way over the Service Road.

It is common ground that the correct approach to the interpretation of an written grant of a right of way is that stated by Rimer LJ in Davill v Pull [2009] EWCA Civ 1309, [2010] 1 P&CR 23 at [28]:

“… The task of interpretation with which the court is faced requires the intention of the parties to the original conveyances to be ascertained from the words of the grants read in the light of the background circumstances which would have been known to the parties. As I observed in Young v Brooks [2008] EWCA Civ 816, [2008] 3 EGLR 27 at [12] Lord Hoffmann’s five principles of interpretation in the Investors Compensation Scheme case, supra, apply as much to the interpretation of an express grant of an easement as to that of a contract. The context, as the judge rightly said, is all; and [counsel] was correct to emphasise the background scheme against which the grants came to be made.”

In the present case, counsel for the Defendants both emphasised that the context of clause 3.5 of the Principal Agreement as amended by the Supplemental Agreement was to be found in Hillingdon’s planning objective set out in Condition 2 to the Planning Permission and recitals E and F of the Principal Agreement. That objective was expressed in Condition 2 as being to “ensure provision of rear servicing to properties on the south side of the High Street so as not to prejudice the future pedestrianisation of the High Street”. Accordingly, both counsel submitted that the reason why rights of way were conferred by clause 3.5 was to compensate for the loss of access to the front of the Authorised Properties caused by pedestrianisation. (Although Condition 2 only refers to pedestrianisation of the High Street, it was evidently contemplated that numbers 1-5 Vine Street would or might be affected as well.)

Counsel for Milebush did not dispute that the requirements for provision of the Service Road and for rights of way to be granted over it had arisen out of Hillingdon’s pedestrianisation plans, but submitted that it was evident from the wording of clause 3.5, and in particular the inclusion of the words “with or without vehicles” in the second line, that the rights granted went beyond what was necessary to compensate the owners of the Authorised Properties for the loss of vehicular access to the front of their properties as a result of pedestrianisation.

To this counsel for Tameside riposted that Milebush’s argument confused the mode of use (“with or without vehicles”) with the purpose for which the rights were provided (“obtaining access for servicing the rear of [the Authorised Properties] only”). (Clause 3.5.3.3 refers to “access for rear servicing purposes”, which I regard as a short-form wording with the same intended meaning.)

In my judgment it is clear, from (i) Condition 2 of the Planning Permission, (ii) recitals E and F of the Principal Agreement, (iii) the purpose identified in the body of clause 3.5 quoted in the preceding paragraph and (iv) the fact that the trigger for clause 3.5.2 to come into effect is a material restriction of vehicular access to the Authorised Properties, that the intention that lies behind the grant of the rights of way in clause 3.5 was to compensate the owners of the Authorised Properties for the loss of vehicular access via the High Street as a result of pedestrianisation. It is true that the rights of way which were granted extend to pedestrian use, but that is explicable on the basis that the parties considered that, if vehicular use was to be granted, it made little sense to exclude pedestrian use.

Another point made by counsel for both Defendants is that clause 3.5.2 provides for the grant of a right of way “upon such reasonable terms as may be imposed by the Developer”. They submitted that this enabled Tameside to impose terms such as those set out in its letter dated 21 May 2009 provided that they were reasonable. Counsel for Milebush disputed this.

In my judgment clause 3.5.2 enables Tameside to impose terms on the rights of way provided that they are reasonable, but only in relation to matters that clause 3.5 does not expressly regulate. Condition (A) sought to be imposed by Tameside limits the purpose for which the right of way may be used. I do not consider that it is open to Tameside, by imposition of a term, to restrict the purpose for which the rights of way may be used more narrowly than clause 3.5 on its proper interpretation does. Condition (B) limits the times during which the rights of way may be exercised. In my view this is permissible if it is consistent with the provision in clause 3.5.2 that the rights be exercisable “at all reasonable times”, but not otherwise. Similarly, condition (D) is permissible if it is consistent with clause 3.5.3.2, but not otherwise.

Counsel for the Defendants relied on the fact that Hillingdon considers the terms set out in the 21 May 2009 letter to be reasonable. In my judgment this cannot be determinative. Reasonableness must be an objective test. Moreover, this argument is inconsistent with the Defendants’ next argument.

Counsel for the Defendants also submitted that clause 8.7(ii) provided for expert determination of any dispute between Tameside and Hillingdon as to reasonableness, although they did not go so far as to submit that this excluded review by the court in the event of an error of law. Counsel for Milebush submitted that clause 8.7(ii) was simply irrelevant given that Milebush was not a party to the Principal Agreement.

In my judgment, clause 8.7(ii) is not relevant to the issue between the parties before me as to the meaning of the words “obtaining access for servicing the rear of those properties”. This is a pure question of construction of the Principal Agreement. I consider that clause 8.7(ii) does have a bearing on some of the other issues, however. In so far as those issues involve a question of fact as to what is reasonable, then I consider it clear that clause 8.7(ii) provides for that question of fact to be the subject of expert determination. I will come to the relevance of this below.

For the reasons explained above, the central issue in these proceedings is whether use “for the purpose of obtaining access for servicing the rear of [the Authorised Properties] only” extends to use for the purpose of an emergency exit. I agree with the Defendants that it does not. My reasons are as follows.

First, to interpret clause 3.5 as extending to use for the purpose of an emergency exit would not be consistent with the intention of the parties I have identified above. Pedestrianisation of the High Street has no adverse impact on emergency egress from the Authorised Properties.

Secondly, I do not consider that use for the purpose of an emergency exit falls within the natural meaning of the words “obtaining access for servicing the rear of those properties” read in context. The verb “service” means “to be of service of” or “to provide with a service”, but it is not easy to define precisely what “servicing” covers in this context. I interpret it to refer primarily to the performance of activities which would ordinarily require use of a vehicle of some kind. Plainly this includes loading and unloading of goods. I do not accept that it is limited to loading and unloading of goods as Tameside contends, however. Although neither was raised by any of the parties, two examples of the kind of use that I consider are within the scope of “access for servicing the rear of those properties” are disabled access (such as a car bringing a wheelchair user to the property) and access by bicycle (or possibly even motorcycle if the motorcycle can be parked on the property). Counsel for Tameside laid some stress upon the references to the “rear” of the properties, but I do not regard this as significant. In my view it merely reflects the geographical fact that the Service Road provides access to the rear to the properties, whereas the High Street (or Vine Street in some cases) provides access to the front.

Thirdly, I consider that this interpretation is supported by the limitation to exercise “at all reasonable times” in clause 3.5.2. Counsel for Milebush submitted the intended contrast was with times which were unreasonable, relying upon what Rimer LJ said about similar wording in Davill v Pull at [32]. I accept that submission. Nevertheless, it clearly does not mean “at all times”. An emergency exit, however, must be potentially available at all times. At minimum, in the case of a bar, it must be available at times which could well be regarded as unreasonable, such as 2 am.

Fourthly, I consider that this interpretation is supported by clause 3.5.5.2, which expressly permits the Developer to control access to the Service Road by security barriers. In my view this inconsistent with use for an emergency exit, which one would expect to be unimpeded.

A secondary issue that crystallised during the course of the hearing was whether use “for the purpose of obtaining access for servicing the rear of [the Authorised Properties] only” extends to access for repair and maintenance of the Authorised Properties. Milebush contends that it does, but Tameside disputes this. Hillingdon’s position on this issue was initially unclear, but during the course of the hearing counsel for Hillingdon informed me that Hillingdon accepts in principle that access for the purpose of repair and maintenance is covered by these words. She emphasised, however, that precisely what can be done for this purpose is subject to other constraints in clause 3.5.

Counsel for Tameside submitted that clause 3.5 did not permit the use of the Service Road, which is Tameside’s land, as a base from which to repair or maintain the Authorised Properties. I accept that submission, but in my view it is beside the point. Milebush and its contractors may wish to use the Service Road to access Milebush’s properties for the purpose of repair and maintenance, for example in order to drive a vehicle such as a mobile crane onto Milebush’s property. (At present this is not physically possible, but it could be in the future.) In my judgment, that would fall within the scope of “access for servicing”.

Condition (B) limits exercise of the right of way to Monday to Friday 7.30 am to 6.00 pm. As I have already said, I consider that clause 3.5.2 requires Tameside to permit exercise at all reasonable times, that is to say, all times that are not unreasonable. I would add that there is a clear contrast in this respect between the language of clause 3.5.2 and that of clause 3.5.1, which only requires Tameside to permit exercise “during normal office hours on Monday to Friday”. Strictly speaking, therefore, Milebush is entitled to the grant of a right of way exercisable “at all reasonable times”.

It follows that Tameside can only justify condition (B) if the hours of 7.30 am to 6.00 pm Monday to Friday constitute “all reasonable times”. Against this, it may be said that it would not be unreasonable for Milebush to seek access at (say) 6.15 pm on a weekday or even 9 am on a Saturday. It is also arguable that what is a reasonable time may depend on the precise nature of the access required. Thus it might be reasonable to use the Service Road for disabled access at a time when it would not be reasonable to use it for repair and maintenance.

In my view this is not an issue which can be judged in the abstract as a matter of construction in these proceedings. Once the phrase “at all reasonable times” has been interpreted as meaning all times which are not unreasonable, what is a reasonable time is a question of fact. For the reasons given above, in the event of a dispute between Tameside and Hillingdon, this would be a matter for expert determination. At present, however, this is no such dispute.

Condition (D) provides that access will be controlled by “the operation of the security gate”. Although not spelled out in the letter dated 21 May 2009, it is evident that this is intended to mean “the operation by a security guard of a padlocked security gate such as the existing one in the manner in which it is presently operated”. As I have already said, I consider that whether condition (D) can be imposed depends in the first instance on whether it is consistent with clause 3.5.5.2.

Counsel for Milebush submitted that it was inconsistent because the existing arrangement was not a “security barrier”. Counsel for the Defendants disputed this. In my judgment padlocked gates of the present kind can be regarded as “security barriers”.

It appears to me from the evidence that Milebush’s real objection is not to the physical construction of the gates, but to the present arrangements for opening the gates, namely that an appointment must be made in advance for a security guard to open the gate. Milebush wants to have a copy of the key to the padlock. The arrangements for opening and closing the security barriers are not regulated by clause 3.5.5.2, however. In my view it follows that it is open to Tameside to impose by way of terms reasonable arrangements. What is reasonable is a question of fact. In the event of a dispute between Tameside and Hillingdon, it will be a matter for expert determination.

Finally, I should note that Tameside has recently offered to provide a video entry system remotely controlled by a security guard located at Beaufort House in place of the current arrangement. This would appear to meet at least some of Milebush’s concerns about the present situation.

As noted above, both Defendants contend that this is not in any event an appropriate case for declaratory relief.

The starting point here is that Milebush is not a party to the Principal Agreement, although it is a beneficiary of clause 3.5. Milebush does not contend that there is any basis upon which it can enforce clause 3.5 against Tameside despite not being privy to the contract. Nevertheless, Milebush seeks declaratory relief as to the true construction of clause 3.5.

The basis upon which Milebush seeks declaratory relief is CPR rule 40.20, which simply provides that “the court may make binding declarations whether or not any other remedy is claimed”. Counsel for Milebush relied upon the recent summary of the principles applicable to the exercise of this discretion by Aikens LJ in Rolls-Royce plc v Unite the Union [2009] EWCV Civ 387, [2010] 1 WLR 318 at [120]:

“For the purposes of the present case, I think that the principles in the cases can be summarised as follows.

(1)

The power of the court to grant declaratory relief is discretionary.

(2)

There must, in general, be a real and present dispute between the parties before the court as to the existence or extent of a legal right between them. However, the claimant does not need to have a present cause of action against the defendant.

(3)

Each party must, in general, be affected by the court's determination of the issues concerning the legal right in question.

(4)

The fact that the claimant is not a party to the relevant contract in respect of which a declaration is sought is not fatal to an application for a declaration, provided that it is directly affected by the issue (in this respect the cases have undoubtedly ‘moved on’ from Meadows).

(5)

The court will be prepared to give declaratory relief in respect of a ‘friendly action’ or where there is an ‘academic question’ if all parties so wish, even on ‘private law’ issues. This may particularly be so if it is a ‘test case’, or it may affect a significant number of other cases, and it is in the public interest to decide the issue concerned.

(6)

However, the court must be satisfied that all sides of the argument will be fully and properly put. It must therefore ensure that all those affected are either before it or will have their arguments put before the court.

(7)

In all cases, assuming that the other tests are satisfied, the court must ask: is this the most effective way of resolving the issues raised? In answering that question it must consider the other options of resolving this issue.”

Counsel for Milebush submitted that it is directly affected by the issue as to the construction of clause 3.5, and so falls within the scope of Aikens LJ’s fourth principle. Furthermore, he submitted that all those affected are before the Court, since none of the other owners of Authorised Properties have requested the grant of a right of way under clause 3.5.

Against this, counsel for the Defendants submitted that this was a novel and inappropriate context in which to attempt to invoke the Court’s jurisdiction to grant declaratory relief, and accordingly Aikens LJ’s seventh principle was not satisfied.

In support of this submission, counsel for Hillingdon pointed out that section 106 of the 1990 Act provides inter alia as follows:

“(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 in this section and sections 106A and 106B as ‘a planning obligations’), enforceable to the extent mentioned in subsection (3)—

(a)

restricting the development or use of the land in any specified way;

(b)

requiring specified operations or activities to be carried out in, on, under or over the land;

(c)

requiring the land to be used in any specified way; or

(d)

requiring a sum or sums to be paid to the authority (or, in a case where section 2E applies, to the Greater London Authority) on a specified date or dates or periodically.

…

(3)

Subject to subsection (4) a planning obligation is enforceable by the authority identified in accordance with subsection (9)(d)—

(a)

against the person entering into the obligation; and

(b)

against any person deriving title from that person.

…

(9)

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;

(aa) if the obligation is a development consent obligation, contains a statement to that effect;

(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 by whom the obligation is enforceable and, in a case where section 2E applies, identifies the Mayor of London as an authority by whom the obligation is also enforceable.”

As counsel for Hillingdon pointed out, the effect of section 106 is that a planning obligation contained in a section 106 agreement is enforceable by the identified local planning authority (here Hillingdon) against the person entering into the obligation (here the Developers) and any person deriving title from that person (here Tameside). Section 106 does not provide for enforcement by a beneficiary of the planning obligation.

Furthermore, as counsel for both Defendants pointed out, it is well established that the decision as to whether, and if so in what manner, to enforce a planning obligation is one for the local planning authority having regard to its planning objectives. That is a public law function which is only challengeable by judicial review. As is stated in the Encyclopedia of Planning Law and Practice at P106.68:

“A s. 106 agreement may be enforced against the original covenantor in contract, and against successors in title to the original convenantor by virtue of sub.(2) [sic]. Enforcement is a matter solely for the local planning authority, and there is no right for the public at large, even through a relator action to bring enforcement proceedings; although the authority’s decision to enforce or not to enforce is amenable to judicial review: Attorney-General ex rel. Scotland v Barratt Manchester Ltd., The Times, January 2, 1990.

In Attorney-General ex rel. Scotland v Barratt Manchester Ltd (1992) 63 P&CR 179 an attempt by residents to enforce an agreement made under a predecessor of section 106 by means of a relator action was rejected. The leading judgment was given by Nicholls LJ (as he then was). Having pointed out that there was an established procedure by way of judicial review for dissatisfied residents to challenge the decisions of local planning authorities, he observed at 195:

“In the nature of things, many decisions of local authorities affect members of the public to a greater or lesser extent. These decisions affect the public and, in that loose sense, ‘the public interest.’ This is as much so in planning matters as in many other fields of activity of local authorities, such as education. But, despite this, there is no general ‘public right’ which entitles or enables the court to override a local authority's decision on a matter which by statute or otherwise has been entrusted to its decision. In exercise of its judicial review jurisdiction, the court is able to ensure that a local authority's decision has been arrived at properly, in the sense that the decision-making process was duly followed. The court will check that the decision-making body proceeded properly, and applied its collective mind properly to the matters entrusted to its decision. If the decision is flawed, the authority may be compelled to reconsider the matter, and this time to do so properly. But the end result is still a decision by the local authority on the relevant issue, not a decision of the court. All this is trite law, but its importance in the present case lies in noting that the public right for which the Attorney-General contends would have the consequence that a decision by the council on whether or not to enforce the covenant in the 1934 agreement, even if arrived at impeccably, could effectively be overridden, at any rate in some circumstances. If the council decided not to enforce the covenant, nevertheless, if the Attorney-General is correct, the covenant would still be enforceable pursuant to the ‘public right’ to have the covenant complied with.”

He went on at 196-197 to say:

“I can see nothing in this statutory provision to suggest that agreements to which the section applies are to be regarded as endowed with a special type or degree of public interest such as to justify the conclusion that they give rise to a “public right” of enforcement. Mr Price [counsel for the Attorney-General], indeed, disclaimed any contention that all agreements to which section 34 applies, or to which its well-known successor section (s.52 of the 1971 Act) applies, give rise to such a right. He was wise to do so. A proposition that all section 52 agreements, irrespective of their content, create a ‘public right’ would be unsustainable. It would be far too wide.

This compelled the Attorney-General to adopt the position that there is to be found in the provisions of this particular agreement some special feature having the consequence that this agreement, unlike the generality of section 34 or section 52agreements, did create a “public right.Mr. Price contended that the special feature was that the land was intended to be preserved permanently as a private open space “for the benefit and amenity of the district.” This is a promising starting point, but the route which Mr. Price was then obliged to negotiate led him into quicksand. He recognised that, notwithstanding the existence of the public right for which he contended, the council had power to vary or release the restrictions in the 1934 agreement, by agreement with the owner of Birtenshaw Farm.(Indeed, this power was exercised in this case. In 1955 the council and the executors of the two Ashworth brothers agreed to modify the user restrictions to enable a school to be built partly on Birtenshaw Farm and partly on Oaks Farm.) The public right, in other words, consisted only of a right to enforce the restrictions in the agreement as subsisting from time to time. Mr. Price contrasted a case (a) where the council had agreed to release or vary the restrictions, with a case (b) where there was no variation or release but the council declined to take steps to enforce the agreement for non-planning reasons: for example, because of a mistaken view of the enforceability of the agreement. He submitted that in the latter case, case (b), there was a residual public right which did not override the council's right to decide whether to vary or release the restrictions. Nor did it override the council's planning policies. In case (b) the public had a right to enforce the agreement in default of the council doing so. In such a case the public right would not be inconsistent with any relevant policy of the council.

I cannot accept this. By thus limiting its scope, one is left with a public right defined in terms which cannot stand scrutiny. On this formulation the 1934 agreement generated a right vested in the public to enforce the restrictions if, but only if, the reason for non-enforcement was unrelated to planning considerations: for example, financial constraints, or a mistaken view of the council's legal rights. I can see no sound basis for concluding that the agreement created a public right of such a curiously circumscribed nature. The agreement either operated to vest a right in the public in respect of the user restrictions, or it did not. If it did, the right must surely have been applicable, at the very least, in all circumstances where the agreement remained in force. But admittedly the right being claimed would not apply if it was for planning reasons that the council decided not to enforce the restrictions.

The difficulties do not end there. There is no practical distinction between a decision of the council not to enforce a restriction and a decision formally to vary or release a restriction. In each case the effect of the decision is the same: non-enforcement. For there to be a public right available in the one case but not the other would be unsatisfactory. If the public right is subordinate to and overridden by a formal variation decision, there can be no good reason why it should not equally be subordinate to and overridden by a decision not to enforce.

If that is correct, no scope is left for the operation of the novel public right being contended for. On analysis, the council's ability to ‘override’ the public right of enforcement by releasing the covenant is inconsistent with there being any public right to enforce the covenant. The custodian of the covenant was the council. Established procedures exist for those dissatisfied with the council's decisions. But there is no independent public right to enforce the covenant. In short; the categories of public right are not closed, but there is no scope for the existence of a public right in this case without doing unjustifiable violence to the contractual and local government framework in which the 1934 agreement rests.”

Counsel for the Defendants submitted that this reasoning applied with equal force to Milebush’s attempt to seek declaratory relief as to the construction of clause 3.5 even though Milebush does not claim any “public right” of the kind asserted in that case. Counsel relied in particular upon the point that Hillingdon has the power in order to further its planning objectives to decide, subject to judicial review, (a) to release Tameside from clause 3.5, (b) not to enforce clause 3.5 in whole or in part or (c) to enter into an agreement with Tameside to vary clause 3.5 (which indeed itself resulted from a variation of the Principal Agreement). Counsel submitted that this was inconsistent with it being a proper exercise of the Court’s discretion to grant a declaration as to the construction of clause 3.5.

I accept that submission. Milebush claims no private law right enforceable against either Tameside or Hillingdon. It seeks declaratory relief against Tameside on the footing that it is directly affected by the interpretation placed upon the Principal Agreement. But why should the Court grant Milebush a declaration against Tameside in circumstances where, even if Milebush was right on the construction of clause 3.5 as it presently stands, Hillingdon would retain a discretion to decide not to enforce, or to vary, clause 3.5? It would be a pointless exercise. Counsel for Milebush had no real answer to this point.

This takes me to the joinder of Hillingdon as a defendant. When commencing the claim, Milebush made it clear that it sought no separate relief against Hillingdon. Hillingdon says that it ought not to have been joined at all. Milebush replies that there was no need for Hillingdon to play an active role in the proceedings. That strikes me as unrealistic in a case such as this. The claim plainly engaged Hillingdon’s interests as the local planning authority, and it therefore needed to be represented. This is illustrated by the difference of view between Tameside and Hillingdon which emerged with respect to repair and maintenance.

In reality, I consider that the reason why Milebush joined Hillingdon as a defendant was to attempt to ensure that Hillingdon was bound by the judgment Milebush hoped to obtain against Tameside. To that extent, Milebush was seeking to enforce clause 3.5 against Hillingdon. For reasons given above, I do not consider that that was a course that was open to Milebush.

Section 2 of the 1989 Act provides inter alia:

“(1)

A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each.

(2)

The terms may be incorporated in a document either by being set out in it or by reference to some other document.

(3)

The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract.”

Counsel for Tameside submitted that: (1) in so far as the Principal Agreement as varied by the Supplemental Agreement was an agreement to grant a right of way to Milebush, it was a contract for the disposition of an interest in land to Milebush; and (2) since the Principal Agreement was not signed by Milebush it was void for failure to comply with section 2 of the 1989 Act.

In support of this submission, he relied upon the decision of David Mackie QC sitting as a Deputy High Court Judge (as he then was) in Jelson Ltd v Derby City Council [2000] JPL 203. In that case the deputy judge held that part of a section 106 agreement between the claimant developer and the defendant planning authority which required the claimant to transfer part of the site to a housing association to be nominated by the defendant to provide affordable housing was caught by section 2 of the 1989 Act because it had not been (and could not have been) signed by the eventual purchaser.

As counsel for Milebush pointed out, however, in R. G. Kensington Management Co Ltd v Hutchinson IDH Ltd [2003] 2 P&CR 13 Neuberger J (as he then was) declined to follow Jelson. His reasons were as follows:

“56.

The defendant's case is that the reference to “the parties” in s.2(3) is to the parties to the proposed conveyance or transfer. Two strands of authority are put forward as supporting that contention. First, that the purpose of s. 2 was to introduce a new and strict regime in relation to contracts for the creation or transfer of interests in land, can be seen from observations of the Court of Appeal in First Post Home Ltd v. Johnson [1995] 1 W.L.R. 1567 at 1571B to H, and McCausland v. Duncan Laurie & Partners [1997] 1 W.L.R. 38 at 44G. Secondly, the result for which the defendant contends is compelled by the reasoning and decision at first instance in this division of Mr David Mackie Q.C. in Jolson [sic] Ltd v. Derby County Council [1999] 3 E.G.L.R. 1991. Despite these authorities, I reject the defendant's case on s.2.

57.

The purpose and effect of s.2 is to be assessed by reference to the words used by the legislature, and nothing said by the Court of Appeal suggests otherwise. Those words are to be given their natural meaning unless there is some very good reason to the contrary. The closing words of s.2(3) require the contract, or the parts of the contract to be signed by ‘each party to the contract’, not by ‘each party to the prospective conveyance or transfer’. In this case that means that the freehold agreement must be signed by the parties to it, the defendant and Mr Caan. Kensington is not a party to the freehold agreement and, as it is not a party to that contract, it seems there is no reason to require it to sign it. I see no reason to give an artificial meaning to s.2(3) as the defendant's argument involves, nor do I consider it permissible to do so. Mr Dowding, in his concise submissions on this issue, said that it would be consistent with the spirit of s.2 if a contract such as the freehold agreement could only be enforced in Kensington's favour if it could be enforced against Kensington. I accept, that the freehold agreement could not be enforced against Kensington unless Kensington had signed it. Accordingly, I see the force of the point, but there is nothing to suggest that the legislature had that sort of consideration in mind when enacting s.2. To give s.2 the meaning and effect that the defendant contends for, would involve an impermissible re-writing and extension or extension of s.2(3). It would also involve giving s.2 a greater degree of interference with Common Law rights and freedom to contract than it naturally bears.

58.

I am not obliged to follow Jolson, but I should only depart from it if I am satisfied that it was wrongly decided, I am clear in my mind that it cannot be supported. It is fair to say that, at least judging from the report, it appears that the simple argument as to why s.2 does not preclude the enforcement of a contract such as the freehold agreement, which causes me to reject the defendant's case, does not seem to have been raised in terms in Jolson—see the summary of the losing argument at [1999] 3 E.G.L.R. 96 B to E.”

For good measure, in Nweze v Nwoko [2004] EWCA Civ 379, [2004] 2 P&CR 33 the Court of Appeal, to whom the Kensington case does not appear to have been cited, cast doubt on the correctness of Jelson while distinguishing it on the facts: see the judgments of Waller LJ at [21] and Carnwath LJ at [35].

In these circumstances, counsel for Milebush submitted that I should follow the Kensington case on the principle stated by Nourse J in Colchester Estates (Cardiff) v Carlton Industries plc [1986] Ch 80. I accept that submission. I am not convinced that Neuberger J was wrong not to follow Mr Mackie QC’s decision. On the contrary, I agree with Neuberger J. Indeed, I would go further. It seems to me that it would substantially frustrate the statutory scheme contained in section 106 of the 1990 Act to interpret section 2 of the 1989 Act as invalidating section 106 agreements which benefit third parties such as Milebush. I cannot believe that that can have been the legislative intention.

For the reasons given above I conclude that Milebush is not entitled to the declaration it seeks. It follows that the claim must be dismissed. In those circumstances I do not see that any useful purpose would be served by considering whether the Defendants were entitled to summary judgment.