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Variation and Enforcement of s106 Obligations – Part 4: Enforcing by way of injunction

In the fourth article in a series by a group of Landmark barristers on the subject of the variation and enforcement of s106 obligations, James Maurici QC, Kate Olley, Heather Sargent, Matthew Henderson and Nick Grant explore the law on enforcing s106 obligations by way of injunction.

S106(5) provides that “[a] restriction or requirement imposed under a planning obligation is enforceable by injunction”. Pursuant to s106(3), a s106 obligation is enforceable by the local planning authority that is identified in the obligation (and also by the Mayor of London, where relevant). It is enforceable against the person entering into the obligation and any person deriving title from them, unless the s106 obligation itself provides that a person shall not be bound in respect of any period during which they no longer have an interest in the land.

Should a third party wish the local planning authority to enforce a s106 obligation but the local planning authority decline or fail to do so, the appropriate recourse would be a judicial review challenge against the local authority’s position. In Milebush Properties Ltd v Tameside MBC [2011] PTSR 1654 a non-party beneficiary of a s106 obligation brought private law proceedings seeking a declaration that the successor in title to the developer was required under the obligation to grant it rights of way. The majority of the Court of Appeal held that a private action by a non-party beneficiary for a declaration was an inappropriate proceeding; judicial review was the proper procedure and the Administrative Court the proper forum.

It is clear from the decision of the Court of Appeal in Avon CC v Millard (1985) 50 P&CR 275 that a local planning authority does not have to exhaust the remedies that are available to it under Part VII of the Town and Country Planning Act 1990 (enforcement notices, etc.) before it can seek to enforce a s106 obligation by way of injunction. Breach of a s106 obligation is, of course, a breach of contract and the ordinary civil remedies for breach of contract are available.

Since the local planning authority will not normally suffer damage and therefore will not normally pursue damages as a remedy, injunction will normally be the only appropriate remedy under the contract. In Newham LBC v Ali [2014] 1 WLR 2743 the Court of Appeal (Dyson MR; Patten and Vos LJJ agreeing) explained that:

[17] …In seeking an injunction, the authority exercises a public function and does so in the public interest. Unless the local planning authority has been guilty of delay or unconscionable conduct such as might justify a refusal of relief on ordinary equitable principles, the court will usually exercise its discretion to grant an injunction in a case of substantial breach of a planning obligation. That applies whether the injunction is prohibitory or mandatory. The court is doing no more than holding the party in breach to its bargain”.

Therefore, where a “final” injunction is sought (interim injunctions are governed by the American Cyanamid principles), in the absence of circumstances that would on normal equitable principles lead to the denial of an injunction, the discretion conferred by s106(5) should normally be exercised in favour of the grant of an injunction, where there has been a substantial breach of a s106 obligation (Newham at [23]).

The fact that there is an outstanding planning appeal when the local planning authority seeks an injunction will usually be irrelevant. That is because there is a distinction between matters that should be considered in the enforcement of planning control, as compared with other decisions. As the Court of Appeal explained in Newham, the relevant distinction is between mechanisms that enforce planning control and those that do not:

“[20] …the matters to which a local planning authority must have regard when making a planning decision concerning matters of planning control (for example, determining an application for planning permission, seeking an injunction under section 187B of the 1990 Act or taking direct action under section 178 of the 1990 Act) are not matters to which a local planning authority is required to have regard when deciding whether to seek an injunction under section 106(5) or to which the court should have regard when deciding whether to grant such an injunction”.

Even where the breach of the s106 obligation is also a breach of planning control, that does not justify conflating the factors that should or may be taken into account in deciding whether to grant an injunction for breach in the two cases: they are distinct (Newham, at [22]). In Newham the Trust against which the injunction was sought argued that the court should adopt a broader and more proportionate approach to the exercise of the discretion to grant an injunction pursuant to s106(5). It relied on South Bucks DC v Porter [2003] 2 AC 558, in which Lord Bingham had said in relation to the power to grant an injunction under s187B of the 1990 Act that:

it had be exercised with due regard to the purpose for which it was conferred, namely to restrain actual and threatened breaches of planning control; where it appeared that a breach or apprehended breach would continue or occur unless and until effectively restrained by the law and that nothing short of an injunction would provide effective restraint, that would point strongly towards the grant of an injunction; but in all cases, the court had to decide whether in all the circumstances it was just to grant the relief sought against the particular defendant.

Rejecting the Trust’s argument in respect of South Bucks DC v Porter, the Court of Appeal in Newham, however, noted that the purpose of an injunction under section 187B was to restrain a breach of planning control; the purpose of an injunction under section 106(5) was to enforce an undertaking voluntarily given to a local planning authority.

The Court of Appeal in Newham also held that an argument based on the European Convention of Human Rights did not take the debate any further because the enforcement of planning obligations by a local planning authority in the public interest fell “squarely” within the scope of art. 9(2) and art. 11(2) of the Convention, which permit limitations to be placed upon the right to freedom of religion (art. 9) and to freedom of assembly (art. 11).

On the facts in Newham, the Trust had entered into the unilateral undertaking pursuant to s106 in order to advance its case on appeal that it should be granted temporary planning permission authorising the Trust’s current use of the site. The Court of Appeal acknowledged that, in the event, the inspector had placed little weight on the s106 obligation – but that did not diminish the significance of the fact that the Trust had entered into it voluntarily for the purpose of advancing its case before the inspector.

The Court of Appeal did, however, suspend the injunction until the outcome of the planning appeals was known (see [35]-[42]). It should though be noted that the power (available under the inherent jurisdiction of the court) to suspend a s106(5) injunction should be exercised “sparingly”: Newham at [42]). A subsequent application from the Trust in Newham for a further suspension of the injunction was refused by the High Court.

In Waltham Forest LBC v Oakmesh Ltd [2010] JPL 249 the High Court granted an injunction in respect of a s106 obligation that had been entered into over twelve years previously, which required inter alia the provision of a footbridge link. The court held that there was:

“[66] …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.”…”.

Furthermore whilst planning permission would be required to enable the obligations under the s106 agreement to be performed, the court considered that that was not likely to present any problems in practice ([67]). It was highly likely that planning permission would be granted given that the s106 obligation had recently been confirmed on appeal; in the unlikely event that planning permission were not to be granted, the footbridge link could not lawfully be constructed and the defendant would not be in breach of an order of the court that it should do so. The fact that the defendant did not own the strip of land on which the footbridge link was to be constructed was also, on the facts, “of no importance” ([68]).

The fact that the cost of the works would be many times more than the quotation received and the money retained by the defendant prior to entering into the s106 obligation was “to a substantial extent” the consequence of the passage of time for which the defendant was itself responsible; “simple justice” tended to suggest, all other things being equal, that the defendant should honour its promise to perform the s106 obligation ([70]).

The court also rejected the argument that the local planning authority should be left to its remedy under s106(6) (i.e. entering the land and then recovering “expenses reasonably incurred” – we will consider that remedy in the next article in this series). The local planning authority explained that it was unwilling to undertake the work itself because as a local authority operating in a financially hostile environment, it did not have the resources, skills or manpower to be able to do so and it did not wish to be exposed to the risk of the defendant subsequently defaulting on payment of the expenses incurred. The Court accepted that the local planning authority’s position was not an unreasonable one for it to take.

James Maurici QC, Kate Olley, Heather Sargent, Matthew Henderson and Nick Grant are barristers at Landmark Chambers.

Read the earlier articles in the series:

  1. Varying a s106 obligation - Kate Olley.
  2. Varying s106 obligations Part 2: S106B appeals - James Maurici QC.
  3. Variation and enforcement of s.106 – Part 3: relationship to s.73 TCPA - Matthew Henderson.
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