Section 106s – potted summary of recent cases by Meyric Lewis December 2014

Formalities Practical problems Top tips Enforcement Some recent appeals/developments

Formalities: Section 106(9) – obligation must: Be executed as a deed State it is a planning oblig for purposes of s. 106 Identify land in which person entering is interested Identify that person and state what their interest is Identify 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 issues Use Law Society precedent? Halsbury’s Encyclopedia of Forms and Precedents? NB though tailoring to specific circumstances NOT 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 sold Not v attractive suing purchasers! In any event? ‘This deed shall not be enforceable against owner-occupiers of dwellings constructed under PP’

Undertaking versus agreement Former 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 1062 S. 78 appeal with UU – but Inspector found various obligations not “necessary”. JR declaration sought that s. 106 not enforceable HELD 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 proceedings HELD not unlawful/unreasonable to enforce (no issue on method of calculation)

Hertsmere BC v. Brent Walker Grp [1994] 1 PLR 1 Section 106 agreement based on former SPD – revised by time payment required. JR of decision to issue debt proceedings HELD 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 decisions /search/ Varying section 106s: Gleeson/Barnsley ( ) – AH req’mt removed altogether Hitchins/Lydney Forest of Dean ( ) – AH requirement reduced Sunbury/Newham ( ) – AH reduced Swindells/High Peak BC ( ) – appeal dismissed

Section 106s – potted summary of recent cases by Meyric Lewis