||Neutral Citation Number:  EWHC 2686 (Ch)
||Case No: HC03C02917
IN THE HIGH COURT OF JUSTICE
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
THE HONOURABLE MR JUSTICE WARREN
|| PETER LONGWILL STROUDE
||- and -
||(1) BEAZER HOMES LTD (2) BEAZER GROUP LTD (3) PERSIMMON HOMES LTD
Mr Gregory Hill(instructed by Messrs Marrons) for the Claimant
Timothy Fancourt QC and Edward Peters (instructed by Messrs Nabarro Nathanson) for
Hearing dates: 4th ,5th,6th, & 7th October 2005
HTML VERSION OF JUDGMENT
Crown Copyright ©
Mr Justice Warren
- In the action the claimant, Mr Stroude, seeks declarations concerning his right of access to a small parcel of land which is required as part of a bypass round the village of Longstanton, Cambridgeshire.
- Mr Stroude is a farmer. He owns a significant amount of land around Longstanton. Some of his land was allocated for residential and commercial development in the Development Plan (the South Cambridgeshire District Local Plan) in 1993. He formed a business relationship with the Beazer group of companies who were interested in acquiring that part of the land which had been allocated for residential development. Beazer took the lead in applying for a suitable planning permission in the expectation that it would acquire the relevant land from Mr Stroude.
- It was apparent from an early stage that, in order to construct the number of houses contemplated, a bypass would have to be built around the village of Longstanton, starting at the south of the village, and then running round its west and north sides.
The history since early 1995
- On 24 March 1995, Mr Stroude entered into an agreement ("the 1995 Contract") with a company now called Beazer Homes (Bedford) Ltd ("Beazer Bedford") by which Beazer Bedford agreed to apply for planning permission for residential development of the parts of Mr Stroude's land described in that agreement as "the Contract Land", "the First Option Land" and "the Second Option Land"; and Mr Stroude agreed to sell the Contract Land to Beazer Bedford and granted it options to buy the First Option Land and the Second Option Land. Beazer Bedford's obligations were guaranteed by the company now called Beazer Group Ltd ("Beazer Group") the second defendant. The option periods relating to the First Option Land and the Second Option Land under the 1995 Contract were extended by three supplemental agreements in December 1995, June 1996 and July 1996. The options expired in December 1997. Notwithstanding the lapse of the options, negotiations continued, as I shall explain, in relation to the purchase of the First Option Land and the Second Option Land.
The 1995 Contract
- I should mention some provisions of the 1995 Contract:
a. Under Clause 3.1, the responsibility for pursuing a planning application is cast on Beazer Bedford.
b. Under Clause 3.3, it is provided as follows:
"3.3 Negotiations with the Council [CCC ; See para 6 below] [Beazer Bedford] will negotiate in good faith with the Council and use all reasonable endeavours to achieve the following:- 3.3.1 the dedication as public highway of such part of the Council's Land as shall be required in connection with the construction of the By-pass; and
c. Clause 6 deals with the sale and purchase of the Contract Land.
i. Clause 6.10.1 provides for the transfer of the Contract Land to contain, among other matters, the grant to Beazer Bedford over Mr Stroude's other land of such rights and easements as shall be reasonably necessary for the provision of an infrastructure of roads and services in order to carry out the residential deve lopment of the Contract Land pursuant to the Contract Land Planning Permission (a defined term of the 1995 Contract in effect a suitable planning permission for residential development at a specified density).
ii. Clause 6.10.2 provides for the exception and reservation to Mr Stroude of easements, access and services over the Contract Land as shall be reasonably necessary to facilitate the present use and future development of the remainder of the Mr Stroude's land. Clauses 6.10.1 and 6.10.2 thus make provision for reciprocal rights to facilitate the development of each party's land. But neither Clause 6 nor any other provision of the 1995 Contract deals with similar rights over the Cartwright Land should it be acquired by either party.
d. It is recognised in the 1995 Contract that the Cartwright Land would be needed for the by-pass. Clause 7.16.1 therefore allows Mr Stroude to exchange any part or parts of the First Option Land for any part or parts of the Cartwright Land [see paragraphs 6 and 9 below] notwithstanding the option which was granted to Beazer Bedford, whereupon the land acquired would form part of the First Option Land and become subject to the option over it; and the land transferred to Mr and Mrs Cartwright would be released from the option over the First Option Land.
e. Clause 24 provides that the provisions of the 1995 Contract should remain in full force and effect in so far as they remained to be performed and observed after completion of the sale and purchase of the Contract Land (and the First Option Land and the Second Option Land if relevant).
- There followed on from the 1995 Contract extensive negotiations by Mr Stroude and Beazer Bedford with the local planning authority, South Cambridgeshire District Council ("SCDC") and the highway authority, Cambridgeshire County Council ("CCC"). Negotiations were also conducted with CCC as owner of certain land, to the north of the village, shown coloured red on the plan ("the Plan") annexed to the Particulars of Claim ("the CCC Land") and with a Mr and Mrs Cartwright who were owners of two small triangles of land cross-hatched black on the Plan, which were needed to complete the line of the proposed bypass.
- Those negotiations were directed towards obtaining planning permission for a scheme for the residential and business development of Mr Stroude's land, including the Contract Land, and the CCC Land with associated amenities, infrastructure and landscaping. As part of the scheme, SCDC and CCC wanted to ensure the construction of a bypass round Longstanton.
- From about 1998, the Beazer Group changed its existing policy of trading through local subsidiaries and began to conduct all of its business, including its involvement in the Longstanton project, through Beazer Homes Ltd ("Beazer Homes") the first defendant.
The Cartwright Contract
- On 9 March 2000, Beazer Homes entered into an agreement ("the Cartwright Contract") with Mr and Mrs Cartwright to exchange some land belonging to them ("the Cartwright Land") for a small triangle of land ("the Exchange Land") pointing into the Cartwrights' retained land and close to the building on their property. The Exchange Land then belonged, and still belongs, to Mr Stroude. The Cartwright Land comprises two triangles at the edge of the Cartwrights' property (which I imagine is their home, but nothing turns on that). It is accessible from Mr Stroude's adjoining property and from the Cartwrights' retained land, but is not otherwise accessible. Its only use from Beazer Homes' point of view was and is as part of the bypass and its associated landscaping works. It could, I suppose, be used for grazing by anyone to whom Mr Stroude or the Cartwrights were prepared to give access, but it has no other use.
- Subject to a condition set out in Clause 15 of the Cartwright Contract the Cartwright Land was to be acquired for a consideration consisting of (i) £85,000 and (ii) a transfer to the Cartwrights of the Exchange Land. Completion was to be 20 working days after the contract had become unconditional. Clause 15 provided that the contract was subject to the condition precedent set out in the Schedule. This was, in effect, (i) the obtaining of a suitable residential planning permission and (ii) the acquisition by Beazer Homes of the Exchange Land. The parties were to co-operate and use all reasonable endeavours to discharge that condition precedent but the Cartwrights were not to act independently of Beazer Homes.
- Mr Stroude has always been, and remains, willing to make the Exchange Land available in order to satisfy the preconditions for including the Cartwright Land in the line of the bypass if that is still necessary to give effect to whatever arrangements may now be in place between the Cartwrights and Beazer Homes (or any other Beazer group company).
Formation of the section 106 Agreement and related matters
- In the period leading up to the grant of outline planning permission, which was obtained on 16 October 2000, negotiations were also on foot with SCDC and CCC for an agreement pursuant to section 106 Town & Country Planning Act 1990 and sections 38 and 278 Highways Act 1980. It was a commercial imperative from the point of view of Mr Stroude and Beazer Homes that the planning permission was obtained by that date since policy changes were to come into effect which would have meant renegotiation of the planning conditions. In order to obtain release of the planning permission, an agreement under the statutory provisions which I have just mentioned had to be entered into. It was therefore in something of a last minute rush that such an agreement was entered into on 16 October 2000 ("the section 106 Agreement") on the same day as the grant of outline permission.
- Negotiations had also been in progress between Mr Stroude and Beazer Homes for a collaboration and contribution agreement in relation to the development but they had not reached a concluded agreement by 16 October 2000 and have indeed not reached any agreement since then. The defendants sought to introduce those negotiations as evidence in this case about the intentions of the parties to the section 106 Agreement in order to show that it was not, and never had been, their intention that the section 106 Agreement should deal with access to the Cartwright Land. The Court of Appeal, upholding the decision of Rimer J, held on 17 March 2005 that such evidence was not admissible. There is no evidence, or at least no admissible evidence, that the parties intended that the collaboration and contribution agreement would deal with access to the Cartwright Land let alone that it would do so exclusively so that the section 106 Agreement would have nothing to say about it. I am certainly not prepared to take judicial notice that such collaboration and contribution agreements dealing with access are the norm in developments of this sort.
- Accordingly, I shall approach the question of construction of the section 106 Agreement and the suggested implication into it of a term concerning access to the Cartwright Land without taking into account the fact that negotiations were being conducted in relation to a collaboration and contribution agreement.
- The section 106 Agreement and the planning permission of 16 October 2000 embody a scheme for the residential and business development at Longstanton. The planning permission granted outline consent for up to 500 dwellings on Mr Stroude's Land and the CCC Land. The area allocated for residential development is at the north end of the development area. It includes the Contract Land, the remainder of Mr Stroude's Land to the north of the Contract Land (being the First Option Land and the Second Option Land) and the CCC Land. The proposed business park is to the southern end of the development area.
- The planning permission, granted, as I have said, on 16 October 2000, provides for development in three phases. It is subject to conditions. Condition 16 restricts development to 500 dwellings; condition 17 provides that no more than 100 dwellings (and no Business Park floor space) shall be occupied before the completion of the interim bypass/collector road between Hatton Road and Over Road; Condition 20 provides that not more than 50 dwellings shall be occupied until a scheme for the bypass (including phasing of its construction) has been submitted and approved; and condition 21 provides that no more than 250 dwellings (and no Business Park floor space) shall be occupied before the bypass is completed.
- The section 106 Agreement was made between (1) SCDC (2) CCC (3) Mr Stroude (4) Mr and Mrs Cartwright and (5) Beazer Homes. Although Mr and Mrs Cartwright were not, in any commercial sense, involved in the development, the Cartwright Land, which they then still owned, formed part of the intended bypass and associated landscaping works so that it was necessary for them to join to ensure that all relevant landowners and their successors were bound by its relevant provisions. It is to be noted that CCC is a party both as the highway authority and as owner of the CCC Land. It is also to be noted that by this time Beazer Homes had become the intended purchaser from Mr Stroude notwithstanding that the contracting party under the 1995 Contract was Beazer Bedford. Indeed, recital 2.2 states (incorrectly) that, by the 1995 Contract, Beazer Homes had agreed to buy part of Mr Stroude's land.
Details of the section 106 Agreement
- There are several provisions of the section 106 Agreement to which I need to refer:
a. Definitions of
i. "the Estate Owners" being Mr Stroude, the Cartwrights, CCC and Beazer Homes in other words, all of the persons owning or interested in land required for the development (but drawing no distinction between different Beazer group companies for this purpose).
ii. "the Highway Works" meaning the construction of (i) the bypass (ii) an interim access road between Hatton Road and Over Road (ii) certain road and junction improvements.
iii. "the Highway Works Progamme" meaning the programme for the phased construction of the Highway Works set out in Part III of the First Schedule.
iv. "the Obligations" being "the obligations undertaken under Section 106 [of the Town & Country Planning Act 1990] in this Agreement and which are set out in clause 7.4 and 7.6.3 and Parts I and III of the First Schedule". It is to be noted that not all of the obligations undertaken in the section 106 Agreement fall within this definition.
v. "the Planning Permission" meaning, in the event, the outline planning permission granted on 16 October 2000 including alterations, amendments and renewals of it.
vi. "the Property" including all of Mr Stroude's land, the Cartwright Land and the CCC Land.
vii. "Traffic Orders" meaning the orders required to enable all of the Highway Works to proceed made under the various statutory provisions mentioned.
b. In order to comply with the requirements of section 106 to make planning obligations binding on successors in title to land subject to such obligations, recitals 2.1 to 2.5 states the interests of the various Estate Owners in the Property and recital 2.6 states (i) that the Obligations (as just defined) are planning obligations within section 106 (ii) the land subject to the Obligations is the Property, that is to say all of it, and (iii) SCDC is the local planning authority by which the Obligations are enforceable. It also recites that CCC is, in relation to the obligations in Part II of the Schedule (which are not, at least expressly, within the Definition of "Obligations"), the local planning authority and also the local highway authority for the purposes of the Highways Act 1980 for the Highway Works.
c. The section 106 Agreement was (see Clause 3) conditional upon and was not to have effect until the later of (i) the expiry of a time limit connected with any challenge to the Planning Permission and (ii) the commencement of development. There was in fact a challenge by judicial review brought by a local resident. The application was refused but continued, with appeals, until October 2002 when the House of Lords refused the resident further leave to appeal.
d. Clause 4 stated that the section 106 Agreement was made "pursuant to the provisions of section 106 and section 38 and 278 of the Highways Act 1980 Act and all other powers enabling and enactments which may be relevant for the purposes of giving validity hereto or facilitating the enforcement of the obligations herein contained [which I consider includes all of the Obligations as defined] with intent to bind the Estate Owners interest in the Property". By Clause 4.2, covenants falling within the provisions of section 106 were deemed to be expressed to be planning obligations to which the section should apply and should be enforceable.
e. Clause 6 is an important provision headed "Release from obligations" a heading which is not entirely apposite. It provides at Clauses 6.1 and 6.2 as follows:
"6.1 An Estate Owner shall not be bound by the Obligations or any other covenants on his part either individually or jointly herein contained in respect of any period which shall commence after he shall have parted with his interest in the Property or that part of the Property to which the obligation or covenant relates (the term "interest" excluding any easement equitable interest or interest arising under any mortgage or charge or restrictive or other covenant)
6.2 [Beazer Homes] shall be bound at the date hereof only by the Obligations on its part undertaken in respect solely of the land forming part of the Property in which it has an interest under the provisions of the [1995 Contract] with [Mr Stroude] and the [Cartwright Contract] with [Mr and Mrs Cartwright]". The main purpose of this provision, I imagine, is to make clear that Beazer Homes had no responsibility in relation to the business park. It should be noted that this provision relates only to the Obligations, and not to any other obligations resting on Beazer Homes under the section 106 Agreement.
f. Clause 7 is headed "The Estate Owners' Covenants". It provides
i. At Clause 7.1: "The Estate Owners covenant with [SCDC] (subject to the foregoing provisions of this Agreement) to observe and perform the Obligations". The reference to the foregoing provisions must, I think, be to Clause 6 so that the obligations of Beazer Homes are circumscribed by Clause 6.2.
ii. Clause 7.2: "The Estate Owners covenant with [CCC] to observe and perform the obligations which are set out in Part II of the First Schedule".
iii. Clause 7.5: "Except in respect of [CCC's] covenant in paragraph 7.6.3 below, [CCC] shall not be personally liable in respect of any of the Obligations but the Obligations shall be binding upon successors in title of [CCC]". In effect, the Obligations (being planning obligations under section 106) are to bind the land but not so as to render CCC itself liable.
iv. Clause 7.6 then provides that, in consideration of clause 7.5, CCC grants access easements to the Estate Owners over the CCC Land for the benefit of the remainder of the Property for the purposes of carrying out the Highway Works. In other words, the Estate Owners have a right to go onto the CCC Land to construct the bypass. Mr Fancourt relies quite heavily on this provision since the express provision for access in relation to the CCC Land makes it difficult, he says, to imply such a right of access to the Cartwright Land. CCC also undertook with SCDC and the other Estate Owners on completion of those of the Highway Works as fall on the CCC Land (ie in practice part of the bypass) to dedicate the same as a public highway: see Clause 7.6.2.
g. Clause 10.7 provides: "Where any covenant is given herein by more than one party then subject to the provisions of Clause 6.1 it shall be on the basis of joint and several liability".
h. Clause 11 provides that nothing contained or implied in the section 106 Agreement itself shall prejudice or affect the rights discretion powers duties and obligations of SCDC or CCC in the exercise of their functions as a local authority.
i. Part II of the First Schedule is headed "Highway Works":
i. Paragraph 1 obliges the Estate Owners to carry out the Highway Works at their own expense in accordance with the Highway Works Programme (see below) and in accordance with approved drawings and so as to connect the Highway Works to the public highway.
ii. Under paragraph 22, CCC covenants that it will use all reasonable endeavours to assist and facilitate the Estate Owners in carrying out those of the Obligations undertaken in Part II of the Schedule, including not unreasonably delaying or withholding consent to design drawings and specifications relation to the Highway Works and co-operating with the Estate Owners in all respects in the execution of the Highway Works. It is slightly odd to see this reference to Obligations (with an upper-case "O") in Part II since the definition of Obligations refers only to Parts 1 and III, not to Part II.
j. Part III of the First Schedule is headed "The Highway Works Programme".
i. Under Paragraph 1, "The Estate Owners covenant" (a) prior to the commencement of any development, to construct a road between points E and F shown on the Plan to a standard suitable for construction traffic and (b) prior to the occupation of 101 dwellings or prior to occupation of any premises on the Business Park, to complete certain of the Highway Works (other than the construction of the bypass).
ii. Under paragraph 2:
"The Estate Owners will
a) prepare and submit to [CCC] for its approval
i. all detailed drawings designs and specifications to enable the construction of the Longstanton Bypass
ii. all detailed drawing required to enable a stage 2 Safety Audit to be carried out on the Longstanton Bypass prior to the occupation of 50 (fifty) dwellings
b) if the relevant approvals are received in respect of the matters described in paragraph 2(a) above and [CCC] has made and confirmed the Traffic Orders then the Estate Owners will invite tenders from suitably qualified contractors for the Longstanton Bypass and commence construction of the same within twenty weeks
c) complete the Longstanton Bypass prior to the occupation of the [sic] 251 (two hundred and fifty one) Dwelling on the Property" As to b), it is to be noted that CCC should have dealt with the Traffic Orders under paragraph 22b) of Part II of the First Schedule within 21 days of the issue of Planning Permission.
Events after October 2000
- Sometime in March 2001, the Persimmon group acquired the Beazer group. In September 2001 Persimmon Homes Ltd ("Persimmon Homes") the third defendant, contracted to purchase the CCC Land. In about May 2003, Persimmon Homes sold the CCC Land to a company called West Longstanton Developments Ltd subject to rights of access to build the bypass which are registered against the title.
- As at October 2000, no Beazer group company any longer had contractual rights against Mr Stroude to acquire any of his land other than the Contract Land. In fact, Beazer and Mr Stroude were negotiating after that time for the sale and purchase of the second and third phases, to the north of the Contract Land, of the part of Mr Stroude's land allocated for the residential development under the planning permission and both sides expected those negotiations to result in an agreement or agreements to sell that land to Beazer Homes, which would then build the bypass. The sale negotiations, however, failed in about September 2002 after the Persimmon Group had acquired the Beazer group.
- As a result, on 6 September 2002, Mr Stroude gave notice to Beazer Bedford, as he was entitled to do, to terminate the 1995 Contract. It is fair to say that, up until that time, the parties were going forward on the basis that an agreement would be reached for the acquisition of Mr Stroude's land by Beazer/Persimmon and that the only development of the land with permission for residential development would be carried out by Beazer Homes. On 12 September 2002, Beazer Bedford waived the condition that any challenge to the planning permission should have been defeated with the result that the sale and purchase of the Contract Land became unconditional. The Contract Land was transferred by Mr Stroude to Persimmon Homes on 23 December 2002, Persimmon Homes undertaking Beazer Bedford's outstanding obligations under the 1995 Contract. As I have said, the options over the First Option Land and the Second Option Land expired so that Mr Stroude retained those parcels of land. The transfer of the Contract Land granted Persimmon the right to enter on Mr Stroude's land for the purpose of carrying out the highway works specified in paragraphs 1(a) and (b), Part III to the First Schedule of the section 106 Agreement. It also reserved similar rights to Mr Stroude over the Contract Land. Nothing is said about entry for the purposes of constructing the bypass.
- On 17 September 2002 without any notice to or discussion with Mr Stroude or his advisers, Beazer Homes entered into a supplemental agreement ("the Supplemental Agreement") with Mr and Mrs Cartwright by which the Cartwright Land was to be transferred to Beazer Homes on or before 11 October 2002, for an initial payment of £30,000 and subject to an obligation on Beazer Homes to pay an additional £100,000 and to transfer to them the Exchange Land, when the Cartwright Contract became unconditional (ie on Beazer Homes acquiring the Exchange Land). Mr and Mrs Cartwright transferred the Cartwright Land to Beazer Homes on 10 October 2002. Beazer Homes is now the registered proprietor of the Cartwright Land.
- On 1 May 2003, Mr Stroude's solicitors lodged a caution against the title to the Cartwright Land in respect of his claimed right to enter onto that land for the purpose of constructing the bypass. By letter dated 21 May 2003, the Peterborough District Land Registry gave Mr Stroude notice of an application by Persimmon PLC to cancel that caution to which Mr Stroude's solicitors objected by letter dated 9 June 2003. Following further correspondence, the Land Registry has concluded that the entitlement to maintain the caution ought to be resolved by proceedings in this Division if they cannot be disposed of by agreement and, by its letter dated 23 August 2003, made a direction to Mr Stroude to commence these proceedings.
- Mr Stroude has offered, by letter dated 18 June 2003 from his solicitors to Persimmon's company solicitor, that if Beazer Homes and Persimmon will co-operate in making the Cartwright Land available for building the bypass, he will transfer the freehold of the Exchange Land to Beazer Homes to enable it to discharge its own obligation under the Cartwright Contract and the Supplemental Contract to transfer the freehold of the Exchange Land to Mr and Mrs Cartwright. Persimmon has declined to commit itself to Mr Stroude (in contrast with acknowledging its obligations to SCDC and CCC) to cooperate in any way or to admit that Mr Stroude would have the right to enter the Cartwright Land to build the bypass once the necessary approvals had been given and Traffic Orders confirmed.
- Persimmon Homes applied for approval of reserved matters to the SCDC in August and September 2003. Consent was obtained on 22 December 2003 for the construction of 91 houses on the Contract Land. That consent is being implemented. The time will shortly arrive, if it has not already arrived, when the 51st house (including those built by Wimpey and Kings Oak as well as Persimmon Homes) is ready for occupation, thus making the provisions of paragraph 2, Part III of the First Schedule to the section 106 Agreement matters of immediate importance.
- Beazer Homes, by a letter dated 18 September 2003 (after the commencement of these proceedings) from its solicitors Nabarro Nathanson, confirmed that it had no objection to Mr Stroude instructing highway engineers to prepare detailed drawings, designs and specifications for the construction of the bypass and to enable a Stage 2 safety audit to be carried out, subject to agreement about the costs.
- In the Agreed Case Summary and Statement of Issues, it is stated that Mr Stroude claims an Order (formulated differently from the Particulars of Claim) as follows:
a. declaring (stated shortly) that Mr Stroude or any successor in title to his retained land (ie the land allocated for residential development and the development of the Business Park) is entitled as against Beaze r Homes and its successors in title to the Cartwright Land to perform the joint and several obligations of himself and Beazer under the section 106 Agreement to construct the bypass, and for that purpose to enter the Cartwright Land and ultimately procure its adoption as a highway, alternatively that there is an implied term of the section 106 Agreement to that effect;
b. restraining Beazer Homes from obstructing or interfering with that right; and
c. directing entry of a notice in respect of that right on the title to the Cartwright Land.
- Mr Stroude says that he is entitled to, and requires, that relief at the present time (and at the time when the proceedings were commenced) because, in order to deal with his land, for instance in negotiating a sale to other potential developers, he needs to know precisely what his rights are. The defendants say that his action is premature and, indeed, that the registration of his caution was entirely unnecessary. The defendants say that there is no reason to think that the provisions of the section 106 Agreement will not be observed by Beazer Homes or its successors as owner of the Cartwright Land and no need, therefore, for the grant of the declaratory relief. The defendants have, however, declined to give any sort of undertaking to Mr Stroude to give him comfort in that respect. Having heard argument over a number of days about the meaning of the section 106 Agreement and the rights of the parties to this litigation, I have no doubt that I should deal with the substantive issues which have been raised. If there is anything in the complaints made by the defendants that the proceedings were premature or that the lodging of the caution was unnecessary, those are matters which I consider can best be reflected in an appropriate costs order.
- The essential questions are (a) is Mr Stroude entitled to enter onto the Cartwright Land to construct the bypass and (b) if so when and under what circumstances? It is accepted by Mr Hill, who appears for Mr Stroude, that such a right would not arise until the relevant approvals and confirmation of Traffic Orders envisaged by paragraph 2.b), Part III of the First Schedule to the section 106 Agreement are in place. It is only then that there is an obligation on the Estate Owners to construct the bypass and Mr Hill accepts that Mr Stroude's right to enter the Cartwright Land is exercisable only in the performance of that obligation. I proceed, therefore, on the footing that I am dealing with the position once those approvals and that confirmation are in place.
- Stating the position briefly, Mr Hill puts the case in two ways:
a. First, he says that, as a matter of the general law any one of two or more persons subject to a concurrent obligation is entitled, as against his co-obligors, to perform it without having to wait to be sued by the obligee. It is not clear to me quite how far that proposition is intended to go. On the facts of the present case, I am dealing only with covenants given by the Estate Owners collectively by the very same clauses of a single document (although there is a dispute to which I will come later about whether the covenants are joint and several or only several). Accordingly, it is necessary for me to consider Mr Hill's proposition only in the context of a concurrent liability which is either joint or several (or both).
b. He also says that a term is to be implied into the section 106 Agreement that Mr Stroude is entitled, as against Beazer Homes, to take all steps required, including entry onto the Cartwright Land, to construct the bypass.
c. He adds that Beazer Homes has consented to the submission of the necessary plans to CCC for approval of the bypass. On receipt of such approval, and the making of the relevant Traffic Orders, the section 106 Agreement imposes an obligation to appoint a contractor and to construct the bypass (an obligation on both Mr Stroude and Beazer Homes).
d. He relies, further, on the provisions of the 1995 Contract (now binding on Persimmon Homes) to use all reasonable endeavours to ensure the adoption as highway of the northern leg of the bypass over the CCC Land; this can only be done by ensuring that the entire bypass is constructed. So, he argued, Persimmon Homes is bound to invoke whatever relevant inter-group arrangements exist within the Persimmon group which have allowed Persimmon PLC to state to SCDC and CCC that it is committed to the construction of the bypass.
e. Finally, he argued that Mr Stroude's rights to enter the Cartwright Land to construct the bypass are proprietary, saying that they are not planning obligations and do not, therefore, give rise to a local land charge. They therefore need to be protected on the Register.
- Mr Fancourt (for the defendants) rejects those submissions, saying that Mr Stroude is attempting to convert a planning obligation owed by Beazer Homes to SCDC and CCC into a private obligation owed to Mr Stroude.
a. First, he submits that Mr Hill's first proposition in relation to concurrent obligations is wrong. Even if there is something in the proposition, it must depend on two or more persons being liable to perform a single, joint obligation. No such implied right arises in the case of several obligations which are necessarily distinct obligations.
b. Secondly, Mr Fancourt submits that the obligations to SCDC and CCC under the section 106 Agreement on which Mr Hill relies are not joint obligations but only several obligations, so that Mr Hill's argument based on concurrent liability does not get off the ground.
c. Thirdly, he says that it is not possible to imply a term into the section 106 Agreement such as Mr Hill suggests. He says this for a number of reasons, the principal one being that the section 106 Agreement is not intended to deal with rights of access over the Cartwright Land but is concerned with matters between the Estate Owners (as landowners) on the one hand and SCDC and CCC (as planning and highway authorities) on the other hand. It is neither necessary or apposite to imply into the section 106 Agreement terms enforceable as between the Estate Owners: it is not necessary to do so to give business efficacy to the section 106 Agreement since all the necessary rights of enforcement to ensure the construction of the bypass are already vested in SCDC and CCC under the relevant legislation, and nor, he says, would the response to the "officious bystander" be to the effect "of course Mr Stroude must have access" since he would equally likely to be told "that matter is not for this agreement; we will deal with it in due course on the sale of the further residential land".
- Before turning to those submissions, I should refer to the legislation against which the section 106 Agreement must be construed.
The statutory provisions
- At the time of the outline planning permission, the provisions of section 106 Town & Country Planning Act 1990 contained a code for the creation and enforcement of what were called "planning obligations" which could be enforced by the "local planning authority". This code gave the local authority much more flexibility in relation to control of developments than was available through the imposition of conditions in planning consents. It provided 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
..as "a planning obligation"), 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 on a specified date or dates or periodically."
- Under section 106(3) a planning obligation is enforceable by the authority identified in accordance with section 106(9)(d) against the person entering into the obligation and any person deriving title from that person but, under section 106(4), the relevant agreement may provide that a person shall not be bound by the obligation in respect of any period during which he no longer has an interest in the land. Injunctive relief is available, under section 106(5), as one method of enforcement of a planning obligation.
- There are certain formal requirements: 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 section 106.
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.
d. Identifies the local planning authority by whom the obligation is enforceable.
- In the present case, these formal requirements are dealt with in Recitals 2.1 to 2.6 as to which see 18.b. above. It should be noted that it is CCC, and not SCDC, which is the local planning authority for the purposes of the obligations contained in Part II of the First Schedule, whereas SCDC is the local planning authority for the purposes of the Obligations (which include the obligations in Part I and III of the First Schedule) although, so far as concerns the Highway Works, Part II and III are clearly intended to operate together and include a considerable amount of overlap. Thus, in relation to the construction of the Interim Access Road and the bypass, CCC (as highway authority) is concerned with the aspects dealt with in Part II (relating to the standard of construction and connection to other public roads) and SCDC (as planning authority) is concerned with the aspects dealt with in Part III (designed to ensure that the development is not occupied until the roads are available for use, in other words to ensure that road infrastructure is in place to handle the extra people who will be living in the development).
- Section 38(3) Highways Act 1980 gives a local highway authority power to agree with any person to undertake the maintenance of, among other things, a way which is to be constructed by that person and which he proposes to dedicate as a highway, and the way becomes a highway maintainable at public expense on such date as may be specified in the agreement. An agreement under that section may (see subsection (6)) contain such provisions as to the dedication as a highway of any road or way to which the agreement relates, the bearing of expenses etc and other relevant matters. The section 106 Agreement is made pursuant to that section (and to section 278) as well as pursuant to section 106 itself: see 18.d. above. The obligations of the Estate Owners under Clause 7.2 and of CCC under Clause 8.2, the details of which are not relevant, of the section 106 Agreement fall within section 38.
- Some aspects of the section 106 Agreement fall, therefore, within section 106 Town & Country Planning Act 1990 and other aspects fall within section 38 Highways Act 1980. But first and foremost, the section 106 Agreement is a contract between the parties to it which, in my judgment, falls to be construed according to ordinary principles of construction. The fact that the section 106 Agreement is made in the context of the statutory provisions is, no doubt, part of the factual matrix against which it has to be construed; accordingly, it should be construed, so far as possible, in a way which enables the statutory provisions to operate. But I do not consider that there are otherwise any special canons of construction which apply to a section 106/section 38 agreement.
- In particular, I do not consider that, simply because the section 106 Agreement is designed to create planning and highway obligations enforceable by SCDC and CCC, in each case against the Estate Owners, all other matters were to be dealt with separately for instance those which Mr Fancourt says were to be included in subsequent conveyancing documents. Nor does it follow that the section 106 Agreement cannot, unless it does so expressly, also create rights and obligations as between the Estate Owners among themselves, as well as between the Estate Owners on the one hand and SCDC or CCC on the other hand. Whether any such other aspects are dealt with in the section 106 Agreement is, in my judgment, to be ascertained according to ordinary rules of construction and implication. No authority has been cited to me which leads me to reach a different conclusion and nor I can detect any policy considerations which should lead me to do so.
- There has been some dispute between the parties about whether there is any obligation at all under the section 106 Agreement on the Estate Owners to SCDC or CCC to construct the bypass and, if so, when that obligation arises. Mr Hill submits that Clause 7.2 and paragraph 1 of Part II of the First Schedule create an obligation to construct the bypass which is a present obligation, albeit that that obligation is not breached vis a vis CCC provided that the provisions of Part III of the First Schedule are observed. He also submits that, once the necessary approvals have been obtained and Traffic Orders confirmed, there is an obligation under Cla use 7.1 and Part III of the First Schedule to commence and complete construction of the bypass. Mr Fancourt submits that there is no obligation on the parties to construct a bypass at all since the time-table under Part III is couched negatively in the sense that the steps envisaged have to be taken only prior to the occupation of specified numbers of dwellings.
- As matters have turned out, I do not need to decide that question (save perhaps later when it comes to deciding matters relating to the costs of these proceedings). This is for two reasons.
a. First, it is accepted by the defendants that Mr Stroude is, without the concurrence of any the defendants, able to submit all the necessary plans etc to enable the construction of the bypass and detailed drawings required to enable a stage 2 Safety Audit to be conducted (as envisaged by paragraph 2.a) of Part II) whether or not 50 dwellings are about to be, or have been, occupied. Plans have in fact now been submitted for approval, although the final design of bridge structures remains outstanding.
b. Secondly, once the approvals are obtained and Traffic Orders confirmed, there is then an obligation, under paragraph 2.b) on the Estate Owners to invite tenders for the bypass and to commence construction within 20 weeks. The defendants concede, obviously correctly, that the construction must then continue; the Estate Owners could not simply carry out a few minor works and then sit back and do nothing. Indeed, the invitation for tenders would inevitably contain a timetable for completion of the works which would, in practice, determine the time within which the bypass would be completed. Paragraph 2.c) then contains a long-stop provision designed to ensure that the bypass in completed before additional traffic is generated to the extent entailed by the occupation of 251 dwellings.
- Accordingly, once the conditions set out in paragraph 2.b) of Part III are fulfilled (which is likely to be some time in the first half of 2006) the Estate Owners (either jointly and severally or just severally) will be under a contractual obligation, to SCDC, pursuant to Clause 7.1 and paragraph 2.b) of Part III to invite tenders and commence construction of the bypass. Further, it is, in my judgment, implicit (a) that the Estate Owners should, following tenders, then contract with contractors for the construction of the bypass and (b) that, once commenced, the construction of the bypass will continue to completion within a reasonable time; a contractual obligation to that effect is owed by the Estate Owners to SCDC (with an added condition that, whenever completed, not more than 250 dwellings can be occupied before completion). These obligations are planning obligations enforceable by SCDC pursuant to section 106, including by injunctive relief preventing the occupation of more than 250 dwellings prior to completion of the bypass.
- Further, whatever the effect of Clause 7.2 and paragraph 1 of Part II prior to the satisfaction of the conditions in paragraph 2.b) of Part III, once those conditions have been fulfilled there are
a. First, a contractual obligation on the part of the Estate Owners to CCC under Clause 7.2 and paragraph 1 of Part II to construct the bypass in accordance with the timetable and other provisions of paragraph 2.b) and c) of Part III.
b. Secondly, a contractual obligation on the part of the Estate Owners to SCDC under Clause 7.1 and paragraph 2.b) and c) of Part III to commence and complete construction of the bypass.
- Mr Hill submits that what is envisaged by, and is needed to comply with, Clauses 7.1 and 7.2 and of Parts II and III is the completion of the entire bypass not just parts of it. That is clearly correct in the sense that, between them, the Estate Owners are bound to see that the bypass is completed once approvals have been obtained and Traffic Orders confirmed. But his submission goes further and is to the effect that each of the Estate Owners is liable for construction of the entirety of the bypass and is not simply responsible for that part of it which passes over his own land.
- I agree with Mr Hill's submissions subject to these qualifications:
a. One result of Clause 6.1 is that an Estate Owner ceases to be bound by the Obligations or any other covenant once he has parted with his interest in the Property. Although Clause 7.1 does, but Clause 7.2 does not, make the covenants contained in them respectively expressly subject to "the foregoing provisions of this Agreement", I do not consider the result of that to be, as was faintly suggested at one stage, that Clause 6.1 only applies to the Obligations and not to other covenants. The reason for the inclusion of those words in Clause 7.1 is, I think, to cover the special position of Beazer Homes under Clause 6.2.
b. Clause 6.2 provides that Beazer Homes (ignoring the distinction between it and Beazer Bedford) is bound, even at the date of the section 106 Agreement, "only by the Obligations on its part in respect solely of" that part of Mr Stroude's land subject to the 1995 Contract and the Cartwright Land. I find the provisions of Clause 6.2 rather obscure. Beazer Homes is stated to be bound only by the Obligations on its part "undertaken in respect solely of the land" in which it has an interest under the 1995 Agreement and the Cartwright Contract. None of the Obligations relates, so far as I can see, solely to that land and to no other land; I think that the use of the word "solely" does nothing other than reinforce the use of the word "only". That, however, is not the only difficulty since, read literally, the only Obligations binding on Beazer Homes would be the negative requirement concerning land use and building occupation prior to construction of the various highway works. However, paragraphs 1.a), 1.b) and 2. of Part III of the Schedule all appear to create positive obligations on the Estate Owners and it seems inherently unlikely to me that Beazer Homes would not, unlike the other Estate Owners, be under a positive obligation to comply, for instance, with paragraph 1.a) by building the road referred to since those are all necessary for the development and, indeed some of the road and junction works, on land to be retained by Mr Stroude, had to be, and in fact were, completed before any other works were undertaken. Be that as it may, Beazer Homes clearly was bound by the Obligations in relation to the Cartwright Land. Accordingly, so far as the Cartwright Land is concerned, the section 106 Agreement created an Obligation in relation to the Cartwright Land by which all of the Estate Owners (other than CCC: see Clause 7.5) were bound.
The position is complicated further by the fact that Beazer Homes was not, in fact, the purchasing party under the 1995 Contract so that recital 2.2 of the section 106 Agreement is incorrect and Clause 6.2 proceeds on an incorrect basis.
Whatever the true scope of the provision, I conclude that it does not qualify Beazer Homes' obligation as an Estate Owner to see to the construction of the bypass in the same way as other Estate Owners.
c. Under Clause 7.5, CCC is not personally liable in respect of any of the Obligations (other than under Clause 7.6.3), although the Obligations are expressed to be binding upon its successors.
- Mr Stroude's case is, of course, that he (or his agents) are entitled to go onto the Cartwright Land in order to construct the bypass and he accepts, as he must, that Beazer Homes would be entitled to go onto his land for the same purpose. He points out that, if he has no such right, he would inevitably be in breach of paragraph 2 of Part III if Beazer Homes refused access to the Cartwright Land. He would face this dilemma: On the one hand, he could comply with his obligations to SCDC and CCC in which case he would have to enter into contracts with contractors and commence construction of the bypass: but he would not able to grant access to his contractors to the Cartwright Land and so would end up being in breach of contract with the contractors. On the other hand, he could avoid putting himself in breach of contract with the contractors by declining to enter into any such contract, but then he would be in breach of contract with SCDC and CCC (either by failing to submit plans or, having submitted plans and obtained approvals, by failing to invite tenders). This, it is said, cannot be right.
Submissions on the law
- There is, slightly surprisingly, no authority which the researches of Counsel have revealed, which deal with Mr Hill's first proposition in relation to obligors subject to concurrent liabilities. Mr Hill therefore seeks to rely on analogies.
- The first analogy is that of a guarantor's quia timet right to require the principal debtor to pay off the creditor when the debt has become immediately due, although Mr Hill accepts that the analogy is "not exact or even close" as he himself puts it in his skeleton argument. However, he points out that such quia timet relief is available even if the guarantor is also liable as a principal creditor, citing Watt v Mortlock  Ch 84 at 87. And he relies on the passage in Andrews & Millett on Guarantees (4th ed) at 1028 where it is stated that a guarantor may obtain relief although the principal does not want to pay and the creditor is content not to be paid. Mr Fancourt, in contrast, says that there is no case in the books where a guarantor has established a right to go onto the land of the
- The second analogy derives from the old case of Hood v Pim (1830) 1 Cooper temp. Cottenham at p 280. This case is reported primarily on a question of procedure, but Mr Hill indicates a relevant point of substance which is recorded. In this case, A, B and C agreed to sell Blackacre to D and also to buy Whiteacre from D; A, B and C filed a Bill for specific performance; C then "resolved not to insist on the agreement" and was made a Defendant instead of a Plaintiff; but specific performance was decreed despite the objection "that the argument [sic the report; but this must be a mistake for "agreement "] had been abandoned by one of the parties, who had contracted jointly with the Plaintiffs". The Court's reasoning, and the exact terms of the decree, are not reported; nevertheless the case is authority, it is submitted, that some only of joint contractors may enforce the counterparty's obligations, in a form of proceeding in which they must aver and prove that they are "ready willing and able" to perform their side of the bargain; so the decision necessarily involves the proposition that some only of joint obligors may perform against the wish of a co-obligor. The claim was for specific performance, so the principle applies not merely to money obligations but to dealings with land in specie.
- I do not find these analogies of assistance.
a. In the case of a guarantee, the guarantor is entitled to an indemnity from the principal if his guarantee is called upon; this is so in equity even if there is no express contract to that effect as between principal and guarantor. There is, at the end of the day, a relationship between them which creates a direct obligation by the principal to the guarantor: the quia timet right merely enables the guarantor to pre-empt a demand on himself by forcing the principal to perform his own obligations in due time. In contrast, in the present case, the question is whether the relationship between co-obligors enables one to assert rights over the property of the other in order to fulfil their concurrent obligations even though there may be no right for one obligor directly to enforce the obligation against the other obligor.
b. In Hood v Pim, both parties (A, B and C, on the one hand, and D on the other) to the relevant contract were before the Court. The Court clearly felt able to enforce the mutual obligations to which the contract gave rise notwithstanding that C had purported to abandon the contract. The court therefore, it seems, compelled C to fulfil his bargain. An analogy might be drawn with the present case if an obligation to construct the bypass had already arisen (because all relevant approvals and Traffic Orders had been confirmed) and Mr Stroude were seeking, in proceedings to which SCDC and CCC were parties, an order that Beazer Homes comply with its own obligations under the section 106 Agreement. It is a very different thing for Mr Stroude to claim a right of access to enable Mr Stroude himself (or his agents, the contractors) to enter the Cartwright Land to carry out his own contractual obligations to SCDC, especially where he is seeking declaratory relief in advance of such approvals and confirmation.
- Mr Hill also relies on the principle that the parties to a contract must join in doing what is necessary to perform it, where their concurrence is needed, even without express words. He relies on a passage from Mackay v Dick (1881) 6 App Cas 251, where Lord Blackburne said this:
"I think I may safely say, as a general rule, that where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect. What is the part of each must depend on circumstances.
He also said, at p 264, that the principle is "obvious good sense and justice".
- This was a Scottish case, but I do not doubt that it also represents English law. Although the case concerned obligations between opposite parties, Mr Hill submits that it is at least equally "good sense and justice" to require parties, who are concurrently liable, to cooperate with one another and not to permit one to hinder the other in rendering performance. There is considerable force in that submission. However, I do not think that Mackay v Dick is anything more than one particular manifestation of the more general principles concerning the implication of terms in an agreement. Indeed, that is how the case is described in Lewison: The Interpretation of Contracts (3rd ed) at 6.12 where it is said that the "formulation of the implied term in cases of this class depends (like any other implied term) on necessity". And in that context I take heed of Mr Fancourt's warning that it is not possible to imply a term as to co-operation simply because it would be sensible and reasonable: the law can
"enforce co-operation only in a limited degree to the extent that it is necessary to make the contract workable. For any higher degree of co-operation the parties must rely on the desire that both of them usually have that the business should get done." per Devlin J in Mona Oil Equipment & Supply Co Ltd v Rhodesia Railways Ltd  2 All ER 1014.
- As to implication, Mr Hill submits that, even if his propositions concerning the rights of one obligor under a concurrent obligation are incorrect, nonetheless, on the facts of this case, a term should be implied into the section 106 Agreement which would result in Mr Stroude (and his agents) being entitled to access to the Cartwright Land for the purposes of fulfilling the obligation to construct the bypass, an obligation resting on all of the Estate Owners under that very agreement.
- The general principles concerning implication of terms are well-established and are largely common ground. They can usefully be found set out in the current (29th) edition of Chitty on Contracts at paragraphs 13-001 to 13-009. Mr Hill relies particularly on paragraph 13-002 where it is said that
..a subsequent disagreement reveals that there are contingencies for which the parties have not provided in their express contract. The question is then whether the court can imply a term to cover the contingency which has unexpectedly emerged."
The relevance of that passage to the present case is, of course, that the parties expected, at the time of the section 106 Agreement, that Beazer Homes would acquire all of Mr Stroude's residential development land and would, therefore, itself be interested in ensuring the completion of the bypass (although, in the light of Mr Stroude also being interested in the construction and completion of the bypass as owner of the Business Park site, arguments about monetary contribution to the cost of construction might have arisen).
- The implied term for which Mr Hill contends is to the effect that Mr Stroude, Beazer Homes and their respective successors (and the same would necessarily apply to the owners from time to time of the CCC Land) may cause the bypass to be built in accordance with Parts II and III of the First Schedule. This, he says, is because:
a. The section 106 Agreement makes no provision for who is to do the job (and there is no other agreement which fills the gap) so it is necessary to make an implication if there is to be a complete contract, reliance being placed in Liverpool CC v Irwin  AC 239 per Lord Wilberforce at p254A-B:
"The present case, in my opinion, represents a fourth category, or I would rather say a fourth shade on a continuous spectrum. The court here is simply concerned to establish what the contract is, the parties not themselves having fully stated its terms. In this sense, the court is searching for what must be implied."
b. That is the obvious answer to the officious bystander's question "who is to build".
- I should, at this point, for completeness dispose of one objection which could be made to Mr Hill's approach which, to be fair to Mr Fancourt, is not an objection which he relied on. It is that, if Mr Hill is correct, a position could arise under which both he and Beazer Homes seek to obtain tenders and to contract with different contractors. However, although that might be a theoretical possibility, it is one which can in practice be ignored since it highly unlikely that both (i) each of Mr Stroude and Beazer Homes would wish to proceed with construction but (ii) they could not agree on a single contractor. If there were a dispute, it is one which should be resolved under Clause 13 (Resolution of Disputes) of the section 106 Agreement.
- Mr Fancourt's principal response to all of this is, as I have said, that Mr Hill is attempting to turn planning obligations under the section 106 Agreement which are obligations owed to SCDC and CCC, into private obligations owed by one co-obligor to another. That, he says, is an incorrect approach. Rather, the section 106 Agreement is concerned only with those planning and highway obligations and has nothing to say about the rights of the Estate Owners among themselves.
- He would like to argue, in support of that conclusion, that the rights of the Estate Owners among themselves would be dealt with in due course; so that it is therefo re impossible to imply into the section 106 Agreement any mutual rights and obligations between the Estate Owners for to do so would be inconsistent with that intention. For the reasons which I have already given (see paragraphs 13 and 14 above), I reject that line of argument. Similarly, I reject the proposition that, because the section 106 Agreement is what Mr Fancourt describes as a "planning agreement" ie one concerned with regulating, pursuant to a statutory code, the rights as between landowners on the one hand and planning and highway authorities on the other, it is not, therefore, to be construed in the same way as any other agreement and cannot be taken as dealing in any way, save as expressly stated, with the rights of the landowners among themselves. It is, as I have already said, to be construed in the same way as any other agreement but taking into account, I readily accept, that it was entered into against the statutory background.
- What Mr Fancourt certainly is entitled to rely on includes (i) the fact that the section 106 Agreement is intended to, and does, create planning and highway obligations under the statutory codes (ii) provisions of other agreements, in particular the 1995 Contract and the Cartwright Contract, which were in existence at the time of the section 106 Agreement which might suggest that it was not intended to regulate certain aspects of the relationships between the Estate Owners and in particular access to their respective land and (iii) the express provisions of the section 106 Agreement itself leading to a similar conclusion.
- I shall return to those aspects when I turn to consider Mr Fancourt's arguments, which are of importance principally in relation to the arguments about implied terms. But before I do so, I wish to deal with the more technical arguments surrounding Mr Hill's propositions concerning concurrent liabilities and Mr Fancourt's argument that the section 106 Agreement creates only several, and not joint and several, obligations in relation to the construction of the bypass.
The consequence of concurrent liability
- It seems to me that if any rights and obligations are to be found as between co-obligors by reason of their agreeing or covenanting to do something (whether jointly or severally or both), those mutual rights and obligations arise from similar, if not identical, concepts as give rise to implied terms in contracts and other documents. At root is some concept of necessity (in contrast with reasonableness), and that is so whether one uses language such as "obvious good sense and justice" (as in Mackay v Dick) or adopts a test such as the need to give business efficacy to the agreement or the last-resort test of the officious bystander. In any given factual situation where A and B covenant together, it seems to me, therefore, unlikely to make any difference in identifying the mutual obligations between A and B whether that covenant is joint, joint and several or only several.
- It is of course the case, as Mr Fancourt says, that several obligations are necessarily distinct obligations. Clearly, if A and B agree with C, in entirely unconnected documents, to do something, that does not mean that any mutual rights and obligations arise between A and B. He submits that, if Mr Hill's approach is correct, one would find implication of terms in all sorts of surprising circumstances. For instance, contrary to Harris v Boots Cash Chemists (Southern) Ltd  2 Ch 376, one would find that, under a standard form covenant by an assignee on the assignment of a lease to observe the covenants in the lease, an assignor would have the right to enter the demised premises to ensure compliance with those covenants. Or in cases such as Ayling v Wade  2 QB 228 (where a covenant by a mesne landlord to observe the covenants in the head lease was held not to be a mere covenant of indemnity but was a covenant requiring the mesne landlord actually to perform the repairing obligations in the head lease) one would find implied rights of entry. I do not consider, howeve r, that any difference of approach would follow at all in a case of the Harris type. That case interpreted the covenant as one of indemnity only and Mr Hill's submissions do not lead to a different approach in the case of such standard form covenants. So far as concerns Ayling, if it is necessary for a mesne landlord to gain entry to comply with his obligations to the tenant in occupation, it is hardly likely that the court would allow the tenant to recover damages if he himself had refused entry to the mesne landlord to comply with his obligations; indeed, one might think that this would be a classic case for the implication of a right of access if nothing were expressed, although in Ayling itself there appears to have been an express licence to do so.
- But, returning to the example in paragraph 61 above, where A and B covenant in the same clause of a single document, the position may well be different. Indeed, the subject matter of the obligations might well be such that separate and distinct unconnected obligations would be wholly inappropriate. For example A and B might well agree, in one agreement, with C to do something which requires a joint endeavour which it would not make sense for either of them to agree to do without the concurrence of the other such as constructing a road running over land belonging to each of A and B. Whether it is appropriate for the law to impose mutual rights and obligations on A and B ought, it seems to me, to depend on whether the obligations to C are concurrent, in the sense that each undertakes the same obligation to C by virtue of the same covenant or agreement, and not on whether the obligation is joint rather than several. In other words, to the extent that Mr Hill's proposition on concurrent obligations is correct at all, it should make no difference whether the Estate Owners' covenants under Clauses 7.1 and 7.2 are joint and several or only several.
- The obligations of the Estate Owners (other than CCC to which different considerations apply) to CCC under Clause 7.2 and Part II of the First Schedule are in my view concurrent in the sense just discussed. Jumping ahead, they also create, for reasons which I will give, a joint obligation on the part of the Estate Owners (other than CCC) to CCC. Further, I consider that the Obligations owed by the Estate Owners to SCDC under Clause 7.1 and Part III of the First Schedule are concurrent in that sense and that those provisions, too, create a joint obligation on the Estate Owners other than CCC to construct the bypass once the necessary approvals have been obtained and the Traffic Orders made.
Implication and necessity
- Having concluded that the mutual rights and obligations of those who undertake concurrent liabilities are rooted in similar concepts of necessity to those giving rise to implied terms, I do not propose to approach the construction of the section 106 Agreement in the rigid, logical, way which Mr Hill adopted. His approach, of course, is to argue that concurrent liabilities give rise, as a matter of law, to mutual rights permitting one obligor to exercise rights against a co-obligor requisite to enable fulfilment of their concurrent obligation; only if that is wrong does one need to consider the implication of terms according to conventional doctrine. Instead, I approach the question as one of necessity, or obviousness, as a single exercise. I return now to the factors identified in paragraph 59 above.
- The first factor: the fact that the section 106 Agreement is intended to, and does, create planning and highway obligations under the statutory codes. For reasons which I have already given, the section 106 Agreement is to be construed according to the same canons of construction as any other agreement. The mere fact that one purpose, perhaps the main purpose, of the section 106 Agreement is to implement the statutory code found in section 106 (and also in section 38 Highways Act 1980) does not lead to the conclusion that it can give rise to other rights only if those rights are expressly created. However, this factor is of relevance to the implication of terms as between the Estate Owners, as to which see paragraphs 76 ff below.
- The second factor: provisions of other agreements. There are two aspects. The first aspect is that the 1995 Agreement contains, at Clause 184.108.40.206, provision for the grant by Mr Stroude of rights and easements in the transfer of the Contract Land to Beazer Homes "as shall be reasonably necessary in connection with the provision of an infrastructure of roads and services in order to carry out the residential development of the Contract Land
". Similar provisions applied in relation to the First Option Land and the Second Option Land. It is not clear whether these rights were sufficiently wide to include access to construct the bypass, although the actual transfer of the Contract Land to Persimmon Homes does not expressly include that right. If they were not wide enough, then it can be argued that the absence of such rights in the contract for the sale and purchase of the Contract Land is to be explained on the basis that the parties intended only to deal with other infrastructure rights; there is no reason to think that they had any different intention when entering into the section 106 Agreement which was, after all, only needed in the first place in order to obtain the planning permission without which the sale and purchase would never become unconditional.
- The other aspect of the second factor is this. It is said by Mr Fancourt that there can be no implication in the section 106 Agreement that Beazer Homes and Mr Stroude (whether together or separately) would have rights of access over the Cartwright Land while it remained in the ownership of Mr and Mrs Cartwright; and that being so, the position is no different once the Cartwright Land has been disposed of by them even if that disposal is to Beazer Homes, an original party to the section 106 Agreement.
- The first part of that argument is, I consider, correct. By the time of the section 106 Agreement, Mr and Mrs Cartwright had entered into the Cartwright Contract which was, as I have said, conditional upon the acquisition by Beazer Homes of the Exchange Land. All the parties contemplated, at that time, that Mr Stroude would provide the Exchange Land to enable the Cartwright Contract to be completed and the bypass to be constructed. Prior to the section 106 Agreement, Mr and Mrs Cartwright's own legal position was well secured. Their land was necessary for the construction of the bypass, but they were not obliged to part wit h it unless and until they received the Exchange Land (which was appropriate to protect and enhance their own property) and the balance of the purchase price.
- The effect of the section 106 Agreement was, it seems to me, to jeopardise Mr and Mrs Cartwright's legal security. This is because they, like Beazer Homes and Mr Stroude, entered into planning and highway obligations with SCDC and CCC and were thus bound, once the necessary approvals had been obtained and Traffic Orders confirmed, to construct the bypass. Of course, everyone expected at that time that Mr and Mrs Cartwright would in fact in due course transfer the Cartwright Land to Beazer Homes and thus cease to have any, even theoretical, liability as a result of Clause 6.1. But in theory, a position could arise under which either of those local authorities would have the right to enter the Cartwright Land and construct the bypass (again in theory, at least, seeking a contribution to the cost of doing so from Mr and Mrs Cartwright); and that right could be exercised in circumstances under which Mr and Mrs Cartwright had no legal right to receive the Exchange Land or the balance of the purchase price because Beazer Homes had not acquired the Exchange Land from Mr Stroude (who was and is under no legal obligation to provide it).
- In those circumstances, it is impossible to suggest that it was an implied term of the section 106 Agreement that Mr and Mrs Cartwright were obliged to allow access to the Cartwright Land and this is so whether one applies a "business efficacy" test or an "officious bystander" test. Mr and Mrs Cartwright could justifiably say that it was never any part of the understanding between the parties that Mr Stroude and Beazer Homes would be entitled to come on to their land while they owned it: the whole basis of the transaction between them and Beazer Homes was that the land itself would be transferred to Beazer Homes so that rights of access would be totally unnecessary. There is no need to imply a right of access to give business efficacy to the commercial arrangements between Beazer Homes and Mr Stroude (on the one hand) and Mr and Mrs Cartwright (on the other); business efficacy would be achieved by fulfilment of the Cartwright Contract, upon completion of which Mr and Mrs Cartwright would drop out of the picture altogether. The officious bystander would, in my judgment, be unlikely to say that Mr and Mrs Cartwright should provide access: on the contrary, being a reasonable person, he would be more likely to say precisely the opposite and that access was a matter for Beazer Homes and Mr Stroude once the land exchange had been effected. Similarly, considering, as I do, that Mr Hill's arguments based on the existence of concurrent obligations depend, ultimately, on a concept of necessity, I do not consider that those arguments result in Mr and Mrs Cartwright being obliged to allow access to the Cartwright Land.
- Mr Hill, probably recognising that hurdle in his way, addresses the appropriate implied term from an entirely different perspective as set out in paragraph 55 above. The position now is that Beazer Homes has acquired the Cartwright Land: by asking the question "Who is to build?", Mr Hill deflects attention away from Mr and Mrs Cartwright and identifies four choices (Beazer Homes and Mr Stroude must act jointly; Beazer Homes must do it; Mr Stroude must do it; either of them may do it). Given that starting point and asking that question, Mr Hill says (and he may well be right) that the officious bystander would say that eit her party may build the bypass. But Mr Hill recognises that Mr and Mrs Cartwright would say, to use his words, "It will not be done until we have transferred [the Cartwright Land], so provided we are paid and we get the Exchange Land we will go along with whatever arrangements the rest of you want to make". Since the Cartwright Land has now, in fact, been transferred to Beazer Homes, there is, Mr Hill says, no objection to be made by Mr and Mrs Cartwright and, as between Beazer Homes and Mr Stroude, Mr Stroude is now entitled to access in accordance with the implied term which he asserts.
- The third factor: the express provisions of the section 106 Agreement itself. Mr Fancourt points out that express rights of access were granted by CCC over the CCC Land to the other Estate Owners for the purpose of constructing the bypass. This shows, he submits, that rights of access were not intended to be granted by the other Estate Owners over their own land. Mr Fancourt says this in his skeleton argument:
"The background to the section 106 Agreement is that both Mr Stroude and Beazer Homes expected that Beazer Homes would purchase all of Mr Stroude's residential development land and that Beazer Homes would purchase the Cartwright Land and the CCC Land. No doubt any mutual rights would have been expected to be dealt with, to the extent necessary, in any further contracts between Mr Stroude and Beazer Homes, as they were in the 1995 Agreement.
The section 106 Agreement does include the grant of rights by CCC as landowner, but that is because it was not liable to carry out the highway works itself: clause 7.5. It was therefore necessary, because not implicit, to grant rights expressly to others to enter onto the Council's land to perform the highway works: clause 7.6.1. Otherwise, if the Council remained as owner of its land, it could not be compelled to build the bypass on that land. If it was obvious to all parties to the section 106 Agreement that each Estate Owner had the right to go onto the others' land to built the By-pass, this provision would not have been included.
This fact is virtually conclusive against any implication of rights of access on an officious bystander basis
- It may be true that, had there been further contracts between Mr Stroude and Beazer Homes, mutual rights would have been dealt with as Mr Fancourt suggests. In practice, there would probably have been no issue about mutual rights at all since Beazer Homes would want to get on with the construction of the bypass as quickly as possible. The issue now arises, however, precisely because an unexpected situation has arisen (ie Beazer Homes has not purchased Mr Stroude's residential development land). What I cannot accept is that, because in the expected situation, no implied term would have been necessary, none is necessary in the unexpected situation.
- There is, however, some force in the argument based on the presence of the express provisions dealing with the CCC Land. If one finds an express provision for one Estate Owner alone to allow access to its land, it lends support, in the absence of any explanation for that provision, to the proposition that no rights of access arise for access to the land of other Estate Owners. If it was obvious/necessary to allow mutual rights of access all round, why include express provision in relation to the CCC Land?
Conclusion on main issue
- In my judgment, Mr Hill is correct in his submission that Mr Stroude has the right to cause the bypass to be built in accordance with the provisions of Parts II and III of the First Schedule to the section 106 Agreement. The presence of the concurrent obligations on Mr Stroude and Beazer Homes in the section 106 Agreement in the context of the factual matrix which I have discussed, leads me by a process of implication to that conclusion. It makes no difference whether one describes that as necessarily implicit, on the facts of the case, in the concurrent obligations undertaken by them as Estate Owners, or whether one implies a term to that effect into the sectio n 106 Agreement in accordance with conventional rules. It is, in my judgment, not an answer to that conclusion to say, as Mr Fancourt submits, that there is simply no need to introduce such a term as between the Estate Owners because, if there is a failure to build the bypass in accordance with the Estate Owners' covenants under the section 106 Agreement, SCDC and CCC themselves can enforce the covenants or, ultimately, carry out the works themselves and charge the Estate Owners for doing so. That may, at the end of the day, produce a similar result but it is hardly consistent with any concept of business efficacy; further, the officious bystander would be likely, in my judgment, to laugh at such a proposition as being one which I, at least, think is contrary to good sense and justice. That is really the answer to implication based on the first factor discussed above.
- As to the first aspect of the second factor, there is mileage for Mr Fancourt's argument only if Clause 6.1.10 of the 1995 Contract was not, as a matter of construction, wide enough to entitle Beazer Homes, and later Persimmon Homes in the actual transfer, to sufficient rights of access to construct the bypass. I am far from certain that the rights were not wide enough. That point was not argued before me. But it is not necessary to consider it further because, in my judgement, even if the rights under Clause 220.127.116.11 were not that wide, this second factor, whether by itself or in conjunction with other factors, does not lead to a conclusion in favour of the defendants.
- Let it be assumed that the rights granted were not that wide, so that Beazer Bedford and Mr Stroude did not, in the sale and purchase agreement, deal with all the rights and obligations necessary to implement the eventual planning permission. That fact is, in my judgment, no reason to reach the conclusion that the section 106 Agreement does not, even by implication, deal with such rights. In relation to the 1995 Agreement, the absence of such rights did not, in any way, make it unworkable or even lead to surprising conclusions. Further negotiations would have been necessary to enable the planning permission, if granted, to be implemented, but neither party was obliged to anyone actually to implement the planning permissio n. In contrast, the section 106 Agreement created, on any footing, obligations which might become enforceable to carry out the Highway Works including construction of the bypass, that is to say obligations to SCDC and CCC. It is the presence of those obligations, and the consequences of a breach of them, which make the critical difference between the two situations. In my judgment, the provisions of the 1995 Agreement are, in the event, of no assistance in construing the section 106 Agreement.
- As to the other aspect of the second factor, the fact that it is not possible, for reasons which I have already given, to imply any right of access while the Cartwright Land remained in the ownership of Mr and Mrs Cartwright, does not mean there can be no implied term as between Beazer Homes and Mr Stroude which has the effect, once Beazer Homes acquired the Cartwright Land, of permitting access to it by Mr Stroude (subject to obtaining the necessary approvals and the making of the Traffic Orders). It is important to remember that Beazer Homes had, by the time of the section 106 Agreement, already entered into the Cartwright Contract which therefore forms part of the factual matrix against which the section 106 Agreement is to be construed. Under that Contract, it was intended, as in fact happened, that Beazer Homes would acquire the Cartwright Land. Against that background, I find no difficulty with the concept of an implied term which provides for a right of access to build the bypass, a right which could, of course, only be exercised once Beazer Homes had acquired the Cartwright Land from Mr and Mrs Cartwright.
- As to the third factor, attractive as the argument is, I do not consider that, in the end, it gets Mr Fancourt home. This is because the position under the section 106 Agreement of CCC in relation to the CCC Land was materially different from that of Beazer Homes in relation to the Cartwright Land. One difference is that, at the date of the section 106 Agreement, Beazer Homes did not own the Cartwright Land and, for reasons already given, it could not be expected that Mr and Mrs Cartwright should be bound to give access to Mr Stroude and Beazer Homes to build the bypass. I do not think that it is correct, in those circumstances, to treat the positive inclusion of a provision creating rights over the CCC Land as an indication that no similar rights should be treated as arising over the Cartwright Land once it had been acquired by Beazer Homes.
- Another difference is that CCC did not have the same liabilities under the section 106 Agreement as the other Estate Owners. Thus, by virtue of Clause 7.5, it was not liable under Clause 7.1 in relation to the Obligations; nor was it liable under Clause 7.2 because it was both a covenantor and a covenantee. The development, both of the residential areas and the Business Park to which the planning permission relates, was a Stroude/Beazer project in which CCC was not involved. Without an express right of access, there would be no way in which Mr Stroude and Beazer Homes, even acting together, could have compelled CCC to permit the bypass to be constructed on its land and, although the effect of section 106(6) is not entirely clear, it must be open to considerable doubt whether SCDC would have had a right to go onto the CCC land to carry out the work itself.
- Indeed, the inclusion of a right of access over the CCC Land in the section 106 Agreement supports Mr Hill's rather than Mr Fancourt's arguments. That right of access is granted for the benefit of the Property (ie including the whole of the residential and business development areas) and is granted to "the other Estate Owners". Accordingly, each Estate Owner (and each successor in title) would be able to rely on the grant over the CCC Land to construct the bypass: the Estate Owners would not, in my judgment, need to act collectively. It is consistent with that position that each Estate Owner should have an implied right of access to each of his co-obligors' land for the purpose of complying with their concurrent obligation.
- Mr Fancourt had one further argument against a finding of a right of access over the Cartwright Land. He says that it would be a fetter on the powers of the local authorities (both SCDC and CCC) if one Estate Owner were to have what amounts to the power to impose the construction obligations under the section 106 Agreement in relation to land which it did not own and which the local authorities might not wish to see implemented. I do not consider that there is anything in this point. I see no reason why an express provision should not be included in a section 106 Agreement giving one landowner a right of access to another landowner's land; indeed, this was what was done in relation to the CCC Land. If it can be done expressly, there is nothing in the "fetter" point and nothing to prevent implication of similar term.
- That is enough to dispose of the main issues in the case. However, there is one point raised by Mr Fancourt which was fully argued and which I think I should deal with.
Joint or several covenants and section 82 Law of Property Act 1925
- Mr Fancourt submitted that if there was anything in Mr Hill's concurrent obligations argument, it could only apply where the concurrent obligation was a joint obligation and that the relevant obligations under Clauses 7.1 and 7.2 were only several.
- As to that, Clause 10.7 tells us that, where a covenant is given by more than one party, it is on the basis of joint and several liability, subject to Clause 6.1 which is set out at 18.e above. Prima facie, the obligations of the Estate Owners are joint as well as several so that, in particular, Mr Stroude and Beazer Homes are jointly liable to SCDC and CCC. But that position is subject to three matters (a) the fact that the covenantors include CCC (as one of the Estate Owners) which is also a covenantee under Clause 7.2 (b) the fact that, under Clause 7.5, CCC is not personally liable in respect of the Obligations (other than Clause 7.6.3) and thus not personally liable under Clause 7.1 in respect of the construction of the bypass and (c) the effect of Clause 6.1 in the light of the fact that two of the original Estate Owners (CCC and Mr and Mrs Cartwright) no longer own any land.
- As to the first of those matters, factor (a), at common law, not only could a person not covenant or contract with himself, but he could not covenant or contract jointly with himself and others nor could he and others covenant or contract jointly with himself alone. Accordingly, at common law, the Estate Owners (ie Mr Stroude, Beazer Homes, Mr and Mrs Cartwright and CCC) could not covenant jointly with CCC so that, at common law, Clause 7.2 could have created only several obligations notwithstanding Clause 10.7.
- The common law position is affected by section 82 Law of Property Act 1925 which provides in subsection (1):
"Any covenant, whether express or implied, or agreement entered into by a person with himself and one or more other persons shall be construed and be capable of being enforced in like manner as if the covenant or agreement had been entered into with the other person or persons alone."
- Accordingly, it is clear that a covenant by A with A, B and C can be enforced as if A had covenanted with B and C alone. The position where A, B and C covenant with A is not so clear. Mr Fancourt submits that such a covenant is not a covenant "entered into by a person with himself and others" since A, in his capacity as covenantee, has not entered into a covenant at all. It is A, B and C alone who, as covenantors, have entered into a covenant but they have not done so with A "and others" as the section requires. Further, he submits that this result cannot be circumvented by treating the covenant by A, B and C with A as "an agreement entered into by a person [A] with himself and one or more other persons [A, B and C]".
- I do not agree with Mr Fancourt's submissions on this point. He asks me, in effect, to read section 82(1) as if, in relation to covenants, it had said "any covenant given by a person to himself and one or more other persons shall be construed etc as if it had been given to the other persons alone".
- Had there been no reference in the subsection to agreements as well as covenants, there would be considerable force in his submission. However, in relation to an agreement, the subsection does not distinguish between a joint right and a joint obligation. If A enters into a contract with B and C jointly, then that contract will be likely to give rise to both joint rights and joint obligations. For instance, if A contracts with B and C jointly to sell his property P for a consideration of £X, then there is a joint obligation on B and C to pay £X to A and a joint right of B and C to receive a transfer of P. If A and C happen to be the same person, at common law the contract is void. But, for the purposes of enforcement, section 82(1) treats the agreement as made between A on the one hand and B on the other hand. It is not, I think, possible to treat the "agreement" for the purposes of that subsection as meaning only A's promise to B to transfer P to B (being a promise by A to himself and another) but to treat A and B's promise to pay £X to A as void (at common law) but not saved by the subsection, leaving the law or equity to intervene in some other way to avoid the obviously incorrect result that A and B can have P without paying for it.
- This indicates the approach which I consider should be taken to covenants. The "covenant" being referred to is not simply the promise by the covenantor to the covenantee; rather, the covenant is the legal relationship which arises as a result of the giving of it by the convenantor. The distinction can, perhaps, most easily be understood by making a linguistic distinction: a covenant can be given by A to B; but a covenant can also be entered into between A and B. The meaning of "covenant" in those two instances is subtly different, a difference which can be seen when one looks at the equivalent contractual position. Take the example above again. It makes perfectly good sense to say that A has given a promise to transfer P to A and B and that A and B have given a promise to pay £X to A. But it is not a normal use of language to say that either one of those promises taken by itself has been entered into between the parties. Rather, it is something larger, that is to say the overall contract containing mutual rights and obligations, which has been entered into between the parties whilst each separate promise has only been given by one party to the other.
- Accordingly, a covenant by A and B with A is enforceable under section 82(1) just as a covenant by A with A and B is enforceable. There is, one might say, a reciprocity of application of the statutory provision. Accordingly, I consider that the notes to section 82(1) in Wolstenholme & Cherry (13the ed) are correct when they say that the subsection overrules Boyce v Edbrooke  1 Ch 836, relating, among other matters, to tenants' covenants by joint lessees one of whom was the landlord (being the tenant for life exercising his statutory powers) and other cases. It follows that the covenants in Clause 7.2 and Part II of the First Schedule are not prevented from being joint covenants because CCC is both a covenantor and a covenantee: instead, the covenants will take effect as if made by the Estate Owners other than CCC with CCC.
- So far as concerns the second matter, factor (b), in paragraph 86 above, it may be that the absence of personal liability on CCC prevents the covenants under Clause 7.1 by all of the Estate Owners, including CCC, from being joint as well as several; but I see no reason in principle why, even if that is so, the covenant by the other Estate Owners, as between themselves and SCDC as covenantee, should not be joint and several. Accordingly, Clause 7.1 creates a joint obligation on Beazer Homes, Mr Stroude and Mr and Mrs Cartwright either with or without CCC.
- So far as concerns the third matter, factor (c), in paragraph 86 above, CCC and Mr and Mrs Cartwright have ceased to be liable, by virtue of Clause 6.1, under either Clause 7.1 or Clause 7.2. To the extent that their successors in title are liable, they are liable only to SCDC and CCC (as the relevant local authorities) under section 106(3)(b). It would, however, be wrong, I think, to describe the effect of Clause 6.1 as releasing a joint covenantor from his covenant; rather, the obligation which he enters into in the first place is defined in such a way as to come to an end when he ceases to own any relevant land. Again, I see no reason why the coming to end of his liability in this way should have any effect on the nature of the original obligation as between the original covenantors and the covenantee. Accordingly, I consider that the obligations of Beazer Homes and Mr Stroude under both Clauses 7.1 and 7.2 remain joint and several.
- Even if that were wrong, I see no reason why an agreement should not be able expressly to provide that a joint and several covenant given by more than two covenantors should not retain its joint and several nature when a condition was fulfilled which brought an end to the liability of one of their number. In other words, it would have been perfectly possible for the section 106 Agreement to provide that the covenants given by Beazer Homes and Mr Stroude to SCDC and CCC should remain joint and several notwithstanding the disposal by CCC and Mr and Mrs Cartwright of their land. In my judgment, that is precisely what Clause 10.7 achieves.
- Mr Hill had a further argument based on the "all reasonable endeavours" obligation on Persimmon Homes, pursuant to Clause 3.3.1 of the 1995 Contract and its novation, to ensure the dedication as public highway of such part of parts of the CCC Land as shall be required in connection with the construction of the bypass. Mr Hill says that such dedication can only be achieved once the entire bypass has been completed and that, accordingly, the obligation on Persimmon Homes extends to taking all reasonable steps to ensure completion of the whole bypass, including that part passing over the Cartwright Land.
- Mr Fancourt has two arguments against that conclusion. First, he says that the obligation under Clause 3.3.1 was satisfied by the inclusion of Clause 7.6.2 of the section 106 Agreement, under which CCC, so as to bind the CCC Land, undertook with SCDC and the other Estate Owners on completion of such part of the Highway Works as fall on the CCC Land that is to say the section of the bypass passing over the CCC Land to dedicate the same as a public highway. Secondly, he says that the structure of the Persimmon group is such that Persimmon Homes has no power to ensure that Beazer Homes constructs, or allows access to Mr Stroude to construct, that part of the bypass which passes over the Cartwright Land.
- Mr Fancourt succeeds on this aspect of the case if either one of those arguments is correct. In my judgment, both of Mr Fancourt's arguments are correct
- As to the first argument, he is correct, I consider, in saying that the purpose of Clause 3.3.1 was to secure, so far as possible, that the CCC Land needed for the construction of the bypass would be made available for that purpose. The bypass would need to be adopted before it could be used as a bypass and for that adoption to take place, dedication by the landowner, and acceptance of that dedication, of the bypass as a public highway would be necessary. Clause 3.3.1 required Beazer Homes to take reasonable steps to ensure that the land would be available for dedication and that the landowner would in fact dedicate it. Once the section 106 Agreement had been made, there was no content left in the obligation which the 1995 Contract cast on Beazer Bedford since everything reasonable had been done to ensure dedication, in due course, by the landowner (now West Longstanton Developments Ltd). Clause 3.3.1 did not, in my judgment, require that Beazer Bedford should take steps in relation to other land (eg using reasonable endeavours to obtain access to the Cartwright Land) to bring about circumstances in which the highway authority would accept dedication. Accordingly, no obligation in this regard fell on Persimmon Homes pursuant to the novation agreement.
- As to the second argument, the group structure of the Persimmon group is such Persimmon Homes has no control over Beazer Homes. They both have an ultimate parent, Persimmon plc, but Persimmon Homes has no holding, direct or indirect, in Beazer Homes. Mr Hill relies on assurances given to SCDC that, if reserved matter approval were granted, Persimmon would ensure completion of the approved development of 91 dwellings including public open space, village green and ancillary works. On the basis that Persimmon Homes had given this assurance, Mr Hill says that there must exist some arrangement within the group which allowed it to do so and that that same arrangement should now be invoked to enable Persimmon Homes to ensure access for Mr Stroude to the Cartwright Land. However, this argument does not stand up to examination because the assurances were given by Persimmon plc and not by or on behalf of Persimmon Homes. There is no evidence that Persimmon Homes in fact has any direct or indirect power or influence over Beazer Homes to cause it to allow Mr Stroude to enter the Cartwright Land in order to construct the bypass. In my judgment, there are no reasonable endeavours which Persimmon Homes can be expected to take in relation to access to the Cartwright Land.
- Finally, Mr Hill submits that Mr Stroude's rights in respect of the Cartwright Land are proprietary and capable of binding that land either as an estate contract or as an equitable easement; they are not "planning obligations" within section 106(1) because they are not owed to a local authority entitled to enforce them against successors under section 106(3)(b) and (9)(d). They therefore need to be protected on the Register of Title (not being overriding interests). Mr Fancourt submits that such rights as Mr Stroude may establish to go onto the Cartwright Land arise out of the covenants given to SCDC and CCC and are part and parcel of the planning obligations created by the section 106 Agreement. A planning obligation is protected as a local land charge under section 106(11) and there is no need, he says, for further protection on the Register.
- Mr Hill is right, I consider, in his submission that Mr Stroude's rights of access to the Cartwright Land are not planning obligations, essentially for the reason he gives. Although it is true that those rights arise because, and only because, the Estate Owners have entered into concurrent obligations with SCDC and CCC, they are, nonetheless, separate rights enforceable by Mr Stroude and not only by SCDC and CCC.
- I also agree with Mr Hill that those rights are proprietary in nature at least since the time when Beazer Homes obtained a transfer of the Cartwright Land; I say nothing about the position while Mr and Mrs Cartwright remained owners of the land. Conceptually, in circumstances where it is for the clear benefit of identified property for its owner to have the right to go onto another persons land to construct a highway (eg to comply with a planning obligation relating to the development of that property), that right is capable, I think, of creating an easement for the benefit of that property, even though the highway, when constructed, is to be a public highway and not a private right of way serving that property. Certainly, the section 106 Agreement contemplates that this is so, which is why Clause 7.6 grants a right of access over the CCC Land and purports to do so (a) for the benefit of the Property (other than the CCC Land) and (b) so as to bind the CCC Land. I do not consider that the fact that the right of access has not yet become exercisable because the necessary approvals have no t been obtained or Traffic Orders confirmed means, as Mr Fancourt submits, that there is no interest capable of protection on the register; contingent interests in land are nonetheless interests, for instance an option to purchase in the future.
- Mr Fancourt, however, submits that, if Mr Stroude has an easement at all, it is not an equitable easement but a legal easement, having been granted by deed (the section 106 Agreement being a deed). As such, it is an overriding interest under section 70 Land Registration Act 1925 (which was the applicable legislation at the time when the caution was lodged in the present case) and therefore not, he says, registrable. Accordingly, a caution should not have been lodged. I do not agree. First of all, section 54(2) provides that a person interested in any land may lodge a caution: there is no exclusion for interests which are overriding interests. Secondly, section 70(3) Land Registration Act 1925 expressly provides for notice of an overriding interest to be entered on the register, which demonstrates that there is no difficulty in an interest being both the subject matter of a notice and an overriding interest (an aspect which also demonstrates that the interest can be the subject matter of a caution). Thirdly, unt il protected by registration, an easement created by deed remains equitable.
- It follows that Mr Stroude's rights were capable of protection by notice when he lodged his caution. He was entitled to lodge it even if it is the case that Beazer Homes has at all times been, and remains, willing to comply with its obligations to SCDC and CCC. The question whether such lodging was premature does not, I consider, arise. This makes it unnecessary for me to consider a large amount of the evidence which went to the circumstances of the lodging of the caution.
- My conclusions therefore are:
a. Mr Stroude will have rights of access to the Cartwright Land for the purpose of carrying out those parts of the Highway Works that fall to be carried out on that land in accordance with Parts II and III of the First Schedule to the section 106 Agreement, such rights becoming exercisable in accordance with those provisions once the necessary approvals have been obtained and the Traffic Orders made.
b. Mr Stroude is entitled to have such rights protected on the Register of Title.
c. Mr Stroude had, at all material times, an interest in the Cartwright Land which was capable of protection by notice on the register. In the absence of such notice, he was entitled to lodge a caution in respect of it. In my judgment, there is no question of such lodging being "premature" or not.
- I will hear counsel on the form of order which I should make to reflect the rulings in this judgment.
Copyright Policy |
Donate to BAILII