Case No. HC09C04357

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

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

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

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

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

Clause 1.1 provides:

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

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

Clause 8.7 provides:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

He went on at 196-197 to say:

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

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

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

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

Section 2 of the 1989 Act provides inter alia:

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

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

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

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

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

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