After the Heaney judgment in 2010 developers have had a clear need to address rights and restrictions at the outset. Can they turn to the local authority for help in cleansing the development site of any right to an injunction? What does s237 actually say?
…the erection, construction or carrying out or maintenance of any building or work on land which has been acquired or appropriated by a local authority for planning purposes (whether done by the local authority or by a person deriving title under them) is authorised by virtue of this section if it is done in accordance with planning permission, notwithstanding that it involves—
(a) interference with an interest or right to which this section applies, or
(b) a breach of a restriction as to the user of land arising by virtue of a contract.
Section 237(1A) applies this power to the use of the development.
So, the authority acquires or appropriates for a planning purpose. Magic, the consented development can proceed and any previous right to seek an injunction is reduced to a right to compensation on a favourable basis for the developer. Not quite.
The effect of s237 is akin to compulsory purchase. Compulsory purchase guidance emphasises the importance of seeking to acquire land by negotiation and provides that a CPO should only be made where there is a compelling case in the public interest. In either case human rights implications are likely.
The Human Rights Act 1998 prohibits public authorities from acting in a way which is incompatible with the European Convention on Human Rights. The use of s237 will often result in interference with rights such as the right to peaceful enjoyment.
Therefore, before invoking s237 a local authority must consider whether the interference is justified. Knowing whose rights will be interfered with and whether they are prepared to give them up, without the need for statutory powers, is important. Unless the scale and complexity of the affected rights makes it infeasible to do so, attempts to extinguish the rights through private treaty negotiations will normally be needed. The public interest must outweigh the interest of the private individuals whose rights are to be interfered with the interference with, rights must be necessary and proportionate. A town centre redevelopment may well be in the public interest and justify interference with rights. A new office block may not.
If an authority is satisfied that use of s237 is appropriate, it is an extremely useful delivery tool. The development site is acquired or appropriated for planning purposes, ideally with a specific resolution explaining the intention that the rights will be subject to s237. The site is then transferred to the developer, perhaps with a confirmatory resolution to make it clear, on the public record, that the authority is intending that s237 applies, maybe even tied to a specific planning permission or type/scale of development, and requirements about giving notice to and negotiating with those whose rights are affected. Done properly, the listed bank next door (as in the case of Heaney) will not be able to obtain an injunction.
Where the developer owns the site, the land must pass through the local authority’s ownership. Considering how the transaction can be structured to reflect SDLT and to allow works to commence whilst the authority holds the freehold interest is crucial. Where a site is being assembled by CPO it is prudent to acquire any necessary rights, avoiding, or at least minimising, the need to use s237.