CIL and S. 106: Recent case-law developments. Heather Sargent 1 October 2018

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1 CIL and S. 106: Recent case-law developments Heather Sargent 1 October 2018

2 S. 106

3 Elsick Aberdeen City and Shire Strategic Development Planning Authority v Elsick Development Co Ltd [2017] PTSR 1413 Supreme Court, 25 October 2017

4 Elsick Provides a useful overview of (i) the correct legal test as to the lawfulness of a planning condition; (ii) the correct legal test as to the lawfulness of a planning obligation; (iii) the role of the latter in the decision to grant/refuse planning permission; and (iv) the boundary between questions of legality and questions of policy. N.b. however: Scottish case, so in E&W context is subject to CIL regs. 122 & 123 (see Good Energy).

5 Elsick Cannot impose a negative suspensive planning obligation (analogous to a Grampian condition) for a purpose that does not relate to the development oruse ofthe site. In particular, it is not lawful to restrict commencement until the developer makes a financial contribution towards infrastructure that is unconnected to the development ofthe site (In E&W: this is dealt with through CIL)

6 Elsick Nor can a planning obligation require contributions towards unconnected infrastructure without restricting the development of the site by means of a negative suspensive obligation: a planning obligation requiring a sum or sums to be paid to the planning authority should be for a planning purpose or objective which should in some way [be] connected with or relate to the land in which the person entering into the obligation is interested (Tesco Stores Ltd v SSE (1994) 68 P&CR 219).

7 Elsick For a planning obligation to be a material consideration it must have some connection with the proposed development that is more than de minimis / trivial. Elsick: this requirement cannot be overcome by the LPA including policy in its development plan to the effect that it will seek such planning obligations from developers ([51]).

8 Elsick [I]f a planning obligation, which is otherwise irrelevant to the planning application, is sought as a policy in the development plan, the policy seeking to impose such an obligation is an irrelevant consideration when [the LPA] considers the application for planning permission.

9 Oates R (o.a.o. Oates) v Wealden DC [2018] EWCA Civ June 2018 Court of Appeal accepts the possibility of refusing planning permission for development that is unacceptable in the absence of CIL infrastructure.

10 Oates Proposed development unacceptable in the absence of improvements to a number of junctions, some of which are included in the LPA s CIL list. Highway authority initially objects to the proposed development, on the ground inter alia that there is no guarantee that the relevant CIL works will be completed before the houses are occupied.

11 Oates HA then withdraws its objection, accepting that by paying the CIL the developer will have done all it can to secure the provision of the relevant CIL works and that a requirement that those works be delivered prior to occupation is inconsistent with their inclusion in the CIL list. LPA grants planning permission without a Grampian condition preventing occupation prior to delivery of the CIL works.

12 Oates CA: It would have been wrong for the LPA to have proceeded on the basis that proposed development that is unacceptable in the absence of CIL works cannot be resisted (provided that the CIL is paid) however that is not what the LPA in Oates did. A LPA may grant planning permission subject to a lawful condition specifically preventing occupation until the necessary infrastructure has been provided, even if that is not within the power of the applicant (because it is included in the LPA s CIL list).

13 (i) Wright; (ii) Good Energy Forest of Dean DC v Wright [2018] JPL 672 Court of Appeal, 14 December 2017 Good Energy Generation Ltd v SSCLG [2018] EWHC 1270 (Admin) 25 May 2018

14 (i) Wright; (ii) Good Energy Wright Whether, on an application for development proposed to be undertaken by a community benefit society, a proposed donation to the community of a proportion of the turnover derived from the development is a material consideration. Court of Appeal: no.

15 (i) Wright; (ii) Good Energy Something that is funded from the development / offered by the developer will not by virtue of that fact alone be sufficiently related to / connected with the development to be a material consideration. Nor is a matter a material consideration simply because it is to be regarded as beneficial to the public.

16 (i) Wright; (ii) Good Energy A planning purpose is one that relates to the character or use of the land. Whilst the community fund would be administered by local people for the benefit of the community, there was no limitation or restriction that required it to be used for a planning purpose.

17 (i) Wright; (ii) Good Energy Dove J had been correct to conclude: (i) that the community donation was an untargeted contribution of off-site community benefits that was not designed to address a planning purpose; and (ii) that there was no real connection between the proposed development and the community donation; such that the LPA was not entitled to take into account the offer of the community benefit fund donation as a material consideration.

18 (i) Wright; (ii) Good Energy Good Energy: Unilateral undertaking pursuant to s. 106 includes a proposed Community Benefit Fund, a Local Tariff and a Community Investment Scheme. Inspector and SoS conclude that having regard to the CIL Regulations, no weight can be attached to those matters.

19 (i) Wright; (ii) Good Energy In the light of Wright, claimant abandons challenge in respect of the CBF. Continues to argue that CIS and Tariff were material planning considerations. High Court rejects submission that any condition that materially furthers the achievement of planning policy goals will be for a planning purpose and therefore a material consideration: a matter does not become material merely because it is included in a planning policy.

20 (i) Wright; (ii) Good Energy Endorses what is said in the Encyclopedia of Planning Law and Practice on the interplay between the case-law on material considerations and CIL reg. 122: To the extent that a planning obligation will overcome a legitimate planning objection to a proposed development, its existence is a material consideration under s. 70(2) TCPA 1990 provided that it meets the tests set out in CIL reg Reg. 122 thus develops considerably the previously evolved case-law relating to when a planning obligation can be a material consideration.

21 (i) Wright; (ii) Good Energy High Court holds that the Inspector and the SoS were entitled to conclude, in the exercise of their judgement, that no weight could be attached to the CIS and/or the Tariff because they did not comply with CIL reg. 122: The CIS was to be funded by the CBF. The latter fell foul of Wright and it was difficult to make any meaningful distinction between the CBF itself and projects funded by it. The figures chosen were not explained / justified by reference to the proposed development.

22 (i) Wright; (ii) Good Energy As to the Tariff, there had to be a real rather than fanciful or remote connection between the benefit that it would secure and the proposed development. The Tariff proposal was too nebulous to meet that requirement. The CIS was merely a potential investment opportunity and the Tariff was essentially an inducement to make the proposal more attractive to local residents and to the LPA.

23 Khodari R (Khodari) v Kensington and Chelsea RLBC [2018] 1 WLR 584 Court of Appeal,11 May 2017 Can s.106 be used to subject the developer to an obligation that no occupant of the proposed residential development will apply for a resident s parking permit? Can it be used to require payment of a one-off monitoring fee to enable the LPA to police the no permit obligation?

24 Khodari No, s.106 is not a suitable mechanism through which to secure no permit obligations. Why? The relevant section is s.106(1)(a): an obligation restricting the development or use of the land in any specified way. The no permit obligation does not seek to restrict the land in which the developer has an interest: it seeks to restrict the use ofthe highway for parking.

25 Khodari However: in Greater London no permit obligations can be entered into under s. 16 of the Greater London Council (General Powers) Act 1974, which requires only that the agreement be made in connection with the land. For the remainder of England and Wales: a potential solution is to exclude the proposed residential development from the schedule of streets in the SI that created the relevant controlled parking zone: see Khodari at [39] and R (AS Property Investments Ltd) v Hounslow LBC [2008] EWHC 1631.

26 Khodari As to the obligation to pay a monitoring fee: On the facts, this had not been a reason for granting planning permission and therefore CIL reg. 122 did not present any obstacle. There is no need to enforce such a one-off fee against successors in title to the original parties, therefore its validity depends simply on the LPA s power to contract for its payment. That power is provided by s. 111(1) of the Local Government Act 1972 / s. 1(1) of the Localism Act 2011.

27 CIL

28 Hillingdon Hillingdon LBC v SSCLG [2018] EWHC 845 (Admin) A demand notice under the CIL Regulations 2010 (reg. 69) is invalid where it fails to give details of the surcharges imposed or to refer to the recipient's rights ofappeal Local authority applies for judicial review of decision by PINS to accept an appeal by the Interested Party ( IP ) against the imposition of surcharges under the CIL Regulations 2010

29 Hillingdon Planning permission granted in 2014 for chargeable development (sheltered housing) Local authority claims that it served a liability notice IP commences the development without giving either (i) notice of commencement under reg. 67 or (ii) notice of assumption of liability under reg. 31 Development is completed without CIL being paid Local authority serves first demand notice in July 2016 IP (over)pays CIL on without prejudice basis

30 Hillingdon In September 2016 local authority subsequently s second demand notice to IP for the levy together with surcharges under regs. 80, 83 and 85 for failure to give notice of commencement, failure to give notice of assumption of liability, late payment and interest IP requests refund of overpaid levy and local authority responds by letter in June 2017 explaining that it imposed surcharges back in September 2016 IP appeals to PINS against surcharges in July 2017 Local authority argues that the appeal is outside the reg day period PINS initially rejects appeal as not made within 28 days of the September 2016 e- mail demand PINS subsequently accepts that the appeal was in time: until the June 2017 letter the IP had not been clearly made aware of the imposition of the surcharges

31 Hillingdon High Court accepts IP s argument that the September was not a valid demand: Under reg. 69(2)(a) a demand notice has to be issued on a form published by the secretary of state or a form to substantially the same effect Under reg. 69(2)(e) it has to state the amount payable including any surcharges imposed or interest Under reg. 69(2)(g) it has to include the other information specified in the form

32 Hillingdon That means that the local authority must expressly state that surcharges are being imposed and append details A rights of appeal section must also be included in the demand notice On the facts: a reasonable recipient of the would have been entitled to wonder whether it was a formal demand notice In the circumstances the demand was not a valid notice (R v Soneji (Kamlesh Kumar) [2005] UKHL 49 considered)

33 Hillingdon The parties could either proceed with the appeal on the basis that any defect in the notice was waived or the local authority could give a compliant notice

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