Town and country planning – Planning permission – Implementation – Planning permission for residential development – Permission subject to planning agreement requiring payment of transport contributions to appellant highway authority – Development commencing – Second permission obtained for same development without requirement for transport contributions – Whether developer entitled to continue development under second permission such that no further transport contribution payable – Appeal dismissed
In 2012, the interested party, as local planning authority, granted planning permission to the respondent for a development of up to 200 dwellings on land in Worcester. The permission was subject to a planning agreement, under section 106 of the Town and Country Planning Act 1990, by which the respondent was obliged to make a financial contribution of more than £800,000 towards transport and infrastructure services for the city. The transport contribution was payable to the appellant highway authority in three equal instalments, with the first to be paid on or before the commencement of development.
The respondent sold its interest in the site to another developer before the development began; although the transport contribution thereupon became an obligation of the purchaser, the respondent agreed under the sale agreement to perform that obligation. Development commenced in October 2013 after reserved matters under the 2012 planning permission were approved and the respondent paid the first instalment of the transport contribution.
As contemplated by the sale agreement, the developer subsequently obtained a second planning permission, on an appeal to a planning inspector, for the same development but free from the obligation to pay a transport contribution. The developer then entered into a unilateral undertaking, under section 106 of the 1990 Act, indicating its intention to implement the second planning permission and to “dispense with the implementation of” the first planning permission.
The respondent sought a declaration that it could not lawfully be required to pay further instalments of the transport contribution if the developer chose to continue the development under the second planning permission. Allowing the claim, the judge held that: (i) the developer could in law elect to continue and complete the development under the second planning permission as perfected by the approval reserved matters, rather than proceed with the first permission; and (ii) on the facts of the case, it had so elected: see [2014] EWHC 3809 (Admin); [2014] PLSCS 325.
The appellants appealed. They contended that the developer could not dispense with the implementation of the first planning permission since it had already been “implemented” by the commencement of development.
Held: The appeal was dismissed.
(1) Since the developer’s section 106 undertaking was enforceable as a contract and was entered into in connection with a commercial development, it should be interpreted in accordance with the principles applicable to the construction of commercial contracts, with appropriate adjustments to reflect the unilateral character of the document. It was therefore necessary to focus on the meaning of the relevant words in their documentary, factual and commercial context, applying an objective test and with reference to commercial common sense where relevant.
The term “implementation”, in relation to a planning permission, was not defined by statute and did not have a single meaning. The term was ambiguous since it could refer either to the beginning of a development authorised by a planning permission or more generally to the carrying out or completion of that development. As used in the unilateral undertaking, the term should be construed as having the latter meaning. To construe it as referring to the commencement of development would render the relevant covenant ineffective. Such a result should be rejected since the developer could not sensibly have intended to dispense with the beginning of the first planning permission at a time when that development had already long since begun. Moreover, it was apparent from the relevant background that the developer had intended to cease carrying out the development under the first planning permission and instead to continue it under the second permission, as was contemplated by the terms of the sale agreement. Accordingly, construing the unilateral undertaking against the relevant documentary, factual and commercial background, and to give it a meaning that avoided ineffectiveness, the word “implementation could sensibly, and should, be read as referring to the carrying out of the development authorised by the relevant planning permission, not merely to the commencement of that development.
(2) The judge had been entitled to find that, after the approval of reserved matters under the second planning permission, the developer had carried out building operations on the site pursuant to that second permission and not the first permission, with the consequence that no further instalments of the transport contribution became payable. As a matter of principle, where two planning permissions existed in respect of the same land, a developer could choose between them. The judge had been entitled to find that, once the obligations under the developer’s unilateral undertaking came into force, the development had thereafter continued under the second planning permission. The terms of the unilateral undertaking, properly interpreted, were themselves clear-cut objective evidence that operations were carried on under the second permission. It did not matter that it was impossible to tell from evidence on the ground whether operations were being carried out under the first or the second planning permission. No difference could be expected in the operations themselves, since the terms of the two planning permissions were identical. If the development authorised by one planning permission was identical to that authorised by another planning permission, it would be absurd if a switch between the two permissions could only be made where a demarcation between the two could be demonstrated physically on the ground.
(3) Further, the fact that some development had already been carried out pursuant to the first planning permission did not prevent the carrying out of further development pursuant to the second permission, given the complete consistency between the two permissions. Where the two planning permissions were materially identical, the development carried out pursuant to the first permission did not make it impossible to carry out the physical development permitted by the second permission in a manner which accorded with the terms of that permission: Pilkington v Secretary of State for the Environment [1973] 1 WLR 1527, R v Arfon Borough Council, ex parte Walton Commercial Group Ltd [1997] JPL 237 and Staffordshire County Council v NGR Land Developments Ltd [2002] EWCA Civ 856; [2003] JPL 56; [2002] PLSCS 127 distinguished.
(4) The appellants were misguided in a further argument which relied on the principle that a planning permission encompassed the whole of a given building operation and that a failure to carry out the development fully in accordance with the permission would render the whole development unlawful. The principle did not address the situation where a building was completed pursuant to two identical planning permissions relied on one after the other. The fact that the development had already been carried out in part pursuant to the first permission did not mean that the relevant building operation could not be carried out “fully” in accordance with the second permission: Sage v Secretary of State for the Environment, Transport and the Regions [2003] UKHL 22; [2003] 1 WLR 983; [2003] 1 PLR 121 distinguished.
John Hobson QC and Stephen Whale (instructed by the legal department of Worcestershire County Council) appeared for the appellants; Anthony Crean QC and John Hunter (instructed by Eversheds LLP) appeared for the respondent; the interested party did not appear and was not represented.
Sally Dobson, barrister
Click here to read transcript: Robert Hitchins v Worcestershire County Council
