Development – Planning permission – Planning policy – Defendant secretary of state granting permission for major urban extension – Claimant authorities seeking to quash decision — Whether defendant failing to consider relevant policy – Whether defendant misunderstanding developers’ unilateral undertaking – Whether developers making proper provision for necessary infrastructure – Application granted
In 2009, having called in the application for his own determination, the defendant secretary of state granted planning permission for a major urban extension to the second interested party (WSC), a consortium of landowners and national house building companies. The development was to include 3,600 dwellings, business premises, shops, leisure, social and community facilities, incorporating schools, open space and associated infrastructures. It was the first phase of a larger urban extension of some 5,000 dwellings. The site lay within the area of the first claimant council, which was the education authority for the area, and partly within the areas of the second claimant council and the first interested party.
The claimants applied to quash the defendant’s decision under section 288 of the Town and Country Planning Act 1990. The first interested party was content with the terms of the permission and the related unilateral undertaking given by WSC pursuant to section 106 of the 1990 Act, in so far as it affected its area; neither the first interested party nor WSC took part in the proceedings.
The claimants contended that the decision was outside the powers of the 1990 Act or relevant requirements had not been complied with to the prejudice of the claimants. They argued that the defendant had failed to take account of the latest development plan in that the proportion of affordable housing required in the development was below what it should have been, and that the policy on renewable energy had been ignored. In each case, if the defendant had taken the policies into account, he had failed to give adequate reasons for the conclusions he had made.
WSC was required to provide for the necessary infrastructure in its unilateral undertaking, but had been allowed unlawfully to opt to pay money to the claimants instead so that they would be liable to make up any deficiencies in the sum paid. Further, the provisions in the unilateral undertaking for temporary schools were not adequate to achieve the aim intended by the defendant. He had misinterpreted the provisions or failed to recognise their deficiencies, and had provided no legally adequate reasons for his conclusions.
Held: The application was granted.
(1) There was nothing legally objectionable in principle in a developer’s decision to opt to provide cash to local authorities for any particular item of infrastructure rather than to carry out the works itself under bonded obligations. There was no prohibition on such a provision in section 106, nor in public law generally. Section 106(1)(d) and 2(c) specifically contemplated that money could be paid under such an undertaking; and it was obviously contemplated that that would enable the local authority to carry out works instead of the developer doing so.
Provided that the money was lawfully adjudged to be acceptable, there was no public law basis for saying that the developer had to carry out the works rather than pay a cash sum to the local authority for it to carry them out. Option provisions in a unilateral undertaking raised no different issue in principle. There might be objections about the amount of money made available and the degree of risk transferred, but that was not a matter of legal principle. It was a matter for the planning judgment of the decisionmaker whether the provision was an acceptable basis for the grant of planning permission.
(2) Transfers of land were permissible within a section 106 agreement and authorities would accept a transfer of land with facilities to use for statutory functions, such as the provision of education or public open spaces, if the terms were agreeable. It followed that there was nothing inherently unlawful in a unilateral undertaking equally making provision for land to be offered to the authority on appropriate terms. The combination of positive and negative covenants, and the provisions for the transfer of land in the instant case, were clearly part of the restrictions on the development and use of land within section 106.
(3) A local authority could not be forced directly to accept the transfer on terms in a unilateral undertaking. It might feel obliged to accept the transfers or leases offered or to forgo the benefits of the infrastructure being provided by or at the cost of the developer. However, that was not a legally objectionable compulsion. There was nothing objectionable under section 106 in a local authority being offered land on which the necessary infrastructure would be built, and agreeing the terms of the transfer. The purpose behind a unilateral undertaking was to avoid an authority’s refusal to enter a proper agreement necessary to make a development acceptable, or the inability of the parties to reach agreement for whatever reasons, preventing that development regardless of what the Secretary of State might decide was sufficient: Wimpey Homes Holdings Ltd v Secretary of State for the Environment [1993] 2 PLR 54 distinguished.
(4) The secretary of state was entitled to conclude that an offer, if accepted, was reasonable and effective to achieve the necessary infrastructure. If so, there was no legally objectionable compulsion. The fact that the terms of the transfer, if accepted, may compel an authority to use the land in a particular way did not amount to unlawful compulsion. It depended on the lawfulness of the secretary of state’s judgment as to the reasonableness and effectiveness of the terms. The transfers and leases did not impose terms that were inappropriate for the transfer or lease of the facilities.
(5) However, on the evidence, the defendant had ignored the renewable energy policy and the unilateral undertaking did not secure the provision of temporary school accommodation that the defendant required and thought had been secured. The defendant had misinterpreted the effect of the convoluted undertaking and consequently ignored relevant considerations and relied on irrelevant ones. Accordingly his decision would be quashed: Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 3 EGLR 119 considered.
Mark Lowe QC and David Forsdick (instructed by the legal department of Hertfordshire County Council) appeared for the first claimant; Mark Lowe QC and Adrian Trevelyan Thomas (instructed by the legal department of North Hertfordshire District Council) appeared for the second claimant; Timothy Mould QC (instructed by the Treasury Solicitor) appeared for the defendant.
Eileen O’Grady, barrister
