Council granting planning permission conditional upon claimant constructing link road on land to be acquired – Parties entering into agreement under section 52 of Town and Country Planning Act 1971 that the council would acquire land and developer would reimburse council – Developer subsequently refusing to reimburse council and contending payment obligation unlawfully imposed – Judge finding developer liable to pay – Developer appealing – Appeal dismissed
In July 1979 Kingswood District Council (Kingswood) granted planning permission to the claimant developer for the development of land at Bridge Yate, Bristol. The permission was conditional, inter alia, upon the claimant constructing a link road over land (the BR land) owned by British Rail. In October 1979 the claimant entered into an agreement with Avon County Council (Avon), the relevant highway authority, pursuant to section 52 of the Town and Country Planning Act 1971. Under the agreement the claimant undertook to build the link road and Avon undertook, if necessary, to use their best endeavours to acquire the land.
In January 1982 Kingswood bought the BR land for £5, but then failed to agree a price with the claimant. Avon then undertook to acquire the BR land at the claimant’s request. After protracted negotiations, Kingswood agreed to sell the land to Avon, provided that the matter was referred to the Lands Tribunal and the price assessed upon the basis that Avon had made an unopposed compulsory purchase order to acquire the land for highway purposes. Meanwhile, the land was conveyed to the claimant which proceeded to construct the link road. In October 1998 the Lands Tribunal determined the price at £428,000. Following a local government reorganisation in April 1996, Kingswood and Avon ceased to exist, with the result that the right to payment for the BR land vested in the defendants.
The claimant refused to pay £428,000 for land originally purchased for £5, and sought an agreement that the 1979 agreement was unlawful. The High Court held that the claimant was liable to pay the £428,000. The claimant appealed, contending that the agreement was not connected with the development and was no more than an agreement to purchase a planning permission. It was submitted that, upon a proper analysis of the House of Lords decision in Tesco Stores v Secretary of State for the Environment [1995] 2 EGLR 147, an agreement entered into for such a purpose was Wednesbury unreasonable, as Avon must have taken into account an irrelevant or immaterial consideration.
Held: The appeal was dismissed.
1. It was essential to bear in mind that the instant case was not concerned with the validity either of the grant of planning permission or of any conditions attached to that permission, but with the vires of the agreement under section 52 of the Act. The power to impose a condition was not unlimited, as any such condition must fairly and reasonably relate to the permitted development: see Pyx Granite Co Ltd v Ministry of Housing and Local Government [1958] 1 QB 554 and Newbury District Council v Secretary of State for the Environment [1981] AC 578. It therefore followed that, on the assumption that had to be made, the terms of the agreement could not have been conditions of the planning permission, and, furthermore, that the agreement was not a material consideration for the purposes of granting planning permission.
2. However, section 52 of the Act provided a power to enter into an agreement with the owner of the land “for the purpose of restricting or regulating the development or use of the land”. Such an agreement was valid, even though its terms were not capable of being conditions attached to the grant of planning permission: see Good v Epping Forest District Council [1994] 2 EGLR 190. Moreover, it was not a prerequisite for the validity of a section 52 agreement that it should relate to any proposed development. The vires of any such agreement depended simply and solely upon whether or not it was entered into “for the purpose of restricting or regulating the development or the use of the land”. The 1979 agreement had clearly been entered into for that purpose. Accordingly, the question was whether, in so doing, Avon had acted unreasonably in the Wednesbury sense.
3. The tests of the validity of the planning permission on the one hand, and the agreement on the other, were not to be confused. If Avon, as the planning authority, had taken the agreement into consideration when determining to grant planning permission, the grant of planning permission could properly be challenged. That was because Avon would have taken into account a matter that they were not entitled to take into account under section 29 of the Act. However, it did not follow that the agreement was in any way infected. There was nothing to suggest that the considerations taken into account by Avon when deciding to enter into the agreement, were anything other than proper highway or planning considerations. The underlying planning application provided an opportunity to obtain a proper benefit for the locality. If there was any error, it was in granting the planning permission, not in determining to enter into the agreement.
Michael Barnes QC and John Harvey (instructed by Burroughs Day, of Bristol) appeared for the appellant; John Howell QC and Jonathan Seitler (instructed by Sharpe Pritchard) appeared for the respondents.
Thomas Elliott, barrister
