Planning agreement under section 52 of Town and Country Planning Act 1971 – Developer agreeing to construct link road on land yet to be acquired by council – Developer agreeing to bear cost of acquisition – Developer contending that payment obligation unlawfully imposed – Distinctions to be drawn between planning conditions and planning obligations assumed under 1971 Act or section 106 of Town and Country Planning Act 1990 – Developer’s application dismissed
In July 1979 Kingswood District Council (Kingswood) granted a planning permission to the claimant developer, conditional,inter alia, upon the claimant constructing a link road over land (the BR land) then owned by British Rail (the July condition). The relevant highway authority were Avon County Council (Avon). In October 1979 the claimant entered into an agreement (the October agreement) with Avon, expressed to be made pursuant to section 52 of the Town and Country Planning Act 1971. By that agreement, the claimant undertook to construct the link road and Avon undertook, in certain events, to acquire the BR land, on the understanding that the costs of such an acquisition would be repaid to them by the claimant. The agreement recited the history of the planning application and contained various provisions (the regulatory provisions) governing the use of the link road and other roads on the development itself.
In January 1982 Kingswood bought the BR land and other land from British Rail for the price of £5, but, having done so, failed to come to terms with the claimant, who considered that no more than a nominal price should be payable. By an exchange of letters in 1987, the claimant agreed to refer the matter to the Lands Tribunal, as arbitrator, to determine the amount payable by reference to the sum that Avon would have had to pay to Kingswood pursuant to an unopposed compulsory purchase order (the CP price).
The claimant proceeded to construct the link road. In March 1988 Kingswood transferred the BR land to Avon upon terms that payment would be made in accordance with the Lands Tribunal determination. By a local government reorganisation, taking effect in April 1996, both Kingswood and Avon ceased to exist, with the result that the right to receive the CP price vested in the first named defendant, while the obligation to pay the same, together with the right, if any, to be repaid by the claimant, devolved upon three other council defendants. In October 1998 the Lands Tribunal, having earlier made an invalid assessment, determined the CP price at £428,000. Resisting the defendants’ claims for payment, the claimant contended that Avon had no power to impose the payment obligation under section 52 of the 1971 Act, as the relevant undertaking was not incidental or consequential to an agreement entered into “for the purpose of restricting or regulating the development or use of land”. The claimant sought a declaration accordingly.
Held: The claimant was liable to pay £428,000, with interest thereon.
1. It was common ground that the presence of the regulatory provisions had brought the October agreement within the terms of section 52. However, that did not allow the claimant to contend that any incidental provision had itself to be restrictive of the use and development of land. It was incorrect to dissect the section 52 agreement into its constituent parts and require each of them, in isolation, to come within the terms of the section.
2. While a planning condition had to relate fairly and reasonably to the development permitted (see Newbury District Council v Secretary of State for the Environment [1981] AC 578), there was no such requirement as regards a planning obligation assumed under section 52 (now under section 106 of the Town and Country Planning Act 1990). The only tests for the validity of a planning obligation were that it had to be for a planning purpose and that it must not be Wednesbury unreasonable: see Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759 (HL), approving Good v Epping Forest District Council [1994] 1 WLR 376 (CA). The fact (assumed for the purpose of the hearing) that the 1979 condition did not relate to the development permitted on the claimant’s land did not disable Avon from imposing the payment obligation by means of the October agreement.
Michael Barnes QC and John Harvey (instructed by Burroughs Day, of Bristol) appeared for the claimant; Terence Etherton QC and Jonathan Seitler (instructed by Sharpe Pritchard) apeared for the defendants.
Alan Cooklin, barrister
