Since the introduction of unilateral planning obligations by the Planning and Compensation Act 1991, it has been possible for a developer to side-step any reluctance on the part of a local planning authority (LPA) to negotiate a planning obligation, at least in circumstances where no positive action on the part of the LPA is required. But the question that arises separately is the extent to which a LPA can rest upon the private law principle of freedom of contract when challenged by a third party for having failed to enter into a planning obligation.
In R (on the application of Halebank Parish Council) v Halton Borough Council – see PP 2012/115 – the LPA owned the land upon which the storage and distribution warehouse was to be constructed by the developer applying for planning permission. At all relevant times, the developer had no interest in the land. Terms negotiated between the LPA and the developer provided that if planning permission was granted, and the developer entered into a contract for the letting of the warehouse, the LPA would receive £1.78m. The LPA’s planning committee was advised that, as no other person was interested in the land, no planning obligation would be entered into. Instead, these monies would be payable under a development agreement to be entered into by the LPA with the developer.
Since the introduction of unilateral planning obligations by the Planning and Compensation Act 1991, it has been possible for a developer to side-step any reluctance on the part of a local planning authority (LPA) to negotiate a planning obligation, at least in circumstances where no positive action on the part of the LPA is required. But the question that arises separately is the extent to which a LPA can rest upon the private law principle of freedom of contract when challenged by a third party for having failed to enter into a planning obligation. In R (on the application of Halebank Parish Council) v Halton Borough Council – see PP 2012/115 – the LPA owned the land upon which the storage and distribution warehouse was to be constructed by the developer applying for planning permission. At all relevant times, the developer had no interest in the land. Terms negotiated between the LPA and the developer provided that if planning permission was granted, and the developer entered into a contract for the letting of the warehouse, the LPA would receive £1.78m. The LPA’s planning committee was advised that, as no other person was interested in the land, no planning obligation would be entered into. Instead, these monies would be payable under a development agreement to be entered into by the LPA with the developer. In support of its claim for judicial review of the LPA’s decision to grant planning permission, the claimant parish council contended that the LPA should have entered into a planning obligation under section 106 of the Town and Country Planning Act 1990 with the developer. (This it could have done by means of requiring the developer to take an interest in the land.) The section 106 route provides transparency, in that the planning obligation has to be placed on the register. Against that, the LPA had resolved formally to make none of the development agreement available for inspection, relying upon provisions in the Local Government Act 1972 (as amended). The court held that the LPA had not acted unlawfully in deciding that, in the absence of being able to enter into a planning obligation, it would follow a different route. This was notwithstanding the fact that another LPA might have wanted to find a way of creating a legal situation where a planning obligation could be entered into. John Martin is a freelance writer.
