Town and country planning – Planning permission – Section 106 agreement – Useful purpose – Developer agreeing to pay towards cost of highway under section 106 agreement – Development not taking place – Developer applying to claimant local authority to be released from obligation to pay outstanding balance under section 106A – Inspector allowing appeal against claimant for failure to determine application – Claimant applying for judicial review – Whether inspector erring in failing to consider whether planning obligation continuing to serve useful purpose – Application granted
On 2 September 1998, the claimant local authority granted permission for a mixed employment and residential development on the site at Clipstone Road East. The claimant agreed to carry out highway works to facilitate the development. In an agreement, made pursuant to section 106 of the Town and Country Planning Act 1990 and section 278 of the Highways Act 1980, the interested party agreed to pay 75% of the cost of those works. All works were carried out by the claimant and the sum said to be owed by the interested party was £459,346.85. The development for which permission was granted did not take place but, on 9 December 2008, the claimant granted a further planning permission and entered site. That application was refused by the claimant but granted by the defendant secretary of state. In the meantime, the interested party had entered into a further section 106 agreement associated with that application by which he undertook to pay the £459,346.85. Of that sum £160,000 was paid, leaving an outstanding balance of £299,346.85. There had, to date, been no development on the site. The effect of each successive section 106 agreement was to extinguish the pre-existing section 106 liability.
On 27 July 2016, the interested party applied under section 106A of the 1990 Act to the claimant to modify the planning obligation, so as to release him from the obligation to pay the outstanding balance. The claimant having not determined that application, the interested party appealed to the defendant who appointed an inspector to conduct the appeal under the written representations procedure. Following a site visit, the inspector allowed the appeal. The claimant applied for judicial review of the inspector’s decision. It contended that, having accurately identified the main issue in her decision, the inspector failed to address the obvious purpose of the obligation, namely to recover public funds.
Held: The application was granted.
(1) When considering an application under section 106A, there were four essential questions: (i) what was the current obligation; (ii) what purpose did it fulfil; (iii) was it a useful purpose; and, if so, (iv) would the obligation serve that purpose equally well if it had effect subject to the proposed modifications. Section 106A involved a precise and specific statutory test and did not bring in the full range of planning considerations involved in an ordinary decision on the grant or refusal of planning permission. The planning inspector had identified the correct obligation and the central question, namely, whether the obligation served a useful purpose. However, she did not expressly consider what purpose it was asserted the obligation served. Had she done so, she would have been bound to conclude that that purpose was to enable the claimant to recover some of the costs of the original highway works which it had carried out. Releasing the interested party from that obligation would undermine that purpose. The question should have been whether that purpose was one falling within section 106A. Subsection 6 did not delimit the characteristics of the purpose which might be “useful” and there was no express limitation to “planning purposes”. Section 106A did not bring in the full range of planning considerations involved in an ordinary decision on the grant or refusal of planning permission: Tesco Stores Ltdv Secretary of State for the Environment[1995] 2 EGLR 147, R (The Garden and Leisure Group Ltd) vNorth Somerset Council[2003] EWHC 1605 (Admin), R (Batchelor Enterprises Ltd)v North Dorset District Council[2003] EWHC Admin 3006 and R (Renaissance Habitat Ltd) vWest Berkshire District Council[2011] 2 EGLR 80 considered.
(2) The statute contained no qualification to the expression “useful purpose”. The critical question was whether the obligation served some useful function, the absence of which made the maintenance of the obligation pointless. The question for the inspector was whether the obligation served any useful purpose, not any useful planningpurpose. The construction of the road was critical to the development of the site originally and that the road had been in place for many years. It could fairly be said that the payment of the highway costs would not directly be related to the present development because the road was already present, and that the building of the road was not necessary to make the development acceptable. But the failure of the inspector to identify the benefit that maintenance of the obligation would achieve meant that none of those observations went to the crucial issue. The inspector erred in law by failing to identify the useful purpose that the obligation served and to consider whether that purpose remained extant.
(3) Here, there was an obvious purpose in enforcing the obligation, namely to recover expenses incurred by the local planning authority in building the road which made the site a candidate for development in the first place. That was a useful purpose because public money expended to facilitate the development should be recovered where possible. In addition, there was a substantial public purpose in encouraging co-operation between local planning authorities and local development. The claimant constructed the road to enable development. It agreed not to enforce the obligation when new proposals were formulated but to transfer that obligation to later applications to assist the developers and encourage appropriate development. Were the developers able to escape the obligation simply because the claimant, in a spirit of co-operation, had so delayed enforcement would do a considerable disservice to the public interest. In any event, that was a useful planning purpose. The decision of the planning inspector could not stand and had to be quashed: Aberdeen City and Shire Strategic Development Planning Authority v Elsick Development Co Ltd[2017] UKSC 66 considered.
Jonathan Mitchell (instructed by Mansfield District Council) appeared for the claimant; Daniel Stedman Jones (instructed by the Treasury Solicitor) appeared for the defendant.
Eileen O’Grady, barrister
