Planning permission – Unilateral undertaking – Section 106(1) of Town and Country Planning Act 1990 – Respondent council refusing planning permission for residential development but indicating that unilateral undertaking to make financial contributions to infrastructure would overcome objections – Appellant developer providing undertaking – Planning permission granted on appeal – Inspector expressing view that undertaking unnecessary – Whether undertaking enforceable – Whether unreasonable to enforce – Appeal dismissed In 2006, the respondent council refused an application by the appellant for planning permission for a development of 14 dwellings on land in Woodley, near Reading. The terms of the refusal indicated that the proposal did not adequately provide for services, amenities and infrastructure, but that this objection could be overcome by a unilateral undertaking, under section 106(1) of the Town and Country Planning Act 1990, to make financial contributions towards leisure, education and library facilities. The appellant accordingly gave an undertaking, in terms that measured the contributions by reference to tariffs contained in supplementary planning advice and local plan policies. The obligations were not to take effect unless and until planning permission was granted and the development was commenced. A planning inspector later granted planning permission on appeal. In his decision letter, the inspector stated that the respondents had not shown the necessity of the contributions required by the undertaking, to which he accordingly gave little weight. The respondents refused the appellant’s subsequent request to discharge the undertaking; they took the view that the inspector’s decision had not affected the enforceability of the undertaking. The appellant’s claim for judicial review of that decision was dismissed. The deputy judge held that the enforceability of the undertaking was conditional on only two events, namely the grant of planning permission and the commencement of development, both of which had occurred, and that it was reasonable for the respondents to enforce the undertaking since it continued to serve a useful planning purpose: see [2011] EWHC 6 (Admin); [2011] 03 EG 83 (CS). He further held that the respondents would have power, under section 111 of the Local Government Act 1972, to refund to the appellant any surplus funds that remained after expenditure of the sums deemed necessary to mitigate the development. The respondents conceded that the full amount of the contribution was no longer needed. The appellant appealed. Held: The appeal was dismissed. The respondents had legitimately refused planning permission on grounds relating to the absence of provision in the planning application for infrastructure needs. The appellant had been invited to give a section 106 undertaking and the giving of that undertaking, by way of a financial contribution to highways, libraries and education facilities, had been a predictable, lawful and reasonable response. The undertaking had become enforceable according to its own terms. Enforceability as a contractual obligation was part of the rationale for the section 106 procedure. The undertaking had become binding and its enforceability could no longer be challenged on the ground that, when made, it had lacked a sufficient nexus with the proposed development: Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759; [1995] 2 EGLR 147; [1995] 27 EG 154 and Circular 05/2005 considered. The inspector’s decision had not cast doubt on the lawfulness of the undertaking. The fact that the inspector was prepared to grant planning permission without giving weight to the undertaking did not mean that the undertaking had ceased to have any legitimate planning purpose. There was no determination of the secretary of state, through his inspector, that deprived the undertaking of a planning purpose: R (on the application of Batchelor Enterprises Ltd) v North Dorset District Council [2003] EWHC 3006 (Admin); [2004] JPL 1222 distinguished. In the circumstances, the respondents were entitled to enforce the undertaking. In doing so, they were not making a planning decision but merely deciding to enforce a contractual obligation. In any event, even if the decision to enforce were a determination under the planning Acts, in the making of which the respondents were required by statute to have regard to the development plan, the undertaking had been in accordance with the development plan when made and did not cease to be so by reason of any concession that the full amount undertaken to be paid was no longer appropriate. There was no unlawfulness in the respondents stating that they would seek to enforce the undertaking only up to a certain amount. A reduction in their claim did not involve a finding that the remaining sum was there other than for planning purposes and did not give rise to an obligation to quash the undertaking. The respondents refusal to discharge the undertaking was not unlawful. Further, it was questionable whether a remedy by way of judicial review was appropriate in a case of this kind. The undertaking had been lawful when given and would be enforced by a private law contract action. If and when a sum were claimed by the respondents, in an action based on the undertaking, it would be open to the appellant to question whether the sum claimed under each head came within the terms of the undertaking. The points that the appellant claimed to make by way of judicial review could be employed as a defence to a private law claim; accordingly, an alternative remedy was available. Per curiam: Since the appellant had not yet made any payments, the question of whether the respondents had a power to repay sums contributed under a section 106 agreement was purely hypothetical. The better view was that they did; they had power to conduct contractual negotiations and a repayment would also be incidental to the respondents’ planning powers under section 111 of the 1972 Act. John Pugh-Smith (instructed by Pitmans LLP, of Reading) appeared for the appellant; Guy Williams (instructed by the legal department of Wokingham Borough Council) appeared for the respondents. Sally Dobson, barrister
R (on the application of Millgate Developments Ltd) v Wokingham Borough Council
Planning permission – Unilateral undertaking – Section 106(1) of Town and Country Planning Act 1990 – Respondent council refusing planning permission for residential development but indicating that unilateral undertaking to make financial contributions to infrastructure would overcome objections – Appellant developer providing undertaking – Planning permission granted on appeal – Inspector expressing view that undertaking unnecessary – Whether undertaking enforceable – Whether unreasonable to enforce – Appeal dismissed
In 2006, the respondent council refused an application by the appellant for planning permission for a development of 14 dwellings on land in Woodley, near Reading. The terms of the refusal indicated that the proposal did not adequately provide for services, amenities and infrastructure, but that this objection could be overcome by a unilateral undertaking, under section 106(1) of the Town and Country Planning Act 1990, to make financial contributions towards leisure, education and library facilities. The appellant accordingly gave an undertaking, in terms that measured the contributions by reference to tariffs contained in supplementary planning advice and local plan policies. The obligations were not to take effect unless and until planning permission was granted and the development was commenced.
A planning inspector later granted planning permission on appeal. In his decision letter, the inspector stated that the respondents had not shown the necessity of the contributions required by the undertaking, to which he accordingly gave little weight.
The respondents refused the appellant’s subsequent request to discharge the undertaking; they took the view that the inspector’s decision had not affected the enforceability of the undertaking. The appellant’s claim for judicial review of that decision was dismissed. The deputy judge held that the enforceability of the undertaking was conditional on only two events, namely the grant of planning permission and the commencement of development, both of which had occurred, and that it was reasonable for the respondents to enforce the undertaking since it continued to serve a useful planning purpose: see [2011] EWHC 6 (Admin); [2011] 03 EG 83 (CS). He further held that the respondents would have power, under section 111 of the Local Government Act 1972, to refund to the appellant any surplus funds that remained after expenditure of the sums deemed necessary to mitigate the development. The respondents conceded that the full amount of the contribution was no longer needed. The appellant appealed.
Held: The appeal was dismissed.
The respondents had legitimately refused planning permission on grounds relating to the absence of provision in the planning application for infrastructure needs. The appellant had been invited to give a section 106 undertaking and the giving of that undertaking, by way of a financial contribution to highways, libraries and education facilities, had been a predictable, lawful and reasonable response. The undertaking had become enforceable according to its own terms. Enforceability as a contractual obligation was part of the rationale for the section 106 procedure. The undertaking had become binding and its enforceability could no longer be challenged on the ground that, when made, it had lacked a sufficient nexus with the proposed development: Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759; [1995] 2 EGLR 147; [1995] 27 EG 154 and Circular 05/2005 considered.
The inspector’s decision had not cast doubt on the lawfulness of the undertaking. The fact that the inspector was prepared to grant planning permission without giving weight to the undertaking did not mean that the undertaking had ceased to have any legitimate planning purpose. There was no determination of the secretary of state, through his inspector, that deprived the undertaking of a planning purpose: R (on the application of Batchelor Enterprises Ltd) v North Dorset District Council [2003] EWHC 3006 (Admin); [2004] JPL 1222 distinguished. In the circumstances, the respondents were entitled to enforce the undertaking. In doing so, they were not making a planning decision but merely deciding to enforce a contractual obligation. In any event, even if the decision to enforce were a determination under the planning Acts, in the making of which the respondents were required by statute to have regard to the development plan, the undertaking had been in accordance with the development plan when made and did not cease to be so by reason of any concession that the full amount undertaken to be paid was no longer appropriate.
There was no unlawfulness in the respondents stating that they would seek to enforce the undertaking only up to a certain amount. A reduction in their claim did not involve a finding that the remaining sum was there other than for planning purposes and did not give rise to an obligation to quash the undertaking. The respondents refusal to discharge the undertaking was not unlawful.
Further, it was questionable whether a remedy by way of judicial review was appropriate in a case of this kind. The undertaking had been lawful when given and would be enforced by a private law contract action. If and when a sum were claimed by the respondents, in an action based on the undertaking, it would be open to the appellant to question whether the sum claimed under each head came within the terms of the undertaking. The points that the appellant claimed to make by way of judicial review could be employed as a defence to a private law claim; accordingly, an alternative remedy was available.
Per curiam: Since the appellant had not yet made any payments, the question of whether the respondents had a power to repay sums contributed under a section 106 agreement was purely hypothetical. The better view was that they did; they had power to conduct contractual negotiations and a repayment would also be incidental to the respondents’ planning powers under section 111 of the 1972 Act.
John Pugh-Smith (instructed by Pitmans LLP, of Reading) appeared for the appellant; Guy Williams (instructed by the legal department of Wokingham Borough Council) appeared for the respondents.
Sally Dobson, barrister