Town and country planning – Community infrastructure levy (CIL) – Liability – Claimant obtaining permission on two separate planning applications – Defendant local authority issuing CIL liability and demand notices – Whether defendants acting lawfully in issuing notices – Whether defendants correctly treating separate planning permissions as one – Application granted
The claimant was the freehold owner of unit C3/C4 which was part of the Orbital Shopping Centre at Haydon Wick, Swindon, Wiltshire. The property was occupied by the interested party. The claimant submitted two separate planning applications to the defendant local authority in relation to the property: one for the installation of a mezzanine floor and the other for external works, including new shop fronts, which created no additional floor space.
The defendants granted planning permission in respect of both applications. They took the view that the mezzanine installation was development liable to a community infrastructure levy (CIL) because the proposed development fell within the meaning of development for CIL purposes due to the direct link between the two applications for the mezzanine and external alterations. Accordingly the defendants issued a CIL liability notice under regulation 65 of the Community Infrastructure Levy Regulations 2010 (SI 2010/948), as amended. The liability notice notified the claimant that it would be liable to £170,900 of CIL to the defendant as CIL collecting authority. The defendants subsequently served a demand notice under regulation 69 in respect of the same development.
The claimant applied for judicial review, challenging the lawfulness of issuing each of those notices. The claimant contended that the defendants had no lawful power to act as they had in issuing both notices as the mezzanine planning permission fell within the exemption under regulation 6(1)(c) of the CIL Regulations. The external planning permission created no floor space and so was not liable to CIL. Each planning permission was independent of the other.
The defendants argued that both planning permissions should be treated as one. The works were carried out together and affected the interior and exterior of the property. Had the works been the subject of a single planning application and planning permission granted that would have been subject to CIL. They were entitled to treat the two applications as a single development for the purposes of CIL. The reality was that the claimant was pursuing a deliberate strategy to avoid CIL. Both planning applications had been submitted on the same day and under a single cover letter. The claimant’s submission that each planning permission could be independently implemented was artificial. In reality, the two applications were linked.
Held: The application was granted.
(1) On the plain and ordinary meaning of the words used in regulation 6(1)(c) of the 2010 Regulations, it was clear that CIL was not chargeable on the mezzanine planning permission. There was nothing on the face of the mezzanine planning permission to link it with the planning permission for external operations. The 2008 Act conferred no discretion as to how a planning permission was to be interpreted, but mandated an interpretation in accordance with the definition in regulation 5, i.e. the words used referred to planning permission granted by a local planning authority under sections 70, 73 or 73A of the Town and Country Planning Act 1990. The statutory intent of the 2010 Regulations, as clarified by later amendments, was to give certainty to developers and the local planning authority as to when and how the liability for CIL would arise. The policy intent was also clear. The explanatory memorandum to the Community Infrastructure Levy (Amendment) Regulations 2011 (SI 2011/987) explained that its purpose was to ensure that there was equal treatment of any development of the interior of buildings. Therefore regulation 6(1)(c) put internal floor space for retail development on the same footing as other internal retail floor space which did not require planning permission.
(2) The claimant’s submission of two separate planning permissions was not a manipulation of the system for any illegal motive. Rather, the claimant had taken advantage of the legislative scheme which permitted it to submit, in this case, two separate planning applications for each act of operational development that it wished to pursue. If it was not the intention of the legislature to permit that to occur then it was for the legislature to change it. At present, that was the consequence of the current statutory scheme. Accordingly, the defendant had acted unlawfully in demanding the CIL under its liability and demand notices by interpreting the two separate planning permissions as one and the claimant’s application succeeded: Vestey v Inland Revenue Commissioners (No 2) [1980] AC 1148, MacNiven (HM Inspector of Taxes) v Westmoreland Investments Ltd [2003] 1 AC 311 and Barclays Mercantile Business Finance Ltd v Mawson (HM Inspector of Taxes) [2005] 1 AC 684 applied; Martin v David Wilson Homes Ltd [2004] 3 EGLR 77 and R (on the application of Burridge) v Breckland District Council [2013] EWCA Civ 228; [2013] PLSCS 76 distinguished.
Neil Cameron QC and Michael Ripley (instructed by Norton Rose Fulbright LLP) appeared for the claimant; Anthony Crean QC and Killian Garvey (instructed by Swindon Borough Council) appeared for the defendants; The interested party did not appear and was not represented.
Eileen O’Grady, barrister
