Planning permission failed to properly address impact on Green Belt openness

The National Planning Policy Framework (“NPPF”) says:

“89. A local planning authority should regard the construction of new buildings as inappropriate in Green Belt. Exceptions to this … [include]:

provision of appropriate facilities for outdoor sport, outdoor recreation and for cemeteries, as long as it preserves the openness of the Green Belt and does not conflict with the purposes of including land within it;
… ”
In Boot, R (On the Application Of) v Elmbridge Borough Council [2017] the Defendant’s development plan policy DM17 – Green Belt (Development and New Buildings) said:

“b. Built development for outdoor sport, recreation and cemeteries will need to demonstrate that the building’s function is ancillary and appropriate to the use and that it would not be practical to re-use or adapt any existing buildings on the site. Proposals shall be sited and designed to minimise the impact on the openness of the Green Belt and should include a high quality landscape scheme.”

The planning officer’s report found that the new £17.9m sports ground use proposed, and the buildings and structures required to support it, including the pavilion, floodlights, fencing and car park, would have an impact on the openness of the Green Belt but considered that it would not be significant.

The Defendant’s planning committee accepted in its Statement of Reasons that:

“There will be a limited adverse impact on landscape and visual amenity and ‘openness’ of the Green Belt, however there will also be significant benefits in terms of facilitating the beneficial use of land within the Green Belt by providing significant opportunities for public access and outdoor sport and recreation by improving damaged land which is supported by para 81 of the NPPF.”

Quashing the planning permission the High Court agreed with the Applicant’s barrister that:

“if a proposal has an adverse impact on openness, the “inevitable conclusion” … is that it does not comply with a policy that requires openness to be maintained. A decision maker does not have “any latitude” to find otherwise, based on the extent of the impact. In the present case the Defendant concluded that there was an adverse impact on openness, but nevertheless granted permission without giving consideration to whether under paras 87 and 88 of the NPPF there were very special circumstances that would justify it.”

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Lapsed Land Registry application saddles land with right of way

Where someone buys real estate they only have an equitable interest in it until it is registered in their name at the Land Registry. Registration perfects their legal ownership. Until that registration the seller is deemed to hold the land on trust for the buyer.

In the High Court case of Baker & Anor v Craggs [2016] two areas of land were being sold by the two joint owners. The second area sold should have had a right of way over the yard of the first area sold but the Sellers omitted to reserve it.

However the Sellers’ failure to reserve that right of way did not prevent them selling the second area with that “right of way”.

Normally transferring the first area without reserving that right of way would have disabled the Sellers from granting it to the Second Buyers. However fate intervened.

The “grant” of the right might still be valid if the Sellers were still the “legal owners” of the yard at the time the Second Buyers bought the second area with the “right of way”.

The Second Buyers faced four hurdles:

1. Were the Sellers still legal owners of the yard notwithstanding that they had already “sold” it to the First Buyer? The court said yes because there had been a major delay getting the first sale registered at the Land Registry due to a problem with the transfer plan. It had been overtaken in the registration stakes by the second sale. Pending registration the Sellers had owned the legal estate in the yard on trust for the First Buyer.

2. Did the First Buyer still have priority over the Second Buyers because of his Land Registry search and application? Answer: no because the priority conferred by them had lapsed when the First Buyer’s original Land Registry application was cancelled due to delays dealing with the plan problem.

3. Was the priority of the First Buyer’s interest nonetheless protected by the fact that he had been in “actual occupation” of the yard since his purchase? Answer: Yes it had been pretty obvious to the Second Buyers. The First Buyer had been doing some building work.

4. Was 3 above fatal to the Second Buyers’ right of way or could the Second Buyers show that the First Buyer’s interest in the yard was “overreached” by the Second Buyers’ purchase of the second area and that right of way so as to be nevertheless postponed to them? The court said: yes. Pending the First Buyer getting registered the Sellers held the yard on trust for the First Buyer but the Sellers nonetheless had all the sale powers of an absolute owner and the First Buyer’s interest in the yard would be overreached so as to be subordinated to the Second Buyers’ purchase and right of way provided (as occurred here) all the sale proceeds of the second area were paid to both the Sellers who still held the yard as trustees for the First Buyer pending resolution of the plan problem and the registration of the First Buyer’s ownership of the yard.

This use of the doctrine of overreaching seems very harsh on the First Buyer as he had no entitlement to any of the sale proceeds of the second area. The Sellers granting a burdensome right of way through the yard to the Second Buyers seems rather inconsistent with the concept of the Sellers holding the yard on trust for the First Buyer.

The very technical concept of overreaching appears to have come to the court’s aid to avoid the Second Buyers from being landlocked.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Old policies can remain part of a development plan

Where planning applications fall to be considered what is the position where old policies remain part of the development plan?

The starting point, for the purposes of decision-making, remains section 38(6) of the Planning and Compulsory Purchase Act 2004.

This requires planning decisions to be made in accordance with the development plan – and, so, in accordance with those old policies and any others contained in the plan – unless material considerations indicate otherwise.

The National Planning Policy Framework (“NPPF”) and the policies it sets out may, depending on the subject-matter and context, constitute significant material considerations.

The mere age of a policy does not mean it ceases to be part of the development plan. The policy continues to be entitled to have priority given to it.

Paragraph 209 and Paragraph 210 to 215 in Annex 1 to the NPPF provide as follows:

“209. The National Planning Policy Framework aims to strengthen local decision making and reinforce the importance of up-to-date plans.”

“211. For the purposes of decision-taking, the policies in the Local Plan (and the London Plan) should not be considered out-of-date simply because they were adopted prior to the publication of this Framework.

212. However, the policies contained in this Framework are material considerations which local planning authorities should take into account from the day of its publication. The Framework must also be taken into account in the preparation of plans.

213. Plans may, therefore, need to be revised to take into account the policies in this Framework. This should be progressed as quickly as possible, either through a partial review or by preparing a new plan.

214. For 12 months from the day of publication, decision-takers may continue to give full weight to relevant policies adopted since 2004 even if there is a limited degree of conflict with this Framework.”

Paragraph 215 sets out the approach to be adopted in relation to old policies and requires an assessment to be made as to their consistency with the policies in the NPPF.

The fact that a particular development plan policy may be old is irrelevant in any assessment of its consistency with NPPF policies.

“215. In other cases and following this 12-month period, due weight should be given to relevant policies in existing plans according to their degree of consistency with this framework (the closer the policies in the plan to the policies in the Framework, the greater the weight that may be given).”

In the Court of Appeal case of Gladman Developments Ltd v Daventry District Council & Anor [2016] Gladman had made an application for planning permission in May 2014 for residential development of up to 121 dwellings on two fields next to Weedon Bec village. It was not in-fill development of the village. The application was directly contrary to saved Local Plan policies HS22 and HS24.

The Council refused planning permission, especially relying on those saved policies.

Gladman argued that reduced or no weight should be given to policies HS22 and HS24 as they were out of date.

This was based on two principal arguments:

1. the Local Plan related to the period 1991-2006, and its evidence base related to that period, and the Structure Plan, which had been superseded and was no longer a statement of current planning policy; and

2. policies HS22 and HS24 related to housing supply and the Council could not show that it had a five year supply of deliverable sites for residential development, so those policies were deemed to be out of date under para. 49 of the NPPF.

In fact the Council was able to show that with current saved housing policies it had a five year supply of deliverable sites for residential development and also that policies HS22 and HS24 reflected a high degree of consistency with a range of policies in the NPPF, not just housing policies, and so they ought to be given considerable weight despite the length of time they had been in place.

The fact that the Council was able to demonstrate that it had the five year supply showed that there was no unmet housing need which required policies HS22 and HS24 to be overridden in that case. In short the current policies were not “broken” since they could be applied here without jeopardising the five year housing supply objective.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Court issued claim within limitation period despite wrongness of fee

In a case where a Claimant innocently fails to pay the correct court fee close to the end of a limitation period the question may arise whether that action was “brought” within the limitation period. Much will turn on which of the following two periods the problem arises in:

A) The period between:
(i) when the Claimant submits the claim form and puts forward the insufficient fee and
(ii) the Court issuing proceedings.

Here the failure to tender the correct fee will prevent any finding that the action has been “brought” for the purposes of the Limitation Act 1980 unless the Court actually issues the proceedings notwithstanding the fee being inappropriate; and

B) The period after the Court issues the proceedings.

Here the mere fact that the fee proffered by the Claimant and accepted by the Court:
(i) is less than should have been tendered and accepted for the claim identified in the Claim Form or
(ii) becomes so because of a subsequent increase in the quantum of the actual claim(s) advanced in the proceedings prior to the end of limitation period

does not prevent the action from being “brought” for the purposes of the Limitation Act 1980 when it is issued by the Court.

In Dixon & Anor v Radley House Partnership (A Firm) & Ors [2016] the High Court Judge said “where (a) abusive conduct is not present and (b) the court sets the wheels of justice in motion by issuing proceedings but (c) the Claimant has not paid and the Court has not required the correct fee, I reject the submission that an action is not brought for the purposes of the Limitation Act 1980 at the moment of issue.”

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Construction: Failure to serve notices did not preclude further adjudication

In Kilker Projects Ltd v Purton (t/a Richwood Interiors) [2016] the High Court had to decide whether failure to serve a ‘payment notice’ or ‘pay less notice’ as required by the Housing Grants, Construction and Regeneration Act 1996 (as amended) (“the 1996 Act”), prevented the paying party from challenging the payee’s contractual entitlement to that payment meaning that the ‘notified sum’ in section 111 of the 1996 Act became “final and conclusive” as to the sum due under the contract.

The claimant submitted that the 1996 Act and the Scheme for Construction Contracts (England and Wales) Regulations 1998 (amendment) (England) Regulations 2011 regulated payment and cash flow. They did not decide the true substantive entitlement to payment under the contract and they did not conclusively determine entitlement to payment. A party who had failed to give the requisite payment and/or pay less notices must pay the amount stated in the payee’s payment notice by the final date for payment. However, having paid, that party was then entitled to seek a determination of any dispute about the valuation of the contractual entitlement of the contractor for the works, and it could do so in adjudication.

The defendant said the effect of a failure by a party to issue a payment notice and/or a pay less notice was that the payer agreed the payee’s valuation for that payment and must pay the application sum in full. In an application for final payment, a failure by a party to issue a payment notice and/or a pay less notice meant that the final account was agreed. It remained open to the payer to challenge the valuation in litigation or arbitration, for instance by proceedings for restitution, but the agreed valuation could not be re-opened in a subsequent adjudication.

The court agreed with the claimant:

“In Matthew Harding t/a MJ Harding Contractors v Paice [2015] the Court of Appeal determined that the employer could refer to adjudication the question of the true valuation of a final account following termination, despite an earlier adjudication ordering payment of the contractor’s application for final payment in full on the basis of a failure to serve a valid pay less notice. In upholding the decision of Mr Justice Edwards-Stuart at first instance, Jackson LJ, with whom the other judges agreed stated:

……. [78] In my view the employer’s failure to serve a Pay Less notice (as held by the previous adjudicator) had limited consequences. It meant that the employer had to pay the full amount shown on the contractor’s account and argue about the figures later. The employer duly paid that sum, as ordered by the previous adjudicator. The employer is now entitled to proceed to adjudication in order to determine the correct value of the contractor’s claims and the employer’s counter-claims.””

Therefore, the claimant had been entitled to refer the final account valuation to the adjudicator and was now entitled to have the amount awarded in that adjudication enforced.

This blog is posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Construction Scheme would not fill shortfall in Scheduled Payments

Sections 109(1) and 110 of the Housing Grants, Construction and Regeneration Act 1996 (“the Act”) require instalment payments to be made for all work under a construction contract lasting 45 days or more.

The parties are free to agree the amounts of the payments and the intervals at which, or circumstances in which, they become due. In the absence of such agreement, the relevant provisions of the Scheme for Construction Contracts (“the Scheme”) apply.

In Grove Developments Ltd v Balfour Beatty Regional Construction Ltd [2016] the defendant contractor said:
– it was entitled to serve an application for a further interim payment and
– that the claimant had failed to serve either a Payment Notice or a Pay Less Notice within the applicable time limits and that in consequence,
– the claimant was liable to pay the defendant £23,166,425.92.

The claimant countered that:

– the defendant had no contractual right to issue or be paid in respect of the application for a further interim payment and, so, the notice regime was irrelevant OR
– that on a true interpetation of the Contract the final date for payment was 18 September 2015 which would mean that the Pay Less Notice which it issued on 15 September 2015 was issued in time and effective.

The defendant contended that Section 109(1) of the Act requires instalment payments to be made for all work under a construction contract lasting 45 days or more. Here the Schedule of Payments only covered interim payments up to and including 22 July 2015. Since the construction contract failed to cover a further interim payment invoiced on 21 August 2015, the relevant timing provisions of the Scheme would apply to it.

The High Court said where sections 109 or 110 of the Act were engaged, the payment provisions of the Scheme would only be imported and apply to the parties to the extent that they have not already concluded binding contractual arrangements that can remain operative.

Those payment provisions would not automatically or necessarily be imported in their entirety.

The arrangements under a contract may be incapable of forming part of a payment scheme when read against the Scheme. Here it may be necessary to import the whole of the Scheme’s Payment provisions.

“But that is not a necessary or correct outcome if the existing contractual arrangements are capable of co-existing with some of the Payment provisions of the Scheme to form a coherent whole.”

There was no requirement as to when such payments are to be made: any arrangement which involved one or more instalment payments would be sufficient. Thus a contract prescribing one periodic payment, even of an insignificant amount, would seem to meet the requirements.

It followed that if the parties enter into an agreement about the amounts of the payments and the intervals at which, or circumstances in which, they become due, the mere fact that the agreement does not provide for interim payments covering all of the work under the contract is no reason to import the provisions of the Scheme to supplement their agreement so as to generate interim payments covering the work not covered by their agreement.

Under Section 109(2), the parties could agree stage payments by reference to stages at highly irregular intervals and for the payment of highly variable amounts. So, it would have been open to the parties to agree the front loading of payments in advance of the value of the work done or to agree that payments would be withheld until very late on. Indeed nothing in section 109(2) prevented the parties from agreeing that the amount of a payment shall be nil.

The parties’ agreement was clear and provided for 23 interim payments on the dates set out in the agreed Schedule and no more.

In Balfour Beatty Regional Construction Ltd v Grove Developments Ltd [2016] the Court of Appeal upheld this decision by a majority of 2:1.

The lead judge said:

” ….the express words used make it clear that the parties were only agreeing a regime of interim payments up to the contractual date for practical completion…….this is a classic case of one party making a bad bargain. The court will not, indeed cannot, use the canons of construction to rescue one party from the consequences of what that party has clearly agreed.”

To exclude the Scheme, the parties must draw up a system of interim payments in good faith. A “cynical device” to exclude the operation of the Scheme by prescribing one interim payment “of an insignificant amount” would be unlikely to be enough. Section 109(2) gives contracting parties a wide scope as to the nature of the regime they may agree.

Here the parties agreed a regime of twenty three interim payments right up to the date specified for practical completion. What had been agreed satisfied the requirements of section 109 of the Act.

Clause 4.14 of the contract provided an adequate mechanism for quantifying interim payments. So, however unusual the contract, it satisfied the requirements of section 110 of the Act.

Accordingly the Scheme did not apply and the appellant could not rely upon the Act and the Scheme to recover interim payments after July 2015.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Covenant for indemnity did not extend to own legal or surveyor’s fees

Where the only relevant tenant’s covenant (clause 4.1) is an obligation “to indemnify the Lessor against all actions proceedings costs claims and demands in respect of any breach non-observance or non-performance” of the tenant’s obligations under the lease and a tenant fails to pay a £50 instalment of ground rent is the landlord entitled to charge a further £50 for a letter demanding payment of the arrears?

In Fairhold Freeholds No.2 Ltd v Moody [2016] the Upper Tribunal (Lands Chamber) said “no”:

“The essence of a contract or covenant of indemnity is that it is a promise by A to protect B from B’s liability to C. For a liability to arise under a covenant of indemnity the party to be indemnified must have come under an obligation to a third party, to meet a claim or demand or to answer some action or proceedings or incur some costs. The question in any case where it is sought to rely on such a covenant is whether the lessor has come under an obligation to make a payment to someone else “in respect of’ some breach of obligation owed to the lessor by the lessee: has A’s breach given rise to B’s liability to C? If the lessor has come under such an obligation the covenant requires the lessee to indemnify the lessor against the cost it has incurred in meeting that obligation.

…………..The “costs” in question are of the same type i.e. the costs of a third party as a result of the lessee’s breach, for which the third party is entitled to look to the lessor for reimbursement. A covenant of indemnity is not the same as a covenant to reimburse the lessor’s own costs incurred in taking steps to enforce the lessee’s obligations……..

I am therefore satisfied that clause 4.1 does not enable the appellant to levy a £50 administration charge or to recoup the costs of its own solicitors in preparing to enforce the respondent’s obligation to pay the ground rent. To the extent that the appellant was under any obligation to make payments to its agent or solicitor as a result of those steps being taken such obligations were not the result of the respondent’s failure to pay the ground rent, but of the appellant’s own instructions.”

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Very short term lettings breached “private residence” covenant

A long lease contains a covenant “not to use the leased property (or permit it to be used) for any purpose whatsoever other than as a private residence.”

If the long leaseholder advertises the property (a flat) for short term lets and grants a sequence of such lettings, is the leaseholder in breach of the covenant?

In Nemcova v Fairfield Rents Ltd [2016] the United Kingdom Upper Tribunal (Lands Chamber) said to avoid breaching the covenant, there must be a connection between the occupier and the residence such that the occupier would think of it as his or her residence albeit not for ever. “The occupier for the time being must be using it as his or her private residence.”

If the occupier is in the property for a matter of days (rather than weeks or months or years) that is a material pointer to the fact that the occupier is not using the property as a private residence.

To be used as the occupier’s private residence, there must be a degree of permanence extending beyond “being there for a weekend or a few nights in the week.”

Where a person occupies for a matter of days and then leaves the property it cannot be said that whilst occupying they were using the property as their private residence.

The occupation there would so transient that the occupier would not consider the property they were staying in as being their private residence even for the time being.

Each case is depends on it’s facts, relying upon the interpretation of the particular covenant against it’s factual background.

Based on the context in which this lease was granted, and the nature of the proposed relationship between the long lessor and long lessee and taking account the obligations entered into, the appellant had inevitably breached the private residence covenant by granting very short term lettings (days and weeks rather than months).

The tribunal said it was not possible to give a definitive answer to the question posed at the beginning of this piece save to say that ‘It all depends’.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Contribution towards element of composite development was lawful planning consideration

Planning law recognises the possibility that an application for planning permission may be for a development which includes a number of elements, a composite development. Here, the advantages of one element can be balanced against the disadvantages of another.

In Campaign To Protect Rural England (CPRE), R (On the Application Of) v Dover District Council [2015] China Gateway International (CGI) Limited (“CGI”) applied for planning permission for an extensive development on two sites on the western fringe of Dover. Namely:

(a) outline planning permission for:

(i) a very large residential development at Farthingloe;
(ii) a much smaller residential with hotel and conference centre development at Western Heights; and
(iii) pedestrian access and landscaping work between the two sites;

(b) full planning permission for:

(i) the conversion of existing buildings on both sites for a variety of purposes; and
(ii) the conversion of the Drop Redoubt at Western Heights into a visitor centre and museum.

Landowners agreed in a Section 106 Agreement to make a total payment of £8,132,499 towards a variety of purposes.

Objectors challenged a £5 million “heritage contribution” to be expended on the refurbishment of the Drop Redoubt and it’s conversion to a visitor centre and museum. It would not cover the whole costs.

Payments of £825,000, to assist making a countryside access area between the two sites, and £27,000, to afford a paved footpath between them, were also agreed.

CPRE said the heritage contribution of £5 million was unlawful and so should have been disregarded by the planning committee when determining CGI’s application for planning permission.

At all times material to this case the lawfulness of a planning obligation under section 106 fell to be determined by regulation 122 of the Community Infrastructure Levy Regulations 2010 which provided:

“(2) This regulation applies where a relevant determination is made which results in planning permission being granted for development.

(3) A planning obligation may only constitute a reason for granting planning permission for the development if the obligation is —

(a) necessary to make the development acceptable in planning terms;

(b) directly related to the development; and

(c) fairly and reasonably related in scale and kind to the development…..”

CPRE said where the planning obligation under a section 106 agreement was to make a payment of money for a specified purpose, “development” in regulation 122(2) meant that part of the development, for which planning permission is sought, which funds the contribution. Here it was the development of the Farthingloe site which would fund the heritage contribution for the Western Heights site. So it was unlawful and should have been disregarded.

Disagreeing with CPRE the High Court said “development” in regulation 122(2) meant the development in respect of which a “relevant determination”, namely the grant of planning permission under section 70 of the Town and Country Planning Act 1990, is made.

Planning permission here was granted for a composite development of the Farthingloe and Western Heights sites, and access land in between.

The lawfulness of the planning obligation to fund the heritage contribution must therefore be judged by reference to the development for which planning permission was granted; in other words the whole development, not solely or principally the Farthingloe site.

“Treated as a composite development, the questions posed by regulation 122 answer themselves. The heritage contribution was necessary to make the development acceptable in planning terms. Without it, the advantage which went a considerable way to balancing the disadvantage of development on an area of outstanding natural beauty could not be achieved. It was directly related to the development. It was to be expended on a part of the development for which planning permission was given, the restoration of the Drop Redoubt and the creation of a visitor centre and museum. It was fairly and reasonably related in scale and kind to that part of the development — at least that sum was required to fund it — and also to the development as a whole, which was understood, rightly, by all to be a major scheme.”

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Retrospective planning consent too late for DIY Builder VAT refund

Section 35 of the Value Added Tax Act 1994 (“VATA”) says a person constructing a building designed as a dwelling can claim a refund of VAT from HMRC provided that the work undertaken is “lawful and otherwise than in the course or furtherance of any business”. To be “lawful” the work must have been carried out in accordance with “statutory planning consent” that has been granted in respect of that dwelling (note (2)(d) Group 5 schedule 8 VATA).

The refund claim must conform to regulation 201 of the Value Added Tax Regulations 1995 (“VAT Regulations”) which, insofar as relevant to the case that follows, provides:

“A claimant shall make his claim in respect of a relevant building by—

(a) furnishing to the Commissioners no later than 3 months after the completion of the building [the relevant form for the purposes of the claim] containing the full particulars required therein, and

(b) at the same time furnishing to them—

…………………….

(iv) documentary evidence that planning permission for the building had been granted”.

In the First-tier Tribunal (Tax) case of Reynolds v Revenue and Customs [2016] a proposed dwelling with only planning permission for an extension and extra storey was in fact required by the building inspectors to be demolished and restarted from scratch because the foundations would not be adequate.

The tribunal said the legislation had to be construed strictly and:

– the demolition and rebuilding of the property was not in accordance with the planning permission then in force and

– the retrospective planning permission for the more extensive works which actually occurred, was not provided to HMRC within three months of completion of the property as specified by regulation 201 of the VAT Regulations.

“…..the legislative requirements for claiming a VAT refund are strict and HMRC are allowed no discretion to accept something less than the prescribed documentation, neither can they extend the time limit. Equally it is not open to us to waive or modify these requirements, even if they lead to what appears to be an unfair result. As a Tribunal created by statute the FTT, unlike the High Court does not have an inherent jurisdiction, rather its jurisdiction is defined and limited by legislation and it does not extend to the power to override a statute (or supervise the conduct of HMRC).”

This blog has been posted out of general interest and does not replace the need to get bespoke legal advice in individual cases.