Tag Archives: Section 106 Agreements

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.

Section 106 contribution obligations ousted by later planning permission and agreement

The High Court case of Robert Hitchins Ltd, R (on the Application of) v Worcestershire County Council & Ors [2014] concerned the Claimant’s obligation under section 106 of the Town and Country Planning Act 1990 (“section 106”), to pay a contribution per dwelling in its proposed development towards the Worcester Transport Strategy.

The Claimant had made a second application. The second application was identical to the first, except that that particular section 106 obligation to make the transport contribution was omitted.

The issue was whether the obligation to contribute that arose from the first application had survived:

1. the Secretary of State’s grant of planning permission on the second application; and,

2. the steps that had been taken to implement that second permission.

The court held that where two planning permissions exist in relation to the same land, a developer may chose between them.

When the grant of the second planning permission had been completed by the grant of reserved matters approval, the developer had two extant planning permissions in respect of the site.

Nothing had been done under the first planning permission that precluded the second planning permission being implemented or the carrying out of the development under that second planning permission.

So, as a matter of law, the developer was entitled to chose which permission it wished to proceed under.

Furthermore in the Section 106 Agreement, which imposed the transport contribution obligation in relation to the first planning permission, the Claimant had reserved the right to apply for further planning permissions for the same development, but without the transport contribution.

This was because the first Section 106 Agreement expressly provided that nothing in that Agreement prohibited or limited any right to develop the site in accordance with another planning permission.

The scheme envisaged that, if and when planning permission were granted without the transport contribution obligation, the developer would take effective steps to ditch the first planning permission in favour of the second planning permission.

Indeed, recital (G) of the Section 106 Agreement entered into in relation to the second planning application said:

“[the developer] intends to implement the Second Planning Permission and the Reserved Matters Approval. [the developer] enters into this Undertaking in order to dispense with the implementation of the First Planning Permission and to dispense with the discharge of the obligations under the First Section 106 Agreement and to implement the Second Planning Permission and the reserved Matters Approval and comply with the terms of the Second Section 106 Agreement.”

Paragraph 1.2 of Schedule 1 to the Section 106 Agreement entered into for the second planning permission made it clear that the developer “intend[ed] to implement the second planning permission…” and since implementation of the second planning permission excluded any possibility of also implementing the first planning permission in relation to the same site, the developer was undertaking to “dispense with the implementation of the first planning permission” as well.

Looked at objectively against the relevant background, those words were intended to mean that, as soon as the second Section 106 Agreement took effect on 18 September 2014, reliance on the first planning permission would be given up, and any material operations thereafter to implement a planning permission could only have been carried out under, and implement, the second planning permission.

So the trigger for payment of the second and third instalments of the transport contributions under the first Section 106 Agreement never arrived, before the developer started to rely on the second planning permission instead, and that second planning permission was not accompanied by any such contribution obligation.

So, on the evidence, from 18 September 2014, the developer elected to continue and complete the development under the second planning permission and therefore had no further obligation to make the transport contributions.

The High Court’s decision here was upheld, by the Court of Appeal, when unsuccessfully appealed against in Robert Hitchins Ltd, R (on the application of) v Worcestershire County Council & Anor [2015].

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

Planning Obligation need not spell out specific mitigation measures

An obligation can only be imposed on a planning applicant under a Section 106 Agreement or Unilateral Undertaking if (amongst other things) it is necessary to make the development acceptable in planning terms.

In considering whether mitigating measures might make the adverse impacts of a proposed development acceptable in planning terms, the decision-maker must consider the nature and extent of the forecast adverse impacts and how the measures will deal with those impacts.

But, following the case below, that does not mean that the precise detail of the measures has to be specified at or before those planning obligations are entered into, and then concreted into those obligations. Especially when the planning authority is going to have control over the monies committed by the developer.

In the High Court case of Trashorfield Ltd, R (on the application of) v Bristol City Council & Ors [2014] the Claimant said the Planning Officers’ Report had admitted that the requirements (above) would only be met if a specific package of measures were identified and agreed following consultation. In other words that the Planning Committee had approved the application only on the basis) that that package of measures would be so identified and agreed with relevant stakeholders before any Section 106 Agreement was entered into.

In fact no such consultation or specific measures had been identified or agreed prior to the Section 106 Agreement. Nor had these yet happened.

So the Claimant said the Section 106 Agreement was:

(1) at odds with the legislative regime, especially regulation 122(2) of the Community Infrastructure Levy Regulations 2010 (“the CIL Regulations”) which limits section 106 obligations to those which are necessary to render the proposed development acceptable in planning terms; and

(2) beyond the powers of the relevant Planning Officer under his delegated powers.

The High Court Judge had last year ruled on the similar case of R (Hampton Bishop Parish Council) v Herefordshire Council [2013].

With reference to the proposed Retail Impact Risk Management Package the Officers’ Report had reminded the Council’s Planning Committee that:

“It is essential that any future scheme of mitigation is compliant with Part 122 of the [CIL] Regulations. This states that measures have to be necessary to make the development acceptable in planning terms; directly related to the development and fairly and reasonably related in scale and kind to the development.”

So in deciding as they did the Planning Committee plainly had this requirement in mind.

The judge said the grant of planning permission was inconsistent with neither (i) the basis upon which the Planning Officer approved the application, and thus was not outside his powers as delegated to him by the Planning Committee; nor (ii) the CIL Regulations.

The potential Retail Impact Risk Management Package would involve a total developer contribution of £202,500. split between management and project costs over a 3 year period. The split would be subject to agreement with the Council, stakeholders and other community groups.

The essence of the Officers’ Report was that if the developer retained control over the monies it had committed to retail impact mitigation, a mechanism would be needed in the planning agreement to make sure that there was proper consultation on the steps to be taken and that the developer was tied into consulting on and performing the measures that the Council considered appropriate. Otherwise, the measures might not be appropriate and as a result, the planning obligation might not be such as to make the development acceptable in planning terms.

In fact the developer did not commit a sum of money that they would spend on retail impact mitigation measures. Instead the developer paid a contribution to retail impact mitigation over to the Council, in two instalments, so that the Council’s commitment to apply funds to a town centre manager apart, the measures it was spent on, and their appropriateness in planning terms, were subject to consultation with those involved with the Town Centre and also to some tweaking to reflect the circumstances at the time of expenditure, but otherwise entirely in the control of the Council.

As the moneys were to be controlled by the Council, there had been no point deciding now what specific measures should be taken.

In fact to have pre-agreed and enshrined in the planning obligation “specific identified measures” for projects funded by that money, that would be implemented possibly five years hence, would have been difficult, unwise and (in terms of the CIL Regulations) quite unnecessary.

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

Handing site to Council legitimate planning obligation

Regulation 122 of the Community Infrastructure Levy Regulations 2010 (“the CIL Regulations”) is a codification of principles developed in the case law – for example, in Tesco Stores Ltd v Secretary of State for the Environment [1995] – and provides:

“122(2) 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.”

Hampton Bishop Parish Council, R (On the Application Of) v Herefordshire Council [2014] concerned Hereford Rugby Club’s proposal to relocate from their current ground to an out-of-city ground. The club proposed development included nearly two hundred dwellings which would finance the new sports facilities.

One of the planning obligations entered into under section 106 of the Town and Country Planning Act 1990 (“1990 Act”) was for the transfer of the Rugby Club’s existing ground to the Council for £1 on completion of the move to the new site.

That proposed obligation was taken into account by the Council as a material consideration favouring the grant of planning permission.

The issue here was whether the Council thus acted in breach of regulation 122 of the CIL Regulations.

The Claimant said that the obligation to transfer the existing ground to the Council was not “directly related to the development” within the meaning of paragraph (2)(b) of the CIL Regulation:

1. The development would be several kilometres away from the existing ground.

2. The users of the development would have no continuing connection with the old ground.

3. The obligation related simply to the transfer of the freehold interest in the ground to the Council, with no restriction on use.

The transfer proposal had formed no part of the Rugby Club’s original application for planning permission but emerged, in a way that has never been explained, between the date of the planning officer’s first report (which strongly recommended against the grant of planning permission) and the Planning Committee’s first meeting.

In a judgment which took a wide view of the CIL Regulation the Court of Appeal said the transfer obligation was directly related to the development.

The existing ground would be released as a direct result of the development which was the subject of the planning application.

So, the ground’s future use was one of the land use consequences of the Council’s decision.

The ground’s existing use for sport might have continued anyway but the transfer to the Council, even without a restriction, would make that more likely.

This was very different from the Council “buying” planning permission which was what had been alleged.

It fitted comfortably within the requirement that the planning obligation be directly related to the development.

The same arguments could apply in a lot of cases and it will be interesting to see if others follow suite.

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