R (on the application of Orbital Shopping Centre Swindon Ltd) v Swindon Borough Council
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Patterson |
| Judgment Date | 03 March 2016 |
| Neutral Citation | [2016] EWHC 448 (Admin) |
| Docket Number | Case No: CO/4516/2015 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 03 March 2016 |
and
[2016] EWHC 448 (Admin)
The Hon. Mrs Justice Patterson DBE
Case No: CO/4516/2015
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Neil Cameron QC and Michael Ripley (instructed by Norton Rose Fulbright LLP) for the Claimant
Anthony Crean QC and Killian Garvey (instructed by Swindon Borough Council) for the Defendant
No representation or appearance for the Interested Party
Hearing date: 24 February 2016
Introduction
On 12 August 2015 the defendant issued a Community Infrastructure Levy ("CIL") Liability Notice under regulation 65 of the Community Infrastructure Levy Regulations 2010 (as amended) ("the CIL Regulations") in relation to the installation of a mezzanine floor and external alterations including new shop fronts at unit C3/C4 North Swindon District Centre, Abbey Meads, Swindon. The Liability Notice notified the claimant that it would be liable to £170,900 of CIL to the defendant as CIL collecting authority.
On 20 August 2015 the defendant served a Demand Notice under regulation 69 of the CIL Regulations in respect of the same development demanding £173,842.25 including surcharges and late payment interest.
This is a challenge to the lawfulness of the act of the defendant in issuing each of those notices.
Permission was granted by Holgate J on 10 November 2015.
At the heart of the proceedings is the correct interpretation of regulation 6(1)(c) of the CIL Regulations.
Factual Background
The claimant is the freehold owner of unit C3/C4 which is part of the Orbital Shopping Centre at Haydon Wick, Swindon, Wiltshire.
Unit C3/C4 is occupied by the interested party, Next PLC. Prior to the carrying out of the works that have become the subject of the impugned notices the Next store comprised a ground floor of 2,349 square metres retail floor space and a mezzanine floor of 326 square metres non-trading floor space.
In January 2015 the claimant submitted two separate planning applications to the defendant: one for the installation of a mezzanine floor at unit C3/4; and the other for external works to the unit. The external alterations application created no additional floor space.
The covering letter with the applications was dated 27 January 2015. That said that the application sought the enhancement of the existing Next store. The insertion of the mezzanine floor would result in a net increase in floor space of 1,709 square metres which would be used for retail purposes. The application, if granted, meant that the permitted floor space exceeded that which was permitted under a section 106 agreement concluded in 2000. Accordingly, a request was made in the letter to modify that agreement.
At the time that the planning applications were submitted the defendant did not have an adopted charging schedule for CIL. One was being prepared for adoption. It was duly adopted and came into effect on 6 April 2015.
Mr Blatchford, who is the claimant's planning consultant, explained in his witness statement that the strategy to submit two separate planning applications was deliberate. It was undertaken to avoid the possibility of later incurring liability to CIL in respect of the increase in floor space in the unit as a result of the mezzanine application. Although the two applications were linked as they sought alterations to the same unit to meet the operational requirements of Next PLC the mezzanine application related only to the interior works of the unit. Mr Blatchford continued:
"It would be entirely possible to implement the mezzanine permission and install and operate the mezzanine floor without implementing the external alterations planning permission or otherwise affecting the exterior of the unit."
In a Decision Notice dated 5 June 2015 the defendant granted planning permission for the installation of a mezzanine floor. Attached to the permission was the following informative:
"The development constitutes Community Infrastructure Levy ('CIL') liable development. CIL is a mandatory financial charge on development … to avoid additional financial penalties the requirements of the impact of CIL must be managed before development is commenced and subsequently payment made in accordance with the requirements of the CIL Demand Notice issued."
By a decision notice of the same day the defendant granted permission for external alterations to the same unit including new shop fronts. No informative was attached to that planning permission.
In a letter dated 9 June 2015 solicitors for the claimant wrote to the defendant. The letter said "The purpose of this letter is to alert you to the fact that the informative on the decision notice which states that the development is liable for Community Infrastructure Levy ('CIL') is incorrect." The letter continued:
"The planning permission granted on 5 June 2015 only permits internal operations at Units C3 and C4. It is only required for the installation of the proposed mezzanine floor because of the effect of Article 44 of the 2015 Order and S.55(2A) of the Town and Country Planning Act 1990.
It follows that the development permitted by the planning permission is the type covered by Regulation 6(1)(c) of the CIL Regulations and is not, therefore, to be treated as development for the purposes of CIL – in other words, the development cannot be liable for CIL."
The defendant responded in a letter dated 17 June 2015 In that letter the defendant set out its view that the application for planning consent for the additional external works was a direct consequence of the mezzanine proposal. Notwithstanding that a separate planning application had been submitted for the external works:
"It is evident that these external works are inextricably linked to the mezzanine proposal. …
Given the circumstances set out above, the Council concludes that the existence of the accompanying facilitative application for external alterations to the premises, albeit under a separate application, justifies the position that the Council has taken in respect of this matter, … thus in this case the development proposals fall within the scope of the meaning of development for CIL purposes due to the direct link between the two applications for the mezzanine and external alterations. It is for this reason that the Council will continue to produce a CIL Liability Notice associated with S/15/0116."
Each of the two planning permissions was implemented on 27 July 2015. The works are now complete.
On 12 August 2015 the defendant issued a CIL Liability Notice.
On 20 August 2015 the defendant issued a Demand Notice.
Legal Framework
Under section 206(1) of the Planning Act 2008 (PA) a local authority may charge CIL in respect of development in its area.
Section 208 provides:
"(1) Where liability to CIL would arise in respect of proposed development (in accordance with provision made by a charging authority under and by virtue of section 206 and CIL regulations) a person may assume liability to pay the levy.
(2) An assumption of liability—
(a) may be made before development commences, and
(b) must be made in accordance with any provision of CIL regulations about the procedure for assuming liability.
(3) A person who assumes liability for CIL before the commencement of development becomes liable when development is commenced in reliance on planning permission."
Section 209(1)(b) of the PA defines development as "anything done to or in respect of an existing building". It continues:
"(2) CIL Regulations may provide for –
(a) works or changes in use of a specified kind not to be treated as development
…
(3) CIL regulations must include provision for determining when development is treated as commencing.
(4) Regulations under subsection (3) may, in particular, provide for development to be treated as commencing when some specified activity or event is undertaken or occurs, where the activity or event—
(a) is not development within the meaning of subsection (1), but
(b) has a specified kind of connection with a development within the meaning of that subsection.
(5) CIL regulations must define planning permission (which may include planning permission within the meaning of TCPA 1990 and any other kind of permission or consent (however called, and whether general or specific))."
Regulation 6 of the CIL Regulations reads:
"6(1) The following works are not to be treated as development for the purposes of section 208 of PA 2008 (liability)—
…
(c) the carrying out of any work to, or in respect of, an existing building for which planning permission is required only because of provision made under section 55(2A) of the TCPA 1990;
…"
Section 55(2)(a) and section 55(2A) of the Town and Country Planning Act 1990 ("TCPA") provide:
"55(2) The following operations … shall not be taken for the purposes of this Act to involve development of the land—
(a) the … alteration of any building or works which—
(i) affect only the interior of the building,
…
…
(2A) The Secretary of State may in a development order specify any circumstances or description of circumstances in which subsection (2) does not apply to operations mentioned in paragraph (a) of that subsection which have the effect of increasing the gross floor space of the building by such amount or percentage amount as is so specified."
Article 44 of the Town and Country Planning (Development Management Procedure) (England) Order 2015 ("the DMPO") provides:
"44(1) The amount specified under section 55(2A) of the 1990 Act (meaning of "development" and "new development") is 200 square metres.
(2)...
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