R (Renaissance Habitat Ltd) v West Berkshire District Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Ouseley |
| Judgment Date | 16 February 2011 |
| Neutral Citation | [2011] EWHC 242 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 16 February 2011 |
| Docket Number | Case No: CO/6592/2010 |
[2011] EWHC 242 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Before : Mr Justice Ouseley
Case No: CO/6592/2010
Mr Richard Harwood (instructed by Horsey, Lightly & Fynn) for the Claimant
Mr Thomas Jefferies and Mr Charles Banner (instructed by West Berkshire District Council) for the Defendant
Hearing date: 21st January 2011
Mr Justice Ouseley :
Renaissance Habitat Limited, the Claimant, is a small developer carrying on business in West Berkshire. It obtained planning permission on 14 December 2005 for the development of land for residential purposes at 69 Bath Road, Thatcham, West Berkshire. As was commonplace for the Claimant and other developers in West Berkshire, it entered into an agreement with the Defendant, West Berkshire District Council, under section 106 of the Town and Country Planning Act 1990 on the same day as it was granted planning permission. Planning permission would not have been granted unless it had entered in to that section 106 agreement.
Under the agreement the Claimant agreed to pay money to the Council by way of contributions towards the infrastructure costs which the Council would incur in dealing with the effect of the permitted development. The agreement specified the sums due and the time at which they were due. The basis upon which those sums were calculated was set out in the Supplementary Planning Guidance produced by the Council in April 2004. In the first week of September 2007 the Claimant began development.
Various sums became due under the section 106 agreement in 2008 but not all were paid to the Council by the Claimant. On 13 August 2009 the Council issued an invoice for £57,792.88 as the balance of the sums due under the agreement. The Claimant calculated that the sums it owed were all paid off on 8 March 2010 by a payment of £20,236.90, which included interest and indexation. The Council says that a further £47,375.81, plus interest, is due. It issued proceedings in the Queen's Bench Division for the recovery of that amount as a debt due under the contract, i.e. under the section 106 agreement. Those proceedings are due to be heard in a trial window commencing 21 March 2011.
The Claimant in these Judicial Review proceedings challenges the decision of the West Berkshire District Council to bring those Queen's Bench proceedings, on the grounds that, since the December 2005 Agreement, the Council has changed the Supplementary Planning Guidance, SPG, upon the basis of which it calculated what developers should pay as infrastructure charges. It has done so in response to decisions of Inspectors on planning appeals against refusals of planning permission by the Council on grounds, among others, that the developer had refused to pay proper infrastructure contributions. Inspectors have rejected some of the Council's contentions as to what the proper infrastructure contributions should be. Two appeals by the Claimant against refusals of planning permission by this Council were allowed on those grounds on other sites. The disputes were not about the arithmetic but about the method of or inputs into the calculations. Circumstances have also changed since 2005 in relation to the need for educational provision so far as this particular development is concerned, because there is greater capacity now than was realised or expected at the school in relation to which the educational contribution was calculated.
The Claimant contends that if the infrastructure contribution were calculated by reference to the changed SPG as at the Council's final invoice date of 13 August 2009, no more would be due from the Claimant than it had already paid.
Hence it challenges the Council's decision to start proceedings on 1 April 2010 for the payment of the balance due under the s106 agreement on the grounds that it is seeking to enforce an unlawful obligation. The Council was enforcing the agreement for more than it could now justify under current SPG. It also challenges what it describes as the policy of the Council not to agree to vary s106 agreements in the light of changed SPG or changed circumstances, as set out in a letter dated 12 March 2010 sent to the local Development Industry Forum.
Mr Harwood for the Claimant sought at the last minute to raise a series of other points, not raised by counsel previously instructed. Consideration of many of these issues would have required the disclosure of documents, and an adjournment of the hearing. This in turn would have jeopardised the trial window. I refused permission for the amendments, save to the extent that they involved no need for further research by the Council; in reality those surviving grounds were no more than illustrations or reformulations of the points already made. Those I refused did not seem likely to advance the essential point anyway and likely to stand or fall for the most part with it.
The statutory framework
"(1) Any person interested in land in the area of a local planning authority may, by agreement or otherwise, enter into an obligation (referred to in this section and sections 106A and 106B as "a planning obligations"), enforceable to the extent mentioned in subsection (3)-
(a) restricting the development or use of the land in any specified way;
(b) requiring specified operations or activities to be carried out in, on, under or over the land;
(c) requiring the land to be used in any specified way; or
(d) requiring a sum or sums to be paid to the authority…on a specified date or dates or periodically.
(2) A planning obligation may-
(a) be unconditional or subject to conditions;
(b) impose any restriction or requirement mentioned in subsection (1)(a) to (c) either indefinitely or for such period or periods as may be specified; and
(c) if it requires a sum or sums to be paid, require the payment of a specified amount or an amount determined in accordance with the instrument by which the obligation is entered into and, if it requires the payment of periodical sums, require them to be paid indefinitely or for a specific period."
There are two provisions for the discharge of these obligations. For the first 5 years after entry into the agreement, "the relevant period", it can only be varied or discharged by agreement. This may well reflect the total of 5 years during which a developer with the benefit of a permission must normally commence development. Thereafter, if the authority refuses the application to vary, the developer can appeal to the Secretary of State, who can impose a variation or discharge. The current provisions are in ss106A and B:
"S106A (1) A Planning obligation may not be modified or discharged except-
(a) by agreement between the authority by whom the obligation is enforceable and the person or persons against whom the obligation is enforceable; or
(b) in accordance with this section and section 106B…
(3) A person against whom a planning obligation is enforceable may at any time after the expiry of the relevant period, apply to the local planning authority by whom the obligation is enforceable for the obligation-
(a) to have effect subject to such modifications as may be specified in the application; or
(b) to be discharged.
(6) Where an application is made to an authority under subsection (3), the authority may determine-
(a) that the planning obligation shall continue to have effect without modification;
(b) if the obligation no longer serves a useful purpose, that it shall be discharged; or
(c) if the obligation continues to serve a useful purpose but would serve that purpose equally well if it had effect subject to the modification specified in the application, that it shall have effect subject to those modifications."
Section 106B deals with appeals and provides
"(1) Where a local planning authority-
(a) fail to give notice as mentioned in section 106A(7); or
(b) determine that a planning obligation shall continue to have effect without modification
the applicant may appeal to the Secretary of State…
(4) Sub-sections (6) to (9) of section 106A apply in relation to appeals to the Secretary of State under this section as they apply in relation to applications to authorities under that section…
(6) The determination of an appeal by the Secretary of State under this section shall be final."
It was not disputed, at least for these purposes, that s106A(6)(b) and (c) meant that the authority could discharge or vary the agreement if it no longer served a useful "planning" purpose, or could serve it equally well in a different form. That word, submitted Mr Harwood, was necessarily implied since the agreement could only be made in the first place for a planning purpose, which is correct, and could only be enforced by a public body acting for a public purpose under the Planning Acts. It was not exercising some private power or purely contractual power. Sullivan J had so held in R (Batchelor Enterprises Ltd) v North Dorset District Council [2003] EWHC Admin 3006.
I am prepared for present purposes to accept that point, but I note that "planning", the word implied, very broad though it is, may lead to a debate about what constitutes a planning consideration for these purposes as opposed to some other useful public purpose which could be pigeonholed under some other head, or even a private purpose such as the protection of private views, which may show the implied restriction to be unjustified. Sullivan J also relied on Ministerial guidance which in fact...
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R Mansfield District Council v Secretary of State for Housing, Communities and Local Government
...J. appears to have accepted, that a useful purpose in this context meant a useful planning purpose. In R (on the application of Renaissance Habitat Ltd) v West Berkshire DC [2011] J.P.L. 1209 Ouseley J. cast some doubt on this and expressed a reluctance to narrow the range of public interes......