Robert Hitchins Ltd v Worcestershire County Council Worcester City Council (Interested Party)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Richards,Lord Justice Floyd,Lord Justice Sales |
| Judgment Date | 27 October 2015 |
| Neutral Citation | [2015] EWCA Civ 1060 |
| Date | 27 October 2015 |
| Docket Number | Case No: C1/2014/3992 |
| Court | Court of Appeal (Civil Division) |
The Queen on the application of
and
[2015] EWCA Civ 1060
Lord Justice Richards
Lord Justice Floyd
and
Lord Justice Sales
Case No: C1/2014/3992
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
PLANNING COURT AT BIRMINGHAM
The Hon Mr Justice Hickinbottom
Royal Courts of Justice
Strand, London, WC2A 2LL
John Hobson QC and Stephen Whale (instructed by Worcestershire County Council Democratic Services) for the Appellant
Anthony Crean QC and John Hunter (instructed by Eversheds LLP) for the Respondent
The Interested Party did not appear and was not represented on the appeal
Hearing date: 13 October 2015
This appeal relates to two planning permissions which were in identical terms save that the first permission was subject to a planning obligation to make a financial contribution towards transport strategy whereas the second permission, granted at a later date, was free from that obligation. The central question is whether the developer, having begun the development under the first permission and having thereby become liable for the first instalment of the transport contribution, switched horses following the grant of the second permission and carried out the rest of the development under that second permission, thereby avoiding liability to pay further instalments of the transport contribution. Hickinbottom J held on the evidence before him that the developer had so acted and that no further instalments of the transport contribution were payable. He granted a declaration accordingly. An appeal is now brought against his order.
The facts
The factual background is set out in some detail in Hickinbottom J's judgment. I will pick out only those points necessary for an understanding of the issues in the appeal.
The proceedings relate to a site in Worcester. The relevant planning permissions for the site were applied for by, and granted to, Robert Hitchins Limited ("RHL"), the respondent to this appeal. As described below, RHL subsequently sold its entire interest in the site to BDW Trading Limited ("BDW"), which is the actual developer of the site but is not a party to the proceedings. The local planning authority is Worcester City Council, which is an interested party in the proceedings but has played no active part in them. The relevant highway authority is Worcestershire County Council, the appellant before this court.
In June 2012, RHL applied for planning permission to develop the site with up to 200 dwellings. On the transport implications of the proposed development, the City Council deferred to the County Council as the highway authority. The County Council sought a financial contribution of some £1 million towards the transport and infrastructure services set out in the Worcester Transport Strategy. RHL argued that no such contribution was lawful or appropriate. But the judgment below describes the commercial pressures to which RHL was subject at the time, as a result of which it was very anxious to obtain planning permission for the site, and to sell the site on, quickly, This led to a negotiation about the transport contribution which resulted in a compromise, the terms of which were reflected in an agreement under section 106 of the Town and Country Planning Act 1990 ("the 1990 Act"), made by deed dated 22 January 2013 and entered into between the City Council, the County Council, RHL and Lloyds Bank plc ("the First Section 106 Agreement").
By paragraph (3) of the fourth schedule to the First Section 106 Agreement, RHL agreed:
"To pay to the County Council the Worcester Transport Strategy Contribution … in three equal instalments, the first instalment to be paid on or before the Commencement Date the second instalment to be paid on or before the occupation of no more than 50% of the Dwellings on the Development and the third instalment to be paid on or before the occupation of no more than 75% of the Dwellings on the Development …."
The "Worcester Transport Strategy Contribution" was defined by clause 1 as a sum equivalent to £4,530 in respect of each dwelling on the Development, which equated to a total contribution of £819,930 for the 181 dwellings for which reserved matters approval was in due course granted (see below). "The Development" was defined in turn, by clause 2.5, by reference to the content of the application for planning permission. The "Commencement Date" was defined by clause 1 as the date on which the Development permitted by the planning permission was begun. According to the terms of the First Section 106 Agreement and by virtue of section 106(3), the obligation to pay the transport obligation ran with the land and was to be enforceable against any person deriving title from RHL.
On completion of the First Section 106 Agreement, outline planning permission ("the First Planning Permission") was granted.
It was RHL's case that the First Section 106 Agreement was entered into without prejudice to its contention that the requirement to pay a transport contribution was unlawful and without prejudice to legal steps in the future to avoid payment of the sum agreed. The judge found that there was no evidence that that intention was ever made manifest to the City Council or the County Council. The First Section 106 Agreement did, however, provide in clause 4.5 that –
"Nothing in this Deed shall be construed as prohibiting or limiting any right to develop any part of the Land in accordance with a planning permission (other than the [First] Planning Permission) granted by the City Council or the County Council or by the First Secretary of State on appeal or by reference to him after the date of this Deed."
In March 2013, before the development permitted by the First Planning Permission was begun, RHL sold its interest in the site to BDW. Although the obligation in the First Section 106 Agreement to pay the transport contribution then became an obligation of BDW, RHL agreed under the sale agreement with BDW to observe and perform the obligation to pay that contribution. BDW agreed to RHL submitting a second planning application for the site, in identical terms to that granted by the First Planning Permission save for the omission of the obligation to pay the transport contribution; and if that second planning application was successful, BDW agreed that it would make an application for approval of reserved matters under the second planning permission and "… in such circumstances [BDW] shall either only implement the [Second] Planning Permission, or if the [First] Planning Permission … has already been implemented, [BDW] shall ensure that once the aforementioned approval of reserved matters has been granted, any further development at the [site] is carried out under the [Second] Planning Permission".
In May 2013, reserved matters approval for 181 dwellings was granted under the First Planning Permission. In October 2013 the development permitted by that permission was begun by BDW, triggering liability to pay the first instalment of the transport contribution under the First Section 106 Agreement. That instalment was paid by RHL to the County Council in November 2013.
In the meantime, in April 2013, as envisaged in its agreement with BDW, RHL submitted a second planning application for the site. The proposed development was identical to that permitted by the First Planning Permission. The only material difference in the application was that no transport contribution was proposed.
The City Council failed to determine the second application in time. RHL then made a non-determination appeal to the Secretary of State under section 78 of the 1990 Act. By a decision letter dated 10 January 2014, an inspector appointed by the Secretary of State allowed the appeal and granted outline planning permission ("the Second Planning Permission") for the same development as was permitted by the First Planning Permission but without any obligation to provide a transport contribution. He held that a planning obligation to secure the transport contribution sought by the County Council would not meet the requirements of regulation 122 of the Community Infrastructure Levy Regulations 2010 ("the CIL Regulations"). By this time a section 106 undertaking ("the Second Section 106 Agreement") had already been entered into by BDW, by deed dated 10 December 2013, in terms that were materially identical to those of the First Section 106 Agreement save for the omission of an obligation to provide a transport contribution.
There were then two sets of legal proceedings. The first was a statutory challenge by the County Council to the inspector's decision to grant the Second Planning Permission without any obligation to provide a transport contribution. That challenge was dismissed. The second was a judicial review claim by RHL seeking various forms of relief against the County Council. The one ground on which RHL was given permission to proceed was a claim for a declaration to the effect that it could not lawfully be required to pay further instalments of the transport contribution under the First Section 106 Agreement if, upon grant of reserved matters approval under the Second Planning Permission, the developer chose to continue the development pursuant to the Second Planning Permission rather than the First Planning Permission. That is the issue decided by Hickinbottom J and to which the present appeal relates.
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