ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(HIS HONOUR JUDGE PEARL)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE RIMER
LORD JUSTICE MUNBY
| The Queen on the Application of Millgate Development Limited
|- and -
Wokingham Borough Council
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Mr Guy Williams ( instructed by Wokingham Borough Council ) appeared on behalf of the Respondent.
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Lord Justice Pill:
"...the proposal fails to make satisfactory provision of adequate services, amenities and infrastructure needs and consequently would have an unacceptable adverse impact upon the amenities of the area. As such the proposal is contrary to policies DP4 and T4 of the Berkshire Structure Plan and Policies WOS4 WR7 WT1 WT3 and WET7 of the 'Wokingham District Local plan"
"1 Any person interested in land in the area of the local planning authority may, by agreement or otherwise, enter into an obligation (referred to in this section and in sections 106A and 106B as a 'planning obligation') enforceable to the extent mentioned in the subsection (3)
....(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;
...c) if it requires the 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 obligations entered into and, if it requires the payment of periodical sums , require them to be paid indefinitely or for a specified period.
3. Subject to subsection (4) a planning obligation is enforceable by the authority identified in accordance with sub section 9(d) –
(a) against the person entering into the obligation; and(b) against any person deriving title from that person.
9. A planning obligation may not be entered into except by instrument executed as a deed which –
a) states that the obligation is a planning obligation for the purposes of this section;b) identifies the land to which the person entering into the obligation is interested;c) identifies the person entering into the obligation and states what his interest in the land is; andd) identifies the local planning authority by whom the obligation is enforceable...
11. A planning obligation shall be a local land charge for the purposes of the Local Land Charges Act 1975 the authority by whom the obligation is enforceable shall be treated as the originating authority as respects such a charge."
"(1)A planning obligation may not be modified or discharged except—
(a)by agreement between the appropriate authority (see subsection (11))]and the person or persons against whom the obligation is enforceable; or(b)in accordance with this section and section 106B.
(2)An agreement falling within subsection (1)(a) shall not be entered into except by an instrument executed as a deed.
(3)A person against whom a planning obligation is enforceable may, at any time after the expiry of the relevant period, apply to the appropriate authority for the obligation—
(a)to have effect subject to such modifications as may be specified in the application; or(b) to be discharged.
(4)In subsection (3) "the relevant period" means—
(a)such period as may be prescribed; or(b)if no period is prescribed, the period of five years beginning with the date on which the obligation is entered into.
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 modifications specified in the application, that it shall have effect subject to those modifications."
"The obligations contained in and created by this Undertaking shall not take effect unless and until the Planning Permission shall have been granted and Commencement of Development shall have taken place."
"The appeal is allowed and planning permission granted subject to conditions set out in the formal decision. None of the conditions relate to the section 106 undertaking."
"The Council's request for contributions towards highways, leisure education and libraries are addressed by the Appellant through the submission of unilateral undertakings. However the Council produced nothing to show that those conditions are necessary in order to satisfy the test in Structure Plan Policy DP4, Local Plan Policy WOS4 or Circular 5/05, Planning Obligations. I therefore conclude that contributions to the provision of infrastructure are unnecessary and afford the unilateral undertakings little weight. "
"Contributions may be sought from developers to provide additional infrastructure or services where they are needed to enable the development to take place and are directly and reasonably related in scale to the proposed development."
"B5 The Secretary of State's policy requires, amongst other factors, that planning obligations are only sought where they meet all of the following tests. The rest of the guidance in this Circular should be read in the context of these tests, which must be met by all local planning authorities in seeking planning obligations.
A planning obligation must be:
(i) relevant to planning;(ii) necessary to make the proposed development acceptable in planning terms;(iii) directly related to the proposed development;(iv) fairly and reasonably related in scale and kind to the proposed development; and(v) reasonable in all other respects.
B6. The use of planning obligations must be governed by the fundamental principle that planning permission may not be bought or sold. It is therefore not legitimate for unacceptable development to be permitted because of benefits or inducements offered by a developer which are not necessary to make the development acceptable in planning terms (see B5(ii)).
B7. Similarly, planning obligations should never be used purely as a means of securing for the local community a share in the profits of development, i.e. as a means of securing a "betterment levy".
THE SECRETARY OF STATE'S POLICY TESTS
B8. As summarised above, it will in general be reasonable to seek, or take account of, a planning obligation if what is sought or offered is necessary from a planning point of view, i.e. in order to bring a development in line with the objectives of sustainable development as articulated through the relevant local, regional or national planning policies."
"This would therefore make it clear that no contributions are required."
"Of course it is normal for a planning obligation to be undertaken or offered in connection with an application for planning permission and to be expressed as conditional upon the grant of that permission. But once the condition has been satisfied, the planning obligation becomes binding and cannot be challenged by the developer or his successor in title on the ground that it lacked a sufficient nexus with the proposed development."
"Planning authorities have a discretion when applying a policy of attempting to obtain the maximum legitimate public benefit by means of a section 106 agreement."
It was not a choice, he stated, which should be imposed on them by the courts.
a) a reason for refusal of permission by the respondents was the absence of provision in the application for infrastructure needs. That was a legitimate reason for refusal. The appellants were invited to give a section 106 undertaking.
b) It was a predictable, lawful, and reasonable response by the appellants to offer such an undertaking and to do so by way of a financial contribution to highways, leisure and libraries facilities, and educational facilities.
c) The appellants gave an unconditional section 106 undertaking.
d) if planning permission was granted on the evidence before him the Inspector stated that there was nothing to show that the contributions were necessary on planning grounds. The undertaking was given little weight by the Inspector in granting permission. It appears very likely that the Inspector would have granted planning permission even in the absence of a section 106 undertaking.
e) On its own terms the undertaking became enforceable. Enforceability as a contractual obligation is a part of the rationale for the section 106 procedure.
f) The Inspector's approach does not cast doubt upon the lawfulness of the undertaking. Planning permission without giving weight to the undertaking does not mean that the undertaking was not given for a legitimate planning purpose. The Inspector was not overruling the local planning authority's view as expressed in the reasons for refusal. I will return to that issue.
g) The appellants did not, as they could have done when they were refused permission by the respondents, question the need for the facilities or the likely cost of the facilities provided.
h) I understand the dismay of the appellants when it emerged that they could have got planning permission without the undertaking they had given in a substantial sum of money.
i) in the circumstances the respondents were entitled to attempt to enforce the undertaking. That did not require analysis by them at the enforcement stage. Subject to the relevance of the development plan they were not making a planning decision but a decision to enforce a contractual undertaking. The relevance of that plan is the main point of issue in the case and I will return to it.
j) the enforceability of the undertaking cannot now be challenged on the basis that, when made, it lacked a sufficient nexus with the proposed development (Lord Hoffmann in Tesco).
"If regard is to be had to the development plan for the purpose of any determination to be made under the planning Acts the determination must be made in accordance with the plan unless material considerations indicate otherwise."
"It is accepted that the question to be considered by the local planning authority in each case is the same: does the obligation still serve a useful planning purpose? Since the court in judicial review proceedings may not substitute its own answer to that question to that of the local planning authority, the question in relation to an application for judicial review in respect of a local authority decision under section 106A(1)(a) is whether a reasonable local planning authority could have concluded that the obligation still served a useful planning purpose. "
Lord Justice Rimer:
Lord Justice Munby:
Order: Appeal dismissed