Claimant being refused permission for development - Claimant’s appeal - Authority refusing to discharge undertaking

R (on the application of Millgate Developments Ltd) v Wokingham Borough Council: Court of Appeal, Civil Division (Lord Justices Pill, Rimer and Munby (judgment delivered extempore)): 6 July 2011

The claimant developer applied for planning permission for 14 dwellings.

The application was refused by the local planning authority (the authority) on the grounds that, among other things, the proposal had failed to make satisfactory provision for adequate services, amenities and infrastructure to counter the adverse impact of the development on local amenities.

The claimant appealed and subsequently submitted a unilateral undertaking (the undertaking) pursuant to section 106 of the Town and Country Planning act 1990 (the 1990 act). The undertaking provided that the claimant would make various financial contributions to local amenities. The claimant's appeal was allowed and planning permission was granted. The inspector found that the authority had not satisfied the tests set out in the relevant structure plan policy, which reflected the provisions of Circular 05/05: Planning Obligations (Circular 05/05), and provided that contributions towards additional infrastructure, services or facilities might be sought by a local authority where they were, inter alia, needed to enable the development to take place.

Accordingly, he concluded that contributions to the provision of infrastructure were unnecessary and he afforded the unilateral undertakings little weight. In light of the inspector’s findings, the claimant sought the removal of the undertaking from the authority’s register of local land charges.

The authority refused and subsequently held that the undertaking was enforceable (the decision). The sum claimed was later reduced by the authority. The claimant’s application for judicial review of the decision was dismissed and the claimant appealed.

It submitted, among other things, that, although the undertaking had been lawful when it was given, the decision to enforce it had been unlawful. The principal issue that fell to be determined concerned the statutory basis for the exercise to be undertaken by a local planning authority when asked to review a unilateral undertaking containing financial obligations, made under s 106 of the 1990 act.

The claimant submitted that: (i) the authority’s refusal to discharge the undertaking had been a determination under the planning acts within the meaning of section 38(6) of the Planning and Compulsory Purchase Act (the 2004 Act), accordingly the decision had to be made in accordance with the development plan unless material ­considerations dictated otherwise; and (ii) in the present case, the entire sum was no longer required to enable the development to take place.

The appeal would be dismissed.

While it was 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 the permission, it was settled law that once that condition had been satisfied, the planning obligation became binding and could not be ­challenged by the developer or his successor in title on the ground that it lacked a sufficient nexus with the proposed development.

In the present case, the authority’s refusal to discharge the undertaking had been lawful. In the circumstances, the authority had been entitled to attempt to enforce the undertaking. The decision had been a decision to enforce a planning obligation, not a decision to grant planning permission. Section 38(6) of the 2004 act did not bite on the decision, therefore, there had been no need for the authority to revisit the development plan policies.

The inspector’s use of the word ‘unnecessary’ had not assisted the claimant. The inspector had been prepared to grant the planning permission without giving weight to the undertaking. However, it did not follow that the undertaking did not have, or did not continue to have, a legitimate planning purpose.

The undertaking had remained a valid contribution for planning purposes. The inspector had not stated that the contribution had fallen outside of the relevant policies and, had he taken that view, he would have been expected to have said so expressly. It had been lawful for the authority to seek to enforce only a certain amount under the undertaking.

The reduction in the claim had not involved a finding that the remaining sum was other than for an appropriate planning purpose. Furthermore, an alternative remedy had been available. The undertaking had been lawfully given and was ­potentially enforceable in a private law action, which the claimant could seek to challenge.

John Pugh-Smith (instructed by Pitmans) for the claimant; Guy Williams (instructed by Legal Services Department, Wokingham Borough Council) for the authority.