Planning Quarterly Update - Case Law Edit

Duty to Give Reasons

In R (oao Save Britain's Heritage) v SoSCLG [2018], the Court of Appeal ruled that, when refusing to call in planning applications for his own determination, the Secretary of State (SoS) should give reasons.

The case related to the proposed "Paddington Cube" development, a 19-storey, 54-metre tall office tower next to the grade I listed Paddington train station and within the Bayswater conservation area. The proposals attracted significant objection from heritage groups and the St Mary's Hospital Trust, which all put pressure on the SoS to call in the application. The SoS declined the request, but did not give reasons for his decision.

The campaign group Save Britain's Heritage (SAVE) challenged the failure to give reasons in the High Court. The court dismissed the application, finding that the SoS had not been obliged to do so.

SAVE then took the battle to the Court of Appeal, claiming that although there was no statutory duty, there was either a legitimate expectation that reasons would be given or a general common law duty.

The Court of Appeal agreed. It found that, whilst no common law duty existed, the SoS had, in 2001, issued a green paper which contained an unequivocal statement that reasons for not calling in applications would be given and this was reiterated in 2010. Although the practice changed in 2014, so that reasons were no longer always provided, the promise was never publicly withdrawn. This created a legitimate expectation that reasons would be given.

Although Westminster City Council granted planning permission prior to the appeal being heard, thus making the appeal somewhat academic, the case has been heralded as a triumph for transparency and puts down a clear marker that unless and until the 2001 policy is publicly revoked, reasons will now need to be given where the SoS elects not to use his call in powers. However, we anticipate that the SoS will not waste any time in revoking the policy.

Public Sector Equality Duty

In the case of R (oao Buckley) v Bath and North East Somerset Council & Another [2018], the court considered, for the first time, whether the Public Sector Equality Duty (PSED) applied to outline planning applications.

In short, there was a development proposal to demolish and rebuild a housing estate and to decant tenants to a nearby site. The Council had carried out an Equality Impact Assessment (EqIA) of the relevant development plan policies and their rehousing strategy, but not of the application.

The Council argued that:

• an EqIA of an outline application would be meaningless as it did not have sufficient information;
• relevant impacts should be assessed at the reserved matters stage; and
• given that the overarching planning policies had been the subject of an EqIA, their PSED was discharged, because the application was judged against those policies.

The court said no and quashed the decision. The Council had failed to take account of the specific impacts of losing a home on those with protected characteristics (the elderly and disabled) and therefore it had not discharged its duty. The impacts which had been considered when assessing the policies and the rehousing strategy were different to those arising in the context of the application.

The duty could not be discharged at a later stage because, at that point, planning permission would have been granted. If the Council did not have sufficient information, it was incumbent upon it to acquire it.

To avoid challenges of this nature, developers and local planning authorities should consider whether a scheme affects those with protected characteristics (as defined in section 149 of the Equality Act 2010) and ensure that specific impacts are given due regard. A record should be kept of the process undertaken.

Quashing of Reserved Matters

Cases where reserved matters approvals are quashed are rare, but in R (oao Ornua Ingredients Ltd) v Herefordshire Council [2018] this is what happened.

The claimant owned a cheese factory on an industrial estate. Outline permission was granted on appeal for a housing development in close proximity to it, subject to planning conditions including a requirement that a noise mitigation scheme be submitted before development commenced.

A resolution to grant reserved matters approval (which included the layout of the development) was made, despite concerns about noise being raised. The Council took the view that the planning condition would adequately address the issue of noise mitigation at a later stage.

Following the resolution but prior to the issue of the decision notice, the claimant submitted evidence that suggested that any mitigation measures were likely to be inadequate, given the layout proposed.

This new material was not considered by the Council, which argued, during the court hearing, that such consideration was not necessary on the basis that the planning condition would provide adequate protection.

The court disagreed and held that the further information cast significant doubt on the validity of the Council's findings and as such, was a material consideration that should have been taken into account before the decision notice was issued. It had no option but to quash the reserved matters approval.

The case highlights the care that needs to be taken when additional information comes to light before a decision notice is granted and acts as a reminder that reserved matters can be liable to judicial proceedings.

It also reinforces the importance of developers seeking to agree conditions and section 106 obligations up front as a means of reducing the delay between a resolution to approve and the formal release of a decision notice.

Avoiding Affordable Housing Contributions

If the method for calculating an affordable housing commuted sum in a section 106 agreement is no longer workable, does that absolve the covenanting party from its liability to pay? This is the question the Court of Appeal had to answer in City of York v Trinity One (Leeds) Ltd [2018].

The case related to a historic section agreement which required commuted sums to be calculated by reference to "normal grant levels from regional TCI tables … or such equivalent grant calculation supported by the Housing Corporation".

Before the payment was made, the system of funding for registered social landlords completely changed. As such, the developer argued no payment should be made on the basis that it was not possible to substitute an alternative method of calculation to that which the parties had agreed.

The Court of Appeal did not agree. It found that the parties had always intended that a commuted sum should be paid and it would defeat that intention if the relevant provision was found to be unenforceable due to a lack of certainty. Therefore it was correct that the court should substitute an alternative method to calculate the sum due, thus illustrating that the courts are reluctant to allow a party to renege on a bargain and will be keen to assist in giving effect to the intention of both sides.

Modifying a Section 106 Agreement– What is "a Useful Purpose"?

An attempt to avoid a section 106 obligation was also the point of contention in R (oao Mansfield District Council) v SoSHCLG [2018].

In 1998, the Council granted planning permission for a mixed use development, subject to a section 106 agreement under which the Council covenanted to carry out highway works and the developer covenanted to pay 75% of the cost of those works.

The highway works were carried out, but not the development, and no payment was made.

In 2011, a further permission was granted and a further section 106 agreement was entered into which again required a payment to be made towards the highway works. Some of the monies due were paid and again, no development was carried out.

In 2016, the developer applied for the obligation to be modified to release it from the requirement to pay the balance of the sum. This was on the basis that because the highway works had been completed, the obligation no longer served a useful purpose.

At appeal, the inspector agreed to the modification on the basis that the contribution was no longer necessary to make the development acceptable in planning terms. The Council applied to the High Court to judicially review the decision.

The High Court quashed the inspector's decision and held that in determining whether to modify a section 106 agreement, four questions must be considered:

• What is the current obligation?
• What purpose does it fulfil? 
• Is it a useful purpose?
• If so, would the obligation serve that purpose equally well if it was subject to the proposed modifications?

So far as the question relating to purpose was concerned, this did not need to be a planning purpose.

In this case, the purpose was to allow the Council to recover some of the costs of the highway works and this continued to be a useful purpose. Whilst the inspector had turned his mind to the question of what the current obligation was, he had not addressed the question of purpose so his decision could not stand.

Accordingly, if a developer is seeking to vary or discharge existing planning obligations, it should turn its attention to the four questions to ascertain if its proposals are likely to be accepted.