Trent Won, Cil Nil

The community infrastructure levy system, in its application to lay individuals in particular, is monstrous, absurdly over-engineered, often badly administered and unfairly opaque.

Could anyone disagree after reading Lang J’s judgment handed down yesterday in R (Trent) v Hertsmere Borough Council (16 April 2021)? (Or for another example see my 19 January 2019 blog post CIL The Merciless).

Solicitor Alison Trent brought proceedings for judicial review, as a litigant in person, in order to quash a totally unjustified demand notice for £16,389.75 that she received on 21 April 2020 in relation to the construction of a dwelling in Radlett.

Her success represents a loud wake-up call for CIL collecting authorities.

Planning permission was issued on 10 February 2017 for demolition of a house and the construction of a replacement three bedroom dwelling.

Even with a project as simple as this, there is a complicated sequence of notices:

⁃ Under regulation 65(1) of the CIL Regulations 2010 “the collecting authority must issue a liability notice as soon as practicable after the day on which a planning permission first permits development”.

⁃ The person assuming liability for CIL then has to serve an assumption of liability notice and, if appropriate as here, a self build exemption claim form.

⁃ A commencement notice must then be served on the authority before development commences.

When something goes wrong in that sequence, matters invariably get messy.

Here:

⁃ There was no evidence that the necessary liability notice had been sent out in 2017 although a draft was on the council’s computer system.

⁃ Ms Trent had unwittingly jumped the gun by purporting to submit a self build exemption form ahead of planning permission being issued and had failed to submit an assumption of liability notice, both mistakes apparently at least partly due to misleading advice she had received from the authority.

⁃ The development took place and, when the authority realised, it issued a liability notice, demand notice and imposed surcharges for failing to submit an assumption of liability notice (surcharge of £50) and failure to submit a commencement notice to the Council (surcharge of £2,500).

Ms Trent had successfully appealed to the Planning Inspectorate against the imposition of the surcharges. The inspector found that (1) the council had failed to issue a liability notice and therefore she had never been in a position to serve an assumption of liability notice – the 2017 notice had never been served and the 2019 notice was not served “as soon as practicable” after planning permission had been issued – and that (2) the deemed commencement date on the demand notice was incorrect. She had also argued that the notices did not meet procedural formalities but the inspector did not need to consider that issue.

Unbelievably, the authority then issued a replacement demand notice, on 21 April 2020, relying on the 2019 liability notice which the inspector had considered not to be valid!

Ms Trent challenged the issue of that demand notice by way of judicial review, arguing as follows:

“In the light of the Inspector’s findings, and the Council’s material misunderstandings or errors of fact and/or errors of law and/or procedure, the Council’s decision to issue the 2020 demand notice, on the basis that the 2019 liability notice was valid, was manifestly improper and/or irrational and/or unfair and unreasonable.

…the Council’s decision to issue the 2020 demand notice, and to maintain its registration on the Land Charges Register for the Property in respect of the alleged CIL liability, was a breach of the Council’s duty under section 6 of the Human Rights Act 1998 in that it acted in a manner which was incompatible with her Convention rights under Article 1 of Protocol 1 to the European Convention on Human Rights (“ECHR”).”

The judge found as follows (extracts from judgment):

“In my judgment, the Defendant was required to issue and serve statutory notices which complied with the requirements in the CIL Regulations, and to do so in the prescribed sequence. In consequence, the Claimant was not under an obligation to pay the CIL, as required by the 2020 demand notice, unless and until the Defendant had issued and served a valid liability notice, in accordance with regulation 65 of the CIL Regulations.”

“Planning permission was granted on 10 February 2017. So the 2019 liability notice was issued 2 years and 6 months (less 5 days) after the grant of planning permission. I agree with the Inspector that such a long period of time cannot reasonably be described as “as soon as practicable” and this amounted to a breach of the requirement in regulation 65(1). The breach was not waived by the Claimant.

Regulation 65(1) imposes a mandatory requirement without any provision for extensions of time. Time starts to run from the date on which a planning permission first permits development. The phrase “as soon as practicable” gives an authority some flexibility, for example, if the recipients are not readily identifiable or their address known, or if there is an administrative backlog. But in the light of the statutory scheme and its purpose, the expectation must be that any delay would be measured in weeks or months, not years. I consider that the absence of any provision for extensions of time was deliberate, to ensure that authorities comply with the duty in a timely way.”

“In my judgment, it is of fundamental importance to the operation of the statutory scheme that the liability notice is issued and served soon after the grant of planning permission because of the key information it contains about the recipient’s liability to CIL, and the next steps which follow under the scheme. It is not the practice of this Council to provide this information in any other form or at any other time, and I assume that the same applies in other authorities.

I consider that the failure to issue and serve a valid liability notice on the Claimant within the prescribed time period was prejudicial. If the Claimant had received a timely liability notice, in February 2017, it would have alerted her to” the need to apply for exemptions.

In my judgment, as the liability notice is a formal legal document, which imposes a tax liability on the recipient, and places a land charge on the owner’s property, it is of fundamental importance that the recipient is correctly identified by their name. In this case, the liability notice should have been addressed and issued to “Alison Trent”. She should have been identified as the owner of the relevant land. Instead, the Defendant addressed and issued the liability notice to “C/O Alison Trent & Co”. “Alison Trent & Co.” is the Claimant’s business. It has no legal or beneficial interest in No. 40 and does not fall within any of the categories of recipients. I consider that the only plausible explanation for this error was incompetence on the part of the Defendant. As the liability notice was not addressed and issued to the correct person, it is invalid.

The regulations do not contain any provisions to save a non-compliant notice. The Claimant pointed out that this is in contrast to other regulatory schemes such as enfranchisement notices under section 13 of the Leasehold Reform, Housing and Urban Development Act 1993 which may be saved by paragraph 15(1) of Schedule 3.

As a general rule, failure to effect valid service of a liability notice would invalidate a notice. However, in this case, the notice was successfully served on the Claimant, care of the London business address, which was the second of the two addressees she provided on the Land Register. Therefore, despite the failure to serve the Claimant at No. 38 or No. 40, which was in breach of the requirements of the CIL Regulations, I do not consider the failure is of sufficient significance to invalidate the notice.”

Whilst the inspector could not formally quash the 2019 liability notice, “I would expect a responsible authority to have regard to the Inspector’s findings when deciding upon its next steps.”

The Claimant’s ground of challenge under Article 1 of Protocol 1 to the ECHR turned on the lawfulness of the 2019 liability notice, and the consequent 2020 demand notice, requiring her to pay the CIL as assessed. As I have found that the notices were not valid, it follows that there would be a breach of A1P1 if the Claimant was required to pay the CIL.”

“In conclusion, the Claimant’s claim for judicial review is allowed. The liability notice issued by the Council on 5 August 2019, and the demand notice issued by the Council on 21 April 2020, are invalid for the reasons set out in this judgment, and are to be quashed.”

So there we have it.

Woe betide any collecting authority that delays unreasonably in serving a liability notice (common in my experience) or addresses it incorrectly. The judgment would imply that the authority may lose the right to serve a liability notice at all (and thereby not be entitled to levy any CIL in relation to the development) if it delays unreasonably in serving a liability notice (in this case there was a delay of two and a half years, but in circumstances where the authority’s records had probably, although wrongly, shown that one had already been served). That had not previously been my understanding and it would be extremely risky for a developer to embark on construction in reliance on that approach, rather than (as is often currently the case) chasing down the late notice so that it can go on the merry-go-round of assumption of liability, securing exemptions and serving the commencement notice. But I can foresee arguments being raised in some situations.

And woe betide this Government if its proposed Infrastructure Levy is as unnecessarily complicated as CIL. First, why do we have a self build exemption in the first place? Secondly, given that we do, it should be obvious from the planning application that the development proposed is likely to qualify. Why the need for any forms at all? Under a properly constructed system, there would be no need for these reeling spools of, of, yes, of red tape – there I’ve said it.

Simon Ricketts, 17 April 2021

Personal views, et cetera

PS This week’s clubhouse Planning Law Unplanned session will be a careers special. 6pm, 20 April. As always, message me for more information.

How To Stay Out Of Trouble In The Planning Court

When cat herders describe their job to a friend, they probably say “It’s like editing a legal textbook written by 20 barristers from the same set of chambers, to an over-arching style guide, and a deadline”.

As editor of the new second edition of “Cornerstone on the Planning Court” (Bloomsbury Professional), Michael Bedford QC would make an excellent herder of cats. Or maybe Cornerstone Barristers are just a collaborative bunch. After all, “Cornerstone on the Planning Court” is part of a series that includes Cornerstone on “Anti-Social Behaviour”, on “Information Law” and on “Social Housing Fraud”.

The first edition of Cornerstone on the Planning Court (which shall I call COTPC1) was published in September 2015, just under 18 months after the Planning Court was created. Our office copy is well-thumbed, corner-folded and spine-broken. Beyond the Civil Procedure Rules and practice directions (which, folks, don’t tell you half of what you need to know!), it has provided the main source of rigorous but practical guidance as to the operation of this new forum, now the sharp end for most litigation of relevance to planners and planning lawyers but which structurally occupies an uncertain space as a specialist list within the Queen’s Bench Division of the High Court (see also my 8 July 2018 blog post, The Planning Court).

The Planning Court has proved remarkably popular. By traditional litigation standards, the permission stage is rapid, followed by a final hearing for those cases which have not been sieved out through that process. Cases earmarked as “significant” are allocated to judges who are particularly experienced in planning law matters. There has also been an enormous throughput.

With Landmark Chambers, we carried out some analysis last year of the cases which have come before the court, which I summarised in my 15 August 2020 blog post, Introducing The Planning Court Explorer. We also held a recorded webinar where Duncan Field and I were joined by John Litton QC, Jenny Wigley QC and Tim Buley QC – PC in 2020: Has the Planning Court proved a success?

The nature of the court, separate but not separate from the wider judicial review functions of the Administrative Court, serves to obscure even basic statistics as to its overall caseload. So I was really taken by a video post last week from Mark Howells at Kings Chambers, Data and statistics of planning judicial reviews (6 April 2021) a deep dive into zipped files and data entries for information which surely should be made more easily available.

With so much new case law, together with changes to costs protection procedures, COTPC2 is a welcome update.

The second half of the book, pages 245 to 451, comprises the relevant Civil Procedure Rules themselves and related practice directions, protocols and forms. The first half of the book combines insightful summaries of the historical development of planning law and its current components, together with judicial review and statutory challenges (at a level which would be a good read even for those new to the subject) and of the many key legal principles arising in Planning Court claims, with detailed from-soup-to-nuts practical guidance for practitioners as to every aspect of the litigation process.

The foreword to COTPC2 is by Holgate J, who takes care to distinguish between decision-making procedures within the planning system which “determine the merits of the competing arguments in each case. The Court exists to deal solely with any public law issues that arise from those decisions and to do so as efficiently as possible, avoiding unnecessary delay”. He refers to “two of the fundamental foundations of our constitution: the rule of law and the separation of power between the courts, the legislature and the executive. These govern the Planning Court just as much as any other part of our legal system”. He quotes Lord Carnwath in the Suffolk Coastal case, one of the most influential cases since COTPC1:

“…the judges are entitled to look to applicants, seeking to rely on matters of planning policy in applications to quash planning decisions (at local or appellate level), to distinguish clearly between issues of interpretation of policy, appropriate for judicial analysis, and issues of judgment in the application of that policy; and not to elide the two”.

We have been warned.

The constitutional role of administrative law is of course a topical issue. My 12 September 2020 blog post, Faulks Review Of Administrative Law: Call For Evidence reported on the review instituted last year by the Government. Many of us were somewhat fearful as to what might emerge but the March 2021 report is to my mind an impressive, considered, piece of work.

My only disappointment is that the “no nonsense” approach of the Planning Court in many respects, particularly in relation to timescales, might have been endorsed as appropriate for wider adoption but instead we seem simply to have been acknowledged as operating in our own little world…

Particular congratulations should go to Celina Colquhoun (39 Essex chambers), as the only planning barrister on the review panel.

The Government has published a consultation document setting out proposed reforms to administrative law in response to the recommendations in the review, with a deadline of 29 April 2021. I noticed this week that ironically the Ministry of Justice has already received a threat of judicial review, from a solicitors’ firm, on the basis that the deadline is considered to be too short.

But I’ll pause there because this post was intended as a review of a book about Planning Court judicial review rather than a review of a proposed judicial review of a proposed review of judicial review.

There is one overwhelming selling point of COTPC2 for me: in the nicest possible way, it will help me sleep.

After all, who of us does not stay awake worrying about phantom missed deadlines, overlong bundles, unnecessary witness statements, late settlement notifications and everything else that can possibly go wrong?

We all want to stay out of trouble in the Planning Court, so thank you Michael and colleagues.

Simon Ricketts, 10 April 2021

Personal views, et cetera

PS This week’s Planning Law, Unplanned clubhouse session (6pm on 13 April) will have as its theme your most bizarre planning inquiry/court hearing/site visit/planning committee stories. We want to hear them on the night, with a prize to the best.

Forthcoming Commercial To Resi Rules Tightened After Consultation

I have taken care over the heading of this piece about the Town and Country Planning (General Permitted Development etc.) (England) (Amendment) Order 2021, laid before Parliament on 31 March 2021, which introduces a new class MA into the GPDO, granting deemed planning permission for change of use from commercial and business use (class E) to residential (class C3) from 1 August 2021.

I have taken care because so much of the noise this week was about how the Government hasn’t listened to the responses it received to its 3 December 2020 consultation paper, whereas for me the news is that it has listened to much of the criticism it received. The final form of the regime is significantly constrained compared to the consultation version. Give credit where credit’s due!

I summarised the initial proposal in my 4 December 2020 blog post, E = C3, expressing a number of concerns. Responses to the consultation from all quarters expressed equivalent concerns – some of course going further, in questioning more fundamentally the role of the permitted development rights process.

Aside from the Order itself which saw the light of day later on that day, we have the 31 March 2021 press statement (at the now traditional one minute past midnight) and the Government’s response to the consultation process.

The RTPI and others were tweeting their reactions before the Order had even been published on line (although to be fair the headlines were in the press statement). A joint letter was sent yesterday, 1 April 2021, to the prime minister by the RTPI, RIBA, RICS and CIOB. I acknowledge that many have “in principle” concerns about the availability of fast-track permitted development rights procedures but isn’t the letter somewhat of an over-reaction? What do members of those organisations think? Call me a defeatist pragmatist, but the proposals could have been so much worse!

These were the Government’s objectives, as they were stated in the December consultation document:

“In his ‘Build, Build, Build’ statement of 30 June 2020 the Prime Minister said that we would provide for a wider range of commercial buildings to be allowed to change to residential use without the need for a planning application. To meet this aim, support housing delivery and bring more residential use into our high streets and town centres, boosting footfall and creating additional demand, we propose to introduce a new national permitted development right for the change of use from the new Commercial, Business and Service use class to residential use. The new right would help support economic recovery, housing delivery and the regeneration of our high streets and town centres.”

The proposals were always intended to be introduced much more quickly than the proposals in last year’s planning white paper – after all existing permitted development rights expire on 31 July 2021 in relation to changes of use from the classes that went to form the new class E:

“While Planning for the future sets out our longer-term ambitions, we want at the same time to continue to explore more immediate changes to the planning system to provide greater planning certainty and flexibility to ensure that it can effectively contribute to some of the immediate challenges facing the country.”

It is also worth remembering that the rights which expire on 31 July already include rights to convert offices (no floorspace limit), light industrial (500 sq m floorspace limit) and retail (150 sq m floorspace limit). The rules to be introduced from 1 August allow greater flexibility in a number of respects but are also significantly tighter than the existing rights in various ways.

My colleague Tom Brooks has prepared a detailed client summary in relation to all of the PD changes within the Order (this blog post is only dealing with class MA rather than the other excitements within). If you message or email me I will send it to you next week, but for the purposes of this blog post I set out below the Government’s summary of the proposed changes:

“We will introduce a new national permitted development right to create new homes through the change of use from Commercial Business and Service uses. The right will:

• have effect from 1 August 2021

• be subject to a size limit of 1,500 sq m of floorspace changing use

• apply to buildings that have been in Commercial, Business and Service uses for two years, including time in former uses now within that class

• apply to buildings that have been vacant for at least three continuous months

• apply in conservation areas, but not in other article 2 (3) land such as National Parks and Areas of Outstanding Natural Beauty

• be subject to prior approval by the local planning authority on specific planning matters

• attract a fee of £100 per dwellinghouse.”

The consultation proposals had:

• no size limit (and this size limit cuts back on what can already be achieved via the existing office to resi PD right)

• no requirement that the relevant building should have been in commercial , business and service uses (i.e. any of the uses that now make up class E) for the two years leading up to the date of the application for prior approval (for offices to residential, the cut off point in the existing rules is 29 May 2013).

• no requirement that the building must have been vacant for the three months leading up to the date of the application for prior approval (a requirement which has not existed in relation to existing PD rights).

There is also now an express carry-forward to 1 August 2022 of existing article 4 directions that restrict office to residential permitted development rights – addressing what would have been a significant loophole (see e.g. my 7 February 2021 blog post Art 4 Life).

Prior approval requirements will still include transport, contamination, flooding, noise, and adequate natural light. As trailed in the consultation proposals, prior approval will be required, where relevant, as to the impact on the character or sustainability of a conservation area caused by the change of ground floor use of a building within a conservation area. Where relevant, prior approval will also be required as to the impact on the intended residential occupiers if the area is considered important for “general or heavy industry, waste management, storage and distribution, or a mix of such uses” and as to the impact on local provision if there is a loss of services provided by a registered nursery or health centre.

Prior approval applications will need to include a floor plan indicating “the total floor space in square metres of each dwellinghouse” (and remember that the Government’s nationally described minimum space standard applies to any schemes which are the subject of a prior approval application from 6 April 2021 in any event).

For the first time, notices will need to be served on on any adjoining owner or occupier and, where the proposed development relates to part of a building, on any owner or occupier of the other part or parts of the building.

Remember that there is no exemption from CIL for permitted development, the usual rules apply – although most commonly the in-use buildings exemption will apply if at least part of the building has occupied for a use which is lawful for at least six months continuously in the last three years.

Mitigation cannot be secured as to matters that are not the subject of the prior approval process, so PD residential development is still free from affordable housing and other social infrastructure commitments (e.g. contributions to the cost of education facilities), but remember that the scale of development now permitted, with the 1,500 square metres cap, is far lower than the scale of conversions of office buildings that we have previously seen. The horse has bolted on that one.

The new rights do not limit in any way the need for planning permission for external works to the building that materially affect its external appearance, so finger-pointing as against the Government’s “beauty” aspirations is misdirected in my view.

What concerns are we left with? Yes, the new rules will allow residential development in potentially unsustainable locations. Yes, the new rules will allow commercial frontages in high streets to be converted to residential use in a way which may harm the traditional function of town centres (although subject to the need for a separate planning permission for the external treatment of the building). Yes, the new rules do limit in practice the role of the local planning authority in determining what are appropriate uses for a particular area. Yes, there will still be room for uncertainty and “gaming” of the system, particularly around the vacancy requirement. Set against these concerns, are the Government’s objectives in terms of enabling more homes to be delivered quickly and in finding new uses for redundant commercial floorspace and is the need for us all to acknowledge the various protections that are now (at last) in place, seeking to ensure that accommodation is to be delivered to at least a minimum standard (e.g. size of homes, light) and seeking to reduce the potential for the new rights to lead to unintended outcomes (e.g the floorspace cap, vacancy requirement).

Where does the balance lie? Are there now sufficient checks and balances? Are we going to see a final rush to make prior approval applications under the existing rules? Join a number of us on Clubhouse for a discussion on this very subject – from 6pm on Tuesday 6 April.

Simon Ricketts, 2 April 2021

Personal views, et cetera