Month: June 2023

CG Fry: AA Post PP

CG Fry v Secretary of State (Sir Ross Cranston, 30 June 2023) is a difficult case with a perhaps unsurprising answer, although one that is disappointing to many.

I’ve often written about the ongoing problems arising from Natural England’s advice that in certain areas, due to potential harm to Special Areas of Conservation and Special Protection Areas by way of nutrients (nitrates or phosphates), water abstraction pressures or recreational pressure, schemes should not be permitted to proceed without demonstrating (through the local planning authority carrying out “appropriate assessment” under the Conservation of Habitats Regulations 2017), that there will not be an adverse effect on the integrity of the relevant protected area. See for example my 18 March 2022 blog post New NE Nutrient Neutrality & Recreational Impact Restrictions (+ DEFRA Nature Recovery Green Paper).

The stage at which appropriate assessment is usually carried out is when an application for outline or full planning permission is being determined in circumstances where it is likely that the development will have a significant effect on an SPA or SAC. But one of the most frustrating aspects for developers about the introduction, usually without notice on the part of Natural England, of these controls is Natural England’s position, supported by the Government, that appropriate assessment is required even if planning permission has already been obtained and where what is being sought is reserved matters approval or discharge of a pre-commencement condition. I mentioned the problem in my 26 March 2022 blog post More On That Natural England Advice. As I said then:

“This of course cuts across the traditional planning law tenet that the planning permission stage is the point at which the principle of the development is determined to be acceptable, with subsequent approvals serving to define the detailed scale and disposition of development within the tramlines of what has been authorised by way of the permission. The authorities’ stance means that planning permission no longer gives any certainty as far as purchasers and funders are concerned and is a real impediment to market certainty and confidence. Who knows what equivalent restrictions lie ahead, after all? Even if your area is not affected at present, this should be of concern.”

I asked:

“Is anyone aware of this issue having been tested, on appeal or in litigation post 1 January 2021? Or is everyone being terribly British and waiting patiently for strategic solutions to be found to all of these neutrality issues before their reserved matters and pre-commencement conditions can be signed off? I suspect that some permissions will expire in the meantime. In my view this is not acceptable, or warranted, but am I a voice in the wilderness here?”

Well, the point now has been tested.

In CG Fry, outline planning permission had been granted for a residential development of 650 houses, community and commercial uses, a primary school and associated infrastructure. Reserved matters approval was secured. Natural England then published its advice to Somerset authorities on development in the Somerset Levels and Moors Ramsar Site, advising that  greater scrutiny was required of plans and projects that would result in increased nutrient loads which may have an effect on SPAs, SACs and sites designated under the Ramsar Convention. CG Fry then sought to discharge various pre-commencement conditions but the Council withheld approval on the basis that an appropriate assessment was required before the conditions could be discharged. CG Fry appealed and the inspector dismissed the appeal. To quote from the judgment:

“He determined that it was legitimate to apply paragraph 181 of the NPPF to give the Ramsar site the same protection in all respects as a European site under the Habitats Regulations 2017. That was because the discharge of the conditions would be an authorising act, as part of the wider consent process, that would allow the realisation of potential effects on the Ramsar site which the Natural England advice note sought to manage. Considering the overarching nature of paragraph 181, this applied regardless of the specific subject matter of the conditions themselves: DL24-26. The Inspector considered that the grant of outline planning permission and reserved matters approval did not have an effect on the scope of any necessary appropriate assessment; the validity of the planning permission was not in question: DL41.

The inspector then determined that the requirement for an appropriate assessment in the Habitats Regulations 2017 applied to the discharge of conditions stage. He rejected the claimant’s argument that inclusion of specific provisions relating to the grant of planning permission, including outline planning permission, at regulation 70 of the Habitats Regulations 2017, did not diminish the applicability of regulation 63, which was simply a sweep up provision: DL44. Even adopting the claimant’s approach that the permission in relation to “consent, permission or other authorisation” in regulation 63 is the planning permission referred to in regulation 70, the concept of “other authorisation” was a broad one. The claimant’s approach would create loopholes counter to a purposive approach to the Habitats Regulations 2017: DL45-47.

As the competent authority, the Inspector said, he was unable to carry out the necessary appropriate assessment to agree the conditions: DL71. He said that he had considered the other relevant planning considerations, in particular the impact on housing delivery: DL72, 74. However, the unfulfilled requirement for an appropriate assessment was an issue of material significance: DL77. In other words he conducted the balancing exercise and concluded that in this case the delay in housing delivery was outweighed by the need to protect the Ramsar site.”

“The claimant’s case in general terms is that the effect of additional phosphate loading resulting from its proposed development was not a material consideration to the determination of the conditions at issue in the case. It was legally irrelevant because it fell outside the specific parameters of what the outline planning permission and the reserved matters approval had left over for consideration under these conditions. The material for the discharge of these conditions was satisfactory, and the only thing preventing their discharge was whether an appropriate assessment of the impact of phase 3 of the development on the Ramsar site from additional phosphate loading was required. There was no nexus between the conditions in relation to phosphates, even with the condition relating to waste water. Nor, on the claimant’s case, does the combination the Habitats Regulations 2017 and paragraph 181 of NPPF change that. The Inspector was wrong in his analysis and conclusions.”

“In broad terms ground 1 is firstly, that the Inspector wrongly construed the Habitats Regulations 2017 and should not have applied regulation 63, as he did, to the discharge of conditions on a reserved matters approval. Mr Banner KC contended that regulation 70 was the relevant provision, and it is confined to planning (including outline planning) permission.”

The judge rejected the ground: “While on a strict reading of the Habitats Regulations 2017 the assessment provisions of regulation 63 do not cover the discharge of conditions, in my view they do apply as a result of firstly, article 6(3) of the Habitats Directive, secondly, a purposive interpretation of their provisions and thirdly, case law binding on me”

“ Mr Banner contended that the Habitats Directive had no status in the UK legal system, except through regulation 9(3) of the Habitats Regulations 2017. The provisions of the European Union (Withdrawal) Act 2018 do not take the argument any further, he submitted, because there is no CJEU pre-existing case law which interprets the Habitats Directive as imposing a requirement to conduct an appropriate assessment at subsequent stages, such as the discharge of conditions on a reserved matters approval. He submitted that Harris concerned whether the claimed obligation under article 6(2) had been recognised by the court before Brexit, and it had. By contrast there is no CJEU or domestic case preceding exit day which supports the view that article 6(3) of the Habitats Directive can be relied upon to impose a requirement for an appropriate assessment at the discharge of conditions stage. Unlike Harris section 4(2)(b) of the Withdrawal Act 2018 is not engaged in this case given the absence of relevant pre-exit case-law.

In my view article 6(3) of the Habitats Directive continues to have effect in domestic law as a result of section 4(2)(b). Johnson J explained in Harris that the requirements of article 6(3) were accepted as binding by the CJEU in Waddenzee: [90]. Articles 6(2) and 6(3) of the Habitats Directive are closely related, so as to be “of a kind” with one another for the purposes of section 4: [91]. The demands of section 4(2)(b) are therefore met. The section is explicit that the recognition in the case law does not have to be by way of the ratio of a case “(whether or not as an essential part of the decision in the case)“.

“Consequently, the requirements of article 6(3) of the Habitats Directive remain part of UK law. That article requires that the competent authorities should not agree a project until an appropriate assessment has been undertaken and it shows that it will not adversely affect the integrity of a site. A planning consent is part of agreeing a project when it is necessary to implement a development. In this case the discharge of pre-commencement conditions was a necessary step in the implementation of the development. An appropriate assessment had not been undertaken up to that point, so consequently the Inspector determined that he could not discharge the conditions prior to one being undertaken. His conclusion was consistent with article 6(3) of the Habitats Directive.”

“Secondly, the Habitats Regulations 2017 demand a purposive interpretation so that the appropriate assessment provisions of regulation 63 apply to a subsequent consent stage including reserved matters applications and the discharge of conditions. A broad and purposive interpretation of the regulations flows from the strict precautionary approach which the CJEU has adopted to the assessment provisions of the Habitats Directive…”

“In my view Wingfield and Swire are authority for the proposition that an appropriate assessment can apply at the reserved matters or discharge of condition stage even if there has been a grant of outline planning permission where the subsequent approval is the implementing decision. There is support, as Lang J found in Wingfield, in the case law concerning the EIA multi-stage consenting procedure such as Barker. There, as we saw, Lord Hope recognised that a material change in circumstances could require an assessment at the reserved matters stage. It will be recalled that in Friends of the Irish Environment Ltd the CJEU stated that the meaning of “development consent” was relevant to defining the equivalent term “agree” in the Habitats Directive. All this is retained case law under the Withdrawal Act 2018 concerning the interpretation of the Habitats Directive and the Habitats Regulations 2017. That the facts in Wingfield and Swire were different is no basis for undermining the principle they established. The common law system would not survive if this were the case, since there will always be a variation, even if slight, in the facts of later cases. That does not preclude the continued application of principle.”

“The upshot is that the Habitats Directive and Habitats Regulations 2017 mandate that an appropriate assessment be undertaken before a project is consented. That is irrespective of whatever stage the process has reached according to UK planning law. The basal fact in this case is that neither at the permission, reserved matters, or conditions discharge stage has there has been an appropriate assessment. Application of the Habitats Directive and a purposive approach to the interpretation of the Habitats Regulations 2017 require the application of the assessment provisions to the discharge of conditions. The strict precautionary approach required would be undermined if they were limited to the initial – the permission – stage of a multi-stage process.”

Ground 2: “For the claimant Mr Banner contended that paragraph 181 of the NPPF did not enable the Inspector to take into account considerations which were legally irrelevant to those conditions.” [Paragraph 181 states that Ramsar sites should be given the same protection as SPAs and SACs].

The judge: “The impacts on the Somerset Levels and Moors Ramsar Site and paragraph 181 of the NPPF cannot be said to be irrelevant considerations in this development. The issue is the read-across of the Habitats Regulations 2017 to Ramsar sites as provided by the NPPF in circumstances where the Council’s shadow appropriate assessment shows that if the project if permitted it will cause harm to the Ramsar site.”

Ground 3: “Mr Banner submitted that even if regulation 63 applies to the discharge of conditions, it ought to be interpreted in such a way that the scope of the appropriate assessment reflects the scope of the conditions being considered. Thus, for example, in the context of an application to discharge a condition relating to root protection zones for trees, an appropriate assessment would concern any effects on site integrity arising from the range of choices the decision-maker has in relation to root protection zones, given the permission granted (and any conditions already discharged). The appropriate assessment would not consider the effects of the scheme as a whole on the habitat in question.”

The judge: “Regulation 63 requires an appropriate assessment to consider the implications of the project, not the implications of the part of the project to which the consent relates. […]  As Mr Wilcox for the Council put it, the thing which is to be the subject of the appropriate assessment is the thing which will be permitted by the authorisation, so that where the decision is the final stage in granting authorisation for a development, it is the development which is to be assessed.”

It was a certainly an issue to be tested and, whilst Richard Moules and Nick Grant (for the Government) and Luke Wilcox (for Somerset Council) may have been on the winning side, well done to Charlie Banner KC and Ashley Bowes for arguing it (and to CG Fry for being prepared to put its head above the parapet). I hope Charlie won’t mind me quoting his subsequent LinkedIn post in its entirety:

“Judgment in CG Fry has been delivered this morning . Key headlines:

1) The Court agreed with the Claimant that on a natural and ordinary reading of the Habitats Regulations they do not require appropriate assessment at the reserved matters or discharge of conditions stages

2) However, CJEU case law to the effect that the EIA Directive’s requirements apply at the reserved matters stage was to be read across to the Habitats context and to discharge of non-RM conditions, as well as first instance domestic case-law upholding the legality of a *voluntary* AA at reserved matters stage.

3) This is an EU “obligation… identified by a court” pre-Brexit which is preserved by the EU Withdrawal Act 2018 ss4&6, because the direct effect of Article 6(3) of the Habitats Directive had been recognised by the CJEU pre-Brexit.

4) Therefore the Habitats Directive continues to apply directly and overcomes the natural and ordinary meaning of the Regulations.

The judge has indicated he is minded to grant permission to appeal his judgment and the parties are discussing the potential for a leapfrog appeal to the Supreme Court.

The judgment will present Department for Levelling Up, Housing and Communities with some challenges for any future legislative solution for the nutrients issue given the Court’s approach to considering whether s4 of the Withdrawal Act preserves post-Brexit the force of EU “obligations… of a kind recognised by a court “ pre Brexit. The Claimant said that this meant the Courts had to have recognised an obligation for AA at discharge of conditions stage, which they hadn’t. The judgment suggests that the relevant obligation is article 6(3) generally. The potential effect of this is that it will be open to anyone to apply to court to set aside legislation on the basis it is contrary to article 6(3) *even if based upon an interpretation of article 6(3) that hasn’t previously been made by the Courts*

The Home Builders Federation’s evidence to court was that 44,000 already consented homes in England are currently blocked because of this issue. The Land Promoters and Developers Federation has also been very active on this issue.

Watch this space!”

A final couple of wry comments from me:

  1. If anyone voted for Brexit thinking that these sorts of problems would become a thing of the past, more fool them.
  1. Let’s not forget that the root of much of the issues over neutrality – whether in relation to nutrients and water abstraction – is the appalling lack of investment on the part of the privatised water companies.

As the judge says at the beginning of his judgment: “In broad terms, this issue relates to the phosphate loading of protected water habitats, leading to eutrophication. This is caused by reasons including agricultural practices and under-investment in water infrastructure. There is a risk of the problem being exacerbated by water generated by new developments which contain phosphates, principally from foul water. The Home Builders Federation states that, due to the unavailability of mitigation options, this issue is holding up the building of no fewer than 44,000 homes in England which already have planning permission.” (my emboldening)

Until the CG Fry judgment landed this morning, I had been intending to pull together some wider thoughts on the implications for planning and the environment of the poor state of our privatised water industry, provoked by articles such as UK government looks at nationalising Thames Water as crisis deepens (FT, 28 June 2023) where delayed housebuilding, aka providing people with homes,  is just part of the collateral damage.

Simon Ricketts, 30 June 2023

Personal views, et cetera

Pic courtesy Towfiqu barbhuiya via Unsplash

What Should We Call The Planning Version Of Trussenomics? And A Pox On The PEx PAX

Is the planning system now in a holding pattern until the general election? It certainly feels that way.

The consultation announced in December 2022 over proposed changes to the NPPF (see my 22 December 2022 blog post It Will Soon Be Christmas & We Really Don’t Have To Rush To Conclusions On This New NPPF Consultation Draft) led many authorities to delay or withdraw their local plans (see for instance Local Plan Watch: The 26 authorities that have paused or delayed their local plans since the government announced housing need changes (Planning Resource, 27 April 2023 (subscription)) and Delayed Local Plans (HBF, 27 March 2023)). The thought occurred to me this week when I was speaking with Peter Geraghty at a TCPA event (congratulations David Lock for your well-deserved Ebenezer Howard medal): if Trussenomics described the event that led to last Autumn’s economic crisis (the repercussions of which persist), what should be the word for that 22 December announcement?

Even if the policy thrust set out in the 22 December announcement was appropriate and worth some short-term process turbulence, it has already stalled. So, what really was the point (aside of course from its politically necessary signalling of capitulation to Conservative backbenchers’ concerns over the prospect of development taking place in their constituencies)? Consultation closed on 3 March 2023. The Government was to respond to the consultation and publish the revised NPPF in Spring 2023. There was then to be consultation on proposed changes to the rest of the NPPF and on more detailed policy options and proposals for National Development Management Policies (supported by environmental assessments), once the Levelling-up and Regeneration Bill had passed through all its Parliamentary stages shortly thereafter. But the Bill is still in the Lords. Lords Report Stage will be on 11 and 13 July. We then have the summer recess (Commons from 20 July, Lords from 26 July) and the Bill then needs to return to the Commons – so there is no prospect of Royal Assent before Autumn 2023. I can’t see how the LURB’s plan making reforms can be implemented this side of the general election.

And yet the Government criticises local planning authorities – and indeed developers – for not getting on with things….

In the meantime, we have little flutters of activity, the latest being Michael Gove’s endorsement this week of a paper published by Policy Exchange (the Government’s de facto policy incubation hub), Better Places: A Matrix for Measuring & Delivering Placemaking Quality, which is an exercise to see whether determining the quality of place making can be reduced to a “universal tool capable of measuring how successful developments will be, (or are) at placemaking for the very first time.”

“The Placemaking Matrix contained within this paper sets out a series of questions whose answers can be used to calculate a score which then reflects the placemaking quality of any new development. Combining the two words of its title and conveniently appropriating the Latin word for peace, the score will be known as the PAX rating.”

“The matrix questions are divided into three groups, those that relate to the Physical, Socio-Economic and Psychological elements of any new development. In this alone the rating system forms a pioneering departure from conventional placemaking practice, while it is relatively easy to define physical attributes and, to a slightly lesser extent, socio-economic ones, no previous study or standard has attempted to quantify the psychological content of places and yet these are arguably the most important when assessing their human impact. The PAX system does just this.”

Aside from the substance of the paper, one thing it really calls out for is some sub-editing and proof-reading. Mark these passages on a range of 0 to 4:

“It is important to note that the Placemaking Matrix does not present itself as a definitive ‘magic formula’ that can conclusively determine design quality and character. While the Matrix sets out to be a universal tool, the localised nature of placemaking will inevitably require adaptation to local contexts and conditions. Consequently It is not our intention that the current set of questions are forever fixed in stone forever. While the paper acknowledges that there are objective, observable truths that define good placemaking, it is not so ideologically rigid as to suggest that a tool such as this must attain pure, unqualified universality. We see our paper as the earliest development of the matrix and we hope and anticipate that with time, testing and hopefully trust from the industry, the questions can be modelled, adapted and evolved to strike the best possible balance between universal best practice and the localised, contextual nuance that also helps drive placemaking success.”

“Furthermore this paper emerges as the latest addition to a Policy Exchange Building Beautiful programme that has attempted to distil the very essence of beauty into an objective standard rather than a subjective instinct, a challenge that now form a central part of the political housing debate.”

So, it’s to be a “universal tool” but (I like this phrase) not “forever fixed in stone forever”. The paper is “not so ideologically rigid as to suggest that a tool such as this must attain pure, unqualified universality”.

Reader, my head was hurting. And then I entered the Matrix: 272 questions, each to be marked on a range of 0 to 4. The percentage score of each of 12 sections is then averaged out. 70% outstanding, 60% good, 50% average, below 50% poor. The questions are quite specific but in large part call for subjective responses. Their relevance is wholly dependent on the scale and nature of the scheme and its location. Some examples:

  • Does the development incorporate cycle lanes?
  •  Does the development maintain a cycle hire scheme?
  • Does the development contain fountains?
  • To what extent do building uses integrate into existing usage patterns in the area surrounding the development site?
  • Does the programme design incorporate opportunities for impromptu street performance?
  • Does any programme apparatus incorporate audio-visual, tactile, sensory or play equipment?
  • What level of healthcare facilities have been provided on the development?
  • Has a letterbox been provided within the development?
  • Will any properties offer commonhold ownership?
  • Does the development incorporate audial stimulation? (i.e. church bells, wildlife habitats)?
  • Does the development promote a visual brand, motif or logo?

Why on earth add yet another technocratic process to the system, to be gamed by all concerned? I would say it’s tick-box but it’s worse than that!

This would all be classic “silly season” stuff. Except for Michael Gove’s endorsement by way of his foreword:

“…it is because placemaking is crucial to the country’s long-term health that Policy Exchange’s newly devised Placemaking Matrix promises to be an indispensable resource. A universal tool that can be used to score a range of elements seen in new and existing developments, it can help build confidence in the wider social value of new residential schemes during the planning process and so unlock much-needed new housing supply.”

“For too long, quality has been viewed by many as a planning impediment. The Placemaking Matrix could help transform it into an incentive. Ike Ijeh’s brilliant new paper for Policy Exchange is no less than a detailed instruction manual for how we can create the good places of the future. I hope it receives the welcome it deserves.”

I don’t disagree with the final sentence incidentally.

Simon Ricketts, 23 June 2023

Personal views, et cetera

Photo extract courtesy of Rafael Ishkhanyan via Unsplash

What Does A Planning Lawyer Do?

Fair question. Particularly at this festive time of year for planning lawyers given the annual publication yesterday by Planning magazine of its Planning Law Survey (16 June 2023, subscription only).

Perhaps recognising our narcissism as a profession, the magazine’s survey of planning lawyers doesn’t rank us by size, turnover or diversity as it does with planning consultants. Instead, it’s a survey of other professionals (“The firms and individual solicitors singled out in this year’s Planning Law Survey by a panel of 195 consultants, developers, councils and other client groups”) as to how highly we and, where relevant, our firms are “rated” (whatever that means). And don’t we all want to be loved? Don’t we just purr at the attention?

To declare an interest, obviously personally I love it. Thank you Planning magazine and thank you those who voted.

To declare another interest, personally I hate it. Inevitably good people are excluded – there may be seven solicitors from my firm in this year’s top 20 but, honestly, we could fill every place on it and more besides! And there are many lawyers from other firms who are as good (if being “good” is the criterion, as opposed to just having the necessary brand recognition – a large element of the rankings is inevitably down to brand recognition).  And have we spoken about the humble brags and (this is not meant as a humble brag) the imposter syndrome arising?

So, what is a planning lawyer in the first place? What does a planning solicitor do? What does a planning barrister do? What are you actually rating us on?

Planning law is short-hand for a fluctuating bundle of areas of law, the breadth or narrowness of the bundle depending on the individual. In England and Wales, its core is of course the Town and Country Planning Act 1990 and related legislation and case law, as a strand of public/administrative law. But nowadays I would expect specialist knowledge of aspects of highways law, heritage law, environmental law relevant to development consenting (including environmental impact assessment, strategic environmental assessment and habitats protection), the Freedom of Information Act and Environmental Information Regulations, the community infrastructure levy, local government law and other relevant legislative areas. Some may be particular specialists in for instance compulsory purchase, infrastructure planning, Parliamentary processes and/or rating.  I would also expect a working knowledge of other areas of law – in most roles you aren’t going to be getting far without a working knowledge of, for example, contract, tort, real estate, corporate, banking and trusts law – if only to the extent of knowing when to call in a specialist. If you engage at all in litigation, you need to understand court processes. And there are some areas which might be thought to be close to planning law which often fall in a different pigeon-hole, for instance housing law, alcohol and events licensing and the detailed operation of the Building Regulations.

Obviously, it’s a split legal profession in England and Wales: solicitors and barristers (not to forget legal executives as well).

What does a planning solicitor do?

  • Of course, much non-contentious legal work, including preparing and negotiating planning, highways and other statutory agreements.
  • Give specialist advice in relation to relevant aspects of real estate,  corporate or other corporate transactions.
  • Give advice as to strategy and legal interpretation – sometimes by way of an advice note equivalent to a barrister’s opinion, sometimes iteratively through close ongoing contact with the client and team.
  • Correspond with external parties (not the role of the Bar).
  • Undertake legal audits of draft application and environmental statement submissions in relation to more complex schemes.
  • On the contentious side, a solicitor needs to be on the record for the purposes of litigation and will usually co-ordinate the litigation process for their client , communicating with the court and the other parties and instructing the barrister.
  • For planning appeals and other statutory processes (eg highways, compulsory purchase) the extent of the solicitor’s role depends on the scale and complexity of the project and the wishes of the client – either right at the centre of things as coordinator, or being called upon for specific tasks.

Private practice solicitors will usually operate as a team, in a firm. You don’t instruct the individual – you instruct the firm.

What does a planning barrister do? You’re probably better off asking a planning barrister but here goes:

  • Advocacy in the High Court and beyond is the domain of those with a right of audience – barristers and those solicitors who have qualified to have the higher right. In litigation, advocacy is of course the final, most visible, lap – after initial advice has been given, pleadings settled and skeleton arguments prepared.
  • Anyone – lawyer, non-lawyer, barrister or solicitor – can appear as advocate at a planning inquiry, but again the Bar has retained a central advocacy role – a barrister is the natural choice as advocate for cases of any complexity given his or her experience and training. Even where the forum doesn’t call for traditional advocacy – eg hearings and examinations – the barrister can play a valuable role in marshalling and stress-testing the case, evidence and witnesses.
  • Giving advice, whether as to strategy or as to legal interpretation, whether in meetings  or by way of formal opinion.

Private practice barristers will usually operate within a set of chambers, as self-employed individuals.

There are a few activities, “reserved legal activities”,  which only can be carried out by an appropriately regulated lawyer. I’ve already mentioned the exercise of a right of audience. Another is the conduct of litigation (except in very specific circumstances non-lawyers should never be tempted to go on the record with the court in relation to legal proceedings). Another is preparing documents for registration at Land Registry and preparing other instruments relating to real or personal estate (I take this to include for instance section 106 agreements and agreements under section 38 of the Highways Act 1980 – solicitor or another qualified legal professional is required).

Maybe, aside from the usually forward looking focus in planning (“what is likely to happen/how can we influence that?” rather than “what happened/who was to blame?”) the teamwork element is what is most enjoyable. There are many areas where there are potential overlaps between the roles of lawyers and planners. I hope that a big part of what clients rate all of us on, lawyers and planners alike, is the extent to which we can:

  • work in seamless and efficient project teams.
  • explain clearly for them our now ridiculously complex planning system and collectively guide them to good outcomes
  • remain professional – people they can trust.

I suspect I have only scratched the surface. And that you will have views. What have I missed?

Simon Ricketts, 17 June 2023

Personal views, et cetera

All Tomorrow’s (Section 106) Parties

This post was prompted by the recent High Court judgment in Link Park Heathrow LLP v Secretary of State (Waksman J, 10 May 2023).

If I had a penny for every time I’ve been asked whether all those with a legal interest in the development site need to be a party to a section 106 agreement or unilateral undertaking…

In fact, my usual going rate is more than a penny. But have this for free:

Let’s start with the statutory power. Section 106 (1) of the Town and Country Planning Act 1990 provides as follows:

“Any person interested in land in the area of a local planning authority may, by agreement or otherwise, enter into an obligation (referred to in this section and section 106A as “a planning obligation”), enforceable to the extent mentioned in subsection (3)—

(a) restricting the development or use of the land in any specified way;

(b) requiring specified operations or activities to be carried out in, on, under or over the land;

(c) requiring the land to be used in any specified way; or

(d) requiring a sum or sums to be paid to the authority (or, in a case where section 2E applies, to the Greater London Authority) on a specified date or dates or periodically.”

A planning obligation, which may be documented by way of agreement or unilateral undertaking, is given a particular legal effect (super power, really) by sub-section 106 (3): it isn’t just enforceable against the person entering into the obligation but also against any person deriving title from that person. And sub-section (4) makes it clear that the agreement or undertaking may provide that a person shall not be bound by the obligation in respect of any period during which he no longer has an interest in the land.

The purpose of a planning obligation is to secure any legally binding commitments that can’t be secured by way of planning condition and which are necessary to make the proposed development acceptable in planning terms.

It makes sense that the local planning authority’s solicitor needs to make sure that the planning obligation binds, as parties, all those with interests in the land which it is necessary to have on the hook, such that there can be no risk that anyone else with an interest in the land can carry out the development, or any part of it, free from any planning obligations which would need to be complied with in order for the development, or that part of it at least, to be acceptable in planning terms.

There is no blanket rule that all those with an interest in the land need to be a party to the planning obligation. Of course that is tidiest. But often it will be the case that a meaningful part of the development can’t be carried out by an individual landowner of part of the site in a way that would be problematic even if that owner were not a party to the agreement or undertaking and if it will not be straight-forward to have that landowner agree to be a party, some thinking needs to be done.. What can be built pursuant to the approved plans on the relevant parcel? Is there any other reason why there is in fact no risk of the mitigation not being provided pursuant to the section 106 agreement or undertaking as intended?

There’s a useful case, R (McLaren) v Woking Borough Council [2021] EWHC 698, which strangely isn’t online but, having checked the rules as to hierarchy of case citation, I feel comfortable relying on Killian Garvey’s LinkedIn feed as the most authoritative report of it (you’re right up there with the All England Reports in my world Killian):

“In McLaren a landowner brought a legal challenge against the grant of planning permission, essentially on the basis that they owned 50% of the site that permission had been granted for and they had not signed the section 106 agreement. The High Court held that there was no error of law in this.

The critical part of the judgment is as follows:

21. In my view, this ground does not raise an arguable legal or public law error. The s.106 agreement follows the requirements of s.106 of the Town and Country Planning Act 1990 . It is in the form of a deed. It identifies, by the definitions referred to, the land in which the person entering the obligation, i.e. New Central, is interested, and the interest which the person entering into the obligation has. It will be recalled that recital 2 of the agreement stated that New Central was the owner of the land with title absolute at HM Land Registry under the number I have referred to and shown hatched blue on the plan. Despite infelicities in the drafting of cl.2, which I have quoted, interpreted in context it expresses the intention of the owner, New Central, to bind its freehold interest in the land, in other words, approximately one-half of the area of the site, the part which it owns.

22. Further, I cannot see any legal requirement that a s.106 obligation ought to bind all material interests in a planning application site. Those with no interest in land can apply for planning permission in respect of it, as Mr Mohamed conceded, and a local planning authority can grant planning permission on taking material considerations into account. On my reading it was not a pre-condition of the Planning Committee’s decision in 2017 for the claimants to be a party to the s.106 agreement. That is not what the report says in its conclusion, and the passage immediately following, under the heading “Planning Obligation”, which I quoted earlier. The fact is that the obligation binds a sufficient part of the site, namely, that belonging to New Central, to preclude development unless its purposes are met. I would add that the claimants have not been excluded from the agreement; they may unilaterally bind themselves at any time to its obligations if they choose to do so.”

Often, if it would be problematic in planning terms to allow development to proceed without a particular owner being bound by the planning obligations, the authority can impose what is known as an Arsenal-type condition to cover off the position. The mechanism is so named because it was used in relation to the Emirates Stadium development (not because it is in any way second best). Basically, the condition prevents development being carried out unless the remaining landowners first enter into a deed adhering to the obligations in the agreement or undertaking. The Government’s Planning Practice Guidance advises as follows:

“Is it possible to use a condition to require an applicant to enter into a planning obligation or an agreement under other powers?

A positively worded condition which requires the applicant to enter into a planning obligation under section 106 of the Town and Country Planning Act 1990 or an agreement under other powers, is unlikely to pass the test of enforceability.

A negatively worded condition limiting the development that can take place until a planning obligation or other agreement has been entered into is unlikely to be appropriate in the majority of cases. Ensuring that any planning obligation or other agreement is entered into prior to granting planning permission is the best way to deliver sufficient certainty for all parties about what is being agreed. It encourages the parties to finalise the planning obligation or other agreement in a timely manner and is important in the interests of maintaining transparency.

However, in exceptional circumstances a negatively worded condition requiring a planning obligation or other agreement to be entered into before certain development can commence may be appropriate, where there is clear evidence that the delivery of the development would otherwise be at serious risk (this may apply in the case of particularly complex development schemes). In such cases the 6 tests should also be met.

[…]

Paragraph: 010 Reference ID: 21a-010-20190723”

This makes sense. Otherwise how would planning permission ever be possible in advance, for instance, of compulsory purchase that may be needed to unlock the development, or of vacant possession being secured?

I don’t know what other people’s experience is, but I am finding inspectors frequently to be taking a hard line and you may not find this out until it is too late – when the decision letter is issued.

Perhaps the word “normally” is being overlooked in the Planning Inspectorate’s Planning Obligations: Good Practice Advice, which states:

“Normally all persons with an interest in land affected by a planning obligation – including freeholders, leaseholders, holders of any estate contracts and any mortgagees – must sign the obligation.”

Which brings us to Link Park Heathrow LLP v Secretary of State (Waksman J, 10 May 2023) (Town Legal acting for the claimant, instructing Rupert Warren KC)). This related to a proposal for a large data centre. There were a number of occupational tenants on the site which were not made party to the necessary section 106 unilateral undertakings.

In my view there was a perfectly respectable case for saying that the tenants did not need to be made party to the planning obligations in any event: the freeholder was bound and in any event none of the tenants could in practice carry out any meaningful element of the proposed data centre development on the area of the site demised to them. But that’s by the bye because the appellant and the two relevant local planning authorities had agreed a proposed Arsenal-type condition which was in this form:

“No work shall be carried out under this planning permission in the area shown hatched purple on the plan…

a) until either all parties with any interest in the area shown hatched purple have entered into a s.106 unilateral undertaking on the same terms on which this permission is granted or

b) such interests have come to an end and evidence of it having come to an end has been provided to the Council.

Reason: The planning permission has been granted subject to a s.106 unilateral undertaking and at the time of this permission being issued the applicant is not able to bind all relevant parties and interests in the site to the terms of the planning obligations that it contains.”

The appeal was by way of a hearing, which of course has its own limitations in terms of the opportunity for detailed debate on these matters. The Inspector dismissed the appeal and his decision letter contained the following conclusions as to whether it was sufficiently certain that the mitigation provided for in the unilateral undertakings would be delivered:

“51. The evidence before me was indicative that the area under jurisdiction of Buckinghamshire experiences residents migrating to other areas to undertake their employment. To mitigate this, the Council seeks the provision of employment and training opportunities on new developments in their area.

52. A planning obligation should run with the affected land. This means that should the land be transferred to a different owner the obligations within the agreement would be enforceable against the future owners. Therefore, a legal agreement should be signed by all parties with an interest in the land. The undertakings that have been submitted as part of the appeal proceedings have been signed by the landowner and the mortgagee, however, they have not been signed by leaseholders that occupy parts of the site. This means that not all of those who have an interest in the land are parties to the undertakings.

53. Therefore, in the event of these unilateral undertakings being breached, the Council cannot take enforcement action against the leaseholders. In consequence, I do not believe that the submitted unilateral undertakings provide me with sufficient certainty that the required mitigation would be provided.

54. I note that the unilateral undertakings have clauses that require that any leaseholds be surrendered prior to development commencing and that a planning condition could be imposed that would ensure that prior to development commencing the leasehold land was bound a legal agreement consistent with the submitted unilateral undertakings.

55. However, layout of the Development has been reserved for future consideration, therefore, at this juncture there is a possibility the land that is covered by the current leases might be the first to be developed. In consequence, if there is not an agreement in place at this point the respective councils would not be able to take enforcement actions against such a breach. Therefore, I must conclude the Development would not provide the required mitigation.

56. The appellant suggested this approach had been taken previously on another site outside the jurisdiction of the Councils involved in this appeal. I do not have full information regarding the planning circumstances of this, which means I can only give this matter a limited amount of weight. Nonetheless, I do not believe the circumstances of the appeal scheme, particularly given my previous conclusions, warrant diverging from the approach of having all the interested parties signing the unilateral undertaking.”

Where in the above is any consideration as to whether the proposed Arsenal-type condition agreed between the parties provided an appropriate solution? This was one of three separate grounds on which the court quashed the decision:

“As [the claimant] contends, either the Inspector misunderstood the effect of this condition, which was an error of law, or if he did understand it he did not take it into account in reaching his conclusion, which was that he was not prepared to remedy the problem of the unenforceable Undertaking before him while it was a material consideration in that regard. Either way, this rendered his decision unlawful.”

I don’t know if others have experienced equivalent reluctance on the part of inspectors to accept Arsenal-type conditions? This was also an issue at the planning appeal stage in Satnam Millennium Limited v Secretary of State (Sir Duncan Ouseley, 8 October 2019) (Town Legal acting for the claimant, instructing Christopher Lockhart-Mummery KC and Heather Sargent) but the decision was quashed on other grounds.

We were also recently acting on a case where the appellant was an overseas company but, before our involvement, had not volunteered to the inspector a foreign lawyer’s opinion to confirm that the relevant unilateral undertaking had been validly executed (the point hadn’t been raised by the local planning authority). This was the only ground on which the appeal was dismissed. The Government Legal Department consented to judgment and the appeal is now being re-determined.

Many banana skins out there, for applicants/appellants and decision-makers alike.

Simon Ricketts, 9 June 2023

Personal views, et cetera

Image courtesy of Andy Warhol via Billboard

Responsible Actors

When do the ends justify the means?

I wrote about Michael Gove’s strong arm tactic to secure contributions from developers towards cladding and other building defect issues, in my 18 February 2022 blog post Developers As Proscribed Organisations: The Government’s Amendments to the Building Safety Bill. The Bill was enacted, including section 128 (prohibition on development for prescribed persons) and section 129 (building control provisions).

By way of the responsible actors scheme (the subject of this DLUHC guide), the Secretary of State can decide to exclude particular businesses (developers) from operating (developing). The background, as to the Grenfell tragedy (albeit with multiple points of culpability) and failings across many other developments, is understood but this is quite a market intervention for a Conservative Government and more of a v-turn than u-turn from the days of “red tape challenges” and similar (literally) dangerous nonsense.

How the process is going to work is now clearer, the draft Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 having been laid before Parliament on 25 April 2023, together with a helpful explanatory memorandum.

I’m going to quote a large chunk of that memorandum:

“7.2 Since the Grenfell Tower Fire, it has become evident that a very significant number of residential buildings of 11 metres and above in height were clad with unsafe materials which posed a fire safety risk to residents.

7.3 In January 2022, the Government set out its position that industry actors that had profited from the events leading up to the crisis must pay to fix the problems they created, and that the wider industry must also contribute to resolving these issues. Our objective with this instrument is to ensure that developers pay an appropriate share of remediation costs.

7.4 The Government initially secured (by Summer 2022) a public pledge from 49 larger developers, committing to fix life-critical fire safety defects in residential buildings 11 metres or more in height which they developed or refurbished in England between 1992 and 2022. In July 2022, the Government published an initial draft developer remediation contract, followed by a period of sustained and intensive engagement with around fifty major developers, coordinated by the Home Builders Federation, until January 2023 on how the Pledge commitments should be codified into a binding contract. The contract terms also include requirements that signatory developers keep residents in buildings which are undergoing remediation informed of progress, and to reimburse taxpayers for money that has already been spent to fix buildings through government funds.

7.5 The developer remediation contract is at the heart of the RAS. The Government has been consistent in its public position that developers who are eligible for the scheme but who elect not to make the important commitments set out in the developer remediation contract, or who fail to comply with its terms, should expect to face significant consequences given the significance and urgency of this problem. In such circumstances, they will be prohibited from carrying out major development and gaining building control sign-off in England, subject to certain exceptions set out in the instrument. The RAS is intended to support a level playing field for major developers in the industry, so that those developers who do make commitments to remediate are not disadvantaged. As of 21 April 2023, and subject to change, 46 of the 50 developers who have been invited to sign the contract have done so. In signing the contract, they have committed to remediation works estimated by the industry to be worth over £2 billion.

7.6 The description of who is eligible for the scheme captures, in both cases by reference to meeting a profits threshold [“average adjusted operating profits of over £10m per year over three years from 2017-2019”], (i) major housebuilders who have developed 11m+ residential buildings, and (ii) other large developers who have developed or refurbished two or more residential buildings that are known to have fire safety defects by virtue of having been assessed as eligible for a relevant government cladding remediation scheme. There is also a route for other developers who developed a defective building to volunteer to join the scheme. The developer selfremediation approach, and the RAS, is to be expanded over time to cover other 4 CO/EM/2022.3 developers who developed or refurbished defective 11m+ residential buildings and should pay to fix them.

7.7 As with the developer remediation contract, the RAS aims to improve the safety of buildings by requiring that any member of the RAS must identify and remediate, or pay for the remediation of, life-critical fire safety defects in residential buildings of over 11m in height which they developed or refurbished between 1992 and 2022. To join the scheme, members of the RAS will be required to enter into the developer remediation contract with DLUHC as published by DLUHC on 16 March 2023 and available at: https://www.gov.uk/government/publications/developer-remediationcontract, and comply with its terms.

7.8 The prohibitions in this instrument relate to persons who are eligible under the instrument for the new RAS scheme and do not join, or who join but who subsequently fail to comply with the scheme conditions and have their membership revoked, and persons controlled by them. It is necessary for the effectiveness of the scheme and prohibitions to include persons under the control of the prohibited developer so that a prohibited developer cannot continue their development business through other entities which they control.

7.9 The regulations enable Secretary of State to make exceptions from the prohibitions covering five main circumstances: businesses under the control of an eligible person who are not in the building industry; exceptions for projects necessary for critical national infrastructure; allowing building control sign-off for residential buildings where people have exchanged contracts on their new home before the prohibition on their developer went into effect; permitting purchasers and owners to obtain a regularisation certificate for unauthorised building work under the Building Regulations 2010; permitting emergency repair works; and permitting building works in occupied buildings to ensure resident safety.”

“11.1 We plan to issue guidance on the operation of the scheme and to local authorities on the operation of the statutory prohibitions. The guidance will be made publicly available by Summer 2023. Because of the time limits provided for in the instrument, this guidance will be available well in advance of the prohibitions being applied to any developer.”

According to the latest DLUHC update, 48 developers have so far signed the developer remediation contract. Three developers are named as being yet to sign the contract.

It may be a brutally effective measure. But imagine if a similar approach was taken to another industry, for example the media or (hmm) water utilities or (hmm hmm) some arms of state activity?

Simon Ricketts, 3 June 2023

Personal views, et cetera

Pic courtesy of Wesley Pibaldi via Unsplash