Legal Viewpoint: Judgment clarifies status of historical obligations

The High Court has clarified the tests required to remove historic planning obligations. It concluded that an obligation imposed in 1998 requiring a developer to pay 75 per cent of the cost of a road built by a Nottinghamshire council still served a useful purpose, even though it was not 'necessary' to make the development in question acceptable.

The scheme approved in 1998 was not implemented, but further permissions were granted and the obligation was carried through in successive section 106 agreements. The last of these required payment in full after five-and-a-half years, even if the permission was not implemented. Although the site remained undeveloped, the obligation to pay the outstanding contribution, amounting to nearly £300,000, was triggered in 2016. The developer applied to discharge the obligation and then appealed against non-determination.

The inspector allowed the appeal (DCS Number 400-017-505), deciding that the obligation no longer served a useful purpose. In her opinion, the fact that the road had been in place for a while meant the obligation to pay was not "directly related" to the most recent permission, so it was not necessary to make the development acceptable. The High Court agreed with the council that the inspector had made an error in law by failing to identify the obligation's useful purpose or whether that purpose remained to be served.

Mr Justice Garnham found the statutory test clear. Despite conflicting case law on the issue, he found that section 106A of the Town and Country Planning Act 1990 does not specify that an obligation’s purpose must be a "planning" purpose. He held that the obligation still served a "substantial public purpose" because it encouraged cooperation between councils and developers and, if it were removed before reimbursement, this would be a "considerable disservice to the public interest".

The ruling brings clarity to the section 106A test, dispels confusion over regulation 122 of the Community Infrastructure Levy Regulations 2010 and illustrates that a historic connection between an obligation and a development site can still be "real and substantial". It also underlines the importance of preparing a good case – the council's was criticised and this was considered in the costs claim. Lastly, it reminds us of the importance of linking section 106 obligations to implementation of the relevant permission. In this case, that would have saved the developer and the council time and money.

R (Mansfield District Council) v Secretary of State for Housing, Communities and Local Government; Date: 13 July 2018; Ref: [2018] EWHC 1794 (Admin)

Kathryn Hampton is senior knowledge lawyer in the planning team at Hogan Lovells International

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