High Court to probe whether s106 agreements remain binding following consent variations

A judge has granted permission for a full High Court hearing to examine whether, in cases where planning permissions are varied, previous section 106 agreements remain binding.

London's Royal Courts of Justice
London's Royal Courts of Justice

North Norfolk District Council in June 2012 granted outline planning permission (the 2012 permission) for construction of 85 new homes on land off Cley Road and Woodfield Road, Holt. The land has since been acquired by developers, Norfolk Homes Limited.

The 2012 permission was subject to a section 106 agreement which provided for an affordable housing scheme, a key planning priority for the council. This required the developer to contribute financially towards a local recreation ground, car parking, community centre and nature conservation.

In 2015, a varied consent (the 2015 permission) was issued in which conditions relating to green energy and to the rating of sustainable homes were replaced to take account of recent policy developments.

Unusually, the 2015 permission did not include an increasingly standard clause to the effect that the section 106 agreement was to remain binding.

Reserved matters were approved by the council in 2016 and the development had since been commenced by the excavation and laying of foundations to one of the new dwellings.

In August last year, however, Norfolk Homes sought confirmation from the council that it was no longer bound by the section 106 agreement attached to the 2012 permission.

After that confirmation was not forthcoming, the developer launched proceedings and the council contended that the development could not lawfully be implemented without triggering the section 106 obligations.

In seeking summary judgment on the issue, Norfolk Homes argued that it was "as plain as a pikestaff" that the section 106 agreement was expressly tied to the implementation of the 2012 permission.

The development had been commenced under the "separate and independent" 2015 permission, which was subject to no such agreement.

The council, however, argued that the case raised "a cogent and novel point of law" that needed to be resolved following a full hearing.

Viewed in context, it was submitted that the section 106 agreement continued to apply to the 2015 permission.

Norfolk Homes had previously made payments under the section 106 agreement and the council contended that that was evidence of a mutual understanding that it continued to be binding. The developer, however, argued that the payments had been made without prejudice and were legally irrelevant.

Ruling on Norfolk Homes' application, Mrs Justice Thornton was not persuaded that the council had no reasonable prospect of successfully defending the claim.

Summary judgment was refused, paving the way for a full trial in what promises to be a test case on the issue. No date for that hearing was set.

Norfolk Homes Limited v North North District Council & Anr. Case Number: QB-2019-004500

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