Developer not tied to original planning obligation after permission updated, High Court rules

The High Court yesterday granted developer Norfolk Homes a declaration confirming that its scheme granted a new permission under section 73 is not bound by the section 106 planning gain agreement that formed part of the original consent.

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

North Norfolk District Council (NNDC) originally gave outline consent to housebuilder Norfolk Homes’ application for up to 85 homes in Holt in June 2012. This permission was subject to a section 106 agreement that included provision of 45 per cent affordable housing along with other financial contributions.

Under section 73 of the Town and Country Planning Act 1990, an applicant can have specific conditions of a permission changed or withdrawn without having the whole application reassessed. On this basis, the developer successfully sought new permissions for the scheme in September 2013 and September 2015, varying the original permission.

In September 2018, the council issued a decision notice refusing a certificate that the later permission could lawfully be implemented without triggering the landowner's section 106 obligations under the 2012 agreement.

But in a judgment handed down remotely yesterday, Mr Justice Holgate ruled that the original s106 agreement had not been explicitly linked to the later permissions. "The grant of these permissions was not made contingent upon the prior execution of any further s.106 obligation, in particular, one imposing the same requirements as those contained in the agreement of June 2012,” his judgment notes.

In a related case referenced in the judgment, a Supreme Court decision last July ruled that a planning condition against selling food from a London retail premises remained valid, even though a later variation to the original permission failed to include such a restriction.

The council argued that this decision meant that the section 106 agreement with Norfolk Homes should be interpreted as also covering development under the new permission, or that this should be implied into the original agreement. However the court dismissed both arguments.

“I cannot accept that the implied language for which NNDC contends is necessary to give efficacy to the 2012 agreement or that the implication is so obvious that it went without saying,” Holgate ruled. “Accordingly, NNDC's argument fails at this first hurdle.”

He stated: "Parties to a s.106 agreement may choose to agree explicitly that the performance of the obligations created applies not only to the planning permission then being granted but also to any subsequent s.73 permission... But if parties reach such an agreement, or a developer offers such an undertaking, they will have had the opportunity to take advice on the statutory framework and the legal implications of the promises they make.

"NNDC has not demonstrated why parties who have entered into an agreement without such explicit language should nevertheless be treated as having tied their hands in the same way in relation to the unknown content and circumstances of future s. 73 applications.”

Norfolk County Council, a co-defendant in the case, was not represented.

Norfolk Homes was represented in the case by Christopher Lockhart-Mummery QC, instructed by DLA Piper.

DLA Piper's development planning lawyer Trevor Ivory said in his LinkedIn summary of the case: “If you are developing pursuant to a section 73 permission and the original planning obligation was not varied, you might want to take a close look at the terms of the agreement to check whether you need to comply or not.”

He told Planning: "The key thing for the planning authority is that, with a section 73 permission, think about whether you need to amend agreements to ensure they are tied to the new permission - though most authorities will do this automatically, or the original section 106 may have provision tying it to future section 73 agreements. Like the Lambeth case, ultimately, it's a drafting point."

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