Court of Appeal ruling on effectiveness of 106 mitigation
An interesting piece of case law was issued by the Court of Appeal on 12 September concerning s106 covenants and their effectiveness in mitigating harm. The question came down to the reasonableness of refusing planning permission even where an apparently adequate s106 contribution had been offered.
The case is Gladman Developments Ltd v Secretary of State. The development proposals were for (variously) 330 dwellings/140 dwellings and 60 extra care units. The site was within an area designated as an “Air Quality Management Area” under the Air Quality Directive 2008.
Gladman had offered by way of a section 106 undertaking the sum of £311,000 towards air quality management. Its offer was based on a formula published by DEFRA. The formula itself was not criticised. What was criticised by the planning inspector in his refusal of the appeal, was the failure by the developer to show how the contribution translated into actual measures likely to reduce the use of private petrol and diesel vehicles.
The Court of Appeal agreed with the High Court that, on the applications before him, the inspector had been left to form his own judgement on air quality questions “without knowing what measures the government’s new national air quality plan would contain… Nor did he know how measures taken at the national level would translate into local measures.” He could not be criticised for his failure to speculate about as-yet unknown measures to improve air quality. “He was entitled to rely, as he did, on the evidence before him, rather than evidence that might have been produced but was not.”
The inspector, in other words, had exercised his planning judgement. Merely because what was regarded as an appropriate formula had been followed in calculating a financial contribution, that was no guarantee of mitigation in itself. It was the failure to translate that £311,000 into concrete measures of mitigation that caused the problem here.
The Gladman case is a really useful re-statement of the tests for all 106 contributions which a planning permission is given in consideration of: that it be (a) necessary to make the development acceptable in planning terms, (b) directly related to the development, and (c) fairly and reasonably related in scale and kind to the development. Admittedly it doesn’t actually say “and provided”, but I think ‘provision’ is inherent at least to (b) and (c) if not (a) as well.
It is also interesting that the refusal in this case turned on a matter which the local planning authority had not used as a reason for refusal before the appeal was made. That highlights one of the real dangers of going to appeal: a fresh decision-maker’s interest in quite different aspects of the proposal than have been of concern throughout a long and expensive application process!
For more information contact Oliver Bussell, Partner in our Commercial Property Team based in Sevenoaks and Ashford.