Re-stating the obvious

Housebuilding iStock 000008203889XSmall 146x219The Court of Appeal has recently considered planning authorities' use of s.106 obligations to prohibit applications for parking permits. John Pugh-Smith reports on the outcome.

With the desire to achieve truly “sustainable development” as well as reducing unwanted congestion to the roads and controlled parking zones affected Planning Authorities, especially within London, have tried to achieve new “car-free” residential developments. Both through the absence of dedicated parking areas but also, through section 106 obligations, they have sought to prohibit applications for parking permits not just for first occupations but also for subsequent owners and occupiers.

In the recent case of R (Khodari) v Kensington and Chelsea RBC [2017] EWCA Civ 333, a judicial review claim was brought by a disgruntled lessee of an existing flatted building, who would be dispossessed if the permitted re-development proceeded, over the legality of this prohibition. At first instance the claim succeeded, and, the related permission was quashed. However, giving judgment on 11 May 2017, the Court of Appeal reversed that decision, and, in so doing has clarified the position. In essence, the Court decided that Section 106 of the Town and Country Planning Act 1990 could not be used to prevent occupants from applying for car-parking permits. However, this restriction was legally enforceable under the ambit of Section 16 of the Greater London Council (General Powers) Act 1974.

Brief facts

The consolidated challenges concerned two consents. The first permission, granted in March 2015, allowed the developer to convert 31 Egerton Gardens, Knightsbridge from five flats to eight through internal works only. Due to parking pressure in the area, RBKC had required the developer, Cedar Park Holdings plc, to enter an obligation that future occupiers of the additional units would not apply for a parking permit and required the developer to pay a one-off monitoring fee designed to enable RBKC to ‘police’ the obligation. The second, alternative, permission, granted in June 2016, allowed the developer to reconfigure the building from five flats in their existing form to five flats of different sizes. However, since there was no increase in the number of units no obligations about parking were involved. In both instances, Mr & Mrs Khodari would have to vacate their flat under a re-development break clause.

In respect of the parking obligation the references in Section 106 to "the land" had to mean land in which the person making the agreement was interested. "The land" in question could be land other than that covered by the permission, provided that there was a direct relationship between the two; but the person entering into the Section 106 agreement still had to have an interest in that land. In the instant case, the only land identified was the building itself. The use which the local authority sought to prevent was not use of any particular flat in the building, but use of the highway for parking. That was not use of the property. The imposition of a covenant in any lease of a flat took the case no further because the subject-matter of the covenant was not the use of the flat. Accordingly, the parking obligation was not capable of being a planning obligation under Section 106. In this regard, the Court of Appeal has confirmed the legal position provided by the High Court in Westminster City Council v SSCLG [2013] EWHC 690 (Admin).

However, following its normal practice, RBKC had also included a declaration that the planning agreement was also being made under Section 16 of the Greater London Council (General Powers) Act 1974. Under Section16 an agreement had to be made "in connection with the land". It was therefore not a requirement that the agreement regulated the use of the land itself. "In connection with" had a wide meaning. Here, there was a "connection" between the use of the three additional units for residential purposes and the potential for the grant of additional parking permits, not least because qualification for a parking permit was residence within the borough. There was therefore a sufficient connection between the requirements imposed by the deed and the proposed development.

Regarding the obligation to pay a monitoring fee, it was a one-off payment to be made on execution of the deed. There was no question of it being enforced against successors in title. In a sense, s.106 was irrelevant. As section 106(1)(d) expressly authorised an obligation requiring a sum to be paid to a local authority, the obligation to pay the monitoring fee fell within the literal scope of the section. That potentially brought into play Regn. 122 of the Community Infrastructure Regulations 2010 which provides that a planning obligation may "only constitute a reason for granting planning permission" if it satisfied certain tests. The first question had to be whether an agreement to pay the monitoring fee was a reason for granting permission. The formal recommendation for permission did not mention the fee, nor was it mentioned in the committee debate adopting the recommendation. The payment was therefore not a reason for granting the permission and Regn.22 did not present an obstacle to it. That obligation was valid.

Comment

While this judgment brings some clarity to these issues it does so in a rather unsatisfactory way given that obligations made under section 16 of the 1974 Act will avoid the legal test, now enshrined in Regn. 122, namely, that obligations must be necessary, fair and reasonable if they are to constitute a reason for granting planning permission. It also still leaves open the prospect that such obligations are likely to be invalid and unenforceable outside the London Boroughs where the 1974 Act does not apply. In other cases, the validity of the monitoring fee may also require further scrutiny, depending on how that issue is treated in the officer report and committee debate.

The case is yet another reminder that planning officers should not be allowed to use Section 106 agreements as the ‘dumping ground’ for a variety of policy attractive but potentially unlawful requirements. Equally, the developer desperate for his decision notice, should be slower to sign up to them without taking expert legal advice.

The Other Issue

Before the High Court (Judge Sycamore QC) Mr Khodari's separate challenge that RBKC had failed, on both permissions, to consider that the building was, or should have been identified as, an undesignated heritage asset, and that the development would destroy important interior features. The Court of Appeal upheld that aspect of the judgment, observing that whether an asset satisfied the definition of "heritage asset" was a matter of planning judgment. Here, the heritage significance of the building and the potential loss of internal features had been at the forefront of the planning committee's decisions so the challenge failed on the facts.

However, giving the lead judgment, Lord Justice Lewison tantalisingly remarked (at para. 21):

“I would accept that the loss of internal features is capable of being a material consideration even though those features could be removed without the need for planning permission where that loss is an integral part of development that does not require permission”

Applying that logic it could follow that views of the interior (for example, in twilight without curtains being drawn of internal features like plasterwork, fireplaces, even certain fixed light fittings such as chandeliers) could become relevant, particularly where an unlisted building within a conservation area is being remodelled. At least on the outworking of this aspect of Khodari’s unsuccessful challenges we will need to await further clarification, and, perhaps from a differently constituted Court of Appeal?

John Pugh-Smith is a barrister at 39 Essex Chambers. He can be contactedThis email address is being protected from spambots. You need JavaScript enabled to view it..