Batchelor Enterprises Ltd., R (on the application of) v North Dorset District Council [2003] EWHC 3006 (Admin)

Case No CO/2791/2003[2003] EWHC 3006 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Friday, 28 November 2003
Strand
London WC2
B E F O R E:
MR JUSTICE SULLIVAN
THE QUEEN ON THE APPLICATION OF BATCHELOR ENTERPRISES LIMITED
(CLAIMANT)
-v-
NORTH DORSET DISTRICT COUNCIL
(DEFENDANT)
Computer-Aided Transcript of the Stenograph Notes of
Smith Bernal Wordwave Limited
190 Fleet Street London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
MR JAMES FINDLAY (instructed by Battens Solicitors) appeared on behalf of the CLAIMANT
MR PETER HARRISON (instructed by Legal Services, North Dorset District Council) appeared on behalf of the DEFENDANT
J U D G M E N T
Between
Batchelor Enterprises Ltd., R (on the application of)ClaimantNorth Dorset District CouncilDefendant

MR JUSTICE SULLIVAN: Introduction

[2]This is an application for judicial review of a decision of the defendant's Development Control Committee on 29 April 2003, communicated to the claimant on 6 May, not to agree to a request under section 106A(1)(a) of the Town and Country Planning Act 1990 ("the Act") to modify an agreement made under section 106 of the Act dated 30 July 1999 ("the agreement") relating to land known as Oakcrest Service Station, Bournemouth Road, Charlton Marshall, Dorset ("the site"). The factual background[3]The claimant owns the site and applied for planning permission to redevelop the former service station with five houses in January 1999. Planning permission was granted on 3 August 1999, after the claimant had entered into the agreement. The site is situated at the junction between the A350 Bournemouth Road, a busy main road, and Greenfield Road. As Greenfield Road approaches Bournemouth Road it splits into two, which for convenience I will refer to as access A and access B. A grassed "island" of land was enclosed between accesses A and B and the Bournemouth Road. It seems that when the service station was in use as such, access B went across part of the forecourt. At the time that planning permission was granted in August 1999 it was not appreciated by either the claimant or the defendant that the access to the A350 across the forecourt was, at least in part, a public highway. The residential development envisaged closing off the access across the forecourt and constructing houses on that part of the site, leaving access A as the sole means of access from Greenfield Road to the A350.[4]The agreement provided that:
"The owner shall at all times hereafter maintain that part of the property shown coloured green on the plan annexed as a grassed open area in a clean and tidy condition free from any buildings or other structures of any kind dedicated in perpetuity as a grassed area of open space land for the benefit and enjoyment of the public."
The area shown coloured green comprised part of the island of land enclosed between accesses A and B and the A350. After construction of the houses had commenced, it was discovered that access B across the former forecourt was a public highway. The partially constructed houses obstructed the highway. Worked ceased and the claimant sought to resolve the problem by making a number of applications. An attempt was made, unsuccessfully, to obtain a stopping up order for access B, leaving access A as the sole means of access to the A350. Application was also made for planning permission for a four house scheme which would leave accesses A and B in situ.[5]The defendant has resolved to grant planning permission for the four house scheme subject to the claimant entering into a further section 106 agreement, in effect revoking the five house scheme. Application was also made for planning permission for a revised five house scheme which, coupled with a stopping up order for accesses A and B, made provision for a new access to the A350 somewhat to the north of the former alignment of access B. Construction of this new access would encroach onto the land which was required to be maintained as a grassed area under the terms of the agreement.[6]The defendant refused planning permission and objected to the draft stopping up order. The claimant appealed to the Secretary of State and an inspector held a public inquiry on 28 and 29 May 2002. At the inquiry the defendant objected to the loss of part of the grassed area saying:
"The area now measures 17m x 50m maximum, is in a very prominent position in the street scene, and is clearly visible from the A350 and from Greenfield Road. It is enjoyed by residents for dog exercising, children's play and walking. The new access would occupy about one fifth of the remaining green area. That reduction in its size, the introduction of the new road and its footways, and the prominence of the new bollards associated with the stopping up of access A, would result in the character and appearance of the area being materially harmed ... "
Also, the availability of an alternative permission may be a material consideration. The new junction is not needed for the redevelopment of the Oakcrest Service Station site. [an application] has been approved subject to formalities for a redevelopment of four dwellings which (i) would be high density; (ii) could be achieved without a new junction; (iii) would not require the stopping up of roads; and (iv) would retrieve much of the grassed area from beneath the partly completed development."[7]The inspector's conclusions included the following:
"60. The grassed area is too close to a busy main road to be of utility for children's play and too small for dog walking. Also, it seems to me that the Promoters are entitled to have their scheme considered on its merits rather than -- as is suggested by the District Council -- significant weight being placed upon the fact that the local planning authority has resolved to approve a development that would make the closure of accesses A or B unnecessary."
[8]The inspector identified two main issues in paragraph 63 of his report:
"I consider therefore the main issues to be whether the proposal would (1) harm the character and appearance of the locality; and (2) prejudice highway safety."
[9]His conclusions in respect of the first of those issues were as follows:
"69. The swathe of grassland that would remain after the introduction of the new access and the widening of the footway would be about 50 per cent of that which existed before construction of the five dwellings commenced and about 80 per cent of that which is the subject of the section 106 agreement. Its frontage would however, albeit only slightly, still extend further to the south east than the garden to the most easterly of the four bungalows, and its north western limit would be unchanged. As a consequence the transitional visual role served by the grassland would not be materially affected by the appeal works, indeed its value to the local scene could be enhanced if, as is suggested by the Promoters, some tree planting took place behind the visibility splay. "70. I conclude therefore on the first issue that the proposal would not materially harm the character and appearance of the surrounding area. It would thus accord with adopted and emerging policies that seek to protect the environment."
[10]The inspector also considered the implications of the agreement. He said this:
"79. The Council submits that any planning permission granted for the new access would be incapable of implementation without contravening the terms of the section 106 agreement, ie the new access would occupy the eastern end of the green area that the Agreement protects. However whilst the council is clearly correct, this need not affect the granting of permission. I say this for two reasons: "80. First, the promoters can agree at any time with the District Council for the agreement to be modified. Should the Secretary of State decide to grant permission, in considering whether or not to treat with the Promoters I would expect the Council to take into account the Secretary of State's reasoning and my conclusions in this report -- particularly those relating to the significance of the open space in terms of its impact on its character in the context of its setting. Secondly, after 30 July 2004, and by virtue of section S106A(4)(b) of the 1990 Act, the Promoters can apply to the District Council for the agreement to be modified. This would only be two years in, to a planning permission with the normal implementation period of five years."
[11]In his decision letter dated 17 September 2002, the Secretary of State agreed with those conclusions. He said that the main issues were: whether the proposal would harm the character and appearance of the locality; and whether the proposal would prejudice highway safety. Dealing with the first of those two issues, the Secretary of State said this in paragraphs 7 and 8 of the decision letter:
"7. The Secretary of State notes that the North Dorset District Council granted planning permission for five dwellings on land to the south east of the appeal site. That planning permission was subject to a section 106 agreement to maintain the grassed area fronting Greenfield Road in a clean and tidy condition free of any buildings or other structures of any kind dedicated in perpetuity as a grassed area of open space land for the benefit and enjoyment of the public. Part of the open space covered by the section 106 legal agreement forms part of the appeal site. The Secretary of State considers that the existing section 106 agreement is a legal matter between the Council and the developers and does not prevent the granting of planning permission for this development. "8. The Secretary of State notes that the grassed area is small, approximately 17m x 50m and is very near the busy main A350 Chippenham to Poole Road, which is a primary transport route. He accepts that the area of grass does serve as a visual link or green buffer between the open countryside and the residential development. He notes that about 50 per cent of the grassed land would remain after the construction of the new road and widening of the existing footpath along the grassed area. The remaining grassed area would be landscaped. Despite the loss, he agrees with the inspector (IR 70) that the proposal would not materially harm the character and appearance of the surrounding area and would accord with the development plan and emerging plan which seeks to protect the local environment."
[12]In his conclusions, the Secretary of State said in paragraph 11:
"The Secretary of State considers that the proposed new road would not materially harm the character and appearance of the surrounding area."
[13]In paragraph 12 under "agreements and conditions", the Secretary of State noted the inspector's comment in paragraph 80 of the report about the modification of the existing agreement "but as already stated (paragraph 7 above) he considers that this is a legal matter between the Council and the developer".[14]The claimant requested the defendant to agree to a modification of the agreement under section 106A(1)(a) of the Act to enable the development and stopping up order approved by the Secretary of State to go ahead. On 14 January 2003, the defendant's Development Control Committee refused that request, notwithstanding a recommendation from the planning officer that it should agree to vary the obligations in the agreement. The planning officer's report said, in part, under the heading "planning appraisal":
"Although, in law, there is no entitlement to apply under section 106A of the Town and Country Planning Act 1990 to amend or vary such an agreement until five years has elapsed, there is no reason why the Council cannot agree to vary such an agreement within the first five years. The inspector did not defer from that view -- indeed, in his report he stated: 'the promoters can agree at any time with the District Council for the agreement to be modified'. It is therefore considered reasonable in this case for the reasons indicated below. "
The appeal to provide an alternative vehicular access to Greenfield Road was ALLOWED. The Secretary of State allowed the formation of an alternative access to Greenfield road and the stopping up of the existing accesses. The Secretary of State was aware of the encroachment into the open area specified by the section 106 agreement and made no objection. There are no planning reasons to refuse this request to vary the obligation. "In particular, the Secretary of State, in coming to his decision, agreed with the inspector's comments on the section 106 agreement. More particularly at paragraph 80 of his report, the inspector commented that he expects the Council to take into account the Secretary of State's reasoning for his conclusions, particularly those relating to the significance of the open space in terms of impact on its character and the contents of the setting. Having referred to paragraph 69 of the inspector's report, the planning officer's report concludes by saying:
"The effect of the development and the new road was therefore fully considered in the appeal process and there are no planning grounds for refusing to vary the 106 agreement in order to bring it in line with the Secretary of State's decision. Although there is no obligation in law to accept such an application (until after 30 July 2004), it would be unreasonable under the circumstances not to accept it and to agree to the requested variation to the 106 agreement."
[15]The claimant's solicitors invited the defendant to reconsider its decision and it did so on 29 April, but the Committee again declined to agree to modify the agreement. On 29 April, the Committee had the original report together with a further report from the planning officer. That report dealt with a number of objections that had been made. The report said this:
"4. The Parish objected on the grounds that the Secretary of State pointed out that the existence of the section 106 agreement is a legal matter between the Council and the developers. It considers that any reduction in size of the land to be retained as open space would detract from the open aspect upon entering the village. There should be a buffer to the development. Any diminishment would substantially harm the character of the area. "5. Eight objection letters from local residents in the village have also been received on the same grounds to those identified by the Parish above, and in addition the following grounds: • The southern entrance has already been lost -- the remainder of the green area should be preserved. • The proposed entrance would be dangerous. • The open space as required by the agreement would make a pleasant focal point for the village echoing the meadows on the other side of the main road, and should therefore be kept in its entirety. • The houses will block visibility at the road junction. • The Council should listen to the concerns of the villagers, not comply with what the developers want. • The agreement was freely entered into by the developers and should therefore remain. • The open area is required by the village for people to exercise their dogs."
[16]Under the heading "local planning authority comments on objections", the report says this:
"The objections are therefore essentially twofold. First, the reduction in size of the open space, and, secondly, on grounds of highway safety. Both issues were addressed by the inspector in his report to the Secretary of State, who did not detract from his recommendations in allowing the appeal. Both issues have been extensively scrutinised at appeal. Your officers do not consider the Secretary of State's conclusions to be wrong or ill founded."
[17]There was also a legal report which set out the background to the matter, including the terms of the agreement, and said this:
"Government guidance in relation to the Discharge or Modification of Planning Obligations is given in Circular 1/97 Annex C. Relevant parts of paragraph C4 read: "
'It would not be reasonable to allow an obligation to be reviewed very soon after it had been entered into. This would give no certainty to a local planning authority, which had granted planning permission on the understanding that a developer would meet certain requirements. Other affected parties might also be disadvantaged by allowing obligations to be swiftly brought to an end. On the other hand, where over a period of time the overall planning circumstances of an area have altered, it may not be reasonable for a landowner to be bound indefinitely. Allowing the five-year period to stand appropriately reconciles these various considerations ... ' "In deciding whether or not to exercise its power under section 106A(1)(a) to agree to vary the terms of the agreement the Council has a discretion, which is unfettered by any specific statutory provisions. The exercise of this discretion can only be challenged on the normal public law grounds and subject to the normal restrictions on bringing a challenge by way of judicial review. "3. Factors to be considered. The factors that the Council may consider in reaching a decision are: (i) Whether it is considered to be in the public interest and in the interest of the proper planning of the area for the land to remain open and undeveloped as originally agreed by Batchelor Enterprises Ltd. (ii) Whether it is considered that the obligation in respect of the open land still serves a useful planning purpose. Does the grassed area make a significant contribution to the character and appearance of the area and the amenities and outlook of the local residents? (iii) Whether if five houses were to be built with a corresponding reduction in the amount of land to be kept open and unbuilt upon, then whether the balance of the remaining land protected by the agreement would have been altered to the detriment of the proper planning of the area. (iv) The fact that the government has made it clear that it was envisaged that once entered into section 106 obligations should not normally be varied quickly or lightly hence the five year period before which an application to vary the terms of an agreement could be appealed to the Secretary of State. (v) The fact that unforseen difficulties mean that the developers could not now build five houses on the land without encroaching on the protected open space. (vi) The fact that the Council has resolved to grant the developer's own application for planning permission (20001/0805) for four houses on approximately the same site. These four houses could be developed with a satisfactory access but without encroaching on the protected piece of land. It is only the developer's own refusal to enter into a section 106 agreement which has prevented the permission for four houses being granted pursuant to the resolution. (vii) The report of the Development Control Manager, which recommended and continues to recommend that the Council agree to vary the terms of the section 106 agreement. (viii) As recorded in the Development Control Manager's report that the Secretary of State's decision letter dated 17 September 2002 has granted planning permission for the development of five houses which if implemented would require a new access to be built over the protected land in breach of the Section 106 agreement. (ix) That in the decision letter it should be noted that both the Secretary of State and the inspector were aware that if this planning permission was to be implemented it would be in breach of the section 106 agreement and that therefore it would be necessary for the Council to agree to the variation or replacement of the agreement before the permission could be implemented. Nevertheless it should also be noted that the Secretary of State and the inspector both made clear that their decision did not bind the Council to vary the section 106 agreement. The inspector in paragraph 80 specifically noted and contemplated that the Council may not agree to vary the agreement and that an application may have to be made after 29 June 2004. The inspector noted that this would still only be two years into the five-year life of the permission. (x) The Secretary of State in paragraphs 7 and 12 of his decision letter did not indicate that his decision was binding on the Council in relation to the pre-existing section 106 agreement (nor could he lawfully have done so). (xi) The fact that the planning permission, which has been granted by the Secretary of State, is inconsistent with the provisions of an existing section 106 agreement does not mean that the terms of the section 106 agreement should automatically be varied in order to accommodate that permission. (xii) That the developers will have a further opportunity to seek to have the agreement discharged after 29 July 2004 when they will be entitled to make an application to the Council under section 106A(1)(b), and if appropriate, an appeal to the Secretary of State as an independent party. (xiii) The current state of the part built site and its affect on the character and appearance of the area up to 29 July 2004 and beyond if the developer does not choose to build the four-house scheme instead."[18]The Committee's minutes record:
"The Committee considered the planning report and the legal report. Each of the factors set out in paragraph 3 of the legal report were considered and it was noted that the developer could not build the five house scheme that had been approved on appeal without variation of the agreement to allow the construction of the access over the protected land. The effect of the part-built state to the site on the character and appearance of the area and the fact that the developer could apply to have the agreement discharged after 29 July 2004 were considered. It was noted that the Secretary of State and the inspector both made it clear that the decision did not bind the Council to vary the Section 106 agreement. It was decided not to vary the agreement for the following reasons: 1. Batchelor Enterprises voluntarily agreed that the land should remain open and undeveloped when they entered into the agreement. Notwithstanding the recommendation of the Development Control Manager it is considered to be in the public interest that the land continues to remain open and undeveloped. The grassed area continues to make a significant contribution to the character and appearance of the area. The value of this area to local residents continues to be demonstrated by their opposition of this scheme and the loss of this part of the open space. It therefore contributes to the amenities and outlook of the local residents. The area that will remain after the access has been constructed will not be of equivalent benefit and will be to the detriment of the proper planning of the area. 2. The developer knew that there was no right of appeal in respect of such an agreement until the expiry of the five-year period. The local residents will be disadvantaged by allowing the agreement to be varied in the manner suggested for the reasons set out in 1 and therefore it should not be varied. 3. The developers could enter into the agreement which would allow planning permission for the four house scheme to be issued. This would permit the redevelopment of the site with a satisfactory access without the loss of the grassed area, thereby preserving the character and appearance of the area in the long term. As there is no obligation to vary the agreement the residents should continue to enjoy the benefit of the agreement as entered into."
Statutory framework[19]Section 106 as originally enacted in the Act was substantially amended by the Planning and Compensation Act 1991. In the Act as amended the relevant provisions in section 106A are as follows:
"(1) A Planning obligation may not be modified or discharged except- (a) by agreement between the authority by whom the obligation is enforceable and the person or persons against whom the obligation is enforceable; or (b) in accordance with this section and section 106B... (3) A person against whom a planning obligation is enforceable may at any time after the expiry of the relevant period, apply to the local planning authority by whom the obligation is enforceable for the obligation- (a) to have effect subject to such modifications as may be specified in the application; or (b) to be discharged. (4) In subsection (3) 'the relevant period' means- (a) such period as may be prescribed; or (b) if no period is prescribed, the period of five years beginning with the date on which the obligation is entered into ... (6) Where an application is made to an authority under subsection (3), the authority may determine- (a) that the planning obligation shall continue to have effect without modification; (b) if the obligation no longer serves a useful purpose, that it shall be discharged; or (c) if the obligation continues to serve a useful purpose but would serve that purpose equally well if it had effect subject to the modification specified in the application, that it shall have effect subject to those modifications. (7) the authority shall give notice of their determination to the applicant within such period as may be prescribed ... (10) Section 84 of the Law of Property Act 1925 (power to discharge or modify restrictive covenants affecting land) does not apply to a planning obligation."
No period has been prescribed for the purposes of paragraph (a) in sub-section (4).[20]Section 106B deals with appeals and provides:
"(1) Where a local planning authority- (a) fail to give notice as mentioned in section 106A(7); or (b) determine that a planning obligation shall continue to have effect without modification the applicant may appeal to the Secretary of State ... (4) Sub-sections (6) to (9) of section 106A apply in relation to appeals to the Secretary of State under this section as they apply in relation to applications to authorities under that section ... (6) The determination of an appeal by the Secretary of State under this section shall be final."
[21]Prior to these amendments made by the 1991 Act, a local planning authority's refusal to vary or discharge a section 106 agreement could be challenged in the Lands Tribunal under section 84 of the Law of Property Act 1925. The purpose of the amendments was to bring the modification or discharge of section 106 agreements wholly within a comprehensive planning code. The defendant's response to the application for judicial review.[22]The claim for judicial review was issued on 17 June. The defendant's response in its summary grounds said in part:
"Where the Council is dealing with a request within the 5-year period, it is exercising its discretion as custodian of the public interest and not simply on planning grounds. The Act does not fetter the discretion of the District Council to consider the request for its agreement to discharge the covenant ... "
The Council submit that when considering a request under section 106A(1)(a) it is not bound by the Secretary of State's decision to grant planning permission."[23]Permission to apply for judicial review was granted by Stanley Burnton J on 22 July, and the defendant's evidence was served on 27 August. In a witness statement served on behalf of the defendant, Mr Lytton-Trevers, a planning officer with the defendant, set out the planning history. Under the heading "the obligation" he said this:
"Although there is no obligation in law to accept such an application (until after 30 July 2004), it could be unreasonable in the circumstances not to accept it and to agree to the requested variation to the 106 agreement."
[24]His statement further says that: "There are no planning reasons to refuse this request to vary the obligation".[25]Although not withdrawn, this witness statement has been supplemented (the defendant would say superseded) by a further witness statement which makes it clear that, although officers concluded that there were no planning reasons to refuse the request to vary the obligation, members disagreed with the officers' recommendation for the reasons set out in the minute above. Although somewhat less than satisfactory, I am prepared, for reasons which will subsequently appear, to proceed upon the latter basis since it would appear to accord with the reality of the position. Submissions and conclusions[26]It is common ground between the parties that, just as a section 106 obligation may be entered into by a local planning authority only if it is for a planning purpose: see Tesco Stores Limited v Secretary of State for the Environment and Others [1995] 2 All ER 636, per Lord Keith at page 464 b to e, and Lord Hoffman at page 656 c to d; so paragraph (b) in sub-section 106A(6) should be read as providing that a local planning authority may determine "if the obligation no longer serves a useful (planning) purpose that it shall be discharged". This accords with the policy guidance contained in paragraph C6 of Circular 1/97 Planning Obligations. That paragraph says in part:
"The department considers that the expression 'no longer serves any useful purpose' should be understood, in land-use planning terms. Thus, if an obligations only remaining purpose is to meet some non-planning objective it will generally be reasonable to discharge it."
The relevant part of paragraph C4 dealing with the significance of the five-year period is set out in the legal report to the Committee: see above.[27]It is clear from the terms of section 106A(1)(a) that the local planning authority has a discretion to consider a request or an application that it should agree to a modification of an obligation notwithstanding the fact that the five-year period has not elapsed. It is common ground that there is a distinction to be drawn between an application made within the five-year period under sub-section 106A(1)(a) and an application made after the expiration of the five-year period under section 106A(3). In the latter case the local planning authority is bound to determine the application within a prescribed time, and if it fails to do so or if it refuses the application, an appeal may be made on the merits to the Secretary of State who may substitute his view for that of the local planning authority. In the former case, the local planning authority has a discretion.[28]On behalf of the defendant, Mr Harrison rightly conceded that this discretion is not unfettered. It must be exercised to further the aims of the statutory scheme, that is to say for planning purposes, and must not be exercised in a manner that is Wednesbury unreasonable. Thus, for example, it would be unreasonable for a local planning authority to refuse even to consider a request made under section 106A(1)(a) simply because it had been made within the five-year period.[29]It is accepted that the question to be considered by the local planning authority in each case is the same: does the obligation still serve a useful planning purpose? Since the court in judicial review proceedings may not substitute its own answer to that question for that of the local planning authority, the question in relation to an application for judicial review in respect of a local authority's decision under section 106A(1)(a) is whether a reasonable local planning authority could have concluded that the obligation still served a useful planning purpose.[30]Against this background, Mr Findlay submitted on behalf of the claimant that the defendant's summary grounds and legal advice led to the conclusion that the Development Control Committee must have proceeded upon the basis that its discretion was an unfettered one and that, because it was dealing with a request made within the five-year period, it was not limited to considering whether the obligation still served a useful planning purpose, but could instead consider some wider public interest.[31]Secondly, the Committee erred in its approach to the Secretary of State's decision of 17 September 2002. In R v Warwickshire County Council ex parte Powergen PLC [1997] 3 PLR, page 62, the Secretary of State had allowed an appeal and granted planning permission subject to the condition that Powergen did not use the site until certain highway works were completed. The effect of the condition was to require Powergen to enter into an agreement under section 278 of the Highways Act 1980 with the Highway Authority. The Highway Authority refused to enter into a section 278 agreement contending that the highway works were not in the public interest. In so contending, the Highway Authority advanced the same criticisms of the highway proposals that had been placed before and rejected by the inspector.[32]On page 66D, Simon Brown LJ, with whom the remaining members of the court agreed, set out a passage from the judgment of Forbes J, who had said:
"It is common ground that the new Section 278 was intended to fit into and play its part in the overall legislative system for the controlled development of land through the planning process and I accept that Section 278 must be interpreted accordingly."
[33]Forbes J concluded that the Highway Authority's decision had been Wednesbury unreasonable. On page 68, Simon Brown LJ said at D:
"There was some debate before us whether that conclusion of Wednesbury irrationality was free-standing of the judge's earlier view based on the scheme of the planning legislation as a whole. To my mind it was not: in truth there is here but one issue: who, as between the Secretary of State (or inspector) on appeal and the highway authority, is to have the last word in deciding a road safety issue of this nature ... "
I for my part prefer the broader Wednesbury analysis of the case. Indeed, so far from this appeal raising, as Mr Supperstone submitted, 'a short point of statutory construction', I see it rather as raising this simple question: is it reasonable for a highway authority, whose road safety objections have been fully heard and rejected on appeal, then, quite inconsistently with the inspector's independent factual judgment on the issue, nevertheless to maintain its own original view? To my mind there can be but one answer to that question: a categoric 'No'."[34]In the present case, we are concerned with a section 106 obligation, which is now (since the 1991 Act) an integral part of the comprehensive planning code. Moreover, we are concerned with the exercise of a discretion, not by a highway authority, but by a local planning authority. In these circumstances, Mr Findlay submits that the observations of Simon Brown LJ apply with even greater force. If one rephrases the issue in the Powergen case:
"Who as between the Secretary of State (or inspector on appeal) and (the local planning authority) is to have the last word in deciding (an amenity) issue of this nature ... "
Is it reasonable for a (local planning authority) whose (amenity objection) has been fully heard and rejected on appeal then quite inconsistently with (the Secretary of State's) independent factual judgment on the issue nevertheless to maintain their own original view?"[35]He submits in summary that the decision of the Committee was perverse. He further submits that the Committee simply failed to grapple with the Secretary of State's decision. It failed to explain why, if it did, it considered that the decision was wrong and why it was appropriate to depart from it. The Secretary of State's decision is of particular significance because of the right to apply after the expiration of the five-year period under section 106A(3), and then to appeal to the Secretary of State under section 106B. He submits that there is no reason to suppose, and certainly none was suggested in the Committee's reasons, that the Secretary of State might be likely to change his mind. Therefore, the practical question for the Committee was, given that there was no realistic prospect of being able to retain all of the grassed area following an appeal under section 106B to the Secretary of State, what was the planning purpose of retaining it pending the outcome of such an appeal?[36]Mr Harrison submitted that the Act drew a distinction between the position where an application to agree to a modification of an obligation was made within and after the expiration of the five-year period. When such a request was made within the five-year period, the local planning authority was entitled to have regard to the advice in paragraph C4 of Circular 1/97. He submitted that, because of the distinction between the position before and after the expiration of the five-year period, the Court of Appeal's decision in Powergen could be distinguished.[37]He accepted that the local planning authority was bound to have regard to the Secretary of State's decision, but he submitted that it was not bound to follow it. The question which the local planning authority had to answer was whether it was prepared to agree to a modification of the obligation. The statutory scheme gave the local planning authority the last word in answering that question for the period of five years after the agreement was entered into. After the expiration of that five-year period, the Secretary of State's view was allowed to prevail.[38]Ingenious though the submission is, it elevates form over substance. Although the formal question was: should the defendant agree to the request to modify the agreement; the question in substance was: does the obligation to keep the whole of the grassed area open and grassed still serve any useful planning purpose?[39]That question was squarely addressed by both the inspector and the Secretary of State. Their answer was that it was not necessary on amenity grounds to keep the whole of the area grassed and open. They reached that conclusion after having heard the defendant and the local residents deploy precisely the kind of arguments that are set out in the Committee's reasons.[40]In those circumstances, it was unreasonable for the Committee simply to maintain the defendant's original view which had been rejected by the Secretary of State. That does not mean that the Secretary of State's decision was binding upon the defendant. As Simon Brown LJ explained in the Powergen case, there might be particular reasons why a highway authority (or a local planning authority in considering whether or not to enter into or to agree to vary a section 106 obligation) might wish to differ from an earlier decision of the Secretary of State. There might, for example, have been some change of circumstances: a new factor might have been discovered. But it would be necessary for that new factor to be spelt out and for the highway authority or the local planning authority to explain why it thought it appropriate to differ from the Secretary of State's view.[41]In the present case, the Committee's reasoning gives no indication that it has grappled with the Secretary of State's conclusions, much less any explanation as to why those conclusions should not be allowed to prevail.[42]I accept Mr Harrison's submission that the representations made by the Parish Council and the local residents raised planning issues, but they were precisely the same issues that had been raised before, and rejected by, both the inspector and the Secretary of State. Moreover, they clearly contemplated that the whole of the grassed area would remain as such for an indefinite period. Neither the representations nor the Committee's reasons address the real question. Given the fact that an appeal to the Secretary of State under section 106B was bound (upon the information before the Committee) to succeed at some time after 30 July 2004, what planning purpose was being served by refusing to permit the early completion of the five house scheme which had remained partially constructed since the summer of 1999?[43]It is significant that the Committee do not expressly disavow the officer's conclusion that "there are no planning reasons to refuse the application". Reading the Committee's reasons in the light of the legal advice and the way the matter was put in the defendant's summary grounds, it does appear probable that the Committee erroneously considered that it was entitled to decline to agree to modify the agreement in the "public interest" even though there were no planning grounds for refusing to agree to the modification.[44]The Committee laid considerable stress upon the fact that there was no right of appeal within the five-year period, and in his submissions, Mr Harrison laid stress on the advice in paragraph C4 of Circular 1/97. I accept, of course, that the Committee were entitled to take that advice into account, but the advice is couched in general terms and deals with the usual run of cases where it is perhaps unlikely that there will have been a significant change in "the overall planning circumstances" in a period of less than five years. The advice does not purport to deal with the kind of case where there has been a material change of circumstances within the five-year period. If there has been such a change, it would be wholly unreasonable for a local planning authority to ignore it merely because it had occurred within, rather than after the expiration of, the five-year period.[45]In the present case, access B always was a highway -- once a highway, always a highway -- but that fact was not appreciated by either the claimant or the defendant when the obligation was entered into. This is not a case where a developer, fully aware of all the surrounding circumstances, completes his development and then tries to renege upon the obligations set out in a section 106 obligation after a relatively short time (the type of circumstance with which paragraph C4 is principally concerned). There is simply no recognition in the Committee's reasoning of the particular circumstances of this case and their relationship to the more general advice given in paragraph C4.[46]For these reasons, I am entirely satisfied that the Committee's decision was unreasonable. The Committee misunderstood the ambit of its powers, failed to have regard to the implications of the Secretary of State's decision, and if and insofar as it did have regard to these implications, failed to explain what planning purpose would be served by refusing to modify the obligation given the Secretary of State's conclusions on the planning merits and the claimant's ability to appeal to the Secretary of State under section 106B within a relatively short period of time. Moreover, the Committee appear to have applied the advice in paragraph C4 in a blanket fashion without regard to the possibility that there might be a perfectly genuine change of circumstance within the five-year period.[47]By way of conclusion, I merely note that the obligation provided that the land in question should be dedicated in perpetuity as a grassed area of open space land for the benefit and enjoyment of the public. In considering the matter under section 106A, the Committee was simply concerned with whether the obligation still served any useful planning purpose. I express no view as to the effect of the dedication of the grassed area as open space land for the benefit and enjoyment of the public, or as to what effect such a dedication might have in respect of land which is subsequently discovered to be a public highway.[48]For these reasons the application for judicial review succeeds and the Committee's decision is quashed.[49]MR FINDLAY: I am much obliged to your Lordship. My Lord, there is an application for costs. I do not know whether the principle is disputed, but the figure is agreed in the sum of £12,852.

MR JUSTICE SULLIVAN: Is the principle disagreed, Mr Harrison?

[51]MR HARRISON: My Lord, it is not, and that sum includes the cost of the application to have a witness statement submitted late. That is agreed between those instructing me and those instructing my learned friend.

MR JUSTICE SULLIVAN: Does that include VAT?

[53]MR FINDLAY: It does, my Lord.[54]MR JUSTICE SULLIVAN: Right, it is just that one is sometimes asked to say that. Thank you very much. The application is allowed. The decision is quashed. The defendant is to pay the claimant's costs. Those costs to be summarily assessed in the sum of £12,852 including VAT.[55]MR FINDLAY: My Lord, only a matter of interest, I do not know whether your Lordship recalls, but this saga has in fact been in front of your Lordship before.[56]MR JUSTICE SULLIVAN: I do. I was thinking about it and I think the very first decision on the stopping up order came before me on an application for judicial review, I think, to quash the refusal to make the stopping up order.[57]MR FINDLAY: It did, indeed, my Lord.

MR JUSTICE SULLIVAN: I do not think I accepted it.

[59]MR FINDLAY: On that occasion I did not have the same success as I did today.[60]MR JUSTICE SULLIVAN: It did ring a bell. Yes?[61]MR HARRISON: My Lord, there is an application for leave to appeal. Although the arguments put forward on behalf of the defendant have not found favour with your Lordship, in our submission they are proper arguments, particularly in relation to the consideration of the pre five-year and post five-year period and I would ask that leave to appeal be granted.[62]MR JUSTICE SULLIVAN: Thank you very much. Mr Harrison, given that I have set out my views on the merits I hope you will not think me discourteous if I simply say that, for those reasons, I do not think that there is a real prospect of success on appeal and I do not think that the case really raises any great issue on principle. It rather more turns on the particular facts here. So I will refuse you leave, but obviously you can go along to the Court of Appeal and try and persuade them.

Cited in 6 later judgments