Lichfield Securities Ltd v Lichfield District Council & Anor

A local planning authority negotiating a planning obligation must have regard to relevant planning policy and administer the process fairly and openly. Where competing developers have legitimate financial interests in the method of apportioning infrastructure costs, they must receive a fair opportunity, with relevant information, to advance their respective methods.

Procedural shortcomings justify public law relief where process and practical impact combine to produce substantive unfairness. An inevitable outcome may negate that impact, but a merely possible repetition of the decision does not. Promptness in judicial review depends on the circumstances, particularly the effect of delay on others. It is not determined mechanically from the earliest practicable date for proceedings.

Lichfield Securities Ltd and the second respondent owned adjoining development sites. The applicant had already contributed substantially to local road infrastructure. The district council agreed that the second respondent would make a contribution under section 106 of the Town and Country Planning Act 1990, calculated by a formula which produced a payment to the applicant.

The council negotiated and agreed the formula with the second respondent without giving the applicant the relevant information or an effective opportunity to participate. Turner J dismissed the applicant's judicial review claim. He found the formula rational and the process unfair, but refused relief because of delay and because the council might reach the same decision again.

The appeal concerned rationality, procedural fairness, promptness and the discretionary grounds for withholding relief.

1. Appeal allowed to the stated extent. Sedley LJ delivered the judgment of the court. The formula was rational because the council could reasonably assume that the whole area covered by the applicant's outline permission would eventually be developed. Unequal financial impact did not itself establish irrationality. Another formula might nevertheless have been equally or more appropriate.

2. The council's process was substantively unfair. Relevant policy required negotiations over planning obligations to be as open, fair and reasonable as possible. The council had agreed the formula with one developer while continuing to give the other the impression that meaningful consultation remained possible. Its one-sided negotiations had corroded the process. The applicant never received the information and effective opportunity needed to advance an alternative.

3. In public administration, outside a mandatory procedural scheme, both defective process and unfair impact must ordinarily be shown. An all but inevitable outcome may demonstrate that an imperfect consultation caused no substantive unfairness. The council, however, did not establish that its formula was the only feasible result. The possibility that it might make the same decision again could neither defeat the finding of unfairness nor justify withholding relief.

4. The substantive judge had jurisdiction under section 31(6) of the Supreme Court Act 1981 to consider undue delay. Where promptness has already been fully determined inter partes at the permission stage, judicial comity and case management ordinarily prevent its reconsideration unless the first judge reserved the matter, new material or changed issues justify it, or the earlier decision was plainly reached per incuriam.

5. Promptness depends on the circumstances and especially the effect of elapsed time on other persons. Although time began to run in early March, the applicant acted sufficiently promptly. The short additional period caused no material prejudice because the developer had already chosen to proceed at its own risk.

6. Under CPR 54.19(2), the resolution and associated section 106 agreement were quashed only so far as they fixed the infrastructure contribution. That issue was remitted for reconsideration through an open process in which both developers would receive relevant information and a fair opportunity to propose an appropriate method.

• Court of Appeal (Civil Division): The appeal was allowed. The resolution and section 106 agreement were quashed only to the extent that they adopted and calculated the second respondent's road-infrastructure contribution. That issue was remitted to the district council.
• Queen's Bench Division (Crown Office List): Turner J dismissed the application for judicial review. He regarded the formula as rational and the process as unfair, but withheld relief because of delay and the possibility that the same decision would be reached again.
• Permission stage: Keene J rejected the respondents' inter partes argument that the claim lacked promptness and granted permission.