JA PYE (OXFORD) LTD v SOUTH GLOUCESTERSHIRE DC & ORS

The validity of a planning obligation and the validity of planning permission are distinct questions. A statutory agreement restricting or regulating the development or use of land need not relate to a particular proposed development. Its validity depends on the statutory purpose and on ordinary public-law controls, including whether the authority acted unreasonably in the Wednesbury sense. If an authority improperly takes the obligation into account when granting planning permission, that may affect the permission. It does not, without more, invalidate the agreement. The relevant question is whether the authority’s reasons for entering the agreement were proper planning or highway considerations.

JA Pye (Oxford) Ltd appealed from the judgment of the Vice-Chancellor in the Chancery Division dated 19 October 2000. The Councils, as successors to Avon County Council, counterclaimed for £428,000 and interest under agreements concerning the acquisition of land and construction of a link road.

The appeal proceeded on the assumption that there was no connection between the permitted development and the road. The central issue was whether that absence of connection made the 1979 agreement unlawful because the agreement amounted to an attempt to purchase planning permission or involved an irrelevant consideration.

1. Appeal dismissed. The 1979 agreement was valid on the issue argued, and the Councils’ counterclaim judgment stood. The appeal was dismissed with costs summarily assessed at £24,899.73.
2. The court distinguished the statutory power to grant planning permission under section 29 of the Town and Country Planning Act 1971 from the power to enter into an agreement under section 52. The former required consideration of material considerations and permitted conditions only within established limits. The latter authorised an agreement with the owner of land for the purpose of restricting or regulating its development or use.
3. Following Good v Epping Forest District Council [1994] 1 WLR 376, the two powers were distinct and subject to different statutory consequences and procedures. An agreement could therefore be valid even though its terms could not lawfully have been imposed as conditions of planning permission.
4. The court treated Tesco Stores v Environment Secretary [1995] 1 WLR 759 as confirming that the absence of a nexus between an obligation and a proposed development may affect its materiality for the planning application, but does not determine the agreement’s vires. The 1979 agreement was entered into for the statutory purpose. There was no evidence that Avon’s reasons for entering it were anything other than proper highway or planning considerations.
5. If the agreement had been taken into account in deciding to grant planning permission, the permission might have been challengeable because an immaterial matter had been considered. That did not infect the agreement itself. The court did not decide whether the later 1987 agreement could independently survive if the 1979 agreement had been unlawful.

• Court of Appeal (Civil Division): dismissed the appeal from the Vice-Chancellor’s judgment of 19 October 2000. Leave to appeal to the House of Lords was refused.
• High Court, Chancery Division: held that no connection between the development and the link road was required for the valid exercise of Avon’s section 52 power and gave judgment for the Councils.