Galliard Hotels Ltd & Anor v London Borough of Lambeth (includes Order)

A planning obligation secured under section 106 must be objectively construed by the court. Where its wording permits revisions or amendments without an express limit, an alternative scheme may satisfy the obligation, provided the planning authority exercises its judgment lawfully. Subsequent events do not retrospectively invalidate planning permission. A planning permission is not rendered unlawful merely because a condition or obligation may prove difficult to implement, particularly where the authority can lawfully modify the obligation. A contribution under a section 106 agreement may be taken into account where its connection with the development is more than de minimis and the permission is not simply bought. Its precise amount is ordinarily a matter for planning judgment and negotiation.

The claimants sought judicial review of Lambeth’s decision to grant planning permission to GLI York Road Ltd for a 234-room hotel. They challenged provisions in the section 106 agreement concerning a coach and taxi drop-off strategy and a contribution of £32,669 towards local libraries.

The claimants argued that the drop-off strategy could not be fulfilled without their consent to use land at 1 Westminster Bridge Road, and that Lambeth had unlawfully accepted an alternative strategy without referring the matter back to its Planning Committee or the Mayor. They also argued that the libraries contribution was excessive, unrelated to the development and an immaterial consideration.

1. The judicial review application was dismissed on all grounds. Permission was granted to advance the supplementary ground, but the challenge failed.
2. Schedule 8 of the section 106 agreement was a matter of contractual construction for the court, not merely a matter of planning judgment. Its paragraphs 4 and 6 permitted revisions and amendments to the strategy, including amendments to the elements identified in paragraph 3. The obligation therefore did not require the initial or continuing use of the claimants’ land at 1 Westminster Bridge Road.
3. The planning authority was entitled to approve an alternative strategy after Transport for London revised its assessment of coach usage and accepted the proposed taxi arrangements. There was no obligation to refer the matter back to the Planning Committee or the Mayor. The later events did not retrospectively invalidate the earlier grant of planning permission.
4. Applying the principle in British Railways Board v Secretary of State for the Environment [1993] 3 PLR 125, the possibility that a planning obligation might prove difficult to implement did not make the permission unlawful. In any event, section 106A permitted modification by agreement between Lambeth and the person against whom the obligation was enforceable.
5. The libraries contribution was a material planning consideration. Applying Tesco Stores Ltd v Secretary of State for the Environment [1995] 2 All ER 636, the connection between the hotel development and local library services was more than de minimis, and the permission had not been bought. The amount was a matter for planning judgment and negotiation. Lambeth had not disregarded Circular 5/05.
6. The application was dismissed. The claimants were ordered to pay the defendant’s costs assessed at £5,950, payable within 28 days. Permission to appeal was refused.