Millgate Development Ltd, R (on the application of) v Wokingham Borough Council

A lawful unilateral planning obligation which has become enforceable on its terms does not cease to serve a legitimate planning purpose merely because an Inspector grants permission without giving the obligation weight. A local planning authority may therefore refuse to discharge it under Town and Country Planning Act 1990, section 106A.

A concession that the authority will not enforce the whole stated sum does not itself require discharge or modification. Even if the development-plan duty in Planning and Compulsory Purchase Act 2004, section 38(6), applies, that concession does not show that the obligation is no longer in accordance with the plan. The developer may instead raise contractual defences concerning the amount claimed in private-law enforcement proceedings.

The developer gave a unilateral undertaking under Town and Country Planning Act 1990, section 106, in support of an appeal against refusal of permission for 14 dwellings. It promised infrastructure contributions of about £170,000, subject to terms governing their application.

The Inspector allowed the planning appeal, but gave the undertaking little weight because the council had not shown that the contributions were necessary. The council later refused to discharge the undertaking and indicated that it would seek a reduced sum. The Administrative Court dismissed the developer's judicial-review challenge.

The appeal concerned whether the Inspector's decision, the development plan, and the council's reduced claim made the refusal to discharge unlawful under section 106A.

1. Appeal dismissed. Pill LJ, with whom Rimer and Munby LJJ agreed, held that the undertaking was lawful when made and became enforceable under its own terms. The developer could not challenge its enforceability on the ground that it lacked a sufficient planning nexus once the condition for planning permission had been satisfied. That followed the principle in Tesco Stores Ltd v Secretary of State [1995] 1 WLR 759.
2. The Inspector's conclusion that contributions were unnecessary to grant permission did not decide that the undertaking lacked, or had lost, a legitimate planning purpose. The Inspector had not been provided with evidence demonstrating the need for the contributions. He granted permission without relying on the undertaking; he did not overturn the council's planning view expressed in its refusal reasons.
3. The court distinguished The Queen (Bachelor Enterprises Ltd) v North Dorset District Council [2003] EWHC 3006 (Admin). In that case the Secretary of State had directly determined that the retained open land no longer served its planning purpose. Here there was no equivalent determination. The undertaking therefore continued to serve a useful planning purpose for section 106A purposes.
4. The court did not need finally to decide whether section 38(6) of the Planning and Compulsory Purchase Act 2004 applied to a refusal to discharge under section 106A. Even if it did, the council's concession that it would seek less than the full sum did not establish that the undertaking had ceased to accord with the development plan or required its discharge.
5. Judicial review was also an unsuitable route for resolving the amount properly recoverable. If the council brought private-law enforcement proceedings, the developer could contend that a claimed sum did not fall within the undertaking's terms. The hypothetical argument that the council lacked power to repay sums paid under such an agreement also failed; repayment appeared capable of being incidental to its powers under Local Government Act 1972, section 111.

• Court of Appeal (Civil Division): dismissed the developer's appeal: [2011] EWCA Civ 1062.
• Administrative Court (High Court): HHJ David Pearl QC, sitting as a deputy High Court judge, dismissed the application to quash the council's refusal to discharge the undertaking on 14 January 2011.
• Secretary of State planning appeal: an Inspector allowed the appeal against refusal of planning permission on 9 May 2007, while giving the unilateral undertaking little weight.