Renaissance Habitat Ltd, R (on the application of) v West Berkshire District Council

A lawful planning obligation under section 106 of the Town and Country Planning Act 1990 remains enforceable despite later changes to supplementary planning guidance or circumstances, unless it is varied or discharged through the statutory mechanism or by agreement. The lawfulness of enforcement does not depend on whether the original calculation would now be regarded as fair or reasonable. A useful planning purpose need not relate to the particular development, the original purpose of the contribution, or the development’s specific impact. Infrastructure expenditure benefiting the area in which new residents live may satisfy that requirement.

The claimant, a developer, entered into a section 106 agreement with the defendant Council when planning permission was granted. The agreement specified infrastructure contributions for education, healthcare, open space, libraries and highways. After development began, the Council’s supplementary planning guidance changed following planning appeal decisions, and circumstances affecting educational provision also changed.

The claimant argued that enforcing the original contribution figures was unlawful because the sums would not have been demanded under the later guidance and because the proposed expenditure did not serve a useful planning purpose. It also challenged the Council’s general approach to applications to modify section 106 obligations after development had been implemented.

1. The claim was dismissed. The Council was entitled to enforce the agreement as made. It had been lawful when entered into, the claimant had known the relevant guidance, and the agreement contained specified sums rather than a continuing mechanism for recalculation. Later criticism of the calculation methods did not establish that the earlier guidance or the agreed sums were unlawful. “Erroneous” or “unreasonable” did not, on the material before the court, establish unlawfulness in public law.
2. Changed circumstances did not make enforcement unlawful, even if the agreement would not have been sought in its existing form under current guidance. The claimant could have negotiated adjustment provisions or used the statutory procedure for variation or discharge under sections 106A and 106B. Judicial review could not be used to rewrite the agreement without using that procedure.
3. Assuming that enforcement was lawful only so far as the payments continued to serve a useful planning purpose, that purpose did not have to relate to the development connected with the agreement, its particular impact, or the original purpose for which the contribution was sought. The court accepted the effect of J A Pye (Oxford) Ltd v South Gloucestershire District Council [2001] EWCA Civ 450 and considered that conclusion consistent with R v (The Garden and Leisure Group Ltd) v North Somerset Council [2003] EWHC 1605 (Admin).
4. The proposed expenditure on local open space, education, transport and related infrastructure served useful planning purposes, including because residents of the development would benefit. The Council’s policy letter was reviewable, but it did not unlawfully fetter discretion. It stated a general approach, preserved consideration of individual merits, and recognised the statutory appeal remedy after the relevant period.