Norfolk Homes Ltd v North Norfolk District Council & Anor

A section 106 planning obligation is a freestanding legal instrument, distinct from the planning permission to which it may be linked. Its scope is determined objectively from the words used, read in context. The public nature of the document does not permit post-contract conduct or an assumed anti-avoidance purpose to rewrite clear language. A section 73 permission grants a fresh permission subject to varied or substituted conditions, while leaving the earlier permission intact. It does not automatically trigger an earlier section 106 obligation, although the authority may require a new or varied obligation before granting it. Terms may be implied only under strict principles of necessity or obviousness, judged at the date of agreement. Clear definitions tied to a particular permission therefore limit the obligation to development under that permission.

The claimant developer sought a declaration that residential development under a 2015 permission was not subject to obligations in a 2012 agreement, and an order removing the agreement from the local land charges register. The 2012 outline permission was accompanied by a section 106 agreement. Later permissions under section 73 varied conditions but did not mention or reproduce that agreement. The 2012 and 2013 permissions expired, while development began under the 2015 permission.

The court determined whether the 2012 agreement, properly construed, applied to development under the 2015 permission and, if not, whether the proposed wording should be implied into it. The claimant’s earlier summary-judgment application had been dismissed by Thornton J, so the matter proceeded to trial.

1. Claim succeeded. The claimant was entitled to the declaration. It was common ground that, once the 2012 and 2013 permissions had expired, the 2012 agreement ceased to have effect under clause 7.7 if it was not triggered by the 2015 permission.
2. A planning obligation under section 106 of the Town and Country Planning Act 1990 is a freestanding legal instrument. It does not form part of a planning permission or its conditions, even though an authority may require it to be executed before granting permission. Section 73 permits the authority to consider whether a fresh or varied obligation is appropriate before granting a new permission; it does not itself make an existing obligation applicable to that permission.
3. The agreement was construed objectively, applying the principles stated in Trump International Golf Club Ltd v Scottish Ministers [2016] 1 WLR 85 and the ordinary contractual authorities. Its public nature justified caution about extrinsic material, but did not support a broader or anti-avoidance approach. Subsequent conduct, payments, omissions and alleged intentions were irrelevant to construction.
4. The definitions of Development and Planning Permission expressly referred to the application and the permission granted in 2012. They therefore confined the triggering of the owner’s obligations to development under that permission, not development under the later permission, however similar. Clause 7.7 concerned when the agreement ceased to have effect, not when its obligations were triggered. Clause 7.10 addressed incompatibility between an obligation and a later permission and did not resolve the separate trigger issue. The reasoning in Lambeth London Borough Council v Secretary of State for Housing, Communities and Local Government [2019] 1 WLR 4317 did not alter that conclusion.
5. The proposed words could not be implied. Applying BP Refinery (Westernport) Proprietary Ltd v Shire of Hastings (1997) 180 CLR 266 and Marks and Spencer plc v BNP Paribas Securities Services [2016] AC 742, the agreement was already coherent, and the suggested term was neither necessary nor so obvious as to go without saying. It would automatically bind the parties to all future section 73 permissions and remove flexibility which the parties might reasonably have wished to retain. Its reasonableness alone was insufficient.
6. NNDC was therefore required to remove the reference to the 2012 agreement from the local land charges register.

First instance proceedings. The judgment records that Thornton J dismissed the claimant’s earlier summary-judgment application on 5 March 2020. No appellate decision is stated.