Greenfields Limited v Isle of Wight Council case update: the implications of unpublished section 106 agreements for developers and authorities

In the recent case of Greenfields Limited v Isle of Wight Council, the Court of Appeal has delivered a judgment serving as an important reminder that section 106 planning obligation agreements should be made available on the planning register under the Town and Country Planning (Development Management Procedure) (England) Order 2015.

In this article we provide a background to the case, reveal the Court of Appeal's findings and highlight the implications for developers and authorities. 

Background to the case

In this case, the judicial review claim centred on a large residential development in Ryde, Isle of Wight, for which planning permission was granted subject to a section 106 agreement securing, among other things, a developer contribution of £406,359 for necessary highway works. 

Critically, neither the proposed nor the final section 106 agreement was placed on the council’s planning register before planning permission was issued. This omission contravened the statutory duty in the Town and Country Planning (Development Management Procedure) (England) Order 2015, which requires such agreements be made public prior to the grant of permission. Residents, acting through Greenfields Limited, sought judicial review of the grant of planning permission by the Isle of Wight Council. The High Court had dismissed the claim, holding the breach was not sufficient to invalidate the permission. However, the Court of Appeal has now overturned that decision.

The rule to publish section 106 obligations stems article 40(3) of the Town and Country Planning (Development Management Procedure) (England) Order 2015, which states:

Does the decision change the current status quo?

The Court of Appeal found here that failure to publish the section 106 agreement was not merely a technical breach, but one which 'resulted in the unlawfulness of the decision' to grant planning permission. The court emphasised the purpose of article 40(3)(b) – to enable public scrutiny and comment on the terms of planning obligations before a final decision is made. The judges were clear that 'the Council’s failure to comply with its obligations meant that the amount of the financial contribution fixed in the section 106 agreement was not publicised, and not known, before the planning permission was issued.'

Having said that, it was acknowledged that a breach of this particular procedural requirement would, as a result mean a permission should be quashed:

Previously, where heads of terms or draft obligations were published, the court has held that this suffices for public scrutiny as long as the heads of terms were implemented in the completed section 106 agreement, as happened in the R (Davies) v Oxford City Council case . 

However, each case can turn on its facts -  the Greenfields case is not a departure from the Davies case. Rather, the court in Greenfields found: 

The amount, and means of calculating a highways contribution, which was of some contention in the Greenfields case. This appeared an important factor in why Lord Justice Lewis was not content to rely on the public availability of the section 106 heads of terms, without a figure for the highways contribution. Neither was Lord Justice Lewis convinced that, notwithstanding the clear procedural breach, section 31(2A) of the Senior Courts Act 1981 should apply on the basis that no different decision would have been reached. On the facts, it was found that it was very likely that the claimant would have commented on the section 106 agreement, and the highways contribution amount specifically, and it was not possible for the court to be satisfied that is was highly likely that the outcome would not be substantially different.

What are the implications for developers?

If a planning authority grants permission without first publishing the draft or agreed section 106 agreement on its planning register, that permission is at risk of being declared unlawful. Relying on heads of terms in an officer report, which are routinely publicly available, is a high risk approach to a risk that can be relatively easily mitigated.

The judgment makes clear that the ability to comment on the actual terms of the section 106 agreement is not a trivial right; affected parties may well have something to say, especially where the obligation is contentious or unclear. The court stated:

Accordingly, developers are strongly advised to confirm with the local planning authorities, particularly in controversial applications, that the draft has been published. This will avoid finding your permission at the mercy of the courts as to whether the procedural breaches should or shouldn’t lead to a quashing order.

What are the implications for authorities?

For local planning authorities, the Court of Appeal’s decision is a clear warning that a failure to comply with article 40(3)(b) is not merely a procedural omission that the court will take lightly. Failure to publish a draft or final section 106 agreement prior to the grant of planning permission, may lead to a permission being quashed, the procedural breach not always capable of being saved by a finding that the decision would have been the same in any event.

Local authorities must not treat the planning register as a mere formality – officers and legal teams should review their internal processes with a view to making public any planning obligations before a final decision is issued.

A link to the full judgment can be found here. For more information, please contact our planning and infrastructure consenting team.