High Court backs Inspector’s decision to dismiss an appeal against the refusal of a s73 application due to perceived defects in the s106 planning obligations

Mrs Justice Lieven has supported a Planning Inspector’s dismissal of an appeal relating to an application made under section 73 of the Town and Country Planning Act 1990, which was accompanied by unilateral undertakings made under section 106 of the Act.

Background

In the case of Redrow Homes Limited v Secretary of State for Levelling UP, Housing and Communities [2023] EWHC 879 (admin), New Forest District Council had refused Redrow’s application under section 73 to remove a planning condition attached to a planning permission for a mix of uses including 168 dwellings and a pedestrian bridge over a railway. The offending condition referred to the Code for Sustainable Homes. The Code has been withdrawn (some time ago) and of itself such an application would not have been contentious.

However, it would seem this application may have been a stalking horse for the main aim of amending the existing section 106 obligation without going through s106A procedures. The original obligation required (after amendment) that a footbridge was constructed over the railway, to be delivered by occupation of the 125th market dwelling. This would leave 17 market dwellings to be occupied.

The Council refused the application. It agreed that the Code was no longer relevant, but based its refusal on the lack of a new section 106 agreement imposing “all of the mitigation and infrastructure that is necessary to make the development acceptable, including the previously agreed footbridge…”.

Redrow appealed the refusal, and made submissions that the failure to deliver the bridge was down to Network Rail. The Council held firm as to the importance and necessity of the bridge (reference to which was included in the description of development on the permission). It further argued that s73 should not be used as a means to make fundamental revisions to a s106 agreement. That should be done via s106A of the Act.

During the appeal, Redrow submitted two unilateral undertakings under section 106, offered as alternatives:

• UU1 – which removed any restriction on occupation relating to the bridge’s delivery, and instead required delivery within 2 years (without any negative controls).
• UU2 – presented a fall back if UU1 was not accepted, and retained a negative control but moved it back so as leave 5 market dwellings incapable of occupation until the bridge was delivered. Interestingly, at the start of the appeal the Council was supportive of this, but later withdrew that support.

The Inspector’s decision

Several reasons were given by the Inspector in dismissing the appeal. For our purposes, the key wording was the finding that “the submission of UUs seeking to modify the terms of a planning obligation…falls outside the scope of … section 73 of the Act. In the absence of a duly executed planning obligation to secure the construction of a pedestrian bridge…the appeal cannot succeed”.

The High Court’s ruling

The parties disagreed as to what the Inspector meant by this (albeit as is now well established, decisions must be read as a whole). Counsel for Redrow argued that the Inspector wrongly failed to consider the merits of the two UUs and that they should have been considered as ‘fresh’ s106 obligations, not modifications. Counsel for the Secretary of State responded that the Inspector found on the planning merits that the UUs would not meet the need to deliver the bridge, and plainly knew that the original s106 would fall away (and so fresh obligations could be offered).

Mrs Justice Lieven found in favour of the Inspector, concluding that:

• If the Inspector thought she had no power to allow the appeal and impose new obligations, much of the decision letter would not make sense. The Inspector appreciated that she could have granted the appeal subject to the UUs.
• The terminology used (modification/’fresh’ obligations) was of no matter as it was clear the Inspector took the view the UUs were insufficient. She found that what was offered was not good enough, not that she had no power to allow the appeal.
• It was ‘totally obvious’ why the Inspector thought the UUs were not good enough.
• The Inspector was finding that the UUs were not appropriate because they did not mirror the terms of the original s106.

Mrs Justice Lieven concluded with an interesting comment as to the interaction between s73 and s106 obligations as follows:

“It cannot be the case that that the effect of the s.73 fresh permission wipes out obligations which have already arisen. It is in my view open to debate the degree to which a s.73 consent would remove an obligation which had arisen but had not yet become enforceable. Powergen makes clear that a developer can elect whether to implement the s.73 consent or the original consent. However, where the original consent has been implemented (here virtually completed), I cannot see how the developer can rely upon s.73 to change the effect of the extant s.106. That is a matter for another case”.

If you would like more information about the use of section 73 to modify planning conditions, or varying planning obligations, please get in touch with our planning & infrastructure consenting team.