The High Court’s decision in R (Oval Estates (St Peter’s) Ltd) v Bath & North East Somerset Council highlights the need to get phasing right. It also highlights reciprocity and new routes of challenge where charging authorities drag their feet.

Flexible system

The ability to phase planning permissions – and so stagger CIL liability – came into force for detailed, as well as outline, permissions in February 2014. This allows real flexibility in how CIL liability is triggered, recognising that CIL Starts Can Be Punishing.

Each ‘phase’ of a development will be a separate chargeable development under the CIL Regulations, where the planning permission expressly provides for development to be carried out in phases.

Retrofit

In Oval Estates, the charging authority granted outline permission for 81 homes in 2016. The developer had not taken the opportunity to phase the permission. When reserved matters were approved in 2017 (RMA), the RMA plans included a phasing plan splitting the development into three elements.

The developer later submitted an Assumption of Liability form in relation to the CIL. In doing so, it stated that the development would be undertaken in phases. It continued to assert that in correspondence with the authority. The authority did not issue the required Liability Notice (LN) ‘as soon as reasonably practicable’ as required by the Regulations and so the opportunity to appeal against the approach did not arise. In order to avoid losing its development finance, Oval then began the development.

A few months later, the authority approved an amendment to the permission itself to add the phasing plan to the approved plans list (as a Non Material Amendment under Section 96A TCPA 1990). The developer had submitted the NMA application a couple of days before the commencement date.

Oval contended that the amount due should have been calculated on the basis of a phased development, where the only CIL due at the time the Notices were issued was for the first phase. Rejecting that – and upholding the demand for the whole of the CIL (£874,283.78) – the Judge held that:

  • The planning permission was not a phased planning permission.
  • The NMA changed the planning permission – it just did so too late (being approved “months after the commencement of work” and so incapable of altering the position at commencement)
  • The S106 agreement was irrelevant on the facts

There are several points to note from the Judgment:

  • It recognises that S96A changes affect the basis of charging (where they are made before the liability position is otherwise crystallised – only timing of the NMA prevented it being effective for CIL calculation purposes in this case);
  • The statutory right to appeal Liability Notice assumptions is the starting point to be exhausted before resort to Judicial Review
  • Commencement of development will bar the appeal route but a Judicial Review remedy may be available in exceptional circumstances: e.g. as here where
    • the late issue of the Liability Notice (nearly 20 months overdue) interfered with Oval’s ability to use its statutory appeal route
    • Oval had to start in order to retain development finance, despite not having a LN to appeal against
  • Most unexpectedly, that the charging authority’s approach to CIL calculation can be subjected to the statutory Liability Notice appeal process even where it has failed to issue one (as long as the nature of the dispute is clear, as it was – on phasing)

The Regulations strike a deliberately harsh balance that demands strict adherence by developers. The judgment helps to tip that balance and fill the void in the Regulations to deal with the inequality of arms. It also underlines the need for great care in tailoring permissions and mobilising sites.