On 28 February the High Court handed down its first official judgment on the meaning of 'a phased planning permission' for the purposes of the CIL Regulations.

In R oao Oval Estates (St Peter's) Limited v Bath & North East Somerset Council,* the Court was asked to settle a long running argument between the Developer and the Council over whether the Developer had a phased planning permission or not.

The answer to this question has important financial consequences. If the Planning Permission was effectively phased then each phase would trigger CIL independently. Effectively spreading the financial cost more evenly  across the entire development. If it was not, then the CIL liability for the entire scheme would be triggered when the development commenced.

For once, this question has not arisen out of an ambiguity in the regulations themselves. The regs contain a useful definition: Reg 2(1) states that a ' "phased planning permission" means a planning permission which expressly provides for development to be carried out in phases'

The confusion arises out of the timeline:

  •  in September 2014 Oval applied for outline planning permission for a development. Permission was granted on 2 March 2016. After the Council had adopted CIL. At that point, the permission was not expressly phased and did not contain a reference to a phasing plan. There was a reference to phasing in the s.106 Agreement, which related to the affordable housing scheme, but there was no express requirement for the scheme to be built out in phases.
  • In April 2017, Oval obtained Reserved Matters Approval for the development. The list of approved plans for the RMA did include a proposed phasing plan, which showed the scheme being built out in three phases.
  • In October 2018, Oval commenced the Development.
  • In February 2019 Oval obtained a s.96A Decision, for a non-material amendment to the Outline Permission - adding a revised phasing plan to the outline consent. This phasing plan showed different phasing arrangements to the plan on the reserved matters approval.

From the Summer of 2017 until the end of May 2019, Oval and the Council were engaged in argument over whether the permission was a phased consent or not. The tone of these discussions is best summarised by quoting the relevant passages of the Judgment:

  1. On 25 April 2017 Oval provided a completed Assumption of Liability Form to the Council.  The Council replied on 5 May 2017 requesting further information, which was provided by Oval by email on 10 August 2017.  In that email Oval informed the Council that the Development would be undertaken in phases.  This marked the beginning of an exchange of correspondence over a lengthy period of time in which Oval asserted the development was a phased development while the Council denied that was so.  In the course of this correspondence, Oval asserted reliance on the contents of the section 106 Agreement, and proposed plan HS3044E (the "proposed plan" referred to in the Reserved Matters Decision) in support of its claim that the planning permission granted in March 2016 was a phased planning permission.  In one form or another the correspondence continued until the end of May 2019.   ....   
  2. Based on the correspondence, there are two matters to note. The first is that on 5 October 2018  Oval sent a Commencement Notice to the Council stating that it intended to commence development on 15 October 2018.  By regulation 67 of the 2010 Regulations a Commencement Notice must be submitted to the collecting authority (in this case the Council) "no later than the day before the day on which chargeable development is to be commenced".  The date of commencement is a significant date for the provisions in the 2008 Act and the 2010 Regulations because by section 208(3) of the 2008 Act and regulation 31 of the 2010 Regulations liability to pay CIL arises on commencement of the chargeable development.  There was a dispute between the Council and Oval as to whether this Commencement Notice had been received by the Council.  However, at the hearing before me it was agreed that the development commenced at the latest, on 15 October 2018. The second matter is the application 12 October 2018 by Oval for the non-material change to the March 2016 planning permission.  I have referred to this at paragraph 5 above.  The change was granted by the Council on 8 February 2019, with the consequence that plan HS3044G was added to the Plans List. This required Oval to undertake the development in phases."

Unfortunately for Oval, they had commenced the Development before the s.96A application had been granted. This ultimately proved to be their undoing as the Judge concluded:

"My conclusion is that this challenge fails. Regulation 31 of the 2010 Regulations is the operative provision.  By the Assumption of Liability Form completed on 25 April 2017, Oval had assumed liability for payment of CIL. Having assumed liability to pay, the effect of regulation 31 was that when on 15 October 2018, work on the Development commenced Oval became liable to pay CIL in respect of the whole development. As at 15 October 2018, the chargeable development was the development permitted by the March 2016 planning permission.  That planning permission was not a phased planning permission. The non-material change to the planning permission, subsequently authorised by the Council in February 2019, months after the commencement of work, did not alter the position."

The provisions of the s.106 Agreement were irrelevant and the s.96A Decision had been granted to late. The position was fixed at the date of commencement.

The moral of this story is one that I find myself repeating so often that it is almost my ringtone. When it comes to CIL - the permission you commence is the one that you pay for - so you need to make sure everything is in order before you start on site.

A lesson which is as true for your phasing strategy as it is for securing affordable housing relief.

*[2020] EWHC 457 (Admin)