Section 106 agreements and outline and s.73 planning permissions

The High Court has considered whether, following an outline planning permission for housing subject to a s106 agreement, section 73 permissions for essentially the same development were bound by the agreement. Christopher Lockhart-Mummery QC analyses the judgment.

An outline planning permission was granted for 85 dwellings. The permission was subject to a s106 agreement securing various obligations, in particular in relation to affordable housing. The agreement, which was in relatively standard form, was tied specifically to implementation of the outline planning permission, a draft of which was appended.

Subsequently, two s73 permissions were granted, each authorising relatively minor changes to the permitted development. The council, North Norfolk District Council, did not require the execution of a revised s106 agreement in relation to either. It was common ground that commencement works had implemented the later s73 permission (and that, of course, that each s73 permission was a free-standing planning permission).

The claimant claimed that the implemented development was not bound by the agreement. The council claimed (1) that the agreement should be construed as extending to a later s73 permission, and in the alternative (2) that such a provision should be implied. It placed strong reliance on the Supreme Court decision in Lambeth LBC v Secretary of State for Housing Communities and Local Government [2019] 1 WLR 4317 in support of its arguments.

In Norfolk Homes Ltd v North Norfolk District Council & Anor [2020] EWHC 2265  the High Court (Holgate J) robustly rejected both arguments. It held that, while Lambeth had endorsed the earlier approach of the Supreme Court in Trump that there were no special rules applying to the construction of planning documents (including a s106 agreement), that decision was otherwise of no assistance to the council. On the proper construction of the agreement, it applied only to the implementation of the outline planning permission.

Following an extensive review of the contractual cases on implied terms in contracts, it further held that there were no grounds for the claimed implication.

Accordingly, the implemented development was free of any planning obligation.

Christopher Lockhart-Mummery QC is a barrister at Landmark Chambers. He appeared for the Claimant, instructed by DLA Piper.