Breaches of planning control, stop notices and compensation

March 8, 2019

A district council recently defeated an attempt in the Court of Appeal to claim compensation in respect of a stop notice served in support of a planning enforcement notice, which was subsequently quashed on appeal. Jonathan Mitchell explains the judgment.

On 25th January 2019 the Court of Appeal handed down its judgement in the case of Huddlestone v Bassetlaw District Council [2019] EWCA Civ 21 thereby bringing to an end a saga that had commenced in 2009. In the case the court was required to consider for the first time the interpretation and meaning of section 186 of the Town and Country Planning Act 1990. The case was the first time that a court at any level has had to consider this provision.

Section 186 provides for the award of compensation for loss suffered as a result of a stop notice served pursuant to section 185 in the event that it shall transpire that the notice was wrongly served.

In this case, the local planning authority, Bassetlaw District Council, had served a planning enforcement notice on 27th October 2009 in respect of a mobile home site owned and operated by the Appellant, Mr Huddlestone. That planning enforcement notice alleged that the site had been developed without planning permission. A planning permission did exist (it had been granted on 22nd May 2006), but there had been numerous failures to discharge the conditions attached to the permission, which failures amounted to such a serious breach of planning control to mean that the development which had taken place was unauthorised and without planning permission.

On 19th November 2009 the enforcement notice was followed up with the relevant stop notice. That stop notice provided that the Appellant was to “Cease the introduction and siting of any further accommodation units, caravans, chalets and other structures onto the land.”

On 8th June 2010 an appeal against the enforcement notice succeeded. The planning inspector held that the local planning authority had over-enforced and quashed the enforcement notice. The Appellant accepted that he was in breach of planning control (section 171A(1) of the Town & Country Planning Act 1990, makes it clear that to carry out development whilst failing to comply with any condition subject to which the planning permission has been granted constitutes a breach of planning control, gave him no option), but his argument that those admitted breaches were not sufficiently serious and did not go to the heart of the planning permission were accepted by the planning inspector pursuant to the decision in R (Hart Aggregates Ltd) v Hartlepool BC [2005] P&CR 31. The consequence was that the development which had taken place was lawful and did have planning consent. The breach of planning control which should have been specified was a a failure to comply with planning condition.

The consequence of the decision was that the stop notice fell away with the quashed enforcement notice. That opened the way to a potential application for compensation to be paid pursuant to section 186 of the Town & Country Planning Act 1990.

Subsequently, on 17th November 2011 the local planning authority issued a further enforcement notice alleging various breaches of planning condition. The Appellant’s appeal against that enforcement notice was dismissed on 11th May 2012.

Regulation 12(2) of the Town & Country Planning General Regulations 1992 provides that a claim for compensation pursuant to section 186 must be made within 12 months of the date of the decision in respect of which the claim or notice is made or given. In R. v Secretary of State for the Environment Ex p Hillingdon LBC (1992) 64 P. & C.R. 105, it was held that time began to run for the purposes of section 186 and the Town & Country Planning General Regulations 1992 regulation 12 with the date of the decision quashing the Notice concerned. In this case that date was 8th June 2010. Accordingly, any claim for compensation had to be made by 8th June 2011.

The Appellant made his application for compensation on 7th June 2011. It totalled approximately £700,000. Having taken advice the local planning authority rejected that claim on 24th May 2013. The limitation period expired for making the claim for compensation expired on 8th June 2016 pursuant to section 9(1) of the Limitation Act 1980. At the request of the Appellant the local planning authority agreed to extend that limitation period. Proceedings were issued in the Upper Tribunal (Lands Chamber) one day before the expiry of the extended limitation period. Even then the Appellant needed an extension of time to file his statement of case.

The parties agreed that the President of the Tribunal should determine a preliminary issue as to the meaning and effect of subsection (5) of section 186 of the Town & Country Planning Act 1990. That subsection provides,

“(5) No compensation is payable under this section—

(a) in respect of the prohibition in a stop notice of any activity which, at any time when the notice is in force, constitutes or contributes to a breach of planning control; or

(b) in the case of a claimant who was required to provide information under section 171C or 330 or section 16 of the Local Government (Miscellaneous Provisions) Act 1976, in respect of any loss or damage suffered by him which could have been avoided if he had provided the information or had otherwise co-operated with the local planning authority when responding to the notice.”

Sub-paragraph (b) was irrelevant in the circumstances of this case.

The local planning authority’s submissions both before the President of the Tribunal and subsequently the Court of Appeal were very simple. It had always been the Appellant’s case that during the period when the stop notice was in force he was in breach of planning control. Furthermore, one of the undischarged conditions, condition 19, required,

“Precise details of the lodges hereby permitted shall be submitted to and agreed in writing by the District Planning Authority before development commences. The development shall be carried out only in accordance with the agreed details.”

The introduction of further units on site, which was the activity prohibited by the stop notice, would inevitably have placed the Appellant in breach of that planning condition.

During argument before the Upper Tribunal, but not the Court of Appeal, reference was made to the Carnwath Report “Enforcing Planning Control” (February 1989), which at paragraph 2.15 had noted that there appeared to be a “mistaken understanding as to the effect of the compensation provisions, which are designed to provide a right of compensation only to the extent that the claimant is deprived of something to which he was lawfully entitled.” At paragraph 9.2 the report proposed amendments be made to the legislation, “First, and most importantly, the position in respect of compensation needs to be clarified and improved. There is still widespread misunderstanding of the position. The effect of the provisions should be that, even were a claim to compensation arises, the assessment will exclude any use or operation which is in breach of planning control. This is not clearly spelt out at present.”

The result of these recommendations was section 186(5)(a) of the Town & Country Planning Act 1990.

Both before the President of the Upper Tribunal and the Court of Appeal, the Appellant sought to argue that because it was open to him to discharge the relevant planning conditions and to cure the breach of planning control that would have arisen had new units been introduced on site, he should not be caught by the provisions of the Act barring the right to compensation.

Further, since no units had in fact been introduced during the period during which the stop notice was in effect, he had not committed a breach of planning control and so, again, should not be barred from compensation. There had been no breach of planning control during the period in which the stop notice was in force.

These arguments were advanced despite the fact that at all times during his appeal against the enforcement notice underlying the stop notice, the Appellant had accepted that he was in fact in breach of planning control – just not sufficiently in breach so as to render his development unlawful and without planning permission.

The Court of Appeal, as can be seen from the judgement of Lindblom LJ, who gave the only substantive judgement, gave these arguments short shrift. The arguments advanced on behalf of the local planning authority, which are rehearsed at para. 21 of the judgement and as set out above, were accepted. As Lindblom LJ said at para. 26 of his judgement, perhaps with the words of Humpty Dumpty in mind, “The subsection means what it says, nothing more and nothing less. Compensation is not to be paid for an activity prohibited by a stop notice, if, while the notice is in force, that activity would be, or would contribute to, a breach of planning control.” There was not warrant for glossing the words of the statute: see para. 27 of the judgement.

“A breach of planning control does not cease to be a breach of planning control merely because it can be overcome. And the statutory scheme does not yield an entitlement to compensation for the prohibition by a stop notice of an activity that involves a breach of planning control”: para. 29 of the judgement.

“In my view, the crucial point in this appeal is simply that, on the day when the stop notice came into force and from then until the day on which it ceased to be in force, the development it required to cease fell within the exclusion in section 186(5). This was so because throughout the period it could be rightly said that such development “constitutes or contributes to a breach of planning control””: para. 30 of the judgement.

The fact that the Appellant had not introduced further units during the period when the stop notice was in force meant that he was simply complying with the provisions of the stop notice. It did not thereby entitle him to compensation. It was the Appellant’s own fault that he had not sought to discharge the relevant planning conditions, which would then have enabled him to undertake the prohibited activities lawfully: see para. 34 of the judgement.

In summary, Robert Carnwath QC, as he then was, proposed a simple amendment to the law to make it clear that local planning authorities would not be obliged to pay compensation in circumstances where the land owner did not have “clean hands” (the author’s phrase). In that he succeeded. Section 186(5) of the Town & Country Planning Act 1990 is a model of clarity requiring no gymnastics in its application.

Jonathan Mitchell is a barrister at Ropewalk Chambers.