In the second in a series of articles from Landmark Chambers on the subject of the variation and enforcement of s106 obligations, James Maurici QC considers s106B appeals in relation to variations and discharge.
Last week my colleague Kate Olley looked at s106A which provides a statutory mechanism for modification or discharge of s106 obligations. This week we look at s106B which provides:
“(1) Where an authority (other than the Secretary of State)—
(a) fail to give notice as mentioned in section 106A(7); or
(b) determine under section 106A that a planning obligation shall continue to have effect without modification,
the applicant may appeal to the Secretary of State.
(2) For the purposes of an appeal under subsection (1)(a), it shall be assumed that the authority have determined that the planning obligation shall continue to have effect without modification.
(3) An appeal under this section shall be made by notice served within such period and in such manner as may be prescribed.
(4) Subsections (6) to (9) of section 106A apply in relation to appeals to the Secretary of State under this section as they apply in relation to applications to authorities under that section.
(5) Before determining the appeal the Secretary of State shall, if either the applicant or the authority so wish, give each of them an opportunity of appearing before and being heard by a person appointed by the Secretary of State for the purpose.
(6) The determination of an appeal by the Secretary of State under this section shall be final.
(7) Schedule 6 applies to appeals under this section.
(8) In the application of Schedule 6 to an appeal under this section in a case where the authority mentioned in subsection (1) is the Mayor of London, references in that Schedule to the local planning authority are references to the Mayor of London.”
There are a number of features to be noted:
- The right to invoke the s106A procedure and thus the right of appeal under s106B applies only where the planning obligation is at least five years old. An appeal under s. 106B is against a decision following an application made under s106A. Where an attempt is made to re-negotiate and agree a variation/discharge outside of s106A and this fails there is no appeal;
- There is also no appeal where the application under s106A was to the Secretary of State in respect of a development consent obligation;
- An appeal may be made under this section against the refusal of the local planning authority and/or the Mayor to modify or discharge a planning obligation under the preceding section, or their failure to issue notice of their decision within the prescribed eight-week period (or any agreed extension thereof);
- It is noted in Butterworths Planning Law Service at  that “It is provided that for the purposes of an appeal in respect of the modification or discharge of a planning obligation, if the appeal has been submitted on the grounds of non-determination, it will be assumed that the LPA has determined that the obligation will continue to have effect without modification. It would presumably still be open, however, for the LPA to resolve in committee that if the application had still been before it (once the application has been made the subject of an appeal to the Secretary of State the LPA no longer has locus standi to determine the application), some form of partial modification might have been acceptable. This is not an option formally recognised by the Act but nevertheless there will be cases when the LPA is not prepared to accept the modifications specified in the application in their entirety, but nevertheless would be prepared to agree some form of compromise. Should the LPA wish to pursue this particular course, then it will be important for it to ensure that the Secretary of State, through his Inspectorate, and the appellant are speedily informed. In such a situation, the appellant should submit another application with amended modification but may not wish to withdraw from the original appeal until the new application has been determined”.
- The jurisdiction of the Secretary of State, or his Inspector, on an appeal is the same as that of the local planning authority under s106A thus it can be determined: (a) that the planning obligation shall continue to have effect without modification; (b) that the obligation no longer serves a useful purpose and may therefore be discharged; or (c) that the obligation does continue to serve a useful purpose but would still serve that purpose if it had effect subject to the modifications specified in the application and that it should therefore be modified in accordance with the application;
- Any appeal must be made within six months of the date of the local planning authority’s decision (or the expiry of the prescribed or agreed period), although the Secretary of State has discretion to extend that period (Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992 (SI 1992/2832) (“the 1992 Regulations”, reg.7);
- S106B(5) provides that either party may request to be heard before an Inspector. The Planning Inspectorate has discretion in such circumstances as to whether to proceed by way of an informal hearing or a public inquiry, but (unlike in s78 planning appeals) the appeal cannot proceed on the basis of written representations without the consent of both parties: this is because s319A of the TCPA 1990 does not apply to s106B appeals;
- The 1992 Regulations (reg.7(2)) require that an appeal under this section must be made on a form obtained from the Secretary of State (https://www.gov.uk/government/publications/modify-or-discharge-a-planning-obligation-s106b) and must include the information specified in the form. In addition, it must be accompanied by a copy of the application to the relevant authority, the certificate accompanying that application, the instrument by which the planning obligation was entered into (not just the relevant part of that instrument placed on public deposit by the local planning authority), any correspondence with the authority relating to the application, and the notice of decision (if any). Appellants are required to copy the completed notice of appeal to the appealed against authority when submitting it to the Secretary of State (reg.7(3));
- None of the planning appeals rules and regulations apply to s106B appeals but one would expect such hearings and inquiries to be conducted along similar lines, and some s106B appeals are heard alongside other planning appeals (see below);
- Jurisdiction to determine appeals under this section is transferred to inspectors (see reg.8 of the 1992 Regulations), though this is subject to the usual powers of the Secretary of State to recover jurisdiction under para.3 of Sch.6 to this Act. An inspector has the same powers under this section as the Secretary of State (Sch.6, para.2(1)(aa));
- A decision made on an appeal under s106B is amenable to judicial review: see e.g. R. (Mansfield DC) v Secretary of State for Housing, Communities and Local Government  P.T.S.R. 540 (discussed in Part 1 of the article);
There is only very limited PINS guidance on s106B appeals: https://www.gov.uk/guidance/appeal-a-modification-or-discharge-of-planning-obligation-application-s106.
As with other planning appeals costs may be awarded for unreasonable behaviour, see e.g. APP/W0340/Q/11/2153060 where costs were awarded against the appellant company who had pursued an appeal that was directly contrary to judicial authority on s106A and B, and who had been a party to one of the leading cases, namely R (Renaissance Habitat Ltd) v West Berkshire DC  EWHC 242 (Admin): see Part 1 of the article. Note also APP/Y3940/Q/2115524 where a decision by the council to withdraw its objection to a proposal to vary the terms of a planning obligation failed to prevent an award of costs being made against it. The appellant sought to discharge three clauses within the obligation, which had been agreed in 1995 and was linked to a permission authorising residential development and the construction of a local centre. The clauses stated that a site should be reserved for a medical centre including a doctor's surgery potentially with ancillary pharmacy. The developer was under an obligation to use all reasonable endeavours to procure a user for the medical use. The appellants stated, however, that despite extensive marketing including advertisements in local newspapers and journals, contacting local doctors and dentists along with others in the sub-region and the primary care trust, no interest in developing the site for its allocated use had been established. Accordingly, they requested that the clauses should be removed to enable the site to be used as a public house, permission having been granted for such a development on appeal in 2006. The inspector considered that the marketing campaign had been extensive and rigorous. In particular, the primary care trust had on six occasions confirmed that it had no interest in developing a health care facility on the site stating that no funding was available and also confirming that the site was too small to allow the provision of a modern doctor's surgery. The trust confirmed that the town had an adequate supply of doctors, he noted, and on this basis there was no realistic chance of a community healthcare facility being developed on the site. The three clauses were therefore deleted, the inspector placing weight on a revised unilateral undertaking that confirmed that the appellants would only use the site for a food and drink use: see DCP para 4.619.
Looking at DCP, COMPASS and also Westlaw (which includes planning appeals reported in P.A.D) the following trends can be observed:
- The most common appeal under s106B appears to be in relation to s106 obligations that restrict the occupancy of dwellings (e.g. for holiday lets, agricultural workers, staff accommodation, affordable housing, age restriction on retirement flats etc.) or otherwise restrict the use of land;
- The appeals also contain many examples of developers seeking to argue that something they agreed to provide as part of obtaining planning permission is no longer necessary see e.g. APP/C/760/8/18/3216236 releasing the developer of a 530 house scheme from an obligation to provide a junior sports pitch and APP/C3810/8/19/3225490 releasing a developer of a scheme for 2 houses from an affordable housing obligation;
- Written representations is a commonly agreed method of determination despite PINS not be able to force this on the parties, as with planning appeals. The next most popular procedure being a hearing with very few such appeals going to an inquiry;
- Recovery of a s106B is very rare, the only example we have found is APP/R0660/W/16/31509608 and this was where the s106B appeal was related to and parasitic on a s78 appeal that had been recovered;
- The success rate appears to be no better than about 50%, which may seem high given the difficulty of meeting the applicable test of not serving a useful purpose. That said the overall number of appeals is low perhaps reflecting that it is the stronger cases that are pursued on appeal.
Looking at s106B appeals that have been determined following an inquiry the following cases give a flavour of the way these appeals work in the more complex cases:
- APP/M5450/Q/16/3160672: appeal seeking modification of a planning obligation so as to increase number of pupils on the roll of an independent school from 525 to 710: dismissed following a 4 day inquiry;
- APP/W0340/Q/11/2153060: appeal seeking to modify and delete financial obligations attached to planning permission: dismissed following a one-day inquiry with award of costs against the appellant (see above). It appears that this case went to an inquiry because there was a considerable amount of contested argument on legal authorities;
- APP/U/430/8/21/7315: appeal seeking to remove a section of land required to be maintained as a garden in a s106 obligation to allow the extension for nursing home business: dismissed following a 1-day inquiry;
- APP/Y3940/Q/2115524 (referred to also above): appeal allowed following a 1-day inquiry and costs awarded to the appellant;
- APP/P0119/0/09/2109407: Discharge sought of obligations relating to education in a 315-home scheme. The obligations contained an option for land for a school and if not exercised a financial contribution; it was argued that any contribution would be used now not to meet need generated by development but to upgrade existing facilities: appeal dismissed following 1-day inquiry;
- APP/M3645/Q/2050232/NWF: s106B appeal linked to enforcement and planning appeals and seeking discharge or modification of a s106 to allow the use of land for airport car parking: appeal dismissed following 6-day inquiry.
There are a few other relevant points to consider.
First, in Newham LBC v Ali  1 W.L.R. 2743, a case we will consider further in a later article when looking at the enforcement of s106 obligations the Court of Appeal held that in the absence of circumstances that would on normal equitable principles lead to the denial of an injunction, where there has been a substantial breach of a planning obligation under s106, the discretion conferred by s106(5) should normally be exercised in favour of the grant of an injunction and that “[i]f a person wishes to contend that a planning obligation no longer serves a planning purpose ,then it should seek to discharge or modify the obligation under section 106A or 106B. That is the route by which Parliament decided that a person might be relieved from its planning obligation” (at , and see also on the relationship between s106A and B and proceeding to enforce a s106 obligation R (Renaissance Habitat Ltd) v West Berkshire DC  EWHC 242 (Admin) at  per Ouseley J. and Waltham Forest LBC v Oakmesh Ltd  EWHC 1688 (Ch)).
Second, the fact that a sum has already been paid pursuant to a s106 obligation does not mean that s106A and an appeal under s106B are necessarily excluded: see Patel v Brent LBC (No.3)  1 P. & C.R. 7 at . And see also by analogy York City Council v Trinity One (Leeds) Ltd  EWCA Civ 1883 dealing with s106BC appeals and whether this had retrospective effect so although a developer was currently liable to pay a local planning authority a sum of money in lieu of providing affordable housing under a s106 agreement, if its appeal against the refusal to modify the agreement by removing the affordable housing obligation was successful, that would extinguish its liability to the authority (s106BA to 106BC of the TCPA 1990 used to provide an application and appeal procedure for the review of affordable housing obligations based on economic viability without taking into account other aspects of the planning consent. These provisions were repealed at the end of 30 April 2016).
The first article in this series, Varying a s106 obligation by Kate Olley, can be found here.
Later articles in the series will consider the relationship between s106 obligations and s73 of the Town and Country Planning Act 1990 (“the TCPA 1990”), and the enforcement of s106 obligations either by way of injunction or a money claim or other form of dispute resolution.