Planning Obligations
When obtaining planning permission, it is often necessary to enter into planning obligations dealing with matters such as the payment of a financial contribution towards infrastructure costs or a restriction on hours of use. The obligations are usually agreed with the local planning authority and documented in a section 106 agreement. However, it is also possible to volunteer an obligation by providing a unilateral undertaking. Giving such an undertaking can enable a developer to ameliorate a perceived objection to a proposed development and so increase the prospect of permission being granted on appeal.
A Problem with Unilateral Undertakings
A recent decision of the Court of Appeal has highlighted a problem which can arise when a unilateral undertaking is given in advance of a planning appeal. It is usual to make the undertaking conditional on planning permission being granted. However, that condition alone is not sufficient to prevent the obligation from taking effect before it has been established that it is really necessary and, crucially, once the undertaking becomes binding, it cannot be unilaterally withdrawn, even if it becomes clear that the planning permission would have been granted without it.
The Recent Case
The case arose out of the refusal of planning permission for a residential development. One of the grounds for refusal related to the lack of adequate services, amenities and infrastructure. The local planning authority indicated that this could be dealt with by a unilateral undertaking providing a financial contribution of £170,500. The developer appealed against the refusal and provided the suggested undertaking. The appeal succeeded, but in his decision letter the inspector said the contribution was unnecessary. Despite that, the Council still sought to enforce the undertaking, although it did reduce the amount of the contribution to £140,000.
The developer applied for judicial review of the authority's decision to enforce the undertaking but lost both in the High Court and, later, in the Court of Appeal. Even though the planning permission would probably have been granted on appeal without the undertaking having been given, the court held that the undertaking remained a valid contractual obligation which the Council was entitled to enforce.
Avoiding the Issue
The issue should not arise where the community infrastructure levy is used, as that is a formula-based system. However, there will still be circumstances where unilateral undertakings will be required. When necessary, good drafting practice will be to ensure that the unilateral undertaking:
- is conditional upon both the grant of planning permission and its implementation; and
- relates only to the planning permission being sought and to no future permission.
In this way, financial contributions would not fall due upon the grant of planning permission. This would give time to apply for a "duplicate" planning permission which would not trigger the unilateral obligation should the local authority refuse to release the developer from the obligation. Obviously this has time and costs implications but having this option in place will improve the prospect of achieving a better negotiated resolution with the local authority.
Source: Millgate Developments Ltd v Wokingham Borough Council [2011] EWCA Civ 1062.
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