Over Taylor Biggs

This can be done either by an Agreement entered into between the local planning authority and the land owner or developer under Section 106 Town and Country Planning Act 1990 or by way of a unilateral undertaking given by the landowner or developer alone frequently to meet objections to proposed development.  A recent Court of Appeal decision has highlighted the need for extreme care when providing obligations under a unilateral undertaking.

Usually, planning obligations are negotiated with a local planning authority and a Section 106 Agreement is entered into.  But a developer might want to offer a unilateral undertaking if it feels the local authority is imposing unreasonable demands or the negotiations are being delayed. 

A developer applied to Wokingham Borough Council for planning permission to build 14 houses.  The application was refused.  The Council stated that proposal made inadequate provision for services, amenities and infrastructure.  It would have an adverse impact on the amenities of the area.  The Borough Council said that its objections could be overcome if the developer offered an acceptable unilateral undertaking.  It calculated that the cost would be in the region of £170,000.

The developer appealed the planning refusal.  It provided a unilateral undertaking to pay the requested contribution.   The undertaking was not to have effect until planning permission had been granted and development had begun.

The developer’s appeal was successful.  The Planning Inspector also said that the Borough Council had not provided any evidence to show the contributions were necessary to satisfy policies in the Structure Plan, Local Plan or Planning Circulars.  He therefore took the view that the contributions were unnecessary.  He gave little weight in planning terms to the impact of the unilateral undertaking.

The developer asked the Borough Council to discharge the unilateral undertaking but the Council said the Inspector’s decision did not affect the enforceability of the undertaking and required the developer to comply.  The developer applied for judicial review of the decision to enforce the unilateral undertaking.

In response, the Borough Council reduced the contribution to £140,000.  The High Court concluded that the enforcement of the undertaking was lawful and the comments made by the Planning Inspector had no effect on enforceability.  Surplus monies could be refunded by the Borough Council under the Local Government Act 1972.

The developer was unhappy and appealed that decision to the Court of Appeal.  It argued that as the Planning Inspector had said the contributions were unnecessary, it was unlawful for the Borough Council to refuse to discharge the unilateral undertaking.  The contribution had been reduced.  Therefore the full sum in the unilateral undertaking was not needed for planning purposes and there were no powers on the Council to refund monies under Section 106.

This appeal was dismissed.  The Court of Appeal found it was reasonable for the developer to offer a unilateral undertaking and to make a financial contribution towards the relevant needs.  It appeared that the Planning Inspector would grant planning permission even if a unilateral undertaking had not been given. 

The planning undertaking became enforceable under its own terms and was not invariably linked to the grant of planning permission.  It could not be said that the unilateral undertaking had been given for an illegitimate planning purpose and the Inspector had not said that the undertaking was invalid for planning purposes.  Therefore the Borough Council was entitled to enforce the undertaking.  It was not making a planning decision but making a decision to enforce a contractual undertaking.

Commentators have said that the Court’s judgment seems harsh on developers where they are required to comply with an undertaking that probably was superfluous to the grant of planning permission. 

One sensible precaution is to include a condition that any undertaking is only to take effect if the Planning Inspector decides the undertaking is necessary to make the development acceptable.  Others have suggested submitting a draft undertaking stated only to take legal effect if an Inspector requires it to be given to facilitate development.

Millgate Developments Limited v Wokingham Borough Council

2011 Court of Appeal