Solicitor Kayleigh Chapman, in our leading Planning & Environmental Law team, looks at the case of R (on the application of Trent) v Hertsmere Borough Council  EWHC 907 (Admin).
This recent case highlights the responsibilities of councils when issuing Liability Notices pursuant to the Community Infrastructure Levy Regulations 2010 (as amended).
Hertsmere Borough Council granted planning permission for a new dwelling on 10 February 2017. On 14 February 2017 the Council prepared a draft Liability Notice, the draft was addressed to the Claimant but both the name and address of the recipient were missing from the remainder of the draft. The Liability Notice reference number was also missing.
The Council asserted during appeal and Court proceedings that the Liability Notice was sent via email to the Claimant and produced a screenshot from the computer log to evidence this. No email showing service was evidenced. The Claimant further denied ever receiving a Liability Notice.
The Claimant commenced the development without serving a Commencement Notice as required under the CIL Regulations. The Council apparently became aware of commencement two years later and subsequently issued a further Liability Notice and a Demand Notice on 5 August 2019. The CIL alleged to be payable was circa £16,000.00 and in addition the Council had imposed two surcharges, one for failing to submit an Assumption of Liability Form (£50.00) and the other for failing to submit a Commencement Notice (£2,500.00). The Council’s 2019 Demand Notice stated a Deemed Commencement Date of 6 June 2019.
The Claimant appealed on the basis that the development was commenced in 2017 and accordingly the deemed Commencement Notice was incorrect. The Inspector, having reviewed the evidence of the Council and Claimant, allowed the appeal and confirmed that the Demand Notice ceased to have effect. The Claimant also appealed against the surcharges imposed and was successful in this regard.
Following this appeal the Council issued a further Demand Notice on 21 April 2020. The Claimant sought to challenge this on a number of grounds, including:
- a) The Council failed to serve a Liability Notice;
- b) The 2019 Liability Notice failed to comply with the requirements of the CIL Regulations to be issued “as soon as practicable” after the grant of planning permission;
- c) The Council’s decision to issue the 2020 Liability Notice was manifestly improper and/or irrational and/or unfair and unreasonable.
In respect of the service of the 2017 Liability Notice the Court agreed with the Inspector that the evidence suggested that the liability notice was “never successfully completed, and the notice was neither issued nor served”.
Turning to the 2019 Liability Notice the Court further found that the Council had not met its duty in Regulation 65(1) CIL Regulations to serve the notice as soon as practicable after the grant of planning permission. The 2019 had been served 2 years and 6 months (less 5 days) after the grant of planning permission. The Court opined that the term “as soon as practicable” should be interpreted as weeks or months, not years.
Further, the Court found that a revised Liability Notice (as the Council claimed the 2019 Liability Notice to be) could only be served to amend or replace an earlier valid Liability Notice. There were also errors within the Liability Notice which the Inspector and Court considered to be significant, for example being addressed to the Claimant’s company which had no interest in the relevant land.
The failure to serve a Liability Notice in accordance with the CIL Regulations was considered to be prejudicial to the Claimant and the Court quashed the 2019 Liability Notice. As a consequence of this finding the Court stated it followed that the 2020 Demand Notice was also invalid and therefore needed to be quashed.
The case illustrates the importance of the Council following the correct procedure and meeting its obligations under the CIL Regulations. It is not uncommon in our experience for Liability Notices to be served 12 months onwards from the date that planning permission was issued and accordingly, the case serves as a useful reminder for Council that “as soon as practicable” should be considered as weeks or months, not years.
The CIL Regime is essentially a tax regime and the procedure must be followed to the letter or else unintended consequences can follow both for developers and councils alike. It is therefore important that you ensure that you understand the procedure to be followed prior to commencing development and if you have any questions to seek professional advice as soon as possible.
For further information or legal advice, please contact firstname.lastname@example.org or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.