Partner Karen Jones, in our Planning & Environmental Law team, reviews this recent case.
The case of R (Braithwaite and Melton Meadows Properties Ltd) v East Suffolk Council [2022] EWCA Civ 1716, demonstrates the importance of responding to Community Infrastructure Levy (CIL) liability notices and demand notices within the time period specified in the CIL Regulations and that a legal notice can only be nullified by way of legal challenge and a decision of a competent court stating that the notice is quashed and nullified.
Background facts
East Suffolk Council (the Council) granted planning permission to Mr Braithwaite the applicant for a mixed use of housing and office development in November 2017. Mr Braithwaite assumed liability for CIL earlier on in the planning process. There were further two separate s73 applications to vary conditions attached to the planning permission for which planning permission was granted. The second of the s73 application was granted permission in February 2019. In March 2019, Mr Braithwaite transferred the ownership of the site to his company Melton Meadow Properties Limited who he was director of (the developer). After making enquires, it was confirmed that the second s73 permission had been implemented. In June 2020 the Council issued a liability notice and demand notice which allowed the developers to pay CIL in instalment. The developer failed to pay the first instalment in time and the Council issued a revised demand notice imposing a surcharge for late payment.
The developer appealed against the surcharge and the appeal was allowed and it was held that the Council had failed to issue the 2020 liability notice as soon as practicable after the day on which planning permission first permitted development as required by regulation 65(1) of the CIL Regulations 2010 and it wasn’t served on the “relevant person” for the purposes of regulation 65(3)(a).
In September 2021, the Council issued a further liability and a demand notice requiring the developer to make immediate payment of the balance of the CIL due and refused the developers subsequent request to withdraw the notices.
In December 2021, the developer challenged the revised 2021 liability notice, by way of an application seeking permission to judicial review the liability notice in the High Court. The High Court judge refused permission and held that the 2020 liability notice was to be treated as valid until quashed by a court of competent jurisdiction, and that it had not ceased to exist on issue of the 2021 liability notice but had only ceased "to have effect" and therefore, the Council had been entitled to issue a revised liability notice. The High Court further held that to challenge the 2021 liability notice, the developers needed to obtain permission to challenge the 2020 liability notice and that a claim to challenge the 2020 liability notice hadn’t been made and, would now be very late and with no good reasons provided for the delay.
The developers appealed to the Court of Appeal contending that, as the 2020 liability notice did not comply with regulation 65(1) of the CIL Regulations 2010, it was a nullity and that no legal consequences could flow from it, such as the period within which proceedings for judicial review had to be begun.
Court of Appeal Judgment
The Court of Appeal dismissed the appeal and held that a decision issued by a public authority was legally valid until it is quashed by a competent court (Smith v East Elloe Rural DC [1956] A.C. 736 and R (Majera (formerly SM (Rwanda)) v Secretary of State for the Home Department [2021] UKSC 46).
The Court of Appeal held that it would be a significant departure from settled principles of public law to treat a decision automatically as having been a nullity and of no effect from the outset, and without an authoritative relevant determination by a competent court. A revised liability notice served under regulation 65(8) of the CIL Regulations 2010 does not retrospectively nullify the previous legal effect of an earlier liability notice.
The Court of Appeal held that the planning inspector's decision to quash the surcharge did not affect the lawfulness of the 2020 liability notice from which no legal consequences could flow. The Court of Appeal further stated that the 2020 liability issued was an extant liability notice, unless it is either quashed by the court or superseded by a revised liability notice. The 2020 liability notice was superseded when the Council issued a revised 2021 liability notice, however the issue of the 2021 liability notice did not nullify 2020 liability notice. Therefore, the grounds for making an application to challenge it had arisen in June 2020 and the developers were long out of time to make a claim for judicial review.
Comment
This Court of Appeal judgment highlights key difference of when a legal notice “ceases to have effect” and when it “ceases to exist”. Therefore, for a legal notice to be declared invalid and nullified, there has to be a decision by a competent court quashing the legal notice or the decision of public authority and that legal challenge in the court has to be brought promptly and within time limit.
The CIL process is very procedural and can become a minefield if not followed correctly, therefore developers and landowners need to be careful and make sure that they follow the procedure carefully and take professional advice were necessary. Any failure to do so will result in losing any exemptions or relief that may have been applied for and surcharges and fines being imposed and losing the ability to pay CIL in instalments.
To assist in understanding the CIL process better, we have produced a flow chart which sets out the different stages of CIL from the grant of planning permission. If you would like any assistance and advice on the CIL procedure, then please get in touch with us to discuss it further.
You may find our blog article, 'Community Infrastructure Levy (CIL) Explained' of interest; it also outlines the CIL process and the timescales involved.
For further information or legal advice, please contact law@blandy.co.uk 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.
