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Supreme Court Reviews Planning Obligations

On 25th October 2017 in Aberdeen City and Shire Strategic Development Planning Authority v Elsick Development Co Ltd [2017] UKSC 66 the Supreme Court reviewed the scope for entering into planning obligations in the context of requested pooled contributions. Whilst the case arose from Scotland, which does not have the CIL regime – yet, the conclusions of the Court are of wider implication and of importance for practitioners on both sides of the border. As the Court makes clear, the underlying statutory schemes for obligations are still comparable.

The background to the case concerned a desire by the planning authority to secure contributions for strategic transport infrastructure required to facilitate new development. It introduced Supplementary Guidance to that end, which, when approved, became an element of the Development Plan. A pooled fund was proposed. But the developer objected to being required to make contributions to the fund given the trivial impact its development would have in respect of the need for some of the proposed interventions.

Most importantly, the Court restated and emphasised that the contribution must be connected to the development proposed in more than a de minimis or trivial sense. It concluded that, without a statutory basis such as is provided for by the CIL regime, pooled contributions of the type sought were unlawful and could not be sought via planning obligations. An obligation to contribute in circumstances when the connection was no more than trivial meant that it was not imposed for a purpose related to the development and was an irrelevant consideration. Furthermore, the absence of such connection could not be overcome by reliance upon a policy in a development plan.

Whilst it was lawful to require contributions to infrastructure necessitated by the cumulative effect of various developments that would only be the case where the land which is subject to the obligation contributes to that cumulative effect.

The Court also made what appears to be an important point as to the drafting of obligations at paragraph 62. The restriction that restricts the development must be in the obligation itself, it is not reasonable cannot rely on the combined effect of the obligation and refusal to issue permission until such an obligation is entered into. The Court stated at paragraph 62:-

"Further, the Council did not include any provision in the planning obligation restricting the development of the Elsick site until a contribution was made. Instead it resolved to grant planning permission for the development but to issue that permission only once Elsick had entered into the obligation. The planning obligation was therefore neither restricting nor regulating the development of the Elsick site and so was outside the ambit of section 75".

James Findlay QC acted for the appellants in successfully obtaining permission to appeal to the Supreme Court but not on the appeal itself.