Court of Appeal hands down landmark judgment in relation to the interpretation of Regulation 122 of the CIL Regulations

Earlier this month, the Court of Appeal heard an appeal brought by Tesco which engaged an important point of legal principle concerning the proper application of the CIL Regulations to a Section 106 Obligation offered to mitigate the retail impact on an affected town centre. Paul Stinchcombe QC and Jonathan Darby successfully appeared on behalf of the Third Interested Party (Windmill Limited) instructed by Eversheds LLP, when neither the Respondent nor any other Interested Party appeared to resist the appeal, and successfully did so, distinguishing the trilogy of Mid Counties cases (R (Mid Counties Co-Operative Limited) v Forest of Dean District Council [2013] EWHC 1908; [2014] EWHC 3059; and [2015] EWHC 1251.

The particular point of wider importance concerned whether the CIL Regulations place upon a Local Planning Authority a requirement to quantify the mitigation offered by way of a Section 106 Obligation before it can lawfully take into account that Section 106 Obligation and weigh it in the balance when granting permission in circumstances where (i) a proposal for a mixed industrial and out-of-town retail development will cause retail harm to the town centre which cannot be entirely mitigated; and (ii) the Authority is willing to accept that harm, provided some mitigation is offered. The Court of Appeal accepted submissions on behalf of Windmill to the effect that there is no such requirement to quantify.

In summary, the Court of Appeal found that whilst the Local Planning Authority must apply the law set out in the CIL Regulations with appropriate rigour, what is appropriate varies in the circumstances of each case. On the facts of the appeal, it was held that the decision-maker could lawfully decide that a Section 106 Obligation offering a certain level of contributions towards mitigation and prioritising, from that sum, a further study to maximise the mitigation achieved from that commitment, satisfied the three requirements of Regulation 122(2) on the basis that (i) it was necessary to mitigate that impact to whatever degree possible from the sum offered, because otherwise the proposal would cause avoidable harm to interests of acknowledged planning importance; (ii) such mitigation was directly related to the development, because that retail impact arises from that development; and (iii) such mitigation was fairly and reasonably related in scale and kind to the development, because whilst it could not fully mitigate the harm it was offered on terms which would reduce the retail impact so far as possible.

The judgment can be read by clicking here.