Admittedly, a blog on the intricacies of the Community Infrastructure Levy (“CIL“) doesn’t sound like a very appealing prospect, but everyone needs their medicine occasionally.
In December 2022, the Court of Appeal had to consider the legal consequences of a local authority’s failure to serve a CIL liability notice and the question of whether the local authority could correct the defects in an earlier notice by serving a revised CIL liability notice.
The case was R (On the application of Braithwaite and Melton Meadows Limited) v East Suffolk Council. The facts were these.
Planning permission for an office and residential scheme was granted in 2017. A CIL liability notice was issued shortly thereafter and Mr. Braithwaite assumed liability for it (for about £920,000). A s73 permission was then granted in 2019. This resulted in a lower CIL amount (about £871,000).
No new CIL liability notice was served at that time. Development commenced in August 2019 and only in June 2020 was a liability notice served (nearly a year later). This was issued to the site owner (Melton Meadows Ltd). It was accompanied by a demand notice and subsequently a surcharge.
The surcharge was appealed and the inspector held that as the CIL liability notice had been served incorrectly, the surcharge did not apply.
Under Reg 65 of the CIL Regulations, a CIL liability notice has to be served “as soon as reasonably practicable” after the day on which the permission first permits development. It also has to be served on the “relevant person” who (in the absence of an assumption of liability) is the applicant.
In this case, the time lag between the permission and the service of the CIL was not “as soon as reasonably practicable” and it had been served on the owner, whereas the correct “relevant person” was Mr. Braithwaite (the original applicant for planning permission).
Then the local authority issued a further CIL liability notice – in this case a revised CIL liability notice – on both the owner and Mr. Braithwaite. Under Reg 65(8) of the CIL Regulations, a revised CIL liability notice can be served “at any time” (so the time limits for this service of an initial liability notice do not apply). This notice was the subject of the Court of Appeal’s judgment.
The first question was: could judicial review proceedings be taken at all? The general rule is that they must be begun within six weeks of the cause of action arising. The Court held that although the proceedings were begun shortly after the second (revised) liability notice, the proceedings were really about attacking the validity of the earlier (2020) liability notice and, because there was a considerable delay in bringing proceedings, they were then out of time.
The reason the Court came to this conclusion was that the appellant’s argument was that, although a revised notice can be served “at any time”, it can only be a revised notice if it was revising something, i.e., a valid original notice. These proceedings were effectively arguing that the 2020 notice was invalid and unlawful. And that question was only now being considered.
The appellant here was caught out by the rule that (other than in exceptional cases) the acts of a public authority are to be considered valid until quashed by a court. The fact that a Planning Inspector had taken the view that the original liability notice was invalid was not enough.
The correct approach would have been for Mr. Braithwaite to continue his planning appeal but at the same time lodge an application for permission to bring judicial review proceedings as a protective mechanism. This proved to be a very expensive lesson for Mr. Braithwaite.
The second question was: What was the legal effect of the breach of the CIL Regulations on the first (2020) liability notice and was the revised liability notice lawfully served in view of that breach?
The Court held that because the revised liability notice was served before any judicial decision to quash the first notice, there was a valid liability notice which could be revised at any time. At the point at which the revised notice was served, the original notice ceased to have effect under Regulation 65(8).
This all seems a little harsh on Mr. Braithwaite but the moral of the story is that if you are served a defective CIL liability notice, do not rely solely on the statutory appeal process. Consider if you also need to commence judicial review proceedings immediately.
See our other blog posts in this series:
Our top 6 Planning Law takeaways in 2022 – Part 1: The problem of overlapping planning permissions
Our top 6 Planning Law takeaways in 2022 – Part 2: Proposals to stop “landbanking”
Our top 6 Planning Law takeaways in 2022 – Part 3: What to do when the planners delay
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