It is a long time (15 October 2016 to be precise) since we wrote anything about the Community Infrastructure Levy (CIL). Since then we have submitted numerous CIL additional information forms; calculated numerous CIL chargeable amounts; received numerous CIL liability notices; submitted numerous commencement notices; received a number of CIL demand notices; made a number of requests for a review of the chargeable amount; appealed the chargeable amount (unsuccessfully); applied to the court for a judicial review of the failed appeal (successfully) and acted as an expert witness in a case where a planning consultant had inadvertently triggered a significant CIL liability for his client when he told him to undertake site works to prevent a planning consent from lapsing. CIL is therefore now an important and unavoidable part of what we do as planning consultants.
As CIL is still a relatively recent development tax, it has taken some time for any CIL disputes to find all their way to the Court of Appeal. That, however, happened in the December 2022 case of R (Braithwaite and Another) v East Suffolk Council [2022] EWCA Civ 1716 which, as well as clarifying a number of important issues of statutory interpretation, includes a useful discussion of the application of the judicial review process to public law decisions.
The facts are not entirely straightforward but were set out clearly by the High Court judge at first instance. The Local Planning Authority, East Suffolk Council (ESC) granted permission on 16 November 2017 for a residential development in respect of which it served a CIL liability notice dated 19 December 2017 on the developer, Mr Braithwaite, in the sum of £924,700.50, who assumed liability for that amount. Mr Braithwaite subsequently obtained further planning consents for revised schemes on the same site on 13 December 2018 and 7 February 2019.
ESC did not issue a CIL liability notice in respect of the 2017 consent. Under the 2019 consent, the CIL liability was reduced to £871,840.39. No new CIL Form 1 and no new CIL liability notices were served in respect of the 2019 planning consent because neither ESC nor Mr Braithwaite appreciated that new notices would be required.
In March 2019, ownership of the development site was transferred by Mr Braithwaite to his company, Melton Meadows Properties Limited.
The development commenced on 2 August 2019. No commencement notice was served and ESC did not consider at the time which of the three planning consents was being implemented. It only asked that question on 19 June 2020 when it said that it would need to issue a CIL demand notice. On 30 June 2020, ESC issued a CIL liability notice in respect of the February 2019 planning consent (the 2020 LN) and a demand notice in the sum of £871,840.39. Those were addressed to the company.
The CIL liability was not paid and on 29 December 2020 ESC imposed a surcharge for late payment of £43,592.02, at which stage Mr Braithwaite took legal advice which concluded that the 2020 LN had not been issued in accordance with the The Community Infrastructure Levy Regulations 2010 (the Regulations). That was said to be for two reasons; the first was that it had not been issued to him as the “relevant person” for the purposes of regulation 65(3)(a) and had not been issued “as soon as practicable” as required by regulation 65(1). Based on that advice, Mr Braithwaite appealed the imposition of the surcharge. The appeal was successful on the grounds that “a LN was not correctly served and consequently the alleged breach that led to the surcharge did not occur”. The appeal decision was issued on 14 September 2021. ESC accepted that the liability notice was not served on the correct person or as soon as practicable.
On 17 September 2021, ESC issued a new liability notice (the 2021 LN) and demand in the sum of £584,133.06 which was the sum due referable to the February 2019 planning consent less instalments that had already been paid. The notice and the demand was correctly addressed, to correct the defect identified in the appeal decision. ESC said that this was a revised liability notice which, under regulation 65(5) it was able to serve “at any time”.
Mr Braithwaite and the company sought a judicial review on the grounds that, as a result of the appeal decision, the 2020 LN had been found to be a nullity and that the 2021 LN could not therefore be a revised liability notice and could only be a new notice under regulation 65(1). As it had been served 2 years and 7 months after the date of the 2019 planning consent, it had not been served “as soon as practicable” as required by regulation 65(1). As an alternative argument, they said that on the service of the 2021 LN, the 2020 LN ceased to exist as a result of wording of regulation 65(8) which says that “Where a collecting authority issues a liability notice any earlier liability notice issued by it in respect of the same chargeable development ceases to have effect”.
ESC said that the planning inspector who heard the appeal against the surcharge did not have the jurisdiction to quash the 2020 LN and that, as the 2020 LN had not been challenged by judicial review at the time, it was open to it to serve a valid revised liability notice in respect of the February 2019 planning consent. The High Court agreed with ESC and dismissed the challenge against the validity of the 2021 LN. The same arguments then went to the Court of Appeal which agreed with the High Court and dismissed the appeal.
In what is an interesting judgment for those engaged in the minutiae of the CIL regulations, there is also a very useful discussion (from para. 64) of the legal status of a CIL liability notice issued without compliance with regulations 65(1) and (3). That includes (at para. 69) a summary of the law around judicial review as follows:
“All official decisions are presumed to be valid until set aside or otherwise held to be invalid by a court of competent jurisdiction. … Decisions are thus presumed lawful unless and until a court of competent jurisdiction declares them unlawful. There is good reason for this: the public must be entitled to rely upon the validity of official decisions and individuals should not take the law into their own hands. These reasons are built into the procedures of judicial review, which requires for example an application to quash a decision to be brought within a limited time. A decision not challenged within that time, whether or not it would have been declared unlawful if challenged, and whether or not unlawful for jurisdictional error, retains legal effect …”
It is easy to see from the facts in this case, including what was said by the inspector in the successful CIL surcharge appeal, why Mr Braithwaite and his legal advisers took the view that they had good grounds for being successful in the Court of Appeal. Some observers may find it surprising that a notice that was clearly invalid at the time it was served could be made valid in the absence of challenge by application of a presumption. That is, however, the hard (and no-doubt very expensive) lesson in this case and a reminder to all on the receiving end of such notices that the only option is a timely challenge.
