Introduction

The case of Elsick Development Co Ltd v. Aberdeen City and Shire Strategic Development Planning Authority & Anor ([2016] ScotCS CSIH_28) was adjudicated by the Scottish Court of Session on April 29, 2016. The dispute centered around the imposition of planning obligations on developers, specifically concerning contributions to the Strategic Transport Fund (STF). Elsick Development Co Ltd challenged the legality of these obligations, arguing that they failed to comply with the principles set out in the Scottish Government’s Circular 3/2012.

The key issues revolved around whether the planning obligations imposed were directly related to the proposed developments, proportionate in scale, and reasonable in all other aspects as mandated by the Circular. The parties involved included Elsick Development Co Ltd as the appellant, and Aberdeen City and Shire Strategic Development Planning Authority along with another respondent.

Summary of the Judgment

The Court of Session ruled in favor of Elsick Development Co Ltd, quashing the Supplementary Guidance (SG) related to the Strategic Transport Fund (STF). The court found that the obligations imposed on developers to contribute to the STF were unlawful as they did not sufficiently relate to the proposed developments under the tests established by Circular 3/2012. Specifically, the obligations were deemed disproportionate and not directly linked to the impacts of the developments. Consequently, the appellate court sustained the appeal, emphasizing the necessity for planning obligations to be clear, direct, and proportionate to the specific development impacts.

Analysis

Precedents Cited

The judgment heavily referenced established legal principles and precedents to bolster its decision. Key among these were:

• British Airports Authority v Secretary of State for Scotland (1979 SC 200): Established that conditions attached to planning permissions must fairly and reasonably relate to the permitted development.
• Pyx Granite Co v Minister of Housing and Local Government (1958) 1 QB 554: Reinforced the necessity for planning obligations to be proportionate and directly related to the development.
• South Bucks District Council v Porter (No. 2) [2004]: Highlighted the requirement for decision-makers to provide clear and adequate reasons for their decisions.
• Persimmon Homes (North East) v Blyth Valley BC [2008] EWHC 1258 Admin: Emphasized that pooled contributions without direct linkages to specific developments are problematic.

Additionally, the judgment referred to statutory guidelines, notably the Scottish Government Circular 3/2012, which outlines the framework for planning obligations and good neighbor agreements.

Legal Reasoning

The court's legal reasoning was anchored in the principles laid out by Circular 3/2012, which stipulates that planning obligations must:

• Relate directly to the proposed development or arise from the cumulative impact of development in the area.
• Be fair and reasonable in scale and kind relative to the development.
• Be reasonable in all other aspects.

In this case, the STF required developers to contribute financially without a clear, direct linkage to the specific impacts of their developments. The obligations were pooled, meaning contributions were used for broad infrastructure projects not necessarily related to any individual development. The court found that:

• The relationship between the developments and the infrastructure improvements funded by the STF was not sufficiently clear or direct.
• The contributions did not proportionately reflect the scale of the specific developments, often involving de minimis impacts.
• The pooling mechanism obscured the direct benefits to the developments, contravening the requirement for a clear link as mandated by the Circular.

Consequently, the court determined that the SG relating to the STF did not comply with the requisite legal standards and was thus unlawful.

Impact

This judgment has significant implications for future planning obligations in Scotland. It reinforces the necessity for:

• Direct Linkage: Developers must demonstrate a clear connection between their contributions and the specific impacts of their developments.
• Proportionality: Obligations must be proportionate to the scale and type of development, avoiding excessive or unrelated demands.
• Transparency: Mechanisms like pooled contributions must maintain transparency regarding how funds are allocated and ensure they directly mitigate the impacts of developments.

Planners and developers must carefully design obligations to align with these principles, ensuring compliance with Circular 3/2012 to avoid similar legal challenges.

Complex Concepts Simplified

Conclusion

The Elsick Development Co Ltd v. Aberdeen City case serves as a pivotal reference in Scottish planning law, underscoring the essential criteria that planning obligations must satisfy to be lawful. The judgment reinforces the principles of direct relevance, proportionality, and reasonableness as outlined in Circular 3/2012. By invalidating the STF obligations due to their lack of direct linkage and proportionality, the court has set a clear precedent that will influence future planning agreements and obligations. Developers and planning authorities must now ensure that any contributions or obligations are meticulously aligned with the specific impacts of developments, thereby fostering fair and balanced urban growth.