Introduction

The case Gardiner v Hertsmere Borough Council & Anor ([2022] EWCA Civ 1162) addresses a critical issue of statutory interpretation concerning the exemption from liability under the Community Infrastructure Levy (CIL) for self-build housing developments. Specifically, the case explores whether the self-build housing exemption applies when planning permission is granted retrospectively under section 73A of the Town and Country Planning Act 1990. The appellant, Nathan Gardiner, challenged the decision of Hertsmere Borough Council to deny his claim for the exemption and subsequently demand CIL payment after retrospective planning permission was granted.

Summary of the Judgment

The Court of Appeal upheld the initial decision by Mrs Justice Thornton, dismissing Mr. Gardiner's claim for judicial review. The court agreed that the CIL Regulations do not permit the self-build housing exemption in cases where planning permission is granted retrospectively under section 73A. The judgment emphasized the strict interpretation of statutory provisions and the necessity for liability to CIL to be assumed prior to the commencement of development. Since retrospective planning permissions eliminate the temporal gap required for assuming liability before development begins, the exemption could not be applied in such circumstances. Consequently, Mr. Gardiner was held liable for the CIL amounting to £118,227.62.

Analysis

Precedents Cited

The judgment referenced several key precedents to support the statutory interpretation:

• Wilkinson v Rossendale Borough Council [2002]: Highlighted the necessity for local planning authorities to consider the planning merits of applications under section 73A.
• Barclays Mercantile Business Finance Ltd. v Mawson (Inspector of Taxes) [2004]: Emphasized a purposive approach in interpreting tax legislation, which was analogously applied to CIL Regulations.
• R. (on the application of Orbital Shopping Park Swindon Ltd.) v Swindon Borough Council [2016]: Reinforced the importance of a purposive construction in interpreting CIL Regulations.
• Rossendale Borough Council v Hurstwood Properties (A) Ltd. [2021] and Fylde Coast Farms Ltd. v Fylde Borough Council [2021]: Supported the notion that statutory interpretations should align with legislative purpose.
• O v Secretary of State for the Home Department [2022]: Reinforced objective assessment and purposive interpretation in statutory construction.

Legal Reasoning

The court's legal reasoning was anchored in a meticulous analysis of the CIL Regulations alongside the Town and Country Planning Act 1990. Key points include:

• Definition of Chargeable Development: Regulation 9(1) defines it as development for which planning permission is granted. Without this definition, the hierarchical structure of CIL Regulations cannot function.
• Assumption of Liability: Regulation 31 requires that liability to CIL can only be assumed after planning permission has been granted. In retrospective cases, the grant of permission simultaneously treats development as commenced, leaving no window to assume liability beforehand.
• Exemption Application: Regulation 54B mandates that claims for exemption must be made after assuming liability and before commencement of development. Retrospective permissions negate this requirement.
• Statutory Interpretation: The court adhered to principles of strict and purposive interpretation, ensuring that language within the statutes was accorded its ordinary meaning, especially given the tax-like nature of CIL.

The court dismissed the appellant's arguments that intended to extend the self-build housing exemption to retrospective planning permissions, highlighting that such an extension was not supported by the statutory framework.

Impact

This judgment has significant implications for future self-build housing projects, particularly those seeking retrospective planning permissions. Key impacts include:

• Clarification of CIL Regulations: Reinforces the need for developers to seek exemptions prior to commencing development, ensuring compliance with the procedural requisites of CIL Regulations.
• Deterrence Against Planning Breaches: By linking retrospective permissions with ineligibility for CIL exemptions, the decision discourages unauthorized development.
• Consistency in CIL Enforcement: Aligns the application of CIL exemptions with the broader planning control regime, maintaining uniformity in how exemptions and liabilities are administered.
• Future Legislative Considerations: May prompt legislative reviews to address any perceived gaps or ambiguities in the CIL framework concerning retrospective permissions.

Complex Concepts Simplified

Community Infrastructure Levy (CIL)

CIL is a charge levied on new developments to fund local infrastructure projects. Developers must pay this levy unless they qualify for specific exemptions.

Self-Build Housing Exemption

An exemption under CIL Regulations allowing individuals who build their own homes to be exempt from paying the levy, provided they meet certain criteria and follow the prescribed procedures.

Section 73A Planning Permission

A provision under the Town and Country Planning Act 1990 allowing for retrospective planning permission for developments that have already commenced without prior authorization.

Chargeable Development

As defined in Regulation 9(1) of the CIL Regulations, it refers to any development for which planning permission has been granted. Only such developments are liable for CIL.

Assumption of Liability

The process by which a developer agrees to be responsible for paying CIL. This must occur after planning permission is granted and prior to the commencement of development.

Conclusion

The Court of Appeal's decision in Gardiner v Hertsmere Borough Council & Anor underscores the strict adherence to statutory requirements within the CIL framework. By ruling that the self-build housing exemption does not apply to developments granted retrospective planning permissions, the court reinforced the necessity for developers to secure necessary exemptions before commencing any development activities. This judgment serves as a pivotal reference for future cases involving CIL exemptions and highlights the importance of procedural compliance in self-build housing projects.