R (Giordano Ltd) v Camden LBC (2018) EWHC 3417 (Admin) was an application for judicial review of a notice of liability to pay a Community Infrastructure Levy (“CIL”) in respect of a proposed development. The issue was whether the Claimant was liable to the Council for CIL, following a grant of planning permission for the development by the Council as local planning authority. The Council had decided that the Claimant was not eligible for a deduction from the “chargeable amount” under the Community Infrastructure Levy Regulations 2010, as amended (“the CIL Regulations”). This was because the Claimant did not meet the conditions in Regulation 40(7) of the CIL Regulations.Section 205(2) of the Planning Act 2008 provides that in making the Regulations providing for CIL, the Secretary of State:
“… shall aim to ensure that the overall purpose of CIL is to ensure that costs incurred in supporting the development of an area can be funded (wholly or partly) by owners or developers of land in a way that does not make development of an area economically unviable.”
A collecting authority such as the Council may issue a Charging Schedule setting the rates and other criteria by reference to which the amount of CIL chargeable in its area is to be calculated. Regulation 14(1) of the CIL Regulations provides:
“In setting rates (including differential rates) in a charging schedule, a charging authority must strike an appropriate balance between –
(a) the desirability of funding from CIL (in whole or in part) the actual and expected estimated total cost of infrastructure required to support the development of its area, taking into account other actual and expected sources of funding; and
(b) the potential effects (taken as a whole) of the imposition of CIL on the economic viability of development across its area”.
The power to set “differential rates” is provided by Regulation 13(1). Regulation 9 defines the “chargeable development” for the purposes of CIL. By Regulation 6, certain works are not to be treated as development. “Planning permission” for these purposes, includes planning permission granted by a LPA under Section 70 of the Town and Country Planning Act 1990. The terms of the relevant planning permission thus define the intended use of the relevant building for the purposes of the CIL Regulations.
Liability to pay CIL arises on commencement of the chargeable development and the liability is to pay an amount of CIL equal to the “chargeable amount less the amount of any relief granted in respect of the chargeable development” Regulation 31(3). The “chargeable amount” must be calculated in accordance with Regulation 40. In summary, Regulation 40 requires the identification of a net chargeable area to which the relevant Charging Schedule rate, with indexation, is applied. Regulation 40(7) sets out the calculation for identifying the net chargeable area. It requires that two categories of internal floorspace are to be deducted from the gross internal area of the development for which planning permission has been granted.
Lang J concluded (paragraph 27) that the Council was correct to conclude that the Claimant did not satisfy all the conditions in Regulation 40(7) for a statutory declaration. As at the relevant date, the intended use, following completion of the chargeable development, was not able to be carried on lawfully and permanently without further planning permission, within the meaning of Regulation 40(7)(ii). The fact that a residential use could have been established at the Property at some future date did not assist the Claimant, as the wording of Regulation 40(7)(ii) expressly required both the present and intended uses to match as at the relevant date. A potential use was not sufficient. The word “lawful” in Section 192 of the 1990 Act means “lawful” in the context of planning legislation. The comparison has to be made between the present use and the proposed use.