First Court of Appeal judgment on Community Infrastructure Levy Regulations

R (Giordano Ltd) v London Borough of Camden [2019] EWCA Civ 1544 The Court of Appeal has for the first time considered the interpretation of the Community Infrastructure Levy Regulations 2010 (the CIL Regs). Overturning Lang J at first instance, the Court of Appeal held that the Appellant, Giordano Ltd, was entitled to a 100% reduction on the amount of CIL that would have been payable under reg 40(7)(ii) of the CIL Regs. The Appellant had a planning permission from 2011 for the change of use of three floors of a building in Central London to six flats (C3 residential use), on which no CIL was payable because it pre-dated the introduction of any charging schedule by the Council or the London Mayor. The 2011 permission was implemented by the carrying out of external works but the building was not physically adapted for residential use. The Appellant then sought planning permission for an alternative scheme of three larger flats, each occupying a whole floor, and that permission was granted in 2017. However, the Council then served a notice that the revised development was liable to in £547,419 in CIL. The Appellant argued that the whole development qualified for a credit pursuant to reg 40(7)(ii) of the CIL Regs because the use of the entire building under the revised scheme was one that was “able to be carried on lawfully and permanently without further planning permission” on the day before the 2017 permission was granted. The Council refused to accept that argument, arguing that a building would only qualify for credit under reg 40(7)(ii) where it was already physically adapted for the relevant use – the proposed use must be its existing “lawful use”. Following a claim for judicial review, Lang J agreed with the Council. The Court of Appeal disagreed, and accepted the Appellant’s argument that on its true construction, reg 40(7)(ii) required no more than that the part of the building in respect of which credit was claimed could be lawfully used for the proposed use, with no requirement of physical adaptation or current lawful use. Per Lindblom LJ, giving the lead judgment:

30. The equivalence of use required is between “the intended use” and “a use that is able to be carried on lawfully and permanently without further planning permission”. The language is somewhat cumbersome. But in this context the natural and ordinary meaning of the expression “a use that is able to be carried on lawfully and permanently without further planning permission”, when construed as a whole, is in my opinion clear. It is that on the relevant day, without any further planning permission having to be obtained, the use in question, together with any necessary physical works to the building, would be lawful, and that it would not be merely a temporary use.

Reg 40 of the CIL Regs has been amended with effect from 1 September 2019 but the wording of reg 40(7)(ii) is replication in para 1 of the Schedule, to which the new Reg 40 gives effect, so the court’s conclusions will be equally applicable to the amended CIL scheme. The judgment will also be of wider interest as the first time the Court of Appeal has considered the construction of the CIL Regs, confirming a straightforward approach to their construction and deprecating the importation of concepts from other branches of planning law without good reason. Tim Buley QC acted for the successful Appellant.