In response to the claimant’s application for planning permission to develop her residential property, the local planning authority provided her with details of forms required for the purposes of the Community Infrastructure Levy Regulations 2010. One of these was the “CIL-Form 7: Self Build Exemption Claim Form Part 1”, required in order for the claimant to claim a self-build exemption from community infrastructure levy on the development, and the authority further advised that it was “highly recommended” that the claimant also submit an “assumption of liability” form. The claimant submitted the self-build exemption form but not the assumption of liability form because, from the authority’s explanation, she had understood it to be neither mandatory nor necessary. However, the true position was that, by regulation 54B(2)(a)(ii) of the 2010 Regulations, a formal assumption of liability to pay community infrastructure levy was a precondition to a valid claim for exemption. In February 2017 the authority granted planning permission to the claimant for the development and works commenced in August 2017, although the claimant, apparently not realising that it was required, did not submit a commencement notice under regulation 67. The local authority produced a draft liability notice to notify the claimant that she was liable to pay a levy of £16,389.75 but no such notice was in fact issued and served on the claimant until August 2019. The 20219 liability notice was followed by a demand notice requiring payment of the levy plus additional surcharges for failure to submit an assumption of liability notice and a commencement notice. The claimant’s appeal against the demand notice and surcharges was allowed by the Secretary of State’s inspector who found, inter alia, that the 2019 liability notice, served 2½ years after planning permission was granted, could not reasonably be described as meeting the requirement under regulation 65(1) of the 2010 Regulations that the collecting authority issue a liability notice “as soon as practicable” after the day on which a planning permission first permitted development. Shortly thereafter, in April 2020 the authority issued a further demand notice claiming payment of the £16,389.75 levy by reference to the 2019 liability notice. The claimant paid the levy to prevent threatened enforcement proceedings but also sought judicial review, challenging the authority’s decision to serve the demand notice on the ground that the liability notice on which it was based was unlawful because, inter alia, it failed to comply with regulation 65(1) and, having been addressed, issued to and served on her business rather than the claimant personally, it also failed to comply with the requirements in regulation 65(2)(a) and (g) that a liability notice be on the form published by the Secretary of State, or a form to substantially the same effect, and contain the other information specified in that form. She further alleged a breach of her right to peaceful enjoyment of her possessions under article 1 of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms.
On the claim—
Held, claim allowed. (1) The local authority was required to issue and serve statutory notices which complied with the requirements in the Community Infrastructure Levy Regulations 2010 and to do so in the prescribed sequence. Pursuant to regulation 69 of the 2010 Regulations, a demand notice could only be issued after a valid liability notice had been issued, as the demand notice had to identify the liability notice to which it related (regulation 69(2)(c)) and be served on each person who had been identified as liable to pay it (regulation 69(1)). In considering the effect of any non-compliance with the requirements of regulation 65 in respect of liability notices, it was necessary to consider the nature and purpose of the notice requirements in the context of the overall statutory scheme. The liability notice was critically important in that scheme because: (i) it was the formal notification of a person’s liability to pay the levy; (ii) it identified any other recipients of the notice, their addresses, and the category within which they fell; (iii) it set out the amount payable, showing how the calculation had been made; (iv) it indicated whether the authority accepted that the person was eligible for any exemption or relief from the levy; (v) it notified the owner of the land that this liability had been registered as a local land charge against the land affected by the planning permission in the notice; (vi) it explained the requirement to submit a commencement notice disclosing the date when development would commence and warned the recipient that failure to submit a commencement notice may result in the loss of relief claimed; (vii) it explained that the authority would send a demand notice after a commencement notice had been served, setting out the final amount payable, the date when payment should be made and the precise payment arrangements; (viii) it explained that liability to pay in full arose from the date development commenced; (ix) it explained the consequences of non-payment, including liability to additional surcharges; (x) it offered recipients a right to apply for a review of the calculation by the authority; (xi) it set out the rights of appeal to the Valuation Office Agency (an executive agency of HM Revenue and Customs); and (xi) it directed the recipient to the appropriate links and addresses for obtaining further information and copies of levy forms. Taking those matters into account, it was of fundamental importance to the operation of the statutory scheme that the liability notice was issued and served soon after the grant of planning permission, because of the key information it contained about the recipient's liability to community infrastructure levy and the next steps which followed under the scheme. The requirement in regulation 65(1) to issue such a notice “as soon as practicable” imposed a mandatory requirement without any provision for extensions of time and with time starting to run from the date on which a planning permission first permitted development. While the phrase “as soon as practicable” gave some flexibility to an authority if, for example, the recipients were not readily identifiable or their address known, or there was an administrative backlog, in the light of the statutory scheme and its purpose the expectation had to be that any delay would be measured in weeks or months, not years. The power of a collecting authority subsequently to issue a “revised liability notice” under regulation 65(4) or (5) only enabled it to amend or replace an earlier valid liability notice which had previously been issued and served (paras 57, 59–61, 67, 68, 70).
(2) Applying those principles to the present case, the fact that the local authority had not even completed the draft 2017 liability notice, let alone issued and served it, amounted to a significant failure on the authority’s part. The 2019 liability notice, served on the claimant 2½ years after the grant of planning permission, could not reasonably be described as being issued “as soon as practicable” and that amounted to a breach of the requirement in regulation 65(1) which the claimant had not waived. The failure to issue and serve a valid liability notice on the claimant within the prescribed time period was prejudicial as, had she received a timely liability notice in February 2017, it would have alerted her to the facts: (i) that her levy liability was the substantial sum of £16,389.75 and she had not been granted the exemption or relief for which she had applied, which information might well have prompted her to challenge the notice with the authority and then take the necessary steps to complete her exemption application by submitting an assumption of liability form, which she had previously concluded was optional in the light of the authority’s earlier communication; and (ii) that in order to be eligible for the self-build housing exemption she had to submit a commencement form before she commenced development at the property (regulation 54B(6)) and would be liable to surcharges if she did not do so (paras 66, 68, 71, 72).
(3) Further, as the liability notice was a formal legal document which imposed a tax liability on the recipient and placed a land charge on the owner's property, it was of fundamental importance that the recipient was correctly identified by her name. In the present case, where the liability notice ought to have been addressed and issued to the claimant herself as the owner of the relevant land, but had instead incorrectly given the name of the claimant’s business, which had no legal or beneficial interest in the property nor fell within any of the categories of recipients, there had been a breach of regulation 65(2)(a) and (g) of the 2010 Regulations. The regulations did not contain any provisions to save a non-compliant notice and the claimant had not waived the breach (paras 79, 83–85).
(4) As a result of the local authority’s failure to comply with the mandatory requirements in regulation 65(1) and 65(2)(a) and (g) of the 2010 Regulations, the 2019 liability notice was invalid from the date of issue and fell to be quashed. In the absence of any valid liability notice it followed that the 2020 demand notice was invalid and also had to be quashed. As the notices were not valid, there would be a breach of article 1 of the First Protocol to the Human Rights Convention if the claimant were required to pay the levy. The local authority ought therefore to repay that sum to her (paras 87, 94–96).
Per curiam. (i) Given that the authority communicated frequently with the claimant about all other aspects of her planning application, advising her on the steps which were required, it is surprising that it did not advise her that, by regulation 54B(2)(a)(ii) of the 2010 Regulations, a formal assumption of liability to pay the levy is a precondition to a valid claim for exemption, and so her claim for exemption was incomplete. The authority’s correspondence did not make the position clear (para 15).
(ii) The inspector's jurisdiction was limited by regulation 117 to the surcharge appeals. Although the inspector had no power to quash the 2019 liability notice and did not purport to do so, but instead simply exercised his power under regulation 118 by quashing the demand notice, a responsible authority could be expected to have regard to the inspector's findings when deciding upon its next steps (para 93).
The claimant in person.
Emmaline Lambert (instructed by Legal & Democratic Services, Hertsmere Borough Council, Borehamwood) for the local planning authority.