Supreme Court rules on Concealed Development

The Supreme Court has unanimously overturned the decision of the Court of Appeal in SSCLG v Welwyn Hatfield [2011] UKSC 15 (on appeal from the Court of Appeal [2010] EWCA Civ 26).

The developer had obtained planning permission to build a barn. The external appearance of the building he erected closely resembled the approved drawings, but it had in fact been built and equipped as a house. Upon completion, the house was occupied as the developer’s home and this use had continued for more than four years when the developer applied for a Lawful Development Certificate. Until then the LPA had been entirely unaware that the unauthorised development had taken place.

It was contended that the house was now immune from enforcement under the 4-year rule and was therefore lawful. The LPA refused to grant an LDC, but an appeal against that decision was successful. However, the LPA successfully challenged the Inspector’s decision in the High Court. The Lawful Development Certificate which had been granted by the Inspector on appeal was quashed by Collins J, on the ground that the appellant had deliberately concealed the development and could not therefore rely on the 4-year rule to establish the lawfulness of the development.

In the Court of Appeal, the case went the other way. This was the subject of my very first posting after this blog was relaunched, on 20 April 2010 (see “Concealed development again ”).
The Court of Appeal overturned the High Court judgment on 29th January 2010 ([2010] EWCA Civ 26).

As I subsequently reported, the LPA then took the case to the Supreme Court. The Council appealed on two grounds. First, it challenged the Court of Appeal’s decision that the development in question was a material change of use; secondly, the Council contended that, as a matter of public policy, nobody should be allowed to profit from his own wrong, and this alone was enough to prevent the developer relying on the 4-year rule under s.171B(2).

I confess that I have certain difficulties with the reasoning of the Court on the substantive issue (relating to the precise operation of the 4-year rule), and I may return to this later. However, the public policy point is perhaps of greater interest and of greater importance.

Lord Mance pointed out that the developer intended to deceive the council from the outset. In his planning application he described the proposed building as a hay barn, said that the application involved no change of use of land, and, in relation to sewage disposal, answered not applicable. Secondly, when building his house, he deliberately refrained from giving the notice under the building regulations (applicable to a house but not an agricultural barn). He did not register for council tax or on the electoral register at the building. He also gave the council as his address his office, whereas all other correspondence was to and from the house. Finally, he lived a low key existence, the house being at the end of a lane or track apparently accessible from the road only by a locked gate.

The aim of this conduct was to obtain a planning permission which would not have been granted had the application been for a dwelling house, and then to conceal the fact that what was being built was and was to be a dwelling house and, subsequently, to live in the house without being detected so as to avoid enforcement action within the 4-year period. The Council therefore submitted that the developer’s deceit should preclude him from obtaining an LDC, even if the development otherwise qualified under the 4-year rule.

The essential point of the council’s case on public policy was that planning permission had been obtained as a result of a deceptive planning application. If the application when made was genuine, that could well put a different complexion on the developer’s conduct, which could then be said to consist predominantly of sins of omission and concealment, rather than of positive deception.

The real essence of the council’s case was to be found in the deception involved in the obtaining of a false planning permission which the developer never intended to implement, but which was designed to and did mislead the council into thinking that the building was a genuine hay barn and so into taking no enforcement step for over four years. This was deception in the planning process and directly intended to undermine its regular operation. The other aspects of the developer’s conduct were ancillary to the plan of deception. Lord Mance observed that, by themselves, these were aspects of conduct not uncommon among those who build or extend houses or convert buildings into houses without planning permission; they do not bear directly on the planning process and he was not prepared to assume, for the purposes of this case, that they would not, at least without more, disentitle reliance upon section 171B(1) or (2) or section 191(1)(a) or (b).

After reviewing the well-known judicial authorities on the issue of legal entitlements being defeated by the fraud or deception of the applicant or claimant, Lord Mance concluded that whether conduct will on public policy grounds disentitle a person from relying upon an apparently unqualified statutory provision must be considered in context and with regard to any nexus existing between the conduct and the statutory provision. Here, the four-year statutory periods must have been conceived as periods during which a planning authority would normally be expected to discover an unlawful building operation or use and after which the general interest in proper planning control should yield and the status quo prevail. Positive and deliberately misleading false statements by an owner successfully preventing discovery take the case outside that rationale.

Here, the developer’s conduct, although not identifiably criminal, consisted of positive deception in matters integral to the planning process (applying for and obtaining planning permission) and was directly intended to and did undermine the regular operation of that process. He would be profiting directly from this deception if the passing of the normal four-year period for enforcement which he brought about by the deception were to entitle him to resist enforcement. The apparently unqualified statutory language could not in his lordship’s opinion contemplate or extend to such a case.

For the reasons he had given, Lord Mance did not consider that sections 171B(2) and 191(1)(a) were applicable to the facts of this case. Had he considered otherwise, he would have concluded that their language could not have been intended to cover the exceptional facts of this case, where there was positive deception in the making and obtaining of fraudulent planning applications, which was directly designed to avoid enforcement action within any relevant four year period and succeeded in doing so. This is a conclusion which would still be relevant, were any application to be made for a certificate under section 191(1)(b) or any reliance sought to be placed upon section 171B(1) to preclude enforcement action in respect of the building itself. In the present case, Lord Mance agreed that the Council’s appeal should be allowed, and that the grant of the certificate under section 191(1)(a) should be set aside.

Lord Brown, in agreeing with the judgment of Lord Mance referred to the case of Fidler v SSCLG [2010] EWHC 143 (Admin). Mr Fidler’s pending appeal to the Court of Appeal has been stayed pending the outcome of the Welwyn-Hatfield case, but Lord Brown observed that consistent with the Supreme Court’s judgment in the present case, it will be open to the council there to advance, as an alternative argument to that on which they have hitherto succeeded, the public policy argument based on the Connor principle.

Finally, Lord Brown referred to Clause 104 in the Localism Bill, which is intended to amend the 1990 Act by inserting three new subsections (171BA, 171BB, and 171BC) expressly to deal with issues of concealment. He did not accept that amending legislation is required. The Connor principle is available in cases of this sort, although it should be invoked only in highly exceptional circumstances (such as the cases of Beesley and Fidler).

One important point which is to be derived from the Supreme Court’s decision is that disqualification from reliance upon the 4-year rule would appear to arise only where a developer deliberately sets out to deceive the LPA (for example by making a false or fraudulent planning application). Mere concealment of the development, it appears, may not be enough to prevent the operation of the 4-year rule. That would change in the future in the event of Clause 104 remaining in the Localism Bill in its present form, although the government may yet be persuaded of the inadvisability of legislating as widely as is currently proposed.

© MARTIN H GOODALL