What next for Certificates of Lawfulness?

1. Introduction

The recent High Court case R (on the application of Ocado Retail Ltd) v Islington London Borough Council [2021] EWHC 1509 (Admin) [2021] EWHC 1509 (Admin) 7 June 2021, considered certificates of lawfulness of existing use or development (CLEUD) pursuant to s.191 Town and Country Planning Act 1990 (TCPA90). The case answers some unanswered questions arising from previous case law, and assists practitioners advising on certificates of lawfulness, as well as immunity periods relating to material changes of use and breaches of condition.

2. Summary

The High Court rejected Ocado’s challenge to the revocation of a CLEUD by the London Borough of Islington (LBI). Local residents had identified that material information had been withheld when the CLEUD application was made. Holgate J held (i) withholding of information does not have to be deliberate; (ii) a breach of condition, or material change of use must be continuous for the relevant period for immunity from enforcement to be gained; (iii) once a lawful use right accrues its continued existence does not depend upon that right continuing to be exercised; (iv) once immunity is gained, the right can only be lost via abandonment or a supervening event. The judgment is important because (i) applications for CLEUDs can be made relying on a lawful use having accrued that is not continuous at the point of application; (ii) care is needed when submitting CLEUD applications not to withhold information even if that information is otherwise available to a local planning authority (LPA).

3. What are the practical implications of this case?

The case assists practitioners advising on the lawfulness of material changes of use and breaches of conditions attached to planning permissions. S.171B(3) TCPA90 provides that a period of 10 years must elapse before a change of use or breach of condition is lawful beginning with the date of breach. Case law relating to this section has now established the following:

• Thurrock BC v Secretary of State for the Environment, Transport and the Regions [2001] J.P.L. 1388 held that the only effective test was to compare the use at the end of the immunity period with the use just before the start of the period to assess if there had been a material change of use.
• Thurrock also established that in calculating the 10 year period no account could be taken of any time when the LPA could not have taken enforcement action, (e.g. because no breach was occurring); that period would not count towards the 10 years. The breach of planning control must have been continuous during the immunity period.
• The Ocado case looks at what happens after the immunity period ends; it was held that the use does not have to be continuous after immunity is gained; once gained, the test is whether the use has been abandoned, there is a subsequent change of use, or a new planning unit is created. Therefore, when an application is made pursuant to s.191 TCPA90 for a CLEUD, the 10 year period relied upon can be sometime in the past, and does not have to be the 10 year period immediately preceding the date of application.

The Ocado case also highlights the necessity of carefully researching the immunity period, and ensuring the evidence is reliable and free of gaps. If information contained in the CLEUD application is false, or information is withheld (whether deliberate or inadvertent) then there is a risk the resulting CLEUD will be revoked pursuant to s.193(7) TCPA90. That the LPAs records might hold complete reliable information is irrelevant, the onus is on the applicant making the CLEUD application to ensure the accuracy of its evidence.

4. What was the background?

A CLEUD application was made in relation to the Bush Industrial Estate in Islington (the Estate). The application form stated that the use had begun more than 10 years before the date of the application in breach of condition. A statutory declaration accompanied the application. The LBI granted a CLEUD for units A-D certifying that these had a lawful B8 use. Relying on the CLEUD, Ocado entered into an agreement for lease of units A-D, and subsequently made a planning application for works to the premises. There was local objection to that application. Residents became aware of the CLEUD and submitted documents to LBI relating to the planning history of the Estate. They asked LBI to exercise its powers under s.193(7) TCPA90 to revoke the CLEUD on the grounds that the application contained statements which were "false in a material particular" or that "material information" had been "withheld." LBI provided opportunities for the Estate’s owner and Ocado to make representations. A further statutory declaration was submitted; this revealed that the declarant had not visited the premises for a period of 4 years within the claimed immunity period. LBI revoked the CLEUD. However, the period relied on to establish immunity spanned some 25 years in total. The evidence suggested that immunity had been gained within this period.

5. What did the court decide?

Holgate J held:

s.193(7)

• Withholding of information does not have to be deliberate for the purposes of s.193(7); the section requires an objective assessment as to whether information has been withheld or not.
• A LPA is entitled to consider the materiality of matters falling within s.193(7) cumulatively as well as individually.
• To be "material" the information in question must at least be relevant. Relevance is for the court to decide (Tesco Stores Limited v Secretary of State for the Environment [1995] 1 WLR 759, 780F).
• The materiality test may be satisfied because the relevant information could have resulted in the LPA making a different factual finding. The test is “could”, not “would”.
• The CLEUD referred to units A-D not being used to capacity; in fact units C and D were vacant for 6 years or more. The declarant of the statutory declaration lacked knowledge of continuous use. These matters were sufficient to satisfy the requirements of s.193(7). Public confidence in CLEUDs must extend to the reliability of the information put forward by an applicant to support the grant of a certificate.
• The assessment of falsity, withholding and materiality are, subject to any issue about relevance, matters of fact and degree, and therefore judgment, for the decision-maker, subject to challenge on the ground of irrationality.
• An applicant can nonetheless be treated as withholding information if that information is in the possession of the LPA, and contained in its records. The onus is on the applicant to justify the grant of a CLEUD with adequate verifying information. The legislation places a risk upon an applicant (and his successors in title) that a CLEUD may be later revoked if the s.193(7) conditions are met.

Continuous use

• Time does not run for the purposes of s.171B during periods when the LPA would be unable to take enforcement action because the breach of planning control has ceased. A breach of planning control must continue throughout the immunity period. If, for example, a breach of condition ceases the clock stops. If the condition is breached again a fresh breach of planning control occurs and the clock restarts (Nicholson v Secretary of State for the Environment (1998) 76 P&CR 191).
• Thurrock established that the concept of abandonment is irrelevant to whether a use right has accrued under s.191(2). Abandonment, and not mere cessation of use, is relevant to determining whether an accrued right is lost.
• An accrued right can also be lost because of some other supervening event, e.g. the creation of a new planning unit, or a material change of use.
• s.191 requires the LPA to be satisfied of the lawfulness of the matter in question at the date of the application for a CLEUD, and not that that matter became lawful on that date. Sections 191(2) and (3) declare that any use, operation or breach of condition is lawful at any time if the time for enforcement action had then expired. That language makes it plain that the time limit for enforcement may have expired at some point prior to the application date. That approach aligns with the language in s.171B that "no enforcement action may be taken after the end of" the relevant time limit.

6. Next steps

A CLEUD is a valuable document, it certifies that an existing use (which could include a use in breach of a condition), or built development is lawful. Obtaining a CLEUD is often a condition precedent to the draw-down of finance, or the completion (as seems to have occurred in the Ocado case) of an agreement for lease, the grant of a lease, or a sale. Preparing a CLEUD application so that the resulting certificate is robust, free from the prospect of successful challenge or revocation, and so that the certificate is drafted in such a manner that it can be relied upon by the intended user is no simple task. A statutory declaration is a legal document and the declarant has to swear to the veracity of the contents. Stress testing the evidence base of the declaration, and exhibiting supporting evidence to it are important. The Courts have not hesitated either to quash certificates where a LPA erred in granting it, or to declare that the resulting certificate has not given the applicant what they thought they were getting. In our experience, preparing a CLEUD application, including drafting the certificate and the statutory declaration would therefore usually benefit from a legal review.