AC-2025-LON000257 - [2025] EWHC 2984 (Admin)

Under Ground Two the Claimant argues firstly that the Defendant was wrong to consider that it had no discretion to waive the liability to CIL, and secondly that to the degree it did exercise a discretion it has done so unlawfully.

The factual position is that the Defendant initially asserted in December 2024 that it had no discretion to withdraw the liability notice and waive any CIL. However, in the subsequent decision of 4^th September 2025 it said that, on the alternative basis, it had considered whether to exercise the discretion and declined to do so. It is the challenge to this latter decision which is subject to Sir Peter Lane’s order, and which I am considering on a rolled-up basis.

Ground Two appears to have four sub-grounds. Firstly, that the Defendant is wrong in law to assert that there is no discretion to withdraw the liability notice and waive the CIL levy. Secondly, that assuming there is a discretion, the Defendant acted contrary to the statutory purpose in failing to exercise it. Thirdly, again assuming the discretion, that the Defendant is seeking “double recovery” without statutory authority. Fourthly, that the exercise of the discretion was unlawful and contrary to general public law principles.

I start with the question of whether there is a discretion under the Regulations. The Claimant’s submission that there is a discretion rests on Regulation 65(7), which states that a collecting authority “may” withdraw a liability notice, and on the overall purpose of the Regulations. Therefore, it is said, there is necessarily an unrestricted discretion within the scheme to withdraw a liability notice and not levy CIL which would otherwise be due.

The fourth witness statement of Mr Leigh sets out examples of some other local planning authorities who do operate a form of discretionary scheme to allow the waiving of CIL in particular circumstances.

The Claimant relies on the overall statutory purpose, as referred to above, of the self-build exemption being intended to support self-builders and not to penalise them or make it difficult for them to construct the dwellings in question. Therefore, the Claimant submits that a construction of the Regulations which allows the Claimant to be effectively penalised for a development that he has not and now cannot build cannot be correct.

In relation to both the argument that there must be a discretion within the scheme, and that that discretion has been unlawfully exercised, the Claimant submits that the Council is in effect seeking to double recover CIL. The Claimant accepts, albeit somewhat belatedly, that the 2016 permission was not merely implemented but also that he had the advantage of living in the outbuilding pursuant to that permission for 7 years. However, he points out that the new built form of that development has not been constructed and now cannot be constructed. The 2023 permission has been implemented and the outbuilding, which formed part of the 2016 permission, has been demolished. Therefore, the Council is in effect seeking to collect CIL for two forms of built development on the same land, where only one can be constructed. Quite apart from the unfairness on the Claimant, such double recovery does not meet the statutory purpose in s.205 PA, whereby CIL is intended to cover the costs incurred by reason of the development.

Finally, the Claimant submits that the exercise of discretion in the letter of 4^th September 2025 was unlawful. It is apparent from the letter that the Defendant has refused to exercise the discretion on the grounds of “consistency”, which in effect means that it has decided it will never waive CIL. This amounts to an unlawful fetter of discretion, because the Defendant is still in reality acting on the basis that there is no discretion.

The Defendant submits that there is no discretion to waive the liability and not collect CIL where it is payable under the Regulations. This is a comprehensive statutory scheme and once CIL is introduced (under s.206 Planning Act 2008) then it must be collected. It would be contrary to the statutory scheme for the Court to find an unfettered discretion to waive CIL.

In respect of the Claimant’s reliance on Regulation 65(7), the Defendant relies on the caselaw referred to by Lang J in R (Heronslea) v SSCLG [2022] EWHC 96 at [134]. The liability for CIL is not created by the liability notice but rather by the commencement of the development.

Regulation 65 sets out a very detailed procedure for the service and, if required, revision of liability notices. If the notice is revised under Regulation 65(4) then one consequence is that a notice may be withdrawn under Regulation 65(7). This deals with the situation where the first notice is fundamentally erroneous. The Court of Appeal in R (Braithwaite) v East Suffolk DC [2023] 832 held that a liability notice continued its legal existence even after a revised liability notice had been issued, see [74]. It therefore follows that for the earlier liability notice to cease to have legal effect it has to be withdrawn under Regulation 65(7).

The Defendant submits that to construe Regulation 65(7) to provide an overarching discretion to withdraw liability notices and therefore waive CIL liability is contrary to the scheme of the Regulations. It would make no sense to have a duty to issue a notice and a revised notice under Regulation 65(1) and (4) if there was an unrestricted discretion to withdraw a notice and waive liability under (7).

An obvious inconsistency would arise because there is a duty in Regulation 69(1) to issue a demand notice, but no power to withdraw such a notice. So, on the Claimant’s case, the liability notice would be withdrawn but the demand notice would remain extant. The Claimant’s only response to this is that the court should imply a power to also withdraw a demand notice.

Regulation 55 gives a discretion to grant discretionary relief in “exceptional circumstances” from liability for CIL, in very specific circumstances, see Regulation 55(3). This strongly indicates against a very broad and unfettered discretion in Regulation 65(7).

The Defendant now accepts that there is a degree of discretion as to what enforcement steps the Council takes on non-payment, but that does not impact on the lack of discretion on the liability itself. There had been some lack of clarity on the Defendant’s position on discretion in respect of the enforcement of CIL liability. At the hearing, the Defendant accepted that there are judgements to be made by the Council as to what enforcement steps are taken if there is a liability for CIL, but it has not been paid.

There is a detailed scheme of enforcement powers, and within those the Council can make choices as to what steps to take to enforce a liability. It is at that stage that issues around alleged hardship may become relevant. The Claimant submits that it asked the Defendant to have a meeting to discuss all issues concerning the Claimant’s circumstances, and the Defendant did not agree to such a meeting and has not been prepared to consider the Claimant’s personal circumstances at all.

The Defendant submits that even if there is, contrary to its principal position, a discretion to waive CIL liability, it has lawfully considered the exercise of that discretion. The letter of 4^th September 2025 takes into account the Claimant’s circumstances. However, the Defendant’s main point is that the scheme of the Regulations, in particular Regulation 32 and 74B, provided a mechanism by which the Claimant could have relieved himself of liability to pay CIL in respect of the 2016 permission; however, he did not avail himself of these powers. It was therefore wholly reasonable for the Council to choose not to exercise a discretion, if it had one.