The case concerned a development of a single house which had been granted exemption from CIL under the self-build exemption.  Having commenced the development, Mr Luck then secured planning permission for an alternative development of two houses on the site and sold the site to a developer.  The Council judged that the self-build exemption had been lost and that, since Mr Luck had started the development, he was liable for CIL in the sum of £334,478.  Construction of the alternative development of two houses was then undertaken to the point where it was common ground that the single house permission was incapable of completion.  Mr Luck contested that the self-build exemption had been lost, and that he was liable for the CIL.  He also asked the Council to withdraw the liability and demand notices, and to agree not to collect the CIL, arguing that there would be double recovery of CIL for the site as the two house scheme was also liable for CIL.  The Council declined to do so.

On the first issue, Lieven J agreed with the Council that the sale of the site to a developer, following commencement of the development, meant that the self-build exemption was automatically lost.  A self-build house needs to be both built and occupied by the same person.  If some building is done by one person and then the site is sold to another, it is impossible for the house to be both built and occupied by the same person.  The Judge held that it was clear from the sale that the conditions for self-build housing no longer existed and the development could not meet the relevant criteria. 

On the second issue, Mr Luck argued that collecting authorities had a general discretion not to collect CIL and to withdraw liability notices.  He pointed to examples of other authorities which operated a form of discretionary scheme which allowed the waiving of CIL in particular circumstances.  Mrs Justice Lieven accepted the Council’s argument that there is no discretion to waive CIL liability and to agree not to collect CIL which is payable under the CIL Regulations.  The Judge gave two over-arching reasons for this.  First, referencing case law on HMRC’s duty to collect tax and limited powers to waive tax, the Judge concluded that it was unlikely that a collecting authority would have a broad discretion to waive CIL liability.  Second, the Judge held that to construe Reg 65(7) as conferring a broad discretion to waive CIL was inconsistent with the very detailed statutory scheme for CIL.  Lieven J noted that the withdrawal of a liability notice does not remove the underlying CIL liability and that there is no parallel express power to withdraw demand notices. 

The Judge also concluded that some double recovery of CIL was not inimical to the statutory scheme for CIL.  The Judge noted that Mr Luck could have transferred liability for CIL under Reg 31, sought to rely on the abatement provisions in Reg 74B, or made provision for CIL in the sale contract, but did not. 

A copy of the judgment can be found here.

Richard Honey KC and Alex Greaves appeared for the successful defendant Council, instructed by the Borough Solicitor.