Lancaster City Council v Secretary of State: s.73, s.106A and the limits of a without-prejudice deed of variation

In Lancaster City Council v Secretary of State for Housing, Communities and Local Government & L&W Wilson (Higham) Limited [2026] EWHC 263 (Admin), Mr Justice Kimblin dismissed a statutory review challenge brought by Lancaster City Council against an inspector's decision to allow a planning appeal for 24 dwellings at Cockerham, Lancashire, and a related costs award.

The appeal had arisen from the council's refusal of a s.73 application by Wilson to vary Condition 11 of an existing permission. The condition controlled housing mix and, the inspector found, partly controlled the provision of affordable housing. Wilson's case was that the scheme was not financially viable with the affordable housing obligation in place. The council's refusal rested on the view that Condition 11 did not bear on affordable housing and that any variation of the obligation required an application under s.106A of the Town and Country Planning Act 1990.

Central to the High Court proceedings was a deed of variation (DoV) submitted to the inspector shortly before the hearing, signed by all parties including the council. The DoV varied the principal s.106 agreement and would take effect only if the appeal were allowed; it lapsed entirely if the appeal was dismissed. The council maintained throughout that its participation in the DoV was without prejudice to its substantive opposition, and that signing it did not constitute agreement to the removal of the affordable housing requirement.

Kimblin J rejected all three grounds of challenge.

On the question of whether the inspector had misapplied any legal test, the court confirmed that s.73 is not itself a power to vary or discharge a s.106 obligation — that power lies in s.106A — but the inspector had not purported to use s.73 for that purpose. Rather, he found that Condition 11 partly controlled affordable housing, that a new s.73 permission would not automatically carry forward the existing obligation, and that the DoV addressed the contingent issue of the principal agreement in the event that permission was granted. No legal error arose from that analysis.

On whether the inspector had misunderstood the council's position, the court found that the inspector both appreciated the strength of the council's opposition and understood that the DoV had been provided on a contingent basis. The without-prejudice nature of such arrangements at appeals is well-established practice. Crucially, the council had not argued before the inspector that the principal agreement would remain enforceable if a new permission were granted — a point recorded explicitly in the costs decision. That concession, made at the hearing, explained why a DoV was required in the first place, and the council's solicitors had engaged in its drafting accordingly.

The court also applied the principle from West v First Secretary of State and Mead Realisations Limited v Secretary of State that a new point not raised at the hearing, or not clearly advanced when the opportunity arose, will not readily be admitted in subsequent proceedings. The council's dissatisfaction, the court observed, originated in misconceptions about how affordable housing was controlled at the site.

On the third issue — whether the inspector had erred in having regard to the DoV — the court found the point unsustainable. Once the inspector had a signed and effective DoV before him, varying the principal agreement contingent on the appeal being allowed, there was no basis to challenge his reliance upon it.

The claim was dismissed. The Simplex argument on relief did not therefore arise.

Copyright & permissions