“I object!” The use of non-objection clauses and confidentiality provisions in the context of Development Consent Order applications

The recent case of R (Suffolk Energy Action Solutions SPV Ltd) v Secretary of State for Energy Security and Net Zero & Ors [2024] EWCA Civ 277 has important application across planning and public law spheres.  This case concerned the question of whether or not one can be contractually prevented from objecting to an application for a Development Consent Order (DCO).   

Facts

Suffolk Energy Action Solutions SPV Ltd (SEAS) appealed against the dismissal of their claim for judicial review of the Secretary of State for Business, Energy, and Industrial Strategy’s decision to grant DCOs for the construction of two offshore wind farms and the associated onshore development.

This case concerned whether the Secretary of State had acted unlawfully in handling a complaint by SEAS which alleged that the interested parties, East Anglia One North Ltd and East Anglia Two North Ltd (both subsidiaries of Scottish Power Renewables), had hindered the landowners’ ability to present objections to the proposed development.  

The complaint centred on the alleged unfair distortion of the DCO process by the interested parties in seeking to acquire land by negotiation, hindering a proper inquiry into the development's public interest. SEAS submitted that the use of non-objection clauses and confidentiality provisions in the Heads of Terms and Option Agreements preceding the application for the DCO was unlawful because these barred, or at least, tended to deter, the landowners from raising any objections to the proposed development, including those which did not impact upon their own land.

All parties acknowledged that it had been practice for many years for non-objection clauses to be used in the context of planning applications / compulsory purchase, however the question for the Court was whether the use of these clauses was in fact lawful. The Court of Appeal (the Court) handed down its decision on 22 March 2024.

Legal Issues

Issue 1: Was the use of non-objection clauses by the interested parties and Scottish Power Renewables legitimate?

The Court highlighted that departmental guidance from the then Department for Communities and Local Government confirmed that land acquisition for development should primarily be by negotiation, resorting to compulsory purchase as a last resort.  However, this guidance did not address the issue of non-objection clauses.

The Court decided that the use of non-objection clauses when a party has obtained an interest in land is permissible for two main reasons:

• an applicant who owns land and seeks planning permission for a relevant use of that land is unlikely to object to that application. This does not undermine the integrity of the process for the granting of planning permission; and,
• the DCO process under the Planning Act 2008 is inquisitorial in nature. This means that it is for the decision-maker to ensure that there is sufficient information to enable an informed and lawful decision to be made on the application for planning permission.

Whether the effect of a non-objection clause is that the decision maker has insufficient information to enable a planning decision to be made, must always be a question of fact.

In this case, facts which contributed towards the legitimacy of the non-objection clauses in the Heads of Terms and the Option Agreements included:

• the Heads of Terms signed by the landowners were expressly “subject to planning & contract” and as such were not binding; 
• the landowners had the benefit of legal advice, and their legal advisors would have explained that the Heads of Terms were not legally binding;
• Scottish Property Renewables had informed SEAS that the non-objection and confidentiality clauses in the Heads of Terms were not binding; 
• no Option Agreements had been signed before the completion of the examination by the Examining Authority (ExA), and only two Option Agreements had been completed before the Secretary of State issued the decision letter;
• 39 out of 55 landowners who had signed the Heads of Terms did in fact object to the scheme; therefore, they were not ‘stifled’ or prevented from objecting to the scheme.

As the non-binding non-objection and confidentiality clauses in the Heads of Terms did not prevent the landowners from objecting to the scheme before the examination process was concluded, this meant that the ExA had sufficient information to subsequently enable a planning decision to be made. The use of those clauses in the Heads of Terms and the Option Agreements on those precise facts was therefore deemed to be lawful.

Issue 2: Did the Secretary of State properly address the use of non-objection clauses by Scottish Power Renewables?

Though it was found that the use of the non-objection clauses was lawful, the Court then determined that the proper procedure had been followed by the Secretary of State, on the following bases:

• the ExA found that, though some of the landowners may have felt constrained from taking part in the Examination, they had not in fact been prevented from doing so. The ExA “was satisfied that all affected persons had the opportunity to be heard;”
• the Court was satisfied that the Secretary of State had considered all of the relevant issues and received all of the necessary information to make his decision;
• As 39 out of 55 landowners objected to the scheme, the EA and the Secretary of State did in fact have access to all of the necessary information.

Analysis 

In considering non-objection clauses in the planning context, the Court referred to an earlier Court of Appeal decision of Fulham Football Club v Cabra Estates (1993) 65 P&CR 284 (“Fulham”) which considered (inter alia) whether public policy could override a non-objection clause. Fulham is summarised at paragraphs 51-57 of the judgment which also reproduces the finding in Fulham that where a “commercial agreement relating to land has been entered into between parties at arm’s length and one party agrees in return for a very substantial payment to support the other party’s applications for planning permission we can see no rule of public policy which renders such an agreement illegal or unenforceable”.  

While the Court ultimately held that the Secretary of State had appropriately addressed the complaint regarding the use of non-objection and non-disclosure clauses by the interested parties in the present case, it emphasised the fact-specific nature of assessing whether such clauses distorted the planning process.  The decision does not provide a sweeping legitimacy for the use of non-objection and non-disclosure clauses which prevent concerned parties from objecting to the grant of a DCO; differing facts (such as, parties being without legal representation) could lead to a different outcome.  Care is therefore required in the use of such clauses.