Summary: The Ombudsman will not investigate Mr X’s complaint about how the Council administered a ‘Section 106’ payment on a planning permission from 2007. The Section 106 agreement was a unilateral undertaking by Mr X’s firm to pay money to the Council once work started, so it could make sure certain extra works were done. The matter is best considered and determined by a court.

The complaint

1. Mr X complains the Council has wrongly taken money under a planning agreement (called a Section 106 agreement) from 2007, but later decided the permission to which the agreement related had lapsed before work started in 2010.
2. Mr X says the loss of the planning permission has reduced the value of the land, and his firm has paid over £60,000 plus interest to the Council for no benefit. Mr X wants the Council to repay the Section 106 money, and pay his legal costs.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word ‘fault’ to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. We provide a free service, but must use public money carefully. We may decide not to start or continue with an investigation if we believe there is another body better placed to consider this complaint. (Local Government Act 1974, section 24A(6), as amended)
4. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)

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How I considered this complaint

5. As part of my assessment I have:
• considered the complaint and the documents provided by Mr X;
• issued a draft decision, inviting Mr X to reply, and considered his response.

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What I found

6. Mr X is a developer. His firm applied for and received conditional planning permission to develop a piece of land in 2007 for residential use. As part of the 2007 permission, Mr X’s firm entered into a Section 106 agreement. This was a unilateral undertaking by the firm to pay £60,000 to the Council once work started, so the Council could ensure certain extra works took place.
7. Mr X says the Council collected the Section 106 money in 2016. Officers considered work under the permission had started in 2010, so the money was due. Mr X says the Council then told him in 2018 that the planning permission was no longer in force. Mr X and the Council’s legal representatives have corresponded since 2018 but have been unable to reach agreement on the matter.
8. I do not consider the Ombudsman should investigate this complaint. I consider it is a matter best dealt with by the courts, which provides the appropriate way for Mr X to seek redress. I do not consider there are any grounds for the Ombudsman to exercise any discretion to investigate this complaint. I find it would be reasonable for Mr X and his firm to use the legal route available. I say this because:
• the disagreement between the firm and the Council raises questions of legal interpretation regarding Section 106 agreements, and the specific agreement for the 2007 planning application. The courts would be best placed to consider and decide on those issues;
• Mr X’s firm is seeking repayment of a large sum of money under a legal agreement or contract. The cost of putting the matter before a court is outweighed by the benefit sought by the firm;
• disputes under legal agreements or contracts are matters for a court of law to decide.
9. I note Mr X wants the Ombudsman to make a decision on the dispute at the heart of his complaint. He says a court cannot decide whether the Council’s actions have been correct, so he cannot take that complaint of maladministration to court. But at its core, Mr X’s complaint is a disagreement on a legal matter. Therefore, it is appropriate for Mr X and his firm to put their case that the Council’s actions and decisions on that legal issue are incorrect. It will then be for a court to decide, after consideration of the evidence from both sides.
10. Mr X also says he wants the Ombudsman to investigate so a judge can use the decision to inform their consideration of any future legal case on the same issues. That is not the role of the Ombudsman. It is for the courts alone to decide matters which are properly ones for a judge, as in this case.

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Final decision

11. The Ombudsman will not investigate this complaint. This is because:
• the matters are best considered and determined by a court; and
• we are satisfied it would be reasonable for Mr X and his firm to use that route to pursue the outcome sought.

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Investigator's decision on behalf of the Ombudsman