The recent case of R(on the application of Hourhope Limited) v Shropshire County Council (2015) considered the question as to what constitutes lawful use in order to qualify for a reduction in the amount of the CIL to be applied under the Community Infrastructure Levy Regulations 2010.

In March 2014 the Claimant had been granted planning permission to demolish a pub and replace it with residential units. The Council imposed the levy, but the Claimant objected to the amount of the levy the Council imposed. The Claimant’s position was that he was entitled to a reduction of the levy as the premises had been in lawful use for 6 continuous months during the 3 years up to the grant of planning permission (as per Regulation 40 (7) and the definition in  Regulation 40(11)).

The pub ceased trading in May 2011 and therefore could not meet the requirement for 6 continuous months trading in the 3 years up to the grant of planning permission. However, the Claimant argued that the fact that the property could still have lawfully been used as a pub after it ceased trading, noting that the fixtures and fittings remained and the pub manager continued to reside in the property hoping that it might re-open, was sufficient to satisfy the test that there had been lawful use.

The Court noted that there was no legislative definition of lawful use in the context of the CIL Regulations. The Court therefore looked first to its ordinary meaning in the context of other provisions of the legislation and the legislative purpose of the legislation itself. The Court found that the words “lawful use” and “in-use building” suggested that there needed to be more than a theoretical use (i.e. demonstrating that the building was actually being used for that purpose).

On the particular facts of the case, it was clear that the property did not meet the requirements of lawful use to be able to benefit from a reduction in the levy. The claim was therefore dismissed.