Legal Viewpoint: Acquisition of land – no objection to non-opposition clauses

It is a long-standing public policy requirement that the compulsory acquisition of land and rights should be a last resort, pursued only after the promoter of a scheme has sought to acquire the necessary interests by agreement with the affected landowners.

The High Court recently rejected a challenge to the decision of the then secretary of state for business, energy and industrial strategy to make two development consent orders authorising two wind farms off the Suffolk coast. In doing so, the High Court provided some welcome reassurance as to the status of “non-objection” and confidentiality wording in option agreements between promoters and affected landowners entered into in the shadow of compulsory acquisition.

The applications were examined between October 2020 and July 2021 by a panel of five inspectors appointed by the Secretary of State. In March 2022, the Secretary of State made two development consent orders authorising the construction and operation of the wind farms, as well as the compulsory acquisition from 55 different landowners of land required for onshore works connected with the wind farms.

The challenge arose from a complaint to the panel made by campaign group Suffolk Energy Action Solutions. It was alleged that the integrity of the planning process was being undermined by the inclusion of a clause in agreements between the promoters and affected landowners which required the landowners not to oppose the DCO applications and to withdraw any representations already made. These agreements were alleged to have a “chilling effect”, with the promoters having “stifled” or “neutralised” the ability of landowners facing possible compulsory purchase to present objections to and information about the scheme. It was also contended that the promoters had “improperly offered substantial payments” to induce landowners to enter into the agreements.

The claimant’s grounds of challenge were numerous and overlapping. Mr Justice Holgate rejected each of the grounds and dismissed the claimant’s application for judicial review, refusing the claimant permission to appeal to the Court of Appeal.

The judge held that the panel was satisfied that all affected parties had had the opportunity to be heard at the examination, and that the secretary of state had agreed with that analysis. The judge found that the secretary of state’s conclusion involved the rejection of the claimant’s allegation that landowners who entered into agreements with the promoters had been “stifled” or “neutralised” by the promoters’ conduct so that they did not make representations that they would otherwise have wanted to make.

Importantly for the development industry, the judge endorsed the propriety of long-established practices relating to agreements between scheme promoters and affected parties. Sums paid by promoters to landowners under option agreements “are not to buy silence” but are for the grant of options and the purchase of property rights in accordance with government policy. There was nothing improper about the modest incentive fees paid in this case to encourage landowners to sign heads of terms sooner rather than later. The judge held that it is normal to treat the amounts paid as confidential, “particularly whilst negotiations are ongoing with other landowners”, and it is also “normal for concluded option agreements to contain a non-opposition clause”. Landowners were able to seek variations to such clauses and, if dissatisfied, could refuse to contract and maintain an opposition to the project. The court had no issue with settlement agreements of this nature being entered into by promoters and affected landowners.

The court’s conclusions recognise common practice and will be welcomed by practitioners seeking – as policy and best practice require – to acquire necessary interests in land by agreement before needing to rely on powers of compulsory acquisition.

Case: R (Suffolk Energy Action Solutions SPV Ltd) v. Secretary of State for Energy Security and Net Zero, and (1) East Anglia One North Ltd (2) East Anglia Two Ltd

Date: 14 July 2023

Ref: [2023] EWHC 1796 (Admin)

David Wood is a senior associate at law firm Hogan Lovells International LLP

This article first appeared in Planning Magazine (13 October 2023)

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