Planning permission — Planning agreement — Town and Country Planning (Use Classes) Order 1987 — Sale of pharmaceutical products in supermarket — Whether sale of pharmaceutical products breach of agreement to sell only food and associated household consumables or to use premises as ‘supermarket’
In April 1989 planning permission was granted for
the erection of a large store. This followed the making of a planning agreement
that contained a covenant by the owners and developers ‘not to sell any goods
from the food store other than food and associated household consumables’
(clause 12(h)). In 1990 the second respondent, Tesco Stores Ltd, acquired the
site, and in 1991 entered into a planning agreement that recited the first
agreement and contained a covenant by Tesco to use the site as ‘a supermarket’ (clause
6.4). Planning permission was then granted to erect a ‘supermarket and
ancillary car parking’. The supermarket was erected and in September 1996 Tesco
began to operate a pharmacy within the supermarket. The appellant, a pharmacist
trading nearby, complained to the first respondent council about the operation
of this pharmacy, contending that it constituted a material change of use of
the supermarket for which there was no planning consent and that there had been
a breach of clause 12(h) of the 1989 planning agreement. The council disagreed.
The appellant appealed the decision of Collins J, dismissing his application
for judicial review of the council’s decision.
Per Brooke and Henry LJJ
Clause 12(h) of the 1989 agreement was not wide
enough to permit the sale or supply of the pharmaceutical products being sold
by Tesco. However, the user covenant in the 1989 agreement was replaced by that
in the 1991 agreement. The sale of pharmaceutical products was permitted by
clause 6.4 of the 1991 agreement.
Per Pill LJ
The sale of drugs, medicines and perfumes in a
pharmacy within a store selling mainly food came within clause 12(h) of the
1989 agreement; medicines and items such as plasters, bandages, sleeping aids
and cough and cold remedies could properly be described as household
consumables. Further, drugs on prescription fell within ‘the retail sale of
goods’ for the purposes of Class A1 of the Town and Country Planning (Use
Classes) Order 1987. In the alternative, in relation to the 1991 agreement, the
parties did not intend to change the use permitted by the
Pfizer Corporation v Ministry of Health [1965] AC 512; [1965] 2 WLR 387; [1965]
1 All ER 450, HL
R v Maldon
District Council, ex parte Pattani [1998] 1 PLR 91
Appeal against the
decision of Collins J
This was an appeal brought by Ashok Pattani
against the decision of Collins J, on 16 October 1997, dismissing his
application to quash the decision of Maldon District Council that there had not
been a breach of planning control by Tesco Stores Ltd.
Chelmsford) appeared for the appellant, Ashok Pattani.
Maldon District Council) represented the first respondent council.
by Berwin Leighton) represented the second respondent, Tesco Stores Ltd.
PILL LJ: Tesco Stores Ltd (Tesco) operates a supermarket at Fullbridge,
near Maldon, Essex. Since September 1996 it has operated a pharmacy at a kiosk
within the store. Mr Ashok Pattani is a pharmacist in Maldon. He claims that
Tesco is operating the pharmacy in breach of planning control. When
representations were made on his behalf to Maldon District Council (the
council) on 23 November 1996, the development committee of the council ‘in the
present circumstances and on the advice of officers confirms the lack of scope
for action in terms of a breach of the original agreement or other
contravention of planning control’.
This is an appeal against the judgment of Collins
J on 16 October 1997 refusing to quash that decision of the council. The judge
also refused to make declarations that the provisions of pharmaceutical
services at the Tesco store involved breaches of planning control.
While the appeal does not, in my view, turn upon
these points, it may be noted, first, that, following an earlier refusal in
1992, in 1995 the Family Health Services Authority (FHSA) permitted, for the
purposes of the National Health Service (Pharmaceutical Services) Regulations
1992 as amended, the relocation into the store of an existing pharmacy in
Maldon. It was permitted as being a minor relocation within the regulations.
Second, upon the first application to the FHSA in 1992, the council did, when
consulted, express the view to the FHSA that ‘the proposed pharmacy at the food
store would be outside the terms of the agreement entered into by Tesco
regulating the food store and therefore detrimental to the vitality and
viability of the designated shopping area within the town centre’. That
reflects policy guidance seeking to retain pharmacies in existing district and
local centres and discouraging their inclusion in out-
1996 para 3.19). The statement was, however, made well after the planning
agreements that now require construction were made.
Planning permission for construction of a store
was granted to developers on 3 August 1988. It was made subject to a planning
agreement being entered into between the applicant and the council under what
was then section 52 of the Town and Country Planning Act 1971 and provided that
‘food goods only shall be sold from the store’. The resulting agreement made on
7 April 1989 contained in clause 12(h) a covenant by the owners and developers:
Not to sell any goods from the food store other
than food and associated household consumables.
Following that agreement, a ‘Notice of planning
decision’ was issued by the council on 10 April 1989 granting an outline
permission.
On 19 April 1990 Tesco, having purchased the site,
applied for planning permission. The description of the proposed development
was: ‘Supermarket with petrol filling station and auxiliary car parking’. The
total floorspace for retail use was stated to be 4,366m2. The
council resolved to grant permission, subject to conditions and to all parties entering
into a planning agreement. In the resolution, the expression ‘food goods only
to be sold from the store’ was retained.
On 15 February 1991 a planning agreement was made
under what had become section 106 of the Town and Country Planning Act 1990 (the
1990 Act). One of the issues in this appeal is whether that agreement varied
the earlier planning agreement.
Permission was granted in a document dated 18
February 1991. In it the proposal is described as ‘Supermarket and ancillary
car parking’, and the permission is said to be granted: ‘having considered your
application to carry out the above development in accordance with the plans
accompanying the said application’. Conditions were attached, which are not
material for present purposes. On the plans, the net sales area was stated to
be 29,700 sq ft (which is 2,759m2). There is no definition of
supermarket in the then current Planning Policy Guidance Note (PPG 6 of 1988),
but there is reference to ‘large modern retail stores’ being ‘large stores of
up to 100,000 sq ft selling mainly food and other convenience goods’. The
current PPG 61, issued in June 1996, defines supermarkets as:
Single level, self-service stores selling mainly
food, with a trading floor space less than 2,500 sq metres, often with car parking.
1 Town Centres and Retail Developments
A ‘superstore’ has a similar definition save as to
scale. It is for the sale of ‘mainly food, or food and non-food goods, usually
with more than 2,500 sq metres trading floor space, with supporting car
parking’. Some
consideration, subject, of course, to planning conditions and agreements.
The Town and Country Planning (Use Classes) Order
1987 provides that the use of land for a purpose within an individual class is
not to be regarded as development. One of the classes is ‘Class A1 Shops’ and
that includes use, inter alia, for ‘any of the following purposes’,
which include:
(a) for the retail sale of goods other than hot
food.
Having received representations on behalf of the
applicant, the relevant committee of the council requested legal advice from
their officers. Under the heading ‘Legal Considerations’, that advice was:
4.1 The relevant issues are —
(a) does the existing permission for the store
extend to the pharmacy?
(b) if so, then is there any breach of planning
condition? and
(c) is there any breach of the planning
agreement(s)?
4.2 Representations have been received from
Messrs Wollastons, Solicitors acting for an aggrieved party, suggesting that
the permission does not cover a pharmacy at all. The permission is dated 18th
July (sic) 1991 and is for a ‘Supermarket and ancillary car parking’.
Whilst we do not have statistical evidence, it is believed that it is
commonplace for supermarkets to contain pharmacies, so that the pharmacy at
Tesco’s is covered by the permission given for a supermarket.
4.3 If the conclusion reached in 4.2 above is
wrong, it would be necessary to consider whether the introduction of a pharmacy
amounted to a material change of use of part of the premises. It cannot amount
to a material change of use if it is a use within the same use class. A
supermarket falls within class A1 of the Schedule to the Town and Country
Planning (Use Classes) Order 1987. Paragraph (a) is use ‘for the retail sale of
goods other than hot food’. Most pharmacies fall within that definition since
the primary function is retail sales and the dispensing of medicines is ancillary
to that — much like food preparation in some shops. ‘Chemist’ shops invariably
rely upon planning permission for retail use. Whether any particular pharmacy
falls within the definition is a matter of fact and degree, but the one at
Tesco is not unusual and appears to fall squarely within the use class.
4.4 Even if the conclusions reached in 4.2 and
4.3 above are wrong, there is still a compelling argument that the use of a
small part of Tesco’s building as a pharmacy is ancillary to the overall use of
the supermarket. We are confident that the use as a pharmacy does not need
planning permission for one or more (probably all three) of these reasons.
Nevertheless, the Solicitors mentioned above have sought Counsel’s opinion in
the matter and we requested sight of it; if it is disclosed and raises new
arguments, then they should be considered.
4.5 We have considered the conditions attached to
Tesco’s planning permission. None of these restrict the range of goods to be
sold. There is no relevant breach of those conditions.
4.6 Turning now to the planning agreements, the
detail is set out in 2.1 above and is regrettably lacking in precision. It is
necessary to analyse the meaning of ‘associated household consumables’. There
is no statutory definition or case law, so we must rely on the commonplace
meaning of the
consume. The dictionary definition of that word includes both ‘eating and
drinking’ and also ‘using up or expending’. Since most products of a pharmacy
are designed to be eaten or drunk and the remainder (such as bandages) are
clearly used up, it would be difficult to argue that goods sold by a pharmacy
are not ‘consumables’. The word ‘household’ merely conveys that the goods are
usually used in the home which is true of the goods sold by the pharmacy. The
word ‘associated’ adds little if anything to the definition. It is difficult to
conceive of other non food goods which are more closely associated with food
than medicines.
5.0 Conclusion
5.1 In conclusion, therefore, we have little
hesitation in advising Members that the use of part of Tesco’s store as a
pharmacy does not require planning permission and is not in breach of any
condition or of the planning agreements.
While supermarkets and superstores are primarily
self-service stores, the fact that there are often within them kiosks where
specialist goods are sold is not, and cannot seriously be, challenged. The
judge stated at [1998] 1 PLR 91 p97H:
Many supermarkets now contain pharmacies. The
pharmacy does not prevent the whole still properly being described as a
supermarket. In my view, the permission to develop the site as a supermarket
carries with it permission to trade in the building in anything which can
ordinarily and properly be regarded as obtainable in a supermarket whose
primary function is to sell food. As is said in para 3.19 of PPG 6, if the
inclusion of pharmacies in out of town retail developments is to be prevented,
conditions should be imposed.
The first two sentences of that paragraph are not
specifically challenged, but must be read in the light of the planning
agreements in this case.
Issue 1, as
expressed by Clive Lewis, for the applicant, is:
Whether any of the following constitute a breach
of Clause 12(h) of the planning agreement:
(a) the sale or supply of prescribed drugs,
medicines and medical appliances;
(b) the sale of non-prescription drugs, medicines
and medical appliances;
(c) perfumes.
Prescribed drugs are those supplied under an NHS
prescription. When using the term ‘medical appliances’, I do not understand Mr
Lewis to have in mind such items as wheelchairs for the disabled, which would
be outside clause 12(h), but items such as surgical bandages.
Mr Lewis submits that to come within the
expression ‘food and associated household consumables’ the items must be
associated with food. The key question is the meaning of the word ‘associated’.
Examples of items associated with food would be drinks, cooking oil, cling film
and washing-up liquid. The judge erred, it is submitted, in concluding that the
12(h). They were associated, he found, ‘because they are commonly to be found
in supermarkets and so can properly be described as associated with food in
terms of shopping’.
Mr Lewis does not rely on the words ‘food goods
only shall be sold from the store’ as such in the resolution of 3 August 1988,
but he submits that it is part of the factual matrix in which clause 12(h) is
to be construed. That may be so, but the force of the point is, in my view,
diminished because the permission eventually granted on 18 February 1991 was
for a ‘supermarket’, and, upon the accepted use of that word, the inclusion of
non-food items can readily be contemplated. The use of that word in the
permission may indicate what the parties had in mind in the agreement.
I agree with Mr Lewis that the key word in clause
12(h) is ‘associated’, but, in context, the judge was, in my view, correct in
his conclusion. The context is that of planned use. Consumables are associated
with food in this context if they are commonly sold with food. They are
associated in a shopping sense in a large store of this type. There is a danger
of making the argument circular and concluding that, because the disputed items
are commonly sold in supermarkets, clause 12(h) must include the disputed
items. While recognising that danger, I conclude that, when using the word ‘associated’
in clause 12(h), the parties intended an association in supermarket shopping
terms. The presence of the word ‘household’ in the clause supports that view
because, on Mr Lewis’ narrow construction and examples, it is difficult to find
a need for the word. Upon a broader construction of the word ‘associated’, it
does limit what would otherwise be a wide range of consumables by confining
them to those found in the household. Once the word ‘associated’ was included
in the 1989 agreement, I conclude that the parties had in mind the type of
store, selling a broader range of goods, contemplated in the planning policy
guidance notes, although the words ‘supermarket’ and ‘foodstore’ were used
somewhat loosely.
Unattractive distinctions can often be found upon
an acceptance of any definition. However, those associated with the narrower
definition of associated are unlikely to have been intended by the parties to
clause 12(h). For the council, Mr Timothy Corner, by way of example, referred
to the fact that kitchen cleaners could be sold but not bathroom cleaners, and
washing-up liquid but not a clothes cleaner. The sale of drugs, medicines and
perfumes in a pharmacy within a store selling mainly food comes within clause
12(h), in my judgment. That medicines and items such as elastoplast, bandages,
sleeping aids and cough and cold remedies can properly be described as
household consumables, I have no doubt.
Issue 2
This issue turns upon regulations governing the
supply of prescription drugs. In Pfizer Corporation v Ministry of
Health [1965] AC 512 it was held in the House of Lords that in the case of
drugs on prescription there was a statutory relationship and not a sale, in the
sense of a consensual contract, by the pharmacist to the patient. Lord Reid
stated at p535G:
But in my opinion there is no sale in this case.
Sale is a consensual contract requiring agreement, express or implied. In the
present case there appears to me to be no need for any agreement. The patient
has a statutory right to demand the drug on payment of 2s. The hospital has a
statutory obligation to supply it on such payment. And if the prescription is
presented to a chemist he appears to be bound by his contract with the
appropriate authority to supply the drug on receipt of such payment. There is
no need for any agreement between the patient and either the hospital or the
chemist, and there is certainly no room for bargaining. Moreover the 2s is not
in any true sense the price: the drug may cost much more and the chemist has a
right under his contract with the authority to receive the balance from them.
It appears to me that any resemblance between this transaction and a true sale
is only superficial.
For the respondents it is faintly argued that,
even upon the applicant’s construction, drugs on prescription do not come
within the limitation in clause 12(h) because there is no sale. Mr Lewis
submits that for practical purposes there is a sale, but that, if there is no
sale, the supply does not come within Class A1 of the use classes order and there
is a breach of planning control. The supply by the pharmacist would amount to
the provision of services, which was a breach of planning control. Section 42
of the National Health Service Act 1977 and regulations made under the Act
refer to the provision of pharmaceutical services. The need for control of
pharmaceutical services under the NHS is obvious, but the regulations were not,
in my judgment, intended to determine the meaning of the word ‘sale’ for the
purposes of planning control. For those purposes, there should be no
distinction between the supply of medicines on prescription and their supply
otherwise than on prescription. Premises with a Class A1 permission, which
allow ‘the retail sale of goods’, would not require planning permission if prescribed
medicines, supplied under National Health Service Regulations, were added to
the list of goods supplied. Section 52 of the Medicines Act 1968 places
restrictions upon the ‘sale or supply of medicinal products’ and includes,
along with the concept of sale by retail, the concept of ‘supply in
circumstances corresponding to retail sale’. That provision is intended to
ensure that prescription drugs are included within the controls. The concept
makes it easier to conclude, for the purposes of planning control, that the
supply is intended to be treated as a sale. It follows that drugs on
prescription are, if my conclusion on issue 1 is correct, within clause 12(h).
Issue 3
This issue does not arise if my finding on issue 1
is correct. Mr Lewis defines it as ‘whether, contrary to the finding of Collins
J, the restriction in Clause 12(h) had been varied by Clause 6.4 of the later
1991 planning agreement’.
In the 1991 agreement there are no fewer than 11
recitals. Operative clauses 4 to 6 set out a series of covenants by Tesco and
operative clause 7 contains a covenant by the county council. Clause 8 includes
a series of ‘agreements and declarations’. They include a declaration that
‘save as varied by this agreement, the original agreement [that is the 1989
agreement] shall continue to have full force and effect and shall continue to
bind the site’.
By clause 6, Tesco covenanted not (without the
written consent of the council) to use the site or any part thereof for uses
other than those listed. At 6.4 is listed ‘a supermarket with in-store coffee
shop’. The submission of the council and Tesco is simple. The use of the word
‘supermarket’ in clause 6.4 is unqualified, and, given its accepted meaning in
PPG 6, the existence of a pharmacy in a kiosk in the store is permitted by the
planning agreement, if not by the earlier clause 12(h).
The 1991 agreement expressly makes provision for
the construction of a loop road and consequential matters. That proposal is the
subject of recitals 6, 7 and 8, and detailed provisions in clause 4. I consider
the intention of clause 6.4 to be a restatement of what the existing use was
agreed to be.
In support of their submission that the clause
extends the permitted use, the respondents rely on recital 7 in the agreement,
which provides that Tesco have ‘submitted the [planning] application which
differs from the application referred to in recital 5 of the original agreement
[the outline application] in that inter alia the estate road as
contemplated by the original agreement shall not be constructed but rather the
road and Loop Road shall be constructed’. It is submitted that the words ‘inter
alia‘ were intended to cover a significant change in agreed use. I consider
it most unlikely that it was intended to change the permitted use by what I
regard as a side wind, especially having regard to the declaration in clause 8.
By way of distinction, clause 11 of the earlier agreement is expressly revoked
by clause 3 of the later one. Bearing in mind the declaration in 8.2 of the
1991 agreement, I would have expected express reference to the earlier use
clause had a variation been intended by clause 6.4. I agree with the judge that
there was no intention in the 1991 agreement to weaken the use restriction.
My conclusion on this point is much influenced by
my view of clause 12(h) in context. Following the 1989 agreement, permission
was sought and granted for a ‘supermarket’. It was not contemplated, in my
view, that the word ‘associated’ should bear the meaning for which the
applicant contends (issue 1). If that is right, there was no need to vary the
1989 agreement in order to include a pharmacy within the permitted use. It is
in that context that I conclude that the parties to the 1991 agreement did not
intend by that agreement to change the permitted use. To the extent that I
regard the use of the word ‘supermarket’ in the 1990 application and the 1991
permission as significant, I see force in the respondents’ submissions on issue
3. The 1989 agreement did not, however, need variation to achieve the result
they seek. It was confirmed by clause 6.4. Notwithstanding the use in some of
the documents of the word ‘foodstore’, the parties, in their agreements,
contemplated a supermarket use on PPG 6 lines.
Upon those findings, it is not necessary to consider
whether the pharmacy can be justified as an ancillary use. I agree with Mr
Lewis’ submission that whether or not a use can be justified as ancillary
involves consideration of the nature or scale of the activity as well as the
floorspace it takes up. If a pharmacy does not come within the use contemplated
in
be justified as an ancillary use. The question does not, however, require
determination upon the hearing of this appeal.
What the applicant seeks to quash, as mistaken in
law, is the decision of the council that they could not take enforcement
proceedings. In my judgment, their conclusion was correct and I agree with the
judge on all three issues. I do not agree in all respects with the reasoning in
the officer’s report presented to the council. A correct decision on a legal
issue cannot, however, be quashed for any defect in the reasoning of the
officers that led to it, and, rightly, a case has not been put on that basis.
For those reasons, I would dismiss this appeal.
BROOKE LJ: Clause 12(h) of the agreement made on 7 April 1989 contained a
covenant by the owners and developers ‘not to sell any goods from the food
store other than food and associated consumables’. I, for my part, would not
consider those words wide enough to permit the sale or supply of the
pharmaceutical products that is now being conducted from the Tesco store on the
site. This is a simple matter of impression, which does not warrant a lengthy
exegesis.
On the other hand, I am quite satisfied, for the
reasons given by Pill LJ, that the present user is permitted by clause 6.4 of
the 1991 planning agreement. Unlike him, I consider that the intention of the
parties to the 1991 agreement was to replace the 1989 user covenant with the
new covenant contained in clause 6 of the later agreement. Clause 12 of the
earlier agreement began with covenant (a) not to use the site for any use other
than those falling within Classes B1 and B2 of the Schedule to the Town and
County Planning (Use Classes) Order 1987, subject to an immaterial exception.
This covenant was followed by covenants (b) to (g), which fell away from the
later agreement because the proposed road scheme was entirely different, and
the clause ended with the user covenant (h). The equivalent clause in the 1991
agreement repeated, in different language, the restriction to Class B1 and B2
uses, and then continued with covenants relating to the new road scheme,
including a petrol station, the new user covenant (6.4) and a covenant enabling
Tesco to erect a retail unit for the sale of DIY and ancillary products.
I can see neither rhyme nor reason for the parties
wishing to carry forward the old user covenant into the new agreement, which
permitted Tesco to erect a supermarket with an in-store coffee shop on the
site, and, in my judgment, the necessary implication is that the parties varied
the 1989 agreement by substituting the new user clause for the old.
The result is, in the end, the same, and I agree
that this appeal should be dismissed.
HENRY LJ: I agree that the appeal should be dismissed, and while the choice
of route to that result (whether by clause 12(h) of the 1989 planning agreement
or by clause 6.4 of the 1991 planning agreement) does not seem to me to be of
central importance, I prefer the path taken by Brooke LJ.
Appeal dismissed.
