Bureau de change — Enforcement notice — Application for leave to appeal against decision of High Court — Whether use as a bureau de change falls within Class A1 or Class A2 of the use classes order — Whether change of use material
The applicants
were lessees of two former shop units in Brompton Road, Knightsbridge, London
SW3, which they operated as a bureau de change. The local planning authority
issued and served enforcement notices alleging a breach of planning control,
namely the unauthorised change of use from retail shop within Class A1 of the
Town and Country Planning (Use Classes) Order 1987 (SI 1987 No 764) to the
primary use as financial services within Class A2 of that order. The
applicants’ appeal to the Secretary of State for the Environment was dismissed
on all grounds save for that relating to the time for compliance. On appeal to
the High Court, the decision of the Secretary of State for the Environment, by
his inspector, was upheld. The applicants applied to the Court of Appeal for
leave to appeal, the principal issues in the appeal being: (1) did the
activities carried on in the bureau de change come within Class A1 of the
order, either alone or into both that class and Class A2; (2) if so, was the
inspector correct to consider that the change of use was material.
(1) The major
activity in the bureau de change was the changing of foreign currency or
travellers cheques into sterling. In the ordinary sense of the English
language, to speak of changing money from one currency into another would not
normally be described as the retail sale of goods: see p13B. The words
‘financial services’ were perfectly apt to include the provision of the service
of changing money from one currency into another: see p13D.
(2) Whether a
change of use was material was a matter of fact and degree. There was ample
evidence to lead the inspector to his conclusion that the change of use in this
case was material. Accordingly, that conclusion could not be challenged: see
p13F.
referred to in the judgments
Application
for leave to appeal against decision of Mr Nigel Macleod QC
This was an
application for leave to appeal (and to renew such application out of time)
against a decision of Mr Nigel Macleod QC (sitting as a deputy judge of the
Queen’s Bench Division) [1993] 3 PLR 49, who had
against the decision of the Secretary of State for the Environment, by his
inspector, in relation to an appeal against two enforcement notices issued and
served by Kensington and Chelsea Royal London Borough Council.
QC (instructed by the solicitor to Palisade Investments Ltd) appeared for the
applicants, Palisade Investments Ltd.
Robinson (instructed by the Treasury Solicitor) appeared for the first
respondent, the Secretary of State for the Environment.
respondents, Kensington and Chelsea Royal London Borough Council, did not
appear and were not represented.
following judgments were delivered.
GLIDEWELL
LJ: On August 30 1991 Kensington and Chelsea Royal
London Borough Council served on the present applicants, Palisade Investments
Ltd, two enforcement notices in identical terms relating to premises in
Brompton Road, London SW3, namely the ground floors of 159 and 201 Brompton
Road. The notices alleged that in each of the premises there had been a breach
of planning control, which was described as:
The
unauthorised change of use from retail shop use within Class A1 of the Town and
Country Planning (Use Classes) Order 1987, to a primary use as financial
services within class A2 of the Town and Country (Use Classes) Order 1987.
The order
required Palisade Investments to cease that unauthorised primary use of the
premises.
On September
27 1991 Palisade Investments appealed to the Secretary of State for the
Environment on grounds (a), (b), (c) and (h) in section 174 of the Town and
Country Planning Act 1990, that is to say: (b) that the matters alleged in the
notice did not constitute a breach of planning control; (c) that the breach of
planning control alleged in the notice had not taken place, (a) (if either (b)
or (c) failed) that planning permission for the development ought to be
granted; and (h) that the time specified in the notice for compliance (three months)
was insufficient.
On June 30
1992 the appeal was heard by an inspector, Mr Lemon. On July 22 he issued his
decision letter. He dismissed the appeal on grounds (b), (c) and (a); he
allowed the appeal on (h) by extending the time for compliance to six months.
On September 4
1992 Palisade Investments appealed to the High Court under section 289 of the
1990 Act. The appeal was heard on June 23 1993 by Mr Nigel Macleod QC, sitting
as a deputy High Court judge.* He dismissed it. Palisade Investments now seek
leave to appeal to this court.
application is now sought to be renewed, but the purported renewal was itself
out of time and so leave is sought both to renew out of time and for leave to
appeal. For my part, I think it right to concentrate on the question of leave
to appeal. If leave to appeal is not to be granted no question arises of
renewal out of time.
*
at [1993] 3 PLR 49.
The issues
before the deputy judge and for this court can be summarised as follows. First,
did the activities carried on at the premises, namely those of a bureau de
change, or to that translate that into English, a money changer’s office, come
within Class A1 of the Town and Country Planning (Use Classes) Order 1987 (SI
1987 No 764), either alone or into both that class and class A2? Second, if so,
was the inspector correct to consider that the change of use was material?
It is trite
law that a material change of the use of land or a building constitutes
development for the purposes of the Town and Country Planning Act. Article 3 of
the use classes order 1987 provides:
Subject to
the provisions of this Order, where a building or other land is used for a
purpose of any class specified in the Schedule, the use of that building or
that other land for any other purpose of the same class shall not be taken to
involve development of the land.
The Schedule
is divided into parts. Part A starts with
Class A1.
Shops
Use for all or
any of the following purposes —
(a) for the retail sale of goods other than hot
food.
That is
followed by number of other specific descriptions of activity:
(b) as a post office
(c) for the sale of tickets or as a travel
agency
(d) the sale of sandwiches or other cold food
for consumption off the premises
and so on. All
are qualified by the final words:
… where the
sale, display or service is to visiting members of the public.
Class A2.
Financial and professional services
Use for the
provision of
(a) financial services, or
(b) professional services (other than health
or medical services), or
(c) any other services (including use as a
betting office) which is appropriate to provide in a shopping area
where the
services are provided principally to visiting members of the public.
Finally, it is
right to mention Class A3, though it does not directly figure in this
application at all.
Food and drink
Use for the
sale of food or drink for consumption on the premises or of hot food for
consumption off the premises.
The purpose of
categorising activities in three different classes in that Schedule is quite
apparent. All three categories are types of activity which are normally or
frequently carried on in premises in a high street or other shopping street. It
was thought right by the drafters of the order that a change of use from some
types of activity normally carried on in a shopping street to other types
should not require planning permission. That was achieved by providing that
they were brought within the same use class, thus did not constitute
development and therefore did not require permission. An example is a change of
use from a shop for the retail sale of goods to use for the sale of sandwiches
or other cold food for consumption off the premises. Both of them are in the
same class and do not require permission. On the other hand, the drafters of
the legislation took the view that there were other activities which might
properly be carried on in a shopping street but for which, either by way of the
commencement of the use or of the change from some other use to that use, it
was desirable that planning permission should be required. Thus, there are the
three different classes in the part of the Schedule and change from one to the
other will normally constitute development. I say ‘normally’ because there is a
final argument to which I must come in due course, that it does not necessarily
follow that change from Class A1 to A2 does constitute development.
It is an
agreed fact that both the premises, the subject of this application, were
formerly used as shops (that is to say, for the retail sale of goods). Thus,
they came firmly within Class A1. Also there is no dispute that before the
service of the enforcement notices the use of both premises had changed to use
as bureaux de change or money changer’s offices.
The inspector
found as a fact in para 9 of his decision:
… the
appellants are a leading operator internationally in the provision of bureaux
de change … These activities are principally the provision of money ie
sterling, in exchange for travellers cheques or foreign currency; the sale of
certain items also takes place, such as postcards, maps and stationery. Some
other services connected with tourism are also offered, such as car hire and
information about London tours. It was acknowledged however that some of the
items offered for sale had only recently been introduced. Moreover it was
accepted that the main use of each property was as a bureau de change.
The last
sentence makes it clear that the fact that some retail sale of postcards and so
on was taking place within the premises, it was not sufficient of itself to
bring the activity within Class A1 and Mr Brian Knight QC does not so argue. He
does point out that in one respect that list of activities is too restricted.
He invites us to accept that not merely is sterling given in exchange for
travellers cheques or foreign currency, but the opposite transaction will on
some occasions ensue, ie that somebody will want to dispose of sterling in
exchange for foreign currency. However,
sterling in exchange for travellers cheques or foreign currency is a finding of
fact which on this application and on any subsequent appeal must be accepted.
The inspector
explained why he reached his decision in paras 20–26 of his decision letter.
The full text of those paragraphs is incorporated as an appendix to this
judgment [see p14]. He summarised in para 30:
To sum up, I
consider that the uses in question here should be regarded as falling within
Class A2 of the 1987 Use Classes Order. As the previous occupancy of both
appeal properties was for retail purposes within Use Class A1, a change has
clearly occurred in this regard in both instances. For the reasons which I have
already identified previously above, it seems to me that this change should be
found to be material both by definition as a result of the distinction set out
in the Order itself and due to the considerable difference in character and
function which, as a matter of fact and degree, thereby result.
The
inspector’s approach, as is apparent from the paragraphs of his letter to which
I have referred, was to consider first whether the use as a bureau de change
fell within Class A2 of the use classes order. He said initially, ‘Apparently
the answer to the question is yes’. Then he went on in a following paragraph to
say that there is no doubt that banks and buildings societies provide financial
and sometimes professional services (thus clearly falling within Class A2) and
that the activities carried on in a bureau de change are similar to those of a
bank. This supports the apparent straightforward finding that such activities
come within Class A2.
Finally, he
based himself upon the relevance of the distinction between Classes A1 and A2,
that is to say, that the legislation clearly intended, as I have sought to
point out, that use for the retail sale of goods and use for the provision of
financial services were activities of different kinds for which, for the change
from one to the other, planning permission should be required. Second, he
considered whether the activity was in Class A1 and found that it was not.
Third, he considered whether even though there was a change from Class A1 to
A2, that change was material. For my part, I think strictly the proper approach
would have been to consider the second question first, that is to say, whether
the activity which fell within Class A1 was the retail sale of goods? If the
answer to that question was no, then though the enforcement notices alleged a
change to Class A2 it did not really matter what the change was to so long as
it was a material change. But since the inspector did answer the second question,
at least somewhat tentatively, the order in which he answered the questions
does not, in my view, form any point of law upon which it can be said his
decision was wrong.
Mr Brian
Knight QC for the applicants submits first (and this is his main submission)
that by concentrating on the comparison or the alleged relationship between the
activities carried on in a bank and those carried on in a money changer’s
office, the inspector has led himself into error. He has not analysed the
differences between the two (and undoubtedly there
a bank, which mean that such activities clearly fall within Class A2. Without
doing so, submits Mr Knight, the comparison was not one he could validly make.
For my part, I reject that approach, because it seems to me that the inspector
first considered whether the activity of the money changer’s office did indeed
fall within Class A2 (at paras 20 and 21) before he went on to consider the
comparison with banks in para 23 of the decision letter. In other words, it was
quite clear that he had gone a long way towards deciding that the activity did
fall within Class A2 and then supported that by the comparison with banks in
para 23.
The deputy
judge said:
I do not
accept Mr Knight’s approach. There is no definition of ‘goods’ nor or
‘financial service’ within the use classes order and so the correct approach is
to look at their ordinary and natural meaning in the context of the use classes
order.
An important part
of that context is that the use classes order does have a particular class
relating to the provision of financial services, as well as the class
containing the use for the purpose of retail sale of goods.
Without more
I would have little difficulty in categorising the bureau de change operation
as the provision of a financial service to visiting members of the public. That
service being the provision of sterling to those in the Knightsbridge shopping
area who wished to exchange their foreign currency or travellers cheques for
sterling. This is what the inspector found to be the principal activity. I
would also expect to see the facilities to rechange any leftover sterling back
into foreign currency as an overseas visitor was nearing the time to depart overseas,
and for UK residents requiring foreign currency to obtain this for use abroad.
Either way, without more, that seems to me to be the provision of a financial
service to the public.
Given the
presence of that as Class A2 in the use classes order, and striving to give
words their normal and natural meaning, I find it a very poor alternative to
classify the operation which I have described as the retail sale of goods under
the overall heading of ‘shop’.
I can only say
that I agree.
Second, Mr
Knight submits that either as an alternative or possibly an addition, the
activity described by the inspector does come within Class A1. He is not basing
this upon the subsidiary sale of postcards and a few other goods, but on the
proposition that changing money is itself a retail sale of goods, at least if
it is carried on at a retail level. Changing money in larger quantities by
other means could not conceivably be so described. Mr Knight submits that in
this context it can properly be so described.
The Class A1 classification
starts off with the first description of activity being for the retail sale of
goods other than hot food. The next two are types of activity that do involve
some financial transaction: a post office for the sale of tickets or a travel
agency. To my mind, it is clear that they were included by specific definition
or description because the legislator thought it right that change of use from
a shop to a post office or vice versa should not require planning permission
because it did not constitute development, but on the other hand, took the view
that it was necessary
because otherwise it might well be said that they did not amount to the retail
sale of goods. Most, or at any rate, much of what goes on in a post office is
not the retail sale of goods. Coming back to this particular activity, not
merely is it not, as the judge pointed out elsewhere in his the judgment,
specifically described in Class A1, but, to my mind, the basic argument is
flawed. Certainly by statute, sterling does not constitute goods; foreign
currency maybe. But here the major activity is the changing of foreign currency
or travellers cheques into sterling. Even without that statutory definition I would
have had no difficulty in concluding that in the ordinary sense of the English
language, to speak of changing money from one currency into another would not
normally be described as the retail sale of goods. But the statutory definition
which makes it clear that sterling is not goods puts the matter, to my mind,
beyond any doubt.
I return to
the contrast between that activity, so described in Class A1, and the fact that
provision is made in Class A2 for financial services where the services are
provided principally to visiting members of the public. These premises do
provide facilities for visiting members of the public exclusively, not merely
principally. Mr Knight sought to argue that the changing of money was not a
financial service, that a service involved some sort of advice-giving. For my
part I disagree. The words ‘financial services’ seem to me to be perfectly apt
to include the provision of the service of changing money from one currency
into another. If it be right that the inspector found this activity fell within
Class A2, then that was a strong pointer supporting the proposition that the
words ‘for the retail sale of goods in Class A1’ did not comprehend this
particular activity.
Finally, Mr
Knight queried the inspector’s conclusion that the change of use from the
former use as a retail shop to use as a money changer’s office was a material
change. It is correct as a matter of law that a change from an activity within
one use class to an activity within another use class may not necessarily be
material. The circumstances in which such a change will not be material will be
rare, but they may occur. Nevertheless, whether a change of use is material or
not is–and again this is trite law–a matter of fact and degree. The inspector’s
conclusion could only be challenged on the basis that there was no evidence to
lead him to it. In my view, far from there being no such evidence there was
ample evidence. Accordingly, I find no arguable point of law upon which to
submit that the inspector’s decision was wrong. I would therefore refuse leave
to appeal. The question of extending time for this renewed application
therefore does not arise.
MILLETT LJ: I agree. The inspector described the main activity carried on upon
the subject premises as the provision of money (that is to say sterling) in
exchange for travellers cheques or foreign currency. That activity does not
involve the sale of anything; it involves the purchase of foreign currency and
the encashment of cheques drawn in foreign currency. But as the judge pointed
out, one would expect the activity of a bureau de change also to include as a
subsidiary activity the sale of foreign currency to foreign tourists about to
return home, or English resident
is a place which buys and sells foreign currency. But, in my view, if regard is
had to activities overall it is a place to which members of the public resort
in order to change their money from one currency into another. In that context
I do not accept the proposition that foreign currency, unlike sterling,
constitutes goods. The parties to the exchange do not so regard it. They regard
foreign currency in exactly the same way as they regard sterling, that is to
say, as money, and they do not regard the transaction as one which involves a
sale or purchase, but an exchange. Accordingly, I agree with Glidewell LJ that
the activity of a bureau de change does not come within Class A1 para (a) as
being the retail sale of goods. The activity in which it engages is the
exchange of money.
I also agree
with Glidewell LJ for the reasons that he has given that a bureau de change
does come within Class A2, the provision of financial services, and that there
is no arguable case which would justify the granting of leave to appeal.
Application
dismissed with costs.
20. In
analysing these conflicting submissions, I note that no case law nor like
decisions have been put forward to support the appellants’ views. Indeed I was
told that the point had been researched but without success. As the Use Classes
Order has now been in operation for in excess of 5 years, this could be
regarded as somewhat surprising if indeed there is any doubt as to the status
of a bureau de change in planning terms. In my opinion therefore this absence
of any corroborative evidence supports the authority’s stance, to the effect
that a bureau de change of this sort is so obviously by definition a use within
Class A2 of the Use Classes Order that the point has not needed to be debated
previously.
21. In this
connection I draw attention also to the contents of Circular 13/87, notably at
paragraph 18. This important source of advice comments on the formulation of
this new category of planning land use, which had not previously been
specifically recognised in the relevant legislation before 1987. It seems to me
that a bureau de change should be found to fall squarely within the description
referred to there as ‘other newer financial and professional services’ which
‘need to be accommodated in shop type premises’. However this guidance goes on
to state that the establishment of this new Class ‘will enable a planning
control to be maintained over proposals involving the conversion of shops for
purposes other than for the retail sale of goods’. In other words, as I see it,
the authors of these statements were clearly envisaging that A2 uses might well
be acceptable within certain shopping areas, but that even so for good planning
reasons permission would still be required for a change from an A1 to an A2
occupancy.
22. Even given
the references in paragraph 18 to ‘newer financial and professional services’,
I do not consider that around 1987 a bureau de change would have been such a
novel, unusual or uncommon undertaking as to have been of little relevance for
planning purposes. In these circumstances it would have been open to the
legislators, had they felt fit, to specifically refer to this activity in
whichever Use Class was felt to be appropriate. For example, the inclusion of a
post office in Class A1 is clearly intended to be for clarification and the
avoidance of any doubt. Otherwise it might well have been argued subsequently
that a post office
although there is reference in Circular 13/87 to banks and building societies
in commenting on the new A2 category, the Order itself does not include these
precise terms.
23. In my
judgment there can be little if any doubt that banks and building societies
provide financial and professional services. Consequently they clearly fall
within Use Class A2. Similarly and for like reasons, and notwithstanding the
arguments put forward on behalf of the appellants to the contrary about the
alleged differences between the appellants’ business operations here and those
normally undertaken by a bank, I still hold the view that a bureau de change of
the type carried out at the appeal properties should be considered on the same
basis. The fact that the Order itself omits any reference to this actual
terminology to my mind only serves to reinforce this conclusion.
24. In the
light of all the above it is my opinion that your Company’s occupancy of the
appeal sites falls logically within Use Class A2. Given that there is no
disagreement that the previous use in each case was for retail purposes within
Use Class A1, then clearly a change has taken place in this respect.
25. As to the
question of ‘materiality’, it may well be that circumstances can exist where a
change from one use to another, or from one Use Class to the other, still does
not involve development requiring permission, because no material differences
can be perceived. However I do not consider this to be so in this instance. To
my mind because of the operations involved and the nature of the undertaking,
your Company’s use of the appeal premises as a bureau de change is quite
different as a matter of fact and degree to that of a retail shop. The
activities concerned are not the same, and goods are not offered for sale to
any significant extent in the manner which would usually be expected to occur
in a conventional retail outlet. To the contrary the nature of the appellants undertaking
is more akin to the provision of a service. I appreciate that Class A1 also
refers to the provision of services to visiting members of the public, but it
does not include the important qualifying word ‘financial’, which Class A2
does. Nor in my opinion do the appeal premises possess the physical
characteristics of a normal shop.
26. As to
whether the provision of currency should be regarded as the retail sale of
goods, I have severe doubts. It could perhaps be said to be a possible approach
to this particular debate. However given the clear terminology used in the Use
Classes Order, and the absence in the relevant legislation of any definition of
the term ‘goods’–which should therefore take its natural and everyday meaning–I
much prefer the Council’s approach; this is that these particular activities
fall so self-evidently within Use Class A2 that by other outcome would be
perverse and unworthy of support.
