Modification order — Planning permission — Town and Country Planning Act 1990 — Exercise of powers under section 100 — Financial impact of a modification order — Whether compensation a material consideration — Whether policy correctly applied
In 1993 the applicant council granted outline planning permission
for a development for a range of uses, including up to 4,654m2 of Class A1
retail (food and non-food) use. The council mistakenly thought they were giving
permission for up to 3,252m2 retail use. The second respondent subsequently
acquired the site and submitted three applications for the approval of reserved
matters. In January 1996 the Government Office for the North East invited the
council to consider revocation or modification of the outline planning
permission on the ground that it was contrary to national and development plan
policies. In May 1996 the Secretary of State, on the recommendation of his
inspector, made an order deleting the Class A1 use, thereby modifying the 1993
planning permission under section 100 of the Town and Country Planning Act
1990. The council challenged that decision contending that the Secretary of
State had erred: (1) in treating as irrelevant the impact on the council of
paying compensation; (2) in applying his policy in relation to section 100, in
particular that part of the policy referring to damage to the wider public
interest; (3)
evidence and correct application of policy ought to have led him to conclude
that permission for retail use in respect of a reduced floorspace was
appropriate; (4) in deciding to delete the totality of the Class A1 retail use
when there was no evidence to support its deletion in so far as it related to
non-food retailing; and (5) in concluding that it was not open to him to modify
the draft order so as to limit retail use to no more than 1,765m2 retail use or
in failing to consider whether he could modify the order so as to limit it to
non-food retailing.
(1) In so far as financial consequences do not relate to the
use and development of land, they are not capable of amounting to material
considerations. It is wholly consonant with the statutory purpose that
decisions under sections 97 and 100 of the 1990 Act should be guided only by
planning considerations. It cannot have been the legislative intention, in
introducing a provision for the payment of compensation, that the impact of
such payment upon a local planning authority’s financial
planning permission. Payment of compensation enters into the picture only after
a decision to revoke or modify has been taken. Its purpose is simply to ensure
that persons interested in the land are compensated for any loss they suffer by
reason of the revocation or modification of the permission: see p57B.
(2) The parliamentary statement concerning the exercise of powers
under section 100 is no doubt carefully formulated, but it remains a statement
of policy and not statute. The interpretation of that policy is a matter for
the Secretary of State, subject to Wednesbury principles. There is a
clear link between the two limbs of the policy. The damage to the wider public
interest is to be looked at not as a separate exercise, consequent upon a
finding that the original decision is grossly wrong, but as part and parcel of
determining whether the decision is grossly wrong. The inspector considered the
damage to the wider public interest to lie in the harm to Alnwick’s vitality
and viability as a shopping centre. That was a proper application of the
policy: see p60E-H.
(3) The test that the Secretary of State had to apply was that laid
down in the relevant policy, ie whether ‘the original decision is judged to be
grossly wrong, so that the damage is likely to be done to the wider public
interest’. It was for him to form that judgment subject to Wednesbury
principles. It is wrong to talk in terms of an onus on the Secretary of State,
or to express the relevant test in terms other than those laid down in his
policy: see p67C.
(4) As this issue was not raised at the inquiry, there was no
obligation on the inspector and Secretary of State to deal with it: see p68G.
(5) The inspector was entitled to consider Circular 14/94, which is
consistent with the correct legal test as to the limits of power of
modification. The inspector was applying a broadly correct approach: see p71A.
Bolton Metropolitan Borough Council v Secretary of
State for the Environment (1990) 61 P&CR 343; [1991] JPL 241, CA
Evans v Waverley Borough Council 94 LGR 227; [1995]
3 PLR 80; [1996] JPL 655; (1996) 160 LG Rev 41; [1995] NPC 13
Michael Shanley Group Ltd v Secretary of State for the
Environment, Transport and the Regions [1999] PLCR 188; [1998] NPC 140
Mills v Secretary of State for the Environment,
Transport and the Regions [1998] 3 PLR 12; [1998] Env LR 17; (1998) 95(4)
LSG 35
Northumberland County Council v Secretary of State for
the Environment (1990) 59 P&CR 468; [1989] JPL 700
Prest v Secretary of State for Wales (1982) 81 LGR
193; [1983] 1 EGLR 17; 266 EG 527, CA
R v Bassetlaw DC, ex parte Oxby [1998] PLCR 283;
[1997] NPC 178
R v Secretary of State for the Environment, Transport
and the Regions (No 2), ex parte Alliance Against the Birmingham Northern
Relief Road [1999] JPL 426; [1998] NPC 14
R v Secretary of State for Transport, ex parte de
Rothschild [1989] 1 All ER 933, CA, sub nom de Rothschild v
Secretary of State for the Environment [1989] 1 EGLR 19
R v Westminster City Council, ex parte Monahan
[1990] 1 QB 87; [1989] 3 WLR 408; [1989] 2 All ER 74; (1988) 58 P&CR 92;
[1989] 1 PLR 36; [1989] JPL 107, CA
Sosmo Trust Ltd v Secretary of State for the
Environment [1983] JPL 806
Sovmots Investments Ltd v Secretary of State for the
Environment [1977] QB 411; [1976] 3 WLR 597; [1976] 3 All ER 720; (1976) 74
LGR 556, CA
Stringer v Minister of Housing and Local Government
[1970] 1 WLR 1281; [1971] 1 All ER 65; (1970) 68 LGR 788; 22 P&CR 255;
[1971] JPL 114
Taylor v Munrow [1960] 1 WLR 151
Vasiliou v Secretary of State for Transport [1991]
2 All ER 77; (1990) 61 P&CR 507; [1991] 1 PLR 39; [1991] JPL 858, CA
Virgin Cinema Properties Ltd v Secretary of State
for the Environment, Transport and the Regions [1998] 2 PLR 24; [1998] PLCR
1; [1997] NPC 13
Application for judicial review
This was an application by Alnwick District Council seeking to
quash an order made by the Secretary of State for the Environment, Transport
and the Regions, under section 100 of the Town and Country Planning Act 1990,
modifying an outline planning permission granted by them.
Alnwick District Council) appeared for the applicant council.
first respondent, the Secretary of State for the Environment, Transport and the
Regions.
second respondent, Safeway Stores plc
RICHARDS J: In these proceedings, Alnwick District Council
apply to quash an order made by the Secretary of State under section 100 of the
Town and Country Planning Act 1990, modifying an outline planning permission
granted by the council in 1993 for the development of a site at Willowburn
Avenue, Alnwick. In his decision letter dated 5 March 1998, the Secretary of
State accepted the recommendations contained in the report of his inspector
following a public inquiry in June 1997. The order was made on the same date.
The application raises a number of legal issues concerning the
exercise of powers under section 100 of the 1990 Act, including the question
whether the Secretary of State should take into account, as a material
consideration, the impact on the local authority of paying the compensation to
which a developer may be entitled in the event of modification of an existing
planning permission.
Facts
The subject site is 5.2ha in size and is located some 1.9km from
the centre of Alnwick. At the time of grant of outline planning permission it
had no designation in a statutory development plan but was specified in the
emerging local plan as a site for industrial and employment development.
On 9 July 1993 an application was lodged for planning permission in
respect of a range of uses, including class A1 retail (food and non-food).
Outline permission was granted on 20 December 1993 for the development ‘as
described in your application for planning permission’. The council thought
that they were giving permission for a development involving retail use of up
to 3,252m2. But the inspector concluded, by reference to the figures submitted
in support of the application, that the outline permission granted was in fact
for retail use of up to 4,654m2. That conclusion is not the subject of
challenge.
Safeway Stores plc, the second respondent in these proceedings,
subsequently became interested in the site and acquired the freehold. Safeway
submitted three applications for approval of reserved matters, differing in
their details but each for a retail store of 4,307m2.
On 30 January 1996 the Government Office for the North East (GO-NE)
invited the council to consider revocation or modification of the outline
planning permission on the ground that it was contrary to national and development
plan policies. On 22 May 1996 the Secretary of State consulted the council as
to whether he should exercise his powers under section 100 of the 1990 Act to
make an order to revoke or modify the planning permission. There followed the
appointment of the inspector, a public inquiry and the inspector’s report. The
inquiry and report related to two principal matters: (1) the Secretary of
State’s proposed modification order, a draft of which was before the inspector
and proposed the deletion of permission for class A1 retail use; and (2)
appeals against the council’s non-determination of Safeway’s applications for
the approval of reserved matters. A letter dated 18 November 1996 from GO-NE
also identified a number of specific matters about which the Secretary of State
wished to be informed for the purposes of his consideration of the case.
In the concluding part of his report, the inspector dealt with the
following matters: the appropriate test for determining whether to exercise the
powers of revocation or modification; the scope of the 1993 planning
permission; the implications for the vitality and viability of Alnwick town
centre; the need for retail use on the subject site; the likely impact on the
surrounding area’s amenity; the degree of conformity with structure and local
plan policy; the degree of conformity with PPG
material considerations; conclusions; and recommendations. The first two of
those sections were preliminary matters, the remainder reflected the list in
GO-NE’s letter of 18 November 1996 of specific matters about which the
Secretary of State wished to be informed.
The inspector’s conclusion in relation to the proposed modification
order, at para 18.1 of his report, was as follows:
On the proposed modification order I conclude that the council was
grossly wrong to misinterpret what was applied for in 1993 and to grant
permission when the clear evidence then, and now, is that the permission for
the store of 3,252 sq m that the council thought it was giving, or for the larger
store of 4,654 sq m, which is what is actually permitted, would firstly,
adversely affect the vitality and viability of Alnwick town centre; secondly,
not accord with the actual need for retail use on the subject site; and
thirdly, be contrary
material considerations raised at the Inquiry… do not in my opinion outweigh
the wrongness of the council’s decision. I consider that the 1993 decision was,
and is, so demonstrably and seriously perverse such that significant harm to
Alnwick’s vitality and viability as a shopping centre was and is likely to
occur. It is therefore expedient to modify the 1993 permission by the deletion
of A1 use, and the proposed modification order should be authorised.
The inspector stated that if the proposed modification order were
authorised, then the reserved matters applications could not be determined. He
reached separate conclusions on those matters in case the proposed modification
order were not authorised.
In his decision letter, the Secretary of State adopted the
inspector’s conclusions and the reasons for them. He therefore made the order
deleting A1 retail use from the 1993 planning permission.
The consequences of the order, in terms of the payment of
compensation by the council to Safeway, are considered below.
The challenge to the order is brought by the council and resisted
by the Secretary of State. Safeway’s position is that it disagrees with the
Secretary of State’s decision but does not challenge it or submit that the
order was unlawful. Indeed, it has appeared as second respondent to advance
arguments in support of the order. None of the other respondents has taken any
part in the proceedings.
Statutory framework
The material provisions of sections 97 to 100 of the 1990 Act,
under the heading ‘Revocation and modification of planning permission’, are
these:
97.–(1) If it appears to the local planning authority that it is
expedient to revoke or modify any permission to develop land granted on an
application made under this Part, the authority may by order revoke or modify
the permission to such extent as they consider expedient.
(2) In exercising their functions under subsection (1) the
authority shall have regard to the development plan and to any other material
considerations.
…
98.–(1) Except as provided in section 99, an order under section
97 shall not take effect unless it is confirmed by the Secretary of State.
(2) Where a local planning authority submit such an order to the
Secretary of State for confirmation they shall serve notice on–
…
(3) The notice shall specify the period within which any person on
whom it is served may require the Secretary of State to give him an opportunity
of appearing before, and being heard by, a person appointed by the Secretary of
State for the purpose.
(4) If within that period such a person so requires, before the
Secretary of State confirms the order he shall give such an opportunity both to
him and to the local planning authority.
…
(6) The Secretary of State may confirm an order submitted to him
under this section either without modification or subject to such modifications
as he considers expedient.
…
100.–(1) If it appears to the Secretary of State that it is
expedient that an order should be made under section 97, he may himself make
such an order.
(2) Such an order which is made by the Secretary of State shall
have the same effect as if it had been made by the local planning authority and
confirmed by the Secretary of State.
…
(7) The provisions of this Part and of any regulations made under
this Act with respect to the procedure to be followed in connection with the
submission by the local planning authority of any order under section 97 and
its confirmation by the Secretary of State shall have effect, subject to any
necessary modifications, in relation to any proposal by the Secretary of State
to make such an order and its making by him.
Section 107 contains provisions as to the payment of compensation
where planning permission is revoked or modified:
(1) …where planning permission is revoked or modified by an order
under section 97, then if, on a claim made to the local planning authority
within the prescribed time and in the prescribed manner, it is shown that a
person interested in the land… —
(a) has incurred expenditure in carrying out work which is
rendered abortive by the revocation or modification; or
(b) has otherwise sustained loss or damage which is directly
attributable to the revocation or modification,
the local planning authority shall pay that person compensation in
respect of that expenditure, loss or damage.
The Secretary of State’s policy with regard to the use of his
powers under section 100 was set out in a statement to parliament by a junior
minister on 20 December 1989:
Section 100 is a default power. Amongst other things, it enables
the Secretary of State to take action to revoke a planning permission, after
following the specified procedures. There is provision for compensation to be
paid.
My Rt Hon Friend’s practice has been to use this power only
rarely. He has taken the view that the power should be used only if the original
decision is judged to be grossly wrong, so that damage is likely to be done to
the wider public interest.
Recently, however, a particular kind of case has come to the
attention of my Rt Hon Friend in which he may well be prepared to exercise his
power to revoke a planning permission. This is where he considers that
consistency is needed between a local planning authority’s decisions in
different cases, in order to ensure that similar circumstances give rise to
similar decisions and that the provisions of the development plan, so far as it
is material, and other material considerations have been taken into account…
My Rt Hon Friend will continue to consider each case on its merits
bearing in mind this policy.
Issues
Mr Hoggett QC, for the council, has made clear that the challenge
is directed towards alleged errors in the inspector’s report on which the
Secretary of State’s decision was based. In his oral submissions he has
identified five issues that are being pursued. They recast and to some extent
limit the matters set out in the notice of motion and skeleton argument, and
may be summarised as follows:
(1) whether the Secretary of State erred in treating as irrelevant
the impact on the council of paying compensation, either generally or in so far
as it had land use consequences by preventing the council from providing
proposed new leisure facilities;
(2) whether the Secretary of State erred in applying his policy in
relation to section 100, in particular that part of the policy referring to
damage to the wider public interest;
(3) whether the Secretary of State erred in deciding to delete the
totality of the Class A1 retail use from the planning permission when the
evidence and correct application of policy ought to have led him to conclude
that permission for retail use in respect of a reduced floorspace (up to
1,765m2) was appropriate;
(4) whether the Secretary of State erred in deciding to delete the
totality of the Class A1 retail use when there was no evidence to support its
deletion in so far as it related to non-food retailing;
(5) whether the Secretary of State erred in concluding that it was
not open to him to modify the draft order so as to limit retail use to no more
than 1,765m2 or in failing to consider whether he could modify the order so as
to limit it to non-food retailing.
All of those issues have been addressed both by Mr John Hoggett QC
for the council and by Mr David Elvin for the Secretary of State. For Safeway,
Mr John Steel QC has addressed issues (3) to (5), the main relevance of which
is that the council contend (though Safeway does not accept) that the value of
planning permission for a 1,765m2 store would be close to that for a 4,654m2
store and that the compensation payable on the making of the modification order
would therefore be much lower. In addition, Mr Elvin and Mr Steel have raised
certain points on the withholding of relief, in the exercise of the court’s
discretion, if the council succeed on any of their grounds of challenge.
Issue (1): relevance of payment of compensation
The evidence before the inquiry was that Safeway would be making a
claim of at least £3m by way of compensation in the event of the planning
permission being modified as proposed. It now appears that the figure will be
in excess of £4m.
In their oral evidence to the inspector the council made brief
reference to the impact on them of paying compensation. The point was
summarised in para 14.5 of the inspector’s report:
Also, if the council is forced to pay compensation, this would
mean that it may not be able to provide new leisure facilities planned for the
District.
In para 17.40 of his conclusions the inspector stated, with a
cross-reference to para 14.5:
With regard to the possible financial consequences for the council
if the proposed modification order is made and compensation is claimed, this is
not a land use planning matter and therefore not one that I can have regard to.
The case advanced for the council is that: (i) the inspector
thereby failed to take into account the land use consequences of payment
of compensation, ie the inability of the council to provide the planned leisure
facilities if they had to pay compensation to Safeway; and/or (ii) the
inspector was wrong to proceed on the basis that payment of compensation more
generally is not capable of being a material consideration. The same errors are
attributed to the Secretary of State in adopting the inspector’s conclusions.
The court has been brought up to date with regard to the planned
leisure facilities. Matters have reached a relatively advanced stage, with a
conditional offer of funding in principle from the Lottery Sports Fund. The
expected total cost of the project is £5.9m, with Lottery funds providing just
over £3m, the Duke of Northumberland donating land, and the balance of £2.65m
coming from the council’s capital reserves. What is said, however, is that
expenditure of that order would not be sanctioned by the council if
compensation had to be paid to Safeway pursuant to the Secretary of State’s
modification order. Thus, it is said, there is still a real issue as to the
impact of the order on the ability of the council to proceed with the proposed
leisure facilities.
Council’s submissions
In relation to the first limb of the council’s case Mr Hoggett
cites R v Westminster Council, ex parte Monahan [1990] 1 QB 871,
which was a challenge to the grant of planning permission for a far-reaching
redevelopment of the Royal Opera House. Permission had been granted for the
whole development on the basis that desirable improvements to the opera house
could not be financed unless office development was also permitted. It was
contended by the applicants for judicial review that such financial
considerations were not capable of being a material consideration. The Court of
Appeal rejected the contention. It approved the approach of Forbes J in Sovmots
Investments Ltd v Secretary of State for the Environment [1977] QB
411 at p425A, as followed by Woolf J in Sosmo Trust Ltd v Secretary
of State for the Environment [1983] JPL 806:
all that the court can do is to say that cost can be a relevant
consideration and leave it to the Minister to decide whether in any
circumstances it is or is not. Of course it follows that the weight to be given
to cost, if it is a relevant factor, is also a matter for the Minister and not
one in respect of which any court is entitled to substitute its opinion… I
would conclude that it is impossible to say that cost can never be a relevant
consideration either in a planning matter or in a compulsory purchase matter.
It can be in both or either and it will depend in every case on the
circumstances of the case. It is then a matter for
1Editor’s note: Also
reported at [1989] 1 PLR 36, CA
the Minister to decide whether or not in any particular instance
cost is in fact a relevant consideration.
The approach so laid down was applied by Mr Malcolm Spence QC,
sitting as a deputy judge of the High Court, in Northumberland County
Council v Secretary of State for the Environment (1990) 59 P&CR
468. The challenge in that case was to a decision of the Secretary of State
based in part on the view that the economic advantages of a proposed
development outweighed the environmental objections to it. Such a view was held
to constitute a correct application of the development plan, which stated that
economic as well as environmental factors had to be taken into account. But the
deputy judge also found, obiter, that the Secretary of State would have
been entitled to proceed on that basis even if there had been no relevant
policy in the development plan. He proceeded from the basis that ‘it is now
well settled that economic considerations may amount to planning considerations
to be borne in mind when granting or refusing planning permission (see, for
example, the Royal Opera House case itself)’. He went on (at pp476-477) to
stress, however, that they must relate to the use and development of land:
What I have said is subject always to the proposition that the
consideration to be sought to be brought into play in assisting upon the
judgment as to whether permission should be granted, be it financial or
otherwise, must relate to the use and development of land… it will be for the
inspector and the Secretary of State to decide in each case whether the other
piece of land is one that can properly be brought into consideration as a
matter of fact and degree in the circumstances of a particular case.
Mr Hoggett submits that those authorities show that financial
consequences are capable of being a material consideration at least in so far
as they relate to the use and development of land; a remote or knock-on
consequence for a desirable development elsewhere can be a material
consideration. There can be no difference in principle between a ‘material
consideration’ for the purposes of section 97(2) and a ‘material consideration’
for the purposes of the grant of planning permission. Thus, contrary to the
approach adopted by the inspector and Secretary of State, the financial impact
of the payment of compensation on the council’s ability to proceed with the
proposed leisure facilities was capable of being a material consideration.
The alternative and broader part of the council’s case, that the
cost to the local planning authority of paying compensation is capable of being
a material consideration irrespective of specific land-use consequences,
proceeds as follows. Payment of compensation is an immediate consequence of the
making of a modification order. In principle, the consequences of a
discretionary decision are a material consideration when exercising the
discretion. The closest application of that principle is to be found in Vasiliou
v Secretary of State for Transport [1991] 2 All ER 771.
1 Editor’s note: Also reported at [1991] 1 PLR 39
In that case the Secretary of State made an order stopping up the
highway notwithstanding the inspector’s finding that it was likely to result in
the failure of the applicant’s business and there would be no possibility of
compensation. He did so on the basis that the economic effect of the order on
the applicant’s business was not a relevant consideration. The applicant
applied successfully for the order to be quashed. In the Court of Appeal,
Nicholls LJ stated at p83D-E:
As a matter of first impression I would expect that when
considering how to exercise this discretion the minister could take into
account, and, indeed, that he ought to take into account, the adverse effect
his order would have on those entitled to the rights which would be
extinguished by his order. The more especially is this so because the statute
makes no provision for the payment of any compensation to those whose rights
are being extinguished. I would not expect to find that such extinguishment, or
expropriation, is to take place in the exercise of a discretionary power
without the minister in question so much as considering and taking into account
the effect that such expropriation would have directly on those concerned.
Having read and reread the sections I can see nothing in their language,
or in the subject matter, to displace my expectation…
Mr Hoggett accepts that the statute may exclude what would
otherwise be relevant considerations. He refers in this connection to a
decision upon which Mr Elvin, for the Secretary of State, places considerable
reliance, R
and the Regions, ex parte Alliance against the Birmingham Northern Relief Road
[1999] JPL 426 (see below). He submits that the statutory language and context
in that case were materially different and that there is nothing in the 1990
Act to exclude consideration of the impact of the local authority’s duty to pay
compensation. If there is an analogy with compulsory purchase orders, where
compensation is payable to those affected, then he submits that a local
authority when considering whether to make such an order must be entitled to
ask themselves not only whether an order is desirable but also whether the
authority can afford to make it. The language of ‘if it appears… expedient’ in
sections 97 and 100 also suggests that a broad range of considerations may be
taken into account (cf Mills v Secretary of State for the Environment
[1998] 3 PLR 12 in the context of tree preservation orders).
More generally it is submitted that it would be extraordinary if a
local planning authority were required to revoke a planning permission whatever
the impact might be on their own costs and services. A local authority, as a quasi
trustee of local taxpayers’ funds, must be entitled to take into account
the costs of the proposed action when exercising a discretionary power: see, by
way of illustration, Taylor v Munrow [1960] 1 WLR 151 at p157. If
a local authority are entrusted with a wide discretion that involves as a
consequence the expenditure of public money, it requires the strongest
statutory language to remove the normal obligation to consider the impact of a
decision on their funds generally and, by necessary extension, the consequences
for their other policies.
Finally, Mr Hoggett submits that implied judicial acceptance of the
ex parte Oxby [1998] PLCR 283. The case related to planning permissions
granted in circumstances where certain councillors had failed to disclose an
interest. The council applied by way of judicial review to quash the grant of
the planning permissions. One of the arguments advanced against them was that
there existed a more appropriate and adequate alternative remedy in the form of
revocation of the planning permissions under section 97 of the 1990 Act. The
council, however, did not consider it expedient to revoke the permissions; they
took the view that permissions vitiated by bias should be declared void without
the payment of any compensation, and that it would indeed be wrong not to seek
to have the permissions set aside but to choose to revoke them and pay
compensation. The Court of Appeal accepted the validity of the council’s
approach. Hobhouse LJ stated at p294:
In my judgment this is a legitimate and proper attitude for the
council to adopt. If they are entitled to have the consents set aside without
the payment of compensation, that is what should occur and they should not lend
themselves to the payment of inappropriate and unnecessary compensation by
reason of exercising their power under section 97.
Respondents’ submissions
For the Secretary of State, Mr Elvin submits first that the
financial impact of a modification order on the local planning authority is not
a material consideration; secondly, that in any event the test applied by the
Secretary of State encompasses concern about the financial consequences; and
thirdly, that the issue was one of such little significance before the
inspector that the court should exercise its discretion against quashing the
decision even if there was an error of law in relation to it.
As to the first submission, Mr Elvin contends that the closest
parallel in the authorities, and one that is firmly against the council’s case,
is that of R v Secretary of State for the Environment, Transport and
the Regions, ex parte Alliance against the Birmingham Northern Relief Road
[1999] JPL 426. The context was the making of compulsory purchase orders, an
expropriatory act giving rise to the payment of compensation and therefore
closely analogous to the present situation. The primary powers in issue arose
under the Highways Act 1980 and the New Roads and Street Works Act 1991, though
the compulsory purchase procedures of the Acquisition of Land Act 1981 were
also engaged. They were discretionary powers, even though not expressed in
terms of ‘if it appears expedient’. The applicants contended that the Secretary
of State, in approving certain schemes and orders, had taken into account an
irrelevant consideration, namely the fact that he would be exposed to claims
for compensation if he did not approve them. Latham J held that the decision
would have been the same even if the Secretary of State had excluded the issue
of compensation from his mind. But he went on (at pp432-433) to deal obiter
with the question whether compensation was a relevant consideration:
I confess that I do not understand how the question of
compensation could be relevant to the highway and other public policy
considerations under the 1980
Act. In my judgment, the applicants are correct in their submission that the
question of compensation is no more relevant to these considerations than would
be the fact that, in the more normal highway proposals, a decision not to make
the relevant schemes and orders would render all the time and expense devoted
to devising, promoting and dealing with the relevant inquiries, nugatory. The
fact that section 1(4) of the 1991 Act makes provision for compensation in
certain eventualities does not make the question of compensation a relevant
consideration any more than does the fact the 1980 Act envisages that the
highway authority will be put to enormous expenses in obtaining ministerial
agreement to highway proposals. Nor can I see how it can be relevant merely
because, if the Secretary of State refused to make the schemes and orders
either at all or timeously, this would result in a claim for compensation which
would in effect be an extra cost in relation to any subsequent proposals which
may be put forward to give effect to what was described as the proven need for
the motorway. Quite apart from the fact that I cannot see how this
consideration can be relevant to the merits of the proposals under consideration,
the argument begs two questions, first whether or not any subsequent proposals
will be forthcoming and secondly whether or not such proposals may not prove
more cost-effective ultimately than the ones under consideration. I do not
suggest that financial considerations are in themselves irrelevant. The
cost-effectiveness of proposals will always form part of the debate in any
highway inquiry. That has a direct relevance to the question of whether or not
the highway need has been established. But that does not mean that any cost
consequence of either approving or not approving the proposals is a relevant
highway consideration under the 1980 Act or toll under consideration under the
1991 Act.
The same approach is said to apply in the present context. The
Secretary of State is intervening because of the conflict between the planning
permission granted and planning policies. The Secretary of State must be guided
by the planning consequences, not the financial consequences, because the
legislation’s concern is with the planning consequences. The grosser the local
planning authority’s error in granting permission, the more likely is it that
the financial consequences of revocation or modification will be large; yet it
cannot have been intended that that should weigh in the balance against the
revocation or modification. The use of the term ‘expedient’ in sections 97 and
100 does not avail the council, since the context requires expediency to be
assessed by reference to the planning issues. Further, the council’s
submissions go too far since, if payment of compensation is a material
consideration, it must always be a material consideration in the exercise of
powers under sections 97 and 100; but the authorities do not go so far as to
suggest that financial consequences are always material considerations.
As to the other authorities, they show that the materiality or
otherwise of financial consequences depends on the context. That is apparent
from the passage of Forbes J’s judgment in Sovmots Investments Ltd, which
was approved in R v Westminster Council, ex parte Monahan [1990]
1 QB 871. Ex
1Editor’s note: Also reported at [1989] 1 PLR 36
parte Monahan itself was not a compensation case, but was
concerned with the grant of planning permission and, in particular, the
question whether it was permissible for the local planning authority to take
into account the fact that a desirable part of a proposed development would not
be financially viable unless permission were given for the other part of the
development. Vasiliou v Secretary of State for Transport [1991] 2
All ER 77 was likewise not a compensation case, but a case about expropriation
without compensation. The question was whether the serious adverse effect on
the landowner of making a stopping-up order could and should be taken into
account. The observations of Nicholls LJ were made in that context and are not
to be read as a general statement about the relevance of financial consequences
in the exercise of statutory powers. R v Bassetlaw DC, ex parte Oxby
[1998] PLCR 283 was a case about alternative remedies, in circumstances where
the original planning permissions were unlawful and an order under section 97 would
not give the same relief as the quashing of those permissions. The validity of
the council’s concerns with regard to the financial consequences of exercising
its powers under section 97 was not the subject of argument or of decision by
the Court of Appeal.
Mr Elvin’s second main submission, that the test applied by the
Secretary of State encompasses concern about the financial consequences, is
based on the terms of the parliament statement that sets out the Secretary of
State’s policy with respect to the exercise of his powers under section 100.
The opening paragraph of the statement refers to the fact that this is a
default power, which involves the revocation of an existing right with
provision for the payment of compensation. The financial consequences of the
exercise of the power are therefore given recognition and are taken into
account in the policy.
The final main submission is that the issue was not one of any
significance at the inquiry, and even if the inspector was in error, the court
should exercise its discretion against quashing the decision. The passage at
para 14.5 of the inspector’s report refers to a point that was not part of the
council’s written evidence. It emerged only in the oral evidence and even then
did not form a substantial part of the council’s case. The cost to the council
was not mentioned in the council’s closing submissions, otherwise than as a
philosophical point in support of the submission that the use of section 97
should be a rarity. It was not included in the summary of the council’s case.
Nor was it mentioned in Safeway’s closing submissions. There is no evidence
that any financial analysis was provided, or any clear indication of the impact
of the payment of compensation on the council’s finances. Thus the council did
not raise this as a serious point for the inspector to grapple with. It is
wrong for the council now to try to use the point as a means of attacking the
Secretary of State’s decision. Moreover, it cannot seriously be suggested that
the inspector would have found it a compelling factor if he had considered it
to be legally relevant, or that it might have made a difference to the
decision: see the test in Bolton Metropolitan Borough Council v Secretary
of State for the Environment (1990) 61 P&CR 343.
Conclusions
I reject at the outset Mr Elvin’s alternative submission that
consideration of financial consequences is encompassed within the Secretary of
State’s policy as to the exercise of his powers under section 100. On no
reasonable interpretation of the policy does it encompass the point: the mere
mention of provision for the payment of compensation is not enough. Nor is that
how the matter was reasoned by the inspector or, therefore, by the Secretary of
State. Had it been reasoned in that way, it would have been necessary to
consider whether an exception from the policy was called for in the
circumstances of the case.
I turn back to the main issue, whether the cost to the local
planning authority of paying compensation is capable of being a material consideration
as a matter of general principle (ie leaving aside the separate argument about
specific land use consequences for the council). The inspector and the
Secretary of State proceeded on the basis that it is not, since it is not a
land use planning matter. In my judgment that was a correct approach.
A decision-maker will often be entitled, if not required, to take
into account as a relevant or material consideration the financial consequences
of his decision. Consideration of the effects of a decision on others is a
normal aspect of the decision-making function and there is no difference of
principle between financial effects and other effects. The observations of
Nicholls LJ in Vasiliou v Secretary of State for Transport as to
the relevance of the adverse effects of a ministerial order were directed to
the specific context of an order extinguishing or expropriating an individual’s
rights, but are in my view capable of more general application. Nor is the
point limited to the effects of a decision on others. It also applies to the
financial consequences for the decision-maker himself. Where decisions involve
the expenditure of public funds, the decision-maker will normally be entitled
or required to take into account matters such as the availability of funds and
competing demands on those funds.
All that, however, is at a level of generality. Whether a
particular consideration is one that a decision-maker is entitled or required
to take into account in the exercise of a statutory power depends ultimately on
the statute conferring that power. A statute may restrict the range of
permissible considerations either expressly or by implication. Whether it does
so is to be determined by reference to its provisions and to the statutory
purpose.
In the exercise of their functions under sections 97 and 100 of the
1990 Act, with regard to the revocation and modification of planning
permissions, local planning authorities and the Secretary of State are required
to have regard to ‘material considerations’ (see section 97(2)). What is
capable of amounting to a material consideration for this purpose must, in my
view, be the same as in relation to the initial determination of planning
applications, ie the ‘material considerations’ referred to in sections 70(2)
and 54A. Although the courts have adopted a flexible approach towards the
concept, a consideration must in broad terms be a ‘planning’ consideration in
order to be material for that purpose. Any
being a planning consideration: see Stringer v Minister of Housing
and Local Government [1970] 1 WLR 1281 at p1294.
It follows that financial consequences are capable of amounting to
a material consideration in so far as they relate to the use and development of
land. R v Westminster Council, ex parte Monahan is an example.
The need for a connection with the use and development of land was helpfully
spelled out in the application of that decision in Northumberland County
Council v Secretary of State for the Environment.
It also follows, however, that in so far as financial consequences
do not relate to the use and development of land, they are not capable
of amounting to material considerations. In my view that is fatal to the general
proposition for which Mr Hoggett contends, that the cost to the local authority
may be taken into account irrespective of land use consequences. I see no
warrant for treating cost as a permissible consideration even where it is not a
‘material consideration’ within the meaning of the legislation. It is wholly
consonant with the statutory purpose that decisions under sections 97 and 100
should be guided only by planning considerations. It cannot have been the
legislative intention, in introducing provision for the payment of
compensation, that the impact of such payment upon a local planning authority’s
financial position should condition the exercise of the powers to revoke or
modify planning permissions. Payment of compensation enters into the picture only
after a decision to revoke or modify has been taken. Its purpose is simply to
ensure that persons interested in the land are compensated for any loss they
suffer by reason of the revocation or modification of the permission.
I therefore reach the same conclusion as that reached by Latham J
in relation to the analogous context of compulsory purchase orders in R
v Secretary of State for the Environment, Transport and the Regions, ex
parte Alliance against the Birmingham Northern Relief Road. Nothing turns
on the different language in which the powers under sections 97 and 100 of the
1990 Act are expressed, in particular the use of the word ‘expedient’ upon
which Mr Hoggett has placed emphasis. The statute contemplates a planning judgment.
What is expedient is to be assessed in those terms.
R v Bassetlaw DC, ex parte Oxby does not assist the
council. The point now in issue was not in issue in that case. Even if the
court assumed that financial consequences were a legitimate reason for not
exercising the authority’s powers under section 97, that was not the subject of
any binding decision. Further, I think it clear that the outcome of the case
would have been the same even if financial consequences had been held to be
irrelevant to the exercise of powers under section 97. What the court was
considering was whether the availability of an alternative procedure under
section 97 made judicial review inappropriate. In the circumstances of the
case, it was plainly not inappropriate for the matter to proceed by way of
judicial review.
I turn to consider Mr Hoggett’s narrower argument that the cost to
the council was capable of being a material consideration in this case because
of its land use consequences, namely the effect on Alnwick’s proposed
leisure facilities. It is a weightier argument, but I am not persuaded by it.
It seems to me that the matters relied on as relating to the use and
development of land are altogether too remote. The financial considerations in ex
parte Monahan were closely related to the proposed development, since one
part of the development would not be viable unless permission were granted for
the other part. The relevant issue in Northumberland County Council was
the weighing of the economic advantages of a development against the
environmental objections to it. By contrast, the consideration raised in the
present case has nothing to do with the development that is the subject of the
planning permission. It arises as a contingent consequence of the statutory
obligation to pay compensation once the relevant planning decision (ie to
revoke the permission) has been taken. I say ‘contingent’ consequence because
everything depends upon the particular circumstances of the local planning
authority at the time of the decision: it is a function of the funds available
to the authority and of the authority’s existing plans for development. I do
not think that such an indirect consequence of the payment of compensation is
sufficient to justify treating the financial impact on the local authority as a
consideration relating to the use and development of land.
I therefore reject both limbs of the submissions advanced by
Mr
both of those points, I would nonetheless refuse relief on grounds of
discretion. I accept Mr Elvin’s submissions on this point. In my judgment the
financial consequences of the payment of compensation were not raised as a
substantial issue at the inquiry. The possible effect on the proposed leisure
facilities was not elaborated or supported by detailed evidence. Moreover,
given the strength of the reasons that led the inspector to recommend
confirmation of the modification order, I see no real possibility that the
financial consequences of the payment of compensation would have affected the
outcome even if they had been treated as legally relevant. Looking at the
matter in terms of the test laid down in Bolton, I am satisfied that
this would be an appropriate case in which to exercise my discretion not to
quash the decision even if I had taken the view that there had been a legal
error.
Issue (2): erroneous application of policy with respect to
section 100?
The council’s case on this issue is that the inspector and the
Secretary of State misapplied the stated policy by failing to look at the
consequences of the grossly wrong decision for the wider public interest.
Council’s submissions
The policy states that the power under section 100 should be used
‘only if the original decision is judged to be grossly wrong, so that damage
is likely to be done to the wider public interest‘ (emphasis added). The
words ‘so that’ are words of consequence, not of explanation. Thus the policy
does not just require a finding that the decision was grossly wrong, but a separate
finding as to the consequence, namely that damage is likely to be
done to the wider public interest (the emphasised words). The ‘wider’ public
interest must be a public interest wider than that which makes the decision
grossly wrong in the first place. Thus it is not sufficient in the present case
to look simply at the effects on Alnwick, which are said to have made the
decision grossly wrong.
The error of the inspector and the Secretary of State, it is
submitted, lay in a failure to look at the wider public interest. The
inspector’s report looks only at the reasons why the original decision was
grossly wrong. In para 17.3 the inspector states:
I consider that my interpretation of a grossly wrong decision in
this case should be one that is so demonstrably and seriously perverse such
that significant harm to Alnwick’s vitality and viability as a shopping centre
is likely to occur, having regard to the development plan and to all other
relevant material considerations at the time the decision was taken by the
council in 1993, and in the light of the information available now.
In his overall conclusions at para 18.1, which I have set out
previously, he echoes that test in finding that the 1993 decision ‘was, and is,
so demonstrably and seriously perverse such that significant harm to Alnwick’s
vitality and viability as a shopping centre was and is likely to occur.’
That approach is contrasted with two other decisions to which
Mr
of land in North Cornwall, where it is said that the Secretary of State relied
on specific additional factors in support of the exercise of his powers:
He is in no doubt that the decision in this case was grossly
wrong, such that damage is done to the wider public interest of protecting
Areas of Outstanding Natural Beauty. He is also concerned that the practice of
taking personal factors into account in deciding applications for retirement
dwellings submitted by members of the farming community introduces a serious
inconsistency into the council’s decision-making, which has brought the
planning system into disrepute in the council’s area.
Similar language about bringing the system into disrepute had been
used in support of an earlier decision, dated 14 March 1991, relating to land
in East Sussex.
Respondents’ submissions
Mr Elvin submits that the inspector and the Secretary of State
plainly had the stated policy clearly in mind and it is inherently unlikely
that either of them failed to apply the policy. The wording of the policy
should not be analysed too strictly, but the reference to damage to the wider
public interest is to be read as an amplification of the ‘grossly wrong’ test:
the wrong has to be gross in the sense that it has an adverse effect on the
wider public interest, and the ‘wider’ public interest means no more than the
‘general’ public interest (as compared with the narrower interests of those
directly concerned in the planning permission).
What constitutes damage to the wider public interest is a matter of
judgment for the Secretary of State. In the North Cornwall decision, for
example, the wider public interest lay in the protection of Areas of
Outstanding Natural Beauty and in the avoidance of serious inconsistency, which
brought the planning system into disrepute. In the present case the wider
public interest lay in the effect on Alnwick as a shopping centre and in the
correct application of national policy and the development plan. It is plain
from what he says about the ‘grossly wrong’ test and from the substance of his
report as a whole that the inspector was looking at such matters and thereby
having proper regard to the wider public interest.
Reliance is also placed on the fact that the council has failed to
identify any yet wider public interest, going beyond national policy and the
development plan, that might be of any relevance to the case. It is not said
that the inspector or Secretary of State failed to take any specific matter of
public interest into account.
Even if the policy is not clearly to be interpreted as contended
for above, Mr Elvin submits that its interpretation is a matter for the
decision-maker and that the court will intervene only if the meaning in fact
attributed to it is one that the decision-maker could not reasonably have
attributed to it: see Virgin Cinema Properties Ltd v Secretary of
State for the Environment [1998] 2 PLR 24. The interpretation adopted by
the inspector and Secretary of State in this case was within the reasonable
range of possible interpretations of the policy.
Conclusion
In my judgment Mr Elvin’s submissions are clearly correct. The
parliamentary statement concerning the exercise of powers under section 100 is
no doubt carefully formulated, but it remains a statement of policy and not a
statute. The interpretation of that policy is a matter for the Secretary of
State, subject only to control on Wednesbury principles. The words bear
the interpretation adopted by the inspector and, through his acceptance of the
report, by the Secretary of State. Their interpretation was within the
reasonable range of possible interpretations of the policy. Indeed, I would
find in favour of the Secretary of State even if it fell to me to construe the
policy as a matter of law, rather than considering the matter on Wednesbury principles.
There is in my view a clear link between the two limbs of the policy. The
damage to the wider public interest is to be looked at not as a separate
exercise, consequent upon a finding that the original decision is grossly
wrong, but as part and parcel of determining whether the decision is grossly
wrong. The words ‘so that’ are words of explanation rather than of consequence.
The earlier decisions referred to by Mr Hoggett seem to me to be
entirely consistent with this analysis. In the present case it is clear that
the inspector considered the damage to the wider public interest to lie in the
harm to Alnwick’s vitality and viability as a shopping centre. That was a
proper application of the policy.
Issue (3): wrong to revoke the totality of class A1 retail use
rather than to permit limited floorspace of 1,765m2?
The issue here is whether the Secretary of State was entitled to
decide
should have permitted retail use of up to 1,765m2. If that would have been the
appropriate result, then it is said that the Secretary of State should have
achieved it by modifying the draft order (issue (5)) or, if that was not
possible, by declining to confirm the existing draft order and then producing a
new draft order for consideration.
The issue arises out of a study prepared for the council in 1996
(the STG study). The study had recommended that there was scope for an
additional 1,394m2 net, which could be increased to 1,765m2 net (these net
figures are to be contrasted with the figure of 4,654m2 gross permitted by the
1993 planning permission, though the net/gross point is not itself of any
significance for present purposes). Against that background it was common
ground in the inquiry that there was scope for an additional 1,765m2.
The inspector examined the point in the section of his conclusions
headed ‘The need for retail use on the subject site’. He stated that two
questions needed to be considered under that heading: firstly, whether the
subject site was the only site in Alnwick that could accommodate a store of up
to 4,654m2 gross; and secondly whether the subject site was the only site that
could accommodate a smaller store sufficient to meet the identified need for
additional floorspace. On the first question he stated that there was no
evidence that there was any site closer to the town centre than the subject
site that could accommodate a store of up to 4,654m2 gross. He then stated that
if the Secretary of State agreed with the STG conclusion that the amount of
additional floorspace that Alnwick could and should accommodate, without harm
to the vitality and viability of the town centre, was less than was permitted
in 1993, then the need for retail use on the subject site had to be examined by
consideration of the possible alternatives. He went on to consider the possible
alternatives. He rejected extension and improvement of the existing Safeway
store. He referred to several sites within or on the edge of the centre that
had been examined at the inquiry as possible sites for a smaller store. He
rejected one and stated that too little detailed evidence was put forward for
him to reach a conclusion on two others. Moving out from the town centre, he
identified one site as potentially attractive and referred to another (the
Willis site) as preferable to the subject site. He said that he had taken into
account Safeway’s submission that it would not be interested in building a
smaller store than the one permitted in 1993 and would not allow a competitor
to build a store on the subject site; and that he did not regard as conclusive
the evidence in support of Safeway’s assertion that there would be no
commercial incentive for any retailer to build a store of the same size or
smaller than the existing Safeway town centre store. All this led to the
following conclusion (para 17.25):
I therefore conclude on the matter of the need for retail use on
the site as follows. There is no evidence of any alternative site for a store
of the size I consider is permitted by the 1993 permission. However, from my
conclusions on retail impact, if the Secretary of State agrees that a smaller
store than the
subject site require more detailed investigation to see if such a store could
be accommodated closer to the town centre, to accord with the advice in
PPG
Council’s submissions
The submissions made on behalf of the council appear to me to have
two strands to them. The broad point is the contention that the inspector (and
therefore the Secretary of State) failed to ask himself whether planning
permission for 1,765m2 would be grossly wrong; if he had asked himself that
question, on the evidence and the correct application of national and
development plan policy he could not have concluded that it would be grossly
wrong; and in those circumstances he should have permitted limited retail use
rather than revoking the totality of such use. Embedded in the broad point is a
separate strand of criticism of the inspector’s approach in this section of the
report towards certain policy issues.
I shall deal first with the criticisms of the inspector’s approach
towards policy issues. Mr Hoggett submits that the inspector misapplied the
test laid down in the June 1996 version of PPG 6 (I should explain that it was
and is common ground that the correctness of the 1993 planning permission had
to be examined both in terms of policy as it stood in 1993 and in terms of the
policy prevailing at the time of the decision on the modification order). PPG 6
lays down a sequential approach to the identification of additional sites for
retail development. This is explained in paras 1.11 and 1.12 of the guidance:
1.11 Adopting a sequential approach means that first preference
should be for town centre sites, where suitable sites or buildings suitable for
conversion are available, followed by edge-of-centre sites, district and local
centres and only then out-of-centre sites in locations that are accessible by a
choice of means of transport.
1.12 …Local planning authorities should be sensitive to the needs
of retailers and other town centre businesses and identify, in consultation
with the private sector, sites that are suitable, viable for the proposed use
and likely to become available within a reasonable period of time.
Picking on the expression ‘likely to become available’ in para
1.12, Mr
6, the inspector was wrong to look merely at ‘possible’ alternatives closer to
the centre; it was the wrong test for determining the acceptability of the
subject site under PPG 6. Mr Hoggett accepts that a similar argument, that PPG
6 does not leave it open to a decision-maker to reject an out-of-centre
proposal on the basis that a town centre or edge-of-centre site might possibly
become suitable, viable and available at some time in the future, was rejected
in Michael Shanley Group v Secretary of State for the Environment,
Transport and the Regions [1999] PLCR 188, but he submits that that
decision is not applicable or was wrongly decided.
It is also submitted that the inspector’s conclusion that the
Willis site was preferable was based on a separate misapplication of PPG 6.
Where
down by para 1.16 of PPG 6 for application to out-of-centre developments
include ‘their accessibility by a choice of means of transport; and their
likely effect on overall travel patterns and car use’. In considering the
Willis site, however, the inspector did not look at choice of transport but
only at its being nearer the town for car-borne shoppers.
A further issue concerns policy ED 12 of the Northumberland county
structure plan, the relevant development plan. That policy provides that retail
development will only be permitted outside existing town centres where it can
be demonstrated that: (a) they are not capable of being accommodated within or
adjacent to an existing centre; (b) they will not adversely affect the vitality
and viability of existing centres; (c) good customer access can be provided by
both public and private transport; (d)
satisfactorily accommodated within the surrounding road network; and (e) they
will not adversely affect the character or setting of the settlement,
surrounding land uses or heritage and conservation interests. As to those
criteria, (a) was found by the inspector, (b) was conceded, (c) was found by
the inspector, in relation to (d) the inspector found that additional traffic
could be accommodated, and in relation to (e) he found the details of the
proposed development satisfactory in the local context. It is submitted that
the inspector ought therefore to have concluded that there was compliance with
the structure plan.
The broad point raised, as I have indicated, is the alleged failure
to consider whether permission limited to 1,765m2 would be grossly wrong. It is
said that the issue of a 1,765m2 store is examined only in terms of PPG
and not in terms of the justification for making a modification order in the
form of the draft. No reference is made to it in the inspector’s overall conclusions.
To the extent that an analogy with compulsory purchase orders is appropriate,
then it is submitted that the test that should have been applied was not
whether there were other sites that might be investigated (para 17.25 of the
inspector’s report), but whether it was necessary in the public interest to
expropriate even that part of the permission that extended to no more than
1,765m2, or, to put it another way, whether the revocation of the totality was
justified as being in the public interest. Reliance is placed on Prest v
Secretary of State for Wales (1982) 81 LGR 193 at p198, where Lord
Denning stated it to be a principle of our constitutional law that no citizen
is to be deprived of his land by any public authority against his will unless
it is expressly authorised by parliament ‘and the public interest decisively so
demands’, and approved the proposition that an authority seeking to dispossess
a citizen of his land ‘must do so by showing that it is necessary’. It is
further submitted by reference to R v Secretary of State for
Transport, ex parte de Rothschild [1989] 1 All ER 933 that the onus is on
the Secretary of State to satisfy himself that the order is justified in the
public interest.
It is then said that, in circumstances where 1,765m2 could have
been developed without harm to Alnwick, the inspector had to apply his mind to
whether it was necessary in the public interest to make an order
Para 17.25 of the report shows, however, that the inspector was not considering
that issue. He treated it as if it were a planning appeal and purported to
apply the policy in PPG 6. By concluding that there had been insufficient
investigation of other sites, he was placing the onus on Safeway. But no such
onus lies on the developer in the context of a modification order, any more
than in the context of compulsory purchase. So there was an error of approach
infecting the whole of the inspector’s conclusion on whether the modification
order should be confirmed.
Respondents’ submissions
The Secretary of State accepts that, given the element of
expropriation of existing rights, there is an analogy with compulsory purchase
orders, though the policy relevant to the present context is that laid down in
the parliamentary statement (the ‘grossly wrong’ test) rather than policy
statements applicable specifically to compulsory purchase. He submits that the
correct general approach towards compulsory purchase orders is to be found in
R v Secretary of State for Transport, ex parte de Rothschild, which
modifies the test in Prest v Secretary of State for Wales, as
well as rejecting the applicability of the concept of onus of proof in relation
to a decision of this kind. Slade LJ, giving the leading judgment, stated at
pp938j-939b:
First, I do not accept that any special rules beyond the ordinary Wednesbury/Ashbridge
rules fall to be applied when the court is considering a challenge to the
Secretary of State’s confirmation of a compulsory purchase order. Second,
however, the Secretary of State, as counsel on his behalf accepted and
submitted, must be satisfied that the compulsory purchase order is justified on
its merits before he can properly confirm it. He must not exercise his powers
capriciously. Given the obvious importance and value to land owners of their
property rights, the abrogation of those rights in the exercise of his
discretionary power to confirm a compulsory purchase order would, in the
absence of what he perceived to be a sufficient justification on the merits, be
a course which surely no reasonable Secretary of State would take.
I think that this approach to the matter reconciles the judgments
in Prest v Secretary of State for Wales with the ordinary
principles of our law applicable to claims for judicial review. Furthermore, it
has the merit of avoiding any reference to onus of proof, which is an
expression more appropriate, as counsel for the Secretary of State pointed out,
to a lis inter partes.
So far as concerns the council’s detailed criticisms of paras 17.18
to 17.25 of the inspector’s report, Mr Elvin submits that they are based on a
number of errors. First, it is wrong to proceed on the basis that, because
1,765m2 would not harm the vitality and viability of Alnwick town centre, it is
therefore acceptable in planning terms. The sequential approach laid down in
PPG 6 may be failed even if there is no such harm. Thus, if there was limited
capacity for alternative retail development without causing harm to the town
centre, it was necessary in the light of PPG 6 to consider whether appropriate
sites existed. A proposal may fail in that respect
evidence. Para 1.9 of PPG 6 provides, for example:
In the absence of a planning brief, if a developer is proposing an
out-of-centre development the onus will be on the developer to demonstrate that
he has thoroughly assessed all potential town centre options.
The absence of a thorough assessment is a matter about which the
inspector complains throughout the section, with general adverse comments in
para 17.18, detailed comments about the absence of sufficient evidence in
relation to specific sites, and his conclusion that if the Secretary of State
were to agree that a smaller store was appropriate, more detailed investigation
would be required to see if such a store could be accommodated closer to the
town centre.
If the council were contending that planning permission for a
smaller floorspace would accord with PPG 6 (and that the permission should
therefore be modified only to the extent of cutting down the floorspace
permitted), it was for the council to adduce adequate evidence about the
absence of alternative sites. The sequential approach under PPG 6 is something
that must have been known to all the parties. The issue of the availability and
suitability of alternative sites had been directly raised by the Secretary of
State in advance of the inquiry. The inspector concluded that, because the
evidence was inadequate, the Secretary of State could not modify the 1993
permission so as to permit a smaller floorspace. It is implicit in his
conclusion that he considered the investigation not to comply with PPG 6.
It follows, in Mr Elvin’s submission, that the council’s contention
that the inspector applied the wrong test under PPG 6 (possibility rather than
likelihood) is misplaced. The inspector did not get that far along the path
laid down by PPG 6 and did not need to get that far. He took the view, as he
was entitled to do, that there was evidence of potential alternative sites but
thorough investigation had not been done and no conclusion could therefore be
reached. In any event Michael Shanley Group v Secretary of State for
the Environment, Transport and the Regions [1999] PLCR 188 shows that the
language of possibility is consistent with PPG 6. Similarly there was no
misunderstanding of the sequential approach with respect to the Willis site.
The inspector was again looking at the matter in terms of sufficiency of
information.
The contention that permission for a smaller floorspace would be in
compliance with the development plan is also mistaken. Policy CD 2 of the local
plan (to which the inspector referred at para 17.32 of his report) provides
that major shopping facilities outside the primary shopping area of Alnwick
will only be permitted where they are not capable of being satisfactorily
accommodated within or adjacent to the primary shopping areas. Similar language
is to be found in policy ED 12 of the structure plan (to which the inspector
referred at para 17.31). Both those policies give greater flexibility as to
location than is provided for in PPG 6. One of the reasons why the inspector
considered the 1993 permission to be in conflict with policy ED
that ‘it has not been demonstrated conclusively
accommodated nearer the town centre’. There was no error in his application of
the development plan. He formed a judgment that was reasonably open to him as
to conflict with the development plan.
In considering this section of the report it must also be borne in
mind that in it the inspector is simply covering one of the matters about which
the Secretary of State had stated he wished to be informed for the purposes of
his consideration of the case, summarised in the heading as ‘the need for
retail use on the subject site’ but also including the availability and
suitability of alternative sites, including town centre sites, in Alnwick. This
was only one of the elements to be taken into account in the overall assessment
of whether the original decision was grossly wrong.
Conclusion
First, I accept Mr Elvin’s submissions that the inspector did not
err in his application of the June 1996 version of PPG 6 in relation to a store
of 1,765m2. In the section of his report on ‘the need for retail use on the
subject site’, the inspector pointed repeatedly to the absence of sufficient
investigation of possible alternative sites. That seems to me to reflect the
threshold requirement laid down in, for example, para 1.9 of PPG 6. His
conclusions on that point meant that he did not get as far as considering, and
did not need to get as far as to consider, whether suitable and viable
alternative sites were ‘likely to become available’ within the terms of para
1.12. They also meant that nothing ultimately turned on the view (or the
adequacy of the reasons for the view) that he expressed about the Willis site
being preferable to the subject site. It was sufficient that the overall
absence of detailed investigation meant that the subject site had not been
demonstrated to be in conformity with PPG 6. I note in this respect the terms
of para 17.34, in which, having concluded that the permission conflicted with
the 1993 version of PPG 6, he stated: ‘This conclusion is not altered by the
current version of PPG
proposal because it has not, in my opinion, been demonstrated
that the subject site passes the sequential test for accommodating the
additional floorspace that the STG study, the council and Safeway Stores plc
agree is appropriate for Alnwick’ (emphasis added).
The same point lay behind the inspector’s conclusion that there was
a conflict with policy ED 12 of the structure plan. His observation that it had
not been demonstrated that the additional floorspace deemed appropriate for
Alnwick could not be accommodated nearer the town centre was plainly directed
towards a store of 1,765m2. In those circumstances he was entitled to find a
conflict with the policy. A similar point would appear to apply in relation to
policy CD
that a store of 1,765m2 would have been in conformity with the development
plan.
Those conclusions take the ground from under Mr Hoggett’s
submission that the inspector could not have concluded, on the evidence
and the correct application of national and development plan policy, that a
planning permission for 1,765m2 would be grossly wrong. But I should still go
on to examine his submission that there was a failure to consider the
application of the ‘grossly wrong’ test in relation to the smaller floorspace.
In my view Mr Hoggett is mistaken in his treatment of the
authorities on compulsory purchase, and seeks in any event to carry the analogy
too far when he contends that there was an onus on the Secretary of State to
satisfy himself that revocation of the totality of class A1 retail use was
justified as being in the public interest. The test that the Secretary of State
had to apply was that laid down in the relevant policy, ie whether ‘the
original decision is judged to be grossly wrong, so that damage is likely to be
done to the wider public interest’. It was for him to form that judgment. His
judgment is open to review on Wednesbury principles; and, given the
element of expropriation involved in the making of an order, the court will
look carefully at the sufficiency of justification in the application of those
principles. But it is wrong to talk in terms of an onus on the Secretary of
State, or to express the relevant test in terms other than those laid down in
his policy. To the extent that Mr Hoggett relies on Prest v Secretary
of State for Wales as imposing any greater or different requirement on the
Secretary of State, that decision must be qualified by what was said in R
v Secretary of State for Transport, ex parte de Rothschild and by
reference to the specific differences in context. So qualified, in my view it
does not support Mr
The view formed by the inspector and the Secretary of State on the
application of the ‘grossly wrong’ test in the present case was based on a
consideration of all the matters set out in the concluding part of the
inspector’s report, including what was said about planning permission for a
store of 1,765m2. In my view, proper account was thereby taken of that matter.
It was not necessary to reach a separate conclusion on whether planning
permission for a store of 1,765m2 would be grossly wrong. In any event,
however, I think it implicit that the inspector and the Secretary of State did
conclude that planning permission even for a store of 1,765m2 would be grossly
wrong.
For all those reasons I reject the council’s case on the third
issue.
Issue (4): wrong to revoke totality of class A1 retail use when
there was no evidence to support revocation in relation to non-food retailing?
This issue is linked with issue (3) in that the council’s case is
again that the Secretary of State was wrong to revoke the totality of class A1
retail use in the 1993 planning permission rather than to leave in permission
for part of such use (in this case, non-food retailing).
Council’s submissions
Mr Hoggett submits that there was an undue concentration on food
retailing and a failure to consider non-food retailing. The 1993 planning
permission, reflecting the application and supporting material, was for class
A1 retail use (food and non-food). It was intended that there should
be other forms of class A1 retailing. The inspector’s findings on PPG 6 and the
development plan, however, all related to food rather than to other retail
uses. There was no finding that, in respect of non-food retailing, the original
grant of planning permission was wrong. Had he applied his mind to this, he
might well have concluded that non-food retailing did comply with the relevant
policies. There was a failure to consider in this respect whether it was
expedient to revoke only part of the permission for A1 retail use rather than the
totality of such permission.
The council says that this point was raised by it at the inquiry
and that the Secretary of State was under an obligation to consider it even if
it was not specifically raised. It is for the Secretary of State to satisfy himself
that it is appropriate to make the order in the form proposed.
Respondents’ submissions
Mr Elvin submits that the possibility of deleting the class A1
permission only in so far as it concerned food retailing was an issue of no
significance at the inquiry. There was a passing comment in the council’s
submissions, directed at a very much smaller unit of 500-600m2. The council
were not putting this forward as a realistic alternative and do not now contend
that the inspector should have considered it as such. It was no part of the
council’s case at the inquiry that permission should be retained for a non-food
store even if permission for food retailing were deleted. The submissions for
the council and for Safeway were all focused on the question of food retailing.
That was the principal important controversial issue; and the inspector’s
omission to deal with the point to the extent that it was raised could not in
any event have made any difference to the outcome. Further, there was ample
opportunity to raise objections along the lines now advanced if those concerned
had wished to do so. It is not open to the council to dredge the point up after
the event for their application to the court.
Those submissions are supported by Mr Steel on behalf of Safeway.
This was not a matter on which Safeway made submissions at the inquiry, since
it was not an issue at the inquiry. Had the point been raised, Safeway would
have opposed it.
Conclusion
I am satisfied that the matter now advanced was not an issue at the
inquiry and that it would have met with strong opposition from Safeway had it
been raised. In those circumstances, the inspector’s report and the decision of
the Secretary of State are not open to criticism on the ground of their failure
to deal with the point. It was not incumbent on them to deal with a point of
this kind of their own motion and in the absence of evidence and submissions
directed towards it.
Issue (5): was it open to the Secretary of State to modify the
draft order?
This issue is directed towards the inspector’s conclusion that it
was not open to the Secretary of State to modify the draft order in the way
considered under issue (3) or (though it was not specifically addressed by the
inspector) under issue (4). The inspector stated at para 17.41 of his report:
I finally consider whether the proposed modification order could
be used to achieve any other course than to delete A1 use from the 1993
permission. I consider that modification orders are similar to compulsory
purchase orders and the advice in Circular 14.94 is therefore relevant. The
power to modify a proposed modification order should be used sparingly and not
to re-write orders extensively. The council’s suggestion that the 1993
permission should now be limited to a floorspace of 1,765m2 would amount to a
fundamental rewriting of the proposed order, which is not possible. In my
opinion the proposed order should be authorised, or not authorised, as it is
written.
There are two reasons why nothing seems to me to turn on this
issue. First, the Secretary of State’s decision to confirm the order in
materially the form of the draft considered at the inquiry was based on his
conclusion that it was appropriate to revoke the totality of the permission for
class A1 retail use; a conclusion that, as I have held in relation to issues
(3) and (4), he was entitled to reach. The outcome did not therefore depend on
the view that it was not permissible as a matter of law to modify the order in
the manner envisaged in those issues. Second, had he reached the conclusion
that it was appropriate to revoke only a part of the permission for class A1
retail but that, for example, limited permission for a store of 1,765m2 should
be retained, he could if necessary have achieved that result by declining to
confirm the existing draft order and putting forward a new draft order in the
appropriate form. It might have been a procedurally elaborate course but it
would in my view have been open to him. Again, therefore, the outcome would not
have depended on the view that it was not permissible as a matter of law to
modify the existing order in the manner envisaged. Nevertheless I think it
appropriate to set out the submissions and my conclusions on the issue.
Council’s submissions
It is common ground that, by virtue of section 98(6), as applied by
section 100(7), the Secretary of State had the power to confirm the draft order
subject to such modifications as he considered expedient. The limits of such a
power of modification have been laid down in a number of authorities, differences
in statutory context being immaterial for present purposes. In Evans v Waverley
Borough Council [1995] 3 PLR 80, which concerned the modification of a tree
preservation order, the Court of Appeal adopted the remarks of Jowitt J in an
earlier case:
It is clear that although the Secretary of State has wide powers
to modify the commission’s recommendations, he cannot transform them so that
they become a different animal. It is a question of degree.
Circular 14/94, ‘Compulsory Purchase Orders: Procedures’, to which
the inspector referred in his report, states in para 27:
The power of modification is used sparingly and not to re-write
orders extensively. Some minor slips can be corrected, but not significant
matters, eg substitution of a different, or insertion of an additional,
purpose.
Mr Hoggett submits that the advice given in the circular is wrong,
since the correct test is the ‘different animal’ test referred to in Evans
v Waverley BC and not the ‘extensive rewriting’ test referred to in the
circular. Reliance on the circular may have led the inspector into error. In
any event the test that he applies, ‘fundamental rewriting’, is neither clear
nor correct. The right question was whether deletion of only part of the 1993
permission, so as to take away some but not all of the rights in respect of
class A1 retail use, would transform the permission into a ‘different animal’.
The answer to that question is that such a deletion would not transform the
permission into a different animal.
Respondents’ submissions
Mr Elvin’s response is, first, that para 27 of Circular 14/94
accords with the ‘different animal’ test laid down by the authorities as to the
limits of the power of modification of draft orders. Although the circular does
not refer in terms to the ‘different animal’ test, the language used (including
the non-exhaustive example as to substituted or additional purposes) provides
acceptable guidance as to the correct approach. The application of the test was
for the inspector and the Secretary of State, and there is no basis for holding
their conclusion to have been irrational. The matters considered at paras 17.18
to 7.25 of the inspector’s report show that there were major land use
implications in granting permission for a substantially smaller amount of
retail floorspace.
Mr Steel QC for Safeway adopts Mr Elvin’s submissions and
underlines them by reference to the difference in function between a 4,654m2
store and a 1,765m2 store. It was common ground at the inquiry that a store of
the latter size would function in a different way and would require less land
space. The differences were qualitative as well as quantitative. It is also to
be noted that significant differences exist between the definitions of
‘superstores’ and ‘supermarkets’ in Annex A to PPG 6. In the June 1996 version,
for example, ‘superstores’ are defined as ‘single level, self-service stores
selling mainly food, or food and non-food goods, usually with more than 2,500m2
trading floorspace, with supporting car parking’, whereas ‘supermarkets’ are
defined as ‘single level, self-service stores selling mainly food, with a
trading floorspace less than 2,500m2, often with car parking’. Thus, apart from
the 2,500m2 cut-off point, superstores may be ‘food and non-food’ whereas
supermarkets are ‘mainly food’. Other differences include the total area of
land required, the layout of the development, and the differences in terms of
numbers of employees, vehicles, claw-back and attractiveness to shoppers and
the market. Further, the evidence was that Safeway had no commercial interest
in developing a smaller store. Thus a 1,765m2 store was plainly a different
animal from the 4,654m2 store that was the subject of the 1993 permission.
Conclusion
I accept the respondents’ submissions on this issue. In my view,
Circular 14/94, to which it was legitimate for the inspector to refer by way
of guidance, is consistent with the correct legal test as to the limits of the
power of modification even though it does not use (and might usefully be
amended in due course to use) the language of ‘different animal’. The fact that
the inspector talked in terms of ‘fundamental’ rewriting shows that he was
applying a broadly correct approach. In any event I take the view that the only
reasonable conclusion open to him in the circumstances of the case was that
modification of the draft order in the manner envisaged in issues (3) and (4)
would transform it into a different animal.
Mr Steel has also raised a more general issue on discretion that
encompasses issues (3) to (5), and on which I should briefly indicate my
conclusion. He submits that to cut down the permission would cause prejudice to
Safeway. Applications for approval in respect of reserved matters had to be
submitted by February 1996, pursuant to condition 2 of the 1993 permission. All
Safeway’s applications related to a 4,654m2 store, not to a smaller or
different store; and it is now too late to submit further applications for
approval of reserved matters. Since this situation has arisen out of the
council’s failure to advance any clear alternative proposal, the relief sought
by the council should be refused even if there were any legal basis to their
contentions. The answer to that, as it seems to me, is that if the Secretary of
State were required to reconsider the modification order, and were to come to
the conclusion, on reconsideration, that it would be appropriate for permission
to be limited to, say, a store of 1,765m2, it would be open to him at the same
time to amend condition 2 so as to give Safeway a further period to apply for
approval of reserved matters. It is difficult to see how, in the circumstances
hypothesised, he could reasonably decline to adopt that course. I should also
mention that all parties are agreed that if the Secretary of State’s decision
were to be quashed in so far as it concerns the modification order, then it
should also be quashed in so far as it relates to the reserved matters appeals,
so that the issues arising could be reconsidered in their entirety.
Overall conclusion
For the reasons given above, the council fail on each of the issues
pursued and their application is dismissed.
Application dismissed.
