Planning — Development of inner-city land — Application for judicial review — Applicant joint-venture company set up to develop site — Statutory development corporation as planning authority — Resolution to make compulsory purchase order — Applicant having no opportunity to be heard — Whether procedural impropriety — Whether making of resolution unreasonable — Whether recourse to existing statutory mechanism as the appropriate alternative — Allegation of unfairness established — Court refusing to intervene to quash the resolution — Application refused
The Central Manchester Development Corporation (the corporation) were an urban development corporation established in 1988 under the Local Government, Planning and Land Act 1980, section 35. They were the planning authority in respect of a designated area in central Manchester which included a development site comprising 11 acres held by Merlin Great Northern Ltd (MGN) under a lease for a term of 124 years less two days from July 30 1984. MGN was a joint-venture company formed for the purpose of developing the site. In June 1989 MGN submitted an outline application for permission to develop the site which was granted on February 14 1990, subject to an agreement under section 52. MGN also applied for a “City Grant” available where the development cost of a project exceeded its expected completion value. The primary object of the corporation was to secure the regeneration of their area within a six-year period. By the end of 1990, the corporation were concerned as to the progress of MGN’s scheme, in particular its application for a City Grant and its ability to raise the necessary capital to enable it to carry through the project from other sources.
Following detailed discussions and negotiations between the corporation and MGN, the corporation held a special board meeting and resolved to make a compulsory purchase order in respect of the site on February 4 1991. MGN sought an order from the court quashing that decision. The application gave rise to two issues: whether there was procedural impropriety such as would prima facie justify the court’s intervention and, if so, whether it should intervene in the exercise of its discretion.
Held The application was refused.
1. To pass the resolution without affording MGN an opportunity to be heard, inter alia, as to its ability to finance the development of the site was unfair so as to amount to a procedural impropriety taking into account the long, close and co-operative relationship which had existed between the parties; and the absence of any argument as to why it was necessary or desirable for the corporation to pass the resolution without first informing MGN that they were minded to take that course — completely at variance as it was with the whole context of the relationship until that moment.
2. However, it would not be appropriate for the court to quash the resolution. MGN could be left to exercise its statutory rights of objection to the compulsory purchase order once made. There was no real ground for assuming that the opportunity which MGN would have as objector to the order put it at any disadvantage or that the real issues would not be considered. The existing statutory mechanism was an appropriate alternative to which recourse should be made.
3. Moreover, there was no real evidence that the position of MGN, so far as raising finance was concerned, had been prejudiced or that there was a blight on the project by virtue of the threat of the compulsory purchase order.
Robert Carnwath QC and Richard Humphreys (instructed by DJ Freeman & Co) appeared for the applicant Merlin Great Northern Ltd; and Malcolm Spence QC and Mary Cook (instructed by Halliwell Landau, of Manchester) appeared for the respondent corporation.
