Mixed-use development – Compulsory purchase powers – Section 226(1A) of Town and Country Planning Act 1990 – Defendants granting outline planning permission to claimant and interested party in respect of same site – Resolution to exercise section 226 compulsory purchase powers in respect of one site – Whether erring in having regard to benefits to another site in deciding in whose favour to make compulsory purchase order – Whether predetermining issue – Claim dismissed
The ownership of a potential development site was divided between the claimant, which held the greater part of the land, the interested party, which owned most of the remainder, and the defendant council, which were also the local planning authority for the area. Although planning permission was initially granted to the claimant, it subsequently informed the defendants that it no longer wanted to proceed and that it was instead negotiating to sell its land to the interested party. The defendants entered into a conditional sale agreement also to sell their land to the interested party, and committed themselves in principle to approving the use of their powers under section 226 of the Town and Country Planning Act 1990 to make a compulsory purchase order (CPO) in support of the latter’s development if the need arose.
The claimant changed its mind and informed the defendants that it did want to develop the site. Both the claimant and the interested party submitted planning applications for mixed-use development, and the defendants granted outline permission to both. They also agreed to use their CPO powers if necessary to facilitate one of the developments. They determined in favour of the interested party, concluding that although both schemes would bring appreciable planning benefits and improve the social, economic and environmental well-being of the city, as required by section 226(1A), the scheme presented by the interested party would enable the development of a second, nearby site that it also owned. The interested party had indicated that the development of the second site alone was financially unviable but that it would be willing to develop it alongside the development of the first.
The claimant sought judicial review of the defendants’ decision on the grounds that they had: (i) misapplied section 226(1A), which required consideration only of the benefits flowing from the development in question and did not permit consideration of the benefits of development at another, unrelated site; and (ii) predetermined the issue in favour of the interested by their earlier conditional sale agreement and “in principle” resolution.
Held: The claim was dismissed.
(1) The CPO powers under section 266 of the 1990 Act had to be exercised for the purpose of facilitating development of the land to be acquired. If the purpose was to facilitate the development of some other land, the conditions of section 226 would not be met and the exercise of the power would be unlawful. It was a condition precedent to the lawful exercise of the power that the defendants should be satisfied that a CPO would facilitate the development at the first site irrespective of the benefits at the second site. However, in choosing between two development proposals for the first site, either of which would in principle be facilitated by a CPO, the defendants had been entitled to have regard to all the benefits that accrued from that development, including any off-site benefits that would be achieved by way of a section 106 agreement. Effectively, the process involved two stages, namely: (i) a decision as to whether a CPO could lawfully be made in respect of a particular development, which had to be determined by focusing solely on the benefits flowing from that development; and (ii) if the power could lawfully be exercised, and there was more than one party in whose favour it could be exercised, a decision as to which party’s proposals the defendants should support. In reaching the latter decision, the defendants had been entitled to have regard to their wider interests and the overall benefits that each of the two proposals would provide. It followed that they had been entitled to reach their substantive decision for essentially the reasons they had.
The defendants had implicitly erred in law in treating the well-being benefits of the development on the second site as being related to the development of the first site, and the terms of the formal resolution disclosed further errors. However, those errors were not such as to require the resolution to be quashed since they had not led the defendants to take into account improper considerations in making their decision.
(2) The defendants had not predetermined the issue. Having been advised that the earlier conditional sale agreement was irrelevant to their decision, it should not be assumed that they had treated it otherwise. Further, although the “in principle” had not been formally renunced, it had been obvious that, once the claimant had changed its mind, the earlier resolution would fall away and the matter would need to be reassessed. The defendants had done that.
Christopher Lockhart-Mummery QC and David Forsdick (instructed by CMS Cameron McKenna LLP) appeared for the claimant; Neil King QC and Guy Williams (instructed by Wragge & Co, of Birmingham) appeared for the defendants; Christopher Katkowski QC and Scott Lyness (instructed by Ashurst LLP) appeared for the interested party.
Sally Dobson, barrister
