Planning gain — Retail development — Planning permission granted for two food superstores — High Court challenge by rival developer — Whether local planning authority had taken into account an immaterial consideration, namely offer of planning benefits — Whether tests of materiality require that benefit offered be necessary to overcome some planning objection to proposed development
In 1992 the
first respondents, Plymouth City Council, resolved that they were minded to
grant planning permission to the second respondents, J Sainsbury plc
(‘Sainsbury’), and the fourth respondents, Tesco Stores Ltd (‘Tesco’),
respectively for the erection of food superstores on two separate sites at
Marsh Mills, Plymouth, in each case subject to the applicants entering an
agreement under section 106 of the Town and Country Planning Act 1990 to secure
certain benefits which they had offered. At the same time, the council deferred
consideration of a planning application by the appellants, Plymouth & South
Devon Co-operative Society Ltd (‘the Co-op’) for the erection of a food
superstore on a site at Chaddleworth, three miles to the east of Marsh Mills.
Earlier in
1992 a draft first alteration to the local plan was approved by the council and
three out-of-town sites for large foodstores were selected, only one being at
the Marsh Mills location. The draft also recognised that stores were expected
to provide community benefits, but provided that applications would be decided
with respect to the principles and policies of good planning practice, irrespective
of the level of community benefits proposed or achievable. There were two
candidates for permission at Marsh Mills, Sainsbury and Tesco, and they had
been invited to make submissions, including suggestions for community benefits
which they could offer pursuant to the draft policy.
The community
benefits offered by Sainsbury included the construction of a tourist
information office, a bird-watching hide and a static art feature on the site.
Off the site they offered park-and-ride facilities, with a contribution of £ 1m
towards the costs of providing the necessary highway and drainage
infrastructure for a nearby industrial site. This last offer was in recognition
of the fact that if Sainsbury were permitted to build their proposed store at
Marsh Mills there would be a loss of industrial land. Tesco’s offer included a
financial contribution to the provision of a creche, a wildlife habitat on a
site contiguous to the proposed development, a moving water sculpture on site,
and the sale to the council of land for park-and-ride facilities. Following
receipt of the offers, a planning officer had recommended approval of both
schemes.
The Co-op
applied to the High Court for judicial review of the resolutions of the council
to grant the two planning permissions to
section 70(2) of the Town and Country Planning Act 1990, the only community
benefits which were material, and thus properly to be taken into account, were
those necessary to overcome, remedy or alleviate planning objections to a
proposal. Hutchison J dismissed the application and the Co-op appealed.
The tests for
the validity of a planning condition laid down in Newbury District Council
v Secretary of State for the Environment [1981] AC 578 applied to
determining the materiality of a section 106 obligation. The question,
therefore, was whether each and every one of the community benefits offered was
capable of having a planning purpose and whether each and every one of them
related to the permitted development. So far as benefits which were to be
provided on site were concerned, there was not the slightest difficulty nor
room for argument since they made the development more attractive and that was in
the public interest. As to off-site benefits, the offers of contributions
towards the alleviation of traffic problems in the way of park-and-ride
facilities, and the £ 1m offer by Sainsbury, both plainly had planning
purposes. The latter offer was a contribution towards restoring the balance in
the provision of employment land disturbed by the grant of permission at Marsh
Mills: see pp 80B-81E and 88F-89D. The judge below was right in rejecting as
unsupported by principle or authority an additional test for determining the
materiality of an offer of community benefits, namely that they must also be
necessary in the sense that they overcome what would otherwise have been a
planning objection to the development, so that, without the benefit in
question, planning permission would have been refused: see pp 80A-B and
85F-88E.
Per Evans LJ: The respondents’ objection that the appellants did not
have a sufficient interest to seek judicial review would have failed. If
planning permission were granted for a superstore development without due
regard to the limits of material considerations, the appeal procedures would be
irrelevant and the sections of the public most directly affected would be the
local community and local traders who would be likely to bear, as individuals,
their share of any economic loss which that community suffered. The fact that
the appellants were themselves developers of a similar, though smaller, scheme
did not affect their status in this respect: see pp 90G-91H.
Decision of
Hutchison J [1993] JPL 538 affirmed.
to in the judgments
Bradford
City Metropolitan Council v Secretary of State
for the Environment (1986) 53 P&CR 55; [1986] 1 EGLR 199; 278 EG 1473;
[1986] JPL 598, CA
Good v Epping Forest District Council [1992] 3 PLR 103; [1993]
JPL 127
Hall
& Co Ltd v Shoreham-by-Sea Urban District
Council [1964] 1 WLR 240; [1964] 1 All ER 1; (1963) 62 LGR 206; 15 P&CR
119; [1963] EGD 638; 188 EG 873; [1964] JPL 316, CA
Newbury
District Council v Secretary of State for the
Environment [1981] AC 578; [1980] 2 WLR 379; [1980] 1 All ER 731; (1980) 78
LGR 306; 40 P&CR 148; [1980] JPL 325, HL
Northumberland
County Council v Secretary of State for the
Environment (1990) 59 P&CR 148; [1989] JPL 700
R v Secretary of State for the Home Department, ex parte Brind
[1991] 1 AC 696; [1991] 2 WLR 588; [1991] 1 All ER 720, HL
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
Safeway
Properties Ltd v Secretary of State for the
Environment [1991] 3 PLR 91; (1991) 63 P&CR 73; [1991] JPL 966, CA
Appeal against
decision of Hutchison J
This was an
appeal by Plymouth & South Devon Co-operative Society Ltd against the
decision of Hutchison J on February 1 1993 ([1993] JPL 538) dismissing the
appellants’ application for judicial review of a decision of the planning
committee of the first respondents, Plymouth City Council, on April 23 1992
whereby the council resolved that they were minded to grant planning permission
for food superstores on two sites at Marsh Mills, Plymouth. The second to fifth
respondents were the applicants for permission and the landowners respectively
in relation to the two sites.
Gilbart QC and Paul Tucker (instructed by Cobbett Leak Almond, of Wilmslow)
appeared for the appellants, Plymouth & South Devon Co-operative Society
Ltd.
Porten QC and Mary Cook (instructed by the solicitor to Plymouth City Council)
appeared for the first respondents.
Barnes QC and David Elvin (instructed by Denton Hall Burgin & Warrens)
appeared for J Sainsbury plc and (instructed by Paisner & Co) for Estate
and Agency Holdings plc, the second and third respondents.
Carnwath QC and John Furber (instructed by Berwin Leighton) appeared for the
fourth and fifth respondents, Tesco Stores Ltd and Vosper Motor House
(Plymouth) Ltd.
following judgments were handed down.
RUSSELL LJ: This is an appeal by the Plymouth & South Devon Co-operative
Society Ltd (the Co-op) against a judgment of Hutchison J who on February 1
1993 dismissed the appellants’ application for judicial review of a planning
decision of Plymouth City Council of April 23 1992. The decision related to the
proposed grant of planning permission in respect of two areas of land in Marsh
Mills, Plymouth. On one plot J Sainsbury plc (Sainsbury) proposed to erect a
food supermarket comprising some 76,500 sq ft. On the other plot Tesco Stores
Ltd (Tesco) proposed to erect a food supermarket of some 70,000 sq ft. The two
sites were at a vast vehicular roundabout at Marsh Mills on the eastern
approach to the city. The Tesco supermarket was to be to the north of the
roundabout and the Sainsbury’s supermarket to the south.
On the same
day that the planning authority resolved to grant the two permissions, they
deferred consideration of a planning application by the appellants for the
erection of a supermarket about three miles or so to the east of Marsh Mills in
the district of Plymton at a location known as Chaddlewood.
The
applications by Sainsbury and Tesco were each accompanied by offers to enter
into agreements with the planning authority pursuant to section 106 of the Town
and Country Planning Act 1990. Various community benefits were proposed by the
applicants to which I will make reference later.
As to the
appellants’ application relating to Chaddlewood, it was deferred on the same
date as the planning authority resolved to grant permission for the two
supermarkets at Marsh Mills so that consideration could be given to reducing
the size of the Chaddlewood supermarket. The Co-op, however, have since been
granted permission to develop a supermarket at Chaddlewood to the scale
originally proposed subject, in their case also, to a section 106 agreement.
The challenge
to the decision taken for development at Marsh Mills contains essentially two
limbs. It is contended first that in resolving to grant permission the planning
authority took into account factors which were not material to the planning
permission contrary to the provisions of section 70(2) of the Town and Country
Planning Act 1990, and, in particular, the section 106 agreements contained
provisions which the planning authority were not entitled to accept as relevant
issues in their decision making process. Second, it is submitted that the
decisions to grant permission were flawed in that the city planning officer
misled the planning committee when he reported to them prior to the decisions
being taken.
In this
judgment I shall not attempt to emulate the judgment of Hutchison J which
extended to some 54 pages of transcript for, as the appeal has developed, so
the issues for our determination have crystallised and now fall within a much
narrower compass than that which confronted the judge.
In 1991 the
planning authority commissioned a report which recommended strictly limited
increases in large food stores, but in January 1992 a draft first alteration to
the local plan was approved. Three out-of-town sites were selected only one
being at the Marsh Mills roundabout. The draft also recognised that stores were
expected to provide community benefits and as a matter of policy provided:
The
requirement of community benefits must always be justifiable in land use
planning terms. Applications will be decided with respect to the principles and
policies of good planning practice, irrespective of the level of community
benefits proposed or achievable.
After the
approval of the first draft alteration to the local plan, Mr Warren Evans, a
senior official of Sainsbury, made extensive suggestions to the planning
authority recorded in correspondence. There were two candidates for permission
in Marsh Mills (Tesco and Sainsbury). To summarise what happened, Mr Warren
Evans suggested that permission should be given to both organisations to open
supermarkets at Marsh Mills. The council responded by inviting each applicant
to make submissions including suggestions for community benefits which the
individual organisation could offer pursuant to draft policy IR4 already
approved by the planning authority at the time the draft alteration to the
local plan was published. Tesco and Sainsbury made their respective offers.
Sainsbury’s
was the more ambitious. A number of attractive features on their site were
contemplated such as the construction of a tourist information centre, a
bird-watching hide overlooking the River Plym and a static art feature, whereas
off the site — though in close proximity to it — there were to be park-and-ride
facilities together with the offer of a contribution up to £ 1m towards the
cost of providing the necessary highway and drainage infrastructure for an
industrial site at Derriford Barton. This last offer was in recognition of the
fact that if Sainsbury were permitted to build a superstore at Marsh Mills
there would be a loss of industrial land which hitherto had been available for
that type of development.
The Tesco
package included a financial contribution to the provision of a creche, a
wildlife habitat on a site contiguous to the proposed development, a moving
water sculpture on site and the sale to the council of a site for park-and-ride
facilities.
Mr Roger Dean,
a senior planning officer with Plymouth was impressed with both offers and in a
lengthy and detailed report to the planning committee recommended acceptance.
He concluded:
In all the
circumstances I conclude that it would not be reasonable to refuse either
application and I therefore recommend that the council be minded to grant both
the Sainsbury and the Vosper/Tesco schemes, subject to all the appropriate
conditions, provided that both applicants enter into planning agreements to
bring about all the highway improvements, as identified by the county engineer
and planning officer and Department of Transport, and the community benefits
identified in the respective packages. In the case of Vosper/Tesco, it is
imperative that the two developments go ahead together to realise the
employment advantages. It will therefore be necessary to insist that the store will
not be open for trading until all the Motor House development is fully
completed.
This last
reference was to the projected movement of Vosper Motor House, a large local
business, to another site in Plymouth, which depended upon the sale of the land
at Marsh Mills to Tesco.
To complete
this outline of the background facts, Mr Dean considered that if the Marsh
Mills stores went ahead the demand at Chaddlewood would be affected and that,
consequently, the scale of the store proposed by the Co-op was too big. He
suggested that the planning authority should negotiate with the Co-op for a
reduction of the Chaddlewood store in terms of its size. All Mr Dean’s
proposals and advice were accepted by the committee and the planning decisions
were taken as earlier indicated in this judgment.
Mr Andrew
Gilbart QC, on behalf of the appellants, first took us to the provisions of
section 70(2) of the 1990 Act. The section is headed ‘Determination of
Applications’ and subsection 2 reads:
In dealing
with such an application the authority shall have regard to the provisions of
the development plan, so far as material to the application, and to any other
material considerations.
Mr Gilbart’s
submissions concentrated upon the proper construction of the words ‘any other
material considerations’ it being contended that only community benefits that
were necessary to overcome or remedy or alleviate planning objections to a
proposal could be taken into account. If a community benefit failed to pass
that test, it became immaterial and any planning decision which was effected by
it was liable to be struck down upon judicial review.
I say at once,
that, in my judgment, Mr Gilbert’s proposition is far too strict and narrow to
give effect to the terms of the statute and is unsupported by any authority. In
Newbury District Council v Secretary of State for the Environment [1981]
AC 578, Viscount Dilhorne (sic)1 said of a planning condition
(and the same must be true of a section 106 obligation) at p 607G:
In order to be
valid, a condition must satisfy three tests. First, it must have a planning
purpose. It may have other purposes as well as its planning purpose. But if it
is imposed solely for some other purpose or purposes, such as furtherance of
the housing policy of the local authority, it will not be valid as a planning
condition. See R v Hillingdon London Borough Council, Ex parte Royco
Homes Ltd [1974] QB 720. Second, it must relate to the permitted
development to which it is annexed. The best known statement of these two tests
is that by Lord Denning in Pyx Granite Co Ltd v Ministry of Housing
and Local Government [1958] QB 554, which has been followed and applied in
many later cases. Lord Denning said, at p 572:
Although the planning authorities are
given very wide powers to impose ‘such conditions as they think fit,’
nevertheless the law says that those conditions, to be valid, must fairly and
reasonably relate to the permitted development. The planning authority are not
at liberty to use their powers for an ulterior object, however desirable that
object may seem to them to be in the public interest,’
. . .
Thirdly, the condition must be ‘reasonable’ in the rather special sense of Associated
Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB
223, 229. Thus it will be invalid if it is ‘so clearly unreasonable that no
reasonable planning authority could have imposed it’ as Lord Widgery CJ said in
Kingston-upon-Thames Royal London Borough Council v Secretary of
State for the Environment [1973] 1 WLR 1549, 1553.
1Editor’s note: The
passage cited by Russell LJ is from the speech of Lord Fraser, not Viscount
Dilhorne.
In the instant
case, there has never been any suggestion of bad faith or of ulterior motive in
any sinister sense on the part of Plymouth City Council. Mr Gilbart also
conceded that it is for the court to decide whether an obligation pursuant to a
section 106 agreement is capable of being regarded as a material consideration
while the weight of such a consideration and its part in the decision making
process — provided it passes the test of materiality as defined by Lord Fraser
— must always remain a matter for the planning authority. For my part I do not
think it is helpful to embark upon a closer analysis of the dicta in Newbury
than is necessary to give effect to them in the individual circumstances of the
individual case. I reject as unarguable that any of the obligations
volunteered by Sainsbury and Tesco and the acceptance of them even approached Wednesbury
unreasonableness, and I simply ask myself whether each and every one of them
was capable of being regarded as having a planning purpose and whether each and
every one of them related to the permitted development. So far as benefits
which were to be provided on site, there does not appear to me to be the
slightest difficulty or room for argument. They made the development more
attractive and that must surely be in the public interest.
As to off-site
benefits, in particular, the offer of a sum of up to £ 1m by Sainsbury, and the
offers of contributions toward the alleviation of traffic problems in the way
of park-and-ride facilities, both plainly had planning purposes. It is common
knowledge that park-and-ride facilities reduce vehicular traffic; a superstore
would create vehicular traffic; the one would counteract the other and
accordingly, in my view, the park-and-ride facilities plainly related to the
development proposed and was for a planning purpose.
The offer of £
1m was not in any sense divorced from Sainsbury’s application to develop their
store. The evidence from Mr Dean was that sites available for industrial
development within the city of Plymouth were not plentiful, and that by
permitting the development at Marsh Mills for retail outlets the planning
authority was further reducing the pool of resources for employment land. The
offer in relation to Derriford Barton was a contribution toward restoring the
balance disturbed by the grant of permission at Marsh Mills. In my judgment
this, too, passed the Newbury test and the planning authority were
entitled to take it into account as material to their planning decision. It is
not material to inquire into the precise part played by these benefits in the
decision reached by the planning authority. The reasons for granting permission
are not disclosed, though in passing it is worthy of observation to note that
Hutchison J did not seem to regard the benefits as ‘determining factors which
led to the council’s decisions’. Those decisions, he thought,
were based on
planning issues and particularly on the fact that no demonstrative harm to
interests of acknowledged importance flowed from either or both proposals.
Apart from the
Newbury case a number of authorities were cited to us. They illustrate
the wide spectrum of materiality. In Bradford City Metropolitans Council
v Secretary of State for the Environment (1986) 53 P&CR 55 at p 64
Lloyd LJ said that it was ‘axiomatic that planning consent cannot be bought or
sold’. Mr Gilbart suggested that in reality this had happened at Plymouth and
he purported to find support for that from the fact that Sainsbury had
indicated that in the event of planning permission not being granted and it
becoming necessary to appeal to the Secretary of State, the offer of community
benefits would be withdrawn. I do not agree. Section 106 expressly contemplates
in subsection (2) the payment of money and, in my view, the threatened
withdrawal of the offer if anything demonstrates that Sainsbury did not regard
their application as dependent upon the money and therefore necessary to the
permission, although it was a feature which the planning authority were
entitled to regard as relevant to their own decision at that stage.
For my part, I
do not find all the many authorities that were cited to us of great assistance
in determining the questions which arise in this appeal. As so often happens
they turned very much on their own facts, and I certainly did not detect in any
of them a departure from the Newbury test or any gloss which it is
necessary to place upon it. A short but valuable contribution to the debate is
to be found in the judgment of Staughton LJ in R v Westminster
Council, ex parte Monahan [1990] 1 QB 871 at pp 121-122.
1Also reported at [1989] 1 PLR 36.
In the light
of the foregoing, I am firmly of the opinion that Hutchison J was right to find
that the planning decisions in favour of Sainsbury and Tesco were intra
vires the planning authority and entirely within their discretion. This
part of the appeal fails.
The second
limb of Mr Gilbart’s attack I can deal with more shortly. Chaddlewood was a
proposed new district centre. The draft first alteration to the local plan
recommended a new food store at Chaddlewood and it was that alteration which
designated Chaddlewood as a new district centre. However, when Mr Dean reported
to the committee he said that ‘the draft first alteration recognises that it is
not realistic to support any more large retail provision in district centres’.
Taken literally that was plainly wrong. There were to be no additional food
stores in existing district centres and, in my view, the report of Mr
Dean read as a whole makes the true position abundantly plain. I cannot believe
that there was any real risk that any member of the committee was misled by
what was no more than a slip of the tongue on the part of Mr Dean. In any
event, the relevant extracts from the draft local plan, including the proposal
for the new store at Chaddlewood, were appended to Mr Dean’s report.
We did not
hear full argument upon whether the appellants ever had sufficient interest to
seek judicial review and I find it unnecessary to express any concluded view,
although my provisional one would be that the respondents’ objections on this
score would have failed. I would dismiss this appeal.
HOFFMANN LJ:
Until a few years ago, almost everyone did their
household shopping in the high street. Town planners insisted that big shops
and supermarket developments should be allowed only in urban or suburban
centres. But these are often crowded and inconvenient for parking. So retailers
began to build out of town superstores, easily accessible by car and surrounded
by ample parking. These proved very popular. They sold not only food and
groceries but also things like do-it-yourself goods, plants and garden
equipment. Some included restaurants and children’s playgrounds, to enable the
weekly shopping to be accompanied by refreshment, social intercourse and
diversion for the children.
Planning
authorities have had to adapt their policies to the pressure
permissions for two such stores at the Marsh Mills roundabout, on the eastern
approaches to the city of Plymouth. Like many other planning authorities,
Plymouth used to have a policy of confining big supermarkets to ‘district
centres’. This was adopted in their local plan in 1987. But in 1988, the
Government published a new Planning Policy Guidance Note (PPG6) on major retail
development. It said:
17. Large
stores of up to about 100,000 sq ft (10,000 sq m) selling mainly food and other
convenience goods are now a well established form of retail development and
clearly meet strong customer demand for convenient car-borne weekly household
shopping. The planning system has been able to cater for them, and several
hundred such stores have been built.
18. Large
retail warehouses have similarly shown themselves to be a successful way of
catering for major household goods, bulky DIY items, etc. Taking part of these
heavy car-borne shopping requirements out of the town centre can positively
help by relieving the centre of traffic congestion and making them pleasanter
places for the more relaxed and varied shopping activities and other town
centre uses.
19. Both
these types of retail development can often make good use of derelict and
neglected sites within urban areas and result in positive environmental gain
and new local employment opportunities.
As a result of
this statement of policy, Plymouth found that on three occasions when they
refused permission for an out-of-town store, their decision was overturned on
appeal to the Secretary of State. So they decided to trim their sails to the
prevailing wind and adopt a new policy. In a draft first alteration to the
local plan, published in January 1992, they selected three out-of-town sites
for large food stores. One of these was the Marsh Mills roundabout. The draft
plan also said that the stores were expected to provide ‘substantial community
benefits’ in accordance with IR4, another new policy stated in the draft. IR4
said that in dealing with applications for planning permission, the council
would consider how the community may benefit as a result of the proposed
development. It listed 11 categories of community benefits, such as the
provision of low-cost housing, public open spaces, wildlife habitats,
contributions to public transport infrastructure and the undertaking of
environmental improvements. A note to this policy explained:
An important
and integral part of the Council’s approach to planning is to negotiate with
private developers to try to ensure that the local community benefits more
directly and is not disadvantaged by new development . . . The requirement of
community benefits must always be justifiable in land-use planning terms.
Applications will be decided with respect to the principles and policies of
good planning practice, irrespective of the level of community benefit proposed
or achievable.
This was the
policy background to the council’s consideration of two applications for
permission to build large food stores at the Marsh Mills roundabout. Tesco
wanted to build on a site south of the roundabout formerly used by an
engineering company and recently acquired by Vosper Motor House, a large local
car dealer. Vosper had bought the site to use part for the relocation of its
business, employing about 1,000
viability of the move depended upon being able to sell the rest of the site to
Tesco. The second application was from Sainsbury, which wanted to build on
another former industrial site to the north-west of the roundabout.
At first the
council planning officers indicated to Tesco and Sainsbury that the council
were likely to adhere to the policy stated in the draft first alteration of
allowing only one store at Marsh Mills. Each applicant was therefore invited to
make submissions to the planning committee as to why it should be preferred.
Both were told that the council would take into account the community benefits
which were being offered pursuant to draft policy IR4. In response, Tesco and
Sainsbury drew up packages of community benefits. They offered to enter into
agreements with the council under section 106 of the Town and Country Planning
Act 1990, binding themselves to provide the benefits. Sainsbury’s offer
included the construction of a tourist information centre on the site, an art
gallery display facility, a work of art in the car park and a bird-watching
hide overlooking the River Plym. They also offered to contribute £ 800,000 to
the establishment of a park-and-ride facility in the neighbourhood and up to £
1m for infrastructure works to make a site at Derriford Barton suitable for
industrial use. Tesco’s package was rather more modest: it included financial
contribution to a creche, a wildlife habitat and a water sculpture to a design
chosen after public competition in the Plymouth area. They offered to sell the
council a site for a park-and-ride facility, but without undertaking to make
any financial contribution. They did not attempt to match Sainsbury’s offer to
equip an industrial site because they thought that the release of the Vosper
site at the docks was sufficient to compensate for their occupation of
industrial land at Marsh Mills.
Sainsbury,
perhaps sensing that Tesco might have the edge in the competition, urged the
planning officers and the planning committee to depart from the draft
alteration and grant both applications. Mr Roger Dean, the chief assistant city
planning officer, was persuaded. He wrote a long report for the planning
committee advising them on the issues and the relevant considerations to be
taken into account and ended by recommending that both applications be granted.
The committee accepted the advice and on April 23 1992 resolved that, subject
to the conclusion of suitable agreements under section 106, they were minded to
grant both applications.
At the same
meeting on April 23, the planning committee also considered an application by
the appellants, Plymouth & South Devon Co-operative Society Ltd (‘the
Co-op’). They wanted to build a substantial development including a superstore
at Chaddlewood, a designated district centre three or four miles from the Marsh
Mills roundabout. The draft first alteration included specific support for this
project. But Mr Dean advised that the Marsh Mills stores might so reduce the
demand for shopping at Chaddlewood that the scheme would be too big. The
planning committee accepted his advice to defer a decision until they had tried
to persuade the Co-op to submit a reduced scheme.
The Co-op were
extremely annoyed at this turn of events. They refused to modify their planning
application, which was eventually approved in August 1992. But, in the
meanwhile, they commenced proceedings for judicial review to quash the
resolution approving the grant of permissions to Sainsbury and Tesco. The main
ground of attack was that the planning committee had acted unlawfully by taking
into account immaterial considerations, namely the offers to provide some or
all of the community benefits.
Section 70(2)
of the Town and Country Planning Act 1990 says that in dealing with an
application for planning permission, the planning authority:
. . . shall
have regard to the provisions of the development plan, so far as material to
the application, and to any other material considerations.
What in this
context is a ‘material consideration’?
The answer appears in the decision of the House of Lords in Newbury
District Council v Secretary of State for the Environment [1981] AC
578, which concerned the vires of a condition attached to a planning
permission. Viscount Dilhorne said such a condition must satisfy three tests
(at p 599H): (1) It must have a planning purpose; (2) it must fairly and
reasonably relate to the permitted development, and (3) it must not be Wednesbury
unreasonable.
(1) and (2)
are tests of materiality: in this context, considerations are material if they
are planning considerations and fairly and reasonably relate to the
development. The third test does not go to whether considerations are material
but is an overriding requirement that the authority’s decision (to grant or
refuse permission, impose a condition, require a section 106 agreement) shall
not be Wednesbury unreasonable. Lord Scarman at p 618 said that most
cases of Wednesbury unreasonableness would arise out of the authority
having regard to considerations which failed one of the first two tests (or
failing to have regard to considerations which passed them.) But there might be exceptional cases in which
a decision was Wednesbury unreasonable notwithstanding that it was based
upon all the material considerations.
Mr Gilbart QC,
who appeared for the Co-op, submitted that in order to be material, an offer of
community benefits must pass an additional test. The benefits must not only be
planning benefits and fairly and reasonably relate to the development. They must
be necessary in the sense that they overcome what would otherwise have been a
planning objection to the development, so that without the benefit in question,
planning permission would have been refused.
The judge
rejected this additional test as unsupported by principle or authority. In my
view, he was right. If the benefits concern planning matters and fairly and
reasonably relate to the development, then the planning authority are entitled
and may be required to take them into account. They are not obliged to exclude
them from consideration while they form a provisional view about the
application and then treat them as material only if the application would
otherwise have been refused. The fact that a benefit overcomes a planning
objection may be a good reason for treating it as material. But none of the
cases relied upon by
consideration for any other reason.
In Bradford
City Metropolitan Council v Secretary of State for the Environment
(1986) 53 P&CR 55 the planning authority granted permission for housing
development subject to a condition that the developer widen the road serving
the development. This would have involved the cession of land and expenditure
of money by the developer. On appeal the Secretary of State discharged the
condition as ultra vires. In this court Lloyd LJ agreed. He said, following Hall
& Co Ltd v Shoreham-by-Sea Urban District Council [1964] 1 WLR
240, that a condition requiring a developer to dedicate its land as a highway
without the compensation to which it would ordinarily be entitled was Wednesbury
unreasonable. The condition was therefore unlawful and, Lloyd LJ went on obiter
to say, would not have been any more lawful if it had been embodied in an
agreement under section 52 of the Town and Country Planning Act 1971. I need
not pause to discuss whether this last dictum was correct or whether the
case would be decided in the same way since the enactment of section 106 of the
Town and Country Planning Act 1990. Whatever the Bradford case may
decide, it contains no trace of a test of necessity. The condition was held to
have been rightly discharged on the ground that it was Wednesbury
unreasonable, possibly because the widening of the road failed Viscount Dilhorne’s
test (2) or possibly because it fell foul of the residual test (3).
R v Westminster City Council, ex parte Monahan [1990] 1 QB 87
concerned what was treated as a single composite development involving
improvements to the Royal Opera House, Covent Garden and the construction of
offices nearby. Office development infringed the council’s policy for Covent
Garden, but they granted permission because without the profit from the office
development, the Royal Opera House would be unable to execute the improvements.
This court decided that this was a material consideration which the planning
authority were entitled to take into account. It applied the criteria of
materiality stated in Newbury. The issue in the case was whether a
sufficient nexus existed between the office development and the Opera House
improvements to entitle the planning authority to say that the desirability of
the latter fairly and reasonably related to the former. This court found such a
nexus in (1) the financial dependency of the one part of the development on the
other and (2) their physical proximity. There is nothing to suggest that the
desirability of the Opera House improvements would have ceased to qualify as a
material consideration if there had been no planning objection to the offices.
Its significance for the decision-making process would have diminished, but
that is not the same as saying that it is somehow stripped of the quality of
materiality.
In Safeway
Properties Ltd v Secretary of State for the Environment [1991] 3 PLR
91, Safeway appealed to the Secretary of State against a refusal of planning
permission to build a superstore in Kidbrooke. The inspector found that there
was only one planning objection, namely the effect which increased traffic
would have upon residents in the surrounding area. Safeway had offered to pay £
1m towards a traffic management scheme which they said would alleviate the
problem. The inspector
management scheme had been identified by the council as desirable before the
Safeway application. This court held that he had failed to have regard to a
material consideration. The traffic management proposal was undoubtedly a
planning matter and it fairly and reasonably related to the development,
because it was capable of reducing the additional traffic disturbance which the
development would generate. It did not matter that the local authority had
thought of having it anyway. In this case the consideration held to be material
could have tipped the balance by reducing or eliminating what the inspector
regarded as the planning objection to the proposal. It would then have
satisfied Mr Gilbart’s test of necessity. But the case does not suggest that
benefits cannot be material considerations on any other grounds.
Finally, Mr
Gilbart points to the Department of the Environment circulars, which say that
conditions should not be imposed or section 106 agreements exacted unless they
are necessary in the sense that planning permission would otherwise have been
refused. This is a theme which runs through the whole of the policy guidance on
how planning powers should be exercised. So para 5 of PPG1 — General Policy
and Principles — says that:
[The planning
system] . . . should operate on the basis that applications for development
should be allowed, having regard to the development plan and all material
considerations, unless the proposed development would cause demonstrable harm
to interests of acknowledged importance.
Dealing with
conditions, PPG1 says:
46. The
ability of local planning authorities and the Secretaries of State to impose
conditions on a planning permission can enable many development proposals to
proceed where it would otherwise be necessary to refuse planning permission . .
. conditions should be used in a way which is clearly seen to be fair,
reasonable and practicable. Conditions should only be imposed where they are:
· necessary
· relevant to planning
· relevant to the
development to be permitted
· enforceable
· precise
· reasonable in all
other respects.
47. In
considering whether a particular condition is necessary, one key test is
whether planning permission would have to be refused if the condition were not
imposed. If not, then such a condition needs special and precise justification.
Similarly,
Circular 16/91, which deals with planning obligations such as section 106
agreements, says:
B7. As with
conditions . . . planning obligations should only be sought where they are
necessary to the granting of permission, relevant to planning and relevant to
the development to be permitted . . .
These
statements of policy embody a general principle that planning control should
restrict the rights of landowners only so far as may be necessary to prevent
harm to community interests. A German or European lawyer would have no
difficulty in recognising this as the principle of proportionality. But the
status of this principle as an instrument of English judicial review is, to say
the least, uncertain: see R v Secretary of State for the Home
Department, ex parte Brind [1991] 1 AC 696. In any case, it would be
bizarre to allow it to be invoked by a trade competitor to destroy a planning
permission granted to a rival who does not complain that his liberty to deal
with his land has been disproportionately restricted. Materiality is an
entirely different matter, because there is a public interest in not allowing
planning permissions to be sold in exchange for benefits which are not planning
considerations or do not relate to the proposed development: see Lloyd LJ in
the Bradford case and Staughton LJ in the Monahan case. The fact
that the principle of necessity is applied as policy by the Secretary of State
does not make it an independent ground for judicial review of a planning
decision. As Sir Donald Nicholls V-C pointed out in Good v Epping
Forest District Council [1992] 3 PLR 103, to say that a condition or the
requirement of a section 106 agreement would have been discharged on appeal by
the Secretary of State, because its imposition did not accord with the policies
I have quoted, is not at all the same thing as saying that the planning
authority would have been acting beyond their statutory powers. This depends
upon the Wednesbury principle and the tests for materiality in Newbury.
I therefore
reject the suggested gloss upon the Newbury tests for materiality and
consider whether they were satisfied by the matters which were proposed to be
included in the section 106 agreements in this case. They all amounted to
considerations of a planning nature and the only question is whether they
fairly and reasonably related to the development. Many of them, such as the
construction of the tourist centre and bird-watching hide, were to be
constructed upon or adjacent to the development itself. They were matters of
benefit to the developer as well as to the community. I do not see how it can
possibly be said that such embellishments did not fairly and reasonably relate
to the development. The only benefits which, in my judgment, give pause for thought
are the two substantial sums offered by Sainsbury as a contribution to work to
be done away from the site. They are the £ 800,000 contribution to a
park-and-ride facility and the contribution of up to £ 1m for infrastructure on
a new industrial site at Derrisford Barton.
Mr Peter
Watkins, of Devon County Council highways department, said that the proposed
superstores would have a traffic impact over a wide area of the local highway
network. The beneficial effect of a park-and-ride facility would be to remove
traffic from the main radial commuter/shopper routes, thus reducing conflict
with traffic heading for the proposed superstore. In addition to this general
causal link, Mr Dean added that there were arguments for utilising part of the
Sainsbury’s site itself for decked car parking to accommodate the
park-and-ride, but Sainsbury preferred the park-and-ride cars to be
accommodated elsewhere. If such accommodation were provided off the site, fewer
people would use Sainsbury’s own car park when they really wanted to
park-and-ride rather than shop at Sainsbury. In my judgment, this was evidence
upon which the judge was entitled to decide that the park-and-ride facility was
fairly and reasonably related to the development.
As for the
infrastructure contribution, Mr Dean said that there was a shortage of serviced
and level sites available for the development or redevelopment of manufacturing
in the city of Plymouth. The council considered that such land should be
available to foster new employment opportunities and policy EM9 of the
structure plan said that the use of employment land for retailing would not
normally be permitted. It was true that in recent appeals to the Secretary of
State concerning other superstores, little weight appeared to have been
attached to this policy. But, as I have pointed out, the fact that a policy
might not be upheld on appeal does not mean that a planning authority are not
entitled in law to treat it as a material consideration. In this case, the
council regarded the improvement of other land by Sainsbury as a compensating
advantage, equivalent to the release of the Vosper site near the docks in the
Tesco proposal. The offer, it should be noted, was not simply to pay the
council £ 1m. It was to contribute up to £ 1m to the actual cost of
infrastructure works undertaken by the council within a period of two years at
a specific site. In my judgment, this benefit was also fairly and reasonably
related to the development.
It follows
that, in my view, the judge was right to hold that the council were entitled to
treat all the matters in the packages of community benefits as material
considerations and this attack on the vires of the decision to grant
planning permission must fail.
Mr Gilbart
also relied upon a completely separate ground, namely that in coming to their
decision, the council had misunderstood one of their own policies. The draft
first alteration, as I have said, contained specific provision for a new food
store at Chaddlewood, which the alteration designated a district centre. In
para 13.24 of his report, in the section dealing specifically with the Co-op
application, Mr Dean drew these provisions of the draft plan to the attention
of the planning committee. But earlier in the report, in para 7.07, Mr Dean
said that ‘the draft First Alteration recognises that it is not realistic to
support any more retail provision in District Centres’. This was not literally true.
Mr Dean should have said that the draft alteration did not support more large
retail provision in existing district centres. It plainly did support
such a development in a proposed new district centre, namely Chaddlewood. In my
judgment, if one reads the report fairly, the context makes it clear that in
para 7.07 Mr Dean meant existing district centres. The members of the committee
could not possibly have thought that he was contradicting what he said in para
13.24. But Mr Gilbart says that the planning committee might have been misled.
They might have thought that the draft alteration ruled out the possibility of
the development for which the Co-op were applying. For my part, I find it
incredible that anyone who read the section dealing with the Chaddlewood
application itself, and containing Mr Dean’s actual advice, could have formed
this view.
I would,
therefore, dismiss the appeal.
EVANS LJ: I agree with both of my lords’ judgments and that this appeal should
be dismissed.
The background
to these applications for planning permission for out-of-town superstores as
described by Hoffmann LJ is further elaborated in a note to section 106 of the
Town and Country Planning Act 1990, as amended by the Planning and Compensation
Act 1991, section 12, in the Encyclopaedia of Planning vol 2 at para
P106.08 under the heading The broader context. The statutory provisions
now reflect the political objective of permitting the greater use of private
capital for what are described as ‘off-site infrastructure costs’, which
formerly were borne by the public sector alone. Hence, the increasing
prominence of ‘community benefits’ and ‘planning gain’.
This appeal
provides an opportunity for the court to emphasise that the underlying legal
principle is unchanged. The planning authority are required by section 70(2) to
have regard to ‘material considerations’, and these must satisfy the three-fold
test stated by Viscount Dilhorne in Newbury District Council v Secretary
of State for the Environment [1981] AC 578 in the passage quoted by my
lords. Mr Gilbart QC has sought to introduce a further limitation, to the
effect that the condition must also be necessary in the sense that it
overcomes what would otherwise be an obstruction to the grant of permission;
but this would complicate the decision-making process and it would add, in my
judgment, an unwarranted gloss to the meaning of the statutory provisions. But
the fact that this attempted limitation fails does not mean that the concept of
materiality is widened in any way.
Neither the Newbury
case nor R v Westminster City Council, ex parte Monahan [1990], 1
QB 87 (the Covent Garden decision), as I read the judgments, involved
‘planning gain’ in the sense of off-site infrastructure costs. The only
reported decisions where such have been held to be material and therefore
lawful are comparatively recent: see in particular Safeway Properties Ltd
v Secretary of State for the Environment [1991] 3 PLR 91 and perhaps
also Northumberland County Council v Secretary of State for the
Environment [1989] JPL 700. Vigilance is necessary if the axiom recognized
by Lloyd LJ in the Bradford case (1986) 53 P&CR 551, that
planning permission should not be bought and sold, is to be preserved. The test
of materiality, strictly applied, in my judgment is a sufficient safeguard
against its abuse.
1Editor’s note: Bradford City Metropolitan Council v Secretary
of State for the Environment.
Russell LJ has
referred to the further issue whether the appellants had sufficient interest to
seek judicial review. Like him, I wish to record my provisional view that the
respondents’ objection on this ground would have failed. If planning permission
was granted for a superstore development without due regard to the limits of
material considerations, then appeal procedures would be irrelevant, and the
sections of the public most directly affected would be the local community, as
in the Covent Garden case, and the local traders who would be likely to
bear, as individuals, their share of any economic loss which that community
suffered. The fact that the appellants are themselves developers of a
similar, though smaller, scheme does not affect their status in this respect.
Appeal
dismissed.
July 19 1993.
The Appeal Committee of the House of Lords (Lords Keith of Kinkel, Jauncey of
Tullichettle and Woolf) dismissed a petition by Co-op for leave to appeal.
