Planning permission and listed building consent — Improvements to opera house — Development included offices — Departure from development plan — Material considerations — Financing opera or financing opera house improvements — Whether consideration material in law — Whether relevant considerations disregarded
Applications
were made by the Royal Opera House, Covent Garden, London, for planning
permission and listed building consent for a development scheme. The
development scheme was to include the demolition of a number of listed and
unlisted buildings, the provision of improved opera, ballet and ancillary
facilities, offices, shops, restaurants and car parking. The desirable
improvements to the opera house were to cost an estimated £ 56m, with £ 33m of
this amount coming from the commercial element of the development and the
balance to be privately raised. The development plan, the Covent Garden action
area plan, contained policies indicating restraint on office development but
also protective of theatres. The plan anticipated the improvement of the opera
house, although the scheme presented, by virtue of the substantial commercial
component of it, was regarded by the planning committee as a departure from the
plan. Westminster City Council, adopting the recommendation of its planning and
development committee, resolved on July 29 1987 that the necessary planning
permission and listed building consents be granted subject to certain
conditions. The applicants in these proceedings, members of the Covent Garden
Community Association, a body with an interest in the area, sought judicial
review of the council’s decision on two grounds: (1) The provision of finance
to maintain the international status of the opera house was not a material
planning consideration which could lawfully justify development regarded by the
planning committee as a major departure from the development plan. A material
consideration must serve a planning purpose and must fairly and reasonably
relate to the permitted development, and by considering the financing of the
opera house the council had had regard to purely financial considerations or to
considerations purely personal to the opera house: these were not relevant to
the decision made. (2) If the council, by their committee, were entitled to
consider the need to finance the improvements to the opera house, they failed
to consider, or to take reasonable steps to inform themselves of, other methods
of financing these improvements without major departures from the development
plan.
The
application was dismissed by Webster J (February 8 1988) on both grounds. He
decided that the function of the court is to decide not whether a consideration
taken into account is in fact material but whether as a matter of law it is
capable of being material. The council, by their committee, decided that the major
departure from the development plan was justified, not by the fact that the
scheme would finance the international status of the opera house, but because
the scheme would finance the opera house improvements, which could not
otherwise be achieved. He concluded that the council were entitled to take into
account the fact that unless the commercial part of the development was
approved, other developments could not be achieved; the commercial development
and the opera house improvements were part of the same scheme and on the same
site. They were considerations relating to the use
character and use of the land. The applicants appealed on both grounds.
1. The council
were entitled to proceed on the basis that, but for the inclusion of the
commercial element of the proposed scheme, the improvements to the opera house
would not proceed at all: see p 53F. Provided that the ultimate determination
of a planning application is based on planning grounds, and not on some
ulterior motive, and that it is not irrational, there would be no basis for
holding it to be invalid in law solely on the ground that it has taken account
of, and adjusted itself to, the financial realities of the overall situation:
see p 51B: Newbury District Council v Secretary of State for the
Environment [1981] AC 578; and Westminster City Council v Great
Portland Estates plc [1985] AC 661 considered by analogy with planning
conditions. Bradford City Metropolitan Council v Secretary of State
for the Environment [1986] 1 EGLR 199 and Hall & Co Ltd v Shoreham-by-Sea
Urban District Council [1964] 1 WLR 240 distinguished.
The material
consideration, of the finances made available from the commercial development
enabling the opera house improvements to be carried out, were related to the
use and development of land, to a planning purpose and to the character of the
use of the land: both the commercial and the opera house proposals formed part
of one proposal for development: see p 55F.
Obiter If a condition would be illegal, on the ground of manifest
unreasonableness or otherwise, if imposed in a planning permission, then it
cannot acquire validity if it is embodied in a section 52 planning agreement:
see p 55B.
2. The council
were entitled to conclude that, but for the commercial element, the development
of the opera house would not proceed. The council, by their committee, had
sufficient material information and general knowledge to enable them rationally
to conclude, as they implicitly did, that there was a limited sum which the
opera house could raise to fund the proposed improvements: see p 57A.
to in the judgments
Bradford
City Metropolitan Council v Secretary of State
for the Environment [1986] 1 EGLR 199; (1986) 278 EG 1473; [1986] JPL 598,
CA
Brighton
Borough Council v Secretary of State for the
Environment (1978) 39 P&CR 46; [1979] EGD 1013; 249 EG 747, [1979] 1
EGLR 147; [1979] JPL 173, DC
East
Barnet Urban District Council v British
Transport Commission [1962] 2 QB 484; [1962] 2 WLR 134; [1961] 3 All ER
878; (1961) 13 P&CR 127; 60 LGR 41; [1961] EGD 468; 180 EG 221, DC
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
Niarchos
(London) Ltd v Secretary of State for the
Environment (1977) 76 LGR 480; 35 P&CR 259; [1978] EGD 929; 245 EG 847,
[1978] 1 EGLR 140; [1977] JPL 247
Prest v Secretary of State for Wales (1982) 81 LGR 193; [1983] EGD
282; 266 EG 527, [1983] 1 EGLR 17, CA
Pyx
Granite Co Ltd v Ministry of Housing and Local
Government [1958] 1 QB 554; [1958] 2 WLR 371; [1958] 1 All ER 625; (1958)
56 LGR 171; 9 P&CR 204; on appeal [1960] AC 260; [1959] 3 WLR 346;
[1959] 3 All ER 1; (1959) 58 LGR 1; 10 P&CR 319, HL
Sosmo
Trust Ltd v Secretary of State for the
Environment [1983] JPL 806
Sovmots
Investments Ltd v Secretary of State for the
Environment [1977] 1 QB 411; [1976] 3 WLR 597; [1976] 3 All ER 720; (1976)
74 LGR 556, CA
Westminster
City Council v Great Portland Estates plc
[1985] AC 661; [1984] 3 WLR 1035: (1984) 49 P&CR 34; [1985] JPL 108; sub
nom Great Portland Estates plc v Westminster City Council [1984] 3
All ER 744, HL
Appeal against
the decision of Webster J
This was an
appeal brought by the applicants against a decision of Webster J (February 8
1988), who had refused their applications for judicial review of a decision of
the first respondent, Westminster City Council, to resolve that planning
permission and listed building consents should be granted upon an application
made by the second respondent, the Royal Opera House.
Carnwath QC and Alice Robinson (instructed by Gouldens) appeared for the
appellants.
Sullivan QC and David Mole (instructed by the City Solicitor) appeared for the
first respondent, Westminster City Council.
Boydell QC and Charles George (instructed by Linklaters & Paines) appeared
for the second respondent, the Royal Opera House.
following judgments were delivered.
KERR LJ: This is an appeal on behalf of the Covent Garden Community
Association against a judgment of Webster J given on February 8 1988 whereby he
refused to quash a planning decision of the Westminster City Council made in
June/July 1987. Its effect was to grant permission to the Royal Opera House
(ROH) to carry out a far-reaching redevelopment of Covent Garden. The central
objective of the application was to extend and improve the Opera House by
reconstruction and modernisation to bring it up to a standard consistent with
its national and international reputation and to develop the surrounding area
consistently with this project. The decision to permit the development of the
site in the manner proposed in the application — after some modifications of
the original scheme — involved a departure from the relevant development plan
by permitting the use of parts of the site for the erection of office
accommodation. The authority was reluctant to permit this, but ultimately
accepted the need for it on the ground that the balance of the funds necessary
to carry out the desired improvements to the Opera House was unobtainable by
any other means.
That decision
was challenged by an application for judicial review on behalf of the
association instituted by two of its members. There are two grounds of
challenge. First, and mainly, it is said that the inclusion of office
accommodation for financial reasons is impermissible, even though ROH is ready
to enter into a binding agreement to use the proceeds from the commercial development
for the benefit of the Opera House. It is said that to permit the commercial
development of part of the site for purely financial reasons, whatever their
nature or purpose, is not a ‘material consideration’ which the authority was
entitled to take into account under section 29(1) of the Town and Country
Planning Act 1971 in granting planning permission for the development as a
whole. That raises an issue of law of general importance on which there has
been considerable discussion. Alternatively, if the challenge on that ground
fails, then it is said that the authority was bound to investigate the
financial aspects sufficiently to entitle it rationally to conclude that the
provision of office accommodation, by way of departure from the development plan,
was in fact necessary to achieve the objectives relating to the Opera House;
that it failed to do so, and that its conclusion was accordingly irrational.
Webster J
rejected both of these contentions and the applicants now appeal. The only
issue before him and us is whether the planning permission for the proposed
development was invalid in law on either or both of these grounds. The courts
are not concerned — in the sense of having no right to concern themselves —
with the planning merits or demerits of the development in any respect. It is
important to emphasise this, because many controversial views are held about
the scheme, and a number of press comments have referred to
courts are somehow involved in taking sides in the discussions.
The
legislation
It is only
necessary to refer to a few of the provisions of the Town and Country Planning
Act 1971. The project formed part of an ‘action area’ local plan, prepared
pursuant to section 11, which falls within the definition of ‘development plan’
in section 20. This was the ‘Covent Garden action area plan’ adopted by the
Greater London Council in 1978. When the GLC disappeared the planning authority
became the Westminster City Council whose planning and development committee
passed the relevant resolution which the council subsequently adopted. It is
necessary to quote the material part of section 29(1):
. . . where
an application is made to a local planning authority for planning permission,
that authority, in dealing with the application, shall have regard to the
provisions of the development plan, so far as material to the application, and
to any other material considerations . . .
The effect of
the words ‘shall have regard to’ is that the contents of the development plan
are deemed to be material considerations, but not that they must
necessarily be followed. Moreover, under section 31(1)(b) the Secretary
of State for the Environment is empowered to authorise planning authorities ‘to
grant planning permission for development which does not accord with the
provisions of the development plan’, and this was done in the present case by
article 14 of the Town and Country Planning General Development Order 1977 (SI
1977 no 289).
The other
provision which is of some relevance is section 52 dealing with agreements
regulating development or use of land, since the conclusion of such an
agreement formed an integral part of the planning permission granted in this
case. Subsection (1) is in the following terms:
(1) A local planning authority may enter into an
agreement with any person interested in land in their area for the purpose of
restricting or regulating the development or use of the land, either
permanently or during such period as may be prescribed by the agreement; and
any such agreement may contain such incidental and consequential provisions
(including provisions of a financial character) as appear to the local planning
authority to be necessary or expedient for the purposes of the agreement.
It should also
be noted that the scheme involved the demolition and reconstruction of a
substantial number of listed buildings in relation to which special planning
controls are imposed by section 55 et seq; but it is unnecessary to
quote from these provisions. Finally, Mr Carnwath QC, who appeared on behalf of
the association, drew attention to section 145 of the Local Government Act
1972, which empowers a local authority to contribute financially to the
promotion of entertainment.
The facts
The Covent
Garden Community Association is an unincorporated association which was formed
in 1971 to safeguard and protect the interests of residents and businesses in
the Covent Garden area. Its purposes include the promotion of high standards of
planning and architecture and to secure the preservation, protection,
development and improvement of buildings or features of historical public
interest in the area. The action area plan acknowledges in para A.4.34 the
‘substantial and constructive contribution to the public debate on the Plan’
made by the association.
The
application for judicial review seeks to quash a resolution of the planning and
development committee of the Westminster City Council,
planning permission and listed building consents be granted for the
redevelopment of the Royal Opera House, the Floral Hall, 2 Bow Street, 17-21
Russell Street, 2-6 Mart Street, 45-51 Floral Street, 51-54 Long Acre and land
fronting James Street, Covent Garden, London WC2, subject to the fulfilment of
three conditions referred to in the resolution. The permitted development
included a substantial block of office accommodation along Russell Street and
part of Bow Street and two smaller blocks along parts of James Street and Long
Acre. These were decisions taken in principle only; the relevant permissions
and consents are still in draft. But rather than wait for the formalities to be
completed it was thought convenient to challenge the decisions at this stage,
and no objection has been taken to this course. On the other hand, Mr Sullivan
QC for the council and Mr Boydell QC for ROH do not accept a submission on
behalf of the association that the court can therefore have regard to changes
in circumstances which have taken place since July 1987 when the decisions were
taken in principle.
The Royal
Opera House Covent Garden Ltd (ROH) is a company limited by guarantee and a
registered charity. It is responsible for the day-to-day administration and
operation of the Royal Opera House. This was designed by E M Barrie and opened
in 1858. Its stage and equipment were modernised in 1902 and new dressing rooms
were added in an annexe in 1932. Since 1946 the theatre has housed two
internationally renowned companies, the Royal Opera and the Royal Ballet, and
the Sadlers Wells Royal Ballet has also been administered from there since
1957. In the same way as many similar European theatres, the stage and other
arrangements were never designed to accommodate present-day performance and
rehearsal requirements. ROH therefore felt it essential to undertake a
programme of modernisation and reconstruction to ensure the Opera House’s
future national and international reputation. The association does not dispute
that further improvements are necessary if the Royal Opera is to maintain and
improve its standing as one of the leading opera houses in the world.
The Covent
Garden action area plan, issued in 1978, to which I must refer in some detail
hereafter, accepted the need to improve the Opera House and regarded the
proposal to extend it as ‘probably the most significant single project in the
area’. It envisaged that this development would be carried out in phases. In
order to meet the most pressing needs for additional and improved facilities, a
first phase of expansion was completed in 1982, when the Opera House was
extended westward along its axis, enabling rehearsal studios, chorus and
dressing rooms and other offices to be added. The cost of that phase was £ 10m,
mainly financed by money raised by public appeal. But this was considered to be
far from sufficient, and in the result ROH applied in October 1986 for outline
planning permission and listed building consents to carry out a far-reaching
redevelopment of the Opera House and parts of the surrounding land and
buildings.
Before coming
to the subsequent history, I must refer to a number of provisions of the action
area plan. In para B.1.2 it was made clear that the policy was to continue to
promote the mixed use of land within the area. For present purposes we are
concerned with theatres, including of course the Opera House itself, on the one
hand, and office accommodation on the other. I will therefore deal with these
aspects in that order.
The plan
contains numerous passages acknowledging the importance of theatres, both from
the point of view of the public interest in entertainment and also for economic
reasons. Thus, para B.7.16 states:
The theatre
plays a very major economic role in the area and the Council consider that its continued
existence and expansion should be encouraged to
opportunities and to retain and increase the viability of other activities such
as theatre support industries, pubs, restaurants and clubs. The economic
spin-off effect would have more than local significance in view of the
importance of theatres as a tourist attraction and as means of earning foreign
exchange.
The proposed
extension of the Royal Opera House was dealt with in para C.1.22
The proposal,
probably the most significant single project in the area is for extensions to
the west and south of the existing building. On the move of the market the
opportunity arose to safeguard the site required for this extension and in
early 1975 the Government purchased the adjoining land westwards as far as
Russell Street, the Piazza and Bow Street.
It is the
intention that the development be undertaken in phases. The extension of the
backstage facilities to James Street will be the first part of the project to
be undertaken and it is anticipated that this could be completed by 1981.
The Opera
House’s overall scheme includes in addition to a major extension to the stage
area, accommodation for the Royal Ballet School, the London Opera Centre and
administrative offices and for a new raised flytower facilitating productions
and giving better sight lines from the amphitheatre. As only part of the
proposed extension will be undertaken during the Plan period, it is important
that each phase is acceptable as an entity and that the remainder of the site
be given sympathetic treatment and used appropriately on an interim basis. As a
matter of urgency proposals for using part of the site as open space in the
short term should be brought forward.
The land
referred to in the first paragraph was subsequently transferred by the
government to ROH in order to enable it to carry out the development. The first
phase referred to in the second paragraph comprised the extensions and
alterations completed in 1982 which I have already mentioned. In connection
with the second, far more important, phase, which is now under consideration,
it must be borne in mind that the centre of Covent Garden is a conservation
area designated as one of outstanding ‘status’ and that the proposals
concerning this phase fall entirely within that area.
As regards the
policies concerning office accommodation, Mr Sullivan on behalf of the council
placed some reliance on para B.6.23, both below and again before us. But in
order to deal with this submission it is necessary to quote this together with
the two preceding paragraphs:
B.6.21 The amount of existing and proposed office
floorspace should be sufficient to contain the estimated future demand for
office accommodation in the area. There is therefore no reason to relax the
Council’s office policy for the Central Area. Thus the overall policy will be
one of restraint consistent with the Council’s strategic aims for the Central
Area.
B.6.22 It is essential, however, to ensure that new
office developments, replacement offices and the modernisation of existing
buildings contain a preponderance of small office units to provide a supply of
units which meet the demand and to prevent the creation of large unlettable
units which could remain vacant for long periods.
B.6.23 Each case will therefore be assessed on its
merits with continuous monitoring of overall decisions with reference to the
basic planning aims of the area. The following factors will be taken into account
when considering planning applications for office development:
1. The type of
office activity and its linkage with Covent Garden and the Central Area.
2. The degree
of benefit to the community office development would produce by way of:
(a) provision of residential accommodation in
conjunction with the development;
(b) provision of specific benefits in the form of
buildings, land or other facilities for use of the public;
(c) conservation of buildings or places of
architectural or historic interest;
(d) provision of small office suites;
(e) provision of land or buildings for other
employment generating uses, for instance, small industrial units.
Mr Sullivan’s
submission, though only subsidiary to his main arguments, was that these
references in the plan could be placed in the balance in support of the
validity of the resolutions. Although they contain no direct reference to the
financial benefits for other parts of the development which might be derived
from the provision of some office accommodation, he said that the second part
of para B.6.23 clearly implied that this had been in the mind of the GLC
committee. So he submitted, in effect, that the proposal which was ultimately
accepted went no further than to differ in degree from what had been contemplated
throughout. Webster J saw some force in this argument but declined to base any
reliance upon it in reaching his decision. I would adopt the same approach. As
Mr Carnwath pointed out, it is perfectly clear that the planning and
development committee regarded the ultimate acceptance of the proposals for
office accommodation as involving a radical departure from the action area
plan. It did not base itself upon para B.6.23 in any way, and I am also
doubtful whether any particular consideration was given to B.6.22. I therefore
disregard these references to office accommodation in the plan.
It is then
necessary to review the subsequent lengthy history. The judgment does so in
considerable detail, and I have already gratefully drawn on parts of it. At p
24E of the transcript Webster J said that he had taken this course
not only
because the matter is one of considerable public interest but also because all
three parties, by their counsel, have directed me to, and asked me to take into
account, the details of the history . . .
There has been
no criticism of anything in this lengthy review, for which the court and the
parties are greatly indebted. If the judgment of Webster J had been reported I
would have incorporated these passages by reference. But they should not be
lost, and since I cannot improve upon them I set out pp 8A to 24C of the
transcript verbatim:
In 1984 the
Royal Opera House instructed architects to prepare proposals for a
comprehensive redevelopment of the Royal Opera House and the surrounding area
which would meet the needs not met by the first phase of development. Those
proposals included a large element of commercial office development, intended
to finance the improvements as a whole; and they included a proposal to
demolish the Floral Hall. On April 26 1985 the GLC’s Planning Committee met and
considered a report of the Director of Architecture and Controller of
Transportation. The report included the following paragraph:
. . . on its merits the scheme will ensure the
completion of an undoubted prestigious project. As such it will also comply
with criteria (b) of para. B.6.23
that is to
say of the Area Plan, the paragraph which I have already quoted in full
in that it will result in the ‘provision of special
benefits in the form of buildings, land or other facilities for use of the
public’.
The report
concluded:
Whilst it may be considered desirable to encourage a
mixed use scheme on the site, for example, shopping fronting the piazza, the
principle of office development funding the
Webster J:
project must be considered undesirable. Leaving aside
matters of policy and precedent, the site is obviously sensitive in townscape
terms, and it will be difficult enough to incorporate the required uses in a
satisfactory civic design solution, without the added impact of a significant
level of office space . . .
In terms of listed buildings there is no doubt that no
case has been made for the demolition of the Floral Hall . . .
Having
received that report the Planning Committee of the GLC resolved:
That the Project Director of the Royal Opera House be
informed:
(i) Whilst the
Council would be prepared to accept at this initial stage the principle of
Opera House uses and other uses on the site, it would not accept the principle
that sufficient commercial development should be included within the
development to fund works to the Opera House. Besides being contrary to
statutory and current Council policies such a development concept would put at
risk the potential to secure a scheme that would be sympathetic to the
well-established character of Covent Garden;
(ii) That the
Project Director be further informed that the Council is not satisfied that a
case has been made for the demolition of the Floral Hall and therefore it would
not at this stage authorise the grant of listed building consent for such
demolition.
Two points
should be noted about that resolution of the Planning Committee of the GLC.
First, it was not put before the Planning Committee of the respondent Council
which later made the decisions now under review, although Mr Carnwath on behalf
of the Association does not rely upon that omission as a ground to support
these applications but merely as part of the background. Secondly the
commercial development forming part of the proposals now under consideration is
not sufficient to fund all the work that is proposed, as will be seen in a
moment.
The
applications made on October 3 1986, which were later amended in June 1987, provide,
after those amendments, for the demolition in whole or in part of the Floral
Hall (although the Floral Hall is to be rebuilt) and of 51-52 Long Acre, for
approximately 16,000 square metres of office floor space and for a 300-space
underground car park entered from Bow Street. The proposals will also involve
the demolition of other listed and unlisted buildings. The proposal for the
underground car park was not initiated by the Royal Opera House but by the
Council itself; and the Council will own and operate that car park if it is
built. But it must be noted that the proposal was a long way from being a
proposal simply for the development of offices and car park. To make good this
point, it is necessary to recite the details of the proposal contained in the
application, which are as follows:
Comprehensive development comprising alteration of,
extensions to and partial demolition of the Royal Opera House, demolition of
listed buildings at the Floral Hall, 46-47 Floral Street and 51-52 Long Acre
and new development to provide: improved opera, ballet and ancillary
facilities; offices; shops; restaurants; car parking; pedestrian and vehicular
ways.
The proposals
relate to a number of sites, which include the whole of the area bounded by
Floral Street, Bow Street, Russell Street and James Street; an area on the
corner of Hanover Street and Floral Street; and about half of the area bounded
by Long Acre, Hanover Place, Floral Street and James Street. The buildings
which it is proposed to demolish so as to provide the main commercial
development are 17-21 Russell Street and 2 Bow Street, on the corner of those
two streets.
In a letter
dated September 30 1986 accompanying the application the Royal Opera House
stated:
The financing of the scheme will not be easily achieved.
No grant aid from Government sources has been offered. This means that the
cultural benefits from the Royal Opera House improvements will not be completed
within an acceptable timescale unless they can, to a substantial degree, be
financed from the overall project.
The Opera
House has estimated that the improvements would cost £ 56m, that £ 33m of this
amount would be met by profits from the commercial element of the proposed
development and that the balance of £ 23m would be
Webster J:
privately
raised. Those were the figures which related to the application as it was
originally made. As will be seen, they have been slightly amended in view of
the subsequent variation.
An
architects’ report which was made available to each individual member of the
Committee both for the February and the June meetings, was included with the
application. Some passages of this report must be quoted. The second and third
paragraphs on p 2 state:
As with many such European theatres, the stage
arrangements were never designed to accommodate present day performance and
rehearsal requirements, and the stage machinery itself is now at the end of its
useful life. The Royal Opera House is therefore compelled to undertake a
programme of modernisation and reconstruction to ensure its future as a major
international house.
It has been made clear that any such project would not
be able to rely on public money and that part of the site available would have
to generate income towards the cost of the theatre’s requirements. The project,
therefore, consists of improvements to the theatre and a series of buildings on
adjacent sites, notably those bounding the Covent Garden Market Square, that
generate the greater part of the income to pay for the theatre works.
Also on the
same page Sir John Tooley, the General Director of the Royal Opera House, who
has sworn an affidavit in this application, is quoted as having said:
It is our belief that the Royal Opera House should be
an integral part of Covent Garden, and an essential aspect of the proposals is
the re-establishment of the missing frontages to the Market Square with
generous shopping arcades which lead to a new second entrance to the theatre.
This entrance, the arcades, and an open loggia at roof level will give the
Royal Opera House a positive presence in the Square. The proposed scheme thus
offers an opportunity to combine the interests of the theatre with those of the
area at large, ensuring the future of the Royal Opera House and the completion
of an important piece of London’s townscape.
Later on the
same page, the introduction reads:
The scheme is a mixture of new buildings for the Opera
House, refurbishment of existing Opera House premises, and new offices, shops
and public parking. This report deals in functional terms with each of these
categories. However, when considering the appearance of the buildings and their
relationship to the surrounding area, the whole project is brought together so
that it can be seen as a coherent part of the city.
At p 10,
under the heading ‘The Site: Proposed’ the report reads:
The project has to find a balance between commercial
and arts uses. The disposition of the site in relation to the present theatre
happens to allow the project to maximise the benefit to the Royal Opera House
without necessarily undermining commercial potential.
Later on the
same page reference is made to the complete rebuilding of the fly tower.
The report
deals with the new arcade at p 30, saying:
The arcade building unifies the theatre and commercial
parts of the scheme. It marks the second entrance to the Opera House, provides
an opportunity for a continuous elegant shopping frontage at ground level and
offers at roof level the loggia, a promenade which connects directly to the new
amphitheatre foyer.
In a letter
dated September 30 1986 accompanying the application the Royal Opera House
stated:
The financing of the scheme will not be easily
achieved. No grant aid from Government sources has been offered. This means
that the cultural benefits from the Royal Opera House improvements will not be
completed within an acceptable timescale unless they can, to a substantial
degree, be financed from the overall project.
I have already
read out that passage of the letter and the estimated costs.
The
Association accepts that the proposals include elements of
Webster J:
architectural
merit and some mixed uses; but they point out that the principal land use
applied for outside the Royal Opera House itself is for commercial offices,
mostly in one large block designed to be let in large units; that the proposals
involve the demolition of large numbers of buildings in the area both listed
and unlisted; and that only the Royal Opera House itself would remain
externally in its present form. They point out that the proposed development
before the amendments were made in June 1987 included no residential
accommodation although 3,660 square feet of residential accommodation exist in
the area at present; and in their view many architectural features would be totally
out of keeping with other buildings in the conservation area and the size of
the office units would be out of keeping with units existing at present.
Whether there is force in that criticism is not for me to say. Unless it comes
to the exercise of my discretion I am not concerned with the merits of the
application, and even if it does come to that I shall certainly not take into
account aesthetic considerations of that kind. On February 3 1987 the Planning
and Development Committee of the Council (‘The Committee’) considered the
proposed development and a report of the Council’s Director of Planning and
Transportation. I must quote a number of passages from this long and detailed
report. At para 4.3 it was stated that the key objectives of the project are:
— to modernise the stage
— to provide a permanent home for the Royal Ballet
— to provide greater public accessibility to the
theatre.
Para 4.3 is
headed ‘The Opera House Improvements’:
. . . Externally, the most obvious manifestations of
these works will be the new fly tower and paint frame studio. Internally, [the
new] alterations provide for greatly improved and enlarged stage areas, new
ballet studios, orchestra facilities and support facilities.
4.4 Greater
public accessibility is achieved by providing a new entrance to be located in
the Market Square. This and the retained Bow Street entrance are linked to a
new foyer system and to an open air loggia at roof level overlooking the
Square. The foyer system incorporates two new performance spaces capable of
accommodating audiences of 300 and 250 people.
4.5 Additional
support facilities are provided north of Floral Street. The larger site bounded
by Floral Street, Hanover Place and Long Acre, which is to be completely
redeveloped, will on its Floral Street frontage provide a new rehearsal studio,
ballet dressing rooms and administrative offices. These facilities will be
linked directly to the Royal Opera House by 2 high level bridges. The buildings
at 48-51 Floral Street will be refurbished to provide workshops for the Royal
Opera House wardrobe production centre.
Under the
heading ‘Shops and Offices’ para 4.6 states that the project incorporates a
substantial commercial element to generate a part of the income to pay for the
theatre works and a table of the various existing and proposed uses in the area
demonstrates that the originally proposed office development of approximately
16,000 square metres would involve an addition of about 14,500 square metres to
the existing area of office use. The report summarises the responses received
by many interested parties and under the heading ‘Office and Residential
Policy’, it having been noted that the application site is subject to the
policies contained in the Area Plan and that the office policy of that plan is
one of restraint which emphasises the importance of providing small office
units, paras 6.4 to 6.6 read:
6.4 . . . The
Director of Property Services considers that the commercial content of the
proposed development maximises the financial return that can be achieved from
this element of the development within the townscape constraints, even though
the commercial consent will not fully subsidise the cost of the improvements to
the Opera House.
6.5 The
compelling functional needs for the modernisation of the Opera House cannot be
disputed. It is clear that the stage arrangements and rehearsal facilities are
wholly unsatisfactory and that the stage machinery is at the end of its useful
life. It also
Webster J:
has to be accepted that in the current climate the
project will not be able to rely upon public funds.
6.6 It is
considered that in principle the proposed office content could be justified on
the basis of the special needs of the Royal Opera House and the uniqueness of
the application . . .
Under the
heading ‘Character and Function’ the report reads:
6.7 The
proposals will introduce a major office use into an area where none exists to
any significant degree. Many of the responses received from the public and
amenity groups consider that this would have a serious detrimental effect on
the special character and function of this part of Covent Garden.
6.8 The
architects anticipating this criticism state in their report that the offices
‘take an appropriately restrained position in the street scene’ and suggest
that the main office building fronting the Square should be used for individual
rooms rather than general office space. They also state that the building will
be suitable for occupancy by either single or multiple tenants providing office
suites ranging from 350m2 upwards.
6.9
Notwithstanding the attempts made by the architects to lessen the impact
it is inevitable that a major effect on the character and function of the area
will result. On balance however it is not considered that the effect would be
so detrimental as to outweigh the benefits of the overall scheme.
Under the
heading ‘Implementation and Financial Considerations’:
6.12 The very
significant office content proposed could only be considered acceptable in
policy terms if the Council were convinced that the development would be
completed in its entirety within a reasonable period of time, and that all of
the improvements and community benefits associated with the scheme could be
provided.
6.13 The
applicants have indicated their willingness to enter into legal agreements to
safeguard the full implementation of the scheme. The [Royal Opera House] are
offering assurances that all moneys-raised from the development would be
committed to arts improvements and that the development would be undertaken in
one continuous phased building programme.
Under the
heading ‘Demolition of the Floral Hall’ para 6.18 reads:
The proposed near total demolition of E M Barrie’s
Floral Hall . . . is clearly contentious in principle. However, given once
again, the special need to provide first rate stage, back stage and other
ancillary facilities commensurate with an opera house of international
standing, the loss of the greater part of the building might be reasonably
regarded as sustainable . . .
In addition, the taking down of the iron and glass
frontage to the north-east corner of the Piazza and the adjacent part of the
Hall, enables the original Inigo Jones architectural concept of the Piazza to
be substantially reinstated by the restoration of one continuous, colonnaded
building around the North and Eastern sides of the square.
Under the
heading ‘The loss of other buildings’ para 6.20 reads:
6.20 Except for
the group of buildings in Floral Street to the west of Hanover Place (ie Nos
45, 46 and 47 Floral Street), which are proposed for demolition and
re-development for further ancillary accommodation for the Opera House, the
proposed demolition and re-development of other listed buildings and unlisted
buildings of townscape value in Long Acre, Hanover Place, and Russell Street is
related to the ‘commercial’ part of the scheme, as distinct from that part
which provides functional accommodation for the Opera House. The case for
demolition and re-development for commercial uses would not normally be
acceptable but in the unique context of the Opera House it is on balance
considered acceptable.
The
amendments to the proposal made in June 1987, which I have already mentioned,
took out from the application the proposal to demolish 46-47 Floral Street.
Under the
heading ‘New Buildings’ paragraph 6.23 reads:
There is little doubt that the design of the new
buildings in the proposed development is of considerable architectural quality
and urban design interest. Indeed that part of the proposed development fronting
the Piazza provides a most welcome restatement of the original Inigo Jones
concept and a singularly positive contribution to and enhancement of the
character and appearance of this part of Covent Garden Conservation Area.
Webster J:
Under the heading
‘Conclusions’ appear the following paragraphs:
9.1 The details
of this scheme are very complex. However, the planning issue can be simply
stated. That is, do the special circumstances of the Royal Opera House justify
the provision of a major commercial development in this part of Covent Garden?
9.4 The final
decision must be balanced against the wider considerations, in particular the
impact of the development on the special character and function of Covent
Garden, the creation of a major speculative office development in the context
of a restrictive office policy and the loss of buildings of special
architectural and historic importance in the absence of good evidence to
support their demolition as opposed to retention and adaptation. These factors
are compounded by the uncertainties which exist with regard to the Royal Opera
House securing the substantial amount of additional funding required over and
above the income generated by the scheme, and the difficulty of securing
concrete assurances which could form the basis of an acceptable legal agreement
to ensure the implementation of the scheme in its entirety.
9.5 The
proposals have to be seen against the need to enhance the functioning of the
Royal Opera House and to improve and update its facilities to a standard
commensurate with its place as a premier European Opera House. It is in this
context that the Committee is, despite some of the less welcome aspects of the
package, on balance recommended to approve the proposals in principle and to
authorise the Director to seek a resolution of a number of design issues raised
and to secure amendments safeguarding the amenities of adjoining residential
occupiers.
The
Committee, having received that report, by no means slavishly followed its
recommendations. On February 3 1987 it took its own line and it resolved:
That the decision be deferred to the June meeting of
the Planning and Development Committee for the following reasons:
1. The Committee is willing to contemplate in principle
a major departure from the Covent Garden Action Area Plan, but wishes to be
absolutely convinced that the commercial development of the site is the only
way of achieving the Royal Opera House improvements. Accordingly, while
welcoming the application in principle, the Committee would wish there to be an
opportunity for future discussion on this crucial aspect.
2. That in the meantime discussions be held with the
applicant regarding the principle of the demolition of listed buildings and
buildings in a conservation area, the design of the frontages to Russell and
Bow Streets and the reinstatement or possible gain of residential
accommodation.
In response
to that decision and resolution the Royal Opera House prepared certain
amendments to the proposed development. Apart from a number of design
amendments to the exterior of the proposed new buildings, they abandoned the
proposal to demolish 46-47 Floral Street, one of the listed buildings, and they
proposed an amendment to the reconstruction of the Floral Hall which would
include reinstatement of a section of the glazed barrel vault roof which had
been lost in a fire 30 years ago. They also considered five alternative
options, each involving less office space; and shortly before the next meeting
of the Committee, held on June 30 1987, they proposed a sixth alternative the
effect of which would be to provide between 20 and 25 flats on the upper floors
of the buildings as proposed for the Long Acre frontage, instead of the
previously proposed offices, an amendment which would reduce the office floor
space content by just over 2,000 square metres, reducing the overall total to
about 14,000 square metres and which would increase the estimated deficit of £
23m by between £ 2m and £ 2.5m to about £ 25m. (The proposal approved on June
30 1987 included this option.)
Before the
meeting of the Committee, on June 30 1987 a further report by the Acting
Director of Planning and Transportation was circulated. Since at their previous
meeting the Committee had accepted the proposal in principle subject to their
being convinced that the commercial development was the only way of achieving
the improvements to the Royal Opera House, this report not unnaturally
concentrated primarily on that aspect of the matter. In para 1.2 the Committee
were reminded that they had indicated their willingness to accept in principle
a major departure from the Action Area Plan. The next few paragraphs of the
report, so far as material, read as follows:
Webster J:
1.3 In response
to the Committee request the Royal Opera House have carried out studies which
show that other alternative land uses would produce considerably lower
development receipts. They therefore adhere to the view that the proposals as
submitted represent the only means of financing the essential improvements to
the Royal Opera House.
Para 1.4
refers to the retention of 46-47 Floral Street and the reinstatement of the
barrel vault roof of the Floral Hall, para 1.5 refers to the public response
and para 1.6, so far as material, reads:
On balance, and having regard to the uniqueness of the
project, it is considered that the proposals can be recommended in principle.
Para 5
consisted of an examination of the first five of the six options to which I
have referred. In para 5.1 it was stated:
The detailed financial information has been submitted
on a confidential basis to the Assistant Director (Valuation), Property
Services Department, who has undertaken a financial assessment in respect of
the Russell Street block as being indicative of the various changes in the overall
scheme.
Those five
options included an increase in the retail accommodation, an increase in the
retail and leisure facilities, an increase in the retail and residential
accommodation, an increase in the retail accommodation together with an hotel
and an increase in the retail and residential accommodation on a larger scale
than the earlier option. Not surprisingly, in view of the fact that each of the
options involved less office accommodation, the Assistant Director (Valuation)
considered that each of these alternatives would provide a lower financial
contribution towards the cost of the Royal Opera House improvement, adding to
the estimated deficit of £ 23m varying amounts ranging from £ 7.5m to £ 21m,
the additional deficit which would result if all office development were to be
deleted from the proposals.
Dealing with
the demolition of buildings, the first two paragraphs under that heading read
as follows:
5.8 The revised
proposals at present involve the same degree of demolition as the scheme previously
considered by the Committee. The applicants contend that the demolition of the
listed buildings is justified by the benefits provided by the improvements to
the Opera House, the Floral Hall reconstruction involving the reinstatement of
a small section of the barrel vault and the completion of the Covent Garden
Piazza with architecture of a high quality.
5.9 With respect
to the listed buildings at 51-52 Long Acre and the unlisted properties in
Russell Street the applicant’s case is that the replacement buildings are of
equal or greater architectural or townscape merit than those currently
existing.
Further on
under the same heading the report reads:
5.10 . . . The
retention of 46-47 Floral Street would obviously be warmly welcomed and would
go a considerable way towards overcoming the concern expressed both by the City
Council and others regarding the extent of demolition involved in the
proposals.
The
conclusions contain the following paragraphs:
5.14 In summary,
the Royal Opera House has demonstrated to the satisfaction of the Assistant
Director (Valuation) that no other combination of land uses could provide as
high a financial contribution to the Opera House improvement as could an office
based commercial scheme.
5.17 It is
considered that the architects, working within the brief presented by the Royal
Opera House, have produced an imaginative and sensitive example of urban
renewal in the important context of Covent Garden. It is on this basis that the
proposals are recommended for approval subject to the subsequent agreement of
detailed planning conditions . . .
In a
supplementary report added to that report shortly before the meeting the Acting
Director of Planning and Transportation referred to the sixth option the effect
of which I have already described.
The minutes
of the meeting of the Committee held on June 30 1987, having summarised those
passages of the officers’ report to which I have already
Webster J:
referred,
including in para 5.2 a reference back to their conclusion on February 3 1987
that the proposal represented a major departure from the Area Plan and that
commercial development of the site was the only way of achieving the Royal
Opera House improvements and having noted also that ‘other possible alternative
ways of financing the improvements and extensions to the Opera House put
forward by third parties had not come to fruition’, records resolutions of the
committee in the following terms:
Resolved – 1. That, subject to (a) any direction by the
Historic Buildings and Monuments Commission and Department of the Environment,
and (b) satisfactory legal agreements to include the completion of the
development in its entirety, the provision and mode of operation of the car
park, the pedestrian walkways, the relocation of the Piazza frontage of the
Floral Hall and the type and management policy of the retail provision,
conditional permission and listed building consent be granted.
2. That the conditions to be attached to the permission
and listed building consent be determined by the Town Planning (Applications)
Sub-Committee by way of the Chairman’s recommendations procedure.
That decision
was referred to the meeting of the Council on July 27 1987, when it was
adopted. It is those two decisions, that of the Committee and that of the
Council, which are the subject-matter of this application. It should be noted
that no planning permission has yet been granted. Unless this application
succeeds, it will be granted when the two conditions referred to in the resolution
have been fulfilled, and when it is granted it will be subject to such
conditions as may be determined by the Town Planning (Applications)
Sub-Committee.
[This
concludes the extract from the transcript of Webster J’s judgment — Editor.]
The issues
I have already
mentioned these briefly at the beginning of this judgment. The first raises the
question whether financial considerations can properly be regarded as material
in granting permission for a development which would otherwise have been
rejected on planning policy grounds or would only have been allowed to be
carried out in some different way. For the purposes of that submission there is
no challenge to the committee’s conclusion, which they clearly accepted on the
facts, that the proposed extension and improvements to the Opera House could
only be carried out if the funds generated by the proposed office accommodation
will be available to make up the anticipated deficit. The second issue is put
in the alternative. It challenges the rationality of this assumption on the
facts, but accepts for that purpose that the decision would have been legally
valid if the assumption had been rationally justifiable. On that issue it will
be necessary to supplement the judge’s review of the history to some extent in
the light of Mr Carnwath’s passing references to subsequent events.
For the sake
of completeness I should briefly mention three other matters to which reference
was made in the judgment, but they have not played any part on this appeal.
First, in answer to an argument raised below, the judgment points out at pp 25
to 27 that the funds generated by the office accommodation were to be used for
physical purposes, viz the extension of and improvements to the Opera
House and not — as had been suggested on behalf of the applicants — as a
‘provision of finance to maintain the international status of the Opera House’.
This attempted distinction was rightly not pursued before us. Second, at pp 24
and 25, the judgment points out that the ultimate decision of the committee was
clearly based on a balance of many factors, and it therefore poses the question
whether it is really fair to judge its validity solely by reference to the
inclusion of the office accommodation in question. That aspect has also played
no part in the
Lord Scarman in Westminster City Council v Great Portland Estates plc
[1985] AC 661 at p 670 — which I will also cite later on — to suggest that the
decision of the committee may in any event be justified on the ground that the
needs of the Royal Opera House constitute ‘an exceptional or special
circumstance’. That aspect was not abandoned on behalf of the respondents, but
it was not felt necessary to develop it and I therefore express no opinion
about it.
Finally, it
was faintly submitted on behalf of the respondents, in particular by Mr Boydell
for ROH, that the conclusion of a ‘section 52 agreement’ between ROH and the
council, as a condition designed to ensure that all aspects of the permitted
development — including the office accommodation — were in fact carried out,
could have an effect on the validity of the committee’s decision. I will
briefly refer to this aspect later on.
Issue I:
can ‘any other material considerations’ in section 29(1) properly include
financial considerations?
This issue can
of course be phrased in many differently contentious ways. If one seeks a
negative answer one might pose the question whether it can possibly be
permissible to authorise a development which, in planning terms, is undesirable
or even indefensible in order to provide funds for some other desirable
development. On the other hand, a more moderate way of putting the issue would
be to ask whether, as a matter of common sense, there could be any reason why
the financial viability of a desirable development, and the means of achieving
it, must necessarily be immaterial considerations in determining applications
for planning permission. Similarly, one can argue by giving illustrations at different
points of the spectrum. For instance it was said on behalf of the applicants
that it would be inconceivable that if ROH happened to own a site near Victoria
they would be allowed to use it for the erection of an undesirable office block
on the basis that the profits would be used to extend and improve the Royal
Opera House. The respondents did not accept that this was self-evident if no
other means were available and countered with more realistic illustrations to
demonstrate the fallacy of the proposition that purely financial considerations
can never be material. For instance, if it is uneconomic to restore a derelict
listed building for its original residential or other use, then it would be
perfectly proper and an everyday situation for a planning authority to allow it
to be used wholly or partly for commercial purposes, if its restoration cannot
in practice be achieved in any other way. Or — to take an example given by Mr
Boydell — in the case of a landmark or tourist attraction such as a derelict
old windmill, a planning authority might well decide to permit the owner to put
up an otherwise undesirable kiosk to sell postcards and souvenirs if this is
the only viable way of obtaining a desirable restoration.
This was the
nature of the opposing contentions. In my view, for the reasons which follow, I
have no doubt that the respondents’ approach is correct in principle, and I
would summarise it in the following way. Financial constraints on the economic
viability of a desirable planning development are unavoidable facts of life in
an imperfect world. It would be unreal and contrary to common sense to insist
that they must be excluded from the range of considerations which may properly
be regarded as material in determining planning applications. Where they are
shown to exist they may call for compromises or even sacrifices in what would
otherwise be regarded as the optimum from the point of view of the public
interest. Virtually all planning decisions involve some kind of balancing
exercise. A commonplace illustration is the problem of having to decide whether
or not to accept
or would in practice, otherwise not be carried out for financial reasons.
Another, no doubt rarer, illustration would be a similar balancing exercise
concerning composite or related developments, ie related in the sense that they
can and should properly be considered in combination, where the realisation of
the main objective may depend on the financial implications or consequences of
others. However, provided that the ultimate determination is based on planning
grounds and not on some ulterior motive, and that it is not irrational, there
would be no basis for holding it to be invalid in law solely on the ground that
it has taken account of, and adjusted itself to, the financial realities of the
overall situation.
This approach
is consistent with the authorities and with good sense. There is no legislative
definition of ‘other material considerations’ in section 29(1). In passages
from two decisions of the House of Lords, the scope of these words has merely
been circumscribed in wide terms, but these would not exclude financial
considerations from being treated as material in appropriate cases. In Newbury
District Council v Secretary of State for the Environment [1981] AC
578, Viscount Dilhorne dealt with this aspect at p 599. He referred to section
29(1) and then quoted the following well-known passage from the judgment of
Lord Denning MR in Pyx Granite Co Ltd v Ministry of Housing and Local
Government [1958] 1 QB 554 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.
Having pointed
out that this statement had already been approved by the House of Lords he went
on:
It follows
that the conditions imposed must be for a planning purpose and not for any
ulterior one, and that they must fairly and reasonably relate to the
development permitted. Also they must not be so unreasonable that no reasonable
planning authority could have imposed them . . .
This passage
was taken a little further in the speech of Lord Scarman in Westminster City
Council v Great Portland Estates plc [1985] AC 661 with which the
other members of the House of Lords expressed agreement. The appeal had been
concerned with a development plan whose validity was challenged on the ground
that it contained proposals for the protection of specific industrial
activities; it was said that these were concerned with the interests of
particular users of land rather than the development and use of land in itself.
In that context Lord Scarman cited, at p 669H, a sentence from an earlier
judgment of Lord Parker CJ, in East Barnet UDC v British Transport
Commission [1962] 2 QB 484 at p 491, in which he had said that ‘what is
really to be considered is the character of the use of the land, not the
particular purpose of a particular occupier’. Then, at p 670B Lord Scarman went
on as follows:
It is a
logical process to extend the ambit of Lord Parker CJ’s statement so that it
applies not only to the grant or refusal of planning permission and to the
imposition of conditions but also to the formulation of planning policies and
proposals. The test, therefore, of what is a material ‘consideration’ in the
preparation of plans or in the control of development (see section 29(1) of the
Act of 1971 in respect of planning permission: section 11(9) and Schedule 4
para 11(4) in respect of local plans), is whether it serves a planning purpose:
see Newbury District Council v Secretary of State for the Environment
[1981]
to the character of the use of land. Finally, this principle has now the
authority of the House. It has been considered and, as I understand the
position, accepted by your Lordships not only in this appeal but also in Westminster
City Council v British Waterways Board [1985] AC 676 in which
argument was heard by your Lordships immediately following argument in this
appeal.
However, like
all generalisations Lord Parker CJ’s statement has its own limitations.
Personal circumstances of an occupier, personal hardship, the difficulties of
businesses which are of value to the character of a community are not to be
ignored in the administration of planning control. It would be inhuman pedantry
to exclude from the control of our environment the human factor. The human
factor is always present, of course, indirectly as the background to the
consideration of the character of land use. It can, however, and sometimes
should, be given direct effect as an exceptional or special circumstance. But
such circumstances, when they arise, fall to be considered not as a general
rule but as exceptions to a general rule to be met in special cases. If a
planning authority is to give effect to them, a specific case has to be made
and the planning authority must give reasons for accepting it. It follows that,
though the existence of such cases may be mentioned in a plan, this will only
be necessary where it is prudent to emphasise that, notwithstanding the general
policy, exceptions cannot be wholly excluded from consideration in the
administration of planning control.
Admittedly,
neither of these cases was concerned directly with financial considerations
similar to the present case. And it is no doubt true that planning authorities
must be particularly careful not to give way too readily to assertions of
financial constraints as a ground for relaxing policies which have been
formulated in the public interest. Thus, take another illustration given by Mr
Boydell. Suppose that an urban authority had a policy of requiring the use of
green tiles — which are substantially more expensive than others — in areas of
residential developments bordering on the countryside. If a developer who
wished to erect an otherwise highly desirable housing estate claimed that this
would be uneconomic if green tiles had to be used, then the authority would
clearly not be bound to reject his application out of hand. It would be bound
to consider it on its merits, although it might well be highly sceptical about
the assertion that the economic viability of the project would founder if green
tiles had to be used. But if, after proper consideration, this were indeed the
conclusion reached on a basis which would not admit of a charge of
irrationality, then there could be no question about the validity of a decision
which permitted the use of red or black tiles in the circumstances.
This takes one
to the authorities in which financial considerations have played a direct part.
In Bradford City Metropolitan Council v Secretary of State for the
Environment [1986] 1 EGLR 199 Lloyd LJ said at p 202G that it has usually
been regarded as axiomatic that planning consent cannot be bought or sold and
that this must be true as a general proposition.
However, the
reported cases which can properly be described as falling within this class
were concerned with situations in which planning and other consents had been
granted for ulterior, and therefore impermissible, motives. Hall & Co
Ltd v Shoreham-by-Sea Urban District Council [1964] 1 WLR 240 is a
well-known example, to which Lloyd LJ referred at length in the Bradford
case. In granting permission for a housing development the authority had
imposed a condition that an adjoining highway, which was already overloaded and
due to be widened by the authority, was to be widened at the expense of the
applicant and by the use of a strip of his land, which would otherwise have had
to have been acquired for the purpose. As Willmer LJ said
invalid:
The
defendants would thus obtain the benefit of having the road constructed for
them at the plaintiffs’ expense, on the plaintiffs’ land, and without the
necessity of paying any compensation in respect thereof.
That was a
clear instance of a grant of planning permission coupled with a condition based
on an ulterior motive. And in most such instances, though not necessarily, the
motive will no doubt be financial or have some financial implications. The
facts in Bradford were similar, although less extreme, and were judged
to fall on the same side of the line. In both cases a condition with financial
implications had been imposed with the ulterior motive of furthering the
purposes of the local authority. In the result both decisions were held to be
‘manifestly unreasonable’, to use the words of Lloyd LJ which he understandably
preferred to ‘irrational’.
Situations such as those in the present case and in the earlier
illustrations to which I have referred are obviously quite different from cases
like Hall & Co Ltd and Bradford. They do not involve the
imposition of a condition to serve the purposes of the local authority. They
involve the acceptance, faute de mieux, of a relatively undesirable
feature of a development as a compromise or sacrifice in order to ensure the
viability of the main project which is judged to be sufficiently desirable to
warrant a partial relaxation of policy. But Mr Carnwath challenged this
analysis. While agreeing that no ulterior motive was involved in the present
case, he did not accept what he called the ‘but for’ argument, that but for the
permission for the undesired office accommodation, the desired development of
the Opera House could or would not take place. He pointed out that under the
Local Government Act 1972 the council had the necessary power to make up any
financial deficiency and claimed that the situation was therefore no different
from Hall & Co Ltd and Bradford in principle.
I cannot agree
with this analysis. There are few, if any, situations in which the ‘but for’
argument could not be countered by pointing to alternatives; but alternatives
of a nature which the relevant authority may reasonably consider to be
uneconomic and therefore impracticable. Such situations do not invalidate the
‘but for’ argument. If sufficient money is made available almost anything can
be done. But this approach provides no test for the balancing exercise involved
in the realistic determination of most planning applications. In the present
case, subject to the applicants’ second submission to which I come shortly, the
council was entitled to proceed on the basis that, but for the permission to
ROH to include the office accommodation in the proposed development, this would
not proceed at all. The applicants’ first submission, with which I am now dealing,
assumes this as a fact while challenging the decision in law. On that basis the
situation is wholly different from cases such as Hall & Co Ltd and Bradford
where the economic viability of the proposed developments was not dependent on
the financial conditions imposed by the authorities.
To the extent
that situations similar to the present case have been considered by the courts
the trend of authority has been in line with the foregoing approach and with
the respondents’ submissions. In Niarchos (London) Ltd v Secretary of
State for the Environment (1977) 35 P&CR 259, Sir Douglas Frank QC held
that it was impossible to decide whether premises could reasonably be adapted
for residential occupation unless the cost of the adaptation was taken into
account. He quashed a rejection of a planning application for office use of the
premises, which would have been contrary to the local development plan, on the
ground that no account had been taken of
Council v Secretary of State for the Environment (1978) 39 P&CR
46 on facts which lie closer to the present case. An inspector had allowed an
appeal against a refusal by a local authority of planning permission to a
school, situated in a conservation area, to put up houses in a part of its
playing fields which lay outside this area. The basis of the application had
been that the proceeds from selling the houses were to be used for the
improvement of the school buildings for which no funds would otherwise have
been available. It is true that the first ground of the inspector’s decision
was that there were no amenity objections to the development. But the
materiality of the financial considerations figured large in the ratio
of the judgment. For the reasons already discussed, I do not accept Mr
Carnwath’s submission that on this aspect the decision was wrong in principle.
The third in
this line of cases is the important decision of Woolf J (as he then was) in Sosmo
Trust Ltd v Secretary of State for the Environment [1983] JPL 806.
The appellants put forward three schemes for the development of a site which
would otherwise have remained derelict. Two were shown to produce an uneconomic
return; the third was for a six-storey office development which would produce a
profit. The planning authority opposed the third scheme on the ground that it
was contrary to its planning policy for the area and refused permission. An
appeal to an inspector on behalf of the Secretary of State was dismissed. He
had accepted that the site would remain derelict if the rejection of the third
alternative was upheld, but he dismissed the appeal, saying:
However as a
generality, the financial aspects of a development are not a relevant planning
consideration. A planning permission runs with the land and in my opinion it
would not be appropriate for the grant of permission to be dependent on the
resources or intentions of a particular developer to carry out a development. .
. . I am of the opinion that there are no compelling reasons in favour of
allowing the appeal proposal contrary to the office policy of the district
plan.
The developers
successfully applied to the High Court to quash the inspector’s decision. Woolf
J pointed out at p 807 that
what could be
significant was not the financial viability or lack of financial viability of a
particular project but the consequences of that financial viability or lack of
financial viability.
He went on to
follow a passage from the judgment of Forbes J in Sovmots Investments Ltd
v Secretary of State for the Environment [1977] 1 QB 411 at p 424 in
which references to the minister equally apply to planning authorities:
. . . 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 the Minister to decide whether or not in any
particular instance cost is in fact a relevant consideration.
Adopting that
passage and quashing the inspector’s decision, Woolf J held that
no Secretary
of State could reasonably come to the conclusion that the economic factor was
not relevant. He . . . could, however, subject to that, have decided what
weight was to be attached to it.
For the
reasons already stated, I am in full agreement with that approach, and in my
view it determines the first issue of this appeal. Mr Boydell raised an
additional point in submitting that the present case was in any event
distinguishable from the Hall & Co Ltd and Bradford cases,
because there was no question of the imposition of any condition by the planning
authority, but a situation in which the developer, ROH, was only too willing to
erect the office accommodation in order to provide the necessary balance of
finance required for the development of the Opera House, and willing to
conclude a section 52 agreement to that effect, as the council required. He
submitted that the powers of a planning authority under such an agreement were
wider than under section 29(1) and that the contrary view indicated by Lloyd LJ
in an obiter passage in Bradford at p 202M was incorrect and
should not be followed. While it is equally unnecessary to express any
concluded view on this question in the present case, I would certainly not
accept that submission as a general proposition. Section 52 agreements
undoubtedly facilitate the formulation of qualified planning permissions in
comparison with the imposition of express conditions, and no doubt they also
simplify the procedural aspects of the planning process in many ways. They have
the advantages of the flexibility of a negotiable agreement in contrast to a
process of unilateral imposition; and they are therefore no doubt far less
vulnerable to the risk of successful appeals or applications for judicial
review, which is to be welcomed. But if a particular condition would be illegal
— on the ground of manifest unreasonableness or otherwise — if it were imposed
upon an applicant for planning permission, then it cannot acquire validity if
it is embodied in a section 52 agreement, whether at the instance of the
applicant himself or not. That, in effect, was equally the conclusion of Lloyd
LJ in the Bradford case.
That leaves Mr
Carnwath’s extreme hypothetical illustration of the undesirable office block in
Victoria which is claimed to be necessary to generate the finance for a
desirable development in Covent Garden. A combination of this nature would be
unlikely to be properly entertained as a single planning application or as an
application for one composite development, as in the present case. I therefore
say no more about it save that all such cases would, in my view, involve
considerations of fact and degree rather than of principle.
Having already
borrowed so much from the judgment of Webster J, it is only right to quote the
passage in which he expressed his conclusion on this issue at p 30D of the
transcript, with which I entirely agree:
It seems to
me to be quite beyond doubt [but] that the fact that the finances made
available from the commercial development would enable the improvements to be
carried out was capable of being a material consideration, that is to say, that
it was a consideration which related to the use or development of the land,
that it related to a planning purpose and to the character of the use of the
land, namely the improvements to the Royal Opera House which I have already
described, particularly as the proposed commercial development was on the same
site as the Royal Opera House and as the commercial development and the
proposed improvements to the Royal Opera House all formed part of one proposal.
Issue II: was
the council entitled to conclude that but for the office accommodation the
development of the Opera House would not proceed?
In the same
way as the judge, I can deal with this issue more shortly. On the basis of the
decision of this court in Prest v Secretary of State for Wales
(1982) 81 LGR 193, Mr Carnwath submitted that the planning and development
committee had been under a positive duty to investigate all aspects relevant to
its determination before reaching a conclusion. That was a case concerning the
confirmation of a compulsory purchase order, not an application for planning
permission, in which the relevant financial aspect — the relative land cost of
alternative sites — had not been considered at all. Watkins LJ said at p 211A
that the Secretary of State had not even given it ‘a passing thought’. That is
miles away from the present case. As will be remembered, before its final
resolution on June 30 1987, the planning and development committee had resolved
on February 3 that it
wishes to be
absolutely convinced that the commercial development of the site is the only
way of achieving the Royal Opera House improvements. Accordingly, while
welcoming the application in principle, the Committee would wish there to be an
opportunity for future discussion on this crucial aspect.
At p 34F of
the transcript the judge rightly said that if a planning committee:
makes or has
made no enquiries its decision may in certain circumstances be illegal on the
ground of irrationality if it was made in the absence of information without
which no reasonable planning authority would have granted permission.
The
appellants’ contention on this issue had therefore been correctly formulated in
their skeleton argument that:
. . . the
information put before the Committee . . . was not such as to enable it
rationally to conclude that the proposal was the only way of achieving the
Opera House improvements.
That
submission turns on the facts. The history has been set out in the lengthy
extract from the judgment below, and I have already quoted the committee’s
resolution on February 3 1987 that they wished to be ‘absolutely convinced’
about the need to include the office accommodation which they described as the
‘crucial aspect’. Further investigations and discussions then followed until
the meeting on June 30 1987 when the committee resolved to accept the proposal
subject to the conditions already mentioned. On behalf of the applicants Mr
Carnwath criticised that decision on three grounds. First, he submitted that
the committee could not have been satisfied that further funds could not have
been raised in other ways, for instance by lotteries which might soon be
legalised by legislation, as in other countries. Second, he said that no
account appears to have been taken of a forecast in a report prepared for the
association that the level of commercial rents was likely to rise so as to
reduce the financial deficit from about £ 22m to about £ 10m. As a separate
point Mr Carnwath also relied on the fact that by April 1988, some nine months after
the committee’s decision, this forecast was proved to have been correct.
Finally, he submitted that the information before the committee had been
insufficient to entitle it rationally to reach the conclusion embodied in the
resolution which has already been set out. In support of this submission he
relied on the contents of the further and supplementary reports by the acting
director of planning and transportation which had been placed before the
committee for the purposes of the meeting on June 30 and on the minutes of that
meeting.
In my view
there is no substance in these contentions. On February 16 1987 the Minister
for the Arts had again made it clear in the House of Commons that no further
financial assistance would be available from government sources, and there was
ample material before the committee, both before and after its preliminary
decision in February 1987, that there was every probability of a deficit which
could not be bridged by any appeal or other foreseeable means. As regards the size
of the deficit, the material placed before the committee showed that careful
consideration had been given to six options of mixed uses, but that even the
most favourable of these still left a
describe the committee’s acceptance of a solution involving the most favourable
of these options as manifestly unreasonable.
As regards Mr
Carnwath’s third point, this is not borne out by the evidence. As one knows,
the bare written record of the minutes of a meeting and of the papers placed
before it often fail to provide a fair impression of the matters which informed
the minds of the participants before they reached their decision. In the
present case the reality was described in affidavits sworn by two officers of
the council and by a chartered surveyor which show the degree of discussion,
questioning and consideration which took place before the outcome of the
meeting on June 30. To suggest that the conclusion which was then reached was
irrational or manifestly unreasonable, or based on information which was, or
should reasonably have been regarded as, inadequate, is in my view untenable.
Conclusion
It follows
that I agree with the conclusions of Webster J and that I have no doubt that
this appeal must be dismissed. It remains to mention, for the sake of
completeness, that in referring to events which have occurred since June 30
1987 Mr Carnwath stressed, as already briefly mentioned, that by April of this
year commercial rents had in fact risen to a level which confirmed the earlier
forecast, that on this basis the unbridged deficit would be reduced to £ 10m,
and that this was now admitted on behalf of the council. Pointing out that the
formal planning permissions and listing consents were still in draft, he said
that an opportunity, and perhaps a duty, to reconsider remained. But this is
not an aspect which we can consider on this appeal. As has been said, keeping
track of changing circumstances in planning situations is like trying to hit a
moving target in the dark. Many variables must inevitably enter into any
assessment, and the rises in interest and mortgage rates during this summer may
well have falsified estimates made as recently as last April. Moreover, the
desirability or finality is no doubt also an important factor. We cannot enter
into considerations of this nature. We can only say that if it is considered by
the council that the circumstances warrant some modification of the development
as presently resolved, then there is clearly no legal impediment in the way.
NICHOLLS LJ:
On June 30 1987 the planning and development
committee of the Westminster City Council decided in principle to grant
planning permission for a scheme of development proposed by the Royal Opera
House Covent Garden Ltd. The scheme involved improvements and alterations to
the Opera House itself and also a substantial element of office development on
adjacent land. The decision of the committee was adopted by the council on July
29 1987. The Covent Garden Community Association are seeking to impeach that
decision. They object to the office element. They say that the decision was
invalid in law.
The primary
line of attack of the association is that when deciding to approve the office
element in the overall scheme the committee took into account a matter it ought
not to have taken into account. It exercised a statutory power for a purpose
for which it was not intended. The office element was approved by the committee
as a source of finance for the other works. Permitting the financially
profitable office development would make it possible for the Royal Opera House
to proceed with much-needed alterations and improvements to the Opera House.
Otherwise the Royal Opera House could not afford to go ahead. The association’s
case is that that was not a proper reason for granting permission for a
commercial development which would otherwise have been refused. Mr Carnwath
crystallised the association’s submission thus: if permission for development
A would be refused on its individual planning merits, the fact that the profits
of that development are to be used to finance development B is not a sufficient
reason for granting permission for development A. The financial purpose is
extraneous to a proper consideration of the planning merits of development A.
That a
planning authority may properly take into account as a material consideration
within section 29 of the Town and Country Planning Act 1971, the practical consequences
likely to follow if permission for a particular development is refused seems to
me to be self-evident. For example, take a run-down site, littered with
derelict buildings. The soil is contaminated from previous industrial use.
Preparation of the site for development will be expensive. The planning
authority is anxious that such an eyesore shall be removed, and housing is the
preferred use. An application is submitted for development with high-density
housing. In my view, it is clear that in considering this application the
planning authority is entitled to take into account, first, that a lower
density of housing will not be commercially viable, having regard to the heavy
cost of site clearance, so that, second, the probable consequence of refusing
to permit the development sought will be the absence of any development for the
foreseeable future, in which event the eyesore will remain.
Likewise if
what is sought is a mixed development, mostly of houses but including some
offices. The planning authority prefers no offices on the particular site. But
I can see no reason, in logic or in policy, why the planning authority should
not be able to opt for what it considers, in planning terms, to be the best
development obtainable in practice: some offices, thus making a development of
the rest of the site for housing purposes commercially possible. The authority
can prefer this to no development at all. I cannot accept that granting
permission for offices in such a case would be an exercise of the statutory
power for a purpose for which it cannot have been intended. Of course, it is
for the planning authority to determine how much importance, or weight, to
attach to the various factors such as the likelihood of there being no
development if the application is refused, the likely consequences in the
neighbourhood if there is no development, and the likely consequences if a
mixed development is permitted.
Mr Carnwath’s
strongest point was that if what I have said above is correct one is on a
slippery slope on which there is no stopping short of a conclusion which would
embrace and accept as valid other cases from which one instinctively recoils.
If the purpose of granting permission for development A is to finance
development B, that purpose can equally exist and be fulfilled if the two
developments have no physical contiguity at all. They can be miles apart. A
hypothetical example mentioned in argument was of the Royal Opera House owning
land elsewhere in London, in Victoria for instance. Could permission for a
commercial development of land in Victoria have been properly granted solely to
finance alteration to the Opera House situated in Covent Garden? Mr Sullivan, for his part, frankly accepted
that he could discern no legal principle which distinguished between (a) what
happens within one building, (b) what happens on two adjoining sites and (c)
what happens on two sites which are miles away from each other.
Other examples
spring to mind. Could permission for an otherwise unacceptable development in
Victoria, or elsewhere in London, or yet further afield, properly be granted
because the site owner is prepared to give a substantial sum towards the cost
of the Opera House works? If it could,
could the local planning authority impose a condition to that effect when
granting permission?
I am not
persuaded by this reductio ad absurdum argument. Circumstances vary so
widely that it may be unsatisfactory and unwise to attempt to state a formula
which is intended to provide a definitive answer in all types of case. All that
need be said to decide this appeal is that the sites of the commercial
development, approved in principle, are sufficiently close to the Opera House
for it to have been proper for the local planning authority to treat the
proposed development of the office sites, in Russell Street and elsewhere, and
the proposed improvements to the Opera House as forming part of one composite
development project. As such it was open to the planning authority to balance
the pros and cons of the various features of the scheme. It was open to the
authority to treat the consequence, for the Opera House works, of granting or
withholding permission for offices as a material consideration in considering
the part of the application which related to offices.
For this
reason I, too, would reject the association’s primary ground of appeal. As to
their second ground of appeal, I have nothing to add to the reasons, with which
I agree, given by Kerr LJ.
I also would
dismiss this appeal.
STAUGHTON
LJ: I agree that this appeal must be dismissed. On
the first issue, the major difficulty seems to me to lie in drawing a line
between obvious extremes. It may be sufficient for the decision in this case to
say on which side of the line it lies. But in my view the court ought, if it
can, to give some indication where the line should be drawn. In Erewhon
Samuel Butler wrote
Extremes are
alone logical, but they are always absurd; the mean is illogical, but an
illogical mean is better than the sheer absurdity of an extreme.
Those
propositions were attributed to the School of Unreasoning. But they appear to
me to demonstrate both the difficulty and also the necessity of drawing a line.
The question
here is whether a planning authority can permit undesirable development A as a
means of securing desirable development B. It is the same question, whether it
comes in the shape of a ‘material consideration’ within section 29(1) of the
Town and Country Planning Act 1971, or of conditions which a planning authority
may lawfully impose on the grant of planning permission. One extreme is the
example given by Kerr LJ of a derelict listed building which the planning
authority wishes to see restored. In principle it would be wholly proper to
consider partial office development A, if that were the only means by which
restoration and partial residential occupation B could be made financially
viable.
The other
extreme arises from the axiom of Lloyd LJ that planning permission cannot be
bought and sold. Suppose that a developer wished to erect an office building at
one end of the town A, and offered to build a swimming-pool at the other end B.
It would in my view be wrong for the planning authority to regard the
swimming-pool as a material consideration or to impose a condition that it
should be built. That case seems to me little different from the developer who
offers the planning authority a cheque so that it can build the swimming-pool
for itself — provided he has permission for his office development. The case of
Brighton Borough Council v Secretary of State for the Environment
(1978) 39 P&CR 46 may have come close to infringing that principle. But I
do not say that, on its own facts, it was wrongly decided.
Where then is
the line to be drawn between those extremes?
In my judgment, the answer lies in the speech of Viscount Dilhorne in Newbury
District Council v Secretary of State for the Environment [1981] AC
578 at p 599, which Kerr LJ has quoted. Conditions imposed must ‘fairly and
reasonably relate to the
they are to be material.
In the present
case, the improvement of the Royal Opera House, B, is a development which the
Westminster City Council considers to be desirable, for valid planning reasons.
The building of office premises in close proximity, A, is necessary if
development B is to occur. It can fairly and reasonably be said to relate to
the proposed development which ought to be permitted. The whole is, to quote
the words of Kerr LJ, a composite or related development. The offices are not
ulterior or extraneous; they are part of the whole.
On the second
issue, there is nothing which I would add to the judgment of Kerr LJ.
Appeal
dismissed, with costs in favour of Westminster City Council; no order as to
costs in respect of Royal Opera House Covent Garden Ltd; application for leave
to appeal to House of Lords refused. A petition by Covent Garden Community
Association to appeal to the House of Lords was dismissed by the Appeal
Committee on December 19 1988.
