Goodman & Anor, R (on the application of) v Lewisham

This appeal concerns an application by the interested party, the Big Yellow Property Company Limited, to construct a storage and distribution facility within the area of the respondent local authority [“Lewisham”]. The facility will provide “self-storage” space for business and private customers, who will have 24-hour access to the site. The applicants, now appellants, are residents near the site, whose property will in their view be adversely affected by the development. Lewisham granted planning permission for the development on 15 February 2002. The applicants’ complaint is not, or at least is not in these proceedings, that it was not otherwise open to Lewisham to take that decision. They complain rather that the decision was ultra vires because Lewisham had not, before taking it, caused to be undertaken the necessary environmental assessment under the Town and Country Planning (Environmental Impact etc) Regulations 1999 [the 1999 Regulations], which Regulations transpose into domestic law the requirements of Council Directive 85/337/EEC [Directive 85/337].

The applicants failed in judicial review proceedings before Sir Richard Tucker, and now appeal to this court with that judge’s leave. In my judgement, Lewisham reached its decision to grant planning permission on the basis of a mistaken approach to the 1999 Regulations, and therefore that decision cannot stand. In order to explain that conclusion it is necessary to set out the legal framework affecting the 1999 Regulations before indicating how that framework applies to the facts of this case.

A recital to Directive 85/337 sets out the basic principle:

“development consent for public and private projects which are likely to have significant effects on the environment should be granted only after prior assessment of the likely significant environmental effects of these projects has been carried out…this assessment must be conducted on the basis of the appropriate information supplied by the developer”

Annex II to the Directive sets out a broad list of types of project in respect of which Member States are required by Article 4(2)(b) of the Directive to determine, through “thresholds or criteria” set by them, whether a particular project should be subjected to a formal environmental assessment.

The United Kingdom has implemented that requirement by providing, in the 1999 Regulations, for two categories of development that potentially attract an environmental assessment. This case is concerned with the second of these, “Schedule 2 development”. That is development of a description that is mentioned in the table in schedule 2 to the Regulations, and either the development is to be carried out in an environmentally sensitive area [not this case] or

“any applicable threshold or criterion in the corresponding part of Column 2 of that table is respectively exceeded or met in relation to that development.”

The table in schedule 2 largely tracks the list of types of development provided in Directive 85/337. Most of the categories relate to agricultural or industrial development. We are concerned with development as set out in part 10 of the Schedule, the general heading of which is “infrastructure projects”. Sub-categories (a) and (b) of such development are:

“(a)

Industrial estate development projects

(b)

Urban development projects, including the construction of shopping centres and car parks, sports stadiums, leisure centres and multiplex cinemas”

The threshold adopted by the United Kingdom for determining whether particular developments falling within those categories come within the reach of the Regulations is that such developments fall under schedule 2 if the area of the development exceeds 0.5 hectare.

The procedure to be followed by a local authority in addressing applications for such development turns on the further concept introduced by the Regulations of an “EIA development”. So far as we are concerned, that is

“Schedule 2 development likely to have significant effects on the environment by virtue of factors such as its nature, size or location”

Where an application is made for EIA development, permission cannot be granted for that development unless the planning authority take into account, and so state in their grant, the “environmental information” relevant to the development [Regulation 3(2)]. The environmental information so required is a statement in accordance with Schedule 4 to the Regulations that either is provided by the developer or is required of him by the planning authority. That latter requirement comes about in the following way. By Regulation 7, where the authority receives an application that “appears” to it to be an application for Schedule 2 development, and is not accompanied by an environmental statement from the developer, the authority must already have, or must within three weeks adopt, a “screening opinion” as to whether the development is an EIA development. If the authority concludes that the development is an EIA development, the inhibitions imposed by Regulation 3(2) on the grant of planning permission come into effect; if the authority does not so conclude, those inhibitions do not apply, and the application is treated like any other planning application.

The first question for a planning authority is, therefore, to determine whether the application before it is a “Schedule 2 application”: that is, in terms of the definition set out in §5 above, whether the development falls within the descriptions and limits set out in Schedule 2. Although the application becomes a Schedule 2 application by decision of the authority; and does not thereafter become an application for EIA development unless the authority further so decides; the authority cannot avoid the implications of the application being for EIA development simply by not taking the preliminary decisions at all. That is clear from the observations of Lord Hoffmann (albeit in relation to the obligations of the Secretary of State under an earlier version of the Regulations, the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988) in Berkeley v Secretary of State for the Environment [2001] 2 AC 603 at pp 614G-615A. The authority is bound to enter upon consideration of whether the application is for Schedule 2 development unless it can be said that no reasonable authority could think that to be the case: Berkeley, loc.cit. If the development is found to be a Schedule 2 development, responsibilities of the same order attach to the authority’s consideration of whether it is an EIA development.

In the present case, the only serious contender for a category of Schedule 2 development under which the application might fall is paragraph 10(b) of the Schedule: infrastructure projects that are urban development projects. These are very wide and to some extent obscure expressions, and a good deal of legitimate disagreement will be involved in applying them to the facts of any given case. That emboldened Lewisham to argue, and the judge to agree, that such a determination on the part of the local authority could only be challenged if it were Wednesbury unreasonable. I do not agree. However fact-sensitive such a determination may be, it is not simply a finding of fact, nor of discretionary judgement. Rather, it involves the application of the authority’s understanding of the meaning in law of the expression used in the Regulation. If the authority reaches an understanding of those expressions that is wrong as a matter of law, then the court must correct that error: and in determining the meaning of the statutory expressions the concept of reasonable judgement as embodied in Wednesbury simply has no part to play. That, however, is not the end of the matter. The meaning in law may itself be sufficiently imprecise that in applying it to the facts, as opposed to determining what the meaning was in the first place, a range of different conclusions may be legitimately available. That approach to decision-making was emphasised by Lord Mustill, speaking for the House of Lords, in R v Monopolies Commission ex p South Yorkshire Transport Ltd [1993] 1 WLR 23 at p 32G, when he said that there may be cases where the criterion, upon which in law the decision has to be made,

“may itself be so imprecise that different decision-makers, each acting rationally, might reach differing conclusions when applying it to the facts of a given case. In such a case the court is entitled to substitute its own opinion for that of the person to whom the decision has been entrusted only if the decision is so aberrant that it cannot be classed as rational.”

That is the decision as to whether the development is a Schedule 2 development. If the authority concludes that it is such, it then has to go on and decide whether that Schedule 2 development is also an EIA development, by determining whether it is likely to have significant effects on the environment by virtue of factors such as it nature, size or location. That is an enquiry of a nature to which the Wednesbury principle does apply, and I understand Sullivan J to have so held in R(Malster) v Ipswich BC [2002] PLCR 251[61].

The application was for a development of more than 0.5 hectare, and was not accompanied by an environmental statement. Lewisham was therefore obliged, under Regulation 7 understood as explained in §7 above, to determine whether the application was a Schedule 2 application. That issue was raised with Lewisham by one of the applicants. Lewisham’s conclusion was conveyed to the applicant by a letter written by a Miss Sterry on 16 January 2002. She said:

“The Town and Country Planning (Assessment of Environmental Effects) Regulations 1988 (SI No: 1199) identify two separate lists of projects in respect to the requirement for an applicant to produce an Environmental Impact Assessment (EIA). Schedule 1 projects, for which an EIA is mandatory, include an oil refinery, storage of radioactive waste and chemical installations etc. This proposal does not fall within this category. Schedule 2 is for projects that are considered could give rise to significant effects on the environment by virtue of factors such as its nature, size or location. The following activities fall into this category, agriculture, extractive industry, processing of metals, glass making, chemical industry, food industry, textile and paper industries, rubber industry, infrastructure projects and other projects i.e. holiday village, knackers’ yard etc. A storage and distribution use does not fall under this category either.”

When the application was reported to the council, much the same terms were adopted by the officers:

“In relation to the request for an Environmental Impact Assessment (EIA), the 1988 Regulations identify proposals that fall within two schedules. The first schedule identifies uses where an EIA is mandatory. These include proposals such as an oil refinery and other heavily polluting uses. Schedule Two contains proposals that may give rise to a significant impact on the environment. A storage and distribution use, such as this proposal, falls in neither Schedule 1 nor 2.”

The first and somewhat obvious objection to Lewisham’s handling of the application is that the officers referred to the wrong Regulations, the 1988 Regulations having by then been superseded by the 1999 Regulations. In the event, nothing in the case turns on that error, but it was not a good start. Secondly, Mr Maurici argued that Miss Sterry and her colleagues were directing their analysis to the particular development before them, rather than to storage and distribution facilities as a category. The judge appears to have accepted that submission, and to have applied to it the further proposition that he had accepted that Lewisham were constrained only by the Wednesbury principle. He said this, at §§ 28-29 of his judgment:

“28.

Were the defendants unreasonable to conclude that it was not an urban development project? The context from which this expression takes its meaning is under the heading “Infrastructure”. This was an existing urban site and of course it exceeds more than 0.5 hectares in area.

29.

Does its redevelopment constitute an urban development project falling within the broader description of an infrastructure project ? The defendants were entitled to regard it as a single site with a single planning use (B8). The scheme proposed was much smaller and simpler thaen the developments referred to in some of the cases cited to me. There was no suggestion in a duplicate application, of which the Secretary of State was seised, that there was any requirement for EIA.”

The conclusion having been reached that the development was not a Schedule 2 development, the question of whether it was an EIA development, and therefore fell under the special requirements as to consideration of the planning application that are set out in Regulation 3 (see §6 above), did not arise.

The flaw in this approach is that I cannot agree with the construction that Lewisham sought to put upon its own decision. It seems to me entirely plain that Miss Sterry, and the author of the report to council, were deciding and reporting that storage and distribution as a category did not fall within paragraph 10(b). I cannot think that that can be right as a matter of law and, although the point was far from conceded, Mr Maurici’s strenuous attempts to support a different analysis at least indicated the importance of the issue. “Infrastructure project” and “urban development project” are terms of wide ambit, perhaps more easily understood by those versed in planning policy than by mere lawyers, and attracting the observations of Lord Mustill quoted in §8 above. But the examples of urban development projects set out in paragraph 10(b) of the Regulation demonstrate that in this instance “infrastructure” goes wider, indeed far wider, than the normal understanding, as quoted to us from the Shorter Oxford Dictionary, of “the installations and services (power stations, sewers, roads, housing, etc) regarded as the economic foundations of a country”. I am unable to accept that a storage and distribution facility (particularly when, as in the present case, it provides services to business and the community at large, and is not simply a private operation), however large and extensive, can never be reasonably regarded as part of the infrastructure as understood in the Regulations. Nor can I accept the contention of Mr Lindblom QC, in his helpfully succinct submissions on behalf of the interested party, that some assistance can be gained from the fact that storage is specifically referred to in other paragraphs of Schedule 2, but not in paragraph 10 with which we are concerned. The storage there referred to is ancillary to the major operations controlled, of the energy industry. The storage with which we are concerned is a general and free-standing operation that must be assessed on the basis of its own function in the general economy. Indeed, it may well have been the absence of any specific reference to storage in the examples of urban development projects given in paragraph 10(b) that misled Miss Sterry into thinking that any storage function was necessarily excluded from that definition.

I accordingly consider that the view taken by Lewisham of the reach of paragraph 10(b) was outside the range of reasonable responses that was open to that authority. Nor can the decision be saved by an exercise of this court’s discretion based on the reconsideration of the decision undertaken by Lewisham after these proceedings were launched. A strong note of caution in respect of such reconsiderations was sounded by this court in R(Carlton-Conway) v Harrow LBC [2002] EWCA Civ 927 at [27], [2002] JPL 1216, and there is nothing about the present case that compels or permits us to depart from that general guidance. The whole aim and object of the system introduced by Directive 85/337 is that there should be sequential and transparent consideration of the environmental implications of a project; and that decisions whether or not to grant planning permission should be taken by planning authorities in the light either of the information contained in an environmental statement or of the reasons why such a statement is not required. The local authority, when presented with this planning application, did not receive that assistance in proper form. It must now be given the opportunity to re-take the decision whether to grant planning permission in the light of an analysis that accords with the requirements of the Regulations.

I would therefore allow the appeal; quash the grant of planning permission; and order that the application for planning permission be remitted to Lewisham for reconsideration in the light of the requirements of the Regulations as explained in this judgment. In view of the terms of the law controlling such consideration on the part of a planning authority, as set out in §§ 8-9 above, it would not be appropriate for this court now to seek to give further guidance to Lewisham as to the factors that it should take into account when undertaking that reconsideration.

I touch briefly upon a further argument of the appellants, which in view of the conclusion that I have already reached does not affect the outcome of the appeal, but which is of some general importance.

Lewisham, acting under section 101 of the Local Government Act 1972, delegated its functions under the 1999 Regulations to three nominated officers. Miss Sterry was not one of these. The applicants therefore argued that, even if the decision contained in Miss Sterry’s letter had been correct, it was invalid as not having been made in the form that the law required. In response to this argument one of the nominated officers, a Mr Gibney, swore an affidavit in which he explained that he considered each application received by Lewisham in order to decide whether it fell within the 1999 Regulations; had done that in relation to the present application, and concluded that it fell outside the Regulations; and when the issue was thereafter raised by the applicant had revisited the issue with Miss Sterry, who was by then handling the application, and advised her before she wrote her letter of 16 January 2002.

It was not suggested that Mr Gibney’s account was anything other than truthful. It demonstrates that it was Mr Gibney, not Miss Sterry, who was the effective decision-maker. The applicants’ objection therefore fails. It must be added, however, that Lewisham’s procedures for dealing with these issues were far from satisfactory. No note was kept of Mr Gibney’s decision, nor of the reasoning on which it was based; and while as I have said I wholly accept his reconstruction of what was done, decisions of such importance should be properly recorded. That is not least so that the elected councillors, who make the decision as to grant of planning permission, should have a readily accessible record of the advice on which those decisions are made. And a system that transparently showed that it was indeed Mr Gibney who took the decision would have prevented the time of the court being taken up with this part of the appeal. It is to be hoped that this case will at least serve to bring home to local authorities generally the importance of the processes of formal and transparent consideration of environmental issues that are required by Directive 85/337.

I agree with the judgment of Buxton L.J. and would only add this.

A planning authority when determining whether a development falls within the description and limits set out in Schedule 2 should heed the exhortation of the European Court in the Kraaijveld Case (C-72/95, 1-5403) where the Court considered the interpretation of annexe II to the Directive

In paragraph 31 the Court said: -

“The wording of the directive indicates that it has a wide scope and a broad purpose. That observation alone should suffice to interpret point 10(e) of Annex II to the directive as encompassing all works for retaining water and preventing floods – and therefore dyke works – even if not all the linguistic versions are so precise.”

In my judgment it would not be a reasonable response to conclude or interpret that the construction of a storage and distribution facility could not be encompassed by “infrastructure project” “urban development projects” under Schedule 2 10(b) of the 1999 Regulations.

Storage and distribution of goods and materials are very much the lifeblood of commerce and trade.

The words “including the construction of shopping centres and car parks, sports stadiums, leisure centres and multiplex cinemas” are not words of limitation but of description which emphasises the wide ambit encompassed by “urban development projects”

I agree with both judgments.