Alderney Estates Ltd. v Secretary of State for Transport, Local Government and the Regions & Anor

1. LORD JUSTICE CARNWATH: The proposal is for residential development of a site of 15.5 hectares in Lower Warton in Lancashire. The borough council failed to determine the application and there was an appeal to the Secretary of State. The inspector recommended the grant of planning permission, following a five-day inquiry. The Secretary of State disagreed and dismissed the appeal. That was in March 2002. A challenge to his decision came on before Judge Rich in September 2002. He decided that the Secretary of State's decision was flawed and should be redetermined, and he remitted the matter for re-determination in accordance with his judgment.

2. Before us, Mr Coppel for the Secretary of State accepts that the decision was flawed and that the appeal should be redetermined, but he is seeking to challenge part of the judge's reasoning. So technically I think this is an appeal against that part of the judge's order which said that the matter was to be remitted "for consideration in the light of the judgment". Mr Coppel wants us to give further and different guidance, and to remit the appeal to be redetermined in accordance with that guidance.

3. The judge gave permission to appeal, because he understood there to be an important point as to the proper construction of Planning Policy Guidance Note No 3 ("PPG3"), which was issued in 2000. That policy note represented an important change of emphasis in the policy as previously applied. As the preamble to the PPG says:

"It records the Government's switch from a policy of 'predict and provide' to a policy of 'plan, monitor and manage' and the national target of securing, by 2008, that 60% of additional housing should be provided on previously-developed land."

In shorthand, the general thrust is that increased priority should be given to brownfield over greenfield sites.

4. The issue in this case arose in this way. The appeal site, which is a greenfield site, was allocated for development in the adopted local plan and was confirmed as such in the revised draft local plan, which was currently under consideration at the time of the appeal. It is allocated for development within the plan period up to 2006. Not surprisingly in those circumstances, the Secretary of State agreed with the inspector that the proposal drew "extremely strong support from both the extant and the emerging local plans". The difference between them related to the application of PPG3. The main parts of that guidance note which are relevant by way of background are: paras 24-27 which deal with "Assessing Urban Housing Capacity" and encourage authorities to carry out urban capacity housing studies to identify opportunities for brownfield development; paras 30-31 dealing with "Identifying Areas and Sites" and giving priority to previously-developed sites in the preparation of local plans; paras 32-34, "Allocating and Releasing Local Ground for Development"; paras 35-36, "Windfalls", dealing with allowances to be made for sites which were not previously identified, for example, following a local factory closure or something of the like; and finally paras 37-39 "Determining Planning Applications".

5. The inspector considered the effect of PPG3, but he decided that the presumption in favour of brownfield sites could not be regarded as determinative in the case before him, because of what he saw as an urgent need for the release of land in the short term. He noted the purpose of PPG3:

"As I see it, the most important element of PPG3 is the move to secure the use of more brownfield and previously developed urban land for residential purposes ...."

He also commented on the possibility of windfall sites:

"Incidentally, I have not afforded any weight to the fact the Council has made not allowance for future, unidentified, large, brownfield, windfall sites ie sites over 1 hectare. In essence, as the remaining period for the emerging LP to run is a mere 5-years all the large sites should be identified. As I understand it, it is only where a longer term than 5-years remains that it may be appropriate to make an allowance for large, unidentified windfall sites beyond the first 5-years of the plan. PPG3 is quite clear that there should always be 5-years supply readily identifiable and capable of being developed, and this is supported by the very recent Government advice given in 'Planning to Deliver".

Following that, he gave his conclusions as follows:

"140. What I believe is implicit in Government guidance is that regular reviews of the housing land position, possibly every year, should be undertaken and this will facilitate the introduction of any large brownfield windfall sites and the 'protection' of the least sustainable greenfield allocations. This is what should happen if the school site in Lytham does come forward for housing within the next 5-years. Incidentally, I think the uncertainty and timescale factors preclude it being included at this stage where we have only 5-years of the emerging LP to run.

141. Having said this, I believe the LP process in Fylde has reached such a stage that, with only 5-years of the Plan remaining, the completion of dwellings on those sites identified within the emerging LP are incapable of delivering at the rate required to meet the SP target of 5,200. In particular, the completion rate required to meet the outstanding figure would require a rate of build above that achieved whether averaged over the previous 10, 5 or 3 year periods.

.... ....

143. My conclusion is, therefore, that irrespective of the requirements and obligations of PPG3 there is no time within the remaining LP period to identify and bring forward additional previously developed and brownfield sites through any structured process. Moreover, even allowing the release of all greenfield sites, including the appeal site, I anticipate there being a significant undershoot on the SP housing requirement. Thus, even should additional large windfall brownfield sites come forward in the next 1-5 years, I would doubt that this would 'save' any allocated greenfield sites, but if this was possible it would be those that are constrained by infrastructure difficulty or other factors."

His overall conclusion on this issue was at paragraph 176, where he said:

"In respect of the policy framework, the proposals for residential development and the eastern section of the Warton Bypass accord extremely closely with every item of published policy. As for the appropriateness of the allocation within the context of the revised PPG 3, I am convinced that to produce an out-turn even approaching the SP housing requirement figure necessitates the urgent release of the appeal site."

6. The Secretary of State did not agree with that conclusion. He considered that the local plan was strongly in the site's favour. He also expressed concern, which he shared with the inspector, about the inadequacy of the borough council's own assessment of housing capacity and suggested that a more rigorous study might have turned up other brownfield sites. The crucial parts of his findings, however, come when dealing with the shortfall against the development plan:

"11. The Secretary of State does not attach as much weight as the Inspector to the possibility of some degree of shortfall in housing land availability, not least because of the likelihood of windfall sites emerging to a extent greater than anticipated by Fylde Borough Council. He considers that there is considerable scope for this potential shortfall to be addressed by further studies and plan review, informed by an active monitoring strategy as indicated in PPG3 (paragraph 34) to enable the Council to maintain a reasonable flow of housing land. The Secretary of State is far more concerned than the Inspector about Fylde Borough Council's lack of consideration of potential windfalls over 1 hectare as, should they emerge, they might make a substantial difference to the scope for brownfield redevelopment in Fylde.

12. In determining this appeal, the Secretary of State is guided by, and places much weight upon, the advice in PPG3 (paragraph 32) that in determining the order in which sites for residential use should be developed, the presumption will be that previously-developed sites will be developed before greenfield sites. The Secretary of State notes the draft Local Plan allocates a number of previously developed sites in the Borough of Fylde for housing development. He considers that your client has not demonstrated at all satisfactorily that there is justification for the use of the appeal site, comprising land that has not previously been developed, for the development of between 243 and 445 dwellings in advance of the development of previously developed sites in Fylde. He considers therefore that the appeal proposals are in fundamental conflict with the advice in PPG3 (paragraph 32), which establishes a presumption that previously-developed sites (or buildings for re-use or conversion) should be developed before greenfield sites. He considers also that the exceptions in PPG3 (paragraph 32) do not apply as there is no conclusive evidence to suggest that the previously-developed sites perform so poorly as to preclude their use for housing before a greenfield site.

13. In addition, as stated above, the Secretary of State has taken account of the fact that the Inspector could not be sure whether a more rigorous Urban Capacity Study would have thrown up other brownfield windfall and/or previously developed land or produced a higher figure for urban intensification (IR 146). The Secretary of State accepts that the evidence presented to the inquiry suggests a potential shortfall in meeting the Structure Plan housing requirement. However, the Secretary of State considers that in the circumstances, given the conflict with advice in PPG3 (paragraph 32) and the fact that a more rigorous Urban Capacity Study embracing all settlements has not been carried out by the Council, more scope for brownfield redevelopment may yet emerge and there is no urgency in releasing this particular site for residential development, at this time."

7. Before turning to the judgment below, I ought to refer in a little more detail to the relevant paragraphs of PPG3. The only ones to which I need refer for present purposes are the following:

"32. In determining the order in which sites identified in accordance with the criteria set out in paragraphs 30 and 31 should be developed, the presumption will be that previously-developed sites (or buildings for re-use or conversion) should be developed before greenfield sites. The exception to this principle will be where previously-developed sites perform so poorly in relation to the criteria listed in paragraph 31 as to preclude their use for housing (within the relevant plan period or phase) before a particular greenfield site.

.... .... ....

34. Sufficient sites should be shown on the plan's proposals map to accommodate at least the first five years (or the first two phases) of housing development proposed in the plan. Site allocations should be reviewed and updated as the plan is reviewed and rolled forward at least every five years. Local planning authorities should monitor closely the uptake of both previously-developed and greenfield sites and should be prepared to alter or revise their plan policies in the light of that monitoring. However, it is essential that the operation of the development process is not prejudiced by unreal expectations of the developability of particular sites nor by planning authorities seeking to prioritise developments in an arbitrary manner.

.... .... ....

38. In considering planning applications for housing development in the interim, before development plans can be reviewed, local authorities should have regard to the policy contained in this PPG as material considerations which may supersede the policies in their plan (see paragraph 54 of PPG1). Where the planning application relates to development of a greenfield site allocated for housing in an adopted local plan or UDP, it should be assessed, and a decision made on the application, in the light of the policies set out in this guidance. Comparison with available previously-developed sites against the criteria in paragraph 31 and in the light of the presumption in paragraph 32 and the policies on design, layout and efficient use of land, including car parking, will be particularly relevant. Where a proposed housing development involves the use of a previously-developed site or the conversion of existing buildings, the proposal may need to be amended in accordance with this guidance, for example, in relation to design, layout, density and parking."

The discussion before the learned judge, and before us, has turned on the extent to which the presumption that one finds in paragraph 32 is to be read in some way as subject to what is said in paragraph 34, and particularly the last sentence.

8. The judge, as I said, held that the decision should be quashed. The principal reasons for that, which are not challenged, are that the Secretary of State had given no evidence, and had given inadequate reasons, for holding that there was a likelihood, or indeed even a possibility of, further sites coming forward, against the background of the inspector's clear conclusion there was no realistic prospect of that during the plan period. As I say, that is not a matter of contention and it is accepted that the Secretary of State would have to reconsider that aspect of his decision.

9. However, the Secretary of State takes issue with what the judge said about the relationship between paragraphs 32 and 34. One needs to start with paragraph 21 of the judgment, where the judge was commenting on the paragraphs quoted above. In relation to the presumption in paragraph 32, he said this:

"That presumption is that such sites 'should be developed before greenfield sites'. But, having regard to the way the presumption is applied by paragraph 38 and the specific words of paragraph 34 warning against prejudice to a development process by unreal expectations or arbitrary prioritisation, it would, in my judgment, be an impossible construction of paragraph 32 if it required the prohibition of any greenfield development as long as any brownfield sites capable of development remain to be developed. The presumption must be read as being subject to the objective to provide sufficient housing land in accordance with the provisions of the approved development plan so far as applicable."

10. He returned to that issue later in his judgment. At paragraph 43 he set out paragraph 12 of the Secretary of State's decision and in particular the sentence where the Secretary of State said that "the appeal proposals are in fundamental conflict with the advice in PPG3 (paragraph 32)". The Secretary of State there said that the exceptions in paragraph 32 did not apply because there was no "conclusive evidence to suggest that previously-developed sites perform so poorly as to preclude their use for housing before a greenfield site." The judge referred to that specific exception, which is indeed stated in paragraph 32, and he continued as follows:

"The finding of fundamental conflict means, therefore, that the Secretary of State construes paragraph 32 as requiring refusal of planning permission for a greenfield site unless the applicant satisfies the decision maker that there is no brownfield site capable of development priority. This, for the reasons which I gave in my exposition of the terms of the PPG, cannot be the true meaning of paragraph 32, which, apart from the indicia in the PPG to which I referred, has to be read subject to paragraph 34. This requires sufficient sites to be shown for at least five years. Thus, where brownfield sites do not provide such supply, a sufficiency of greenfield sites should be identified. If they are not so identified, and supply is not then monitored as that paragraph envisages, the operation of the development process will be prejudiced in the manner that paragraph 34 warned against. Such misinterpretation or misapplication of paragraph 32 is therefore, in my judgment, a further error of law disclosed by the decision letter in thus having regard to a material consideration."

The judge went on to consider whether that error, as he saw it, was mitigated or modified by the following paragraphs of the decision. He said that it was not.

11. The appeal before us is the result of the Secretary of State's anxiety that the meaning of his policy should not be misunderstood. It is, I have to say, a somewhat artificial circumstance in which the issue comes before us. First we are being asked by the Secretary of State to say whether the judge correctly understood his policy. That seems rather odd at first blush, since the Secretary of State should know what his policy is intended to mean. The clearest way for him to show what it means is to apply it to a particular case with adequate reasons, which he failed to do here. However, both parties accept that the court has a role in deciding whether the decision-maker's construction of the policy was a possible construction. Secondly, we are being asked to decide this issue in the abstract. Again, I say the acid test of the policy is how it is applied in a particular factual situation. We do not know what view the Secretary of State would now take if forced to make a properly-reasoned appraisal of the application of his policy to the facts of this case. I bear in mind that the facts are as fully known as they are likely ever to be, given that they were the result of a substantial inquiry and a carefully-reasoned report from the inspector.

12. The issue before us has narrowed in the course of the debate almost to vanishing point. The skeleton argument of Mr Brown, who appeared below for the Secretary of State, took a rather stronger line than has been taken before us by Mr Coppel. In paragraph 4.2.1 of the skeleton argument Mr Brown took issue with the judge's statement that paragraph 32 was to be read subject to paragraph 34. He said this:

"Both paragraphs 32 and 34, as written, are directed at the preparation of development plans. PPG3 gives specific guidance on the approach to be taken in the course of development control when dealing with planning applications which are made at a time when the development plan has not yet been brought up to date with the guidance in paras 29 to 34. In particular, para 38 makes it clear that paragraph 32 is relevant both to plan preparation and to development control decisions. However, there is no comparable advice in relation to para 34. Para 34 is not intended to be relevant at the development control stage; there is nothing in the PPG which requires paragraph 32 to be subordinated or read subject to paragraph 34; nor is there anything which requires the presumption in paragraph 32 to be overriden if the guidance in paragraph 34 has not been met."

13. That appeared to be saying that paragraph 34 has no relevance at all to a planning permission decision. Mr Coppel does not take that rather rigid line. Put at its simplest, he says that paragraph 34 is a relevant factor but not "a trumping factor". In my view he is clearly correct to make that concession, if concession it be. Paragraph 34, which deals with the supply of housing, ends with the sentence upon which the judge placed weight, talking about the need for the "operation of the development process" not to be prejudiced by unreal expectations or arbitrary priorities. The operation of the development process, it seems to me, certainly includes, not only the allocation of sites, but also the release of sites for development. When one comes to paragraph 38, it does indeed say that comparison with the presumption in paragraph 32 is "particularly relevant", but it does not exclude other factors. So the Secretary of State understandably is putting weight on the new approach, as outlined in paragraph 32, but is certainly not, as I read it, excluding paragraph 34 as a relevant factor. That much is now common ground.

14. Mr Sauvain, who appears for the developer, added a further complication -- and by that I mean no criticism -- in that he said the Secretary of State's reading of the judge's view of the Secretary of State's policy was indeed a misunderstanding. In his skeleton he said this:

"At no stage did the Learned Judge hold, as is claimed by the [Secretary of State] that local planning authorities should not refuse planning permission on greenfield sites where they cannot identify a 5 year supply of housing land .... It is .... agreed that, put in this way, such would not be a correct interpretation of PG3. PPG3 does, however, require Development Plan needs to be met and, where it is apparent that greenfield land must be released in order to meet those needs, paragraph 32 of PPG3 should not be used arbitrarily as a means of prioritising brownfield land over Greenfield land where the result would be prejudice of the development process and to meeting housing need."

The last part of that statement is intended as a reference to the last sentence of paragraph 34.

15. Mr Coppel accepts the last sentence of that statement, in particular the statement that the PPG does require development plan needs to be met, as well as the words that follow. However, he asked us to add a further qualification, defining the use to be made of paragraph 34. At that stage in the argument, there was some negotiation, with the assistance of the court, as to what the wording of the addition should be. In the end, Mr Sauvain agreed that, to his statement, there should be added the following sentence: "Paragraph 34 is a relevant factor against which the presumption in paragraph 32 must be balanced." Mr Coppel was happy with that, if there was substituted the word "may" for the word "must".

16. I fear that at this point we were being asked to go beyond the proper role of the Court of Appeal, which is not to negotiate the terms of government policy. As I see it, Mr Sauvain's formulation, which treats paragraph 32 as a factor which "must be brought into the balance", implicitly recognises, as is implicit in all administrative decisions, that the weight to be given to the particular consideration is a matter for the decision-maker. So it must be brought into the equation but it may be that, in all the circumstances of the case, either it has little weight or that it is overridden by other factors. So in my view, there is really nothing left of this appeal which the court can or should seek further to resolve.

17. The important point which the Secretary of State was anxious to establish was that the judge's use of the word "subject to", in considering the relationship of paragraph 32 to 34, should not be interpreted in the way the Secretary of State fears it might be. I hope that what I have said is sufficient to remove that fear. I am not in any event convinced that it was the correct interpretation of the judge's decision.

18. The Secretary of State has agreed to bear the respondent's costs of this appeal in any event. Accordingly, in my view, it is not necessary for us to do more than say that the matter be remitted for determination and consideration in the light of the judgment below as clarified by this judgment. Subject to that, I would make no order other than that the respondent's costs be paid by the Secretary of State.

19. LORD JUSTICE BUXTON: I agree this appeal should be disposed in the way indicated by my Lord and for the reasons that he gives. There is nothing I wish to add.

20. LORD JUSTICE SIMON BROWN: I too agree.

ORDER: The judge's order that the matter be remitted for determination and consideration in the light of his judgment should be replaced with a requirement for it to be considered in the light of the judgment below as clarified by this judgment. The respondent's costs, agreed at £15,000, be paid by the Secretary of State.

(Order does not form part of the approved judgment)