Brown, R (on the application of) v Stobart Air Ltd

Judgment

Lord Justice Sullivan:

Introduction

“Erection Of A Freight Storage And Distribution Facility Including Chilled Cross Dock Facility (Use Class B8) With Associated Offices (Use Class B1), Gatehouse/Office/Canteen/Staff Welfare Facilities, Landscaping, New Vehicular Access, Car And Lorry Parking And Other Infrastructure Works. ”

“The City Council considers that the proposed development of the Freight Distribution Centre and its associated administrative offices, chilled cross-dock and ancillary buildings, whilst not in itself in accord with the provisions of Policy EC22 of the adopted Carlisle District Local Plan 2001-2016, would be integral to securing and facilitating essential investment in upgrading the aviation infrastructure at Carlisle Airport. The Council considers that the associated investment is necessary to both safeguard the Airport and to enable it to provide a vital economic stimulus to the local economy through the potential attraction of passenger and air freight services, better access to raw materials, services, suppliers and customer markets for businesses in Cumbria, South-West Scotland and the Borders and to encourage potential tourist growth.

The attainment of an operational, modern Airport suitable for regional air services is fully in accord with the objectives of national planning guidance, the North West of England Plan: Regional Spatial Strategy to 2021, the Regional Economic Strategy, Sub-Regional Planning Policy aspirations and the provisions of adopted Local Plan Policy DP3. The potential environmental impacts arising from the development proposals have been assessed within the accompanying Environmental Statement, and related documents that support the application including a Flood Risk Assessment, Transport Assessment, Economic Impact Statement and Design and Access Statement. In its overall scrutiny of the planning merits of the proposals the Council has subjected those supporting submissions to detailed scrutiny, including full assessment by specialist Consultants, prior to determining that the application, with appropriate safeguards including linkage to a S106 Agreement, is acceptable. The Council is satisfied that the achievement of the renewal of the principal runway and the provisions of passenger terminal facilities can be delivered through the mechanism of the S106 Agreement and that by providing those facilities, the development as a whole can be regarded as policy compliant.

In reaching that conclusion the Council is also mindful that the S106 Agreement makes proper provision for replacement of habitat lost from the County Wildlife Site to the proposed development, that the applicants will provide appropriate public transport to serve the development, and that they will ensure through the provision of a Noise Insulation Scheme that suitable protection from increased noise associated with overnight lorry movements is provided to receptive bedroom windows of properties on either side of the route that these vehicles will take to and from Junction 44 and the application site.

In granting this planning permission, the City Council has taken into account all relevant environmental information (including the supporting Environmental Statement) within the meaning of Regulation 3(2) of the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999.”

“1. The planning permission is linked to a Section 106 Agreement which

covers the following matters:

Other matters covered by the Section 106 Agreement included:

Factual Background

The proposed Freight Distribution Centre was smaller in scale than that proposed in the first application, although it contained a larger element of office floor space (Report, para 5.3).

“5.162 In relation to the issue of compliance with Policy EC22, the improvements to the Airport, which could be secured, would accord with the development plan. It is open to debate whether the development as a whole would accord with the development plan as a whole. It is probably more appropriate to regard the development for which planning permission is sought as not in accordance with the development plan as a whole but to regard the development as financially enabling development for improvements to the airport which would be a considerable benefit and which could override harm. In this regard, the Economic Benefits have to be weighed against the possible harm arising from the policy tension with Policy EC22, especially when these are matched with the regeneration opportunities the application brings to Carlisle Airport, as proffered through a Section 106 Agreement.”

“ 5.170 In evaluating the application proposals, and the provisions that the Heads of Terms contain, it is open to Members to come to a view that, with a combination of appropriate planning conditions and S106 obligations, the proposals in their entirety would be “in accordance” with the Development Plan. The situation differs from that of the previous application in that the Council has commitments to matters that the applicant had not previously committed to deliver e.g. public transport, replacement for habitat loss, specification for the runway works.

5.171 Essentially, therefore, whilst the application has been properly advertised as a “Departure” (since there was throughout much of the period since the application was lodged insufficient detail attached to the Heads of Terms that had been promulgated) it is open to Members to take the view that, with the provision of the matters identified in para 5.163, the Heads of Terms, as now firmed up and fleshed out by the applicants, is:

In short if it is accepted that, by linkage with the intended S106 Agreement, approval of the development will be the facilitator of the Airport investment and thus might realise its potential economic benefits (which are widely supported by key stakeholders, Agencies, Authorities and the business community) the application would become policy compliant in its full sense and would not require to be referred to the Secretary of State.

5.172 Consequently, and in conclusion, if Members are satisfied that:

a) The associated planning conditions that are recommended will
deliver an acceptable development as proposed; which

b) Coupled with the related obligations under S106 that the applicants will commit to as part of the development will lead to the delivery of a fully operational, modern Airport, potentially yield the restoration of passenger services, lead to an expansion of the area’s wider connectivity and give Cumbria better access to markets, suppliers and services, all the economic benefits flowing from these fully justify support for the proposals the Committee may resolve to grant planning permission, subject to the prior attainment of the S106 Agreement.”

11. The Committee resolved to give authority to the Head of Planning and

Housing Services to issue an approval for the proposed development

subject to the completion of a Section 106 Agreement, the key points

of which were to include (inter alia):

12. The Interested Party’s obligations are set out in clause 4 of the Section 106
Agreement dated 11^th March 2009. The relevant provisions are contained in
clause 4.2 under the sub-heading “Runway/Terminal”

“4.2.1 Unless otherwise approved in writing by the Council not to commence works to construct the Building until a construction programme in respect of the Works has been submitted to and approved in writing by the Council PROVIDED THAT the requirements of the CAA and TRANSEC shall be paramount in all circumstances.

4.2.2 Unless otherwise approved in writing by the Council not to commence works to construct the Building until the Council has been consulted in respect of the details (including size location and associated car parking) of the Terminal PROVIDED THAT for the avoidance of any doubt nothing contained within this Deed shall prevent the Owner from submitting a planning application to the Council for the use of a passenger terminal building in excess of five hundred (500) square metres (as originally constructed and/or used).

4.2.3 Unless otherwise approved in writing by the Council not to Occupy the Development until the Works have commenced in accordance with the construction programme approved pursuant to sub-Clause 4.2.1 of this Deed.

4.2.4 To Substantially Complete the Works in accordance with:-

4.2.4.1 the construction programme approved pursuant to sub-Clause 4.2.1 of this Deed;

4.2.4.2 the requirements of the CAA and/or TRANSEC (as the case may be); and

4.2.4.3 a PCN value/specification of no less that thirty one (31) insofar as the Works comprise repair/renewal of the Runway.

4.2.5 Following Substantial Completion of the Works to maintain:-

4.2.5.1 the Runway at a PCN value/specification of no less than thirty one (31) or such other PCN value/specification as may be approved by the CAA having regard to the heaviest Public Transport Category operating at the Airport from time to time; and

4.2.5.2 any apron and/or taxiway which directly serves the Runway at a PCN value/specification which is reasonably commensurate with the PCN value/specification of the Runway (from time to time) and complies with the requirements of the CAA

For so long as the Terminal is in Operation

4.2.6 To use reasonable endeavours to keep open the Terminal (or such other terminal facility for the processing of passengers as the Council is consulted upon by the Owner from time to time) for a period of no less than 10 (ten) years from the date of Substantial Completion of the Terminal PROVIDED THAT (in the Owner’s reasonable opinion) it is commercially viable to do so having regard to (among other things) the likely level of passenger throughput of the Terminal from time to time."

The “Building” is the Freight Storage and Distribution Facility; the “Works” are the works to repair/renew the existing main runway at the airport, and to substantially complete the Terminal; and the “Terminal” is the proposed air transport passenger terminal facility with a floor space of no less than 400 square metres (see Clause 1.1 of the Agreement).

The EIA Regulations

13. The EIA Regulations give effect to Council Directive 85/337 EEC (as
amended) on the effect of certain public and private projects on the
environment (“the Directive”). Article 1(2) of the Directive states that for the
purposes of the Directive “project” means:

“ – the execution of construction works or of other installations or schemes,
- other interventions in the natural surroundings and landscape including those involving the extraction of mineral resources.”

14. The European Court of Justice has said that

“The wording of the Directive indicates that it has a wide scope and a broad purpose”

see para 31 of Case C – 72/95 Kraaijeveld and Others, and para 46 of Case C – 227/01 Commission v Spain.

15. There is no dispute that regulation 3(2) of the EIA Regulations applied not merely to the first, but also to the second planning application in issue in these proceedings:

“ (2) The relevant planning authority or the Secretary of State or an inspector shall not grant planning permission or subsequent consent pursuant to an application to which this regulation applies unless they have first taken the environmental information into consideration, and they shall state in their decision that they have done so.”

“Environmental information” is defined in regulation 2(1) as meaning, inter alia the “environmental statement” and any representations made in response thereto; and “environmental statement” means a statement:

“(a) that includes such of the information referred to in Part I of Schedule 4 as is reasonably required to assess the environmental effects of the development and which the applicant can, having regard in particular to current knowledge and methods of assessment, reasonably be required to compile, but

16. Schedule 4 sets out the “Information for inclusion in Environmental Statements”. The information in Part I of Schedule 4 includes:

“4. A description of the likely significant effects of the development on the environment, which should cover the direct effects and any indirect, secondary, cumulative, short, medium, and long-term, permanent and temporary, positive and negative effects of the development, resulting from;

The Claimant’s EIA Challenge

The EIA Challenge – discussion

“5.58 In short, the argument is that it is essentially a financial (rather than a functional or operational) imperative for the Freight Warehouse and Distribution Centre to be developed at this site but, by doing so, the applicants maintain that this will deliver the only realistic capital stream to enable the investment that is required to upgrade the Airport infrastructure and allow it to survive, let alone grow.”

“The Board also believes that the acquisition of Carlisle Airport, although not the primary purpose, offers the Group the opportunity to provide air freight solutions as well as the potential to develop passenger aviation. The experienced airport management team available to the Group following the recent acquisition of Southend Airport would take management responsibility for this. In addition, the Board believes that the acquisition of Carlisle Airport would further strengthen the Group’s position as a multimodal logistics provider, given its existing operations in road and rail and its planned water based operations at Weston Port.”

“Environmental Assessment was required particularly when taking into account the cumulative impact of development

Haulage. Still considered that the development of a haulage depot and warehouse at the airport was a departure to the development plan, particularly in view of the inspectors report into objections to the Local Plan on the airport policies.

Conclusion from Counsel was that it would be better to re-submit a whole application and it was likely to be called in anyway because of the comment from the Government Office last time that it was of more than local significance.”

27. The response of the Interested Party’s Solicitor was that a repeat application was “out of the question it would be called in and they would run out of time.” The Defendant was told that the new application would be significantly different from the earlier application. After recording discussion of a number of matters, the note says that:

“Following discussion it was agreed that an environmental assessment would be submitted as part of the application”

Although the issue had been flagged up by the Defendant prior to the application, it was not addressed in the Interested Party’s Environmental Statement, and for whatever reason the Defendant thereafter failed to consider the implications for the purposes of regulation 3(2) of the EIA Regulations of its insistence on a Section 106 Agreement which would ensure that the freight distribution centre could lawfully be developed only if it was developed in conjunction with the airport works.

28. Mr Village QC submitted that it was unnecessary to include information as to
the environmental effects of the airport works in the Environmental Statement
because these works were “inchoate”. In the absence of sufficient detail of the
airport works it was not reasonable (see the definition of environmental
statement in reg 2(1), para. 15 above) to require an assessment of their
environmental effect as one of the cumulative effects of the development. He
referred to the provisions of the agreement which require substantial completion
of a terminal building with a floor space of no less than 400 square metres,
while leaving open the possibility of a planning application for a terminal with a
floor space in excess of 500 square metres (para. 12 above).

29. This submission is not well founded for two reasons. First, there is no evidence
that this was the basis on which the Defendant considered whether the
environmental effects of the airport works should be assessed as part of the
cumulative effects of the development and concluded that they should not.
Second, any lack of detail about the airport works was not such as to prevent the
Defendant from assessing, with the assistance of advice from EKOS and ASA,
the economic, transportation and tourism advantages of securing their
implementation through the mechanism of the proposed Section 106
Agreement. Thus, EKOS was able to assess the market potential for both
commercial passenger and air cargo operations (Report, paras. 5.65 – 5.75), and
ASA was able to describe what was likely to be provided by way of passenger
terminal facilities and to provide a specification for the repair/renewal of the
existing main runway (Report, paras. 5.141 – 5.150). ASA was also able to
advise by reference to the likely number of Air Traffic Movements (ATMs) on
the “safety issues” arising out of the use of the new facilities at the airport
(Report, para. 5.152).

30. Mr Village submitted that the assessments by EKOS and ASA were based on
the “minimum case”: the airport works required by the Section 106 Agreement
and no more. On a fair reading of the Report that submission puts the cart
before the horse: it was the earlier assessments by EKOS and ASA that
informed the content of the Section 106 Agreement. To the extent that they
described a minimum, rather than, as would appear from the report, the likely
case in respect of the airport works, there is no reason why this could not have
been reflected in any assessment of the environmental effects of those works as
part of the cumulative effects of the development.

31. For these reasons there is no doubt, in my judgment, that the grant of planning
permission was unlawful because there was a failure to comply with regulation
3(2) of the EIA Regulations. In the light of this conclusion it is unnecessary to
consider the further basis on which Mr Jones advanced the Claimant’s EIA
challenge: that there was also a breach of the Directive because
the project for the purposes of the Directive included the airport works.

EIA – Discretion

32. Owen J considered that the EIA challenge was arguable (para. 27, judgment), but
he refused to grant permission to apply for judicial review because he was
satisfied that the court would exercise its discretion to refuse to grant relief even
if it was satisfied that the decision to grant permission was flawed (para. 30
judgment). Owen J concluded that “no purpose would …. be served by
permitting the claimant to pursue his claim on this ground” for two reasons:-

(1) If the airport works were likely to have a significant environmental effect
an environmental statement assessing their cumulative effects, which would
include the effects of the Freight Distribution Centre would be required.

(2) The Environmental Statement which accompanied the first planning application had not identified any adverse environmental effects, and since the airport works required by the Section 106 Agreement were much reduced by comparison with those in the first application there was no prospect of a different outcome if the Respondent was required to reconsider the second application.

33.When deciding how to exercise the court’s discretion Owen J did not refer to

the decision of the House of Lords in Berkeley v. Secretary of State for the

Environment (2001) 2 AC 603. Whether or not the grant of permission was also

in breach of the Directive, there was a breach of regulation 3(2), and

“It is exceptional even in domestic law for a court to exercise its discretion not to quash a decision which has been found to be ultra vires…” per Lord Hoffmann at page 616 F-G.

34. Mr Village invited us to uphold Owen J’s exercise of the Court’s discretion on
the basis of both reasons (1) and (2) (above). Mr Mould did not rely on reason
(2). In my judgment, he was right not to do so for the following reasons. The
second application was, as the Interested Party’s solicitor had told the
Defendant it would be (para 27 above), significantly different from the first
application. The airport works were different and reduced in scale, and
although the Freight Distribution Centre was reduced in scale it contained a
larger amount of office floor space (para 6 above). The first application was
considered by the Defendant to be a departure from the development plan, the
second application was not.

35. Even if the two applications had not been materially different, the fact remains
that the Defendant did not consider the “environmental information” which had
been provided in respect of the first application when it came to consider the
second application. Owen J referred to the fact that the Environmental
Statement accompanying the first application had not identified any
environmental effects (para 29 judgment), but the obligation under regulation
3(2) is to take into account the “environmental information”, which includes not
merely the Environmental Statement but, most importantly, any representations
made in response thereto: see regulation 2(1), and Berkeley at pp 615D-616D.
The totality of the information in respect of the first application had persuaded
the Defendant that it was a departure from the development plan and the
Secretary of State that it should be called in.

36. Both the Defendant and the Interested Party submitted that Owen J’s reason (1)
for not quashing the permission was sound. They submitted that the
environmental effects of the Freight Distribution Centre would inevitably be
considered as part of the cumulative effects of the airport works. The section
106 agreement ensured that the former could not proceed unless the latter were
commenced, and the latter could not commence if they involved development
until the requisite planning permission was available, either for permitted
development under the Town and Country Planning (General Permitted
Development) Order 1995 (the GDPO), or following an application for
permission. Even if the Interested Party proposed to carry out the airport works
as permitted development, the EIA Regulations would still apply so as to ensure
that the works did not proceed without an Environmental Statement if the
Defendant considered that they would be likely to have a significant
environmental effect: see articles 3(10) and (11) of the GPDO.

37. The confident assertion before this Court that there will be consideration of the
cumulative environmental effects of both the Freight Distribution Centre and
the airport works sits uneasily with the Defendant’s deliberately non-committal
responses in its letter dated 6^th January 2009. In answer to the question whether
the airport works would require planning consent the Head of Planning and
Housing Services replied:

“Paragraph 5.2 of the Committee Report states:

“The applicants rely on carrying out these works under the “Permitted Development” rights..

It does not state that the Council accepts this position. Furthermore, nor have we come to a view as to whether, in the event that the works are permitted development, an EIA will be required thus requiring a formal application for planning permission.”

38. It will be noted that the section 106 agreement does not prevent the
commencement of the Freight Distribution Centre until a planning permission
has been obtained (see para 12 above). Mr Village submitted that if it involved
development this was inherent in the obligation to submit and obtain the
Defendant’s written approval of a construction programme. It may well be the
case that for commercial reasons the Interested Party would be unlikely to
submit such a programme until it had the requisite planning permission, and the
Defendant might well be unwilling to approve such a programme unless it was
satisfied that the requisite permission was available. The fact remains that the
construction of the Freight Distribution Centre is not tied to a permission for the
airport works. The occupation of the Freight Distribution Centre is effectively
tied to such a permission because the airport works could not lawfully be
commenced without a planning permission, either an express permission or one
granted under the GPDO.

39. Mr Jones submitted that there was a fundamental objection to the course which
commended itself to Owen J. The underlying purpose of the Directive is that
the environmental effects of a development, including any cumulative effects,
are considered at the earliest possible stage in the decision making process: see
R (Barker) v. London Borough of Bromley [2006] UK HL 52 (2007) 1AC 470
per Lord Hope at para 22. If a decision is taken to permit a development on the
basis that any cumulative environmental effects of carrying it out will be
considered at some future stage there is the danger that the developer will have
obtained a “foot in the door”. Even if the later assessment of the cumulative
effects might otherwise lead to a conclusion that those effects were
unacceptable, the local planning authority would be committed to the
development for which permission had been obtained, and that commitment
would be a relevant factor in deciding whether cumulative environmental
effects which might have been regarded as unacceptable if they had been
considered at the outset, must be accepted at the later stage given the prior
commitment.

40. In the present case, the section 106 agreement leaves open the possibility of a
completed but unoccupied Freight Distribution Centre. That possibility might
well be an unlikely outcome for commercial reasons, but the fact that
permission had been granted for the Freight Distribution Centre would be a
relevant factor when deciding whether the cumulative environmental effects of
the airport works, including the effects of the Freight Distribution Centre, were
such as to justify a refusal of permission. Since the object of both the Directive
and the Regulations is to ensure that any cumulative environmental effects are
considered before any decision is taken as to whether permission should be
granted, an assurance that they will be assessed at a later stage when a decision
is taken as to whether further development should be permitted will not, save
perhaps in very exceptional circumstances, be a sufficient justification for
declining to quash a permission granted in breach of regulation 3(2) and/or the
Directive.

41. There are no exceptional circumstances in the present case. We were told by
Mr Village that works to implement the planning permission dated 12^th March
2009 have not been commenced, and no construction programme in respect of
the airport works has been submitted. In these circumstances, there is no good
reason why the permission should not be quashed.

42. Mr Village told us that if we concluded, contrary to his submissions, that the
grant of permission was unlawful, the Interested Party was prepared to give an
undertaking to the Court, to be incorporated into a section 106 planning
obligation so as to bind the land, that it would not commence development of
the Freight Distribution Centre until screening of both it and the airport works
had been undertaken by the Defendant under the EIA Regulations. It is difficult
to see what purpose would be served by the court’s acceptance of such an
undertaking that would not equally well be served by the quashing of the
permission. A planning permission is a public document. Third party rights,
e.g. the rights of agricultural tenants on the land, may be affected by the
existence, or otherwise of a planning permission. There would have to be some
very good reason to persuade the court that acceptance of an undertaking that an
unlawful permission would not be implemented, or would be implemented only
on certain terms, would be a more appropriate course than a decision to quash
an unlawful permission. No such reason has been identified in this case. It
follows that the EIA challenge to the permission succeeds and the permission
must be quashed.

The Claimant’s other grounds

44. In ground 2 the Claimant submitted that a distinction should be drawn between
a section 106 agreement and the imposition of conditions on a permission for
the purposes of article 2(2) of the Departures Direction which states that an
application need not be referred to the Secretary as a departure if the local
planning authority:

“impose such conditions on the permission as will ensure, in their opinion, that if the development is carried out in accordance with these conditions it will be in accordance with the development plan.”

Since Mr Jones fairly conceded that the Court would be unlikely to quash the permission on this ground alone it is unnecessary to decide whether the reference to the imposition of conditions in article 2(2) includes obligations imposed under section 106. What matters for present purposes is the Defendant’s response in its Skeleton Argument to this ground of challenge. It contended that:

“a planning obligation can have a similar effect to a planning condition in making development comply with the development plan.”

If a permission is subject to a condition which requires certain works to be carried out, the environmental effects of those works will be part of the cumulative effects of the development which has been permitted. The fact that a permission is granted subject to the completion of a section 106 agreement which requires those works to be carried out is a difference of form, not substance for the purposes of the EIA Regulations.

45. The complaint in ground 4 of the challenge – that the Defendant failed to

give any reasons for its decision not to refer the application to the Secretary

of State – is academic because it is clear that the Secretary of State, in

response to representations from the Claimant’s Solicitor, carefully

considered whether to call in the second application and decided not to do

so. In these circumstances it is unnecessary to consider whether there was

any duty to give reasons for such a decision, and if there was, whether

sufficient reasons were given.

46. Ground 5 of the challenge, in which the Claimant submitted in the

alternative that the section 106 agreement, properly construed, did not

secure the carrying out of the airport works, provoked the intended response

from the Defendant and the Interested Party: that the section 106 agreement

did secure the airport works. In doing so, it ensured that the environmental

effects of those works were part of the cumulative environmental effects of

the Freight Distribution Centre ( see above).

Conclusion