Derwent Holdings Ltd v Trafford Borough Council & Ors

This appeal concerns the validity of a planning permission granted by Trafford Borough Council ("the Council") to Tesco Stores Limited ("Tesco") and Lancashire County Cricket Club ("LCCC"). Their joint application proposed development in two parts: a large superstore (15,500 sq m) on land owned by the Council fronting the A56, and the redevelopment of the nearby Old Trafford Cricket Ground as an improved stadium for international cricket. The two parts were linked by a pedestrian walkway. It was intended that, if permission was granted, the Council would sell their land to Tesco for £21m and the proceeds of sale would then be passed on to LCCC to subsidise their redevelopment.

The Appellant ("Derwent") is the owner of an existing retail park known as White City Retail Park ("WCRP") several hundred metres away from the Tesco site, also fronting onto the A56. They had made an application for permission to create a new food store (9036 sq m) and to refurbish existing units for non-food retail use.

The two applications were considered at the same meeting of the Council's Planning Committee on 11^th March 2010. The Committee resolved to grant permission on the joint application, but to refuse the Derwent application. The Derwent refusal was subsequently upheld on appeal by a planning inspector. The permission on the joint application was issued on 29^th September 2010, having been delayed pending, first, the decision of the Secretary of State whether to call it in, and, secondly, the conclusion of a planning agreement.

The application for judicial review was originally advanced on ten grounds. Before the judge they were reduced to seven. In this court, Mr Tucker QC for Derwent has further refined and reordered his case. There are in substance four grounds:

The principles determining whether benefits on one site or part of a site can be taken into account as offsetting the planning disbenefits of another are now well-established at the highest level (see R (Sainsbury’s) v Wolverhampton CC [2010] 2 WLR 1173). At the time of the consideration of the present application, the current departmental guidance was contained in Circular 05/05. Between the Council meeting in March 2010 and the issue of the permission in September 2010, the Community Infrastructure Levy Regulations 2010 (the "CIL regulations") came into effect, expressing similar principles in statutory form in respect of “planning obligations”. Regulation 122 states:

“(2)

A planning obligation may only constitute a reason for granting planning permission for the development if the obligation is—”

(a)

necessary to make the development acceptable in planning terms;

(b)

directly related to the development; and

(c)

fairly and reasonably related in scale and kind to the development.”

Mr Tucker submits that, in considering the relationship between two parts of the scheme, and the materiality of the obligations to be secured by the planning agreement, it was essential for the members to be clearly advised as to the governing principles. This was not done, and as a result either they failed to have regard to relevant considerations, or there was a risk of confusion sufficient to vitiate their decision.

Before the judge there was some reference to comments by individual members at the meeting, which it was suggested showed that they had not properly understood the issues. The judge commented:

“... they are all brief extracts from Councillors' observations, the first of whom voted against, anyway. And it cannot be said from the remarks attributed to the other two, who voted in favour, that they did so on the basis that they had identified planning objections in the Tesco element which they then disregarded because of the cross-subsidy. One has in any event to be wary of attributing too much significance to the speeches of only a few (here 2 out of 8) of the voting majority – see for example R v London County Council [1951] 2 KB 471 per Buckley and Pickford LJJ at p489 and R v Exeter County Council [1991] 1 QB 471 per Simon Brown J (as he then was) at pp483-484.”

Although similar points were repeated in the appellant’s skeleton argument in this court, Mr Tucker has not pressed them in oral submissions, but has relied instead on what he sees as internal contradictions in the chief planning officer’s report itself, taken with the terms of the subsequent planning agreement.

The officer’s report on the joint application was a long and detailed account (more than 80 pages) covering the content of the proposal, the representations for and against, the relevant planning policies, and the officer’s own “observations”. Among the matters referred to in the context of the policies was a list of “regeneration benefits”, including the creation of “a stadium recognised as one of the leading venues for both international and domestic cricket”. Earlier it had been recorded that Sport England had emphasised the importance of the proposed investment in sport, and recommended that the “financial cross-subsidy” should be secured by a planning agreement.

The first part of the officer’s observations dealt with the “Principle of Development”. It was made clear at the outset that the application was being presented by the promoters on the basis that each part could each be justified in its own right, rather than that the benefits of one were needed to offset planning objections to the other:

“1.

The proposed development seeks to ensure the retention of Lancashire County Cricket Club in the borough of Trafford and to secure redevelopment of the ground to meet the ECB's standards for International and Test match status. This part of the development would be partly funded by the sale of a Council owned site on Chester Road to Tesco on which permission for a large foodstore is sought. The applicant maintains that this is not an "enabling" proposal but instead is a "cross-subsidy" proposal. In essence the applicant's position is that each element of this planning permission is acceptable 'in principle' but that the cricket club element of the proposal will only come forward in the event that the whole proposal is approved by reason of the cross-subsidy to LCCC which will be released by the Council following the sale of land to Tesco for the purpose of this development. The link between the proposed foodstore and redevelopment of the cricket club would be through a separate funding agreement and a Section 106 agreement both of which will include clauses to ensure that the foodstore will not open for trading until LCCC have 'let' the contract for all those works at the ground required to meet the ECB's TSF2 requirements (listed as Phases 2a, 2b and 2c in the Supporting Statement). Other than the proposed pedestrian link there is no physical link between the two elements of this application and as such each must be considered separately by the Council when assessing the acceptability of the principle of development…” (emphasis added)

In its “Conclusion on the Principle of Development”, the officer explained why in his view this test was satisfied:

“The proposed foodstore has been assessed against the policies within the Development Plan and national guidance in PPS4. It is concluded that there are no sequentially preferable sites within the identified catchment area and that whilst ‘adverse’ impacts are identified on nearby centres these are not considered to be ‘significant’. The proposal has been assessed against the relevant tests within PPS4 and is considered to be acceptable on this basis.

The proposed economic development (including the brasserie, and hotel extension) at the cricket ground has also been assessed against the same tests and are considered to be appropriate. The regeneration benefits accruing from the whole development, of the local, city and regional area would be substantial and the development would provide a top class cricketing venue for the North West, capable of hosting international matches.

The loss of the Protected Open Space on the northern site is considered to be acceptable as this part of the site (which has not been used for over 10 years) is considered to be surplus to requirements of the existing school and proposed Academy and LCCC will deliver, through the redevelopment proposals, a sporting programme which will provide educational links with local schools considered to be of greater community value than this site in its current form.” (paras 140-2)

The officer recommended that the application be notified to the Secretary of State, but that, assuming no intervention by him, and on conclusion of an “appropriate legal agreement” to secure certain specified matters, permission could be granted. The matters to be included in the agreement included:

-

The use of the cricket school and the media centre by community and educational groups and bodies (arrangements to be agreed);…

-

That the store will not open for trading until the contract for the works described as phases 2a, 2b, 2c in the planning supporting statement (i.e. all those elements necessary to meet the English Cricket Boards TSF2 requirements by a specified date) has been let;...”

Mr Tucker submits that, by requiring these matters to be included in a planning agreement before the issue of the permission, the officer was implicitly acknowledging (contrary to the basis on which the proposal had been introduced) that they were “necessary to make the development acceptable in planning terms”. At best the members would have been confused, as was explained in the appellant’s skeleton:

“Reading the Report as a whole it is clear that members were being asked to give weight to the regeneration benefits associated with the LCCC proposal... and yet members were not then being invited to disregard such benefits when addressing their minds to the question of whether or not the Tesco proposal considered on its own merits was or was not acceptable.”

Reference was made, for example, to paragraph 142 of the report, which indicated that the loss of open space would be offset by the sporting programme for local schools:

“Members were thus being asked to judge the acceptability of each part separately whilst also being asked to consider parts of one in conjunction with the other.”

That problem is compounded, it is said, by the terms of the planning agreement as later concluded. The agreement was expressed to be made under section 106 of the Town and Country Planning Act 1990, and section 111 of the Local Government Act 1972. The latter provision was needed, it seems, because at the time Tesco, not yet being an owner of the land, could not enter into binding obligations under section 106.

Mr Tucker relies particularly on Recital (K) in the Preamble which states:

"The Council is satisfied that the obligations in this Agreement are:-

(a)

necessary to make the Development acceptable in planning terms;

(b)

directly related to the Development; and

(c)

fairly and reasonably related in scale and kind to the Development."

(Those words, it will be noted, follow the words of the CIL regulations which had by then come into force.) Clause (6) of the agreement imposed on Tesco the obligations contained in part 2 of schedule 1, including (at paragraph 10):

“The Foodstore Element shall not be open for the retail sale of goods to the public until the Stadium Contract has been entered into.”

This says Mr Tucker, is express recognition that, again contrary to the approach adopted in the planning officer’s observations, the works to the stadium were regarded as “necessary” to make the foodstore “acceptable in planning terms”. Accordingly, he says, there is an inherent inconsistency in the way in which members were asked to consider the matter.

Like the judge, I am unable to accept this argument. We are entitled to start from the presumption that those members who voted for the proposal were guided by the officer’s advice. If so, they would have understood that they should consider the merits of the two parts of the proposal separately. They would have found in the officer’s report sufficient reasons to conclude that, so viewed, they were acceptable in planning terms. At the same time they would have been aware that the proposal was being put forward as not merely acceptable, but as carrying with it significant regeneration benefits, including the improvement of the cricket ground. The offer of a legal agreement to secure those benefits would no doubt have added to the attractions of the proposal. But that does not mean that it was regarded as necessary to offset some perceived planning objections. Nor is there anything in the officer’s report to suggest that it was. There is nothing objectionable in principle in a council and a developer entering into an agreement to secure objectives which are regarded as desirable for the area, whether or not they are necessary to strengthen the planning case for a particular development.

Mr Tucker can extract some theoretical comfort from the terms of the section 106 agreement. However, this must be seen in context. It seems likely that the wording of the recital followed a standard form for a section 106 agreement, reflecting the wording of the relevant regulations. It was entirely apt for most of the matters listed in the schedule, which were indeed “necessary” to make the development acceptable. If it had added “or to secure other planning benefits”, there could have been no objection. Even if, which I do not accept, the validity of the agreement was in some way affected by this point, I do not see how it can be used to challenge the planning judgment made some six months before.

That is enough to dispose of this ground of appeal. However, for completeness, I should add that, even if there had been some risk of confusion on this issue, I would need some persuasion that it would have been fatal to the permission.

Arguments about the legality of “enabling developments” have a long history. Particular problems have arisen where there is no direct link between the two proposals under consideration. That was the issue before the Supreme Court in R(Sainsbury’s) v Wolverhampton CC [2010] 2 WLR 1173. It was held that the relationship between Tesco’s proposed superstore on the outskirts of Wolverhampton, and the site on which it had offered regeneration benefits in the city centre, was not sufficiently close for the latter to be taken into account as justifying a compulsory purchase order for the former. This case was contrasted (see per Lord Collins at para 52-3) with R v Westminster City Council ex p Monahan [1990] 1 QB 87, where the two elements were directly linked as part of single application. It was common ground that in such a case it was permissible to take account of the benefits of the one as offsetting the possible planning objections to the other.

A similar contrast can be drawn in this case. Derwent, shortly before the committee meeting, had offered to match Tesco’s cross-subsidy with its own contribution of £21m to the development of the cricket ground. The members were understandably advised that this was not relevant to the merits of Derwent’s proposed retail development, given the lack of any sufficient relationship between the Derwent site and the cricket ground. In the joint application, however, there was a direct relationship. The two elements were in close proximity and physically linked, and they were reasonably included in a single application. Even if, as Mr Tucker submits, some members may have been confused into thinking that they could take account of the overall benefits of the two elements, it is not clear to me why that would have been legally objectionable.

The Revised Trafford Unitary Development Plan was adopted in June 2006. Policy S11 provided that out of town retail development should not be permitted unless certain criteria were satisfied, including (iv) that the development would not lead to the sporadic siting of comparison goods shopping along a road corridor. This point was one of a number of grounds for the refusal of a Tesco proposal on the same site by a planning inspector in November 2006.

Mr Tucker’s simple submission is that this criterion remained part of the current development plan, and as such the Council was obliged to have regard to it. The planning officer’s report made no mention of it, and accordingly the members’ consideration was legally defective. Mr Sauvain’s answer is that, although still part of the development plan, this point had by 2010 ceased to be of any practical significance, because it had been overtaken by changes in the government policies on which it had been based.

It was clear from the text accompanying policy S11 that it was intended to give effect to national policy in Planning Policy Guidance Note 6 of 1996 (PPG6). That had similarly included advice against the sporadic siting of comparison shopping out of town centres, especially along road corridors. Subsequent revisions of national retail policy made a number of changes to the applicable tests, removing the reference to “need” as a criterion, and also omitting any reference to “sporadic siting along road corridors”. Such words were not included in the corresponding policy in Planning Policy Statement 6 (PPS6), which in 2005 replaced PPG6. The change seems to have been overlooked in the UDP which continued to refer to PPG6. This may, as Mr Sauvain suggests, have been because it was by then at a late stage of its development. In any event, in December 2009 there was a further change, when PPS6 was replaced by PPS4, substantially recasting the policy framework for consideration of retail proposals. That was the basis on which the officer judged the present joint application.

Mr Tucker does not question the relevance of PPS4. However, he contends that it did not necessarily supersede S11(iv), which remained formally part of the development plan. He also points to the fact that in considering Tesco’s previous application in November 2006, the policy was regarded by the authority and the inspector as still relevant, even though by that time it had already been omitted from national policy in PPS6.

The judge rejected this argument:

“55.

The view which was obviously taken in the Report was that the relevant policy for retail developments of this kind could now be found exclusively in PPS 4 and there was no need to assess it against the requirements of S11. The body of the Report reflects that approach. As both sides accept that need has been ruled out, the only difference in practice concerns (iv). It can reasonably be inferred that the reason why the Report contains no assessment as to whether the Large Tesco store would amount to sporadic siting on a road corridor is because this was not now considered to be relevant...

I agree that it remains arguable that this limb of (iv) could be said still to have survived, although for my part I incline to the view that as national policy was one of the justifications lying behind S11 and that no longer includes (iv) and given the terms of the "saving" letter, requirement (iv) is no longer relevant. But on any view it seems to me that the approach taken by the Planning Officer of giving primacy to the terms of PPS 4 (thereby in effect disregarding any element in S11 which does not now reflect PPS 4) was an entirely rational and reasonable approach.”

He also noted that Derwent’s planning consultant, Mr Highton, had made no mention of policy S11(iv) in his long letter of objection dated 27^th January 2010.

I agree with the judge’s reasoning. Even if S11(iv) was still part of the statutory development plan, the officer was entitled to give it minimal weight in the light of later developments in the national policies on which it had been based. It might have been better if that process of reasoning had been spelled out for members, but that is not enough to invalidate the conclusion. Further, since the point was not considered sufficiently significant to be mentioned as an objection by Derwent’s planning consultant, they can hardly claim to have been prejudiced by the Council’s failure to mention it in their reasons for granting permission.

As already stated, I can deal with these points briefly. The alleged unfairness is said to have arisen from the loss of the opportunity for Mr Highton to address the meeting personally. The circumstances are explained in the judgment and do not need to be repeated here. Mr Carney, a director of Derwent, and himself a surveyor, was present and did speak, but Mr Highton, as their planning expert, was not able to add his weight to the arguments. The judge was not persuaded that there was any real prospect that, had Mr Highton spoken in support of Mr Carney, he could have “turned the meeting round" (para 36).

Again I agree. In so far as Mr Highton wanted to bolster the case for Derwent’s proposal, there is no reason to think he would have been any more successful than the full Derwent team were when the matter later came before the inspector on appeal. In so far as he wanted to add weight to the arguments against the joint application, they had already been articulated in writing, and there were others making similar points. In so far as he would have sought to pursue the arguments advanced in the judicial review challenge, they are disposed of by the decision which we are now giving.

Turning to the last ground of appeal, the reasons given for the permission were succinct:

“1.... This informative is only intended as a summary of the reasons for the grant of planning permission. For more detail on the decision please contact Planning & Building Control.

2.

The proposal would result in a satisfactory form of development that is considered to comply with the provisions of Proposals [reference is then made to the policies and their titles including S11 although there is no reference to PPS 4 or H10].

3.

In determining this planning application the Local Planning Authority have had due consideration of the information contained in the applicant's Environmental Statement (ES) including (additional information subsequently submitted), all comments made by the consultation bodies, and all representations from members of the public about environmental issues."

The judge referred to the guidance given by Collins J in R (Tratt) v Horsham District Council [2007] EWHC 1485:

“26 …It seems to me that reasons in relation to planning decisions must normally deal with the main issues that have been raised. That is again a clear basis upon which the adequacy of reasons should be judged. …. It seems to me that the reasons ought at least to have stated, albeit only in a sentence in each case, why those issues have been decided in favour of the applicants.”

The judge commented that, although PPS4 was not mentioned in the reasons, no-one who read the report could be in any doubt as to its significance in the reasoning. Nonetheless, he accepted that judged by Collins J’s test the reasons were defective in that there was “no summary of the main issues for example in relation to adverse impact”. However, he noted Mr Tucker’s concession that if he failed on all other grounds, he could not succeed on this alone. Furthermore, since the general reasoning was clear from the officer’s report, as confirmed by the Council’s evidence before the court, the only appropriate relief would have been to order the Council to put that reasoning into a proper summary. That would have been of no value to Derwent. No doubt with such thoughts in mind, Mr Tucker has made the same concession in this court. Accordingly, I need say no more about this ground.

For these reasons, which are substantially in accord with those of the judge, I would dismiss the appeal.

I agree.

I also agree.