South Shropshire District Council v First Secretary of State

MR JUSTICE HARRISON: This is an application under section 288 of the Town and Country Planning Act 1990 to quash a decision of the first defendant made through his inspector on 10th January 2003 when he allowed the second defendant's appeal against the claimant's refusal of planning permission for a development comprising demolition of an existing industrial garage and coach depot and the erection of five houses at Minsterley Motors, Stiperstones, near Shrewsbury. The inspector's decision was made following a hearing held on 17th December 2002.

Stiperstones is a small village consisting of about 30 dwellings in an Area of Outstanding Natural Beauty about 35 kilometres south west of Shrewsbury. It has a primary school, a shop/post office, a church and a public house. The site is owned by Minsterley Motors, a bus operator who uses it as a bus depot and whose bus services include those serving the village of Stiperstones. Minsterley Motors propose to relocate their bus depot to Minsterley. The second defendant, who are developers, have an interest in the redevelopment of the site.

On 23rd January 2002 the second defendant applied to the claimant, the local planning authority, for full planning permission for the demolition of the existing buildings and the erection of five houses on the site.

On 7th March 2002 the claimant refused the application for two reasons. The second reason for refusal related to the design and materials of the proposed buildings. The first reason for refusal, however, stated as follows:

On 24th May 2002 the second defendant appealed against that refusal. On 25th September 2002 the second defendant submitted a new application for five houses, the purpose of which was to overcome the second reason for refusal of their first application. It was successful in that respect because the sole reason for refusal of the second application was the same as the first reason for refusal of the first application. There was no appeal against the refusal of the second application but, at the hearing held on 17th December 2002, the inspector agreed to consider the appeal relating to the first application on the basis of the revised plans which had been submitted in connection with the second application. The result was that the appeal hearing was only concerned with the first reason for refusal, that is to say a policy ground of refusal.

Mr Jones, who appeared on behalf of the claimant, advanced five grounds of challenge against the inspector's decision. In order to understand those grounds, it is necessary first of all to refer to the various policies which were considered by the inspector, and then to refer to the inspector's decision letter.

The South Shropshire Local Plan, adopted in 1994, contains three policies relevant to the appeal. Firstly, Policy GP2, entitled "New Development General Requirements", states that proposals for new development will normally be permitted provided it conforms to 12 criteria which are set out in that policy.

Secondly, Policy HG4, entitled "Location and Scale of Housing Development", permits "infilling of 1 or 2 houses only" in a number of named settlements which include Stiperstones. One of the reasons given for that policy is to ensure that new house building is permitted only in suitable settlements and on a scale which will not be detrimental to their character.

Thirdly, Policy STI1, entitled "Housing Development on Unidentified Sites", states that housing development on sites within the development boundary of Stiperstones would be appropriate provided that the site consists of a gap of one or two new houses in an otherwise built-up road frontage and provided that the proposals conform to the general policies of the Plan.

In the year 2000 the new Planning Policy Guidance 3: Housing ("PPG3") was issued. Paragraph 38 of PPG3 provided that, when considering planning applications for housing development in the interim before development plans can be reviewed in the light of the new national guidance, local authorities should have regard to the policy in PPG3 as material considerations which may supersede the policies in their development plan.

In a section of PPG3 headed "Rural Housing - Village Expansion and Infill", paragraphs 69, 70 and 71 state as follows:

As a result of the publication of PPG3, the claimant published a new Interim Housing Policy. Policy I1 deals with open market housing and Policy I2 deals with affordable housing. Policy I1 states that proposals for market housing will only be allowed in seven named settlements, which do not include Stiperstones. The note to that policy explains that only those settlements in the district are truly sustainable and satisfy the requirements of PPG3 that new housing should be in locations which provide opportunities for travel by public transport and the full range of employment, services and facilities.

Policy I2 states that proposals for large scale affordable housing development outside the six (sic) settlements identified in Policy I1 will be permitted in 16 named settlements, which include Stiperstones, provided that the development meets an identified local need and is in scale with the size and character of the settlement. The note to that policy explains that those settlements have certain specified facilities and have access to regular public transport.

In a letter accompanying the Interim Housing Policy the claimant explained that the effect of the Policy is that many proposals for new housing outside the seven named settlements referred to in Policy I1 many not be granted planning permission even if they appear to be supported by Local Plan policy.

Having dealt with the relevant policies, I now turn to the inspector's decision letter. In paragraph 3 the inspector identified the only outstanding issue as being whether the location of the site was acceptable having regard to national and local policies which seek to promote sustainable development.

In paragraphs 4 to 8 of the decision letter, he dealt with the planning policies. In paragraph 4 he referred to Policy HG4, Policy STI1 and Policy GP2 of the South Shropshire Local Plan. In paragraph 5 he referred to a revised version of the Joint Structure Plan which was placed on deposit in July 2002 and which, amongst other things, promotes the redevelopment of previously used land. The inspector said that those policies in the Joint Structure Plan were in conformity with national policy and he was therefore able to endow them with appreciable weight in the appeal. In paragraph 6 he referred to the emerging Local Plan to which he was unable to lend significant weight because it was at an early stage. In paragraph 7 he referred to PPG3, noting that it seeks to create more sustainable patterns of development and that it gives priority to the re-use of previously developed land within urban areas. In paragraph 8 he referred to Policy I1 and Policy I2 of the Interim Housing Policy. He stated:

In paragraphs 9 to 17 of the decision letter, the inspector set out his reasons. Having described the village of Stiperstones and the appeal site itself, he stated at paragraph 10:

In paragraphs 11 and 12 the inspector referred to some planning appeal decisions which had been cited by both sides. In paragraph 13 he referred to paragraphs 38, 70 and 71 of PPG3, remarking that paragraph 71 recognised that adequate land should be made available within or adjoining villages to enable local requirements to be met.

In paragraphs 14 to 17 the inspector stated as follows:

In paragraphs 18 to 20 the inspector dealt with other matters. In paragraph 18, he stated:

In paragraph 19 the inspector remarked that jobs at the coach firm would not be entirely lost to the rural area because the depot was moving to Minsterley. He stated that there would be a benefit in road safety terms from the relocation of the coach depot because the minor road leading to the village off the A488 was restricted in width and alignment.

In paragraph 20 he took into account the environmental benefit which would result from the relocation of the garage, the council not disputing that the existing use resulted in an unsightly development in the centre of the village. The inspector said that he had noted on his site visit that the manoeuvring of coaches involved reversing on to the road immediately in front of the primary school. He stated that those additional matters served to reinforce his conclusion on the main issue. He therefore concluded that the appeal should be allowed.

I now turn to the grounds of challenge. As I mentioned previously, there are five grounds. I deal with them in turn.

The first ground of challenge is that the inspector failed to address the question whether the development complied with the Development Plan. It is said that if he had done so, he would have been bound to conclude that the development conflicted with Policies HG4 and STI1 of the Local Plan. It was submitted that it was his statutory duty under section 54A of the 1990 Act to address that question because the inspector had attached little weight to the Interim Housing Policy so that he should have then considered the Local Plan policies except in so far as they were contrary to PPG3.

I do not consider that there is any merit in this point. The short answer is that the inspector did expressly recognise in his decision letter that the development was contrary to Policies HG4 and STI1. In paragraph 14 he stated that:

He went on to conclude that it would not constitute the significant quantity of housing provision referred to in paragraph 70 of PPG3, but he concluded in paragraph 16 that the scheme would fall within the latter part of paragraph 69 and the first part of paragraph 71 of PPG3, describing it as "modest infill development".

The inspector also expressly recognised that the development would be contrary to Policies HG4 and STI1 in paragraph 18 of the decision letter when he stated:

Having recognised that the development would not be in accordance with those Development Plan policies, but would be in accordance with PPG3, he then took into account other material considerations which favoured the development, including the road traffic and environmental benefits arising from the relocation of the depot and the removal of an unsightly development in the centre of the village.

In my view, the inspector cannot be criticised for adopting that approach, which was perfectly consistent with section 54A of the 1990 Act which states that the determination shall be made in accordance with the Development Plan unless material considerations indicate otherwise. In the circumstances of this case, the inspector was not required to go further than he did. It was not a part of the claimant's case that the development should be refused because it was contrary to Policies HG4 and STI1. The single ground of refusal alleged that it did not comply with the principles of sustainability in PPG3. That is why the inspector identified the only outstanding issue as whether the location of the site was acceptable having regard to policies that seek to promote sustainable development.

In its written statement for the hearing, the claimant acknowledged that the Local Plan was out of date and that the relevant planning guidance for development in settlements such as Stiperstones was now contained in PPG3. It was not part of the claimant's case that, if the inspector was to attach little weight to the Interim Housing Policy, he should then consider the case on the basis of non-conformity with out of date Local Plan policies. The claimant's case was based on the Interim Housing Policy and PPG3.

I therefore conclude that the inspector dealt with this aspect of the matter perfectly satisfactorily by recognising that the development was not in accordance with Policies HG4 and STI1 and by identifying the issue as being whether the development accorded with policies that seek to promote sustainability.

The second ground of challenge was that, in finding that there was a relatively frequent bus service from Stiperstones to Shrewsbury, the inspector failed to address the issue whether the present level of public transport would continue if permission was granted and if Minsterley Motors relocated their depot from Stiperstones to Minsterley. Mr Taylor, a development control officer who appeared for the claimant at the hearing, made a witness statement in these proceedings in which he stated that he told the inspector that the Shrewsbury bus service was provided by Minsterley Motors and that once their depot was relocated to Minsterley, the buses would terminate at Minsterley. He asserted that the second defendant did not dispute that evidence, but both Mr Howard, a director of the second defendant, and Mr Timothy, the second defendant's planning consultant, both of whom were present at the hearing, asserted that the suggestion that the bus service would be terminated was disputed. It was submitted alternatively on behalf of the claimant that, if the inspector had taken that issue into account, he failed to give any reasons why he did not accept Mr Taylor's evidence.

It is clear that this point about the termination of the bus service upon relocation of the depot to Minsterley was not at the forefront of the claimant's case because it was not mentioned at all in its written statement for the hearing. It was only mentioned orally by Mr Taylor at the hearing without any evidence to substantiate that the bus service would terminate in those circumstances. It was nothing more than speculation. Having been raised by the claimant at that stage, it was for the claimant to substantiate it. The inspector expressly referred in the decision letter to the relocation of the bus depot to Minsterley. If he had thought that there was evidence to show that that would result in the termination of the bus service, I am sure that he would have dealt with it. The fact that he did not do so indicates that he did not consider it to be a substantial point meriting his attention. He cannot be expected to deal with every point that is simply raised orally at the hearing. Having said that, I would accept that it would have been better if he had dealt with it in his decision letter, if for no other purpose than to obviate the kind of point that has now been raised. If he were at fault, it is not a matter upon which I would have granted relief because it is clear that there was no evidence to substantiate the assertion that the relocation of the bus depot would lead to the termination of the bus service to Stiperstones and there was, therefore, no basis on which the inspector could have reached such a conclusion.

I should just mention that contracts between Minsterley Motors and the County Council were produced in evidence before me, although they were not before the inspector. They are not in a particularly satisfactory form and I have not thought it right to take them into consideration. It is obvious that there must be some sort of arrangement between Minsterley Motors and the County Council in respect of the bus services that they provide, but I have made no assumption as to its precise terms, nor is it necessary for me to do so having regard to the conclusion that I have reached on this ground of challenge.

The third ground of challenge related to the inspector's conclusion about the claimant's Interim Housing Policy. Having concluded in paragraph 8 of the decision letter that, as it had not been subject to public consultation, he could only afford the policy significant weight to the extent that it complied with the general thrust of PPG3, the inspector concluded in paragraph 15 that the policy involved a fairly radical interpretation of PPG3 in relation to rural housing.

The claimant's case was that the inspector had failed to explain how the Interim Housing Policy was not in compliance with PPG3. A radical interpretation did not mean that it was not in compliance with PPG3. It was submitted that the inspector had failed to give reasons why the policy was not in compliance with the general thrust of PPG3, and that it was particularly important that he should have done so as he was differing from the decisions of some other inspectors who had held that the Interim Housing Policy was consistent with PPG3. It was contended that there was a failure to give reasons in respect of a principal issue in the case.

Whilst I can understand the claimant's concern over the lack of weight given by the inspector to its Interim Housing Policy, the inspector gave his reasons for that conclusion. Firstly, it is clear from paragraph 8 that he was plainly and rightly concerned about the lack of public consultation on the Policy. It was for that reason that he did not feel able to attach any significant weight to it unless it complied with the general thrust of PPG3. He explained what he meant by that in paragraph 15 when, after remarking on its radical interpretation of PPG3, he stated:

The inspector gave his reasons in paragraph 16 for concluding that, as a modest infill development, the development would be consistent with paragraphs 69 and 71 of PPG3. He concluded in paragraph 17 that it was not unacceptable having regard to policies which seek to promote sustainable development.

Having reached that conclusion, it was plainly open to him to conclude that the radical nature of the Interim Housing Policy exceeded the requirements of PPG3 because it did not permit any market housing development, even modest infill development, on previously developed land within Stiperstones or within any other settlement other than the seven named settlements in policy I1, whereas the inspector had found that such a development in Stiperstones would be consistent with policy PPG3. Bearing in mind that such a radical policy, which would prevent a development found by the inspector to be consistent with PPG3, had not been the subject of public consultation, the inspector was entitled, as a matter of judgment, to find that it exceeded the requirements of PPG3 and to decline to attach significant weight to it in the circumstances of this case.

In my view, therefore, when one looks at the decision as a whole, rather than just concentrating on one particular part of it, it is tolerably clear that the inspector has adequately explained why he concluded as he did.

I am conscious that in some appeal decisions inspectors have taken a different view of the compatibility between the Interim Housing Policy and PPG3, but the impact of the policy will vary in each case according to the nature of the settlement involved. In this case the inspector took into account in paragraphs 11 and 12 appeal decisions that went both ways. In my view, he dealt with that aspect of the matter quite properly when, after referring to the appeal decisions, he remarked in paragraph 12:

The fourth ground of challenge related to the inspector's conclusion in paragraph 16 of the decision letter that, although the development would not cater for those in housing need, it would nevertheless help to satisfy a local requirement. It was submitted that the inspector had not explained what local requirement he was referring to, and that Mr Taylor's unchallenged evidence in his witness statement was that no evidence was given at the hearing that the development would help to satisfy a local requirement, nor was there any submission to that effect. If the inspector was referring to a need for market housing, Mr Taylor's evidence in his second witness statement was that there was no need for market housing in the area, albeit that that evidence was not given before the inspector. It was therefore contended that the inspector was not entitled to reach the conclusion that the development would help to satisfy a local requirement, and that he had failed to give adequate reasons for that conclusion.

Whilst I can understand the point being made, it seems to me that more is being made of it than is justified. In my view, the inspector, in referring to "a local requirement", is referring to the terminology used in paragraph 71 of PPG3 which reflects the concern that there should be adequate housing provision within villages in rural areas to meet the needs of local people. The inspector expressly stated that the development would not cater for those in housing need. He was not, therefore, referring to affordable housing. He was, in my view, simply referring to the obvious fact that there will always be a requirement of local people for homes in their locality and that this development would help to satisfy such a local requirement. I do not consider that it was necessary for there to be a specific quantification of local need before making such a simple and general observation. I do not, therefore, accept that this is a ground of challenge which would justify the quashing of the decision.

The fifth and final ground of challenge related to the conclusion in paragraph 17 of the decision letter that the appeal site was not unacceptable having regard to national and local policies which seek to promote sustainable development. That was said, on behalf of the claimant, to amount to a conclusion that Stiperstones was a sustainable village. It was submitted that that was a perverse conclusion, particularly as the bus service would be discontinued if the development were to take place.

First of all, for the reasons I have explained when dealing with the second ground of challenge, I do not accept that there was evidence to substantiate the assertion that the bus service would be discontinued if the development were to take place.

Secondly, paragraph 17 of the decision letter is a concluding paragraph expressly based on all the matters mentioned by the inspector in the preceding paragraphs. The question of whether Stiperstones was a sustainable settlement for a modest infill development was a matter of planning judgment. The inspector took into account the various matters relevant to that question, including the facilities in the village and the public transport to it, and, having balanced the various considerations, he reached a conclusion that he was entitled to reach. Whilst it may be a conclusion with which the claimant disagrees, I cannot say that is a conclusion which no reasonable decision-maker could reasonably reach. It is necessary to pass a high threshold to succeed on a perversity challenge and, in my judgment, this ground of challenge does not pass that threshold.

It follows that, for the various reasons that I have given in relation to the five grounds of challenge, attractively and persuasively as they were presented, this application must be dismissed.

MR COPPEL: My Lord, I am grateful. The first defendant has served on the claimant a schedule of costs. I do not understand the principle or the numbers disputed by the claimant, so I would ask for an order that those costs be summarily assessed in the sum of £5,563.75.

MR JUSTICE HARRISON: Can we deal with that straight away, Mr Jones? First of all, do you accept that you should pay the first defendant's costs.

MR JONES: I do, my Lord, and the figures agree.

MR JUSTICE HARRISON: Thank you very much. Mr Dove?

MR DOVE: My Lord, I have already alerted my learned friend that I will make an application for costs on behalf of the second defendant. In doing that, my learned friend has been good enough to photocopy an extract from the encyclopedia which provides a brief resume of the principles, with which I am sure your Lordship is familiar. I will hand a copy up in case my learned friend wishes to refer to it.

MR JUSTICE HARRISON: Thank you very much.

MR DOVE: My Lord, I concede immediately that it is not normal for a second set of costs to be awarded, that I am not entitled to my costs (inaudible) just because I am a developer, and that I need to set out the separate matters on which we were legitimately entitled to be represented, and that it follows, therefore, that we are legitimately entitled to our costs. So, my Lord, on that basis I hope I do not need to refer to the encyclopedia because I suspect that in making those concessions, I have set out the agreed basis on which I can succeed, if I can succeed at all.

My Lord, what I say is this. Firstly, in relation to Ground 1, on the basis of the matters on which your Lordship found against the claimant, whilst some of those matters were matters which were germane to the arguments put by my learned friend on behalf of the Secretary of State, some others of them, which related to the way in which the case was put by the claimant, were matters which were specific points raised by us in respect of our response both to the witness statement and also to the argument. You will recall that in the skeleton argument I was careful to identify that I wished to make points which went beyond those which were already made by the Secretary of State, and those points in relation to Ground 1, which were germane, related to the fact that these claimants had not, in fact, in the context of the litigation, made the point which they now rely upon in this litigation. My Lord, that is how I put it in relation to Ground 1.

MR JUSTICE HARRISON: Sorry, what is your point in relation to Ground 1?

MR DOVE: My point in relation to that is that the material in relation to the statement of case, which your Lordship referred to in the judgment, which set out the fact that these claimants did not say that non-compliance of the development plan was a ground on which they --

MR JUSTICE HARRISON: I see.

MR DOVE: -- sought to resist the proposal. All of that argument is, in effect, sourced from the material provided to the court by the second defendants in form of a witness statement from Mr Timothy and my argument on Monday. It is additional material above and beyond that which the Secretary of State has provided.

My Lord, so far as Ground 2 is concerned, you will recall that we put in our witness statements from Mr Howard and Mr Timothy in response to the contention which had been made by Mr Taylor in his witness statement, that it was not disputed that the bus depot closing would lead to the end of the service. My Lord, if you recall (inaudible) argument, you will see the point that your Lordship recorded in argument about the status of (inaudible). Nonetheless, the ground of that material was that there was a relationship, as your Lordship put it in the judgment, between Minsterley Motors and the County Council, which effectively went behind what Mr Taylor was saying. And it was necessary, in my submission, for us both to put in that material, and also argue the matter, both on the merits and on the question of discretion in respect of both points on which we were successful, because in the absence of those points they were not points taken by the first defendant.

My Lord, so far as the third Ground is concerned, again I simply draw attention to the fact that many of the conclusions which your Lordship reached were reached on the basis of contentions which we made above and beyond those contentions made by the Secretary of State, in particular in relation to the relationship between the Interim Policy, these proposals, and PPG3.

My Lord, so far as Ground 4 is concerned, that again is a ground on which it was alleged by Mr Taylor that there was undisputed evidence, and it was necessary for us to provide some form of response. That response was both in the form of the witness material setting out what, in fact, had been said about the question of local departments (inaudible) this witness statement, and also dealing with the matter by way of argument.

My Lord, in my submission -- and it is not necessary for me in my submission to make out that we have added something on each and every ground -- on most, if not all, of the grounds on which the litigation proceeded on Monday, the second defendant to the claim acted a supplementary part, as opposed to simply a subsidiary part, on the footing of both the witness statement which we put before the court and also the additional matters of argument which we have drawn to the court's attention.

MR JUSTICE HARRISON: Thank you very much.

MR DOVE: Can I put my case in this way? I invite the court to grant us our costs, to be assessed. Or alternatively -- I will put two alternatives. One is that one avenue open to your Lordship is to take the view that those costs incurred by the first defendant are a reasonable proxy for the type of costs that we might have incurred, and to assess them. Or alternatively, if your Lordship is against me on the question of representation, but in favour in terms of the additional evidence that we have lodged, then I would ask that your Lordship order that those costs in providing witness statements be ordered, to be assessed.

MR JUSTICE HARRISON: Thank you very much. Mr Jones?

MR JONES: My learned friend rightly concedes that it is an exceptional matter to award costs in favour of the second defendant. My Lord, in my submission, the facts in this case pull against taking such an exceptional course. Firstly, the bulk of the skeleton arguments of the second defendant supporting the Secretary of State, the Secretary of State in no way limited his opposition to specific grounds in this matter. He fought it fully.

Secondly, my Lord, this is a small local authority. It has a total population of 35,000 people. It is therefore very different from the Bolton case where there was a consortium of eight neighbouring authorities. My Lord, there is a real unwillingness from smaller authorities, particularly in less affluent parts of the country, to bring matters to this court, even where they feel there is a proper argument of law, because of fear of the costs consequences, the normal costs consequences, yet alone the risk of double costs.

Next, my Lord, the third point. This is a small development. Again, on the opposite end of the scale from the Bolton development, where exceptional size and weight was held to be a material factor in favour of the exceptional course of granting costs to a developer.

Then, having dealt with those three substantive points, there are two procedural points which I will raise. Firstly, this is a case where the witness statements from the second defendant were, in my submission, unsatisfactory, and were unquestionably extremely late. That did add to the costs of the claimant. Then, finally, there has been no schedule of costs whatsoever served by the second defendant, although the claimant and the first defendant did serve each other with schedules of costs. My Lord, unless I can assist you further.

MR JUSTICE HARRISON: Thank you very much.

MR DOVE: I will deal very briefly with that, if I may, my Lord. I do not deal with the first point, it is already covered in the submissions I have already made. My Lord, the size of the local authority, whilst it is said that the notes to the encyclopedia may be of relevance, I have no doubt that this was a much smaller piece of litigation overall, and I have equally no doubt that the local authority has substantial resources, and far more than my client, in terms of its turnover.

As far as the scale of the development is concerned, it may be a small development, but to those who instruct me, it is a matter of some significant importance. That is why we chose to become involved. And we were provoked to become involved, if I may say so, by the way in which (inaudible) which provoked us and required us to respond to it. That is the principal reason why it was necessary for us to attend the case in the way that we did. Unless I can assist your Lordship further, those are my submissions.

MR JUSTICE HARRISON: Thank you very much. Costs are within the discretion of the court. Normally the second defendant would not be awarded his costs unless there were some separate matters upon which he was entitled to be represented. As delightful as it has been to have the representation of the second defendant by Mr Dove and, as helpful as his submissions were, in my view it would not be appropriate for the second defendant to be awarded their costs, other than in relation to the witness statements which they have submitted. Any additional matters could have been quite properly made in writing, but it was necessary for them to submit the witness statements which they did, and I think it is right that the claimant should pay the costs incurred by the second defendant in the preparation of those witness statements. Only to that extent will I award the second defendant their costs. That amount will have to be assessed. Is there anything else?

MR JONES: My Lord, there is. I apply for leave to appeal. I am conscious that that may sound strange after what I said about the resources of small local authorities, but I do so because it is proper to invite leave, rather than the matter having to come back before your Lordship.

MR JUSTICE HARRISON: It seems that everybody does, almost as a matters of course nowadays.

MR JONES: The test is whether there is a real prospect of success, and your Lordship will in this matter form a view as to whether any of the grounds are borderline or not, or are matters which would be given some prospect of success on the other hand. I very much doubt whether saying anything about those grounds would assist your Lordship, so I apply for leave, my Lord.

MR JUSTICE HARRISON: Thank you very much. I am not prepared to grant leave to appeal. You will have to go to the Court of Appeal if you wish to have leave. Thank you very much.