Redrow Homes (Eastern) Ltd. v First Secretary of State

MR JUSTICE SULLIVAN: This is an application under section 288 of the Town and Country Planning Act 1990 ("the Act") to quash a decision by an inspector appointed by the first defendant contained in a decision letter dated 7th January 2003. In that decision letter the inspector dismissed the claimant's appeal against the second defendant's refusal to grant outline planning permission for residential development with access, an extension to open space and land raising, on a site at Danley Farm, Minster Road on the Isle of Sheppey.

The Kent structure plan was adopted in 1996. Policy H1 stated that provision should be made within Swale Borough Council for 9,400 dwellings for the period 1991 to 2006, of these, 3,300 were to be within the Isle of Sheppey.

The Swale Borough Local Plan was adopted in July 2000. In section 3, dealing with housing policies, paragraph 4.3.1 explained the priorities for the Isle of Sheppey planning area:

The Local Plan identified a number of sites with planning permission for housing development. They including Thistle Hill, Minster and Kingsborough, Minster. Together these sites were to provide "the residential support element to the employment initiatives proposed particularly at Sheerness port and Neatscourt" (4.3.10).

In addition to these sites with planning permission, Policy H28 identified a number of new housing sites. The application site forms the major part of one of those sites, No 8, Danley, Halfway. The area of the Local Plan allocation is given as 8 hectares, on which it was expected that 160 dwellings would be provided between 1991 and 2001. The allocated site lies between Halfway and Minster and on its eastern side adjoins Abbey Rise, a public open space which is designated as a Local Landscape Area in the Local Plan. Paragraph 4.3.20 of the Local Plan explains:

In March 2000 a revised version of PPG3 Housing, replacing the 1992 edition, was published. The introduction explains that the new guidance:

Paragraph 24 advises Local Planning Authorities to undertake urban housing capacity studies. Paragraph 28 states that Development Plans "should provide clear guidance as to the location of new development so that it meets housing requirements in the most sustainable way." To this end, paragraph 31 states:

Paragraph 34 is as follows:

Thus far the advice has been concerned with development plan preparation, not development control. Paragraphs 37 to 39 deal with "Determining Planning Applications". Paragraph 37 urges local planning authorities to revise their plans to take account of the new guidance as quickly as possible. Paragraph 38 is in these terms:

The cross-reference in paragraph 38 of PPG3 to paragraph 54 of PPG1 is to the following passage:

This was the policy background which led to the refusal of planning permission by the council. As the inspector explained in paragraph 6 of his decision letter:

On 24th May 2002 the council refused planning permission for two reasons:

In the light of these two reasons for refusal, the inspector identified the main issues as:

On the first of those issues the inspector concluded:

On the second main issue he concluded:

Having dealt with a number of other matters, access, flooding, archaeology and ecology, and concluded that they did not justify a refusal of planning permission, the inspector's overall conclusion, in paragraph 64, was as follows:

On behalf of the claimant, Mr King QC submits that the inspector erred in law in three respects. Firstly, by failing properly to apply PPG3; secondly, by failing properly to apply section 54A of the Act; and thirdly, by failing to take into account a material consideration in reaching his conclusions about the effect of the proposed development on openness between Halfway and Minster. I will deal with these three grounds in reverse order.

Although the application for planning permission was in outline "siting with regard only to the division between the housing and the open space" was not reserved for later approval (see paragraph 2 of the decision letter). (Further references in parenthesis are to the decision letter unless otherwise stated.)

In paragraphs 33 and 34 the inspector referred to those policies in the Local Plan which sought to protect, and extend, the Abbey Rise Local Landscape Area, and to Policy E10 which sought to prevent the erosion of countryside gaps between settlements. In paragraph 35 he referred to three landscape assessments which had been carried out by the Borough Council, by Kent County Council and by Alan Pyke Associates on behalf of Halfway Residents Association. These assessments advocated slightly different boundaries between the housing and the open space. The claimant was contending that the boundary of the housing development could be taken further east, towards the existing LLA, than recommended in any of the three landscape assessments. At the inquiry the council argued that housing development should not be allowed any further east than an established hedge along a field boundary between Field III (on which housing would be allowed) and Field II, to the east, which would become part of an extended LLA. The claimant was contending that Field II could be developed for housing. During the course of the six-day public inquiry in October and November 2002, the inspector heard extensive argument in relation to this topic. Both the claimant and the council called expert landscape evidence. Although there was disagreement over the accuracy of montage representations, the inspector was satisfied that sufficient material had been produced to allow him to form an opinion (paragraph 41). He made a site visit on 27th November 2002. In paragraph 42 he concluded:

In the remainder of paragraph 42 and in paragraphs 43 and 44 the inspector amplified his reasons for reaching this conclusion, by reference to various viewpoints and the perceived impact of housing development so far east upon Abbey Rise.

It might be thought that there could be no possible criticism of this conclusion, and none was advanced by Mr King. But the inspector in paragraphs 45 to 47 went on to consider what would be the appropriate LLA boundary. In paragraph 45 he said that he agreed with the Kent County Council landscape appraisal which was based on land form, it proposed a line denoting the base of the hill which lay to the east of Field III, rather than a hedgerow boundary, as advocated by the Borough Council. This meant that the southern part of Field II (included in the LLA by the Borough Council) would become available for housing development, but not the whole of Field II as contended by the claimant.

Accordingly, in paragraph 46 of the decision letter the inspector said:

The claimant's criticism of this aspect of the decision letter is confined to the inspector's view that adopting the KCC landscape appraisal would leave not merely the southern part of Field II, but also Field VI available for housing development (paragraph 46). Field VI is the north-western corner of the housing allocation in the Local Plan. It was excluded from the application site. In his closing submissions to the inspector Mr King (who appeared on behalf of the claimant at the inquiry) dealt with the implications of the Borough Council's proposed development boundary, which excluded the whole of Field II. He said this apropos of Field VI:

It is submitted that the inspector failed to have regard to these matters in concluding that Field VI would be available for housing if the KCC boundary was adopted, and that this was clearly a relevant factor since it was necessary to balance the impact on the gap and the LLA against the need to maximise the housing yield from the site. Even if there was any force in this criticism, it would not avail the claimant. The inspector had already concluded in paragraph 42 that the boundary for housing development proposed by the claimant would encroach too far eastwards. That conclusion remains valid, whether or not the inspector erred in his assessment of all the implications of agreeing with the KCC landscape assessment.

But in my judgment there is no force in the criticism in any event. Field VI is part of the housing allocation in the Local Plan. Thus, setting aside the first main issue, PPG3, which one must do for this purpose, it is in principle as available for development as the remainder of the allocation. It was not suggested that the land ownership constraints were insuperable, merely that the claimant had tried and been unable to obtain an option. The archaeological evidence is best described as tentative and it certainly does not suggest that there would be an archaeological objection to residential development on Field VI. The inspector had accepted "the principle of land raising as flood protection". No doubt Mr King put the claimant's case before the inspector to best advantage in his closing submissions. That case was not that Field VI would not be available for housing development, merely that it "may well ... not come forward by 2006." The inspector was entitled to take the view that, for the purposes of defining the appropriate long-term boundary between housing development and the LLA, adopting the KCC boundary would leave Field VI available for housing development.

Having defined the main issues in paragraph 4 of the decision letter (as set out above) the inspector dealt with planning policy in paragraph 5:

I have set out above paragraph 6 of the decision letter. In it the inspector begins his reasoning on the first issue by recording that the site is greenfield land "substantially on a Local Plan housing allocation." The inspector continued in paragraph 7:

Having considered the implications of this shortfall in paragraphs 24 to 32 of the decision letter, the inspector concluded, in the last sentence of paragraph 32:

In its second ground of challenge the claimant contends that the inspector failed to identify the respects in which the proposal did not accord with the development plan, failed to assess the policies of the development plan and decide whether in the light of the plan, read as a whole, planning permission ought to be granted, and failed to identify the material considerations which indicated that planning permission should be refused otherwise than in accordance with the plan. Mr King submitted that rather than adopt the approach prescribed by section 54A, the inspector had simply asked himself, on the first main issue, whether the proposal accorded with the advice in PPG3 (see the last sentence of paragraph 32).

This criticism takes one sentence of paragraph 32 out of context and is wholly unrealistic, given the context in which the inquiry was being held and the rival contentions with which the inspector had to grapple in his decision letter. This was not a case where there was any issue as to whether or not the proposed development was in accordance with the housing policies in the statutory development plan. The starting point was that the appeal site comprised the majority of a housing allocation in the Local Plan. The council's reasons for refusal (see above) did not suggest that there was any conflict with any relevant development plan policy, save in relation to the manner of the development prejudicing the countryside gap. In paragraph 48 of the decision letter (see above) the inspector identified those Local Plan policies, relating to the countryside gap and the local landscape area with which the proposed development was in conflict. There is no indication in the decision letter that he believed that the proposed development would conflict with any other policies in the development plan. He was right to say, in paragraph 32, that the proposal accorded with development plan policy "in many respects", because he would, in the remainder of the decision letter, conclude that it conflicted with the policies identified in paragraph 48. Thus it would have been inaccurate for him to have said that the proposal was entirely in accord with development plan policy.

Against the background of the site's allocation for housing development in the Local Plan, the issue, as identified in the council's first reason for refusal, and the inspector's first main issue, was whether the change in policy guidance contained in the new PPG3 justified a refusal of planning permission otherwise than in accordance with the development plan. The inspector was not writing a thesis on section 54A, he was dealing with the contentious issues between the parties at the inquiry. Given that the appeal site was allocated for housing, it is readily understandable that the inspector briefly recorded this as his starting point and then proceeded to deal, in detail, with the implications of PPG3. His reference at the outset to paragraph 38 of PPG3 makes it plain beyond any doubt that he appreciated that the development plan was the starting point, and that the issue at this particular inquiry was whether the new policy guidance in PPG3 "superseded the policies in [the] plan", thus justifying a decision otherwise than in accordance with the plan.

This was the claimant's principal challenge. As particularised in the claim form this ground was subdivided into seven criticisms of the inspector's application of PPG3 to the appeal proposal. The first of those criticisms contended that the inspector had erred in principle, in failing to adopt the approach to PPG3 which was set out by His Honour Judge Rich QC in Alderney Estates Ltd v Secretary of State for Transport, Local Government and the Regions and Fylde Borough Council [2003] JPL 744, as clarified by the Court of Appeal on 21st February 2003, [2003] EWCA Civ 346. In that case the inspector had recommended that planning permission should be granted for the release of a greenfield site, saying:

In paragraph 40 the judge said:

In paragraph 43 the judge said that the driving force for the Secretary of State's decision was a misinterpretation of paragraph 32 of PPG3. Having referred to the reasoning in the Secretary of State's decision letter, the judge concluded in paragraph 45:

The Secretary of State appealed to the Court of Appeal. It was conceded that the decision letter would have to be quashed in any event upon the basis that he had given no evidence, or inadequate reasons, for concluding that other sites might come forward. However, the Secretary of State was concerned with what His Honour Judge Rich had said as to the relationship between the advice contained in paragraphs 32 and 34 of PPG3. During the course of submissions before the Court of Appeal, the issue between the parties narrowed, as the Court of Appeal recorded "almost to vanishing point". In the event it was not contended on behalf of the Secretary of State that paragraph 34 had no relevance to a planning application. Nor was it contended on behalf of the developer that local planning authorities should not refuse planning permission on greenfield sites where they could not identify a five-year supply of land. After discussion between the parties, the court endorsed the following formulation:

Mr King submitted that the inspector in the present case had made an "Alderney-type" error. He had failed to have regard to development plan need (paragraph 34 of PPG3), and had instead considered whether there was sufficient brownfield sites available to match the provision that would be made by the appeal site. That was, in effect, to construe PPG3 as though it prevented the release of any greenfield site so long as an alternative brownfield site was available, regardless of development plan needs. The very error made by the Secretary of State in the Alderney case.

In my judgment, this criticism is plainly unfounded as soon as one reads the decision letter as a whole. The inspector dealt with the first issue under a number of subheadings. In the first of these, between paragraphs 6 and 11, he referred to the council's procedure for dealing with applications for the residential development of allocated greenfield sites, in the light of PPG3, in advance of the Local Plan. That procedure involved a number of tests, one of which was to consider whether the proposed number of dwellings could be accommodated on previously-used land within the existing urban area. The council had identified such land in an Urban Capacity Study (UCS), as recommended in paragraph 24 of PPG3. It contended that the number of dwellings proposed in the appeal could be accommodated on land identified in the UCS. Between paragraphs 12 to 18 the inspector considered the UCS, which was available to the inquiry even though it had not been published. He concluded (paragraph 17) that the proposal's site capacity "could be met by 2006 from UCS sites". If the inspector had stopped there and concluded that for this reason planning permission would be contrary to PPG3 he would have been in error in failing to consider development plan requirements, but he did not. Between paragraphs 19 to 22 he considered the criteria set out in paragraph 31 of PPG3, as he was advised to do by paragraph 38. He concluded in paragraph 21 of the decision letter:

Again, if the decision letter had stopped there Mr King's submissions would have had considerable force, because up to that stage of the decision letter the inspector had not addressed the advice in paragraph 34 of PPG3. However, the inspector went on to consider housing land supply in considerable detail between paragraphs 23 to 27 of the decision letter. I have set out the terms of paragraph 23 above. It is plain that the inspector took as his starting point the structure plan requirement for 3,300 houses within the Isle of Sheppey planning area by 2006. He concluded that that requirement was not likely to be met. In paragraphs 24 to 27, he went on to consider the significance of that shortfall:

Against this background, the inspector's conclusions in paragraphs 28 to 32 of the decision letter were as follows:

The Alderney Estates judgment considered by the inspector was of course the judgment at first instance, not that of the Court of Appeal, but what is important and fatal to the claimant's criticism of the inspector's approach to PPG3 in principle is the inspector's express consideration of the argument that sufficient housing land should be provided in accordance with the development plan. Thus, the inspector was, in terms, balancing the advice in paragraph 34 of PPG3 against the presumption in paragraph 32. Having done so, he was entitled "subject to his giving reasons and complying with s.54A of the Act" to conclude that planning permission should be refused (see paragraph 40 of His Honour Judge Rich's judgment above).

I have dealt with section 54A (above). The inspector's reasons for concluding that planning permission should be refused, notwithstanding the fact that there would undoubtedly be a shortfall on the structure plan requirement for 3,300 houses are set out in paragraphs 28 to 32 of the decision letter. In summary, the structure plan requirement was employment led and employment development was falling behind target to a very great extent. In consequence, if the proposed houses were built now they would be occupied mainly by those commuting off the island for work, which would not be desirable in terms of sustainability, one of the principal objects of PPG3.

At one stage Mr King submitted that paragraph 32 gave no guidance as to whether development plan targets should be met, it was solely relevant to how development plan targets should be met. Thus, if development plan targets were not likely to be met conflict with the presumption in paragraph 32 could not be a proper reason for refusal. This legalistic approach to the interpretation of PPG3 fails to pay sufficient regard to the totality of the advice in paragraphs 31 to 34 and 38, and is, in effect, an attempt to reinstate the interpretation which was rightly disavowed by counsel for the developer in the Alderney Estates case in the Court of Appeal (see paragraph 14 of the Court of Appeal's judgment). Paragraph 34 does not compel a local planning authority to grant planning permission for a greenfield site merely because it is unable to identify a five-year supply of housing on brownfield sites, just as paragraph 32 does not compel a local planning authority to refuse planning permission for a greenfield site merely because an alternative brownfield site is available. Whether planning permission should be granted or refused in any particular case will depend upon a balanced assessment of all relevant factors, including in particular those identified in paragraphs 32 and 34 of PPG3 (see paragraph 38).

Mr King criticised the inspector's reliance on the Local Plan Review, submitting that it was wrong for the inspector to speculate as to what alterations there might be to development plan requirements. In my view, the inspector did not engage in speculation. In marked contrast to the inspector's finding in the Alderney case that there was an urgent need for the release of the appeal site, the inspector in the present case concluded that although there was a shortfall in relation to the structure plan requirement of 3,300 dwellings, there was no such shortfall in relation to local need (see paragraphs 27 and 29). In these circumstances, with the higher, employment-led figure being held back by the non-availability of the second crossing of the Swale until spring 2006, the end of the current plan period (paragraph 25), there was sufficient time to devise an appropriate strategy for monitoring and managing housing supply through the Local Plan Review, the adoption of which was anticipated in the autumn of 2005, prior to the completion of the second Swale crossing (paragraphs 31 and 32). I appreciate that such an approach is most unwelcome to the claimant, but it would appear to be an eminently reasonable one upon the basis of the inspector's findings, and it certainly does not disclose any error of law or misapplication of the policy advice contained in PPG3 when read as a whole.

The claimant's remaining criticisms under this ground were concerned with detailed aspects of the inspector's findings when dealing with the first main issue. In paragraph 16 of the decision letter the inspector said this:

It was submitted that there was no evidence for the conclusion in the first sentence of paragraph 16. The evidence before the inquiry was that only one allocated site, containing eight dwellings, had been developed. It was also contended that this error influenced the inspector's further conclusions in paragraphs 30 and 31 that if the appeal site was developed now there would be much less chance of the UCS sites identified being developed in the short or medium-term, and that an appropriate strategy would include restricting the availability of greenfield sites which were much easier to develop. I do not accept either contention. In his proof of evidence on behalf of the council before the inspector, Mr Lloyd, the council's Local Planning Manager, had argued, inter alia:

Next, criticism is made of paragraph 29 of the decision letter (which is set out above). It is said that the inspector made an assumption that house prices in Sheppey were not rising and that there was no evidential basis for that assumption. There was evidence before the inspector that house prices in Sheppey were amongst the lowest in the region. Mr King accepts that it was contended on behalf of the claimant that landowners were holdings on to sites in the expectation that prices would rise with the arrival of the second crossing.

Against this background, the inspector's comment that one would normally expect prices to rise in conditions of restricted supply (because landowners were, for whatever reason, holding on to sites) seems perfectly reasonable. It is impossible to describe it as an error, much less to elevate it into an error of such significance as to justify quashing the decision. Against the undisputed background before the inspector of house prices being the lowest in the region and of landowners holding on to sites, the inspector was entitled to form the view that there did not appear to be a high market demand for houses in Sheppey, whether or not one would have expected prices to rise in such a situation.

The next criticism in the claim form was not pursued. The final sentence of paragraph 29 of the decision letter, as issued to the parties, read as follows:

Then it was said that the inspector had erred in paragraph 27 of the decision letter when dealing with the issue of windfall sites. The relevant part of paragraph 27 is as follows:

A further criticism which was not pursued related to the inspector's approach to other greenfield sites in paragraph 22 of the decision letter. The inspector said:

Lastly, it is said that the inspector erred when assessing the appeal site against "the ability to build communities" criterion in paragraph 31 of PPG3. In paragraph 20 the inspector concluded:

This was a very long and, despite the error in paragraph 29, careful decision letter. I have cited only selected extracts from it. The inspector was required to deal with the principal issues before him, not with every single aspect of every issue, however minor. The matter was put in this way to the inspector by Mr King at the very end of that section of his final submissions which dealt with issue 1:

For these reasons, I am satisfied that the inspector did not err in principle when considering the first main issue and that in so far as there were any errors of detail -- "trend" rather than "employment" in paragraph 29 and double-counting of windfall sites -- they could have had no possible impact upon the inspector's overall conclusion.

For these reasons, this application must be refused.

MR BROWN: My Lord, I am very grateful for that. I do not know if a copy of our costs schedule has reached your Lordship?

MR JUSTICE SULLIVAN: I do not think it has, actually.

MR BROWN: If I could pass one up? (Handed) I should stress, my Lord, that the costs schedules were not exchanged in advance before today. I leave it to my learned friend to say whether that causes him a problem, although I do not understand at the moment that it does.

My Lord, my application is for the first defendant's costs in the sum that you see set out on the second page, grand total, £6,314.25.

MR JUSTICE SULLIVAN: What do you want to say about that, Mr King?

MR KING: My Lord, only two things. The first is that the sum is not in issue and is agreed, but the second is that I am going to invite your Lordship, for reasons which I will explain, not to make a full award of costs in favour of the first defendant. I am not going to submit that the first defendant should not get any of his costs, but there should only be a partial award. The basis for that, my Lord, is, as I mentioned yesterday, that essentially the basis for that submission is the contents of the inspector's witness statement, which was submitted late in the day, 22nd May. It is dated 21st May but I think we received it on 22nd May. In my submission, much more significantly than the lateness, which in itself I am not suggesting is significant, does much more, we would submit, than merely correct a typographical error in the decision letter, as paragraph 4 of the inspector's statement suggests or asserts.

My Lord, yesterday in argument I drew attention to my learned friend Mr Brown's skeleton, paragraph 3.12, where he said that the last sentence of paragraph 29 of the decision letter made no sense as written. I understand my Lord to have agreed with that in his judgment, at least no sense we would submit as written without explanation. The claimant genuinely did not understand what the inspector meant in that sentence, although of course anyone can speculate as to what he might have meant. It is, I submit, perfectly possible in the context of the decision letter, and in particular the rest of paragraph 29, that the inspector had had in mind some distinction between local need on the one hand and trend growth on the other which had some kind of bearing on the outcome of the appeal. As it turned out, of course, that is not what he meant, he meant something different. But I would submit that it was necessary, and it was necessary in order to resolve that evident nonsense to make the application to the court under section 288. My Lord, of course I accept -- it is a fact and I have not suggested otherwise -- that the inspector's witness statement led to the withdrawal of the claim, of course it did not. I recognise that. I recognise of course as well that the claimant pursued other grounds which were unsuccessful. Nevertheless, I think it is unusual, perhaps very unusual, for an inspector to have to correct an error of this kind through a witness statement. The claimant has not, I hope your Lordship will think reasonably and sensibly, sought to argue that the decision should be quashed on that ground alone. But there was an error. It has been corrected. It is for that reason that, in my submission, my Lord in his discretion should award the Secretary of State only part of his costs. The proportion is more difficult, of course. I am going to invite my Lord to make an order that the claimant should pay 50 per cent of the Secretary of State's costs.

MR JUSTICE SULLIVAN: Thank you. Mr Brown, what I am minded -- sorry, would you like to say anything else?

MR KING: Not at all, my Lord. I was wondering if my Lord was going to ask me a question.

MR JUSTICE SULLIVAN: No, I was not. I quite understand your position.

Mr Brown, I was not minded to be quite as generous as Mr King thinks I might be, but at the moment I do not really see why the claimant should pay for the Treasury Solicitor sorting out with the inspector that the inspector had made an error in the inspector's own decision letter. They were perfectly entitled, if you like, to have that much of the cost of their claim as set out this error. In so far as you are seeking costs from them, if one has to bear in mind they incurred a very little bit of costs, it was only one of the grounds amongst many, I understand that. But it did seem to me a possible injustice could be done about this by saying that the Treasury Solicitor got together with the inspector for a couple of hours or so at £150 an hour, and if the costs were £6,000 rather than £6,300 that would mean that fairness would be done. Could you really complain about that?

MR BROWN: My Lord, I couldn't complain about the general principle. It is point which I rather anticipated might be made and one of the things that I asked about when I saw the costs schedule was -- first of all, is there any time which is attributable to the inspector's witness statement and, secondly, if there is, can that be isolated? The answer to the first question is, "Yes, there is time in there." The answer to the second is, "Yes, it can be isolated and it is of the order of three-quarters of an hour", which my instructing solicitor works out at about £87.50. But if your Lordship wanted to say £100 or so to knock off the total, we would have no quarrel with that.

MR JUSTICE SULLIVAN: Thank you very much indeed. Bearing in mind the fact the claimant -- do you want to say anything else?

MR BROWN: No, my Lord.

MR JUSTICE SULLIVAN: Bearing in mind the fact that the claimant has been put to a bit of unnecessary expense and bearing in mind that the Treasury Solicitor has incurred what is, from the claimant's point of view, a bit of unnecessary expense even though not quite as much as the two hours that I have mentioned, I think I am going to adhere to my initial view, albeit for slightly different reasons, and say that the costs ought to be rounded down to £6,000 and that would fairly reflect the fact that we need not have spent time on the error.

MR BROWN: My Lord, I am grateful.

MR JUSTICE SULLIVAN: The application is dismissed. Costs are summarily assessed in the sum of £6,000.

Thank you both very much indeed for very helpful submissions. I am sorry that they have led me into giving rather a long judgment. There is a spare copy of the appeal decision I have just fished it out for those who might be disadvantaged for not having copies.