Bennett Fergusson Coal Ltd., R (on the application of) v First Secretary of State & Anor

MR JUSTICE BLACKBURNE: This is a claim by Bennett Fergusson Coal Limited under section 288 of the Town and Country Planning Act 1990 ("the Act") against an order quashing the decision by letter dated 19 February 2003 made by Mr BC Wilkinson of the Planning Inspectorate appointed by the first defendant, the first Secretary of State, dismissing the claimant's appeal against the second defendant's refusal of a certificate of lawful use for a proposed materials recycling facility on land at North Wingfield Road, Grassmoor, near Chesterfield in Derbyshire. The second defendant, Derbyshire County Council, which is the local planning authority, had refused to grant such a certificate in April 2002. The issue for determination by the inspector was whether that refusal was well-founded (see section 195 of the Act).

Section 192 of the Act provides for the issue of certificates of lawfulness of a proposed use or development. So far as is material it provides as follows:

Section 191(2) explains what uses and operations are at any time lawful for the purposes of the Act. So far as is material it reads as follows:

The relevant question here was whether the proposed use would amount to development. Essentially two arguments were put forward. The first was that the existing and the proposed uses of the site were within the same use class of the Town and Country Planning (Use Classes) Order 1987, namely class B2. The second was that, even if the existing and proposed uses did not both come within class B2, a change from one to the other would not amount to a material change of use.

Relevant to the first argument is section 55(2)(f) of the Act which, so far as is material, provides as follows:

The relevant order made under that provision is the Use Classes Order of 1987, to which I have already referred, article 3, paragraph 1 of which provides that:

The only relevant use classes are classes B2 and B8. B2 is as follows:

An industrial process, the expression appearing in class B2, is defined by Article 2 as follows:

"Minerals" is defined by section 336(1) of the Act, and it is common ground that it includes coal.

Relevant to the second argument is section 55(1) of the Act which provides, so far as is material, that development as used in the Act means, among other matters:

It will be seen therefore that changes of use within a class scheduled to the Use Classes Order are deemed for the purposes of the Act not to involve development in the sense of the making of any material change in the use of the buildings or land in question.

To determine the questions which were before him for decision, the inspector had, therefore, to consider the character of the existing and proposed uses and decide whether they both came within the same use class. It was only if he found that one, and a fortiori both, did not, that he had to consider whether a change from the existing to the proposed use would constitute a material change of use. He determined that neither the existing nor the proposed use fell within the same use class. He found that each use was sui generis, that is to say, it did not fall within any of the use classes. Recognising that the mere fact that they were not within the same use class did not necessarily mean that a change of use from the one to the other would involve a material change of use, he went on to consider whether a material change of use would indeed be involved. He decided that it would. He therefore found that the County Council's refusal to grant a certificate was well-founded and accordingly dismissed the claimant's appeal.

His decision is set out in his decision letter dated 19 February 2003 to which I now turn. In paragraph 3 of his letter the inspector described the existing use of the site. After observing that there was no significant dispute between the parties as to the details of the activities which take place at the site, he said this:

In paragraphs 4 to 6 he set out his conclusions about those activities. He said this:

Mr Fraser QC, appearing for the claimant, criticised that conclusion and the reasoning which led to it. He submitted that, in the light of what the inspector said about the existing use appearing in paragraph 9 in a section in which the inspector was dealing with the proposed use, the only sensible conclusion to which the inspector could have come was that the primary use of the site was for coal processing and that the other activities of storage and distribution were no more than ancillary. In short, that the existing use fell within class B2.

Paragraph 9 reads as follows:

Mr Fraser submitted that the conclusion is reinforced by the inspector's reference in paragraph 9 of his letter to the categories of activity being essential to the success of the enterprise as a whole, in both functional and commercial terms, and his rejection in the same paragraph of the applicability of class B8. Those references indicated, he submitted, that the inspector regarded the three main activities identified by him as functionally related so that they were not separate uses. Having regard, therefore, to his view that the site was not used for a class B8 use, the inspector must, or could only properly, have concluded that storage and distribution were ancillary to the primary use of processing. In short, that the existing use was in class B2. Processing coal, he said, was clearly within paragraph (c) of the definition of industrial process in Article 2 and possibly also within paragraph (b). He went on to submit that it was not apparent why the inspector came nevertheless to the conclusion that processing coal was not the primary use and that the other activities were not merely ancillary, and therefore, that the use was not within class B2.

He submitted that insofar as the reasons for the conclusion appear in paragraph 6 of the decision letter, they not only provided no basis for the conclusion, but were immaterial considerations which the inspector should not have taken into account. Those matters were: his reference to Article 3(6)(g) of the Use Classes Order and the references in the publication known as the Land Use Gazetteer to various forms of use, some of which are described as being within class B2 and others of which are described as being sui generis.

Persuasively as the argument was put, it is not one which I can accept. The inspector took the view, as is clear from paragraphs 4 and 5 of his decision letter, that although part and parcel of a single enterprise, the elements of storage and distribution constituted major categories of the overall activity separate from the industrial processing activity rather than ancillary to it. Given his description in paragraph 3 of the existing use, this was a view to which he was entitled to come; for it is clear from that description that not all coal and manufactured fuel brought on to the site were the subject of an industrial process as that expression is defined in Article 2. The inspector referred, in particular, to 25 per cent of the coal and manufactured fuel being delivered to the site -- a proportion of which was then or later loaded into hoppers from which they were either bagged up or loaded directly into lorries for local delivery. It is difficult to see how that element of that activity on site could properly be characterised as an industrial process or as ancillary to such a process.

In coming to his conclusion on existing use, the inspector was entitled, in my view, to have regard to the two matters which he noted in paragraph 6, namely, Article 3(6)(g) and the Land Use Gazetteer. Article 3(6) is exclusionary. It makes clear that certain uses will not be within one of the scheduled use classes. Paragraph (g) makes clear that use of land as a yard for the storage or delivery of minerals, including, therefore, coal, is one of those excluded uses, and therefore, that for the purposes of class B2, an industrial process involving coal cannot include a use of the land as a yard for its storage or delivery.

The inspector was careful to point out that Article 3(6)(g) was not a full or exact description of the existing use. I do not, for my part, see why the inspector should not have had regard to this as one of the "relevant factors and arguments", as he put it, leading to his conclusion that, viewed as a whole, the site did not have an existing use which was within any of the classes of the Use Classes Order. Likewise the inspector's reference, for it was no more than that, to the Land Use Gazetteer. I understand this to be a private publication frequently referred to in inspector's decisions which expresses a view, it is no more than that, and I do not understand the inspector to have accorded it any greater status, as to whether particular uses do or do not fall with particular use classes.

At the end the day, I am unable to detect any material flaw in the inspector's approach to the proper characterisation of the existing use. His conclusion that the existing use was not within any of the use classes was one which it was properly open to him to reach.

Before leaving this part of the claim, I should add that I do not find it necessary to come to any view on a point raised by Mr Coppel, for the First Secretary of State, namely whether the only industrial process relevant to minerals, at any rate in a case such as this, is what is described in paragraph (c) of the definition of industrial processing.

Having regard to his conclusion on existing use, it was not necessary for the inspector to come to any view on whether the proposed use could fall within any of the use classes. This is because Article 3(1), which I have read and which is the key provision in the Use Classes Order, only operates in relation to use changes within the same class. It is necessary, nevertheless, to examine what the inspector said about the proposed use since it is relevant to the decision whether a change from the existing proposals would include a material change of use.

In passing, I note but reject a submission by Mr Cahill QC, for the County Council, that it was only relevant to consider whether there will be a material change of use if the inspector had concluded that both the existing and the proposed uses were not within the same use class.

The inspector's description of the proposed use is set out in paragraph 7 of his decision letter, and his conclusions about the planning consequences of that use as set out in paragraphs 8 to 11. He said this (omitting paragraph 9 which I have already read):

The inspector therefore took the view that materials recycling involves an activity distinct from the elements of storage, processing and distribution, which he considered were no more than ancillary to the recycling activity. He considered that, because waste materials which are brought on to the site are materials which the recycling company has usually been paid by the supplying customer to take away, what is involved is what in paragraph 10 he referred to as a disposal service. Taking that into account, and taking also into account that there was what he referred to as a fundamental difference between materials classified as waste and minerals, both physically and as perceived by many members of the public, he concluded that the proposed use would not fall within class B2 or any other use, but would be sui generis.

I should perhaps say, although it is not necessary for me to express any view, that, in agreement with Mr Fraser, I cannot see that the fact that the materials being processed are waste which have no value to the supplier is relevant to whether an industrial process within the meaning of Article 2 is involved, or that it is relevant that the recycling company is being paid by the supplier to have the waste materials removed. Mr Coppel submitted that what was involved in recycling was converting a liability, as he put it, into something of value. For my part, I cannot see that those attributes of the activity should prevent the process described in paragraph 7 of the decision from coming within paragraph (c) of the definition of industrial process in Article 2, and why, therefore, that use should not come within use class B2 -- it being common ground that if it were an industrial process as so defined it would not fall within use class B1. Nor, disagreeing with Mr Coppel, do I see why waste should not be within the meaning of "article" as used in the definition of industrial process.

If necessary, therefore, I would have found that the inspector had misdirected himself in concluding that, for the reasons set out in paragraphs 10 and 11 of his decision letter, the proposed use was not within any of the classes in the Use Classes Order.

That brings me to the final question which is whether the inspector's conclusion that the existing and proposed uses, not both being within the same class of the Use Classes Order, are materially different in planning terms is open to challenge. In paragraph 15 of his decision letter, the inspector simply stated that:

In the course of argument my attention was drawn to the decision in Devonshire County Council v Allen Caravans (Estates) Ltd (1963) 14 PCR, page 440, and in particular to remarks of Lord Parker (sitting in the Queens Bench Divisional Court with Gorman J and Salmon J, as he then was) who at page 441 said this:

I should also mention an observation in the speech of Lord Bridge in Westminster City Council v British Waterways Board [1985] AC 676 at p. 683, where in connection with the scope for planning purposes and established use, the following was stated -- I should say that the case was a landlord and tenant dispute and as such was far removed from pure planning matters:

MR COPPEL: My Lord, I am grateful for that. I would ask for an order formally in those terms. I also ask for my costs in this matter. My Lord, the matter was originally listed for one day and indeed did take one day, but plainly judgment has caused it to spill over into a second day so strictly speaking, under the Practice Direction, summary assessment of costs is not mandatory, however, I would ask for a summary assessment of costs. A schedule has been prepared, updated to take today into account.

MR JUSTICE BLACKBURNE: Shall I first deal with the principle as to whether you should get your costs?

MR WALTON: My Lord, I also have an application for costs on behalf of the second defendant -- dealing with the principles rather than the amount. It is, of course, well established that a successful second defendant is not normally entitled to his costs, but in this case, my Lord, I say that there should be a departure from that normal rule. The reason for that is because the County Council's interest in this matter is a separate matter from that of the Secretary of State given the matter that was under discussion here and the significance of it to the Council. The bare facts are that this is an important planning matter and that the claimant was seeking through the process of law to get development on this site other than through the more regular planning application route. Of course, this Council was very concerned that if that matter was to succeed, such things as the environmental statement and the like would not necessarily have to be put in.

MR JUSTICE BLACKBURNE: Any reason why all the various points that Mr Cahill advanced could not have been advanced through the Secretary of State?

MR WALTON: My Lord, there is and the reason for this -- and this is an alternative basis on which I put may case that there should be an order for costs in favour of Council -- is that it was not clear until very late in the day what points the Secretary of State was going to be taking. Your Lordship will be aware that there was a timetable for the submission of skeleton argument.

MR JUSTICE BLACKBURNE: That may be, but co-operation between the parties at an earlier stage could have ensured that any relevant points could have been taken by counsel acting for the Secretary of State.

MR WALTON: My Lord, certainly there has been no lack of attempted co-operation on the Council's part. Chasing has been undertaken, but it was not until last Friday that the Secretary of State's skeleton argument was put in, by which time we were committed so far as we could be at that time to presenting our case to the court. So in my submission there was a separate issue for the County Council to pursue. So in that case what I submit is that there should be a separate order for costs as a departure from the general Bolton rule. Alternatively, if your Lordship is against me on that, that the Secretary of State in being awarded his costs, and one must submit that that should be the normal way of things, that there should be a division of that award. Again, in Bolton it is clearly set out that that normally should not happen, but here with the late submission of the Secretary of State's skeleton argument, we would submit that it would be fair for the County Council to have half of the Secretary of State's award of costs.

MR JUSTICE BLACKBURNE: Thank you very much. Miss Hannif?

MISS HANNIF: My Lord, in relation to the Secretary of State's costs, we cannot resist that, however there is one small matter for dispute in relation to the hours spent on working on documents.

MR JUSTICE BLACKBURNE: Can I deal with the principle, then I will look at the question of summary assessment?

MISS HANNIF: As regards the costs of the second defendant, my Lord, there is no reason why they had to be separately represented. There was no separate or distinct issue which they had to be heard on. The Secretary of State's submissions amply covered anything they had to say. We would submit that there is no need for them to get costs in this hearing.

MR JUSTICE BLACKBURNE: Thank you very much. Anyone else want to say anything?

MR COPPEL: Just to say something in relation to the suggestion that some of the costs to be awarded to the Secretary of State should be carved out and given to the second defendant, the position here -- your Lordship already has the point in relation to the co-operation that clearly existed between the first and second defendants. Secondly, the second defendant's skeleton only came in on 30 June and as I understand it there has been no communication in order to see what points would be being taken by the Secretary of State prior to that. So there would appear to have been a commitment to Mr Cahill appearing before this court very early on in the piece -- more or less, regardless of the stance being taken by the Secretary of State. When one looks at his skeleton argument compared, for example, with mine, obviously there are different ways of expressing the points but essentially the points are the selfsame points made by the Secretary of State.

MR JUSTICE BLACKBURNE: First of all, the Secretary of State can have his costs. I shall make no order so far as the County Council's costs are concerned.

MR COPPEL: My Lord, on that basis may I hand up a summary assessment that has been prepared. As I say, I have updated in manuscript to take account of the fact that judgment was today.

MR JUSTICE BLACKBURNE: Mr Hannif, you have seen this, and those instructing you?

MISS HANNIF: There was one small item with it in page two in relation to work done on documents. It states that as 16 hours. My Lord, considering that the claimants put together the bundle and it only took us 11 hours that seems somewhat excessive. In the light of that we would submit --

MR JUSTICE BLACKBURNE: What are you saying it should be? Should it be 11 or 10 hours or what?

MISS HANNIF: We would submit between 8 or 10 hours would be a fair figure.

MR JUSTICE BLACKBURNE: Any other queries?

MISS HANNIF: That is all, my Lord.

MR JUSTICE BLACKBURNE: The grand total I see -- grand may not be quite the right word -- is £6,080. Right do you want to say anything in answer to that?

MR COPPEL: Just two things very, very shortly. The work done on documents is, if I may say so, an old chestnut in 288 appeals because it is always high when the Secretary of State appears, and the reason for that is this: of course the Treasury Solicitor has not appeared at the inquiry itself or participated so it has to come up to speed in relation to that. Secondly, the Treasury Solicitor always prepares a minute as to whether the matter merits defence and that is where a large part of the work done on documents comes in because where the Secretary of State takes the view that it ought not be defended then he throws in the towel. That is something to be encouraged rather than penalised where it is decided that the matter is to go ahead. So 16 hours for the preparation of all of the work done on documents, bearing in mind that he has not had a role before, is perfectly reasonable bearing in mind that a minute has to be prepared for the Planning Inspectorate. The second point I make, my Lord, is that the grand total is rather less than the grand total which is put before this court by the claimants in their summary schedule -- the claimant's of course having the benefit of their knowledge by having prepared for the planning and appeal itself. So I do not really think it lies in their mouth to quarrel with the sum in a matter like this which is, in any view, a fairly modest sum.

MR JUSTICE BLACKBURNE: I shall assess costs in the figure of £6,080.

MR COPPEL: Grateful, my Lord.

MISS HANNIF: One final matter to raise. My Lord, we would seek permission to appeal this matter and there are four main grounds for that. The first relates to the fact that, if the inspector had held that the existing use was made of discrete parts then he ought to have gone on to have considered whether he could have issued a lawful development certificate for part of the site -- this is something he did not consider. The second is that the reference to Article 3(6)(g) was essentially relevant to his decision. The inspector stated that it was very similar to the existing use, however he has not addressed whether the storage or the distribution of the minerals is something which is ordinarily incidental to the processing which is clearly a different question to whether they are essentially similar or not. The third ground, my Lord, is that in the light of the fact the inspector incorrectly directed himself as to the character of the proposed use, the issue then arises how could he have made a correct comparator between the existing and the proposed use? Lastly, my Lord, in relation to the fact that materials were different, we would submit that is irrelevant. The issue is (inaudible) the process.

MR JUSTICE BLACKBURNE: Thank you. Mr Coppel, what do you say?

MR COPPEL: My Lord, the test for granting permission is that which is set out in CPR 52.3 which is whether there is a real prospect of success or some other compelling reason. All that Miss Hannif has done, with respect to her because she obviously has not seen what was run yesterday, is to have a re-run of the arguments that have been run before your Lordship yesterday without suggesting any reason why there is a real prospect of success of appealing your Lordship's decision as opposed to -- it is sought to be re-run in the Court of Appeal and why your Lordship's decision has a real prospect of being overturned by the Court of Appeal. Nothing has been advanced in relation to that, my Lord, and for those reasons there should be no appeal.

MR JUSTICE BLACKBURNE: Do you want to say anything?

MR WALTON: My Lord, no.

MISS HANNIF: My Lord, there are two separate tests, the other being there is another compelling reason for the appeal, or in this case there clearly is a crucial matter of public importance, namely as to the distinction to be applied to these uses and the process through which we will decide whether they are sui generis or B2, and for that reason we would submit that it is of general importance to a number of other issues and there is therefore a compelling reason why the question ought to go to the Court of Appeal.

MR JUSTICE BLACKBURNE: I think you ought to go to the Court of Appeal for permission.