Jewson Holdings Ltd., R (on the application of) v Vale of the White Horse District Council

Judgment

1. MR JUSTICE DAVIS: This is an application by the claimant, a company called Jewson Holdings Limited, brought pursuant to the provisions of section 288 of the Town and Country Planning Act 1990, by way of claim form issued on 23 December 2002. By these proceedings, the claimant seeks to quash a decision of an inspector retained by the first respondent, the First Secretary of State, contained in a decision letter dated 12 November 2002. The inspector's decision was given in the context of an appeal brought by the claimant pursuant to the provisions of section 78 of the Town and Country Planning Act 1990 against a refusal of the second defendant, the Vale of the White Horse District Council, to grant it planning permission. The decision was given as a result of an inquiry by reference to that particular appeal.

2. The appeal itself concerned a site known as Valley Farm, Cumnor Road, Farmoor, in Oxfordshire. It appears that two buildings on the site were grade II listed buildings and it was common ground that the site itself is in the Green Belt. Previously, so it would appear, planning permission had been granted in March 2000 in respect of the site for the demolition of some of the buildings on the site and the conversion of some of the others to produce a total of over 920 square metres of office accommodation. It appears that there are a number of buildings on the site including some barns. There is evidence to suggest that ultimately the claimant received advice to the effect that it would not be viable to implement that particular planning permission.

3. In the event, on 12 October 2001 the claimant made a fresh application for planning permission. In summary, this seems to have involved the construction of four new office buildings and the demolition of two large barns on adjacent land. The proposal would result in approximately 1,245 square metres of office accommodation. On 18 February 2002, the council refused planning permission and it was against that refusal that the claimant appealed as I have indicated.

4. The claimant has always accepted that as the site is in the Green Belt it needed to demonstrate that there were very special circumstances sufficient to outweigh the normal presumption against development. At the inquiry the claimant's essential contentions were twofold and were in the alternative. First, that the proposed development would enhance the setting of the listed buildings; and second, that the new build element constituted enabling development within the meaning of that term in the English Heritage document entitled, "Enabling Development and the Conservation of Heritage Assets". In the result, by virtue of the decision of the inspector, the claimant failed on both of those points. Its current challenge is limited to an attack on the reasoning and the decision of the inspector with regard to the second issue raised.

5. There are two particular points which form the thrust of the claimant's case before me today. First, the claimant, by Mr Cameron of counsel, submits that the inspector erred in law in failing to take into account a material consideration: namely, the policy guidance given in the policy document of English Heritage, which can be called the PSPGA, or by failing to understand the policy properly. Second, that the inspector erred in law in failing to give proper, adequate and intelligible reasons for his finding that the claimant had failed to demonstrate that the amount of development proposed on the site was the minimum necessary in order to secure the repair and long term future of the listed buildings.

6. Mr Cameron very helpfully took me through what might be said to be the background of the applicable law. It soon emerged that he and Mr Coppell, counsel appearing on behalf of the First Secretary of State, were in agreement as to the applicable legal principles. Mr Cameron submitted that the inspector was under a duty to have regard to the provisions of the development plan so far as it was material to the application and (he stresses) to any other material considerations. In that context, he referred me to section 70(2) of the 1990 Act. Further, Mr Cameron submits that the inspector was under a duty to make his determination in accordance with the development plan unless material considerations indicated otherwise, and he referred me to section 54A of the 1990 Act in that regard.

7. Mr Cameron went on to submit that in considering whether to grant planning permission for development which affected a listed building or its setting, special regard had to be had to the desirability of preserving the building, or its setting, or any features of special architectural or historic interest which it possessed. He also helpfully cited to me the well-known principles -- to the extent that the application of those principles is additional to the powers conferred by the Town and Country Planning Act 1990 itself, as set out in the case of Ashbridge Investments Ltd v Ministry of Housing[1965] 1 WLR 1320 at page 1326. Those principles are so well-known they do not need to be set out by me here.

8. Further legal points of principle about which Mr Cameron and Mr Coppell were in agreement were that when questions of interpretation of a planning policy are to be considered it is for the court to determine as a matter of law what the words are capable of meaning, and if the decision-maker attaches a meaning to the words which they are not capable of bearing, then it would have made an error of law and it would have failed properly to understand the policy. Needless to say, the court's role in this jurisdiction is essentially one of review. The court itself, of course, does not make substantive decisions as to matters of planning judgment. So far as the duty to give reasons is concerned, it is common ground that reasons must be proper, adequate and intelligible and deal with the substantial points and main issues that have been raised. In this context, Mr Cameron referred me to the decision in Bolton Metropolitan District Council v the Secretary of State [1996] 71 P&CR 309. He also cited to me the decision in Granada Hospitality Ltd v Secretary of State for the Environment, Transport and Regions [2001] 81 P&CR 505, where at paragraph 48 of his judgment Collins J said this:

"48. It is necessary to consider how inspectors' reports and decision letters should properly be approached. There is much learning on this subject, but the principles are by now clear and not really in dispute. Essentially, the reasons given must be proper and adequate. There is a duty to set out the major steps in the reasoning which led to the decision in question, and it is necessary also to state the conclusions reached on the principle issues raised and which had to be decided. It is, however, unnecessary to refer to all matters (even though they may be material) if they are not significant.

9. Collins J goes on to cite authorities in that regard and then at paragraph 50 says this:

"50. The parties must know why they have won or lost, and what conclusions have been reached on the principal important controversial issues. Furthermore, in my judgment, it is necessary that the decision be read fairly. Thus where, as here, an inspector directs himself as to the materiality of a particular issue, it should not be assumed that any later observations are in conflict with that direction, unless there is no other reasonable meaning to be attached to what the inspector has said.

"51. The same principle, as it seems to me, should apply to alleged errors of law. Any experienced Inspector would have known that he must not introduce new policy considerations. What he said might perhaps, on one interpretation, be capable of being construed as though he was wrongly doing that. That indeed is the construction that [counsel] has urged upon me. But that construction should not be placed on his words unless no other is reasonably to be found from what he has said."

I propose to direct myself in accordance with those observations which seem to me also to be well established by other authorities.

10. In addition, it is a requirement that where reasons for a determination are said to be inadequate, it must also be shown that the claimant's interests have been substantially prejudiced as a result. In that context, Mr Cameron helpfully cited Save Britain's Heritage v Secretary of State for the Environment[1991] 2 All ER 10 at page 22.

11. Before turning to the decision letter in question, it is, I think, convenient at this stage to refer to the policy statement and practical guide to assessment promulgated by English Heritage. This is a substantial document. It starts, after a foreword, with the policy statement. At page 7 of that policy statement there is this statement:

"English Heritage believes that there should be a general presumption against 'enabling development' which does not meet all of the following criteria."

12. There then follow a number of listed bullet points as to those criteria. One of them reads as follows:

"It is demonstrated that the amount of enabling development is the minimum necessary to secure the future of the heritage asset, and that its form minimises disbenefits."

13. Then over the page under the heading, "Overview" there is a section entitled, "What is enabling development?" This is said:

"Enabling development is development that is contrary to established planning policy -- national or local -- but which is occasionally permitted because it brings public benefits that have been demonstrated clearly to outweigh the harm that would be caused. The benefits are paid for by the value added to land as a result of the grant of planning permission for its development, so enabling development can be considered a type of public subsidy. It has been proposed in support of a wide range of public benefits, from opera houses to nature conservation, but this guidance is concerned primarily with enabling development proposed to secure the future of heritage assets."

14. Then a little further on there is this statement in the context of enabling developments:

"Thus, unlike most planning applications, financial issues are central to determining proposals for enabling development."

15. Further on down the page, under the heading, "Why the concern?", it is said that enabling developments became a cause of concern because schemes had been permitted that had, amongst other things, not been demonstrated as being necessary, whether in principle or in scale, to achieve the benefit. Further on in this document there is this statement to be found at page 13 of the PSPGA:

"The essence of a scheme of 'enabling development' is that the public, typically the community in a particular area, accepts some disbenefit as a result of planning permission being granted for development which would not otherwise gain consent in return for a benefit funded from the value added to the land by that consent. Such proposals are normally only entertained when the funds can not be generated in any other way. So unlike most planning decisions, the financial consequences of the granting of permission are not only relevant, but fundamental to the decision making process."

And then a little further down:

"These are not decisions to be taken lightly. They should follow the evaluation of all potential options as part of the assessment process. The enabling development may, for example, lie within a Green Belt, on which government policy is clear; indeed the principle is relevant to all decisions involving enabling development.

"Inappropriate development is by definition, harmful to the Green Belt. It is for the applicant to show why permission should be granted. Very special circumstances to justify inappropriate development will not exist unless the harm by reason of inappropriateness and any other harm is clearly outweighed by other considerations.

"In summary, an enabling development is an established and useful planning tool by which a community may be able to secure the future of the heritage asset, and sometimes other benefits, provided it is satisfied that the balance of public advantage lies in doing so."

16. I was taken by Mr Cameron and Mr Coppell through various aspects of the practical guide to assessment contained in the PSPGA. In the course of that review, I was referred, amongst other things, to paragraph 1.4 which is at page 19 of the document. That, in referring to the roles and responsibilities of the developer, makes clear that, amongst other things, a developer should explore a range of alternative planning strategies. In paragraph 2.6 under the heading, "Financial information", which is page 24 in the document, this is said at 261:

"Much of the information the local planning authority requires for a scheme of enabling development is the same as for any development involving a listed building, its setting, or any other sensitive location in which design and materials are particularly important. The main difference is that financial considerations are fundamental to the decision from which follows a need not only for information to be supplied, but also for critical assessment by appropriately qualified professionals. Thus the local planning authority should ensure that it has sufficient information to make an informed decision upon the application."

17. Then I was referred, amongst other provisions, to that set out in paragraph 4.6.1 at page 42 of the document. Under the heading "Market testing" this is said:

"Save for historic entities discussed above, before any enabling development should be considered, the applicant needs to demonstrate that real efforts have been made without success to continue the present use, or to find compatible alternative uses for the asset. This should normally include the offer of the unrestricted freehold on the open market at a realistic price reflecting the condition of the asset, and, so far as ownership allows, with an appropriate curtilage. The offer of a lease only, or the imposition of restrictive covenants would normally reduce the chances of finding a new use."

18. The following two sub-paragraphs 4.6.2 and 4.6.3 connote that it is anticipated that a degree of formality by way of marketing and retention of appropriate chartered surveyors is to be expected. I was referred also to paragraph 5.3 and 5.4 of the PSPGA at page 46 of the document. Paragraph 5.4.1, under the heading, "Conservation deficit", reads as follows:

"In financial terms, the case for enabling development normally rests on their being a conservation deficit. This is when the existing value (often taken as zero) plus the development cost exceeds the value of the heritage asset after development. Development costs obviously include not only repair, but also, if possible or appropriate, conversion to optimum viable use and a developer's profit appropriate in the circumstances. A development appraisal in such cases produces a negative residual value. If so, enabling development (provided it meets the other criteria in the Policy Statement) may be justified, but only sufficient to cover the conservation deficit, ie to bring the residual value up to zero."

19. Those various provisions, I think, sufficiently set out the applicable policy and also makes it clear what is behind the notion of enabling developments, and also makes clear what is behind the notion of conservation deficit with a requirement that there be the minimum necessary to bridge that particular deficit.

20. The planning inspector received a quantity of evidence and other materials. His decision letter was promulgated a few weeks after the conclusion of the inquiry hearing. He summarised the background, and at paragraph 4 in the decision letter he said this, under the heading "Main issues":

"In my view there are two main issues in this appeal. There is no dispute that the new buildings included in the appeal proposal would constitute inappropriate development in the Green Belt and the first issue is, therefore, whether there are any very special circumstances sufficient to outweigh the normal presumption against such development. The second main issue is the impact on the listed buildings and their setting."

21. Mr Cameron accepts that that is an adequate summary of the main issues. Then the inspector sets out relevant aspects of planning policy, and at paragraph 11 he says this:

"English Heritage has issued guidance on enabling development in the form of its 2001 publication entitled Enabling Development and the Conservation of Heritage Assets, which includes a Policy Statement and Practical Guide to Assessment (PSPGA). I regard this as an important material consideration in the context of this appeal."

22. It is accepted by Mr Cameron that the inspector was entitled to regard the PSPGA as an important material consideration. Paragraph 12, under the heading "Appraisal", records that the appellants argued that the increased openness resulting from the development, together with improvements to the visual amenity of the Green Belt and the setting of listing amounted to very special circumstances that outweigh the presumption against inappropriate development in the Green Belt. The inspector records also that the claimant's alternative case was that the very special circumstances were provided by the need for enabling development to secure the restoration and long term preservation of the listed buildings.

23. The inspector then reached a conclusion with regard to one of those arguments at paragraph 16, and no challenge is made to that conclusion. Having done that, the inspector turned to the question of enabling development.

"17. The English Heritage policy statement and practical guide to assessment states that there is a presumption against such proposals. Paragraph 4.6.1 of the PSPGA says that, before any enabling development is considered, applicants must demonstrate that real efforts have been made, without success, to continue the present use or to find compatible alternative uses for the asset. This should normally include the offer of the unrestricted freehold on the open market at a realistic price reflecting the condition of the asset. This has not been done and the appellants say that their development appraisal shows it to be unnecessary.

"18. Much time at the inquiry was taken in exploring the conflicting views of the parties with regard to the Development Appraisal. Paragraph 5.1.2 of the PSPGA describes the appraisal process as a matter of informed professional opinion, which is not an exact science even if carried out with all due thoroughness. Paragraph 5.3.1 says that appraisals are, by their very nature, prone to inaccuracy because of the large number of variables, particularly building costs and projected end values. For these reasons, although there may well be circumstances where such appraisals provide the only means of assessing a proposal, I do not regard them as substitute for full market testing or as a wholly reliable indicator of whether market testing should be undertaken. I therefore consider that, in the absence of any effort to market the site at a realistic price, the case for enabling development has not been made out.

"19. I see no reason to doubt that the conversion of the barns into office use, for which listed building consent has been granted, would preserve these Heritage assets and secure their long-term future in sympathetic use. However, although the appellants say that it is not viable to undertake development of the scheme that was approved in 2000, I do not regard that as being, in itself, a good argument in support of the appeal proposal. The appeal proposal may well provide one viable form of development but paragraph 1.4 of the PSPGA says that developers should explore a range of development strategies. In my view, the appellants have produced insufficient evidence to demonstrate that this has been done. In particular, I am not persuaded that they have fully and objectively explored the council's suggestion that the barns could be repaired and put to a beneficial low key use such as storage without the need for enabling development.

"20. The council argues that the conversion works go beyond what is needed in order to simply repair the buildings and put them to a low key beneficial use. The appellants sought to address this criticism at the inquiry by identifying the costs of repair items (Document 11) in its Development Appraisal. However, I am not persuaded that these figures, taken out of context, necessarily represent a fair assessment of the cost of essential repairs to the barn. There is no evidence before me to suggest that the appellants have assessed the cost of simply repairing the barns other than as part and parcel of a conversion scheme.

"21. I consider that the appellants have therefore failed to demonstrate that the amount of development proposed on the site is the minimum necessary in order to secure the repair and long term future of the listed buildings. Consequently I consider that in this instance the need for enabling development does not amount to a very special circumstance sufficient to outweigh the presumption against the inappropriate development in the Green Belt.

"22. My conclusion on this issue is that there are no very special circumstances sufficient to outweigh the normal presumption against inappropriate development in the Green Belt and that the appeal proposal would conflict with Policy G4 of the Structure Plan and Policy G1 of the Local Plan."

24. Mr Cameron attacks this decision letter on the two bases that I have indicated. In particular he complains that the inspector paid no regard and made no findings as to the financial considerations (as to which there was much evidence) or to the financial consequences of the grant or refusal of permission -- which, he submitted, the PSPGA had said were fundamental to the decision-making process. Mr Coppell, for his part, submitted that if one simply looks at paragraph 18 alone, one can see that the inspector was focusing on the PSPGA document (which he had already directed himself was a very material consideration) and was having particular regard to paragraph 4.6.1 and 5.3.1. What the inspector had said in paragraph 18 was that although there might be circumstances where appraisals proffered provided the only means of assessing a proposal, he did not regard them as a substitute for full market testing. Mr Coppell submitted that the inspector was fully entitled to take that view, which view entirely accorded with the statements in the PSPGA document which I have already mentioned. He therefore submits that the inspector was entitled to take that approach; and Mr Coppell also stresses that the inspector concludes this paragraph of the decision letter by saying this:

"I therefore consider that in the absence of any effort to market the site at a realistic price, the case for enabling development has not been made out."

25. Accordingly, submits Mr Coppell, that is in itself the end of the matter because, as he submits, the inspector, correctly directing himself, has drawn a conclusion that he was entitled to draw and has concluded that that, in effect, was the end of the matter because the case for enabling development had not been made out. Mr Cameron, for his part, candidly acknowledged that had the decision letter ended there he might have been in some degree of difficulty. But his point is that the inspector did not stop there, but went on to consider the other matters in paragraphs 19, 20 and 21 and, accordingly, one must have regard to the totality of the reasoning.

26. I agree with Mr Cameron that one must have regard to the totality of the reasoning. Nevertheless, as it seems to me, Mr Coppell is right on this particular point. It seems to me that the inspector is saying, just by reference to the matters set out in paragraph 18, that that is enough to dispose of the appeal because the case for enabling development had not been made out because there had not been sufficient full market testing. That, in my judgment, is a view the inspector was entitled to reach because full market testing as explained in the PSPGA document, had been given a good deal of emphasis by English Heritage. Accordingly, as it seems to me, on that ground alone, this claim must fail. But I go further than that because in my view when one considers paragraph 19, 20 and 21, taken in the context of the whole decision letter, the inspector is giving a further reason why he is not satisfied that the claimant had made out his case with regard to the enabling development.

27. The inspector pointed out that the PSPGA stresses that developers should explore a range of development strategies. He took the view which, in my judgment, was a view he was entitled to take, that the claimant had produced insufficient evidence to demonstrate that it had explored a range of development strategies. He said in terms that he was not persuaded that the claimant had fully and objectively explored the council's suggestion that barns could be repaired and put to a beneficial low key use, such as storage without the need for enabling development. Further, in that context, in paragraph 20 the inspector indicated his view that the figures with regard to repairs as put forward by the claimant did not necessarily represent a fair assessment of the cost of the essential repairs to the barn and, accordingly, as it seems to me, on that ground too the inspector was entitled to conclude as he did: that the claimant had failed to demonstrate that the amount of the development proposed on the site was the minimum necessary in order to secure the repair and long term future of the listed buildings. In my judgment each and both of those grounds are unimpeachable in this court. Mr Cameron complained that the inspector had not grappled with the financial considerations which, as he submitted, the PSPGA document had emphasised were likely to be fundamental in cases of this kind. It seems to me, however, that the way in which the inspector dealt with this really leads to a conclusion that he was not required to grapple with the minutiae of those particular details because he had regard to matters which he was entitled to conclude were fundamental preconditions for getting this particular planning proposal off the ground. In this context I think Mr Coppell was entitled to stress the words in paragraph 5.4.1 with regard to conservation deficits: that is to say, "if so, enabling development (provided it meets the other criteria in the policy statement) (emphasis added) may be justified, but only sufficient to cover the conservation deficit." Mr Coppell's point, which I accept, is that the inspector was concluding, as he was entitled to conclude, that the other criteria in the policy statement had not been met.

28. Accordingly this claim must fail. I would only add this: even had I thought that the inspector had not given sufficient reasons with regard to the points set out by him at paragraphs 19, 20 and 21, that would not, in my judgment, have availed the claimant in any event, because in my view the claimant would have suffered no sufficient or substantial prejudice. I say that just because its claim would have failed by virtue of the inspector's reasoning as set out in paragraph 18 of the decision letter. Accordingly, and notwithstanding Mr Cameron's careful and indeed excellent arguments, I have come to the conclusion that this claim fails.

29. MR COPPELL: I am grateful, my Lord. I would ask for my costs and for those to be summarily assessed. Your Lordship should have, as my learned friend should have had, a sheet setting those out. I would ask for my costs to be as there set out.

30. MR JUSTICE DAVIS: Firstly, Mr Cameron, do you object in principle to your liability to pay costs?

31. MR CAMERON: No.

32. MR JUSTICE DAVIS: Right. You say you want £4,662.50?

33. MR COPPELL: Yes, my Lord.

34. MR JUSTICE DAVIS: Let us just have a look at this. 10 hours work done on documents when parties between them could not even get a full copy of the decision letter before me?

35. MR COPPELL: My Lord, the reason for that is -- and this happens in all applications that are lodged under section 288 -- is that the Treasury Solicitor always stands back and takes a view whether the matter ought properly to be defended and that is why one gets the number of the hours on documents -- looking through the totality -- because the Treasury Solicitor comes to these matters, in a sense, fresh.

36. MR JUSTICE DAVIS: They are not counsel of course.

37. MR COPPELL: And they were not instructing solicitors at the inquiry either.

38. MR JUSTICE DAVIS: You submit that this sum is a fair sum. I will hear Mr Cameron. Mr Cameron, you start on the position that it is nearly one half of your own which is not always a promising start. Anyway, what do you say about this?

39. MR CAMERON: I do not resist this claim. It is a perfectly proper claim.

40. MR JUSTICE DAVIS: You think £4,663.50 is fair?

41. MR CAMERON: I do not have any instructions to the contrary. I have seen what our claim is, as your Lordship points out. I have no basis on which to object to it. I do not think I can say anything more.

42. MR JUSTICE DAVIS: It seems to me that costs should follow the event and, therefore, the claimant should pay the defendant's costs. Considering the matter and making a summary assessment as I do, I take the view that those costs to be paid should be in the sum of £4,663.50.

43. MR COPPELL: I am grateful.