Alliance Spring Co Ltd. & Ors v The First Secretary of State

This case concerns a major development resulting from Arsenal Football Club’s (AFC) need for a stadium with increased capacity and a desire that that stadium should continue to be in Islington. A result of the Taylor recommendations following the Hillsborough disaster was that football stadia should provide seating for all spectators. This resulted in the capacity for the existing stadium in Highbury being reduced to 35,000. AFC is a major player in the Premier league and needs to accommodate more spectators if it is to be able to finance the enormous sums which now have to be paid to attract the top quality players to enable it to maintain its position in the league. The new stadium will have a capacity of about 60,000.

AFC had started life in Woolwich and had moved to Highbury in 1913. For obvious reasons, not least because it had been its home for some 90 years and the largest concentration of its supporters lived in the area, AFC wanted its new stadium to be close to its old. Football stadia are not on the whole desirable in built up areas and so AFC no doubt appreciated that to get planning permission it would have to persuade Islington Council, as the local planning authority, that whatever scheme it proposed would result in an overall benefit in planning terms. Thus it was essential to liaise with the Council and provide much more than the relocation of the stadium from its existing to a new site. AFC concluded that a site at Ashburton Grove, Highbury, which was near to its present ground, and was largely owned by the Council, offered the best opportunity.

In 1999 the proposals, worked out in consultation with the Council’s planning officers, were made public. They involved three interconnected developments which involved the relocation of the stadium to the Ashburton Grove site, a redevelopment at Lough Road nearby to accommodate a waste recycling centre which was to replace one which was at the Ashburton Grove site but which had reached the end of its useful working life and a redevelopment of the site of AFC’s existing stadium. There was extensive consultation and a detailed environmental statement. The proposals were controversial and generated considerable opposition as well as support. Although they did not comply with UDP policy in a number of respects, the planning officer recommended approval, there was no call in by the Secretary of State and approval was granted on 30 May 2002, following the conclusion of an agreement under section 106 of the Town and Country Planning Act 1990 (the 1990 Act).

The grant of planning permission was challenged by an application for judicial review. A renewed application for permission came before Ouseley J following refusal by Sullivan J on the papers. In a lengthy and detailed judgment given on 31 July 2002 ([2002] EWHC 2044 Admin) he dismissed the claim. I need only cite Paragraph 8 of his judgment to indicate the comprehensive nature of the challenge and its lack of merit. Ouseley J said this: -

“The matter now before me is brought by only two residents. The other claimants have fallen by the wayside. The consolidated grounds in part were not really pursued, notably to the extent that they raised human rights grounds, which were misconceived and unsupported by any evidence. A number of additional grounds were sought to be raised. The grounds raised were refined and altered in the skeleton argument, and before me, from those set out in the claimants’ skeleton argument. No possible point or permutation of a point has been overlooked by counsel for the claimants. I hope I do justice to the variety and ingenuity of his multifaceted arguments. They have put the decision-making process of the London Borough of Islington through a demanding legal audit as if a roving commission were being conducted on behalf of all objectors. I have examined all these points. In the end I have concluded that these applications fail. Most of the points raised are indeed unarguable. ”

An attempt to persuade the Court of Appeal to grant permission to appeal failed.

Since the planning permissions were for a major redevelopment which would necessarily involve the demolition of a number of buildings not all of which were owned by the Council or AFC, a Compulsory Purchase Order was likely to be needed. On 17 June 2002 the Council made such an order under s.226 of the 1990 Act. This provides, so far as material, as follows: -

“(1)

A local authority … shall … have power to acquire compulsorily any land in their area which –

(a)

is suitable for and required in order to secure the carrying out of development, re-development or improvement …

(2)

A local authority and the Secretary of State in considering for the purposes of subsection (1)(a) whether land is suitable for development, re-development or improvement shall have regard –

(a)

to the provisions of the development plan, so far as material,

(b)

to whether planning permission for any development on the land is in force; and

(c)

to any other considerations which would be material for the purposes of determining an application for planning permission for development on the land.

(4)

it is immaterial by whom the local authority propose that any activity or purpose mentioned in subsection (1) … should be undertaken or achieved (and in particular the local authority need not propose to undertake any activity or to achieve that purpose themselves).”

The Order, which is entitled ‘London Borough of Islington (Ashburton Grove and Lough Road, Islington) Compulsory Purchase Order 2002’, covered 134 plots of land. It was stated to provide for “the purchase for the purposes of securing the carrying out of development, redevelopment or improvement as a mixed use scheme including a 60,000 capacity stadium, an education ‘learning centre’, a replacement Arsenal Sports and Community Centre, a replacement waste and recycling centre, new and refurbished houses, new live-work units, new general business space, new shops, financial services and cafes/restaurants, new leisure space, two new gym/health clubs, two new nurseries, four new community health facilities and new publicly accessible open space of the land and new rights described in the Schedule hereto”.

There were a considerable number of objectors to the Order and so an inquiry was held before an Inspector. It sat for 14 days between 14^th January and 20^th February 2003. At a pre-inquiry meeting, it was agreed that it should proceed in two parts, the first to consider objections in principle to the order, the second to consider matters specific to particular plots. By the time the inquiry commenced, 24 of 33 statutory objections had been withdrawn. The only effective remaining objections related to plots in Queensland Road, which was at the south end of the Ashburton Grove site and in which there were a number of businesses. The statutory objectors carried on businesses there and were concerned that it would be impossible to find suitable alternative premises and that compensation payable under the Act would be insufficient to enable them to set up or maintain their businesses elsewhere.

In a lengthy and detailed report which ran to 788 paragraphs over 129 pages, the Inspector recommended that the order should not be confirmed. The Secretary of State did not agree with the Inspector and on 12 December 2003 he sent a letter to the Council enclosing the Inspector’s report and his own reasons for disagreeing with the recommendations in the form of an indication that he was “minded to confirm the CPO” with some modifications. Copies of this letter and of the Inspector’s report were sent to all who were entitled to appear at the inquiry and who appeared at it affording them the opportunity to comment on the Secretary of State’s proposed decision in writing within 28 days. In due course, the Secretary of State decided to confirm the Order on 19 May 2004.

On 15 July 2004 the claim before me was lodged by five statutory objectors who have businesses in Queensland Road and by one of the claimants before Ouseley J. It is made pursuant to s.23 of the Acquisition of Land Act 1981, which, so far as material, provides: -

“ If any person aggrieved by a compulsory purchase order desires to question the validity thereof, or if any provision contained therein on the ground that the authorisation of a compulsory purchase thereby granted is not empowered to be granted under this Act or any such enactment as is mentioned in section 1(1) of this Act [which includes the 1990 Act], he may make an application to the High Court”.

It is accepted by the Secretary of State that in order to justify a CPO he must be satisfied that there is a compelling case in the public interest. He had issued a Circular 02/03, which was in force at the material time and which gave guidance on the use of compulsory purchase powers. It confirmed the above test: see paragraph 14. And in paragraph 4 of Appendix A it dealt with the powers conferred by s.226(1)(a) of the 1990 Act. It stated: -

“This wide power may be used to acquire land for a variety of planning purposes such as a town centre redevelopment or other comprehensive regeneration scheme for which the authority wishes to assemble a number of individual properties or areas of land.

But it is always necessary for the acquiring authority to be sure that the purposes for which it is making a CPO sufficiently justify interfering with the human rights of those with an interest in the land affected. In this case, the five claimants with businesses in Queensland Road will clearly suffer an interference with their rights under Article 1 of the First Protocol to the European Convention on Human Rights, which deals with the protection of property. It reads, so far as material: -

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No-one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law …”

Compulsory purchase powers are granted in the public interest and so, provided they are exercised in accordance with the law and in a properly proportionate fashion, will not constitute a breach of the Article.

The Inspector was unimpressed with the Council’s case that the scheme would produce an effective and desirable regeneration of the areas concerned. His overall conclusion is expressed thus in Paragraph 780 of his report: -

“The land that the Council now seek to acquire compulsorily is suitable for this stadium led scheme of redevelopment to the extent that planning permissions have been granted for the proposals. That land is required, if the scheme is to proceed through to completion, but I am not persuaded that there is a compelling case in the public interest that the CPO should be confirmed. There are clear conflicts with the development plan’s requirements and little could be achieved by way of effective regeneration, particularly for those areas that are most in need”.

There was an issue whether the proposals were financially viable. The Inspector was concerned that insufficient information had been given to establish viability, but was persuaded that it was likely that the scheme would be deliverable. He considered the need for the Queensland Road properties since the Council had decided to permit the new stadium to be constructed. In paragraphs 757 and 758 he said this: -

“Other plot Specific objections … all relate to land that is associated with those parts of the scheme that would be centred around the realigned Queensland Road. In some cases plots could be omitted from the CPO without affecting the stadium or access to it. Certainly the scheme could be modified to alter the access arrangements and to exclude some or all of the development that is proposed to the south of the podium (sic). However, if existing buildings were to be retained on those plots, they would appear in stark contrast to the new development. This would undermine the architectural quality of the scheme and would fundamentally upset the urban composition on this part of the site. As I have already indicated, the development to the south of Queensland Road is clearly needed to achieve a successful transition from the stadium to the surrounding area.

758.

The location of the Ashburton Grove site is highly valued by objectors who operate businesses from there. They are worried about the consequences of having to move away and, for some, the practicalities of achieving the move without undue harm to the businesses raise particular challenges. I have no doubt that suitable relocation premises could be found, albeit in another part of the city. However, AFC’s early efforts in this respect have caused unnecessary delays, in certain cases, and I am not convinced that all businesses could be successfully relocated before the Queensland Road part of the scheme commences in 2005 … Nevertheless, these considerations, together with those that relate to the scope of compensation payments, do not persuade me that the redevelopment of the Ashburton Grove site should be reduced in extent if the scheme were to proceed, given the design considerations that I have referred to”.

He concluded (paragraph 760) that all of the land within the CPO was required for the purposes of the development, but that compulsory purchase was only needed in some cases to ensure that clear title to the land was obtained.

The scheme was, as the Inspector said, rooted in AFC’s desire for a larger stadium. He noted that the Council had originally sought to justify the use of compulsory purchase powers on the basis that the scheme would help to secure AFC’s long term future in Islington and would bring regeneration benefits. However, the main justification presented to the inquiry was that the CPO was needed to achieve a comprehensive regeneration scheme. He observed that there was no persuasive evidence to suggest that the Club would leave if the CPO was not confirmed: indeed, since the new stadium was to go ahead even without the CPO, that observation was hardly surprising. But he recognised that a more compelling reason to confirm the CPO would be the need to secure a comprehensive regeneration scheme. There was no precedent for a stadium led regeneration scheme, but he did not suggest that this was of itself a good reason to recommend that the CPO should not be confirmed.

It is, I think, an adequate summary of the material conclusions reached by the Inspector if I cite paragraphs 689 to 693 and 696 of his report.

“689.

The Council’s approach to regeneration of the area, in and around the CPO sites, appears to be opportunistic and weakened by its failure to engage the local community. Their Regeneration Strategy requires regeneration activity to be planned, to achieve defined objectives, with active involvement at all levels by the people who live and work in these areas. Indeed the Unitary Development Plan makes it clear that the Council will seek such involvement. Extensive consultation on the planning aspects of what is being proposed is no substitute for canvassing views on what is required.

690.

Opportunism in matters concerning regeneration is understandable and not necessarily wrong. However, in the absence of objectives that are informed by local needs, there is a danger that the benefits to the community will be overly constrained by private interests.

691.

The AFC scheme represents the largest development proposal ever made in the Borough. A critical requirement here is to secure a proper balance between the public and private interests. AFC want to fund and construct a new stadium whereas the Council are hoping to secure regeneration across a wide tract of north London. Indeed the Council have consistently refuted suggestions, that the scheme is for AFC’s benefit, by pointing out that all their actions have been predicted on the basis that the scheme would deliver a comprehensive scheme of regeneration.

692.

The question of whether the scheme is likely to be completed is a matter that I shall return to. The Council maintain that development at Drayton Park and residential development at Lough Road are likely to proceed in any event. They also point out that the effects of losing the Queensland Road element of the scheme would be severe and that planning permission for the overall scheme is indivisible. Certainly the need to obtain control over properties in Queensland Road, and thereby secure the overall scheme, is the main reason advanced for confirmation of the CPO. It was therefore surprising to learn towards the end of the inquiry that, shortly after the proceedings closed, the Council would sell AFC sufficient land to enable the stadium to be built. This willingness to allow the stadium to proceed, in absence of any certainty that it would form part of the publicly promoted comprehensive scheme of redevelopment, does not strengthen the Council’s case and is not adequately explained by their unsubstantiated analysis of the risks involved.

693.

These considerations undermine the Council’s stated commitment to effective regeneration and are consistent with objectors’ claims that regeneration arguments have been retrofitted to what is, in effect, simply a redevelopment scheme. This has particular significance in the light if the Council’s acknowledgement that they would need to manage the process if successful regeneration is to be achieved.

696.

I am led to the following conclusions. The main justification for the use of compulsory purchase powers here would be to achieve a comprehensive regeneration scheme. Confirmation of the Compulsory Purchase Order would overcome any outstanding uncertainties regarding title to the land, but the scheme of development that it would facilitate was not conceived with a view to effective regeneration. In any event successful regeneration would not flow automatically from completion of the scheme; it would require the Council’s active involvement. However the Council’s stated commitment to regeneration and to achieving a comprehensive scheme is undermined by their failure to adhere to their own Regeneration Strategy and by their willingness to allow the proposed new Arsenal stadium to be built, irrespective of whether the Order is confirmed”.

He was not persuaded that the scheme would have the effect that the Council was putting forward and, as was submitted to me, there were unsatisfactory elements in it. For example, a waste recycling centre and a stadium were hardly desirable neighbours for residential accommodation, affordable housing was to be allocated in the least desirable parts of the site, and there would be a loss of areas of industrial and business use which would be detrimental overall.

I have already referred to the Secretary of State’s letter of 12 December 2003 in which he indicated that he was minded to reject the Inspector’s recommendation and asked for any comments within 28 days. It was suggested by Mr Horton that there was no power to act in that way and that it was not for the parties to inform the Secretary of State of any defects in his reasoning. It was further suggested that the Secretary of State acted unfairly in sending this letter because, if I correctly understand the submission, he was endeavouring to discover in what ways his decision might be said to be flawed. In fairness to Mr Horton, he did not in the end press those submissions, no doubt because he appreciated that they wholly lacked merit. While the Secretary of State was not obliged to notify the parties in advance that he was minded not to follow the Inspector’s recommendation, he cannot be criticised for having given them the opportunity to make further representations. In particular, they might (as indeed the claimants did) want to suggest a need to reopen the inquiry if there was a good reason to do so. In any event, in my view this sort of advance notice is an example of good administration since it gives the parties an opportunity to raise matters which may affect the result if they are matters which have not been properly taken into account. The Secretary of State decided there was no need to reopen the inquiry since he had not differed from the Inspector on a finding of fact. The submission made by the claimants was that evidence of the individual circumstances of each of them and the hardship which would befall them should be considered. That had already been done before the Inspector and the decision not to reopen the inquiry cannot be criticised.

The Secretary of State’s letter of 19 May 2004 by which he notified his decision to confirm the CPO is lengthy and detailed. His key conclusions were that the main justification for the use of compulsory purchase powers, namely to achieve a comprehensive regeneration scheme, had been met, that there was a compelling case in the public interest that the CPO should be confirmed, that all the land was required and that the acquisition of the properties was proportionate. He assessed the scheme on the basis of the complete package of proposals.

He recognised that the Inspector could properly have regard to the planning aspects: indeed, s.226(2)(c) of the 1990 Act makes it clear that he should. But he noted that those matters were taken into account in the grant of planning permission. In those circumstances, it is not in my view appropriate for an Inspector to take a different view on planning considerations which have already been considered unless there is fresh material or a change of circumstances. Clearly if there is evidence to show that particular matters were not taken into account or were not fully considered, a fresh view can properly be taken. The Secretary of State concluded (paragraph 23): -

“In considering whether to confirm the CPO the Secretary of State has judged the desirability of the overall scheme not solely on the basis that there is a planning approval, but also whether there is a compelling case in the public interest to justify acquiring private interests. Whilst the fact that planning permission for the proposals has been granted does not automatically mean that the CPO should be confirmed, the Secretary of State is satisfied that the provisions of s.226(1) and (2) have been met and that it is in the public interest that the development should proceed.”

In paragraphs 24 to 28 of the letter the Secretary of State reached conclusions on the purpose of the CPO. He said (paragraph 26): -

“The Secretary of State agrees with the Inspector’s conclusions that the desire to bolster the Club’s chances of future success is not a sound reason for use of compulsory purchase powers, but that a more compelling reason to confirm the CPO is the need to secure a comprehensive regeneration scheme. In this respect he also agrees with the Inspector that parts of the Borough are in need of regeneration and accepts the Inspector’s conclusions that the Lough Road site and its surroundings are more in need than the area which includes the Ashburton Grove site. The proposals represent an opportunity to regenerate two of the Borough’s poorest areas – the Lough Road site has been identified as an Area of Opportunity since at least 1988 and although much of Queensland Road is in use, many of its buildings are outdated and in poor condition”.

Further on in the same paragraph he said: -

“He also notes that the Council originally sought to justify the use of compulsory purchase powers on the basis that this would help to secure AFC’s long term future in the Borough and that the scheme proposed would bring regeneration benefits. However, the main justification presented to the inquiry was that the CPO was needed to achieve a comprehensive regeneration scheme. The Secretary of State considers that the Council’s actions have all been predicated on the basis of a comprehensive scheme”.

He concluded that the benefits were indeed such as to satisfy him that a compelling case had been established.

The letter went on to deal in detail with the concerns which had led the Inspector to decide that a compelling case had not been established. It is not necessary to lengthen this judgment by citing these at length. Suffice it to say that Mr Horton recognises that he cannot launch a successful attack on the decision if the Secretary of State is reaching a different conclusion based upon a different judgment on the facts found by the Inspector. He is entitled to attach greater or less weight to particular matters and so reach a different conclusion. That he has done and no error of law is disclosed.

The main thrust of Mr Horton’s submissions is that the real purpose of the scheme was to give AFC a new stadium and this could not properly be regarded as a scheme to achieve a comprehensive regeneration of the relevant area. Further, he submits that it is not a proper purpose for the exercise of compulsory purchase powers for those powers to be used to enable AFC to construct a replacement stadium. There was some argument in the course of the hearing as to whether the purpose of the proposals should be determinative. It seemed to me that, while the purpose of any scheme of development was very important and might in many cases produce the right answer, the effect of the scheme might be more important. However, the Secretary of State has clearly had regard to the purpose and I am content to assume for the purposes of this case that purpose is all important. The Secretary of State has decided that the main purpose was a comprehensive regeneration, albeit the trigger for the scheme was the desire of AFC for a new stadium with a substantially increased capacity. There is nothing in the material put before and accepted by the Inspector which persuades me that that decision was ill founded or was one which the Secretary of State was not entitled to reach. Developments which result in regeneration of an area are often led by private enterprise. Mr Horton perforce accepts that that is so, but submits that this is not the sort of situation where, for example, a private development is the anchor for a particular scheme. I disagree.

I understand and have considerable sympathy with the claimants’ concerns that their businesses are to be at best disrupted by a scheme which benefits AFC. But the Council was entitled to make use of AFC’s desire to have a new stadium to produce and promote a scheme which it regarded as a comprehensive redevelopment of the area in the public interest. And the Secretary of State was entitled, in his judgment, to conclude that the main purpose, and certainly the main effect, was indeed to achieve a comprehensive and desirable redevelopment of a deprived area.

Mr Horton submits that the claimants’ Convention rights have not been properly considered. There is no doubt that the Secretary of State did consider them and it is to be noted that the Inspector’s view was that, if the Secretary of State differed from that which he recommended, he believed that any interference with Convention rights was likely to be considered proportionate. That was the view taken by the Secretary of State. Once he decided that there was a compelling case that the CPO should be confirmed, that view was not only not erroneous but was manifestly correct. It was not necessary to consider each case individually once the view was properly taken that all the land had to be acquired to enable the scheme to be put into effect.

Complaint is made that there was insufficient information provided by AFC and the Council to enable the Secretary of State properly to be satisfied that the scheme was viable. The Inspector, although critical of what he regarded as the lack of information, was satisfied that the scheme was deliverable. The Secretary of State was entitled to take the same view. There was nothing unfair in the failure to provide more information. That failure would hardly have prejudiced the claimants: it was far more likely to have prejudiced the Council.

Although considerable time was taken in presenting this claim, in reality it has no substance. The Secretary of State was entitled to form his own judgment and this he did. He had regard to all relevant matters. The fact that the scheme was led by and to a large extent dependent on a private developer is no reason why it should be rejected. Section 226(4) of the 1990 Act itself recognises that the Council which has determined that there should be a CPO does not itself have to carry out the purpose for which it is required.

It follows that this claim must be dismissed.