MR JUSTICE BURTON: This claim arises out of an inspector's report delivered in September 2004 after a Local Plan inquiry held between January and March 2004, relating to housing requirements in the area of the Erewash Borough Council, which is now the defendant. The claimant is Corus UK Limited, which is the owner of a now derelict site at Oakwell Brickworks, Ilkeston. Both counsel, Richard Harwood for the claimant and Andrew Hogan for the defendant, have been extremely helpful, both in lucid and persuasive skeleton arguments and in their oral submissions before me.

The Oakwell Brickworks site could potentially be developed for housing, though preferably in conjunction with some other land, but has had a problem of contamination which still remains to be resolved. There has not yet been any proposal for its development nor any planning application, but the claimant wishes to preserve that possibility and to avoid any risk that it could be given less than full consideration if and when one is made.

Oakwell Brickworks did feature for potential housing in the Derby and Derbyshire Joint Structure Plan adopted in January 2001 and as part of Proposal H1 Housing in the list of sites contained in the Erewash Borough Local Plan First Deposit Statement of March 2001, but it disappeared by amendment in the Second Deposit Written Statement of October 2002, and was not included as a list of potential housing in the Ilkeston Sub-Area of the Erewash Council in the Urban Capacity Study for October 2002, which accompanied that Second Deposit Statement.

The defendant Council said this at that time, under the heading "Ilkeston Sub-Area":

In a further population and housing Topic Paper of 2003, the Council further said this at paragraph 5.4:

The claimant put in written objections at the local inquiry effectively to the exclusion of Oakwell Brickworks. The defendant said this in its submissions to the inquiry, which is supplemented with, as I understand it, oral representations. At paragraph 3.2 of the proof of evidence of its expert, this is said:

The inspector in his report viewed the possibility of development of Oakwell Brickworks considerably more favourably, and in a passage in his report which was specifically devoted to the claimant's objections in relation to the Oakwell Brickworks being omitted from the H1 list of properties set out for housing in the Ilkeston sub-area, he said as follows:

The inspector concluded:

A Council is not required to accept the recommendations of an inspector at a Local Plan inquiry, but must give reasons for so doing if it does not accept such recommendations. There is common ground as to the law, which was not the subject of any contention before me. The relevant regulation is Regulation 27 of the Town and Country Planning (Development Plan) (England) Regulations 1999, and three relevant authorities were referred to me: Miller and ors v Wycombe District Council [1997] JPL 951; Stirk v Bridgnorth District Council [1997] 73 P&CR 439; and Welsh Development Agency v Carmarthenshire County Council [2000] JPL 692.

In the event, the question of whether the defendant Council gave reasons was not in the forefront of the argument as I shall describe. The defendant Council did not accept the recommendation to which I have referred in the report, but not by reference to any specific considerations in relation to the Oakwell site or its contamination, or any problem about it at all. They considered that there was no call for any housing in the Ilkeston sub-area at all, and so they deleted the H1 Proposal and the H1 list of authorities from the Local Plan in its entirety. Thus, the recommendation of the inspector that the Local Plan be modified by reinstating Proposal H1, the housing land allocation at Oakwell Brickworks, was not followed by Oakwell Brickworks being included in Proposal H1 because Proposal H1 was entirely eliminated. This meant that there was to be no provision in relation to possible housing, not only at Oakwell Brickworks, but in relation to any other of the residue of the housing listed in H1 and in respect of which planning permission had not been granted.

The response of the Council to the inspector's report is contained in a statement of decisions and schedule of proposed modifications dated February 2004. At what is our page 234, the Council stated this under the heading "Proposed Modification":

The specific reason given in the statement for not accepting the recommendation of the inspector at 3.11 with regard to the Oakwell Brickwork site appears at what is our page 252 in the bundle. Having recited the recommendation, which I have set out above, the column under the heading "Council's response to inspector's recommendation", reads:

Three grounds are set out by Mr Harwood of counsel in his skeleton, which are his very helpful way of crystallising the original four grounds in his claim form, coupled with a fifth which came in by amendment as to which there has been no objection by Mr Hogan. I read the first ground as set out in paragraph 4(1) with a small addition which I shall indicate.

Mr Harwood was compelled in the course of submissions to accept that he was not in a position to support this ground and that it did not in any event properly constitute the nature of his argument. He is not, he made it quite plain, relying on mala fides . As I have set out it, it was not a reason for rejection by the Council of the inspector's report that they still stood by their questioning views as to the deliverability of housing on the site by reference to contamination or otherwise. The reason for their rejection of this site, and indeed of all and any other sites in H1 (there being thus no discrimination against Oakwell Brickwork site per se) was that set out at page 252, which I have recited above. Mr Harwood accepted that his real case was that the Council was not entitled to rely on that reason, and that brought him effectively to his second ground, which I shall describe and which formed the nub of his case before me today and the basis of the battle ground between him and Mr Hogan, insofar as it remained.

The Council area, as I have indicated, is made up of three sub-areas, only one of which was Ilkeston; the other two are Long Eaton and Derby. In the Derby and Derbyshire Joint Structure Plan, to which I shall refer, there was certain provision made for housing development in the Erewash Borough between 1991 and 2011 in respect of each of those three sub-areas, coming together at a total amount of 6,000. Ilkeston was targeted for 3,200 and Long Eaton for 2,400. However, it soon became clear that there was over-provision of such new housing in Long Eaton and under provision in Ilkeston, and for the purposes of the inquiry, there was a document prepared, which has been called the Proposed Pre-Inquiry Modification Statement of September 2003 ("PIM").

PIM 8 was the proposal of the insertion of a new paragraph 2.9a into the Urban Capacity Study of April 2003 which the inspector was specifically requested to consider at the inquiry. 2.9a would read, if accepted, as follows:

By the time of the inquiry, this over-provision borough-wide had increased, and the figures as at 31 October 2003 were that there was a borough-wide over-provision of 178 dwellings, with an over-provision of 286 in Long Eaton and an under-provision of 158 in Ilkeston. By the time of the response to the inspector's report, to which I have referred when the inspector's recommendation in regard to Oakwell, which rejection is now under challenge, was published, the figures had changed yet further and there was now an over-provision borough-wide of 371 dwellings, with an over-provision in Long Eaton of 542 and an under-provision in Ilkeston of 231.

There was one other amendment which the Council put before the inspector, reference PIM 11, and that was to be a new paragraph 2.25 in the said Urban Capacity Study, reading as follows:

The policy of setting off over-provision in one Sub-Area against under provision in another was described by me, I know not whether for the first time, in the course of this hearing as "off-set", which was adopted by both parties in the course of their submissions. It is quite plain that the decision by the defendant not to accept the inspector's recommendation in relation to the inclusion of Oakwell Brickworks in H1 by virtue of the deletion of the entirety of H1 was on grounds of off-set. Off-set, and the entitlement of the defendant Council to do it, has thus formed the focus of the argument before me.

Mr Harwood submitted that the inspector's report contained an unconditional recommendation that Oakwell Brickworks should be included in a list as part of proposed housing which was irrespective of the Council's policy of off-set, and it would have been to be conceded, irrespective of whether any other land was also said to be available for housing in the Ilkeston Sub-Area. Alternatively, he submitted that, if the Council was permitted to reject the recommendation of the inspector, off-set itself could not be an excuse for the reasons he has given, and other reasons or better reasons would have had to have been put forward. This depends upon a construction -- or at any rate a close reading -- of the inspector's report.

I have indicated that there was a separate section dealing with each objector, and in particular with regard to the written objection by the claimant, and it was at paragraph 3.11 that he dealt with the objection by the claimant. I have read the passage of the report in which he indicated his favourable views with regard to the site. That section began with the following sub-paragraphs, and I recite 3.11.1 and 3.11.2:

It is those two paragraphs, and in particular the last two sentences of 3.11.2, which are relied upon by Mr Harwood in his submission that the recommendation with regard to the Brickworks was unconditional, and that such Brickworks must be included as permitted housing in the Ilkeston Sub-Area without consideration of off-set.

I turn to the section to which he makes reference in those paragraphs, namely 3.2, and I recite paragraphs 3.2.32 and 3.2.34 through to 3.2.37:

The inspector there sets out what one might call the pros and cons of off-set, and if it stopped at that, it might be said that his subsequent recommendation in 3.11 would simply fall within that debate and perhaps override any otherwise pros for the policy of off-set. However, the inspector does not leave it at his discussion of the pros and cons of off-set, he makes specific recommendations at the end of paragraph 3.2. He recommends that the Local Plan be modified in accordance with the proposed change, among others, PIM 11; that is, the addition of paragraph 2.25 which I have earlier recited.

Centrally, he then makes a further recommendation that the Local Plan be modified by "... (h) inserting a paragraph 2.9a along the lines of Proposed Change PIM 8, but updated as necessary, and ensuring that the reference to the over-provision figure is adequately explained". It is quite plain that he expected that 2.9a, which I have read and which at that stage referred to the over-provision of 21 dwellings, would now be updated to cover the considerably greater over-provision that there was, and he was simply anxious that that over-provision be adequately explained. Clearly it could be by reference to the over-provision in one Sub-Area and the under-provision in another.

Mr Harwood has submitted that in some way there is a tension between 2.25 and its reference in part met and 2.9a, but I am entirely satisfied that there is not intended to be any such tension, and that they each serve slightly different functions, as is apparent from their wording. As it happens, 2.25 was not proceeded with by the defendant Council, as referred to earlier in their response statement. The clear picture, in my judgment, is that by specifically approving 2.9a, the inspector was legitimising the policy of off-set. It can certainly not be said in the slightest that, whether by the parallel inclusion of 2.25 or otherwise, he was recommending against off-set or in any way recommending that there had to be provision of housing in the Ilkeston Sub-Area, notwithstanding over-provision in the Long Eaton Sub-Area or the Derby Sub-Area.

It is in those circumstances that the response statement to which I have referred specifically says at page 244 of the bundle that there will be incorporation of a new paragraph 2.9a by agreement with the inspector's recommendation as it is put, namely:

It is very clear to me that when the inspector was making plain his views as to the suitability of Oakwell Brickworks, he was thereby ruling out any of the caveats that had been expressed in the documentation to which I have referred by the defendant, which might have justified exclusion on grounds of contamination or non-deliverability of the site, and that he was not recommending the unconditional inclusion of Oakwell Brickworks, not to speak of Oakwell Brickworks if no other site were to be included, which, as I have indicated, is what Mr Harwood would need to argue, when he was simultaneously accepting and making the recommendation as to the availability of the off-set policy, as I have described.

In my judgment, the Council acted entirely in accordance with the recommendation, or certainly within it, when they concluded that they would operate the off-set policy which meant no housing, which thus meant that neither the Oakwell Brickworks nor any other housing previously on the H1 list was to be included in the new Local Plan. In those circumstances, Mr Harwood's argument fails.

His third ground is set out in this way in his skeleton argument:

Even reading that ground makes one appreciate that it is not the strongest of contentions. It is not a question of no reasons being relied upon; it appears to be a Wednesbury unreasonableness test. The case appears to be along the following lines: the defendant ought to have included a ten-year plan and did not. Mr Harwood accepts that, in the event, the inspector did not recommend the inclusion in the Local Plan of a ten-year plan. He explains his thinking in his report, and I here incorporate 3.2.5, 3.2.44(b), 3.2.46 and 3.2.47:

It is quite plain from that passage that, although he criticises the absence of a plan, he does not recommend that there be a ten-year plan in the Local Plan, but simply that the defendant Council instead makes an early start on the Local Development Framework, which is in any event required now by new legislation. What is said by Mr Harwood is that if there had been a ten-year plan, which there was not, and if there should have been a ten-year plan, which there should not, then if they were not going to have a ten-year plan, whether or not they should have had it, they should have or could have included in the non-ten-year plan the Oakwell Brickworks as a fall-back position. It is quite clear to me that, given that the defendant Council was not carrying out a ten-year plan and is not in the end criticised by the inspector for not having done so, they were not obliged to include in a four-year plan a site which might well have been included in the ten-year plan. The argument must, in my judgment, fail.

In those circumstances, the claim fails in its entirety. I add only a short coda on the question of relief. Mr Harwood accepts that if, in accordance with his submission, there was an unconditional recommendation by the inspector which could not be complied with by operating the off-set policy, then the Council would not have been obliged to have acted in accordance with that recommendation, but would have to have given reasons for doing so if they did not. In my judgment, particularly given the way in which the inspector dealt with the pros and cons of off-set, it would have been very easy indeed for them to satisfy that requirement to give reasons, even if they did not do so even on what they have produced. The reasons are obvious. The over-provision continued to increase. The figures now in the bundle which would have required to have been considered by me so far as the exercise of discretion is concerned if this is the only basis on which the matter had been left to me are that, as at 2006, there was an over-provision in the defendant area of 1,555 dwellings because there is an over-provision in Long Eaton of 1,602, and even an over-provision in Ilkeston by virtue, I am told, by Mr Hogan of some successful appeals against refusals of planning permission in the Ilkeston Sub-Area itself. There simply is no requirement on the evidence for any housing in order to comply with the defendant's plans, whether at the Oakwell Brickworks or otherwise.

In any event, if I were to have been persuaded to quash the Local Plan, as Mr Hogan points out, it would not now be possible to produce a new Local Plan as it has been overtaken by the requirement for a local development framework, as the inspector himself expected, in paragraph 3.2.47, which I have recited above. The defendant Council is in the process of preparing a Local Development Framework in any event, and thus any order would have been fruitless.

As a footnote, and indeed perhaps of some comfort to the claimant when it comes to such Local Development Framework, the Brickworks have been included in the most recent version of the Urban Capacity Study, that of October 2006, as a developable brownfield site, albeit on a longer term basis than the claimants wished. Consequently, there must be judgment for the defendant.

MR HOGAN: I am obliged. My Lord, there is an application for costs.

MR JUSTICE BURTON: Yes.

MR HOGAN: The principle of costs is not in issue. The quantum of costs is not in issue. A point has been raised as to whether the local authority should be charged VAT on their costs. I have taken instructions. I am told that they should and the final figure is £9,317.62.

MR JUSTICE BURTON: Yes, what is the basis for saying that there should not be VAT added?

MR HARWOOD: On the basis that if the local authority are able to recover VAT, they will be in a position of being paid the sum including VAT.

MR JUSTICE BURTON: Is that not the case with all claimants who are companies -- all successful parties -- and it is normal to order VAT.

MR HARWOOD: My Lord, it is not our understanding that it is normal --

MR JUSTICE BURTON: Do you have any authority on it?

MR HARWOOD: My Lord, we do not, although an oddity of this particular case is that the Council has charged VAT on its own inhouse solicitors' fees, so it is making, according to the statement, it is making a VATable supply --

MR JUSTICE BURTON: It seems to me that the sensible way forward, from this point of view, might be, might it not, for me to make an interim order for the full amount of the costs less VAT, and for me to order that the balance go to detailed assessment if not otherwise agreed, and then either you can agree it or battle it out in correspondence or the taxing master can resolve it fairly speedy.

MR HARWOOD: Absolutely, my Lord.

MR JUSTICE BURTON: How much is the non-VAT figure?

MR HOGAN: My Lord, it is £7,946.50.

MR JUSTICE BURTON: I will make an interim order for the payment of 7,946.50, within 21 days?

MR HARWOOD: That is fine.

MR HOGAN: I am obliged.

MR JUSTICE BURTON: Within 21 days, and the balance of the -- I am so sorry, let me start again. The defendants to have their costs of the proceedings, to be assessed if not agreed. There will be an interim order of 7,946.50 to be paid within 21 days, the balance of the costs to be assessed if not agreed. Thank you very much.

MR HARWOOD: My Lord, just one or two further matters.

MR JUSTICE BURTON: Yes.

MR HARWOOD: Two points about the transcript (inaudible). First of all, my Lord ought to recall towards the start of your Lordship's judgment referring to the site having been allocated in the Structure Plan.

MR JUSTICE BURTON: Which one?

MR HARWOOD: My Lord referred to it being allocated in the Derbyshire Structure Plan. It was actually the Erewash Local Plan 1994.

MR JUSTICE BURTON: I thought I was reciting the Derby and Derbyshire Joint Structure Plan 2001. Let me just find it. I made some notes of what I said so I can easily look it up. I said Oakwell Brickworks feature for potential housing in -- and I said tab 5, which is January 2001, Derby and Derbyshire Joint Structure Plan, and then I said as part of list H1 in tab 6, which I described as the First Deposit Local Plan, and then I said: however it disappeared, for shorthand in tab 7, and in tab 14. Now, what did I wrongly refer to?

MR HARWOOD: My Lord, the slip was referring to it as being in the Structure Plan; it was in the adopted Erewash Local Plan of 1994.

MR JUSTICE BURTON: Hold on.

MR HARWOOD: Which is tab 4.

MR JUSTICE BURTON: I am sure you are right, but I cited -- you are absolutely right. It did not feature in tab 5; it only featured in tab 6.

MR HARWOOD: And it was in the adopted Local Plan. If it had been the Structure Plan, the argument would be very different.

MR JUSTICE BURTON: I did refer to tab 6. I said tab 5 and tab 6, so I shall make sure that there is only reference to a feature in tab 6, which is the Local Plan, and it did not feature in tab 5, my fault.

MR HARWOOD: My Lord, the reference throughout was in tab 4, which is the adopted Erewash Local Plan of 1994.

MR JUSTICE BURTON: Hold on. You are absolutely right. That is my mistake. I will make sure there is a reference to tab 4 and tab 6 in my shorthand, rather than to tab 5 and tab 6. Thank you.

MR HARWOOD: My pleasure, my Lord. The other point in the transcript, as I understood my Lord's judgment, my Lord was saying that what had been PIM 11, the paragraph 225, the sort of "Sub-Area will in part" point, that that was left out of the adopted plan.

MR JUSTICE BURTON: It was. I do not know.

MR HARWOOD: It was not.

MR JUSTICE BURTON: If it was not left out of the adopted plan, so be it. It was certainly left out -- I never looked at the adopted Plan, I am glad you corrected me -- but it was certainly left out of the response document because I actually read in the course of my judgment page 234, which positively recommends, if you notice, that the section entitled "Principal housing sites", paragraphs 2.25 to 2.33, and the (inaudible) be deleted. You are simply saying that was not carried through? It does not matter.

MR HARWOOD: No, my Lord, I think there are two 2.25s, because at page 238 of the bundle --

MR JUSTICE BURTON: Yes.

MR HARWOOD: We have in the fourth column the Council's decision -- paragraph 2.25 which is earlier can be deleted.

MR JUSTICE BURTON: It was not the slightest of significance to my thinking as to whether -- I think it was just a parenthesis to show that I had noticed. But I will take it out. Thank you, ie 2.25 was deleted by it and was replaced by a new 2.25.

MR HARWOOD: It was replaced by a version.

MR JUSTICE BURTON: It was not a stepping stone in any of my thought processes. Thank you.

MR HARWOOD: My Lord, I have a short application for permission to appeal.

MR JUSTICE BURTON: Yes, what is the basis of it?

MR HARWOOD: The basis of that, my Lord, is that my Lord has identified as the critical issue in this appeal what it was the inspector said in relation to the need to allocate Oakwell Brickworks in the context of the off-set point between Sub-Areas.

MR JUSTICE BURTON: Yes.

MR HARWOOD: And my submission, my Lord, was that the inspector had said there is a need to allocate, notwithstanding the off-set point and the Council simply failed to grapple with that. My Lord, it is a relatively short point, but it is a point which I say, with respect, the Court of Appeal may disagree with you.

MR JUSTICE BURTON: I do not think it is one that the Court of Appeal is going to have the slightest interest in. It is not a matter of construction of a statute. There is no law involved in this case at all. It is simply looking at the report, and I do not think the Court of Appeal will be interested. In any event, I conclude that it is quite clear that you have no prospect of success in relation to it.

MR HARWOOD: I am grateful, my Lord.