Taylor Wimpey UK Ltd & Anor v Crawley Borough Council

MR JUSTICE WILKIE: This is an appeal pursuant to section 113 of the Planning and Compulsory Purchase Act 2004 ("the 2004 Act") against certain parts of the Local Development Core Strategy ("the Core Strategy") adopted by Crawley Borough Council ("the defendant") on 28th November 2007. The order sought is that the High Court quash the Core Strategy in part by reason of the fact that it is alleged that the document is not within the appropriate power and/or a procedural requirement has not been complied with.

The order sought is to quash the third bullet point in paragraph 11.5 of the Core Strategy which, in respect of the North East Sector, sets out among the key objectives and principles of development of the North East Sector the following: "To ensure that development avoids ... existing or possible future aircraft noise contours of 60 dBA Leq or more;" and in Part 2 of the Core Strategy, entitled "Planning and Development Themes", under sub-part 2, concerning housing, the following words in paragraph 2.7:

The Town and Country Planning Act 1990, section 70, concerns determination of applications: general considerations. Subsection (2) provides:

The 2004 Act makes provision for local development documents by section 17, which, in so far as is relevant, provides as follows:

The Town and Country Planning (Local Development) (England) Regulations 2004 provides, by Regulation 7, documents which must be development plan documents as follows:

Section 19 of the 2004 Act concerns preparation of local development documents and, in so far as is relevant, provides as follows:

Section 20 of the 2004 Act entitled "Independent examination" provides, amongst other things, as follows:

Section 22 provides for withdrawal of local development documents, but because of the way in which the argument has developed it is unnecessary for me to refer to this in any specific detail.

Section 23 provides for adoption of local development documents as follows:

Section 24 concerns conformity with regional strategy and provides, so far as it is relevant:

Part 3 of the 2004 Act concerns development. In particular, section 38 concerns the development plan. Subsection (3) provides:

For the sake of completeness, section 113 of the 2004 Act concerns the validity of strategies, plans and documents. It applies, amongst other things, to a development plan document and anything falling within any of the categories specified as a relevant document. Subsection (3) provides:

Since the coming into effect of the new planning system provided for by the 2004 Act, the Government's national policies on aspects of planning in England have been set out in documents known as "Planning Policy Statements" or PPSs. Two such PPSs are relevant for the purposes of this litigation. PPS 12 concerns local development frameworks. Paragraph 1.4 provides:

Chapter 4 of PPS 12 concerns preparation of a local development document. Paragraphs 4.22 to 4.24 provide, amongst other things, as follows:

(That statement has had to be significantly changed as a result of the decision of the Court of Appeal in Blyth Valley Borough Council v Persimmon Homes (North East) Ltd [2008] EWCA Civ 861:

There are then set out nine tests under subheadings "Procedural", "Conformity" and "Coherence, consistency and effectiveness". In particular, under the heading "Conformity", the following appears:

Under the heading "Coherence, consistency and effectiveness" the following appeared:

PPS 3 concerns housing and was published in 2006. In particular, in the section entitled "Delivering a flexible supply of land for housing", the following statements appear at paragraphs 52 to 56:

As paragraph 4.22 of PPS 12 recognises, prior to the 2004 Act system there were documents known as Structure Plans which remain a material consideration in so far as their provisions are "saved". One such Structure Plan which has been saved is the West Sussex Structure Plan, adopted by West Sussex County Council in February 2005. It contains the following provisions. Under the heading "Location", and in particular under the heading "Locational strategy", Policy LOC1 provides:

This last reference contains a reference to a footnote which reads:

The West Sussex Structure Plan goes on in that part concerning location to refer in paragraph 84 to the Future of Air Transport White Paper and to identify that:

Part 10 of the Structure Plan concerned needs, and within that section included a part entitled "Level of residential and employment development". Policy NE1 provided that:

Further on in the section entitled "Needs" there is a section headed "Gatwick Airport" and Policy NE19 concerns that particular location. It includes, amongst other things, the following:

Under the previous planning regime, the national government set out its guidance on planning matters through documents entitled "Planning Policy Guidance" ("PPGs"). PPG 24 concerns planning and noise and was published in 1994. It is summarised as follows at bundle 3, page 641:

Paragraph 3, entitled "Noise policies in development plans" provides, amongst other things, as follows:

Amongst the annexes contained in PPG 24 is Annex 1, which concerns noise exposure categories for dwellings. Paragraph 1 provides as follows:

Category C provides:

Annex 1 then goes on to set out recommended noise exposure categories for new dwellings near existing noise. It then tabulates the recommended categories as against different types of noise source and against four noise exposure categories, A, B, C and D. In respect of air traffic during the hours of daylight, 7.00am to 23.00 hours, category B is between 57 and 66 decibels. Category C is between 66 and 72 decibels.

Annex 3 contains detailed guidance on the assessment of noise from different sources. Under the subheading "Noise from aircraft", paragraph 8 provides as follows:

The claimants have land interests in a substantial portion of the North East Sector of Crawley. The defendant is the local planning authority with responsibility for its area.

The North East Sector was identified in the West Sussex Structure Plan 1993 as a suitable location for an additional new neighbourhood for Crawley and land was allocated in the adopted Crawley Local Plan of 2000 for the development of up to 2,700 dwellings and other uses.

A planning application for a new neighbourhood was submitted in 1998, but as the Government was intending to bring forward a White Paper on the Future of Air Transport, it issued an Article 14 direction in March 1999 preventing the council from granting planning permission. That planning application subsequently became the subject of an appeal to the Secretary of State.

The Air Transport White Paper there referred to was entitled "the Future of Air Transport" and was published in December 2003. Its main conclusions were set out concerning South East in chapter 11 and summarised in paragraph 11.11 in a number of bullet points, including the following:

The significance of the reference in the West Sussex Structure Plan Policy NE19 to restricting residential and other noise-sensitive uses within the noisiest forecast 66 dB around Gatwick Airport and to ensure that adequate sound insulation is provided for new residential development between the noisiest forecast 60 and 66 dB contours is that position of the land, the subject of the claimants' planning permission, is such that no significant development is anticipated along or beyond the 66 db contour, whereas a significant quantity of the development site lies between the 60 and 66 dB contours. Accordingly, the proposed development is consistent with the West Sussex Structure Plan and also consistent with the measures contained and identified in Annex 1 of PPG 24, whereas it is not consistent with the statement of desirability contained in paragraph 8 of Annex 3 of PPG 24 if that policy applies.

The claimants appealed the non-determination of their planning application and a public inquiry was held, resulting in an inspector's report to the Secretary of State dated 22nd January 2007. Part 12 of that report set out the inspector's conclusions. One issue which arose was the relevance of one of the council's policies, policy GD17, on noise, which provided that:

The inspector concluded that there was a conflict between that policy, GD17, and the Structure Plan policy, NE19. The inspector concluded that the Structure Plan should take precedence because it was adopted some 4 years after the Local Plan, and in so doing he applied section 38(5) of the 2004 Act.

Another significant issue before the inspector was whether the proposed development would comply with guidance given in PPG 24. The inspector concluded that the advice contained in paragraph 8 of Annex 3 of PPG 24 was directly relevant to the appeal proposal and that the granting of planning permission would run counter to the principles of good planning enshrined in the opening paragraphs of that guidance, and accordingly it was a significant material consideration weighing against the grant of planning permission at that time. This had been an issue of sharp dispute between the claimants and the council before the inspector. The respective arguments and his conclusions are to be found at paragraphs 12.45 to 12.53 of the inspector's report, which I refer to but do not repeat in detail in this judgment.

However, the inspector set out his overall conclusions on this issue at paragraph 12.197 in the following terms:

The inspector then goes on in paragraphs 12.203 to 12.205 as follows:

The inspector therefore recommended that the claimants' appeal be dismissed and planning permission refused. On 14th May 2007 the Secretary of State by her decision letter accepted those conclusions and recommendations. She agreed with the inspector that Local Plan Policy GD17 should be disregarded in favour of the later West Sussex Structure Plan Policy NE19 (see paragraph 22 of the decision letter). She also agreed with the inspector that as no housing was proposed within the 66 decibel contour, the proposal would not conflict with the West Sussex Structure Plan Policy NE19 (see paragraph 24).

The Secretary of State agreed, for the reasons given by the inspector at paragraphs 12.45 to 12.53, that the advice given in paragraph 8 Annex 3 of PPG 24 is directly relevant to the appeal proposal (see paragraph 27 of the decision letter). She set out her overall conclusions in the following terms, at paragraphs 53 to 56:

On 26th May 2006 the Borough Council submitted its submission core strategy to the Secretary of State for examination. It contained the overall vision for the future development of the town up to 2018 and beyond. Part 2 of that document concerned housing. Effectively, it discounted the North East Sector strategic development location by reason of the Government's airport policy. Accordingly, it did not include the North East Sector as contributing to the delivery of its housing targets. Part 11 specifically concerned the North East Sector. It provided, amongst other things, as follows. Paragraph 11.1 was to the effect that the North East Sector had been identified in the adopted Local Plan to accommodate up to 2,700 dwellings and other uses, originally identified as such in the 1993 West Sussex Structure Plan and the 2005 West Sussex Structure Plan which superseded it. Paragraph 11.2 referred to the 2003 White Paper and contained the following, "Therefore, the Council has to have regard to the potential noise contours of a possible wide spaced second runway in accordance with the Draft Outline Master Plan" in relation to Gatwick Airport, and it also referred to the fact that a final decision on the future of Gatwick may be several years away.

Paragraph 11.3 provides as follows:

Paragraph 11.4 recorded that a new neighbourhood should not be permitted in that sector whilst there was a possibility that a significant proportion of the development would be in an area above 60 dB LEQ if a wide-spaced parallel runway were required for Gatwick Airport in accordance with the White Paper.

It therefore set out its key objectives and principles for development in the North East Sector which contained no reference to the North East Sector site. In particular Policy NES1 was to this effect:

There was a public consultation as part of the Secretary of State's examination process, to which the claimants contributed in July 2006. Commenting on the overall housing requirement to 2018, they said that they were satisfied that the North East Sector can be developed without prejudice to the provision of a second, wide-spaced runway at Gatwick. In relation to Policy H2 on housing allocation, they said, amongst things, that the omission of the North East Sector as an allocated housing site under that policy was a significant omission from the plan, likely to result in a considerable shortfall in housing numbers. In respect of Policy H3 on housing location strategy, they said that it should be amended to provide for development at the North East Sector, for the reasons they then set out. On Policy NES1 they said that they supported the identification and retention of the North East Sector as a neighbourhood for mixed use development, but objected to the detailed content of the policy which sought to delay its release until post-2018.

In respect of Gatwick Airport they said, at paragraph 1.14:

The examination inspector identified a number of issues for examination, one of which was issue 10: the North East Sector. The council made its submissions in January 2007. The inspector had identified a number of questions which he posed in relation to issue 10. Question (a) included what the constraints affected residential development in this sector, for example aircraft noise. The council said this:

On question (c), whether the approach on this issue should be all or nothing in relation to this sector, they identified that the all or nothing approach was appropriate. On issue (d), how would the claimants' proposal measure up again the test of soundness, the council said that development at this stage would be contrary to PPG 24, particularly Annex 3.

Question (e) asked: what would be the implications in terms of the possible outcomes of the examination of the Secretary of State either allowing or dismissing the current called-in application following the recent inquiry? The council's position on that was that if the application were dismissed, the approach set out in the Core Strategy would be implemented.

The claimants submitted their representations on issue 10 in January 2007, in preparation for oral sessions proposed for 15th and 16th March. On question (a), concerning aircraft noise as a constraint, the claimants referred in significant detail to their submissions before the planning application inspector in a number of paragraphs which I need not refer to in detail, but which include at paragraph 1.4 the following:

On issue (c), namely whether it was an all or nothing approach, they said that they would be concerned about allocating only a limited area of land within the sector, which might produce a scheme which was insufficiently comprehensive and not viable.

On issue (d), how their proposals measured up against the tests of soundness, they indicated that in their view it was only the timing of the development which remained at issue between the parties and that the evidence in the recent inquiry had demonstrated that any noise objection was resolvable.

On the question of the implications of the outcome of the planning appeal, they said that the question of dismissal would depend on whether the dismissal was on a point of principle or a matter of detail, and if the former it depended why the scheme was considered unacceptable. But if the appeal were allowed then the issue became simpler and the appropriate course would be to count the North East Sector as part of the current housing land supply.

On 15th March 2007 at the examination session, the claimants' position was that the examination should reconvene after the Secretary of State had taken the planning decision.

On 1st June the defendant, on the instruction of the inspector, wrote to all concerned requesting attendance at an additional examination session on 19th June to consider the implications of the by then refusal of the Secretary of State of the planning appeal. The issues he wished to explore were identified as follows:

The further examination meeting took place on 19th June. The claimants informed the inspector of their challenge to the Secretary of State's decision and the bases for it, but did not ask that consideration of the Core Strategy be further delayed to await the outcome of that challenge.

The examination inspector reported on 20th August 2007. On the question of soundness, he said as follows at paragraph 7:

The examination inspector also considered a general overview on the site specificity of the Core Strategy. He identified the particular problem for the defendant arising from what he saw as the unavailability of the North East Sector. In relation to the conformity tests (vi and v), he said as follows at paragraph 25:

He then set out a number of the matters which had been foreshadowed in the earlier part of the report, and said as follows:

In respect of Chapter 2/2 "Housing", amongst other things he said as follows, at paragraph 59:

He set out his conclusions of housing land supply and implications for soundness at paragraphs 64 to 66, which, again, I need not repeat in this judgment. In paragraph 68 he set out his conclusion:

He then set out wholesale changes to that part of the Core Strategy. In particular, at paragraph 2.7 he said as follows:

He then set out his proposed alterations to the various housing policies. They included at H1 a provision for an early review to be undertaken and in relation to H2, the following new paragraph:

It will be noted that this reflects the approach which he had foreshadowed in the letter of 1st June as being, it would seem, his preferred option for dealing with what he perceived as the uncertainty and current unavailability of the North East Sector by reason of the combination of the White Paper and the Secretary of State's decision on the non-determination appeal.

In relation to Part 2/8, concerning Gatwick Airport, there is a reference to the West Sussex Structure Plan Policy NE19, but in a wholly different context. In relation to Part 2/11 concerning the North East Sector, he says as follows:

In paragraph 132 he described that certain matters in the submitted Core Strategy were confusing and unsound against tests 7 and 8, because taken in combination they could potentially hold up the well-developed plans for the North East Sector by making the release of the area dependent on the timing and outcome of a review of the Local Development Framework. He said this:

In paragraph 133 he set out the changes which he recommended to the Core Strategy. In particular, in paragraph 11.2 he said as follows:

It is to be observed that the claimants do not in any way criticise paragraph 11.2 as being an accurate account of the decision of the Secretary of State, and they draw a contrast between that account and the way in which the effect of the Secretary of State's decision was recorded in the report and in paragraph 2.7, to which I have already referred.

Also within paragraph 133 the inspector set out his proposed modifications to the key objectives, which included the following:

This challenge was heard by Collins J on 9th July 2008. The challenge succeeded. The Secretary of State's decision was quashed and remains for redetermination. In that challenge the claimants relied on four grounds. However, for the purposes of this case only ground 1 and ground 3 are relevant. They were summarised in paragraph 25 of the judgment:

The judge appears to have decided the case essentially on ground 3. In paragraph 26 of the judgment, he said as follows:

At paragraph 29 he said:

At paragraphs 38 and 39, in relation to the decision on housing need, he said:

An issue has arisen between the claimants and the defendant in this case whether, and if so to what extent, Collins J accepted or rejected the claimants' case on NE19 and PPG24. The defendant says that Collins J concluded that the Secretary of State was entitled to rely on PPG 24 and was not acting in conflict with Policy NE19 in so doing. The claimants, on the other hand, point out that the judge indicated in two places that if the Secretary of State and/or the inspector had concluded correctly about the immediate need issue, then the fact that Policy NE19 was to an extent inconsistent with Annex 3, paragraph 8 of PPG 24, would have been unlikely to have carried much weight sufficient to have resulted in the claimants' appeal to the Secretary of State being dismissed.

Collins J, in dealing with the issue of costs, expressed himself in paragraphs 4 and 5 as follows:

Accordingly, in my judgment, it cannot be said that Collins J was determining the NE19/PPG 24 issue in favour of the defendant's arguments. To the extent that he was expressing any tentative view but without deciding it, the gist of his judgment appears to be more on the side of the claimants than the defendant, though I emphasise he was not actually making that decision and he made that clear, both in his judgment and in his ruling on costs.

Finally, in relation to the factual matrix, on 11th September 2008 in the context of this litigation the defendant wrote to the claimants as follows:

The first ground is that in adopting as the key objective and principle for development of the North East Sector the ambition of ensuring that development avoids areas of existing or possible future aircraft noise contours of 60 dBA Leq or more, there was a total failure to take into account the West Sussex Structure Plan Policy NE19, that that failure is contrary to the advice given at paragraph 4.24(iv) of PPS 12 and, in general administrative law terms, amounts to a failure to take a relevant consideration into account.

The third ground, which is run in tandem with the first, is that no reasons have been given for the new constraint reflected in that particular passage, nor is it founded on any evidence base, whether robust and credible or otherwise.

It is pointed out by the claimants that there is no explicit mention of Policy NE19 in either the inspector's examination report or the Core Strategy itself, save for a single reference in a different context in the report. This is said to be of particular significance, in that the structure plan is recent, 2005, the Secretary of State had concluded in the planning appeal that it was the appropriate local plan to be considered, and that the proposed development was in accordance with it. Accordingly, it is said, although the Secretary of State had, in refusing planning permission, concluded that the guidance in PPG 24, Annex 3, paragraph 8 should apply, it was incumbent upon the examination inspector, having regard to the soundness of the Core Strategy, to have had regard to Policy NE19 in the context of planning for housing need and in considering whether to include the passage in relation to the key objective complained of in the Core Strategy. By failing to consider NE19 in that context it is said that the inspector erred, causing the Core Strategy to be flawed in this respect.

The defendant contends that the inspector had well in mind the outcome of the appeal decision to the Secretary of State and also the arguments which had been advanced in that process and which had been advanced to him in the consultation documents, to which I have referred. I am also pointed to a number of passages in the report, paragraphs 59, 66, the draft 2.7, Policy H2 and paragraphs 130 to 133 of the report, each of which either contains an express reference to the West Sussex Structure Plan or, by inference, refers to it.

The claimants point out, however, that their objection to the Core Strategy document is limited in this particular respect to one passage only, and that is to say the key objective for development of the North East Sector at paragraph 11.5, and that there was a need to have regard to structure plan Policy NE19 in relation to that particular key objective, and there is a manifest failure to do so.

The examination inspector deals with this particular aspect in relation to the North East Sector at paragraphs 130 to 133 in his report, to which I have already referred. The claimants' argument is that one looks in vain for any recognition that by adopting within the Core Strategy the key objective which seeks to preclude development subject to existing or possible future aircraft noise contours of 60 decibels or more, the examination inspector is deciding that, in the Core Strategy, the guidance given by PPG 24 Annex 3, paragraph 8 should prevail over Policy NE19 in the Structure Plan. Nor is there any recognition that in the Core Strategy the phraseology of that key objective is more prescriptive than what is contained in PPG 24, which is described as a desirable aim rather than a firm policy requirement. Nor is there any recognition that this has the effect of cutting across Structure Plan Policy NE19(B)(2)(vii), which appears to have been specifically tailored to meet the case of the potential development of a second runway at Gatwick Airport. They contend, furthermore, that it is plain from the appeal inspector's report, paragraph 12.35, that in adopting the Structure Plan Policy NE19 the authors of that document did have regard to PPG 24, but there was no evidence that the examination inspector considered whether he was entitled to or should import into the Core Strategy a key objective which had the effect of cutting across the recent Structure Plan policy, which in turn had taken full account of that central Government guidance. It is said by the claimants that at its highest the examination inspector's report accurately records in paragraph 11.2 the way in which the Secretary of State reached her decision on the appeal by reference to the 60 decibel contour recommended by PPG 24, but did so as part of a multi-faceted decision which included, as an important element, the Secretary of State's conclusion that there was no immediate need to release the site in the period up to 2012. Accordingly, the claimants argue that the decision to include that bullet point as a key objective was reached without having any or any proper regard to a relevant material factor and accordingly was both unlawful under general principles and constituted a breach of the guidance set out in PPS 12.

They also rely on the decision in the case of London Borough of Bromley v Secretary of State for Communities and Local Government [2007] EWHC 2480 (Admin). Miss Cook argues that this authority is not in point because that concerned a planning determination to which section 38(6) applied, rather than the section 20 exercise conducted by the examination inspector. I accept her contention that the difference in the exercise being conducted by the respective inspectors means that there has to be a limitation on the extent to which the principles set out in the Bromley case are directly applicable to this, but it is, in my judgment, nonetheless significant that the West Sussex Structure Plan, postdating (as it did) PPG 24, referring explicitly to the 66 dB contour which is a demarcation between the categories identified in Annex 1 of PPG 24, plainly did have that statutory guidance in mind and, therefore, the deliberate tailoring of the Structure Plan in respect of Gatwick Airport in that way serves to emphasise the need for consideration to be given to the Structure Plan by the examination inspector in considering the soundness of the Core Strategy.

Unhappily, I am driven to the conclusion that the examination inspector too readily adopted wholesale the conclusion of the Secretary of State when she was dealing with a specific planning application in a specific temporal context, and by so doing failed to have regard to a highly relevant matter, namely the West Sussex Structure Plan Policy NE19 and its impact on this particular part of the Core Strategy, and furthermore failed at all to give reasons why a key objective should be adopted in the Core Strategy which on the face of it not only cuts across an already existing Structure Plan policy, but on the face of it seems to be more exacting and more prescriptive than even the statements set out in paragraph 8 of Annex 3 of PPG 24.

In my judgment, therefore, grounds 1 and 3 are made out insofar as they affect the bullet point set out at paragraph 11.5 of the Core Strategy.

Ground 2 asserts that the passage at paragraph 68, subparagraph 2.7 demonstrates a fundamental misunderstanding by the examination inspector of the basis of the Secretary of State's decision letter of 14th May 2007.

As I have indicated, at various passages in the examination inspector's report, reference is made to the impact of the Secretary of State's decision on the planning application to the Core Strategy in fairly stark terms. I have referred to paragraphs 59, paragraph 68, subparagraph 2.7, Policy H2 and paragraph 130. The claimants contend that those paragraphs, said to summarise the effect of the Secretary of State's decision, do so inaccurately and draw the contrast between those statements and subparagraph 11.2 in paragraph 133 which sets out, the claimants say, accurately the multi-faceted and balanced nature of that decision.

Essentially, the claimants' point is this. The decision of the Secretary of State in her decision letter to refuse planning permission was not based on the overriding effect of the policy guidance set out in PPG 24, Annex 3, paragraph 8 as compared with Structure Plan Policy NE19. On the contrary, her view as to which of those policies prevailed was one material consideration only amongst a number of factors either way which were taken into account, and the conclusion was one which was taken by her weighing the different factors. The claimants rely on the language used by the inspector at the very end of his report at paragraph 12.205, in which he says:

One of the important factors taken into account by the inspector and the Secretary of State was their perception that there was no immediate need to release the site in question to meet existing and future housing need within the time constraints being considered. That was a consideration of limited temporal effect. The situation might change. Accordingly, it is said that the examination inspector by assuming that the adverse decision of the Secretary of State meant that the site was unavailable unless or until the second Gatwick runway issue was resolved, whenever that might be, significantly overstated the position and, by its inclusion in the Core Strategy as a statement of the effect of the Secretary of State's decision at paragraph 2.7 unqualified in that respect, acts as a major impediment to any subsequent application for planning permission in respect of that site.

The defendant seeks to argue that the Secretary of State's determination was not "on balance", but rather was one in which the noise issue was the subject of serious contention between the parties and was decisively concluded in favour of the defendant's position by the inspector and the Secretary of State. Further, the defendant says that the different task which the examination inspector was performing compared with that of the appeal inspector means that the Core Strategy should be read as a whole, including the modifications made by the inspector to safeguard the claimants' position by enabling the North East Sector to come on stream as a potentially available site as soon as the position in respect of Gatwick's second runway becomes clear and without any requirement for a review.

In my judgment, the defendant's position fails properly to recognise the balanced nature of the conclusion of the appeal inspector and the multi-faceted nature of the Secretary of State's decision letter. In each of them an important, perhaps the decisive, factor was the assessment of immediate need. Were that position to change or, as has happened, to be found to have been flawed, the balance of forces for and against using the North East Sector, even where a second runway might be developed, need not necessarily be the same as it was in May 2007. Accordingly, to characterise the Secretary of State's decision on the appeal as precluding, once and for all, the availability of the North East Sector for residential development until the second runway issue is crystallised one way or another was to misunderstand the balanced nature of the Secretary of State's decision. The inclusion in the Core Strategy of paragraph 2.7, insofar as it dealt with the reading by the examination inspector of the effect of the Secretary of State's decision therefore, in my judgment, introduces an unnecessary and prejudicial obstacle in the way of the claimants were they to seek planning permission or, as it has turned out, the Secretary of State has to redetermine their application for planning permission.

I am fortified in this view by the fact that Collins J's ruling, on the successful challenge to the Secretary of State's decision, made it clear in the paragraphs to which I have referred that the flawed decision on housing need caused the decision to be quashed because the decision of the Secretary of State on the issue of noise was not of such a weight that it would override even a flawed assessment of housing need. I refer in particular to paragraphs 26 and 39 of the judgment, where at the very least the judge envisages the reasonable prospect that, absent the flawed determination on the question of immediate need, the Secretary of State's decision may well have gone the other way.

It therefore follows in my judgment that the passage complained of (paragraph 2.7) does erroneously overstate the effect of the decision of the Secretary of State on the planning appeal, both at the time the statement was made, when that decision was still extant, and now, after that decision of the Secretary of State has been quashed. It therefore follows that in my judgment ground 2 succeeds.

Ground 4 complains that as the examination inspector's decisions complained of follow directly from the decision of the Secretary of State, which has now been quashed, it could not be lawful to rely on it and take it into account as a material consideration. In my judgment, this adds little if anything to ground 2. I do not accept the premise that, the Secretary of State's letter having been quashed, none of it could be relied upon as a lawful material matter. However, the apparent reliance of the examination inspector on an exaggerated account of the impact of the Secretary of State's planning decision, which in turn has turned out to be a flawed decision, means that the passage complained of (paragraph 2.7), deriving its force as it does from a misunderstanding of the basis of that flawed decision, cannot be allowed to remain in the Core Strategy. But that is essentially ground 2. I therefore make no decision in respect of ground 4.

For the reasons which I have stated, this appeal succeeds in respect of each of the two passages complained of and, subject to any argument as to the form of order, to that extent the Core Strategy should be quashed.

Yes.

MR TABACHNIK: My Lord, we are very grateful for your Lordship's expeditious and very thorough consideration of the issues. Can I start by seeking to identify and clarify with your Lordship the terms of any quashing order that will follow from the judgment that has just been delivered. If you have bundle 2 to hand --

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: -- it might perhaps be convenient to look at each of the impugned passages.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: The first one is paragraph 2.7, which is on page 119 --

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: -- of bundle 2.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: I think formally in the challenge what we sought to attack was only the second sentence.

MR JUSTICE WILKIE: The one that starts "however".

MR TABACHNIK: Correct, up to "White Paper".

MR JUSTICE WILKIE: Up to "White Paper", yes.

MR TABACHNIK: Although I have to say on reading it again this morning, I cannot myself see that there is any purpose in the third sentence remaining. It rather hangs. It does not relate to anything. So subject to anything Miss Murphy has to say --

MR JUSTICE WILKIE: I am not sure there is very much that means anything in the rest of that paragraph.

MR TABACHNIK: The first sentence I do not think we have any objection to. That is simply recording and accurately recording a statement of fact. Not a very relevant part of the history any more.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: But there is nothing unlawful or inaccurate.

MR JUSTICE WILKIE: Certainly the last sentence does seem to hang together with the previous one.

MR TABACHNIK: It does.

MR JUSTICE WILKIE: And one would be left scratching one's head as to what it meant otherwise.

MR TABACHNIK: So I would invite your Lordship to put a line through the third sentence as well, as I say subject to anything Miss Murphy says.

MR JUSTICE WILKIE: Thank you.

MR TABACHNIK: Then so far as the key objective is concerned, obviously the main focus of the challenge, that is on page 155.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: So far as it is in the text of the adopted Core Strategy. The third bullet point down.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: And again so far as the challenge was concerned, we attacked either the entirety of that third bullet point or else the words from "and existing".

MR JUSTICE WILKIE: From "and existing" to the end.

MR TABACHNIK: To the end. We certainly do not have a problem with the limitation in relation to flood risk. I am not sure it is necessary in light of other national guidance, but there has been never a challenge to it, so I think my clients would be happy if those words "and existing" to the end of the objective were excised.

MR JUSTICE WILKIE: Yes, thank you.

MR TABACHNIK: My Lord, that is what I say about the form of the order.

MR JUSTICE WILKIE: Yes, to quash those two passages in the Core Strategy.

MR TABACHNIK: Indeed.

MR JUSTICE WILKIE: Yes, Miss Murphy, on that issue do you have any comment to make?

MISS MURPHY: Firstly, in relation to paragraph 2.7 on page 119, yes, I certainly see the force in that point.

MR JUSTICE WILKIE: Yes, thank you.

MISS MURPHY: I am not arguing for that sentence to be retained because it would be a bit of a non sequitur I think.

MR JUSTICE WILKIE: Yes.

MISS MURPHY: Then so far as page 155 is concerned, paragraph 11.5, I do not see really the advantage at this stage of removing the flood risk conclusion, so our suggestion is that your Lordship does not make any order about that.

MR JUSTICE WILKIE: The only argument is from the words "and" to the end.

MISS MURPHY: Yes.

MR JUSTICE WILKIE: Yes.

MISS MURPHY: I agree with that.

MR JUSTICE WILKIE: Very well, so you are in agreement as to the form of the order?

MISS MURPHY: I am.

MR JUSTICE WILKIE: Thank you.

Yes?

MR TABACHNIK: My Lord, next I have a costs application. There are a number of matters on costs. I do not know if your Lordship wants to deal with the principle of costs first and then I am going to invite your Lordship to give me a payment on account. Schedules have been prepared and exchanged and I will hand one up at the appropriate moment.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: So far as the principle is concerned, the very simple submission is that we have won. We have succeeded in securing all of the relief that we sought through these proceedings and so there is no reason why we should not have our costs of them.

MR JUSTICE WILKIE: So that is the issue of principle. On account?

MR TABACHNIK: Yes, can I hand up a Schedule?

MR JUSTICE WILKIE: I have received - at least one was delivered on 10th October; is that the one I should have?

MR TABACHNIK: Yes. It is three pages long.

MR JUSTICE WILKIE: Yes, that is the one.

MR TABACHNIK: It says "Claimants' statement of costs for hearing on 13 October".

MR JUSTICE WILKIE: Correct, yes.

MR TABACHNIK: That is the one your Lordship should have. I think all I need to say about it, again subject to anything Miss Murphy says --

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: -- is that, as you will see from the middle of the second page, this was only in respect of the hearing up to and including Monday this week. So there is a little bit to be added on to reflect yesterday in particular, and possibly a little bit for this morning as well.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: But that I anticipate will not dramatically impact.

MR JUSTICE WILKIE: It might take the numbers into six rather than five figures.

MR TABACHNIK: I would be surprised if it does not.

MR JUSTICE WILKIE: Right. What do you suggest as an appropriate level of interim costs?

MR TABACHNIK: I would ask for 50 per cent, so £50,000. Your Lordship may have noted while glancing through Collins J's decision on costs that what he did was, first of all, determine the submission made by the Government that there should be a discount of costs to reflect arguments that have succeeded and arguments that had not succeeded.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: That was the primary focus of his written decision, and what he said was we should get 90 per cent of our costs.

MR JUSTICE WILKIE: Right.

MR TABACHNIK: It was then effectively agreed between ourselves and the Government that he should give us 50 per cent of the 90 per cent.

MR JUSTICE WILKIE: Yes.

MR TABACHNIK: As I say, there was no argument at all in fact, I think both skeletons on costs agreed, that 50 per cent was the appropriate level. There is guidance in the White Book and from a case called Marks all about the factors to be taken into account. Unless there is going to be any significant argument as to whether 50 per cent is appropriate, I am not going to address you on that.

MR JUSTICE WILKIE: Let us hear what Miss Murphy says about these two issues.

Yes, first of all, the issue of principle.

MISS MURPHY: Yes, my Lord. On principle I do ask your Lordship to take into account CPR Part 44.3(4)(b), i.e. in the exercise of your discretion on costs.

MR JUSTICE WILKIE: Okay.

MISS MURPHY: I will read that out for convenience, my Lord.

MR JUSTICE WILKIE: Yes.

MISS MURPHY:

MR JUSTICE WILKIE: Right.

MISS MURPHY: Clearly I have in mind that your Lordship said that that ground in your view added little to ground 2.

MR JUSTICE WILKIE: Yes.

MISS MURPHY: But notwithstanding that observation, your Lordship also indicated that you did not accept the premise that the quashing of the section 78 decision meant that, as a matter of principle, it could not be relied upon and that was the fundamental basis of ground 4 and you found against the claimants on that.

MR JUSTICE WILKIE: Right.

MISS MURPHY: So that is the only matter of principle that I wish to address.

MR JUSTICE WILKIE: You would presumably say a fairly nominal discount of five per cent or something like that? Or do you argue for more? You cannot argue for 25 per cent, surely?

MISS MURPHY: I would hesitate to describe the discount I am seeking as a nominal discount --

MR JUSTICE WILKIE: What do you say?

MISS MURPHY: -- either in terms of principle or indeed in terms of quantum.

MR JUSTICE WILKIE: Let us deal with the principle first.

MISS MURPHY: But certainly something more than five per cent, but I think something less than 25 per cent.

MR JUSTICE WILKIE: Right.

MISS MURPHY: Given the argument, I have to concede that argument did not focus as extensively on that ground as on others.

MR JUSTICE WILKIE: Yes.

MISS MURPHY: That is the principle, my Lord.

MR JUSTICE WILKIE: Yes.

MISS MURPHY: Then so far as I think a kind of subsidiary principle point is concerned, costs on account I do not resist that --

MR JUSTICE WILKIE: No.

MISS MURPHY: -- as a matter on principle. So that is principle is dealt with.

Then turning to the quantum, to the amount of costs. I have a schedule which I think deals with the claim on the basis that is a one-day claim. I may be wrong about that.

MR JUSTICE WILKIE: I think it is, because there is no provision for a second day fee.

MISS MURPHY: Right. I will deal with it on that basis anyway. I do not seek to quibble, my Lord, with the hours which were spent.

MR JUSTICE WILKIE: I think at the moment, all I am interested is a ballpark figure on account, the balance being subject to detailed assessment.

MISS MURPHY: In that case, my Lord, I have no further submissions to make on costs.

MR JUSTICE WILKIE: 50 per cent you are happy with?

MISS MURPHY: Yes, I do, the remainder be subject to detailed assessment?

MR JUSTICE WILKIE: Yes.

MISS MURPHY: I am content with that, my Lord.

MR JUSTICE WILKIE: Thank you very much.

Mr Tabachnik, have you anything to say about the fact --

MR TABACHNIK: Only if you need me to comment on it.

MR JUSTICE WILKIE: I do not think I do actually.

It seems to me that although I have not found in the claimants' favour on ground 4, effectively they have succeeded totally in the challenge which they have brought and it would not be right to make any discount in relation to that particular matter.

So the order in principle is that the defendant shall pay the whole of the claimants' costs. I shall make an award of costs on account equal to £50,000, in broad terms 50 per cent of the costs claimed, the balance to be subject to detailed assessment.

MR TABACHNIK: I am much obliged.

MR JUSTICE WILKIE: Yes. I will rise for a few minutes.