Benn, R (on the application of) v Secretary of State for Communities and Local Government & Anor

This is an application brought by Mr Benn under section 288 of the Town and Country Planning Act 1990 ("the 1990 Act") by which he seeks to challenge the decision of the Inspector of the first defendant, the Secretary of State for Communities and Local Government ("the Inspector"), dated 20 July 2010.

Mr Benn has appeared in person on this application and has, if I may say so, put his points very forcefully and succinctly to me. Mr Alan Evans of counsel appears on behalf of the first defendant. The second defendant is Hambleton District Council that made the planning decision that is the basis of this particular application.

The background is that Mr Benn made an application for a grant of planning permission from the Hambleton District Council and that permission was refused by a notice dated 16 September 2009. Mr Benn then appealed to the Inspector and the Inspector's decision, as I have already recited, was made in July 2010.

The background is set out in the Inspector's decision where he describes what he calls the appeal site, which he did in fact visit himself on 4 June 2010. He says that that site, which is a property owned by Mr Benn, lies within the centre of the village of Burnston on the eastern side of the main street. The property is part retail/part domestic with the retail element comprising a shop and small post office. During the course of the hearing Mr Benn provided me with a helpful photograph of the site. To the naked eye it appears to be several properties that are linked together that would in fact look like domestic properties, but by looking at the photograph carefully you see that there is indeed a small retail premises comprising the shop and the post office within the centre of the domestic residence.

The Inspector refers to a number of policy documents. In particular at paragraph 5 he refers to policy document DP5 of the development policies, a development plan document which states that proposals that would lead to the loss of community facilities will only be permitted if there is a demonstrable lack of community need for the facility and the site or building is not needed for an alternative community use, or retention of the community facility is clearly demonstrated not to be financially viable when operated either by the current occupier or by the alternative occupier, or an alternative facility is provided or facilities are combined with other facilities which meets identified needs in an appropriately accessible location.

The Inspector says that he notes that:

I should explain that Mr Benn has been assisted by his wife Mrs Benn, in relation to the management of the shop and certainly in the last period Mrs Benn has in effect been running the shop. She works and is paid full time by the post office to run the post office element and therefore she is in a position to run the shop and it is only for a very small time when a holiday is taken that someone else is actually employed in the shop and there is an entry for wages in the accounts that were shown to the Inspector.

It appears that both Mr and Mrs Benn do indeed now wish to retire and do not wish to continue, at least with the shop, and that is the background for which they have asked that they be entitled to use the room that is devoted to the shop for domestic purposes.

I should also add in the context of what is said in paragraph 7 that the shop comprises no more than a room effectively in what otherwise would be domestic premises and probably at the outset -- Mr Benn explains to me this is a very old property indeed -- had originally of course been part of the domestic residence. That in turn means that basic facilities such as a toilet or washing facilities are not contained within the shop, but the shop would have to have access in the hands of another party to the domestic facilities of Mr and Mrs Benn or whoever else would be owning the house. Therefore in my judgment to say that the sale would not be a straightforward matter is perhaps a little of an understatement in these circumstances. Unless Mr and Mrs Benn or whoever else was owning the property allowed the operator of the shop to have access to those facilities, it is difficult to see indeed how any business could effectively be run from that room.

I should also add that before the Inspector was a document that no doubt formed part of his findings and that was a document of 1 February 2010 written by Mr Benn to the planning inspectorate by reference to the appeal, and in that document he sets out background matters that explain first of all the nature of the business carried on, the sort of changes that have gone on in the local economy that are really very well known, namely the continuing development of the supermarket to the extent that, as Mr Benn explained orally before me, that a well-known supermarket now indeed provides transport facilities to those living in the village in order to visit the local supermarket of that particular chain.

The Inspector moves on in paragraph 8 to consider what I regard as the critical issue in this appeal, namely the financial viability of the business. From what I said before, it is plain that if this business is not financially viable the case for the change of use is a compelling one and it would appear that the Inspector would have accepted that. However, and this is highly unfortunate, the only evidence that the Inspector had before him as to the actual profit and loss of this business were accounts from the period 1 October 2006 to 30 September 2007. The Inspector, on the basis of that single set of accounts, concluded that there was not sufficient financial information before him to justify a finding that the business was not viable. Looking at those particular accounts, it would appear that the profitability, even shown on the basis that is shown in those accounts, was very fragile indeed, showing a net profit of just a few hundred pounds.

As I indicated at the hearing, even looking at those accounts it would be arguable that from an economic or accounting perspective the accounts may be -- and I do stress may be -- understated in terms of the loss. That is because nothing is shown by way of wages paid to Mrs Benn for her services of running the shop. Whoever owns the shop obviously has to have some person running it and they could not be expected to do it for nothing. However, there is no attribution of any form of wage to Mrs Benn for that activity. As I pointed out, if this business were run by a limited company it is inevitable that the company would show something by way of wages which would then be a taxable element in the hands of the salary earner.

Furthermore, this business obviously uses the premises, namely the room, but again there is no element by way of rental if a third party such as a limited company owned this business it would incur some rent for the use of the room. Space does not come free of charge and therefore that would be an additional cost. Therefore, on the face of it, and subject to any more sophisticated accountancy, it would appear that that loss is possibly understated. However, as I said, that was the only information before the Inspector.

The question then arises as to whether the finding of the Inspector that that information was not sufficient to show lack of viability of the business was a finding that was open to him. It is important to bear in mind that the High Court, under section 288 of the Act, is not conducting a re-hearing of the original appeal before the Inspector. That is critical in this case because for the purpose of this hearing Mr Benn has now produced further accounts for the years 2008/2009, 2009/2010 which show, if anything, a less favourable position perhaps than the position in 2006/2007. In my judgment, if those further accounts had been before the Inspector it would have been very difficult indeed for the Inspector to say that this business was viable, particularly taking into account the further matters that Mr Benn has quite properly stressed, namely the reality of the local economic situation with the ever increasing dominance of the supermarket chains. However, that information was not before the Inspector.

Mr Benn says that that information was not available. As I stressed, that is not really the test here because this is not a re-hearing. However, even if it had been a re-hearing I would have had difficulty with that submission. There is a letter in the file that shows that the next year's accounts were indeed filed by the time of this appeal with Revenue and Customs and therefore were available.

Furthermore, I would add that it does not in my opinion appear to be necessary to have filed accounts with revenue and customs before the accounts can properly be put before the planning authorities which include the inspectors. It might be said that without filing with the Revenue those bodies might look somewhat sceptically at the accounts. However, if the accounts were to be certified by an accountant that point in my judgment would carry little force. Furthermore, this is not a case where it is suddenly that an unexpected loss would be shown. There is here a consistent pattern and therefore no reason to believe that the subsequent accounts that were submitted (even if not yet filed with the Revenue) should not carry weight with the planning authorities.

Therefore, and it is I must say with some regret because I have the greatest sympathy with Mr and Mrs Benn, I am not able to find that the Inspector did make any error on the material that was before him by way of financial information. I am not in a position to say that he erred in law, that is, that he reached a conclusion that no reasonable Inspector could have reached on what was before him.

Mr Evans has said that the correct way forward is for Mr Benn to make a further planning application with the now more up-to-date and comprehensive material in relation to the financial viability of the business. I also would endorse that approach because it does seem to me -- I am not the planning authority and therefore I can only say what strikes me by way of impression from these documents, but I will nonetheless state it -- it does seem to me, on the basis of further material that has been submitted, the case that this business is not viable is a very powerful one indeed. However, for the reasons that I have given, I say regrettably I have to reach the conclusion that the Inspector did not make an error of law in this case and therefore I dismiss the application.