D Morgan Plc, R (on the application of) v The Welsh Ministers & Anor (Rev 1)

This is an application for judicial review of the decision dated 9^th December 2010 of Mr. Clive Nield, an appointed Inspector exercising powers transferred to him by the First Defendants, to refuse an application for costs made by the Claimant pursuant to section 320 and Schedule 6 of the Town and Country Planning Act 1990 and section 250 (5) of the Local Government Act 1972.

Permission was granted by His Honour Judge Vosper QC on the 31^st March 2011 upon grounds 2 and 3 of the grounds of claim. The Claimant has abandoned ground 1 in the light of that limited permission.

The Second Defendants are the statutory authority with responsibility for the enforcement of planning control in the area including Sea View Farm, Old Aston Hill, Ewloe in Flintshire (“The Appeal Site”). The Claimant is the freehold owner of the appeal site.

On 4 April 1978 planning permission was granted by the Second Defendants’ predecessor Council for the tipping waste at the appeal site. Tipping began after 1978 and continued for a number of years. In 2004 two enforcement notices were served, appealed and withdrawn.

Two further enforcement notices dated 4 January 2007, in relation to an embankment at the appeal site, were served. In addition, on 6 December 2004 the Second Defendants issued one enforcement notice ("the site B notice") in which it was alleged that the deposit of waste on the land was in excess of the final levels permitted by the 1978 planning permission.

The site B notice alleged:

The relevant requirement of the site B notice was to:

The notices issued in respect of the embankments require the removal of the embankment from a date linked with the date specified for the work to be done under the site B notice.

The Claimant appealed against the enforcement notices on a number of grounds, including that the notices were a nullity and, in addition, that tipping in excess of the planning permission had not occurred.

By letters of 25 February 2005 and 12 September 2007 the Claimant’s solicitors wrote to the Second Defendants inviting them to withdraw the site B notice on the grounds that it was legally defective. The Second Defendants refused to do so.

On 25 June 2010 the Claimant’s solicitors wrote to the Second Defendants enclosing a copy of an opinion written by Leading Counsel which sets out the legal basis for the contention by the Claimant that the site B notice was legally defective. Again, the Second Defendants were invited to withdraw the site B notice. Again there was a refusal to do so

Finally at the Claimant’s instigation a meeting was held between the Claimant and the Second Defendants at which meeting the Second Defendants were again invited to withdraw the notice. There was a further refusal.

In the autumn of 2010 a public inquiry had been arranged. At the Claimant’s instigation the Inspector was invited to conduct a preliminary hearing in which he was asked to consider only the legal challenge to the validity of the enforcement notices. The Inspector agreed with that course. The first part of the public inquiry dealing with the legal arguments took place in October 2010. Following the adjournment of the inquiry the Inspector notified the parties that he was minded to allow the appeals on the basis that the site B enforcement notice was a nullity. It was and is agreed that if the site B notice was a nullity, so were the two embankment notices. Following that notification the Claimant made a written application for costs.

In his substantive decision on the validity of the site B notice, the Inspector rejected the Claimant’s argument that the notice was not complete within its four corners. It referred to the 1978 planning permission and the approved drawing and the Inspector considered that even though those documents were not attached to the notice, they were in the public domain and there was no doubt as to which documents reference was being made.

However, the Inspector acceded to the Claimant’s second argument, namely, that the notice failed to specify the requirements with suitable precision. I quote from the decision letter:

The parties made written submissions to the Inspector on the issue of costs. The Claimant contended, relying on Circular 23/93, Awards of Costs Incurred in Planning and Other (Including Compulsory Purchase Order)Proceedings, that the Second Defendants had behaved unreasonably and caused the Claimant to incur unnecessary expense in the appeal process.

The two grounds of the application were that, first, that the third party should have known the notices were a nullity and should not have issued them and second, that the Council should have heeded the advice provided by the applicant on many occasions that the notices were a nullity. In refusing the application for costs on behalf of the Claimant, the Inspector gave his reasons as follows:

It is clear that, appropriately, the Inspector purported to have regard and to follow the relevant guidance on the issue of costs contained in the Welsh Office Circular 23/93. The Claimant contend that he misinterpreted or misapplied the Circular.

The introduction to the Circular states:

Annex 1 to the Circular continues:

Paragraph 22 of Annex 3 was specifically referred to by the Inspector in the costs decision:

The two remaining grounds of challenge to the decision are first, that the Inspector failed to understand or take into account Welsh Office Circular 23/93 and, second, that he was guilty of procedural unfairness.

Taking ground 2 first, it is contended that at paragraph 9 of the decision the Inspector elides the two examples of unreasonable conduct given in the Circular and fails to understand or take account of the fact that he had found that there had been a technically defective notice.

Second, he was wrong to conclude that this was a case of disputed legal interpretation rather than a serious misunderstanding of clearly established principles of law.

In his skeleton argument Mr Crean QC contends that, by eliding the two examples of unreasonable conduct the Inspector appears to have rejected the technical defect argument or has disregarded it, which would amount to a failure to take account of a material consideration. He then contends that in paragraph 9 the Inspector has found that this was a dispute about legal interpretation when, as a decision letter makes clear, there was no dispute on the law at all.

In oral argument Mr Crean stresses, by reference to his submissions on costs (hearing bundle [HB] 151) that he specifically referred to the passage in Annex 3 of the Circular, including both the example of an incorrectly or technically defective notice and the contrasted examples of “a serious misunderstanding of clearly established principles of law” as opposed to “reliance on a legal interpretation which is not, in the event, supported by the reasons for an appeal decision”.

In fact, it did not appear from the argument of the Claimant that it was being maintained that the Council had actually misunderstood clearly established principles of law or that that was a finding of the Inspector in his decision in relation to the site B notice. In a sense, therefore, Mr Crean had actually unnecessarily invited the Inspector to consider the Annex example of a misunderstanding of clearly established principles of law.

Mr Crean then contended that this was a clear example of a technical defect and that in consequence the Inspector should have gone on properly to apply the policy and to have awarded costs against the Council. That latter argument seems to me to go beyond an allegation that the Inspector misunderstood the policy and to resurrect the irrationality argument for which there was no permission granted and which was abandoned prior to the hearing before me.

Mr Moffett invited me to return to a consideration of the structure of the Circular. As the introduction to the Circular makes it absolutely clear, the issue to be considered by the Inspector is whether the conduct of the Council can be described as "unreasonable".

There is no suggestion by any of the parties that the Inspector applied an incorrect interpretation of "unreasonable" which should, in this context, as the Circular makes clear, be given its ordinary meaning (as opposed to "Wednesbury" unreasonableness).

In consequence, as I believe was also the final position of all the parties, I consider it is unnecessary for me to venture into the interesting debate about the proper basis for the interpretation of policy guidance in the planning law field. Both Mr Moffett and Mr Crean addressed me at some length about the two seemingly divergent lines of authorities represented on the one hand by R(Kennedy) v Health and Safety Executive [2009] EWCA Civ 25 (urged upon me by Mr Crean to be the correct “objective” single meaning approach) and on the other by R v Derbyshire CC, ex p Woods [1998] Env LR 277, in which is the statement of principle by Brooke LJ which has been explicitly approved by a series of succeeding Court of Appeal and first instance cases. There was, for example, specific approval of the passage in R (Heath and Hampstead Society) v Vlachos by Carnwath LJ (with whose judgment Sedley LJ agreed – a point of significance, as Mr Crean cites his judgment in R (Sainsbury’s Supermarket Ltd.) v First Secretary of State [2005] EWCA Civ 520 in support of his contentions).

For my part, I found the analysis of Davies J. in Cranage Parish Council and others v First Secretary of State and others [2004] EWHC 2949 at paragraphs 49 to 51 to be the most helpful synthesis of the correct approach to interpretation but, with some relief, I have concluded that it is unnecessary for the purpose of this judgment to resolve any possible divergence of judicial views.

To return to the Inspector’s decision, I entirely accept Mr Moffett’s argument that the Inspector clearly takes as the fundamental touchstone of his decision the issue of whether the conduct of the Council can be categorised as unreasonable. The Inspector begins his analysis at paragraph 3 with a correct reference to the Circular test; he refers at several points in his analysis of the conduct of the Council in the body of his decision to the conduct of the Council as being reasonable; he concludes his decision at paragraph 13 with his finding that unreasonable behaviour cannot be demonstrated.

I do consider that in paragraph 9 of the decision the Inspector could have been clearer in categorising the Council’s error in relation to the site B notice. I, myself, would not characterise the failure of the authority as a failure of "legal interpretation". However, it is important to have regard to the issues that were considered by the Inspector in part one of the inquiry. As Mr Tucker QC, who appeared for the Council at part 1 of the inquiry and before me, helpfully made clear, despite the fact that in the pre-inquiry meeting (see Inspector's notes HB 207 – 211 and particularly paragraph 14) the Inspector made it clear that part 1 of the inquiry would be confined solely to legal arguments in respect of nullity and/or invalidity of the enforcement notices, in order to support the Council's legal argument that the site B notice was not a nullity because it was sufficiently certain, expert surveying evidence was called by both the Council and the Claimant.

Mr Tucker produced to me (not in the hearing bundle) the briefing notes of his expert. It was contended that it was possible to derive from the plan attached to the planning permission a range of interpretations of level and that that range of interpretations produced sufficient certainty within the four corners of the enforcement notice so that the notice was not a nullity. The Claimant, on the other hand, contended not only that there was insufficient certainty and that, in any event, to achieve any degree of certainty it was necessary to rely on another plan or a survey and, thus, to stray outside the four corners of the enforcement notice but also that it was not possible to derive a range of interpretations from the permission plan.

In fact, in his decision on nullity, the Inspector accepted that a range of interpretations was possible from the permission plan. However, he acceded to the Claimant’s argument that the range was hopelessly uncertain and that to make it certain, in any event, required reference outside the four corners of the enforcement notice.

It was to those arguments that the Inspector was making reference in paragraph 6 and 7 of his costs decision. Having been specifically invited by Mr Crean to consider the examples in paragraph 2 of Annex 3 that the Inspector refers to in paragraph 8 it is, perhaps, not surprising that he strove to categorise the Council's arguments which he rejected as a deficient legal interpretation rather than a misunderstanding of established principles of law. No one suggested it was the latter. Having regard to the issues explained by Mr Tucker I can understand the Inspector's choice of description of the error of the Council as a deficient legal interpretation. In any event, if one reads paragraphs 10 and 11 of the Inspector's decision it becomes absolutely clear to what conduct of the Council he was referring.

In South Somerset District Council v Secretary of State for the Environment and another [1993] 1PLR 80, in a well known passage, Hoffman LJ (as he then was, gave guidance about the correct way to approach the reading of an Inspector’s decision:

“The Inspector is not writing an examination paper on current and draft development plans. The letter must be read in good faith and references to policies must be taken in the context of the general thrust of the Inspector's reasoning. A reference to a policy does not necessarily mean that it played a significant part in the reasoning: it may have been mentioned only because it was urged on the Inspector by one of the representatives of the parties and he wanted to make it clear that he had not overlooked it. Sometimes his statement of the policy may be elliptical but this does not necessarily show misunderstanding. One must look at what the Inspector thought the important planning issues were and decide whether it appears from the way he dealt with them that he must have misunderstood a relevant policy or proposed alteration to policy.”

That passage has particular relevance here. Reading the decision as a whole, it is clear to me that the Inspector was referring in paragraphs 8, 9 and 10 to the issue that required expert evidence before him and saw it as a mixed question of fact and law. It may be that Mr Tucker describes it most accurately as a factual decision which had particular legal consequences. What is patent is that, although the Inspector, in part, though not in whole, found against the Council on the central factual issue of whether the range of interpretation of levels was sufficiently certain, he considered they had a reasonable case which was advanced reasonably.

His finding against them meant that the notice, insufficiently certain, was a nullity. But the Circular does not compel the Inspector, although he has made that decision, as he clearly indicates he has (see his reference to the “hopeless lack of precision” at paragraph 6), to find, as a result, that the conduct of the Council was unreasonable and, thus, that an award of costs should be made against them. As the Circular makes very clear, the Annexes merely give examples of conduct which may give rise to the conclusion that the party guilty of that conduct has acted unreasonably. As Mr. Moffett put it, there is no presumption in favour of an award of costs. The Inspector has obviously been well aware that an example in the Annex of conduct that may be considered unreasonable is where an authority has issued and continued to defend on appeal a notice that is held to be technically defective. He both refers specifically to that example at paragraph 8 and accurately summarises his finding of technical defectiveness. However, he, with his undoubted expertise, and having heard the evidence and argument that he summarises, concludes that the conduct of the authority was not unreasonable.

Moreover, he carefully lists the various material considerations relevant to the conduct of the Council in his decision, starting, for example, with the very relevant consideration that he had found for the Council on the first of the 2 grounds argued by the Claimant. In paragraphs 6 and 7 (to which I shall return in considering ground 3, the second extant ground of challenge) he properly takes into account the belief of the Council when deciding initially to pursue enforcement action, on what he found to be reasonable grounds, that there appeared to have been excess tipping on any of the range of interpretations of level that their expert had told them could be derived from the permission plan and that they believed, again on expert advice, that the higher levels of tipping were harmful to amenity. Thus, he was accepting not only the bona fides of the Council but also that they were motivated by a view they had properly taken of the public interest, a factor specifically mentioned in Annex 3 of the Circular (HB 32, paragraph 21).

It is, in my judgment, impossible to conclude on a fair and full reading of the decision that the Inspector in any sense misunderstood or misapplied the Circular. There must be genuine or substantial doubt that he did to justify a successful challenge. Here, in my judgment, there is none. The Inspector mentioned, and, it must be concluded, took into account the relevant examples, considered all material considerations and no immaterial ones and reached a conclusion to which he was entitled to come. Indeed, the irrationality argument having been abandoned, it is impossible for Mr. Crean to argue that the Inspector was not entitled to come to the conclusion he did. Above all, the Inspector at all times applied the right test to the conduct of the Council, namely, whether it was unreasonable.

I therefore reject ground 2, the first of the extant grounds.

As to ground 3, procedural unfairness, the argument is that the Inspector agreed to separate the legal argument that the site B enforcement notice was a nullity from the merits of that notice, dealing with the legal argument in part 1 of the inquiry and the merits in part 2. That, I accept, is clear from the Inspector’s notes of the pre-inquiry meeting. Mr. Crean told me, and Mr. Tucker confirmed this, that there was an agreement between counsel at part 1 of the inquiry, that there would be no cross examination on evidence relating to the merits of the enforcement notice which were to be dealt with in part 2 and that that agreement was notified to the Inspector.

Mr. Crean felt himself bound, therefore, not to cross examine the Council’s expert on whether the tipping which actually had taken place had exceeded that permitted under the planning permission and whether the current final levels had any impact on amenity, evidence given by the Council’s expert in part 1 of the inquiry (see his briefing note). Moreover, although the Council, in their written submissions on costs to the Inspector (submitted, as were the submissions of the Claimant, prior to receipt of the full reasons of the Inspector for finding the notice a nullity), make reference to the excess tipping (see HB page 157 paras. 1.3 and 1.4), Mr. Crean continued to feel himself bound by the directions of the Inspector and the agreement between counsel. These were controversial issues – the Claimant had evidence to contradict the Council’s expert both on the issue that there had been excess tipping and that there had been an adverse effect on amenity.

Mr Crean contends that to make findings on these issues on the basis of evidence that was unchallenged for the above reasons and to use those findings as a basis for rejecting the costs application (as he contends the Inspector has done in paragraphs 6 and 7 of the decision) amounts to procedural unfairness.

I am afraid I have concluded that the procedural unfairness argument is entirely misconceived. First, as Mr. Tucker’s explanation of the context of the evidence by his expert makes clear, that evidence of excess tipping was directed to the issue of nullity, not to the merits of the notice. It was contended that, having regard to the range of interpretations of the permission plan, which the Council’s expert considered could be deduced from the plan, on any view of that range there had been tipping in excess of permission. Thus, it was contended, the enforcement notice was sufficiently precise.

On that basis, the evidence was relevant to a part 1 inquiry issue. It would have been very surprising, if it had not been, that Mr Crean did not object to it and that the Inspector allowed it. Mr Crean would not have been debarred by his agreement from cross examining on it or from calling evidence to counter it (in fact he did call such evidence). Indeed he had the opportunity to challenge the contentions based on that evidence again on the issue of costs and it is wrong to suggest, as he does, that the procedure and agreement meant that he did not have “a fair crack of the whip”.

Moreover, I accept Mr Moffett’s submission that paragraphs 6 and 7 of the decision are related simply to the Council’s decision to institute enforcement action. The Inspector was bound to consider all aspects of the Council’s conduct in both initiating and pursuing to appeal the enforcement procedure. If, for example, they did not have any true belief that they could establish that there had been excess tipping or that there had been damage to amenity, and were bringing the enforcement proceedings to show their voters they were taking a stand in relation to the site, then the Inspector would be entitled to conclude their behaviour was unreasonable. In contrast, as the Circular makes clear, a Council’s genuine view that enforcement action was essential in the public interest is very relevant to the question of unreasonableness (see paragraph 21 of Annex 3, HB 32). The Inspector was taking, as Mr Moffett correctly submitted, a completely orthodox approach based on the costs Circular.

Again, reading the Inspector’s decision fairly and not like an examination paper or a statute, I am in no doubt that in paragraphs 6 and 7 the Inspector was considering whether, in deciding to pursue enforcement action, and on the limited evidence that had been put before him, the Council had reasonable grounds for concluding there had been excessive tipping and damage to amenity. He was “inclined to agree” that there had been such reasonable grounds and therefore concluded that there had been “a reasonable basis for the Council’s decision to seek to pursue enforcement action”.

If by that last sentence, and contrary to Mr. Moffett’s contention, which I have accepted, the Inspector meant “pursuit to appeal” then his judgment on evidence on which the Council based their decision is equally valid.

Additionally, in my view, the Inspector could not have made it more clear that he was reaching no concluded decision on the evidence of tipping or amenity, and, indeed, that he could reach no concluded decision without the further evidence that would have been presented in part 2 of the inquiry.

Mr Crean contends that, had he felt able to cross examine or make submissions on the evidence which he says the Inspector made, at the very least, preliminary findings on, or had he been able to call evidence to counter it, it might have made a difference to the findings on costs. I disagree. The issue to which the evidence referred to by the Inspector related was whether there was a reasonable evidential basis for the Council’s view that they should pursue enforcement action. That involved simply an assessment of the expert evidence that the Council had available to make their judgment. No amount of contrary evidence, cross examination or submissions at the part 1 inquiry would have been relevant to that assessment.

There was no procedural unfairness in the approach of the Inspector. I reject ground 3 and, it follows, I dismiss the application for judicial review.

As I indicated to the parties, I shall deal with any ancillary orders which cannot be agreed, including costs and any application for permission to appeal, by way of a telephone hearing at the Cardiff Civil Justice Centre at a time and date convenient to counsel.