Scottish Widows Plc & Ors v Cherwell District Council & Ors

On 18 December 2012 the defendant, Cherwell District Council, granted planning permission to the first interested party (“LXB Properties”) for the redevelopment of a site known as “Banbury Gateway”. Existing buildings were to be demolished and a retail park built to include flagship stores for Marks & Spencer and Next, together with smaller shops and three associated restaurants and cafes. The site is immediately adjacent to the M40 at its Banbury junction. The site is currently occupied by the Prodrive group of companies (“Prodrive”) but it is too small for their needs. They have contracted to buy another larger site in Banbury, known as the Hella Site, and have obtained planning permission to build new premises. They are doing so with a view to a substantial expansion of their activities, with increased employment for local people. LXB Properties own both sites. The two developments are commercially linked. Subject to the grant of planning permission on the Gateway site, Prodrive are obliged to give vacant possession and purchase the alternative site. Prodrive have consistently explained that they need more space for expansion and would like to achieve it in Banbury where many of their current employees live. The redevelopment of the existing (Gateway) site is essential for financial reasons to enable the construction of new premises at the alternative site.

These two claims for judicial review are brought by the Scottish Widows plc group (“Scottish Widows”) and Aegon UK Property Fund Limited (“Aegon”). Scottish Widows are the long leaseholder of the Castle Quay Shopping Centre in Banbury. Their entirely legitimate commercial concern is that business may be sucked away from the town centre should the development of Banbury Gateway go ahead. Aegon owns the Banbury Cross Retail Park on the northern edge of Banbury town centre and have similar legitimate commercial concerns.

These claims come before me as rolled-up applications for permission to apply for judicial review pursuant to the order of Hickinbottom J of 29 May 2013. The grounds advanced collectively by the claimants may be summarised in this way:

I grant permission, but for reasons which follow the claims will be dismissed.

Whilst a very substantial volume of factual material was placed before the court the surrounding facts can be summarised relatively briefly to enable the legal contentions to be understood. LXB Properties well recognised that it was necessary to deal with the sequential test, disaggregation and the impact of their proposed development upon Banbury town centre as part of their application. To that end they instructed White Young Green (“WYG”) to provide their expert opinion on all material planning issues. The Council instructed CBRE to review the work undertaken by WYG and advise on the same issues. Scottish Widows instructed Turleys and Aegon instructed Savills. WYG concluded that the sequential test was satisfied, that disaggregation was not feasible and that the impact on Banbury town centre was not such as to put the proposal in conflict with applicable planning policy. To a greater or lesser extent CBRE, Turleys and Savill disagreed with the conclusions reached by WYG.

The Planning Committee met to consider the application on 22 March 2012. A detailed and comprehensive report was prepared by Jane Dunkin on behalf of the Council’s Head of Public Protection and Development Management [“HPPDM”]. It is accepted by all parties that the report was an impressive piece of work that set out the competing views of the experts. The conclusions of CBRE were summarised. Their overall conclusion was that the sequential test was not satisfied and that whilst the impact on the town centre “may not be significant”, the proposed development would jeopardise investment in two town sites (Bolton Road and Canalside). The report noted that either of these points “would justify refusal of the application” (paras 3.17 and 3.17.1). The report identified a series of “key issues” which included, amongst much else, “Sequential Assessment and Retail Impact”.

Section 5.5 of the report dealt with the sequential test and retail impact. It was noted that because the site was an out of town centre location and not allocated for retail development,

“PPS4 requires the applicant to demonstrate that there are no sequentially available sites that are available, suitable and viable, and that there would be no significant adverse impacts, in terms of impact on centres and in terms of wider environmental, economic and regeneration impacts. The applicant has produced a Retail Assessment and an Addendum to that Assessment to address these matters. They are available to view via the Council’s website.”

What then followed was an analysis of the competing views of WYG and CBRE. In summary:

I shall set out Jane Dunkin’s conclusion on these aspects of the application for planning permission in full:

“5.5.8

Conclusion on Sequential Assessment and Town Centre Impacts

5.5.8.i The proposed development does not accord with Policy EC17 of PPS4 as WYG has not demonstrated compliance with the requirements of the sequential approach for the following reasons:

•

There is no convincing argument that some of the A1 (Footnote: ¹) units could not be disaggregated

•

Banbury’s market share does not need to be urgently improved therefore the Bolton Road site must be considered as an available site

•

The Bolton Road site is sequentially preferable and could accommodate some larger A1 units alongside a convenience goods retail offer

[HPPDM] agrees with these conclusions and therefore, based on the advice in accordance with Policy EC17, planning permission should be refused solely on these grounds.

5.5.8.ii Notwithstanding the above conclusions, the proposal would have significant impacts upon the town centre as set out below:

•

Banbury Gateway would exist as a standalone destination due to the presence of A3 (Footnote: ²) units and a food hall therefore discouraging linked trips to the town centre

•

Even is M&S and Next agree to retain a presence in the town centre this could only be secured over a short time period. Their loss would reduce investor confidence in the town centre

•

The proposal would hinder the delivery of the Bolton Road site thereby negatively impacting upon planned investment

[HPPDM] considers that these impacts would be significant and as such the application does not accord with policy EC16 and PPS4.”

The claimants did not submit that the only lawful outcome of this application for planning permission was refusal. However, they submitted that on the material before them the only conclusion which the Planning Committee could come to on the sequential test was that the applicants, through WYG, had failed to demonstrate that it was met. Additionally, they submitted that the Council misunderstood or failed to apply the sequential test. In support of that second submission they pointed to observations made by individual councillors in the course of debate which, it was suggested, show a misunderstanding of the sequential test.

The core submission of the claimants on ground 2, as with ground 1, was that on the material available to them the only conclusion which the Planning Committee could come to was that there would be significant damage to the vitality and viability of the town centre were the application for planning permission to be granted.

The sequential test was considered by the Supreme Court in Tesco Stores Ltd v Dundee City Council [2012] UKSC 13. The wider importance of the case is to establish that the interpretation of policy is a matter for the court. The sequential test may be summarised as requiring that preference should be given to town centre sites, where sites or buildings suitable for conversion are available, followed by edge-of-centre sites, and only then to out-of-centre sites in locations. Much of the debate before the Supreme Court centred on what was meant by “suitable” in this context. Lord Reed stated:

“24.

I turn then to the question whether the respondents misconstrued the policies in question in the present case. As I have explained, the appellants' primary contention is that the word "suitable"…[means] "suitable for meeting identified deficiencies in retail provision in the area", whereas the respondents proceeded on the basis of the construction placed upon the word by the Director of City Development, namely "suitable for the development proposed by the applicant". I accept, subject to a qualification which I shall shortly explain, that the Director and the respondents proceeded on the latter basis. Subject to that qualification, it appears to me that they were correct to do so, for the following reasons.

25.

First, that interpretation appears to me to be the natural reading of the policies in question. … Read short, Retailing Policy 4 of the structure plan states that proposals for new or expanded out of centre retail developments will only be acceptable where it can be established that a number of criteria are satisfied, the first of which is that "no suitable site is available" in a sequentially preferable location. Policy 45 of the local plan is expressed in slightly different language, but it was not suggested that the differences were of any significance in the present context. The natural reading of each policy is that the word "suitable", in the first criterion, refers to the suitability of sites for the proposed development: it is the proposed development which will only be acceptable at an out of centre location if no suitable site is available more centrally. That first reason for accepting the respondents' interpretation of the policy does not permit of further elaboration.

26.

Secondly, the interpretation favoured by the appellants appears to me to conflate the first and third criteria of the policies in question. The first criterion concerns the availability of a "suitable" site in a sequentially preferable location. The third criterion is that the proposal would address a deficiency in shopping provision which cannot be met in a sequentially preferable location. If "suitable" meant "suitable for meeting identified deficiencies in retail provision", as the appellants contend, then there would be no distinction between those two criteria, and no purpose in their both being included.

27.

Thirdly, since it is apparent from the structure and local plans that the policies in question were intended to implement the guidance given in NPPG 8 in relation to the sequential approach, that guidance forms part of the relevant context to which regard can be had when interpreting the policies. The material parts of the guidance are set out in para 6 above. They provide further support for the respondents' interpretation of the policies. Paragraph 13 refers to the need to identify sites which can meet the requirements of developers and retailers, and to the scope for accommodating the proposed development. Paragraph 14 advises planning authorities to assist the private sector in identifying sites which could be suitable for the proposed use. Throughout the relevant section of the guidance, the focus is upon the availability of sites which might accommodate the proposed development and the requirements of the developer, rather than upon addressing an identified deficiency in shopping provision. The latter is of course also relevant to retailing policy, but it is not the issue with which the specific question of the suitability of sites is concerned.

28.

I said earlier that it was necessary to qualify the statement that the Director and the respondents proceeded, and were correct to proceed, on the basis that "suitable" meant "suitable for the development proposed by the applicant". As paragraph 13 of NPPG 8 makes clear, the application of the sequential approach requires flexibility and realism from developers and retailers as well as planning authorities. The need for flexibility and realism reflects an inbuilt difficulty about the sequential approach. On the one hand, the policy could be defeated by developers' and retailers' taking an inflexible approach to their requirements. On the other hand, as Sedley J remarked in R v Teesside Development Corporation, Ex p William Morrison Supermarket plc and Redcar and Cleveland BC [1998] JPL 23, 43, to refuse an out-of-centre planning consent on the ground that an admittedly smaller site is available within the town centre may be to take an entirely inappropriate business decision on behalf of the developer. The guidance seeks to address this problem. It advises that developers and retailers should have regard to the circumstances of the particular town centre when preparing their proposals, as regards the format, design and scale of the development. As part of such an approach, they are expected to consider the scope for accommodating the proposed development in a different built form, and where appropriate adjusting or sub-dividing large proposals, in order that their scale may fit better with existing development in the town centre. The guidance also advises that planning authorities should be responsive to the needs of retailers. Where development proposals in out-of-centre locations fall outside the development plan framework, developers are expected to demonstrate that town centre and edge-of-centre options have been thoroughly assessed. That advice is not repeated in the structure plan or the local plan, but the same approach must be implicit: otherwise, the policies would in practice be inoperable.”

The claimants’ criticism based upon comments made by individual committee members was pressed only sotto voce in oral argument for two reasons. The first was practical and the second legal. The practical reason was that a number of those who voted made no observations at all, and others made no observations on this aspect of the application. Others addressed the matter with obvious understanding of the concept, especially Councillor Mallon, who took a leading part in the debate.

The legal reason stemmed from the consistent approach in authority that caution is required when trying to extract from a general discussion the reasoning of a corporate body; and that what is said in debate does not necessarily reflect the views of an individual at the time that he votes R v Poole ex parte Beebee [1991] 2 PLR 27 at 31. The claimant relied upon R v Exeter City Council Ex parte J.L. Thomas &Co. Ltd [1991] 1 QB 471 at 483 - 484 in support of the proposition that it is permissible to look at the general tenor of the transcript to detect whether the councillors have misunderstood the policy they are applying.But one must be cautious of attributing too much significance to the speeches of only a few of the voting majority –as Simon Brown J (as he then was) said in Exeter City Council echoing R v London County Council [1951] 2 KB 471 per Buckley and Pickford LJJ at 489.

The insuperable problem which the claimants have in this case of making anything of the comments made by the councillors on this ground (and indeed the next) is that the material issue was stated with clarity in the Report and set out in the experts’ reports from WYG and CBRE. Furthermore, there were contributions from professionals at the meeting itself directed towards the issue. Contrast that with the position that obtained in R (Lanner Parish Council) v Cornwall County Council [2013] EWCA Civ 1290, where the report from officials demonstrated a misunderstanding of the relevant policy which was reflected in the minutes and committee discussion.

I am entirely unpersuaded that the Planning Committee misunderstood the sequential test. The question is whether, as the claimants submitted, the material before the Planning Committee was such that they could not properly be satisfied that the sequential test was met.

There was a strong view held by CBRE and agreed by HPPDM that the applicants had failed to demonstrate that the sequential test was met. However, on no fair reading of the Report could it be suggested that HPPDM considered that there was only one answer to the question whether the sequential test had been met. Neither can it be said that CBRE expressed themselves in a way which suggested that there was only one answer. CBRE addressed their conclusions to the officials and commented

“If, however, officers are content that the sequential approach has been satisfied and the adverse impacts will not be significant, the positive and adverse impacts of the scheme will need to be weighed against one another.”

Thus, as this comment makes clear, there was room for two views about whether the sequential test was met and also on the question whether the development would have a significant adverse impact on the town centre.

It was for HPPDM to advise upon, but for the Planning Committee to decide, the question. HPPDM and officials were entitled to their own view of the strength of the competing contentions of the experts, but it was for the Planning Committee to evaluate that evidence and make its own planning judgement bringing its local knowledge to bear. Detailed criticism of aspects of the work undertaken by WYG carry the claimants nowhere in the absence of a convincing submission that there was no basis upon which the Planning Committee could properly and rationally conclude that the sequential test was met. That provides a very high hurdle. It suggests that despite all the work done by WYG, for the very purpose of demonstrating that the sequential test was met, not only had they failed to do so (as a matter of legitimate difference of opinion), but that they were so far from doing so that their evidence, professional opinions and conclusions were, for these purposes, worthless. It suggests that CBRE were wrong to work on the basis that there was room for two views and it also suggests that HPPDM was wrong to recognise in the Report that the Planning Committee had a choice on this issue.

The claimants make the case that WYG had not gone far enough to demonstrate that the sequential test was satisfied. To my mind they fail to recognise the central feature of the proposed development, namely the need for a critical mass of shops and supporting catering facilities, which cannot be delivered elsewhere in the medium term. But that is to enter into the merits, which is not the function of the court. The factual question for the Planning Committee was one which called for evaluation of conflicting evidence and opinion and the exercise of planning judgment by the Planning Committee. From the mass of material placed before them, its members were entitled to conclude that the applicants had surmounted this particular hurdle by demonstrating that the sequential test was met.

The same considerations apply to the issue relating to the impact of the new development on Banbury town centre, which is the subject matter of ground two. The issue was intimately connected with the question whether Marks & Spencer and Next would maintain their town centre stores for the periods in respect of which they gave assurances - Next until the expiry of its current lease in 2016 and Marks & Spencer for much longer. The Planning Committee was entitled to take those public assurances into account. The impact on the town centre would depend not only on that, but also on the extent to which shopping trips currently destined for the town centre would be diverted to the Banbury Gateway, and on the extent to which new business would be brought to Banbury town centre as a result of shopping journeys generated by the development. Retail experts can bring their considerable experience to bear to provide estimates based, in particular, on impacts measured in comparable situations. It is not a science. It is suggested by the claimants that WYG significantly under-estimated the adverse impacts. That conclusion was reflected in the advice given by HPPDM that

“the development would have a significant impact on Banbury due to the establishment of a stand alone site that would not encourage linked trips and the high probability that the anchor store of M&S and Next in the town centre would not remain in the medium term.”

It was HPPDM’s view that the development would discourage town centre trips, reduce investor confidence in the town centre and thus significantly affect its vitality and viability. The minutes of the March 2012 Planning Committee meeting show that members had in mind that the development “could have a positive impact on the town centre.” In this they were disagreeing with the conclusions of HPPDM and CBRE. The claimants submitted that there was no adequate engagement by councillors on the issues raised by HPPDM. They also submitted that the way in which this issue was summarised in the report for the meeting on 24 May was no more than officials trying to make sense of the nonsensical. Further, that the final reasons, which suggest that the development would “protect the vitality and viability of Banbury town centre”, were bizarre.

PPS4 and NPPF contain policies to refuse proposals which would be likely to have “a significant adverse impact” upon the town centre. Retail impact was one of the main topics covered in the expert evidence before the Planning Committee, as well as in the report from HPPDM. The policy was identified. It is impossible to conclude that the members of the Planning Committee failed to understand the material policy. The question whether there was, or was not, likely to be a significant adverse impact on the town centre was one of planning judgment based upon the material before the committee and their local knowledge. The distillation of the reasoning of the majority of the members found in the report for the meeting on 24 May 2012 reflects the necessary implications of the majority’s conclusion in March 2012 with some permissible gloss gleaned from the discussion. There is no indication that when faced with those reasons in May 2012 the members of the committee expressed any disagreement with them as an accurate reflection of what had been decided, and why.

The claimants submitted that the use of the word “protect” in the minutes which accompanied the planning permission on December 2012 in relation to the vitality and viability of the town centre was perverse, given the evidence of adverse impact before the Planning Committee. They suggested that it amounted to a conclusion that the impact would be positive.

The planning judgement which the committee was called upon to make related to a significant adverse impact. The report for the meeting in May expressed the conclusion relating to town centre impact by adverting to three features. First, members did not consider that the development would have an impact upon existing and planned town centre investment. Secondly, it would encourage linked trips to the centre via the proposed shuttle bus. Thirdly, members therefore concluded that the development would not have an impact upon the vitality and viability of Banbury town centre. It was noted that, as a result, the development accorded with guidance relating to the vitality of town centres contained within the NPPF.

I accept that “protect” is not an obvious word to have chosen to convey the meaning wrapped up in those three points and the general sense that the Planning Committee did not consider that there would be a significant adverse impact. Nonetheless, that is what the word was designed to convey. “Protect” does not mean “positively enhance”, as the claimants suggested. Its natural meaning in this context is that the development would preserve the town centre from attack or not lead to its depredation. Its use does not suggest any legal error on the part of the committee.

The claimants submitted that the summary reasons given by the Council were inadequate. Mr Findlay QC, for the Council, noted that Aegon did not appear to be suggesting that the reasons were inadequate. Mr Tucker was able to point to a sentence in Aegon’s grounds which makes a passing reference to the summary reasons but, that said, this was Scottish Widows’ argument rather than Aegon’s. Mr Cahill focused on the absence of explicit mention of the sequential test in the summary reasons quoted above, and submitted that the general reference to NPPF (which preserves that test) was not good enough, at least in a context where the members had disagreed with the advice they received from officials. In reply, he did not press his argument that the summary reasons in relation to the impact on Banbury town centre were inadequate given the express reference to “vitality and viability”. He submitted that the more detailed reasons in the report prepared by HPPDM for the meeting on 24 May were of no account, despite the decision being re-affirmed and thus (it might be thought) the committee having given the clearest of indications that it was content with them.

The effect of Mr Cahill’s submission is that the summary reasons should have said in terms that the view of WYG on the sequential test had been accepted.

The argument was founded upon the proposition that by contrast with cases in which the committee adopted the recommendation of officials where there would rarely be any need to say more than they agreed, there was a legal obligation on members to say more when they disagreed. Mr Cahill relied upon the observations of Sullivan LJ in Siraj v Kirklees Metropolitan Council [2010] EWCA Civ 1286 at paragraph [15]:

“When considering the adequacy of summary reasons for a grant of planning permission, it is necessary to have regard to the surrounding circumstances, precisely because the reasons are an attempt to summarise the outcome of what has been a more extensive decision making process. For example, a fuller summary of the reasons for granting planning permission may well be necessary where the members have granted planning permission contrary to an officer’s recommendation. In those circumstances, a member of the public with an interest in challenging the lawfulness of planning permission will not necessarily be able to ascertain from the officer’s report whether, in granting the planning permission, the members correctly interpreted the local policies and took all relevant matters into account and disregarded irrelevant matters.” (emphasis added)

The learned Lord Justice went on to draw the contrast with cases in which the members had endorsed the reasoning contained within the report.

In R (Telford Trustee No. 1 Ltd and another) v Telford and Wrekin Council [2011] EWCA Civ 896 between [14] and [26], Richards LJ reviewed the law relating to summary reasons. He noted that the planning officer’s report was addressed to an informed readership and endorsed (as had Sullivan LJ in Siraj) that regard should be had to factors identified by Sir Michael Harrison in R (Ling (Bridlington) Ltd) v East Riding of Yorkshire [2006] EWHC 1604 (Admin). These included:

Mr Cahill submitted that the effect of these authorities was to impose an obligation to give fuller reasons where the advice of officials was not accepted, and in this case the Council had not done so. In my judgment it is clear from the language used by Sullivan LJ that he was not seeking to apply a universally applicable gloss to the statutory requirement to give summary reasons but rather, in a carefully caveated statement, noted that the circumstances he identified may require more by way of explanation. The purpose of summary reasons is to enable those concerned about the application to understand why it had been granted in the context of the surrounding circumstances.

In this case the report from HPPDM made clear that there was a profound disagreement between WYG and CRBE about whether the sequential test was satisfied and also on the question whether there would be a significant adverse impact on Banbury town centre. Officials preferred the views of CBRE (which were supported by Turleys and Savills) but recognised that members might take a different view. In granting permission the natural inference was that the members were satisfied on those counts, as they were on the myriad of technical issues about which there was no controversy and also (contrary to the view of officials) that they did not share the concern regarding the aesthetics of the development. The report prepared for the meeting on 24 May explicitly stated those conclusions. The draft reasons were published on 15 June 2012 in substantially the same form as they emerged in December. Neither of these claimants, nor anyone else for that matter, made any suggestion that they were inadequate or left any doubt about the underlying resolution of the points in issue. In my judgment the reference in the summary reasons to compliance with NPPF was more than enough, in the context of the very detailed exposition of the conflicting views in the report for the meeting in March and the clear reasons found in the report for the May meeting, to enable all concerned to understand why the permission had been granted. The summary reasons were not legally wanting.

There is one final observation on the question of reasons. Even had I been satisfied that the reasons were legally flawed on grounds of inadequacy, I would not have quashed the grant of planning permission. This is a case where such a failure could have been adequately met by requiring further reasons to be given: R (TWS) v Manchester City Council [2013] EWHC 55 (Admin) at [132]; R (Mid-Counties Co-operative Ltd) v Wyre Forest District Council [2009] EWHC 964 (Admin) at [191]. The reason why that course was followed in those cases is all the stronger now that there is no statutory obligation to give summary reasons at all.

The claimants contend that the planning permission should be quashed because of the failure of the Council to secure a section 106 agreement which tied Prodrive to its new site for a finite (but unspecified period) and also obliged Marks & Spencer to retain its town centre store for a finite period of perhaps five years. So far as Marks & Spencer was concerned, Mr Cahill points to the terms of a section 106 agreement referred to in R (Zurich Assurance Ltd t/a Threadneedle Property Investments Ltd) v North Lincolnshire Council [2012] EWHC 3798 (Admin)whereby the developer agreed not to let a unit to a particular tenant without having secured a covenant from the prospective tenant that it would maintain its existing town centre store for five years. Both Mr Cahill and Mr Tucker submitted that something similar might have been devised to tie Prodrive to its new site for the same period, although no worked example was provided.

The Section 106 agreement required of the developers in this case contained no such provisions. The claimants put their argument on this ground in two ways. First, they submitted that the resolution of the Planning Committee in March 2012 required such an agreement to be entered into as a condition of the grant of planning permission. Secondly, they submitted that it was irrational not to require commitments of this nature which bound Prodrive and Marks & Spencer respectively.

I deal with the first argument shortly. The resolution of the Committee on 22 March, re-affirmed on 24 May, delegated all matters relating to the section 106 agreement to HPPDM in consultation with the Chairman. The Planning Committee was not prescriptive about its content. In my judgment, this argument misunderstands the nature of the decision made by the Planning Committee. The grant of planning permission was not conditional upon any particular content of the section 106 agreement. The claimants are right to observe that officials advised that the agreement should contain such conditions (see paragraph 10 above). But the resolution recorded in the minutes was that the application:

“be approved subject to a legal agreement and appropriate conditions and that authority be delegated to [HPPDM], in consultation with the Chairman, to negotiate the legal agreement and conditions.”

As the resolution makes clear, the Planning Committee did not prescribe the nature of the conditions which should attach to the planning permission, nor did it specify any particular content for the section 106 agreement.

So far as the second argument is concerned, on 19 March 2012 Marks & Spencer’s Head of Property had written to the Chairman of the Planning Committee explaining that the town centre store was held in part subject to a lease until 2027 and in part freehold. He explained that the company could have broken the lease but had not done so. It was now legally committed to the leasehold element of its store and to its town centre store which it saw as complementary (and not in competition with) the proposed new store. He reiterated an earlier offer to sign a commitment to maintain the town centre store for five years from the opening of the new store. At the meeting on 22 March 2012 a representative of Marks & Spencer made a public statement to the same effect. Although the argument advanced under section 106 has not been developed by reference to Next, that company had indicated publicly that it would keep its town centre store at least until the expiry of its current lease in March 2016. In correspondence exchanged before the Planning Committee meeting, officials had mooted the possibility of a requirement to tie Next to the town centre, but it did not find its way into the report.

Prodrive gave written and oral assurances that they would locate their (expanded) business at the Hella site if planning permission were granted at the old site. In a letter written on 12 March 2012 Prodrive said:

“I believe you are aware that we have an Agreement with the developers LXB whereby post approval of Banbury Gate, we will be required to sell the existing site to LXB and re-invest the funds in acquiring and refurbishing the former Hella premises from LXB thus satisfying our growth requirements for the business in Banbury.

To make this very clear, and so there is no misunderstanding, we are contracted to buy the Hella site, which will then become the new headquarters for Prodrive. Should the Council require further comfort, I wanted you to know that Prodrive would be prepared to enter into a unilateral undertaking confirming our commitment to remain an integral part of the fabric of Banbury, the detail of which can be documented post Planning Committee decision.”

That unilateral undertaking was reoffered before the meeting of the Planning Committee. It was not mentioned in the report. A representative of Prodrive spoke at the meeting and expressed his disappointment at its absence from the report and stated publicly that Prodrive would be prepared to be bound by a section 106 agreement.

Confusion had arisen in the pre-action protocol letters and the claimants’ pleadings relating to the position of Prodrive. Arguments were formulated on the basis that the development of Banbury Gateway was for technical planning purposes “enabling development” linked to the development of the Hella site. It was not. Those arguments were not pressed orally.

The evidence of how the section 106 agreement ended up in its final form is found in a short statement from Nigel Bell, a solicitor employed by the Council. The section 106 agreement covered all of the technical matters identified in the report from HPPDM. No point arises in respect of any of them. A number of conditions were attached to the planning permission expressly to safeguard the vitality and viability of the town centre. Similarly, no issue arises with respect to them. Mr Bell explains that after the March meeting he gave thought to whether the section 106 agreement might seek to bind the anchor stores (Marks & Spencer and Next) and Prodrive, respectively to the town centre and to the Hella site. He noted that neither Marks & Spencer nor Next had an interest in the Banbury Gateway site and more generally, that he considered that there would be “difficulties in the practicability and enforceability of such obligations which in this case made them undesirable.”

Mr Findlay prayed in aid the decision of the House of Lords in Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] A.C. 1 in which the sound basis of the settled practice of the court not to grant a mandatory injunction requiring the carrying on of a business was affirmed. In an orthodox commercial environment of the sort encountered in that case, namely a 35 year lease with a clause requiring a store to be open during the ordinary hours of business, the landlord would be entitled to damages for breach of the covenant, but not an injunction to enforce it. It seems to me that Mr Bell was right to doubt the enforceability of the sort of covenant referred to in Zurich Assurance. The Council would not have a direct right to enforce it; the developers might have little interest in doing so; were they to try (on this hypothesis to force a town centre shop to be kept open) authority would at the least be a hindrance; and there would be no obvious right to damages, because the developer would suffer no loss as a result of the town centre store closing. So far as Prodrive was concerned they described a legal agreement which committed them to buy and develop the Hella site. The claimants object that the agreement was never provided by Prodrive to the Council (or more widely disclosed) but there is no reason to doubt that the letter from which I have quoted accurately set out their legal obligations.

An agreement between Prodrive and the Council, or covenants with LXB properties, might well have run into similar difficulties as those identified in Co-operative Insurance.

I do not doubt the ingenuity of lawyers to draft agreements which on paper would achieve the aim of tying Marks & Spencer to the town centre for five years, and Prodrive to the Hella site. The claimants did not suggest a formula which could have done the same with respect to Next beyond the expiry of their current lease. There would be obvious difficulties in insisting that they renew an expiring lease. Be that as it may, Mr Bell’s doubts about the wisdom of a section 106 agreement seeking to achieve these aims were soundly based.

Both Mr Findlay and Mr Katkowski described the challenge to the absence of a section 106 agreement dealing with these matters as a pure Wednesbury irrationality challenge. That characterisation is correct. Mr Cahill submitted that the nature of this development was such that it was necessary to secure these aims through a section 106 agreement. In my judgment that argument founders for a number of reasons. First, it was clearly a material consideration for the Planning Committee that Marks & Spencer and Prodrive (and indeed Next) had unequivocally and publicly committed themselves in the ways described. As I have noted, the Planning Committee did not make it a condition of the grant of planning permission that those public assurances were translated into legal obligations. That approach cannot fairly be described as irrational. The Committee was entitled to place reliance on such assurances. Secondly, whilst HPPDM and the Chairman of the Committee could not have been criticised had they sought to include these matters in a section 106 agreement, they were entitled to conclude that the practicability and enforceability problems identified by Mr Bell were such as to make it undesirable.

Were Marks & Spencer, Next or Prodrive to resile from their public statements they would no doubt pay a commercial price; and the members of the Planning Committee might pay a political price. But I am unable to accept that the absence of a legal commitment in a section 106 agreement was unlawful for the purposes of granting planning permission.

None of the grounds advanced by the claimants succeeds. In those circumstances the claims for judicial review are dismissed.