Carroll v Secretary of State for Communities and Local Government & Ors

The Second Defendant’s Core Strategy was adopted on 8 December 2010. Core Strategy Strategic Objective CO2 is:

“Strategic Objective for Fostering Vitality

Our strategic objective to foster vitality is that the quality of life of our predominantly residential Borough is enhanced by a wide variety of cultural, creative and commercial uses which can significantly contribute to the well-being of residents and to the capital’s role as a world city.”

Policy CF5 provides, in part:

“Location of Business Uses

The Council will ensure that there is a range of business premises within the Borough to allow businesses to grow and thrive; to promote the consolidation of large and medium offices within town centres; support their location in areas of high transport accessibility; and protect and promote employment zones for a range of small and medium business activities which directly support the function and character of the zone.

To deliver the Council will, with regard to:

Offices

a.

Protect very small and small offices (when either stand alone or as part of a larger business premises) throughout the Borough; medium sized offices within the Employment Zones, Higher Order Town Centres, other accessible areas and primarily commercial mews;…

e.

require all new business floorspace over 100sq.m to be flexible, capable of accommodating a range of unit sizes;

Light Industrial

f.

protect all light industrial uses throughout the Borough;

g.

require new light industrial uses to be located within Employment Zones, predominantly commercial mews and other areas where amenity is not harmed;

h.

require the provision of a mix of unit sizes suitable for the creative and cultural businesses, as appropriate.”

Paragraph 31.3.37 of the Core Strategy states:

“The Council considers that a small, medium-sized or large business development is one with a total floor area of between 100sq.m and 300sq.m, between 300sq.m and 1,000sq.m and more than 1000sq.m respectively. It may be a development which will contain a single occupier or one which will contain a number of smaller units.”

Policy CL3 requires development to preserve and take opportunities to enhance the character or appearance of conservation areas.

Part 3 (Class B) of the 1995 Order grants planning permission for changes, either way, between B1 and B8 uses:

“Development consisting of a change of the use of a building—

(a)

to a use for any purpose falling within Class B1 (business) of the Schedule to the Use Classes Order from any use falling within Class B2 (general industrial) or B8 (storage and distribution) of that Schedule;

(b)

to a use for any purpose falling within Class B8 (storage and distribution) of that Schedule from any use falling within Class B1 (business) or B2 (general industrial).”

Prior to 30 May 2013 the following development was not permitted under this Class:

“Development is not permitted by Class B where the change is to or from a use falling within Class B8 of that Schedule, if the change of use relates to more than 235 square metres of floorspace in the building.”

On 30 May 2008 the floorspace limit was raised to 500sqm.

The planning appeal was conducted under the 2009 Regulations, Part 2 in its form prior to the 2013 amendments. These provided interested persons (those notified of the original application or whom had made representations on it) to be informed of the appeal (reg.13), and to be able to make representations within six weeks of the starting date (reg.15). The Appellant and the local planning authority had the same six-week period to send in their written representations, and a further period to comment on other parties’ representations (the end of nine weeks for the other main party) (reg.14) and two weeks from receipt for other representations (reg.15(2)). By regulation 14(7) “the Secretary of State may disregard further information from the appellant and the local planning authority which was not sent within 9-weeks of the starting date unless that further information has been requested by the Secretary of State”.

The principle of procedural fairness in respect of planning appeals was formulated by Jackson LJ in Hopkins Developments Ltd v Secretary of State for Communities and Local Government [2014] PTSR 1 145 at paragraph 47 as follows:

“Any participant in adversarial proceedings is entitled (1) to know the case which he has to meet and (2) to have a reasonable opportunity to adduce evidence and make submissions in relation to that opposing case.”

Beatson LJ noted that in the context of administrative decision-making the ascertainment of what procedures are required to achieve fairness is “acutely sensitive to context and the particular factual situation” (para 85). Burnett LJ in the recent decision of Vicente v Secretary of State for Communities and Local Government [2014] EWCA Civ 1555 agreed (at para 19) that this is so.

If a new point arises during an appeal then it may be necessary to give third parties an opportunity to make further representations beyond the statutory period. In Phillips v First Secretary of State [2003] EWHC 2415 (Admin) Richards J, as he then was, stated:

“54.

…in my view it clearly lies within the discretion of an Inspector to invite further representations if he considers it necessary to afford such an opportunity in the interests of fairness.

55.

The need to invite further representations in the interest of fairness is likely to arise very infrequently. The sequence of representations provided for in the regulations will normally be sufficient to achieve fairness. But the opportunity to make additional representations can and should be given if a new point is raised which the Inspector ought to take into consideration and which cannot fairly be taken into consideration without giving such an opportunity. Whether fairness requires it depends entirely on the particular facts of the case.”

In R (on the application of Ashley) v Secretary of State for Communities and Local Government [2012] JPL 1235 the Inspector’s decision was quashed as third parties should have been given an opportunity to comment on expert acoustic evidence submitted by the appellant shortly before the close of the period for representations by interested parties. Pill LJ rejected the submission that the claimant could have availed himself of opportunities to enquire what representations had been made by the appellant or to inspect the evidence at the Council offices outside the six-week period. Patten LJ stated at paragraph 48:

“The Inspector was in my judgment only entitled to proceed to determine the appeal on the basis of the written representations if he could satisfy himself that an adequate opportunity had been given to the interested party to meet the new evidence that had been submitted very late by the Appellant.”

He added (at para 53):

“If the Inspector wished to adhere, as he did, to the written statement procedure, he could only in my judgment do that consistently with the rules of natural justice by, as I have said, satisfying himself that the interested party was aware of the late evidence and had in fact chosen to make no comment upon it.”

At the time of the submission of the appeal the Planning Inspectorate’s Procedural Guidance: Planning appeals and called-in planning applications (PINS 01/2009) identified “core principles which underpin the operation of a well-functioning appeal system” (para 1.4.2). Paragraph 4.5.2 under the heading “Interested persons representations and the 6-week stage” states:

“If an interested person wishes to make further representations on the appeal these must be made within 6 weeks of the start date. The Planning Inspectorate will send copies of any representations made by interested persons at the 6 week stage to the appellant and local planning authority. There is no further opportunity for interested persons to comment on the appeal after the 6 week stage.”

As Pill LJ observed in Ashley (at para 30), “The last sentence of that paragraph is a strong discouragement to an interested person making enquiries of the planning officer after the six week period”, and he suggested the Guidance “should be reviewed with a view to preventing the unfairness which, in my judgment, may arise if it is followed” (para 31).

The Planning Inspectorate’s Good Practice Advice Note 10 Introduction of new evidence/material at appeal (June 2009) advises:

“3.

… Unless there is a material change in circumstances which could not have been foreseen at the time of the local planning authority’s decision, new issues and wholly new evidence should not need to be introduced at appeal. This is in the interests of fairness so as to ensure that no party, including any third parties, is disadvantaged. … [A]ppellants should be confident in the strength of their case without commissioning new evidence”

On 28 August 2013 the Planning Inspectorate published a new Procedural Guide: Planning appeals and called-in planning applications – England. In part 3 (“Other important information”) paragraph 3.2 deals with late disclosure of evidence:

“What happens if someone discloses evidence late?

3.2.1

If the appellant or the local planning authority introduces material during the appeals process which was not included within the grounds of appeal or sent with a questionnaire this can lead to the need to change the procedure or to adjourn hearings or inquiries. For appeals following the written representations procedure late disclosure may require an extension to the standard timetable, to allow all parties to be made aware of, and be given the opportunity to comment upon, the late evidence. Late disclosure of evidence can lead to a claim for costs.”

Annex K to the 2013 Procedural Guide provides advice on amendments to applications in the course of an appeal:

“K.2.1 If an appeal is made the appeal process should not be used to evolve a scheme and it is important that what is considered by the Inspector is essentially what was considered by the local planning authority, and on which interested people’s views were sought.

K.2.2 Where, exceptionally, amendments are proposed during the appeals process the Inspector will take account of the Wheatcroft Principles when deciding if the proposals can be formally amended. In the ‘Wheatcroft’ judgment the High Court considered the issue of amendments in the context of conditions and established that ‘the main, but not the only, criterion on which judgment should be exercised is whether the development is so changed that to grant it would be to deprive those who should have been consulted on the changed development of the opportunity of such consultation’. It has subsequently been established that the power to consider amendments is not limited to cases where the effect of a proposed amendment would be to reduce the development.

K.2.3 Whilst amendments to a scheme might be thought to be of little significance, in some cases even minor changes can materially alter the nature of an application and lead to possible prejudice to other interested people.

K.2.4 The Inspector has to consider if the suggested amendment(s) might prejudice anyone involved in the appeal. He or she may reach the conclusion that the proposed amendment(s) should not be considered and that the appeal has to be decided on the basis of the proposal as set out in the application.”

Annex L gives guidance on the introduction of new material during an appeal. L.2 is concerned with “changed circumstances”. This provides, at L.2.2, that

“If, exceptionally, any party provides new evidence at appeal stage this may lead to:

•

delay – so that we can given the other party or interested people the opportunity to comment…”

Mr Richard Harwood QC, for the Claimant, submits that the Claimant was given no opportunity to comment on whether there had been a change of use to B8 and the merits of the appeal if the proposal was considered as B8 to C3, rather than B1 to C3. The effect of the change in the basis of the appeal from B1 to B8 was profound. The Inspector considered that this disposed of the arguments about the protection of the existing use of the building and policy CF5 (see para 53 below). Yet the Inspector failed to appreciate that consultation was required as to whether the use was B8 and the implications of that change.

The argument that the use was B8 and that the merits should be considered on that basis was first raised by the Third Defendant in her six-week statement served on the Planning Inspectorate, at the earliest, on 27 November 2013. It was not put on the websites of the Second Defendant or the Planning Inspectorate. There was, Mr Harwood submits, no evidence that the Claimant had knowledge of this change in the basis of the appeal before 18 December 2013.

Indeed, whilst the Claimant was subsequently made aware from the Second Defendant’s Officer Report in relation to the second planning application (see para 25 above) that officers considered that the use had become B8, there was no indication that the present appeal for a change from B1 to C3 was to be considered on that basis. The Second Defendant had refused the Third Defendant’s application for a CLEUD on 10 December 2013 on the basis that the use was still B1 (see para 22 above), and on 18 December 2013 in its nine-week statement the Second Defendant had re-stated its position in that regard (see para 23 above). The Inspector could not have determined the appeal as of 18 December 2013, when time ran out for making representations, on the basis of a B8 use when the Second Defendant and the Claimant were contending that the use was B1.

It was not until the Inspector received Savills letter dated 28 May 2014 (and the attached Officer Report) that he was informed of the apparent acceptance by the Second Defendant in the appeal that the use was B8. It appears from the decision letter that he then decided to amend the description of the development for the purposes of the appeal (see DL1 and 4 at para 31 above). However he did so without informing the Claimant of what he was proposing to do and giving the Claimant an opportunity to make representations on this issue before reaching a final decision in this regard.

The concession made by the Second Defendant and the decision of the Inspector to amend the description of the development had, Mr Harwood submits, a decisive effect on the issues in the appeal. This is clear from DL5 (see para 31 above). The Second Defendant’s first reason for refusal fell away. In the Inspector’s view because the lawful use is B8 Policy CF5 has no application, and there is no in-principle difficulty with the change of use to residential.

Mr Harwood submits that substantial prejudice was caused to the Claimant because if he had been given the opportunity to make representations on whether the building was in B8 use and the principle of a change from B8 to C3 use he could have made the following points: (1) that the building is not in fact in B8 use. The Second Defendant’s evidence from inspection is that not all of the building is actively used for B8 purposes (see para 25 above). (2) On the merits of a change from B8 to C3, Policy CF5 is also “to ensure that there is a range of business premises” (see para 33 above), which would include B8. (3) The Third Defendant was seeking to exploit a loophole created following the adoption of the Core Strategy. Her aim was to avoid the policy protection for offices by changing the use to distribution and storage. Prior to 30 May 2013 permitted development rights for a B1 to B8 change were limited to changing 235sqm of floorspace, less than the floorspace (382sqm) of the building. Further, the planning authority and the Minister can decide not to follow policy if material considerations indicate otherwise. They could, Mr Harwood submits, therefore decide to protect office use on the site and generally by refusing to permit changes from B8 to residential where the B8 use had arisen following a change from B1 under permitted development rights. (4) The change would be contrary to Strategic Objective CO2 (see para 32 above). (5) It would cause a permanent loss of B1 office accommodation. (6) It would also be contrary to the Spatial Development Strategy for Greater London (July 2011) (see, in particular, Policy 4.2 and 4.4, and paragraphs 4.10-4.21 which note the need to protect suitable office and industrial uses which include storage and distribution).

In support of this submission as to prejudice caused to the Claimant, Mr Harwood refers to the reasons given by the Second Defendant on 16 May 2014 for refusing the B8 to C3 second planning application when, he submits, the Second Defendant essentially relied upon points (2) to (4) (see para 27 above); and Mr Harwood also relies on the Claimant’s letter dated 2 September 2014 to the Planning Inspectorate where he supports the Second Defendant’s reasons for refusing the second planning application and makes a number of these points (in particular at paras 31-40).

In response Mr Timothy Morshead QC, for the Third Defendant, submits that the alleged lack of opportunity to comment on the Third Defendant’s contention at the six-week stage that the existing use was B8 rather than B1 does not show that the decision was unlawful for four reasons. First, the Claimant could and should have foreseen that the Inspector would or might base his decision on the then-existing B8 use of the property, rather than the historic B1 use. In support of this submission Mr Morshead refers to paragraph 2(d) of the grounds of appeal (see para 11 above), and the circumstances at the Property known to the Claimant which included the commencement of B8 use by the time of the six-week statement.

Second, the Claimant did in fact foresee this point and he made representations in relation to it on 25 November 2013 (see para 19 above). Third, the Claimant in that letter expressly “reserved the right” to make further representations to the Inspector in the light of the Third Defendant’s six-week statement. He did not suggest that he needed any special arrangement to enable this to occur and therefore the Inspector had no reason to invite the Claimant to respond. Fourth, Mr Morshead submits that, contrary to the Claimant’s evidence, the Claimant in fact saw the Third Defendant’s six-week representations in good time to make further comment had he so desired, but he did not do so. In an e-mail dated 2 December 2013 to the Second Defendant the Claimant refers specifically to having reviewed the Third Defendant’s “appeal statement currently before the Planning Inspectorate”.

Further, Mr Morshead submits that the alleged lack of opportunity to comment on the Second Defendant’s subsequent agreement that existing use of the property was B8 rather than B1 also does not show that the decision was unlawful. The question for the Inspector was whether the existing use of the Property was in fact B1 or B8 (see Kingswood District Council v Secretary of State for the Environment and another (1987) 57 P&CR 153). The Claimant made no response to the six-week statements, despite having told the Inspector that he would do so if anything arose on which he wished to comment. The Second Defendant made no representations suggesting that Savills were wrong to say that it was agreed between the parties that the existing use was B8. Further, at the time of the appeal decision the Property was in fact and remains in B8 use. Indeed, Mr Morshead contends, the Claimant does not suggest to the contrary; it is his case that any B8 use was part of a “cynical ruse” by the Third Defendant (see para 19 above). Moreover the Inspector actually inspected the Property and saw for himself “what was what”.

As for the alleged lack of opportunity to comment on the implications of such a use for the appeal, Mr Morshead contends that they were as the Claimant stated in his representations made on 25 November 2013 (see para 19 above). Mr Morshead suggests that any reliance on CF5 is counter-factual because the Second Defendant had repudiated its relevance in their own 9-week statement (see para 23 above) and did not make any submission to the contrary subsequently.

In my judgment the First Defendant acted unfairly in failing to give the Claimant an opportunity to comment on whether there had been a change of use from B1 to B8 and the merits of the appeal if the proposal was considered as B8 to C3, rather than B1 to C3. I agree with Mr Harwood that the effect of the change in the basis of the appeal from B1 to B8 was so significant that the Inspector should have brought it expressly to the attention of the Claimant and given him an opportunity to make representations.

I do not accept Mr Morshead’s submission that what was said in Ground 2(d) of the grounds of appeal suggested that such a change to B8 had taken place or was likely to take place. I agree with Mr Harwood that all that is there being said is that as a matter of law there can be such a change. Further I reject Mr Morshead’s submission that the Claimant’s letter of 25 November indicated that he knew of the change. It merely states, what by that stage was plain, that the Third Defendant had an “intention to change the use of the property from B1 to B8”. She had made an application for a CLEUD on 10 September 2013, however that application was refused by the Second Defendant on 10 December 2013. The Second Defendant and the Claimant made clear in their representations that the issue before the Inspector related to a change from B1 use to C3 use.

I reject the Third Defendant’s allegation that the Claimant was aware of her written representations and therefore had an opportunity to respond before the deadline expired on 18 December 2013. They were not published on the websites of the Second Defendant or the Planning Inspectorate until after the appeal decision was published. I accept what the Claimant said about his reference to the Third Defendant’s “appeal statement” in his e-mail dated 2 December 2013. The Third Defendant’s six-week statement was not sent to the Planning Inspectorate until 27 November 2013 at the earliest. There is no evidence that the Claimant had access to that statement. In my view the probability is that he was referring, as he said, to the Planning Appeal Form containing the grounds of appeal (see the Claimant’s witness statement dated 15 January 2015 at paras 4-5).

In his representations of 25 November 2013 the Claimant had reserved his position to comment by 18 December 2013 on any documentation produced by the parties. However in my view there was no obligation on him to ‘hunt down’ any representations that were filed by the main parties. In any event if he had managed to obtain sight of them, any representations he wished to make in response may well have been out of time. It took the Claimant’s solicitors over two weeks to obtain the Third Defendant’s representations from the Treasury Solicitor after the appeal decision was published. Obtaining an extension of time after 18 December 2013 to make further submissions would not have been straightforward under the procedural rules, especially as he had no right to make comments after the six week period which ended on 27 November 2013 (see paras 38, 43 and 44 above).

However the fact is that as of 18 December 2013 there had been no change in the description of the development from an existing B1 to B8 use in the grounds of appeal. Both the Second Defendant and the Claimant were contending that the use was B1 use, and the Inspector could not have proceeded, certainly in the absence of a site visit, on the basis that there had been a change of use from B1 to B8.

What brought about the change in the basis of the appeal was Savills’ letter of 28 May 2014 to the Planning Inspectorate, which was long after the statutory time for representations had expired. It was receipt of Savills’ correspondence and the enclosure of the Officers Report that led the Inspector, as he stated in his decision (see DL1 and 4 at para 31 above), to amend the basis of the appeal. He did so without giving the Claimant an opportunity to make representations. Savills, on behalf of the Third Defendant, had presented evidence of what they said was an agreement between the Second and Third Defendants that the current use of the appeal site is lawfully Class B8 storage use. This was a matter that, in my view, was plainly material to the issues that the Inspector had to decide. Indeed the Inspector considered it to be so as he changed the description of the development following receipt of the new evidence.

I do not accept Mr Morshead’s submission that there was no need to inform the Inspector of the Second Defendant’s decision to reject the officers’ recommendation and to refuse permission. There is no proper explanation from the Third Defendant or Savills as to why the Inspector was not sent a copy of the Second Defendant’s Planning Application Committee decision, that had been sent to Mr Edmunds on 16 May 2014. It appears that the Inspector proceeded, without enquiring, on the basis that Members had accepted the recommendation of the officers. That being so the matter was relatively straightforward. There was current B8 use and no in-principle objection to change to residential use. If the Inspector had been informed, as in my view he should have been, of the Committee decision, then no doubt he would have given further thought to ‘what was going on’ at the Council in relation to this appeal, and investigated and given the Claimant an opportunity to respond before changing the description of the development, in particular having regard to the CLEUD decision of 10 December 2013 and the Second Defendant’s nine-week statement confirming that the use was B1.

The 2013 Procedural Guide (see paras 46-48 above) makes clear that interested parties should be allowed to comment on late disclosure of material. The Claimant was not aware of the 28 May 2014 correspondence and it was not suggested that he should have been.

I accept Mr Harwood’s submission that substantial prejudice was caused to the Claimant because if he had been given the opportunity to make representations on whether the building was in B8 use and on the merits of a change from B8 to C3 he could have made a number of points that, in my view, may have affected the outcome of the appeal (see paras 54-55).

Mr Harwood submits that the very scale of the change in the appeal is shown by the decision of the Inspector unilaterally to amend the description of development from B1 to C3 to B8 to C3. The Inspector considered that an amendment was required properly to describe the proposal then under consideration. Yet the Claimant was not consulted on the amendment, nor did he have an opportunity to address its implications. The amendment was therefore, Mr Harwood contends, contrary to the Wheatcroft principle and the guidance given in the Inspectorate’s Procedural Guide (see paras 46-48 above).

Mr Morshead submits that it was inevitable and correct that the Inspector should compare the proposed use of the Property with its existing use at the time of the decision, not its historic use when the application was made. In fact it is sufficient to show that it was reasonably foreseeable that the Inspector would do so. It is clear, Mr Morshead submits, from the representations made by the Claimant on 25 November 2013, that he recognised the possibility of the existing use being regarded as B8 (see para 19 above). That being so Mr Morshead suggests that the Claimant very significantly exaggerates the importance of the Inspector’s amendment. The Wheatcroft principle does not, Mr Morshead submits, support the Claimant. The development which was applied for by the Third Defendant was to put the Property to residential use, recognising that this would involve a change from its existing use which at the time of the application was B1 but at the time of the decision was B8. Mr Morshead submits that that is not a change, whether in substance or otherwise, to the development which was applied for (see Ioannou v Secretary of State for Communities and Local Government [2014] EWCA Civ 1432 at para 16 where Sullivan LJ recently considered the Wheatcroft principle). Mr Morshead submits that overall this ground adds nothing to Ground 1.

For the reasons I have given on Ground 1 (see paras 60 to 68 above) I consider that the Inspector should have informed the Claimant that he was proposing to amend the description of the property (Box E in the Planning Appeal Form, see para 11 above) from B1 to B8, following receipt of the letters from Savills dated 28 May 2014 and the Officers Report. The new evidence provided by Savills long after the statutory time for representations had expired led the Inspector to amend the description of the development. He made the amendment presumably because he thought it necessary to do so in the light of the new evidence, as a result of which there was a change in the issues to be determined on the appeal. In my judgment the First Defendant acted unlawfully in making this amendment so that the appeal was determined on a different basis without first giving the Claimant an opportunity to comment on the change or its effect.

The Inspector makes no mention of the Third Defendant’s second planning application for a change of use from B8 to C3 or the Second Defendant’s rejection of it. He knew of the application, having received a copy of the Officer’s Report enclosed with Savills letter of 28 May 2014 (see para 29 above). However he was unaware that the Officer’s recommendation was rejected, and that the Second Defendant refused the application or the reasons for that decision.

Mr Harwood submits that there was a procedural failure in that both of the main parties should have informed the Inspector of the Committee decision, if the appeal was to be considered on a B8 to C3 basis. Since the Inspector proceeded to determine the appeal on the basis of a change of use from B8 to C3 it was, Mr Harwood submits, plainly material that the Second Defendant had just refused a planning application on the site for just such a scheme. Mr Harwood contends that the Third Defendant, by her agent Savills, made a deliberate decision to inform the Inspector of the view of the Second Defendant’s officers that the B8 to C3 change of use was acceptable, but not that the Members had disagreed with the officers, and accordingly the application for planning permission for such a change of use was refused. Mr Harwood submits that the Inspector was misled by the failure to inform him of what was a highly material fact. She did not inform the Inspector that the Second Defendant’s Planning Application Committee had rejected the principle of a B8 to C3 change. Moreover she has not sought to explain the 28 May 2014 correspondence and there is no basis for her to dissociate herself from Savills’ actions on her behalf.

Mr Harwood submits that the Inspector should have inquired as to the outcome of the second planning application. The Inspector was aware of the application. As Collins J stated in less obvious circumstances in London Borough of Hounslow v Secretary of State for Communities and Local Government and Mrs Krishna Deoi Kapoor [2009] EWHC 1055 (Admin) (at para 19):

“There was an obligation upon the Inspectorate at least to check. It would have taken a matter of seconds to go to the relevant website. If they had, they would have discovered exactly what the decision was and that it was directly in point.”

Mr Harwood submits that on reading the Second Defendant’s decision on the second planning application the Inspector would have seen reference to policies CO2 and CF5 of the Core Strategy (see para 27 above), and would have been obliged to have had regard to them (see s.70(2) as applied by s.79 of the 1990 Act).

In response Mr Morshead makes three points. First, he denies that there was any wrongdoing by the Second Defendant or Savills in only sending the officers report to the Planning Inspectorate on 28 May 2014. The reason for doing so, he says, was solely to inform the Inspector that it was agreed that the building was now in B8 use; it was not sent to show that the Second Defendant accepted the principle of change of use to B8, and the Inspector placed no reliance on whether the change from B1 to B8 was acceptable. Second, he submits that it is wrong to suggest that a planning Inspector ought to attach weight to a decision of the Second Defendant, namely the second planning decision, that the Council itself is not in a position to support. Mr Morshead refers to the witness statement of the Third Defendant of 22 September 2014 where at paragraphs 61-69 she deals with the second planning appeal and the hearing on 12 May 2014. She says that Mr Jonathan Bore, the Second Defendant’s Executive Director of Planning, having told the Committee that there were no grounds for refusal, was asked “to find a ground for refusal”. Third, Strategic Objective CO2 would not have justified a refusal of consent (as for CF5 see para 59 above).

In my judgment the decision of the Second Defendant to refuse planning permission for the change of use of the land from B8 to C3 and Strategic Objective CO2 of the Core Strategy were material considerations to which the First Defendant should have had regard. I agree with Mr Harwood that since the Inspector proceeded to determine the appeal as a B8 to C3 change it was material that the Second Defendant had just refused a planning application on the site for just such a scheme. However the Inspector was unaware that the Officers’ recommendation was rejected and that the Committee had refused the application or the reasons for its decision. If the Inspector had seen the Second Defendant’s decision on the second planning application he would have seen reference to policies CO2 and CF5 and would have been obliged to have had regard to them.

Mr Morshead submits that any alleged prejudice to the Claimant is an entirely self-inflicted wound. He told the Inspector and the Third Defendant that he would make further comments if he felt that this was required in light of the six-week statement (see para 20 above). Both the Inspector and the Third Defendant were entitled to rely on his statement in this regard.

I reject that submission. I consider that the Claimant has been prejudiced for the reasons set out in paragraphs 54 and 55 above, and that the prejudice did not result from anything that the Claimant did or omitted to do.

Further, Mr Morshead submits that any question of prejudice to the Claimant if the decision stands, must be balanced against the prejudice to the Third Defendant if the decision be quashed. He submits that on no view does that balance come down in favour of quashing the appeal decision.

I disagree. In my judgment the Claimant has made out all three grounds of challenge and he has suffered substantial prejudice. It is the Third Defendant’s evidence that she will be seriously prejudiced if the decision is quashed because any application coming before either the Second Defendant or the Planning Inspectorate after the adoption of the Second Defendant’s new policy on basements will have to take into account that new policy which will mean that the building will need to be redesigned and it will cost hundreds of thousands of pounds to build a lesser building than she is able now to build (see paras 96-98 of her witness statement dated 22 September 2014). I reject Third Defendant’s contention that any prejudice to herself from the changes in basement policy should displace the normal principle that unlawful decisions should be quashed.

In any event I accept Mr Harwood’s submission that the Third Defendant shares a substantial part of the blame for the errors in the appeal process. In reaching this conclusion I have regard first to the fact that her grounds of appeal dated 30 August 2013 said the use of the building was B1, and it was only in her six-week statement submitted at the end of November 2013 that she stated that the use had changed to B8 in August 2013, but even then she confirmed the grounds of appeal based on a change of use from B1 to C3 (see paras 13 and 14 above). Second, she, through her agents, informed the Planning Inspectorate on 28 May 2014 that the recommendation of the Second Defendant’s officers was that the building was in B8 use and planning permission should be granted, but failed to inform the Inspectorate, as she should have done, that on 12 May 2014 the Second Defendant’s Planning Application Committee had disagreed with the Officers’ Report and refused planning permission, and the reason for the refusal.

On 13 January 2015 the Inspector allowed the second planning appeal. I am informed by Mr Harwood that that decision is under challenge. Mr Harwood submits that for the purposes of the present proceedings the Claimant does not have to show that the reasoning in the second appeal was unlawful. The court simply needs to be able to conclude that the decision could have been different, not least because of the influence of the first appeal decision on the Inspector. Mr Morshead submits that the Inspector reached his decision independent of what his predecessor had said in the first appeal. However I note that the Inspector states that although the proposals the subject of the first decision are significantly different to the second appeal “the first appeal remains a material consideration” (para 6). The Inspector noted that because of the decision in relation to the first appeal the Second Defendant had indicated that it did not seek to contest the second appeal (para 8). There was, as Mr Harwood observes, as a result no consideration given to the first inspector’s finding that the use was B8 (para 24). Further, the Inspector stated that he saw no reason to depart from the view of the first inspector that there was no in-principle difficulty with change of use to residential (para 24). He added that he attached “substantial weight to that [first] decision” (para 29). In my judgment the second appeal decision is so influenced by the first appeal decision that it is not possible to conclude that if the first decision had been different the same result would have been reached in the second appeal (see Phillips at para 61 for the relevant test).

For the reasons that I have given this challenge succeeds. Accordingly the application is allowed and the decision of the Inspector is quashed.