Lidl Great Britain Limited v East Lindsey District Council

The Claimant (Lidl Great Britain Limited (“Lidl”)) seeks to quash the grant of planning permission dated 4 November 2022 by the Defendant to the Interested Party (Aldi Stores Limited (“Aldi”)) for development of a new retail foodstore and associated development on land off Spilsby Road, Horncastle.

The Claimant and the Interested Party are each supermarket operators trading in a discounter style. Each has applied for planning permission for a supermarket on different parcels of land outside of the town centre but within the settlement of Horncastle.

The issue in the case is whether the Defendant approached the question of cumulative retail impact on Horncastle town centre lawfully in granting the Interested Party planning permission. The Claimant’s essential complaint is that, in circumstances where there was only sufficient capacity for one new foodstore in an out of centre location (without causing a significant adverse impact on the vitality and viability of Horncastle town centre), the Defendant acted unlawfully in granting planning permission for the Interested Party’s proposal without comparing it to the Claimant’s proposal.

Permission to proceed with the claim was granted by Ms Karen Ridge sitting as a Deputy Judge of the High Court on 15 December 2023 following an oral renewal hearing. The Deputy Judge granted permission on ground 1 (failure to consider the merits of the Claimant’s proposal) and part of ground 2 (unfair to determine the Aldi application until the outcome of the comments on the Lidl retail assessment were known and the schemes could be considered together).

This judgment is structured as follows:-

The Claimant’s application was submitted on 22 April 2022. It sought planning permission for the demolition of existing buildings and the erection of a new foodstore with access, parking, landscaping and associated works at Boston Road Horncastle. When submitted, the application proposed a net sales area of 1,411 sq m.

On 2 September 2022, the Claimant amended its scheme to reduce the floorspace to 1,251 sq m (of which 1,001 sq m would be convenience good sales and 250 sq m for comparison good sales). Following receipt of the amended scheme, the Defendant undertook a further consultation exercise which commenced on 7 September 2022.

The Interested Party’s application for planning permission was submitted 7 weeks earlier on 3 March 2022 (and validated on 11 March 2022). It proposed a foodstore with 1,315 sq m of net floorspace (comprising 1,052 sq m of convenience floorspace and 263 sq m of net comparison floorspace). The proposed development includes a petrol filling station.

At a meeting between the Claimant’s representatives and the Defendant’s planning officers on 7 June 2022, the Defendant indicated its intention to consider the Claimant and the Interested Party’s applications together. Part of the judicial review claim which failed at the permission stage was that this had created a legitimate expectation. The Deputy Judge held that it was not arguable that the Defendant had made any binding promise.

The evidence of Ms Kate Bleloch (Senior Acquisitions Consultant for the Claimant) explains (in para 8 of her witness statement dated 14 December 2022) that the proposed reduction in sales area between the Claimant’s submitted application and its amended application was “a bid to win the beauty parade between the Lidl and Aldi applications” to “reduce the impact on Horncastle Town Centre”.

The applicable version of the National Planning Policy Framework (NPPF) was published on 20 July 2021. Its policy in respect of retail development was contained in paragraphs 90 and 91 which provided as follows.

The key development plan policy in respect of retail development is policy SP14 of the East Lindsey Local Plan (2018). It provides so far as material:-

There are three relevant components of the retail policy for the purpose of considering out of centre proposals.

It is common ground that policy SP14 sets a lower threshold for the retail impact assessment than the national default. Both schemes exceed the 1,000 sq m threshold for requiring an impact assessment in policy SP 14.

It should be noted that para 91 of the NPPF directs refusal of planning permission where there is likely to be significant adverse impacts on the vitality and viability of the town centre. SP 14 does not use that language but facilitates an assessment of a proposal’s impact on the town centre.

In order to assess each application, the Defendant appointed specialist retail consultants (Nexus). Nexus were tasked with reviewing the retail analysis submitted by the Interested Party and the Claimant respectively and undertaking their own evaluation. In September 2022 Nexus produced retail impact assessments which considered the effect of the Lidl scheme as submitted and the Aldi scheme and assessed their cumulative impact.

Tables 4.1 and 4.2 of the Nexus’ assessment showed the impact of the Aldi store, the Lidl store (as submitted) and the cumulative impacts on the Horncastle town centre. Table 4.1 did so by reference to the assumptions made by Aldi’s retail consultants. Table 4.2 did so by reference to the assumptions made by Lidl’s retail consultants. In both tables the Aldi store is projected to have a greater impact on town centre trading than the proposed Lidl store. Paragraph 4.62 of Nexus’ assessment noted the “cumulative impact on the Co-op on Conging Street and the Tesco on Watermill Road to be high”. Para 4.68 indicated that “when assessed cumulatively, we are concerned that the impact could be at a significant adverse level, and therefore cannot conclude that the [Aldi] proposal (when considered alongside Lidl) accords with the requirements of both strands of the NPPF impact test and the Local Plan in so far as it relates to the impact on town centre vitality and viability”. The same conclusion was reiterated in paragraph 5.11 (under the heading of summary and recommendations).

On 12 October 2022, the Defendant’s case officer for the Claimant’s scheme (Miss Lindsey Stuart) requested Nexus to produce an “addendum to the assessment to take account of the reduced sized store and retail area” (para 13 of Lindsey Stuart witness statement dated 9 January 2023).

Both applications were major development. Under article 34 of the Town and Country Planning (Development Management Procedure) (England) Order 2015, local planning authorities are expected to determine such applications within a 13 week period. The period may be extended by agreement (article 34(2)(c)).

The consequence of exceeding this timeline without agreement is that the applicant would be able to make an appeal against the non-determination of an application to a planning inspector. An adverse costs award against the local planning authority could be made if a planning inspector decided that the local planning authority had behaved unreasonably in failing to make a timely determination.

The evidence before the Court in respect of agreed extensions of time is as follows.

In respect of the Interested Party’s application, Michelle Walker’s (the Defendant’s case officer for the Aldi application) indicates that a series of extensions of time were agreed with the Interested Party until 4 November 2022 (see para 4 of her second witness statement dated 24 January 2024). This extension of time was stated to be enable the matter to be considered at the 3 November 2022 planning committee.

In respect of the Claimant’s application, a series of extensions were agreed. Most materially for present purposes Miss Stuart wrote to Lidl’s representatives on 12 October 2022 stating “The current extension of time expires tomorrow. Can you please agree to a further extension of time until 6 December 2022”.

The Claimant was not made aware that the Interested Party’s application was proceeding to be considered at the Planning Committee on 3 November 2022. Ms Bleloch’s witness statement indicates that she became aware of that fact on 4 November 2022 (see para 10) after the committee meeting had taken place. Richard Huteson (Partner of Rapleys LLP, planning consultants for the Claimant) confirms in para 4 of his second witness statement dated 17 January 2023 that the Claimant did not become aware of the Interested Party’s application being determined separately from its application until 4 November 2022 (after the committee meeting had taken place).

The explanation provided in the Defendant’s evidence as to why the Claimant’s application was not considered on 3 November 2022 is set out in paragraph 16 of Miss Stuart’s witness statement dated 9 January 2023. It states: “The reports for the agenda for the Planning Committee held on 3/11/2022 needed to ideally be completed by 12/10/2022 or at the latest by 21/10/2022. As outlined above I did not have the addendum to the Retail Assessment to take account of the amendments to reduce the size of the store which were needed to complete the report therefore the application was not ready to be determined in time for the Planning Committee on 03/11/2022”.

The Interested Party’s application was considered at the planning committee on 3 November 2022. It was granted planning permission. Planning permission was issued on 4 November 2022. Members of the planning committee had the benefit of an officers’ report to committee (“OR”) recommending approval and an addendum report (“AR”). The key parts of those reports were as follows.

Section 7 of OR identified the main planning issues which included retail impact.

Para 7.4 identified the proposal as being an out of centre site. Paras 7.5 set out the NPPF’s retail policy and para 7.6 referred to SP 14 of the Local Plan. Paras 7.13-7.15 stated:

As to the retail issues relating to the Aldi scheme:-

This analysis shows Nexus acknowledging disadvantages of the Aldi scheme impacting on town centre stores. However, it advised that there would not be significant adverse impacts on the town centre as a whole.

Paras 7.33-7.38 addressed retail cumulative impact.

Paragraph 7.38 referred to the Lidl amendment (to reduce its proposed floorspace) and stated:

The report drew together the retail conclusions as follows.

This analysis (consistent with the earlier parts of the report) was to the effect that the Aldi store could be harmful to the vitality and viability of the town centre but would not by itself amount to a significant adverse impact.

Para 7.42 states:

The overall conclusions section of OR stated (at para 8.1):

The AR dealt with comments received since the publication of the OR and provided some further guidance to members.

As to comments received:-

The further planning analysis on retail issues was contained in para 9 of AR in the following terms:

Planning permission was issued on 4 November 2022.

The Claimant’s application for planning permission has yet to be determined. By agreement, it is being held in abeyance pending the outcome of this judicial review claim.

The determination of an application for planning permission must be made having regard to the provisions of the development plan (so far as material) and to any other material considerations (s.70(2) Town and Country Planning Act 1990). The determination should be in accordance with the development plan unless material considerations indicate otherwise (s.38(6) Planning and Compulsory Purchase Act 2004).

In considering an officer’s report to members of a planning committee, the approach is well settled and summarised by Lindblom LJ. in Mansell v Tonbridge and Malling BC [2017] EWHC Civ 1314 at para.42. The test is in substance whether the report is materially misleading. The report should not be made subject by the Court to “hypercritical scrutiny” (see St Modwen Developments Limited v SSCLG [2017] EWCA Civ 1643 at para 7, per Lindblom LJ). The report should be read fairly and as a whole.

There are many cases on the materiality of alternatives in planning decision making. The general approach to alternative sites is summarised by Holgate J in R (Stonehenge World Heritage Site Limited) v Secretary of State for Transport [2021] EWHC 2161 (Admin) at paras 269-271 (which draws in particular on the analysis of Simon Brown J (as he then was) in Trusthouse Forte v Secretary of State for the Environment (1987) 53 P&CR 293 at 299-300 and the discussion of approach contained in the Court of Appeal’s decision in R (Mount Cook Land Limited) v Westminster City Council [2017] PTSR 116 at para 30). This line of cases emphasises that it will ordinarily be a matter of planning judgment for the decision maker to assess the relevance of the alternatives (see Langley Park School for Girls v Bromley [2009] EWCA Civ 734 at paras 52-3).

Sullivan J (as he then was), astutely observed in R (Chelmsford Car and Commercial Ltd) v Chelmsford [2006] 2 P&CR 12 at para 8: “it is necessary to approach the authorities with a degree of caution since they are all fact sensitive”.

In developing his submissions, Mr Edwards KC for the Claimant invited the Court to differentiate between general cases concerning the relevance of alternatives and “rivals” cases. For cases to fall within this latter “category”, Mr Edwards KC identified the following essential features (a) rival proposals (b) for one planning permission (c) which were before the decision making authority.

By contrast, Mr Cameron KC submitted that there was no special category of “rivals” cases. He further contended that the present case was not analogous to the cases relied upon by Mr Edwards KC. I will address this debate once I have identified the key authorities.

In GLC v Secretary of State for the Environment (1986) 52 P&CR 158, the Court of Appeal upheld the dismissal of a challenge to planning permissions for residential and commercial development in the Docklands area of London. The challenge that the Secretary of State had failed to consider alternative sites failed. Oliver LJ. (with whom Mustill LJ. and Sir Roualeyn Cumming-Bruce agreed), made the following observations on the approach to alternative sites (at p.172):

Oliver LJ.’s observations have been considered in subsequent cases.

It is important to note that Oliver LJ’s observations were preceded by a caveat: “It is plain that there are, as the learned judge accepted, cases where a comparable site must be a material consideration; an obvious example is an airport. It is I think difficult to define where the dividing line is drawn.” He was not “seeking to lay down a test for every case, because definition is I think always dangerous in these circumstances”.

Oliver LJ’s observations were considered further by the Court of Appeal in Secretary of State v Edwards (1994) 69 P&CR 607 (CA). The facts concerned candidate sites for a motorway service area. Each potential sites necessarily involved development in the open countryside. The local planning authority had refused planning permission for 7 schemes. Mr Edwards promoting one scheme appealed the refusal in his case and asked for the appeal to proceed by public inquiry. Roadside Development Limited (RDL) appealed the refusal in respect of their sites and these appeals proceeded by the written representations procedure. A request by Mr Edwards to have the appeals heard together failed. The Secretary of State granted planning permission to RDL. Mr Edwards’ challenged this on the basis of a failure to undertake a comparative assessment of the alternatives before granting consent. The challenge succeeded at first instance (before Nigel Macleod QC sitting as a Deputy Judge of the High Court). The Secretary of State’s appeal to the Court of Appeal was dismissed.

At first instance, one of the points made by the Deputy Judge (see (1993) 66 P&CR 393 at 408) was: “If [the Secretary of State] failed to take account of the material matter because of an earlier administrative decision….[the Secretary of State] cannot hide behind the administrative decision to justify the omission”. That part of the reasoning was not challenged in the appeal.

The appeal focussed on whether alternative sites were a material consideration. Roch LJ (with Sir Stephen Browne and Russell LJ agreed) drew on Oliver LJ’s suggested approach (at 613). The Court of Appeal undertook the exercise of applying those indicative criteria and held that the case fitted the description of a case where alternatives were relevant. At 615-6, Roch LJ noted that there could be no dispute as to the third and fourth criteria – the existence of an alternative site for the same project which might have a lesser adverse effect on the countryside, and a situation in which [there] could only be one permission, or alternatively a limited number of permissions for such development”.

At 616, Roch LJ stressed: “Crucial in this case, in my judgment, was the fact that there were not merely alternative sites, but those sites had been the subject of planning applications and were, in the case of three other applicants, the subject of appeals to the Secretary of State. Those other sites were material planning considerations in the circumstances of this case, account of which would have created a real possibility that the Inspectors’ decisions in the RDL appeal would have been different”.

In Chelmsford, Sullivan J (as he then was) quashed the grant of planning permission for affordable housing outside the settlement boundary. In the circumstances of the case, where there were two rival sites for the same local need, the Council had erred by not undertaking a proper comparison of their advantages and disadvantages. The Council had undertaken a partial comparison of the sites but had failed to take account of the Claimant’s site contention that it was better located in terms of its relationship with the defined settlement boundary and with existing settlement pattern.

As mentioned, above, Sullivan J noted at para 8 the need for caution as the authorities on alternatives are all “fact sensitive”. Sullivan J noted Roch LJ’s observations in Edwards and observed that it may be relevant to distinguish between cases where an application had been made for a rival scheme which had to be determined and a case where an alternative had been suggested by an objector (para 9 and para 11).

In Chelmsford , Sullivan J. at paras.13-14 held as follows:

Having reviewed the circumstances of the case, Sullivan J concluded (at para 23): “it was inconsistent and unrealistic to contend that there were no “competing sites” issue. Both sites were competing, on opposite sides of the same road for the same very limited, and highly localised need”.

Sullivan J therefore held that the failure to undertake balanced assessment of their merits was unlawful.

In Derbyshire Dales DC v Secretary of State for Communities and Local Government [2010] I P&CR 19 Carnwath LJ (as he then was) sitting in the High Court upheld a planning Inspector’s decision that it was unnecessary to consider alternative sites when granting planning permission for the erection of four wind turbines. Carnwath LJ’s judgment (at paras 14-22) contained an analysis of “long-running debate among planning lawyers” as to the relevance of alternative sites (dating back to Rhodes v Minister of Health and Local Government [1963] 1 WLR 208). Carnwath LJ highlighted the distinction (by reference to the judgment of Simon Brown J (as he then was) in Trusthouse Forte between cases in which it is permissible and cases in which it is necessary to refer to alternative sites.

Carnwath LJ explained at para 19 that Edwards was the only example of the cases which were cited to him which indicated that it was necessary to refer to alternative sites. He observed at para 19: “The facts illustrate the special circumstances which are necessary to support such an argument”. Having set them out, he observed at para 22:

Carnwath LJ then set out some wider reflections on the legal approach to whether a consideration is a mandatory material consideration (drawing on the judgment of Cooke J in the New Zealand Court of Appeal’s decision Creednz Inc NZ v Governor General [1981] 1 NZLR 172 at 182).

In the Supreme Court case in R (Samuel Smith Old Brewery (Tadcaster) v North Yorkshire County Council [2020] UKSC 3 at paras 29-32, Lord Carnwath drew on his judgment in Derbyshire Dales and the judgment of Cooke J in Creednz. Having done so, he formulate the point at issue in the Samuel Smith case as:

There is a direct link between the caselaw on alternatives and the recent formulation by the Supreme Court on the approach to mandatory material considerations. Edwards and Chelmsford are cases which were decided before the basis for mandatory material considerations had been so articulated. However, I consider that they are consistent with the subsequent recognition that the specific facts of a case may make it obviously material to consider alternatives. In both cases, there were two or more putative developers competing for one planning permission (or in the case of Edwards two planning permissions) where the rival applications were before the decision making body. In Carnwath LJ’s consideration of Edwards (in Derbyshire Dales), he thought the defect in the decision making process could have been similarly expressed in terms of Wednesbury unreasonableness.

Samuel Smith was cited by the Supreme Court with approval in R (Friends of the Earth Limited) v Secretary of State for Transport [2020] UKSC 52 at para 118. In Friends of the Earth, the Supreme Court referred to the “third category” (by reference to the judgment of Cooke J) as being cases where notwithstanding the silence of the statute “there will be some matters so obviously material to a decision on a particular project that anything short of direct consideration of them by [the public authority]….would not be in accordance with the intention of the Act”. In respect of this third category of material consideration, the Supreme Court gave the following guidance (at paras 119-121).

The threads of this discourse as to the nature of mandatory material considerations are helpfully drawn together by Thornton J in R (Peak District Council and South Yorkshire Branch of the Campaign to Protect Rural England v Secretary of State for Transport [2023] EWHC 2917 (Admin) (in the context of a discussion of alternatives to the A57 Links Road scheme). At para 36, Thornton J explained:

Rationality is often appropriately characterised as setting a particularly high hurdle for Claimants in planning cases. The classic encapsulation of this is contained in the observations of Sullivan J (as he then was) in Newsmith Stainless Ltd v SSETR [2021] EWHC Admin at paras 6-8. That standard of review is apt for cases which involve matters of impression or attempts to review the exercise of broad planning judgments where the essence of the decision is exercise of a judgment on which a broad range of views are possible none of which can be categorised as unreasonable. That said, the approach to rationality is sensitive to its context and the nature of the decision under challenge. Sedley LJ observed in R v Parliamentary Commissioner for Admin, ex parte Balchin [1998] 1 PLR 1 at para 27 irrationality means “a decision which does not add up, in which, in other words, there is an error of reasoning which robs the decision of logic”. In the present case, there is a debate about how rationality should be approached. I return to this below.

Mr Edwards KC on behalf the Claimant contended that the present case (like Chelmsford) concerned two competing proposals for what in practice was one planning permission for new convenience retail floorspace in Horncastle. Both proposals were for a discount foodstore. Both were proposed on sites which were located out of the town centre for the purposes of planning policies concerning retail development. As such, and given their scale, their impact on the vitality and viability of the town centre at Horncastle was material, for the purposes of planning policy.

Therefore, he submitted the comparative merits of each became an obviously material consideration in the determination of both. He argued that AR para 9(k) accepts that alternative schemes need to be considered together where there are “two rival sites for the same local need”. Here, despite the Defendant’s officers concluding the schemes were rivals (as they plainly were), the Defendant failed, when determining the Interested Party’s application for planning permission, to consider the merits of Claimant’s proposal on a comparative basis or at all. The Defendant’s officers gave the Planning Committee no advice on this in either or the OR, AR or otherwise. This failure “without explanation – to ‘join the dots’ and compare the merits” was irrational (given that the schemes were correctly characterised as rivals for a single planning permission).

Mr Edwards submits that the Defendant in granting planning permission for the IP’s proposal (a) the Defendant failed to have regard to an obviously material consideration, namely Claimant’s rival proposal and/or (b) having recognised (see AR at para.9(k)) that C’s rival proposal was relevant, acted irrationally in failing to have regard to it on any substantive basis.

Mr Edwards accepted the Claimant’s second ground of challenge which concerned procedural fairness was essentially parasitic on his first ground. The scope of ground 2 as pleaded had been much reduced by the Deputy Judge at the permission stage. The point now at issue is: if the Defendant was legally obliged to have regard to Claimant’s rival proposal when determining the Interested Party’s application, was it procedurally unfair for Defendant to have determined the Interested Party’s application as it did.

On behalf of the Defendant, Mr Garvey contended that there was no obligation to take account of alternatives in the present case.

He stressed that the Defendant had decided to grant planning permission for the Aldi scheme because it did not cause planning harm.

He specifically relied on paragraph 9(i) of AR which he submitted contained a finding that there would not be retail harm to the town centre from the Aldi proposal. As such, he contended that this was not a case where alternatives were relevant because the premise for any discussion of alternatives was that there might a better alternative which reduced the harmful impact of the proposed development. Mr Garvey submitted that this premise did not arise here due to the finding that the Aldi scheme did not cause harm.

Mr Garvey emphasised that the decision taken by the Defendant was that cumulative impacts were material but they were given little weight for the reasons explained in the AR 9 (h) and (k). He contended that paragraph 9(h) explained that the Lidl application was not “ready to be considered by the Council” and as such, he submitted, the Defendant was not able to undertake any comparison. He argued it was a matter for the Council as to how much weight they placed on cumulative impacts. He submitted that there was no basis for reviewing the Council’s decision to place limited weight on alternatives on grounds of irrationality.

Mr Garvey submitted that the Court should apply the Newsmith approach to its consideration of alleged irrationality.

Both Mr Garvey and Mr Cameron KC on behalf of Aldi submitted that there was no special category of cases concerning rivals. They each argued that the present case did not share characteristic features with Edwards and Chelmsford on which the Claimant relied. They argued that in Chelmsford the consideration of alternatives arose under the specific requirements of the planning policy at issue in that case.

Moreover, Mr Cameron KC submitted that the part of retail policy which was concerned with alternatives was the sequential test. There was an unchallenged finding here that there were no sequentially better sites than the Aldi scheme available. This was accordingly not an appropriate case for the general law to impose any requirement to consider alternatives (which were relevant under the policy at a different stage of the analysis).

In resolving these competing arguments, the starting point is to identify with care (and in accordance with the well-established principles) the planning analysis in OR and AR which formed the basis of the Defendant’s decision.

Officers drew on and accepted the retail analysis undertaken by Nexus, the Defendant’s retail consultants. This is apparent from OR at paras 7.31-2 (setting out adverse impact from the Aldi store on certain town centre shops but judging that this did not amount to a significant adverse impact). The same analysis is set out in paras 7.41 and 8.1 of OR.

In the OR, the analysis of Nexus (adopted by officers) was that the Aldi store would have some adverse impacts on the town centre but there would not be significant adverse impact on the town centre.

This analysis was not altered or qualified in AR. Mr Garvey and Mr Cameron KC argued that para 9(i) of AR indicated that there would not be any retail planning harm. On a fair reading of the reports, I do not consider that it is correct to read into that sub-paragraph a conclusion which is discordant with the remainder of the retail analysis in OR and AR. Mr Garvey and Mr Cameron KC argued that the finding of no conflict with policy SP 14 necessarily conveyed a conclusion that there would be no adverse impact on the town centre. However, I do not agree that this reflects a fair reading of the retail analysis in OR and AR. Read in context, the whole thrust of the retail analysis in OR was that there would be a disadvantageous impact from the Aldi store on its own on the town centre but this in itself would not amount to a significant adverse impact. This is clear from the parts of the OR that I have referred to above. Moreover, it is precisely the point also made in AR para 9(d). The conclusion of Nexus (which officers adopted) was that there would not be a significant adverse impact on the town centre. I reject the proposition that AR para 9(i) displaces the consistent way in which the relationship of the Aldi scheme with the town centre was analysed in OR and AR read fairly as a whole. Paragraph 9(i) should be read in harmony with the rest of the analysis.

Reading the analysis as a whole, it is plain that the Aldi store did have some adverse impacts on the town centre but it would not have a significantly adverse impact on the town centre if developed on its own. It was on this basis that the conclusion was reached that there would be no conflict with retail policy.

I therefore disagree with the proposition advanced by Mr Garvey and Mr Cameron KC that this a case where there would be no disadvantageous retail impact. That is not what the retail analysis showed or how it was analysed in OR and AR read as a whole. The focus of Nexus’ analysis was that there would be some adverse impact which it found fell short of “significantly adverse” to the town centre.

Moreover, cumulative impact was considered to be a material issue. As far as cumulative impact is concerned, the evidential position was clear. There would be a significant adverse impact if the Aldi Store and the Lidl store both came forward. This is clearly set out in paras 7.33-7.38 of OR and paragraph 9(f) and 9(g) of AR.

The advice of Nexus was that the Defendant should consider cumulative retail impact.

The reason given in AR for giving little weight to “cumulative impact” was that “only the Aldi store is before members” and “cumulative impact” may be considered a more weighty consideration in the future when the Lidl application is considered.

The implication of this is that the Aldi scheme would be considered on a different (and more favourable) basis than the Lidl scheme. In the former case, little weight would be given to cumulative impacts. In the latter case cumulative impacts would inevitably be a more significant material planning issue. The practical effect of this would be to treat as determinative the fact that the Aldi scheme was the first to be considered. This is the inescapable consequence of the factual context (as analysed by the Defendant itself) namely (a) both stores (if developed together) would have a significant adverse impact on the town centre (b) they were accordingly rivals competing for the finite retail capacity available to trade in an out of centre location in a way which would not cause a significant adverse impact on the vitality and viability of the town centre.

Mr Garvey’s submits that attributing little weight to cumulative impact in determining the Aldi scheme which was reasonably open to the Defendant. He relies on paragraph 9(h) of AR as explaining why this approach was taken. He submits that the Defendant was not in a position to compare the two schemes and so could not undertake the comparison.

In my judgment Mr Garvey’s submission reads more into paragraph 9(h) of AR than the evidence before the Court supports. AR paragraph 9(h) indicates that the Lidl scheme is not “ready to be considered by the Council”. The evidence before the Court as to why that was so is contained in paragraph 16 of Miss Stuart’s witness statement which states that Nexus addendum (taking account of the reduced Lidl scheme) was not yet available. This updated retail impact information would have revealed the extent to which the Lidl store would have a lower impact on a solus basis (i.e. one store basis) than the Aldi store (in a context where the figures available already showed that the Lidl store would have less impact). It would also have confirmed whether the overall judgments on cumulative impact altered (in the context of OR 7.38 indicating that “it is not expected that the reduction proposed would lead to a change in the cumulative impact”).

The evidence before the Court does not indicate that there was any other missing information in respect of the Lidl scheme. The consultation on the amendments had been undertaken in September 2022. On the evidence before the Court, it is not suggested that the Defendant lacked information to enable it to be compared with the Aldi scheme save for the additional retail impact information already discussed which is the missing document referred to in paragraph 16 of Ms Stuart’s witness statement.

Moreover, to the extent that the Defendant was not ready to make the comparison, I consider that there is some force in the analogy which Mr Edwards KC makes with the Edwards case. In Edwards at first instance the Deputy Judge rejected administrative convenience as a justification for failing to grapple with the comparative merits of the scheme. The fact that the Defendant was not ready to make the comparison is not a good reason to fail to undertake the comparison if it is a mandatory material consideration. Similarly, the fact that the administrative period for determining the Interested Party’s application was due to expire does not render what is otherwise a mandatory material consideration irrelevant.

The critical question therefore is whether this is a case where a comparison between the two schemes needed to be made.

I do not consider that this question can be resolved by determining the somewhat abstract legal debate about how alternative cases should be classified and whether there is a special category of rival cases.

As Sullivan J (as he then was) observed, these kinds of cases are fact sensitive. The need to undertake a comparison will only be a mandatory material consideration if it is “so obviously material”. It will be so where it would be irrational not to assess it.

In the circumstances of the present case, I consider that we are in such territory. This is because of the uncontentious factual basis of the present case The critical points are:-

These uncontested facts make the comparison between the rival candidates obviously material in my judgment.

The facts of this case do fall broadly within the parameters sketched out by Oliver LJ in GLC.

There was a debate before me as to whether the second indicative criteria was met. Mr Cameron KC and Mr Garvey contended it was not because there was a finding of no retail harm. I disagree. As I have already indicated, I consider that the proper reading of OR and AR (and the supporting retail analysis) is that there would be adverse effects from the Aldi store on the town centre (but in itself this would not be a significant adverse impact on the town centre). In my view, this is sufficient to come within the broad concept of “disadvantage” which is indicated by Oliver LJ. There does not have to be a finding of conflict with a development plan policy. Retail impact which draws trade away from town centre stores is a disadvantage in the sense postulated by Oliver LJ.

I disagree with the analysis advanced on behalf of the Defendant and the Interested Party that the Chelmsford case is explained as a case where the issue of alternatives arises under the policy at issue in that case. As I read Sullivan J’s analysis in Chelmsford he saw the case as one in which there were obviously two candidates for one opportunity where there would be no justification for granting both and so it was necessary to undertake a fair comparison between their advantages and disadvantages. Sullivan J’s reasoning is wider than the Defendant and the Interested Party’s contention that the issue of alternatives arises only from the specific wording of the policy. In my view, it arose from the essential characteristics of there being alternative proposals to meet a specific local need (see in particular para 14 of Chelmsford).

In the present case, we are in a broadly similar situation. There cannot be two out of centre stores without causing a significant adverse impact on the vitality and viability of the town centre. The analogy with the local need in the Chelmsford case is the (evidentially established) finite retail capacity for a single out of centre store without causing significant adverse impacts on the vitality and viability of Horncastle town centre. Given that evidential position, it was necessary to grapple with the competing merits of the candidates to fill the available capacity and do so in a coherent and principled way. The fact that one store by itself would not cause harm addresses only part of the relevant planning context in a case where there is a rival store which proposes to fill a finite amount of capacity and both cannot be granted.

I agree with Mr Edwards KC’s submission that adopting a “first past the post” approach does not satisfy the need for a coherent way of determining which of the rivals should be preferred. I consider that this is a case like Chelmsford where a fair comparison and coherent comparison of the rival sites was needed (and was not undertaken).

Therefore, I consider that we are in the territory of a mandatory material consideration (as characterised by Lord Carnwath in Samuel Smith) because on the facts of the case, the need for a comparison was “so obviously material” as to “ require direct consideration”.

I reach the same conclusion approaching the issue from the perspective of rationality. I consider that there was a logical flaw in the Defendant’s decision to leave out an assessment of the competing merits of these rivals schemes. The Defendant’s approach offers no principled or coherent approach for choosing between the two schemes. Its effect is to apply a different approach to the assessment of Aldi’s proposal than would inevitably apply to the consideration of Lidl’s scheme. In my judgment, this was irrational (in the sense explained in R v Parliamentary Commissioner for Admin exp Balchin) namely it was a decision which “does not add up”. By failing to address the relative merits of the two candidates to meet the finite retail capacity, there was a gap in the Defendant’s reasoning which deprives its decision of logic. As Mr Edwards KC submits, the Defendant’s decision making process identified the cumulative impact position, acknowledged that the Lidl and Aldi were rivals to meet the finite capacity and then did not undertake any comparison between them. This logical flaw is within the legal concept of rationality (as explained by Sedley J in Balchin). The Court has a legitimate role in examining the logic of the Defendant’s reasoning (as reflected in the officers’ report). The rationality issue is different from the classic Newsmith situation where the Court adopts a high level of deference to reviewing (for example) an aesthetic judgment or the way in which the planning authority weighs competing public interest considerations.

As I have already indicated, I have rejected Mr Garvey’s submission that the Defendant made a considered decision that a comparison could not be undertaken. The evidence before the Court indicates that the Defendant did not consider the Lidl application because it was waiting for the addendum to the retail impact assessment. This would have provided a further refinement of information which it already had (namely that the Aldi store alone has more impact than the Lidl store and both together would have a significant adverse impact on the vitality and viability of the town centre). I do not consider therefore that the Defendant put forward a logical explanation for failing to compare the 2 rival candidates to meet the finite retail capacity that the retail evidence before it had identified.

My decision is not based on accepting Mr Edwards’ proposition that there is a special category of cases which applies to rivals. I consider that this contention underplays the importance of the particular facts of the case. To make generalisations about categories of cases risks oversimplification. It fails to heed the warnings that there is no “one size fits all” approach (per Sullivan LJ in R (Langley Park School) v Bromley LBC [2010] 1 P&CR 10 at para 52) and that categorisation can be “dangerous” (per Oliver LJ in GLC).

My decision is grounded in the particular circumstances of this case. Here, the critical facts are that the evidence identifies the reality that there are two proposals before the authority to address the finite available capacity for a single out of centre supermarket without having an adverse impact on Horncastle town centre. This essential position is established and uncontentious (as analysed by the Defendant based on the cumulative retail impact assessment its consultants undertook). Both proposals are before the Defendant (as stressed in Edwards at 616 and noted by Carnwath LJ in Derbyshire Dales at para 22). There is also no suggestion that either applicant has behaved in a tactical or contrived way. In this specific context, I consider that it was not lawful to omit a comparative assessment.

Mr Cameron KC submitted that the question of alternatives was part of the sequential assessment stage of retail policy. That is correct but it does not alter the analysis above. In a case where there is only one application for retail development the policy context focuses on the sequential test as the place in which alternatives are evaluated. But that is not this case. The specific evidential circumstances of this case is one in which there are two proposals before the authority aiming to address what on the evidence has been found to be finite retail capacity (without causing significant adverse impact on the town centre). Those are the uncontentious facts which mean that in the specific circumstances of this case a comparison was necessary (and was not undertaken). Moreover, as I have found, the reason for declining to undertake it reveals a logical gap in the Defendant’s decision making.

In my judgement therefore ground 1 succeeds.

The second ground of challenge concerns fairness.

It was accepted by all parties that this was parasitic on ground 1. I agree. Ground 2 was not the subject of discrete submissions. I therefore make limited observations about it. Ground 1 has succeeded on the basis that it was unlawful to grant planning permission for the Aldi scheme in the specific circumstances of this case without comparing it to the rival Lidl proposal. It would plainly be easier to undertake such an assessment if the applications were considered together at the same meeting. However, I would not go so far as to say that they must necessarily be so considered together. The key point is the need to undertake a comparison where the evidence is so clear that they are alternate propositions for addressing the finite retail capacity to trade in an out of centre format without causing significant harm to the vitality and viability of Horncastle town centre.

The Court expresses no view (and makes no assumption) on the comparative merits of the two schemes. The fact that the Lidl scheme is smaller and draws less away from the town centre may or may not be an advantage. That depends on a holistic retail impact assessment which is a matter for the local planning authority. There are other differences between the proposals which will need to be weighed in the planning balance. These are matters of planning judgment for the Defendant. The essential complaint which has succeeded in this claim is that the Defendant failed to undertake such an exercise.

I have concluded that ground 1 of this claim succeeds and the grant of planning permission to the Interested Party dated 4 November 2022 should be quashed.

I thank Counsel for their helpful submissions in writing and orally.