Dual Purpose

I need to declare an interest as I’ve recently been acting for an electronic communications code operator but…

Ouseley J’s ruling in Westminster City Council v Secretary of State & New World Payphones Limited (5 February 2019) raises more questions than some of the media headlines would suggest.

Background

New World Payphones is the operator of an electronic communications network for the purposes of the Communications Act 2003 and the Town and Country (General Permitted Development) (England) Order 2015.

It proposed replacing two existing telephone boxes with a single new kiosk on Marylebone Road. It had made two applications to Westminster City Council: an application under the GPDO for a determination as to whether its prior approval was required for the new kiosk and at the same time an application for express consent under the Town and Country Planning (Control of Advertisements) (England) Regulations 2007 for the “display of illuminated digital advertisement panel…as part of new telephone kiosk“. The panel was to be on the rear of the proposed kiosk.

Westminster City Council refused both applications. New World Payphones appealed. The inspector allowed the appeal against refusal of prior approval under the GPDO and refused the appeal against refusal of express consent under the Control of Advertisements Regulations.

Westminster City Council then challenged the decision to allow the prior approval appeal.

The legislation

In brief summary, Class A of Schedule 2 Part 16 of the GPDO gives deemed permission for:

A. Development by or on behalf of an electronic communications code operator for the purpose of the operator’s electronic communications network in, on , over or under land controlled by that operator or in accordance with the electronic communications code consisting of –
(a) the installation, alteration or replacement of any electronic communications apparatus
….”

If the apparatus comprises a public call box, a determination is required from the local planning authority as to whether prior approval is needed for the siting and appearance of the development.

It should also be noted that whilst an illuminated advertisement needs express consent under the Control of Advertisements Regulations, there is automatic deemed consent for a non-illuminated advertisement on one glazed surface of a telephone kiosk, subject to certain restrictions.

Westminster City Council’s submissions

Ouseley J summarised Westminster’s grounds of challenge as follows:

⁃ “the grant of prior approval was outside the powers conferred by the GPDO because the new kiosk was not “for the purpose” of the operator’s electronic communication network, but instead was primarily for the purpose of advertising via the illuminated panel.”

⁃ “the Inspector had ignored an issue which it raised, namely that there was no need for the proposed kiosk. There had to be a need for the proposal before it could come within the scope of permitted development in Class A of Part 16 of the GPDO, and before consideration of its siting and appearance could be relevant. Third, as a form of belt and braces, it contended that the Inspector’s approach to the need for and purpose behind the proposed kiosk was irrational or inadequately reasoned.”

Ground 1

The judge didn’t accept the council’s formulation that that the “provision of communications facility had to be the dominant or primary purpose in order for the development to come within the scope of Part 16” and that the “operator’s purpose was to be identified by the reason for which he proposed the development.” According to the council:

A differently designed and smaller communications facility could be provided were it not for the advertising panel component of the design. This also showed what its dominant purpose was, as did New World Payphones’ statement in its written representations that a kiosk would only be replaced if both prior approval and advertisement consent were granted. The dominant purpose could not be the provision of the electronic communications facility if, in the absence of the advertising panel, the electronic communications facility would not be provided.”

The judge approached the issue in a different way, starting by considering the nature and purpose of the GPDO. “If there were no GPDO, a specific planning application would have to be made for all the developments which benefit from the general permission it gives. A whole array of different types of development, are regarded as fit for permission, subject to specific conditions. For some, and Part 16 Class A is one of them, the relevant material considerations are taken into account in the grant of the general permission, provided that certain specific material considerations are resolved through a specific decision-making process. Those specific considerations vary from one type of development to another. That restricted range of considerations is established because the others have already been resolved in favour of the type of development proposed. The restricted range is clearly tailored to the specific type of development at issue. However, the general range of considerations have not been resolved in relation to a development which does not come within the Class relied on, and the issues for specific consideration have not been tailored to such a development. The definition of the Class has to be interpreted in that light.

In my view, that means that the whole development for which prior approval is sought must fall within the Class relied on, and no part of it can fall outside it. Otherwise, the general permission in the GPDO, and the restricted range of considerations would be applied to development which falls outside the scope of the permission.”

A development therefore falls outside the scope of Class A Part 16 if it is not “for the purpose” of the operator’s network. That means, at least in the specific context of a GPDO permission, that a proposed development falls outside it, if part of it falls outside it. It cannot be said that the whole falls within the GPDO. The benefits of the GPDO, a quicker process, the limited range of material considerations, and the restricted range of conditions would be used for a development, part of which they were not intended for, and which had not been judged to merit permission on that basis. A development which is partly “for the purpose” of the operator’s network, and partly for some other purpose, is not a development “for the purpose” of the operator’s network, precisely because it is for something else as well. The single dual purpose development must be judged as a whole.”

I do not consider that the question is whether the dominant purpose is for the operator’s network, although for certain purposes that is how a statutory purpose is judged. In the context of planning law, the concept of dual or mixed uses does not turn on dominant or secondary purposes: thus a farm, when a farm shop was added, would be used for mixed purpose of agriculture and retail; similarly a house with an office use in a part of it, would not be “residential” but a mixed use. The other use would create a mixed or dual use unless it was incidental or ancillary to the identified use, which would mean that it was part of that use and not a separate use at all, or was legally so small as to be of no significance, de minimis. I consider that the GPDO should be analysed by reference to concepts with which planning law is familiar, rather than by dominant or primary /secondary considerations.”

I do not consider that the evidence here could permit of any conclusion other than that the kiosk served a dual purpose. Part of its purpose was for the operator’s network, as a telephone kiosk. Part of it was to be the electrified advertising panel. The panel was for the purpose of displaying advertisements. It was not ancillary or incidental to the kiosk, nor legally insignificant. It does not matter whether it would have been lit if no advertisements were displayed. No relative significance has to be attributed to either part of the dual purpose; it is sufficient if the two purposes exist without the advertising use being ancillary or incidental or of no legal significance.

Ground 2

The judge rejected the council’s argument that it was relevant for a decision maker to consider whether there was a “need” for the kiosk.

The text of Class A was intended to be quite simple, and would not have been intended to import some objective “need” test, or to involve the local authority questioning precisely why the operator “required” the kiosk, and judging how good a reason that was. This would contradict the essential feature of the GPDO which is to narrow the range of considerations which a decision-maker has to consider, in order to streamline certain aspects of the planning system.”

It’s not straight-forward

I say that for a few reasons:

1. The ruling was based on the facts of the case: a proposed illuminated/digital advertisement panel and two applications having been made, one being for the display of an illuminated advertisement. Plainly the ruling can’t read across to every telephone kiosk, even those that allow for a facility to display a non-illuminated advertisement with the benefit of deemed consent under the Control of Advertisement Regulations. After all, what purpose would the deemed consent mechanism (specifically directed at telephone kiosks) serve if any kiosk that allowed for such an advertisement, by definition, did not have prior approval under the GPDO? Kiosks such as the BT image below have long been a familiar part of the UK street scene for many years (ah London 2012…)

The idea that some advertising on the surface of telephone kiosks can be considered to be inherent or ancillary, and indeed specifically is controlled by a code within the Control of Advertising Regulations that has specific criteria as to what advertisements on telephone kiosks should have automatic consent and therefore legally irrelevant at prior approval stage, is surely reflected in previous rulings such as Infocus Public Networks Limited v Secretary of State (Foskett J, 17 December 2010) (a different Infocus case to that which is cited in Ouseley J’s judgment):

As I have indicated, it is this part of the Inspector’s reasoning that I find difficult. If the primary issues for consideration, once the principle of this kind of development is acknowledged, are the siting and appearance of any kiosk, then “appearance” (though apt to include anything attached to the surface of the kiosk) would ordinarily be thought to be the intrinsic appearance of the kiosk itself. The fact that a telephone kiosk is something of a magnet for advertising material is obvious to anyone who walks along a street where telephone kiosks are situated. It has been recognised in a formal sense by the promulgation of the 2007 Regulations. Those Regulations give what would certainly seem to be a self-contained code for the regulation of advertising material generally and, in this particular context, of advertising materials attached to the surface of a telephone kiosk.

Against that background, it seems to me that a Local Planning Authority has ample powers to ensure the discontinuance of advertising that represents a “substantial injury to the amenity of the locality or a danger to members of the public”. There is a right of appeal for the owner or occupier of the site to the Secretary of State. To that extent and upon that basis, I do not consider that the existence of advertising material on a telephone kiosk that is otherwise sited appropriately in the planning context and has an intrinsically acceptable appearance is a material consideration in deciding whether prior approval should or should not have been given to the erection of that kiosk.”

2. Ouseley J rejects the dominant or primary purpose test proposed by the council, in favour of “concepts with which planning law is familiar” in the form of his “dual purpose” test which, as far as I’m concerned, is without any precedent. But then the test seems to come back in his statement that “it is sufficient if the two purposes exist without the advertising use being ancillary or incidental or of no legal significance“. Is this acknowledging the points in my paragraph 1 above?

3. To what extent is the motive of an operator relevant? Perhaps it is straight-forward in the New World Payphones type situation where the operator is making a specific application for the display of advertising alongside the application for the kiosk, but what about in other circumstances where motives can only be discerned from secondary evidence? And taking a step back, do we apply such considerations in relation to other industry business models that are dependent on advertising or sponsorship? Is the London Evening Standard a newspaper? Is Channel 4 News a news programme?

4. What are the implications for other parts of the GPDO? For instance, close to the pockets of local authorities, there is Part 12:

“A.  The erection or construction and the maintenance, improvement or other alteration by a local authority or by an urban development corporation of—

(a) any small ancillary building, works or equipment on land belonging to or maintained by them required for the purposes of any function exercised by them on that land otherwise than as statutory undertakers;

(b) lamp standards, information kiosks, passenger shelters, public shelters and seats, telephone boxes, fire alarms, public drinking fountains, horse troughs, refuse bins or baskets, barriers for the control of people waiting to enter public service vehicles, electric vehicle charging points and any associated infrastructure, and similar structures or works required in connection with the operation of any public service administered by them.”

So presumably one implication of the ruling, on the broad interpretation that some might give it, is that there no longer deemed permission for any bus shelter, refuse bin or seat that allows for advertising? If not, why not?

Permission to appeal

Ouseley J granted the Secretary of State permission to appeal, the test for which is that either (a) the court considers that the appeal would have a real prospect of success; or (b) there is some other compelling reason for the appeal to be heard.

So his judgment is unlikely to be the last word on this subject.

MHCLG consultation paper

I covered MHCLG’s consultation paper Planning Reform: Supporting the high street and increasing the delivery of new homes in my 8 December 2018 blog post Permitted Development: Painting By Numbers Versus Painting The Sistine Chapel?, at the time not saying much about the proposal to “remove the existing right that allows the installation of, and advertising on, new public call boxes“, because the proposed restriction seemed to me not to fit well with all of the other proposals, which are for extensions of permitted development rights, nor with the theme of supporting the high street and increasing the delivery of new homes.

It would be helpful if MHCLG were to reflect, with DCMS and Ofcom, on what comes from the Court of Appeal’s thinking when any appeal comes before it, before considering further, on the back of a specific consultation paper, whether any legislative change is in fact needed, and if so what. As I mentioned in my previous blog, in my view what is really needed is an updating of the permitted development rights in Part 16 of Schedule 2 to the GPDO to reflect the role of streetside furniture in relation to 3/4G (soon to be 5G and all that 5G will facilitate in terms of smart city functions) and wifi. The “public call box” terminology is certainly old fashioned and misleading. But, to use other old fashioned terminology, there is a big risk of throwing out the baby with the bath water.

Simon Ricketts, 16 February 2019

Personal views, et cetera

Dual porpoises

VIP, Biscuits: 2 More Refusals For Major Projects In London

Getting messy isn’t it?” was how I ended my 26 January 2019 blog post The Secretary Of State & London.

Two more decisions to note since that blog post:

VIP Trading Estate and VIP Industrial Estate, Charlton

I suspect that this is the first example of a London Mayor calling in an application for his own determination and refusing it. In the final month of his mayorality in April 2016, Boris Johnson had agreed to defer a decision in relation to Bishopsgate Goodsyard, faced with an officer’s recommendation to refuse the application (it ended up never being determined). But Sadiq Khan’s flip flopping over Leopard Guernsey Anchor Propco Limited’s application to the London Borough of Greenwich for planning permission to redevelop the VIP Trading Estate and VIP Industrial Estate, Charlton has been quite something else.

This is a scheme that started off as comprising 975 dwellings , together with non-residential floorspace, in buildings ranging from nine to 28 storeys. Following consultation responses and comments from the Mayor in his stage 1 referral report, the 28 storey tower was removed and the amount of housing reduced to 771.

Greenwich officers recommended approval but on 9 July 2018 committee members resolved to refuse it on five grounds, namely overdevelopment, insufficient proportion of family sized housing, lack of a safe access to the business premises next door (a building known as Imex House that houses Squeeze’s Glenn Tilbrook’s studio) and introduction of noise sensitive uses, failure to make appropriate replacement employment floorspace provision and daylight/sunlight deficiencies.

Having considered his officers’ stage 2 report dated 13 August 2018, the Mayor called in the application for his own determination. The report sets out the various improvements that would be sought to the proposals as part of the call in process.

Various amendments were negotiated and secured. Officers’ stage 3 report was published for the representation hearing held on 29 January 2019. The report recommended approval.

But then the bombshell at the end of the representation hearing. Despite having intervened to prevent Greenwich members refusing the application against their officers’ recommendations six months previously, and despite amendments to the scheme proposals having been negotiated to officers’ satisfaction, presumably in line with the Mayor’s instructions (if not, was he not paying attention or something?), the Mayor then announces that he is refusing the application. His reasons for refusal published a few days later on 4 February 2019 in part bear a marked resemblance to those of Greenwich’s planning committee: poor design; unsatisfactory relationship with Imex House and introduction of noise sensitive uses; failure to make appropriate replacement employment floorspace provision, and absence of a section 106 agreement to secure affordable housing and other obligations (I’m not sure whether this is a purely procedural reason for refusal or he was actually not satisfied with the affordable package negotiated by his officers: 35%, rising to 40% with grant).

I have no views on the scheme itself, and I accept that of course he must have an open mind during the representation hearing, but what a waste of six months! He says in the letter setting out his reasons for refusal that he “called in this application to subject it to further scrutiny” but that is a poor excuse. He was surely looking to use the particularly useful Mayoral call in power in order to squeeze some further enhancements from the scheme so that, when that had been done by his officers to his satisfaction, he could approve it. In turning it down, where does that leave his officers? And given that applicants are unable to engage with the man himself, can they now be sure that what they are being told by his team is necessary to secure approval will indeed be sufficient?

Bermondsey Biscuit Factory and Bermondsey Campus Site

The decision of the London Borough of Southwark at its planning committee meeting on 6 February 2019 to refuse planning permission for Grosvenor’s 1,342 dwelling build to rent scheme in Bermondsey is another one to be aware of. Members followed the recommendations in the officers’ report, the main reason being that Grosvenor’s affordable housing package was unacceptable, comprising, in summary, that 27.37% of the habitable rooms would be let at an average discount of 25% below market rents, with usual early and late stage viability review mechanisms. (The application indicated that “the depth of discount across the affordable units could vary, with greater discounts offered on some units, but this would require higher rents (up to 80% of market rents) on others to ensure that the overall level of discount does not exceed 25% overall. Grosvenor has described the sum equating to a 25% discount as the ‘subsidy pot’ and suggested whilst this could be distributed in a variety of ways, the impact of the DMR cannot exceed the financial value of that ‘subsidy pot’ “).

The Mayor of London had flagged in his stage 1 report: “Whilst the proposed increase in housing supply is strongly supported, in the absence of an independently verified viability position the proposed 27% provision of affordable housing is unacceptable. The applicant must deliver deeper DMR discounts, including London Living Rent

Southwark took an equivalent position but the report to committee is interesting in the way that it (1) transparently sets out the differences between the viability work carried out by the parties’ respective viability consultants (GVA – in old money, now Avison Young – having advised the council after the publication of the Mayor’s stage 1 report) and (2) highlights the differences in build to rent (referred to as PRS, private rental sector, in the committee report) affordable housing policy approach in two dimensions: at GLA vs borough level, and as between adopted and emerging plans. Not an unfamiliar position for any developer but particularly difficult for those promoting build to rent (which is, after all, strongly supported in principle by MHCLG and the Mayor of London) as a relatively new product in terms of determining the appropriate approach to affordable housing.

The viability differences are nicely summarised by Mike Phillips (ex Property Week editor) in his 4 February 2019 Bisnow piece Grosvenor’s Bermondsey Rejection Is A Microcosm Of London’s Affordable Housing Quandary.

As to the complexities arising from varying policy approaches to build to rent, a few extracts from the committee report:

⁃ “London Plan policies 3.11 and 3.12 and draft London Plan Policy H5 seek to maximise the delivery of affordable housing, with the draft London Plan seeking delivery against a strategic target of 50%. Policy H6 of the draft London Plan and the Affordable Housing and Viability SPG prescribe a threshold approach to affordable housing to incentivise swift delivery, and draft London Plan Policy H13 applies this principle to ‘build to rent’ products. In this case, a minimum of 35% affordable housing threshold applies.

⁃ The Mayor’s affordable housing and viability SPG “recognises that Discount Market Rent is an appropriate tenure within PRS developments and considers that the rent level for DMR should be pegged at London Living Rent levels, for households with incomes up to £60,000. The guidance requires affordable housing to be secured in perpetuity, and in addition requires a clawback mechanism if the wider PRS homes are sold out of the Build to Rent sector within 15 years. The clawback is intended to respond to the different financial model applied to the PRS sector and to ensure the developer does not benefit financially if the homes are converted to market sale.”

⁃ The borough’s core strategy “requires that a minimum 35% affordable housing is provided on all residential developments of 10 or more units, with a tenure split in the Bermondsey area of 70:30 social rent: intermediate homes. Applications would be subject to viability assessments if policy compliance is not being offered, with the expectation that as much affordable housing will be provided as is financially viable. The Core Strategy makes no specific reference to PRS housing.”

⁃ The submission version of the New Southwark Plan “requires the affordable ‘DMR’ housing to be secured in perpetuity, and the overall housing development to be secured within the rental sector for at least 30 years” [contrast with the Mayor’s 15 year requirement] with a changed tenure split of 15% social rent and 20% DMR at London Living Rent [contrast to GLA position where it can all be London Living Rent DMR]

Clearly it is going to be key for the parties to resolve their difficulties over viability, whether that requires changes to the scheme or an appeal. This was a decision taken against up to date government guidance on the approach to viability appraisals, the work was relatively transparent and there was not a major difference of principle over benchmark land value. The reality is that the process is not straightforward; there are issues of judgment, particularly when dealing with a relatively untested business model and the need to estimate the rents that will be achievable in an area that will have been significantly changed by way of development. After that, the tenure split question is surely economically subsidiary, although clearly on-site social rented housing will come at greater cost to the scheme’s viability in a number of ways and so there are political choices to be made.

More widely

I’m not sure whether the Secretary of State had either scheme specifically in mind, when he threw his own political pebble into the pond, as reported in the Planner on 31 January 2019: Brokenshire tells GLA to step up (https://www.theplanner.co.uk/news/brokenshire-tells-gla-to-‘step-up’ ). People in glass houses…

In the meantime, the examination continues into the draft London Plan. Hearing sessions are currently considering housing issues, with MHCLG participating. The Just Space website is a useful unofficial resource in relation to the examination, with links to each written statement for each session together with thumbnail-sketch type notes of the session itself.

Lastly, as a postscript to my 26 January 2019 blog post, it has now been reported that Croydon Council as well as possibly the Mayor are supporting Thornsett Group’s challenge of the Secretary of State’s Purley Baptist Church call-in decision.

Still messy, isn’t it?

Simon Ricketts

Personal views, et cetera

Peek Frean biscuits, from Bermondsey.

What To Do About Poor Air Quality? The Shirley Case

In this week of all Brexit weeks it was interesting to see the approach of the Court of Appeal in a case, R (Shirley) v Secretary of State (Court of Appeal, 25 January 2019), which turned on the practical extent of the Secretary of State’s duty to give effect to the objectives of the Air Quality Directive. The UK is under binding commitments in the Air Quality Directive to improve air quality, transposed into domestic law by way of the Air Quality Standards Regulations 2010. Was he required to call in for his own determination a planning application for development that would worsen or prolong breaches of limit values in an Air Quality Management Area (“AQMA”) for nitrogen dioxide or PM10?

Before we turn to the ruling, a quick update may be useful on the continuing saga of the Government’s continued failure to prepare a lawful Air Quality Plan in compliance with its duties under the Air Quality Directive (its deadline having been 1 January 2010) since my 4 November 2016 blog post The UK Government & Air Quality (ahem). At the point I wrote the blog post, the Supreme Court had ordered in April 2015 that the Government should prepare a legally compliant Air Quality Plan by the end of 2015, the Government had purported to publish compliant proposals on 17 December 2015 which were then found to be legally inadequate by Garnham J in his judgment in ClientEarth v Secretary of State (No. 2) (Garnham J, 2 November 2016). He gave the Government a further deadline of 31 July 2017.

The Government purported to comply by that deadline but Garnham J held that attempt too was deficient in a number of respects, in R (ClientEarth) v Secretary of State (No. 3) (Garnham J, 21 February 2018). He made a declaration as to the deficiencies as against the requirements of the Directive and Regulations, ordered the urgent production of a supplement to rectify the deficiencies and that the balance of the plan should remain in force in the meantime to avoid any delay in its implementation. His judgment concluded:

I end this judgment where I began, by considering the history and significance of this litigation. It is now eight years since compliance with the 2008 Directive should have been achieved. This is the third, unsuccessful, attempt the Government has made at devising an AQP which complies with the Directive and the domestic Regulations. Each successful challenge has been mounted by a small charity, for which the costs of such litigation constitute a significant challenge. In the meanwhile, UK citizens have been exposed to significant health risks.

It seems to me that the time has come for the Court to consider exercising a more flexible supervisory jurisdiction in this case than is commonplace. Such an application was made to me when the November 2016 judgment was handed down. I refused it on that occasion, opting for a more conventional form of order. Given present circumstances, however, I would invite submissions from all parties, both in writing and orally, as to whether it would be appropriate for the Court to grant a continuing liberty to apply, so that the Claimant can bring the matter back before the court, in the present proceedings, if there is evidence that either Defendant is falling short in its compliance with the terms of the order of the Court”.

The Government published a supplement to its plan on 5 October 2018 and as far as I know there has been no legal challenge to it or application back to Garnham J pursuant to his liberty to apply. So we may finally now have a legally compliant Air Quality Plan?

In the meantime, the European Commission has commenced infringement proceedings against the UK and other member states for delays in implementing the Directive.

To bring the narrative right up to date, the Government published its Clean Air Strategy on 14 January 2019, setting out proposed measures that will in due course form part of the forthcoming Environment Bill. On an initial reading there seems to be a deliberate shift away from the areas where the Government has found it difficult to comply with the Air Quality Directive, particularly in relation to polluting emissions from vehicles. From the foreword by Michael Gove:

We often think of air pollution as a problem caused by road transport and industrial level burning of fossil fuels. These are two of the central sources of pollution, but industry and government have worked together to remedy many of the worst problems by incentivising the use of clean fuels and investing in new technology. We have already secured a significant reduction in emissions since the 1970s. But now this trajectory has slowed.

Now we need to tackle other sources of air pollutants that damage human health and the environment. Air pollution can be caused by intensive agricultural food production, heating our homes or even cleaning with certain solvents

Whether that is well based is for others to judge.

But perhaps more of that another day and now back to Shirley. The appeal before the Court of Appeal concerned an application by Corinthian Mountfield Limited for planning permission for 4,000 dwellings and associated development that had been resolved to be approved by Canterbury Borough Council.

Dove J had rejected the appellants’ claim for judicial review of the Secretary of State’s decision not to call in the application. The Court of Appeal considered three grounds of appeal:

(1) whether the preparation and implementation of an air quality plan complying with Article 23 of the Air Quality Directive would be a sufficient response to breaches of limit values (ground 1 in the appellant’s notice);


(2) whether the Secretary of State had a duty as “competent authority” to use his planning powers to avoid the worsening or prolongation of breaches of the limit values, and was therefore obliged to call in Corinthian Mountfield’s application for planning permission (ground 2); and


(3) whether it was irrational for the Secretary of State to assume that any errors in the city council’s approach could be put right if it reconsidered the application, or could be brought before the court in a claim for judicial review if planning permission were granted (ground 3)
.”

The point is an important practical one – if a project is likely to increase exceedances of pollutant limit values, does that by itself lead to the risk of call in or legal challenge?

“Is the preparation and implementation of an air quality plan complying with article 23 of the Air Quality Directive a sufficient response to breaches of limit values?

Article 13 of the Directive, transposed by Regulation 17 of the Regulations, requires the Secretary of State to ensure that levels of specified pollutants do not exceed defined limit values. In zones where levels are below the limit values the Secretary of State must “ensure that levels are maintained below those limit values and must endeavour to maintain the best ambient air quality compatible with sustainable development“.

Article 23 of the Directive, transposed by Regulation 26 of the Regulations, requires that where exceedances of annual mean limit values of specified pollutants occur, the Secretary of State must draw up and implement an air quality plan to achieve the limit value.

Dove J had “concluded that when the limit values in the Air Quality Directive are exceeded, if article 13 is read with articles 22 and 23, the preparation and implementation of an air quality plan with a view to overcoming those exceedances and keeping their duration as short as possible is the “specific and bespoke remedy”. There was, he said, “no room within the scheme” of the Air Quality Directive for any “freestanding responsibility” to take any specific action on “permits” or “development consents”. He was “unable to read into the legislation any requirement to take particular actions in relation to permits or development consents”.

For the appellants, Mr Robert McCracken Q.C. submitted that the judge had erred in his understanding of the Air Quality Directive and the 2010 regulations. He had failed to adopt a suitably purposive approach, failed to recognize the high level of environmental protection required by EU law, and failed to follow the approach taken by the Court of Justice of the European Union in relevant authority. He had not grasped that the Air Quality Directive requires the taking of action, not merely the preparation of air quality plans, and that the adoption and implementation of an air quality plan is a necessary but not a sufficient response to breaches of limit values…”

As referred to in my 4 November 2016 blog post, this has been Robert McCracken QC’s position for a long time – indeed in my blog post I included a link to his 2015 legal opinion to that effect.

Lindblom LJ examines in detail the Court of Justice of the European Union case law before agreeing with Dove J and rejecting the “purposive approach” argument:

Dove J.’s description of article 23 as providing the “specific and bespoke remedy” for a breach of article 13 therefore seems apt. This does not mean that Member States may not also adopt other measures to address a breach of article 13, in addition to preparing and putting into effect an air quality plan complying with article 23. But nor does it mean that Member States are compelled by any provision of the Air Quality Directive to do that. A demonstrable breach of article 13 does not generate some unspecified obligation beyond the preparation and implementation of an air quality plan that complies with article 23. The case law does not suggest, for example, that in such circumstances a Member State must ensure that land use planning powers and duties are exercised in a particular way – such as by imposing a moratorium on grants of planning permission for particular forms of development, or for development of a particular scale, whose effect might be to perpetuate or increase exceedances of limit values, or by ensuring that decisions on such proposals are taken only at ministerial level“.

Did the Secretary of State have a duty as “competent authority” to use his planning powers to avoid the worsening or prolongation of breaches of limit values?

Again, the answer was no:

I cannot accept that argument. It finds no support in relevant case law. In my view, as Mr Maurici and Mr Pereira submitted, it is not possible to construe the provisions of the Air Quality Directive and the 2010 regulations as constraining the Secretary of State’s very wide discretion either to call in or not to call in an application for planning permission when the limit values under article 13 have not been complied with, or when an air quality plan under article 23 has not yet been put in place or has proved to be deficient or ineffective. The air quality legislation does not do that. It does not have the effect of narrowing the Secretary of State’s call-in discretion in such circumstances, let alone of transforming that discretion into a duty, or of requiring a particular application for planning permission to be refused. None of the provisions of the Air Quality Directive engages with the process of making decisions to authorize individual projects of development. If a proposed development would cause a limit value to be breached, or delay the remediation of such a breach, or worsen air quality in a particular area, neither the Air Quality Directive nor the 2010 regulations states that planning permission must be withheld or granted only subject to particular conditions. These may of course be material considerations when an application or appeal is decided, and so too the measures in an air quality plan for the relevant zone, if there is one, or in an action plan prepared under the Environment Act 1995. But the Air Quality Directive and the 2010 regulations do not, in those or any other circumstances, compel the decision-maker to refuse planning permission, or impose on the Secretary of State an obligation to make the decision himself.”

Was the Secretary of State’s decision not to call in the application irrational?

Given that planning permission had not yet been granted by the city council, it was open to the council to take the application back to committee if it was not called in.

Lindblom LJ held that the Secretary of State’s freedom to exercise his call-in discretion is considerable. “The Secretary of State also knew that if he did not call in the application, the city council would be able to consider it again, taking account of any further representations made to it, and, with the advice of its officers and professional consultants, revisiting the committee’s resolution to grant planning permission. And if planning permission were to be granted, it could be challenged by a claim for judicial review. It was not perverse for the Secretary of State to have these considerations in mind when he made his decision not to call in.”

Lastly, the Court of Appeal considered and rejected for four reasons the appellants’ submission that a reference should be made on the first ground of appeal to the Court of Justice of the European Union:

⁃ the appeal failed in any event on the other grounds so a decision on the questions in the reference would not be necessary to enable this court to give judgment;

⁃ the issue was in the court’s view “acte clair” (ie reasonably clear and free from doubt)

⁃ a reference would cause unjustifiable delay in a case where the decision under challenge was procedural, not substantive

⁃ a reference was opposed by all four respondents.

Concluding thoughts

The case is an interesting example of the way in which EU law has become so familiar to the lawyers and judges of our domestic courts. Nearly all of our environmental law is EU-derived. Post-Brexit, when EU-derived legislation such as the Air Quality Standards Regulations will continue to apply (unless and until amended or revoked) on a free-standing basis and without the backing of the Directive, it is inconceivable to imagine that we will not all in practice still draw upon the CJEU’s case law to assist in matters of interpretation.

Over time this may change, once our legislation starts to diverge with that of the EU (we see already the deliberately differing objectives and approaches of DEFRA’s Clean Air Strategy) and once differing strands of judicial interpretation start slowly to open up. It’s going to get complicated. Our judges will always be more resistant to the purposive approach to interpretation – legislation should mean what it says – which is why in our common law system it is so important that our laws are precise rather than broad statements of principle in the way that has led to so much litigation in relation to EU Directives.

The case also illustrates the scale of the hurdles to be cleared in persuading our courts to refer issues to the Court of Justice of the European Union. If there had been a reference in Shirley, could we have completely ruled out the prospect of a surprise finding, à la People Over Wind? I’m still grumbling, five years on, about the Supreme Court’s refusal in the HS2 Action Alliance case to refer the Strategic Environmental Assessment issues that we raised to the CJEU. The risk/prospect of referral is generally a low one.

The earlier ClientEarth sequence of cases (within which there was in fact a reference) raises the separate question as to whether it is sufficient for responsibility for compliance with environmental targets to remain with Parliament and whether the proposed Office for Environmental Protection would have sufficient power as against a future Government that is dragging its heels. Would the OEP be able to fulfil that supervisory role that Garnham J has had to take in the ClientEarth litigation?

But in the meantime, it is helpful to have the Court of Appeal’s clarification that non-compliance by the Government with its international responsibilities does not lead to what would effectively been an embargo on any form of development where it could be argued that there might be an adverse effect on air quality in an AQMA, regardless of the local improvement measures to which the relevant local authorities had committed under the Directive and Regulations, and regardless of the usual statutory requirement for decision makers to determine applications in accordance with the development plan unless material considerations indicate otherwise. It would have led to decision-making chaos.

But that shouldn’t let anyone off the hook. The onus really must continue to rest with the Government and local authorities to take the necessary steps to ensure that roadside emissions are reduced to acceptable levels, no matter how politically unpopular the implications (eg further charging zones, making it more expensive and less convenient to use a polluting vehicle and the reverse for users of public transport – and priority being given to pedestrians and cyclists in our cities). The onus must also rest with developers to seek to ensure that their proposals are, in the language of the draft London Plan, air quality neutral or positive.

Clean air may be invisible but surely, one day, it will be seen as a vote winner?

Simon Ricketts, 2 February 2019

Personal views, et cetera

The Secretary Of State & London

The Secretary of State wrote last year to the Mayor of London: “I am not convinced your assessment of need reflects the full extent of housing need in London to tackle affordability problems. I have listened carefully to yours, and others, representations, and I am clear that the public interest lies with ensuring you deliver the homes London needs, including in the short term, as quickly as possible.”

Do we see this same message being delivered in his recent interventions?

None of this is news to regular readers of Planning magazine but I give you:

Purley Baptist Church site, Croydon

A scheme by Thornsett Group and Purley Baptist Church for the “demolition of existing buildings on two sites; erection of a 3 to 17 storey development on the ‘Island Site’ (Purley Baptist Church, 1 Russell Hill Road, 1-4 Russell Hill Parade, 2-12 Brighton Road, Purley Hall), comprising 114 residential units, community and church space and a retail unit; and a 3 to 8 storey development on the ‘South Site’ (1-9 Banstead Road) comprising 106 residential units, and associated landscaping and works.”

Supported by the London Borough of Croydon and by the Mayor. But opposed by, amongst others, Conservative MP Chris Philp (Croydon South). The application was called in on 12 April 2017 and, despite inspector David Nicholson recommending approval, refused by the Secretary of State in his decision letter dated 3 December 2018, essentially on design and heritage grounds:

26. Given his serious concerns about the design of the scheme as set out above at paragraphs 13 to 15, for the reasons given above the Secretary of State does not consider that the application is in accordance with the development plan overall. He has gone on to consider whether there are material considerations which indicate that the proposal should be determined other than in accordance with the development plan.

27. In favour, the scheme will provide 220 new homes which he considers should be given significant weight. The Secretary of State also affords significant weight to the benefits to Purley District Centre arising as a result of the regeneration of the site. The provision of a new church and greatly enhanced community facilities are also benefits, to which the Secretary of State gives moderate weight. He considers the level of affordable housing and the potential effects on air quality to be neutral in the planning balance.

28. Against the scheme, however, the Secretary of State gives substantial weight to the poor design of the South Side proposals, and to the height and proportions of the tower set out in paragraphs 13 to 15 above, which he considers not to be in accordance with relevant policies in the development plan.

29. The Secretary of State has also considered whether the identified ‘less than substantial’ harm to the significance of Purley Library and surrounding Conservation Areas is outweighed by the public benefits of the proposal. In accordance with the s.66 LBCA duty, he attributes considerable weight to the harm the significance of Purley Library. However, he considers that the benefits of the scheme, as set out in Paragraph 22 of this letter, are insufficient to outbalance the identified ‘less than substantial’ harm to the significance of Purley Library and surrounding conservation areas. He considers that the balancing exercise under paragraph 196 of the Framework is therefore not favourable to the proposal.”

It always feels slightly odd when the Secretary of State, on a desk-based examination of a set of papers, and following a public inquiry, considers it appropriate to overrule the judgment of local planning authority, Mayor and inspector in relation to these sorts of issues

I understand that the decision has been challenged in the High Court by the applicants.

Sir William Sutton Estate, Royal Borough of Kensington and Chelsea

By contrast, a scheme opposed both by RBKC (which refused permission) and by the Mayor for “demolition of the existing [Sir William Sutton] estate (Blocks A-K, N and O) and ancillary office; delivery of 343 new residential homes comprising of 334 apartments and 9 mews within buildings of 4-6 storeys; provision of Class D1 community floorspace with associated café; new Class A1-A5 and B1 floorspace; creation of new adopted public highway between Cale Street and Marlborough Street; new vehicular access from Ixworth Place; creation of new basement for car parking, cycle parking and storage; new energy centre fuelled by CHP, and works to adjacent pavement“.

The developer, Clarion Housing Group (formerly Affinity Sutton Homes Limited), appealed. Curiously, the appeal was only recovered by the Secretary of State for his own determination on 1 May 2018, just over a week before the start of the inquiry. By his decision letter dated 18 December 2018 the Secretary of State accepted his inspector’s recommendation and dismissed the appeal.

The main issue was in relation to the level of affordable housing proposed. After the appeal was submitted, the appellant had attempted to improve the position with changes to the scheme:

The key changes relate to the quantum of social rented housing and the number of mews houses. The Revised Scheme proposes 2,825 m2 more social rented floorspace, an increase from 237 to 270 social rented homes. The 9 private mews houses would be removed and replaced with social rented flats. Elements of the building design would be changed. The Revised Scheme results in an increase in the overall number of homes from 343 to 366.

The non-residential floorspace in the Appeal Scheme and the Revised Scheme would be the same in respect of Classes A1-A3 and B1 workspace, but there would be a decrease in the community floorspace in the Revised Scheme.”

However, applying ‘Wheatcroft‘ principles (“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”) the Secretary of State, agreeing with the recommendation of his inspector, refused to consider the revised scheme due to concerns as to the adequacy of the consultation that had been carried out. (One legitimate criticism was of “skewed” questioning of the public in a Feedback Form which asked “Do you support the proposals to amend the scheme to provide 33 additional homes for social rent?“, although I have seen similarly skewed questioning in MHCLG consultation documents…).

The Secretary of State did not accept the appellant’s position as to whether there was existing affordable housing on the site:

vacation of a property by a Registered Provider as a preliminary step towards estate renewal cannot reasonably be a basis for disregarding that floorspace for the purposes of affordable housing policy. He further agrees, for the reasons given at IR206-218, that the AS fails to comply with the ‘no net loss’ element of development plan policy.”

He considered that for the same reason the benchmark land value for the purposes of viability appraisal should be “based on the current situation, that is based on social housing development, as the Council contends.”

He concluded that the appeal scheme failed “to satisfy the policy aims of no net loss of social housing and maximum reasonable provision, largely for reasons related to the way in which the exiting [sic] vacant units of social housing are treated.”

Newcombe House, Notting Hill

Still in RBKC and back to the saga of Newcombe House. As summarised in my 18 June 2017 blog post, an appeal in relation to the proposed development of the site had been rejected by inspector David Nicholson (as of the Purley Baptist Church site case above). The refusal had partly been on similar grounds to the dismissal of the Sir William Sutton Estate appeal.

A new scheme was brought forward by the developer, Notting Hill KCS Limited, for “demolition of existing buildings and redevelopment to provide office, 46 residential units, retail uses, and a flexible surgery/office use, across six buildings (ranging from ground plus two storeys to ground plus 17 storeys), with two-storey basement together with landscaping to provide a new public square, ancillary parking and associated works.”

RBKC resolved to refuse the new application on 31 January 2018, on townscape, heritage and affordable housing grounds. On 26 March 2018 the Mayor of London intervened and took over the application. The applicant varied the scheme to increase the humber of homes and amount of affordable housing and the Mayor resolved to approve it on 18 September 2018 subject to completion of a section 106 agreement.

However, following representations by RBKC, the local residents group and Emma Dent Coad MP, the Secretary of State has issued a holding direction so that he can consider whether to call in the application for his own determination.

Kensington Forum Hotel

Another RBKC saga. An application by Queensgate Bow Propco Limited for the redevelopment of the Kensington Forum Hotel for “comprehensive redevelopment and erection of a part 30, part 22 and part 7 storey building comprising hotel bedrooms and serviced apartments (Class C1) with ancillary bar, restaurants, conferencing and dining areas, leisure facilities and back of house areas; residential accommodation (Class C3); with associated basement, energy centre, plant, car parking, cycle parking, refuse stores, servicing areas; associated highway works and creation of new publicly accessible open space with associated hard and soft landscaping“. The scheme included 46 homes.

On 27 September 2018 RBKC resolved to refuse planning permission – as with Newcombe House on townscape, heritage and affordable housing grounds. As with Newcombe House, the Mayor of London intervened and took over the application, on 5 November 2018.

This time however RBKC has issued proceedings for judicial review, seeking to quash the Mayor’s decision to take over the application. From the 7 December 2018 pre-action letter it appears that the grounds are (1) alleged errors of fact as to the number of homes which RBKC has recently delivered and (2) a failure to take into account RBKC’s programme for building new homes (including homes for social rent).

In the meantime it is reported that the Secretary of State has, again as with Newcombe House, issued a holding direction so that he can consider whether to call in the application for his own determination.

Getting messy isn’t it?

Simon Ricketts, 26 January 2018

Personal views, et cetera

The Purley scheme, image from inspector’s report

CIL The Merciless

Failing to serve a CIL notice can have huge consequences, as R (Shropshire Council) v Secretary of State (Mr C M G Ockleton, vice president of the Upper Tribunal, sitting as a High Court judge, 16 January 2019) illustrates.

Mr Jones, a self-builder, secured planning permission for a large new home with triple garage. Good news.

He received a liability notice for CIL assessing the amount of CIL that would be payable on commencement of the development as £36,891.43. Bad news.

He then applied for and secured full relief from CIL, relying on the self-building exemption. Good news.

In order not to lose the benefit of the relief, regulation 54B (6) provides that a “person who is granted an exemption for self-build housing ceases to be eligible for that exemption if a commencement notice is not submitted to the collecting authority before the day the chargeable development is commenced.”

You can see what is going to come next.

There was a section 106 agreement under which Mr Jones was obliged to notify the council when works pursuant to the planning permission were to begin, as the commencement date triggered a contribution of £9,000 under the agreement. Mr Jones sent the council an email with a heading referring to the section 106 agreement, notifying the council that works would commence the next day, which the council acknowledged, under the same heading.

Mr Jones didn’t send a separate commencement notice in the form required by the CIL Regulations.

The worst of news: he then receives a demand notice requiring the full £39,891.43 on the ground that the development had commenced without a commencement notice being sent to the council plus a surcharge of £2,500 for “invalid commencement“.

Mr Jones responded with a letter of horror and apology, saying that he knew about the Regulations and thought that he had given sufficient notice of commencement by his email of 10 July. The relevant Council official replied in sympathetic terms but pointing out that the CIL process is separate from the planning process and is controlled very precisely by national regulations in relation to which the local authority had no discretion.”

Mr Jones, then instructed solicitors and counsel (good money after bad) and after various exchanges his representatives appealed against the demand notice (or rather a replacement demand notice that the council issued, given that the deadline for appealing against the first demand notice had passed).

Good news: The inspector allowed his appeal: the inspector “accepted that “on a literal interpretation of the Regulations” the email did not include particulars required by Form 6 (the form specified for the purpose under reg 67) and failed to identify the LN reference, but that the “oversight” was not fatal to Mr Jones’ case, because the email did refer to the relevant site and planning permission and unambiguously specified the intended date of commencement. In these circumstances, at para 10, he held that “in practice, substance, form and all intent and purposes the email communication has the same effect as Form 6”. He said he was content that “the purpose behind CIL reg 67 has been satisfied in spirit at least” and “the apparent failure to strictly comply with the terms of reg 67(2) should be put aside”. There was in any event no prejudice to the collecting authority because it was aware of the date.”

Alarm bells ring – “satisfied in spirit at least” when you are dealing with the CIL Regulations??

Bad news: the council challenges the appeal decision in the High Court and the Secretary of State consents to judgment, leaving poor Mr Jones to fight on. Potentially £40k+ down and now in High Court litigation, with exposure to paying the council’s legal costs if he loses.

Even worse news: the High Court finds for the council:

First, the email did not amount to a valid commencement notice because it did not comply with the requirements of regulation 67 (2, which requires that it must:

(a) be submitted in writing on a form published by the Secretary of State (or a form to substantially the same effect);

(b) identify the liability notice issued in respect of the chargeable development;

(c) state the intended commencement date of the chargeable development; and

(d) include the other particulars specified or referred to in the form.”

Secondly, the case law does “not justify a process of simply looking to see the apparent purpose of the regulations and treating any act fulfilling that purpose as sufficient to comply with them. The Regulations make perfectly clear that the consequence of failure to comply is loss of the exemption; and failure to comply means failure to submit a notice under reg 67.

Finally the judge rejected the submission by Saira Sheikh QC “that in the circumstances of the present case the court should in its discretion refuse to grant relief to the Council. The requirements and the forms for fulfilling them are readily available, were made available to Mr Jones, and he accepted that he knew a commencement notice needed to be given. Only when the consequences of his failure were brought home to him in a substantial charge did Mr Jones claim that an email sent to the Council on an entirely different topic was his attempt to comply with the detailed requirements of which he was aware. There is no trace of any waiver or attempted waiver by the Council, and I do not see that Mr Jones could properly have interpreted the reply to his email in relation to s 106 as a waiver of the obligation to submit a commencement notice if he wished to maintain his self-build exemption. The argument based on the Inspector’s view that the Council should have told him (again) that he needed to submit a commencement notice is without merit: the Inspector was simply wrong about that. No system of administration could survive a duty imposed on a recipient of an email on one subject to remind its sender of all other notices on different subjects that he might want to send. The fact that the penalties are discretionary does not mean that the imposition of CIL itself is discretionary: it is not. The Council seems to have behaved as sympathetically as they could, imposing a minimum interest charge; and maintaining the imposition of the surcharge, in the absence of which Mr Jones would have no right of appeal. His difficulties have been caud maintaining the imposition of the surcharge, in the absence of which Mr Jones would have no right of appeal. His difficulties have been caused entirely by his own acts and I see no good reason to relieve him from the consequences at the expense of the ratepayers of Shropshire.

What an unforgiving process this is. As commented by solicitor David Brock in a tweet when Town Legal circulated this case yesterday:

The complications and traps of the CIL Regulations and self-builders are not really compatible. Which is odd given that Government encourages self- and custom-house building

Of course, the Government will say that it already has proposals in hand to deal with injustices such as this, in its consultation document Reforming developer contributions: Technical consultation on draft regulations. In Mr Jones’ situation there would now be (once the draft regulations are finalised and in force) “a surcharge equal to 20 per cent of the notional chargeable amount or £2,500, whichever is the lower amount.”

Clearly, the proposals will assist but cases such as that of Mr Jones illustrate both the absurdly rigid nature of the system but also the curious approach of charging authorities, on the one hand sympathetic, but on the other hand going out of the way to take court proceedings to overturn an inspector’s decision that might be said to have arrived at a morally right outcome by the wrong legal reasoning (which would admittedly have created a terrible precedent). And as for that sentence in the judgment…

“His difficulties have been caused entirely by his own acts and I see no good reason to relieve him from the consequences at the expense of the ratepayers of Shropshire“.

First of all, whilst mercy is not possible under the regulations and it is difficult to see how the legal answer could have been any different, surely a little sympathy expressed for Mr Jones might have been appropriate and secondly, this betrays some degree of misunderstanding as to the modern system of local government finance and I wonder how much money from CIL receipts Shropshire Council already has sitting in its accounts, to which it now adds this windfall?

Simon Ricketts, 19 January 2019

Personal views, et cetera

PS Good news last week: obviously subscribe to Tom Dobson’s new blog, Man Plans God Laughs, last week’s piece being on that consultation document. (NB pic below is of Charles Middleton as Ming the Merciless – who would obviously have enjoyed CIL – rather than of Tom, where the relationship is more nuanced).

Section 106 Agreements & Public Procurement

Faraday v West Berkshire Council (Court of Appeal, 14 November 2018) is essential reading for those advising on development agreements between local authorities and developers: the fact that the developer has the benefit of an option as to whether to take an interest in the relevant land and carry out the development does not prevent the agreement from being treated as a public works contract. Quite a reversal from Holgate J at first instance.

For planners and planning lawyers advising on section 106 agreements, the case is more reassuring than for those struggling with development agreements. The Court of Appeal considered that the position in relation to development agreements was to be distinguished with that in relation to section 106 agreement. It expressed the position more firmly than the High Court had previously needed to in Midlands Co-Operative Society Ltd, R (on the application of) v Birmingham City Council and Tesco Stores Limited (Hickinbottom J, 16 March 2012).

The Midlands Co-Operative case concerned a deal reached between Birmingham City Council and Tesco for the redevelopment of land in Stirchley owned by the council on which there was an indoor bowls and community centre. Part of the arrangements between the council and Tesco included a section 106 agreement to provide and fit-out a replacement community centre and indoor bowls facility. The decisions to enter into a contract to sell the site and to use CPO powers to assist with assembly of the remainder of the development site were challenged by a competing developer, the Co-op, which asserted that the arrangements amounted to a public works contract and that that public procurement requirements had been breached.

Hickinbottom J rejected the challenge, on the basis that whilst the council had exchanged contracts to sell the land to Tesco there was no legally enforceable obligation on Tesco to carry out the works unless it chose to proceed. Whether it proceeded with the scheme was at its discretion.

For those reasons, I do not consider that Tesco is now under any legally enforceable obligation to perform any relevant works that mean that the arrangements between it and the Council or any of them (including the contract for the sale of the Community Facility) fall within the scope of “public works contract” for the purposes of the 2006 Regulations; and, hence, the procurement provisions of those Regulations do not apply.

If there had been legally enforceable obligations to perform works, at least the three further potential issues would have arisen, namely (i) whether those obligations were mere planning obligations that would not invoke the provisions of the 2006 Regulations, (ii) whether the 2006 Regulations would not apply, because the main purpose of the arrangement was not the procurement of works, and (iii) whether the 2006 Regulations only give rise to private rights, such that a public law claim based upon them is inappropriate. In the light of my finding that the arrangement involved no legally enforceable obligation to perform works, those issues do not arise in this case; and it is unnecessary for me to consider them further.”

The Court of Appeal in Faraday rejected the notion that if the developer is not under a legally enforceable obligation there cannot be a public works contract. In the lead judgment, Lindblom LJ set out the court’s reasoning as follows:

The touchstone, then, is whether, in substance, the agreement in question, at the date it is concluded, provides for a relevant procurement.

In this case, judged by that test, the development agreement clearly did provide, at the date it was entered into, for a procurement by the council of the development it was intended to deliver. At that date, no further act of procurement by the council remained to be done, for which a lawful public procurement procedure could later be conducted. The time for that had passed. When it entered into the development agreement, the council had nothing more to do to ensure that a “public works contract” would come into being. It had, in fact, done all that it needed to do to procure. It had committed itself contractually, without any further steps being required of it, to a transaction that will fully satisfy the requirements of a “public works contract”. It had committed itself to procuring the development from St Modwen. The development agreement constitutes a procurement in its result, and a procurement without a lawful procurement procedure under the 2004 Directive and the 2006 regulations. The procurement crystallizes when St Modwen draws down the land. The ground lease entered into by St Modwen will contain an unqualified obligation to carry out works, and a corresponding obligation will also be brought into effect in the development agreement itself. The development agreement made that commitment on the part of the council final and provided also for a reciprocal commitment on the part of St Modwen. It did so without a public procurement process, and without affording any opportunity for such a process to be gone through before the “public works contract” materializes. At that stage it would be too late. Thus a “public works contract” will have come into being without a lawful procurement process. The regulation of the council’s actions in procuring the development will have been frustrated.

By entering into the development agreement, therefore, the council effectively agreed to act unlawfully in the future. In effect, it committed itself to acting in breach of the legislative regime for procurement. As Mr Giffin submitted, that is in itself unlawful, whether as an actual or anticipatory breach of the requirements for lawful procurement under the 2004 Directive and the 2006 regulations, or simply as public law illegality, or both. The only other possibility would be that a contracting authority is at liberty to construct a sequence of arrangements in a transaction such as this, whose combined effect is to constitute a “public works contract”, without ever having to follow a public procurement procedure. That would defeat the operation of the legislative regime.”

Whilst it was not necessary to deal with the point for the determination of this case, Lindblom LJ was careful not to suggest that this meant that the section 106 agreement in the Midlands Co-Operative case would on his reasoning have amounted to a public works contract:

The section 106 planning obligation was […] a very different kind of agreement. It had a distinct status and role in the statutory planning scheme. Its purpose was to regulate the development of land for which the local planning authority was granting planning permission. By its terms the developer, and its successors in title, would not be able lawfully to proceed with the development for which planning permission was granted, and in particular would not be able to demolish the existing community facilities on the development site, until it had constructed replacement facilities. The section 106 agreement did not oblige the developer to proceed with the development. But in any case it was not the kind of transaction that is governed by the public procurement regime. By its very nature, it was not a “public works contract”. Its essential object – and its necessary justification in the interests of the proper planning of the local planning authority’s area – was to ensure that the community facilities would be replaced if the planning permission were implemented. Otherwise, the proposed development itself would not have been acceptable, and planning permission should not have been granted for it. As Hickinbottom J. said (in paragraph 116 of his judgment), “the council’s primary objective was of a planning nature – to develop the Site – rather than having performed the works involved in replacing the community facility”. In this case, by contrast, when it entered into the development agreement, the council was not exercising any of the functions of a local planning authority under the statutory planning scheme. It was entering into a contract whose essential object was the execution of the works for which it provided. It therefore fell within the scope of the public procurement regime.”

That is an important paragraph, because if obligations on developers in section 106 agreements to carry out works were to trigger public procurement requirements, the whole practice of using planning obligations to achieve acceptable development would rapidly have come to a halt. Instead, we have clarity that there is not a problem.

Good news. And also good news that as a planning lawyer I may not now need to focus so much on the Public Procurement (Amendment etc.) (EU Exit) Regulations 2019 – laid before Parliament on 13 December 2018 and prepared with the objective of continuing the current public procurement regime post Brexit.

Simon Ricketts, 12 January 2019

Personal views, et cetera

PS Some chat about the lawyers involved in these cases:

Leading counsel for the unsuccessful claimant in Midlands Co-Operative was David Holgate QC, as he was back in 2012 – and the position as a judge he later took at first instance in Faraday was very much in line with the approach that Hickinbottom J had taken in Midlands Co-Operative in the face of Holgate’s submissions – no legally binding obligation on the part of the developer, therefore no public works contract.

Junior counsel for the city council in Midlands Co-Operative was a very young Charlie Banner, who deservedly becomes Charles Banner QC on 11 March 2019. He was led in Midlands Co-Operative by David Elvin QC, whilst in Faraday Banner would appear for the claimant (and at first instance was given some of the treatment from Holgate that in Midlands Co-Operative Holgate had himself received from Hickinbottom) (with Elvin appearing on the other side for the defendant council).

Photograph via Sothebys

Street Trees

DEFRA published its Protecting and enhancing England’s trees and woodlands consultation paper on 30 December 2018, with a deadline of 28 February 2019 for responses. The proposals include imposing new statutory duties on local authorities:

⁃ “a duty to consult on the felling of street trees

⁃ “a duty to report on tree felling and planting”

Presumably these are intended to be included in the forthcoming Environment Bill and they could justifiably be known as “Sheffield’s Law”. After all they of course have their roots in the peculiar saga there, where the city council and its PFI contractor Amey have been engaged in systematic felling of roadside trees at an unprecedented scale.

I reported in my 17 December 2016 Trees In Court: A Festive Special blog post on the the late Gilbart J’s rejection, in R (Dillner) v Sheffield City Council  (27 April 2016) of a local resident’s challenge to that process. The judge commented: “It may be that those who will be disappointed by the terms of this Judgment will want to see a different legislative regime in place. That is a matter for Parliament, and not for this Court.

The continued felling led to significant protests, with arrests, curiously, made under section section 241 of the Trade Union and Labour Relations Act 1992. (The Independent Office for Police Conduct subsequently found in August 2018 that the arrests and detention were inappropriate and in December 2018 compensation payments were awarded).

The commitment in the Conservative Party’s manifesto in May 2017 surely specifically had the Sheffield situation in mind:

In addition to the 11 million trees we are planting across our nation, we will ensure that 1 million more are planted in our towns and cities, and place new duties on councils to consult when they wish to cut down street trees.” (my emboldening).

On the back of the Gilbart J ruling, an injunction in relation to continuing protests was ordered by Males J in Sheffield City Council v Fairhall and others (15 August 2017) in the following terms:

“Accordingly I order that the three remaining named defendants must not:

1.
(1) enter any safety zone erected around any tree within the area shown edged red on the plan which will be attached to the order (the area of Sheffield City);
(2) seek to prevent the erection of any safety zone;
(3) remain in any safety zone after it is erected;
(4) knowingly leave any vehicle in any safety zone or intentionally place a vehicle in a position so as to prevent the erection of a safety zone; or
(5) encourage, aid, counsel, direct or facilitate anybody else to do any of the matters in paragraphs 1 – 4 above including by posting social media messages.

2. There will in addition be an order in the same terms against persons unknown being persons intending to enter or remain in safety zones erected on public highways in the city of Sheffield. Such an order is appropriate in accordance with the principle established in Hampshire Waste Services Ltd v Intending Trespassers upon Chineham Incinerator Site [2003] EWHC 1738 (Ch).”

Like Gilbart J, Males J distanced himself from the wider issues:

“I must emphasise that this judgment deals solely with the legal question whether the council is entitled to an injunction. That will include consideration of whether as a matter of law the council is entitled to exclude members of the public from safety zones around trees so that those trees can be felled and whether or to what extent those who object to this course are entitled to maintain a presence within safety zones in order to prevent the work from being carried out. However, I express no view, one way or the other, as to the merits of the council’s tree felling programme or the objectors’ campaign. Those are social and environmental questions which are politically controversial and can only be resolved in a political forum. They are not a matter for this court

Following the June 2017 general election, Michael Gove had of course been brought back into the Cabinet as Secretary of State for Environment, Food and Rural Affairs. In March 2018 he was reported by the BBC as having “accused Sheffield City Council of “environmental vandalism” and promised to do “anything required” to end its controversial tree-felling programme.

Felling paused the day after, although the city council renewed its injunction in July 2018, by way of a High Court ruling (His Honour Judge Robinson, 12 July 2018)

The Yorkshire Post reported on 13 December 2018 that the city council now announced a revised tree management strategy, reducing significantly the amount of felling proposed.

So back to the DEFRA consultation proposals.

Street trees‘ are defined as “managed trees lining the highway within the urban environment“. The duty to consult would not apply to other urban trees such as parks or open spaces.

The idea is that the “local authority” (presumably the local highway authority, although this is not made clear – eg presumably TfL in London in relation to the TfL network?) would consult “on every tree proposed for felling during a four week closed consultation period. A notice inviting consultation to be placed on the tree, letters sent to local residents in close proximity to the tree (100m2). If more than 50% of respondents in the closed consultation disagree with the proposal this will trigger a full public consultation.” Full consultation appears to mean “a notice published in the town hall and online“.

Is this workable? Assuming that there would often need to be a full consultation process, how long would this all take, bearing in mind that the consultation responses would then need to be conscientiously considered by the authority, presumably at a relevant committee meeting held in public with officer’s report and so on, before a legally robust decision could be taken?

There would be exemptions, the scope of which could well lead to dispute:

“1. Dangerous: Tree needs to be felled because it presents an immediate danger and work is urgently needed to remove that danger. Trees that immediately affect the operational use of the footway by people – forcing them to use the carriageway – are considered dangerous for the purposes of this policy.

2. Responding to a pest or disease instance:Removal of a tree is a critical partof the implementation of a management or control programme, following notification by regulatory authority in response to a pest or disease instance.

3. Dead.

4. Damaging:Tree needs to be felled because it is causing significant damage to
the apparatus of a statutory undertaker (such as gas, electricity or water) where urgent access is required for repair; or tree needs to be felled because it can be demonstrated that it is causing significant damage and threatens the integrity of a footpath or carriageway to such an extent that it presents an imminent danger.

5. Young Trees Damaged/Failed:Young trees (up to fifteen years old) which will be replaced within two years. The position of the tree has already been established. Consultation could lead to discussion that undermines that decision when replacement is essentially a maintenance management activity

There is a further complication:

“Trees designated as having special historic or cultural significance would automatically be subject to wider public consultation. To meet this definition trees would have to meet one of the following criteria. The tree may be:

• culturally, historically, ecologically significant – such as veteran trees

• linked to a person or event that is culturally or historically significant
For trees that meet this criteria an extraordinary measure/action or level of resource can be taken or dedicated to its preservation. The local authority may initially be unaware of this significance so a full consultation where significance is suspected or raised as an issue is essential
.”

So yet again we are faced with quite a complex, or at least fiddly and fine grained, regime to deliver on a superficially nice idea – and to what end? If Sheffield City Council had followed these procedures the outcomes could well have been the same.

I also find it strange that there is no mention in the document of the town and country planning regime, for example the role of tree preservation orders and the protection provided to trees in conservation areas. Would not amendments to the planning regime not have been more logical?

The separate proposed duty to report on tree felling and replanting raises a further issue. The document is silent about the intended frequency of reporting but let’s assume it is to be annual. This reporting will not just cover street trees but will be much wider:

Local authorities would be required to record on felling and planting activity for which they are both directly and indirectly responsible, including trees which are felled as part of planning decisions.”

So could we see “local authorities” (by which I assume is meant local highway authorities) have to collect data as to how many trees are to be felled as a result of planning decisions by the local planning authority (that are not even on highway land), or will this only apply to unitary authorities? More thinking required!

I have managed to avoid mention of the separate, much more complex, set of proposals within DEFRA’s other current consultation, on biodiversity net gain (2 December 2018). That also has some major potential implications – these days planners’ eyes need to be on DEFRA as much as MHCLG it seems to me.

Simon Ricketts, 5 January 2019

Personal views, et cetera

Photo courtesy of the Woodland Trust