England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
(Mr Justice Lawrence Collins)

		Royal Courts of Justice Strand, London, WC2A 2LL
		19 February 2003

Lord Justice Jonathan Parker :

INTRODUCTION

1. This is an appeal by the London Borough of Wandsworth ("Wandsworth") against an order made by Lawrence Collins J, sitting in the Queens Bench Division (Administrative Court), on 11 July 2002, dismissing its application for an order under section 288 of the Town and Country Planning Act 1990 ("the 1990 Act") quashing a decision of the Secretary of State for Transport, Local Government and the Regions ("the Secretary of State") recorded in a decision letter dated 12 December 2001.
2. By his decision, the Secretary of State granted planning permission to Tesco Stores Limited ("Tesco") to develop the site of the former South London Hospital for Women on Balham Hill, in South London, for mixed development including a food store. The decision related to two linked applications by Tesco which had been called in by the Secretary of State under section 77 of the 1990 Act. In granting planning permission, the Secretary of State did not follow the recommendations of his Inspector, who, following a lengthy public inquiry, had recommended that planning permission be refused. Tesco is joined in the proceedings as an interested party and opposes the appeal.
3. Section 288 of the 1990 Act provides (so far as material) that any person aggrieved by a decision by the Secretary of State on an application which has been called in under section 77, and who wishes to challenge the validity of the decision, may apply to the High Court for an order quashing the decision.
4. The primary issue before the judge, and before us on this appeal, is whether (as Wandsworth contends) in reaching his decision the Secretary of State misinterpreted Government guidance on relevant policy issues in a material respect, with the consequence that his decision must be quashed and the planning applications remitted to him for reconsideration. Associated with that issue is what I may call a 'reasons' challenge by Wandsworth, directed to the same aspect of the Secretary of State's decision.
5. Permission to appeal was granted by Laws LJ at an oral hearing.

THE FACTUAL BACKGROUND

6. The factual background to the matter is set out in section I of the judge's judgment, which I quote in its entirety:

"1. This application concerns the proposed development of the former South London Hospital for Women, Balham Hill. It was built in the late 1920s and designed by Sir Edwin Cooper. It is close by Clapham South Underground station and Clapham Common. It was closed in 1984. In 1994 Tesco Stores Ltd ("Tesco") purchased the site, and submitted a scheme for mixed development in 1995, which was refused by Lambeth Borough Council in 1997. An appeal was dismissed in 1998 on the ground that the scheme would fail to enhance the character or appearance of the conservation area in which the site lies, Clapham Conservation Area No. 1.

2. In 1999 Lambeth Borough Council resolved to grant planning permission in the light of a revised application which preserved the façade of the hospital. The applications were called in, and an inquiry was held in April 2000. The Inspector appointed by the Secretary of State to hold the inquiry recommended that both applications for planning permission be refused in a report of February 7, 2001. The Secretary of State for Transport, Local Government and the Regions did not agree with the recommendations of the Inspector and by letter dated December [12], 2001 ("the Decision Letter") the Secretary of State granted planning permission to Tesco for a food store and 104 flats.

3. In this application made under section 288 of the Town and Country Planning Act 1990 ("the 1990 Act") the claimant, Wandsworth London Borough Council "Wandsworth"), which opposed the applications for planning permission, seeks to quash the decision of the Secretary of State. The boundary between Lambeth and Wandsworth is very close to the site.

4. The existing shops and other facilities at Balham Hill are partly within the London Borough of Lambeth and partly in Wandsworth. The whole of the site, save for 16 Cavendish Parade, is within the Clapham Conservation Area No.1. Wandsworth objected to the two applications. The area around the site includes a mix of residential, shopping and service uses. There are parades of shops to both the north and south of the site. Opposite the site is the Clapham South Underground station, which has shop units within it. There are some further shop units in 1-8 Westbury Parade, which adjoins the station. Clapham High Street and Balham town centres are approximately 1 km to the north and south, respectively. In total, there are 78 businesses, including some 50 retail units.

5. The shopping units which lie within Lambeth (1-11 and 17-23 Balham Hill) are identified in the Lambeth Unitary Development Plan as a "Neighbourhood Centre." Those in the adjoining London Borough of Wandsworth (25-41 and 43-65 Balham Hill; 1-8 Westbury Parade and the units in the Tube Station) are identified in the Deposit Draft of the Revised Wandsworth Unitary Development Plan as "Important Local Parades." "

THE RELEVANT GOVERNMENT GUIDANCE ON POLICY ISSUES

7. The relevant guidance is to be found in two policy documents – viz. Planning Policy Guidance Note 6 (as revised in June 1996) relating to Town Centre and Retail Developments ("PPG6") and a document called RPG3 (Strategic Guidance for London Planning Authorities) ("RPG3") – when read in conjunction with a Parliamentary answer ("the Caborn statement") given by the Planning Minister, Mr Richard Caborn, on 11 February 1999 with the stated intention of clarifying Government policy on (among other things) retail development.

PPG6

8. The 1996 revision of PPG6 was undertaken at the request of the House of Commons' Environment Select Committee which, in 1994, endorsed the existing policy but asked for it to be made clearer and stronger.
9. Paragraph 1.1 section 1 of PPG6, under the general heading "Objectives and Approach", sets out the Government's policy objectives, including the following:

" – to sustain and enhance the vitality of town centres;

– to focus development, especially retail development, in locations where the proximity of businesses facilitates competition from which all consumers are able to benefit and maximises the opportunity to use means of transport other than the car; ...."

10. Paragraph 1.5 of PPG6, under the heading "The plan-led approach" is in the following terms:

"Structure plans and UDP Part 1's, following consultation with business interests and the local community, should set out the hierarchy of centres and the strategy for the location of employment, shopping, leisure and entertainment, hospitals, higher education and other uses which generate many trips and should be well served by public transport. In particular, the development plan should indicate a range and hierarchy of centres, from city centre, through town centre, district centre to local centres and village centres, where investment in new retail and other development will be promoted and existing provision enhanced. Local planning authorities should, in indicating a hierarchy of centres, recognise that the role, function and relative importance of centres will change over time."

11. Under the heading "Preferred locations: the sequential approach" PPG6 states as follows:

"1.10 In drawing up their development plans, local planning authorities should, after considering the need for new development, adopt a sequential approach to selecting sites for new retail development. Both local planning authorities and developers selecting sites for development should be able to demonstrate that all potential town centre options have been thoroughly assessed before less central sites are considered for development for key town centre uses. If, however, there is no need or capacity for further developments, there will be no need to identify additional sites in the town.

1.11 Adopting a sequential approach means that first preference should be for town centre sites, where suitable sites or buildings suitable for conversion are available, followed by edge-of-centre sites, district and local centres and only then out-of-centre sites in locations that are accessible by a choice of means of transport.

1.12 The Government recognises that the approach requires flexibility and realism from local planning authorities, developers and retailers. Developers and retailers will need to be more flexible about the format, design and scale of the development, and the amount of car parking, tailoring these to fit the local circumstances. Local planning authorities should be sensitive to the needs of retailers and other town centre businesses and identify, in consultation with the private sector, sites that are suitable, viable for the proposed use and likely to become available within a reasonable period of time.

1.13 Not all centres, particularly small and historic towns, will have sites that are suitable in terms of size, parking, traffic generation or servicing arrangements for large-scale developments in the town centre itself. In such centres, developments should be of a scale appropriate to the size of the centre. There may also be sites in town centres which are currently subject to constraints, such as multiple ownership. Where they are identified as potential sites, local planning authorities should indicate how these constraints could be resolved.

1.14 As sites may become available after the local plan has been adopted, local planning authorities should include criteria-based policies in line with this PPG in their plan.

1.15 This approach should also apply to all key town centre uses which attract a lot of people, including commercial and public offices, entertainment, leisure, and other such uses. These should be encouraged to locate in city, town and district centres. Smaller-scale facilities, such as health centres, branch libraries, local offices of the local authority, primary schools, pubs and restaurants, should be encouraged in local centres."

12. Section 2 of PPG6 is headed "Town Centres". The opening paragraphs are in the following terms:

"In this guidance, the term "town centre" is used generally to cover city, town and suburban district centres, which provide a broad range of facilities and services, and act as a focus for both the community and for public transport. It excludes small parades of shops of purely local significance. The size of centre will influence the range of activities and its function. The scale of development possible and the opportunities available will differ from place to place. The guidance will need to be interpreted according to the different circumstances of each place. In London and other large cities, outside the central area, the principal shopping centres usually perform the role of town centres and these are usually complemented by district centres."

13. The "Glossary of Terms" in Annex A to PPG6, under the heading "Types of Centre", includes the following:

"Types of centre

Local centre – small grouping usually comprising a newsagent, a general grocery store, a sub-post office, and occasionally a pharmacy, a hairdresser and other small shops of a local nature;

District shopping centres – Groups of shops, separate from the town centre, usually containing at least one food supermarket or superstore, and non-retail services such as banks, building societies and restaurants;

Town Centre : in this guidance, the terms "town centre" is used generally to cover city, town and traditional suburban centres, which provide a broad range of facilities and services and which fulfil a function as a focus for both the community and for public transport. It excludes small parades of shops of purely local significance. The policy guidance for this PPG should be interpreted in a way that relates reasonably to the particular size of the town centre concerned. In London and other large cities, outside the central area; the principal shopping centres usually perform the role of town centre and these are usually complemented by district centres (see above).

Regional shopping centres – Out-of-town centres generally over 50,000 square metres gross retail area, typically enclosing a wide range of comparison goods.

Types of location

Edge-of-centre; for shopping purposes, a location within easy walking distance (i.e. 200 – 300 metres) of the primary shopping area, often providing parking facilities that serve the centre as well as the store, thus enabling one trip to serve several purposes. For other uses, such as offices or leisure, edge-of-centre may be more extensive, based on how far people would be prepared to walk. For offices, this is likely to be in the region of 500 metres of the station or other public transport interchange.

Out-of-Centre; a location that is clearly separate from a town centre, but not necessarily outside the urban area."

RPG3

14. The aim of RPG3, as I understand it, is to clarify how the guidance in PPG6 is to be interpreted and followed in relation to London. Paragraphs 5.1 to 5.3 in section 5 of RPG3, which is headed "Town Centres and Retailing", are in the following terms:

"Town centres

5.1. Town centres within London provide a sense of place and identity and a focus for a variety of activities including shopping, local services, leisure and entertainment, other commercial activities and housing. London has a dense pattern of town centres usually well served by public transport. These existing town centres will therefore continue to be the main focus for the provision of shopping and community facilities in London. In general, Government policy for town centres is to :

sustain and enhance the vitality and viability of town centres, and to focus retail development in locations where the proximity of competing businesses facilitates competition from which all consumers should be able to benefit

ensure the availability of a wide range of shops, services and facilities to which people have easy access

maintain an efficient and innovative retail sector

maximise the opportunity for shoppers and other town centre users to use means of transport other than the car.

5.2. Guidance on the national approach to planning for town centres and retailing is given in PPG6. This is applicable to London, but needs to be applied with care as London has many centres performing different functions. PPG6 sets out a sequential approach for preferred locations. The first preference should be for sites in established town centres, but if suitable sites are not available or cannot be made available, edge of centre sites should be considered. Such sites should be used to reinforce the centre and enhance its accessibility by public transport but, in certain locations, may have a role in urban regeneration. Out of centre developments are only likely to be acceptable:

where existing centres are incapable of providing good retailing opportunities

where the scale, type and location of such developments would not undermine the vitality and viability of those existing centres

in locations that can be well served by public transport (either existing or proposed).

5.3. Town centres have a range of functions as illustrated in table 5.1. In London, each centre provides a unique blend of functions and strengths and not all centres have the same characteristics and opportunities. In PPG6, development plans have been given the role of setting out the range and hierarchy of centres in order to focus new retail and other development. The Secretary of State considers that this cannot be satisfactorily undertaken by London UDPs by Boroughs in isolation. He therefore looks to LPAC [the London Planning Advisory Committee], and the Boroughs jointly to provide the framework which should be reflected in the strategic policies of the UDP. LPAC has indicated a hierarchy or 'network' of centres and the Secretary of State commends the description of centres set out in Tables 5.1 and 5.2 (derived from LPAC and GOL [Government Office for London] research) as a basis for considering the future of centres and drafting appropriate policies and proposals in UDPs".

15. Table 5.2, referred to in the passage just quoted, is headed "Types of London town centres". I set out its contents in full.

"Table 5.2. Types of London town centres

International Centres are major concentrations of wide ranging specialist or comparison shopping in competition with equivalent centres in other countries and containing shops and facilities with a significant international appeal in terms of customer profile

Metropolitan Centres are presently characterised as outstanding shopping centres in outer parts of London with wide catchment areas covering several Boroughs and authorities outside London. They typically have more than 100,000m² of total retail floorspace and 60,000m² of comparison shopping floorspace. They offer a high level and range of comparison shopping including multiple retailers and several department stores. They also have a significant range of employment and service functions and most have developed complementary activities which draw in people outside shopping hours

Regional Shopping Centres are major concentrations in excess of 50,000m² of high quality wide ranging specialist or comparison shopping, generating a substantial proportion of turnover from an area covering several Boroughs and areas outside London

Major Centres are typically closer together than those in the metropolitan category, and are characteristic of Inner London. Their attractiveness for retail has depended on maintaining a mix of both comparison and convenience shopping. They usually have at least 50,000m² of retail floorspace. Some centres have developed specialist roles in addition to their general retailing functions. With sizeable local catchment areas, many of these centres have established cultural and entertainment facilities

District Centres have traditionally provided convenience goods and services for local customers. They typically range in size from 10,000 to 50,000m² . Comparison shopping floorspace rarely exceeds 50% of the total. Their basic attraction is that they are easy and pleasant for local people to use. Some have attracted individual specialist shops or functions such as restaurants

Neighbourhood or Local Centres have traditionally provided local services for local customers."

The Caborn statement

16. The Caborn statement was directed to (among other things) the circumstances in which planning authorities, when considering planning applications for retail and leisure development, should take into account the need for such development.
17. The transcript of the material part of the Caborn statement reads as follows:

"Our policy on town centres, including retail and leisure development, is set out Planning Policy Guide Note 6: Town Centres and Retail Development (PPG6). This aims to sustain and enhance the vitality and viability of our existing town centres by focusing new investment, particularly for retail and leisure uses within city, town and district centres. This statement is intended to add to and clarify the guidance in PPG6 in the light of a number of issues raised in recent litigation which concern the interpretation of PPG6 and Government policy.

PPG6 advises local planning authorities to adopt a positive, plan-led approach to handling planning applications involving new retail and leisure developments. It advises them, in preparing planning strategies and policies, to consider the need for new retail and leisure development in the plan area over the lifetime of the plan. Having established that such need exists, local planning authorities should then adopt a sequential approach (as explained in PPG6) to identify suitable sites. If there is no need for further developments, there will be no requirement to identify additional sites.

Proposals for new retail and leisure development which accord with a up-to-date plan strategy or are proposed on sites within an existing centre, should not be required to demonstrate that they satisfy the test of need because this should have been taken into account in the development plan.

However, proposals which would be located at an edge-of-centre or out-of-centre location and which:

- are not in accordance with an up-to-date development plan strategy; or

- are in accordance with the development plan but that plan is out of date, is inconsistent with national planning policy guidance, or otherwise fails to establish adequately the need for new retail and leisure development and other development to which PPG6 applies,

should be required to demonstrate both the need for additional facilities and that the sequential approach has been applied in selecting the location or the site."

THE INSPECTOR'S REPORT

18. Section 1 of the Report deals with procedural matters. Section 2 sets out the factual background and planning history. In section 3 the Inspector sets out the case for Tesco (the applicant before the Inspector). In paragraph 3.37, under the heading "Retail need", the Inspector records Tesco's case in relation to the requirement (under PPG6) to show need, as follows:

"PPG6 advises that local centres for the purposes of the guidance also constitute town centres and this is confirmed by RPG3 which should be read in conjunction with PPG6 when relating the guidance to London. From Mr Caborn's February 1999 statement in clarification of PPG6, since the proposed site is within a centre, there is no requirement to demonstrate that the test of need is satisfied (Doc 49). This is especially the case since, as shown by the previous Inspector's policy analysis, the proposals are in accordance with an up to date development plan strategy. Nevertheless, the test of need is met."

19. In section 4 of his Report the Inspector sets out Lambeth's case (in favour of granting planning permission). In paragraphs 4.14 and 4.15 the Inspector sets out Lambeth's case in relation to the "need" requirement, as follows:

"4.14 If it were concluded that Balham Hill centre comprises a "small parade of shops of purely local significance" then, having regard to PPG6 and Mr Caborn's clarification, the proposal would have to be assessed as relating to an out of centre location and there would be a requirement to show need for retail development and to apply a sequential approach. If it were concluded that the centre provides a "broad range of facilities and services and fulfils a function as a focus for both the community and for public transport" then from the PPG6 Annex A definition, the proposal would be for a town centre location and there would be no requirement to show need or to adopt a sequential approach.

4.15 Considered as a whole, this is not the case in either Lambeth of Wandsworth UDP's, Balham Hill centre comprises a range of some 78 individual businesses including about 50 shops occupying a gross area of some 5,500 sq m and complies with the PPG6 Annex A definition (Docs 85, 97, 88, 115). It is therefore a town centre in PPG6 and RPG3 strategic policy terms and the need and sequential approach requirements do not apply."

20. In section 5 of his Report the Inspector sets out Wandsworth's case. Paragraphs 5.6 and 5.7 of the Report, under the heading "The Status of Balham Hill Centre", read as follows:

"5.6 The argument that Balham Hill comprises a town centre for the purposes of PPG6, RPG3 and the Caborn statement is not credible. Balham Hill serves local day-to-day needs and is not in any sense a focus for the community. RPG3 does list neighbourhood and local centres in Table 5.2 as a type of London town centre but the preceding paragraphs explain that the descriptions in Tables 5.1 and 5.2 are commended as a basis for considering the future of centres and drafting appropriate policies and proposals in UDPs. They do not appear to be a basis upon which to make development control decisions.

5.7 The central aim of Government policy for shopping is to ensure that the vitality and viability of town centres is sustained and where possible enhanced. The Caborn statement adds to and reinforces this key objective. Balham Hill is not what any reasonable person would call a town centre, even when one considers the Lambeth and Wandsworth sides together. In their land use survey (Docs 87, 88) LB Lambeth tried to show a centre that could possibly accord with RPG3 advice but this involved selecting an area which practically met Balham itself. Balham Hill is, as the last Inspector described it, "a parade of small shops serving very local needs" and is similar to many such collections of shops which have grown up around minor tube stations outside central London."

21. The Inspector records Wandsworth's contentions in relation to the Caborn statement and the "need" requirement in paragraphs 5.10 to 5.12 of the Report, as follows:

"5.10 Mr Caborn's February 1999 statement adds to PPG6 (Doc 104). It does not change the terminology in Annex A or in the box at the head of Section 2. The first paragraph of the statement makes it clear that the town centres that PPG6 seeks to sustain and enhance are "city, town and district centres". The reference in the third paragraph to "existing centre" must clearly have the same meaning and it would be unreasonable to interpret these latter words as including "local centre". This is demonstrated in the Brent Cross decision where the Inspector found that even though Brent Cross was a shopping "centre" it was not an existing centre for the purposes of the Caborn statement and was in fact an "out-of-centre" location and so the provisions of the fourth paragraph of the Caborn statement applied (Doc 83). The only reference in the statement to local centres is in the seventh paragraph, which is concerned with application of the sequential approach and is not relevant to the requirements in respect of "need".

5.11 The other part of the third paragraph of the statement exempts new retail development from showing need if it accords with an up-to-date plan strategy which has taken the need for such development into account. Lambeth UDP Policy S5 seeks to direct developments over 2500 sq m to Major and District centres (not Neighbourhood centres), and a retail objective is to make provision for new retail development within the existing shopping hierarchy (Doc 84). The proposal contravenes the policy and objective. Also, in retail terms, the UDP is not up-to-date; so that, even if it were decided that the proposals were in accordance with the plan, the Section 54A presumption would not apply.

5.12 The fourth paragraph of Mr Caborn's statement indicates that even if the proposal is in accordance with the plan but the plan is out of date, inconsistent with national planning policy guidance or fails to establish adequately the need for new retail development then "need" must be shown and the sequential test applied. The proposals do not have express development plan backing. The UDP makes no reference to an assessment of need having been done, nor to the fact that national guidance requires need to be assessed before development plans are drawn up. Lambeth UDP has not adequately established the need for new retail development and does not require a sequential test to be satisfied. It follows that need for this retail development has to be shown and the sequential test applied."

22. Section 6 of the Report sets out the cases for a number of interested persons who appeared before the inquiry, and section 7 deals with written representations which the Inspector had received from various quarters. I need not refer to those sections in the Report.
23. Section 8 of the Report contains the Inspector's conclusions. Under the heading "Status of Balham Hill in the Retail Hierarchy", the Inspector says this (in paragraphs 8.17 to 8.22):

"8.17 The existing shops and other facilities in Balham Hill lie partly within LB of Lambeth and partly in LB Wandsworth [2.4, 2.9]. There are about 50 retail units, mainly arranged in parades acing onto the A24 [3.34]. Nos. 1-11 & 17-23 Balham Hill, on either side of the application site, are located in LB Lambeth and are designated in Lambeth UDP as a Neighbourhood centre; other UDP designations for shopping centres being Major centres and District centres. Nos. 25-41 & 43-65 Balham Hill, 1-8 Westbury Parade and units in Clapham South Underground station are located in LB Wandsworth. They are without specific identification in the adopted Wandsworth UDP; the range of classifications being Town centres, Local centres and Important local parades. In Wandsworth Deposit Draft UDP the Balham Hill shops are identified as an Important Local Parade [2.27].

8.18 LB Lambeth argue that in addition to the retail parades the centre of Balham Hill contains a broad range of services and facilities, with a total of 78 individual businesses including the shopping units, and should be regarded as a town centre in RPG3 and PPG6 terms and for the purposes of Mr Caborn's clarification [4.13-4.16]. The Applicant supported this view, but LB Wandsworth, LPAC, Clapham South Neighbourhood Association and others strongly oppose it [3.37, 5.6, 6.7, 7.6].

8.19 It appears that in the past LB Lambeth and LB Wandsworth may well have considered their respective parts o Balham Hill separately for UDP preparation and policy purposes, and the use of different classifications is not helpful in assessing its status in the retail hierarchy. It does seem to me, however, that the previous appeals Inspector took a limited view in describing Balham Hill as "a parade of small shops"[5.7].

8.20 Having regard to RPG3 Tables 5.1 & 5.2 and to LB Lambeth's estimate of 5,500 sq m of gross floorspace for the total existing retail provision [4.15], as well as its relationship to larger nearby centres, it seems to me that for present purposes Balham Hill as a whole may be in RPG3 terms appropriately be regarded as a Neighbourhood or Local centre. Such centres are described within Table 5.2 under the heading of "Types of London Town Centres" as having traditionally provided local services for local customers.

8.21 PPG6 Annex A advises as to the meaning of town centre, as used in the guidance, and at the start of Section 2 PPG6 states "In London and other large cities, outside the central area, the principal shopping areas usually perform the role of town centres and these are usually complemented by district centres". Of the nearest sizeable centres to Balham Hill, Clapham High Street and LB Lambeth about 1 km to the north of the application site is identified in Lambeth UDP as a District centre; Balham in LB Wandsworth about 1 km to the south of the site is classified in Wandsworth UDP, and the Draft Deposit version, as one of the 5 main Town Centres in the Borough [2.7].

8.22 In this context, even considered as a whole and taking account of all the circumstances of the area including the Underground station, my own view is that Balham Hill lacks sufficiently broad range of facilities and services and does not sufficiently serve as a focus for the community for it to be regarded as fulfilling the role of town centre as envisaged in national guidance for the purposes of applying the requirements set out in Mr Caborn's statement. I therefore consider it appropriate that the proposals should be required to demonstrate need and a sequential approach to the site selection".

24. The Inspector accordingly went on to address the question whether need for the proposed retail development had been adequately demonstrated, and concluded (in paragraph 8.49) that it had. He also concluded (in paragraph 8.53) that, adopting the "sequential approach", there was no alternative site which would be preferable in retail terms or which would be likely to meet other needs such as he had discussed earlier in the Report.
25. However, the Inspector nevertheless concluded that planning permission should be refused on conservation grounds, and he accordingly recommended refusal. No issue arises on this appeal in relation to conservation.

THE SECRETARY OF STATE'S DECISION

26. The Secretary of State found the material considerations for and against the grant of permission for the proposed development to be "finely balanced" (see paragraph 33 of the decision letter), but in the result he concluded that permission should be granted. However, we are not directly concerned on this appeal with the manner in which the Secretary of State weighed the various factors in coming to his conclusion. The only aspect of his decision which is of direct relevance to this appeal is his interpretation of the relevant policy guidance in relation to the requirement to show "need" in the instant case. This is dealt with in paragraphs 12 and 13 of the decision letter, under the heading "Status of Balham Hill in the Retail Hierarchy", which read as follows:

"12. As the Inspector notes, the existing shops in Balham Hill lie partly within the LB Lambeth and partly within LB Wandsworth (IR 8.17). The shops in Lambeth are designated as a Neighbourhood centre, the shops in Wandsworth are identified in the Deposit Draft Wandsworth UDP as a Important Local Parade. The Secretary of State accepts the Inspector's conclusion that the PPG6 and RPG3 – Strategic Guidance for London Planning Authorities – must be read together (IR 8.9). He agrees with the Inspector that Balham Hill as a whole may in RPG3 terms be appropriately regarded as a Neighbourhood or Local Centre (IR8.20).

13. As the site is allocated in the plan for mixed-use development and is well related to Balham Hill neighbourhood centre, with properties either side of the application site being included in the definition of the centre of the UDP (Doc 84), the Secretary of State is satisfied that the site is within a centre for the purposes of interpreting PPG6 in accordance with the requirements set out in Mr Caborn's statement of 11 February 1999. He therefore disagrees with the Inspector that it is necessary to demonstrate need and a sequential approach to site selection for these applications".

27. The reference in paragraph 13 to "Doc 84" is a reference to an Ordnance Survey plan of the site and the immediately surrounding area.

THE PRESENT PROCEEDINGS

28. In the present proceedings, Wandsworth seeks to quash the Secretary of State's decision on the ground that in reaching it he erred in law in interpreting the relevant policy guidance. He is said to have erred in the following four respects (I quote from the claim form):

"(i) [I]n concluding that the application site was within a centre for the purposes of interpreting PPG6 and the Caborn statement and therefore exempt from the requirement to demonstrate need for the retail development proposed.

(ii) [F]urther or alternatively, in failing to apply the Caborn statement properly or at all in recognising that retail purposes in existing centres are exempt from demonstrating need only if need has been taken into account in the development plan. The need for further retail development had not been addressed at all in the adopted Lambeth UDP.

(iii) Further or alternatively, in failing adequately or at all to state whether Balham Hill was a town centre in terms of PPG6, RPG3 and the Caborn statement, and if so, why he differed from his Inspector on this fundamental conclusion.

(iv) Further or alternatively, in failing to give proper or adequate reasons for his decision not to require the developer to demonstrate retail need and a sequential approach to site selection."

29. The claim form contains additional grounds of challenge with which we are not concerned on this appeal.

THE JUDGE'S JUDGMENT

30. In paragraph 20 of his judgment the judge summarises Wandsworth's grounds of challenge on the policy issues as follows:

"20. What is said by Wandsworth in relation to the retail policy issues is: (i) the Secretary of State erred in law in concluding that the application site was within a "centre" for the purposes of applying the approach identified in PPG6 and expanded upon in the Caborn statement; (ii) even if the application site was within a centre for the purposes of PPG6 and the Caborn statement, the Secretary of State should not have concluded that it was exempt from the requirement to demonstrate need, since it had not been the subject of consideration in an up-to-date development plan; (iii) the Secretary of State failed to give adequate reasons for disagreeing with his Inspector, who concluded that Balham Hill was not a town centre in terms of PPG6 and the Caborn statement, and he failed to give proper or adequate grounds for his decision not to require the developer to demonstrate need. In addition, it was suggested that the Secretary of State erred in law in taking into account irrelevant considerations in his determination whether or not there was a retail need for the development."

31. In section V of his judgment the judge addresses the policy issues. He begins by reminding himself, by reference to Tesco Stores Ltd. v. Secretary of State for the Environment [1995] 1 WLR 759 at 780 per Lord Hoffmann, that "matters of planning judgment are within the exclusive province of the local planning authority or the Secretary of State". After referring also to Grandsden & Co Ltd v. Secretary of State for the Environment [1986] JPL 519 (affd. [1987] JPL 365) and R v. Secretary of State for the Environment etc. and Kettering BC, ex p. Tesco Stores Ltd [2001] JLP 686 at 692 ("Kettering"), a decision of Keene J (as he then was), the judge summarises the submissions made on behalf of Wandsworth by Mr Stephen Morgan (who also appears for Wandsworth on this appeal) as follows:

"24. The essence of Wandsworth's complaint is that the Secretary of State wrongly considered that the site was within a town centre in the context of government policy and accordingly that it was not necessary for Tesco to have demonstrated that there was a need for the proposals or that a sequential approach had been taken. The Secretary of State, it is said, gave no reasons for disagreeing with the Inspector's contrary and reasoned view. As a result the Secretary of State took the view that it was not necessary to demonstrate need and a sequential approach to site selection for these applications. The Secretary of State merely noted that the Inspector concluded that the retail need for the proposals had been adequately demonstrated and that the sequential approach had been followed and satisfied.

25. Wandsworth relies on the fact that, as reflected in PPG6 and the Caborn statement, the central aim of Government policy for shopping is to ensure that the vitality and viability of town centres is sustained and where possible enhanced. Balham Hill serves local day-to-day needs and is not in any sense a focus for the community, and Balham Hill is, as the previous appeals Inspector described it, "a parade of shops serving very local needs" and which the present Inspector said was similar to many such collections of shops which had grown up around minor tube stations outside central London.

26. Accordingly it is argued that the Secretary of State has erred in law in treating such a centre as a town centre for the purposes of PPG6, RPG3 and the Caborn statement because: (a) the "key features" in PPG6 distinguish the promotion of development in town centres from support for local centres; (b) para 1.11 distinguishes town centre sites from district and local centres: "...a sequential approach means the first preference should be for town centre sites, where suitable sites or buildings suitable for conversion are available, followed by edge of centre sites, district and local centres and only then out-of-centre sites in locations that are accessible by a choice of means of transport"; (c) given that the Secretary of State did not state that he disagreed with the Inspector's conclusions on the role of Balham Hill or the Inspector's interpretation of PPG6 and RPG3, there was no basis for the Secretary of State to conclude that the site was within a centre for the purposes of interpreting PPG6. On the basis of the Inspector's conclusions PPG6 was not capable of bearing an interpretation that includes Balham Hill as a "town centre" within the meaning of PPG6 and the Caborn statement."

32. The judge rejects that challenge to the Secretary of State's decision. After referring once again to a passage in the judgment of Keene J in Kettering at p.692, the judge continues (in paragraph 32 of the judgment):

"32. Paragraph 3 of the Caborn statement cannot be read in isolation. It identifies the situations in which it is not necessary to demonstrate need and a sequential approach; but the following paragraph identifies when it is necessary, namely for "edge-of-centre" and "out-of-centre" locations. A "neighbourhood or local centre" does not fall within the definition of either an "edge of centre" or an "out-of-centre" location. The reasoning in the Kettering case that nothing on the face of the Caborn statement which confines the phrase "existing centre" to " a town centre in the narrow sense" applies to the neighbourhood or local centre in the present case. There is nothing in the statement to suggest that the words "existing centre" are confined to any particular form of centre."

33. On that footing, the judge concludes (in paragraph 34 of the judgment) that:

".... the Secretary of State's conclusion that Balham Hill, as a 'Neighbourhood or Local centre", was an 'existing centre' [the expression used in the Caborn statement] was a reasonable interpretation of policy."

34. He in effect repeats that conclusion in paragraph 35 of the judgment, where he says that in reaching his decision the Secretary of State was:

".... attaching a meaning to the words 'existing centre' which, in the context of the other relevant policy documents [i.e. PPG6 and RPG3], those words can properly bear."

35. The judge then addresses a further submission made by Mr Morgan to the effect that even if Balham Hill may be regarded as an 'existing centre' for the purposes of the Caborn statement, the Secretary of State should nevertheless have considered whether there was a need for the proposed development, since the Lambeth development plan took no account of need. Mr Morgan had submitted that the reference in the third paragraph of the Caborn statement to the requirement that "need" is to be taken into account in the development plan applied not merely to proposals "which accord with an up-to-date plan strategy" but also to "sites within an existing centre". The judge rejects that submission, for three reasons. First, if the submission were correct, the words "or are proposed on sites within an existing centre" would be redundant. Second, the fourth paragraph of the Caborn statement (which, the judge concludes, must be read with the third paragraph) imposes no such requirement on sites within existing centres. Third, if the submission were correct a developer would be required to show "need" notwithstanding that the site is in a location which, applying the guidance in PPG6, is an appropriate location for the proposed development. After another reference to Kettering, the judge concludes (in paragraph 38 of the judgment):

"The result is that once the Secretary of State had found the site to fall within an existing centre for the purposes of the Caborn statement, he was entitled to interpret his own policy so as to find that the question of need did not arise, even though it had not specifically been addressed in the development plan."

36. The judge then turns to Wandsworth's 'reasons' challenge, which he also rejects. He does so in the following terms (in paragraphs 39 and 40 of his judgment):

"39. The next group of complaints relate to lack of adequate reasoning. It is said by Wandsworth that the Secretary of State failed to explain: (i) on what basis he concluded that the site is within a centre for the purposes of interpreting PPG6; (ii) on what basis he reached that conclusion, given that he agreed with the Inspector that Balham Hill as a whole might in RPG3 terms be appropriately regarded as a Neighbourhood or Local Centre; (iii) on what basis he reached that conclusion given that the Inspector concluded that that Balham Hill lacked a sufficiently broad range of facilities and services and did not sufficiently serve as a focus for the community for it to be regarded as fulfilling the role of a town centre as envisaged in national guidance for the purposes of applying the Caborn statement; and (iv) his decision not to require the developer to demonstrate need. Wandsworth has been substantially prejudiced by this failure as it cannot be understood on what basis this conclusion has been reason and why the Secretary of State has rejected, if he has, the conclusions and approach of the Inspector.

40. I was referred to the familiar principles on the requirements of reasoning in planning decisions, and the need for prejudice (Bolton Metropolitan Borough Council v. Secretary of State for the Environment (1990) 61 P & CR 343 at 353; Save Britain's heritage v No 1 Poultry Ltd [1991] 1WLR 153, 165), but I can deal shortly with this point. If the Secretary of State was entitled to take the view that Balham Hill was an existing centre he did not need to spell out why he disagreed with the Inspector. It is clear that the Secretary of State considered that a neighbourhood centre such as Balham Hill was an "existing centre" for the purposes of interpreting PPG6 and the Caborn statement. To the extent that this interpretation differed from that of the Inspector, the point needed no further explanation. So also, the Inspector having concluded that a demonstration of need was required but also satisfied, it was not necessary for the Secretary of State to spell out why need was not required to be demonstrated, still less to explain why notwithstanding the Caborn statement, it was not necessary to demonstrate it. That follows from the fact that he was entitled to take the view that for existing centres it was not necessary to demonstrate need."

37. Finally, the judge turns to the conservation issue and rejects Wandsworth's challenge to the Secretary of State's decision on that issue. As noted earlier, that challenge is not renewed on this appeal.

PERMISSION TO APPEAL

38. The judge refused Wandsworth permission to appeal. Wandsworth duly applied to this court for permission. Permission was refused on the papers by Brooke LJ but, as noted earlier, was granted by Laws LJ on a renewed oral application. In paragraphs 4 and 5 of his judgment when granting permission to appeal, Laws LJ said this:

"4. The essence of Wandsworth's complaint in this court is not as to the language of the policy documents – 'existing centre', 'town centre', 'neighbourhood or local centre' – but rather that the Secretary of State failed to consider in his decision letter a central part of the case put forward on the merits as to why Balham Hill should not be considered a centre. The judge, it is said, did not deal with that argument. The function or role of Balham Hill had, however, been critical to the Inspector's reasoning. If the issue were whether the judge was entitled to hold that the Secretary of State was in his turn entitled to the view that as a matter of the language used in the policy documents Balham Hill fell to be regarded as an existing centre, I would agree with Brooke LJ [when] refusing permission that there would really be no prospect of showing that the judge was wrong. But that is not, with respect, really the issue. It is, as I have stated, the Secretary of State's alleged failure to consider Balham Hill's function, a failure that stands in sharp contrast, so it is said, with the reasoning of his Inspector. On this issue I have concluded that an appeal is arguable.

5. Mr Morgan .... indicates that that is the whole of his case, and the appeal will no doubt go forward on that basis. ...."

TESCO'S RESPONDENT'S NOTICE

39. By a Respondent's Notice, Tesco (which appears by Mr Patrick Clarkson QC and Mr Scott Lyness, who also appeared for Tesco before the judge) relies on a number of additional arguments for upholding the judge's decision.

THE ARGUMENTS ON THE APPEAL

40. Before us, Mr Morgan submits that given that the Secretary of State did not disagree with the Inspector's conclusions on the function and role of Balham Hill or his interpretation of PPG6 and RPG3, there was no basis on which the Secretary of State could properly conclude that the site was "within an existing centre" for PPG6 purposes. He submits that the Secretary of State has failed to address the question how Balham Hill functions or what is its role in the local community; rather, he has simply applied to it the label of "centre". That, submits Mr Morgan, is not a legitimate process of reasoning, in that it fails to take account of matters which, in accordance with the relevant policy guidance, the Secretary of State is bound to take into account. Hence the Secretary of State has been guilty of an error of law which invalidates his decision. Mr Morgan further points out that the decision letter makes no reference to the Inspector's reasoning or conclusions on this issue.
41. As to the inclusion of 'Neighbourhood or Local Centres' in the list of 'types of London town centres' in RPG3 (see ibid. table 5.2), Mr Morgan submits that in order to fall within the description of a 'neighbourhood or local centre' the area in question must demonstrate the necessary characteristics of a 'centre', in accordance with paragraphs 5.1 to 5.3 of RPG3. Hence it remained necessary for the Secretary of State to consider the function and role of the alleged 'centre' in the local community.
42. As to the reasons, or lack of them, in paragraphs 12 and 13 of the decision letter, Mr Morgan submits that it was incumbent on the Secretary of State, as a matter of law, to explain the basis on which he reached the conclusion (in any event erroneous) that Balham Hill was to be regarded as an existing 'centre' for the purposes of the Caborn statement. Absent any, or any adequate, reasons for that conclusion, Wandsworth has (he submits) suffered substantial prejudice in that the lack of reasoning has given rise to serious doubt as to the proper interpretation of the Caborn statement (and hence of PPG6 and RPG3), and as to how the relevant policy guidance is to be applied in circumstances such as those of the instant case.
43. Miss Nathalie Lieven, who appears for the Secretary of State (she did not appear below), reminds us that (as is common ground on this appeal) matters of planning judgment are exclusively for the decision-maker (see Tesco Stores Ltd v. Secretary of State for the Environment [1995] 1 WLR 759 at 780H per Lord Hoffmann). She also reminds us that (as is, once again, common ground) if there is a dispute as to the meaning of words in a document containing policy guidance of which the decision-maker is bound to take account, the function of the court is to determine what as a matter of law those words are capable of meaning; and that if the court determines that the words in question are capable of bearing more than one meaning, the decision-maker will not have acted unlawfully if he adopts one of those meanings (see R v. Derbyshire CC, ex p. Woods [1997] JPL 958 at 967 per Brooke LJ). She submits that in the instant case the Secretary of State has not acted irrationally, nor has he taken into account immaterial considerations or failed to take into account material considerations. The interpretation which he gave to the relevant policy guidance was, she submits, an interpretation which was open to him.
44. Miss Lieven submits that it was not necessary for the Secretary of State to consider the function and role of Balham Hill in the local community and that his conclusion that Balham Hill was "an existing centre" within the meaning of that expression in the Caborn statement, was a perfectly reasonable and natural conclusion in the context of the legal and policy framework within which the Secretary of State had to operate. She cites Kettering as authority for the proposition that "an existing centre" in the context of the Caborn Statement is not limited to town centres strictly so called but includes district and local centres.
45. Thus she submits that, having expressly agreed with the Inspector's conclusion that Balham Hill is to be regarded as a "neighbourhood or local centre", the Secretary of State was fully entitled to conclude that, as a matter of interpretation of the relevant policy guidance, that conclusion was enough to establish that the site was 'within an existing centre' for the purposes of the Caborn statement and that accordingly it was not necessary to consider "need". On that footing, the Secretary of State did not have to go further (as the Inspector had purported to do in paragraphs 8.21 and 8.22 of his Report) and consider whether Balham Hill met some stricter test.
46. As for the alleged lack of reasons, Miss Lieven submits that the Secretary of State was not obliged in law to offer any more detailed explanation for his conclusions than is contained in paragraph 13 of the Decision Letter. She submits that, having (in paragraph 12 of the decision letter) adopted the Inspector's conclusion that "Balham Hill as a whole may in RPG3 terms be appropriately regarded as a Neighbourhood or Local centre", the Secretary of State goes on in paragraph 13 to consider whether the site is "within a centre" for the purposes of the relevant policy guidance. In the first sentence of paragraph 13 he gives his reasons for concluding that the answer to that question is Yes.
47. In any event, she submits, it cannot reasonably be contended that Wandsworth has suffered substantial prejudice on account of any lack of reasons in the decision letter. She submits that the basis of the Secretary of State's conclusion is clear: Balham Hill is an "existing centre" for the purposes of the relevant policy guidance, the site is "within" that centre, hence it unnecessary to demonstrate "need" or to adopt the sequential approach. She submits that the Secretary of State's decision leaves no room for doubt as to the interpretation which the Secretary of State placed on the relevant policy guidance, or as to the manner in which he applied that guidance in the instant case.
48. Mr Clarkson QC, for Tesco, adopts Miss Lieven's submissions. He reminds us of the substantial nature of the proposed development, and of the facts relating to Balham Hill as recited in the Inspector's report. He submits that the grant of planning permission on the site in question is fully consistent with Government policy, and that the Secretary of State's conclusion (in agreement with the Inspector) that Balham Hill is an "existing centre" for the purposes of the Caborn statement, and that accordingly "need" does not have to be established, is one which the Secretary of State was entitled to reach.

CONCLUSIONS

49. In the first place, I respectfully agree with the observation of Laws LJ (in paragraph 4 of his judgment when granting permission to appeal, quoted earlier) to the effect that there is no mileage in this appeal in so far as it raises the question of the proper interpretation of the relevant policy guidance. In my judgment, the word "centre" in the expression "within an existing centre" in the Caborn statement, when read in context, is clearly capable of bearing a meaning which extends beyond that of town centres in the strict sense, so as to include neighbourhood or local centres. As Keene J said in Kettering (at the foot of p.692):

"What is meant by those words an existing centre? Nothing in the [Caborn] statement confines that phrase to a town centre in the narrow sense. Indeed, the phrase being used there is not even an existing town centre but merely an existing centre without indicating what particular type of centre is being referred to. Three paragraphs earlier there is a reference to centres indicating that the Government's policy is concerned to focus new investment including retail investment in city, town and district centres."

50. In any event, the inclusion of "Neighbourhood and Local Centres" in the list of "Types of London town centres" in Table 5.2 in RPG3 seems to me to put the matter beyond any real doubt.
51. I can therefore see no scope for any challenge to the validity of the Secretary of State's decision based on what is said in paragraph 12 of the decision letter.
52. I turn, then, to paragraph 13 of the decision letter. As it seems to me, once it is accepted (as in my judgment it has to be) that the Secretary of State was entitled to interpret the Caborn statement in the way he did, the scope for any challenge based on paragraph 13 of the decision letter effectively falls away. Had the factors which are mentioned in the first sentence of the paragraph (viz. that the site is allocated for mixed development, and that it is "well related to Balham Hill with properties either side of the application site being included in the definition of the centre in the adopted UDP") been put forward by the Secretary of State as factors supporting the conclusion that Balham Hill is an "existing centre" for the purposes of the Caborn statement, then there would be force in an argument to the effect that they are not relevant to, and accordingly cannot support, such a conclusion. But as I read paragraph 13 that is not the context in which they are referred to. I accept Miss Lieven's submission that, having concluded (in paragraph 12) that Balham Hill as a whole is an "existing centre" for the purposes of the Caborn statement, all that the Secretary of State is doing in paragraph 13 is addressing the straightforward question whether the site is "within" that centre, for those purposes. The factors mentioned in the first sentence of the paragraph are directly relevant to that question.
53. In my judgment, Mr Morgan's reliance on the absence of any reference in paragraphs 12 and 13 of the decision letter to the function and role of Balham Hill in the local community is misplaced. Those are factors which the Inspector expressly considered when reaching his conclusion (in paragraph 8.20 of his Report) that Balham Hill as a whole is a neighbourhood or local centre for the purposes of the relevant policy guidance – and Mr Morgan applauds him for having done so. That being so, it was in my judgment enough for the Secretary of State to say that he agreed with that conclusion, without being required expressly to revisit, in the decision letter, the reasoning which had led the Inspector to reach it.
54. Nor, with respect, does it seem to me that (as was suggested by Laws LJ at one stage during the course of argument) the Inspector's conclusion in paragraph 8.22 of his Report undermines the reasoning which led him to the conclusion expressed in paragraph 8.20. Having reached the conclusion (in paragraph 8.20) that Balham Hill as a whole was to be regarded a neighbourhood or local centre, the Inspector plainly took the view that that conclusion was not sufficient in itself to answer the question whether it was an "existing centre" for the purposes of the Caborn statement and that some higher test had to be met, viz. that he had to be satisfied that Balham Hill was a "town centre" in some stricter sense. Accordingly, he went on to address that question and concluded (in paragraph 8.22) that Balham Hill did not meet the supposed higher test. I do not for my part see anything in paragraphs 8.21 or 8.22 which is inconsistent with, or which in any way undermines, the conclusion which he expressed in paragraph 8.20.
55. As to the 'reasons' challenge, I accept Miss Lieven's submission that there was no legal obligation on the Secretary of State to give any more detailed reasons for his decision on the issue in question than those which are expressed in paragraphs 12 and 13 of the decision letter. In particular, for reasons already given (see paragraph 53 above), I do not consider that the Secretary of State was required to deal expressly with matters (such as the function or role of Balham Hill in the local community) which the Inspector had specifically considered in reaching a conclusion with which the Secretary of State expressly agreed.
56. I would accordingly dismiss the appeal.

Lord Justice Laws :

57. I agree that this appeal should be dismissed for the reasons given by Jonathan Parker LJ, whose judgment I have had the advantage of reading in draft. For reasons I gave in granting permission to appeal, it at first seemed to me that there was force in Mr Morgan's argument that the Secretary of State had simply not grappled with the Inspector's reasoned views as to the "function" of Balham Hill. But the argument cannot in the end withstand the impact of the planning policy guidance documents, in particular RPG3, which of course deals specifically with London. As my Lord has shown, Table 5.2 of RPG3 includes "Neighbourhood or Local Centres" among "Types of London town centres". The Inspector and the Secretary of State were agreed that Balham Hill was a "neighbourhood or local centre", and there is as I understand it no suggestion that that conclusion falls to be questioned. The Secretary of State so indicates at paragraph 12 of his decision letter, and in paragraph 13 concludes further, for reasons he gives, that the appeal site is within a centre for the purposes of PPG6 and the Caborn statement. In my judgment he was not required to do any more. Unless there were any question of disapplying RPG3, which plainly there was not, Balham Hill's accepted status as a neighbourhood or local centre meant that it fell to be treated as a town centre for PPG6 purposes. Accordingly, as it seems to me, the Inspector's discussion of role and function was (at any rate in the context of ascertaining the existence or otherwise of a relevant town centre) a work of supererogation. In those circumstances it was not incumbent on the Secretary of State to deal with it.
58. This case seems to me to furnish an appropriate opportunity to recall and to emphasise the fact that in the planning field the determinations of the Secretary of State (and the recommendations or decisions of his Inspectors) are directed to what some of the older cases described as a "tutored audience". It is in the nature of the planning process that in a case such as this the words and the meaning of the planning guidance documents must have been present to the mind of all the participants; indeed they would have been travelled over time and again. Circumstances of that kind are systematically important in ascertaining whether, in any given instance, the decision-maker's duty to give reasons has been fulfilled.

Lord Justice Ward :

59. I also agree.
Order: appeal dismissed; claimant to pay costs of first defendant in sum of £15,700. (Order does not form part of the approved judgment)