England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Mr JAMES GOUDIE QC
SITTING AS A DEPUTY JUDGE OF THE HIGH COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		16th April 2003

Lord Justice Kennedy:

1. This is an appeal against a decision of Mr James Goudie QC sitting as a Deputy Judge of the High Court in the Administrative Court, who in a judgment delivered on 19^th December 2001 dismissed the appellant claimant's application to quash the decision of a Planning Inspector appointed by the Secretary of State. On 10^th April 2003 we allowed the appeal, and we now give our reasons for that decision.

Background.

2. The decision of the Planning Inspector related to 1.74 hectares of land at Gatcombe Farm Industrial Estate near Wrington, North Somerset, in the Bristol and Bath Green Belt. The land used to be a mushroom farm, and there were at all material times nine low level buildings on the site with intervening areas of concrete. The land is on a south facing slope about 4 kilometres north of the Mendip Hills, and since it ceased to be used as a mushroom farm it has been used for research and development in relation to mushrooms, and then piecemeal for industrial or commercial purposes. The planning and commercial history of the site over the last decade is of some importance because it casts light on one of the matters which the Inspector had to consider, namely how the site was being used at the time of the Planning Inquiry in June 2001, and what would happen to it if the planning permission then under consideration were not granted.
3. In 1992 planning permission was granted for a new business park to occupy 3500 square metres of the site, on the basis that any right to carry on any other activities on the site would be surrendered. That planning permission was renewed in 1996 for a further five years, but by then it was becoming apparent that the proposal for a new business park was not viable. So in 1997 outline planning permission was sought for residential development with 20 houses. That was refused by the local planning authority on grounds which included the need to keep the land available for employment uses. There was an appeal which was dismissed, but the Inspector who heard that appeal recognised that there was no longer any real prospect of development in accordance with the existing planning permission, and did not exclude the possibility that a proposal for less intensive residential development of the sight might obtain planning permission. He said at paragraph 33 of his decision letter –

"I consider that, if traffic and visual factors are capable of constituting persuasive, very special circumstances, housing must be of a more limited number and restricted to the least exposed, lower area of the site."

In 1998 the site owners refurbished 30 units on the site, covering about 3100 square metres. That was about one half of the area covered by buildings, and they then sought actively to obtain occupiers for the refurbished units. In 2000 fifteen of the thirty units were occupied. That generated some income, and reminded the local planning authority of some of the disadvantages of the site. Not only was it unattractive, but also the short term occupiers generated traffic, much to the annoyance of those who lived nearby. The planning authority was already being offered an alternative, because in May 2000 the appellants sought planning permission for 10 two-storey dwellings with integrated office space and associated works on the lower part of the site. The scheme was prepared by a reputable firm of architects, and the officers of the local authority supported it. They recognised, of course, that as the land was in the Green Belt very special circumstances would need to exist to warrant an exception to the general presumption against new housing, but on three separate occasions, to three different committees, officers recommended approval. However, on 22^nd November 2000, their advice was finally rejected by the members of North Somerset Council on three bases –

(1) that the development would result in the unacceptable loss of land used for business purposes:

(2) That the site is not easily accessible by means other than private cars, contrary to the structure plan and other advice on sustainable residential development, and -

(3) That it constituted inappropriate development in the Green Belt.

Because of the attitude taken by the local authority officials in relation to the planning application the site owners had, during 2000, ceased trying to market the refurbished units, and by January 2001 only seven were occupied. The appellants appealed to the Secretary of State against the decision of 22^nd November 2000, and an Inspector was appointed to hear the appeal in June 2001. By then only five units were occupied, and there was very little activity on the site. The local authority's position was that it would still like to see the 1992 planning permission implemented, but it recognised that if that did not happen and planning permission were not granted low grade user of the site was likely to continue.

Statement of Common Ground.

4. Rule 15 of the Town and Country Planning Appeals (Determination by Inspectors) (Inquiries Procedure) (England) Rules 2000 SI 1625 requires that prior to the start of an Inquiry the local planning authority and the appellant shall together prepare an agreed statement of common ground. That statement is then made available to the Inspector and also to the other parties. As Mr George QC, for the appellants, submitted to us, the whole purpose of the rule, which was new in 2000, is clearly to limit the scope of the Inquiry, and to indicate matters on which (subject to any direction to the contrary from the Inspector) evidence will not be required.
5. In this case a substantial statement of common ground was prepared. It dealt with the site, the planning history, the planning policy and other matters agreed between the parties. In dealing with what the site owners had done since 1998 the statement of common ground said at paragraph 2.4.3 –

"They let out the existing buildings for employment uses. In a section 106 Agreement attached to an earlier permission, the Local Planning Authority accepted the previous industrial use of many of the buildings on the site. The buildings that were identified in that Agreement have been refurbished and let on short licenses to a variety of marginal uses including car repairs, storage, offices, window manufacture etc. It appears that these B1, B2 and B8 uses are immune from enforcement action due to the wording of the previous legal agreement."

Attached to the statement of common ground was a technical note prepared by consultants instructed by the appellants to address highway and transportation issues. It contains a table setting out the traffic movements which it was expected would result from four different land use proposals, namely the business park proposal, the 20 dwellings proposal, the use of 3500 square metres of floor area for general business use, and the ten dwellings proposal. As the note states –

"This table clearly illustrates that the proposal for ten dwellings will generate much less traffic than the likely alternative uses for the site."

That would still have been true even if only one third of the 3500 square metres was occupied. The technical note ended -

"National and local guidance confirms that it is realistic that the development in rural areas will be more dependant on the car than development in urban areas and encourages a flexible approach. It has been shown that the proposal for ten dwellings at this location presents more sustainable development than employment use.

In overall highway terms therefore, this report concludes that the proposal to re-develop this brown field site for residential use represents the most sustainable development option, reduces traffic flows and resultant impact (particularly lorry movements) and offers highway safety improvements which will be to the benefit of the wider public."

The note was specifically agreed by the local authority's planning and transport policy officer in a letter of 1^st May 2001, and the appellants then prepared their case for presentation at the Inquiry.

Before the Inspector.

6. Just before the hearing was due to commence the local authority had second thoughts about whether what was happening on the site was in fact a lawful use. Mr George did not ask for an adjournment, but he did agree to the statement of common ground being amended by deleting paragraph 2.4.3 set out above. He submitted that it was not necessary for the Inspector to decide whether the present use of the site was lawful, not least because it was clear that the local authority supported employment purposes as a preferred use, and would therefore grant planning permission in respect of refurbished units if it were necessary to do so.
7. In addition to the local authority and the appellants, Mr Hall represented himself and other local residents at the Inquiry. He supported the appellant's proposals, and all three parties regarded the existing situation with disfavour. Visually it was unattractive, it generated more traffic than the appellant's proposals, the downmarket operations in some buildings attracted vandals who dumped cars, and so forth.
8. The issue, Mr George submitted, was whether as the local authority contended it was necessary to retain the land for employment purposes, and that was what the evidence on both sides sought to address. There was also, of course, emphasis on the land being in the Green Belt. The local authority called a planning officer, Mr Willmot, and their Economic Development Manager Mr Foster, who said that the site –

"Provides an opportunity to deliver an exceptional development, of which employment provision should be an integral and key element. If this is unachievable, it is my view that the resultant loss of existing employment on the site outweighs the need for additional new residential development."

The appellants called four witnesses – a landscape consultant, the architect, Mr Price (a surveyor and valuer specialising in commercial property) and Mr Parker (a planning expert).

9. Mr Price made it clear that in his judgment if planning permission were refused "there is a market for the existing buildings on site, albeit that this will be at the lowest quality and lowest rent/price sector of the market." He was critical of the state of the existing buildings and of their location, and said that a high quality refurbishment would not be financially viable. In paragraph 4.4, which I cite because Mr Brown for the Secretary of State relied upon it, Mr Price said of low grade user –

"Such users are, however, only prepared to pay low rent or capital values, meaning that any significant upgrading of the accommodation is unsustainable. It is therefore likely that the buildings will not benefit from significant repair or upgrade and that they will continue to deteriorate from their currently poor condition."

Mr Price pointed out that other sites in the area offered similar accommodation, so the loss of this site for those purposes would not be significant. Such user was unlikely to create significant local employment opportunities, but could well create significant amounts of traffic of a type particularly unsuitable for a site with poor access.

10. Mr Parker dealt in oral evidence with the level of investment required to refurbish existing buildings, and after two days of hearing the Inspector on the third day visited the site.

The Decision letter.

11. The Inspector was clearly very impressed by what he saw at the site. In paragraph 5 of his letter he identified the three main issues in the case as –

"(1) The effect of the proposal on employment opportunities in the area;

(2) The compatibility of the proposal with the locational principles of sustainable development; and

(3) Whether the benefits of the scheme are sufficient to constitute the very special circumstances necessary to overcome the presumption against inappropriate development in the Green Belt."

In paragraph 18 the Inspector said –

"In the event of the appeal being unsuccessful, in my view the most compelling evidence in relation to the possible future use of the site derives from my visit."

He then describes some of what he saw and continued –

"The buildings on the site have a semi-derelict appearance and character, and I consider their re-use even by the low-order activities referred to by the appellant as an unlikely prospect, even if planning permission for such uses would not be necessary."

In paragraph 19 the Inspector said –

"It follows therefore that, notwithstanding the common ground between the principal parties, in my view it is most unlikely that the quantity and quality of traffic generated by the fall back use would be even near that estimated by the appellants accessibility technical note."

The previous Inspector had suggested that if planning permission were not granted the site owners would attempt to realise the scope for employment uses, and in paragraph 20 the Inspector said –

"From the evidence I received at the Inquiry, and on the basis of my site visit, I believe his prediction has turned out to be incorrect, and that any re-use of the buildings would now require levels of investment of a quantity which would be likely to result in rents which would render the units unattractive to many potential occupiers."

12. That was, on the face of it, a surprising conclusion in the light of the uncontested evidence as to what had happened between the two Inquiries.
13. It was in the light of those factual findings that the Inspector turned to consider the three issues he had identified. Naturally he found in favour of the appellants in relation to the employment opportunities issue because in his opinion the fall back position offered no employment opportunities, but he resolved the other two issues against the appellants, and the appeal was dismissed.

High Court Proceedings.

14. These proceedings against the Secretary of State and the Local Planning Authority were commenced on 1^st August 2001 pursuant to section 288 of the Town and Country Planning Act 1990. In their amended Claim Form the appellants sought relief on five grounds. In broad terms those grounds can be summarised as follows –

(1) The Inspector failed to have proper regard to the evidence that lower order industrial activity had taken place on the site and was likely, if planning permission were not granted, to continue.

(2) That having, as a result of his site visit, concluded that significant activity was unlikely to continue he failed to afford to the parties, and in particular to the claimant, a proper opportunity to comment on that conclusion, which was of considerable significance when seeking to evaluate the advantages and disadvantages of the proposed development.

(3) That the Inspector failed to give sufficient reasons, and in particular to explain what he envisaged to be the future of the site if planning permission were not granted.

The Deputy Judge rejected all of the grounds on which the claimant sought relief, and we now have before us four grounds of appeal. In the Appellant's Notice there was a fifth ground of appeal, but that has been abandoned. To a large extent the grounds of appeal reflect what was in the amended Claim Form, but I propose to deal with each of the four grounds separately.

Ground 1.

15. In their first ground of appeal the appellants assert that the deputy Judge erred at paragraph 29 of his judgment when he said –

"It was open to the Inspector, on the totality of the evidence, and taking proper account of his site visit, and his own proper role, to conclude that the prospect of significant reoccupation was unlikely."

For the appellant is contended that significant reoccupation was likely, not unlikely, as demonstrated by the evidence of what happened between the two Inquiries, and by the unchallenged evidence of Mr Price and Mr Parker. That could not be wholly displaced by the impressions formed by the Inspector on a site visit, particularly bearing in mind that Rule 18(3) of the Inquiries Procedure Rules provides –

"If, after the close of an Inquiry, an Inspector proposes to take into consideration any new evidence or any new matter of fact (not being a matter of government policy,) which was not raised at the Inquiry and which he considers to be material to his decision, he shall not come to a decision without first –

(a) Notifying the persons entitled to appear at the Inquiry who appeared at it of the matter in question; and

(b) Affording them an opportunity of making written representations to him or of asking for the re-opening of the Inquiry …. "

16. In this case the appellants did not receive any notification pursuant to that Rule, even though the Inspector does seem to have taken into consideration and given considerable weight to his own observations. In paragraph 18 of the decision letter he said –

"I saw on my visit that many of the units or potential units are in a very poor condition. Part of the roof has collapsed on at least one of the buildings, most of the doors and windows are either missing or broken, services do not appear to be readily available, and many of the units appear far from secure or even weather-proof."

As Mr George pointed out, what was described as a roof collapse was really a ceiling collapse in an un-refurbished unit, and services were available adjacent to all refurbished units. Those were the sort of matters which could have been explained had the procedure envisaged by Rule 18(3) been followed. As to the conclusion which the Inspector was minded to draw from his observations, had the appellants been alerted to those they could have put in the schedule of lettings in 2000, with which they had not previously troubled the Inspector because, in the light of the statement of common ground and the stance taken by the local planning authority, the ability of the owners to operate the site to the 2000 level did not seem to be in issue.

17. For the respondent Mr Paul Brown accepts that the Inspector's conclusion as to the future use of the site was at variance with the case presented by the appellants and by the local planning authority, but he submits that, as the deputy judge pointed out, there was evidence to support the Inspector's conclusion.
18. As Mr Parker said, the site was unkempt and an eyesore. A number of recent users had terminated their licences because of vandalism, there was "little interest for employment sites in the area" and the site was some distance from the main transport corridors.
19. Mr Price also said that demand for employment space was concentrated on larger settlements, and in the Wrington area it was extremely limited. Sites without building prominence, or ease of motorway access were unacceptable, and despite marketing the nature and location of this site made it unattractive to potential occupiers. The take up of employment land in Wrington had, Mr Price said, been very limited. The market for these buildings was at the lower quality and lowest rent/price sector of the market, and that meant that any significant upgrading of accommodation is unsustainable, so it is likely that the buildings will continue to deteriorate from their present poor condition. There were a number of alternative sites offering accommodation of the same sort for lower order uses, and take up on this site had been slow and intermittent, suggesting that demand was limited. As Mr Parker put it "easy in, easy out" with licensees "only likely to occupy for a few months at a time".
20. Historically most occupation had been in 1998 when there was an estate manager who lived in a caravan until it was stolen, and although 15 units had been let 14 had departed, and there had been constant mindless vandalism of cars on the site, so the Inspector was right to conclude –

"Evidence submitted on behalf of the appellant suggests that there would only be a limited demand from companies or others for small, low quality industrial uses."

So, Mr Brown submits, after a site visit the Inspector was entitled to conclude that the prospect of significant reoccupation of the buildings was distinctly unlikely. The Inspector was entitled to weigh in the balance what he saw. That went both to the attractiveness of the site to a potential tenant and to the costs such a tenant would have to bear, including any costs of connecting services. The Inspector was not bound to accept the professionals' view.

21. I accept, as Mr Brown contends, that there was evidence which could be said to support the Inspector's conclusion as to what was likely to happen to the site in the future, but much of the evidence had been adduced for a different purpose, and the question had never been explored as to whether it could properly be used to support a conclusion which was not regarded by any of the parties as a realistic possibility during the course of the Inquiry.

Ground 2.

22. That brings me to ground 2 which is at the heart of Mr George's submissions in this case. He contends that, having regard to the content of the statement of common ground and the way in which the Inquiry had progressed, procedural fairness and Rule 18(3) required that before writing his decision letter the Inspector should raise with the parties his concern that the disrepair of the buildings (together with the unavailability of services) was such as to lead to rents so high that they would deter potential occupiers and result in there being no future for industrial or commercial use. Unless that was done the appellants, and the local residents, were entitled to feel that they had not had what Lord Russell in Fairmount Ltd v Secretary of State for the Environment [1976] 1 WLR 1255 described at 1266A as "a fair crack of the whip". In Wigan NBC v Secretary of State for the Environment [2002] JPL 417 Sullivan J said at 425 that the Inspector was not bound by the terms of the agreed statement. She was entitled to form her own view "subject only to giving the parties a fair opportunity to comment". In Castleford Homes v Secretary of State for the Environment [2001] PLCR 470 Ouseley J said at paragraph 65 –

"If an Inspector is to take a line which has not been explored … fairness means that an Inspector give the party an opportunity to deal with it. He need not do so where the party ought reasonably to have been aware on the material and arguments presented at the Inquiry that a particular point could not be ignored or that a particular aspect needed to be addressed."

That, Mr George submits, was the obligation of the Inspector in this case. He did not give the appellants the opportunity to which they were entitled, and when addressing this complaint the deputy Judge said simply –

"The complaint in my judgment fails on the facts. These aspects were sufficiently explored. There was no procedural unfairness. This is another way of dressing up what is essentially a merits complaint."

In the submission of the appellants that is an inadequate response.

23. Mr Brown pointed out that when giving evidence Mr Price did deal with the costs of refurbishment, and the effect of those costs on marketability, and Mr Parker provided figures, so the evidence was available, and Mr Brown submitted that even if the Inspector had raised the possibility of there being no future industrial use for the site Mr George could have done nothing more than point to evidence which the Inspector already had. But of course the evidence had not been tested or deployed in relation to that issue. It had not been put to either expert that there was no industrial or commercial future for the site, and on that issue the Inspector was not, as it seems to me, in fairness entitled to form his own conclusion without giving the parties an opportunity, not only to make submissions, but also to ask the experts to assist. In my judgment the second ground of appeal is made out.

Ground 3.

24. The third ground of appeal relates to the Inspector's reasoning. It is said not to be possible to discern from the decision letter what future the Inspector envisaged for the site, having rejected both employment and residential uses. That, as Mr George points out, can make it difficult for the site owners to plan for the future, but having concluded as I have in relation to ground 2 I do not need to consider this ground any further.

Ground 4.

25. Ground 4 relates to what the deputy judge said at the end of his judgment about the conclusion of the Inspector in relation to the green belt. The deputy judge said –

"The third ground for refusal was a free standing reason, sufficient in its own right to lead the Inspector to dismiss the appeal. In relation to that reason, the difference in the traffic generation was only one of the factors taken into account by the Inspector in coming to his conclusion that the undoubted benefits of the development fell 'well short' of the 'clear advantages required' in order for there to be 'very special circumstances' which would justify undoubtedly inappropriate development in the Green Belt.

The burden of proof is upon the Secretary of State to demonstrate that, if the Inspector's conclusion in relation to traffic generation were flawed this would not have affected his decision. This issue does not arise on my findings, but, if it had, I would have held that the burden was discharged."

26. Mr George submits that, having identified an important procedural error, the court should not speculate as to whether the Inspector's conclusion in relation to the Green Belt issue would have been different if the Inspector had resolved the issue in relation to traffic as the appellant submitted that he should have done. Certainly traffic was rightly regarded by the Inspector as a relevant factor. Mr Brown submits that the traffic issue cannot have been decisive because the Inspector said that his conclusions left him "well short" of the advantage required if there was to be inappropriate development in the Green belt. In my judgment it is not possible to say whether if the error had not been made the Inspector would have arrived at the same conclusion.

Conclusion.

27. Those are the reasons why, in my judgment, it was necessary to allow the appeal and to grant the relief sought, namely an order that the decision of the Inspector be quashed, and that the matter be remitted to the Secretary of State.

Lord Justice Buxton:

28. I agree.

Lord Justice Carnwath:

29. I also agree.
Order: Appeal allowed with costs to be agreed by parties with liberty to return to court if dispute remains on one or two issues; otherwise subject to detailed assesment. (Order does not form part of the approved judgment)