England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QBD Administrative Court
LORD JUSTICE MOSES
CO/10709/2012

		Royal Courts of Justice Strand, London, WC2A 2LL
		7th November 2014

Lord Justice Maurice Kay :

1. The issue raised in this appeal is whether the proposed redevelopment of a site on the seafront at Margate ought to be subjected to an environmental impact assessment (EIA). The site comprises Arlington House and Arlington Square. I shall refer to it as "the Arlington site". On 13 June 2013 the Secretary of State granted planning permission to Metropolitan Property Realizations Limited (MPRL) for the proposed redevelopment which would involve the construction of a Tesco Superstore with parking, services and an access road; the refurbishment of Arlington House; the construction of a 60 bed hotel; the demolition of existing retail premises and a 2-storey car-park; and the development of necessary sewerage infrastructure. Some 500 car parking spaces for leisure and tourist use would be lost. The grant of planning permission followed the recommendation of an Inspector's Report dated 21 December 2012. The Secretary of State had previously issued a screening direction on 18 July 2012 to the effect that no EIA was necessary.
2. In consolidated proceedings in the Administrative Court the appellant, Louise Oldfield, sought to challenge the screening decision, the Inspector's Report and the grant of planning permission. She is a local resident and businesswoman. She is also the Chair of the Margate Conservation Area Advisory Group and has acted on behalf of Friends of Arlington Margate. Her proceedings in the Administrative Court included both an application for a judicial review of the screening decision and an appeal pursuant to Section 288 of the Town and Country Planning Act 1990. The centrepiece of her case was and remains the failure to carry out an EIA. Her application and her appeal were dismissed by Lord Justice Moses sitting as a judge of the Administrative Court on 12 December 2013. She now appeals, permission having been granted by Lord Justice Jackson, who ordered an expedited hearing and directed that the appeal could be heard by a two-judge Court.
3. Next to the Arlington site lies Dreamland Amusement Park (the Dreamland site) which contains Grade II and Grade II listed buildings. It too is in need of redevelopment. Lord Justice Moses begun his judgment with the observation that the two sites are "of prime importance to Margate's regeneration" : [2013] EWHC 4269 (Admin), paragraph 1. The beach lying between these two sites and the sea is the subject of protective designations. It is a Ramsar site (being a wetland of international importance), a Special Protection Area, a Special Area of Conservation and a site of Special Scientific Interest, mainly because of its importance as a habitat for wintering and breeding birds.
4. When the Planning Brief for the Arlington site was published in 2008 it stated that it "should be read in cognisance of the Planning Brief for the Dreamland site". Since then, the histories of the two sites have developed in parallel. While the Arlington site was attracting the planning decisions which are the subject of this litigation, the Dreamland site was the subject of a compulsory purchase order which was unsuccessfully challenged in the Administrative Court on 13 March 2013 and on appeal to this Court on 8 October 2013 : Margate Town Centre Regeneration Company Limited v Secretary of State [2013] EWCA Civ 1178. The proposed developer of the Arlington site, MPRL, is not concerned with the redevelopment of the Dreamland site. The central issue arising in the present appeal is whether, in relation to the Arlington site, the Secretary of State unlawfully failed to consider the cumulative effects of the proposed redevelopment of the Arlington site when assessed with the effects of the redevelopment of the Dreamland site. The case for the Appellant is that, if the cumulative effects had been properly considered, the Secretary of State would not, or might not, have dispensed with the need for an EIA.

The Statutory Framework

5. EIAs owe their origin to Directive 85/337/EEC (as later amended and now consolidated by Directive 2011/92/EU). At the material time in the present case, domestic transposition was contained in the Town and County Planning (Environmental Impact Assessment)(England and Wales) Regulations 1999, to which I shall refer as "the EIA Regulations" (although they have now been superseded by the Town and Country Planning (Environmental Impact Assessment) Regulations 2011 for applications made since 24 August 2011). No issue as to deficient transposition arises in this case.

Recital (2) in Directive 85/337/EEC sets the scene.

"…. policy on the environment is based on the precautionary principle and on the principles that preventative actions should be taken… Effects on the environment should be taken into account at the earliest possible stage in all the technical, planning and decision making process.

Regulation 2 of the EIA Regulations defined "EIA development "as

"… development which is either – Schedule 1 development [not this case]; or

Schedule 2 development likely to have significant effects on the environment by virtue of factors such as its nature, size or location.

6. Where proposed developments comprise EIA development, the decision-maker - in the present case, the Secretary of State –

"shall not grant planning permission pursuant to an application to which this regulation applies unless they have first taken the environmental information into consideration and they shall state in their decision that they have done." (Regulation 3(2))

"Environmental information" is defined in Regulation 2 as

"…the environmental statement including any further information, any representations made by any body required by the Regulations to be invited to make representations and any representations duly made by any other person about the environmental effects of a development."

"Environmental statement is there defined as a statement

"(a) that includes such of the information referred to in Part 1 of Schedule 4 as is reasonably required to assess the environmental effects of a development and which the applicant can, having regard in particular to current knowledge and methods of assessment, reasonably be required to compile."

Thus, an application for EIA development imposes a substantial burden on an applicant. Of particular significance in the present case is the provision of paragraph 4 of Part 1 of Schedule 4 which includes in the required information

"a description of the likely significant effects of the development on the environment, which should cover the direct effect, and any indirect, secondary, cumulative, short medium and long-term permanent and temporary, positive and negative effects of the development resulting from –

(a) the existence of the development.

Screening decisions, in the context of the present case, are the responsibility of the Secretary of State. Regulation 4(3) provides:

"a direction of the Secretary of State shall determine for the purpose of these Regulations whether a development is or is not EIA development."

In this way, an applicant can ascertain at a relatively early stage whether or not the proposed development attracts the EIA regime.

7. The Directive and the EIA Regulations have spawned a considerable amount of litigation. At the level of general principle, it is common ground that (1) "the scope of [the Directive] is wide and its purpose very broad" : Paul Abrahams v Region Wallone [2008] ECR 1 – 01197, at paragraph 33; and (2) the expression "likely to have significant effects on the environment" connotes something more than a bare possibility, "though any serious possibility would suffice" : R (Bateman) v South Cambridgeshire District Council [2011] EWCA Civ 157, at paragraph 17. per Moore-Bick LJ. This is a matter for the decision-maker, subject to irrationality Jones v Mansfield [2004] ENVLR 21.
8. The judgment of Moses LJ

On the central issue, Lord Justice Moses came to the following conclusion:

40… in the light of the close relationship between the two projects, the environmental effect of the Arlington project did have to be considered cumulatively with the proposed development of Dreamland alongside. The development of Dreamland could not be ignored or put to one side when considering the environmental effects of Arlington and their significance in order to fulfil the requirements of Schedule 3(1) and (4) of the Regulations.

41…But were they put to one side?...

42…In the screening decision of 18 July 2012, it is demonstrated that the Dreamland project was considered….

43…The conclusion was reached:

"No significant cumulative effects are likely given the type and scale of the proposed development."

44…It is not possible, in my view, to suggest that the Dreamland project or its effects were ignored at that stage…

47… At the Inquiry… the appellant had a full opportunity to deploy every argument and give evidence in relation to the cumulative effects to make good her argument that an assessment was required…

49 [The] conclusion [in the Inspector's Report] as to traffic is of some significance … because it shows that whilst it was taken into account, the conclusion was there was no combined effect of the two projects; rather, the effect on traffic in the area would be the consequence of the Dreamland development and not of a combination of Arlington and Dreamland.

50 Similarly… there was consideration of sewage discharge and ample evidence of complaint and concern by those who lived in the area leading, no doubt, to [a condition] being imposed.

52 It seems to me….impossible to say that the Inspector failed when considering the screening direction to take into account the Dreamland project. On the contrary, it was taken into account but when considered cumulatively with Arlington, it did not lead to the view that significant environmental effects were likely.

Lord Justice Moses set out passages from paragraphs 298 – 300 of the Inspector's Report which concluded with an expression of agreement with the earlier screening decision. He added (at paragraph 53) "The Secretary of State came to the same conclusion."

9. The essential analysis of Lord Justice Moses was contained in the following three paragraphs:

54… It was open to the decision-maker as a matter of judgment to conclude that even if the environmental effects of the Dreamland project were likely to be significant, there were no significant cumulative effects. It was open to the decision-maker to conclude that significant environmental effects would be the free-standing consequences of the Dreamland project and were not to be considered as part of the cumulative consequences of the Arlington development under consideration.

55…It is important …to distinguish between the free-standing effects of the Dreamland development and the cumulative effects of both that development and Arlington. If, as they were entitled to do, the Inspector and the Secretary of State reached a conclusion that there were no significant cumulative effects, there was no requirement to consider the free-standing consequences of the Dreamland project merely because the two projects were linked. Still less is there any warrant for saying that because they concluded there were no significant cumulative effects, they must have ignored the requirement to consider cumulative effects.

58…The Inspector and the Secretary of State did take into account the cumulative effects of both projects…..neither… was required to go further in the light of their judgment that the significant environmental effects were likely to be free-standing consequences of the Dreamland project and not of both projects considered cumulatively."

Lord Justice Moses also considered and rejected other grounds of challenge, only one of which is maintained before us, namely that the Inspector and the Secretary of State had unlawfully engaged in "project splitting", that is to say with the technique of splitting a project into sub-projects so that each falls out side the screening criteria. Although advanced as the first ground of challenge before Lord Justice Moses and the first ground of appeal in this Court, Ms Jenny Wigley emphasises that, in reality, it is her secondary fall-back ground. I shall therefore refer to it as Ground 2.

10. Ground 1 : failure to consider cumulative effects

The case for the Appellant is that this failure occurred at all three levels : the screening decision; the Inspector's Report; and its subsequent adoption by the Secretary of State when granting planning permission. I shall consider them separately. Before I do so, I should refer to the two Planning Briefs in a little more detail.

The Dreamland Planning Brief was issued in February 2008. It referred to the site as forming "the hidden heart of Margate seafront". It

"also details aspirations for adjacent areas including Arlington Square, Marine Terrace and the seafront, which, while not subject to site specific policy designations must be acknowledged in relation to regeneration aspirations for Dreamland and its environs"

The Arlington Planning Brief followed in October 2008. It referred to

"the need for the Council to work with the owners of Arlington and Dreamland to agree plans for the regeneration of the two sites. This brief assists that process focusing on the Arlington site. It should be read in cognisance of a Planning Brief for the Dreamland site approved by the Council in February 2008."

(1) The Screening Decision

11. The screening decision with which we are concerned was contained in a letter dated 18 July 2012. It replaced an earlier screening decision dated 12 January 2012 which had been shelved following receipt of a pre-action protocol letter. The decision letter stated that the Secretary of State "is of the opinion that the proposal would not be likely to have significant effects on the environment by virtue of factors such as its nature, size or location". It did not refer to Dreamland. However, it attached an analysis and checklist in tabular form which listed "questions to be considered", whether outcomes were likely or unlikely and, in a third column, whether "this is likely to result in a significant effect".
12. Question II was concerned with whether there are any issues "on or around the locations which are protected … and which could be affected by the project". The second column referred to the Margate Seafront Conservation Area and the Dreamland site "which comprises a Grade II listed cinema, the Grade II listed Scenic Railway and the Grade II menagerie buildings and cages". They were "likely" to be affected but

"no significant effects on the setting of the Dreamland setting are likely in the context of the existing land uses and surrounding urban environment".

Nor would there be likely to be significant effects on protected sites from surface water run-off.

13. Question 26 asked "whether there are any plans for future land uses on or around the location which could be affected by the project?" The second column referred the

Dreamland site. It added :

"Vehicular access to the Dreamland site is currently via junctions on Belgrave Road. The main pedestrian access is via Marine Terrace. Vehicular access to the proposed Arlington development would be via a new road which has the ability to link into the Dreamland site".

That link is no longer proposed. However, at the time of the screening decision it was considered to be part of the proposal but was not thought likely to give rise to significant effects.

14. Finally, Question 27 asked whether there were "any other factors which should be considered, such as consequential development which could lead to environmental effects, or the potential for cumulative impacts with other existing or planned activities in the locality?" The second column referred to "potential cumulative impacts with proposed Dreamland site" but the third column stated :

"no significant cumulative effects are likely given the type and scale of the proposed development".

15. Lord Justice Moses concluded that, in the light of this material, it is "not possible to suggest that the Dreamland project or its effects were ignored" at the stage of the screening decision (Judgment, paragraph 44). I respectfully agree. The extract from the analysis and checklist which I have set out shows that cumulative impact was considered. Indeed, it would be highly surprising if it had not been as it was an allegation of a failure to consider it which had featured prominently in the pre-action protocol which prompted this reconsideration of the screening decision.

(2) The Inspector's Report

16. All this can be said with similar force in relation to the Inspector's Report. At an early stage in his Report (paragraph 6) the Inspector listed fourteen matters which the Appellant "considers render the [screening decision] defective". The first was the "failure to consider the cumulative impacts". As Lord Justice Moses observed (at paragraph 47) :

"At the Inquiry….the Appellant had a full opportunity to deploy every argument and give evidence in relation to the cumulative effects to make good her argument that an [EIA] was required".

Moreover, when the Inspector came to his "Conclusions on EIA matters" (Report, paragraphs 298 – 300), he again referred to the appellant's complaints as itemised in paragraph 6. Having considered matters such as traffic conditions and living conditions, including foul and surface water disposal, he concluded (at paragraph 299 – 300).

"The development is located on a previously developed site in a built up area of Margate and comprises a similar type of residential and commercial development to that which already exists on the site, with the addition of a hotel and which should increase in scale and intensity of use… In my view, the residual impacts are unlikely to have significant effects on the environment and, therefore, EIA is not required. I agree with screening direction … made in July 2012".

17. He recommended the imposition of numerous conditions on any planning permission, including one as to foul and surface water disposal (to which I will return when considering ground 2).
18. All this led Lord Justice Moses to hold that it was impossible to say that the Inspector failed, when considering the screening direction, to take into account the Dreamland project:

"On the contrary, it was taken into account but when considered cumulatively with Arlington, it did not lead to the view that significant environmental effects were likely." (Paragraph 52)

On one level, this analysis has force. I do not think that the Inspector failed to consider the cumulative effects of the Arlington and Dreamland projects as he perceived them. However, it may then be necessary to identify the methodology which underlay the perception. I find this task easier to carry out when analysing the Secretary of State's decision letter dated 13 June 2013.

(3) The decision of the Secretary of State dated 13 June 2013

19. The essential part of the decision of the Secretary of State was expressed as follows (at paragraph 24) :

"The Secretary of State notes that the Inspector relied on the [screening direction] of 18 July 2012 and has not seen any reason to question [it] …

The appeal proposals are not part of a wider project that takes in the Dreamland site and furthermore there is no need for a cumulative assessment with the Dreamland scheme, given its status and the uncertainty that surrounds the…. Compulsory Purchase Order which is the subject of a legal challenge. Taking into account the written submission and evidence presented to the inquiry, including that concerning the matters to which Louise Oldfield draws attention, the Secretary of State does not consider that these lead him to question his 'screening directions'… and he is content that an [EIA] is not required before the determination of this appeal." (Emphasis added)

20. The passage I have emphasised suggests a different process of reasoning from that identified in the analysis which accompanied the screening direction and the Inspector's Report. Rather than taking the form of a cumulative assessment having been carried out but with a finding of no likelihood of significant environmental effects, it is expressed in a way which seems to assert that there was no need for cumulative measurement with Dreamland because (a) the proposed Arlington development is not part of a wider project which includes Dreamland and, in any event, (b) Dreamland remained so surrounded by uncertainty arising from the unresolved legal challenge to the Compulsory Purchase Order that cumulative assessment was not yet necessary or appropriate.
21. I have expressed the last two sentences in terms of "suggests" and "seems" because Lord Justice Moses was convinced that paragraph 24 of the Inspector's Report, when properly analysed, does not bear the meaning which a first reading might prompt. He agreed with the appellant that the mere fact of the existence of the legal challenge to the Dreamland Compulsory Purchase Orders, "was no ground for saying that the cumulative effects of the two projects need not to be considered". (Judgment, paragraph 57). However he immediately added:

"The wording might have suggested that but it plainly does not mean it since, as the last sentence and the reference to the appellant's submissions make clear the Secretary of State was well aware that the effects of both projects were considered cumulatively in reaching the decision that no EIA was needed."

22. He then referred again to his interpretation that the Inspector and Secretary of State had judged that "the significant environmental effects were likely to be the free-standing consequences of the Dreamland project and not of both projects considered cumulatively".
23. On any view, paragraph 24 of the Secretary of State's decision letter is not a masterpiece of drafting. The statement that the Arlington proposal is "not part of a wider project that takes in the Dreamland site" is true to the extent that the two sites were always treated as separate projects. Hence the separate planning briefs. However, as Lord Justice Moses observed at an earlier stage of his judgment (paragraph 40):

"The development of Dreamland could not be ignored or put to one side when considering the environmental effects of Arlington and their significance in order to fulfil the requirements of [paragraph 3 and 4 of Schedule 4] the Regulations."

Indeed, that had been recognised in both planning briefs. I do not consider that a fair reading of paragraph 24 compels a conclusion that, at this late stage, the Secretary of State was misdirecting himself positively to disregard Dreamland because it is a separate project. No one was suggesting that.

24. The next statement - that "there is no need for a cumulative assessment with the Dreamland scheme" - has to be seen in the context of what follows ("given its status and the uncertainty") rather than of what had gone before ("not part of a wider project"). It is important that an assessment is made in the light of what is known and what is reasonably predicable on or ascertainable at the time. Although the Dreamland site was earmarked for development, its future remained uncertain. The issue of the compulsory purchase order remained unresolved and no planning application was yet forthcoming. In these circumstances, it was permissible for the Secretary of State to conclude that there were at that point no cumulative significant environmental effects. I consider that that was what the Secretary of State was intending to convey. It is to some extent borne out by the concluding sentence of paragraph 24, to which Lord Justice Moses attached significance. I, therefore, conclude that, notwithstanding its imperfect expression, paragraph 24 can and should be construed in such a way that does not embrace a material misdirection or error of law. The reality is as stated by Lord Justice Moses. At the time with which we are concerned there were considered to be no significant cumulative effects on the environment.
25. This does not mean that, as the development of the Dreamland site gathers pace, there may not be significant cumulative effects on the environment resulting from the development of Dreamland when considered with the now permitted development of the Arlington site. However, the Inspector and the Secretary of State were in no position to assess that when considering the development of the Arlington site in 2012 and 2013. The position in relation to Dreamland was too uncertain. I note that the Dreamland Planning Brief (unlike the Arlington one) made it clear that a planning application in relation to Dreamland "will almost certainly need to be supported by an …EIA". As I understand it, although there have been recent developments in relation to the Dreamland site since the failure of the legal challenge to the compulsory purchase order (and since the judgment of Lord Justice Moses), no EIA has yet taken place. However, that is not a matter relevant to the present Arlington litigation.
26. Ground 2 : Project Splitting

It is well known that decision- makers in this context have to be alert to ensure that developments do not circumvent the EIA mechanism by "salami-slicing" their proposals. There, the Commission guidance, promulgated in Interpretation of definitions of certain project categories (2008) stated (at page 8) :

"ECJ case-law has addressed the issue of 'salami-slicing', i.e. the practice of splitting projects into sub-projects so that each of these falls below the screening thresholds or criteria and therefore avoids the objection to undergo an EIA"

The precise scope of this ground of appeal has not always been crystal clear. However, in the capable hands of Ms Wigley it becomes clear that its focus is not an alternative way of running the Dreamland point. Rather it is a complaint that the screening decision was vitiated by a failure to take a holistic view of the likely effects on the environment of the proposed Arlington development. In this Court, the essence of the complaint is that important matters, in particular the potential environmental effects of foul and surface drainage from the Arlington site, were left up in the air at the time of the screening decision, to be dealt with at a later stage. This, submits Ms Wigley, flies in the face of the precautionary principle and of the objective enshrined in Recital (2) of the Directive that effects on the environment "should be taken into account at the earliest possible stage".

27. The proposed development of the Arlington site embraced (1) a Tesco superstore with associated parking and services, the refurbishment of Arlington House and outline planning permission for a 60 – bed hotel; and (2) the demolition of Arlington Square retail shopping and of a 2 – storey car park, the development of the necessary sewage infrastructure (including in relation to the 60 – bed hotel). At first (24 February 2011) Southern Water expressed concern that there was "currently inadequate capacity in the local network to provide foul sewage disposal to service the proposed development". However by 27 May 2011 (more than a year before the reconsideration of the screening decision), Southern Water, as a statutory undertaker was stating :

"The proposed drainage strategy is acceptable to Southern Water. The point of connection to the public sewer should be confirmed by a capacity check. The details of sewage water disposal will need to be confirmed.

We request that should this application receive planning approval, the following condition is attached to the consent:

'Construction of the development shall not commence until details of the proposed means of foul and surface water sewage disposal have been submitted to, and approved in writing by, the local Planning Authority in consultation with Southern Water'.

This duly informed the screening decision. Therefore, the Inspector's Report recommended a similar (but not identical) condition and it was later attached to the planning permission by the Secretary of State.

28. Lord Justice Moses concluded (at paragraph 28) that this history refuted the allegation of project-splitting. It demonstrated that foul and surface water disposal had been properly considered at every stage and that, by dealing with them through the medium of a condition, the Secretary of State was not hiving off an important issue. He was addressing it and doing so by permissible means. I have no doubt that that conclusion is correct. Moreover, as Ms Wigley appears to accept, foul and surface water disposal is her best point on project-splitting. Its failure makes it unnecessary for us to consider other points which are covered in the Administrative Court judgment on this issue.
29. Conclusion

It follows from what I have said that I would dismiss this appeal. I observe that the development of the Arlington site has received a great deal of consideration. Plainly the area adjacent to the seafront in Margate is in need of urgent need of appropriate regeneration. Apart from this relatively narrow appeal, there is no remaining objection to MPRL's proposals for the site, subject to the conditions attached by the Secretary of State to the planning permission. I do not question the genuineness of the Appellant's concerns but it is a fact that no objection is now pursued as to the qualitative nature of the planning permission as granted. No Wednesbury point is or could be taken.

Lady Justice Macur DBE :

30. I agree that this appeal should be dismissed although for slightly different reasons to those given by my lord, Maurice Kay LJ.
31. For the reasons given by my lord I agree that the Inspector's decision that "the significant environmental effects were likely to be the free standing consequences of the Dreamland project and not of both projects considered cumulatively" is unimpeachable. If the Secretary of State had not merely noted the Inspector's process and decision, but expressly adopted the same rationale there could be no arguable appeal. As it is the second sentence in paragraph 24 of the letter dated 13 June 2013 introduces what I am satisfied is the incorrect assertion that "there is no need for a cumulative assessment with the Dreamland scheme given its status and the uncertainty…" This is clearly at odds with that part of the judgment of Moses LJ with which I agree that "the mere fact that [the compulsory purchase order] was under challenge at the time was no ground for saying that the cumulative effects of the two projects need not be considered."
32. I am not persuaded that there is any legitimate manner of construing the second sentence to correct the apparent error promulgated. However, I am satisfied that the prospective mischief of his self misdirection may be ignored since (i) the Secretary of State does not disavow the Inspector's basis of decision in the first sentence of paragraph 24 and, (ii) the final - third - sentence of the paragraph refers to the "the written submissions and evidence presented to the inquiry, including that concerning the matters to which Louise Oldfield drew attention," which supports Moses LJ determination that, "…the reference to the appellant's submissions make clear the Secretary of State was well aware that the effects of both projects were considered cumulatively in reaching the decision that no EIA was needed".
33. That is, I consider that the Secretary of State recorded an additional - albeit wrong – reason for upholding the Inspector's decision in the second sentence, not an alternative one. The literal interpretation of the first and third sentences are not tainted by the imprecise drafting of the second. The Secretary of State can therefore be presumed to have proceeded on the basis that the necessary cumulative assessment had taken place.