England and Wales High Court (Administrative Court) Decisions

FEDERAL MOGUL CORPORATION v. SECRETARY OF STATE FOR ENVIRONMENT, TRANSPORT AND REGIONS [2000] EWHC Admin 395 (11th October, 2000)

CO/4486/1999
IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION
(ADMINISTRATIVE COURT)


Royal Courts of Justice
Strand
London WC2

Wednesday, 11th October 2000

Federal Mogul Ltd., the Claimant was refused planning permission for the redevelopment for housing purposes of its former engineering works, at Netherhampton Road, Harnham, Salisbury. The site includes a range of industrial, storage and office buildings, including two large factory buildings, and a number of specialist buildings including a chrome plating building. The site closed for business in December 1998.

The site lies just to the west of the residential area of Harnham and beyond it lies the large Southern Electricity site.
Salisbury District Council refused permission on three grounds: the first related to the loss of employment land contrary to Policy E2 of the Salisbury District Local Plan, the second related to Policy H23 and the fact that the site lay outside any housing policy boundary, and the third was that the proposal was premature.
The Inspector dismissed the appeal after an Inquiry and the challenge by the Claimant to that decision under S288 Town and Country Planning Act 1990 relates principally to the way in which the Inspector dealt with the issues arising out of the first two reasons for refusal.
It is now necessary to set out relevant parts of the Decision Letter. The Inspector sets out policies and the main issue as follows:
"The Development Plan
4. The Salisbury District Local Plan was adopted in 1996. It imposes housing policy boundaries, beyond which, in the countryside, Policy H23 seeks to prevent the erection of new dwellings save as provided for under other specified policies. There was no submission that the current proposal fell within these exceptions. The policy also provides however for proposals for residential development on urban land outside the housing policy boundaries to be considered against other relevant plan policies. The term "urban land" is not defined. As indicated by the local plan Inspector, however, whether a particular site is in the countryside for this purpose will be a matter of judgement in each case.
5. Policy E2 of the plan seeks to prevent the loss of land either allocated or in use for employment purposes to other uses unless there are demonstrable environmental or conservation benefits arising from the proposal. The eastern boundary of the appeal site coincides with that of the housing policy boundary around the residential area of Harnham, to the south west of the centre of Salisbury. The site has been in general industrial use for many years. Even if now unoccupied, there was no dispute that this remains its authorised use. Whether the site is treated as urban land or as being in the countryside for the purposes of Policy H23, the proposal would therefore still need to be considered against Policy E2.
Main issues
8. The main issues are:
i. whether there are demonstrable environmental and/or conservation benefits arising from the proposal, and if not,
ii. whether the local supply of employment land is nevertheless sufficient to justify the loss of the site for employment purposes and/or
iii. whether a grant of permission for residential development would prejudice the outcome of the local plan process."
He then expressed his reasoning in relation to E2 (for which H23 in paragraph 9 is merely a typographic error):
"Inspector's reasons
Environmental and/or conservation benefits
9. Although not explicit from Policy E2 itself, it is to my mind implicit that for benefits to be sufficient to meet the exception, they need to be in addition to and/or of significantly greater value than those which would arise in any event, for example as a result of other policy requirements. The provision of affordable housing, public open space and a contribution towards educational funding in accordance with other plan policies thus carry little if any weight in this context, however important they may be in themselves. Further, because of the location of the site and its limited access, the open space towards the rear of the site would be mainly for the benefit of the new residents. That on the road frontage not only exists now but contains a number of protected trees, so could reasonably be expected to remain undeveloped. The area of hillside/woodland owned by the appellants to the south of the site is crossed by a public footpath. The Council's assertion that there would be little scope or incentive for its development was not challenged. There was no evidence to suggest that it was either in poor condition or under threat in some way and I can find no significant benefit in it becoming a public rather than private liability."

He then deals with each of the benefits relied on by the Claimant, and considered remediation in paragraph 11:
"11. Some remedial measures might be needed at the site, as a result of possible contamination. Consultants had been instructed to investigate this aspect, but the Appellants were reluctant to divulge the results, at least to this inquiry. Entry to the main building said to be affected, a former chrome plating unit, required no protective measures when I visited the site and all the plant and machinery had been removed. In the absence of any real evidence, I am unable to conclude that any particular benefit would result from this proposal which would not arise with continuing employment use, whether by redevelopment or otherwise."
His conclusions on this first issue are in paragraph 14:
"14. I therefore conclude that while the development would certainly bring with it some real benefits, they would either be required to such a proposal under other policies and/or would not be of such advantage in environmental or conservation terms as to meet the requirements of adopted Policy E2. For the sake of clarity, they would fail also to meet the similar requirements of emerging Policy E16. On the face of it therefore, the proposal falls outside the terms of the development plan and it is necessary to look at other considerations."
He then turned to employment land supply:
"15. Preliminary to the question of the site's continuing contribution to the supply of employment land is the question of its viability for such use. Two of the three principal buildings on the site were built during World Ware Two and were said to have been constructed to withstand bomb damage. The third, a two storey building containing the chrome plating plant, dates from the 1970s. There is also a number of ancillary structures, including offices and stores. The Appellants relied on initial advice on the likely costs of demolition of all the buildings on the site, remedial works and provision of the infrastructure necessary to serve a multi-occupied estate. That is to presuppose that reuse by a single or small number of occupiers is not feasible. Apart from the bungalows at the southern end of the site, however, none of the buildings could be described as derelict, even if some are in poor condition. The main buildings may not be of modern design, but there was no technical evidence to show that any of them are structurally unsound or incapable of reuse, with refurbishment if necessary.
16. Further, as already indicated, the main industrial buildings have been cleared of plant and machinery and I have no real information on the extent of remedial works necessary, if any, to make the site usable, whether for employment or some other use. Indeed, it is not clear how much of the site is affected nor is there any reason to believe that large areas of it could not be used before remedial works were carried out or even without them. Reuse and/or refurbishment would not necessarily involve additional infrastructure requirements to the extent needed under a comprehensive redevelopment scheme. I do not doubt that the costs involved could be substantial, but on the limited evidence before me, I am unable to conclude that it would be either physically impossible or financially prohibitive."
Having acknowledged the low take up rate of employment land and the existence of a 14 year supply on that basis, the Inspector considered the particular significance of this site in paragraphs 18-19:
"18. Apart from the large site to the west of the Harnham Trading Estate, however, none of the sites agreed as definitely available exceeded 1ha. The choice of larger sites in the Salisbury area for those seeking a relocation from either within or outside the district is thus already extremely limited and would become even more so if the appeal were allowed. Even allowing for the acknowledged poor location of Salisbury in relation to the motorway network, there was evidence of demand for and/or interest in larger sites in the area, in the form of general inquiries to the County Council, express local interest in the appeal site, and the recent 3.4ha extension of a site a few kilometres to the north of Salisbury. The last of these might not be described as strictly within the Salisbury area, but equally is not included in the calculation of take-up rates of strategically identified land.
19. Further, the only marketing of the appeal site since it became available in mid-1998 has been the placing of a board on-site and the issuing of details to those inquiring about it and/or the large Southern Electricity site to the west. The latter has been on the market for, it was said, some 4 years. While there are obvious similarities of size and location, that remains a different site with different considerations, not least as a large part of it is undeveloped. The advice that a marketing campaign for the appeal site would not be worthwhile I do not doubt was based on a genuinely held commercial view. That does not of itself demonstrate the site's lack of suitability or attractiveness for continued employment use and must be seen in the light of the undisputed additional value the site would have with a residential permission. It is no criticism of the Appellants that they understandably wish to obtain the best possible return on a disposal of the site, but such private objectives have to be weighed against the wider planning considerations."
He also pointed out in paragraph 20 that a high employment level did not disprove a continuing need for the provision of large sites, pointing out that not all proposed allocations would be confirmed or would appeal to those looking to locate close to Salisbury itself. He concluded in paragraph 21 as follows:
"21. PPG4 advises that planning authorities should aim to ensure both a sufficiency of employment land and a variety of sites to meet differing needs. The loss of the appeal site to residential use would be especially damaging to the latter objective and to that of meeting local needs in the Salisbury area. The evidence presently available is far from conclusive that reuse of the site for employment purposes would be uneconomic nor does it demonstrate that retention for such use is unrealistic or unnecessary in terms of the supply and demand for employment land. In the light of my conclusions on the first issue, therefore, I do not consider that a departure from presently adopted local policy would be justified."
His comments on prematurity also cast light on the way in which he appraised the Claimant's evidence and the benefit he ascribed to the proposed housing provision itself:
"22. It may yet be, following a full examination of present and future needs and of land availability through the local plan process, that the site will be found to be surplus to requirements. Dismissal of the appeal would place a burden on the Appellants, if they are otherwise unable to dispose or make use of the site, pending the outcome of such a review. At the very least, however, a grant of permission now would reduce the options available for the replacement plan, in relation to both housing and employment land. Given the amount and location of the employment land to be lost, and the scale of the proposal, to allow it without compelling evidence in its favour could therefore prejudice the outcome of the plan process in both respects, even if the Council's evidence did not demonstrate that, by itself, it would be fatal to the overall strategy. Further, with housing supply figures running significantly ahead of annually expressed structure plan requirements, there are no overriding arguments in relation to housing needs."
Mr Hobson Q.C's first ground of challenge on behalf of Federal Mogul Ltd. is that the Inspector failed to reach any conclusion on the issue of whether the appeal site was urban land or countryside, for the purposes of Policy H23. In paragraph 4 of the Decision Letter, he points out that residential development on "urban land outside the housing policy boundaries had to be considered against other relevant plan policies". That is a paraphrase of Policy H23 in Bp102. This was land just outside the housing policy boundaries.
True it is that having identified that whether land is urban land or not is a matter for judgment, the Inspector expresses no conclusion on the issue. But I accept Mr Mould's submission on behalf of the Secretary of State that the Inspector did not have to do so. The only consequence of the Inspector reaching a conclusion that the appeal site constituted urban land would have been that the residential development proposal did not fall at the first hurdle but had to be considered against relevant plan policies. Policy E2 is the obvious relevant policy. The Inspector analysed the proposal against that policy which is exactly what he would have done if he had reached a conclusion that the land was indeed "urban land" as the Claimant was urging. Accordingly the absence of a conclusion on that issue is irrelevant to the Inspector's reasoning, and was unnecessary in order for him to deal with the appeal.
An Inspector is obliged to give his reasoned conclusion on the principal important controversial issues, and is obliged to explain the essential steps in his reasoning. The question of whether the land was urban land or not was an issue between Federal Mogul and the Council at the appeal. But it was irrelevant to the reasoning of the Inspector. He is not obliged to reach conclusions on issues which make no difference to his reasoning merely because they have been in issue between the parties. He is perfectly entitled to say, in effect, that he assumes in favour of the Claimant that it is urban land without deciding the issue and then to consider the Claimant's arguments on that basis.
Mr Hobson Q.C. submitted that the absence of a conclusion on this issue precluded the Inspector from approaching the housing benefits in as favourable a light as he might otherwise have done. This is not an argument which has a basis in the wording of Policy H23 or of E2. Moreover, the Inspector recognised in paragraph 14 of the Decision Letter that there were housing benefits but pointed out in paragraph 22 that the scale of housing supply meant that there were no overriding arguments in relation to housing needs. It is difficult to see that any advantage could have accrued to the Claimant from an express favourable conclusion on the urban land issue.
Mr Hobson Q.C. also submitted that his client was prejudiced because not knowing whether the site was urban land or not hindered alternative redevelopment proposals. That debate is still a live one but in any event, there has to be an inadequacy of reasoning for any question of prejudice to arise. For the reasons which I have given, I do not consider there to have been any error on the Inspector's part on this issue.
The second ground raised by the Claimant was that the Inspector misinterpreted Policy E2, or ignored considerations relevant to its application, where in paragraph 9 of his Decision Letter he held that it was implicit in Policy E2 that the environmental or conservation benefits arising from the proposal had to be "in addition to and/or of significantly greater value than those which would arise in any event, for example as a result of other policy requirements". Mr Hobson Q.C. submitted that so long as the environmental or conservation benefits arose from the proposal that was sufficient. It is clear from the subsequent reasoning of the Inspector in relation to benefits relied on by the Claimant, that he did give less weight to or discount benefits which failed his implicit test.
Mr Mould submitted, and I accept, that the correct approach for the Court to adopt when assessing the way in which an Inspector has interpreted a policy is set out in R v Derbyshire C.C. exp. Woods 1997 JPL 958 C.A., and as elaborated in Virgin Cinema Properties Ltd. v SOS 1998 2 PLR 24. The question for the Court is whether the interpretation adopted is a reasonable one, having regard to and only to material considerations.
In my judgment, the Inspector's approach certainly satisfies that test. Whilst I recognise the force of Mr Hobson Q.C's submission that the policy text simply refers to the benefits arising from the proposal, I am satisfied that the Inspector's approach, putting the policy in the context of its purpose, is at least perfectly reasonable, if not the only sensible interpretation.
As Mr Mould submitted, the prime objective of Policy E2 is to safeguard existing employment land, and to permit that aim to be set aside only if overriding benefits, environmental or conservation in nature were found. If those benefits that accompany a housing development would also accompany an employment use or development, the purpose of the policy would be undermined to the extent that those benefits enabled the unemployment land to be developed for another purpose. Likewise, if the benefits relied on were by nature those that housing development had to bring so as to overcome an objection e.g. in relation to open space provision, the housing development would in effect be relying on no more than the fact that it was housing development rather than relying on the non-housing benefits which the policy contemplates. The same point applies in relation to benefits which any housing development has to provide on any site: they are in effect housing benefits; to accord those weight in interpreting or applying Policy E2 would undermine its aim and the effectiveness of the requirements which have to be satisfied for an exception to be made. Any housing development could satisfy them without the limitations implied by the Inspector. At all events, for the reasons which I have given, the Inspector's approach is a perfectly reasonable and hence lawful one.
Mr Hobson Q.C's third ground of challenge relates to the way in which the Inspector treated one of the benefits relied on, that relating to contaminated land and remediation. If the Inspector's approach to benefits generally was lawful, this is the only benefit in respect of which his analysis generates further complaint.
Mr Hobson Q.C. submits that the Inspector, in stating in paragraph 11 of the Decision Letter that he was unable to conclude "that any particular benefit would result from this proposal which would not arise with continuing employment use, whether by redevelopment or otherwise," because he lacked "any real evidence", had ignored the evidence of Mr Tarry and Mr Lacey on behalf of the Claimant, in part not contested by the Council. Mr Hobson Q.C. also submits that the Inspector allowed himself to be influenced by the irrelevant fact that there had been no protective measures undertaken when he visited the former chrome plating unit, said to be the main building affected by contamination.
I do not accept these submissions. First, the evidence of Mr Tarry as relied on by Mr Hobson Q.C. in his submissions, at B p 58, and of Mr Lacey at B p 79, is as general as it is possible to be. Mr Lacey simply says "The site requires some environmental remediation as a result of its previous uses". Mr Tarry says less. The extent of the Council's agreement, B p 108, was that "Environmental remediation for industry is less onerous than that for residential development".
In my judgment, the Inspector is fully entitled to appraise the material as a lack of real evidence addressing the issue of interest to him, which was whether this housing proposal brought any particular benefit which an employment use or redevelopment would not. The Inspector was making a point about the unpersuasive and inadequate nature of the material, rather than ignoring or rejecting it; he makes clear in paragraph 23 of his Decision Letter that further evidence on another application could deal with the contamination issue.
As to the absence of protective measures, this is the sort of matter which an Inspector is entitled to take into account when weighing the evidence and he was entitled to use it to reinforce his appraisal of the evidence as inadequate.
Mr Hobson Q.C's fourth basis of challenge related to the way in which the Inspector dealt with the issues of refurbishment and re-use of the site for employment purposes. The Inspector was dealing with the question of whether, as the proposal failed Policy E2, there were considerations relating to the supply of employment land and the prospects of this land being used for employment purposes which told in favour of residential development.
Mr Hobson Q.C. made a series of inter-related points: in effect the Inspector ignored Mr Lacey's evidence that the buildings were not capable of economic re-use; he ignored the significance of the additional 50 hectares allocation of employment land in the emerging local plan; he failed to consider the site's suitability for employment, failed to reach any conclusion on whether the site was needed for employment purposes, and ignored the significance of the failure of 4 years' marketing of the adjoining Southern Electricity site to lead to employment development. He ought to have brought together a view on the cost of development and a view on the extent of employment land supply so as to reach a fully reasoned conclusion on the true prospects of the appeal site being used or redeveloped for employment purposes.
In my judgment, these contentions are wrong. The Inspector was not satisfied by the Claimant's evidence on the viability of redevelopment because it failed to address, in a way he found persuasive, the question of whether reuse of the existing buildings by one or a small number of occupiers was feasible. Apart from a short paragraph, Mr Lacey's evidence dealt with the costs of demolition and redevelopment for a multi-occupied estate. It was only one paragraph (2.4 B p 72) which addressed the use of the existing buildings and it simply said that they were "not considered to be capable of economic re-use for industry" because of their age, design and the degree of previous usage. The Inspector was fully entitled to regard himself as having only "limited evidence" on refurbishment and/or reuse; paragraph 16 of the Decision Letter. How he appraised Mr Lacey's evidence was a matter for his judgment and he was entitled to decline to conclude from it that refurbishment and/or reuse "would be either physically impossible or financially prohibitive". In paragraph 23, he recognises that, on another application, further evidence on the reuse issue could be forthcoming.
In paragraph 20 of his Decision Letter, the Inspector explicitly addresses the significance of the 50 hectare employment land allocations, identifying uncertainty over their allocation, the lack of appeal of some of them in terms of location compared to the appeal site for some occupiers and his view that such proposed allocations were not a basis now for a release of employment land in breach of policy.
In paragraph 18, 20 and 21 of his Decision Letter, the Inspector explicitly addresses the suitability of the appeal site for employment use in terms of its size in a location close to Salisbury, and in essence identifies an important role for it as a large site close to Salisbury.
In paragraph 19 of his Decision Letter, the Inspector explicitly addresses the significance for the appeal site of the lack of success in marketing the adjoining Southern Electricity site. He had some substantial material from Mr Lacey (B p 81-83) on the similarities, and some shorter material from the Council (B p 108) drawing attention to differences between the sites and problems with the adjoining site from which the appeal site did not suffer. The Inspector also saw a potential advantage to the appeal site in its buildings compared to the adjoining land, a large part of which was undeveloped. This relates back to the Inspector's approach to refurbishment, differing as it did, from Mr Lacey's. In my judgment, the Inspector on the material before him was fully entitled not to be satisfied that a clear conclusion could be drawn in relation to the appeal site from experience on the Southern Electricity site. That was a matter for him to appraise; it cannot be said that he was bound to accept Mr Lacey's inferential evidence. The Inspector recognised in paragraph 23 of the Decision Letter that fuller testing of the market could lead to a different conclusion.
The threads of these points are drawn together by the Inspector in paragraph 21 of the Decision Letter. He identifies the potential importance of the land and the fact that the evidence that reuse or refurbishment was unviable, or that retention in employment use was unrealistic or unnecessary in supply or demand terms, was far from conclusive. He does bring cost, supply and demand together. He simply was not satisfied on what he saw as key points because of the weak nature of the Claimant's evidence. He was entitled to so appraise it: his conclusions on it are not remotely irrational and he recognised that better evidence could alter a number of important conclusions.
Accordingly, and despite Mr Hobson Q.C's able submissions, this application is dismissed.

THE DEPUTY JUDGE: I hope that you have received a copy of the judgment in relation to this. For the reasons that I have set out in that judgment, this application is dismissed.

MS ROBINSON: Thank you, my Lord. I am standing in for Mr Mould today. Would your Lordship order the claimant to pay the Secretary of State's costs? Your Lordship should have a revised cost schedule which takes into account the costs of attending today, and the sum that I seek is £3,748.

THE DEPUTY JUDGE: I am not sure that I have that revised cost schedule. I have the cost schedule of the previous hearing.

MS ROBINSON: I will hand one up.

THE DEPUTY JUDGE: Yes. Anything else you are seeking? You do not have to.

MS ROBINSON: No.

MR GREATOREX: My Lord, I appear this morning on behalf of Mr Hobson. As far as the issue of costs goes, we do not oppose the payment of costs. The only issue is as to the amount. I was told that costs had been agreed at some point in the past, presumably not that because it is a more recent version. Unfortunately there is no-one here from whom I can take instructions this morning to confirm.

THE DEPUTY JUDGE: The only extra, Mr Greatorex, over what you have previously had if that previous statement was agreed, is an additional £60 for attending the judgment plus the fee for counsel attending the judgment, making the total of £3748 compared to a previous total of £3588. If that figure was agreed, you are not going to have any success arguing you should not pay the costs.

MR GREATOREX: The only problem I have is that I am not sure whether the previous schedule which is being referred to in submissions was the one that was agreed or not. I was hoping to take instructions this morning but that was not possible.

THE DEPUTY JUDGE: If you are not in a position to do so then Ms Robinson, do you have any instruction to say that some other figure was agreed?

MS ROBINSON: No. My instructions are that the original schedule, excluding the additional sums for today, was agreed.

THE DEPUTY JUDGE: In any event Mr Greatorex, it is a reasonable figure and I am going to order that your client pay the costs in the sum of £3,748.

MR GREATOREX: I would ask for permission to appeal in this case. The case does raise important issues concerning the obligations on inspectors to reach conclusions in respect of all relevant policies within the development plan. I say that is an important issue of law and that permission to appeal should be granted on that basis.

THE DEPUTY JUDGE: You need permission, do you?

MR GREATOREX: Yes.

THE DEPUTY JUDGE: Well, you cannot have it. The issues in my judgment are quite straightforward and raise no issues of wider significance. There is nothing there that, in my judgment, warrants troubling the Court of Appeal.

MR GREATOREX: I am grateful, my Lord.