England and Wales High Court (Administrative Court) Decisions

QUEEN v. WYRE BOROUGH COUNCIL ex parte DRANSFIELD PROPERTIES LIMITED [2001] EWHC Admin 147 (7th February, 2001)

Neutral Citation Number: [2001] EWHC Admin 147

IN THE HIGH COURT OF JUSTICE CO/2204/2000

QUEENS BENCH DIVISION

ADMINISTRATIVE COURT

Royal Courts of Justice,

Strand,

London WC2A 2LL

Wednesday, 7th February, 2001.

BETWEEN:

Respondent

Claimant

Introduction:

1. Wyre Borough Council seeks the regeneration of part of the centre of Fleetwood through a major retail foodstore based development. It is called the Cop Lane Scheme. Knowing of this two developers, each with the backing of a foodstore operator, sought planning permission for what they considered to be the appropriate form of development, on sites which substantially overlapped each other but which were not identical. With the benefit of planning permission, each engaged in discussions with the Council and its independent consultant to persuade the Council to choose it as the developer of the preferred scheme. It was envisaged that there would be an agreement with the Council for the use of compulsory purchase powers in order to complete the necessary land assembly, and for the exercise of other related statutory powers.

2. On 1st June 2000, following consideration of what are described in correspondence as criteria, and further correspondence, the Council decided to select the scheme proposed by CityPark Realty Ltd., with ASDA as store operator, in preference to the scheme proposed by Dransfield Properties Ltd., with Morrison's as store operator.

3. Dransfield Properties Ltd., the Claimant, seeks to quash that decision. It contends that the determining factor behind the selection of CityPark was a conclusion by the Council that the CityPark scheme would not require recourse to Single Regeneration Budget (SRB) or other public funds, whereas the Dransfield scheme would. This was so conspicuously unfair as to be unlawful as an abuse of power or was in breach of a legitimate expectation in circumstances where, in effect, the Council in correspondence had given every impression that that was not a matter of concern. Had the true position been known that decisive factor could have been addressed successfully.

The Facts.

4. On 10th December 1999, Dransfield was granted full planning permission for a development scheme in Fleetwood town centre based on a food store of 6800 sq.metres gross, in which would be approximately 4200 sq.metres net sales area. This was to be operated by Morrisons. Dransfield had already received planning permission in August for a somewhat smaller store.

5. On 11th May 2000, CityPark was granted full planning permission for a development scheme in Fleetwood town centre based on a food store which although described as 4383 sq.metres gross was in truth 4383 sq.metres net sales area. This was to be operated by ASDA. There was a condition imposed on the CityPark permission requiring the subsequent approval of the food store's elevational treatment.

6. These two stores were thus similar in floor area. However, the scheme proposed by Dransfield was overall a larger scheme covering and, Dransfield contended to the Council, regenerating a larger area of Fleetwood town centre than the CityPark scheme, even though to a considerable degree the scheme sites overlapped.

7. Naturally both developers engaged in discussions with the Council over the progress of their applications for planning permission and incurred expense in promoting their schemes. Dransfield and Morrisons certainly took steps to acquire the necessary land by agreement and at 1st June 2000, the date of the Council's selection of its preferred scheme, Dransfield and Morrisons had assembled a large part of their site, though a lesser part was owned by CityPark and ASDA and other persons. Neither developer could complete its scheme without the use by the Council of compulsory purchase powers and so each was competing to be the scheme favoured by the Council for the exercise of such powers, pursuant to an agreement with the chosen developer indemnifying the Council against the costs. The Council appointed Donaldsons, Chartered Surveyors, to advise it in addressing the schemes.

8. On 31st January 2000, the Council's Property Services Manager wrote to Dransfield, as it did to CityPark, confirming that appointment:

"to assist the Council in determining a preferred developer/development for the site which will include the use of S.R.B. funds towards the cost of abnormal works. ... Working to a tight schedule the Council have requested that a final written report with recommendations, be received by noon on the 28th February 2000.

In this way, the two schemes for the Cop Lane Site now before the Council can be independently appraised with regard to an agreed criteria in order that the Council can inform the North West Development Agency of the preferred developer/development in order that the Agency can conduct an appraisal for S.R.B. purposes on the preferred scheme."

Discussions between Dransfield and Donaldsons were envisaged.

9. Accordingly, on 10th February 2000, Donaldsons wrote to Dransfield asking for a meeting to:-

"discuss the scheme in more detail and consider your appraisal in terms of identifying the amount of gap-funding required and the timing of the scheme implementation. My main areas of consideration are the scheme itself, the developer/operator relationship and track record, financial/viability issues especially with regard to gap-funding and finally, issues arising with regard to implementation in terms of re-locations, C.P.O. and so forth. For your information, I enclose a list of Criteria that had been agreed with Wyre Borough Council."

The Council wrote a letter on the same day in similar terms:

viability was to be addressed in order:-

"to quantify any level of gap-funding required and finally issues surrounding the implementation of the scheme and any impact this may have on the S.R.B. timetable."

The criteria were again enclosed.

10. Those criteria, more a check-list of headings, included under the heading "Financial Viability", the following factors: "Public Sector shortfall funding including N.W.R.D.A. appraisal", "S.R.B. Monies and Timescale" and "S.R.B. Outputs." The significance of S.R.B. funding was that it could fund the gap between cost, particularly abnormal costs associated with the site, and scheme value. Such funds were available to the Council from the N.W.R.D.A. and their availability could be at risk if they were not actually used within a certain timescale.

11. On 23rd February 2000, the timetable for the completion by Donaldsons of its task was extended to 10th March 2000, by which time a report with recommendations was expected.

12. The Council's Policy Committee was due to consider the matter on 16th May 2000. Before that meeting, ASDA circulated to Councillors and to the public more widely, a statement of the benefits of its proposal, comparing it favourably with Dransfield's scheme. In particular, in relation to "S.R.B. Monies and Timescale" it said;

"Our proposals are flexible. We can make the scheme happen entirely from our own resources and without S.R.B. funds if necessary. This, we understand, would save the Council some £700,000 of their own funds required to draw down the S.R.B. Monies. However, if required we could structure the finances to include S.R.B. Monies."

Dransfield became aware of this assertion between the committee meeting of 16th May and 1st June 2000.

13. Apparently prompted by that, the Council on 15th May 2000 inquired of N.W.R.D.A. as to what the implications of that proposal were for the availability of S.R.B. to the Council. The Council confirmed its understanding of what N.W.R.D.A. had advised in a letter of 16th May 2000. In essence, S.R.B. funding earmarked for this town centre re-development would not be automatically withdrawn if it were not spent on that purpose, but would be available for other re-generation schemes of comparable benefit. This information was before the Council's Policy Committee when it met on 16th May 2000.

14. There is no Minute of that meeting on 16th May 2000, but it is clear from subsequent correspondence that the Committee deferred a decision on the selection of a preferred developer for the Cop Lane Scheme, so as to seek further information from the development parties. There then followed the crucial correspondence upon which Mr. Lindblom QC., for the Claimant, relies.

15. In a letter dated 18th May 2000, Mr. Brown, the Council's Chief Executive said:

"In order that I may be in a position to clarify and confirm matters for the benefit of Members regarding the Dransfield/Morrisons proposal, I should be obliged if you would provide unequivocal responses to the following propositions:

1. That your scheme will be undertaken in accordance with the approved planning consent or as amended by agreement between you and this Council's Planning Authority.

2. That the scheme as defined in 1 above will be developed and completed with no financial assistance from this Council and no further draw from the S.R.B. Funds then those already expended on the Cop Lane Re-development."

A number of other assurances, not now directly material, were sought, and an answer required by 5pm on 22nd May 2000 for the benefit of Members' timetable. Clearly the ASDA proposal to forego S.R.B. and other public funding was of interest to the Council and it wanted to know if the Claimant would make a similar offer in relation to its permitted scheme, or to that scheme with any modifications acceptable to the Council as planning authority.

16. Dransfield replied on the 22nd May 2000. It expressed surprise that further information was sought and repeated the advantages which it saw its scheme as having in scale and architectural quality. It confirmed that it would implement the permitted scheme. So far as the second matter in the Council's letter of 18th May 2000 was concerned, Dransfield re-iterated twice that the abnormal costs, the high quality of development and the larger scale of development would inevitably require S.R.B. funding at the level already submitted to the authority and essentially confirmed by N.W.R.D.A. However, the response continued:

"In the event that the Council decide that they do not wish to spend monies promoting an S.R.B. scheme, I can confirm that the Dransfield Properties/Wm. Morrisons can come forward with a reduced scheme similar to that proposed by our competitors. In this case the land assembly cost will fall substantially due to the reduced land requirments, as would the build costs elements due to the inferior design. The resulting factor being S.R.B. may not be required".

The other assurances sought were given and the letter concluded by pointing out additional advantages enjoyed by the Dransfield scheme over his rival.

17. The Council replied on 23rd May 2000, following a telephone conversation between Dransfield and Mr. Brown, seeking clarification of aspects of that letter. Written confirmation was sought of three oral assurances, two of which matter. So far as material, the letter reads:

"2. In Section 2, paragraph 4 of your letter you state that Dransfield Properties/William Morrisons can come forward with a reduced scheme similar to that proposed by your competitors. Will you confirm that Dransfield Properties/William Morrisons will develop a reduced cost scheme if that is the wish of this Council.

3. Again in Section 2, paragraph 4 of your letter you state that in regard to a reduced cost scheme similar to that proposed by your competitors the cost will be reduced and the resultant factor will be S.R.B. may not be required. I shall be obliged if you will confirm that this reduced cost scheme can be developed by Dransfield Properties/Morrisons without S.R.B. funds or this Council's monies being required.

As stated in our telephone conversation a report on this matter will be presented to a special meeting of the Council's Policy Committee which is scheduled for the evening of the 1st June 2000 and the above mentioned information is required for that report. I shall therefore be obliged if you would forward the information as discussed in our telephone conversation, in writing, by fax this afternoon".

18. Dransfield's answer on 23rd May 2000, so far as material said:

"2. We can confirm that Dransfield Properties/Wm. Morrisons, if so required by the Council, will come forward with a reduced scheme similar to that proposed by the competing developer.

3. The Council officers need to determine fully the CityPark Realty/ASDA consent if in the event a standard ASDA concept design is acceptable to Wyre Borough Council Officers - i.e. a steel-cladded building and a vaulted cladded roof and retaining the existing facade buildings, we strongly believe that S.R.B. funds will not be required. However, if as we suspect Wyre Borough Council opt for a high quality design, the cost of developing the competing scheme will be significantly affected i.e. the perceived costs will be substantially higher.

I do not believe that a credible organisation could unequivocally confirm their ability to deliever such a scheme until the proper planning process has been evaluated."

The reference in paragraph 3 to the steel cladding reflects the fact that Condition 23 on the CityPark permission still required approval to be obtained for the elevational treatment of the store.

19. No further information was sought; the Council simply concluded the correspondence by thanking Dransfield for letting the Council have its comments and for its co-operation. In particular, as Mr. Lindblom QC pointed out, Dransfield was not asked to submit a smaller scheme avoiding S.R.B. funding, nor does the correspondence specifically indicate that Dransfield would be materially disadvantaged by not doing so.

20. On 1st June 2000, the Policy Committee took its decision in the following manner, as the Minutes reveal. The Officers' Report and Donaldson's Report are understandably regarded by the Council as confidential and have not been presented to the court. The Minutes, however, record:

"Cop Lane Area, Fleetwood - Proposed Development.

Further to Minute P.Y.3 the Chief Executive submitted a report which contained details of additional information provided by the two developers following the meeting of the Committee held on 16th May 2000. Copies of the written responses from the developers were appended to the report together with a copy of a further letter from one of the developers.

The report outlined the choices available to Members and commented that in the event of the Committee choosing either of the schemes which did not require S.R.B. or Council funding, the North West Regional Development Agency had indicated in principle that the S.R.B. funds currently allocated for the regeneration of the Cop Lane site could be re-allocated to other schemes which took the regeneration of Fleetwood a step further and offered comparable outputs.

The report also referred to the possible use of the Council's Compulsory Purchase Powers and financial assistance in respect of the redevelopment of 139 to 161, Lord Street, Fleetwood.

Following detailed consideration, it was subsequently moved ... 'that the more comprehensive of the schemes proposed by Dransfield Properties/Wm. Morrisons be approved'."

21. This Motion was lost. The Second Motion considered included as Item 2:

"that the scheme proposed by CityPark Realty/ASDA be approved subject to the scheme being delivered without S.R.B. funding or financial assistance from the Council";

but before that was dealt with substantively, an amendment was proposed by supporters of the Dransfield scheme which would have substituted for Item 2:

"that both developers be allowed to submit a scheme which does not require S.R.B. funding or financial assistance from the Council".

This amendment was lost and the unamended Second Motion, including Item 2, was approved. The Committee approved the use in principle of compulsory purchase powers subject to an indemnity. The issuing of a Press Release by the Chief Executive was approved.

22. As this Press Release has been the subject of some controversy, I set out the important parts. It refers to the approval of the CityPark scheme, its benefits and the approval of the use of C.P.O. Powers. It also says:

"the Council's Chief Executive, Michael Brown said, 'Members approved the CityPark Realty scheme on the basis that it would require no further public or S.R.B. spending. This in turn will open up exciting regenerating possibilities which otherwise might not have happened'."

Mr. Lindblom QC contends that this shows that the reason for the selection of CityPark was because its scheme, unlike Dransfields, required no further public or S.R.B. spending, and that that is precisely what the Press Release conveys. Mr. Findlay, for the Council, submits that, as Mr. Brown says in his Witness Statement, it was not intended to provide reasons for the decision because the Committee itself provided no reasons, and that issues far more extensive than the use of S.R.B. funding were considered. The crucial words in the Press Release are that approval for CityPark was "on the basis that it would require" no S.R.B. funding. Thus the Press Release expressed the underlying requirement upon which approval was given rather than the reason for the approval of the scheme as the preferred development.

23. In subsequent correspondence between Dransfield and the Council, Dransfield complained that the decision had favoured CityPark because of its position on S.R.B. funding, in the face, it was said, of officer and consultant preference for the Dransfield scheme. Mr. Brown in his corrected second letter of 15th June 2000, replied:

"It is a bold assertion to state that the recommendations were ignored. Clearly, Members had all the relevant information in front of them and it would be, in my view, a valid assumption that Members took account of the reports and recommendations in front of them. The assumption which appears to underly your statement of fact that Members Committee ignored the recommendations is, in my view, untenable.

I note that it appears to you that the decision was taken on one factor alone, the requirement for S.R.B. funding. Again, I am constrained by the position with regard to the matter having been dealt with in private. I can say, however, having been authorised so to do for the purposes of issuing a Press Release, that the issue of public funding was a major consideration in the decision. Although there were differencies in the merits of the schemes, in terms of the extent to which they achieve the objectives of the Partnership and the Council for the regeneration of the site, it was clear that both schemes - the Dransfield Properties/Morrisons scheme and the CityPark Realty/ASDA scheme - satisfied the essential requirements. However, one scheme was dependant on a substantial public investment and the other was not. Faced with that choice, the Committee opted for the scheme which would not require public funding. Clearly, public funding was, rightly, a significant issue but it was far from being the sole factor which was taken into account.

You also assert that the Council refused your clients an opportunity to offer a scheme which did not require public funding. This does not accord with the correspondence conducted with your clients, prior to the meeting of the Policy Committee on 1st June, in which they were asked specifically if they would carry out a scheme which would achieve the regeneration of the site through a retail development which did not require public funding. Your Clients' response to the effect that such a scheme could be carried out by them was placed before the Members for their consideration at the meeting on 1st June.

You will see that the actual position, so far as I am properly able to state it given the constraints referred to above, is materially different to a significant degree to the assertions and statements made in your letter. The Council was faced with an extremely difficult choice between two competing schemes and for the re-development of the same site but the Committee had before them all the relevant information and took appropriate account of all of it in reaching their decision."

24. Later, in a letter of 25th July 2000, Mr. Brown enclosed the Minutes of the meeting of 1st June 2000, saying:

"Enclosed are the Minutes of the meeting, which clearly indicate that three decisions were taken. First, the decision was taken not to opt for a scheme involving funding; secondly, a decision was taken not to ask the Claimant to submit a detailed scheme before the choice was made, and, thirdly, a decision was made to choose the scheme before the Council as opposed to one which was merely promised to it... As to legitimate expectation:- (2) the Claimant continued to submit/persist with one scheme only which was dependant upon S.R.B. funding. That was a matter of its own choosing.

(3). The Claimant was given the opportunity before a decision was taken to say whether it would be prepared to come up with a less expensive scheme - if requested by the Council ...."

The Legal Background.

25. There is no specific statutory power which empowers or governs the taking of decisions such as this by a Local Authority. It was agreed before me that the decision was a precursor to the taking of decisions in relation to the exercise of compulsory purchase powers and perhaps road closure orders, which would be governed by specific statutory provisions. The likeliest source for the power being exercised by the Council was s.111(1) of the Local Government Act 1972, which empowers the doing of an act which "is calculated to facilitate or is conducive or incidental to, the discharge of any of [the Council's] functions."

26. It was not disputed that the decision of 1st June 2000 was judicially reviewable and that it could be successfully reviewed, were the Claimant to succeed in showing that it was so conspicuously unfair a decision as to amount to an abuse of power or that it was in breach of a legitimate expectation.

27. It was further agreed that the analysis of the law provided by Richards J. in Regina -v- The Lottery Commission ex parte Camelot Group plc, 21st September 2000 was relevant and indeed very helpful in this case. I was referred in particular to the following passages which I adopt respectfully as a statement of the relevant legal principles.

"57. It is well established that the exercise of statutory powers is subject to a requirement of procedural fairness. As Lord Bridge expressed it in Lloyd -v- McMahon [1987] AC 625, 703A-B: '... when a statute has conferred on anybody the power to make decisions affecting individuals, the courts will not only require the procedure prescribed by the statute to be followed but will readily imply so much and no more to be introduced by way of additional procedural safeguards as will ensure the attainment of fairness'.

58. What precisely is required depends upon the context. In a frequently cited passage in his speech in Reg. -v- Home Secretary ex parte Doody [1994] 1 AC 531, 560E-561A, Lord Mustill sets out a number of propositions which include:

'(3) The principles of fairness are not to be applied by wrote identically in every situation. What fairness demands is dependant on the context of the decision and this is to be taken into account in all its aspects'....

60. It is also common ground that at the very least considerable caution is required before the court concludes that a breach of procedural fairness has not affected the substantive result.

61. In relation to legitimate expectation Mr. Crow points to the line of authority to the effect that it must be founded on a clear and unambiguous representation: see e.g. Reg. -v- Jockey Club ex parte R.A.M. Racecourses [1993] 2 All E.R. 225 which is based in turn on Reg. -v- I.R.C. ex parte M.F.K. Underwriting Agencies Ltd. [1990] 1 WLR 1545. Mr. Pannick, however, points to the wider principle, which is not in dispute, that even if the normal requirements for breach of legitimate expectation are not met, a decision may nonetheless be so unfair as to be an abuse of power and unlawful. In Reg. -v- I.R.C. ex parte Unilever plc [1996] STC 681, the Revenue had relied on a statutory time-limit as defeating claims for loss relief in circumstances which were held to be very unfair. Sir Thomas Bingham, M.R. accepted in general terms a number of points advanced on behalf of the Revenue, including that there was no clear, unambiguous and unqualified representation by the Revenue such as was found necessary in M.F.K. He went on, however, to say that the courts had not previously had occasion to consider facts analagous to those in the case before it. The categories of unfairness were not closed and precedent should act as a guide not a cage. Having considered the points in favour of Unilever, he concluded, at p.691G-H and 692D-F: 'These points cumulatively persuade me that on the unique facts of this case the Revenue's argument should be rejected. On the history here, I consider that to reject Unilever's claims in reliance on the time-limit, without clear and general advance notice, is so unfair as to amount to an abuse of power....

The threshold of public law irrationality is notoriously high. It has to be remembered that what may seem fair treatment of one taxpayer may be unfair if other taxpayers similarly placed have been treated differently. And in all save exceptional circumstances the Revenue are the best judge of what is fair. It has not, however, been suggested that the detailed history described above has any parallel. The circumstances are, literally, exceptional. I cannot conceive that any decision-maker fully and fairly applying his mind to this history,... could have concluded that the legitimate interests of the public were advanced, or that the Revenue's acknowledged duty to act fairly and in accordance with the highest public standards was vindicated, by a refusal to exercise discretion in favour of Unilever. I share the judge's conclusion that this refusal, if fully informed, was so unreasonable as to be, in public law terms, irrational'.

It is to be noted that the finding of abuse through unfairness was not dependent upon the finding of irrationality.

62. In an equally interesting passage, at 694H-695B, Simon Brown LJ said this in reaching the same broad conclusion:

'... Of course legal certainty is a highly desirable objective in public administration as elsewhere. But to confine all fairness challenges rigidly within the M.F.K. formulation - requiring in every case an unambiguous and unqualified representation as a starting point - would to my mind impose an unwarranted fetter upon the broader principle operating in this field: the central Wednesbury principle....

Unfairness amounting to an abuse of power as envisaged in Preston and the other Revenue cases is unlawful not because it involves conduct such as would offend some equivalent private law principle, not principally indeed because it breaches a legitimate expectation that some different substantive decision will be taken but rather because either it is illogical or immoral or both for a public authority to act with conspicuous unfairness and in that sense abuse its power....

In short I regard the M.F.K. category of legitimate expectation as essentially but a head of Wednesbury unreasonableness, not necessarily exhaustive of the grounds upon which a successful substantive unfairness challenge may be based'.

63. Although it was upon those passages in Unilever that Mr. Pannick put particular weight, he also referred in his Skeleton Argument to the decision of the Court of Appeal in Reg.-v- North and East Devon Health Authority, ex parte Coughlan [2000] 2 WLR 622 which provides an up-to-date and very detailed judicial analysis of the whole topic of unfairness, substantive as well as procedural. In that case the court, whilst referring to Simon Brown LJ's judgment in Unilever as a valuable reconciliation of the existing strands of law, did not think it necessary to explain the modern doctrine of legitimate expectation in Wednesbury terms (see 654, para.81). The thrust of the judgment is to treat abuse of power as an underlying and unifying principle. Thus the various Wednesbury categories are to be regarded as the major instances but not necessarily the sole ones, of how public power may be misused (para.81). So too a decision may be so unfair as to amount to an abuse of power and be contrary to law (see e.g. 653 para.78, referring to Unilever).

64. In the light of such developments Mr. Pannick submits that the court should not limit itself to an unduly narrow analysis in terms of established categories but should look at the matter in the round when assessing whether there has been an abuse of power....".

The Claimant's Submissions.

28. Mr. Lindblom QC submitted first that the decision was conspicuously unfair. He submitted that the Minutes, the Press Release and subsequent correspondence pointed clearly to the conclusion that whilst many other factors may have been considered, the decisive factor in the preference for the CityPark scheme was its absence of requirement for S.R.B. funding, releasing that funding for expenditure elsewhere by the Council. There was nothing in the criteria produced to both parties in February 2000 which suggested that avoiding the use of S.R.B. funding would be a factor. The correspondence after the Committee Meeting of 16th May 2000 made clear that reliance on S.R.B. funding would not be a factor against Dransfield's scheme because Dransfield had made its position plain: it was prepared to come forward with a reduced scheme, similar to CityPark's, avoiding the use of S.R.B. funds if that was to be taken as a factor against its currently proposed scheme. There had been no suggestion that its answers in that respect were unsatisfactory or that an actual reduced scheme was required to be produced by 1st June 2000, which would have been a near impossible task anyway. No timetable problems had been identified to it. What happened was that, inspired by a rival's stance, the goal posts were shifted and a neutral factor became decisive in such a way that Dransfield could have no shot at the newly-positioned goal, in spite of correspondence which led Dransfield to believe that it had satisfied the Council on the issue and that the goal posts remained where they always had been.

29. Mr. Lindblom QC drew parallels between the position of the Claimant and the position of GTech. in the Lottery Commission case. There, the Lottery Commission told GTech.(para.19 of Richards J's judgment) that it would not proceed further with a determination that GTech. was not a fit and proper person to manage part of the National Lottery business; this was taken by Camelot and GTech. to cover not just the existing licence but also the new licence application. However, Camelot was subsequently held to have failed to meet the statutory criteria because of a want of fitness and propriety in relation to GTech. Camelot complained that the unfairness in it being prevented from correcting the deficiencies in its bid was compounded by that additional unfairness.

30. Mr. Lindblom QC submitted that the Regulator's riposte, that Camelot was simply seeking a second bite of the cherry, having failed to propose what it now proposed to deal with the issue, was very akin to the Council's riposte here. It should, he said, meet the same fate: there was a marked lack of even-handedness in not giving Dransfield the same opportunity as CityPark to produce a scheme not reliant on S.R.B funding, in view of the manner and time at which that issue was raised. This unfairness was compounded by the effect of the correspondence after the 16th May 2000 meeting leading Dransfield to believe that S.R.B. funding would not be an issue.

31. Mr. Lindblom QC's alternative submission was that the correspondence post 16th May 2000 in the context of the criteria led to a clear understanding that the requirement for S.R.B. funding for its current scheme or the absence of a specific scheme not requiring S.R.B. funding, would not be factors between the developers in view of Dransfield's willingness to produce such a scheme. There was no point in the question about Dransfield's willingness to produce such a scheme in view of the very short timescale, if its absence were to be important. This gave rise to a legitimate expectation that the decision would not be made in the manner or on the basis upon which it was, or at least that it would not be made without Dransfield having the opportunity to submit a reduced scheme. Mr. Lindblom QC referred me to the helpful but not exhaustive categorisation of types of legitimate expectation in Reg.-v- Devon County Council ex parte Baker [1995] 1 All ER 73.

32. I should add that Mr. Lindblom QC also submitted that the decision was irrational if Dransfield's willingness to produce a reduced scheme were taken into account and ignored a material consideration if that willingness were not taken into account.

The Council's Submissions.

33. Mr. Findlay submitted that in essence the facts of this case fell a long way short of those necessary to establish the exceptional circumstances required to show conspicuous unfairness, in the absence of a breach of a legitimate expectation, and that the Lottery Commission case was very different. Here there was no clear and unambiguous representation such as to found a legitimate expectation or one upon which Dransfield actually relied.

34. He submitted that the criteria offered no particular steer as to the way in which they would be applied; there was no requirement to use public funds and no advantage expressed in using them, were their use to be unnecessary. CityPark did not go outside any set rules; they merely came up with a package which the Council was entitled to prefer. What Dransfield were seeking was a second bite at the cherry, an opportunity to come up with a scheme to match what, on Dransfield's case, had been found attractive about the CityPark scheme. But it had always been open to Dransfield to produce such a package. The position was no different from that in which CityPark would have found itself if the Council had decided that it wanted the benefits of the larger regeneration scheme proposed by Dransfield.

35. The Council did not change horses, on the Council's racier sporting metaphor. There could have been no challenge if on 16th May 2000, the Council had decided to prefer CityPark because it did not require S.R.B. funding. Thereafter it acted with conspicuous fairness to Dransfield in giving it the opportunity to make its position clear, as was of course also in the Council's interest in its task of choosing a development. The Chief Executive was essentially seeking information on Dransfield's current scheme and then following up Dransfield's reply so that Members could be fully informed.

36. Substantive legitimate expectation, which was the form of legitimate expectation in effect relied on here, required both an unambiguous representation and reliance upon it to one's detriment. This can be seen in Reg.-v- Devon County Council ex parte Baker (supra) at p.88E-G in the judgment of Simon Brown LJ.

37. Finally, there was nothing irrational in the Council's conclusion. Although no reasons for the decision were specifically given, that did not make the decision irrational. The position of Dransfield and its willingness to come forward with a reduced scheme, not dependant on S.R.B. funding, was clearly before the Council and was considered. It was not irrational to decide to prefer a scheme which now existed, even though its elevational treatment had yet to be finalised, over one which did not yet exist but which would inevitably be rather similar. Although those specific reasons were not given, it would be too strong, given the nature of the decision and the circumstances, to treat the decision as irrational.

Conclusions.

38. Whilst the submissions of Mr. Lindblom QC were attractively presented, I do not accept them, preferring instead those of Mr. Findlay.

39. I accept Mr. Lindblom QC's submission that it is correct to conclude from the deferment of the 16th May 2000 decision, the subsequent correspondence before the 1st June 2000 Meeting, the order in which the resolutions were dealt with, the Press Release even interpreted as the Council would have it, and the post 1st June 2000 correspondence, that the determining factor in the choice made between the two schemes was the absence of a requirement for S.R.B. funding in the CityPark scheme. It was of course not the only factor considered, but it was clearly the decisive factor.

40. However, I do not consider that the Council acted unfairly, let alone with that conspicuous degree of unfairness which would be required to treat the decision as unlawful, on that ground. First, no unfair advantage was given to either developer; no opportunity was given to one which was denied to another, nor was there a change in the rules or criteria by which the decision was to be made, nor was the manner in which the decision was reached, unfair. It is a very different case on its facts from the Lottery Commission case, where the fundamental unfairness lay in the decision to proceed with only one of two non-compliant bids, giving one but not the other an opportunity to remedy its shortcomings. In the instant case, each party presented the package which it thought would be the most attractive: Dransfield highlighted the greater scale and regenerative potential of its scheme; CityPark highlighted the advantage of the smaller scale of its scheme in avoiding the use of S.R.B. funding which could then be deployed elsewhere. It was a matter for commercial judgment. CityPark, rather than Dransfield, successfully anticipated that which the majority of Councillors would find most attractive. Dransfield had as much opportunity as CityPark to devise such a scheme; its opportunity did not commence only at the point at which it became apparent that this could be of real significance to the decision.

41. Second, the criteria, or rather list of relevant factors, was neutral: it made no claim for benefit or disadvantage over the use of S.R.B. any more than it did over the scale of the scheme. The way in which any such factor, as revealed in a particular scheme, would appeal to the Councillors, was a matter for the commercial judgment of the developers. Nothing has been placed before me to suggest that it would be intrinsically surprising to a commercial developer to find that the degree of dependancy of its scheme upon S.R.B. or other public funding, could be a factor in the support it received from a local authority, or a factor in the choice which an authority might make between two competing schemes.

42. I do not consider that it can be said that the Council changed the rules; no steer was given as to the advantage or disadvantage of using S.R.B. or having a larger site. No promise was given that the extent of use of S.R.B. funding would be irrelevant, such that no advantage at all could accrue from a less S.R.B. demanding scheme. The existence of S.R.B. as a factor for consideration would suggest the reverse if anything.

43. Third, I do not consider that the correspondence between 16th May 2000 and 1st June 2000 bears the weight which Dransfield seeks to place upon it, as closing off the relevance of S.R.B. funding as a point of distinction or requiring an opportunity in fairness to be given to Dransfield to produce an S.R.B. free scheme.

(1) The letter of 18th May 2000 is written, as it states, for the purpose of seeking information by Officers and the letter of 23rd May 2000 seeks clarification of the answers given. It is seeking information so that the Council can make a decision, rather than stating how, let alone restricting the framework within which, the decision would be made.

(2) The letter of 18th May 2000 seeks information only in relation to the Dransfield scheme currently before the Council; it asks if that scheme could be done without S.R.B. funding and gives no encouragement to any belief that S.R.B. was not an issue or could be dealt with by a willingness to produce a reduced scheme.

(3) The reply of 22nd May 2000 focused on the current scheme and only offered a reduced scheme (similar to the CityPark scheme) very much as a second best which might not require S.R.B. funding. The clarification sought in the letter of 23rd May 2000 was that Dransfield would develop a reduced cost scheme "if that is the wish of this Council". There is no promise or common understanding that that issue could be solved in that way. The Chief Executive just wanted full information so that the Council could make a fully informed decision. The clarification given was simply that a reduced and S.R.B. free scheme, similar to CityPark's, would be produced if the Council wished.

(4) Properly understood the correspondence was then reflected in the decision-making process: the larger scheme was considered, the giving of time to Dransfield to produce a smaller scheme was considered; both were rejected. The Council did all that reasonably could have been expected following that correspondence, by way of considering Dransfield's position.

(5) The above analysis of the correspondence shows the position to be very different from that in which Camelot and GTech. found themselves in the Lottery Commission case. The Commission correspondence in that case was far less equivocal as to the satisfaction of the fit and proper person test than is the correspondence in this case over the relevance of S.R.B. In the Lottery Commission case, it was clear that the correspondence could easily be read as covering the new licence application. Here, the correspondence contains no comparable basis for a conclusion that S.R.B. was, in effect, irrelevant or would be dealt with by a further deferment for another scheme to be produced.

44. Fourth, in so far as Mr. Lindblom QC relies upon legitimate expectation, I do not consider that the correspondence, even in the context of the February criteria, contains any unambiguous representation that S.R.B. funding would be irrelevant or dealt with by a deferment of a decision. Its language simply does not go that far upon the analysis which I have set out above. It is also difficult to see what detrimental reliance was placed on the correspondence in view of the shortness of timescale in which Dransfield could, in practice, do anything by way of production of a reduced scheme. It had already indicated that the scheme if reduced would be similar to CityPark's.

45. Finally, I do not consider the decision to be irrational or to have ignored the offer made by Dransfield of a reduced scheme. The correspondence was before the Members. The motions included one to give Dransfield time to produce a reduced scheme. Whilst no reasons were given there was clearly a basis upon which the decision could have been made rationally, namely the advantage of reaching a decision now in respect of a scheme, the essential features of which were known or, as to elevational treatment still controllable, rather than the disadvantage of incurring the delay which deferment would entail, just to produce what Dransfield describes as a similar scheme. I do not accept that a decision in these circumstances with a potential rational basis (even though the actual basis is unknown) should be held to be irrational.

46. For those reasons this application is dismissed.

MR JUSTICE OUSELEY: If there are any difficulties that arise on either side if you keep in touch through the usual channels.