England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		4th July 2003

Mr Justice Richards :

1. The claimant company owns and operates Cadbury Garden Centre at Smallway, Congresbury, North Somerset. By these proceedings it challenges what it says was a decision in principle by North Somerset Council to grant an application for the extension of the range of goods which could be sold at a neighbouring garden centre, Greenholm Nurseries Retail, which is owned and operated by the interested party, Mr Vanderplank. This is the third set of proceedings in which the claimant, which is subject to fewer restrictions in its own planning permission, has sought to prevent proposed enlargements to the scope of Greenholm's planning permission. Although litigation can be seen here as the pursuit of competition by other means – Mr Straker QC has described the case as "the latest stage in a long and expensive campaign by a well-resourced corporate claimant to use the courts to delay the business activities of a competitor" - the challenge must be viewed in the ordinary way on its legal merits.

The facts

2. Planning permission for the retail sale of plants at the Greenholm site was granted on 31 October 1991. Permission was subject to conditions that (1) "the goods to be retailed shall be limited to plants grown on the site plus those additional items specified in the Section 106 Agreement" and (2) "no additional buildings shall be erected outside that part of the site defined on the sales area on the plan dated 17 December 1986".
3. The section 106 agreement was an agreement of the same date which contained in the second schedule a list of approved goods for retail sale. It also provided that the extent of the areas to be used in connection with the sale and display of goods was to be agreed with and approved by the council.
4. The reasons for the imposition of those restrictions can be discerned from an officers' report dated 18 November 1987 which led to the 1991 permission and section 106 agreement:

"Members may recall that planning permission was granted for the above development by the South Area Planning Committee at its meeting on the 9^th July 1986. Approval was granted subject to the applicant entering into a Section 52 Agreement [i.e. what is now a section 106 agreement] to secure a contribution towards a highway improvement works, to define a sales area on the site and to categorise the items that could be retailed ….

The matter was again referred to the Committee at its meeting on 26^th August 1987. The applicant felt that whilst he would be able to meet the cost of road improvements, the financial burden of his business would be excessive if he was limited to solely retailing plants on this site and his land-holding in Kingston Seymour ….

Upon further consideration, it is felt that retailing on the site could still be effectively controlled if the applicant was to be allowed to sell plants 'grown on' in pots that are unable to be grown in the soil on site, such as acid loving varieties. Such a variation in the terms of the Section 52 Agreement would not conflict directly with Policy WRA/S4, given that the plants would spend some time on site being 'grown on'."

5. The reference to policy was to Policy S4 of the Woodspring Rural Areas Local Plan. That has now been replaced by the North Somerset Local Plan 1999, which is in materially identical terms save that the direct successor to Policy S4 of the old plan is Policy S5 of the current plan.
6. Policy S5, as it now is, is contained in a section on "Retail Development in the Countryside". The section starts, at paragraph 15.43, with the general point that in order to minimise car journeys and protect the character of the countryside it is important that retail development is located within existing built-up areas. Accordingly the current Policy S4 provides that planning permission will not be granted for retail development outside settlement boundaries where this could result in sporadic development in the open countryside, or would be likely to have an adverse impact on nearby village shops, or where the likely level of traffic generated would have an unacceptable impact on the rural environment.
7. There follows a specific sub-section on "Retail Sales from Farms, Market Gardens and Nurseries". The three paragraphs under that heading state:

"15.44 There has been an increase in recent years in the number of small farm units, market gardens and nurseries involved in retail activities. By their very nature, such businesses are usually located on busy, main roads in the open countryside. Whilst the goods of these enterprises offered for sale are generally home grown, large-scale retailing from the premises particularly of produce not grown on the site and non-garden related items, is contrary to Green Belt and open countryside policy.

15.45 Therefore in order to control the spread of such premises the Council will, where appropriate, either by condition or legal agreement, place a restriction on the range of goods which can be sold. This restriction will seek to ensure that the majority of the retail area shall be given over to produce grown on site and the remainder to consist of either produce grown elsewhere or garden related ancillary goods.

15.46 The sale of bulky items such as sheds, fences, garden machinery can create a visual intrusion and are therefore more appropriately sold within built up areas."

8. That leads in to Policy S5 itself, which is in these terms:

"Planning permission for the use of land or buildings for the sale of goods from agricultural/horticultural units will be granted provided that:

(i) there will be safe and easy vehicular access that will not create a traffic hazard, and

(ii) implementation of the proposal will not harm the character of the surrounding landscape, and

(iii) a majority of the retail area is given over to produce grown on the site and the remainder to consist of either produce grown elsewhere or garden related ancillary goods."

9. That is the policy context within which the restrictions on range of goods and sales areas were included in the 1991 permission and section 106 agreement.
10. By a supplemental section 106 agreement dated 22 January 1993 the permitted range of goods was amended. The schedule to the supplemental agreement provides:

"1. That the only goods sold on at or from the land shall be:

(1) Plants (including trees shrubs seeds bulbs pot and house plants alpine and herbaceous plants and plant material including roots and vegetables and flowers from any source or nurseries including Greenholm Nursery

(2) Composts for all types of plants including peat

(3) Fertilisers and pesticides

(4) Pots and container for all types of plants

(5) Canes stakes and plant ties

(6) Garden tools and gardening aids

(7) Garden sheds conservatories and greenhouses

(8) Greenhouses and conservatory heaters and heating fuels

(9) Garden structures (pergolas) etc fencing gates and items necessary for their construction and preservation

(10) Garden furniture and ornaments

(11) Garden machinery lawnmowers hedge cutters etc and repair facilities

(12) Aquatic sundries ponds ornaments etc

(13) Aquatic livestock – fish

(14) Pet foods and pet sundries

(15) Gardening information – books booklets videos tapes and CDs

(16) Gardening gifts and stationery

(17) Stonework patios paving and concrete products for the garden or indoor gardening aids

(18) Garden leisure equipment

2. No more than 45% of the defined sales area shall be utilized for the sale of goods coming into the categories specified in sub-paragraph 1(6) to 1(18) inclusive of this Schedule in accordance with the plans received by the Council on the 11^th November 1992."

11. Although the section 106 agreement was subsequently varied further, the variation is immaterial and it is therefore the above list which provides the point of comparison for the further modifications now applied for, as explained below.
12. In May 1998 an application was made for planning permission to replace the existing buildings on the site with a single new structure and to build a new canopy for growing and sale of plants. This involved a substantial increase in floor area as compared with the existing buildings on the site. The council granted permission. The claimant challenged the grant of permission, contending that the area on which the new structure was to be built was not covered by the 1991 permission and that the application involved a change of use of part of the site from agricultural to retail. The Court of Appeal held that the 1991 permission comprised anything to be sold under the section 106 agreement and covered the whole of the site. The new permission was held to be valid. It did not, however, involve any alteration in the goods permitted to be sold.
13. In March 2001 an application was made for permission to build a new glasshouse to house a living exhibition of plants and invertebrates and an educational facility at the site. The council resolved to approve the application. That resolution was originally one of the targets of the present proceedings, but the claimant has abandoned that part of its challenge and it is unnecessary to say anything further about it.
14. On 5 April 2001 an application was made to expand the range of goods to be sold under the section 106 agreement. Taking into account a subsequent amendment, the additional goods that the applicant sought to retail encompassed (1) swimming pools and associated products, (2) edible provisions and delicacies "in keeping with farm shop sales", (3) ornaments, arts and crafts products and gifts "in keeping with a normal garden centre sale", (4) traditional garden and outdoor pursuits equipment and outdoor pursuits clothing, and (5) Christmas and other seasonal decorations. A covering letter stated:

"We feel that in this time of rapidly changing retailing practices and fierce competition within the horticultural and gardening industries that it is essential and only fair that we are able to trade under the same planning constraints (106 agreement) as our neighbours Cadbury Garden Centre, who, as you know are permitted to offer for sale a very wide and diverse range of goods. Also in the light of the recent decision at the Appeal Court in London last autumn …. Their Lordships' ruling was that planning permission had been granted for the entire site of 3.77 ha. and the new structure has been given new planning approval under Class A1 of the Town and Country Planning Act which is the same as our neighbour Cadbury Garden Centre."

15. On 13 February 2002 the South Area Committee recommended to the Planning and Regulatory Committee that the request for an expanded list of goods be agreed "on the grounds that the use is close to an existing large retail use, there would be no adverse retail impact, and there would be no material increase in traffic". At a meeting on 6 March 2002 the Planning and Regulatory Committee considered the recommendation and resolved "that an expanded range of goods be included in the Section 106 Agreement, subject to clarification on the range and amount/floor area of items able to be sold". The minutes of the meeting record that:

"… Members did not generally accept that extending the list of goods to be sold under the Section 106 Agreement would lead to an intensification of retailing activity in the countryside thereby adversely effecting [sic] established retail centres in neighbouring villages or that it would lead to a material increase in traffic. It was generally considered by members that given the location of the site next to an existing large retail use, any retail impact or increase in private car journeys would be minimal.

The Director of Planning and Environment drew members attention to the guidance contained in PPG6 regarding the need to concentrate retailing in town centres. The committee was advised that the suggested list of additional items to be sold was so vague that almost any goods could be sold from the site. Therefore, if the committee was minded to extend the range of goods to be sold, further clarification was required with regard to the range of items to be included within the Section 106 Agreement."

16. The recommendation of the South Area Committee and the resolution of the Planning and Regulatory Committee were both reached contrary to the advice of officers as set out in the reports that were before the committees.
17. The claimant applied for permission to challenge the resolution by way of judicial review, on the ground that in deciding to grant the application the council had failed to apply the test in section 106A of the Town and Country Planning Act 1990 (as to which, see below). Although the council submitted grounds of opposition, it subsequently agreed to re-determine the application; and an order quashing the earlier resolution was made by consent on 12 November 2002.
18. Meanwhile, on 15 April 2002, the applicant had submitted a revised schedule of goods that it wished to sell at the site. The revised list was set out in a schedule in these terms:

"1. Swimming pools, poolcare products and accessories.

2. (Farm Shop) please see attached list … [see below].

3. Ceramics, china and glass. (excluding kitchen-ware and table-ware) Ornaments: cork, copper, wood, fabric, plastic, brassware, stone and shells. Candles, candlesticks and accessories. Picnic-ware. Gardening toys, Children's garden toys, Children's soft toys, (excluding bicycles and Go-carts) Stationary, cards pictures, frames and giftwrap for all occasions.

4. Gardening and Outdoor-pursuits clothing, including walking and fishing but (excluding Mountaineering Climbing and Caving.) Gardening and Outdoor-pursuits equipment including lights, shades, canopies, tents, nets, bags, rods, poles, line and hooks. (excluding Mountaineering Climbing and Caving equipment.)

5. Christmas and other seasonal decorations including New Year's Day, Valentine's Day, Mother's Day, Father's Day, Easter, Guy Fawkes Day, Halloween, and Royal occasions."

19. The proposed range of farm shop products, as referred to in paragraph 2 of the schedule, was as follows:

"1. Meat & Fish – Fresh, Frozen, marinaded, dried, cured, Cooked, Uncooked, and prepared

2. Vegetables and Fruit – Fresh, frozen, marinaded, tinned, dried and prepared.

3. Dairy – Butter, eggs, milk, cheese, yoghurts, dairy ice creams and any other dairy foods.

4. Preserves, Chutneys and Pickles.

5. Bakery Products – a variety of different breads, cakes and savouries.

6. Dry foods – such as Nuts, crisps, Dried Fruit, Pulses, Flour, yeast, Herbs, Spices, tea, coffee etc, confectionary and other Dehydrated foods.

7. Delicatessen foods – such as Biscuits (sweet and savoury), Oils and Vinegars, Olives, pasta, prepared soups, sauces and meals, country pates and pies.

8. Regional Beers, Wines and Ciders, Fruit Juices, Cordials and other Soft Drinks."

20. The revised list was considered by the South Area Committee on 19 June 2002, when the committee resolved that a plan of the proposed sales area be sought for consideration and that further assessment of the potential retail impact be carried out, and that investigations by officers be carried out to ascertain where meat products would be supplied from and to obtain a definitive list of bakery products. It would appear that in considering the matter the committee was acting in pursuance of the resolution of the Planning and Regulatory Committee of 6 March 2002.
21. Following the council's agreement to submit to a consent order quashing the resolution of 6 March 2002, but a few days before the order was actually made, the application to extend the range of goods to be sold at the site was resubmitted to the Planning and Regulatory Committee on 6 November 2002. Although the claimant complains that it was given no advance warning of this, no procedural point is taken. At the meeting on 6 November the committee had before it a further officers' report, again advising that the application be refused. The report dealt first with counsel's advice that the council was vulnerable to losing the judicial review proceedings and that the appropriate course would be to retake the decision in the light of the requirements of section 106A, which were described. The report then set out the process to be followed in reconsidering the matter:

"S106A of the Act provides that a Local Planning Authority that received applications to discharge or modify planning obligations may either refuse them; or, if the obligation no longer serves a useful purpose, discharge it; or if the application would serve a useful purpose equally well with the modifications specified by the applicant, consent to the modifications sought.

The submission seeks to modify the obligation by adding to the list of existing products that are allowed to be sold from the site …. The test set out in the Town and Country Planning Act, in these circumstances is 'whether the obligation continues to serve a useful purpose, but would serve the purpose equally well if it had effect subject to the modifications specified in the application'. It if does then the obligation should be modified.

The useful purpose of this obligation is that it serves to meet planning objectives for the control of retail development in the countryside.

This Committee has indicated through its resolution that the obligation (S106 Agreement) does serve a useful purpose and that subject to clarification on the range/origin and amount/floor area of items able to be sold, the modifications sought should be approved.

Further negotiations have taken place which have resulted in clarified list of products to be sold.

However if members remain minded to approve the application, it is important that they should record that in their view, the Section 106 Agreement continues to serve its original purpose equally well as modified. The resolution should also be subject to the receipt of a plan demonstrating the spatial arrangement of the products to be sold from the retail area."

22. There followed the revised list of products as set out in the applicant's letter dated 15 April 2002. Reference was made to previous officers' reports for background information. Advice was then given in relation to the four matters that the committee was told it had to consider under section 106A, namely (1) what the original purpose of the planning obligation was, (2) whether the obligation continued to serve that purpose, (3) what the effect would be of the modification specified in the application, and (4) in the light of the effect of the modification, whether the planning obligation would continue to serve the purpose as well as it had done previously. The advice given was as follows:

"Issue (1); Original Purpose of Planning Obligation

The original decision to allow limited retailing from the site was granted having regard to the applicant's willingness to enter into a Section 106 Agreement to control both the extent of a site used for sales, as well as the range of goods to be retailed. This enabled the proposal to comply with Policies S/4 and S/5 of the Local Plan which regulates retail sales from farms, market gardens and nurseries and with Government Guidance contained in PPG6. Without this obligation sales activities on the site could expand to include items normally sold from village shops and town centres which would undermine their viability and vitality and lead to further closures to the detriment of residents.

Issue (2); Does the obligation continue to serve its original purpose?

The obligation continues to be an effective tool in restricting the range of goods that can be sold from the site. The character of the activity is that of a small garden centre with an emphasis on plant sales. This enables the activity to comply with policies S/4 and S/5 of the adopted Local Plan as well as Government advice on retailing in the open countryside.

Issue (3); The Effect of the Proposed Modification

Whilst it is considered that in the light of the previous decisions of Committee, the amended list represents a less generic and more clearly defined set of product lines, there will always remain some ambiguity. This would subsequently lead to enforcement difficulties. The products to be retailed by the 'farm shop' would be incapable of being limited to 'local produce' and this element of the operation could easily grow into a general A1 food outlet selling any foodstuffs which would threaten the vitality and viability of village shops and shopping centres in the surrounding area.

The sale of some products, particularly food, would impact on the vitality and viability of existing shops and centres which local and national retail policy seek to protect. A needs based, sequential approach should be followed for new shopping proposals. The applicant has not sought to justify his proposal on this basis.

An expansion of the retail activity on the site would take the land use beyond what could be termed a garden centre/nursery and would therefore conflict with Policies S/4 and S/5 and other policies/national guidance as outlined above.

A further expansion of retailing activity on the site would generate a greater number of trips and most, if not all, of these would be made by car, given the site's location in open countryside. This operation would be contrary to the principles set out in Planning Policy Guidance Notes 6 and 13, both of which seek to direct such development to locations offering a choice of trip modes. This is reinforced by Policy T/11 of the North Somerset Local Plan which states that Planning Permission would be granted for development only when the proposal inter-alia can be integrated with public transport, cycleway and footpath links.

Issue (4); Would the amended obligation continue to serve its purpose equally well as modified?

The agreement has, as stated above, a useful purpose in controlling retailing development in the countryside. However the agreement as proposed to be modified would not serve that purpose equally as well because it would permit a further expansion of retailing activity. Given this and the potential for enforcement difficulties, it is considered that not all of the list of products proposed by the applicant are likely to prove acceptable. The proposed expansion therefore remains unacceptable."

23. The committee's deliberations and conclusion in relation to the application are recorded in a minute of the meeting. After referring to the documents before the committee, the minute continues:

"Members were advised that the committee was required to demonstrate that it had gone through the appropriate process (as set out in the report) in reaching its decision in order to minimise the chances of a successful legal challenge.

At the invitation of the Chairman, Councillor Mrs Knifton addressed the Committee.

In reconsidering the application, members expressed the view that in reaching its earlier decision the committee had taken into consideration the key issues as required under Section 106A of the Town and Country Planning Act 1990. It was generally agreed by members that this application needed to be considered not in isolation but in the context of the neighbouring retail outlet. Members also referred to appeal decisions by the Planning Inspectorate that had overturned attempts by the authority to restrict expansion of the neighbouring retailer. It was further suggested that the list of products the applicant was proposing to sell from the site was suitably limited when compared to the range of products sold at the neighbouring outlet.

The Committee was advised that it was required to consider the application on the basis of:

1. What the original purpose of the planning obligation was;

2. Whether the obligation continued to serve that purpose;

3. What the effect would be of the modification specified in the application, and

4. In the light of the effect of the modification, whether the planning obligation would continue to serve the purpose as well as it had done previously.

The Committee considered that the planning obligation would continue to serve the purpose as it had done previously because there were many things which could be sold from the site which were not contained in the modified list to be incorporated in the new Section 106 Agreement.

Members remained of the view that the application should be approved, subject to clarification of the range and amount/floor area of products to be sold, and considered that the modified Section 106 Agreement would continue to serve its original purpose to regulate retail sales. It was not generally accepted that the modification would lead to an intensification of retailing activity in the countryside or that it would lead to a material increase in traffic given the neighbouring retail outlet.

RESOLVED: that the application for an expanded range of goods to be included in the Section 106 Agreement be APPROVED as the modified Section 106 Agreement continues to serve its original purpose to regulate retail sales, subject to referral back to the South Area Committee for determination of the list of products and amount/floor area of items able to be sold."

24. The South Area Committee considered the matter on the 20 November and 18 December 2002. For the purposes of the latter meeting there was a further officers' report, which repeated some of the objections to the application and concluded:

"Given this and the potential for enforcement difficulties, it is considered that not all of the list of products proposed by the applicant are likely to prove acceptable. If the Committee is nevertheless prepared to approve the proposal to extend the range of products that can be retailed from the site it is considered essential that a clause be added to a supplemental agreement limiting the floor space that can be used for this purpose. The applicant has suggested a figure of 870 square metres as the amount of floor space which should be allowed to be used for selling the listed items. The applicant has justified this figure as comprising approximately 10% of central sales area defined in the original planning application for the development of the site …. The figure of 10% of the sales area is considered reasonable …."

25. The committee resolved that a plan of the proposed sales area be sought limiting the floor space for the sale of products in the expanded range to 870 square metres and that further assessment of the potential retail impact of that floor space be carried out. It appears that a report on retail impact is still awaited and that the committee has still to determine the precise list of products to be sold and the amount/floor area of items that may be sold.

Legislative framework

26. Section 106A of the 1990 Act provides:

"(1) A planning obligation may not be modified or discharged except –

(a) by agreement between the authority by whom the obligation is enforceable and the person or persons against whom the obligation is enforceable; or

(b) in accordance with this section and section 106B.

…

(3) A person against whom a planning obligation is enforceable may, at any time after the expiry of the relevant period, apply to the local planning authority by whom the obligation is enforceable for the obligation –

(a) to have effect subject to such modifications as may be specified in the application; or

(b) to be discharged.

…

(6) Where an application is made to an authority under subsection (3), the authority may determine –

(a) that the planning obligation shall continue to have effect without modification;

(b) if the obligation no longer serves a useful purpose, that it shall be discharged; or

(c) if the obligation continues to serve a useful purpose, but would serve that purpose equally well if it had effect subject to the modifications specified in the application, that it shall have effect subject to those modifications.

(7) The authority shall give notice of their determination to the applicant within such period as may be prescribed …."

27. Section 106B deals with appeals to the Secretary of State. It provides in material part:

"(1) Where a local authority –

(a) fail to give notice as mentioned in section 106A(7); or

(b) determine that a planning obligation shall continue to have effect without modification,

the applicant may appeal to the Secretary of State.

(2) For the purposes of an appeal under subsection (1)(a), it shall be assumed that the authority have determined that the planning obligation shall continue to have effect without modification …."

28. Mr Elvin QC submits, and I do not understand it to be the subject of any dispute, that in considering an application under section 106A there are four essential questions to be considered: what is the current obligation? what purpose does it fulfil? is it a useful purpose? and if so, would the obligation serve that purpose equally well if it had effect subject to the proposed modifications? Mr Elvin lays stress on the words "equally well" and describes them as ordinary English words importing a principle of equivalence. Section 106A involves a precise and specific statutory test and does not bring in the full range of planning considerations involved for example in an ordinary decision on the grant or refusal of planning permission.
29. Mr Elvin further submits, and again I understand it to be common ground, that the question whether the statutory test is met must be decided by reference to the entirety of the modifications specified in the application. It is an all or nothing decision. It is not open to the authority to decide that the obligation shall have effect subject to only some of the proposed modifications. If the authority considers that some of the proposed modifications are acceptable but others are unacceptable, it can of course invite the applicant to submit an amended application or a new application containing only the acceptable modifications; but in the absence of an amended or new application it must determine that the obligation shall continue to have effect without modification.

Issues

30. The grounds of challenge are that the council (1) failed to consider the correct statutory question, (2) failed to reach a rational decision on the statutory question, (3) took into account immaterial considerations, (4) failed to give rational and intelligible reasons for the decision, and (5) reached a perverse decision on the planning merits if it was entitled to consider such merits at all.
31. The council takes issue with the claimant on all those grounds and raises a threshold contention that the application for judicial review is premature since the Council has not yet taken a decision amenable to review.

Prematurity

32. Mr Straker QC submits that the resolution of 6 November 2002 was not a decision under section 106A at all but amounted to no more than a resolution that, consistently with the purpose of the existing section 106 obligation, some extension to the list of goods could be secured. It was an approval subject to referral to the South Area Committee for detailed consideration, i.e. the Planning and Regulatory Committee was not prepared to approve the list as presented to it at that time. The matter remains under consideration by the South Area Committee, and even the claimant acknowledges that there is no final list of permitted goods. Whilst it is accepted that the only course open to the council under section 106A is to approve or reject the specified modifications as a whole, Mr Straker submits that if the committee were to conclude that a limited extension of the list of goods was acceptable, consideration could then be given to whether the applicant should be invited to amend the application or submit a new application. It is possible that no particular category of goods will eventually be approved for inclusion in an extended list. In the circumstances there is no "decision to approve the application" as challenged in the claim form, and the relief sought ("to quash the decision and remit the application for redetermination by the council") is misconceived since there has been no decision to quash and remit. If in due course an extended list is decide upon, then the claimant can challenge that decision. Until that occurs the council's consideration of the list should be allowed to proceed.
33. In further support of the submission that there was no decision amenable to review, Mr Straker points out that the council has not given notice of any determination pursuant to section 106A(7) – a period of eight weeks is prescribed – and that the interested party therefore has a right of appeal to the Secretary of State under section 106B(1). By virtue of section 106B(2) such an appeal would proceed on the assumption that the council had determined that the planning obligation should continue to have effect without modification, i.e. a deemed refusal. Thus the claimant seeks to characterise the resolution as a decision to approve when at the same time the interested party has a right of appeal on the basis of a deemed refusal.
34. Mr Elvin submits that the council's case on prematurity represents a shift of ground. In the council's summary grounds for contesting the claim, the resolution was referred to as a "decision", albeit a conditional decision. In the witness statement of Mr Cole, the council's Principal Planner, it is stated: "The Planning and Regulatory Committee were effectively making an in-principle decision on the range of goods application. They did not decide that any particular further items or categories of items could now be retailed on the site". It is submitted that not only was that how it was understood by the council's officers, but that is the plain effect of the resolution itself. It was indeed a decision in principle. The Planning and Regulatory Committee did not simply refer the matter to the South Area Committee for consideration and determination by that committee. It narrowed the issues left to that committee. Although part of the process remains to be gone through, there is already a decision that can be targeted. If, as the claimant contends, that decision was legally flawed, there is a utility in allowing it to be challenged at this stage.
35. My conclusions on those rival submissions are as follows:

i) Plainly there was no final decision having legal effect under section 106 A. Under the terms of the resolution, a final decision will arise only when the South Area Committee has determined the list of products and amount/floor area of items able to be sold. The claimant could have waited until such a determination before mounting a challenge.

ii) It does not follow, however, that the claimant is necessarily precluded from mounting a challenge at this earlier stage. There is an analogy, though the parallel is not exact, with the ordinary procedures concerning the grant of planning permission. A resolution to grant planning permission subject e.g. to the conclusion of a satisfactory section 106 agreement can be described as a decision in principle or a preliminary or provisional decision. It is to be distinguished, however, from the actual grant of planning permission; and the resolution can be revoked or varied at any time prior to the grant. R (Burkett) v. Hammersmith and Fulham London Borough Council [2002] 1 WLR 1593 establishes that time for applying for judicial review runs from the grant of permission, but does not rule out the bringing of a challenge at an earlier stage if the court in its discretion considers that a useful purpose would be served by such a challenge. Such challenges have been entertained in appropriate cases.

iii) I do not attach much significance to the council's point that, in the absence of notification of a final decision within the time laid down, there is a deemed refusal triggering a right to appeal to the Secretary of State under section 106B. A similar right of appeal, based on a deemed refusal, exists where a local planning authority has resolved to grant planning permission but has not made the grant within the time laid down. The existence of that right of appeal does not preclude a challenge to the resolution to grant planning permission. Of course, if a right of appeal has been exercised, any challenge to the authority's resolution becomes academic, which will generally provide a sufficient reason for refusing to entertain it. In the absence of an appeal, one looks to see whether, although there has been a deemed refusal within the terms of the statute, there has in practice been a decision that can form the sensible subject of challenge.

iv) So in my view there is no automatic bar to a challenge at this stage. It is necessary to consider what has been resolved and whether a useful purpose would be served by allowing that resolution to be challenged in advance of a final decision.

v) In this case I am satisfied that the resolution amounts to a decision in principle to approve the application to expand the range of goods to be sold under the section 106 agreement. What has been left over to the South Area Committee is a determination of details – a precise list of goods to be included and the amount/floor area of such items. The basic question whether a modification of the kind proposed meets the statutory test for approval has been given an answer in the affirmative. Looking at the terms of the resolution, the discussion that preceded it, and the way in which it has subsequently been viewed by planning officers and the South Area Committee, I do not think that it is to be read simply as a resolution that, consistently with the purpose of the section 106 agreement, some extension to the list of goods could be permitted.

vi) Whether a useful purpose is served by a challenge to the decision depends on consideration of the substantive case advanced by the claimant. For that reason I did not invite the parties to take the question of prematurity as a preliminary issue at the hearing and I shall not express my own conclusion on it until I have examined the substantive issues in the case.

Substantive issues: the claimant's case

36. In relation to ground 1 Mr Elvin submits that, although members were informed of the legal test under section 106A in terms of which no complaint is made, the minute of the meeting of the Planning and Regulatory Committee on 6 November 2002 demonstrates that members did not understand that test:

i) The issue at the forefront of their minds, as appears from the views they initially expressed, was a comparison between the Greenholm site and the claimant's neighbouring outlet. The fact is, however, that the Greenholm site is subject to greater restrictions than the complainant's site: Mr Elvin took me to the latest decision letter concerning the claimant's site in order to show that it has the benefit of a fall-back planning permission for open retail use which underlies the different planning history of the site and explains why, exceptionally, the site is subject to fewer restrictions. Members had to focus on the restrictions imposed on the Greenholm site by the section 106 obligation and on the application of the specific questions that arise under section 106A in relation to those restrictions.

ii) Members were then reminded of the relevant questions under section 106A, but proceeded to express a view in terms that badly paraphrased the key question ("the planning obligation would continue to serve the purpose as it had done previously") and to give a reason that could not sensibly answer the question whether the modified obligation would serve the purpose equally well ("because there were many things which could be sold from the site which were not contained in the modified list to be incorporated in the new Section 106 agreement").

iii) In concluding that the application should be approved subject to clarification of certain matters, members considered that the modified obligation "would continue to serve its original purpose to regulate retail sales". The same phrase is repeated in the terms of the resolution itself. The correct question, however, was whether it would regulate retail sales in a way which served equally well the purpose of promoting the relevant countryside policies, in particular Policy S5: it was to achieve compliance with that policy that the section 106 obligations were imposed in the first place, as is clear from the officers' report which led to the 1991 permission and section 106 agreement. In looking at the general question of regulating retail sales, members were simply not addressing the right question or applying the statutory test.

iv) Thus Mr Elvin submits that taking a broad view and reading it fairly, the minute shows that members failed to understand or to apply the statutory test. The reason, he suggests, is that they were attracted and led astray by the argument that the Greenholm site should be treated in the same way as the claimant's site.

37. As to ground 2, Mr Elvin submits that since the purpose of the section 106 obligation was to ensure compliance with Policy S5, the primary, if not the sole question for the council was whether granting the application to expand the range of goods would continue to ensure such compliance equally well. The only rational answer to that question was that the modified obligation could not serve the purpose equally well. It is plain that the range of goods proposed in the application goes far wider than that envisaged or permitted by Policy S5: in essence the list, if permitted, would turn the site into a general food store. That was the consistent view of officers, and although members are not required to follow officers' advice, on this occasion the only rational course for them was to do so. The matter had to be determined on the basis of the application submitted. It would have been possible to defer a decision and to invite an amended or new application, but the members went ahead with a decision in principle. If any decision in principle was to be taken in relation to the existing application, it had to be a decision to refuse the application.
38. Ground 3 is really another way of expressing a point already made. It is submitted that members erroneously considered the planning merits of the proposals in the context of the claimant's neighbouring retail outlet, the fact that previous successful appeals had overturned attempts by the council to restrict expansion on that site, and the view that the list of products the applicant was proposing to sell was suitably limited when compared with the range sold at the claimant's outlet. Such matters are irrelevant for the purposes of the statutory test, and also because the planning situation in relation to the claimant's site is affected by factors that do not apply to the Greenholm site.
39. Ground 4 is also another way of expressing points already made. In particular, it is submitted that the reason given for the view that the planning obligation would continue to serve the purpose it had done previously ("because there were many things which could be sold from the site…") is unintelligible in the light of the statutory requirements.
40. As to ground 5, it is submitted that if, contrary to the claimant's primary submissions, the council was entitled to consider the wider planning merits, then it reached a perverse conclusion on the issue. The minutes of the meeting record that "[i]t was not generally accepted that the modification would lead to an intensification of retailing activity in the countryside or that it would lead to a material increase in traffic given the neighbouring outlet". Yet the whole purpose of the application was to intensify retailing in the countryside: that was the only rational conclusion to be drawn from the list of goods submitted. There was no evidence that the new trade for the application site would result only from diversion of trade from the claimant's site.

Substantive issues: the council's case

41. Mr Straker emphasises first that the minute of the meeting on 6 November is not to be read as a sequence of reasons but as a note of what occurred at the meeting. It should not be construed strictly.
42. He submits that the claimant's case proceeds on a mistaken basis in focusing on Policy S5 as "the purpose" of the section 106 obligation. The officers' report of 18 November 1987 makes clear that even at that time the purpose was the effective control of retail activity on the site. The policy context is also wider than the claimant suggests. Regard must be had to the countryside policies generally, not just to Policy S5. Policy S5 is concerned specifically with agricultural/horticultural units, whereas the Court of Appeal held that the entire site has a retail use.
43. If the exercise is to control retail activity in the countryside, which is plainly a useful purpose, then the context of the neighbouring site is highly material and something to which members properly had regard. It is relevant for example to the question whether there will be an overall increase in traffic and in the level of retail activity. It was therefore sensible to look at the neighbouring site and to ask for further information by way of a retail assessment of the items on the list. So too the reference to inspectors' appeal decisions was perfectly sensible when looking at the question of control of retail activity in the countryside.
44. In the passage in the minute that follows the reminder of the statutory test, members are recorded as taking the view that the obligation "would continue to serve a useful purpose". This was plainly equivalent to the "equally well" test under section 106A. The reason given ("because there were many things that could be sold from the site…") should be read as meaning that there are many items which are not on the modified list and which therefore could not be sold from the site even if the modified list were accepted, the point being that there will therefore be continuing control on retail activity in the countryside if the application is approved.
45. If one looks at the minute in this way and considers the matter in context, it can be seen that members were not assessing the application as a matter of social equity between the interested party and the claimant, but were considering the retail consequences of approving the application and were doing so in the context of the relevant countryside policies. On that basis the arguments advanced by the claimant under the headings of legal test, rationality, immaterial considerations and reasons should all be rejected. As to the fifth ground, members were not considering the straight planning merits but were considering whether the modified range of goods would serve the purpose of the planning obligation; and they were entitled to rely on local knowledge in the matter.

Conclusions

46. The first two questions that the members of the Planning and Regulatory Committee were advised by officers to consider were (1) what was the original purpose of the planning obligation and (2) whether the obligation continued to serve that purpose. Strictly, as it seems to me, section 106A(6) does not require that the obligation continues to serve its original purpose. What matters is whether the obligation continues to serve a useful purpose. On the facts of this case, however, I do not think that the point is of any significance since there is no suggestion of any material change in the purpose served by the obligation since it was originally imposed. In particular, there is no suggestion that there has been any material change in the policy context.
47. In my view the original purpose of the obligation was not simply to secure effective control on retailing activity in the countryside. It was to secure compliance with local policies on retail development in the countryside. It was within the context of those policies that effective control on retailing was required. The view expressed in the officers' report of 18 November 1987 that "retailing on the site could still be effectively controlled …" must be seen within that policy context rather than as a complete expression of the purpose of the agreement. Equally, the fact that specific reference is made in the same report to compliance with what was then Policy S4 and is now Policy S5 does not mean that that was the sole purpose of the obligation. Policy S5 must be considered together with the wider policy objectives, such as minimising car journeys and protecting the character of the countryside, that are expressed in the same section on retail development in the countryside and that underlie the current Policy S4.
48. Nevertheless Policy S5 is plainly a key element in the relevant countryside policies. In the case of premises of the kind here in issue ("farms, market gardens and nurseries"), it requires that "a majority of the retail area is given over to produce grown on the site and the remainder to consist of either produce grown elsewhere, or garden related ancillary goods". The supporting text makes clear that restrictions on the range of goods that can be sold will be imposed by condition or legal agreement to ensure compliance with that requirement and thereby to prevent more general large-scale retailing from such premises. In all the circumstances there can in my view be no doubt that the section 106 obligation, with its range of goods restriction, was directed primarily at securing compliance with Policy S5. Accordingly, although the purpose of the obligation can be expressed generally as securing compliance with local policies on retail development in the countryside, and the wider picture can therefore be taken into account, that purpose includes specifically and very importantly securing compliance with Policy S5. That was the original purpose and, given the absence of any material change in the policy context, it must in my view be the continuing purpose. It is plainly a useful purpose.
49. The next step in the analysis under section 106A(6) is to ask whether the obligation would serve that purpose "equally well" if it had effect subject to the modifications specified in the application for an extension of the range of goods permitted to be sold at the site. Once it is accepted that the modifications specified in the application must be considered in their entirety, i.e. that it is not permissible under the statute to approve an application on the basis of accepting some of the modifications but rejecting others, then it seems to me that there is only one rational answer to that question. One does not need to engage in lengthy examination of the detailed list to see that the range of goods sought to be included within the scope of the modified obligation goes far outside anything capable of meeting the requirements of Policy S5. That is the case with many of the food items referred to under the heading of the "farm shop" in paragraph 2 of the main list (and detailed on a separate list), almost all of the items in paragraph 3, many of the outdoor pursuits items in paragraph 4 and all or most of the seasonal items in paragraph 5 (I express no view on the swimming pool items in paragraph 1). That being so, I do not see how the conclusion could rationally be reached that the purpose of the obligation would be served "equally well" if the obligation had effect subject to the modifications specified in the application. To permit retailing of all those items from the Greenholm site would be to depart radically from Policy S5 and to permit a move towards large-scale retailing of the kind which the policy seeks to prevent.
50. That brings me to the resolution of 6 November 2002 and consideration of whether the members of the Planning and Regulatory Committee erred in any or all of the ways for which Mr Elvin contends.
51. In my judgment the members failed properly to understand the statutory test, although it had been explained to them in writing and orally at the meeting. I acknowledge that the minute of the meeting is not to be construed strictly and must indeed be approached with a degree of benevolence; though it is relevant to note that the council had agreed to an order quashing its previous decision and that members must have been aware that their re-determination would be subjected to detailed legal scrutiny. It is nonetheless striking that members did not state that the obligation would serve its purpose "equally well" if modified, but only that "it would continue to serve the purpose as it had done previously". Moreover they expressed the "purpose" as being "to regulate retail sales", a formulation which in my view was unduly vague and did not adequately reflect the purpose of securing compliance with local policies on retail development in the countryside. What makes this particularly important is that there does not seem to have been any proper focus on the question whether the obligation would continue equally well to secure compliance with the requirements of Policy S5 if it had effect subject to the modifications specified in the application. The reason given for the conclusion that the modified obligation would continue to serve its original purpose was, even if understood in the way contended for by Mr Straker, not sufficiently directed to that question and again suggests a failure to understand the statutory test.
52. A further problem about the approach adopted is that members do not appear to have appreciated that, for the purposes of reaching a decision on the particular application, the modifications specified in the application had to be considered in their entirety. That is not surprising, since the point seemed to emerge only at the hearing before me. The point is nevertheless an important one. Members plainly contemplated that the detailed list left over for determination by the South Area Committee might involve a lesser range of products than specified in the application. The particular application could not, however, be approved on that basis; an all or nothing decision was required. It therefore did not make legal sense to approve the application in principle yet leave the determination of details to the South Area Committee. A decision to approve or refuse was required in respect of the application as a whole.
53. For all those reasons I consider that the decision to approve the application in principle was based upon a flawed legal approach and that the claimant's case on ground 1 is well founded.
54. If, contrary to the foregoing, members did direct themselves correctly as to the statutory test, then in my judgment they reached an irrational decision in applying it (ground 2). I have already explained why I consider that the only rational conclusion was that the obligation would not serve its purpose equally well if it had effect subject to the modifications specified in the application.
55. In the circumstances I need say very little about the other grounds of challenge. As to immaterial considerations (ground 3), I take the view that members were entitled to take into account the claimant's retail outlet as part of their wider consideration of the impact on the countryside and on traffic levels. There is, however, force in Mr Elvin's submission that members were unduly influenced by a comparison between the claimant's outlet and the Greenholm site. The focus of the exercise under section 106A must be on the purpose served by the restrictions in the section 106 agreement relating to Greenholm rather than on the less restrictive planning regime to which the claimant's outlet is subject for reasons peculiar to itself. As to reasons (ground 4), I have already criticised the reason given by members for the conclusion that the modified obligation would continue to serve the purpose as it had done previously. As to ground 5, I would note only that, although in my view it is permissible to take account of the wider questions of intensification of retailing activity in the countryside and increase in traffic levels as aspects of the relevant countryside policies, such matters should not be allowed to obscure the importance of securing compliance with Policy S5; and in any event, on the basis of the material I have seen I doubt whether the members had a sufficient evidential basis for reaching the conclusions they did on the wider issues.
56. I return finally to the issue that I left over at the end of my discussion of prematurity. In my view, for the reasons given, the council's decision to approve the application in principle was legally flawed and the flaws are such that they cannot be corrected by a determination of the South Area Committee on matters of detail. I do not see how the application can lawfully be approved in its present form. There is a value in making that clear now, so that the whole matter can be considered afresh: for example, it may be that the details of the present application can be considered informally by the South Area Committee and that an amended or new application can then be submitted in the light of that committee's views on those details. In any event, I consider that in all the circumstances there is real utility in entertaining this application rather than allowing matters to proceed on an erroneous basis and requiring the claimant to wait until a final decision is taken under section 106A.
57. Accordingly I propose to quash the Planning and Regulatory Committee's resolution of 6 November 2002. I do not think that any further relief is needed. I will, however, hear from counsel on all questions of relief before making a final order.
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MR JUSTICE RICHARDS: I am handing down judgment in this case. For the reasons given in the judgment, the claim succeeds and the decision under challenge will be quashed.

MR FORSDICK: I am grateful, my Lord. I make an application on behalf of the claimant for an order for costs.

MR JUSTICE RICHARDS: Yes.

MR FORSDICK: There is a dispute as to the assessment of costs, and given the sums involved we accept that it should go for detailed assessment.

MR JUSTICE RICHARDS: Yes.

MR FORSDICK: There were two grounds effectively, two decisions challenged originally, the glasshouse application and the range of goods application. My Lord will have seen from the claim form that the substantive history was common to both and required to be set out in respect of both applications for judicial review. The glasshouse application merited a couple of paragraphs at the end of the claim form and just one separate ground of challenge. In response, the grounds of opposition on behalf of the Council dealt again in common with the range of goods application until the last two paragraphs of the witness statement. So a very small amount of additional work was caused by the glasshouse application.

MR JUSTICE RICHARDS: Plainly I cannot resolve what costs are attributable to the glasshouse application.

MR FORSDICK: I understand that.

MR JUSTICE RICHARDS: I can say, and I do say and put it on the record, that the figure that is claimed in the schedule strikes me as being excessive as a figure for costs for the application that I have dealt with. I would say it is roughly twice as high as it should be.

MR FORSDICK: I understand the position of the court and I think that was the position taken by the other side. Clearly, those instructing me will have to look at the schedule and make sure that it is correct and submit it to assessment. My Lord, the reason I have raised the glasshouse application and the range of goods application is there is an issue as to what ought to happen with the costs of the glasshouse application. What I suggest is there are two options: one is for my Lord just to adopt a broad brush reduction in the costs awarded in favour of the claimant; the other is to award the claimant its costs of the substantive case but to award the Council its costs of the additional costs in relation to the glasshouse application. Procedurally it may be simpler to adopt the percentage reduction. I understand my learned friend will ask my Lord to take the other route, which is to award the claimant costs subject to (inaudible) and to award the Council their costs on the glasshouse application.

MR JUSTICE RICHARDS: Yes.

MR AUBURN: My Lord, thank you. We would say that in relation to the glasshouse application it is right that you make an order for costs in favour of the local authority. This was a separate challenge to a separate decision.

MR JUSTICE RICHARDS: And where there are mixed costs it will be for the costs judge to apportion appropriately.

MR AUBURN: Yes. It is not a matter we would hope to determine today. I would simply ask that you make the decision in principle that the local authority --

MR JUSTICE RICHARDS: You accept that the Council should pay the claimant's costs of the range of goods application.

MR AUBURN: I have a very short submission to make in relation to the range of goods application.

MR JUSTICE RICHARDS: Well, let me hear that submission.

MR AUBURN: My Lord, if I can just make one final point on the glasshouse application, I would point out that it was abandoned late in the day.

MR JUSTICE RICHARDS: Yes.

MR AUBURN: In relation to the range of goods application, a short point. The fact that your Lordship said that the claim could legitimately be brought does not mean that it warrants an award of costs, and I would say that it is most appropriate that there be no order for costs in relation to the range of goods application for this reason. It was really worked out effectively on the day of the hearing that section 106A has an all or nothing interpretation. To be frank, this was not something that either side had brought up or appreciated prior to that. I think I can be frank in saying that.

MR JUSTICE RICHARDS: I think I indicated that in my judgment.

MR AUBURN: Yes. The reality of the matter is that once it is appreciated that section 106A has that interpretation, then, in reality, we were bound to refuse the application, so the point is that if either side had appreciated this --

MR JUSTICE RICHARDS: Not the way Mr Straker argued it at the hearing. He did not say, "Hands up, subject to the prematurity challenge".

MR AUBURN: The point does fit in with prematurity to the extent that if they had waited they could only have got a refusal. The point is still that they need never have come to court. While I fully accept your Lordship's decision on prematurity, in relation to costs the point is they need never have come here, and in fact they would not have been prejudiced in any way by waiting to get what, on the law, must have been an inevitable refusal. If they waited until then there would have been no need. My Lord, that is all I have to say on that. You will know, as local authority, we are effectively caught between two parties in the situation and probably would have been challenged whatever we had done. While, obviously, we tried to get it right, your Lordship has said we did make a mistake, but I would say that frankly we would have been challenged whatever we had done in this matter.

MR JUSTICE RICHARDS: I hope that the guidance I have given in the judgment may assist with regard to the future consideration of this matter. That is your submission on costs. Thank you very much.

Anything in reply?

MR FORSDICK: Just simply, my Lord, the position was that we offered on two occasions to adjourn the application for JR pending the final determination of the Council on the final limb. That was rejected twice, at page 158 and 160 of the bundle. For those reasons we attended and were successful on the prematurity point.

MR JUSTICE RICHARDS: Thank you very much.

MR AUBURN: Just in relation to that, there were offers on either side and you will know that we also offered that the matter be determined on the papers to avoid the need for an oral hearing.

MR JUSTICE RICHARDS: The defendant will pay the claimant's costs of the range of goods application. I rejected the submissions made as to prematurity. I found the decision was unlawful for the reasons stated in my judgment. I see no reason in all the circumstances for departing from the ordinary rule that costs should follow the event.

The claimant will be ordered to pay the defendant's costs of the glasshouse application. Again, it seems to me entirely right, the application having been brought and then abandoned, that the claimant should pay the costs of that application.

In each case there will be detailed assessment if the costs cannot be agreed. I am not going to deal with the matter by way of some sort of percentage apportionment because I do not feel able to do so on the information I have, and, in any event, I think that this is a matter that if it cannot be agreed, which I hope it can, had better be looked at with some care by a costs judge.

I repeat what I said in the course of submissions that the figure that is put forward in the schedule before me of something in excess of £27,000 seems to me to be excessive and getting on for twice a reasonable figure for the costs of the range of goods application. However, that is a matter for determination, if necessary, by a costs judge. I can take it no further than the view I have expressed.

MR AUBURN: My Lord, there is just one very short matter in relation to appeal. As local authority, really the decision does need to go to a committee finally, but I will ask for permission to appeal from your Lordship shortly and simply to say that the Court of Appeal has stressed on occasions that parties should avoid going to court, particularly in judicial review, unless it is absolutely necessary, and this was not a case in which it was necessary. I would ask for permission to appeal from your Lordship. Irrespective of your decision on that, I would ask for 28 days to file an appellant's notice, an extension of time. The purpose of that is simply to give the Council and the committee time to meet and give the matter mature reflection.

MR JUSTICE RICHARDS: Yes. I refuse permission to appeal on the grounds that there is no real prospect of success and no point of general importance. I will grant you your extension of 28 days for seeking permission from the Court of Appeal if so advised.

I should perhaps mention, I am not going to put it on the form, but for your purposes, that of course a decision whether to entertain an application of this sort, as indicated in my judgment, does involve a measure of discretion, which is a point that I have no doubt that the Court of Appeal would have in mind if you sought to take it to the Court of Appeal. Thank you very much.