CO/961/2003 
Neutral Citation Number: [2003] EWHC 1627 Admin
IN THE HIGH COURT OF JUSTICE 
QUEEN'S BENCH DIVISION  
THE ADMINISTRATIVE COURT 
Royal Courts of Justice 
Strand
London WC2 

Thursday, 26th June 2003
 
B E F O R E:

MR JUSTICE RICHARDS
 
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RICHMONDSHIRE DISTRICT COUNCIL
(CLAIMANT)

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FIRST SECRETARY OF STATE
(DEFENDANT) 
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Computer-Aided Transcript of the Stenograph Notes of 
Smith Bernal Wordwave Limited
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Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
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MR I COLVILLE (instructed by Sharpe Pritchard) appeared on behalf of the CLAIMANT
MS S-J DAVIES (instructed by Treasury Solicitors) appeared on behalf of the DEFENDANT
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J U D G M E N T 
(As approved by the Court) 
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Crown copyright©
Thursday, 26th June 2003
1.	MR JUSTICE RICHARDS:  This case arises out of an application for planning permission for the erection of three two-storey dwellings on a site in Richmond, Yorkshire.  The application was made in January 2002.  Permission was refused by the local planning authority, Richmondshire District Council, in April 2002.  The developer appealed to the Secretary of State, who appointed an inspector to determine the appeal.  The appeal was dealt with by the written representations procedure.  By a decision dated 6th January 2003 the Inspector allowed the appeal and granted planning permission.  The Council now applies to this court under section 288 of the Town and Country Planning Act 1990, seeking to quash the Inspector's decision.
2.	The issues before this court concern the way in which the Inspector dealt with one particular policy of the Richmondshire Local Plan adopted in September 2001, namely policy 64.  It was numbered policy 65 in an earlier version of the plan and it is to policy 65 that the decision letter refers, but there is no material difference between the earlier policy 65 and the present policy 64.  The policy is headed "Recreational Open Space Standards" and is in these terms:
"The standard of 2.43 ha. (6 acres) of open space accessible to the public per 1000 population will be used by the Council as an interim measure, to assess the needs of the communities listed below, until a replacement local standard has been completed ...
Richmond ... 
Development proposals in these areas which would, to a material extent, taking due account of the standard, either reduce the supply of, or fail to meet extra demand for, open space of this kind will not be permitted."
The following text provides the justification for the policy.  Amongst other things, it indicates the kinds of recreational open space involved.  It states in its final paragraph:
"Not all development will include recreational open space on-site.  Guidance Note 8 explains how, in these circumstances, developers can meet any shortfall arising from their development by contributing towards the provision of open space on a site allocated in Policy 65."
Policy 65 of the present local plan contains a list of areas of land allocated for use as public open space during the plan period.
3.	Guidance note 8, referred to in the explanatory note to policy 64, is headed "Contributions To The Funding Of Open Space Provision".  It provides, so far as relevant:
"Where recreational open space, which is needed in association with a development, cannot be provided within the site or on other land in the developer's control, an alternative approach (which should meet the requirements of Policy 64), would be to make a financial contribution to the provision of areas of open space identified in Policy 65.  This Guidance Note sets out a basis for negotiations with developers in these circumstances ...
Guidance Note 14 identifies three settlements (Richmond ...) where additional open space is required to meet the minimum standard.  In these settlements, it is likely that all new residential developments which are too small realistically to accommodate recreational open space, and where it would be unreasonable to require the developer to make available other suitable land off the development site, will need to consider a financial contribution in lieu of physical provision.  Whilst developers of new housing will not be expected to meet the cost of dealing with a historic deficit of recreational space, all new housing contributes to population growth and thus gives rise to a need for extra open space in accordance with the NPFA '6 acre standard' ...
The object of the arrangement put forward below is to provide a consistent basis for negotiations.  Thus, a fair pro rata contribution will be sought from all developers in the settlements where a need has been identified, based on the estimated cost of provision in accordance with the '6 Acre Standard'.  
The basis for calculating the cost of provision will be as follows ...
3.  Since all residential development in the identified settlements will be expected to contribute to the provision of facilities, the requirement for open space will be related to the size of dwellings to be built ...
Contributions will flow into a fund set up for the purchase of land for open space purposes, where this is required, or for the equipping or laying out of open space where land is already available.  If proposals are not implemented within 10 years of receipt of the contribution, the money will be returned to the developer ...
The contributions will only be used to fund the provision of recreation space within the settlement in which the residential development is taking place.  
Exceptions to the scheme will be sheltered accommodation for the elderly, rest homes, nursing homes and other institutional homes, extensions, granny annexes, replacement dwellings (on a one to one basis), and temporary permissions for mobile homes.  The Council accepts that these types of development will not affect the demand for open space to a material extent.  Other developments are, however, likely to do so ..."
4.	It is common ground that policy 64 formed part of the development plan and that, by virtue of section 54A of the 1990 Act, the application for planning permission was required to be determined in accordance with the policy unless material considerations indicated otherwise.  It is also common ground that Guidance Note 8 did not itself form part of the development plan, but was a material consideration to be taken into account.  It is, however, a form of supplementary planning guidance to which substantial weight should be given (see PPG12 paragraph 3.16).  
5.	Despite the difference in their status, there is, as it seems to me, a very close relationship between the policy and the guidance note.  The way I view it is that extra demand for open space can be met either directly or indirectly.  It can be met directly by the developer's provision of open space as part of the development or on other land in the developer's control.  It can be met indirectly by a financial contribution to the council in accordance with Guidance Note 8 which will be used for the purpose of purchasing land for open space and equipping or laying out land available as open space.  If provision is made indirectly as provided for by the guidance note, then there will be no failure to meet extra demand for open space and thus there will be no breach of the policy.
6.	In the course of argument I expressed concern that contributions obtained in accordance with Guidance Note 8 might be used or available for use for purposes other than the provision of open space.  Mr Colville, however, explained to me by reference to passages in the guidance note (the principal ones of which I hope I have quoted) and on the basis of instructions he obtained in court that such contributions are ringfenced and are used and available for use only for the purchase, equipping and laying out of open space within the settlement where the development is taking place.  On the assumption that all this is audited in the ordinary way, it seems to me that the concerns I expressed were misplaced.  
7.	I return to the facts of the present case.  Policy 64 was not relied on as one of the reasons for refusal by the Council.  The developer had acknowledged the need for negotiations to secure a contribution under the policy and it was thought, when the matter was before the Council, that appropriate negotiations could be concluded.  The Council's refusal of planning permission was on altogether different grounds.
8.	The Inspector, nonetheless, dealt with policy 64 on the appeal, as she was bound to do.  It is to be noted that by the time of her consideration of the appeal there had been no concluded negotiations between the Council and the developer with regard to a contribution under the policy, or more accurately under Guidance Note 8, and that by the time of the appeal it was too late for any requirement to be imposed as to the making of such a contribution.  The Inspector dealt with the matter on that basis.  What she said in paragraph 12 of her decision under the heading "Recreational Provision" was as follows:
"The Council's reasons for refusal do not cite any failure to comply with LP Policy 65 on the provision of recreational open space.  No S106 undertaking has been submitted and it is clear that if I were to allow the appeal, no monetary contribution could be required.  The proposal would therefore appear not to comply with Policy 65, its related schedule and guidance.  The proposed family houses would be likely to create new demand for open space if they gave rise ultimately to an influx of children into the area.  However, the Council has not explained in its representations what material harm would be likely to result if this development were to be allowed without the suggested contribution.  It does not explain how the contributions made under Policy 65 have been used to date, nor how a failure to make a contribution in this case would be likely to impact upon the recreational provision currently being made within the Richmond area.  In these circumstances, where only 3 dwellings are concerned and on balance, I consider that material harm is unlikely to result in this case."
(I repeat that the Inspector's references to policy 65 are to policy 64 of the current local plan, which I have already quoted.)
9.	The principal submission advanced by Mr Colville on behalf of the Council is that the Inspector fell into legal error in paragraph 12 of her decision.  The point, in brief, is that she decided that the development did not accord with policy 64, but went on, erroneously, to say that because in her view it would not cause material harm, the appeal should be allowed and planning permission should be granted.  If she was going to grant planning permission for a development which did not accord with the development plan, then, it is submitted, it was incumbent on her to identify other material considerations and to weigh them up in the ordinary way so as to decide whether a departure from the development plan was justified.  By way of example of the correct approach, Mr Colville cited City of Edinburgh v Secretary of State for Scotland [1997] 1 WLR 1447 at 1459 D-G per Lord Clyde.  However, Mr Colville submitted, the Inspector did not approach the matter in that way.  She introduced into her reasoning a concept of material harm that is not to be found in the policy and she proceeded on the basis that if a development would not cause material harm then planning permission should be granted even though the development would not be in accordance with the policy.  All that, it is submitted, involved an erroneous approach.
10.	For the Secretary of State, Miss Davies submits, first, that policy 64 raises two questions for the decision maker:  one, whether the proposed development would reduce the supply of or fail to meet extra demand for open space and, two, if so, whether it would do so to a material extent.  Whether a shortfall would be to a material extent is, she submits, a matter of judgment for the decision maker.  The mere fact of development in an area where there is a need for additional open space does not, of itself, compel the decision maker to find that a shortfall is material in an individual case.  The judgment is one to be made in all the circumstances of the individual case and it is one with which this court will interfere only if it is perverse.
11.	In the present case, submits Miss Davies, the Inspector found that, although there would be a shortfall, it would not be to a material extent and therefore the development would be in accordance with the policy.  The way in which the Inspector proceeded was to say, first, that the proposal would "appear" not to comply with the policy because the houses would be likely to create new demand for new open space, but to go on to consider materiality and to find for the reasons given that the shortfall would not be to a material extent.  So the whole exercise engaged in by the Inspector related to the terms of the policy itself.  There is no hint that she was purporting to engage in a broader exercise under section 54A of finding non-compliance with a policy but one that was outweighed by the existence of other material considerations.
12.	Inherent in that last point, but something that I should record separately, is that Miss Davies did not seek to submit that if the Inspector did find that the development would not accord with the policy, the Inspector nonetheless engaged in a lawful analysis under section 54A.  Miss Davies did not concede that the absence of material harm is incapable of being a material consideration, but did not address positive submissions to the effect that it is capable of being a material consideration.  Her stance was that even if it is capable of being a material consideration, and as such of outweighing a departure from the development plan, it was no part of the Secretary of State's case in relation to the present decision that the Inspector dealt with the matter in that way or, if she did, that she proceeded lawfully in so doing.
13.	The analysis that Miss Davies provided of the Inspector's reasoning was presented very cogently and attractively, and I have been sorely tempted to go down the route that she suggested.  I have borne firmly in mind the need to adopt a common sense approach, reading the decision as a whole and with an appropriate degree of benevolence.  I have read and re-read paragraph 12 of the decision and looked at it in the wider context of the decision as a whole, though it is fair to say that there is little else in the decision that assists in the proper interpretation of paragraph 12.  
14.	In the end, I have come to the view that the approach for which Mr Davies contends, and which she submits is obvious, is in fact mistaken.  It seems to me that the Inspector has got into a muddle on this issue - something which is less surprising when one bears in mind that the issue was not the subject of any argument in the written representations before her and she did not think it necessary to invite any submissions or representations from the parties on the point.  
15.	In my judgment, the tenor of the Inspector's reasoning in the relevant passage is that the development would fail to comply with policy 64 but that it was unlikely to cause material harm to that policy or to the objectives of the policy and therefore the non-compliance should not stand in the way of the grant of permission.  It is of course true that she says that the development would "appear" not to comply rather than it "would not" comply or that it "does not" comply.  But she does not qualify her comment by saying that it would "at first sight" appear not to comply or anything of that kind; nor does she come back to say that after all, on full analysis, it can be seen that the development would or does comply.  I am left with the strong impression that she accepts for the purpose of her analysis and her decision that the development would not comply with the policy.  
16.	Her subsequent analysis of the issue of material harm is expressed in terms very different from the way in which one would have expected her to express herself if she had been considering the "material extent" provision in policy 64.  First, and most obviously, she does not refer at all to "material extent", but talks in terms of "material harm".  Secondly, those two expressions do not seem to me to be synonymous or co-extensive.  If one were considering "material extent" in policy 64, one would expect the focus to be on the extent of the extra demand or the extent to which the particular development had failed to meet that extra demand.  As an example in relation to the former point, Guidance Note 8 indicates that there are certain types of development, such as residential homes for the elderly, which it is accepted are unlikely to affect demand for open space to a material extent.  The Inspector does not approach matters in that way.  As it seems to me, she seems to be addressing a different and wider question, which is whether the objectives of the policy would be harmed by this particular development even though there was technically a non-compliance with the policy.  
17.	One can certainly envisage the possibility that a development would be contrary to the terms of the policy because it would in itself to a material extent fail to meet extra demand for open space, but that the objectives of the policy would not be harmed, for example because sufficient provision had now been made for open space so as to meet not only existing demand but also the additional demand created by the development.  That is more the kind of thing that the Inspector appears to me to have been looking at.  What she was saying was that there was no evidence before her to show where things now stood in terms of open space in the area, and it is in the absence of any such evidence, and bearing in mind that she was concerned with only three dwellings, that she concluded on balance that the development was unlikely to give rise to material harm to the objectives of the policy.  Thus, in my judgment, she was not limiting herself to an exercise within the terms of the policy, but was taking into account a wider issue of material harm.  Unfortunately, even if she might have been entitled to look at that wider issue, she did not do so in a way that complied with the basic approach required under section 54A.  
18.	Accordingly, there was here an error of law.  Moreover, it led to the Inspector granting permission in circumstances where, as I have held, she found that a development would be contrary to the development plan, in that it would be contrary to policy 64, and she did not go through a lawful exercise of finding countervailing material considerations.  In those circumstances the decision must be quashed.
19.	I think it unnecessary to consider further arguments that were advanced by Mr Colville under the heading of "reasons", "failure to take account of material considerations" and "taking into account immaterial considerations".  Most of his further submissions were closely related to and flowed from his basic submission as to the existence of an error of law.  To the extent that they were separate, I did not consider them to have any real substance, but nothing turns on that.
20.	I note finally that the developer would appear to have only himself to blame for the fact that the appeal must now be re-decided.  When the matter was before the Council he appeared to have no objection to making a contribution in accordance with Guidance Note 8.  It was only because of his subsequent unwillingness to enter into a commitment that the Inspector had to deal with the issue under policy 64 at all.  I am told by Mr Colville, on the basis of his instructions, that, having been granted planning permission by virtue of his successful appeal to the Inspector, the developer has persisted in his refusal to make a contribution.  But for that, it might have been possible to deal with matters by consent.  If that information is correct, the developer has adopted a course which, in conjunction with my judgment as to the erroneous approach adopted by the Inspector in deciding the issues under policy 64, has resulted in the decision being quashed and the matter having to be remitted for reconsideration.
21.	MR COLVILLE:  My Lord, I make an application for the authority's costs to be paid by the first respondent.  There has been a costs schedule drawn up and --
22.	MR JUSTICE RICHARDS:  I have not had it.
23.	MR COLVILLE:  My Lord, no.
24.	MR JUSTICE RICHARDS:  I should have.
25.	MR COLVILLE:  I apologise, my Lord.  It has been agreed by the first respondent.
26.	MR JUSTICE RICHARDS:  Yes.  What do you say, Miss Davies? 
27.	MS DAVIES:  My Lord, I obviously cannot oppose the application as I understand the amount has been agreed between our respective instructing solicitors.
28.	MR JUSTICE RICHARDS:  Yes.  On both sides the costs are, I have to say, reasonable, on your side even more reasonable than on the appellant's side.  I will make an order that the Secretary of State pay the Council's costs summarily assessed in the sum of £7,400. 
29.	MS DAVIES:  I rise on a different matter, my Lord.  In respect of the last part of your Lordship's judgment, where you have made reference to the developer, you will see the two gentlemen sitting behind me, who I learnt at lunchtime are in fact the developer, and in conversation with Mr Tate he has led me to understand that in fact as between him and the Council he did in fact offer after the grant of permission to make the payment in question.  So although the way it was put to your Lordship by the Council was that the developer had refused to pay the amount, Mr Tate has said to me in conversation that that is not right and that he has offered to pay it since, so I thought it right to draw that to your Lordship's attention so that your Lordship may wish to just think again about that part of the judgment.
30.	MR JUSTICE RICHARDS:  Certainly.  If that is right then I have been potentially misled by Mr Colville.
31.	MR COLVILLE:  My Lord, I was acting on instructions.  I can only go on the way the Council has understood the position.  There has been no attempt or no communication between the developer and the Council by way of an offer, or indeed a planning obligation, which your Lordship knows can be unilateral.  My Lord, there has been no indication at all.  My Lord, those are my instructions.  I cannot take the matter any further forward other than to say that I was not misleading the court, nor would I have intended to do so.
32.	MR JUSTICE RICHARDS:  I am sure if anything has happened it is not deliberate on your part or on the part of those instructing you.  At best, there has been some confusion here as to the true factual position.  If the position is as is relayed to me through Miss Davies, I have been unfair in at least part of the comments I made in relation to the developer's stance and I will look at it again when I get the judgment to see whether I should qualify those remarks, but it is probably sufficient that it is said here by way of reaction to the information given to me, if correct.  I am very grateful.
33.	MS DAVIES:  One other matter, just in terms of the question of appeal.  I wonder if your Lordship would direct that the 14 days run from when we get the transcript of your Lordship's judgment.  Obviously we will consider it carefully and it may be that there is not an appeal, but if there were would your Lordship direct that we have 14 days from the date we have the transcript? 
34.	MR JUSTICE RICHARDS:  Yes.  Is there not a prior question to be resolved, which is that of permission to appeal? 
35.	MS DAVIES:  My understanding is I can ask either your Lordship or the Court of Appeal.
36.	MR JUSTICE RICHARDS:  I do not think that you would be very popular going to the Court of Appeal if you have not asked me first.
37.	MS DAVIES:  Indeed, my Lord.  Can I just take some instructions on that.  In that case I do ask for permission to appeal.  This obviously does raise a matter of some importance as to how the inspector should approach a policy of this nature and --
38.	MR JUSTICE RICHARDS:  I hear what you say.  I refuse permission to appeal.  I do so on the basis that, notwithstanding what I said about having been sorely tempted to go down the route that you so attractively offered to me, at the end of the day I reached a firm view on construction and I do not think there is a real prospect of the Court of Appeal taking a different view, and I do not regard the case, frankly, as raising an issue of importance.  It very much turns on the construction of a single paragraph in a single decision letter.  Had I accepted your submissions, it might have given rise to wider issues for the Council, but that is neither here nor there.  I will record the reasons as being: no real prospect of success and no issue of general importance so far as I judge the matter.
39.	MS DAVIES:  I am sorry, my Lord.  The question of the 14 days, would your Lordship direct that that run from receipt of the transcript? 
40.	MR JUSTICE RICHARDS:  Yes, I can do that.  Thank you.