England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		20th February 2006

1. MR JUSTICE OUSELEY: McCarthy and Stone Developments Limited (the claimant) was refused planning permission by Wirral Borough Council in January 2004 for the development of land in Hoylake for 25 one-bedroom and 13 two-bedroom sheltered flats for the elderly, together with ancillary development. Its appeal to the First Secretary of State was dismissed by an inspector, following a public inquiry, by a decision letter dated 1st February 2005. The claimant challenges that decision under Section 288 of the Town and Country Planning Act 1990 on the grounds that the decision was outside the powers of the Secretary of State and because procedural requirements to give legally adequate reasons had not been complied with, to its prejudice. The claimant's case at the inquiry, in brief, was that there was an identified local housing need in the west of Wirral for the private sheltered housing for the elderly, in the provision of which it is experienced.
2. There are three grounds of challenge, which are interrelated. The claimant contends that the Inspector adopted a legally erroneous approach to the meaning of the development plan policy governing the locally identified housing need for the elderly in this area, giving it a far stricter meaning than was warranted or, alternatively, ignored the relevant policies. Further, it is said that, if that is wrong, he failed to give any reasons for such conclusion as to the import of that policy which he may have reached. This contention was then related to the standard of proof required by the Inspector for the identification of housing needs. The Inspector's conclusion on that issue, and this was the second point, itself gave no adequate reasons for his conclusions on the evidence adduced to him. Finally, the Inspector compounded those errors by concluding that the whole issue of housing need for the elderly should be dealt with through the eventual development plan process rather than through the appeal process.
3. The development plan includes the Wirral UDP of 2000 and RPG13 of March 2003, the Regional Planning Guidance for the Northeast. It now has the status of an Initial Regional Spatial Strategy. By Section 38 of the Planning and Compensation Act 2004, decisions must be made in accordance with it, unless material considerations indicate otherwise. There was no debate before me but that the whole of RPG13 was part of the development plan for these purposes in the same way in which all parts of local plans have been parts of the development plan for the purposes of Section 54(a) of the 1990 Act. The distinction between policy and explanatory memorandum in the structure plans of yore did not apply here. That was because those latter parts of the structure plans were not approved by the Secretary of State. Conversely, he had approved everything contained within RPG13.
4. The development in question is on a site which is previously developed land in the urban area of Hoylake in the west of the Wirral. It is therefore outside the area of the North West Metropolitan Area, or NWMA, as defined in RPG13. It is also outside the key towns and cities identified as areas outside the NWMA. The thrust of RPG13 in SD1 is that the priority for the allocation of development should be given to the Liverpool and Manchester conurbations and then to other identified cities and towns within the NWMA and, thereafter, development outside the NWMA goes to identified key towns and cities. As I have said, Hoylake is outside the NWMA and is not one of the key towns or cities identified outside it. That part of Wirral Borough Council's area which lies east of the M53 was within the NWMA and that part which lies west of the M53, referred as west of Wirral, lies outside the NWMA.
5. There was no dispute in this case but that there was no requirement for further housing to meet general housing needs either in the Wirral or in the west of the Wirral. The Inspector found that, before account was taken of demolitions, there was a 12.6 years' supply of housing for the Wirral as a whole. The Inspector, in his decision letter, identified that the main issue, and the only one relevant for these purposes, was:

"... whether the appeal proposal would result in an over supply of housing outside the NWMA, and if so whether there are material considerations to justify the scheme."

6. The Inspector set out the planning policies and identified, in paragraph 6, that the development plan comprised the Wirral UDP and RPG13. The last sentence of paragraph 6, which gives rise to some controversy, said:

"At the inquiry, it was agreed that the following policies are those most relevant to these appeals."

He then referred to three specific policies within RPG13. He pointed out that the WUDP had been, so far as material here, superseded by the guidance in RPG13; the extent of housing land supply and the superseding of the WUDP by RPG13 had led the council to adopt a series of criteria regarding new residential development, which he set out in full. He pointed out, correctly, that they did not constitute a formal policy or adopted supplementary planning guidance.

7. The Inspector then turned to the first issue and set out the reasons for refusal, which included reference to paragraph 3.18 of RPG13, a policy to which he had made no reference in his summary of the relevant RPG13 policies. He then referred to housing land supply and, in paragraph 18, referred to the definition of "Local Housing Needs" in the glossary to RPG13. There is one category of needs to which I need to make reference. The relevant passage thus reads:

"These [local housing needs] apply when employment, social and economic consequences lead people to choose or demonstrate a need to live or remain in a locality where accommodation is not available to them. Categories of need could include..."

iii) people who have long-standing links with the local community such as the elderly, who need to be close to relatives."

8. The Inspector summarised the appellant's case, recognising the appellant as a "long-established national provider of private sheltered housing". The appellant's contention that there is a recognised need for such facilities in west Wirral was said to be supported by the Council's Wirral Housing Strategy 2002 and the 2001 Census. The Inspector examined the survey questionnaires and returns from a survey of need or demand which the appellant had commissioned for the purposes of the inquiry. In the course of it, he referred to an additional telephone survey by Opinion Research Business and demographic data for the appeal site provided by Experian Business Strategies Division. The conclusion as to need was said by the appellant to be supported by those two other surveys. There is no reference in that summary of the appellant's case to policy SD3 and in particular paragraph 3.18 in the RPG13.
9. The Inspector finally turned to his analysis of the issue. He started by saying, in paragraph 24:

"In essence, it is the nature of the questionnaire and the resultant conclusion which was the principle [sic] matter of issue before the inquiry."

In paragraphs 24 and 25, he set out a number of criticisms made by the local authority of the design of the questionnaire; that it was unrepresentative in terms of sample and important alternatives to the claimant's mode of provision for the elderly had been omitted from the options to answer. I note in passing that the question of the location of the need or the nature of the housing stock available to meet that need was not the subject matter of criticism which he identified. His criticisms related to the soundness or extent of the data relating to quantifying need or demand.

10. In paragraph 26 of the decision letter, the Inspector said this:

"I agree with the Council concerns. Indeed, the number of answers compared to the overall response to the questionnaire suggests that some questions might have elicited multiple answers, although the form was not designed with this in mind. Consequently, I am of the opinion that the Housing Survey undertaken on behalf of the appellant was not sufficiently robust or unambiguous having regard to the stringent requirements of RPG13 and housing allocation within the Wirral. The needs of elderly people, and where accommodation could be provided if justified, should be established by the Council, not through the S78 appeal procedure but through the development plan process. Indeed, the Council is committed to shortly undertaking a full Housing Needs Assessment for the Borough. This will assess the needs for affordable housing, sheltered and very sheltered housing within the HMRJ area, the NWMA and outside the NWMA."

11. In paragraphs 27 and 28, he referred to ways in which the reservations that he had about the appellant's survey might have been overcome, either by earlier consultation by the appellant or by greater cooperation on the part of the council, whose attitude had been the subject matter of some criticism at the inquiry. But he concluded, in paragraph 28:

"However, based on the interpretation of the appellant's Housing Survey in its present form, I am of the opinion that the appeal proposal would result in an oversupply of housing outside the NWMA. I do not consider than an overriding need for elderly persons accommodation on this site, outside the NWMA, has been demonstrated which is sufficient to overcome the very restrictive housing policies which PRG13 has introduced. As such, and whilst the proposed development might well satisfy the requirement of WUDP Policy HS7, it is contrary to RPG13 Policy DP1 with regard to the SDF, and Policies SD1 and UR7."

Finally, in paragraph 40, he said in his overall conclusions:

"For the above reasons, the appeal proposal would result in an oversupply of housing outside the NWMA, for which there are no material considerations to justify such a situation."

12. The first ground upon which Mr Katkowski QC, for the claimant, submits that there is an error of law is that the Inspector has disregarded or misinterpreted the relevant policies of the development plan and, in particular, policy SD3 and paragraph 3.18 or, alternatively, he has failed to give reasons for such conclusions on that policy as he may have reached. The Inspector does not refer in his description of the relevant policies to SD3 and 3.18, nor does he refer to it in the description of the appellant's case to him, nor does it feature in his analysis of the relevant policies or in his application of the policies to the conclusions which he arrives at in relation to housing need.
13. It is not disputed by Mr Beard, on behalf of the Secretary of State, but that policy SD3 and paragraph 3.18 were relevant parts of the development plan. They are relevant parts because they are, at least, the policy and passages which deal with development outside the North West Metropolitan Area.
14. Policy SD3, in the introduction, says that, briefly, in this part of the Northwest outside the North West Metropolitan Area "development will be concentrated in the following key towns and cities". None are relevant here.
15. Paragraph 3.18 says, however:

"To the south of the North West Metropolitan Area, the environment and the relative prosperity of the local economy may well generate demand for housing and other land uses over and above the western half of Wirral and Cheshire's own needs, but this demand should continue to be resisted to support the urban regeneration of the North West Metropolitan Area and relieve pressure on areas of constraint within Cheshire together with potential traffic congestion. Provision of housing and other land uses should therefore be based principally on meeting the needs of the area's current population and its housing needs."

The relevant policy thus features at no stage in the Inspector's analysis of policy, of the evidence or in the conclusions set out in paragraphs 26, 28 and 40. It is surprising that the Inspector did not refer to the relevant policy for the area which he was considering. It is particularly surprising that he did not refer to it because it was identified in the reasons for refusal and was referred to in both parties' submissions to him. It is even more surprising that the Inspector introduced policies with the last sentence of paragraph 6 of his decision letter, to which I have already made reference, given that counsel for the appellant at the inquiry had specifically objected to the Inspector that he had omitted paragraph 3.18 from his enumeration at the outset of the inquiry of the relevant policies.

16. The language which has been used to describe the relevant policies, as seen by the Inspector, in paragraph 26, is that "the stringent requirements of RPG13 and housing allocation within the Wirral". Paragraph 28 refers to the failure to demonstrate "an overriding need for elderly persons' accommodation on this site" and a need which had to be "sufficient to overcome the very restrictive housing policies" in RPG13.
17. Mr Katkowski submitted that that language was not justified by the policies within RPG13, particularly when regard was had to the language of SD3 and paragraph 3.18. These words used by the Inspector were, he submitted, not just descriptive and irrelevant but played a role in setting the standard by which he was to judge the evidence, as the link between the quality of the evidence and the stringency of the requirements, in paragraph 26 of the decision letter, makes clear.
18. Mr Beard submitted that the Inspector plainly had the issue to which paragraph 3.18 gives rise in mind, not just because of the reference to the reason for refusal but because the bulk of the decision letter addresses the identification of housing need for the elderly and does so by reference to the glossary in RPG13, which indicates that he has made the link between paragraph 3.18 in the RPG and the definition of local needs in the glossary. The whole consideration of the Inspector was about whether the local need had been shown and it was agreed that if it could not be shown then the appeal was bound to fail. The language used by the Inspector was a legitimate description of the policies he found rather than the superimposition of a requirement not to be found in the policy. His conclusions on the policies were clear and it was obviously sufficient that he had concluded that the local need had not been made out.
19. I accept that the Inspector addresses the issues of local housing need for the elderly and that is an issue to which paragraph 3.18 of RPG13 can give rise, but I do not accept that that means that he has addressed paragraph 3.18 or correctly interpreted the relevant development plan policy. If he had had paragraph 3.18 in mind, I would have expected him to say so because of its importance to the case. It arises in the reasons for refusal; in the parties' submissions, particularly those of the appellant; and was specifically drawn to his attention by the appellant at the outset of the inquiry. He does not refer to it once, although he refers to a number of other policies from the RPG. More tellingly, when dealing with the policies that apply to local housing needs for the elderly, he refers specifically and in full to the informal policy which the Wirral Borough Council had resolved should be applied to local housing needs in view of the housing oversupply. He did not even refer to it in his description of the claimant's case, even if only to dismiss it as adding nothing.
20. I do not consider that a decision letter that ignores the key development plan policy can be saved simply by saying that the topic to which it gives rise has been considered. Policies may differ in the way in which they express the degree of restriction, the degree of need, the degree of proof required for what may be seen as an exception to policy. It is important that the terms of the policy be grappled with and not just the topic to which it is said that policy may give rise. The question of what the framework is to the consideration of the various planning factors is important. Their framework governs the weighting to various factors, the approach to be adopted and hence means the terms of the policy matter, not just the topic which it may give rise to.
21. My conclusion that the Inspector has not had regard to policy 3.18 and may instead have turned to the Local Planning Authority's informal policy, is reinforced by the language in which he expresses himself. The true thrust of RPG13 is that development should be channelled first to the NWMA and then to key towns and cities outside it. But DP1, although headed "Economy in the Use of Land and Buildings", points out that one object of new development is to assist people to meet their needs locally. Paragraph 3.18 is in line with that. Those two policies treat the meeting of local needs, as does the glossary, where they arise, as an important aim of planning policy. No especial standard of proof is required to show that a local need exists and there is no policy requirement for exceptional circumstances to be shown in order that local needs be met. The restriction simply arises from the fact that development is not to take place within the area of Hoylake, for example, if it is not meeting a local need; but there is no restriction on development there which does meet a ideal need. There is no policy requirement that an overriding need be shown and that local development needs could not be met elsewhere.
22. The language which the Inspector uses, and to which I have made reference, that of "stringent requirements", "overriding need", "very restrictive policies", is the language of severe restrictions to be overcome, which does not chime with a proper reading of the policies in DP1 or in paragraph 3.18. They chime rather better with the informal policy adopted by the Local Planning Authority but that is not part of the development plan.
23. It is plain that the Inspector does not use that language as a mere description of the way he sees the thrust of the policies. They play a part in his decision making. In paragraph 26 of the decision letter, he explicitly links the calibre of data and analysis, which a housing needs survey had to show, to those instinctive requirements. The more restrictive the requirements, the more robust and unambiguous the new evidence had to be. That language clearly shows a misinterpretation of policy. If he had regard for the relevant policy, I am satisfied that he misconstrued it which amounts, in my judgment, to the same thing as disregarding it.
24. In the light of those conclusions, it is not necessary for me to say whether he was given any adequate reasons in relation to the conclusions on that policy but he gives no reason, I have to say, to suggest that he had regard to it or interpreted it properly. I would also add, although I shall return to it later, that the second part of paragraph 26 of the decision letter, which is concerned with the process through the development plan whereby he has required, seemingly, that housing needs should be established, sets a requirement which is not borne out by law or policy and itself appears to suggest that he has applied, from his erroneous interpretation of the relevant policies, a standard which they do not give rise to. Accordingly, Ground 1, put forward by the claimant, is made out.
25. The second ground is that the Inspector has given inadequate reasons for his conclusions on local housing need. It is not contended that he ignored the various strands put forward because of the references which he makes to them in his analysis of the appellant's case. The contention is that he gave no reasons for his conclusions in relation to three strands of evidence other than the claimant's own study. Those three strands are the Wirral Housing Strategy of 2002 for the period of 2003 to 2008, the EBS study and the ORB study to which I have briefly made reference. It was contended by Mr Katkowski that the focus on the claimant's study during the inquiry simply reflected the part that was at issue. The other parts, and in particular the Wirral Housing Strategy, were not at issue but they all fell to be brought into account and reasons had to be given as to how that had been done. In particular, they might have been regarded properly as adding support, as the claimant had contended, for the conclusions in the claimant's own study with which the Inspector disagreed. Mr Beard submitted that the Wirral Housing Strategy had its limitations because it was not locationally precise, but that was not part of the Inspector's reasons, and the Inspector did not contend that the claimant's study was deficient either, by reference to the way in which he dealt with location. Mr Beard also emphasised that the key debate at the inquiry was over the claimant's own study. That is the essence of the debate and, rhetorically, Mr Beard asked why had such a study as the claimant had provided been done if the Wirral Housing Strategy was satisfactory. The rhetorical question received the answer that the Wirral Borough Council had asked for it. No-one had suggested, submitted Mr Beard, that the other studies were sufficient if the claimant's own study had failed to persuade the Inspector. The Inspector's reasons dealt with a principal issue in relation to this matter.
26. I do not accept the claimant's arguments here. I appreciate that its case was that all of these items of evidence were of a piece. The four documents came together; each tended in the same direction and each then supported the other but the real thrust of the case was that it was the claimant's study that provided a clear, reliable and sufficient basis for the decision and the others were regarded as supporting material. The Inspector did consider those matters, it is accepted. He did explain why he rejected the major document. I observe in passing, although it is not, of course, the Inspector's reason, that the ORB report was quite short and the EBS was quite general and the way it was introduced to me by Mr Katkowski did not leave me to suppose that there was a major piece of material there which required separate consideration, apart from that given in the claimant's own study. It is not necessary for the Inspector to go through each document. It was the housing needs study by the claimant which was the key to its case.
27. I accept that it would have been better for the purposes of this case if the Inspector had dealt with it but it is clear that he was not satisfied by the strength of the appellant's study and it would be to expect reasons for his conclusion on each material consideration to require him to have given reasons in relation to those studies. That is not the Inspector's obligation. His obligation is to give reasons which deal with the principal issues in contention. I accept that had he interpreted properly the relevant policies, he might have dealt with the evidence relating to the data more fully.
28. I turn finally to the third ground, which is perhaps more troubling to the claimant than the preceding ground. This arises from the Inspector's comment from the second part of paragraph 26 of the decision letter, in which he says that the process of determining housing needs should be not through the appeal system but through the development plan process and done by the council. There appears to be no particular reasoning which underlies the view thus expressed. There was no prematurity objection from the council contending that the appeal should be dismissed while the council pursued, in its own time and own way, an assessment of housing needs. The Inspector's point in paragraph 26 does not sit easily either with his suggestions in paragraph 27 and 28 that, had the survey process been carried out differently, with earlier involvement by the council and greater cooperation from it, the issue might have been resolved through the appeal process.
29. However, the Inspector is clearly wrong in his comment if he intended it to be a statement of law and it is unsupported by any relevant policy. There may or may not be a planning advantage in pursuing this process through the development plan or pursuing it exclusively through the development plan but it may also be that the Inspector's comment reflects his misunderstanding of the policies and puts the test too high on that account. Housing needs for the elderly are often, following DP1 and paragraph 3.18, to be met locally. They are, from that point of view, an exception to the general locational thrust of policy. But they are not an exception which the policies require to be pursued through any particular process. The question of process is therefore a matter for the Local Planning Authority and the developer to argue about on its merits. It was not done at the inquiry, so far as I can see from any material presented to me.
30. However, although the last part of paragraph 26 represents a separate error by the Inspector, I cannot see where that error has separately affected the decision which he arrived at. It is more than anything a reflection of Ground 1 and his misinterpretation or ignoring of the relevant policy.
31. So upon Ground 1, I allow this application and quash the Inspector's decision.
32. MR KATKOWSKI: My Lord, may I ask for an order to be made in those terms, that the claim be allowed and the decision letter be quashed?
33. MR JUSTICE OUSELEY: Yes.
34. MR KATKOWSKI: My Lord, in relation to costs, we agreed outside of court a sum for each eventuality but the sum that we had agreed in relation to our costs, so to speak, have been agreed on the basis of me winning all of the points. I have to say, I do not have my learned friend's instructions in the circumstances. Perhaps we could just have a moment's pause, my Lord?
35. MR JUSTICE OUSELEY: Yes.
36. MR BEARD: My Lord, may I take very brief instructions? (Pause) My Lord, I accept the principle that the costs must follow the event and I make no submissions in relation to apportionment. I agree with the figure agree outside.
37. MR KATKOWSKI: Thank you. In that case, my Lord -- I am very grateful -- I ask for an order to be made that the defendant, the First Secretary of State, pays the claimant's costs in the sum assessed, as agreed between the parties, at £15,000.
38. MR JUSTICE OUSELEY: Does that include VAT or not? Or is that the total? (Pause) You will say plus VAT, they will say no VAT. I will say that includes VAT, because, after all, you were generously treated on the apportionment. £15,000 to include VAT. You can work out what that is.
39. MR KATKOWSKI: My Lord, thank you very much indeed. We are very grateful to you.