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
		19th January 2007

1. MR JUSTICE SULLIVAN: There are two applications before the Court. The first is an application under section 288 of the Town and Country Planning Act 1990 ("the Act"), to quash a decision of an Inspector, appointed by the first defendant, contained in a decision letter dated 13th February 2006. The second is an application for Judicial Review of the Inspector's decision in a related costs application. The Inspector's cost decision is also dated 13th February 2006.
2. I will deal with the two applications in turn. The section 288 appeal decision was concerned with an appeal made by the claimants against a decision by the second respondent to refuse planning permission for a proposed new farm bungalow at Great Omenden Farm, Pook Lane, Smarden, Ashford in Kent.
3. The second defendant had refused planning permission, not because it disagreed with the claimants' contention that there was a need for a new farm bungalow on the holding, but because it contended that, in addition to the usual agricultural occupancy condition, the claimants also ought to enter into a section 106 agreement to guard against the possibility of future severance of the proposed farm bungalow from the farmland. That was the sole issue between the second respondent and the claimants, namely: would an agricultural condition suffice, or should the agricultural condition be backed up with a section 106 agreement?
4. The claimants' appeal was dealt with by way of an informal hearing, which was held on 12th January 2006, and the Inspector conducted a site visit on the same day. Prior to the hearing, the Smarden Parish Council had written to the planning inspectorate saying that:

"Smarden Parish Council objects to this application as it believes that the existing oast house, which is in Biddenden parish, has planning permission for conversion. The Parish Council would prefer that the oast be redeveloped before the new building is considered."

5. There was also a valuation prepared on behalf of the claimants, which dealt with the extent to which the imposition of a section 106 agreement would affect the value of the farm. As part of the valuation exercise, the oast house was mentioned as having potential for residential conversion, but the valuation went on to point out that there could be "hope" value only, and not an assumption that planning consent could be achieved.
6. There matters stood until the morning of the hearing. When the Inspector opened the hearing he produced an agenda. Among the various agenda items the main topic for discussion was identified in bold type:

"Whether there is justification for seeking to prevent, by means of a legal obligation, the severance of the proposed farm bungalow from existing land and buildings at Great Ormenden Farm."

7. Item 5 gave a list of:

"Other Topics For Discussion:

"i) The financial test;

"ii) The availability of other potential residential accommodation;

"iii) The impact of the proposed dwelling on its surroundings;

"iv) Precedent;

"v) Any other topics for discussion."

8. In his decision letter, the Inspector identified the main issues in paragraph 2:

"The Council accepts that there is a clear functional requirement for an additional permanent dwelling on the farm and that the existing agricultural business is financially capable of sustaining a residential unit at the site as proposed. I have no reason to disagree, and therefore consider the main issues in this appeal to be:

"1. Whether there is justification in seeking to control the severance of the proposed farm bungalow from existing farmland and the buildings and;

"2. Whether the identified function for further agricultural workers' accommodation could be adequately met through the adaptation of existing premises, rather than by means of a new build dwelling."

9. In paragraphs 3 to 6 the Inspector set out the relevant policies in the development plan. His reasoning commences in paragraph 7, and in paragraphs 9 to 19 he dealt with the first main issue, the control of severance. Although it will be necessary to return briefly to this issue for the purpose of considering the costs application, it is unnecessary to refer to this issue in any greater detail in the context of the section 288 application. Suffice it to say that the Inspector accepted the Claimants' contention that a section 106 agreement was not required in addition to the ordinary agricultural occupancy condition.
10. Thus far, therefore, the Claimants had succeeded in respect of the only issue which had been raised by the local Planning Authority, and in respect of the main topic for discussion identified in the Inspector's agenda.
11. The Inspector then went on to deal with the second main issue that he had identified in the decision letter. In order to decide whether the claimants had a fair crack of the whip, in the sense that the Inspector was dealing with an aspect of the appeal which was fairly and squarely at issue, and to which they could reasonably have been expected to respond, it is necessary to set out the extent of the inspector's reasoning under the heading "Other Accommodation":

"20) Both the Council and the appellants consider the site of the proposed building dwelling to be the least obtrusive location that practical requirements of the enterprise could be added and catered for. I do not dispute the location chosen as far as the suitability for a new build dwelling is concerned. Undeveloped space immediately adjacent to the complex of farm buildings being somewhat limited.

"However, my attention has been drawn by Smarden Parish Council to the existing oast house, at the centre of the farmyard, the use of which as agricultural workers' accommodation, could avoid altogether the need to need for a new build residential development on the farm.

"21) At the hearing, both parties dismissed the principle of adapting this building for residential occupation, on the basis that it is already used for storage associated with the agricultural business.

"The council added that in considering this possibility, it had concluded that the displaced storage would have to be housed in a new building, which would have no less an impact on the countryside than the proposed bungalow, and would not therefore be suitable conversion of the oast as a valid option.

"22) I am far from convinced by this stance, contrary to the Parish Council's understanding, the building in question did not benefit from a residential planning permission. Nevertheless I know that the planners letter for potential residential conversion. And indeed it seems to me to be eminently suitable for this, containing substantial windowed rooms, and the functional bedroom on the first floor level, which in my estimation could be classed as an adequately suitable residential unit. Whilst some of these rooms did contain agricultural storage at the time of my visit, they were not intensively used for that purpose. In fact, as the appellants confirmed, some were used primarily for the storage of domestic items.

"23) Apart from the need to relocate existing storage, no reasons for the oast being unsuitable as a means for meeting the identified functional need for an additional worker's dwelling, either in terms of the condition or the location of the building, or the quality of accommodation required, was forthcoming from either party. It appears to me that at least some of the items currently kept in the oast house could be transferred to vacant space within the timber framed barn nearby. Others could be housed in the new storage building, which, due to its relatively limited function, could be considerably smaller, and sited far less obtrusively, than the proposed bungalow, perhaps as an attachment to one of the existing structures.

"24) Unlike the erection of a new dwelling, the impact on the countryside and SLA, the oast house conversion need not be readily discernible. In terms of location, the building does not overlook the farm access, so would not fulfil all the security functions of the proposed bungalow. However, I am not aware of any other impracticality which would prevent the successful occupation by an agricultural worker, EPS7 confirms that protection from intrusion will not by itself be sufficient to justify a new agricultural blade and in the event that such concerns could be satisfactorily addressed by other means.

"25) Having received no convincing explanation as to why the oast house could not be functionally converted as a residential occupation, I am not satisfied that the proposed bungalow is essential in order to meet the identified functional need for additional agricultural workers' accommodation. I consider, from the absence of the evidence to the contrary, that the significant harm to the countryside, and SLA would arise from the appeal's proposal could be avoided through the use of existing premises on the farm, which are suitable and available for occupation.

"26) I find this to outweigh my conclusions on the issue of severance accordingly I conclude that the proposed farm bungalow would be harmful to the character and appearance of the countryside, the SLA, and thus contrary to the general objectives as such their policies RS1, RS5 and EAP4, Local plan policies HD7, EN27, VP2 and RE10, the merging structure plan policies QO1, SS7, E3, E5, NHP6 and National Policy PPS7. I further conclude that the function and need for an additional agricultural accommodation on the farm does not outweigh the harm identified, or justify a departure from the relevant policies in this case."

12. On behalf of the Claimants, Mr Clay submitted that the Inspector's decision was procedurally unfair; whilst the issue of the use of the oast house had been raised by the Parish Council, that was under the mistaken belief that there was a planning permission for conversion. It was true that the Inspector had looked at the oast house on his site visit, but the potential for converting the oast house, absent a planning permission, and for reorganising storage at the farm, were not raised, or not sufficiently raised, so as to give the claimants a fair crack of the whip. He submitted that it was particularly unfair for the Inspector to rely on the fact that he had received "no convincing explanation as to why the oast house could not be partially converted for residential accommodation," when that had never been identified as a reason for refusal by the Planning Authority. The availability of other potential residential accommodation had been raised as an issue in only the most general of terms, and not until the Inspector produced his agenda at the beginning of the hearing. Even then it was identified not as a main topic, but simply as one of a number of other topics for discussion.
13. The relevant authorities are conveniently cited by Ouseley J at paragraphs 52 and 53 of his judgment in Castleford Homes Limited v The Secretary of the State for Environment, Transport and the Regions [2001] EWHC Admin 77.

"52. The relevant law, though not cited to me, is to be found in cases such as Fairmount Investment Ltd v The Secretary of State for the Environment [1976] 1 WLR 1255 at page 1266; and H Sabey & Co Ltd v The Secretary of State for the Environment [1978] 1 All ER 586. Did the claimant have a 'fair crack of the whip?' Was the claimant deprived of an opportunity to present material by an approach on the part of the Inspector which he did not and could not have reasonably have anticipated? Or is he trying to improve his case subsequently, having been substantially aware of, or alerted to, the key issues at the Inquiry? Did he simply fail to realise that he might lose on an aspect which was fairly and squarely at issue, and hence fail to put forward his fall-back case? These are the sort of questions which can be used to guide a conclusion as to whether the manner in which a particular issue was dealt with at an Inquiry involved a breach of natural justice and was unfair.

"53. It is always difficult for parties to an Inquiry to know how far it is necessary to go in order to deal with the contingent ramifications of the process yet to be undertaken by an Inspector of analysing the arguments, accepting some in whole or in part, and rejecting others. It is obviously helpful if an Inspector does flag up issues which the parties do not appear to have fully appreciated or explored. The point at which a failure to do so amounts to a breach of the rules of natural justice and becomes unfair is a question of degree, there being no general requirement for an Inspector to reveal any provisional thinking. It involves a judgment being made as to what is fair or unfair in a particular case."

14. Notwithstanding the valiant efforts made by Mr Sharland on behalf of the first defendant to persuade me that the Inspector acted fairly in this case, I have not the slightest doubt that this was a case where the claimants did not have a fair crack of the whip. The Inspector approached the second main issue in a manner which they did not and could not reasonably have anticipated.
15. This is not a case of a claimant who has failed to deal with an obvious point seeking subsequently to improve his case. This is a case where the claimants have lost an appeal on a point which was very definitely not "fairly and squarely at issue."
16. The position might have been different if the Parish Council had been correct in its belief that there was planning permission for the conversion of the oast house for residential purposes. That issue had been raised, and, it having been raised, the Claimants could not have complained if the Inspector had inquired why that planning permission had not been implemented as an alternative to building a new bungalow. And further they could not have complained if the Inspector, having heard their explanation, had not been satisfied by it.
17. But once it is accepted that the Parish Council was mistaken, and there was no planning permission for the conversion of the oast house, the Inspector had to embark upon a wholly novel exercise, constructing not simply another main issue, but the issue that turned out to be the determining issue. That determining issue was not simply an aspect of the local Planning Authority's refusal, it was a wholly different case, bearing in mind the very narrow ambit of the matter in issue between the local Planning Authority and the Claimants: should a section 106 agreement supplement the normal agricultural occupancy condition.
18. The Inspector's agenda, which simply listed amongst a number of other topics for discussion, "The availability of other potential residential accommodation" could not conceivably have been sufficient to put the Claimants on notice that, in the absence of a planning permission for the conversion of the oast house, the Inspector proposed to explore the following questions for himself: (i) whether or not the oast house might be suitable for conversion; (ii) to what extent its existing use for storage could be relocated elsewhere within the farm holding; (iii) in so far as it could not be accommodated within existing buildings within the holding, whether it could be accommodated in a new building; (iv) what the size of that new building might be; (v) whether its siting would be less obtrusive than the siting of the proposed bungalow; (vi) whether it might be provided as an attachment to one of the existing structures; (vii) whether converting the oast house would enable the new accommodation to fulfil all the security functions of the proposed bungalow; (vii) if not, whether that was a consideration which would justify refusal of planning permission for a new dwelling.
19. None of those issues was fairly and squarely raised in advance of the hearing. There is no satisfactory evidence that they were discussed at the hearing. I have read paragraph 21 of the decision letter. It is clear that when the point made in the Parish Council's letter was put to the Claimants and to the local Planning Authority, that suggestion was dismissed upon the basis that the building was already used for storage, the Planning Authority adding that, in its view, a new storage building would have no less of an impact on the countryside. The Planning Authority made it clear that it had not pursued the conversion of the oast house as a valid option.
20. That was the very limited extent to which this "other topic" was discussed at the hearing. It is a far cry from that brief discussion to engaging in an investigation as to the suitability for conversion of the oast house, bearing in mind the number of windows, bearing in mind the existence of bathrooms, and whether or not an adequately sized residential unit would be provided etc, and then going on to reorganise the storage on the farm so that the conversion could take place.
21. Although Mr Sharland submitted that there was discussion about that at the site visit, so the Claimants should have been aware of what was in the Inspector's mind, I do not accept that submission. There is no evidence as to what was discussed at the site visit. It would be surprising if this wholly new case was discussed not during the hearing but at the site visit, bearing in mind the function of a site visit. All that can be said is that it seems that at the site visit, the Appellants confirmed that some of the storage was storage of domestic items.
22. The short answer to the Inspector's point, that he had received "no convincing explanation" as to why the oast house could not be converted to residential accommodation, is that it is not surprising that he did not receive such an explanation, because it had not been identified as an issue (absent a planning permission for conversion) in advance of the hearing. Thus neither the Claimants nor the local Planning Authority had a fair opportunity to deal with this wholly new point of the Inspector's own devising.
23. For these reasons, I am satisfied that there was a clear breach of natural justice in this case, and that the decision must be quashed.
24. I turn to the related costs decision. The Inspector began by summarising the Claimants' submissions. It was contended that the second Respondent had been unreasonable to insist upon a section 106 agreement in addition to the standard agricultural occupancy condition. The second Respondent answered this by saying that, in the particular circumstances of this case, it had demonstrated its concerns about the possible consequences of granting planning permission without an obligation preventing severance of the dwelling from the existing farm. The Inspector's conclusions were in these terms:

"6. I have considered this application for costs in the light of section 8 plan 3 and all the relevant circumstances. This advises that irrespective of the outcome of the appeal, costs may only be awarded against the party who has behaved unreasonably, and thereby caused another party to incur or waste expense unnecessarily.

"7. At the hearing the Council demonstrated to my satisfaction that, at least in the long term, the absence of an obligation to control a severance of the proposed agricultural dwelling and associated plans could lead to proposals for further dwellings, which in certain circumstances have proved difficult to resist. Neither the development plan nor national guidance contains promises promoting the use of such measures. However, the council legitimately presented the long term consequences of severance as something which weighs in the balance of evidence against established policy. I have simply reached a different conclusion as to where that balance rests, and do not therefore find the Council to have acted unreasonably in pursuing the particular line of argument.

"8. Moreover, in my judgment the reason for the refusal as put forward by the Council is complete, precise and specifically relevant to the application. At the hearing the Council explained to my satisfaction that the proposal would contravene the settlements of countryside policies sited in the absence of a planning obligation, it also demonstrated adequately why considered measures to control severance would secure compliance with those same policies.

"9. I therefore consider that unreasonable behaviour resulting in unnecessary expense, as described in Circular 8/93, has not been demonstrated, and conclude that an award of costs is not justified."

25. It is common ground that the Inspector applied the correct legal test. That is to say, had the second respondent behaved unreasonably, and thereby caused another party to incur expense unnecessarily? On behalf of the Claimants, it is submitted that the Inspector's reasoning was contradictory, and therefore perverse, because, although he concluded in the costs decision that the second respondent had not been unreasonable, in the decision letter dealing with the planning appeal, he had said, in paragraph 18:

"An obligation of this kind [a section 106 obligation] would also endorse highly questionable interference by the Council in the farmer's basic rights to keep and dispose of property. The fact that an application could be made in five years time to vary or move such restrictions does not in itself justify varying position. Indeed, in my view, paragraph 5 of Annexe A which is PPS7 provides a sufficient safeguard against abuse over such a period.

"I therefore find the council's approach to fail the test of reasonableness and necessity, set out in Annexe B to Circular 5, 2005, Planning Obligations. In any event, and its decision not to tie the existing farm house to the proposal and opposition to the imposition of a second occupancy restriction on that property leaves the way open for a dwelling to the lost to the farm in any event, and clearly reduces the effectiveness of the envisaged obligation in securing the safeguards seized." (emphasis added)

26. It is submitted that since planning permission was refused solely on the basis that there was no section 106 obligation, and the Inspector concluded that the Council's approach failed the tests of reasonableness and necessity, set out in Annexe B to the circular dealing with planning obligations, then it must follow that the refusal of planning permission was also unreasonable.
27. I do not accept that submission. As Mr Sharland pointed out in his skeleton argument, it does not necessarily follow from the fact that the Inspector concluded that the Council's approach failed the test of reasonableness and necessity in relation to the imposition of a planning obligation, that it acted unreasonably in seeking a section 106 agreement.
28. The reasonableness test set out in the Circular focuses on the reasonableness of the imposition of a planning obligation, and not on the reasonableness of the Council's conduct in resisting the appeal.
29. Putting the matter more simply, reasonable people may quite properly differ as to whether or not it is reasonable to seek either a particular condition, and/or a particular section 106 obligation. Merely because an Inspector takes a different view of the reasonableness of either a condition and/or a section 106 obligation, it does not follow that the party insisting on that condition and/or obligation must have been behaving unreasonably. The two questions are distinct.
30. I do not propose to extend this judgment by setting out the full text of the Inspector's consideration of the "Control of Severance" issue in paragraphs 9 to 19 of his decision letter. Suffice it to say that the Inspector accepted that there were proper arguments advanced in favour of attempting to impose controls over severance, but ultimately he concluded that the contrary arguments advanced by the Claimants prevailed.
31. As the Inspector made clear in his decision on the costs issue, the Council had raised perfectly proper concerns relating to the future potential for severance. The only issue was whether those concerns should be addressed by condition or by way of condition backed up by way of a section 106 Agreement.
32. The Inspector concluded that, balancing the arguments for and against, a section 106 Agreement was not necessary. The fact that he disagreed with the second respondent's assessment of the reasonableness of requiring a section 106 Agreement does not mean that the second respondent acted unreasonably in persuing its argument to appeal. As the Inspector said, he simply reached a different conclusion as to where the balance should be struck.
33. For these reasons, the application for Judicial Review must be refused.
34. For the sake of completeness I should add that it is clear from the terms of the cost decision that the Inspector, in deciding not to award costs, was not in any way influenced by his conclusion on the second main issue. So the fact that the section 288 application succeeds has no impact upon the costs decision.
35. MR SHARLAND: My Lord, I would ask for permission to appeal in this matter. I would submit it raises important points as to the extent the Inspector needs to spell out, in his agenda, key issues and so forth, and that such an appeal would have reasonable prospects of success. Unless I can assist you further on that?
36. MR JUSTICE SULLIVAN: Thank you very much. Mr Clay, I do not need to trouble you. I refuse permission not merely on the grounds that there are not reasonable prospects of success. I would say a challenge on the facts of this case is utterly hopeless.
37. MR SHARLAND: I am grateful for that indication. In relation to the cost issue, I would not resist an application for costs in relation to the section 288 appeal. I assume my learned friend will accept, he cannot resist, an application in relation to the Judicial Review. I do not know if you have the two schedules of costs?
38. MR JUSTICE SULLIVAN: I have not actually, no.
39. MR CLAY: My Lord, I wonder if I could intervene here, as those are being identified.
40. MR JUSTICE SULLIVAN: Yes.
41. MR CLAY: Just to say this: that the nature of the cost schedule produced by the applicant is one where one has to get a calculator out and identify what goes with what, and that job has been done, but there is not a figure on there that I can point your Lordship to.
42. What I can do, and perhaps the way to deal with this is, on the other hand I should add, the Treasury solicitor has separated out the costs of the two matters under two separate heads. So it is quite clear what goes with what there. What I was going to propose to do, in order to give the Respondent an opportunity to look at that, was to tell him the figure that we had come to in relation to the 288, which is £10,033.45.
43. MR JUSTICE SULLIVAN: Would it be helpful to adjourn? Shall I just rise and say until quarter past, which would give me enough time to get a cup of coffee, and you enough time just to -- maybe even twenty past twelve or something like that. Ultimately, unless you are going to argue about each other's figures, I ought to end up with one figure, to go in one way or the other, because you presumably want to set, I would imagine, off one against the other. So it must be possible for you to do that rather than me.
44. MR SHARLAND: My Lord, I do not think it will take long to look at the figures. I was going to suggest that given that it was essentially one-all, that this court should make no order for costs. The Respondents' costs have been split up between the two, and they are broadly similar, although not identical. The total costs have not been split up in relation to the appellants' costs.
45. MR JUSTICE SULLIVAN: Which is the Appellants' costs? Which one is which? The 1,926 is the 288; is it?
46. MR CLAY: Yes, and 2,049 is the (inaudible) I think.
47. MR JUSTICE SULLIVAN: I do not have Mr Clay's costs at all; I do not think I have, anyway. I did not notice them in any bundles, I am afraid, unless they are lurking about in the back where I have not noticed, but I do not think they are. No, I have not had them at all, Mr Clay.
48. MR CLAY: My Lord, may I take instructions, to see if I can obtain a copy. But I wonder if I could just deal with the principle, because within two minutes the Secretary of State's position is shifted from the initial proposition, which was that we should have our costs in the section 288, and he should have his costs in the Judicial Review, which seemed to me to be a fair way of dealing with it, and I had not resisted that, but once they found what the figures were, they then changed their mind and decided that there should be no order for costs.
49. MR JUSTICE SULLIVAN: It does seem to me that it is conceivable that the JR was slightly less burdensome than the 288, and so I would not necessarily accept Mr Sharland's six of one and half a dozen of the other, because it might be sort of four and a half of one and seven and a half for the other. That is why I am going to adjourn for 15 minutes or so to give you time at least to just sort it out, get a copy, explain it to Mr Sharland and we will see where we go from there, because I do not want to argue about the detail if I can help it.
50. MR CLAY: My Lord, thank you for that. May I, before your Lordship rises, just raise two points at this stage, so that they can be considered.
51. MR JUSTICE SULLIVAN: Yes.
52. MR CLAY: The first is that we have also an application for permission on a precautionary basis, if nothing else.
53. MR JUSTICE SULLIVAN: On the costs point?
54. MR CLAY: On the costs point.
55. MR JUSTICE SULLIVAN: Yes.
56. MR CLAY: To appeal to the Court of Appeal.
57. MR JUSTICE SULLIVAN: Is there a particular point you want to say, that the Court of Appeal should be troubled on, on that? You can imagine how keen they will be to deal with a costs issue.
58. MR CLAY: I am sure they will be very enthusiastic, my Lord. I think the issue is this: what your Lordship said in dealing with this in your Lordship's judgment, so far as I have recorded it, was that the question of reasonableness in the imposition of a requirement for a section 106 is different from the question of unreasonableness in resisting the appeal.
59. MR JUSTICE SULLIVAN: Yes. Reasonable people may differ as to what is unreasonable.
60. MR CLAY: My Lord, I understand that point. I think the point is actually a different one, and the one that I would be seeking to, and in particular to draw to the attention of the Court of Appeal, and it is this: that not only, of course, does a local authority need, as a matter of procedure, to support its case with argument when it comes to resisting an appeal, they also are required, in refusing planning permission, to act reasonably. And so in doing so, if they say: but for the absence of a section 106, and there is no condition to that, it is simply saying that our reason for refusal is that you have not put forward something which we would wish to take account of for material consideration; but for the want of a section 106 we would have granted planning permission. And at the same time, as on the Inspector's finding, such a 106 would in itself be unreasonable.
61. In my submission the subsequent decision not to award costs, because although it was clearly unreasonable for them to refuse permission, they have actually come up with arguments as to why there is at least some argument as to why such a section (inaudible) in issue being provided, is, in my submission, wrong in law. And that in itself is an important point, and has reasonable prospects of success.
62. MR JUSTICE SULLIVAN: Yes. Reasonable views of people may differ as to whether it has reasonable prospects of success. So I refuse you for the reasons set out in the judgment, but you are obviously free to pursue that to the Court of Appeal if so advised.
63. MR CLAY: Thank you, my Lord.
64. MR JUSTICE SULLIVAN: So you want to do that. If I come back at twenty past, will you have sorted out the costs?
65. MR CLAY: I will, my Lord, but there was a second point.
66. MR JUSTICE SULLIVAN: The second point, yes.
67. MR CLAY: It is a very short point, for everyone to think about, and your Lordship may have an immediate answer on it.
68. Your Lordship was looking for a single figure, the only difficulty with that is that unless the order actually reflects both figures, if either does go forward to the Court of Appeal, there may be difficulty.
69. MR JUSTICE SULLIVAN: Yes. I think it may just be easier to leave you do the arithmetic.
70. MR CLAY: Of course, yes.
71. MR JUSTICE SULLIVAN: If Mr Sharland can persuade the Court of Appeal that this Inspector did not run the whole new hare and running, then all be up in the air. All right. I will rise till twenty past.
72. MR CLAY: My Lord, there is a copy.
73. MR JUSTICE SULLIVAN: Are you going to do it now? Have you told Mr Sharland --
74. MR CLAY: No, I think we ought to discuss it --
75. MR SHARLAND: My Lord, I think there will be discussions on the figures.
76. MR JUSTICE SULLIVAN: Have you seen this?
77. MR SHARLAND: I have seen it, yes.
78. MR JUSTICE SULLIVAN: Do you want to do it now then?
79. MR SHARLAND: I am happy to do it now, my Lord.
80. MR JUSTICE SULLIVAN: Very well. If you give me the schedule, please, if you would. (Handed).
81. Thank you.
82. Right, Mr Clay, how is this to be split up then?
83. MR CLAY: I have just been instructed that my instructing solicitor's only copy has been handed forward to you. I have my own copy, and I am going to take instructions as to quite how this is --
84. MR JUSTICE SULLIVAN: No, I think my idea was a much better idea, and that is for me to go off and have a coffee, and for you to sort this out. So I am going to come back in a quarter of an hour's time. Twenty-five past.
(A Short Adjournment)
85. MR JUSTICE SULLIVAN: All right; who is going to start?
86. MR CLAY: My Lord, perhaps I can tell you what we do agree on, and then what we do not agree on, and then take it forward in that way.
87. MR JUSTICE SULLIVAN: Yes.
88. MR CLAY: Can I ask that the schedule of costs -- and we have not managed to get it copied in the time, but if I can pass this copy, I think this is one your Lordship could use for the basis of this --

89. (Handed).

89. MR JUSTICE SULLIVAN: Thank you, yes.
90. MR CLAY: My Lord, the principle appears to be agreed between us, as I understand it, that the Respondent should pay the Applicants' costs of the 288.
91. MR JUSTICE SULLIVAN: Yes.
92. MR CLAY: And the applicant should pay the Respondents' costs of the Judicial Review. So the question is then: what are those respective costs?
93. MR JUSTICE SULLIVAN: Yes.
94. MR CLAY: The figure for the Respondents' costs for the Judicial Review are set out in the cost schedule, and are £3,726, and I think we do not take issue with that.
95. We have explained the method by which we have calculated from the cost schedule before your Lordship, our part of the costs. I think your Lordship will see that the total costs appear to come to some £17,000. And we say of that £10,033.45 is the cost of the section 288, and that is calculated by looking at those stock costs, which is specific and attributable to the 288, and which are identified on there, and then adding to that half of the costs of other matters, for example counsel's brief fee for today.
96. MR JUSTICE SULLIVAN: Yes.
97. MR CLAY: Subject to the proviso that I am going to, I hope, accurately reflect on behalf of the Respondent, that basis for identifying the costs does not appear to be in dispute, as I understand it.
98. MR JUSTICE SULLIVAN: No.
99. MR CLAY: I would add that those respective figures, of £10,033.45 and £3,726, on a broad basis clearly reflect firstly the fact that the burden of work in these matters always falls on the applicant, they are the ones who prepare the application and the bundle, and your Lordship will have seen the extent to which anything was put in in response by the Secretary of State.
100. Secondly, the extent to which there is more work in this case on the section 288. It was a far more complex case, all the authorities refer to it, and if one looks at the Respondents' skeleton argument, there are 25 paragraphs devoted to the section 288, and four devoted to the Judicial Review.
101. In my submission, if you like, the broad balance of those figures, 10,000 as against 3,700, effectively, well reflects the relative balance of work between the parties and between the issues.
102. What I understand, however, that the costs schedule, having been exchanged in accordance, as I understand it, (inaudible) not been exchanged properly, and the normal rule being on cases of this kind, which is less than half a day, with luck, that these things can be dealt with summarily. Only now, at the adjournment, one issue has been raised. That is my instructing solicitor's hourly rate, and that is set out there, at partner's rate, where the partner has played a part, at £220 per hour. He is a partner of some 18 years' experience. But others have done other tasks --
103. MR JUSTICE SULLIVAN: Yes.
104. MR CLAY: -- as part of things. And then all that I have been able to identify is some other unspecified questions, which led the Respondent to say that they should go for a detailed assessment. My Lord, that would be very unfortunate in my view, because it again involves everybody having to put much more time, which again has a cost effect, into dealing with justification of these costs.
105. Your Lordship can see, I think, that the figures broadly reflect the burdens on the parties, and the division between the cases. £220 an hour does not seem an excessive fee for a partner of 18 years' experience. It is clearly partner material; certainly the 288 is a complex issue. On that basis I invite your Lordship to make the order for costs on the basis of the two figures, £10,033 being the figure the Respondent pays to the Appellant for the 288, and £3,726 to be paid by the Appellant to the Respondents as to the cost of the Judicial Review.
106. MR JUSTICE SULLIVAN: Yes. Mr Sharland.
107. MR SHARLAND: Thank you very much, my Lord.
108. Obviously the first issue that we need a decision from you on is whether some of the detailed assessment should take place in this case; and the order of re-issue from the detailed assessment, if costs cannot be agreed. And we would hope that costs could be agreed, and therefore there would be no need for detailed assessment, but my instructions are that that is the order we are seeking and (inaudible) appropriate to (inaudible) assess the matter today.
109. The reason for that is: we dispute not only the actual figures, which are contrary to the Supreme Court guide limits figures on some of the solicitor's hourly rate and so forth. We are not entirely clear, but we think there is clear duplication of those matters raised, which we do not think are claimable.
110. And obviously we got this quite lengthy schedule yesterday, and we have not yet had an opportunity to collate the information provided, given the limited time.
111. On that basis we seek detailed assessment, my Lord.
112. MR JUSTICE SULLIVAN: Yes.
113. MR SHARLAND: I think it would be useful if we had a decision from your Lordship, subject to your views on that, before I make any submissions on the figure which I think is likely to be relatively lengthy cost submissions.
114. MR JUSTICE SULLIVAN: I am bound to say I think if there are going to be submissions included, they ought to be made (inaudible) detailed assessment. This was always a one-day case. It has ended up being a half-day case, probably a three-quarters-of-a-day case, by the time we have heard your submissions on costs, but there we are.
115. And I am bound to say the Treasury solicitors' costs on the 288 were £4,597. The Claimants' costs were round about double that. So, bearing in mind one's experience in these things, and generally speaking the lesser burden on the Defendant than on the claimant, it does not seem that things are so far adrift and so seriously excessive that if they are excessive at all, it would justify detailed assessment.
116. I think I ought to make a stab at it, frankly, today, and deal with the matter by some reassessment. As I say, when you do have a Claimants' costs that are about double that of the Treasury solicitors on the 288, that is not that unusual, bearing in mind the relative people burden of the day, much of which falls on the claimant.
117. I appreciate there are some cases where the Treasury solicitor makes a substantial input into the bundle, and there are all sorts of witness statements and (inaudible) and Inspectors and so on, but this has not been the case now. So, answer: no, I am not minded to go for detailed assessment; I think you better make your pitch.
118. MR SHARLAND: Thank you very much, my Lord. Can I first start with the hourly rate?
119. MR JUSTICE SULLIVAN: Yes.
120. MR SHARLAND: My Lord, I am afraid I do not have a copy of this. My learned solicitor obtained it from the Treasury costs people, but guidance figures for summary assessment costs have been issued by the Supreme Court, and they relate to those (inaudible) London and city is more expensive.
121. MR JUSTICE SULLIVAN: Yes.
122. MR SHARLAND: And in relation to Maidstone, the rates to allow for senior fee earners are Band 1, grade A, guideline rate: £184; grade B, £163; grade C, £134; and grade C, £100.
123. My Lord, the solicitor, partner, who did most of the work on this matter would be a grade A, because of his seniority. So the guideline figure there is £184.
124. MR JUSTICE SULLIVAN: Is that for general work or specialist work?
125. MR SHARLAND: My Lord, that is the figure, unless it is substantial and complex litigation, where other factors have been varied litigation and the complexity (inaudible). More important than that though, were any international elements that could justify a higher figure. My Lord, I would suggest that none of those matters applies. This is not a particularly complex case. The (inaudible) litigation, I would suggest, is not particularly high for the High Court. It was not urgent. And there is no international dimension that I am aware of, my Lord. So in light of that, the guideline figure for Mr Curtis should be £184.
126. So if you look at the schedule, there where it says A, we say it should be the £184, rather than a multiple of £220. So a 20 per cent deduction.
127. My Lord, and that is only if you accept that this matter was such that it required someone of band A. We submit that this matter did not require someone of such seniority. It was not a particularly complex matter, and it can be dealt with by someone at band B at £163 an hour.
128. MR JUSTICE SULLIVAN: Yes.
129. MR SHARLAND: Those are the submissions on the hourly rate. Going to the actual figures, obviously this is without prejudice as to the earlier arguments as to rate and seniority, but in relation to perusal of documents, five and a half hours is billed by a senior partner, who conducted the hearing before the Inspector. He will be familiar with all the documents, and there is no need for five and a half hours, perusal, my Lord, we would suggest. Obviously we have no details of the telephones, letters and e-mails, but we would suggest those figures are rather high.
130. In relation to the drafting of the documents, drafting has been billed both by a partner and by counsel. We do not have particular details of what was being drafted, but I suggest, my Lord, there is likely to be some significant overlap.
131. My Lord, in relation to counsel's figures, they are set out on the third page of the schedule of costs. Drafting advice and ground, that is £2,250. We would suggest that is very high, and a reasonable figure would be £1,500. Equally briefly, because the skeleton has been billed separately, a reasonable figure would be £2,000, rather than £3,500.
132. MR JUSTICE SULLIVAN: Which would bring it down to what?
133. MR SHARLAND: My Lord, it depends which argument you accept.
134. MR JUSTICE SULLIVAN: Suppose I accepted all of those points, what do you say it ought to be that would be a good starting point?
135. MR SHARLAND: My Lord, in relation to the third page --
136. MR JUSTICE SULLIVAN: Can I just understand this. As I understand it, the brief fee, the way it has been done, is just simply to split it down the middle on that?
137. MR SHARLAND: Yes. The impact on our submissions, if you accept them, on the page 3, the briefing and drafting advice would be a deduction of £1,125.
138. MR JUSTICE SULLIVAN: Yes. I am just saying that the way it has been done, the briefing ends up at £1,750 or whatever it is for the 288, and £1,750 notionally for the JR?
139. MR SHARLAND: Yes, my Lord. And that approach being agreed (overspeaking) we just say the total figure, so that would lead to a deduction of £1,125. The arguments in relation to the first two pages, my Lord, are a bit more complex, but I would suggest adopting a very sort of rounded approach, that it would lead to a further deduction of approximately £1,500 to £2,000. So I would suggest, given that the figure is at just over £10,000, that a reasonable figure would be £7,000. That is obviously a very broad-brush approach, but I do not think you want me to go through the final calculations or anything like that.
140. MR JUSTICE SULLIVAN: No. Obviously one must have an eye on the end figure as well as the internal detail, as it were.
141. MR SHARLAND: Of course.
142. MR JUSTICE SULLIVAN: Yes, thank you very much. What do you say about that then, Mr Clay?
143. MR CLAY: My Lord, the first point that I am instructed to make is that, of course, our figure of £10,000 is inclusive of VAT. I do not have the benefit of a copy of the Supreme Court guidance figures, and I confess that I would have to mug up on it if I was going to address them in any detail, but I think there are some general points that can usefully be made.
144. I understand that the figures here are not inclusive of VAT, these are net figures. The second point is that although my instructing solicitors are based in Maidstone, this is a specialist area, and if one was to go to a senior partner in, as it were, a provincial, and I do not say that in a derogatory sense at all, if one were to go to a provincial solicitors' office and ask for them to deal with a matter like this, they would treat it as being a highly specialist subject. It involves, and in this case, it involves a member, in Mr Curtis, a member of the Law Society's Planning Panel. So for those reasons I submit that the £220 figure is, as an hourly rate, entirely reasonable.
145. Then, in terms of the time that was taken, firstly hours of perusal of documents, five hours and 30 minutes, of course one of the jobs in providing for the bundles for a case like this, and identifying what should be drawn to the attention of the Court, is actually making sure that you do not simply produce all and everything. Courts do not take kindly to having the entire cases put by both sides put in front of them, and having to be read them. And if we had done that, then my learned friend would be complaining that he had had to read all sorts of irrelevant material, and would be seeking his costs on that basis. So it is a selection process.
146. There is, of course, also the perusal of authorities, identification of those authorities, and, in my submission, a perusal of documents at five and a half hours is clearly within the band of reasonable times.
147. As per drafting overlap; what I think my learned friend is suggesting, and I hope this is wrong, is that somehow there has been duplication, that we have both done the same draft. My Lord, that is not the case. There has been drafting by counsel, by me, and there has been drafting by my instructing solicitor. And included within that, of course, is the drafting of the very comprehensive instructions that I received. Moreover, there is an onus on the instructing solicitor to carefully check, and it is a drafting exercise, the drafts which come through from counsel.
148. So although it is actually not in fact -- these are not (inaudible) agreed hourly rate, if one looks at the second page, we are not talking about vast amounts of time taken in drafting. But that criticism is, I submit, unfounded.
149. Then, if I may say so, we do feel particularly aggrieved, and that is not to say because I am making the submission, but we do feel particularly aggrieved with the way that matters which are in the cost schedule, set out as a round figure for both matters, that they accept our offer that we divide them down the middle, notwithstanding that on the written submissions, five out of six parts of the work went into the 288, as compared to the Judicial Review. We split that down the middle. And they then take that half figure, which, in my submission, is a more than generous figure, and then start haggling about whether our half is fairly incurred. My Lord, based on which, we would accept what is suggested, that the fair and proper and right way to deal with it, on a summary basis, is to split it down the middle, was because it would become very difficult to start precisely identifying what proportion, and one starts to pluck figures, 60/40 and 70/30 out of the air in terms of the time we have spent on it. It seemed to us to be a fair basis, and I am sorry that it is then being used as a figure which is then subsequently whittled down.
150. MR JUSTICE SULLIVAN: Just to get a handle on the overall figures; the £10,033, that includes VAT?
151. MR CLAY: Yes, inclusive of VAT.
152. MR JUSTICE SULLIVAN: So then assuming it is at about £10,000, I know it is the wrong way to do the calculation, but there must have been about £1,750 worth of VAT, I suppose? Certainly (inaudible) worth of VAT.
153. MR SHARLAND: About £1,400, my Lord.
154. MR JUSTICE SULLIVAN: £1,400, is it?
155. MR SHARLAND: About.
156. MR JUSTICE SULLIVAN: About £1,400. So it is about -- but anyway we are in the region of £8,500-odd, plus VAT, or £8,500, a little more, so Mr Sharland would say, by comparison with the Secretary of State's figure of £4,500. Because actually we are comparing apples and pears slightly, because it does not include VAT. Just to bear that in mind.
157. MR CLAY: My Lord, I think I have dealt with each of the detailed points that have been raised. In the end with these kind of costs things, one could spend forever looking at the detail of it. But, my Lord, in the end one has to take a view as to whether these figures can be taken as a whole to be excessive. They have been properly recorded. There is no suggestion that they have not been properly or fairly recorded, nor that these are not in fact the hourly rates of the various people that are involved, and the fees that have been incurred. On that basis, provided your Lordship is satisfied that they fall within a reasonable band, reflecting properly the division, as it were, of labour, as between the parties, and between the two cases, then I would invite your Lordship to stick with the figures that were put forward by (inaudible) upheld.
158. MR JUSTICE SULLIVAN: Thank you very much.
159. The formal order of the Court is that the section 288 application is allowed. The Judicial Review application is dismissed.
160. Permission to appeal is refused in both cases.
161. In respect of the Judicial Review application, the Claimants are to pay the first Defendants' costs, those costs to be summarily assessed in the sum of £3,726.
162. In the case of the section 288 application, the first Defendant is to pay the Claimants' costs, summarily assessed in the sum of £10,033.45, including VAT. My reasons for not accepting the Secretary of State's criticisms of those costs are as follows: the guidance figures are just that, guidance. And I have no doubt that this type of case, whilst it is readily familiar to someone in the Treasury Solicitors Organisation, is, in fact, regarded as a matter requiring specialist attention; and the Claimants' solicitor, notwithstanding a member of the Law Society Planning Panel fulfils those criteria, and so I am satisfied that the rate of £220 is not unreasonable.
163. Equally, bearing in mind the obligation of the Claimants to carry the case forward, to identify the relevant documents, and so on and so forth, it seems to me the hours spent are not unreasonable, and the bundle, if I may say so, was impeccable.
164. So far as counsels' fees are concerned, it seems to me that the splitting of the fee, effectively, between the Judicial Review application and the section 288 application is, in principle, favouring the Secretary of State, because there is no doubt that more work was involved in the 288 application. There is no reason to believe that these are not perfectly genuine fees put forward, and I am not persuaded that they are unreasonable.
165. I have also stood back and had a look at the overall picture. This is a case where the Treasury Solicitors' costs for overall costs for the 288 were £4,597, that does not include VAT. Once one makes an allowance for VAT, the amount of costs claimed by the claimants is in the region of £8,500 to £8,600. Bearing in mind the relative burdens on the parties, and (inaudible), it does not seem to me that the discrepancy between £8,600 and £4,600-odd is so startling as to warrant trying to deduct items from the costs that, no doubt, were actually incurred.
166. So for all of these reasons, I am satisfied that the figure ought to be that which is claimed. Thank you very much.