England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		7th April 2008

Mr Justice Forbes :

1. Introduction. In these proceedings, the Mayor of London ("the Mayor") challenges the decision of the First Secretary of State ("the Secretary of State"), contained in a letter dated 7^th March 2006, whereby the Mayor was ordered to pay to Victoria Hall Ltd ("Victoria Hall") the costs of its appeal under section 78 of the Town and Country Planning Act 1990 ("the 1990 Act") against the refusal by the local planning authority, the London Borough of Brent ("the Council"), at the direction of the Mayor, to grant planning permission for student accommodation and ancillary uses at Northway Garage, North End Road, Wembley.
2. The Legal Framework. The Town and Country Planning (Mayor of London) Order 2000 ("the 2000 Order") makes provision for the referral of certain planning applications to the Mayor. The following are the material terms of the 2000 Order.

i) Article 3 provides that "the local planning authority shall as soon as reasonably practicable after receiving an application of potential strategic importance send (it) to the Mayor…"

ii) Article 4 precludes the local planning authority from determining the application (inter alia) for 14 days after notification has been given to the Mayor under Article 3.

iii) By Article 5(1) the Mayor may within 14 days direct a refusal of the application if he:

"considers that to grant permission …would be

(a) contrary to the spatial development strategy or prejudicial to its implementation; or

(b) otherwise contrary to good strategic planning in Greater London."

It is common ground that the Mayor's spatial development strategy had not been published at the relevant time. Accordingly, the material provision was Article 5(1)(b).

iv) Article 5(2) provides that:

"the Mayor, in directing a refusal, is required to have regard to certain matters, including:

(a) the principal purposes of the Greater London Authority;

…

(d) regional planning guidance issued by the Secretary of State".

v) By Article 5(4) the Mayor is required to set out his reasons in a statement which accompanies a direction to refuse.

vi) By Article 5(7) the local planning authority is required to refuse the application after receiving the Mayor's direction to do so.

vii) By Article 5(8) the Secretary of State may prohibit the planning authority from implementing the Mayor's direction.

viii) The Schedule to the 2000 Order sets out the definition of "application of potential strategic importance" as meaning:

"Category 1a

1. Development which

(a) comprises or includes the provision of more than 500 houses, flats or houses and flats …

…

Category 1c

1. Development which comprises or includes the erection of a building in respect of which one or more of the following conditions is met:

…

(c) the building is more than 30 metres high and outside the city of London."

It is to be noted that the 2000 Order contains no definition of what is meant by "strategic importance"

3. The relevant ministerial policy about strategic planning in London is contained in Government Office for London Circular 1/2000 ("the 1/2000 Circular"). The 1/2000 Circular makes it clear that the purpose of the consultation process in the 2000 Order is:

"To enable the Mayor to advise the local planning authority on qualifying applications which raise issues of genuine strategic importance;"

and that such matters should be

"of more than local importance and be of significance to the wider interests of London as a whole ".

4. Paragraph 6.20 of the 1/2000 Circular provides (inter alia):

"… the Mayor may be ordered to pay the Secretary of State's costs of holding an appeal inquiry and the costs of other parties where he or she has directed refusal of planning permission. This is intended to guard against inappropriate use of the Mayor's power of direction. An order for costs can be made whether or not the Mayor participates at an inquiry. Annex 3 to this circular modifies Circular 8/93 on the award of costs to give guidance on the circumstances in which such an order may be appropriate."

5. So far as material, Annex 3 of the 1/2000 Circular provides as follows:

"(ii) Policy guidance on the award of costs

7. Policy guidance on the award of costs incurred in planning and other proceedings is set out in Circular 8/93 – "Award of costs incurred in planning and other (including compulsory purchase order) proceedings". This annex supplements and where stated below amends, Circular 8/93 to give guidance on the award of costs to or against the Mayor in respect of proceedings carried out under the provisions of the planning acts.

(a) Status of the Mayor

8. For the purposes of awarding costs the Mayor should be treated as a "Principal Party" where an appeal has been made following a direction to refuse planning permission issued by the Mayor and implemented by the local planning authority.

…

(p) Unreasonable Behaviour

11. The following is hereby added to the Appendix to Circular 8/93, "Unreasonable behaviour: A Summary of the Criteria":

"Where he or she is a Principal Party to an appeal, the Mayor of London is at risk of an award of costs against them if for example, he or she:

…

(2) fails to provide evidence, on planning grounds, to substantiate any reason for refusal of planning permission arising from a direction issued by the Mayor as set out in the accompanying statement of reasons;

…

As with the existing appendix, this list is illustrative and not exhaustive and needs to be read in conjunction with the relevant annexes to Circular 8/93."

6. Ministerial Circular 8/93 provides (inter alia) for the award of costs where a party behaves unreasonably such that others are caused unnecessary expense. In this context, reasonableness does not have the technical Wednesbury meaning: see Hann ~v~ Secretary of State for the Environment, Transport and the Regions (2001) EWHC Admin 930 at paragraph 15, applying R ~v~ Secretary of State for the Environment ex parte North Norfolk District Council (1994) 2 PLR 78 at 84.
7. The factual background. Victoria Hall is a property developer specialising in the provision of living accommodation for students. On 19^th February 2001, Victoria Hall applied to the Council for planning permission for a built development of between 4 and 15 storeys to provide 505 student bedrooms together with ancillary uses ("the proposed development").
8. The form of the proposed development consisted of 2 parallel and similar blocks of accommodation that started at 4 storeys at the eastern edge of the site and stepped up to 15 storeys at the western edge. Between the two blocks was an irregularly shaped courtyard area about 52 meters long and generally some 9 meters to 13.5 meters wide. It was proposed that this area was to be landscaped and utilised as an amenity space for the students.
9. The proposed development site adjoins a development known as Danes Court which comprises several 4 storey blocks of 1930s flats, set in their own grounds. One of the amenity spaces used by the residents of Danes Court directly abuts the northern boundary of the proposed development site.
10. On 20^th July 2001, the Council resolved to grant planning permission for the proposed development and formally consulted the Mayor on 31^st July 2001, as required by the terms of the 2000 Order. Having taken the advice of officers contained (inter alia) in a report dated 9^th August 2001 ("the officers' report"), the Mayor directed refusal of planning permission by the Council by letter dated 10^th August 2001 ("the direction"). Although a copy of the officers' report was enclosed with the direction, the Mayor did not provide a formal separate statement of his reason for issuing the direction (see Article 5(4) of the 2000 Order), but incorporated his reason into the body of the letter of the 10^th April itself, as follows:

"I refer to your letter of 31 July 2001, informing me that Brent Council is minded to grant planning permission for the above planning application. I refer you also to the notice I issued on 20 April 2001 under the provisions of article 4(1)(b)(1) of the above Order.

Having now considered a report on this case (reference PDU/0190a/02, copy enclosed), I direct you to refuse planning permission (under the powers conferred on me by article 5 of the above Order). My reason is set out below.

The proposal by virtue of its design in terms of its scale, layout and relationship to its surroundings would result in a poor quality development that is contrary to the design policy advice as set out in Planning Policy Guidance Notes PPG1, "General Policy and Principles", 1997, paragraphs 13 to 20 and Annex A; PPG3 "Housing", 2000, paragraphs 54 to 56; Regional Planning Guidance Note RPG3, "Strategic Guidance for London Planning Authorities", 1996, paragraphs 8.2 to 8.6 and 8.10 to 8.22; The Urban White Paper, "Our Towns and Cities: The Future", 2000, paragraphs 2.36 to 2.38, 4.12, and 4.20 to 4.24; and "Towards the London Plan: Initial proposals for the Mayor's Spatial Development Strategy", 2001, paragraphs 2.58, 2.59 and 2.68 to 2.70. As such, the development proposal is considered to be contrary to good strategic planning in London.

I would be grateful if you would issue the appropriate notices, giving the above reason."

11. As a result and in accordance with the terms of Article 5(7) of the 2000 Order (see above), the Council refused planning permission for the proposed development by notice dated 24^th August 2001.
12. Victoria Hall then appealed against the refusal of planning consent pursuant to section 78 of the 1990 Act. As a result, a Public Local Inquiry ("the Inquiry") was held by the Secretary of State's duly appointed Inspector ("the Inspector") between 28^th May and 13^th June 2002. At the Inquiry there were 4 main parties, namely Victoria Hall, the Council, the Mayor and the Danes and Empire Court Residents Association, together with LKB Investments Ltd.
13. The Mayor's case at the Inquiry was summarised in paragraph 4 of the Grounds of this application, as follows:

"4.1 The Mayor's primary concern on the planning merits related to the design of the development. He did not object to the density of the living accommodation on the site as proposed nor did he object in principle to tall buildings on the site. He had 3 concerns:

i) He considered that the design solution put forward by (Victoria Hall) resulted in two tall buildings which were juxtaposed so as to create a courtyard space which was too small and too dominated by the buildings to be a satisfactory amenity space for the occupiers.

ii) The Mayor was also concerned about the quality of internal residential amenity for the future occupiers of the rear (northern block) …especially at the lower levels, in terms of levels of daylight and sunlight.

ii) The Mayor was also concerned by the impact of the rear (northern) block on the amenity space of Danes Court."

14. The Inspector's report to the Secretary of State ("the Inspector's Report") is dated 2^nd September 2002. The Inspector expressed his overall conclusion in the following terms:

"263. I have concluded that the site is suitable for a high density scheme for a student hall of residence with some ancillary commercial A1/A3 uses. I support the general design approach and consider that it would mostly provide satisfactory standards for students although some inward/ facing bedrooms on the lower floors could be cheerless and claustrophobic through a combination of low levels of daylight and sunlight and short distance outlook. On the other hand, I consider that the scheme would have an oppressive and overbearing effect on the adjoining amenity area within the Danes Court Estate contrary to policies of the adopted and draft UDP. For that reason supported by some other limited effect on Danes Court and Danes Lodge I recommend dismissal of the appeal."

15. In his decision letter dated 3^rd February 2003, the Secretary of State adopted the conclusions of the Inspector. The Secretary of State dismissed the appeal because of the impact of the proposed development upon the amenity space of Danes Court. There is no challenge to that decision in these proceedings.
16. At the conclusion of the Inquiry, the Council and Victoria Hall both made applications for an award of costs against the Mayor. In a separate report dated 2^nd September 2002, the Inspector recommended (inter alia) that the full applications for costs be granted. In his costs report, the Inspector expressed his conclusions in the following terms:

"Conclusions

23. I have considered these applications for costs in the light of Circular 8/93 as amended and supplemented by GOL Circular 1/2000, Annex 3, in relation to applications against the Mayor of London, together with all the relevant circumstances. I have taken note of the advice that, irrespective of the outcome of the appeal, costs may only be awarded against a party who has behaved unreasonably and thereby caused another party to incur or waste expense unnecessarily.

24. I have had particular regard for Article 5 of the Town and Country (Mayor of London) Order 2000 and the Schedule to the Order, and the statement setting out the Mayor's reasons for his Direction. The application was clearly referable as of potential strategic importance under Category 1C(c) to Part 1 of the Schedule to the Order. However, I do not consider that the Mayor's stated reasons for the Direction contained reasonable grounds for concluding that the effects of the proposal would be of actual strategic importance for London. The Direction of refusal was therefore unjustified.

25. In reaching this conclusion I have taken account of the Mayor's evidence to support the stated reasons for his Direction of refusal. I appreciate that this would be a relatively tall building in the context of this particular area. However, in my view, the Mayor's evidence did not substantiate the view that this was an application with unfavourable strategic consequences which it would have been inappropriate for the Local Planning Authority to determine in the first instance. On the contrary, it seems to me that the adverse impacts of the scheme are entirely local.

…

27. The Brent Committee voted in favour of the application, albeit apparently on a casting vote. Thus, but for the Mayor's Direction, the Council would have granted a conditional planning permission and there would have been no appeal. It may be ironic that without the Mayor's inappropriate intervention there would have been no appeal, no opportunity for the Mayor and the Third Party to express the views that they did, and no recommendation from me that the appeal be dismissed. Nonetheless, I can conclude that the application was one that should properly have been left to the Borough to determine and therefore consider that full awards of costs in favour of the Appellants and LB Brent are justified."

17. On 3^rd February 2003, the Secretary of State issued his decision letter on the costs application and accepted the Inspector's recommendation that full awards of costs in favour of the Council and Victoria Hall were justified. The Secretary of State therefore made awards of costs against the Mayor. However, the Secretary of State's costs decision was challenged by the Mayor on the grounds, inter alia, that the Secretary of State had not given any or any adequate reasons for this decision. In the event, the costs decision was quashed by order of the High Court by consent on 24^th July 2003 and the matter was remitted to the Secretary of State for reconsideration.
18. Some 31 months later, the Secretary of State issued his reconsidered determination of the costs application by letter dated 7^th March 2006 ("the decision letter"). Paragraph 1 of the decision letter is in the following terms (I quote from that sent to Victoria Hall):

"1. I am directed by the First Secretary of State to refer to the order of the High Court of 24^th July 2003, quashing the Secretary of State's decision of 3^rd February 2003 to make a full award of costs to the London Borough of Brent and to your client Victoria Hall Ltd against the Mayor of London. The decision was quashed on the grounds that the Secretary of State had failed to set out adequately in his decision letter his reasons for awarding costs against the Mayor. This letter relates to the re-determination of the application by your client, the appellants, for a full award of costs against the Mayor of London. I apologise for the delay in issuing this re-determination."

19. Having regard to the issues raised by these proceedings (see below), it is appropriate to quote at some length from the remainder of the Secretary of State's decision letter, as follows:

"Policy issues

4. In planning appeals, the parties are normally expected to meet their own expenses, and costs are awarded only on grounds of "unreasonable behaviour", resulting in unnecessary expense. Your client's application for a full award of costs has been reconsidered in the light of policy guidance in DOE Circular 8/93 as supplemented by the advice in Annex 3 to GOL Circular 1/2000, the appeal papers, the ICR, the reasons for quashing the initial determination, the parties' further submissions, and all other relevant circumstances. In particular, the Secretary of State has had regard to the conditions set out in paragraph 6 of Annex 1 to DOE Circular 8/93 which are normally required to be met. These are:

(1) one of the parties has sought an award at the appropriate stage in the proceedings;

(2) the party against whom the costs are sought has behaved unreasonably; and

(3) the unreasonable conduct has caused the party seeking costs to incur or waste expense unnecessarily, either because it should not have been necessary for the matter to be determined by the Secretary of State or because of the manner in which another party has behaved in the proceedings.

5. Article 5(1 )(a) of the 2000 Order enables the Mayor to direct refusal if he considers that to grant planning permission would be contrary to the spatial development strategy or prejudicial to its implementation and article 5(1)(b) enables him to direct refusal if it would otherwise be contrary to good strategic planning in Greater London. Article 5(2) of the 2000 Order lists the considerations to which the Mayor must have regard in so far as they are material to the application, and the Schedule to the 2000 Order sets out the types of proposals which are to be regarded as being of "potential strategic importance".

6. Paragraphs 6.1 to 6.21 of GOL Circular 1/2000 provide further advice on the Mayor's role. Paragraph 6.10 states that the purpose of the consultation is to enable the Mayor to advise the Borough on those aspects of a qualifying planning application that raise issues of genuine strategic importance. It goes on to state that such matters should be of more than local importance and should be of significance to the wider interests of London as a whole, and that the Mayor should avoid commenting on matters that do not fall into this category. Paragraph 11 of Annex 3 to the Circular amplifies this by setting out examples of the criteria against which the Mayor's behaviour should be assessed in determining whether it might be appropriate to award costs against him. These include, at paragraph 11 (2), failure "to provide evidence, on planning grounds, to substantiate any reason for refusal of planning permission arising from a direction issued by him as set out in the accompanying statement of reasons". Paragraph 6.20 of the Circular explains that the purpose of providing a power in section 345 of the Greater London Authority Act 1999 for the Secretary of State to be able to order the Mayor to pay costs is to guard against inappropriate use of the Mayor's power of direction.

Consideration

7. In coming to his decision about whether or not to award costs to your client and Brent Council, the Secretary of State has considered whether the circumstances of the case fulfil the conditions set out in paragraph 6 of annex 1 to DOE Circular 8/93 and has had regard to GOL Circular 1/2000 …

…

Has the Mayor behaved unreasonably?

9. The decision facing the Mayor at the outset was whether, on the papers before him, it was appropriate to issue a direction in accordance with his power under article 5(1) of the 2000 Order and the guidance contained in the relevant Circulars. The Secretary of State accepts that it would not have been reasonable to expect the Mayor to have carried out a detailed examination of all the issues of a nature expected at a planning inquiry before coming to his decision. That is one of the purposes of any inquiry brought about, as in this case, by an applicant's appeal in respect of the refusal of planning permission. Nevertheless, in deciding whether to issue a direction the Mayor is obliged to have regard to all material matters before him and to examine the matters in detail. It is also reasonable to expect him to provide factual guidance about the specific concerns which he considers would need to be pursued at an inquiry, and then to follow those through comprehensively and in detail at the inquiry. Hence, the Secretary of State needs to satisfy himself that, on the basis of the matters as set out in the direction or the planning report accompanying it, at the inquiry or in the GLA's subsequent submissions to the Secretary of State, the Mayor's decision to issue a direction was reasonable.

10. At the time of the Mayor's direction, RPG3 was the extant regional planning guidance for London and the Mayor had published his consultation document "Towards the London Plan: Initial Proposals for the Mayor's Spatial Development Strategy". These were clearly material considerations which it was appropriate for the Mayor to take into account. However, as the spatial development strategy was still in embryonic form at that time, the decision to issue a direction would necessarily have been based on article 5(1) (b) of the 2000 Order. The Secretary of State has therefore had regard to that in considering the extent to which the Mayor has provided evidence, on planning grounds, to substantiate the reasons for issuing his direction.

11. The Mayor set out his reasons for making the direction in a letter dated 10 August 2001, accompanied by a GLA Officer's Report setting out further details of the reasons. This Report acknowledged that the Mayor considered that the principle of the proposed development was acceptable in strategic planning terms as regards high rise, high density mixed-use, affordable housing and the general architectural detailing of the buildings in terms of fenestration details and the provision of on-site car parking. The reason given by the Mayor in his letter for issuing the direction was that the development proposal, by virtue of its design in terms of scale, layout and relationship to its surroundings, would result in a poor quality development that was contrary to design policy advice and, as such, he considered the proposal to be contrary to good strategic planning in London. He considered that "there are strategic design concerns in terms of the details of the scheme. Elements of the scheme that remain unacceptable are: the poor quality of the high rise/high density building; the proximity of the rear service areas of the shops and restaurants; the gloomy aspect of the residential accommodation that looks out onto the central yard area; the oppressive/overbearing "canyon"/"alley" effect of the central yard area all caused by the juxtaposition of the main blocks of accommodation."

12. The reasons which the Mayor gave for his direction were that it was contrary to the design policy advice as set out in Planning Policy Guidance Note PPG1, "General Policy and Principles", 1997, paragraphs 13 to 20 and Annex A; PPG3, "Housing", 2000, paragraphs 54 to 56; Regional Planning Guidance Note RPG3, "Strategic Guidance for London Planning Authorities", 1996, paragraphs 8.2. to 8.6 and 8.10 to 8.22; The Urban White Paper, "Our Towns and Cities: The Future", 2000, paragraphs 2.36 to 2.38, 4.12, and 4.20 to 4.24; and "Towards the London Plan: Initial Proposals for the Mayor's Spatial Development Strategy", 2001, paragraphs 2."58, 2.59 and 2.68 to 2.70.

13. The Secretary of State takes the view that the policy advice in PPG1 and the Urban White Paper to which the Mayor's direction refers is expressed in very general terms. Hence, while the Secretary of State agrees with the Mayor that development should respond positively to its surroundings, he considers that the Mayor should have provided a more specific indication of how and why the impact of these policies could have had potential strategic importance in relation to this proposal. These policies are general in nature, and the Secretary of State considers that the Mayor acted unreasonably in failing to substantiate how their impact on the area of the proposed development could have unfavourable strategic implications.

14. Similarly, the direction refers to paragraphs 54 to 56 of PPG3, headed "Designing for Quality" and which set out the design criteria to which local planning authorities should have regard. These paragraphs in PPG3 are not intended to indicate which matters are strategic but rather which matters need to be taken into account in the design of new development. Therefore, whilst the Secretary of State considers that these policies should be applied in all circumstances, he does not see that as implying that the potential impact of every aspect of design is necessarily going to be of strategic significance.

15. Although the direction also refers to RPG3 and the Brent UDP, neither it nor the accompanying letter makes it clear why, and in what ways, the Mayor felt that there was a risk that the design aspects of the proposal might have strategic implications in relation to the policies in those plans. Although the case presented by the GLA at the inquiry (as reported by the Inspector at paragraphs 24 and 25 of his main report) and in their representation to the Secretary of State of 21 October 2003 made it clear that, in making his direction, the Mayor had given considerable weight to the fact that the proposed development lies within the Wembley Stadium Regeneration Area, (which is identified as a major regeneration opportunity area in RPG3 and was at that time a draft proposal in policy WEM 17 of Brent's draft UDP), neither the direction letter nor the accompanying Report referred to these policies as part of the planning grounds for issuing the direction nor explained any particular reasons why this aspect needed further consideration. Furthermore, although in their later submissions the GLA emphasised the significance of the location of the site within the Wembley Stadium Area, they did not at any stage offer a convincing argument to substantiate their case that the details of the proposal could have strategic significance for that Area. The fact that a proposal is located within a strategic area does not necessarily mean that it will itself be of strategic significance. The Secretary of State considers that it was beholden on the Mayor to explain the nature of his concerns.

16. The GLA explained at the inquiry that the Mayor's direction was based on his concern to ensure that the design of all developments should contribute to, rather than detract from, the quality of London as a whole. However, the Secretary of State considers that that would be an impracticable basis for issuing directions and that it would be contrary to the intention in the legislation that the Mayor's role should be limited to development which is of more than local importance or which is significant to the wider interests of London as a whole (notwithstanding that the Secretary of State acknowledges that, in considering potential significance "to the wider interests of London as a whole", this does not necessarily require it to be demonstrated that a proposal could affect the whole of London). Furthermore, while the Secretary of State agrees that the design of development is important, and can be a strategic consideration, he takes the view that that does not mean that all design considerations are necessarily of strategic significance. Thus, while the Secretary of State accepts that the GLA did put forward evidence at the inquiry to substantiate the Mayor's concerns about potential design weaknesses in the scheme, he does not consider that the evidence put forward indicated in any meaningful way how or why these matters of relative detail might have a significance beyond the immediate locale.

17. The Secretary of State has therefore concluded that the Mayor acted unreasonably in issuing his direction. Although it might not have been unreasonable in principle to issue a direction to secure the exploration of any possible strategic implications of the design of the proposal, the Mayor failed in this case to back up his generalised assertions about such concerns, either at the time of making the direction or subsequently, by any significant factual evidence to substantiate any such potential consequences.

Did the unreasonable conduct cause the party seeking costs to incur or waste expense unnecessarily?

18. The Mayor's decision to direct that the planning application be refused led to the need for your client to appeal and thus led to associated costs being incurred both by your client and by Brent Council. Having concluded that the Mayor acted unreasonably in issuing the direction, it follows that it should not have been necessary for the matter to be determined by the Secretary of State and so it should not have been necessary for your client and Brent Council to have incurred the costs associated with preparing for, and attending, the inquiry.

19. The Secretary of State accepts that it might have been reasonable in principle for the Mayor to have issued a direction to ensure that the possibility of any strategic implications arising from the localised design implications of the proposed scheme could be explored at an inquiry and that, in such an eventuality, the costs incurred by the parties could not necessarily have been said to have been wasted. However, the Secretary of State considers that there are two reasons why that does not apply in this case. Firstly, the generalised nature of the assertions made in the Mayor's direction and the accompanying Planning Report gave no detailed factual indication of how and why his concerns could have a strategic impact, so that your client had no clear basis on which to prepare a focussed case rebutting them. Secondly, although the issuing of the direction gave rise to the need for an inquiry, the evidence put forward by the GLA to the Inspector was again mainly based on generalised assertions and, to the extent that it dealt with the· facts of the proposal, was concerned with only localised potential effects. That meant that little of any real value was added to the debate about how or why the GLA's concerns might have a significance beyond the immediate locale and therefore whether the costs incurred by your client and Brent Council in preparing for, and attending an inquiry were justifiable.

Conclusions

20. Having regard to all the matters considered above, including the fact that the Report accompanying the direction letter accepted that the principle of the proposed development was acceptable in strategic planning terms in respect of a number of significant matters (as set out in paragraph 11 above), the Secretary of State has come to the conclusion that the Mayor acted unreasonably in issuing the direction on the grounds stated in it, and in subsequently failing to substantiate the grounds. The Secretary of State takes the view that the issues on which the direction was based did not in this case raise strategic issues, and that, both at the time of his direction and subsequently, the Mayor has failed to provide evidence, on planning grounds, to substantiate the basis for his direction (that there was a risk of more than localised harm resulting from the implementation of the proposal in the form in which it was designed). The Secretary of State considers that the possibility of such localised harm is a matter which should properly have been left to the local planning authority to determine. The Secretary of State therefore considers that the issuing of the direction was an inappropriate use of the Mayor's power of direction and that this unreasonable action led directly to your clients incurring expense which would otherwise not have been necessary if the planning application had been left to the local planning authority to determine. A full award of costs is therefore made. "

20. The Grounds of Challenge. On behalf of the Mayor, Mr Stephenson put forward five grounds of challenge, which he summarised respectively in paragraphs 4.1, 5.1, 6.1, 7.1 and 8.1 of his written skeleton argument, as follows.

(1) The Secretary of State erred in law in that he set out to satisfy himself that the Mayor had acted reasonably whereas the proper approach was to ascertain if the Mayor had acted unreasonably (see paragraph 4.1: hereafter "the Error in Approach").

(2) The Secretary of State erred in law in that he irrationally dismissed or ignored or misunderstood the Mayor's evidence in the case and/or ignored or failed to apply his own policies and guidance and/or failed to give adequate reasons for his dismissal of such evidence (see paragraph 5.1: hereafter "The Evidential Error").

(3) The Secretary of State erred in law in making his decision substantially upon the form and content of the Mayor's Direction, which matter was not a relevant consideration or was only of peripheral relevance in this case (see paragraph 6.1: hereafter "The Mayor's Direction Error").

(4) The Secretary of State erred in law in his re-definition of the phrase "otherwise contrary to good strategic planning in London" as "development which is of more than local importance or which is significant to the wider interests of London as a whole …"; see paragraph 16 of the decision letter (see paragraph 7.1: hereafter "The Definition Error").

(5) The Secretary of State erred in law in that it was irrational for him to conclude that the Mayor had wasted the costs of the inquiry when the Mayor succeeded on one issue and when the Secretary of State accepted by his decision to dismiss the application for permission that the development was unacceptable in planning terms (see paragraph 8.1: hereafter "The Planning Appeal Outcome Issue").

21. I therefore now turn to consider each of these grounds of challenge.
22. Ground 1: The Error in Approach. Mr Stephenson referred to the decision letter and in particular to the final sentence of paragraph 9 (see above) and submitted that this demonstrated that the approach adopted by the Secretary of State to the issue of costs had been to consider whether the Mayor had acted reasonably in deciding to issue the direction to refuse planning permission, as opposed to considering whether the Mayor had behaved unreasonably in doing so. It was Mr Stephenson's submission that the approach adopted by the Secretary of State predicates that an award of costs will be made unless the party against whom the order is sought (i.e. the Mayor) can show that his decision was reasonable. Mr Stephenson submitted that this effectively imposed on the Mayor the burden of proving that he had acted reasonably in issuing the direction in question and that such an approach was wholly inappropriate because it was not in accordance with the principles enshrined in section 250(5)(b) of the Local Government Act 1972 and the ministerial guidance contained in Circular 8/93 as amended and supplemented by Annex 3 of Circular 1/2000.
23. For his part, Mr Karas QC submitted on behalf of the Secretary of State, supported by Mr Fookes on behalf of Victoria Hall, that the Mayor was indisputably a party to the Inquiry and that thus the Secretary of State's power to award costs against him was the general power to award costs against parties to planning inquiries. In my view, that submission is clearly correct. Mr Karas submitted (again correctly, in my view) that this general power is unfettered by statute but the Secretary of State has adopted policies as to how and when he will exercise this power (see Circulars 8/93 and 1/2000, referred to above). Mr Karas therefore submitted that the real question raised by this first ground of challenge is whether the Secretary of State misdirected himself in the light of his policy with regard to the award of costs against parties to inquiries. Again, I agree with that submission.
24. I also agree with Mr Karas that this particular ground of challenge is, in effect, entirely dependent on one sentence in paragraph 9 of the decision letter that has been taken wholly out of context. I accept Mr Karas' submission that, when the decision letter is read as a whole, it is perfectly clear that the Secretary of State approached the issue of whether or not costs should be awarded against the Mayor by considering whether it had been established that the Mayor had behaved unreasonably in issuing the direction to refuse planning permission: see, in particular, paragraphs 4, 6, 9 (including the heading), 13, 17 and 20 of the decision letter. Accordingly, I am satisfied that the Secretary of State's approach was entirely in accordance with his policy as expressed in Circulars 8/93 and 1/2000.
25. As Mr Karas observed (see paragraph 19 of his written skeleton argument), it is also clear from the terms of the decision letter that the Secretary of State decided that the Mayor had behaved unreasonably in issuing the direction and then failing to substantiate the reason stated in it (see paragraphs 6, 9 to 17 and 20 of the decision letter) and it was this that formed the basis of the Secretary of State's decision to make an award of costs against him: see paragraph 20 of the decision letter.
26. Accordingly, the key question that the Secretary of State had to consider in determining whether, in the circumstances of this case, the Mayor had behaved unreasonably was whether the Mayor had substantiated his stated reason for issuing his direction that planning consent be refused. In my view the Secretary of State was quite correct to characterise that question as "the extent to which the Mayor has provided evidence, on planning grounds, to substantiate the reason for issuing his direction": see paragraph 10 of the decision letter. This did not represent the imposition of any inappropriate burden of proof on the Mayor. In the circumstances of this case, this was the key question with which the Secretary of State was correctly concerned in deciding whether the Mayor had acted unreasonably so as to justify making an award of costs against the Mayor. For the reasons I have already given, it is clear that there was no misdirection or failure by the Secretary of State to understand or apply the relevant policy on the award of costs. I am therefore satisfied that there is no substance in this ground of challenge which fails accordingly.
27. Ground 2: The Evidential Error. Mr Stephenson referred to the decision letter and submitted that the Secretary of State's criticisms of the evidence that had been called on behalf of the Mayor was limited to the following assertions:

(1) that the evidence did not indicate "in any meaningful way how or why these matters of relative detail might have a significance beyond the immediate locale": see paragraph 16 of the decision letter;

(2) that there was no "significant factual evidence": see paragraph 17; and

(3) that the evidence was "generalised assertions" and dealt only with "localised potential effects": see paragraph 19.

28. It was Mr Stephenson's submission that, when the evidence called on behalf of the Mayor was fully and properly considered, it could be seen that the Secretary of State's foregoing assertions with regard to the Mayor's evidence were manifestly wrong in fact and/or that the conclusions reached by the Secretary of State and expressed in those assertions were irrational. Mr Stephenson referred to the witness statements of Paul Ricketts and Colin Wilson, both of whom had given evidence in accordance with their witness statements on behalf of the Mayor at the Inquiry. Mr Stephenson submitted that, on a fair reading of those statements it could be seen that their combined evidence to the Inquiry constituted far more important and significant testimony than that alluded to and summarised in the Secretary of State's foregoing assertions, as follows:

(1) details were given of the Mayor's views on the sensitivity of the site and its locality and its role in the principal regeneration area of Wembley;

(2) the relevant strategic guidance was identified and explained;

(3) the strategic need for tall buildings and high density developments to be of excellent design in order to be acceptable was emphasised;

(4) it was explained how the poor design of the proposed development breached the strategic guidance and the Mayor's vision for London and detracted from its built environment, especially in relation to the Wembley Regeneration Area;

(5) it was explained how the poor design in this case would adversely affect both residents within the development and those adjoining it; and

(6) the point was firmly made that if developers were allowed to build poor designs especially in sensitive locations it would undermine the effectiveness of strategic policies.

29. Mr Stephenson submitted that the Secretary of State had either failed to understand or had ignored the crucial point that was sought to be made by the evidence called on behalf of the Mayor, namely that whilst the criticisms of the design were internal to the proposed development itself (apart from the adverse effect on the adjoining property), the strategic implications of the deficient design were considerable. Mr Stephenson stressed that the Mayor's support for tall buildings and high density developments was clearly expressed to be conditional upon excellent design and that, in the Mayor's view, to permit poor design of such developments undermined this important strategic approach.
30. Mr Stephenson contended that, upon proper analysis, the Mayor's case at the Inquiry had been clearly directed towards a criticism of the design of the building, the adverse effect of the building as designed upon its substantial community of occupiers and upon adjoining properties, its departure from strategic design principles and the detrimental effect of that departure upon strategic policy. He stressed that that this was a strategic approach to the case and was one that was entirely in line with the Secretary of State's own policy guidance: see, for example, Article 5(2) of the 2000 Order, paragraph 54 of PPG3 and (in particular) paragraph 6.1 of Circular 1/2000, which provides that "Even in a plan led system the success or failure of strategic planning policies is ultimately determined through individual development control decisions". It was Mr Stephenson's submission that the Mayor's evidence had been expressly directed towards and had dealt fully with such issues, as encapsulated in Mr Ricketts' conclusion that:

"(the development) gives high density development a bad name and does nothing to improve the quality of the build form in Wembley an area of strategic national and international importance for London as a whole." See paragraph 10.1 of Mr Ricketts' witness statement.

31. Mr Stephenson submitted that it was apparent from the terms of his decision letter that the Secretary of State had not engaged meaningfully with the Mayor's evidence, because he had either ignored or misunderstood the essential thrust and point of the Mayor's evidence, and had thus fallen into error. In the alternative, it was Mr Stephenson's submission that the Secretary of State had failed to give adequate reasons for the assertions made in his decision letter (see paragraph 27 above) so as to explain why the Mayor's strategic case was so unsupportable and thus so unreasonable as to be condemned in costs.
32. For his part, Mr Karas submitted that the Secretary of State had clearly had regard to his own policies and guidance (as well as other relevant policies) and the manner in which the Mayor had dealt with them: see paragraphs 12 to 15 of the decision letter. I agree with that submission and with Mr Karas' submission that it is apparent from the terms of the decision letter that the Secretary of State both had regard to and applied those policies.
33. Mr Karas submitted that the Secretary of State's treatment of the evidence and of policy, as expressed in the decision letter was both rational and intelligible. I agree. I am satisfied that, on a fair reading of the decision letter, it is clear that:

(1) the Secretary of State considered the Mayor's reason for making the direction based upon design and policy: see paragraphs 11 and 12 of the decision letter;

(2) he considered the policies upon which the Mayor relied and explained his conclusions about the strategic implications of such policies in the context of the Mayor's case: see paragraphs 13 to 16;

(3) whilst accepting that in some instances localised design might have strategic implications, the Secretary of State concluded, as a matter of judgment, that the Mayor had failed to substantiate the making of the direction on the ground that the proposed development would be contrary to good strategic planning: see paragraphs 16 and 19 of the decision letter; and accordingly

(4) he concluded that the Mayor had failed to substantiate how the design objections that had been raised had strategic implications and that, as a result, the Mayor had behaved unreasonably in issuing the direction in question: see paragraphs 17 and 20 of the decision letter.

34. Mr Karas rejected the suggestion that the Secretary of State had either ignored of failed to understand the Mayor's strategic case. He submitted that the Secretary of State clearly did have regard to the Mayor's design objections and to the relatively brief assertion (see, for example, paragraph 95 onwards of Mr Ricketts' witness statement) that these had "considerable" strategic implications. Mr Karas pointed out that this is manifestly so from the terms of the decision letter and, in particular, from the emphatic way in which the Secretary of State concluded that the Mayor's design objections were matters of relative detail which had not been shown to have any significance outside the proposed development's immediate location: see paragraph 16 of the decision letter. I agree with that submission.
35. As Mr Karas observed, it is clear that the Secretary of State's conclusion was one that he had reached as a matter of judgment, after having given due consideration to all the evidence. It was for the Secretary of State to decide whether or not the Mayor's design objections really did raise any matters of strategic importance and whether the Mayor had substantiated his case that they did. Essentially it was for the Secretary of State to weigh the nature and implications of the evidence. I agree with Mr Karas' submission that the Secretary of State's conclusion (see, for example, paragraph 20 of the decision letter) was one that he was entitled to reach on the evidence and is one that cannot possibly be stigmatised as irrational. I am satisfied that the Secretary of State's judgment and conclusion are both intelligible and rational. I therefore reject Mr Stephenson's submissions to the contrary effect.
36. So far as concerns Mr Stephenson's alternative submission, that the Secretary of State's reasons were inadequate, I agree with Mr Karas that there is nothing in this particular point. It is clear from the terms of the decision letter that the essential reason why costs were awarded against the Mayor, because he had behaved unreasonably, was that the Secretary of State came to a conclusion about the inadequacy/insufficiency of the evidence that the Mayor had adduced at the Inquiry in support of his reason for issuing the direction. The Secretary of State's conclusion was that the Mayor had failed to adduce evidence that substantiated the reason for issuing the direction on strategic grounds, as explained fully in paragraphs 11 to 20 of the decision letter. As I have already stated, the Secretary of State's conclusion was that the Mayor's design concerns were not strategic, but were matters of relative detail that had no significance outside the immediate locality. As a result, the Secretary of State came to the conclusion, as he was entitled, that the Mayor had failed to make good his case that he had issued the direction on the basis that the proposed development was contrary to good strategic planning.
37. Accordingly, for those reasons, I am satisfied that the second ground of challenge also fails.
38. Ground 3: The Mayor's Direction Error. Mr Stephenson submitted that the form and content of the Mayor's original direction to refuse planning permission were either irrelevant or of only peripheral/marginal relevance to the issue that the Secretary of State had to decide for the purposes of making an award of costs against the Mayor. It was Mr Stephenson's submission that the unreasonableness of the decision-maker (i.e. in this case, the Mayor) can only be properly judged by reference to the evidence called to justify the decision in question (i.e. in this case, the decision to issue the direction in question). Broadly stated, it was Mr Stephenson's submission, in effect, that the Secretary of State had attached far too much significance to the form and content of the direction and had failed to give sufficient or proper consideration to the Mayor's evidence.
39. In my view, there is nothing in this ground of challenge. I have already expressed my satisfaction with regard to the Secretary of State's consideration of the Mayor's evidence when dealing with Ground 2 above. So far as concerns the direction itself, I agree with Mr Karas' submission that the form and content of the direction were plainly relevant. As indicated above, the Mayor's reason for issuing the direction and the policies relied on was expressly incorporated into the actual letter that contained the direction. The Secretary of State was clearly entitled to consider that reason and to scrutinise the policies mentioned (see paragraphs 11 to 15 of the decision letter) before going on (as he did) to consider whether the Mayor's evidence substantiated the reason given for issuing the direction.
40. In short, in the circumstances of this case and as explained above, the form and content of the direction were plainly highly material to the Secretary of State's proper consideration of whether the Mayor had behaved unreasonably in issuing it. For all those reasons, this ground also fails.
41. Ground 4: The Definition Error. Mr Stephenson pointed out that the trigger for the Mayor's decision to issue the direction to refuse planning permission had been that the proposal was "contrary to good strategic planning in Greater London": see Article 5(1)(b) of the 2000 Order (supra). Mr Stephenson referred to paragraph 16 of the decision letter and submitted that the Secretary of State had redefined the wording of Article 5(1)(b) so that it applies to development "which is of more than local importance or which is significant to the wider interests of London as a whole".
42. Mr Stephenson submitted that this redefinition was both unnecessary and unhelpful in the present case because it concentrates attention on the physical aspects of the proposed development itself and ignores the implications and wider consequences of permission being granted for a particular proposed development. Mr Stephenson suggested that, as a result, the Secretary of State had ignored the wider strategic implications relied on by the Mayor and had wrongly categorised his design objections as matters of "relative detail".
43. In my view, this ground of challenge is also founded on a selective quotation of part of the decision letter, without consideration of its proper context. I agree with Mr Karas that, in paragraph 16 of his decision letter, the Secretary of State was concerned to deal with the Mayor's suggestion that all design issues have strategic importance (because the design of all developments should contribute to, rather than detract from the quality of London as a whole). It was in that context that the Secretary of State used the expression about which complaint is made. In my view, there is nothing inappropriate about the use of such an expression when reaching the conclusion (as the Secretary of State did: see paragraph 20 of the decision letter) that design matters of purely local (i.e. not strategic) significance are not within the Mayor's remit under the statutory scheme, because his powers of direction were solely concerned with "strategic planning".
44. I am satisfied that there is no error of law on the Secretary of State's part as suggested by Mr Stephenson. In fact, as Mr Karas pointed out, the approach adopted by the Secretary of State was as follows:

(1) he considered the strategic policies upon which the Mayor relied: see paragraphs 11 to 15 of the decision letter; and

(2) he then considered whether the Mayor had substantiated his case that those strategic policies had been infringed: see paragraphs 16 to 17 of the decision letter.

As Mr Karas pointed out, Mr Stephenson himself suggested such an approach was the appropriate one: see paragraph 7.4 of his written skeleton argument.

45. Accordingly, I am satisfied that there is no substance in this ground of challenge, which also fails for those reasons.
46. Ground 5: The Planning Appeal Outcome Issue. Mr Stephenson pointed out that the Mayor actually succeeded on part of his case at the planning appeal with the result that the appeal was dismissed by the Secretary of State because of the detrimental effect the proposed development would have on the amenity of the neighbouring residential flats at Danes Court and Empire Court.
47. Mr Stephenson submitted that the outcome of the planning appeal was a material factor that the Secretary of State had simply failed to take into consideration when reaching his decision on costs. Mr Stephenson emphasised the materiality of this particular factor by pointing out that it was the Mayor's stance (in contrast with that adopted by the Council) that had resulted in the rejection of a proposal that, on the Secretary of State's own view of it, was unacceptable in planning terms. He submitted that, had it not been for the Mayor's opposition, the proposal would have been accepted by the Council and built to the detriment of the locality and good strategic planning in London. It was Mr Stephenson's contention that, by failing to take such a material factor into account in his decision-making, the Secretary of State had acted irrationally and/or unfairly in condemning the Mayor in costs.
48. Although Mr Stephenson put forward this ground of challenge in a most attractive and persuasive fashion, I am afraid that I agree with Mr Karas that it misses the point. It is clear from the decision letter that the Secretary of State was well aware that the planning appeal had been dismissed on design grounds and that he was also well aware that the Mayor had put forward evidence to substantiate the Mayor's concerns about the design weaknesses of the proposed development. However, the point is that the Secretary of State concluded, as he was entitled, that planning permission had not been refused on any grounds that justified the Mayor's decision to issue the direction on the ground that the development in question was contrary to good strategic planning. In my view, as Mr Karas submitted, if a direction has been unreasonably made (as the Secretary of State justifiably decided this one was), the Secretary of State is plainly entitled within his discretion to take this into account and make an order that the Mayor pay the parties' costs of any resulting planning inquiry – even if, in the event, planning permission is not granted for the proposed development (for non-strategic reasons) following the inquiry. I am satisfied that Secretary of State's exercise of his discretion to award costs against the Mayor cannot be faulted, notwithstanding the outcome of the planning appeal, and I reject Mr Stephenson's submissions to the contrary effect.
49. Conclusion. For the foregoing reasons, I have come to the firm conclusion that this application must be and is hereby dismissed.