Neutral Citation Number: [2010] EWHC 1771 (Admin)
Case No: CO/5856/2009
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 15/07/2010

Before:

MR JUSTICE WYN WILLIAMS
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Between:

	R (On the application of)
THE PRUDENTIAL ASSURANCE COMPANY LTD	Claimant	
	- and -		
	SUNDERLAND CITY COUNCIL
and
PEEL INVESTMENTS (UK) LTD	Defendant

Interested Party	
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 (Transcript of the Handed Down Judgment of
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No:  020 7404 1400, Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
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Mr Richard Harwood (instructed by S J Berwin) for the Claimant
Mr Martin Carter (instructed by the Chief Solicitor Sunderland City Council) for the Defendant 
Mr Christopher Katkowski QC & Mr Simon Pickles (instructed by Thomas Eggar LLP) for the Interested Party 
Hearing date: 9 June 2010
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Judgment

Mr Justice Wyn Williams: 
Planning History 
1.	On or about 11 August 1988 the Defendant granted outline planning permission to the Interested Party for the erection of non-food retail development, car parking, a service area, a fast food unit and a petrol/diesel station upon an area of land at the Glover Industrial Estate which was located on the outskirts of the town of Washington, Tyne and Wear.  The planning permission was conditional; however, the conditions specified did not relate to the use of the site.
2.	No doubt that was because on 8 August 1988 an agreement in writing had been concluded between the Defendant, the Commission for New Towns and the Interested Party pursuant to section 52 of the Town & Country Planning Act 1971 (hereinafter referred to as “the section 52 agreement”).  By clause 1 of that agreement the Interested Party covenanted not to use the land which was to be the subject of the planning permission:-
“….for the sale by retail or otherwise or the provision direct to the public of any of the following goods or services:-
a.		consumable food stuffs whether fresh, frozen or packaged
b.		stationery, newspapers, periodicals and books.
c.		pharmaceutical goods
d.		jewellery and watches
e.		sports goods.
f.		florist.
g. 		travel agency.
h.		wines, spirits, beers and tobacco.”
	The covenant was expressed to be a covenant which would subsist permanently and it was also expressed to be enforceable against persons deriving title from the Interested Party.
3.	Clause 1 was made subject to clause 2.  That clause provided for a limited number of exceptions to the prohibition contained within clause 1.  Clause 3 was in these terms:-
“3. With the exception of the restriction contained in clause 2(a) above nothing in this agreement shall be construed as prohibiting or limiting any right to develop the said land or any part of the said land in accordance with a planning permission granted by the Council or by the Secretary of State after the date of this Agreement.”  
4.	In due course the site was developed for retail purposes.  In its original form there were 4 retail units.  The site became known as the Peel Centre.
5.	In 2003 the Interested Party applied for planning permission for an area of land which would form an extension to the Peel Centre.  The application was not determined by the Defendant but called in by the Secretary of State.  On 29 July 2004 the Secretary of State granted planning permission for the extension of the existing retail park “consisting of 5760 sq m of non-food retail wharehousing on land at Peel Retail Park, Spire Road, Washington, Tyne & Wear in accordance with application number 03/00120/OUT dated 20 January 2003 subject to the following conditions….”.  Condition 13 provided that the development permitted should not be used for the retailing of 19 different classes of goods without the prior written consent of the local planning authority.  The classes specified included all those classes of goods which the Interested Party was precluded from selling by virtue of clause 1 of the section 52 agreement.
6.	On 22 December 2005 the Interested Party applied to the Defendant for what it described as “external alterations to existing retail unit” in respect of Unit 3 at the Centre.   The application was supported by a number of plans.  
7.	On 22 February 2006 the Defendant granted the Interested Party’s application.  The planning permission was in the following terms.
“In pursuance of its powers under the above mentioned Acts and Orders, the City of Sunderland, as local authority has APPROVED the following namely:
Proposal  	External alterations to existing retail unit and erection of freestanding entrance canopy feature.
At		Former Conroys Unit The Peel Centre Glover, Washington
Subject to compliance with the following conditions:” 
	Three conditions are then specified.
8.	On 14 July 2006 the Defendant and the Interested Party were signatories to a document entitled Deed of Revocation.  The purpose of the document was to revoke clause 1(e) of the section 52 agreement.  The terms of the deed are such that it is clear that both the Defendant and Interested Party proceeded on the basis that save for the revocation in respect of clause 1(e) the section 52 agreement would subsist unaltered.
9.	On 2 October 2006 the Interested Party applied to the Defendant for planning permission for “external alterations, construction of new free-standing entrance canopies and formation of goods access road to enable conversion of retail unit into two units.”  The application related to Unit 1 at the Peel Centre.  
10.	The Defendant granted planning permission in relation to this application on 11 December 2006.  The form of the grant was identical to the permission granted on 22 February 2006.  It was as follows:-
“In pursuance of its powers under the above mentioned Acts and Orders, the City of Sunderland, as local planning authority, has APPROVED the following namely:
Application ref             06/04039/FUL
Proposal		Conversion of one retail unit into two units, construction of new free-standing entrance canopies and formation of a goods access road.
At	1 Peel Centre The Glover Washington.
Subject to compliance with the following conditions:”
11.	On 18 July 2008 the Interested Party made an application for planning permission in respect of Unit 2 at the Centre.  The proposal described in the application was “external alterations and construction of new free-standing entrance canopy.  To enable its conversion into two units.”  On 1 October 2008 the Defendant granted planning permission as follows:-
“In pursuance of its powers under the above mentioned Acts and Orders, the City of Sunderland, as local planning authority, has APPROVED the following namely
Application ref           08/02901/FUL
Proposal 		Conversion into two units and external alterations including construction of entrance canopy
At		2 The Peel Centre Washington
Subject to compliance with the following conditions:”
12.	On 14 January 2009 the Interested Party applied for a certificate of lawfulness of proposed use or development in respect of Unit 1.  The proposed use was described as 
“open A1 retail and a planning permission dated 11.12.2006 (06/04039/FUL) unfettered by the requirements of the section 52 agreement of 08.08.1988 as amended by the deed of revocation of 14.07.2006.”
	On the same date the Interested Party applied for such a certificate in respect of Unit 2.  On 11 March 2009 the Defendant granted both certificates.
These proceedings
13.	The Claimant is the owner of major parts of the town centre of Washington.  It has invested substantial sums of money in promoting retail development at the Centre.  Over the years, the Claimant has observed developments at the Peel Centre with the interest naturally to be expected of a competitor.  The trigger for these proceedings was the Defendant's decision to issue a certificate of lawfulness of proposed use or development in respect of Unit 1.  The Claimant alleges that the Defendant acted unlawfully when issuing the certificate.  The Statement of Facts and Grounds identify four bases upon which the Claimant alleges that the certificate can be impugned.  
14.	I need not detail how the proceedings have unfolded.  I say that for this reason.  At the commencement of the hearing before me the parties agreed that the appropriate course of action was for me to consider first ground 3 as advanced in the Statement of Facts and Grounds.  At the end of the oral argument relating to ground 3 I invited the parties to consider whether any useful purpose would be served by my considering any of the other grounds advanced.  After considering their positions for a short period of time the parties informed me that I need not consider the other grounds raised.  Accordingly, this judgment deals with one issue only.  The issue is whether or not the Defendant erred in law in considering that the section 52 agreement would cease to apply to Unit 1 if planning permission 06/04039/FUL was implemented.  It is common ground that an identical issue arises in relation to Unit 2 if planning permission 08/02901/FUL is implemented.  It is to this issue, in respect of both units, to which I now turn.
15.	Mr Carter and Mr Katkowski QC submit that I should begin my search for the resolution of the issue identified above by interpreting the planning permission which was granted in respect of Unit 1 on 11 December 2006.  The relevant principles of interpretation are to be found in the decision of Keene J (as he then was) in R v Ashford BC ex parte Shepway DC [1999] P.L.C.R. 12 as explained by the Court of Appeal in Barnett v Secretary of State for Communities and Local Government [2010] 1P&C.R. 8.  During the course of his judgment in Ashford Keene J formulated the following principles:-
“1. The general rule is that in construing a planning permission which is clear, unambiguous and valid on its face, regard may only be had to the planning permission itself, including the conditions (if any) on it and the express reasons for those conditions….
2. This rule excludes reference to the planning application as well as to other extrinsic evidence, unless the planning permission incorporates the application by reference.  In that situation the application is treated as having become part of the permission.  The reason for normally not having regard to the application is that the public should be able to rely on a document which is plain on its face without having to consider whether there is any discrepancy between the permission and the application….
3.  If incorporation of the application in the permission is to be achieved, more is required than a mere reference to the application on the face of the permission.  While there is no magic formula, some words sufficient to inform a reasonable reader that the application forms part of the permission are needed, such as “…in accordance with the plans and application…” or “…on the terms of the application…”, and in either case those words appearing in the operative part of the permission dealing with the development and the terms in which permission is granted.  These words need to govern the description of the development permitted…
4.  If there is an ambiguity in the wording of the permission, it is permissible to look at extrinsic material, including the application, to resolve the ambiguity…..”
	In Barnett the Court of Appeal approved the following passages from the judgment of Sullivan J (as he then was) which was the judgment under appeal.
“where a full planning permission for the erection, alteration or extension of a building is granted, it is unnecessary for that permission to expressly incorporate the application plans and drawings.  Precisely because the permission is a ‘full’, and not an outline permission, any member of the public will know there will be plans and drawings which will describe the development that has been permitted….
….
….In the Ashford case Keene J was considering the proper interpretation of an outline planning permission.  The issue was whether, in construing that planning permission, regard could be had to a letter which had been included in an environmental statement that had accompanied the application for planning permission….
If it is plain on the face of the permission that it is a full permission for the construction, erection or alteration of a building, the public will know that, in addition to the plan which identifies the site, there will be plans and alterations which will describe the building works which have been permitted precisely because the permission, is not, on its face, an outline planning permission.  In such a case those plans and drawings describing the building works are as much a part of the description of what has been permitted as the permission notice itself.  It is not a question of resolving an ‘ambiguity’.  On its face, a grant of full planning permission for building operations is incomplete without the approved plans and drawings showing the detail of what has been permitted.  In the absence of any indication to the contrary, those plans and drawings will be the plans listed in the application for permission.  If a local planning authority does not wish to approve the plans submitted with the application and wishes to approve amended plans, then it can include a statement to that effect in the decision notice.  Absent any such statement, the reasonable inference,…..is that a grant of full planning permission approves the application drawings.”
16.	On the basis of these statements of principle it seems to me to be clear that the planning permission granted in respect of Unit 1 incorporated the drawings, at the very least, which accompanied the planning application.
17.	Both Mr Carter and Mr Katkowski QC submit that the planning permission granted in respect of Unit 1 falls to be interpreted by reference to the words of the grant and the drawings which accompanied the application and no more.  They both submit that the words of the grant do not incorporate the terms of the planning application into the permission.  They further submit that the words of the grant taken together with the plans and drawings create no ambiguity.  Accordingly, there is no basis for the court to have regard either to the application form or any other intrinsic material when interpreting the planning permission.
18.	In my judgment, those submissions are correct.  There is nothing about the wording of the planning permission which makes it permissible to say that the application form has been incorporated into the permission.  In my judgment, the words “application ref 06/04039/FUL” which are to be found in that part of the notice of planning permission which constitutes the grant do no more than identify the application which is the subject of the grant of planning permission.  The words are a reference to the application; they are not apt to incorporate the terms of the application into the permission granted.
19.	What does the planning permission in respect of Unit 1, properly interpreted, authorise?  In order to answer that question it is necessary to return to some basic principles and also consider a number of statutory provisions.
20.	The words of the grant of planning permission are plain; on its face the notice of permission authorises “the conversion of one retail unit into two units, construction of new free-standing entrance canopies…”  As a matter of plain English, the Defendant was authorising the conversion of one shop into two together with, specifically, works to the exterior of the building necessary to achieve that conversion.  The plans which accompanied the application for planning permission were completely consistent with that interpretation. There were two relevant plans which showed the proposed development. The first plan (page 65 of Bundle 1) showed Unit 1 divided into two units by an internal stud partition wall; it showed each of the units thereby created with its own customer entrance, goods entrance and new staff amenity block.  The second plan (page 66 Bundle 1) showed the elevations (front, back and side) of each unit.
21.	The work necessary to achieve the conversion was necessarily to be undertaken both to the interior and exterior of Unit 1.  As a matter of interpretation of the planning permission it might be thought obvious that it was authorising the carrying out of the building activity necessary to put in place what was shown on the two plans and which would result in the conversion of the unit from one shop into two.
22.	Mr. Harwood does not agree. His argument runs as follows.    
23.	Section 55(1) of the Town & Country Planning Act 1990 defines development in the following way:-
“(1) Subject to the following provisions of this section, in this Act, except where the context otherwise requires, “development”, means the carrying out of building, engineering, mining or other operations in, on, over or under land, or the making of any material change in the use of any buildings or other land.
Subsection (2) provides:-
The following operations or uses of land shall not be taken for the purposes of this Act to involve development of the land – 
a) the carrying out for the maintenance, improvement or other alteration of any building of works which –
i) affect only the interior of the building, or
ii)	do not materially affect the external appearance of the building, 
and are not works for making good war damage or works begun after 5 December 1968 for the alteration of a building by providing additional space in it underground;
.... ....
f) in the case of buildings or other land which are used for a purpose of any class specified in an order made by the Secretary of State under this section, the use of the buildings or other land or, subject to the provisions of the order, of any part of the buildings or the other land, for any other purpose of the same class. 
Section 57 of the 1990 Act specifies that planning permission is required for the carrying out of any development of land.
24.	Mr. Harwood accepts that in this case planning permission was required for certain of the building operations which were specified in the planning application.  They were the external alterations to Unit 1, the construction of new free-standing entrance canopies and the formation of a goods access road; each clearly constituted operational development within section 55 of the 1990 Act.
25.	Mr Harwood submits, however, that the conversion of Unit 1 into two units is achieved solely by virtue of internal alterations to the building.  He submits that no planning permission was necessary for the internal alterations by virtue of section 55(2)(a).  Accordingly, he submits that as a matter of interpretation all that the planning permission in respect of Unit 1 authorised was the physical alterations to the exterior of the building.
26.	Mr Carter and Katkowski QC submit that “the conversion of Unit 1 into two units” constitutes operational development.  The conversion is inextricably linked with both the interior and exterior alterations to the building.  They submit that an examination of the plans which were submitted with the planning application demonstrate that beyond any dispute.
27.	There can be no doubt that the carrying out of an alteration which affects only the interior of the building does not constitute development.  The statute says so in terms.  In my judgment, however, whether or not a proposal constitutes development within section 55 of the 1990 Act cannot be determined by looking at the individual component parts of the proposal in order to decide whether each, looked at in isolation, falls within or without section 55(1) and 55(1A) or whether they fall within the exceptions specified in section 55(2).  It seems to me to be wholly artificial to consider whether individual aspects of a development scheme, if standing alone, would or would not constitute development.  I take the view that the issue of whether or not a proposal constitutes development must be considered by reference to the proposal looked as a whole and then answered either yes or no.
28.	Looked at in this way there is no doubt in my mind that the proposal for which planning permission was sought in respect of Unit 1 constituted development.  The planning permission which was granted authorised the carrying out of the whole of that development.  In my judgment, therefore, the planning permission authorised the conversion of Unit 1 into two separate units and it authorised the works necessary to achieve that end.
29.	The planning permission so granted did not limit the use to which the two units could be put.  In those circumstances, submit both Mr. Carter and Mr. Katkowski QC, permission was granted for retail uses falling within Class A1 The Town and Country Planning (Use Classes) Order 1987.  On any view of the wording of the notice of the grant of permission, the permission granted was for retail units i.e. shops.  In the absence of a condition limiting the use of the units to certain categories of shops or a condition limiting that which can be sold all the uses permitted under class A1 are permitted.
30.	It seems to me that this argument can only be defeated if, somehow, the permission granted can be read as being subject to the section 52 agreement or more accurately subject to the section 52 agreement as preserved by the Deed of Revocation.  Clause 3 of the agreement is critical and, in my judgment, it is capable of one meaning only.  The meaning of the clause is that the section 52 agreement shall not be interpreted as prohibiting or limiting the right of any person to develop the land which is the subject of the agreement in any way which is authorised by a planning permission granted subsequent to the conclusion of the agreement.  It is not possible, in my judgment, to interpret clause 3 as prohibiting or limiting the use of the land which is the subject of the agreement if a planning permission is granted subsequent to the execution of the agreement which authorises a use prohibited or limited by the agreement.  So to conclude would be to re-write the clear words of clause 3 of the section 52 agreement.
31.	I reach this conclusion with reluctance.  It is clear that the officer of the Defendant who granted permission for the conversion of Unit 1 into two units simply did not consider the possibility that the terms of the planning permission granted to the Interested Party would have the effect of releasing the two units authorised by the permission from the constraints imposed by the section 52 agreement. However, it does not seem to me that the subjective state of mind of the officer can have any relevance to the proper interpretation of the planning permission and the relationship of that permission to the section 52 agreement.
32.	Likewise, no extrinsic material is properly admissible to interpret the planning permission so as to achieve an interpretation of the planning permission which would mean that use of the two units was subject to the section 52 agreement. In particular, the terms of the planning application in respect of Unit 3 together with the material which supported that application cannot be used as an aide to the construction of the planning permission in respect of Unit 1.
33.	I have reached this conclusion quite independently of the decision of HHJ Waksman QC, sitting as a High Court Judge, in the very recent case of Stevenage Borough Council v Secretary of State for Communities and Local Government and another [2010] EWHC 1289 (Admin).  Nonetheless his conclusions in that case are entirely consistent with my own and, obviously, I am fortified in my own view as a consequence.
34.	In Stevenage the local planning authority (Stevenage Borough Council) granted planning permission in respect of a new retail park within its administrative area in 1987.  The planning permission was made subject to two conditions (3 and 4) which were said to apply to all the units within the retail park for which planning permission was granted.  Condition 3 was in the following terms:-
“3…..the consent which this permission grants, in so far as it relates to retail floor space shall, unless otherwise agreed in writing by the Local Authority be confined to retail warehousing of comparison goods to exclude expressly the sale of all food stuffs for consumption off the premises, clothes and footwear (other than specifically for the playing of sport) or other fashion goods retailing;”
Condition 4 provided:-
“4.  The retail warehouse floor space referred to in condition three of this permission shall not, at any one time, exceed a total of 200,000 square feet (18,580 metres) and in the case of each individual retail warehouse shall, unless otherwise agreed in writing by the Local Authority be not less than a minimum of 15,000 square feet (1395 square metres)”
35.	Following the grant of this permission the retail park was created.  It consisted of some 17 units.  
36.	On 9 April 2006 the owner/occupier of the retail park applied for planning permission in respect of some of the units.  One of those units was Unit 7.  The application sought permission for the recladding of a number of the units including number 7.  The plans submitted with the application, however, demonstrated that it was proposed to convert Unit 7 into two units.
37.	The application for planning permission was granted.  The decision notice specified that planning permission was granted conditionally.  On its face the permission granted was for “alterations to external elevations of units….”
38.	In 2007 the planning permission was implemented and Unit 7 was divided into 2 units.  Thereafter an application was made for a certificate of lawfulness of proposed use or development; the certificate sought, if granted, had the effect of authorising the use of the two units created from Unit 7 for the unrestricted sale of retail goods within Use Class A1.  On appeal, an Inspector duly appointed by the First Defendant, granted the certificate.  In the proceedings before HHJ Waksman QC, Stevenage Borough Council challenged the grant of the certificate.
39.	In paragraph 24 of his judgment the learned judge records the following:-
“It should further be noted that the Council accepts that if the Inspector was correct to determine that the 2006 permission did indeed encompass the internal sub-division works, the resultant building was a new chapter in the planning history and/or section 75(3) of the Act applied, thereby having the effect of removing condition three and justifying the LDC granted.”
	The learned judge went on to consider what he designated “the true nature of the 2006 permission”.  Essentially he reached the conclusion that the internal sub-division objectively formed part of the proposed works which were authorised by the planning permission.  He reached that conclusion by a process of reasoning which is similar to that expressed by me above.
40.	It is to be noted that the planning permission under scrutiny by HHJ Waksman QC did not authorise, on its face, the conversion of one unit into two.  That authorisation was said to arise by virtue of the incorporation of the plans accompanying the planning application into the permission. The words of the planning permission in the instant case obviously lend themselves more easily to the conclusion that the internal works which were to be performed as part of the works of converting Unit 1into two units were the subject of authorisation by the planning permission.
41.	Mr. Carter and Mr. Katkowski QC submit that there is an alternative route by which it is proper to reach the conclusion that the planning permission granted in respect of Unit 1 permits unrestricted use of the two units for Class A1.
42.	Section 75 of the 1990 Act is in the following terms:-
“1. Without prejudice to the provisions of this Part as to the duration, revocation or modification of planning permission, a grant of planning permission to develop land shall (except in so far as the permission otherwise provides) enure for the benefit of the land and of all persons for the time being interested in it.
2. Where planning permission is granted for the erection of a building, the grant of permission may specify the purposes for which the building may be used.  
3. If no purpose is so specified, the permission shall be construed as including permission to use the building for the purpose for which it is designed.”
43.	Under section 336 of the Act building is defined to include any structure or erection and any part of a building.  Erection in relation to buildings is defined by the same section to include alteration.
44.	In the light of these provisions Mr Carter and Katkowski QC submit that the effect of the planning permission in respect of Unit 1 was not just to authorise the conversion of one unit into two units but also to authorise the use of those units for the purpose for which they were designed.  As a matter of fact they were designed for retail purposes; no one has or could suggest otherwise.  In consequence unrestricted retail use is permitted since the planning permission does not restrict that use in any way.
45.	In Stevenage HHJ Waksman QC considered an argument that these statutory provisions had the effect of authorising unrestricted retail use of the two units created from the larger unit whether or not upon its true interpretation the planning permission authorised the internal works which were a necessary part of the conversion.  He rejected that argument for reasons I need not consider since I understand that Mr. Carter and Mr. Katkowski QC go no further than suggest that section 75(3) of the 1990 Act can be prayed in aid once it is decided, as here, that the planning permission authorises the whole of the work necessary to achieve the conversion of one unit into two.  So confined, I accept that section 73(3) has the effect for which counsel contend.
46.	The permission granted for Unit 2 is to be interpreted in exactly the same way as the permission in relation to Unit 1.  No material distinction exists between the two permissions. In my judgment, the consequences of the grant of the permission for Unit in 2 are identical to those which I have described above.
47.	I have reached the conclusion that the arguments advanced by the Defendant and Interested Party in relation to Ground 3, as summarised above, are correct.  The challenge on ground 3 must fail.
48.	During the course of his submissions Mr. Katkowski QC advanced an additional reason why the challenge on ground 3 should fail.  He drew my attention the fact that following the challenge to the certificate in respect of Unit 1 the Defendant had issued a fresh certificate which had as its object the curing of defects in the certificate under challenge (those defects being the subject of other grounds of challenge).  However, the point of law arising by virtue of ground 3 was as capable of being taken in respect of the second certificate as it was in relation to the first.  Yet there had been no challenge to the second certificate.
49.	Section 192(4) provides that:-
“The lawfulness of any use or operations for which a certificate is in force under this section shall be conclusively presumed unless there is a material change, before the use is instituted or the operations are begun, in any of the matters relevant to determining such lawfulness”
Mr. Katkowski QC submits that the effect of the second certificate must be that the lawfulness of the use which is the subject of the second certificate “shall be conclusively presumed…” since the second certificate is in force.  That, he submits, precludes a successful challenge on ground 3 to the first certificate.
50.	It is unnecessary for me to determine this point and I decline to do so.  Such a point is far better considered when it is necessarily the determining point in the case in question.  I mention it at all only to demonstrate that the point was taken so that if this claim finds itself before a higher court Mr. Katkowski can pursue the point if he considers it to be advisable.
51.	I propose to hand down this judgment at 9.30 am on July 15 2010.  If the parties can agree an order consequent upon my judgment there need be no appearance at the handing down.  If the parties wish to address the appropriate order by way of written submissions as opposed to oral submissions at the handing down they should send written submissions to my clerk by 3pm 14 July 2010.