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 WC2A 2LL
		11 April 2011

SIR MICHAEL HARRISON:

Introduction

1. This is a claim for judicial review of the defendant's decision dated 1 September 2010 to make two statutory instruments, namely the Town and Country Planning (General Permitted Development) (Amendment) (No 2) (England) Order 2010 ("the GPDAO"), and the Town and Country Planning (Compensation) (No 3) (England) Regulations 2010 ("the Compensation Regulations"). The claim seeks to quash certain provisions of those statutory instruments which relate to houses in multiple occupation ("HMOs"). The claimants are Milton Keynes Council, Oxford City Council and Newcastle City Council, all of whom experience some problems with HMOs, as do a number of other local authorities. The claimants' case is that the defendant ought to have consulted directly with local planning authorities before deciding to make the two statutory instruments.

Legislative changes

2. The GPDAO amends Class I of Part 3 of Schedule 2 to the General Permitted Development Order 1995 by including, as permitted development under Class I, the following development:

"Development consisting of a change of use of a building-

(a) to a use falling within Class C3 (dwelling houses) of the Schedule to the Use Classes Order from a use falling within Class C4 (houses in multiple occupation) of that Schedule;

(b) to a use falling within Class C4 of that Schedule from a use falling within Class C3."

3. The claimants' objection relates to paragraph (b), which grants a new permitted development right enabling a change of use from use as a single dwelling house to use as a small house in multiple occupation (an "HMO") without the need to obtain planning permission. There is no objection to paragraph (a), which allows a change of use in the reverse direction and which had been contained in a previous statutory instrument.
4. The Compensation Regulations limit the liability of local planning authorities ("LPAs") to pay compensation in the event that they decide to make an Article 4 direction to remove the new permitted development right granted by the GPDAO. It does so by providing in Regulation 2 as follows:

"For the purposes of paragraphs (2A)(a) and (3C)(a) of section 108 of the Act (compensation where development order or local development order withdrawn), development of the following description is prescribed-

...

(b) development permitted by Class I of Part 3 of Schedule 2 (changes of use relating to dwelling houses and houses in multiple occupation)."

5. Section 108 of the Town and Country Planning Act 1990 provides for the payment of compensation in certain cases where planning permission granted by a development order is withdrawn and where, on an application for planning permission for that development, the application is refused or permission is granted subject to conditions.
6. The combined effect of Regulation 2 and section 108 of the 1990 Act is convoluted to explain, but the parties are agreed that the resulting position is that LPAs' liability to pay compensation where they make an Article 4 direction withdrawing the permitted development rights under the GPDAO is reduced in the following two situations:

i. Where 12 months' notice is given in advance of an Article 4 direction taking effect, there will be no liability to pay compensation, and

ii. Where an Article 4 direction is made with immediate effect or with less than 12 months' notice, compensation will only be payable in relation to planning applications which are submitted within 12 months of the effective date of the direction and which are subsequently refused or are granted permission subject to conditions.

7. The position therefore is that, prior to 1 October 2010 when the GPDAO and the Compensation Regulations came into force, planning permission was needed for a change of use from a dwelling house to an HMO (ie from Class C3 to Class C4) so that LPAs could control the potential amenity and environmental problems that can arise from HMOs, by either refusing planning permission or by the imposition of planning conditions. Now that such a change of use is permitted development, the LPAs have no control over the change of use, except by making an Article 4 direction which will expose them to the risk of compensation in the circumstances I have just described.

Factual background

a) Introduction

8. There had in fact already been a recent change in the planning law relating to HMOs not long before 1 October 2010 which had resulted from a formal consultation exercise that had been carried out in 2009. Those changes involved HMOs becoming a separate use class, rather than being a sui generis use, and a change of use of an HMO to a dwelling house (ie Class C4 to C3) becoming permitted development. Those changes, which had been promulgated by the previous government, came into force on 6 April 2010. The 2009 consultation exercise carried out prior to those changes is relevant to consideration of the fairness of the consultation exercise carried out in 2010, which is the subject of these proceedings and which resulted in the GPDAO and the Compensation Regulations.

b) 2009 Consultation

9. I therefore turn next to the 2009 consultation exercise. Paragraph 6 of the 2009 consultation document explained:

"Problems caused by high concentrations of houses in multiple occupation (HMOs) have been highlighted as an issue in a number of towns and cities across the country. This consultation document aims to test the validity of such concerns and explores what, if anything, might be proposed as a solution."

10. The 2009 consultation document canvassed three options. They can be summarised as follows:

Option 1 - make no change in the planning legislation, but promote best practice, focusing on local management of HMOs through other means and existing legislative powers.

Option 2 - amend the Use Classes Order to introduce a new HMO Use Class and a definition of an HMO along the lines of that in the Housing Act 2004.

Option 3 - the same as option 2 with the addition of an amendment to the General Permitted Development Order to allow for changes of use between a dwelling house and an HMO to be permitted development, leaving LPAs to issue directions under Article 4 if they wish to remove permitted development rights in respect of defined areas.

11. The 2009 consultation document posed 16 specific consultation questions and it was open to all interested parties to respond. It was stated that responses would be particularly welcome from LPAs, residents, students and student bodies, property developers and landlords, and those that represent groups likely to be affected. Milton Keynes Council was amongst those responding. There were 948 consultation responses. Of those consultees who expressed a preference for an option, 6 per cent preferred option 1; 92 per cent preferred option 2; and 1 per cent preferred option 3. The Government's response to that exercise was to implement a form of option 2, which introduced a new HMO Use Class (Class C4), with a definition of an HMO along the lines of the Housing Act 2004, and which amended the General Permitted Development Order to permit a change of use from an HMO to a dwelling house (ie from Class C4 to Class C3) without the need for planning permission. What it did not do was to permit a change of use from Class C3 to Class C4 without planning permission. Those changes were brought into effect by the Town and Country Planning (Use Classes (Amendment) (England) Order 2010, and by the Town and Country Planning (General Permitted Development Order) (Amendment) (England) Order 2010, both of which came into force on 6 April 2010.

g) 2010 Consultation

12. When the coalition government came into office following the general election in May 2010, Ministers took the view that the recent legislation introduced as a result of the 2009 consultation imposed an unjustifiable regulatory burden on landlords and LPAs in areas where HMO development was not a cause of concern. In particular, they were concerned that it would deter prospective landlords from entering the market, leading to inadequate supplies of low cost housing in many areas. The government therefore favoured Option 3, allowing a change of use from dwelling house to HMO as permitted development, leaving LPAs to remove that permitted development by an Article 4 direction if they wished to do so, with a reduced liability to compensation as I have described.
13. Following advice by Departmental officials in a submission to Ministers dated 21 May 2010, Ministers decided that it was not necessary to have a further formal consultation exercise. In her witness statement, Mrs Turner, the Team Leader with policy responsibility for the Use Classes Order at the Department for Communities and Local Government, stated in paragraphs 27 and 28 as follows:

"27. Ministers agreed that a further consultation was not necessary. They considered that consultees had already stated their views on Option 3 and that it would be wasteful of resources effectively to ask them to state those views again. Another full and formal public consultation would have required another 12-week consultation period and a further period after that for detailed analysis and the production of a full "Summary of Responses" document for all responses received. Ministers took the view that this was not at all justified given that there had already been a full public consultation and detailed analysis of views on Option 3.

28. However, it was not considered prudent simply to announce unilaterally that Option 3 would be implemented without seeking the view of key interests one final time to verify that there was nothing further that they wished to bring to the Defendant's attention in relation to this policy. In view of the unpopularity of Option 3 during the first public consultation, Ministers were conscious that any implementation of Option 3 would have to be sensitively handled. To this end, in accordance with the advice of their officials, Ministers agreed that it would be sensible to give key partners, representing the full range of interests in this policy area, one last opportunity to express any views in relation to Option 3 so that they could inform the detailed implementation of the policy in due course."

14. On 17 June 2010, the Minister made a written statement in Parliament announcing his intention to make the proposed legislative changes, stating his belief that there was a need to move away from a centralised regulatory approach. He stated that his officials would work through the details of the proposed changes with interested partners to ensure that the new rules work for local people without placing an unnecessary burden on businesses. His stated aim was to have the revised arrangements in place by 1 October 2010.
15. On the same day, the defendant sought the views of eight representative bodies, which included the Local Government Association and the Planning Officers Society, to which were added five further representative bodies at the suggestion of the National HMO Lobby, together with the later addition of the Royal Town Planning Institute.
16. The consultation letter, dated 17 June 2010, referred to the consultation as "an informal consultation" and stated:

"We believe it is important to get the new rules in place as soon as possible and we [would] therefore like to work through the detail of the proposals with key interested partners rather than undertake a full public consultation.

We would value your input into the development of these proposals to ensure that they work effectively for local people without placing any unnecessary burden on those who are unaffected by HMO development."

17. The letter attached a brief note of the proposals and a list of eight consultation questions. Comments were required by 9 July (ie a three-week period) and it was stated that it was intended to set up meetings in the week commencing 5 July.
18. The background note accompanying the letter stated as follows:

"There is a current blanket requirement for applications for planning permission for material changes of use from dwelling houses to small HMOs. This imposes a regulatory burden on landlords and local authorities in those areas where HMO development is not a concern. There is a risk that this will deter prospective landlords from entering the market and endanger the supply of what is a vital source of low cost housing in many areas.

However there is a belief that the planning system needs to enable local people to take action to deal with specific local problems such as those which

can be associated with concentrations of HMOs.

The proposals outlined above will mean that, in future, any change of use between C3 dwelling houses and C4 HMOs can take place freely without the need to submit planning applications. Where there are concerns about the impact of future HMO development in a particular area, local authorities will be able to use existing powers, in the form of Article 4 directions, to remove the permitted development rights and require planning applications for such changes of use.

There will be costs associated with the use of Article 4 directions. In order to reduce local authorities' liability we are proposing to apply the compensation provisions inserted by s189 of the Planning Act 2008 to this kind of development. Currently local authorities are liable to pay compensation for the 12 months following the effective date of the direction. We intend to make

changes to the compensation provisions to limit their liability further so that they are only liable if they choose to implement Article 4 directions with immediate effect or with less than 12 months notice. In delivering local solutions it will be for authorities to make a judgement on whether the benefits outweigh the costs associated with taking action."

19. The eight consultation questions were as follows:

"[1] Do you consider that the proposals will allow local areas to take action without imposing unnecessary burdens on unaffected areas?

[2] If not, why not? What do you think could be done, within the constraints of the current planning framework, instead?

[3] Do you think there will be unintended consequences as a result of the proposed changes? If so what will they be and how do you think they

could be mitigated?

[4] Do you think there are any other changes which need to be made to make this approach work more effectively eg to HMO definition?

[5] Do you have any information on costs/benefits which would be relevant to impact assessment?

[6] Do you think LPAs will choose to issue Article 4 directions with immediate effect or less than 12 months notice?

[7] How should we monitor the impact of these proposals and assess their success? What is the best review approach?

[8] Do you have on comments on the legislation as drafted?

20. Three of the bodies consulted - the Local Government Association, the Planning Officers' Society and the Royal Town Planning Institute - expressed the view that there should be a full, formal consultation. The three claimant Councils in this case found out about the consultation process and sent in their consultation replies, as did some other LPAs.
21. On 21 July 2010 there was a Departmental submission to the Minister by officials which dealt with matters raised by the respondents to the informal consultation exercise. Amongst other matters, it dealt with the issue of compensation. It considered the concern expressed that compensation would be a disincentive to LPAs issuing Article 4 directions with less than 12 months' notice, and it considered whether any amendment to the compensation arrangements was necessary. It stated that it was not possible to estimate the level of exposure for LPAs because it would depend upon the particular circumstances, and it would be for the LPA to weigh up the risk in taking its decision. The submission also mentioned that a considerable number of respondents, mainly LPAs, believed that a full, formal consultation should have been carried out.
22. A final submission was made to the Minister on 26 August 2010, with an attached impact assessment which contained summary sheets and seven pages of the evidence base for the summary sheets. One of the summary sheets stated that there was a great deal of uncertainty about the problem of HMOs, and about the extent to which LPAs would decide to use their Article 4 powers. It was stated that there would be a review in October 2013 to establish the impact of the changes and the extent to which the policy objectives had been achieved. Amongst other things, the evidence based sheets contained a section dealing with the consultation exercise and a section containing a table dealing with the benefits and costs relating to the different groups affected by the proposals.
23. The Minister, having considered that submission, approved and signed the two statutory instruments which were made on 1 September 2010 and laid before Parliament on 7 September 2010 to come into effect on 1 October 2010. On 14 September 2010, Harriet Harman MP invoked the negative resolution procedure with the result that the Delegated Legislation Committee debated the statutory instruments on 16 November 2010 and the motion to seek their annulment failed.

The issues

24. There is agreement between the parties that there are three issues in this case: (i) whether the claimants and other LPAs had a right to be consulted on the defendant's proposals; (ii) whether the consultation was unfair because of the failure to consult the claimants and other LPAs directly; and (iii) the effect of Parliament's subsequent consideration of the statutory instruments under the negative resolution procedure.
25. However, the main thrust of the claimants' case arises under the second issue, the fairness of the consultation procedure. That was, said Mr Mould QC on behalf of the claimants, the crux of the matter. It is therefore appropriate that I should deal with that issue first.

Issue 2

a) the claimants' submissions

26. The claimants' core complaint is that the informal consultation exercise on the defendant's proposal to introduce permitted development rights to change from a dwelling house to an HMO (from Class C3 to Class C4) was unfair and unreasonable because the defendant did not consult LPAs directly, but only indirectly through their national representative bodies. It was submitted that, given the purpose of the consultation exercise, namely to consult on the practical implementation of the proposed changes, and given the radical nature of the proposed changes and its impact on LPAs, including the compensation aspect, it was legally inadequate for the defendant to consult only the representative bodies, particularly in the short time given, and that fairness and reasonableness demanded that he should have consulted with LPAs directly.
27. Mr Mould accepted that the defendant was entitled to pursue Option 3 because it was a political decision, but he submitted that the purpose of the 2010 consultation exercise was different from the 2009 consultation exercise, in that it was concerned with the practical implementation of Option 3, involving a balance between deregulation where HMO development is not a concern and the need for control where it is a concern. It was submitted that the LPAs, who would be responsible for giving effect to the changes, were the bodies best placed to answer the questions posed in the 2010 consultation document because they would be aware of the practical consequences of implementing the proposal.
28. It was argued that the only means of securing control over changes of use to HMOs after 1 October 2010 would be by making Article 4 directions with immediate effect, which would expose LPAs to a liability to pay compensation for loss of development value, which in itself would deter LPAs from making such directions.
29. Mr Fenwick, the Assistant Director of Planning at Milton Keynes Council, in his third witness statement dated 9 March 2011, set out the matters which he said his Council would have addressed if he had been consulted with sufficient time to respond. They included such matters as transitional arrangements for LPAs who judged it necessary or expedient to retain uninterrupted control over HMOs, and the need to impose conditions on the permitted development right to change from Class C3 to Class C4 in order to control a number of amenity considerations.
30. Both sides agreed that, whether or not consultation is a legal requirement, if it is embarked upon, it must be carried out properly (see R v North East Devon Health Authority ex parte Coughlan [2001] QB 213 at para 108).
31. Both parties also drew my attention to the case of R(Legal Remedy UK Limited) v the Secretary of State for Health [2007] EWHC 1252 (Admin), a case involving an alleged failure to consult individual doctors on changes to their training arrangements. In that case, it was held that the consultation that had taken place, involving the relevant national representative bodies, was sufficient. Mr Mould relied on that case as showing that the court will inquire into the fairness of a decision to consult only representative bodies. He submitted that the result in this case is different from that case, in that the defendant's decision to consult with representative bodies rather than with LPAs themselves, without any rational explanation, was unfair and unreasonable in that it constituted a failure to understand the degree to which the representative bodies would be able competently to represent the interests of the LPAs in informing him on the questions he had posed, particularly in the short time given.

b) the defendant's submissions

32. Mr Morshead QC submitted on behalf of the defendant that the defendant had to make a judgment as to what degree of consultation would be suitable against a background that there had already been a full public consultation on Option 3. Bearing in mind that a decision-maker has a broad discretion as to how a consultation exercise should be carried out (per Sullivan J, as he then was, in R (Greenpeace Ltd) v Secretary of State for Trade and Industry [2007] Env LR 29 at para 62), and given the limited objectives of the 2010 consultation, it was submitted that it was rational to limit the consultation to representative groups. The defendant wanted a time-limited last minute review, not a re-run of the 2009 consultation exercise. He did not want to hear again what was wrong with Option 3; he wanted to get on with it. Mr Morshead asked rhetorically, if LPAs should be directly consulted, why should not other parties such as landlords, students etc be consulted directly rather than through their representative bodies.
33. Mr Morshead submitted that all the significant points now relied on by the claimants were flushed out in the 2009 consultation exercise, as was shown by the Summary of Responses document in March 2010. Similarly, the impact assessment resulting from the 2010 consultation exercise showed that all the claimants' significant concerns had been taken into account. Reliance was also placed on a table contained in Mrs Taylor's witness statement showing that six of the eight questions asked in the 2010 consultation were essentially the same as comparable questions asked in the 2009 consultation, demonstrating that individual LPAs had already received a fair opportunity to respond to those questions.
34. Mr Morshead also relied on the fact that all three claimants had in fact made representations to the defendant, giving their answers to the eight questions asked in the 2010 consultation, and making clear their opposition to the proposals. In their witness statements to this court, they had voiced the opinion that the risk of compensation would make it unrealistic for LPAs to make Article 4 directions, yet Milton Keynes had now made two Article 4 directions, one effective in 12 months relating to the whole of its area, the other immediately effective relating to a more restricted area. The other two claimants had also made Article 4 directions effective in 12 months' time. It was submitted that the claimants did not like Option 3 because they would have to pay compensation, which was the real reason behind their objection to the consultation exercise.
35. Mr Morshead said that the defendant was fully aware that there were gaps in the information revealed by the consultation exercise, but that it was the defendant's responsibility to decide whether to proceed on the given state of knowledge or to try to improve it further, which was a political decision for the defendant alone.
36. So far as the matters mentioned in Mr Fenwick's written statement are concerned, which Mr Fenwick said his Council would have addressed if it had been consulted in sufficient time to respond, Mr Morshead submitted that it was not credible that they would not have occurred to the Council previously, and that they were in the nature of an afterthought. The claimants had had a full opportunity to make representations on Option 3 as part of the 2009 consultation. Their interests as an LPA had been represented by the Local Government Association during the 2010 consultation, and they had also participated individually in the 2010 consultation. They had therefore had a plentiful opportunity to raise those kinds of concerns and, if there were any substance in them, they could be dealt with in the review.

c) conclusions on Issue 2

37. I start my consideration of this issue by reminding myself that the decision-maker will usually have a broad discretion as to how a consultation exercise should be carried out. That is so in this case. In exercising that broad discretion, the fairness of the way in which the consultation exercise is carried out will depend on the circumstances of the case. In this case, one of the important considerations is that there had already, very recently, been a 12-week full consultation exercise in 2009 which included consultation on Option 3 and which included direct consultation with LPAs as well as with other interested parties. It was, in my view, perfectly reasonable for the defendant to have decided that it was not necessary to repeat that exercise after he had decided to go for Option 3. He had decided to get on with Option 3 as quickly as possible, but he was conscious that it was a matter that had to be sensitively handled because it involved adoption of an option which was the least preferred option in the 2009 consultation exercise. He therefore decided to allow a short, informal consultation exercise to give a last opportunity to all the key interests to bring anything further to his attention which could inform the detailed implementation of Option 3 in due course. In my view, that was a reasonable exercise of his broad discretion as to how the consultation exercise should be carried out in the circumstances.
38. Although the exercise can be categorised as relating to the practical implementation of the proposed policy, it is clear from the nature of the eight questions asked in the 2010 consultation exercise that six of them are very similar to questions that were asked in the 2009 consultation exercise. The comparison table prepared by Mrs Turner shows that to be so. The 2010 informal consultation exercise was therefore essentially covering matters which had already been covered in the 2009 exercise, giving one last chance to the key interests to raise any matters which they had not raised on the 2009 exercise which might help to inform the detailed implementation of the policy. Mr Morshead's description of it as a last minute check may be too colloquial, but in my view it helps to give the flavour of what was involved.
39. That being so, the question remains whether it was unfair and unreasonable to limit the exercise to representative bodies and not to consult the LPAs directly. In my judgment, it was not. If the defendant had consulted the LPAs directly, he would, as a matter of fairness, have had to consult the other interested parties directly and the exercise would have grown into the type of exercise similar to that in 2009, which was exactly what the defendant, for understandable reasons, wanted to avoid. The decision to limit the informal exercise to representative bodies of the key interests was commensurate with the nature of the exercise intended by the defendant which I have described. It was a short informal exercise to pick up any remaining points that may have been missed which could inform the detailed implementation of the policy in due course. Bearing in mind the overlap between the questions asked in that exercise with those asked in the 2009 exercise, it was not unreasonable to expect that LPAs would have dealt with most of them in the 2009 exercise. The matters now mentioned by Mr Fenwick for the first time in his third affidavit, three weeks before the hearing of this case, as being matters Milton Keynes Council would have raised if they had been directly consulted, do have the appearance of somewhat of an afterthought.
40. All three claimants did in fact send in consultation replies on this occasion, as did some others. I accept that time was short, but all the claimants are well versed in the problems of HMOs. It is also clear from the summary of responses on the 2009 consultation exercise, and from the impact assessment following the 2010 consultation exercise, that the main points raised by the claimants were flushed out by those exercises. Despite their objections, all claimants have in fact now made Article 4 directions, one of them by Milton Keynes Council having immediate effect and therefore involving a potential liability to compensation.
41. Whilst I accept that the claimants have knowledge of the practical problems caused by HMOs and are in a position to comment on the practical implementation of the proposed change in the law relating to them, they had a full opportunity to make representations on Option 3 as part of the 2009 consultation exercise which involved essentially similar questions to those asked on the 2010 consultation exercise, which in themselves were capable of including matters of practical implementation. Bearing in mind the nature of the 2010 consultation, it was not, in my view, unreasonable for the defendant to decide to consult representative bodies rather than to consult LPAs directly. In my judgment, the consultation exercise was not so unfair as to be unlawful.

Issues 1 and 3

42. In view of my conclusion on Issue 2, it is not necessary for me to consider Issue 3. I have considered whether I ought to deal with Issue 1, which involves whether the claimants had a right to be consulted on the defendant's proposals and whether any duty of fairness only arises in the context of a legitimate expectation to be consulted. My conclusion on Issue 2 is that, even if the claimants did have a right to be consulted, the consultation was not unfair in the circumstances. In those circumstances, it seems to me to be unnecessary to embark on a consideration of what is, strictly speaking, a prior issue. Furthermore, it would be undesirable to do so when it is not necessary, especially as the point gives rise to some interesting questions of principle. I have dealt with what was described as the crux of the case and that is sufficient for the disposal of the case.

Overall conclusion

43. My overall conclusion therefore is that the failure of the defendant to consult the claimants directly, rather than through their representative bodies, was not so unfair in the circumstances as to render the consultation exercise unlawful.
44. MR MORSHEAD: My Lord, I am grateful. I would invite your Lordship to dismiss the claim, and the question of costs then arises. I do not know how your Lordship would like to approach this. I would ask as a matter of principle for my costs. The question then arises as to whether your Lordship feels able to conduct a summary assessment, the schedules having been sent to the court.
45. SIR MICHAEL HARRISON: Yes, there are schedules. First of all, I am afraid I cannot read your name.
46. MR MOULES: Mr Moules, my Lord.
47. SIR MICHAEL HARRISON: Mr Moules, I do beg your pardon. First of all, do you accept the principle that you should have to pay the costs?
48. MR MOULES: Indeed, my Lord, yes.
49. SIR MICHAEL HARRISON: So far as the amount of costs are concerned, are there any points of dispute or not?
50. MR MOULES: There is one point of dispute as to the quantum, my Lord.
51. SIR MICHAEL HARRISON: I think I am happy, if there is only one point, I will deal with that now. Just let me get the schedule of costs before me.
52. MR MOULES: The point, my Lord, relates not so much to the schedule, as the costs earlier in these proceedings. A letter should be on the court file dated 18 January 2007. I have a clean copy which may assist if I hand it up now. This is a letter written by my instructing solicitors to the court, copying in the defendant, querying the quantum of their costs at the renewed permission hearing. As you will see, my Lord, the costs schedule served by the defendant in respect of the paper permission application, resisting that, were £1,980, and that then jumped up --
53. SIR MICHAEL HARRISON: Sorry, do I get that from the schedule of costs or from this letter?
54. MR MOULES: This is the first paragraph of the letter.
55. SIR MICHAEL HARRISON: Yes.
56. MR MOULES: And in the following sentence the costs then jump to £9,292 for resisting the oral renewal permission application, and the thrust of this letter was querying quite why that occurred. The defendant at the oral permission hearing did not produce a skeleton, but relied on its summary grounds. No further witness evidence was produced and no explanation has yet been provided as to why the costs leapt by nearly £7,000. It is not apparent what extra work was done. So it is more a question at this stage rather than a dispute.
57. SIR MICHAEL HARRISON: Are those costs included in the schedule of costs in this case? They are not, are they?
58. MR MORSHEAD: My Lord, they are. We do not ask for an extra £9,000 on top of the £17,500-odd in our one-page schedule. Would it help to identify the document?
59. SIR MICHAEL HARRISON: Wait a moment, I think I have the wrong --
60. MR MORSHEAD: My Lord, your Lordship may have two schedules.
61. SIR MICHAEL HARRISON: It is £17,000 at the bottom of the page, sorry. You were saying?
62. MR MORSHEAD: I do not know if my learned friend had concluded his submissions on this point.
63. SIR MICHAEL HARRISON: My query to you was whether the costs of the renewed permission hearing were included in this and I think you told me they are. Can you identify them for me?
64. MR MORSHEAD: I do not know that I am going to be able to identify them separately. There is not an add-on bill that needs to be considered.
65. SIR MICHAEL HARRISON: I see. Thank you very much. So you are raising that point, Mr Moules, as a query at this stage.
66. MR MOULES: That is right. The question is: we do not see what additional work was done between the written permission hearing and the oral permission hearing to justify that increase in costs.
67. SIR MICHAEL HARRISON: I see. Thank you very much. Mr Morshead, can you shed some light on that?
68. MR MORSHEAD: I am not sure I am going to be able to do in great detail, as often is the way in a summary assessment.
69. SIR MICHAEL HARRISON: Had you been given notice of this point?
70. MR MORSHEAD: My Lord, we do have the letter. It seemed to us one way of doing this, as is sometimes done, is to do a little compare and contrast with the claimants' schedule, which sheds a little light on this. Your Lordship perhaps has that.
71. SIR MICHAEL HARRISON: Yes, I do.
72. MR MORSHEAD: We have done a little arithmetic, and your Lordship may notice that the number of hours claimed on behalf of the solicitors who acted for this claimant, all apparently in-house it seems, are unusually large. On the first row of this schedule your Lordship sees a principal solicitor who says he spent 22 hours, a senior solicitor who says she spent 62 hours and an assistant spending 52 hours, and that I am afraid is only the beginning of it. That is said to be leading up to the filing of the claim on 23 September. If one then adds in certain other rows, the picture becomes even more, may I say surprising. Would your Lordship kindly turn over the page, the first of the large rows here is said to relate to costs between filing the claim on 23 September and the renewal hearing on 20 January. So that is the claimants' alleged costs or time spent between filing the claim and the hearing. Your Lordship sees the principal solicitor says he spent 10 hours on the case; the senior solicitor says she spent 17½; and the assistant says 83 hours. That is down to the point about which my learned friend complains of a sum of, whatever it is, some £7,000 being the difference between £2,000-odd and £9,000-odd. Of course, that is not by any means all of it, because over the same period of time, your Lordship casting his eye back to page 2 and 3, will see the significant sums spent additionally on counsel -- a very senior junior, if I may say so, Mr Jones, called in 1975, in addition to Mr Cahill QC, also called in 1975, and by the time of the renewal hearing a new Queen's Counsel whose fees on their own account for an additional £9,000.
73. My Lord, the very large amount of time, even reading no further into this schedule, that the claimant spent, and its advisers spent on this issue, is perhaps a reflection of the importance which they attached to the matter. My clients' time in total, my Lord, dealing with the case as a whole is apparent from the very small schedule that your Lordship has. Your Lordship sees on the whole of the case attendances on the client are claimed only in an amount, without doing it exactly, at about 16 hours or something like that -- attendances on counsel, including conferences -- but also again, this is roughly speaking, it is well under 20 hours. Attendances on opponents -- your Lordship casting his eye down that schedule, as of course is all one can do in this context, will notice how very much smaller the numbers are than the claimants. Turning over the page, work down on documents, your Lordship sees again very much more modest numbers. I should add, my Lord, that this schedule has not been updated to account for today's hearing, but we do not take a point on that. I am not seeking to add to the number your Lordship sees here. My Lord, bearing in mind that we are involved in a summary assessment, I invite your Lordship to have regard primarily to the matter of proportionality and ask, well, is the figure of £17,500 at all surprising for a hard contested one-day judicial review, in which there was, your Lordship has seen, quite a detailed witness statement from Mrs Turner which your Lordship has referred to in his judgment. In my respectful submission, your Lordship under this exercise should be comfortable in feeling that we have done no more than was appropriate.
74. SIR MICHAEL HARRISON: You have not actually answered the question about how it goes up, even if you are right in what you have said -- how it has gone up from £1,980 to £9,290 between the two periods.
75. MR MORSHEAD: My Lord, in between those times the principal activity which took place, as I understand it, was disclosure. That was the main thing. There was also, of course, a review of the merits and further advice was taken, but the biggest exercise would have been the disclosure exercise. Your Lordship has seen the amount of material involved, not all of it, of course, has come from my client, but there had presumably to have been a search made and there had to be the usual consideration of privilege. But it is not quite right to say that nothing happened between the two events indicated in the letter of 18 January.
76. SIR MICHAEL HARRISON: Yes. Thank you very much. Anything you want to say in reply?
77. MR MOULES: Only this my Lord: this letter was written almost three months ago, asking for specific details. It has been ignored, and my learned friend is unable to give anything more than a general impression. In exercising your judgment, my Lord, I ask you to bear that in mind.
78. SIR MICHAEL HARRISON: Yes.
79. Whilst the amount of costs claimed on behalf of the defendant seems to me, on the face of it, to be reasonable, a point has been raised by the claimant that the defendant's costs went up from £1,980 to £9,292 between the written application for permission and the oral permission hearing. As Mr Moules quite rightly says, the defendant has been asked to explain how that extra amount of costs was incurred in that period of time as long ago as 18 January 2011, and the only explanation that has been forthcoming was that during that time there was disclosure, which admittedly does include a number of documents, and a review of the merits. I have to say that I am slightly surprised by the amount of that increase, albeit I do accept that the total amount claimed, on the face of it, would appear otherwise to be reasonable.
80. To account for that point that has been raised, I propose to make a small reduction in the amount of the defendant's costs, so that the total will be £16,000, rather than £17,422. It is a pragmatic approach, but that is what I propose to do. Does anything further arise?
81. MR MOULES: I am grateful, my Lord. I do have an application for permission to appeal. I appeal on both grounds: that there is a realistic prospect of success; and that the case raises a point of general public importance.
82. In respect of the first point, my Lord, I acknowledge that your Lordship has reached a firm view on issue 2, but the case does raise an issue which, for the reasons given in our skeleton argument, there is a realistic prospect that another judge may take a different view, and so for those written reasons I request permission to appeal.
83. In respect of public importance, it is quite clear that this case raises an issue affecting local authorities across the country, three of whom are claimants to this appeal. It affects the extent of planning control which local authorities can impose within their borough. It also affects the residential amenity of their local inhabitants. So for those reasons I submit the point is one of general public importance. Irrespective of whether permission to appeal is granted my Lord, I also ask that you extend the time for the appellant's notice to run from the date when the transcript is delivered rather than the date of today to enable my client to take advice as to their future actions. Unless I can assist your Lordship further, those are my submissions.
84. SIR MICHAEL HARRISON: Thank you very much. Mr Morshead, do you have anything to say on that?
85. MR MORSHEAD: My Lord, so far as permission to appeal is considered, I can see that if your Lordship had found it necessary to consider either issue 1 or issue 3, it might properly have been said that your Lordship would be justified in considering granting permission to appeal. As it is, your Lordship has dealt with the matter without finding it necessary to engage in those grounds, and in those circumstances, in my submission, the claimant should ask the Court of Appeal to decide whether either of the grounds on which permission might be granted applies in this case.
86. So far as extending time for permission to appeal is concerned, that would be of concern to us. Your Lordship will remember that I think there was some concern to get this matter heard expeditiously, for obvious reasons. There are statutory instruments out there on the, as it were, statute book. It would not be desirable for there to be any lingering question about their lawfulness for any longer than is absolutely necessary. I dare say my client would not be unsympathetic if the claimants asked for some time-limited extension. I think the usual order is 21 days. Perhaps your Lordship might consider extending to 28 days, something like that. I am afraid it would not be well received at all if your Lordship were to extend time in the open-ended way suggested by my learned friend because we cannot control when any transcript is going to be available. A lot of work can be done on any grounds without sight of the transcript, and so I would respectfully suggest there is not a compelling case for extending time for permission to appeal.
87. SIR MICHAEL HARRISON: Thank you very much.
88. Mr Moules, I am not prepared to grant permission to appeal. I am prepared to extend time, but not in the way that you have suggested. I agree with Mr Morshead, it is rather open-ended. I will extend time for appealing to 28 days, and I will ask if expedition could take place with regard to the provision of the transcript.
89. Thank you very much.