QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| Scottish Widows Plc
Scottish Widows Unit Funds Ltd
Aegon UK Property Fund Ltd
|- and -
|Cherwell District Council
LXP RP (Banbury) Ltd
Prodrive Holdings Ltd
Prodrive Motorsport Ltd
Hundred Percent Properties Ltd
Mr David Richards
Paul Tucker QC and Anthony Gill (instructed by Nabarro LLP) for the Third Claimant
James Findlay QC and Hugh Flanagan (instructed by Cherwell District Council) for the Defendant
Christopher Katkowski QC and Graeme Keen (instructed by Marrons Solicitors) for the First Interested Party
Hearing dates: 6th and 7th November 2013
Crown Copyright ©
The Hon Mr Justice Burnett:
i) The Council failed to understand and apply the 'sequential test' and the possibility of 'disaggregating' the development by recognising that aspects of it could be accommodated in the town centre, in accordance with PPS4 and the National Planning Policy Framework ["NPPF"];
ii) The Council's conclusion that the development would not damage the vitality and viability of Banbury town centre was incorrect and not open to it on the evidence available;
iii) The summary reasons given for the grant of planning permission were inadequate as regards both (i) and (ii);
iv) The Council failed to secure section 106 agreements which obliged Marks & Spencer to maintain their town centre store for at least five years after opening one at Banbury Gateway, and Prodrive to maintain their operation at the Hella site for an unspecified period. This was unlawful because:a) The Council's planning committee based its decision to grant planning permission on the basis that such agreements would be executed (delegating authority to the Chairman and officials); andb) The only proper conclusion was that such agreements were 'necessary' and it was therefore Wednesbury unreasonable not to insist upon them.
"PPS4 requires the applicant to demonstrate that there are no sequentially available sites that are available, suitable and viable, and that there would be no significant adverse impacts, in terms of impact on centres and in terms of wider environmental, economic and regeneration impacts. The applicant has produced a Retail Assessment and an Addendum to that Assessment to address these matters. They are available to view via the Council's website."
i) WYG considered the availability of Banbury sites as alternatives for some or all the retail floor space proposed for Banbury Gateway. CBRE initially considered that Bicester and Kidlington should be considered, but accepted the explanation of WYG why that was inappropriate (subject to disaggregating some of the proposed development) (5.5.3).
ii) WYG argued that a critical mass of development was needed at Banbury Gateway, in other words that by disaggregating and requiring some of the retail space to be located in the town centre, the development would not be commercially attractive. CBRE disagreed. They and HPPDM thought there was scope to locate some of the smaller retail units on sequentially preferable sites. There was a question whether the restaurant units could be located elsewhere, but CBRE agreed that possibility was not a sound reason to dismiss the whole development. The report noted that "if it is considered reasonable to disaggregate some of the units … CBRE considers there is a case for widening the search area to … Bicester and Kidlington." (5.5.4)
iii) The availability of sequentially available sites was assessed by WYG in the short to medium term, that is three to five years. The criterion is whether a site is available now or within a reasonable time. They considered that a relatively short timescale was necessary because of 'retail leakage' from Banbury, of which CBRE were unconvinced. WYG thought there was an urgent need to improve Banbury's overall market share. CBRE disagreed and so concluded that the search for alternative sites, for the purposes of the sequential test and disaggregation, should encompass a longer timescale (5.5.5.i and ii).
iv) CBRE thought that the Bolton Road site would be available in the long term and should be not be discounted for the purposes of this aspect of the application. They agreed with WYG that Bolton Road could not accommodate the whole development but CBRE considered that some of the retail space could be located within Bolton Road. They concluded that WYG "had not done enough to render this site unsuitable for consideration" and that Bolton Road was "available, suitable and viable and as such they are not satisfied that the site is not sequentially preferable, i.e. capable of taking some of the development proposal at the application site." HPPDM agreed. Policy EC17 of PPS4 specified that unless there was compliance with the sequential approach permission should be refused. Both CBRE and the Head of Planning advised that planning permission should be refused on this ground alone. (5.5.5.iii – vii).
v) They agreed with WYG that the Canalside site was not sequentially available.
vi) If, contrary to the views of CBRE and the HPPDM, the sequential test was satisfied, the Committee would need to move on to consider the impact of the proposal on the town centre. The report continued"PPS4 states that if it is considered that the proposed development would have a significant adverse retail impact the application must be refused. If however it is considered that the impacts would not be significant, the application must be determined taking account of the positive and negative impacts and any other material considerations." (5.6.2)
vii) CBRE considered that WYG had not provided sufficient material in support of their conclusion that the impact on the town centre trade would be "only" 3.4%. They wished to know more about who was likely to take up the smaller units, eight in number, in the proposed development in addition to Marks & Spencer and Next in the flagship stores. They accepted that "comparison" shopping trips were likely to be diverted to Banbury from other towns (that is shopping by going in and out of a number of different shops looking for a particular type of item) and also that the new flagship stores would be a draw. Nonetheless, CBRE thought that the impact on the town centre had been underestimated. (5.6.3 and 5.6.4)
viii) CBRE agreed that the most significant diversions of trade would come from out of centre locations so there would be no immediate significant impact upon the overall vitality and viability of the town centre. They were concerned about the long term future of the Marks & Spencer and Next stores in the town centre. Next had committed to the town centre until the expiry of its current lease, in 2016 and Marks & Spencer had provided a letter of comfort stating that they would remain in the town centre. But there was no formal obligation upon either to remain there. CBRE was concerned that because the flagship store (designed to cover the entire range of Marks & Spencer stock) would include a food hall, that would discourage trips to the centre of Banbury. (5.6.5)
ix) CBRE and WYG disagreed about the impact of the proposal on future plans to develop the Bolton Road area of Banbury, because the long term aim is to attract large retail units there, to complement smaller units. CBRE was concerned about investor confidence in the town centre, particularly if the future of Marks & Spencer and Next was uncertain. Overall, CBRE considered that there was "a strong possibility that the proposal will hinder the delivery of the scheme at Bolton Road" (5.6.6)
x) CBRE stated that no account had been taken of job losses in the town centre, but recognised that the overall impact of the proposal would be likely to increase employment in Banbury. (5.7)
"5.5.8 Conclusion on Sequential Assessment and Town Centre Impacts
5.5.8.i The proposed development does not accord with Policy EC17 of PPS4 as WYG has not demonstrated compliance with the requirements of the sequential approach for the following reasons:
- There is no convincing argument that some of the A1 units could not be disaggregated
- Banbury's market share does not need to be urgently improved therefore the Bolton Road site must be considered as an available site
- The Bolton Road site is sequentially preferable and could accommodate some larger A1 units alongside a convenience goods retail offer
[HPPDM] agrees with these conclusions and therefore, based on the advice in accordance with Policy EC17, planning permission should be refused solely on these grounds.
5.5.8.ii Notwithstanding the above conclusions, the proposal would have significant impacts upon the town centre as set out below:
- Banbury Gateway would exist as a standalone destination due to the presence of A3 units and a food hall therefore discouraging linked trips to the town centre
- Even is M&S and Next agree to retain a presence in the town centre this could only be secured over a short time period. Their loss would reduce investor confidence in the town centre
- The proposal would hinder the delivery of the Bolton Road site thereby negatively impacting upon planned investment
[HPPDM] considers that these impacts would be significant and as such the application does not accord with policy EC16 and PPS4."
"As the application is recommended for refusal a s106 agreement is not required. If the recommendation is not accepted however, an agreement would be needed to secure the highway infrastructure contributions, security CCTV, public art a shuttle bus, the retention of M&S in the town centre and the retention of Prodrive in Banbury."
"For the reasons given the application is considered to be unacceptable in planning terms as it does not demonstrate compliance with the sequential approach and would have significant impacts upon Banbury Town Centre and planned investment, furthermore the application is considered to be unacceptable by virtue of its design and layout. However, members are reminded of the context of the application as set out in para 5.1 of this report which is that Prodrive wish to move to the Hella site. This is clearly a finely balanced judgement however the recommendation is one of refusal for the reasons set out below."
Those draft reasons for refusal clothed these conclusions in the language of planning policies.
"… approval subject to further conditions delegated to officers in consultation with the Chairman based on a balanced view that the application meets the requirements of the sequential approach laid out in PPS4…"
The councillor who moved the motion methodically went through both the sequential test and town centre impact in his observations.
"The Council, as local planning authority, has determined this application in accordance with the development plan unless material considerations indicated otherwise. The development represents investment in Banbury which is considered to be economically important and is acceptable on its planning merits. It would not result in an unacceptable loss of existing employment land, would protect the vitality and viability of Banbury Town Centre and would not result in unacceptable transport impact or be a risk to highway safety. The development is considered to be acceptable in terms of its landscape impact, design and layout and its subsequent impact upon residential, visual and public amenity and would not result in causing harm to the existing public right of way which crosses the site, public safety, biodiversity, ecology, trees, air quality or archaeology. Furthermore, the development would not be at risk from land contamination or significantly contribute to flood risk or climate change. As such the proposal is in accordance with  Policies … of the South East Plan 2009,  Policies … of the Cherwell Local Plan and Government guidance contained within the National Planning Policy Framework. For the reasons given above and having regard to all other matters raised including third party representations, the Council considers that the application should be approved and planning permission granted subject to appropriate conditions, set out above."
The Notice of Decision had recited the details of those conditions and the section 106 agreement. There is no reference in these summary reasons to PPS4. That is because it had been superseded by NPPF, which was referred to, shortly after the meeting of the Planning Committee in March 2012.
"Members accepted the retail sequential and impact tests that were carried out in association with the development and did not consider that it would have an impact upon existing and planned town centre investment and would encourage linked trips to the centre via the proposed shuttle bus. Members therefore concluded that the development would not have an impact upon the vitality and viability of Banbury Town Centre which accords with guidance on ensuring the vitality of town centres contained within the NPPF."
HPPDM (to whom delegated authority had been given) advised that it was still appropriate to seek a section 106 agreement with the developer, to which both Cherwell District Council and Oxfordshire County Council would be party.
Grounds 1 and 2: The Sequential Test/Disaggregation; The Impact Test
"24. I turn then to the question whether the respondents misconstrued the policies in question in the present case. As I have explained, the appellants' primary contention is that the word "suitable"…[means] "suitable for meeting identified deficiencies in retail provision in the area", whereas the respondents proceeded on the basis of the construction placed upon the word by the Director of City Development, namely "suitable for the development proposed by the applicant". I accept, subject to a qualification which I shall shortly explain, that the Director and the respondents proceeded on the latter basis. Subject to that qualification, it appears to me that they were correct to do so, for the following reasons.
25. First, that interpretation appears to me to be the natural reading of the policies in question. … Read short, Retailing Policy 4 of the structure plan states that proposals for new or expanded out of centre retail developments will only be acceptable where it can be established that a number of criteria are satisfied, the first of which is that "no suitable site is available" in a sequentially preferable location. Policy 45 of the local plan is expressed in slightly different language, but it was not suggested that the differences were of any significance in the present context. The natural reading of each policy is that the word "suitable", in the first criterion, refers to the suitability of sites for the proposed development: it is the proposed development which will only be acceptable at an out of centre location if no suitable site is available more centrally. That first reason for accepting the respondents' interpretation of the policy does not permit of further elaboration.
26. Secondly, the interpretation favoured by the appellants appears to me to conflate the first and third criteria of the policies in question. The first criterion concerns the availability of a "suitable" site in a sequentially preferable location. The third criterion is that the proposal would address a deficiency in shopping provision which cannot be met in a sequentially preferable location. If "suitable" meant "suitable for meeting identified deficiencies in retail provision", as the appellants contend, then there would be no distinction between those two criteria, and no purpose in their both being included.
27. Thirdly, since it is apparent from the structure and local plans that the policies in question were intended to implement the guidance given in NPPG 8 in relation to the sequential approach, that guidance forms part of the relevant context to which regard can be had when interpreting the policies. The material parts of the guidance are set out in para 6 above. They provide further support for the respondents' interpretation of the policies. Paragraph 13 refers to the need to identify sites which can meet the requirements of developers and retailers, and to the scope for accommodating the proposed development. Paragraph 14 advises planning authorities to assist the private sector in identifying sites which could be suitable for the proposed use. Throughout the relevant section of the guidance, the focus is upon the availability of sites which might accommodate the proposed development and the requirements of the developer, rather than upon addressing an identified deficiency in shopping provision. The latter is of course also relevant to retailing policy, but it is not the issue with which the specific question of the suitability of sites is concerned.
28. I said earlier that it was necessary to qualify the statement that the Director and the respondents proceeded, and were correct to proceed, on the basis that "suitable" meant "suitable for the development proposed by the applicant". As paragraph 13 of NPPG 8 makes clear, the application of the sequential approach requires flexibility and realism from developers and retailers as well as planning authorities. The need for flexibility and realism reflects an inbuilt difficulty about the sequential approach. On the one hand, the policy could be defeated by developers' and retailers' taking an inflexible approach to their requirements. On the other hand, as Sedley J remarked in R v Teesside Development Corporation, Ex p William Morrison Supermarket plc and Redcar and Cleveland BC  JPL 23, 43, to refuse an out-of-centre planning consent on the ground that an admittedly smaller site is available within the town centre may be to take an entirely inappropriate business decision on behalf of the developer. The guidance seeks to address this problem. It advises that developers and retailers should have regard to the circumstances of the particular town centre when preparing their proposals, as regards the format, design and scale of the development. As part of such an approach, they are expected to consider the scope for accommodating the proposed development in a different built form, and where appropriate adjusting or sub-dividing large proposals, in order that their scale may fit better with existing development in the town centre. The guidance also advises that planning authorities should be responsive to the needs of retailers. Where development proposals in out-of-centre locations fall outside the development plan framework, developers are expected to demonstrate that town centre and edge-of-centre options have been thoroughly assessed. That advice is not repeated in the structure plan or the local plan, but the same approach must be implicit: otherwise, the policies would in practice be inoperable."
"If, however, officers are content that the sequential approach has been satisfied and the adverse impacts will not be significant, the positive and adverse impacts of the scheme will need to be weighed against one another."
"the development would have a significant impact on Banbury due to the establishment of a stand alone site that would not encourage linked trips and the high probability that the anchor store of M&S and Next in the town centre would not remain in the medium term."
Ground 3: The Reasons Challenge
"When considering the adequacy of summary reasons for a grant of planning permission, it is necessary to have regard to the surrounding circumstances, precisely because the reasons are an attempt to summarise the outcome of what has been a more extensive decision making process. For example, a fuller summary of the reasons for granting planning permission may well be necessary where the members have granted planning permission contrary to an officer's recommendation. In those circumstances, a member of the public with an interest in challenging the lawfulness of planning permission will not necessarily be able to ascertain from the officer's report whether, in granting the planning permission, the members correctly interpreted the local policies and took all relevant matters into account and disregarded irrelevant matters." (emphasis added)
The learned Lord Justice went on to draw the contrast with cases in which the members had endorsed the reasoning contained within the report.
i) The statutory obligation does not extend to giving reasons for rejecting objections that had been raised to the grant of planning permission;
ii) There is no obligation to give reasons for reasons.
Ground 4: The Section 106 Agreement
"be approved subject to a legal agreement and appropriate conditions and that authority be delegated to [HPPDM], in consultation with the Chairman, to negotiate the legal agreement and conditions."
"I believe you are aware that we have an Agreement with the developers LXB whereby post approval of Banbury Gate, we will be required to sell the existing site to LXB and re-invest the funds in acquiring and refurbishing the former Hella premises from LXB thus satisfying our growth requirements for the business in Banbury.
To make this very clear, and so there is no misunderstanding, we are contracted to buy the Hella site, which will then become the new headquarters for Prodrive. Should the Council require further comfort, I wanted you to know that Prodrive would be prepared to enter into a unilateral undertaking confirming our commitment to remain an integral part of the fabric of Banbury, the detail of which can be documented post Planning Committee decision."
That unilateral undertaking was reoffered before the meeting of the Planning Committee. It was not mentioned in the report. A representative of Prodrive spoke at the meeting and expressed his disappointment at its absence from the report and stated publicly that Prodrive would be prepared to be bound by a section 106 agreement.