England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		20 December 2013

Mr Justice Collins :

1. These three claims were heard together pursuant to an order of Foskett J of 25 September 2013. Each seeks to set aside a decision of the defendant to refuse their claims for exemptions from the amendment of the Town and Country Planning (General Permitted Development) Order 1995 (the GPDO) effected by the Town and Country Planning (General Permitted Development)(Amendment)(England) Order 2013 (the Amendment Order). The material provision in the Amendment Order was to add to permitted developments, that is to say developments which did not require a grant of planning permission, the following:-

"J. Development consisting of a change of use of a building and any land within its curtilage to a use falling within Class C3 (dwelling houses) of the Schedule to the Use Classes Order from a use falling within Class B1(a)(offices) of that Schedule."

2. Foskett J ordered that there should be a 'rolled up' hearing, namely that the judge dealing with the claims should consider whether permission to seek judicial review should be granted and, if he decided that it should, he should deal with the substantive claim. I decided that permission should be granted since the claims seemed to me to be arguable. Mr Swift, Q.C., did not dissent from this. The claimants undertook to pay the appropriate fee and so I have dealt with these claims on their merits.
3. The Amendment Order was laid before Parliament on 9 May 2013 and came into force on 30 May 2013. No challenge has been made to it and so the ability to change use from office to dwelling house must now be accepted. The claims that are made result from the failure to grant exemptions to claimed areas within the respective boroughs. If exemptions had been granted, they would have been included in the GPDO under Part 4 Article 1(6A) which specified areas within various applicant local planning authorities which succeeded in obtaining exemptions so that the relevant permitted development provisions would not apply in those areas. Each of the claimants is a local planning authority ('LPA').
4. In April 2011 the defendant produced a document which was headed:-

"Relaxation of planning rules for change of use from commercial to residential.

Consultation"

This document reflected the government's commitment to supporting economic growth and to drive an increase in the supply of land for housing. It indicated a desire to change from commercial to residential use without the need for planning permission. It was said that the changes proposed would 'offer an opportunity to contribute to reducing [the shortage of land available for residential accommodation] by recognising the scope for allowing as permitted development the change from commercial to residential'. It continued in Paragraph 4:-

"The proposals will also promote regeneration of commercial land and help bring empty commercial buildings back into productive use."

5. The relevant proposal on which consultation was sought was the change of use from "Commercial (B use classes) to residential (C3 use classes)." In Paragraph 12, it was said that the government wanted to "encourage economic growth by encouraging development to bring redundant commercial premises back into use and at the same time help tackle the need for more housing." The benefits which it was said would result included the encouragement of "developers to bring forward more housing proposals and make better use of buildings that are no longer needed and/or unsuitable for their original purpose." (Paragraph 24).
6. Article 4 of the GPDO permits a LPA to make an order restricting permitted developments, but such an order carries with it a right to possible compensation if an application for planning permission for development which would have been permitted development is refused or granted subject to conditions. Section 189 of the Planning Act 2008 introduced provisions whereby any such compensation would be payable only if the application for planning permission was made within 12 months of the direction under Article 4 coming into force. It also provided that if a LPA gave at least 12 months notice in advance of the withdrawal of the permitted development right, compensation would not be payable. It was said that the government was minded not to apply the provisions of section 189. In the result, section 189 does apply pursuant to the Town and Country Planning (Compensation)(England) Regulations 2013 (the Compensation Regulations). The attack on the inclusion of the material permitted development in the Compensation Regulations is said to be 'dependent and consequential upon the success of the application to quash the Amendment Order.' Since the only result of success might be the exemption of some or all of the material areas of the boroughs from development which would be permitted within Class J, it is impossible to see why the Compensation Order should be challenged. It would not apply if an exemption was granted since any development within that area would not be permitted and so could not fall within Article 4.
7. In July 2012 the defendant published his response to the April 2011 consultation. The decision then made was not to amend the GPDO but to rely on a new policy in the National Planning Policy Framework (NPPF) that LPAs should:-

"…normally approve planning applications for change to residential use and any associated development from commercial buildings (currently in the B use classes) where there is an identified need for additional housing in that area, provided that there are not strong economic reasons why such development would be inappropriate."

Paragraphs 35 and 36 identify the reasons behind this decision. They read:-

"35. The consultation paper recognised that any permitted development right would need to be tailored to ensure that it did not give rise to unintended consequences and that it would be possible to build in effective mitigation provisions. This view was supported by the responses to the consultation, particularly in relation to the need to ensure that local employment needs continue to be met and that housing would be appropriate to its location.

36. We believe that a strong, national planning policy will achieve the Government's aims of delivering more housing and encouraging the reuse of empty buildings while giving local authorities and their communities the opportunity to influence development in their area and take account of local circumstances. We will keep the impact of this policy under review to ensure that it is effective."

8. The defendant changed his mind and on 6 September 2012 he made a statement to Parliament. The statement is lengthy and lays emphasis on the need to reduce red tape and to enable new homes to be produced. Under the heading 'getting empty offices into use' this is said:-

"We have already undertaken a series of measures to make change of use easier, to help get empty buildings back into productive use.

We will introduce permitted development rights to enable change of use from commercial to residential purposes, while providing the opportunity for authorities to seek a local exemption where they believe there will be an adverse economic impact. This common sense measure will help the regeneration of our towns and cities. Our high streets will benefit from a greater resident population, increasing footfall and supporting local shops.

This package of measures will ensure that the reforms which we have made to the planning system are implemented as effectively as possible, and that the planning system plays as full a role as possible in supporting local jobs and local firms. "

It was apparent from what was said that LPAs would be able to avoid the new proposed permitted development if they could establish that there would be an adverse economic impact. The July response also referred to there being 'strong economic reasons why such development would be inappropriate.'

9. The reference to the NPPF was to paragraph 51 which requires LPAs to 'identify and bring back into residential use empty housing and buildings in line with local housing and empty homes strategies and, where appropriate, acquire properties under compulsory purchase powers'. It then reads as quoted above from the July document. It is to be noted that the policy appeared to be aimed at empty offices or at least underused buildings.
10. On 24 January 2013 Mr Quartermain, the chief planner in the Department, wrote to all chief planning officers to alert them to the forthcoming permitted development rights for a change of use from B1(a) office to C3 residential purposes which would come into force in Spring 2013. The new rights would be 'time-limited for a period of 3 years.' The letter informed its recipients of the opportunity to seek an exemption for specific parts of their localities. It read:-

"Alongside the new permitted development rights it was announced that local authorities would be given an opportunity to seek an exemption for specific parts of their locality. If you consider that a specific part of your locality should be exempted from this change, and meets the criteria set out below, you now have an opportunity to request an exemption from these new rights. It should be recognised however that this measure is seen as an important contribution to assisting the economic well-being of the country and this is reflected in the high thresholds we are setting, which recognise that any loss of commercial premises will be accompanied by benefits in terms of new housing units, additional construction output and jobs. These benefits are potentially very substantial and are likely to be felt at the local authority level and wider.

Therefore, exemptions will only be granted in exceptional circumstances, where local authorities demonstrate clearly that the introduction of these new permitted development rights in a particular area will lead to:

A. the loss of a nationally significant area of economic activity.

B. Substantial adverse economic consequences at the local authority level which are not offset by the positive benefits the new rights would bring.

If you propose to request an exemption it must relate only to the geographical area justifiable in the light of the above criteria.

More detailed requirements and an explanation of the assessment process are set out in Category B."

Any submission must, it was said, reach the department by 5 pm on Friday 22 February 2013.

11. Category A I need not consider in detail. All claimants bar Richmond applied to exempt the areas of the Central Activities Zone which extended into their boroughs. These were all allowed, largely as a result of the submissions made by the City of London and the Mayor of London. Camden submitted one other area under Category A, namely Camden Town, but that failed to achieve the necessary positive marks by a considerable margin. Category A concerns the loss of a nationally significant area of economic activity. As will, I think, become apparent, the complaints about the process of applying for exemptions would not avail Camden in that it was not disabled from producing a stronger case to establish that the area was nationally as opposed to locally significant. Category B was relied on in the alternative.
12. Category B indicated what would be considered in assessing requests for exemption. There were four considerations, namely:-

1. The scale of the impact in absolute terms.

2. The significance of the adverse impact at the level of the local authority or wider.

3. The degree to which there is likely to be a strategic and long-term adverse economic impact.

4. Whether the proposed area of exemption is the smallest area necessary to address the potential adverse economic impact.

13. This was then said:-

"Local authorities must provide a detailed description of the adverse impact they anticipate, and demonstrate clearly both how the introduction of these permitted development rights will lead to that impact, and why the particular area should be exempted. A clear explanation must be given of how any additional evidence supports this case.

The benefits which the policy will deliver have been taken into account in setting a high threshold for exemptions, and will not be assessed separately. Local authorities are therefore not required to submit information on this."

The defendant relies on the requirement that there must be a detailed description of any adverse impact and a clear demonstration why the adverse impact would occur and why the particular area identified should be exempted. Since the benefits were assumed, the threshold for exemption was set at a high level. The information to be submitted must include a map of a given scale clearly identifying the area and 'a report which specifically addresses the anticipated impact and the above four assessment criteria, making reference to supporting evidence where appropriate.' So far as supporting evidence is concerned, this was said:-

"What supporting evidence would be appropriate?

It is a matter for the local authority what evidence they choose to submit in support of their application. The following list is not exhaustive, but matters which may be relevant could include:

evidence on matters such as the makeup of business accommodation in the relevant area, office vacancy rates and employment levels/trends

evidence on local economic development strategies

for (A) evidence relating to the national significance of the economic activity

evidence on the likely immediate impact of the changes, and the likely long-term impact

evidence on the likely impact on local clusters and sources of local employment growth

the view of the Local Enterprise Partnership on whether the loss of business space in a particular locality would have a significant impact on the wider local authority area

Local authorities must clearly demonstrate the way in which the evidence provided supports their arguments on the assessment criteria set out above."

14. There can be no doubt that the letter informed its recipients that they must in order to achieve an exemption demonstrate clearly that an adverse economic impact would be likely to result by reference to supporting evidence. They must show clearly how that evidence supports their submissions and the level of adverse impact required is high. It must have been obvious that exemptions were not likely to be granted unless a very convincing case supported by evidence shown to be reliable and to support the application was submitted.
15. On 24 January 2013 the defendant made a further statement to Parliament. He prefaced this by observing that the government "… want to promote the use of brownfield land to assist regeneration and get empty and under used buildings back into productive use" and this would, he said, help to promote economic growth. The specific amendment to the GPDO with which these claims are concerned would, he said, provide badly needed houses for local people and would make a valuable contribution to easing our national housing shortage. By bringing underused offices back into effective use they would, he said, also help create jobs in the construction and services industries and help regenerate our town centres and former commercial areas and would bring a greater resident population to our high streets increasing footfall and support for local shops. I presume the word 'footfall' simply means that there would be more local people on the high street. As the claimants have stated, the amendment to the GPDO is not limited to underused or empty office premises and the absence of any inclusion of affordable housing will not necessarily benefit local people. Indeed, the Royal Borough of Kensington and Chelsea succeeded in obtaining an exemption for the whole of the borough because the value to landlords of residential as opposed to office accommodation would be likely to result in the buying out of existing office tenancies and the provision of housing accommodation for the wealthy. However, those concerns cannot now be raised since they would go (if at all) to the lawfulness of the amendment which cannot be attacked.
16. The Department received 61 applications under Category A and 1325 under Category B. Consideration had been given during February to the best way of dealing with all applications and it was decided to engage consultants. Ove Arup was instructed. According to the evidence from the present director of planning great care was taken to ensure that the numerous applications were dealt with in a fair and consistent way. Each application was assessed using the same criteria on its own merits. It was decided by the Department that an equal weighting should be applied to the strength of the case for exemption and the robustness of the evidence in support. Thus the assertions made by an applicant had to be clearly supported by referenced and submitted evidence. For each of the four criteria referred to in Paragraph 12 above there were to be five points for strength of the case, and five for robustness of evidence. Thus a total of 40 would be the maximum.
17. The threshold for success was to be high, reflecting the defendant's announcement and the letter of 24 January 2013. It was decided that it should be set at 28 out of 40 for Category A and 36 for Annex B. Thus there had to be full marks for at least two of the four criteria in any Category B application for it to succeed. The appropriate threshold was a matter for the judgment of the defendant and it cannot in my view be challenged. It has been suggested that the distinction between A and B was unjustified, but the reason which led to this distinction was the greater difficulty that any applicant would face in establishing national as opposed to local economic damage caused by the proposed amendment. I do not think that the thresholds chosen can be regarded as unlawful.
18. All claimants contend that the failure to inform them of the way in which their applications would be assessed was unfair and so unlawful. It is submitted that the Department should have settled in advance how it would approach the assessments and should in particular have told applicants of the decision to award marks for robustness of evidence separately from the strength of the application so that a meritorious application could be marked down if the evidence was regarded as insufficiently robust. That could and in some cases did mean that a failure to cross reference to evidence including relevant planning policies led to a mark down. It is also said by the claimants that there was no reference to any need to refer to planning policies. Each claimant says that if it had realised the need to do so, it could easily have included the material cross-references and could have geared its submissions to focus on the matters which were regarded by the assessor as important.
19. It is further submitted that once the Department decided with Ove Arup what the criteria for assessing applications would be, it should have informed all applicants so that, if necessary, they could supplement their applications to try to meet those criteria. The failure to do so was for the same reason as the failure to notify in advance unfair.
20. In addition it is submitted that insufficient time was given for the submission of applications. To allow only four weeks following a lengthy consultation and a delay of over 4 months between the decision announced in September 2012 and the 24 January 2013 letter was unreasonable and so unfair. If more time had been available, the claimants all assert that they could have obtained more and cogent evidence. For example, as is said in evidence produced on behalf of Islington, an assessment could have been made of the likely volume of office leases which would expire in the three years of the order. That exercise had in fact been carried out by the City of London. Case studies could have been carried out with small businesses occupying offices to judge the likely extent of loss of office space and so the impact, including employment loses. These were but examples.
21. By letters of 10 May 2013, the claimants were notified of the decisions made on their applications. All Category A applications based on the CAZ were allowed but all others were rejected. Thus in due course the 2013 Amendment Order provided in Paragraph J.1(a) that development was not permitted if the building was on Article 1(6A) land. This specified all land in respect of which exemptions had been allowed. In addition, a building had to have been used for Class B1(a)(Offices) use immediately before 30 May 2013 or, if not in use immediately before that date, its last use must have been within Class B1(a)(Offices). If a permitted change is to be made, Paragraph J.2 requires the obtaining of approval of the authority as to transport and highways impacts, contamination risks on the site and flooding risks on the site and a formal application has to be made to the authority. The J.2 requirements are not likely to result in many possibilities of refusal within the claimants' areas.
22. The 10 May 2013 letters gave the scores achieved and included a table which set out what were said to be full details of the scores. This table was useless since it did not indicate more than the score achieved and failed to indicate the reasons for such score. It was not until the response of the Department to the pre-action protocol letters was given by the Treasury Solicitor in July 2013 that the score guide and the individual scores with reasons set out in applying the guide were produced. The failure to give that information earlier cannot be justified, but a ground of challenge raised in the claims that the reasons were inadequate has not been pursued. It is therefore unnecessary to consider the detailed reasons given in each case to see whether they are so inadequate in any particular instance so as to be unlawful.
23. The system adopted in agreement with Ove Arup was that each of the five criteria should receive marks from 1 to 5 for both strength of case and robustness of evidence. In descending order of marks, the award was for clear and detailed demonstration, good demonstration, some demonstration, weak demonstration and no demonstration of the strength of case. Similar approaches were applied for robustness of evidence and the pro forma specifically referred to the need for cross referencing and evidence clearly justifying the contentions made.
24. The defendant contends that the claimants should have been aware from 6 September 2012 what was to come and so should have begun to prepare their cases for any exemption in good time. Thus the four week time allowed was, it is submitted, adequate. No application was made for an extension and it is to be noted that 30 of the 33 London Boroughs were among over 1300 applicants. No other complaints have been made and other LPAs were able to put forward all that they needed to put forward in the time allowed. Lambeth in addition complains that its failure to appreciate, due to lack of information, the relevance of the provision of affordable housing led it to waste time which it could otherwise have spent on producing more detail to support its application. That complaint has no substance since it was clear that the only relevant consideration was an adverse economic impact. I am not persuaded that the time given was in all the circumstances inadequate and it certainly was not such as was unlawful.
25. In considering what in the circumstances of a particular case is required for the process leading to the decision to be fair has been considered in a number of cases. It is not in my view necessary to refer to other than observations of Lord Mustill in R v Secretary of State for the Home Department ex parte Doody [1994] 1 AC531 at p.580. These have been relied on and applied in many subsequent cases. What fairness requires will depend on the context of the decision. He sets out 6 separate headings and it is only necessary to set out in detail numbers 5 and 6. These read:-

"(5) Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to procuring a favourable result or after it is taken with a view to procuring its modification, or both

(6) Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interest fairness will very often require that he is informed of the gist of the case which he has to answer."

26. As Lord Mustill said, the standards of fairness are not immutable. Mr Swift submitted that the claimants should not be in the same category as individuals who are directly affected by decisions. But if they can show an adverse economic impact resulting from a particular decision, I see no reason in principle why what is to be regarded as fair should necessarily be diluted. Reliance is placed by the claimants on the need for them to be informed at least of the gist of the matters with which they must deal and the way in which their applications should be put in order to be effective.
27. I have been concerned at the decision to give separate consideration of and marks to the substance of the evidence. If an adverse economic impact in a particular area is accepted to have been demonstrated, it is difficult to see that any deficiencies in the evidence produced to demonstrate that adverse impact should be regarded as justifying a mark down. What is material is the established adverse effect since it is that which should result in exemption. I can understand the possibility that the evidence produced meets all necessary requirements to score full marks but does not demonstrate to the same standard the claimed adverse impact. Thus for example if 5 were awarded for the robustness of the evidence but only 4 for the strength of the case, this would only result in a one mark loss and so on one view indicates a 4.5 out of 5. But I do not think it is appropriate to mark the other way round, namely a deduction for robustness of evidence from a higher mark for strength of case. There are a few examples of this (for example, in Islington's application 5 is given under the first criterion for strength of case but 4 for robustness of evidence) but in no case is the overall total brought to the 36 marks required.
28. I am not persuaded by the claimants that they could not have been expected to be aware of the relevance of planning policies or of the loss of business rates. If, as will have been the case in relation to many policies, they have been put in place to produce inter alia positive economic benefits, the loss of business rates is clearly an adverse economic impact. It was made clear in the 24 January 2013 letter that it was for the applicant to establish its case and to decide on the material it should present and the manner in which it should be presented. That the threshold was to be set at a high level was equally made clear.
29. I have no doubt that it would have been sensible for the defendant to have worked out in advance how applications were to be assessed and to have given that information to the LPAs. Hindsight is often a powerful force. But failure to do what is best is not to be equated to unfairness justifying a decision that what was done was unlawful. While the detail of the way in which the assessment would be undertaken was not provided, the 24 January 2013 letter coupled with the defendant's statement of 6 September 2012 gave sufficient information to enable all applicants to appreciate what had to be established to obtain an exemption and the need to provide clear and cogent evidence to justify the grant of an exemption. An obligation to demonstrate by means of specific references how the evidence produced supported the application was implicit and any applicant should have appreciated that. Indeed, Category B referred explicitly to the need to make reference to supporting evidence where appropriate.
30. It follows that having regard to the context I am not persuaded that there was unfairness in either of the ways argued by the claimants. I can well understand the concerns which led to these claims and it may well be that in parts of the claimant boroughs the benefits which it is believed will accrue from the amendment to the GPDO will not result. The lack of any requirement for affordable housing is worrying. However, those are not matters which can lead to the grant of relief on the claimed basis of unfairness in the process for seeking exemptions.
31. Mr Reed on behalf of Lambeth argued in addition that there was defective consultation in that the engagement on the exemption process from January 2013 constituted a further consultation stage. In his argument, he refined this to submit that there should have been consultation on the criteria for exemption. The consultation had come to an end when the defendant decided to make the amendments to the GPDO. The criteria were set out in the 24 January 2013 letter. They flowed from consideration of the responses to the April 2011 consultation. Mr Reed's submission in reality went to unfairness in the failure to indicate the details of how applications would be assessed. It is unarguable that there was any consultation still needed. I reject that ground.
32. I have of course considered the details put forward in the extensive documentation produced but for reasons which I hope are clear I have not considered it necessary to set out the individual matters raised by and dealt with in the applications made by each claimant. As I have said, there is no challenge now to the adequacy of reasons and it therefore must be accepted (subject to the strength and substance point I have dealt in Paragraph 28 above) that the marks given cannot be impugned.
33. It follows that in the circumstances these claims must be dismissed.