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
		15/09/2016

Mrs Justice Patterson:

1. This is a renewed application for permission to apply for judicial review of the Defendant Council's decision to agree to the proposed variation of the 99 year lease with the Coin Street Community Builders Limited ("CSCB") over land on the south Bank of the River Thames, to enable CSCB to sub-let land to the Garden Bridge Trust ("GBT") and for part of the land to be used for the construction of a landing station for the Garden Bridge project. The Council has already granted planning permission for the Garden Bridge project.
2. The Claimant is a local resident and objector to the Garden Bridge project. She is also a member of an action group against the project, called Thames Central Open Spaces ("TCOS").
3. Ouseley J refused permission on the papers by order dated 1 August 2016. His reasons were as follows:

"The claim is unarguable for the reasons given in the AoSs.

1. The claim is not brought promptly in relation to either the true focus of challenge, which is the decision of March 2016, nor the asserted focus of challenge, the OSC decision of 21 April 2016. No reason for an extension of time is shown. There was no surprise in the decision; the Claimant and her supporters were well able to move much more quickly.

2. There was no disposal nor any by the Council. No advertisement was required. The effect on open space was clearly considered so far as necessary for this purpose, but the attack seems to be very much the misguided one that the balance struck in the planning permission should have been reconsidered. If the land was not controlled or managed by the Council, the Order would not apply anyway, but the Council had other powers on which it could rely. If it did apply, it amply empowers the lease variation. The decision was plainly within the Councillor's powers, because the scheme of delegation had changed to make it expressly so, but there was sufficient breadth in them anyway. If there were any error, the outcome would not have been different.

3. The ACV point is misconceived. If the mechanism is triggered, it will have to be considered. The points made in the report are all correct; there is no fetter.

4. The asserted improper commercial purpose, which required the involvement of a company to be lawful is misconceived. The arrangement to share the income does not make the purpose of the lease variation predominantly commercial.

5. The reasons are plainly adequate.

6. There is no prospect that the decision would have been different but for the errors, if errors they be."

4. The Claimant renewed her application for permission on 8 August 2016. At the request of the parties, Cranston J ordered, on 1 September 2016, that the renewal application should be listed as a rolled-up hearing, so that if permission were granted the substantive hearing would immediately follow. As a result I have had the benefit of full skeleton arguments from the Claimant, the Defendant and GBT, witness statements, and a full bundle of relevant documents, all of which I was able to read in advance of the hearing.
5. Despite the skilful submissions of Mr Laurence QC and Mr Stedman Jones on behalf of the Claimant, over a period of two and a half hours, I am satisfied that the Claimant does not have an arguable claim for judicial review, and accordingly I refuse permission for the reasons I now give.

Delay

6. I agree with Ouseley J that the claim was not made promptly as required by CPR 54.1A as it was made three months after the grounds to make the claim first arose, which date was 24 March 2016, not 21 April 2016 as pleaded in the claim form. The claim was issued on 24 June 2016. The Council's decision to agree to the proposed variation of the lease between the Council and CSCB was made on 24 March 2016 by a delegated decision of the cabinet member for jobs and growth. Three Councillors then applied for the delegated decision to be called in. It was considered on 21 April by the Council's Oversight and Scrutiny Committee. The Committee decided that there were no grounds to refer the decision back for reconsideration, nor to refer it to the full Council, so the decision of 24 March stood. This was merely a review procedure. The Committee did not have power to reverse the March decision.
7. I do not consider that it was reasonable for the Claimant to delay the issue of the legal challenge until after the call-in procedure was completed. The decision was made on 24 March and the grounds for a legal challenge arise out of that decision, not the later refusal of the call-in application. The explanation for the delay was that the Claimant was focusing on the campaign to persuade the Council to change its mind. I do not consider that this was a good or sufficient reason for delay.
8. Nor do I consider it was reasonable for the Claimant to wait a further two months after the call-in decision before issuing the claim. The explanation for the delay is that she had to obtain legal advice and CFA funding. In my view she could and should have done so sooner, particularly bearing in mind that she was part of a very active action group. Regrettably a pre-action letter was not sent until 24 May, over a month after the call-in decision. It should have been sent earlier. The Defendant then responded on 7 June and the proceedings, as I have said, were issued on 24 June 2016.
9. The Defendant Council has complained that the delay has been prejudicial since the variation of the lease is a precondition for the implementation of the planning permission and the commencement of construction of the bridge. The arrangements for implementing the project are costly and complex and involve a number of different stakeholders, so delay has significant consequences. Planning permission was granted as long as ago as 11 November 2014, and the judicial review challenge to that decision was abandoned on 2 June 2015. Considerable time has already elapsed and if the decision were to be quashed the delay would be even longer.
10. So, in the exercise of my discretion I refuse to grant permission, on grounds of undue delay in making the application and the consequences of that delay, pursuant to section 31(6) of the Senior Courts Act 1981.
11. For the record, both the Claimant and the Defendant agree that, as no European law point arises in this claim, the domestic law requirement to make the claim promptly remains applicable.

Ground 1A

12. Under ground 1A the Claimant alleges that the Council was in breach of a requirement to advertise the proposed decision to agree to the variation of the lease and consider any objections, pursuant to section 123(2A) of the Local Government Act 1972 ("LGA 1972").
13. In my view this ground is unarguable because the duty to advertise under section 123(2A) only arises where a Council disposes of land. The Council has not disposed of land; it has merely agreed in principle to enter negotiations to vary the terms of the existing lease so as to permit sub-letting by a third party which leases land from the Council.
14. The term "dispose of land" is not defined in the LGA 1972. These words should therefore be given their ordinary meaning, and I accept the Defendant's submission that the ordinary meaning is the grant of an interest or estate in land, whether by creating a new interest or transferring an existing interest.
15. This interpretation is consistent with the way those words are defined in regulations referred to in section 123(2AA), which states:

"Subsection (2A) does not apply to a disposal to which the provisions of regulations made under section 1 of the Playing Fields (Community Involvement in Disposal Decisions) (Wales) Measure 2010 apply."

The regulations made under that section, which are the Playing Fields (Community Involvement in Disposal Decisions) (Wales) Regulations 2015 define "dispose" as "To grant any estate or interest in land" (Regulation 2).

16. This interpretation is also consistent with the way in which the word "dispose" and "disposal" is used in subsections (2) and (7) of section 123.
17. The term "disposal" has been defined in other contexts. For example, section 101 of the Leasehold Reform, Housing and Urban Development Act 1993 states:

"'disposal' means a disposal whether by the creation or the transfer of an interest, and includes the surrender of a lease and the grant of an option or right of pre-emption,

...

'interest' includes estate;"

18. In the case of R v Thurrock Borough Council ex parte Blue Circle Industries Plc [1995] Env. LR 307, the court considered whether a variation of a lease and under lease to allow Blue Circle to carry out further waste activity on a site amounted to a disposal for the purposes of section 233 of the Town and Country Planning Act 1990. Glidewell LJ said at 313:

"Would the variation of the covenant to permit the deposit of domestic refuse which was not subjected to high density baling be a 'disposal of land'? ... It is sufficient to consider whether the variation would be a disposal.

The word 'disposal' is defined in section 336 of the Act of 1990 as:

'means disposal by way of sale, exchange or lease, or by way of the creation of any easement, right or privilege, or in any other manner, except by way of appropriation, gift or mortgage, and "dispose of" shall be construed accordingly.'

Mr Harper accepts that the variation of the terms of the covenants would not come within any of the express words of that definition, but he argues that it would be a disposal 'in any other manner'. Mr Beloff counters that a disposal of a right or interest is a transaction which results in the disponer no longer having the right or interest at all. To use Mr Beloff's cryptic phrase, he 'gets rid of it'. I agree that this is the natural and normal meaning of the word 'dispose'. Thus I also agree with Mr Beloff that an agreement to vary a right is not normally a disposal of that right. In this case, assuming that the covenants would create a right over land, the variation in the terms of the covenant would amount to a variation of that right, but the right itself would still remain. Thus in my judgment such a variation would not be a disposal of the right.

I thus agree with MacPherson of Cluny J. that the variation would not be a 'disposal of land'."

Simon Brown LJ agreed in a passage at page 314 and so did Nourse LJ at page 315.

19. The Claimant's proposed redrafting of section 123(2A) to include a requirement to advertise any arrangements which might result in land being disposed of by a third party would be an impermissible extension of the legislation, in my view.

Ground 1B

20. The Claimant has abandoned ground 1B.

Ground 1C

21. The Claimant submits that the Council erred in relying upon the powers in Article 7 of the Ministry for Housing and Local Government Provisional Order (Greater London Parks and Open Spaces) Act 1967 (which enables the Council to provide and maintain open-air facilities for recreation and erect and maintain buildings and structures in connection with this purpose) because the Order only applies where the "open space" in question is "under the control and management of a local authority". The land in issue in this case is not under the control and management of a local authority, as it is controlled and managed by the lessee of the land - the CSCB - under a 99-year lease granted in April 1992, so the Order could not properly be relied upon by the Council.
22. For the purposes of this application, I accept the Claimant's submission. However, the Council made its decision in reliance upon a number of statutory powers. The 1967 Order was only one of them. The decision was lawfully made under section 1 of the Localism Act 2011 ("LA 2011"), which empowers the Council to do anything individuals generally may do. It was also lawfully made under section 111 LGA 1972, which grants the Council power to do anything (whether or not involving the expenditure, borrowing or lending of money, or the acquisition or disposal of any property or rights) which is calculated to facilitate or is conducive or incidental to the discharge of any of its facilities. So, even on the assumption that the Council erred in relying on the 1967 Order, this cannot be a basis for quashing the entire decision, and it would serve no purpose to grant permission on this ground.

Ground 1D

23. The Claimant has abandoned Ground 1D.

Ground 2

24. The Claimant's ground 2, as pleaded in her Statement of Facts and Grounds, was that the Council erred in failing to consider properly the status of the land as an asset of community value. Section 95 LA 2011 provides that the owner of an asset of community value must not enter into a relevant disposal of the land unless he has notified the local authority of his intention and no community interest group has requested to be treated as a bidder for the asset during the moratorium periods.
25. In my view, the Council correctly set out the position in relation to the ACV status in the officer's report, which read as follows:

"4.6 On 27 May 2015, the land at Queens Walk and associated public open space was listed as an Asset of Community Value (ACV) by the Council in their capacity as administrators of the ACV regime, which came into force under the Localism Act 2011. The proposed South Landing Station is within the land now currently listed as an ACV.

4.7 In the event there is any relevant disposal within the Section 96 of the Localism Act 2011 (the 'Act') the Council will receive notice, and the appropriate officer will need to determine what, if any, action the Council is required to take under Section 95(1) of the Act.

4.8 There is no impact on the ACV whether or not there was a surrender and re-grant or variation to the lease. CSCB is a community interest group as defined by regulation 13 of the Asset of Community Value Regulations 2012. The Council cannot force CSCB to surrender its lease, in order that the Council could grant it to a third party, CSCB's agreement to any variation, surrender and re-grant would be required to enable it to do so."

26. I agree with the Defendant's submission that the officer's report was not saying that the ACV provisions would be ignored; rather it was saying that, if there was a disposal by CSCB, they would be triggered, but whether they were triggered depended on what CSCB did and that would be a matter for CSCB.
27. I also agree with the Defendant's submission that the Council has not fettered its discretion as to what may happen if notification of the disposal under the 2011 Act is provided by the owner of the land, for this purpose CSCB. Paragraph 4.7 of the officer's report specifically states that at that point in time the appropriate officer will need to determine what, if any, action the Council is required to take.
28. In her renewal application, the Claimant has not pursued the pleaded ground 2. Instead, an alternative ground 2 was presented for the first time in the skeleton argument dated 12 September. It was not pleaded in the renewal application dated 8 August, and there was no application to amend the Statement of Facts and Grounds before the court. The Defendant was only notified of the new ground on 7 September, a week ago. Normally this would be unacceptable. However, the Defendant has prepared its response and I consider that in this contentious and urgent case it is in everyone's interests for the new points made to be dealt with and dealt with now. Therefore I give the Claimant permission to amend the Statement of Grounds to add paragraphs 31 to 36 of her skeleton argument and make any consequential amendments.
29. The Claimant submits that the Council has committed itself in principle to entering an arrangement whereby upon completion of the deed of variation CSCB will simultaneously grant a sub-lease to GBT, and so there will be no opportunity for CSCB to give a valid notice pursuant to section 95(2) of the 2011 Act. In my view, this point is unarguable. Despite the views expressed in the draft Heads of Terms, I do not consider that there is any legal impediment to CSCB giving notification of an intention to dispose of an interest prior to variation of the lease and prior to grant of any sub-lease. I agree with the submissions of the Defendant and GBT on this point.
30. But in any event, regulation 13 of the Assets of Community Value Regulations 2012 applies. It provides:

"(1) Where the responsible authority receives notice under section 95(2) of the Act in relation to any listed land, an owner of the land may enter into a relevant disposal of any of that land to a community interest group ... at any time in the eighteen months beginning with the date of receipt of the notice."

This is the one type of disposal which may be made during a moratorium period.

A "community interest group" is defined in regulations 12 and 5 of the 2012 Regulations. It is beyond argument that both CSCB and GBT fall within the definition of a "community interest group". In particular, GBT is a registered charity and it has a local connection with the land as its activities are wholly or partly concerned with the local authority's area (see regulation 4(a)).

31. The Claimant now seeks to challenge the lawfulness of regulation 13, arguing that it is ultra vires. However, I am satisfied that regulation 13 comes within the scope of the enabling provision, which is section 95(5)(j) of the 2011 Act, which provides that the bar on a disposal during the moratorium period in subsection 1 does not apply "in cases of a description specified in regulations made by the appropriate authority."
32. The 2012 Regulations were made by the Secretary of State. They give community interest groups a preferential status in bidding for assets of community value at any time without unnecessary delay: see paragraph 7.34 of the explanatory memorandum to the 2012 Regulations. The "Community Right to Bid: non-statutory advice note for local authorities" (DCLG October 2012) includes the disposal to community interest groups in the list of the exemptions in Annex A and refers to this exception in paragraphs 2.13 and 9.6. There is nothing in either the legislation or the guidance which dictates that where regulation 13 applies there should be a competition between different community groups, where one such has already agreed to buy the land.
33. So, in my view there is no legal basis upon which a community interest group which opposes the Garden Bridge project, such as TCOS, can block a disposal to a community interest group which supports the project, although of course it is at liberty to make known any alternative bid. It may have been preferable or fairer if the legislation had made provision for competition, but the absence of such provision does not make the regulation ultra vires.
34. For the reasons I have concluded that ground 2 in both its original form and its new form is unarguable and permission ought not to be given.

Ground 3

35. The Claimant submits that the Council was intending to enter into the variation of the lease for a commercial purpose, and therefore section 4(2) LA 2011 applies and so it had to act through a company, which it has not done.
36. Section 1 of the Localism Act 2011 provides, so far as it material:

"Local authority's general power of competence

(1) A local authority has power to do anything that individuals generally may do.

(2) Subsection (1) applies to things that an individual may do even though they are in nature, extent or otherwise —

(a) unlike anything the authority may do apart from subsection (1), or

(b) unlike anything that other public bodies may do.

...

(4) Where subsection (1) confers power on the authority to do something, it confers power (subject to sections 2 to 4) to do it in any way whatever, including —

...

(b) power to do it for a commercial purpose or otherwise for a charge, or without charge, and

(c) power to do it for, or otherwise than for, the benefit of the authority, its area or persons resident or present in its area."

37. Section 4 LA 2011 provides, so far as is material:

"Limits on doing things for commercial purpose in exercise of general power

(1) The general power confers power on a local authority to do things for a commercial purpose only if they are things which the authority may, in exercise of the general power, do otherwise than for a commercial purpose.

(2) Where, in exercise of the general power, a local authority does things for a commercial purpose, the authority must do them through a company."

38. The explanatory notes to section 4.2 state:

"[Local authorities] must also only trade commercially through a company. These provisions reflect the trading powers in section 95 of the Local Government Act 2003."

39. In this case, the decision was to vary a lease to allow the Garden Bridge project, which is recreational in nature, to proceed in accordance with the planning permission granted. This was not done for a commercial purpose.
40. There may be an opportunity for CSCB to generate additional income beyond its current levels of funding and income from commercial use of the South Landing Building. The Council therefore intends to seek an income-sharing mechanism so that it may receive a share of any surplus income. I do not consider that this can be characterised as the Council trading commercially. Any such income share would be incidental to the Council's primary purposes. The Council will not be operating any commercial activities itself; they will be operated by the GBT and CSCB. Moreover, the Council is not seeking to make a profit. In the officer's report to Council it was stated that, "[a] mechanism for income share is to be included to ensure LB Lambeth's fiduciary obligations are met and adequately served", and "[a]ny income that the Council receives will be invested in the local area".
41. In my view, therefore, ground 3 is unarguable. But even if it was arguable, the Council would still be entitled to rely on the broad powers conferred by section 111 LGA 1972, and so there would be no purpose in granting permission on this ground.

Ground 4

42. The Claimant submits that the reasons given by the Council for its decision were inadequate, in particular in failing to explain adequately how its legal powers enabled it to act in the way it proposed.
43. Although there was no express duty on the Council to give reasons for the variation of a lease, I accept for the purpose of this application that the underlying issue, the Garden Bridge project, attracted a level of public interest and controversy which meant that the public ought to have been informed of the decision and the reasons for it, as indeed they were.
44. Applying the principles set out in the case law cited to me, I consider that the reasons given were sufficient and met the required standard. In particular, I do not agree that the Council was required to give a more detailed analysis of the legal powers upon which it relied. In accordance with usual local authority practice, detailed officers' reports were prepared which adequately explained the action which the Council was taking, the legal basis upon which it proposed to act and the reasons for it. The decisions then taken in March and April were formally minuted. These documents were made available to the public in accordance with the requirements of the Local Government Act 1972. I consider it is important to note that this material was in addition to the wealth of information which had already been provided by the Council about the Garden Bridge project in the context of the application for planning permission.
45. The Claimant has not suffered any prejudice. It is, I consider, fanciful to suggest that the Claimant's lawyers were hindered in pursuing the legal challenge because they could not understand the legal basis of the Council's decision. For these reasons I consider that ground 4 has no prospect of success and is unarguable.
46. That concludes my reasons for refusing permission. As to costs, Ouseley J gave a costs capping order with a limit of £5,000 for the Claimant, but I see that he ordered that the Claimant pay £5,000 in costs towards the Defendant's costs of preparing the acknowledgement of service. So that --

MR SHELDON: My Lady, I am only asking for that to be repeated in your order.

MRS JUSTICE LANG: Confirmed? Yes.

MR SHELDON: Obviously the costs are greater than that, but they are capped at that amount.

MRS JUSTICE LANG: Yes, so they have been used up.

MR SHELDON: Yes.

MR LAURENCE: My Lady, could I just check with my learned friend, when I was looking at the acknowledgement of service in the bundle at tab 2 -- this may not be relevant to the exact costs point, but in tab 3, sorry, Lambeth's acknowledgement of service, I see the form that was used at the bottom of page 30, the first page of the clip is the form of March 2002. My learned friend Mr Tait's clients on the other hand used a form of July 2015. The only difference is that the up-to-date form does contain the question, "The applicant has indicated that this is a claim to which the Aarhus Convention applies", and then at section E in the up-to-date form, "Do you deny that the claim is an Aarhus Convention claim?" I am bound to say I had assumed that Lambeth, like GBT, both did not deny that it was an Aarhus Convention claim but we do not know their answer to that because they did not use the right form and therefore did not fill in the relevant section.

MRS JUSTICE LANG: All I was really seeking to get from you was whether you had anything to say about my proposed order that I confirm Ouseley J's order as to costs.

MR LAURENCE: No, I certainly agree with that my Lady. Could I just take a moment to check in the circumstances, first through your Ladyship, am I right that your Ladyship having refused permission there is no question of me asking for your Ladyship to consider permission to appeal that decision? I have to renew that application in the normal way to the Court of Appeal?

MRS JUSTICE LANG: Yes.

MR LAURENCE: If your Ladyship will just therefore give me a moment --

MR SHELDON: My Lady, while Mr Laurence is discussing with his junior, one other matter is - your judgment is on an application for permission which you have refused. You gave quite detailed reasons and the matter is of broader interest in terms of some of the legal issues.

MRS JUSTICE LANG: So we will get it transcribed.

MR SHELDON: Can I ask for it to be transcribed at my client's expense but also for it to be cited, as in made available to the public, so that it can be cited in future cases? There is a power for that, but I cannot locate it.

MRS JUSTICE LANG: Once a transcript has been approved and issued then it is in the public domain.

MR SHELDON: It is in the public domain, but there are certain cases which -- ordinarily permission decisions are not allowed to be cited in other cases because it is simply an argument for permission, but where the judge in the case has said, no, this is -- I have heard full argument, and therefore the matter can be cited, then it can then be used elsewhere. That is what I am asking for. I cannot recall --

MRS JUSTICE LANG: Maybe I could just look into that, and if appropriate I will make such an indication, but if not then I will not.

MR SHELDON: My Lady, if we find the particular provision we will send it to you.

MRS JUSTICE LANG: Obviously, you need it in the event that there is a renewed application to the Court of Appeal.

MR SHELDON: My Lady, that is absolutely right, but we are interested in the broader points as well. Thank you.

MR LAURENCE: My Lady could you help me with this? If we do renew our application for permission to appeal to the Court of Appeal, it would be very helpful obviously not to have to do that before we have a transcript of what your Ladyship has said. We have to make application for renewal to the Court of Appeal in the ordinary way pretty quickly. Is there a chance we could get at any rate an unapproved version of what your Ladyship has said sooner than a transcript would normally be able to be applied?

MRS JUSTICE LANG: No. We do not issue unapproved transcripts for obvious reasons. However, if I have a word with the shorthand writers I am sure the transcript will emerge quite quickly. But you should not delay your application.

MR LAURENCE: My Lady, we have no intention of doing that. It is simply that if you make an application, as it is possible I will be instructed to do, it would be much preferable to be making it against the background of having in front of one the --

MRS JUSTICE LANG: Yes. Well, I am sure you will be able to recycle the arguments in your skeleton.

MR LAURENCE: At all events, I am very encouraged to think your Ladyship is going to offer such help as she can to enable something to appear sooner rather than later.

MRS JUSTICE LANG: Yes. Well, I appreciate everyone wants this to move quickly. Is there anything else?

It just remains for me to thank all counsel very much for all the hard work they have put into this. Thank you.