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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Standard Commercial Property Securities Ltd, Re Application For Judicial Review [2000] ScotCS 228 (15 August 2000)
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Cite as: [2000] ScotCS 228
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OUTER HOUSE, COURT OF SESSION |
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OPINION OF LORD NIMMO SMITH in the Petition of STANDARD COMMERCIAL PROPERTY SECURITIES LIMITED Petitioner: for judicial review of a decision dated 26 August 1999 of Glasgow City Council
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Petitioner: Currie, Q.C., Mure; Semple Fraser, W.S.
Respondents: Sir Crispin Agnew, Q.C., Cowie; Edward Bain (for Glasgow City Council)
Martin, Q.C., Williamson; Russel & Aitken (for Atlas Investments Ltd)
15 August 2000
Introduction
[1] This application for judicial review came before me for a first hearing. The petitioner is Standard Commercial Property Securities Limited ("Standard"), one of a group of companies of which Bass plc is the parent. Another company in the same group is Bass Developments Ltd ("Bass"). Standard seeks judicial review of a decision of Glasgow City Council ("the Council") dated 26 August 1999. The Council have lodged answers. The petition was served on Atlas Investment Services Ltd ("Atlas"), as an interested party. Atlas has also lodged answers. Each of Standard, the Council and Atlas was represented before me at the hearing, which proceeded on the basis of the parties' pleadings and productions as supplemented by counsel's oral submissions. Some difficulty was caused by the intimation by Standard of adjustments to the petition shortly before the hearing, too late for the other parties to be able to adjust in reply, but by the end of the hearing I was satisfied that all parties had had a reasonable opportunity to carry out appropriate enquiries and to place relevant information before me, and that the information was sufficient for the purposes of this opinion. During the course of the hearing the factual information emerged in a somewhat piecemeal fashion. I had it in mind in preparing this opinion to put this factual information together in a continuous chronological account, but I have found it impossible to do this because counsel's submissions in law were related to the factual information as it stood from time to time. I have decided therefore that there is no alternative to a résumé of the submissions about both fact and law in the order in which they were presented to me.
[2] The decision of the Council of which Standard seeks judicial review ("the decision") was taken by the Development and Regeneration Services Committee of the Council on 26 August 1999 and is recorded in minutes of that date in the following terms:
"185-221 Buchanan Street and 1-7 Bath Street (Ward 17) - Compulsory Purchase Order approved - Instruction to Director of Protective Services.
18 There was submitted a report by the Director of Development and Regeneration Services outlining the need to promote a Compulsory Purchase Order (CPO) over property at 185-221 Buchanan Street and 1-7 Bath Street (Ward 17).
After consideration, the committee
(1) approved the principle of promoting a CPO over the subjects under the terms of section 189 of the Town and Country Planning (Scotland) Act 1997; and
(2) instructed the Director of Protective Services to conclude a binding agreement in normal terms with Atlas Developments [sic]Ltd allowing the promotion of the CPO to progress."
[3] The report referred to in the minutes is dated 16 August 1999 and was prepared by Don Bennett ("Mr Bennett"), an official in the Council's Department of Development and Regeneration Services. It is in the following terms:
"1. PURPOSE OF REPORT
To outline the need to Committee for authority to promote a Compulsory Purchase Order over the subjects at 185 to 221 Buchanan Street and 1 to 7 Bath Street, Glasgow.
2. RECOMMENDATION
Committee is requested to:
1. Authorise the principle of promoting a Compulsory Purchase Order over the subjects at 185 to 221 Buchanan Street and 1 to 7 Bath Street, Glasgow under the terms of section 189 of the Town and Country Planning (Scotland) Act 1997.
2. Authorise the Director of Protective Services to conclude a binding agreement in normal terms with Atlas Investments Limited allowing the promotion of the Compulsory Purchase Order to progress.
3. INFORMATION
3.1 Background
Glasgow is the second largest retail centre outside London and has an enviable reputation for the range and quality of the retailers represented, many of international repute, and not represented elsewhere in the UK.
At the heart of the core is Buchanan Street, the premier retail street in Scotland. Recent years have seen investment in the order of £500 million, mainly at the northern end, with such major developments as the Buchanan Galleries and the George Hotel. Complementing these major developments has been a programme of Public Realm Works, currently ongoing, to the street itself, involving new paving, lighting, street furniture and redesigned underground stations. Buchanan Street will be a showcase for the City.
This will produce a shopping environment of international status, which will further establish Glasgow as a city of quality, a place to invest.
Demand for sites on Buchanan Street is, therefore, understandably high. The only part of Buchanan Street which has not been the subject of redevelopment is that stretch from Nelson Mandela Square northwards to Bath Street, an area of mainly 2-storey properties in generally poor condition and which is ripe for redevelopment.
Numerous developers have expressed an interest in this area. Unfortunately, the area has a multiplicity of owners and despite attempts to acquire these interests, the number of owners and the unrealistic values being asked has led to previous developers abandoning their projects.
3.2 Current Position
Atlas Investments Limited, a property development company with a proven track record in the City and with ownership interests in properties on West Nile Street, behind Buchanan Street frontage, have recently acquired the Buchanan Hotel. They are negotiating the purchase of other properties within the site, and currently have 63% of the street block.
They propose to develop a retail scheme on the site which would complement Buchanan Galleries opposite. This will further the proper and effective redevelopment of this prime City Centre location and will fully accord with relevant planning policy.
They have encountered the same problems of mixed ownerships and unrealistic values being sought which, if paid, would place the cost of redevelopment of the site beyond that which the market could support, making redevelopment impossible, thereby prejudicing the amenity of the street and eroding its attractiveness and economic vitality. Given the high standards set by Buchanan Galleries opposite, and the high level of investment in the area, it is to be regretted that the circumstances prevailing on the opposite side of the street are effectively thwarting the complete and comprehensive regeneration of the area.
3.3 Use of Compulsory Purchase Powers
It is in this context and in pursuance of the proper planning of the area, that as a means of breaking this impasse, the use of the City Council's CPO powers is being sought.
The use of these powers in no way affects the owners right to a fair market value, a value which would undoubtedly reflect the prime location they enjoy. The CPO powers do, however, prevent the situation where an owner or owners can hold the project to ransom, thereby preventing the redevelopment from taking place.
In normal circumstances, before the Council will assist with a CPO, a number of conditions require to be met, namely:
1. A planning consent is in place.
Before a CPO is confirmed a detailed planning consent will be required. The developer is in the process of preparing a planing application for retail development at the site which will be processed by the Planning Authority in advance of the confirmation of any CPO.
2. The applicant can demonstrate to the satisfaction of the Council that reasonable offers have been made and that all attempts to negotiate have failed.
The developer can demonstrate that all attempts are being made to secure the properties by negotiation and is hopeful that he will be in a position to secure in the order of 80% of the interests by this means.
3. That the applicant will enter into an agreement with the Council to meet all the Council's costs including compensation, i.e. the Council will not be liable to meet any costs associated with the CPO.
The developer has confirmed that he will meet such costs and will enter into an agreement with the City Council to this effect.
3.4 Conclusion
From the information available it is clear that if the site is to be redeveloped and the regeneration of this site is a priority, then the use of the Council's powers of compulsory acquisition will be required. In seeking this authority and in commencing the process it is possible that this will be sufficient to bring a greater realism to the negotiations,. Where this is not the case, the Council will acquire the properties and then immediately transfer them to the developer to ensure that the site is redeveloped, in the pursuance of the Council's aspirations for the City Centre and the City's continued growth."
[4] On 19 and 20 October 1999 the Council and Atlas entered into a Minute of Agreement of a type referred to in the course of the hearing as a "back-to-back agreement" ("the agreement"), the preamble to which narrates that the Council has determined to promote under powers contained in the Town and Country Planning (Scotland) Acts the Compulsory Purchase Order after referred to and that it has been agreed between the Council and Atlas that the Council will convey to Atlas the CPO subjects as after defined on certain terms and conditions. In clause 1 the expression "the Compulsory Purchase Order" is defined as meaning the Buchanan Street, Glasgow CPO 1999 and "the CPO subjects" as meaning the subjects described in Part 1 of the schedule. Part 1 of the schedule describes the CPO subjects as being those comprising 185/195, 197/205, 209/213, 217 and 221 Buchanan Street, 3, 5 and 7 Bath Street and 100 West Nile Street all Glasgow with the parts of Bath Lane, Bath Street and Buchanan Street all Glasgow adjacent thereto as shown on the relative plan. Clause 2(a) provides inter alia that the Council will submit the Compulsory Purchase Order to the Secretary of State (defined as meaning the First Minister or such other Minister authorised by the Scottish Executive of the Scottish Parliament) and shall use all reasonable endeavours to have the same confirmed by the Secretary of State as expeditiously as possible and shall thereafter upon expiry of the appeal period (defined as meaning the six week period from the date on which notice of the confirmation of the Compulsory Purchase Order is first published within which an application can be made to the Court of Session) in respect of the Compulsory Purchase Order in the event that no application has been made to the Court of Session proceed to have a General Vesting Declaration executed and registered in the Land Register of Scotland. Clause 2(b) provides that the Council shall use all reasonable endeavours to procure that the said General Vesting Declaration in respect of the Compulsory Purchase Order is registered in the Land Register before the amount of compensation referred to in Clause 5(i) is established. Clause 3(a) provides that at no time whilst the agreement remains in force shall the Council enter into any voluntary negotiations with the proprietors and/or tenants of any of the CPO subjects except with the prior written consent of Atlas which consent will not be unreasonably withheld or delayed. Clause 3(b) contains provisions enabling Atlas at any time prior to confirmation of the Compulsory Purchase Order by the Secretary of State to request the Council by notice in writing to take no further action in connection with the acquisition of the whole or any part of the CPO subjects, and makes provision for what is to happen in the event of such notice being given. Clause 4 provides that, throughout the period of negotiations in respect of compensation to be paid for the CPO subjects or any of them, the Council shall consult fully with Atlas and produce promptly copies of any correspondence and details of all negotiations relative thereto. It proceeds to make more detailed provision for consultation with Atlas and approval by it of compensation figures. Clause 5 provides that Atlas shall reimburse various sums to the Council in the manner set out in Clause 10. These include (i) the total compensation or purchase price, including interest thereon properly due, and reasonable legal expenses and outlays properly paid by the Council to the proprietors or tenants of the CPO subjects and (ii) the reasonable costs properly incurred by the Council in connection with the promotion and confirmation of the Compulsory Purchase Order or arising in direct consequence thereof. Clause 6 provides that notwithstanding the term
"Nothing in this Agreement shall prejudice or abridge the rights, powers, and duties of the Council as local authority for the said City under the Town and Country Planning (Scotland) Acts and other Acts or under any Statutory Instrument, Order or other made pursuant thereto and the Council shall be entitled to exercise the said rights and others as fully and freely as if the Council were not party to the said Agreement."
[5] Standard now seeks the following orders:
(1) declarator that the decision was ultra vires and in any event falls to be reduced;
(2) declarator that the agreement was ultra vires of the Council and falls to be reduced;
(3) reduction of the decision; and
(4) production and reduction of the agreement.
Submissions for Standard
[6] In moving me to grant orders in these terms, senior counsel for Standard opened his submissions by stating that Standard owned property in Buchanan Street and Bath Street, Glasgow. He referred to drawings bearing to show the ownerships within the CPO boundary at 26 August 1999 and 26 April 2000. According to these productions, "SCPS (Bass Developments)" is shown as owning the ground floor and basement of the building at 221 Buchanan Street and 3 Bath Street on 26 August 1999, and the whole of that building and the whole of the building at 5 and 7 Bath Street, together with the top floors of the buildings at 209-213 Buchanan Street and 217 Buchanan Street on 26 April 2000. The expression "SCPS (Bass Developments)" refers to Standard (the petitioner) and Bass. At this stage of his submissions counsel did not distinguish clearly between them, and indeed from time to time referred to Bass as if it was the petitioner. On both dates Atlas owned the whole of the buildings at 100 West Nile Street and 185-195 Buchanan Street, together with the upper three floors of the building at 197-205 Buchanan Street. By 26 April 2000 Atlas owned in addition two of the upper floors at 209-213 Buchanan Street and two of the upper floors and part of the basement at 217 Buchanan Street. Acquisitions had thus been made in the meantime by both Standard and Atlas from other owners. As at 26 April 2000 the ground floor and the basement at 197-205 Buchanan Street, the ground floor and basement at 209-213 Buchanan Street, the ground floor and part of the basement at 217 Buchanan Street and the whole of the building at 106 West Nile Street remained in other ownership.
[7] Counsel went on to state that prior to 26 August 1999, and in particular in March and July 1999, representatives of the petitioner had had discussions with representatives of the Council about a proposal by the petitioner to develop the site it owned at 221 Buchanan Street and 3 Bath Street, which was at present a public house situated on the corner of these two streets. These discussions included, at the suggestion of the Council's representatives, the possibility of the petitioner's promoting a larger development. What was very important was that prior to the taking of the decision on 26 August 1999 the Council were aware that the petitioner owned property within the area of the proposed Compulsory Purchase Order, and that it had its own plans to develop the site. Implicit in this was the knowledge that the petitioner, in implement of its plans, would require to submit an application for planning permission. At no time prior to 26 August 1999 did Atlas approach Standard or Bass or any of their representatives with a view to procuring their holdings in the relevant area. As at 26 August 1999 Atlas had not submitted a planning application for development within that area.
[8] Counsel then referred to the terms of the decision and Mr Bennett's report, which I have already set out. He submitted that the minutes recording the decision disclosed that nothing other than the report was before the committee. It was significant that the minutes disclosed an instruction to enter into the agreement before planning permission was granted to Atlas. It was implicit in the report that Atlas would be unable to acquire all of the subjects which they needed because unrealistic prices were being asked. The purpose of making the decision was to induce owners other than Atlas to negotiate more realistically or to enable the Council to acquire their subjects compulsory and immediately to transfer them to Atlas.
[9] Counsel continued by stating that on 6 October 1999 Atlas submitted a planning application. On 19 October 1999 representatives of Standard wrote to the Council reminding the Council of Standard's plans and objecting to the proposal to promote a CPO. Of the two letters written on that date, one was to the Council's Planning and Development Department, reminding the Council that discussions with officials of the Council about Standard's alternative proposals for the application site had already taken place and stating that Standard was pursuing these alternative proposals and objected to Atlas's proposal. As it happened, the agreement between the Council and Atlas was executed on 19 and 20 October 1999.
[10] On 9 March 2000 Standard submitted an application for planning consent for proposed demolition and redevelopment to form a retail unit at 221 Buchanan Street and 3-7 Bath Street. In the letter which accompanied the application it was stated that part of the site was owned by a Mr Hong. Counsel informed me that Standard had now bought this part from him. On 4 April 2000 full planning permission was granted to Atlas for erection of a commercial development comprising retail, restaurant and leisure uses with an associated access/loading area following demolition of existing buildings at 3-9 Bath Street/104 West Nile Street/ 185-221 Buchanan Street.
[11] Counsel then turned to his submissions about the applicable law. Section 189 of the Town and Country Planning (Scotland) Act 1997 ("the 1997 Act") provides inter alia as follows:
"189. - (1) A local authority shall, on being authorised to do so by the Secretary of State, have power to acquire compulsorily any land in their area which -
(a) is suitable for and is required in order to secure the carrying out of development, redevelopment or improvement;
(b) is required for a purpose which it is necessary to achieve in the interests of the proper planning of an area in which the land is situated.
(2) A local authority and the Secretary of State in considering for the purposes of subsection (1)(a) whether land is suitable for development, redevelopment or improvement shall have regard to -
(a) the provisions of the development plan, so far as material,
(b) whether planning permission for any development on the land is in force, and
(c) any other considerations which would be material for the purpose of determining an application for planning permission for development on the land.
(4) It is immaterial by whom the local authority propose any activity or purpose mentioned in subsection (1) or (3)(a) is to be undertaken or achieved and in particular the local authority need not propose to undertake that activity or achieve that purpose themselves.
(7) The Acquisition of Land (Authorisation Procedure)(Scotland) Act 1947 shall apply to the compulsory acquisition of land under this section and accordingly shall have effect as if this section had been in force immediately before the commencement of that Act.
(8) The exercise by a local authority of any power which they have under this section, is subject to the provisions of sections 171A and 171B (promotion of economic development) of the Local Government (Scotland) Act 1973."
The remaining subsections of section 189 are not relevant for present purposes. By section 53 of the Scotland Act 1988 the functions of the Secretary of State now fall to be exercised by the Scottish Ministers. Section 191 of the 1997 Act provides inter alia as follows:
"191. - (1) Where a planning authority -
(a) has acquired or appropriated any land for planning purposes, and
(b) holds that land for the purposes for which it was so acquired or appropriated,
the authority may dispose of the land to such person, in such manner and subject to such conditions as may appear to them to be expedient for the purposes mentioned in subsection (2).
(2) Those purposes are to secure -
(a) the best use of that or other land and any buildings or works which have been, or are to be, erected, constructed or carried out on it, whether by themselves or by any other person, or
(b) the erection, construction or carrying out on it of any buildings or works appearing to them to be needed for the proper planning of their area.
(3) Subject to the provisions of subsection (7), any land disposed of under this section shall not be disposed of otherwise than at the best price or on the best terms that can reasonably be obtained."
Subsections (4)-(6) provide for the procedure to be followed where representations are made to the Secretary of State that a planning authority have refused to dispose of any land under section 191 to any person and that the refusal constitutes unfair discrimination against him or is otherwise oppressive. Subsection (7) provides:
"(7) In relation to land acquired or appropriated for planning purposes for a reason mentioned in section 189(1) or (3), the powers conferred by this section on a planning authority shall be so exercised as to secure, so far as may be practicable, to persons who -
(a) were living or carrying on business or other activities on any such land,
(b) desire to obtain accommodation on such land, and
(c) are willing to comply with any requirements of the authority as to the development and use of such land,
an opportunity to obtain accommodation on it suitable to their reasonable requirements on terms settled with due regard to the price at which any such land has been acquired from them."
By section 201(1) references to the acquisition or appropriation of land for planing purposes in inter alia section 191 are to be construed by reference to the purposes for which land may be acquired under inter alia section 189. The remaining subsections of section 191 are not material for present purposes.
[12] On the question of the meaning of the word "required" in section 189(1)(a) and (b) counsel referred to two English cases. The first of these was R v Secretary of State for the Environment, Ex parte Leicester City Council (1987) 55 P & C.R. 364. McCullough J. said at p. 367, under reference to section 112(1)(a) of the Town and Country Planning Act 1971, that "the section requires that the land must be required, and requires the need for its acquisition by the local authority in order to secure its development." The second case was Sharkey and Another v Secretary for State for the Environment and Another [1992] 2 P.L.R. 11, in which the Court of Appeal upheld the decision of Roch J. In delivering the leading judgment, McCowan L.J. said at p. 19, under reference to the same statutory provision and to the Leicester case:
"I agree with Roch J. that the local authority do not have to go so far as to show that the compulsory purchase is indispensable to the carrying out of the activity or the achieving of the purpose; or, to use another similar expression, that it is essential. On the other hand, I do not find the word 'desirable' satisfactory, because it could be mistaken for 'convenient', which clearly, in my judgment, is not sufficient. I believe the word 'required' here means 'necessary in the circumstances of the case'."
[13] Counsel then turned to Wordie Property Co Ltd v Secretary of State for Scotland 1984 S.L.T. 345 in which Lord President Emslie, in a well known passage at pp. 347-8, said:
"A decision of the Secretary of State acting within his statutory remit is ultra vires if he has improperly exercised the discretion confided to him. In particular it will be ultra vires if it is based upon a material error of law going to the root of the question for determination. It will be ultra vires, too, if the Secretary of State has taken into account irrelevant considerations or has failed to take account of relevant and material considerations which ought to have been taken into account. Similarly it will fall to be quashed on that ground if, where it is one for which a factual basis is required, there is no proper basis in fact to support it. It will also fall to be quashed if it, or any condition imposed in relation to a grant of planning permission, is so unreasonable that no reasonable Secretary of State could have reached or imposed it."
Counsel submitted that this passage was equally applicable to a local authority such as the Council, and emphasised that a decision would be ultra vires if inter alia the local authority had failed to take account of relevant and material considerations which ought to have been taken into account.
[14] In statement 4(2A) of the petition (as adjusted) it is averred that when making the decision on 26 August 1999 the Council's Development and Regeneration Committee proceeded under a material misapprehension in regard to relevant and material facts. Firstly, as at the date of the decision, the petitioner had not been approached by the Council with a proposal to purchase its and its associated companies' interests in the CPO site. Accordingly, the committee could not properly conclude that any proposal to be made by Atlas had been thwarted by the petitioner's refusal to sell to it. Secondly, the report to the committee dated 16 August 1999 did not inform the committee about the meetings held with officials of the Council in March and July 1999. Accordingly, the committee were not made aware of the petitioner's current development proposals for the CPO site. In the circumstances, the averment concludes, the decision by which the Council committed themselves to co-operate solely with Atlas was therefore ultra vires the Council et separatim was unreasonable, and falls to be reduced. Counsel submitted that an essential premiss of Mr Bennett's report was that development of the area could not proceed in accordance with proper planning because some of the owners were refusing to sell except at unrealistic values. Built into this was a two-faceted proposition: that owners apart from Atlas were only refusing to sell because of price considerations, and that the prices asked by them were in effect exorbitant. That being the premiss of the report which led to the decision, the committee did not take into account, since they were unaware of it, the highly material fact that the petitioner, which owned a significant part of the overall site, far from having refused to sell in order to extract an exorbitant price, had not been approached at all, but on the contrary wished to develop its site itself. It was incontrovertible that the fact that the owner of a significant part of the scheme was not holding out for an exorbitant price and thereby frustrating the proper planning of the entire development, but wanted to carry out its own development, was highly material to the proper exercise by the Council of their powers under section 189 of the 1997 Act. The Council had to be able to say that the land in question was required for the purposes set out in section 189(1) and accordingly (having regard to Sharkey's case) that its acquisition was necessary in the circumstances of the case. The Council thus needed to be aware of the relevant circumstances, and Mr Bennett's report was misleading.
[15] Statement 4(1) of the petition avers that the committee's decision was taken in pursuance of an ulterior or collateral purpose, namely to enable Atlas to acquire the land subject to the proposed CPO. The Council do not in fact wish to acquire the land subject to the proposed CPO for the statutory purposes. Mr Bennett's report states:
"In seeking this authority[i.e. to authorise the principle of promoting a CPO] and in commencing the process it is possible that this will be sufficient to bring a greater realism to the negotiations [i.e. between the owners of property subject to the proposed CPO and Atlas]. Where this is not the case, the Council will acquire the properties and then immediately transfer them to the developer ...".
It is averred that in seeking to use their powers to facilitate the acquisition of the land by a private developer and in particular with a view to encouraging owners of property to sell to a particular developer at prices more advantageous to a developer than would otherwise be the case, the Council have acted ultra vires and the decision accordingly falls to be reduced. Counsel submitted that for any development to proceed within the CPO area, and also in order to achieve proper planning of the area, it was clear that the planning process would require to be gone through. As at 26 August 1999 the Council's officials knew that Atlas intended to promote a development. From discussions in March and July 1999 they knew that the petitioner also intended to promote a development. As at 26 August 1999 neither Atlas nor the petitioner had submitted a planning application. By taking the decision on 26 August 1999 to promote a CPO and enter into a back-to-back agreement with Atlas, the Council had acted ultra vires and by way of an unreasonable exercise of their powers under section 189 in respect that they had decided to exercise their powers in circumstances where no reasonable local authority could have concluded that the requirements of section 189 had been met. The land must be required, in the proper sense of that word, to secure the carrying out of development and the proper planning of the area. In this connection there were six critical factors. (1) The Council knew or ought to have known that the petitioner, which was a significant proprietor within the CPO area, wished to progress a development which included its own property. (2) The appropriateness of this proposed development in planning terms would require to be but had not yet been considered within the planning process. Accordingly the Council could not say that the whole area covered by the proposed CPO and in particular the petitioner's property was "required". (3) Atlas's scheme had not yet been but would require to be considered within the planning process. So the Council could not yet reasonably conclude that the petitioner's property was required. (4) The petitioner had not refused to sell on the basis of demanding an exorbitant price for its subjects. So far as it was aware, Atlas had not approached the proprietors of other subjects within the CPO area. It was not clear from Mr Bennett's report who, if anyone, Atlas had approached. (5) It appeared from Mr Bennett's report and the minutes of 26 August 1999 that the Council had decided to whom to sell the area after compulsory acquisition without having considered the terms of section 191(2) of the 1997 Act, in particular whether the proposed disposal would secure the best use of the land or the proper planning of their area. In a situation where no application for planning permission had yet been determined, the Council could not reasonably make a decision as to whom they should sell the land to for the purpose of securing its best use. How could the Council make a proper decision as to whom to sell it to when the planning processes had not yet been gone through? (6) On the face of Mr Bennett's report, which was accepted by the committee, the committee were motivated by a collateral and ultra vires purpose, namely to promote the scheme of one particular developer by inducing others to sell at prices at which ex hypothesi they did not wish to sell. This was particularly objectionable in a situation where neither Standard nor Atlas had submitted an application for planning permission. Having regard to these six factors, counsel submitted that the Court should infer that the Council did not have proper regard to the terms of the statutory provision, or if they did, they had made their decision in circumstances in which no reasonable lo
[16] In statement 4(2) of the Petition it is averred that in any event the decision to instruct the Director of Protective Services to enter into an agreement obliging the Council to transfer land acquired under the proposed CPO to Atlas was ultra vires. Their powers to dispose of land acquired by them pursuant to section 189 of the 1997 Act are set out in section 191. Having regard to the terms of section 191, (a) it was ultra vires of the Council to commit themselves in advance of acquisition of the land subject to the proposed CPO to transfer it to a particular developer on particular terms; (b) it was ultra vires of the Council to decide to dispose of land which might be acquired by them under the proposed CPO to a particular developer without addressing themselves to the terms of section 191(2); (c) it was in any event not possible for the Council properly to address themselves to the terms of section 191(2) when Atlas had not yet applied for planning permission for their proposed development; (d) it was ultra vires of the Council to decide to dispose of land which might be acquired by them under the proposed CPO to a particular developer on particular terms without having regard to the terms of section 191(3); and (e) it was ultra vires of the Council to decide to dispose of the land subject to the proposed CPO without having regard to the terms of section 191(7). Counsel relied particularly on point (d). He submitted that section 191(3) was mandatory. It envisaged that when a local authority have acquired land, they cannot dispose of it otherwise than at the best price which can be obtained. It could not be assumed that the consideration which Atlas had agreed was the best price which the Council, having become vested in the land, could achieve. Standard was another party interested in carrying out a development in the CPO area. The statutory requirement was not to obtain no more than the Council paid out, it was to obtain the best price. In advance of the date on which the Council were to become vested in the land, they had committed themselves to selling it at no more than they would pay. This was an infringement of section 191(3).
Submissions for the Council
[17] Senior counsel for the Council opened his submissions by indicating that he had not yet received full instructions about certain matters of fact which were in dispute. The information which he had at that time was that Atlas was the only party who had expressed any interest in carrying out a development in the CPO area. Enquiries were being carried out with a view to giving him instructions about the subject matter of Standard's adjustments, which had only been intimated the previous afternoon. He did not yet have information about what had been discussed at any meetings between the petitioner and the Council, and as to whether the petitioner had expressed an interest in the whole of the CPO area. He would however proceed to advance submissions to me.
[18] Counsel moved me to refuse the orders sought by Standard. Alternatively, if matters of fact remained in dispute, he moved me to allow a second hearing at which evidence, perhaps in affidavit form, could be provided. Counsel went on to submit that Standard had approached the whole question on too many fronts. It was talking about its own plans and proposals in respect of its own property, rather than the broader picture. The position of the Council was as set out in paragraph 4 of their answers to the petition. It is averred in that paragraph that the proposal to acquire these subjects by CPO is part of a long-term plan, going back about 30 years, for the regeneration of the area abounding the north end of Buchanan Street. The city centre of Glasgow was officially recognised as a regional shopping centre in the Central Area Report 1975. The Central Area Local Plan 1987 stated that "a single area based on Buchanan Street, Gordon Street, Sauchiehall Street and Argyle Street will be designated for prime shopping ...". Policy RS 3 referred to a continuous retail frontage for Buchanan Street. The Central Area Local Plan 1990 reaffirmed the shopping policy for the area and that the whole of Buchanan Street was included as a "principal retail street". The city wide Local Plan Review 1998 identified a number of primary retail streets including the whole of Buchanan Street. This background and overall objective were known to all the councillors and Mr Bennett's report was seen by them in this context. The redevelopment of the Concert Hall was the start of the process and viewed as a pivotal point. The redevelopment was part of the Public Realm Project involving the Council, the Glasgow Development Agency and formerly Strathclyde Regional Council. This included a policy of pedestrianisation. Buchanan Street in this area has been redeveloped as a pedestrian precinct. The Buchanan Galleries shopping complex has now been completed opposite the proposed CPO site. The former George Hotel to the north of the CPO site is under redevelopment. The sites to the south of the CPO site are subject to proposals for redevelopment all of which are under way. The CPO site is a block of buildings facing onto Buchanan Street that has not been redeveloped. The buildings are fairly run down and not in character with the surrounding area. They are in multiple ownership. The Council have long sought proposals for their redevelopment. Attempts by previous developers to assemble the site for development have failed because of the multiple ownership of the site and the unrealistic prices demanded by some of the owners. In about June 1999 Atlas approached the Council with proposals for redevelopment of the site. The Council have worked with Atlas on other redevelopments and the company has a good track record in Glasgow. At the time of the decision Atlas owned about 63% of the proposed CPO site and was in active discussion to acquire more of the property. The Council understand that it has since increased its land holding in the area. Against that background and subject to the conditions set out in paragraph 3.3 of Mr Bennett's report being complied with, the promotion of a CPO (1) will be required in order to secure the carrying out of redevelopment of the CPO site and/or (2) will be required for the purposes of achieving the interests of proper planning of the area. Reference is made to section 189(1) of the 1997 Act and Sharkey's case. At the time of the decision Atlas had discussed in detail its development proposals with the Planning Department, and had produced an artist's impression of how the site would look in context. It was the only developer who had expressed an interest in acquiring and redeveloping the property. The committee were aware of the planning proposals a
[19] Counsel developed these averments by submitting that planning and development were not just a matter of individual planning permissions, but needed to be looked at as a wider picture: see section 189(2)(a) and (c). Section 189 was predicated on a broader planning picture. The Council were looking for a comprehensive redevelopment of the whole site. This was being looked at when the Council were considering the decision that was made. The redevelopment need not necessarily involve any one developer, but at the time Atlas had made the only realistic proposal for redevelopment of the whole site. No formal planning application had been lodged by Atlas, but the Council had had fairly detailed discussions about what was proposed for the site. Atlas had lodged an application for planning permission on 6 October 1999, before the agreement was entered into. The Council knew that Atlas had 63% of the CPO site and wanted more and that unrealistic values were being sought by the other owners. Irrespective of the interest of Standard, there was still a multiplicity of ownership. Atlas had said that there were problems about ownership and unrealistic values. These problems had occurred on previous occasions when attempts had been made to put the site together, which was why previous developers had failed. What was being said in Mr Bennett's report was that in order to secure redevelopment of the site within a reasonable time, against the background of the history of problems, a CPO was needed. This fell within the scope of section 189. Counsel referred to the Glasgow Central Area Report 1975 and subsequent local plans including the Glasgow City Council Local Plan Review 1998, and submitted that Mr Bennett's report needed to be seen in the context of the overall policy and of what was sought to be achieved. The CPO was required, within the meaning of section 189(1), because truly it was necessary in the whole circumstances for the development of the whole site because Atlas had more than 50% of the site and would probably have 80% by the time of the CPO. The decision was reasonable in order to ensure that the remaining 20% was bought in. The CPO was also required for a purpose which it was necessary to achieve in the interests of the proper planning of the area. The meaning of the word "required" in section 189(1) was as defined in Sharkey's case. There was a range within which it was open to the Council to take a reasonable decision. Mr Bennett's report, fairly read, was not saying that Atlas was being thwarted. This was a decision to promote a CPO in principle if certain things came to pass, not a decision to start the CPO process. It was subject to conditions. If Atlas could say that reasonable offers had failed, the Council were entitled to say that a CPO was the solution. Standard did not own a significant part of the site. The Council were being asked to take a policy decision to promote a CPO if they were satisfied that redevelopment of the site could not be achieved in any other way. A contingency plan was a perfectly proper way for a local authority to proceed. Counsel referred to Wards Construction (Medway) Ltd v Kent County Council [1999] 2 P.L.R. 61 in which, he submitted, the Court of Appeal had approved a decision to promote a CPO as part of a contingency plan. The Council's decision was merely a decision in principle that if Atlas could not put the site together, a CPO would be used to achieve this result. Atlas was the only developer in the frame which was proposing to redevelop the whole area. Mr Bennett was putting to the Council that past problems were recurring. It was questionable whether Standard owned a significant part of the site. It was only a relevant and material fact if Standard could say that if it had been approached it would have been willing to sell
[20] Counsel then turned to the averment in statement 4(1) of the petition that the decision was taken in pursuance of an ulterior or collateral purpose. He submitted that this was too narrow an approach. The purpose behind the decision was to get this area redeveloped, and Atlas was the only developer in the frame to do it. The fact that Atlas might benefit from the decision was not the primary purpose behind it. The decision was therefore reasonable. Section 189(4) was important. In considering whether to promote a CPO, the local authority were entitled to propose that a particular person should carry it out. Counsel submitted that section 191 did not apply to back-to-back agreements. He referred to a list of other back-to-back agreements which the Council had entered into with other developers. He submitted that section 189(4) does not sit with section 191. It was clear that under section 189 a local authority might promote a CPO because they proposed that a development should be undertaken by someone in particular. If that was proposed, then they were entitled to enter into a back-to-back agreement. By subsection (8), section 189 was subject to sections 171A and 171B of the Local Government (Scotland) Act 1973, which contain provisions relating to the promotion of economic development. A back-to-back agreement would fall within the expression "such steps as they may from time to time consider appropriate for promoting the economic development of their area", which a local authority are empowered to take under section 171A(1). Counsel accepted that if entering into a back-to-back agreement was otherwise ultra vires, this provision would not make it intra vires, but submitted that in construing section 189(4), one was entitled to have regard to section 171A. The Council were trying to promote this redevelopment as part of a prime shopping area. Section 191 on the other hand was directed to the situation where a local authority had acquired land and were keeping it and looking out for somebody to use it. If Standard's submission was correct, no reliance could be placed on section 189(4), because it would never be open to a local authority to prefer a particular developer. The expression "holds" in section 191(1) must therefore refer to holding in the relatively long term, not acquisition for the purpose of passing on. A back-to-back agreement did not lead to a local authority holding land which they had acquired for the purpose of the agreement. Section 191 accordingly did not apply. Counsel also sought to take from section 189(4) that it was right to propose that someone should be the developer. The purpose was to get this area developed. The fact that the petitioner might have had its own scheme for its own purpose was not, in the broader picture, a relevant consideration. If there was to be a suggestion that Atlas had misinformed the Council, evidence of that would be needed. The Council were entitled to proceed on the basis of the information provided by Atlas. In the context of his submissions about back-to-back agreements, counsel referred to Rolf v North Shropshire District Council (1987) 55 P & C.R. 242, though he accepted that this might not be helpful to his submission because the decision turned on a different statutory provision from the present one.
[21] When he came to address me again on the second morning of the hearing senior counsel for the Council sought leave to lodge as productions copies of notes prepared by architects acting for Bass relating to meetings held on 1 March and 8 and 15 July 1999. It was not explained why these were being tendered as productions for the Council rather than Standard. There was no opposition to the lodging of these documents at this stage, and I allowed them to be lodged. Senior counsel for the Council said that he was not in a position to dispute the veracity of the notes and was willing to proceed on the basis that they were a reasonably accurate record of what took place. These notes show that the first two meetings were held with officials in the Council's Planning and Development Department, while the third was held with an official in the Roads and Highways Department. There was discussion about proposals not only to redevelop the corner building now owned by Standard, but also to redevelop the whole of the CPO site. In paragraph 2.03 of the note of the meeting held on 8 July 1999 it is recorded that Tom Turley, an official in the Planning and Development Department, confirmed that if Bass could achieve 50% ownership of the site, then a cleansing CPO might be granted. Paragraph 2.04 is in these terms:
"CMCD [Calum MacDonald of 3D Architects, acting for Bass] explained the theory of submitting the large and small schemes simultaneously for Planning Approval. The large scheme includes the original Town House Hotel, Old Athenaeum Theatre and the remainder of the site to the north of the Old Athenaeum Theatre. The small scheme, is the fall back proposal for the property at 221 Buchanan Street."
Counsel said that he was not in a position to say why Mr Bennett might or might not have referred to these proposals in his report to the committee. He might have regarded it as impracticable because Atlas had 63% of the CPO site. When I said that this was speculation, counsel said that he could not explain why they were not referred to in the report. He said that he was in a difficult position and there might need to be further procedure.
[22] With respect to the submission based on statement 4(2) of the petition, counsel said that his response was predicated on the alternative basis that section 191 did apply. In that event, section 191(2) mirrored section 189(1). So if a CPO was required to achieve the purposes set out in section 189(1), a sale to Atlas would secure the purposes set out in section 191(2). Section 191(3) provided for a disposal at the best price or on the best terms which would achieve the purposes set out in subsection (2). Accordingly the price might be minimal: it was necessary to look at the package as a whole. Mr Bennett was entitled to take the view that Atlas was offering the best price or the best terms. In a back-to-back agreement the sale would take place on the vesting date when compensation would be payable on the basis of open market value, which was the best price. Counsel referred to R v The Commission for the New Towns, Ex parte Tomkins and Another (1988)87 L.G.R. 207, in which Dillon L.J. said at pp. 216-7 that the phrase the "best price that can reasonably be obtained" referred to the highest price in money that could be got, subject to considerations of prudence such as that a bird in the hand might on occasion be worth more than two in the bush. If section 191 did apply in the circumstances of the present case, counsel submitted, the proper remedy was for Standard to ask the Council to dispose of the CPO site to Standard. If the Council refused, Standard could make representations to the Secretary of State, who under section 191(6) had power to prevent a disposal to one party.
[23] Counsel for the Council concluded his submissions by agreeing that if I was against the Council all the way, the agreement should fall. He contrasted the Council's position on this point with that of Atlas.
Submissions for Atlas
[24] At the outset of his submissions senior counsel for Atlas lodged, without opposition, a record in tabular form of communications between agents for Atlas and various interests. He addressed me first on the factual background. He reminded me of the planning history of the CPO site and the surrounding area. The site had featured in the local plan for a number of years. As at 26 August 1999 Atlas had 63% of the solum of the CPO site. Bass as owner of the corner building had about 4-5% of the solum of the site. Standard did not own any of the site. Standard took entry to the first floor premises at 3 Bath Street on 27 August 1999, having concluded missives on 20 August 1999. Its next purchase was on 4 October 1999. It was Bass which had participated in meetings and there was no reason why Standard should have been involved. The record which had just been lodged confirmed that negotiations had taken place with Bass in relation to its site in 1997. There was an issue of fact whether Bass had been approached by Sears Properties Netherlands BV ("Sears"), Atlas's predecessor in title. One owner had required a purchase price which was several times the proper value of the relevant interest and this had not been acceptable to either Sears or Atlas.
[25] The decision was taken on 26 August 1999 and Standard did not seek to challenge it until the present application was lodged on 9 February 2000. Meanwhile the agreement, which was contractual, had been entered into on 18 and 19 October 1999. Counsel submitted that it was incompetent to seek to reduce a contractual document by way of a petition for judicial review and in particular this should not be done where almost two months had elapsed between the decision and the execution of the agreement. This question of competency had been considered by Lord Maclean in McIntosh v Aberdeenshire Council 1999 S.L.T. 93. A decision which could have been challenged and if fulfilled would lead to a contractual agreement was not challenged and the agreement was entered into. It was now incompetent to reduce the agreement. This could be said to be a situation of mora in which the issue of administrative certainty arose. Counsel referred to my decision in WWF-UK Ltd and Another v Secretary of State for Scotland [1999] Env L.R. 632 and Lord Bonomy's decision in Uprichard and Others v The Fife Council and Another, 31 March 2000. These, he submitted, were supportive of the plea to competency. It was reasonable for Atlas to rely on approaches made by its predecessor Sears to other proprietors. Sears had been trying to assemble a site (as had Standard) and Atlas had acquired Sears's interests and subsequently acquired the premises at 100 West Nile Street. The decision to proceed with a CPO could not fairly be represented as being for an ulterior purpose. Mr Bennett's report fairly represented the difficulties of assembling the site with a view to its redevelopment. Unless the problems arising from multiplicity of ownership could be overcome, the Council would proceed with the acquisition of the CPO site for the planning purpose they had decided to initiate.
[26] Counsel then turned to the legislative provisions. A local authority could only acquire land compulsorily under section 189 if they were authorised to do so by the Scottish Ministers. The decision taken by the Council was a preliminary to the ultimate acquisition of the land under a procedure which would require confirmation by the Scottish Ministers. There would be no material effect on Standard until the CPO was confirmed and there had been a general vesting declaration. Standard did not have to negotiate if it did not wish to. Section 191(4) only applied once the compulsory purchase procedure had been completed and the land was in the ownership of the planning authority. So the decision was not an end in itself, but a means towards an end. Standard had not been denied the opportunity to participate in subsequent procedure. The CPO would cover the whole site, including land in Atlas's ownership, so theoretically it was possible for third parties to try to buy it. Counsel contrasted the expressions "local authority" in section 189 and "planning authority" in section 191. This was a point of distinction between the two sections which gave rise to separate considerations. Counsel agreed with senior counsel for the Council that both paragraphs (a) and (b) of section 189(1) applied in the present case, though he submitted that in principle this subsection enabled a local authority to acquire land compulsorily for either or both of the purposes set out in these two paragraphs. Subsection (2) applied only to a decision under paragraph (a). A local authority were clearly entitled to exercise their discretion even if planning permission was not in force. They were only obliged to take into account the question whether planning permission was in force and were not bound by its terms. The Council could take into account the fact that there was no application for planning permission, but this was not prescriptive as to the outcome. Had both Atlas and Standard previously lodged applications for and been granted planning permission, neither of these would have defined the position for the Council for the purposes of subsection (1). Section 189(4) was most important. The local authority might at the same time as taking a decision determine by whom the development was to be carried out. A decision about the exercise of compulsory purchase powers could be taken at the same time as a decision as to who was to carry out the ultimate development. But for this provision, there would be a two-stage process. Subsection (4) made it clear that the two decisions could be taken together. It inevitably meant that it was intra vires of the Council to have regard to practical considerations related to the ultimate completion of the development: who was to carry it out and how it was to be paid for. This required a further exercise of discretion.
[27] Turning to the provisions of section 191, counsel submitted that the purposes mentioned in subsection (2) were obviously physical development. Here another discretion was vested in the planning authority which they were entitled to exercise. Subsection (3) conferred a final discretion on them. There was no general entitlement to dispose of the land, but there was an entitlement under reference to subsections (1) and (2). The disposal could only be for purposes which the planning authority had identified under subsection (2). They were not unfettered in the exercise of their discretion: they must only be disposing of land for proper planning purposes which they had identified and on the best terms. This subsection put an obligation on the planing authority not to dispose of the land for a ridiculously low value. Counsel said that he did not adopt the primary submission by senior counsel for the Council that section 191(3) did not apply to the present case. He submitted that it was incumbent on the local authority to have regard to the duty imposed by section 191(3), but on a proper reading of Mr Bennett's report they did have regard to that duty. There were thus five elements of the discretion which it was the Council's responsibility to exercise.
[28] Counsel went on to refer to a number of cases. In the Leicester case, supra, it was held that it was for the local authority to judge the need for the acquisition in order to secure development of the land. This was an exercise of discretion. Sharkey's case, in which "required" was said to mean "necessary in the circumstances of the case", should in his submission be read in light of the proposition that a statutory body must always exercise a discretion within the limits of reasonableness, so the expression should be "reasonably necessary in the circumstances of the case". A decision under section 189(1) could accordingly only be struck down if a reasonable bystander could say that it was Wednesbury unreasonable. Counsel next referred to Stannifer Developments Ltd v Glasgow Development Agency 1999 S.C. 156, in which it was held that there was no general rule that a body seeking to exercise a statutory power was under a duty to act fairly, and that although there were cases in which it fell to a body exercising statutory powers to act fairly having regard to the interests of those affected by the exercise of those powers, no duty existed in the circumstances of that case. Counsel submitted that it was for someone challenging a decision to demonstrate that better terms might reasonably have been obtained from them and Standard did not do that. Counsel referred, lastly, to R. v Essex County Council, Ex parte Clearbrook Contractors Ltd, 3 April 1981, in support of a submission that the Council were entitled to have regard to the whole circumstances in relation to the acquisition and subsequent disposal of land in deciding that section 191(3) would be satisfied by the proposed agreement with Atlas.
[29] Counsel accordingly advanced the following propositions. The Council as planning authority were entitled to conclude, in light of the planning history of the site and of the area, that compulsory purchase was appropriate. They were entitled to conclude in terms of section 189(4) that the development should be carried out by Atlas. They satisfied the duty imposed by section 191(3) in deciding that when acquired the land should be disposed of to Atlas for the purpose of carrying out the development and in consequence they were entitled to enter into the agreement to achieve that purpose. All these factors had been properly addressed in Mr Bennett's report. The "best terms" included the fact that Atlas owned 63% of the site and might own 80% of it. The discussion which had taken place about the alternative proposals of Bass were not a relevant material consideration which the committee required to take into account. Bass and Standard were on nothing like the same footing as Atlas as potential developers. The decision to omit any reference to these discussions was one which Mr Bennett was entitled to take. For the purposes of the committee's decision it was so immaterial that it was not brought to their attention. As at 26 August 1999 there was no effective competitor of Atlas. It was up to Standard to show where the Council went wrong and that reference to the discussions about Bass's alternative proposals in the report would have altered the decision. At least Standard needed to say that these proposals were relevant and material.
Further submissions for Standard
[30] In reply to these submissions senior counsel for Standard turned first to the preliminary points taken on behalf of Atlas. The only preliminary plea tabled on behalf of Atlas is the third plea-in-law in Atlas's answers, which is to the effect that the agreement between the Council and Atlas being a private contract, the second plea-in-law for Standard, in terms of which reduction of the agreement is sought, should be dismissed. Counsel did, however, seek to reply to all the points which had been advanced. On the question of Standard's title and interest, counsel said that at the time of the decision on 26 August 1999 Bass owned the subjects which were shown as being owned by Standard in the drawings which had been produced. Thereafter Standard acquired property adjacent to these subjects, and the decision was taken that all the subjects should be transferred into Standard's ownership in due course. It was Standard which had made the application for planning permission. Standard thus owned some of the property and would in due course own it all, it had made a planning application, and accordingly this gave it adequate title and interest. On the question of alleged mora on the part of Standard, counsel reminded me that on 19 October 1999 Standard wrote to the Council inviting them not to enter into a binding agreement with Atlas. There was no suggestion that, if these letters had been written immediately after the decision was taken in August 1999, the Council would not have proceeded to enter into the agreement. It could not be said that any delay had had the slightest effect on the course of events. On the question of alleged prematurity, on the ground that the Council had only agreed to do something in principle, counsel submitted that this ignored the fact that the Council had entered into a binding contract with Atlas which was subject only to certain conditions. This was more than a decision in principle. Having regard to the provisions of section 191(4) of the 1997 Act, if Standard was correct in its contention that the decision was ultra vires or unreasonable, it was not appropriate to delay until the Council had acquired the site by CPO. Any suggestion of prematurity was therefore unfounded.
[31] On the question of the dealings between Sears and Bass about Sears's proposed land assembly project, counsel submitted that nothing said on behalf of Atlas suggested that the circumstances in 1997 and in 1999 were sufficiently similar to lead anyone to assume that the attitude of Bass would be the same in 1999 as previously. The attempts by Sears to assemble land had been obstructed by inter alia the attitude of Atlas, which owned the subjects at 100 West Nile Street. Atlas thereafter acquired Sears's interests. There was no reason to assume that the attitude of Bass or Standard towards Atlas would be the same as it had been towards Sears. Counsel emphasised that Standard was founding not only on the fact that Bass and it had not been approached by Atlas, but also on the fact that it wished to develop its property, either as part of a comprehensive redevelopment of the whole site, or in any event on its own.
[32] Counsel submitted that Atlas's competency plea was ill-founded. McIntosh v Aberdeenshire Council could be distinguished and in any event did not assist Atlas. Standard was not a party to the agreement, so, unlike the pursuer in that case, it was not open to Standard to raise an ordinary action for reduction of the agreement. In any event, in that case Lord Maclean had accepted that in circumstances such as the present the supervisory jurisdiction of the Court could be invoked.
[33] Counsel then gave his substantive response. Senior counsel for the Council had suggested that Mr Bennett's report was of a general character. If that was right, this was even worse from the committee's point of view. Counsel did not agree with the submission for Atlas that, broadly speaking, the issue was whether the purposes set out in section 189(1)(a) and (b) could reasonably be regarded as requiring a disposal to a particular developer. He did not disagree that the definition of "required" in Sharkey should be read subject to the concept of reasonableness, so that it meant "reasonably necessary in the circumstances of the case". What emerged from the characterisation of the report by senior counsel for the Council was that the position of Bass or Standard was not considered at all. On the face of the report the committee had no idea that Bass owned part of the site and proposed that it should be redeveloped, either on its own or as part of a comprehensive development. This was a material matter of fact which, for whatever reason, was not before the committee when they took their decision. Where the committee had to decide that a particular piece of land was required for the purposes of paragraph (a) or (b) of section 189(1), it was extraordinary to suggest that they could proceed on the basis of a generalised belief that there had been difficulties without addressing the question whether that particular piece of land would require to be compulsorily purchased. There was no basis for any conclusion that Bass or Standard would stand in the way of a comprehensive development. Nothing in the planning policies required that development of the area be carried out by reference to a single developer or single owner, even if the whole area was to be comprehensively developed. The committee had not had any regard to the question whether Bass's proposals were compatible with the desire to achieve redevelopment of the area in accordance with the tenets of proper planning. Even if one simply focused on the narrower scheme which Bass had started to discuss with the Council in March 1999, the Council as planning authority had power to cause redevelopment of the corner site to be compatible with redevelopment of the broader area. This matter had not been discussed. Against a total failure to consider the position of Bass, the committee had decided to impose a choice of sale or compulsory purchase. The decision of the committee was flawed for four reasons. (1) The Council had no basis whatsoever for concluding that the land owned by Bass was required, within the meaning of section 189. (2) The committee had failed even to address a material issue, which was the attitude of Bass to the redevelopment of its subjects. (3) There was no basis for concluding, as the committee had done, that because the owners of 20% of the site allegedly refused to sell, a compulsory purchase of their land was required, because there was no basis for concluding that 100% ownership was required. (4) The committee had failed to take account of the fact that Bass as well as Atlas had proposed a comprehensive development. What it came to was that in not taking into account or addressing the position of Bass the Council could not possibly take a proper decision that the land was required for the purposes set out in either paragraph (a) or paragraph (b) of section 189(1).
[34] Counsel then turned to the question of the relationship between section 189(4) and section 191. He submitted that section 189(4) was not to do with specifically authorising a local authority to commit themselves to a particular developer at the time of deciding that a CPO was required. Its purpose was to make clear that the local authority were not disabled from exercising their powers if they did not propose to carry out the development themselves. It was not Standard's argument that a local authority could never decide that they would enter into a particular arrangement with a particular developer, nor that a back-to-back agreement was not intra vires of a local authority. But in deliberating whether it was appropriate, the local authority required to address the issues, and in particular whether the land was required for the purposes set out in paragraph (a) and (b) of section 189(1). Section 189(4) should be treated as permissive. It empowered a local authority to proceed with a CPO if they were not going to carry out the development themselves. Section 191(1) still applied, however. Counsel said that he was focusing very sharply on the circumstances of this case. He was not arguing that a back-to-back agreement might not be entered into if the Council had addressed themselves to the relevant issues. But section 189(4) did not authorise them to enter into a back-to-back agreement in any circumstances whatsoever.
[35] Under reference to the provision of section 191(3), counsel disagreed that the onus was on Standard to say that a better price could have been obtained. Standard's case was that because the Council had not even addressed the question whether by entering into an agreement with Atlas the best price or terms could be obtained, Atlas would acquire the land at cost price. Bass, and now Standard, was interested in developing either the subjects owned by it or the whole package. It was therefore plain that at the time the Council came to own the land as a result of the CPO procedure, it could not be said now that the price or terms on which the subjects would pass to Atlas were the best, because the matter had not been tested. On 26 August 1999 the committee had authorised a deal with Atlas "on normal terms", This did not take account at all of the position of Bass or Standard. It was clear that the Council had not addressed the critical issue whether the cost of individual properties was the same as the value of the whole site in single ownership. If it was right, as submitted on behalf of the Council, that section 191(3) did not apply, section 74 of the Local Government (Scotland) Act 1973 would come into play, and in terms of subsection (2) thereof a local authority could not dispose of land for a consideration less than the best that could reasonably be obtained: see Stannifer Developments Ltd v Glasgow Development Agency, supra.
Further submissions for the Council
[36] In his second speech, senior counsel for the Council said that he now had information from the leader of the Council who was present at the committee meeting on 26 August 1999. Mr Bennett had made some spoken reference to the Bass proposal. This was all the information counsel had, and he suggested that there should be a second hearing. Atlas's proposals were well down the line, there had been detailed discussion with it, it held 63% of the site, the Bass proposals had only been put forward at a meeting in July 1999, its scheme for the whole site had been discussed in broad terms, it was reasonable to infer that the Council would consider that in order to secure what they wanted within a reasonable time they were entitled to say that only Atlas were in the frame. Counsel was unable to suggest any reason why a decision should not have been put off until the Bass proposal could be considered in more detail and a choice between the two proposals could be made on their merits. He said that there had been delay for a long time and the Atlas proposal was a "bird in the hand". Counsel did not associate himself with the preliminary points taken on behalf of Atlas, and said that the Council wished to defend their decision on its merits.
Further submissions for Atlas
[37] Senior counsel for Atlas, in his second speech, submitted that his preliminary points were within the ambit of Atlas's competency plea. The concession that a back-to-back agreement might be lawful meant that the decision to enter into one was inevitably a matter of discretion. Neither Bass nor Standard had suggested a comprehensive redevelopment which did not require a CPO, at least in respect of part of the site. It could not be said that in the circumstances the Council had failed to take account of a material consideration when deciding to facilitate the Atlas scheme.
Submissions about further procedure
[38] The hearing concluded with a discussion of the question whether there should be a second hearing. Senior counsel for Standard pointed out that the committee's minutes said that they considered the report and that alone. Senior counsel for the Council submitted that provision should be made for the lodging of affidavits. He accepted what the minutes said, but repeated that he had information that Mr Bennett had made a reference to the Bass proposals.
Decision
(1) Competency
[39] Notwithstanding the averments in the petition and some of the earlier submissions by senior counsel for Standard, to the effect that Standard owned property within the boundaries of the proposed CPO site as at 26 August 1999, I understood counsel's final position to be that on that date Standard did not own any property within the site. On the other hand, by the time the present application was lodged, Standard did own property within the site and shortly thereafter it lodged an application for planning permission. Given its relationship with Bass, as members of the same group of companies, and the decision that it rather than Bass should carry forward the proposals initiated by Bass, I am satisfied that Standard has the necessary title and interest to seek judicial review of a decision which if further implemented may result in the compulsory acquisition of its property and put an end to its proposed development.
[40] I am also satisfied that this application is neither too late nor premature. I was not fully addressed on the concept of mora in applications for judicial review, and in particular the extent to which it may be necessary for a respondent to demonstrate prejudice to him by reason of delay on the part of the petitioner. The particular event that was pointed to as having occurred between the date of the decision and the lodging of this application was the execution of the agreement. Standard had, however, no means of knowing when the agreement was to be executed and, in any event, the agreement itself achieved no immediate result. The position might have been different had Standard delayed until after the CPO procedure was complete, for example, but this has not yet even been initiated. Equally, it does not seem to me that the application could be described as premature in a situation where the Council have not only taken the decision but have implemented it to the extent of entering into the agreement with Atlas and no doubt would, unless prevented from doing so, be prepared to initiate the CPO procedure to further the development for which they have granted planning permission to Atlas. There is thus obvious practical content to the application as matters stand. I see no reason why, particularly at a time when its own application for planning permission has not yet been determined, Standard should be expected to wait longer to challenge the Council's decision.
[41] This leaves the question whether it is competent for Standard to seek reduction of the agreement in this application for judicial review. In McIntosh v Aberdeenshire Council Lord Maclean appears to me to have gone no further than to hold that the petition was incompetent because judicial review was an inappropriate means by which to challenge what was a contractual arrangement between the parties to it. He did not hold that it was never competent in an application for judicial review to seek reduction of a contract entered into pursuant to an ultra vires decision. Nothing in West v Secretary of State for Scotland 1992 SC 385, which Lord Maclean discussed in McIntosh, would appear to point to that conclusion. All that the Court said in West, at p. 413, was that contractual rights and obligations are not as such amenable to judicial review. In my opinion where, as here, a third party with the necessary title and interest alleges that a decision of a decision-maker such as a local authority to enter into an agreement is ultra vires, and consequently the entering into the agreement is also ultra vires, it is open to the Court in the exercise of its supervisory jurisdiction to entertain an application for reduction not only of the decision but also of the agreement, the validity of which depends on the validity of the decision. It would obviously be convenient to dispose of both branches of the challenge in a single process, and nothing in the authorities to which reference was made appears to me to suggest otherwise. In my opinion therefore it is competent for Standard to seek reduction both of the Council's decision inter alia to enter into an agreement with Atlas and of the agreement entered into pursuant to that decision.
(2) Statutory Provisions
[42] The power of compulsory acquisition conferred on a local authority by section 189(1) of the 1997 Act may be exercised by them, subject to the necessary authorisation, if the land is required for either or both of the purposes set out in paragraphs (a) and (b) which are, broadly speaking, planning purposes. I accept, adopting McCowan L.J.'s definition in Sharkey, as modified in the course of the hearing before me, that "required" means "reasonably necessary in the circumstances of the case". Accordingly, for a local authority validly to exercise the power of compulsory acquisition, they would have to consider in respect of the land in question whether in light of the whole circumstances of the case so far as material (which, for the purposes of paragraph (a) would include the matters set out in subsection (2)(a), (b) and (c)) compulsory acquisition of the land is reasonably necessary. Section 189(4) makes it clear that the power under subsection (1) may be exercised even where the local authority propose that another person is to undertake the activity or achieve the purpose; but their decision whether they themselves or another person would do this would be governed by the requirements of subsection (1). Subsection (4) does not expressly authorise a local authority to enter into an agreement, such as a back-to-back agreement, with the other person. In my opinion authority to do this must be sought elsewhere, and is to be found in section 191. There is an obvious correlation between sections 181 and 191 by virtue of the definition in section 201 of the expression "planning purposes" in the latter by reference to the former. It does not appear to me to be a sound objection to reliance on section 191 that subsection (1) only authorises disposal of land which has both been acquired (or appropriated) and is held by the local authority. No doubt this would apply to land which has been held for some time but is found not to be required for the purpose for which it was originally acquired and is thus available for disposal as being surplus to requirements. But land may properly be described as being held by a local authority as soon as it is vested in them by virtue of a general vesting declaration following upon procedure for compulsory acquisition, and in my opinion section 191 applies as soon as the land has vested in the local authority. In considering whether to dispose of the land, however, the local authority would have to consider what manner of disposal, and what conditions to which it should be made subject, may be expedient for the purposes mentioned in subsection (2), which include the best use of the land and the erection on it of buildings appearing to them to be needed for the proper planning of their area. Section 191(3) does not prohibit such a disposal otherwise than at the best price that can reasonably be obtained. The expression in that subsection is "otherwise than at the best price or on the best terms that can reasonably be obtained" (my emphasis). It would therefore be for the local authority to consider not only the price (as related inter alia to the amount of compensation payable under the compulsory purchase procedure) but also the terms offered by any person to whom the disposal might be made. These terms would include those which would be most conducive to achievement of the purposes set out in subsection (2), and would thus include matters such as the likely ability of the person, on the basis, for instance, of past experience and financial soundness, to carry the development through to completion. Moreover, subsection (3) is subject to the provisions of subsection (7), so that consideration might require to be given to the interests of those who were carrying on business on the land and desired to continue to do s
[43] Read together, sections 189 and 191 appear to me to provide a statutory framework within which a local authority may decide to acquire land compulsorily and to sell it to a developer under a back-to-back agreement, provided that proper account is taken of all the considerations I have mentioned, particularly the planning purposes in section 189(1). I thus reject the submission for Standard (which was in any event, as I understood it, departed from) that a decision to enter into a back-to-back agreement cannot competently be made at the same time as a decision compulsorily to acquire the land in question. I also reject the submission for the Council that the authority for the entering into a back-to-back agreement is to be found in section 189(4) and that section 191 has no application for this purpose. I accept the submission for Atlas as to the provisions of sections 189 and 191 which give rise to the exercise of a discretion. I prefer, however, to express this as a single, composite discretion rather than one to be exercised in stages, as I understood counsel for Atlas to submit. The over-riding consideration for the local authority, as it appears to me, is whether acquisition of the land by them and its development by the developer with which a back-to-back agreement is to be entered into are reasonably necessary for planning purposes.
(3) The validity of the decision
[44] In light of the statutory provisions and the views I have expressed about the matters which the Council would require to consider in order validly to exercise their discretion, I turn to the question of what they did in fact consider. It seems to me to be the only proper interpretation of the minutes recording the decision that the committee based their decision on a consideration of Mr Bennett's report, and accordingly that it is to the contents of this report alone that regard must be had in identifying the matters which the Council took into account. For this reason I do not propose to allow a second hearing for the purpose of establishing what else may have been mentioned to the committee; what matters is what they took into account. The issue then becomes a narrow one. One assumption which underlies the report appears to be that a single comprehensive redevelopment of the whole site, at present occupied by several buildings with different owners, by a single developer is required. It does not necessarily follow that because the whole site requires to be redeveloped a single comprehensive development is required. There is thus no discussion of the possibility of the involvement of more than one developer, or of separate (but mutually compatible) redevelopments of different parts of the site. There is no reference at all to the discussions with Bass about its proposals for redevelopment of the whole site or in any event that part of it occupied by the existing building at the corner of Buchanan Street and Bath Street. There is thus no comparison made between the merits of the proposals of Bass (and later of Standard) and those of Atlas. The committee must be taken to have decided that the corner building required to be compulsorily acquired as part of the CPO site in the belief that its owners were holding the project to ransom, as it was put in the report. Irrespective of what approaches, if any, had been made to Bass by Sears or Atlas, the fact that Bass had proposals of its own and had discussed them with officials of the Council was in my view clearly relevant and material and should have been before the committee in Mr Bennett's report. Moreover, if, as I must assume from counsel's primary submission, the committee took the view that section 191 had no application for the purposes of deciding whether or not to enter into an agreement with Atlas, it cannot be said that they took account of the matters which they required to consider under that section.
[45] For these reasons in my opinion the committee failed to take account of relevant and material considerations in exercising their discretion under sections 189 and 191 and their decision falls to be quashed: see Wardie Property Co Ltd v Secretary of State for Scotland, supra. In reaching this view I am not of course expressing any opinion as to the merits of Bass's and now Standard's proposals compared with those of Atlas, or as to whether the committee might have reached a different view had they been put in a position which would have enabled them to take account of all relevant and material considerations. For all I know the decision might have been the same. But because account was not taken of relevant and material considerations the decision and the agreement which was entered into pursuant to it were ultra vires of the Council.
[46] I shall accordingly sustain the first and second pleas-in-law for Standard, repel the pleas-in-law for the Council and Atlas, pronounce decree of declarator that the decision of the Development and Regeneration Services Committee of the Council dated 26 August 1999 and the agreement between the Council and Atlas dated 19 and 20 October 1999, were ultra vires of the Council and reduce the decision and the agreement accordingly.