Scottish Court of Session Decisions

[1] This is an appeal under sections 237 and 239 of the Town and Country Planning (Scotland) Act 1997 by City of Edinburgh Council (hereinafter referred to as "the appellants") against a decision of the Scottish Ministers' reporter dated 9 November 1999. The Scottish Ministers are the first respondents and Cuba Norte Limited (formerly St. Vincent Street (277) Limited) are the second respondents.

[2] The City of Edinburgh Council served an enforcement notice dated 17 November 1998 relating to an alleged unauthorised development, namely, a change of use of premises at 192-194 Morrison Street, Edinburgh from restaurant to public house/licensed club. The second respondents appealed against the enforcement notice and the reporter, Mrs. Jill Moody, was appointed to determine the appeal. A public local inquiry was held from 17 to 19 August 1999. The enforcement notice alleged that there had been "a change of use of the premises from a restaurant to a public house/licensed club where amplified music is provided" without planning permission having been granted. The first ground of appeal against the enforcement notice was that, in respect of any breach of planning control which may be constituted by the matters stated in the notice, planning permission ought to be granted.

[3] In February 1996 the appeal site had been granted planning permission for change of use from retail/storage to a Class 3 restaurant. Class 3 is specified in Schedule 1 to the Town and Country Planning (Use Classes)(Scotland) Order 1997 (S.I. 1997 No. 3061) as permitting "use for the sale of food or drink for consumption on the premises".

[4] In paragraphs 4 and 5 of the decision letter the reporter described the appeal premises. They comprise a street level unit on Morrison Street, which links via a flat roofed addition, across the backcourt and into one of the mews buildings. An internal difference in levels has created a ground floor at the front, which stretches from Morrison Street through the link, above a basement that extends beneath the full floor area. At the back, in the mews building, there is a mezzanine floor in the form of a gallery, which overlooks part of the basement. The main public entrance is from Morrison Street, and the front elevation has five full length window/glass doors. At the time of the reporter's site inspections the site was in use as the "Cuba Norte", which advertised a combination of food, drink and entertainment. Internally, about half of the basement formed kitchens, storage and other services activities. Part of the remainder had been laid out with tables and appeared to be in occasional restaurant use, and the balance was occupied by a bar and open dance floor area. There was disco equipment standing along one full wall of the open area, and there was a bar along the opposite wall. Most of the ground floor was taken up by a long bar, plus seats and tables, some of which also appeared to be in occasional restaurant use. The mezzanine was entirely in restaurant use.

[5] The reporter found (in paragraph 39) that the existing combined drinking and dancing activities exceeded what could reasonably be regarded as ancillary to the authorised restaurant and (in paragraph 40) that in the context of the public house use the high level of entertainment provision was more than could be ancillary to that public house use. She was satisfied (paragraph 41) that the authorised restaurant use had been replaced by three main use components, none of which were ancillary to the authorised use, or to each other, so that a material change of use had occurred. This material change was to a new and unauthorised sui generis mixed use, incorporating a public house and amplified music. In the event, the reporter allowed the appeal, directed that the enforcement notice should be quashed and granted planning permission for a mixed use development incorporating restaurant and public house uses, plus dancing and entertainment, subject to certain conditions.

[6] In reaching her decision to allow the appeal, the reporter considered the applicability of Policy L5 contained in the Central Edinburgh Local Plan which was adopted by the appellants in May 1997. Paragraphs 7.15 to 7.18 and Policies L2, L3, L4 and L5 relate to restaurants, public houses and other commercial leisure uses.

[7] Paragraph 7.15 and 7.16 state as follows:

Policy L5 is in the following terms:

[8] Before the reporter the second respondents had submitted that the present use of the premises was not materially different from a restaurant and therefore it could not conflict with Policy L5. On the other hand the present appellants submitted that Policy L5 had been breached by the change of use. The appeal to this court relates to the way in which the reporter dealt with Policy L5 in her decision letter. Her conclusion on that matter is contained in paragraph 47 of the decision letter which is in the following terms:

[9] Before us counsel for the appellants attacked the reporter's conclusion that the appellants' earlier decision to grant planning permission for a Class 3 restaurant use had already breached Policy L5 and that, accordingly, that particular policy was no longer applicable. He submitted that the reporter's conclusion on this matter amounted to an error in law and had vitiated her decision to allow the appeal, quash the enforcement notice and grant planning permission for the change of use. In particular, the reporter had erred in concluding that the Class 3 restaurant fell within the definition of "similar licensed premises" in Policy L5. With regard to the circumstances in which the court would be entitled to interfere with a decision by a reporter in relation to the interpretation of a planning policy in a local plan, counsel referred to Virgin Cinema Properties Limited and Others v. Secretary of State for the Environment and Others [1998] 2 P.L.R. 24 and Freeport Leisure plc v. West Lothian Council 1999 S.L.T. 452. It was necessary to consider the reasons given by the reporter for the interpretation which she had adopted and the adequacy of those reasons. In the present case the reporter had adopted an interpretation of Policy L5 which was perverse, untenable and unreasonable. Policy L5 did not refer to change of use of premises under or in the midst of housing to "a public house or other licensed premises". When it referred to "licensed premises", those licensed premises had to be similar to a public house and a Class 3 restaurant was not similar to a public house. The Use Classes Order made it clear that the use of premises as a public house and their use as a Class 3 restaurant were separate and distinct. In paragraph 7.15 and 7.16 of the local plan, public houses and restaurants were treated separately. While Policy L2 dealt generally with commercial leisure uses, Policy L5 had a much narrower application and focused on public houses or other licensed premises which were similar to a public house, such as a wine bar. Policy L5 was clearly not intended to apply to a Class 3 restaurant where the provision of alcohol had to be ancillary to the consumption of food. Counsel also founded on the terms of a non-statutory guideline on the location of licensed premises which had been approved by the appellants in January 1999. It covered policy L5 and was referred to by the reporter in paragraph 42 of the decision letter where she observed that it "broadly accords with the policies in the adopted local plan". However, the guideline stated that it applied to proposals for inter alia a public house and a wine bar but did not apply to uses that fell within Class 3 of the Use Classes Order. It also observed that the Use Classes Order established a distinction in planning terms between a public house and other food and drink uses. Accordingly, the terms of the guideline were not consistent with the interpretation which the reporter placed on Policy L5. Further, the reporter had given no reasons for her conclusion that a Class 3 restaurant fell into the category of "similar licensed premises". The reporter's decision on this issue, which was clearly a material part of her determination, was perverse and unreasonable and the court was entitled to interfere. In the circumstances the decision of the reporter should be quashed.

[10] Counsel for the first respondents, the Scottish Ministers, submitted that the reporter had not been shown to have erred in law. He accepted that the decision of the reporter was open to challenge if she had failed to have regard to a relevant policy in the local plan or if, as is alleged in this appeal, she had failed properly to interpret such a policy. In that connection counsel referred to City of Edinburgh Council v. Secretary of State for Scotland 1998 SC (HL) 33 per Lord Clyde at page 44G-H. However, it was not for the court to determine what was the proper interpretation of a planning policy. That was for the reporter to determine and the court could not interfere if the wording of the policy was capable of bearing the interpretation which the reporter had placed on it. The court could only interfere if the reporter's interpretation of the policy was perverse in that she had given to the words, in their context, a meaning which they could not possibly bear. Whether a proposed development fell within the ambit of a particular policy was essentially a matter of fact and degree for the planning judgment and expertise of the reporter. Counsel referred to R. v. Hillingdon London Borough Council [1986] AC 484 per Lord Brightman at page 518E and R. v. Derbyshire County Council, ex parte Woods [1997] JPL 958 per Brooke L.J. at pages 967-8. It would be sufficient if the respondents could show that the words were "just conceivably" capable of bearing the meaning which the reporter placed on them. The issue in the present appeal was whether the words "or similar licensed premises" in Policy L5 were capable of meaning restaurant premises with planning permission for Class 3 use. It was important to note that the restaurant had been granted a public house licence (paragraph 27) and not a restaurant licence, and that was a factor which the reporter was entitled to take into account in determining whether the restaurant fell within the term "similar licensed premises" compared to a public house. In the local plan restaurants and public houses were both seen as having a potentially adverse effect on public amenity. A wine bar would be struck at by Policy L5 as would a restaurant operating with a public house licence. If it had had a restaurant licence, the provision of alcohol would have had to be ancillary to the provision of food. Counsel submitted that a Class 3 restaurant with a restaurant licence would fall within Policy L5 and a fortiori a restaurant with a public house licence would fall within Policy L5 as in terms of the licence alcohol could be sold for consumption on or off the premises. The non-statutory guideline was published after the local plan had been adopted and was not part of the local plan. It was just evidence of what the appellants understood their policies in relation to the location of licensed premises to mean. It was sufficient if the respondents were able to show that it was "just conceivable" that the wording of policy L5 was capable of including a Class 3 restaurant. The appellants had failed to demonstrate any error of law and the appeal should be refused.

[11] Counsel for the second respondents adopted the submissions which had been advanced on behalf of the first respondents. He submitted that the scope for intervention by the court in relation to the interpretation placed on a local plan policy by a reporter was very limited. If several meanings could be attributed to the wording of a policy, and the reporter had selected one of those meanings, then no error of law had been demonstrated, even if the court took the view that the meaning selected had, in the circumstances, been the wrong meaning. The appellants had to demonstrate that the wording of Policy L5 was not capable of bearing the meaning attributed to it by the reporter. Planning permission for change of use to a Class 3 restaurant had been granted in February 1996. Counsel informed us that a grant of a provisional licence was made in March 1996 and that the plan of the premises included a bar counter. In October 1996 a public house licence was granted. A Class 3 restaurant could have a bar counter so long as the service of alcohol was ancillary to the provision of meals, but at that time it required a public house licence because of the presence of the bar counter, even though it did not have planning permission for use as a public house. A restaurant licence would not have been granted to a restaurant which had a bar counter. However, that practice changed in 1999. The reporter referred (in paragraph 48) to the fact that the site had had planning permission for an unrestricted restaurant. Counsel submitted that a Class 3 restaurant with a restaurant licence would be struck at by Policy L5 and a fortiori if it had a public house licence. Policy L5 was not confined to public houses and wine bars. While paragraph 7.16 of the local plan was the basis for the narrow interpretation advanced by the appellants, paragraph 7.15 was capable of supporting the wider construction which the respondents were urging on the court. Counsel further submitted that the non-statutory guideline was not properly an aid to construction of the local plan. It was simply a statement of what the appellants later thought their policy relating to the location of licensed premises actually meant. The appeal should be refused.

[12] In reply, counsel for the appellants disputed the second respondents' submission that it was sufficient for them to show that the wording of Policy L5 could "possibly" or "just conceivably" bear the meaning attributed to it by the reporter, and submitted that the proper test was whether the words could reasonably bear, in their context, the meaning which she had attributed to them. The reporter had effectively given no reasons for reaching her conclusion in relation to Policy L5. Counsel further submitted that both respondents had sought to rely on the implicit suggestion that the reporter had been influenced, in reaching her decision that Policy L5 had already been breached, by the fact that the restaurant had been granted a public house licence, but that was not what the reporter said in her decision letter. All she said was that "the Council's decision to favour a restaurant has already breached the development plan". She was thus referring to the grant of planning permission for use as a Class 3 restaurant as breaching Policy L5, not the grant of the public house licence.

[13] The appellants' case is that the reporter failed properly to interpret Policy L5 and in the course of the hearing the question arose as to the circumstances in which the court would be entitled to interfere. There is no doubt that, in a case where a decision on a planning appeal has been delegated to a reporter, it will be for the reporter to interpret the relevant policy contained in the development plan exercising his or her planning judgment. However, the reporter's decision "will be open to challenge if he fails to have regard to a policy in the development plan which is relevant to the application or fails properly to interpret it" (City of Edinburgh Council v Secretary of State for Scotland, supra, per Lord Clyde at p.44G-H). In R v Derbyshire County Council, ex parte Woods, supra, Brooke L.J. made the following observations (at pps.967-8):

In Virgin Cinema Properties Ltd v Secretary of State for the Environment, supra, Deputy Judge George Bartlett, Q.C., observed (at p. 29):

[14] In our opinion, the reporter having held that a Class 3 restaurant fell within the ambit of Policy L5, the question which we have to determine is whether or not the wording of Policy L5 was properly capable of applying to the former Class 3 restaurant use. If the words "similar licensed premises" in Policy L5 were not properly capable of applying to the authorised Class 3 restaurant use, then it would follow that the reporter misinterpreted the policy. It is to that issue that we now turn.

[15] The local plan policies in relation to restaurants, public houses and other commercial leisure uses are set out on pages 70 and 71 of the local plan. Paragraph 7.15 states that the Council is concerned to prevent the excessive concentration of such uses in areas which have a mixed but essentially residential character and goes on to state that the "uses which these objectives embrace include principally public houses and other licensed premises, restaurants, cafes and 'take-away' hot food shops, night clubs and other similar potentially un-neighbourly uses. In practice it is proposals for public houses and 'take away' hot food shops which are the most frequent cause of concern". In paragraph 7.16, dealing with policies seeking to prevent encroachment of such uses into residential areas or their location in premises where residential amenity will be adversely affected, it is stated as follows:

The wording of paragraph 7.16 is particularly relevant to Policy L5 which, as we have already stated, is in the following terms:

As counsel for the appellants pointed out, Policy L5 does not refer to "a public house or other licensed premises" nor does it refer to "a public house or similarly licensed premises". It is, in our opinion, clear that Policy L5 seeks to prevent, under or in the midst of housing, the change of use of premises to a public house or other licensed premises which are similar to a public house. Indeed, this was the interpretation adopted by the reporter in paragraph 47 of the decision letter. She found that the appeal site is in a mixed activity zone and, under reference to Policy L5, that it was reasonable for the appellants to find that the site is in the midst of housing. She stated that the existing mixture of uses (following the unauthorised change of use in respect of which the enforcement notice was served) incorporated a significant public house element and that Policy L5 was relevant. She then went on to observe that that policy referred to similar licensed premises and that she was satisfied that the approved Class 3 restaurant fell into that category. In other words, she found that the authorised use as a Class 3 restaurant fell within the definition of "similar licensed premises" in Policy L5. On the basis of that important finding she concluded that "although the mixed uses would be strictly contrary to Policy L5, the Council's decision to favour a restaurant has already breached the development plan" and that Policy L5 was no longer applicable. Her conclusion on this matter is based on the appellants' original decision to grant planning permission for change of use to a Class 3 restaurant and she does not seek to found in paragraph 47 on the fact that the restaurant had a public house licence. In these circumstances the question which arises is whether the words "or similar licensed premises" in their context in Policy L5 are capable of being treated as referring to a Class 3 restaurant. To put it another way, is a licensed Class 3 restaurant capable of being regarded as similar to a public house? The appeal premises did not have planning permission for use as a public house and, indeed, the Class 3 authorised use effectively prevented them being used as a public house. So far as the sale of alcohol is concerned, it could only be sold for consumption on the premises, whereas in the case of a public house it can be sold for consumption on or off the premises. Further, in the restaurant the consumption of alcohol had to be ancillary to the service of a meal on the premises. We also note that the stated objective of the appellants' guideline relating to the location of licensed premises, which was formally adopted in January 1999, was "to provide guidance in support of local plan policies for licensed premises in locations where the protection of residential amenity may also be an issue", and in the document reference was made to the terms of Policy L5. The guideline stated that it applied to proposals for certain types of licensed premises, namely, public houses, beer gardens, wine bars, licensed hotels and entertainment venues (including night clubs/discos) but that it did not apply to uses that fall within Class 3 (Food and Drink) of the Use Classes Order. It also stated that the Use Classes Order established a distinction in planning terms between a public house and other food and drink uses and there is no doubt that that is so. On the whole matter we have reached the conclusion that the wording of Policy L5 is not capable of referring to a change of use to a Class 3 restaurant and that the reporter's conclusion that the approved restaurant fell into the category of "similar licensed premises" is an interpretation which the wording of Policy L5 is not capable of bearing. The reporter, in our opinion, misinterpreted Policy L5 and this led her erroneously to conclude that Policy L5 had alr