Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2010] CSOH 122
P522/10	OPINION OF LORD DOHERTY in the Petition of THOMAS DAVID WILLIS Petitioner; for Judicial Review of a decision by Argyll and Bute Council to grant planning permission for a development at Tarbert Road, Campbeltown, Argyll ­­­­­­­­­­­­­­­­­________________

Petitioner: Connal, Q.C., Solicitor Advocate; McGrigors, LLP

Respondent: S Smith, Advocate; Brodies LLP

1 September 2010

Introduction

[1] In about March 2005 Mr Andrew Irvine Smith applied to Argyll and Bute Council ("the Respondents") for outline planning permission for a proposed housing development at Tarbert Road, Campbeltown ("the site"). In about May 2005 the Petitioner purchased the site from Mr Smith. In 2009 the Petitioner submitted his own application for outline planning permission for a similar housing development on the site. Thereafter during 2009 both applications were being furthered by the respective applicants.

[2] The Petitioner submitted representations opposing the grant of planning permission in principle to Mr Smith, and contending that if the Respondents were minded to make such a grant they ought not to do so unless and until a Section 75¹ planning agreement relating to the development on the site was concluded between Mr Smith, the Petitioner and the Respondents. On 15 March 2010 the Respondents granted Mr Smith planning permission in principle without having required the conclusion of such an agreement. The grant was subject to fifteen conditions. Condition 3 provided that the development should not commence until a scheme for affordable housing (as defined in the condition) had been submitted to and approved by the Respondents.

1. Town and Country Planning (Scotland) Act 1997, Section 75.

[3] In these judicial review proceedings the Petitioner seeks declarator that the planning permission granted to Mr Smith was ultra vires, null and of no effect, and reduction of the permission.

[4] The matter came before me for a First Hearing. The representations and other correspondence between the parties, some correspondence between Mr Smith's agents and the Respondents, and two affidavits from planning officers of the Respondents were among the productions. While these were not the subject of any formal agreement both parties referred in detail to their contents and I understood them to be content that I proceed on the basis that the relevant correspondence had in fact been sent in the terms and on the dates which the copy letters bore. The Petitioner did not raise any issue with the factual content of the affidavits.

Planning policies and guidance

[5] In the development plan the site is within an area allocated for housing development.

[6] Policy STRAT HO 1 of the Argyll and Bute Structure Plan (November 2002) provides:

"(A) Planning conditions and planning agreements shall be required, in appropriate cases, to facilitate the delivery of housing to meet local housing need, including affordable housing provision."

[7] Policy LP HOU 2 of the Argyll and Bute Finalised Local Plan provides:

"(A) All new housing sites...will be expected to contribute a proportion of affordable housing. The benchmark figure is that each site with a total capacity of 8 houses or more should contribute 25% of the total number of units as affordable housing.... (B) Planning conditions and Section 75 planning agreements shall be required, in appropriate cases, to facilitate the delivery of housing to meet local housing needs, including affordable housing provision."

[8] PAN 74 "Affordable Housing" advises:

"Planning Conditions and planning agreements

41. The local plan should set out the means of delivering affordable housing and indicate the likely nature and scale of other contributions expected from each development. Provision of land for affordable housing should where possible be the subject of a planning condition, particularly where a proportion of a site is to be made available for on-site provision of affordable housing, e.g. stating 'The area shown on the attached drawing (including reference) shall be development solely for the purposes of affordable housing to the satisfaction of the planning authority'. A Section 75 agreement may be necessary, for example where a commuted sum is to be negotiated to enable off-site provision or to enable retention of affordable units."

[9] Circular 12/1996 "Planning Agreements" provided:

"6. When deciding whether to grant planning permission, planning authorities should wherever possible rely on planning conditions including, where appropriate, suspensive conditions, rather than using a planning agreement. Planning conditions must, however, satisfy the normal legal tests; further guidance is contained in Circular 18/1986 which should now be read in the light of the recent House of Lords decision in British Railways Board against the Secretary of State for the Environment and Hounslow London Borough Council [1994] JPL 32; [1993] 3 PLR ¹. The use of conditions rather than planning agreements should help reduce delays in the development control process although many authorities feel that agreements provide an alternative and more effective means of enforcement without the risk of having a condition overturned or modified at appeal. The Secretary of State's view is that a right of appeal should not be frustrated in this way.

Footnote 1. In this case the House of Lords held that the mere fact that a desirable condition, worded in a negative form, appears to have had no reasonable prospects of fulfilment does not mean that planning permission must necessarily be refused as a matter of law."

Circular 12/1996 was revoked by Circular 1/2010.

[10] Planning Circular 1 of 2010, "Planning Agreements" provides:

"13. Where a planning permission cannot be granted without some restriction or regulation the planning authority should firstly consider whether the restriction or regulation can be achieved by the use of a planning condition. Planning conditions are preferable to a planning or other legal agreement, as they are simpler and can potentially save time and money...."

[11] In 2007 the Respondents' planning officers prepared a paper entitled "Annex 1: Development Plan Policy Guidance - Affordable Housing". In December 2007 the paper was approved by the Respondents as supplementary planning guidance for use in connection with Local Plan affordable housing policy LP HO 2. The Guidance was informal supplementary planning guidance. It did not have statutory status (i.e. it was not supplementary planning guidance adopted and issued in terms of the Town and Country Planning (Scotland) Act 1997, section 22 (as substituted by the Planning etc. (Scotland) Act 2006, Part 2, section 2) and relative regulations). Part 1 of the paper set out the "Policy Context":

"1.2 ....Local Plan policies must be based on a robust assessment of local needs in each community to be undertaken in conjunction with the local Housing Authority. Based on this evidence, clear guidance must be given on what constitutes affordable housing and the appropriate mechanism for securing it. Policies may provide for the retention of affordable housing for successive as well as the initial occupants, and seek to reserve such properties for people falling within particular categories of need. Suitable delivery mechanisms include the selective use of planning conditions, Section 75 and other legal agreements, and through partnership working with private developers and Registered Social Landlords.....the Council's approach to this is set out initially in the Argyll and Bute Structure Plan Policy HO 1.....This approach is further reinforced by the Argyll and Bute Local Plan Policy LP HOU 2..."

Part 4 of the paper sets out "Mechanisms for Securing Affordable Housing":

"4.1 Where housing land is being allocated in the local plan and where the allocation indicates an element of affordable housing is required, then planning permission will be subject to prior completion of a Section 75 Agreement with the landowner/s and other interested parties that ensures an affordable housing contribution...."

The paper proceeded to describe a range of mechanisms to achieve affordable housing provision.

The Petitioner's representations

[12] By a written representation dated 4 June 2009 the Petitioner's agent objected to Mr Smith's application. That representation stated:

"...The application was submitted in March 2005, at which time the site was owned by the applicant, Mr A. Smith. Mr Willis took ownership of the site in May 2005.

As the applicant is not the owner of the site, he would not be in a position to implement a planning consent, or deliver the affordable housing provision required by Policy LP HOU 2 of the Finalised Local Plan.

We have recently submitted planning application 09/00767/OUT on behalf of Mr Willis. Our proposal is for the erection of 24 dwellinghouses, with 25% affordable housing provision, as required by Policy LP HOU 2.

Development Plan Policy Guidance on Affordable Housing indicates that a Section 75 Agreement is the preferred mechanism for the delivery of affordable housing provision. This can only be negotiated by the landowner.

We consider that our application on behalf of the landowner represents the only opportunity for the development of the site and the most realistic mechanism for the delivery of affordable housing.

We therefore consider that the Council should refuse the application..."

[13] By further representation dated 25 November 2009 the Petitioner's agent referred to both applications and wrote:

"We have a concern that should the planning applications be approved without a Section 75 Agreement as the mechanism for the delivery of affordable housing (in compliance with the local plan), then it would create significant difficulties for David Willis as owner. He would be unable to progress a detailed planning application and thus secure the implementation of his housing site zoned in the local plan. We consider this would not be in the public interest.

This unusual but likely sequence of events is due to the particular terms of a legal agreement between our client and Andrew Smith...

We asked that you would not issue any planning consent until we have put our case to you and you have had an opportunity to consider it...."

[14] At a meeting on 4 December 2009 between planning officers of the Respondents and agents of the Petitioner the latter advised that the sale agreement between Mr Smith and the Petitioner required a substantial payment to be made to Mr Smith on the granting of outline planning consent (viz. "planning permission in principle" in terms of Section 59 of the 1997 Act (as amended by the Planning etc. (Scotland) Act 2006)). However, the Petitioner maintained he was unlikely to be able to obtain funding for the development until detailed consent was obtained. If either application for outline consent was granted the Petitioner would be liable to make payment of the deferred consideration to Mr Smith but would not have funds to do so. On the other hand, if the execution and registration of a Section 75 agreement were to be required before an outline consent was granted, the Petitioner would not become liable to make the additional payment to Mr Smith unless and until he co-operated to enable the agreement to be executed. The Petitioner envisaged the scenario being that no consent in principle would be granted to Mr Smith. This would allow the Petitioner time to bring forward his detailed scheme, get planning consent and funding for it, and pay Mr Smith. In response to this information the planning officers advised that the financial arrangements between Mr Smith and the Petitioner were private arrangements which did not appear to be a material consideration. They indicated that there was a surfeit of housing sites in the locality: and that it was now standard practice to grant planning consents for affordable housing without Section 75 agreements, certainly at the "in principle" stage. The agents of the Petitioner indicated that the Petitioner would make a further detailed submission to the Respondents within 10days/2 weeks explaining the Petitioner's position.

[15] Following the meeting of 4 December 2009 the Petitioner did not make a further detailed submission. By letter dated 2 March 2010 the Petitioner's agents wrote to the Respondents referring to the matters that they had previously raised and expressing concern that the Smith application was to be considered before the Petitioner's application was ready to be considered. By letter dated 3 March 2010 a planning officer of the Respondents replied:

"...Firstly, having regard to the issue as to whether or not it is in the public interest to determine an alternative proposal relating to the development of this site I would reiterate the initial view of the Planning Department that the concern raised relates solely to the private interests of your client in respect of a land transaction; it is considered that this objection does not sufficiently relate to the nature of the development or the use of the land and as such is not material to the determination of the alternative application. At our meeting of 4^th December it had been indicated that Bryce Associates were to prepare a detailed objection outlining their case in this matter; the Planning Department had indicated that if they were to do so then it may be necessary to seek confirmation of this position from the Council's Solicitors and, if considered appropriate by the Head of Planning, seek determination of the application by Elected Members rather than under delegated powers. To date I have not received any such detailed case which demonstrates that determination of the alternative proposal is contrary to the public interest; the alternative proposal has progressed to a stage where a determination is possible and will be undertaken in light of the submissions to date...

At the meeting of 4^th December it was indicated that Bryce Associates would be in a position to submit an amended road/plot layout and surface water drainage details to address Roads and SEPA concerns within a matter of weeks. To date no such submission has been received by the Planning Department other than indication of submission end February/beginning March. At that meeting it was agreed that it would be the preferred option of the Planning Department if both applications relating to the development of this site could be determined concurrently - however, it was advised by the Planning Department that this would only be appropriate if Mr Willis' submission could be amended during a short time period as the alternative application was in a final process of consultation on amended details. It was not agreed that it was essential to determine these applications together - other than the private issue of a land transaction as raised by yourselves, there are no material land use planning issues which would dictate that the applications be determined together..."

Grant of Planning Permission in Principle to Mr Smith

[16] Mr Smith's application was determined under the Respondents' delegated procedure. The report prepared by the planning officer recommended that planning permission in principle be granted subject to certain conditions. One of the proposed conditions was that the development should not commence until a scheme for affordable housing had been submitted to and approved by the planning authority.

The report narrated:

"(D) History: ....The Planning Department is also considering an alternative outline submission (ref. 09/00767/OUT) for the development of the current application site by a different applicant (Mr David Willis). The alternative proposals at the time of writing consist of 24 dwellinghouses although the proposal may be amended to address deficiencies in the proposed access arrangements and to incorporate surface water drainage. In view of objections raised by consultees the Planning Department is not in a position to bring this alternative proposal forward to be determined concurrently with the current application....."

The report went on to note Mr Willis' objection to the proposed development by Mr Smith.

"Concern is raised by Mr Willis, the applicant for the alternative proposal, that approval of the current application would not be in the public interest. It is argued that if the current proposal were to be granted that Mr Willis, who is the current site owner, would have difficulty in progressing a detailed planning application to secure the implementation of the housing application.

Comment: Bryce Associates have previously advised that they intend to submit further detailed representations on behalf of Mr Willis, originally a timetable was verbally agreed with the Planning Department of submission during December 2009. Bryce Associates later advised in writing that all further documentation would be submitted prior to 29^th January 2009(sic)[2010]- this date has subsequently passed without further submission. In any event, on the basis of the information submitted to date, it is the consideration of the Planning Department that the concerns raised relate specifically to the detail of a land transaction between two parties. The provisions of the Scottish Planning Policy set out that the planning system does not exist to protect the interests of one person or business against the activities of another. As these representations relate to matters of property ownership and finance rather than the use of land they are not considered to be material to the determination of the current application; the Planning Department is unaware of any other material considerations which would suggest that the determination of the current application should be delayed."

The report considered whether it was appropriate to impose a requirement that there be a Section 75 agreement:

"(H) PLANNING OBLIGATIONS

Is a section 75 agreement required? No."

It continued:

"(P) Assessment and summary of determining issues and material considerations

This is an application for permission in principle for a development of twenty-three dwellinghouses on land which is included within the settlement boundary for Campbeltown and forms part of a larger Housing Allocation which is scheduled for the provision of fifty-six dwellinghouses. The proposal is consistent with the development plan policies relating to housing development. Third parties have raised material concerns relating to road safety, building design and impact upon the privacy/amenity of existing residential property. Third party concern has also been raised as to whether it is in the public interest to determine the current application in view of issues relating to a property transaction involving the application site - it is the view of the Planning Department that this issue is a matter of civil law relating to the personal interests of the applicant/objector and should not therefore be a material consideration to the determination of the current application. Matters relating to affordability, access, landscaping, play area provision and design can be addressed by means of condition.

(Q) Is the proposal consistent with the development plan: Yes.

(R) Reasons why Planning Permission or Planning Permission in Principle should be granted:

The application is consistent with development plan policies STRAT DC 1 and LP HOU 1 and with Housing allocation H-AL 14/1: it also meets the requirements of other relevant policies in the Local Plan. There are no other material considerations, including the issues raised by third parties, which would warrant the setting aside of the presumption in favour of development established by the provisions of the approved Development Plan."

[17] As indicated in paragraph [3] above, on 15 March 2010 the Respondents' Head of Planning granted planning permission in principle for the development proposed by Mr Smith.

The parties' contentions

[18] On behalf of the Petitioner Mr Connal submitted that in determining Mr Smith's application the Respondents had failed to have regard to material considerations. These were the fact that there was a need for affordable housing in the locality; that it was important that affordable housing be delivered; and that the Development Plan Policy Guidance paper indicated that the mechanism of delivery of affordable housing ought to be a Section 75 agreement. Mr Connal drew back from describing the DPPG as a constraint on the policies set out in the Local Plan. He submitted it "refined" those policies and, while it need not be followed, regard had to be had to it. The Respondents had been wrong to characterise the matters which the Petitioner had raised as being essentially to do with his own private commercial interests. By doing so they had overlooked the material matters which the Petitioner had in fact raised. While it was trite that planning permission related to the land, and that permissions were often granted to persons who had neither ownership nor control of a proposed development site, the fact was that Mr Smith was not the owner of the site here and therefore he could not deliver the development (including the affordable housing). The Petitioner was the only person who could deliver a housing development on the site. If, contrary to the Petitioner's submission, the Respondents had indeed had regard to all the matters which had been properly raised as material considerations then they had reached a decision which no reasonable planning authority properly directing itself could have reached in the circumstances. Two further matters were mentioned by Mr Connal. First, he ventured some criticism of the terms of condition 3: however, ultimately he did not contend that it was invalid and unenforceable. Second, while in the Petition the Petitioner had averred that he had a legitimate expectation that planning permission would not be granted before a Section 75 agreement was executed, he did not advance submissions in support of that contention: the point was simply that the Respondents had failed to follow their own policy guidance.

[19] In reply counsel for the Respondents submitted that none of the criticisms of the Respondents' decision was well founded.

[20] Having regard to the representations made by the Petitioner, in writing and orally, the Respondents had not erred in characterising their gist as being matters related to the private business interests of he and Mr Smith. His overriding concern was to avoid a situation arising whereby he became liable in early course to make a payment to Mr Smith. He wished to have control over when that liability would crystallise. The Respondents had made it absolutely clear to the Petitioner how they characterised his concern, and he had had the opportunity to correct them by making further submissions. He had refrained from doing so. In such circumstances the Court should be very slow to conclude that the Respondents were not entitled to proceed as they had done.

[21] In so far as the Petitioner founded upon Mr Smith's lack of ownership of the site as a reason why the planning permission ought not to have been granted the contention was misconceived. Planning permission affected the land. It was incorrect to assert, as the Petitioner did, that there were no possible circumstances in which development in furtherance of the planning permission might occur. Notwithstanding the Petitioner's protestations as to his funding difficulty, it remained possible that the development could be carried out by him, or by Mr Smith or anyone else who might obtain control of the land from the Petitioner.

[22] Standing the way in which the Petitioner had focused and presented his representations it could not reasonably be maintained that they had raised the suggested material considerations he now sought to found upon.

[23] In any case, all of the matters now raised by the Petitioner were in fact considered by the Respondents. The need to secure that any development made appropriate provision for affordable housing was addressed, and dealt with by the imposition of a suspensive condition. The DPPG paper was not statutory supplementary guidance. It did not comprise part of the development plan. Besides, properly construed it ought not to be read as obliging the Respondents to require a Section 75 agreement as the sole means whereby affordable housing might be delivered. Paragraph 4.1 of the paper required to be read in context. The context included the introductory explanation in Paragraph 1.2, the development plan policies, and the national policy guidance (Circular 12/1996, para.6 (which was in force at the time the DPPG paper was approved but was revoked by Circular 1/2010); PAN 75, para. 41; Circular 1/2010, para. 13). Properly construed paragraph 4.1 was permissive rather than prescriptive. A Section 75 agreement was an option which could be used, but did not have to be used. The possibility of using a Section 75 agreement had been considered by the Respondents but they had decided that the way to proceed was by using a suspensive condition. That was a view they were fully entitled to reach.

[24] The proposed development was in accordance with the development plan and with national planning guidance. The Respondents had had regard to all material considerations. What weight, if any, to attach to each was a matter for them. In the whole circumstances it could not possibly be said that the decision was one which no reasonable planning authority could have reached.

[25] The Respondents also argued that the Petitioner had no title or interest to bring these proceedings. Counsel submitted that the only right which the Petitioner had was to have his own application dealt with fairly, honestly, reasonably and in accordance with the law. He had no right to be kept free from commercial prejudice. Reference was made to Bondway Properties Ltd v City of Edinburgh Council 1999 SLT 127 at p. 132H-L. Finally he suggested that this was a case where judicial review ought not to be available to the Petitioner because he "had failed to exhaust his remedies". By that I understood him to refer to the fact that the Petitioner had been afforded the opportunity to make detailed submissions to the Respondents but had not taken it up.

[26] In a brief rejoinder Mr Connal submitted that the Petitioners did have title and interest. They were entitled to have their objection properly considered. The complaint was that it had not been properly considered, for the reasons he had already advanced.

Discussion and conclusions

[27] I do not accept counsel for the Respondents' submission that the Petitioner lacks title and interest to challenge the Respondents' grant of planning permission to Mr Smith. The Petitioner's circumstances appear to me to be materially different from those of the Petitioner in Bondway. He is the owner of the land on which the development is proposed. He objected to Mr Smith's application. He complains that his objection has not been properly considered. In such circumstances he is plainly a person whose interests are affected by the grant and who has title and interest to challenge it on the grounds that he claims his objection has not been properly considered.

[28] Nor do I accept the argument that because the Petitioner failed to make the promised detailed submission to the Respondents he should be treated as if he was a party who had failed to exhaust statutory remedies. The Petitioner duly exercised his statutory right to make representations in relation to the application. This is not a case where the Petitioner could pursue or could have pursued the present complaint by appeal or review under or by virtue of any enactment (R.C. 58.3(2)).

[29] The grant of planning permission which is challenged was made by the Head of Planning under the Respondents' Scheme of Delegation. There was no challenge to the vires of the Head of Planning making the grant in the exercise of delegated powers. Nor was it suggested that it was unlawful for the Respondents to determine Mr Smith's application before the Petitioner's application was ready to be considered.

[30] I turn to the Petitioner's representations. In my opinion it is evident that the Petitioner's real - and clearly expressed - concern was that the grant of planning permission in principle would be the occurrence of an event which would result in him becoming obliged to make a substantial payment to Mr Smith. The Petitioner's wish was to prevent that occurring. The means suggested was for the Respondents to require Mr Smith to obtain a Section 75 agreement before planning permission in principle was granted. The result would have been that the Petitioner could have delayed indefinitely the occurrence of liability to make payment to Mr Smith.

[31] In my opinion, in the circumstances described, the Respondents were entitled to characterise the Petitioner's objection in the way which they did. They did not misdirect themselves in doing so. The representations were centred upon the financial difficulty likely to be caused to the Petitioner. It was that matter, rather than the matters he now contends ought to have been material considerations, which formed the essence of his objection. The Petitioner contended that the financial difficulty likely to be caused to him would jeopardise the development, and that it was in the public interest that that should not occur. As outlined above, the Respondents put squarely to the Petitioner their understanding of the thrust of his representations. If there was any misunderstanding on the Respondents' part (and I do not think there was) the Petitioner did not avail himself of the opportunity he had to correct that misunderstanding by making the detailed submission which it was suggested might follow.

[32] Even if, contrary to my opinion, the Respondents ought to have treated the representations as raising the matters upon which the Petitioner now founds, I am not satisfied that the Respondents misdirected themselves in any of the ways which the Petitioner suggests.

[33] The fact that Mr Smith does not own the site did not preclude planning permission being granted in the terms in which it was granted. The fact that a matter does not lie within an applicant's sole power does not prevent it being made the subject of a negative suspensive condition (Grampian Regional Council v Secretary of State for Scotland and City of Aberdeen District Council 1984 S.C. (HL) 58). It is well established that the function of a planning authority is to decide whether a development is desirable in the public interest. The fact that an applicant is not the owner and the owner opposes his application does not mean that the use of a negative suspensive condition is inappropriate. What is appropriate depends on the circumstances and is to be determined in the exercise of the discretion of the planning authority (British Railways Board v Secretary of State for the Environment [1994] JPL 32).

[34] When the Respondents' report is read fairly, and proper consideration is given to the context and surrounding circumstances, it is tolerably clear that the Respondents did have regard to all the matters which the Petitioner maintains were material considerations. Regard was had to the need for part of the development to be affordable housing. Appropriate provision was made for its delivery - by making the grant subject to a negative suspensive condition. The DPPG paper is not statutory supplementary planning guidance. It forms no part of the development plan. The guidance which it contains does not bear to be, and ought not to be construed as being, prescriptive. Any other conclusion is very difficult to reconcile with the terms of the paper as a whole, with development plan policies, and with national planning guidance. The paper had been referred to by the Petitioner in his initial written representation. It had been made clear by the Respondents at the meeting on 4 December 2009 that their standard practice now was not to require Section 75 agreements in cases like the ones under consideration. In those circumstances I am not prepared to infer from the absence of express reference to the paper in the Respondents' report that the Respondents failed to have regard to it. In the whole circumstances (including the history of discussions between the parties, and the fact that the report expressly stated that account was taken of all representations made) a readier inference is that regard was had to the paper but that the Respondents did not consider it appropriate to give it any (or any significant) weight.

[35] Mr Connal's final submission was that even if the Respondents had not otherwise misdirected themselves the decision ought to be reduced on the ground that it was unreasonable. He acknowledged the high threshold which would require to be met in order to succeed on this ground. I am wholly unconvinced that the Petitioner comes anywhere near meeting that threshold. I am not persuaded that the Respondents exceeded the jurisdiction conferred upon them. In my view a reasonable planning authority could, directing itself properly, have decided as the Respondents did.

Decision

[36] In the result, for the reasons given above, I am satisfied that Respondents acted lawfully in granting Mr Smith planning permission. I dismiss the Petition.