Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH 11
	OPINION OF LORD MALCOLM in the cause TESCO STORES LIMITED Petitioners; For Judicial Review of a decision by the Highland Council dated 20 April 2010 to grant planning permission in principle to Asda Stores Limited for the development of a supermarket and petrol filling station at Knockbreck Road, Tain ­­­­­­­­­­­­­­­­­________________

Petitioners: Martin QC; Ms Munro, advocate; Semple Fraser LLP

First respondent: Smith QC; Biggart Baillie LLP

Second respondent: Thomson QC; Dundas & Wilson CS LLP

25 January 2011

[1] In this application for judicial review the petitioners are Tesco Stores Limited (Tesco). The first respondents are the Highland Council (the Council). The second respondents are Asda Stores Limited (Asda). The petitioners ask the court to quash a decision of the Council dated 20 April 2010 to grant planning permission in principle to Asda for the development of a supermarket and petrol filling station at Knockbreck Road, Tain. Tesco were granted a similar permission in the town centre at Shore Road, Tain on 5 September 2008. Having now obtained a detailed consent they are in the course of implementing that permission. Tesco challenges the out of centre permission to their competitors for two main reasons. Firstly it is said that the decision is vitiated because of a failure to properly interpret and apply the relevant retail policies, and in particular the sequential approach when selecting locations for, amongst others, retail uses. Secondly it is said that certain councillors voted in favour of the Asda application simply because of a desire to stop or undermine the Tesco development. Before considering these matters it is necessary to set out the planning background and history in detail.

The planning background

(a) The first Asda application

[2] On 14 March 2007 the Planning, Development, Europe and Tourism Committee met to consider an application by Asda for a Class 1 retail store permission with associated facilities at Knockbreck Road, Tain. The Council's principal planner advised the committee that although there was strong local support, the application was contrary to the local plan which allocated the land for housing use. A site at Shore Road in the town centre had been retained in the local plan as a site for a new supermarket. (This site is adjacent to that subsequently the subject of the Tesco permission). However the Committee resolved to grant permission, subject to conditions and reference of the application to the Scottish Executive. This was on the basis that material considerations outweighed the suggested reasons for refusal. In due course the Asda application, and another similar foodstore application by Robertson Properties Limited (RPL) at Morangie Road, Tain, were called in by the Scottish Ministers.

(b) The Halcrow retail study

[3] In May 2008 the Council received a retail study for Tain prepared by Halcrow Group Limited (production 6/6). The Council had asked Halcrow to review the decision to grant approvals for both the Asda and a Lidl foodstore at Morangie Road, Tain. (The Lidl opened in late 2007). The review also considered the two subsequent and, at that time, undecided planning applications for foodstores in Tain lodged by RPL and Tesco. A retail capacity assessment was prepared to determine the level of further convenience retail provision which could be supported. Figure 1 in the report sets out the location of proposed and existing foodstores in the town. Of the pending applications, only that lodged by Tesco was located in the town centre. It was adjacent to the Shore Road development plan retained allocation site, which was the subject of a lapsed outline supermarket consent. The Tesco site was the subject of a separate planning approval in outline for housing. It was noted that the local plan site at Shore Road "failed to meet the requirements of modern convenience retailers" as reflected in its inability to attract development despite its allocation for the previous 22 years. Noting additional road infrastructure constraints, the consultants advised that Shore Road should be discounted as a suitable site for a foodstore development. The Lidl and two Co-op stores (one in the town centre) provided the only convenience retailing in the town. It was clear that a need for further provision had been established in the development plan. Additional provision would reduce leakage of expenditure, particularly to Tesco stores at Inverness and Dingwall, and improve the commercial viability and vitality of Tain.

[4] The retail capacity assessment suggested that within a revised 30 minute drive time catchment area there was sufficient expenditure (£20.2 m) to support further convenience floor space. This was sufficient to support "either the Asda or RPL applications in addition to the Tesco application", leaving a final retail balance in the range of £1.4 million to £4.8 million, cf para 4.1.5, figure 3, and table 2. As will become apparent, I consider that this finding is of importance when assessing the issues raised in the current proceedings. In particular it indicates that there is room in Tain for both the Tesco town centre development and another foodstore such as that proposed by Asda. (It can be noted here that subsequently the RPL application was withdrawn). The consultants advised that in the context of the development plan and relevant material considerations the decision to approve the Asda application was "robust and defendable". It was concluded that the Asda site "performs well in the context of the sequential approach", reflecting the view that the town centre allocated site was unsuitable. It appears to me that this study set the planning background or framework for much of what unfolded thereafter.

(c) Tesco's application and the opposition to it

[5] Production 6/4 is a report by the head of planning and building standards in respect of Tesco's outline application for the retail development at Shore Road (2,500 square metres gross floor space). At this time the Asda application had been supported by the Council, but was still to be determined by Scottish Ministers, and the RPL application at Morangie Road had not been determined. The Council had been advised that with the acceptance of off site road improvements and new traffic management proposals there were no transportation reasons for refusal of the Tesco application. It was noted that the local plan allocated an adjacent site for a foodstore, however in recent times this had been "set aside" by both the Council and the owner. Approval subject to conditions was recommended.

[6] On 1 July 2008 the relevant committee of the Council approved the Tesco outline application, with the condition that the Council's, rather than national car parking standards should apply. Voting was six in favour, five against. Those in favour included Councillor Durham, with Councillors Rhind and Torrance in the other camp. At the meeting it was recorded that the RPL application had been withdrawn. It was acknowledged that a lot of work still required to be done before traffic orders were made. Councillor Rhind made it plain that he was against the proposal on traffic management grounds. He did not consider that the site would be used by those without a car. The proposals would not work at this site. He was "suspicious" of the proposal. Councillor Durham noted that the adjacent site had been allocated for food retailing because of a 1986 outline application which had never been implemented. The Council had granted a housing consent on the Tesco site. Asda's application had been granted and called in, then "all of a sudden" Tesco arrived and acquired this site. He asked, does Tesco simply want to stop Asda? According to him that was "the general attitude". He considered that the Halcrow report showed that there was sufficient trade for all the various applicants within a 30 minute drive time. If the application was rejected then there would be an appeal, and an inquiry into both the Asda and Tesco applications. He would support the recommendation in the report to committee, subject to the application of the Council's policy standards.

[7] Councillor Torrance considered that the proposed store was "in completely the wrong place", including with regard to access for local residents. It was very much "backland (town) centre". It would encourage cars and "empty the High Street." He did not accept the Halcrow view. Two new supermarkets in Tain would mean that somebody would fail - "probably the Co-op." Given the build up of traffic the town centre would become "like Hampden Park on a Saturday afternoon." He continued "I just don't like the vast changes that will affect the character of our town." Other councillors spoke strongly in favour of the Tesco application. One said "We should let them all come and see what they can do." Highways officers stressed that it was simply an outline application, but was a complex case subject to "traffic assessments and so-on". Councillor Durham proposed the motion for approval, which was carried by six votes to five.

[8] I have mentioned the comments of the councillors who are the focus of the second ground of challenge to the decision. In the context of that issue it is worth noting that there was a view that the Asda application came first, was supported by the Council, and then the Tesco application was lodged. In addition those speaking against the Tesco application focused on site specific issues concerning the town centre site, some of which remained to be addressed in the context of traffic assessments prior to an application for detailed permission.

(d) The factual basis for the second ground of challenge

[9] The Scottish Ministers were notified of the decision but did not call in the Tesco application. Both the Asda and RPL proposals were withdrawn before the commencement of the public inquiry into those called in applications. The result was that at that stage the Tesco Shore Road development was the only pending application for a new foodstore in Tain. An application for approval of reserved matters was lodged on 17 November 2008. The related events thereafter are summarised in the petition in the following manner:

"The report to the committee prepared by the area planning and building standards manager recommended that the reserved matters be approved subject to conditions. Only two letters of objection to the application were timeously received. That being so, the application was one which could have been determined by planning officials acting under delegated powers. On 16 January 2009, an article published in the Ross-shire Journal reported Councillor Rhind's belief that Shore Road was 'not the right place for a supermarket' due to the make up of the town centre, with narrow streets and tight corners, and his intention 'to try to bring the detailed proposals to the planning committee for determination, rather than be passed by officials using delegated powers.'

To that end, Councillors Rhind and Torrance arranged a public meeting attended by more than 150 people, who were, as reported in the Press and Journal on 26 February 2009, 'urged to register their concerns (about the Tesco application) before next Tuesday with the planning and building standards manager with an email to (address supplied).' A substantial number of objections were sent to that email address, in consequence of which the application required to be determined by the committee. The article in the Press and Journal also records the intention of Councillors Rhind, Torrance and Durham to meet with representatives of Asda on 27 February 2009. As at that date Asda had no interest in Tain, having withdrawn its first application in respect of Knockbreck Road. The application with which this petition is concerned was only lodged with the Council on 17 December 2009. Asda also lodged an objection to Tesco's reserved application, late, on or about 26 February 2009.

The committee met to consider the reserved matters application on 3 March 2009. (The minutes) narrate that Councillor Rhind was present at the meeting, his request for a local member vote having been refused by the assistant chief executive of the Council in view of comments about the Tesco application attributed to him in the press. Reference was made, in that connection, to section 7.10 of the Councillors Code of Conduct, which provides that members proposing to take part in the consideration of planning applications must not give grounds to doubt their impartiality. Councillor Rhind was, however, permitted to make representations; and did so. He stated that the committee should 'right a wrong.' Subsequently, he stated that his objective was 'to stop a supermarket on that site.' In addition, Councillor Rhind read a statement provided by Councillor Torrance, who was absent, detailing his opposition to the development. Thereafter Councillor Wilson moved that the application be refused for three reasons. In moving that motion, Councillor Wilson, who owns a town centre florists shop which would be in direct competition with the proposed Tesco store, did not declare an interest in the application, contrary to section 5 of the Councillors Code of Conduct.

The decision taken by the committee on 3 March 2009 was not fully competent and required to be revisited. The committee met again on 21 April 2009 and agreed to amend its earlier decision by deletion of the second reason for refusal. The decision thus amended was notified to Tesco on 30 April 2009. The reasons given for refusal were (a) condition 9 of the outline consent required Tesco to provide car parking compliant with the Council's standards, which Tesco had failed to meet; and (b) the proposed pedestrian links to the store did not allow all sectors of the public suitable or easy access due to the restraints and adverse levels of the site, thus contradicting national planning policies.

Tesco appealed against the refusal of the reserved matters application. A public local inquiry was held in connection with that appeal over four days in March 2010. On 6 May 2010, the reporters appointed by the Scottish Ministers issued their decision allowing the appeal....The reporters held that the number of parking spaces proposed by Tesco complied with the development plan, and that there was no evidence to justify the Council's requirement for a higher level of on site parking. They further held that, so far as concerned access to the store, 'the topographical relationship between the store and the site boundaries was considered acceptable to the planning authority when it included the site as part of the town centre in the recently adopted local plan and when it granted outline planning permission...[Subject] to a condition controlling their detailed design, the proposed means of access to the building are acceptable.'

In connection with Tesco's application for expenses, the reporters held that

'The expenses incurred by the appellants in bringing this appeal are a direct result of the Council's unreasonable behaviour...It should not have been necessary for the case to come before the Scottish Ministers for determination. The Council is therefore liable to the appellants for all of the expenses incurred in making this appeal.'"

The overall outcome was that, subject to traffic orders, Tesco was and remains able to develop and operate a foodstore and related facilities at Shore Road.

(e) The renewed Asda application

[10] Although much of the discussion at the hearing before me concentrated on the councillors' objections to the development by Tesco of the Shore Road site, the focus of the present proceedings is on the recent outline permission granted to Asda at Knockbreck Road. Having withdrawn the original application, Asda lodged a renewed application with the Council on 17 December 2009. It was accompanied by a planning statement and assessment prepared by Messrs Drivers Jonas (productions 6/18 and 6/19). The development included 3,796 square metres of gross floorspace. Of the net retail sales area 65% would be convenience, and the remainder comparison. It was explained that the original application was withdrawn because of a desire to re-evaluate the design of the development. At paragraph 5.22 and following of the planning statement, under reference to the relevant policies in the structure plan the authors stated that in small and medium sized towns

"Foodstore provision will normally be located within town centres or within edge of centre locations. Development will only be permitted if the proposal does not pose a potential risk to the vitality and viability of local services. The structure plan acknowledges that in certain circumstances town centre sites can be problematic, because of amenity or traffic congestion and alternative sites may need to be considered. The sequential approach to site selection detailed in the accompanying retail impact assessment demonstrates that the site at Knockbreck Road is the most suitable for the proposed retail development in terms of availability, developability, accessibility and size. It also demonstrates that the sites within the town centre are not acceptable, particularly in terms of suitability and accessibility. The retail assessment also demonstrates that there is a quantitative and qualitative need for the new store and that the proposals will not have an unacceptable impact on established centres within the catchment area."

The conclusions at section 7 included the following statements:

• "The accompanying retail assessment demonstrates that the proposal will meet both the quantitative and qualitative needs of the town and surrounding area.
• The site is defined as an out of centre location and satisfies SPP8 in relation to the location of retail development as there are no sequentially preferable locations.
• The retail assessment also demonstrates that there will be no unacceptable impact on the vitality and viability of the identified town centres and other local centres within the catchment area."

[11] The accompanying retail assessment is an important document in the context of the present proceedings. Section 4 contains the sequential assessment. It addresses two town centre sites, namely the site allocated in the development plan at Shore Road West, and the adjacent Tesco Site, and also four out of centre sites. It is asserted (and there is no dispute on this) that there are no available edge of centre sites, nor any other identified commercial centre sites. Out of centre sites do not require to be comparatively assessed as part of the sequential approach. So far as the Shore Road site allocated in the local plan is concerned, the study notes that it amounts to approximately one hectare and is therefore substantially smaller than the proposed Knockbreck Road development site of 4.5 hectares. The overall sequential assessment for the allocated site is summarised at paragraph 4.32 as follows:

"Within the context of the suitability of the site for retail development, the site is not large enough to accommodate the scale of the development proposed. Furthermore, the steep topography of the site means that the site is not suitable for such a land use. The site also occupies a 'backland' location which is not attractive to the applicant in commercial terms and would affect the viability of the proposed store. In terms of accessibility, we can conclude that it is not possible to provide suitable or appropriate access arrangements for service vehicles, cars and pedestrians required for the retail development, due to topographical and physical constraints of the area. The site is not available for development and this has been confirmed in writing by the landowner. Significantly the site is not capable of accommodating the proposed retail floorspace. Despite a local plan allocation which supports retail development, this site at Shore Road has been vacant for nearly 15 years. As a result of a lack of retail interest, the accessibility difficulties and steep topography, we are confident that the Shore Road site can be disregarded in sequential terms as an option for the proposed development."

The assessment then considers the Tesco Shore Road site. The assessment is summarised at paragraph 4.62:

"Within the context of the suitability of the site for retail development, the site is not large enough to accommodate the scale of the development proposed. Furthermore, the steep topography of the site means that the site is not suitable for such a land use. The site also occupies a 'backland' location which is not attractive to the applicant in commercial terms. In terms of accessibility, we can conclude that it is not possible to provide suitable or appropriate access arrangements for service vehicles, cars and pedestrians required for the retail development, due to the topographical and physical constraints of the area. The site is not available for development as it is within the ownership of another retail operator. The site is not capable of accommodating the proposed retail floorspace."

[12] The sequential assessment notes that, although six sites had been identified and assessed, only the two town centre sites at Shore Road were required to be assessed in terms of retail planning policy. It was concluded that:

"Following a thorough appraisal of each site's suitability, they are both considered to be unacceptable for the proposed retail development and therefore are not sequentially preferable."

Paragraph 4.130 states as follows:

"To summarise, the site on land to the west of Knockbreck Road is suitable for retail development in terms of the land use allocation within the adopted local plan. Retail is clearly stated as an acceptable use within the expansion area. This use will remain as ancillary to the main use and development of the expansion area for housing. The size, relatively flat topography and shape of the site makes it ideal for a large footprint of a single building, such as a retail foodstore. The site also has good accessibility in terms of walking, cycling and public transport as well as being adjacent to the A9 trunk road. Finally the site is available with no market constraints and can accommodate the proposed scale of floorspace and necessary car parking."

[13] Section 6 of the retail assessment contains a quantitative assessment designed to estimate the economic capacity or quantitative need for the proposed convenience and comparison goods floorspace and to predict the likely effect of the proposal on the vitality and viability of Tain town centre and other district and local centres within the catchment area. The narrative is detailed and the methodology complex. For present purposes it is important to note that table 4, which estimates the convenience goods turnover for stores both inside and outside the catchment area, includes and therefore takes into account the Tesco proposed store at Shore Road (estimated turnover £5.82 million). The total estimated convenience goods turnover for the catchment area (which was agreed with the Council) is £51.93 million in the design year of 2013. The total estimated turnover drawn from the catchment area by stores outside the catchment area located in Inverness is £19.71 million. The estimated convenience goods turnover for the new Asda store is £12.7 million in 2013, with the majority (80% which equals £10.23 million) coming from within the catchment area. Paragraphs 6.38/9 deal with the convenience good retail capacity analysis at 2013 and state:

"Taking into account the proposed turnover of the new Asda store in Tain and the total available convenience goods expenditure in the catchment area, table 9 estimates the surplus convenience expenditure after the opening of the proposed Asda store. It shows that there is potentially some £11.32 million of leakage money leaving the catchment area and being spent in shops in other centres. As shown, there is a surplus of some £1.10 million in 2013 after the development of the Asda store. Note that this also takes into account the new Tesco store at Shore Road in Tain."

[14] The assessment then predicts the impact in 2013 of the proposed Asda store on all retail floorspace. Paragraph 6.52 states:

"Table 13 shows a total trade diversion of £1.46 million from Tain town centre as a whole, resulting in a 12% impact. With only one vacant unit in the town centre (at the time of our health check in November 2009) and evidence of an improving town centre in terms of its vitality and viability, we do not consider that a 12% impact would adversely affect the town centre. The town exhibits a strong mix of local comparison retailers in addition to two existing supermarkets (Co-op, Lidl) and the proposed Tesco. The addition of an Asda store would help serve the community of Tain better and result in a more even geographic distribution of food retailing in the town. We consider that the proposed new Tesco store at Shore Road would most likely feel the biggest impact, with a trade diversion of some 16% of its convenience turnover. We do not consider that this will threaten the viability of this new foodstore, which may simply have to adjust its trading profile."

By way of an overall summary, paragraphs 6.59/60 state the following:

"This section has reviewed the capacity of the catchment area to accommodate in economic terms a 3,796 square metres gross (1,858 square metres net floor space) proposed Asda store. It has been demonstrated that there is sufficient growth in both convenience and comparison expenditure within the catchment area between 2009 and 2013, and accordingly, that there is sufficient capacity to support the new Asda store in Tain at the design year of 2013. Our impact assessment has also demonstrated that there will be no adverse impact upon the vitality or viability of Tain town centre shops or any other defined centre within the catchment area. In summary, the proposal meets the requirements of the tests set down in both national and local planning guidance on retail development."

As noted earlier, this assessment proceeded upon the basis that the Tesco store at Shore Road is trading in the design year of 2013.

(f) The planning officer's report to committee

[15] When the relevant committee considered the new Asda outline application it had the benefit of a report from the head of planning and building standards. This is another important document in the context of the challenges to the grant of planning permission. It noted that the Asda application site was identified in the local plan as part of a future expansion area for development "primarily including residential use and amenity uses." In the context of retail policy, and in particular the vitality and sequential assessments, it noted that since the approval of the local plan in February 2007 Tain had seen the development of the Lidl supermarket at Morangie Road and outline permission had been granted for the Tesco proposal. That application was then at appeal pending an inquiry into the Council's refusal of the reserved matters application. Reference was made to the Drivers Jonas retail assessment accompanying the Asda application. It concluded that there was an under-provision of retail floorspace in the area; existing stores were over-trading; and there was leakage of expenditure outwith the catchment. Reference was also made to the Council commissioned Halcrow report, which concluded that there was justification for two additional supermarkets in Tain based on a 30 minute drive time catchment area. The planning officer noted that Tesco objected to the Asda application on the basis that their proposed investment should be established before further retail floorspace within the settlement was assessed and approved. In earlier assessments the Council had recognised the limited value of the allocated town centre site. Other opportunities within or adjacent to the town centre were also limited. The planning officer stated that the key sequential locations were those at Morangie Road and Knockbreck Road. In that regard preference should be given to the Morangie Road site over Knockbreck Road, because of its proximity to existing supermarkets at the west end of Tain. Thus, in the planning officer's view, the Asda application failed the sequential test.

[16] The report ended by concluding that the application was contrary to the allocated residential and amenity uses in the local plan. While the development plan supported growth and retail development, the expansion of retail provision in Tain had been in the Morangie Road area to the west of Tain. There was capacity to support a greater level of retail floorspace and a wider choice of shops. There was sufficient expenditure within a 30 minute drive time to allow both the Asda application and the Tesco development to proceed. An improved offer in Tain would discourage lengthy journeys to Inverness and other centres, all consistent with structure plan policy. An application in principle for a supermarket at Morangie Road remained to be determined by the Council. Knockbreck Road was not regarded as the best sequentially located out of centre site.

"Although this is a subjective judgement, land at Morangie Road is preferred for reasons of co-location with other retail stores. In all other respects the Knockbreck Road site is equally regarded as a site which could physically accommodate the proposed retail development."

While it was recognised that the Knockbreck Road proposal offered important benefits and that members had previously supported a supermarket at that location, the recommendation was for refusal because of inconsistency with the local plan allocation and the sequential preference for the Morangie Road site. However, if the Council was minded to grant the application, that would not be regarded as a significant departure from the development plan which recognised the advantages of further retailing being directed to communities such as Tain.

[17] At the hearing on the petition for judicial review it was accepted by counsel for Tesco, Asda and the planning authority that the author of the report had misunderstood the sequential test. In particular the sequential test has no application to the comparative merits or demerits of out of centre sites. However this was not a ground of challenge of the decision, no doubt because it was neither an operative cause nor a factor in the decision under challenge. In the event the committee rejected the adverse recommendation which was based on that error. The challenge mounted on behalf of the petitioners was that no out of centre site should have passed the sequential assessment, given the possibilities for development in the town centre, all as preferred by the relevant planning policy.

(g) The committee meeting on 20 April 2010

[18] The Caithness, Sutherland and Easter Ross Planning Committee met in the Royal Hotel, Tain on 20 April 2010 to determine the Asda outline application. Councillors Durham and Torrance were amongst the members present. Non members in attendance included Councillor Rhind, who as a local member had been granted the right to vote. There was a large gathering of mainly supportive local people present. There are a number of accounts of the meeting before me, including the formal minutes, three affidavits from persons present, and newspaper reports. The Ross-shire Journal of 23 April 2010 reported that it was standing room only and that "It was clear from the cheers, heckles and applause throughout the meeting...that virtually everyone in the room was desperate to see the application granted permission." The principal planner, Mr Ken MacCorqudale, explained the reasons for the refusal recommendation, but concluded by saying that there was a "fine balance of issues" and he advised the members "It is your choice." The affidavit of Callum Ford, a development manager for Tesco, states that in respect of the sequential test Mr MacCorqudale advised the committee that the Shore Road site was taken up by Tesco, and the adjacent site was too small. In addition he stated that there was "sufficient capacity for additional floorspace without significant impact on Tesco, Co-op and Lidl." He said that the recommendation for refusal was a "finely balanced judgement."

[19] Mr Ford then notes that Councillor Ross was the first to speak. He was supportive of the application and praised the thoroughness of the report, noting the strong community support in favour of the application, which would allow greater retail competition. The structure plan and the Halcrow report provided support for there being capacity for another retail development. He also made reference to the jobs and investment which the application would bring. He referred to the positive planning history. His comments were met with public applause and cheering, requiring the chair to call for order. Mr Ford then summarises the contributions of Councillors Torrance, Durham and Rhind as follows:

"Councillor Torrance next provided his thoughts on the application. He welcomed the support of his colleagues. He then stated that he was still hoarse from the Tesco appeal. I think this was meant to be a joke and to endear him to the partisan audience. He explained that he had always supported the application site. He welcomed competition and choice. He stated that an additional store at the alternative site at Morangie Road would lead to overcrowding, and noted that a third location was required. I found it difficult to hear the rest of Councillor Torrance's comments because of public murmurings of support. The chair called for order but was largely ignored. Councillor Durham then spoke. He noted that the previous application had been supported. He commented that three years of 'store wars' would end. He called for the same decision to be made as in 2007. This resulted in cheers from the public. He described the decision as 'the most important decision in recent years'. He noted the community's support for the application in principle and 'specifically Asda.' He commented that there were 'too many Tescos in the Highlands.' This resulted in loud applause and cheers. He sought additional conditions relating to the tree canopy, dry stone walls and trolley bays. Councillor Rhind spoke next about the application. He is a local member but is not on the planning committee. He stated that he was respectful of the committee report but that he disagreed with the recommendation. He welcomed an additional major retailer. He commented that the development would be a catalyst for future growth and would stimulate the High Street. He noted that there would be no detriment from the development and that, in his view, there would only be positive outcomes. He commented on the proposed improved entrance to the town and the road and pedestrian link improvements as well as the new jobs which would be brought. He commented that Asda had been 'long awaited.' Councillor Rhind compared the support and objections to the application, and noted that 99% supported the application at the consultation stage. He invited the Committee to support the proposal, which was met with loud cheering and applause from the public."

Mr Ford states that one councillor spoke to the effect that while she was not supportive of the application she would not oppose it. She was booed by the crowd. Mr Ford records that there was rapturous cheering and applause when the application was approved unanimously by the ten members of the committee plus the local member who had been granted voting rights.

[20] Mr Douglas Thornton, a regional property director of the petitioners, has also submitted an affidavit containing his recollections of the meeting. Though in more partisan terms, broadly it mirrors that of Mr Ford. Mr MacCorqudale is recorded as saying that he regarded the Tesco proposal at Shore Road as committed development, and that there was "huge" capacity for new floorspace within Tain because of the amount of retail expenditure leaking to Inverness. There was sufficient capacity for two new stores in the town.

[21] Susan Bease is a solicitor who acts as clerk and legal adviser to the committee. She was clerk at the meeting in the Royal Hotel and she has provided an affidavit. She prepared the minutes which record the comments made in the course of the debate. Councillor Ross opened the debate and spoke in favour of granting the application. The local councillors, namely Councillors Torrance, Durham and Rhind all supported the application. Most of the other councillors contributed. All members able to vote supported Councillor Ross's motion, subject to the conditions mentioned in the report. Ms Bease refuted the averment in the petition that the manner in which the meeting was conducted demonstrated that all or a majority of the members present had already determined the outcome, or that their discretion had been fettered. She explained why the meeting took place in the hotel, with members of the public relatively close to the Committee members, namely to allow as many local people to attend as wished to do so. It was obvious that the majority of those attending were enthusiastic about the application, however none of them were permitted to address the meeting. While Councillor Durham did say that there were too many Tescos and not enough Asdas in the Highlands, something which was an irrelevant consideration, the reasons for the unanimous decision were those put forward by Councillor Ross as set out in the minute of the proceedings. That irrelevant comment aside, she heard nothing which suggested that the committee members were granting consent in order to frustrate the Tesco development. She refuted the averment in the petition that the councillors were allowed to conduct themselves in a manner "not within the accepted moral standards" for a meeting of that nature.

[22] The minute of the meeting (production 6/20) records the views expressed by those councillors speaking at the meeting. It concludes by stating that the committee agreed that the reasons for granting the application contrary to the planning officer's recommendation were as follows:

·       "Strong economic and social benefits for Tain and the wider area.

·       The acceptability of retail expansion in Tain.

·       The retail capacity available with current under-provision.

·       The planning acceptability of development on this site.

·       The justification for a sensible and objective interpretation of the sequential assessment based on planning history and the strong and supportive public representation."

It was considered that the above reasons satisfied and were in line with policies G1, G2, R1 and R2 of the structure plan.

The ground of challenge based on the sequential assessment

[23] The sequential approach to be used when selecting locations for retail and commercial leisure uses (formerly contained in SPP8) is familiar to all involved in retail planning. It is common for public inquiries into such applications to spend much time engaged in a detailed consideration and discussion of the terms of the policies and their application to the particular circumstances. The policies are now contained in the town centres and retailing section of the single volume Scottish Planning Policy, February 2010 (production 6/17). The relevant paragraphs are as follows:

"62. The sequential approach should be used when selecting locations for all retail and commercial leisure uses unless the development plan identifies an exception...The sequential approach requires that locations are considered in the following order:

·       Town centre

·       Edge of town centre

·       Other commercial centres identified in the development plan

·       Out of centre locations that are or can be made easily accessible by a choice of transport modes.

63. The sequential approach requires flexibility and realism from planning authorities, developers, owners and occupiers to ensure that different types of retail and commercial uses are developed in the most appropriate location....Where development proposals in edge of town centre, commercial centre or out of centre locations are not consistent with the development plan, it is for applicants to demonstrate that more central options have been thoroughly assessed and that the impact on existing centres is acceptable. Out of centre locations should only be considered when:

·       All town centre, edge of town centre and other commercial centre options have been assessed and discounted as unsuitable or unavailable.

·       Development of the scale proposed is appropriate, and

·       There will be no significant adverse effect on the vitality and viability of existing centres.

64.             When a proposed retail or commercial leisure development is contrary to the development plan, planning authorities should ensure that:

·       The sequential approach to site selection has been used.

·       There is no unacceptable individual or cumulative impact on the vitality and viability of the identified network of centres.

·       The proposal will help to meet qualitative and quantitative deficiencies identified in the development plan, and

·       The proposal does not conflict with other significant objectives of the development plan or other relevant strategy.

65. Retail impact analysis should be undertaken where a retail and leisure development over 2500 square metres gross floor space outwith a defined town centre is proposed which is not in accordance with the development plan....The impact analysis should consider the relationship of the proposed development with the network of centres identified in the development plan. When carrying out an analysis, a broad based approach should be adopted."

The rationale of this planning policy is to support town centres by influencing the type, siting and design of new development. Developers are encouraged to consider "adjusting or sub-dividing large proposals to better fit with existing development, and making use of vacant and under used land or premises." (paragraph 57)

Submissions for the petitioners regarding the sequential approach

[24] The petition avers that both the retail assessment (the Drivers Jonas report) and the report to committee prepared by Mr MacCorqudale "fundamentally misapplied" the sequential test by disregarding the two town centre sites. Given the grant of outline planning permission and the reporters' decision on the reserved matters appeal, the Tesco site must be regarded as a suitable site. In so far as the Tesco site is on the small side, developers are expected to demonstrate flexibility. It was of no moment that the site is owned by Tesco, such matters being irrelevant in planning terms. The report to committee is criticised as having failed to apply the sequential approach at all.

[25] Ms Munro submitted that there had been a misinterpretation of the sequential test. In particular the Council had allowed the developer to dictate what did and what did not constitute a suitable site. Thus the Council wrongly excluded both the Tesco site and the adjacent land at Shore Road West as being too small. Developers should design their developments for the available site or sites in the town centre, not select the site which suits the preferred design, otherwise developers could outflank the sequential preference for town centre sites by adopting overly grand aspirations. The opinion to the contrary expressed by Lord Glennie in Lidl UK GMBH v Scottish Ministers [2006] CSOH 165 is wrong and should not be followed. In so far as the retail assessment criticised the town centre sites for other reasons, such as topography, road network concerns, etc, these were simply wrong. One site had outline permission for retail use and the other was allocated for these purposes in the local plan. Ownership by another retail operator was irrelevant.

[26] Junior counsel stressed that at the time the Tesco site was undeveloped. She made it clear that her criticisms were based on the assumption that the Asda proposal could and should be developed at the location of the Tesco site. In her submission it was not to be seen as floorspace additional to that permitted by the Tesco permission. Counsel referred to City of Edinburgh Council v The Secretary of State for Scotland, 1998 SC (HL) 33; Land Securities Group Plc v The Scottish Ministers 2007, SC (HL) 57; City of Edinburgh Council v The Scottish Ministers 2001 SC 957; and Bolton Metropolitan Borough Council v The Secretary of State for the Environment [1991] 6P & CR 343.

[27] Mr Martin QC adopted Ms Munro's submissions. He stressed the priority which retail policy gives to town centres, as reflected in Lord Rodger's speech in the Land Securities case. He emphasised that the planning system should be blind to the identity of the developer and to the ownership of potential sites. He agreed with junior counsel that the situation was "not a two store scenario". Consumers in the area could obtain the required services from one store on the Tesco site. Capacity does not demonstrate a need for an out of centre Asda store. Mr Martin challenged the retail impact assessment that the Asda store would not adversely affect the town centre since there was no assessment of the impact should the Tesco store not proceed. He submitted that the true basis of the decision to grant the Asda proposal was that there was sufficient capacity, but only on the assumption that the Tesco store did not proceed. This means that the Council was considering and proceeding upon the basis of one new store, not two new stores, thus the sequential analysis was flawed in having ruled out the obvious site, namely the Tesco site, with or without some of the adjacent one hectare site. In any event, the Council could not know what the consequence of the Asda development would be for the Tesco store in the town centre, thus the decision was unreasonable. Reference was made to paragraph 26 of the petition. In short the alternative submission came to be that the development should not have been granted because it would or may halt a consented town centre development.

The submissions in reply

[28] For the Council Mr Smith QC stressed that the sequential test refers to sites which are unsuitable or unavailable. Various cases were cited to the general effect that the court should not interfere with a reasonable interpretation of a planning policy and should not be drawn into the merits of a planning decision. Contrary to the assertion in the petition, it was clear that town centre sites had not been disregarded. The concerns were not limited to issues of size, for example reference was made to the road network and physical constraints, and also to the non-availability of the town centre sites. Mr Smith emphasised that the Council was considering two new stores, namely the Tesco and the Asda proposals. It was not a case of one or the other. The Asda capacity and impact assessments had assumed that the Tesco store was trading. The planning officer's report to committee proceeded upon the same basis. It expressly referred to there being justification for additional retail floorspace with sufficient expenditure from the catchment area "to allow both the Tesco and the current proposal". The planning authority was granting an additional permission, not seeking to undermine or thwart the approval granted to Tesco.

[29] As to the Drivers Jonas report, Mr Smith submitted that it was clear that the author used the terms "need" and "capacity" interchangeably. For example, at paragraph 6.58 there was reference to overtrading and to expenditure leakage to other centres, especially Inverness. The reports before the committee demonstrated that two new stores were acceptable and desirable. The attempt to demonstrate that Asda was approved simply to stop Tesco did not bear scrutiny. An analysis of the affidavits and of Ms Bease's minute demonstrates that very little was said at the meeting about the Tesco development. This was not surprising since it was not the subject matter of the discussion. The criticism that there was no assessment of impact upon the town centre without a Tesco was not part of the written pleadings. In any event, the Council had previously granted outline consent for a foodstore at Knockbreck Road in 2007, before the Tesco application was on the scene, at which time issues of impact would have been assessed.

[30] For Asda Mr Thomson QC referred to Tesco's objection to the Morangie Road and the Asda applications (production 6/29). (It can be noted that subsequently the Morangie Road application was once again withdrawn). Reference was made to paragraph 2.2 which states:

"Asda has indicated that the Tesco site is not available to Asda for development. However, this is only as a result of Asda not making any approaches to the previous landowner of the site, AWG, despite the site having been the subject of a successful planning application for residential use applied for by the previous owner and therefore clearly an 'available' large site in the defined town centre."

Mr Thomson observed that in this statement Tesco confirm that, at the relevant time, the site was unavailable for the Asda proposal. In paragraph 2.9 it is asserted that any quantitative deficiencies will be addressed through the development of the Tesco store, and that "the real question is whether Tesco would continue to develop out this store if a larger store on the edge of town was developed." The objections stressed the view that Tesco will be in direct competition to an out of centre store at a time when there is neither a quantitative nor a qualitative deficiency in the catchment. Counsel observed that, while in general the language in the objections was ambivalent and circumlocutory, it was not said that the Tesco store would be halted by approval of the Asda application.

[31] Mr Thomson submitted that it was wholly reasonable for the Council to adopt a two store approach for Tain without waiting for the Tesco store to be trading. While Tesco did question the extent of any quantitative and qualitative deficiency, this was a matter of planning judgment for the planning authority to determine. In Mr Thomson's submission, if the whole facts are considered, Tesco's "conspiracy theory" falls away. It was not difficult to understand why the members voted as they did. There was no unreasonableness or irrationality, nor any deficiency in the sequential approach analysis.

Discussion and decision on this ground of challenge

[32] The criticisms of the sequential analysis and assessment proceeded upon the basis that when considering the Asda application the Council had to decide where one new store in Tain should be located. In other words, it was as if the Tesco permission did not exist. On that hypothesis the criticisms would have force. However, in my view the reality is that (a) the planning officer and the relevant committee appreciated that the Council had granted outline permission to Tesco to develop a store at the Shore Road site, and (b) the question before the committee was whether an additional store should be approved. In these circumstances it was wholly understandable that the two town centre sites would be rejected. Neither was available, and the larger site was to be developed by a rival operator. Even if the one hectare site on the land adjacent to Tesco's land was available, it was at least open to the planning authority to take the view that it was too small for the proposed development. In any event, standing the permission granted on the adjacent site and the traffic management concerns related thereto, it would be surprising were the planning authority to insist on the same general location for an additional store.

[33] The retail impact and planning assessments leading up to the Asda decision, including the planning officer's report to committee, amply demonstrate that the committee was being asked whether to grant permission for retail provision additional to that already approved at the Tesco site. Contrary to the terms of the petition, it is clear that the sequential test was not disregarded. I can detect no error of law nor any irrationality in the rejection of the town centre sites. The only other potential sites were in out of centre locations. The second recommendation in the planning officer's report was based on the mistaken assumption that out of centre sites should be compared as part of the sequential approach. However this error led nowhere, since the committee rejected that recommendation.

[34] As emerges from a consideration of the objections lodged by Tesco to the Asda application, issue was joined on the advice to committee that there was scope and justification for both the Tesco and an additional foodstore in Tain. Nonetheless it was not said that Tesco would halt its development if the Asda application was granted. To a large extent the submissions on this aspect of the case presented by Mr Martin challenged the planning merits of the decision, as opposed to highlighting any procedural or legal irregularities.

[35] As a general proposition I have sympathy with Ms Munro's submission that the sequential test demands flexibility from developers and that they cannot automatically set aside the implications of the policy in favour of town centres simply by designing a scheme which cannot be fitted into an available town centre location. However there must be limits to the extent to which this can be demanded of a developer, and, except in very clear circumstances, this will be an issue to be determined by the judgement and discretion of the planning authority. Ms Munro also conceded that her submissions depended upon the one store scenario. I have rejected that scenario, and for all the above reasons I consider that this challenge to the decision is without merit.

[36] Under reference to paragraph 26 of the petition, Mr Martin presented an alternative argument, namely that it was unreasonably premature to grant the Asda application and assess the impact on the town centre before the Tesco store was in operation. In particular an Asda approval might prompt a reassessment of Tesco's plans. In my view this submission necessarily involves a challenge to the clear advice given to the committee that there was scope and planning justification for both a town centre foodstore and an out of centre foodstore in Tain. There was nothing before the committee which required it to proceed on the basis that approval of the Asda proposal would stop or even threaten the consented town centre development. In any event the submission raises an issue of planning judgment or discretion, not a question of law such as would allow the court to interfere with the decision. As mentioned above, there was ample evidence to justify the view that both the Tesco and an additional foodstore could be permitted, and indeed that such would be both good for Tain and in the overall public interest.

[37] I have set out the planning background and the information before the committee in some detail. I can detect no error of law nor any unreasonableness in the Wednesbury sense in the decision taken, which was based on detailed and appropriate assessments and reports from officers of the planning authority and from planning consultants.

The second ground of challenge

[38] Though presented quite separately, and while, on the face of it, raising a wholly distinct line of argument, there is an overlap between the two grounds of challenge. The second ground proceeds on the basis that by voting in favour of the Asda application three councillors, namely Messrs Rhind, Durham and Torrance, were motivated by a desire to stop Tesco's development in the town centre. Consistently with the earlier submission, this argument is predicated upon the assumption that there was no room for viewing the Asda application as additional provision in Tain. Given those councillors well known antipathy to the Tesco proposal, it was submitted that it is reasonable to infer that this motivated or "infected" their decision to vote in favour of the Asda application. Notwithstanding that this criticism relates to only three of the eleven councillors who voted in favour of the application, it was submitted that this is sufficient to undermine the decision.

[39] The factual basis for this ground of challenge is summarised in the quotation from the petition set out earlier. The petitioners also rely upon their criticisms as to the conduct of the planning committee meeting in the Royal Hotel. At the hearing I was taken through a number of documents in support of this part of the petitioners' case. They include press reports, some of which contain quotations from the councillors. In my judgement this material, when considered along with the background circumstances, establishes the following:

1. When Asda first proposed a foodstore at Knockbreck Road, the application received considerable support, including from the local councillors now under criticism.

2. Subsequently Tesco applied for a foodstore in the town centre at Shore Road. This attracted opposition for a variety of site specific reasons, including from Councillors Rhind and Torrance. Councillor Durham initially supported the proposal but subsequently joined the opposition.

3. In due course Tesco achieved a full planning permission for that store, despite an orchestrated campaign to stop it, which was led by one or more of the said councillors and others.

4. Meanwhile a renewed planning application by Asda at Knockbreck Road received outline planning permission after a unanimous decision, including the votes in favour of the said three councillors, all against a background of continuing local support for the Asda proposal, and of significant ongoing opposition to the development of the Shore Road site on the part of those councillors and others.

5. While the committee meeting at the Royal Hotel was obviously a lively and robust occasion, I can identify no irregularity or impropriety concerning the arrangements for or the conduct of that meeting which would in itself, or in combination with other factors, justify interference by the court.

[40] The petitioners ask the court to infer that the local councillors decided in favour of the Asda proposal, not because they were persuaded of its planning merits, but because of a determination, and in particular a pre-determination to do all that they could to thwart the Tesco store. The first question is whether the available information supports that submission. However, before turning to that question I will address the relevant law on the topic.

[41] Counsel for the petitioners were not specific as to the exact nature or categorisation of their challenge. Variously reference was made to concepts such as bias; perceived bias; pre-determination; fettering of discretion; the taking into account of irrelevant considerations; breach of the rules of natural justice; unreasonableness and irrationality. There was lengthy discussion of the case law and of the relevant legal principles. While I have considered the large number of cases provided to me in the folders of authorities, I am content to proceed on the basis of the judgments in R (Lewis) v Redcar & Cleveland Borough Council [2009] 1 WLR 83 (Court of Appeal). So far as relevant to the present proceedings their Lordships' approach can be summarised as follows:

1. The decision maker should not be influenced by any pecuniary, proprietary or other personal interest in the outcome.

2. In any legal challenge, the court should consider whether a fair minded and informed observer would be left with the view that there was a real possibility that the planning committee or some of its members were biased in the sense of approaching the decision with a closed mind and without impartial consideration of the relevant planning issues; though this test should be applied with caution to avoid making the whole process impossible or unduly difficult. For example, unlike judges, councillors must be allowed the legitimate potential for a pre-disposition towards a particular outcome and the freedom to express opinions and views in advance of the decision.

3. Given the constitutional position and role of councillors, and bearing in mind the practicalities of local government, clear pointers are required if it is to be held that a councillor or councillors had a closed mind, or the appearance of a closed mind at the time of the decision. Were it otherwise real damage could be done to the democratic process.

4. If councillors have neither a pecuniary nor a personal interest in the outcome, they will have complied with their duties if they address the relevant planning issues before them fairly and on their merits, even though they may approach them with a pre-disposition towards one side. Thus councillors must be prepared to change their minds and to remain open to any new argument.

5. It may be easier to quash a decision if it is without any apparent or substantial planning justification, and conversely more difficult if there are legitimate reasons in its favour. Unless there is positive evidence to the contrary, councillors can be presumed to have been aware of and to have followed their obligations.

6. While there is the potential for striking down a planning decision on the basis of appearances, the potential for this is more limited than in respect of a judicial or quasi judicial process. As Longmore LJ put it: "...The test of apparent bias relating to pre-determination is an extremely difficult test to satisfy."

[42] No councillor had a financial or personal interest in the grant of Asda's application in the sense discussed in the cases. Thus I approach the present question by asking whether the factors relied on by the petitioners demonstrate that there was pre-determination, or at least an appearance of pre-determination on the part of one or more of the councillors concerned. This can be contrasted with a pre-disposition on the part of the relevant councillors. At the moment, and for present purposes, I am content to proceed upon the basis that if the involvement in the decision by one or more of the said councillors is tainted by an illegality of this kind, then this would be sufficient to quash the unanimous decision; though I recognise that should the issue arise there is room for discussion and deliberation on that topic.

[43] The petitioners ask the court to infer from the available information that the said councillors decided in favour of the Asda proposal not because of the planning merits of the application, but because of a pre-determination to stop or at least undermine the Tesco proposal. I consider that this submission faces a number of formidable difficulties, which can be summarised as follows:

1. The Asda proposal came first, and attracted considerable support, including from Councillors Rhind, Torrance and Durham, at a time when that support could be based only upon wholly proper and legitimate considerations.

2. Though ultimately they were unsuccessful, the local councillors were fully entitled to form the view and oppose the Tesco proposal on the basis that it was inappropriate and against the public interest.

3. A councillor could be both against Shore Road and in favour of Knockbreck Road, each for appropriate and legitimate reasons, and a councillor is allowed to have a pre-disposition towards such a result.

4. While it is clear from the newspaper reports and other information relied upon by the petitioners that the three councillors were strongly against the Tesco proposal, the petitioners have not pointed to any clear evidence which demonstrates, or even reasonably suggests that on 20 April 2010 they ignored the planning issues concerning the Asda proposal, and entered the meeting with a fixed and closed mind based upon an overwhelming desire to stop Tesco.

5. In any event, there was no good reason to suppose that a decision for Asda would stop or undermine Tesco's proposal. Contrary to the assertion of the petitioners' counsel, the Council was deciding whether to allow an additional new store in Tain, not one as an alternative to or in substitution of the previously consented Tesco proposal.

6. In all the circumstances, in my view a fair minded observer of the whole proceedings would conclude that, in respect of all the councillors involved, the Asda application was approved for the reasons set out in the relevant minute, after a proper consideration of the relevant planning issues, all based on the aforesaid background of appropriate information and advice.

[44] It is true that the decision was taken against the advice of the planning officer. However, in the main that advice was based upon an erroneous approach to the sequential analysis. On that officer's own advice, and indeed on any reasonable view, it was open to the committee members to reject his recommendation and decide that sound planning reasons indicated that Tain should have the benefit of an additional supermarket at Knockbreck Road. Given the formidable planning case in favour of the proposal, all as narrated above, I consider that an observer would be unduly suspicious or overly sensitive should he conclude or suspect that the decision was taken for improper reasons. Furthermore, the case law counsels considerable caution before being ready to quash such decisions on the basis of apparent bias or the like.

[45] In saying all of this I have not overlooked Councillor Durham's comment about there being too many Tescos and not enough Asdas in the Highlands. That kind of remark might be of significance if there was no sensible or sound basis to reach the decision taken. However where there is such a foundation, I consider that it would be wholly unreal and disproportionate to strike down the decision because of a stray irrelevant or prejudicial remark made by one councillor at the meeting.

[46] Much of the criticism of the councillors concerned their involvement in the decision making process concerning the Tesco proposal, for example with regard to alleged self interest and alleged breaches of the Code of Conduct. However, the present challenge relates to a wholly different planning process. I see no good reason to translate those criticisms concerning the councillors and the Tesco development to the procedures relating to the quite separate Asda application, particularly given my finding that it involved an additional as opposed to an alternative store in the town.

[47] As a fall back position I was asked to allow a proof as to the merits of this ground of challenge. I am not prepared to do so. In my view the facts and circumstances relied on do not justify the relevant averments and pleas-in-law in the petition. In the whole circumstances, and applying the appropriate legal principles as summarised above, I consider that this ground of challenge falls to be rejected.

[48] The result is that the application for judicial review is refused. I shall sustain the first respondent's third plea-in-law and the second respondent's third, fourth, fifth and sixth pleas-in-law. Meantime I shall reserve all questions of expenses.