EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Carloway Lord Menzies Lord Marnoch	[2012] CSIH 81 XA54/12 OPINION OF THE COURT delivered by LORD CARLOWAY in the application under s 238 of the Town and County Planning (Scotland) Act 1997 by TESCO STORES LTD Applicants; against ABERDEEN CITY COUNCIL Respondents: _______________

Act: Dean of Faculty (Keen QC), Burnet; Semple Fraser LLP

Alt: Gale QC; Morton Fraser LLP

Ross; Scottish Government Legal Directorate (for the Scottish Ministers)

11 October 2012

Legislation etc.

[1] The Town and Country Planning (Scotland) Act 1997 (c. 8) lays down a statutory scheme for the creation, and in some instances destruction, of local development plans. Such a plan is:

"a broad statement of the planning authority's view as to how the development of the land could and should occur and as to the matters which might be expected to affect that development" (section 15(1)).

This involves the preparation of a "main issues report" (section 17) setting out general proposals and thereafter a Proposed Local Development Plan (section 18). The Plan may be modified in light of any representations made but, thereafter, it is to be submitted to the Scottish Ministers who may appoint a reporter to examine it and to report upon its content (section 19; see also Scottish Government Planning Circular 1 of 2009 on Development Planning, para 68). Upon receiving the report, the planning authority are required:

"19...(10)...(a) to make (i) (except in so far as they decline to do so, on such grounds as may be prescribed for the purposes of this sub-paragraph) such modifications, if any, to the proposed local development plan as the appointed person recommends, and

(ii) such other modifications to it, if any, as appear to them to be requisite having regard to the report".

Otherwise, the authority must proceed to publish the Plan, advertise their intention to adopt it and, in due course, adopt it (section 20).

[2] The prescribed grounds for declining to make any modifications recommended by a reporter are contained in the Town and Country Planning (Grounds for Declining to Follow Recommendations)(Scotland) Regulations 2009 (2009 SSI No 53). The grounds concern issues of consistency with strategic plans and planning policies and with certain specific environmental provisions. However, there is a general provision which allows a planning authority to reject a recommended modification where it is:

"2... (c) ...based on conclusions that [the reporter] could not reasonably have reached based on the evidence considered in the course of the examination".

In terms of the Planning Circular (supra):

"61. Examination reports are largely binding on planning authorities. ...

63. ...section 19(10) of the Act requires authorities to make the modifications recommended in the examination report, and any other requisite modifications. The intention is that these other modifications should be wholly consequent on the reporter's recommendations (e.g. to rectify any factual or terminological inconsistencies created by the reporter's recommended modifications), and should not introduce unconnected new material into the plan".

[3] Once a plan has been adopted, the determination of any planning application must be in accordance with its terms, in the absence of material considerations indicating otherwise (section 25).

Facts

[4] This is an application under section 238 of the 1997 Act to quash the Aberdeen Local Development Plan as ultra vires. The particular focus is upon a site in the western quadrant of the city at the former Woodend Hospital Annexe in Rousay Drive on the south side of the Lang Stracht. This site was bought by the applicants, who are keen to develop it as a superstore, in about 2001. Outline planning permission to use the site for such a store was granted in 1996 (and perhaps, in part, as early as 1989). The Aberdeen Local Plan, adopted in 1991, identified the site (designated as OP61) as suitable for a superstore. None was, however, built at that time.

[5] A Local Plan inquiry in 2007 heard submissions on the need for a new superstore in west Aberdeen. The applicants had argued then that there was such a need, which could be met on an expanded Woodend site or elsewhere. One alternative mentioned at the inquiry was the former Summerhill School, then owned by the respondents and also located on the south side of the Lang Stracht, a short distance to the east of Woodend. The respondents supported the idea of a new superstore, which, they agreed, could be accommodated on an expanded Woodend site or elsewhere, provided the latter met the "sequential" approach to planning. This approach prefers retail developments in regional and town centre sites to edge-of-centre locations, which are, in turn, preferred to out- of-centre developments.

[6] The reporter agreed with the contention that there was a need for a superstore in west Aberdeen (Report on Issue 239, para 39 et seq). However, he considered that the Local Plan ought to identify a specific site for the superstore. He observed:

"44. If... a site other than OP61 were identified for the new food superstore, the owner of OP61 would still be able to proceed with the retail development for which planning permission exists. This would result in two major retail developments, possibly in close proximity to each other. No case has been made for this scale of development and nothing has been put forward to show how it could be avoided...

45. The matters covered in the preceding paragraphs point strongly to designating the OP61 site as the location for the new west Aberdeen food superstore".

[7] The reporter's recommendations, which were accepted by the respondents, found their way into the Local Plan, adopted on 28 June 2008, as follows:

"3.49.6 ...there remains a need for a modern superstore to serve the western districts of the City... The previous local plan which was adopted in 1991 identified a site at Lang Stracht-Rousay Drive as suitable for a modern supermarket. Planning permission has been granted for a retail development on part of this site. Development on this site would meet the need.... The site is shown as OP61 on the proposals map.

3.49.7 No need has been identified for any other new superstores in the city at this time... With the exception of the new superstore on site OP61, any superstore proposals which do come forward will be assessed in terms of policy 65A... Proposals for the OP61 site will be considered in terms of policy 62".

[8] Policy 62 is headed "New Superstore" and expressly supports, in principle, the development of the Woodend site. Policy 65A is headed "Sequential Approach" and states that retail developments should be in specified locations which are hierarchically listed, with a preferred order of Regional, Town, District and Neighbourhood Centres. In each case, proposals are not to detract from any first, second, third or fourth tier location. "Lang Stracht-Rousay Drive" is specified as a District Centre, but with the qualification that it was:

"effective only from such time as a superstore development in accordance with Policy 62 has been completed and brought into use".

Lang Stracht and Rousay Drive (the latter effective only as above) were also specified separately as Neighbourhood Centres as was Summerhill Drive.

[9] Meantime, in March 2008, an application for detailed planning permission at the Woodend site was made. The respondents resolved to grant this in November 2008, but it was not until 24 November 2010, following the conclusion of a formal planning agreement, that consent was finally given.

[10] On 18 August 2010, the respondents approved a Proposed Local Development Plan, which zoned both the Woodend (now OP38) and Summerhill (OP120) sites as opportunities for residential development; recognising that this would not preclude the development of either site as a superstore. A number of representations in relation to the sites were made to the reporter appointed by the Scottish Ministers to examine objections. Some of these questioned the "deliverability" of the Woodend site, given the length of time which had expired from the granting of planning permission without a development being completed. Summerhill was advanced by some as a more appropriate alternative.

[11] The respondents' position was that development of either the Woodend or Summerhill sites would meet the need for a superstore in the area. They noted the terms of the earlier Local Plan to the effect that Woodend would be classified as a District Centre once the superstore had been constructed. However, they considered that, if a superstore was not built on one of the sites, that site would be suitable for alternative rezoning for residential development. On the question of both sites being developed for retail use, the respondents commented:

"The impact of two superstores on the Lang Stracht would have to be carefully considered in terms of the effect on the vitality and viability of nearby centres through a Retail Impact Assessment if a planning application was submitted".

[12] In his Examination Report on this matter (Issue 64) to the Scottish Ministers, dated 21 December 2011, the reporter remarked that:

"... The thrust of most of the representations relating to [the Woodend and Summerhill] sites is to support the use of one or other of them as a superstore... but probably not both of them which would raise concerns about the cumulative effect of traffic and retail".

He recorded that, in a representation dated 10 January 2011, the applicants had represented that they intended "to start development on the site in the near future". In relation to the Summerhill site, he commented as follows:

"The other site (OP120) also has retail developer interest, and is the preference of the community council. However the representation in support of retail development at this site... is quite guarded, focussing more on the overall need for a superstore in this area and the failure to develop site OP38, rather than setting out the merits of site OP120, and making no mention of any intention to submit a planning application for a superstore at this site".

[13] In recommending no modifications to the respondents' proposal to zone both sites for housing, the reporter concluded:

"3. In these circumstances, given the long period that site OP38 has had approval for retail development but without implementation, the apparent suitability of both sites for this purpose, and the uncertainty as to which proposal will come to fruition, I agree with the [respondents] that it would be preferable to allocate both sites for residential use... Residential redevelopment on either site would clearly be compatible with surrounding uses, but this allocation would not preclude retail use at either site. Conversely to identify one or other of the sites as the preferred location for the superstore would pre-judge the outcome of what at present appears to be a fluid situation, and could result in superstores on both sites. However any proposal for a superstore on site OP120 would have to be considered in the context of the planning permission on site OP38... Similarly I agree with the [respondents] that the identification of one of these locations as the district centre for the area would be premature until one or other of the schemes has been brought to fruition".

[14] On 25 January 2012 the respondents resolved to adopt the plan as the Local Development Plan with effect from 29 February 2012. Both sites are listed as opportunities for residential development. The sequential approach in relation to retail development is retained in the Plan (policy RT1), but the Plan does not specify what the Regional, Town, District and Neighbourhood Centres now are. The Woodend site is not nominated as a District Centre, subject to the completion of the development. Indeed, no location is expressly designated as a particular centre. However, the Plan defines what a Centre is. A District Centre consists of:

"Groups of shops outwith the city centre, usually containing at least one food supermarket or superstore and non-retail services".

Completion of a superstore on the Woodend (or Summerhill) site would presumably result in it becoming a District Centre, despite the absence of a specific designated location in the Plan.

[15] On 15 February 2012, the Scottish Ministers issued a clearance letter enabling the adoption of the Local Development Plan to proceed. Meantime, on 30 September 2011, an application for planning permission for a superstore on the Summerhill site was lodged by Optimisation Developments Ltd, a company associated with Morrisons, who are competitors of the applicants in the food and general retail markets. The respondents had sold the Summerhill site to Morrisons. On 19 April 2012, the respondents' Development Management Sub-Committee resolved to approve that application subject to conditions, including the completion of a planning agreement.

Submissions
(a) APPLICANTS
[16] Although in their application the applicants had tabled a number of grounds supporting the contention that the Local Development Plan was ultra vires and ought to be quashed, ultimately only one ground ("Ground 16") was insisted upon. In particular, no criticism was directed towards the findings and recommendations of the reporter in respect of his examination of the Proposed Local Development Plan approved in 2010. As developed in oral argument, the essence of the complaint was that the respondents had acted outwith the powers in the 1997 Act because, when they had adopted the Plan, they had been aware that the Woodend development was proceeding. The reporter on the 2010 Plan had clearly been concerned not to open up the opportunity for there to be two superstores in west Aberdeen. Yet by the time of the adoption, the respondents must have been aware that the Plan would have, as its likely outcome, the opposite result. Adopting the Plan, in light of the knowledge then available of the progress of the Woodend development, thus contradicted the reporter's recommendations. Events had moved on since the "fluid" situation described in the report. As at the date of its adoption, the Plan could be seen to have the inevitable, or at least highly likely, consequence that two superstores would be created. The designation of Summerhill for residential development allowed consideration of retail development, including a superstore, in competition with the existing consent at Woodend.

[17] In terms of an affidavit from a civil engineer, the applicants had, from December 2010, been in negotiations with the respondents concerning the drafting of a traffic regulation order, which was approved by the respondents on 13 September 2011, albeit that it was not yet in force. From March 2011, the applicants were engaged in designing road improvements (including drainage) and, from July 2011 to January 2012, they were in contact with the respondents over consents for these. Detailed correspondence was produced to vouch this. On 19 December 2011, the applicants had engaged Barr Construction as the main contractors for the construction of a superstore on the site, with a start date in April 2012. On 9 February 2012 they had applied for a building warrant and had tendered a cheque for £16,542 in that regard. Completion of the superstore was scheduled for October 2012. An affidavit from a town planner acting for the applicants detailed negotiations on planning matters, such as landscaping and layout, over a similar period.

[18] In short, as it was put in the written case:

"In failing to take into account of the respondents own state of knowledge of the likely imminent development of the Woodend site, when adopting the Local Development Plan and in the form in which it was adopted the Local Development Plan the respondents failed to take account of a material consideration which existed as at the date of its adoption, separatim was based upon a matter of fact in respect of which there was no reasonable basis in fact as at the date of its adoption, separatim acted in a manner in which no reasonable planning authority acting reasonably would have acted."

[19] The appropriate consequence of the respondents' failings was a quashing of the Plan. That would not, however, involve starting from scratch (Hallam Land Management v City of Edinburgh Council 2011 SLT 965).

(b) RESPONDENTS

[20] The respondents submitted that the argument which had been advanced failed to understand the approach dictated by the 1997 Act and, in particular, the limited bases for altering the Proposed Local Development Plan, once the report from the independent reporter had become available. Moreover, it remained open to the respondents, in an individual planning application, not to follow the plan if material considerations dictated otherwise (see previously City of Edinburgh Council v Secretary of State for Scotland 1998 SC (HL) 33, Lord Clyde at 43).

[21] The Planning Circular (paras 32 -42) specified the context of the Local Development Plan having to be fixed at a particular point in time, after consideration of the available material. It was an historic document, in that the adopted Plan must have had regard to what the reporter had said and recommended some time previously. As the Circular stated (para 63), the scope for departing from the reporter's conclusions was extremely limited. The examination report had to be taken as a datum. At that point, any objections to the Proposed Local Development Plan would have had to have been considered by a specialist reporter and his recommended modifications were subject only to very limited alteration.

[22] The reporter had not said that there could not be two superstores. If he had reached that view, a policy statement to that effect would have been included as a modification. If there had been such a policy statement then, given that Woodend already had planning consent, development of Summerhill would have been contrary to the Plan. As it was, the Summerhill application could still be considered on its merits. Any sequential approach could only have cut in once the site at Woodend had been developed.

[23] If there was a change in circumstances after the date of the examination report on which the adopted Local Development Plan had been based, that could be advanced as a material consideration justifying a departure from the Plan. There was provision for the occurrence of such a change, but the content of the Plan had to be determined at a particular time. Predictions and proposals had to be based on the circumstances pertaining at that time.

[24] If the court were against the respondents on these matters, the remedy was not to quash the whole plan, but only that part of it relating to the Woodend site. Otherwise there would be an excessive level of disruption as a result of the revival of all the policies contained in the earlier plan.

Decision

[25] The statutory regime set out in Part I of the Town and Country Planning (Scotland) Act 1997 is one which, of necessity, involves a cut-off date at the point at which the "appointed person" completes his examination under section 19(3). His subsequent report must be based on material presented to him before that time. It is only on the basis of that material that he will be able to propose modifications to a Proposed Local Development Plan. These modifications, based on that material, must be incorporated into the Plan; other than in the very limited circumstances detailed in the Town and Country Planning (Grounds for Declining to Follow Recommendations)(Scotland) Regulations 2009. The Regulations allow a planning authority to refuse to make a modification if the reporter has reached an unreasonable conclusion, but the unreasonableness of that conclusion must be "based on the evidence considered in the course of the examination" (regulation 2(c)) and not upon any subsequent material, or indeed new material, which was not presented to the reporter.

[26] In any event, it is important to note that, in respect of the Proposed Local Development Plan approved in 2010, there were no relevant modifications proposed by the reporter in respect of the Woodend or Summerhill sites. Rather, the reporter's recommendation (Issue 64, p 318) was "No modifications". There was accordingly no basis upon which the respondents could have altered the terms of the Proposed Local Development Plan, in which they had designated both sites for residential use and had not made any specific reference to Woodend being, or becoming, a District Centre. For these reasons the present application must fail.

[27] The court's view ought not to cause any difficulties in practice. By its very nature, a development plan will be historical in nature. It must be framed on the basis of material then in existence, adopted at a subsequent point and acted upon even later. If it transpires that, since the date when the evidence justifying a modification was considered, there has been a material change in circumstances, that fact may be used, in an individual planning application, to justify a departure from the development plan on the basis that it constitutes a "material consideration" indicating that a departure from the development plan is justified (1997 Act s 25(1)). In this connection, the applicants could, and did, object to the grant of planning permission for a superstore on the Summerhill site based upon the facts advanced in this application to quash the Plan.

[28] It should also be emphasised that the reporter examining the Proposed Local Development Plan did not reach the conclusion that only one superstore ought to be developed in west Aberdeen.

[29] The reporter at the time of the 2007 inquiry had certainly recommended that the Woodend site be designated as the location for the new superstore. However, this did not find its way into the 2008 Local Plan, which left open the possibility of another site being so developed, even if Woodend was preferred in principle. Woodend's designation as a District Centre was qualified in that it could only achieve that status once built. Since it has not been built, it has never achieved the protection afforded to such a Centre as a result of the operation of the sequential approach. At the time when the Proposed Local Development Plan was approved in August 2010, detailed planning permission had still not been granted for the Woodend site and it is clear that, at least at that time, there was continued uncertainty over whether the Woodend site would ever proceed. The respondents' decision, in approving the Proposed Local Development Plan, to promote the possibility of an alternative site for a west Aberdeen superstore, notably by removing any form of preferred status for the Woodend site, can hardly be (and ultimately was not) criticised. After all, the respondents' policy was that there was a need for such a superstore. They had granted planning permission for the building of such a store many years previously, but the need had still not been met. More importantly, in publishing the Proposed Local Development Plan 2010, it is clear that the respondents intended to depart from the idea that there could only be one superstore in the area. Rather, their representations to the reporter were that the impact of two superstores in the Lang Stracht would have to be carefully considered; not that it ought, as a matter of planning policy, to be prevented. This was consistent with the change in designation of both opportunity sites to "residential".

[30] With the publication of the Proposed Local Development Plan, the applicants took more positive steps towards commencing construction at the Woodend site. It was, by that time, for the applicants to persuade the reporter that a modification ought to made to the Plan whereby: (a) as a matter of planning policy, only one superstore ought to be built in west Aberdeen; and (b) given the steps the applicants were taking in relation to their existing planning consent, which was finalised in November 2010, the single superstore ought to be located at the Woodend site. In so far as they did try to persuade the reporter of these matters, they failed.

[31] The reporter's conclusion was that whether Woodend would ever be developed remained "uncertain". He specifically did not want Woodend to be designated as the only preferred site because of the "fluid situation". He refrained from stating specifically that there should only be one superstore. On the contrary, he accepted that the Summerhill application would have to be considered on its merits, albeit in the context of an existing permission at Woodend. He did not recommend a modification identifying Woodend as a District Centre, although it is doubtful whether this, of itself, represented a significant change from the previous position. Were a superstore at Woodend to be built, it would, on the face of things, achieve District Centre status in terms of the definition of such a Centre in the adopted 2012 Local Development Plan, even although it was not specifically named as such in that Plan.

[32] In all the foregoing circumstances, even if the respondents had been aware that Woodend was progressing apace, their adoption of the Local Development Plan cannot be seen to run counter to any recommendation by a reporter that there should only be one superstore in west Aberdeen. There was no such recommendation. In any event, the court is not persuaded that the material in the affidavits of the civil engineer and the planner is such that it demonstrated, as at February 2012, that Woodend would be proceeding. Whatever preparatory work may have been carried out, it would seem that very little had actually occurred by way of construction on the ground. The respondents would have been entitled to the view that the reporter's descriptions of the development as uncertain and fluid remained current.

[33] The court will accordingly refuse this application. Had the applicants' arguments on the merits found favour, the court would have been inclined to quash the plan only in so far as it related to "Issue 64" (Allocated Sites: Woodend...Summerhill ..." etc.). It is clear that such a remedy is open to the court in terms of section 238 of the 1997 Act and the court agrees with the reasoning of Lord Malcolm in Hallam Land Management v City of Edinburgh Council 2011 SLT 965 (paras [21] et seq), that it would be entirely disproportionate to do otherwise.