Scottish Court of Session Decisions

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2016] CSIH 69

XA91/15

Lady Paton

Lady Smith

Lord Drummond Young

OPINION OF THE COURT

delivered by

LORD DRUMMOND YOUNG

in an appeal

under

 

section 239 of the Town and Country Planning (Scotland) Act 1997

 

by

 

NORTH LANARKSHIRE COUNCIL

Appellants

against

 

a decision by Scottish Ministers dated 3 August 2015 upholding an appeal by Peter D Stirling Ltd and the I D Meiklam Trust and granting planning permission in principle for the expansion of Mossend railhead

 

Appellant:  Findlay; A Sutherland;  Ledingham Chalmers LLP

Respondents (Scottish Ministers):  Johnston, QC;  Burnet;  Scottish Government Legal Directorate

Interested parties (Peter D Stirling Ltd and the Trustees of the I D Meiklam Trust):  Armstrong, QC;  Anderson Strathern

 

23 August 2016

 

[1]        In October 2013 the interested parties, Peter D Stirling Ltd and the Trustees of the I D Meiklam Trust, applied to the appellants, the local planning authority, for planning permission for the expansion of Mossend railhead.  The work included additional rail sidings at the railhead and the development next to it of a freight terminal known as the Mossend International Railfreight Park. The relevant works included buildings for Class 5 (General Industry) Use, Class 6 (Storage and Distribution) Use, and ancillary support uses, including access to the A8 road and associated site preparation, earthworks, infrastructure and landscaping.  On 22 September 2014 the appellants refused planning permission for the proposed development.  The applicants (the interested parties) appealed to Scottish Ministers against the refusal.  On 22 December 2014 Scottish Ministers, exercising powers under paragraph 3(1) of Schedule 4 to the Town and Country Planning (Scotland) Act 1997, directed that they would determine the appeal themselves rather than having the decision made by a reporter appointed by them.  A reporter, Mr Michael Cunliffe, was appointed to report and make recommendations to Scottish Ministers. 

[2]        The appeals were considered on the basis of written submissions.  The reporter also carried out two site inspections, accompanied on 6 February 2015 and unaccompanied on 6 March 2015.  He produced a report dated 5 May 2015, which was presented to Scottish Ministers.  In summary, the report concluded that the proposed development would not be in accordance with the development plan, and that material considerations that supported the development did not carry sufficient weight to justify the granting of planning permission in principle in the light of the provisions of the development plan.  For that reason the report recommended that the appeal should be dismissed and that planning permission in principle should be refused.  Nevertheless, Scottish Ministers did not support the reporter’s recommendation;  they upheld the appeal and granted planning permission in principle.  

[3]        The appellants have appealed against that decision under section 239 of the Town and Country Planning (Scotland) Act 1997, which, in subsection (5)(b), permits the court to quash an order or action “if satisfied that the order or action in question is not within the powers of this Act, or that the interests of the applicant have been substantially prejudiced by failure to comply with any of the relevant requirements in relation to it”.

[4]        In considering the appeal, we propose first to summarize, at some length, the report prepared by Mr Cunliffe, the reporter.  Secondly, we will set out the terms of the material parts of Scottish Ministers’ decision letter.  Thirdly, we will set out the principles of law that are relevant to appeals of this nature, and in particular the grounds on which the court may interfere with the decision of a planning authority, including Scottish Ministers.  Fourthly, we will consider the application of those principles to the decision by Scottish Ministers.

 

Mr Cunliffe’s report

[5]        Mr Cunliffe’s report begins (chapter 1) with a description of the site, which comprises approximately 125.8 ha lying to the south of the A8 trunk road, west of a major railway line, and north of Bellshill. The southern part of the site (28.2 ha) consists of an existing railhead and adjacent brownfield land, formerly in industrial use, while the larger northern part (97.6 ha) consists of agricultural land covering an area south of the A8 road.  The proposed development consists of an extended railhead with four additional sidings, a rail freight storage and distribution park, and a service and logistics park with 200,000 square metres in total of Class 5 (industrial) and Class 6 (storage and distribution) floorspace, with supporting ancillary Class 4 office space.  An access road to the A8 road is proposed.  The intention is to create a strategic rail freight interchange based on expansion of the established Mossend Railhead, operated by the first of the interested parties. 

[6]        The report covers four major topics:  freight transport, the Green Belt and sustainable locations, environmental and amenity impacts and economic impacts. 

Freight transport

[7]        On freight transport, the reporter set out the respective contentions of the developers and the council, and also those made of behalf of Freightliner Ltd, who own and operate a rail freight terminal at Gartsherrie Road, Coatbridge.  His conclusions (paragraphs 2.23-2.30) were as follows.  The appeal site occupies a particularly advantageous position in relation to transport links, owing to its proximity to the west coast main railway line and the A8 and M8 roads. Direct access to the A8 and on to the motorway network would be available.  Thus the proposed development would support modal shift in the freight sector from road to rail, reducing traffic congestion and lowering carbon emissions.  The extension of the existing Mossend Railhead would enable it to handle longer trains, thereby securing economies in unit costs.  Furthermore, the terminal would be located on brownfield land. 

[8]        Some policies in the Strategic Development Plan provided support for the proposal.  The Spatial Development Strategy listed freight hubs as core components, and noted a need for investment in freight hubs in key locations to enable modal shift from road to rail to occur.  In the Plan the locations for freight hubs are set out in Schedule 3;  these included Mossend, Gartsherrie (in Coatbridge), and others.  The policies in the Local Plan supported the freight terminal element of the proposal but were less supportive of the rail freight park.  The Third National Planning Framework (NPF3) supported modal shift of freight transport from road to rail, and it identified Mossend, along with Coatbridge and Grangemouth, as an important interchange in the Central Belt.  Nevertheless, Mossend had not, in NPF3, been designated as a national development;  the priority developments had to await NPF4, the next version of the National Planning Framework.  Consequently some caution was necessary in assessing the weight to be assigned to NPF3 in its support for the proposal.  Mossend was one of a number of existing and proposed rail freight developments in North Lanarkshire.  The Freightliner terminal at Coatbridge had spare capacity and some development potential, which could be put at risk by the appeal proposal.  Another competing terminal existed at Eurocentral, just to the east of the appeal site, and a further new site at Kilgarth had been designated in the development plan for rail freight development.  A strong case could thus be made out for strategic consideration of rail freight needs and priorities at the national level (NPF4) and at regional and local levels (in the Strategic and Local Plans), to ensure the optimum pattern of development. 

[9]        Scottish Planning Policy supported development that contributed to sustainable development.  The appeal proposal was in accord with some of the applicable criteria, including giving due weight to net economic benefit;  supporting delivery of infrastructure, including transport;  and mitigating climate change.  The development sat less comfortably with some other aspects of SPP, however, but it was consistent with a further policy in SPP, for new or expansion of rail freight interchanges on suitable sites.

 

Green Belt and sustainable locations

[10]      On the subject of the Green Belt and sustainable locations, after setting out the cases for the developers and the council, the reporter referred to a substantial number of letters of objection, and three petitions.  In these the loss of Green Belt was one of the main reasons for objection.  The reporter then set out his conclusions (paragraphs 3.41-3.51).  The part of the appeal site that lay within the Green Belt had an agricultural, undeveloped landscape with scenic qualities and a peaceful character which was sensitive to large-scale development.  This helped to provide some relief from the heavily urbanised character of this part of North Lanarkshire.  Although the proposed freight terminal was on brownfield land, the rail freight park would require the loss of 59.4 hectares of Green Belt land.  That element of the proposal was contrary to the Local Plan, under which the proposal did not qualify as acceptable development.  In 2011-2012 the case for excluding the site from Green Belt designation had been considered in the context of the Local Plan examination, but the resulting report concluded that the land should be retained as Green Belt.  The reporter in that examination thought that a review of the potential for land-use change in the vicinity of the new motorway would allow a comprehensive and co-ordinated approach, and would allow the preparation of a master plan for the entire A8/M8 corridor.  The present reporter agreed with that conclusion, and considered that the Local Development Plan process provided the most appropriate vehicle to revisit the Green Belt designation.

[11]      Furthermore, the Strategic Development Plan’s spatial development strategy (diagram 3) included the Green Network and Green Belt.  The proposal would contribute 38 hectares to the former at the expense of a loss of 59 hectares of the latter, in an area where Green Belt was a limited resource.  The reporter concurred with the council’s view that the proposal would involve the loss of such a significant area of Green Belt that it would not reflect the spatial development strategy or be supportive of the spatial vision and strategy of the SDP.  The designation of Mossend as a strategic freight hub recognized the possibility of some incursion into the Green Belt, but there was a question of scale and balance.  Substituting built development for green fields across the full width of the corridor between Bellshill and Coatbridge would exceed what the reporter regarded as a reasonable scale and balance.  He therefore found that the rail freight park element of the proposals would not be in accord with the spatial development strategy. 

[12]      Because the proposed development was not in line with the strategy, it was subject to a sustainable location assessment in terms of diagram 4 of the SDP.  The development as a whole would score positively against certain criteria, including minimising the carbon footprint and mitigating greenhouse gas emissions, promoting sustainable transport, but it would score less well on minimising the development footprint, and poorly on supporting Green Belt objectives.  Those problems related particularly to the rail freight park rather than the rail freight terminal.  The developers had suggested that the rail freight park was necessary to complement and cross-fund the other elements of the proposal, including road access to the A8, but this involved a question of scale and balance.  The reporter found it difficult to accept that development comprising 53 per cent “sustainable location” and 47 per cent “not sustainable location” could be regarded overall as consistent with the vision and strategy of the SDP.  The reporter expressed his overall conclusion on the Green Belt and sustainable locations as follows (paragraph 3.51): 

“My overall conclusion is that the proposal would have a significantly adverse effect on the Green Belt;  that it would not be consistent with development plan policies relating to the Green Belt;  and that it would not qualify as a ‘sustainable location’ in terms of the SDP”. 

 

Environmental and amenity impacts

[13]      On the subject of environmental and amenity impacts, the report noted, in setting out the case for the council, the existence of Policy DSP4 of the North Lanarkshire Local Plan, which required industrial and distribution uses to integrate successfully into the local area without an adverse impact on adjoining residential areas.  These included adverse visual effects.  In particular, criterion 3f of the policy required that the development should achieve a high quality in terms of integrating successfully into the local area and avoiding harm to neighbouring amenity by relating well to the existing context, and required the avoidance of an adverse impact on existing or proposed properties through overlooking, disturbance and other matters.  The proposal would result, it was submitted, in large-scale industrial and distribution uses being located close to existing residential areas.  In particular there would be significant adverse visual effects resulting from the loss of existing views into open countryside and from the use of lighting after dark.  Furthermore, the proposed 24 hour operation of the rail freight park would not be appropriate alongside existing dwellings owing to noise impacts. 

[14]      On this subject, the reporter concluded (paragraphs 4.28-4.31) that most of the impacts of the proposed development would be acceptable, or could be made so by the imposition of planning conditions.  The major exception was the landscape and visual impact of the rail freight park.  The relevant policy, DSP4, criterion 3f, required development to integrate successfully into the local area and avoid harm to the neighbouring amenity by relating well to the existing context and avoiding an adverse impact on existing or proposed properties.  Given the significantly adverse visual impact, the reporter found that the proposed development would not relate well to the existing context and would not accord with criterion 3f.  He considered that such non-conformity was sufficiently significant to conclude that the development would not accord with policy DSP4 as a whole. 

[15]      Furthermore, Policy NBE1, dealing with protecting the natural and built environment, safeguarded sites of importance for natural heritage and biodiversity from development.  An environmental statement had noted the loss of 1.85 hectares of woodland, including trees subject to tree preservation orders, with an impact of moderate-major significance.  While in the long term the lost trees would be replaced by community woodland, there would be an absence of mature trees for a period of several years.  The proposal would not therefore conform to Policy NBE1.

 

Economic impacts
[16]      On the subject of economic impacts, the application had been supported by an Employment and Socio-Economic Case, which estimated that there would be between 2,200 and 3,200 net additional permanent jobs created in transport and storage by 2030.  The range took account of different assumptions about displacement of existing economic activity, and leakage and multiplier effects.  The impacts in respect of jobs and gross value added had been assessed by the developers using what was described as a “bespoke Economic Impact Appraisal (EIA) model”.  EIA was said to be the standard method of assessing the net additional impacts that will arise through project activity, and it took account of guidance given by HM Treasury for central government projects.  The operational EIA took account in particular of displacement, namely the extent to which activity at Mossend would take away demand from elsewhere, leakage, namely the extent to which on-site operational jobs would be taken by residents living outwith the target area, and multipliers, namely the impacts that would arise from additional business and employee spend patterns;  the last factor was based on Scottish Government data. 

[17]      The reporter’s conclusions on economic impacts (paragraphs 5.15-5.17) were that, while the proposal had potential to generate substantial economic benefits, there was considerable uncertainty about whether, and how quickly, that potential would be fully realized, and as to the extent of displacement of existing economic activity that would result.  Realization would depend on market conditions and the willingness of businesses to relocate to the Mossend rail freight park, or to route their traffic through the terminal.  A large number of retail distribution centres existed within the Central Belt, and the council had suggested that there was already an effective network in place for the distribution of goods.  The reporter thought that, if Mossend were to succeed in attracting business, much of that business would be displaced from other locations.  This was more likely to be true of distribution activity than of manufacturing, some of which might be attracted to the rail freight park and could represent a net gain to Scotland.  Nevertheless, there would be a real prospect of the closure of the Freightliner terminal at Coatbridge, and potentially a risk to other facilities in central Scotland.  The reporter therefore considered that “a cautious approach should be adopted in assessing the net economic benefits”.  In the developers’ economic assessment gross impacts were reduced by 10-25 per cent at the North Lanarkshire level and 30-50 per cent at the Scottish level to account for displacement.  The reporter thought that it would be prudent to assume the higher figures in respect of displacement. On that basis, the reporter thought that the 2025 estimate of 2,100 gross jobs would equate to slightly over 1,000 net additional jobs at the Scottish level, to which multiplier effects would need to be added.  Those represented considerable economic benefits that were an important consideration to be taken into account in the overall balance.  He thought, however, that it was also possible that a substantial proportion of the benefits could be realized by rail freight developments in alternative locations. 

 

Overall conclusions and recommendations

[18]      In setting out his overall conclusions and recommendations, the reporter began by noting that the proposed development would offer substantial benefits, which he summarized, but that significant disbenefits must be set against those.  The disbenefits related in particular to major loss of Green Belt, continuous built development between Bellshill and Coatbridge, significant visual and amenity impacts on the local community, and loss of recreational space.  In addition, existing and proposed alternative sites for rail freight were likely to be eclipsed.  The developers had submitted that Mossend offered clear advantages over alternatives and should be allowed to proceed now to allow the undoubted benefits to be realized.  They had further submitted that the elements of the proposal, notably the rail terminal, the rail freight park, the A8 access road and green space were not separable, and that the rail freight park was necessary to cross-fund the rest of the development.  On these matters, the reporter concluded (paragraph 6.3)

“However, given the substantial price in terms of green belt intrusion and effect on local communities, I do not consider that a strong enough case for the development within the present planning policy context has been made out”.

 

[19]      In relation to the Strategic Development Plan, the reporter noted that he had found that the spatial development strategy (diagram 3) provided partial support for the proposal, but it also supported the Green Belt, and he thought that on balance the proposal was not consistent with the strategy.  Other provisions of the SDP provided some support, notably Schedule 3 and Strategy Support Measure 6.  Diagram 4 showed both positive benefits from the freight terminal and green network and negative elements arising from the rail freight park.  Overall, however, he considered that the proposal as a whole could not be regarded as a “sustainable location” consistent with the vision and strategy of the SDP;  this was based on the considerations summarized above at paragraphs [8] and [11]-[12] of this opinion.  That is a clear finding that the proposal was not, in terms of its location, consistent with the SDP.  In relation to the Local Plan, certain policies supported the freight terminal but not the rail freight park, and the proposal would be contrary to a range of policies covering in particular the Green Belt, the maintenance of defined urban/rural boundaries, adverse visual impacts, and the protection of natural heritage and biodiversity from development.  On the basis of the development plan as a whole, the reporter found that the proposed development would not be in accordance with it.  He noted that both the Strategic Development Plan and the Local Plan were relatively recent;  both dated from 2012. 

[20]      In relation to freight transport, the reporter accepted that NPF3 provided some support for the proposed development but that it envisaged that further work would be necessary to develop a strategic view of future development priorities for rail freight in time for NPF4 (see paragraph [8] above).  Caution was therefore necessary in assessing the weight to be assigned to NPF3 in support of the appeal proposal. 

[21]      In relation to Scottish Planning Policy, certain policies lent support to the development but others favoured the retention of the Green Belt.  SPP has a presumption in favour of development that contributes to sustainable development, but that involves balancing costs and benefits of a proposal over the longer term.  The aim, as the reporter indicated, is to achieve the right development in the right place, not to allow development at any cost.  On these bases, the development scored positively in some respects, including net economic benefit;  the report concluded that the economic benefits would be substantial, with the creation of over 1,000 new jobs by 2030.  Transport infrastructure would be supported, and there would be a significant contribution to climate change mitigation by removing carbon dioxide emissions as a result of moving transport from road to rail.  On the other hand the proposal scored less well on supporting good design.  Very large industrial and warehouse buildings and high earth bunds would be constructed in close proximity to residential areas.  The report concluded that the proposal would not protect the amenity of the existing development, and the quality of Hattonrigg, a neighbouring residential area, would be significantly diminished.  There would also be a net loss of natural heritage.  Furthermore, the result would be continuous built development for most of the green space between Bellshill and Coatbridge. 

[22]      On the foregoing basis, the reporter’s final conclusions were as follows: 

“6.11 Whether the proposal can be regarded on balance as development that contributes to sustainable development depends on the relative weight to be attached to different factors. While I recognize that there would be substantial economic benefits and carbon savings, in my view these are outweighed by the adverse impacts on quality of place, residential amenity and green space.

6.12 … I do not consider that a sufficient case has been made out that the proposal with its large railfreight park on Green Belt land would be, in the terms used by SPP, ‘the right development in the right place’. Further examination of alternatives is required, and mechanisms for this are provided by the Scottish Government’s freight study to inform NPF4, the review of the SDP and the preparation of the LDP. It may be that a more modest rail freight development at Mossend, with reduced incursion into the Green Belt and less impact on residential communities, could form part of the strategy”.

 

The reporter’s overall conclusion was that the proposed development would not accord with the development plan, and that the material considerations which lent support to it did not carry sufficient weight to justify granting planning permission.  The recommendation was accordingly that the appeal should be dismissed and that planning permission in principle should be refused. 

 

Scottish Ministers’ decision letter

[23]      After receiving Mr Cunliffe’s report in May 2015, Scottish Ministers issued a decision letter dated 3 August 2015, in which they upheld the appeal by the interested parties against the decision of North Lanarkshire Council.  The material provisions of the decision letter are as follows: 

“6. Scottish Ministers have carefully considered all the evidence presented by the written submissions and the reporter’s conclusions and recommendations and do not support the reporter’s recommendation to refuse this application.

7. While the reporter’s finding that the proposal is contrary to the development plan is accepted, taking into account all the merits of the proposal, Scottish Ministers consider that there are material considerations, that carry sufficient weight to support the application. National Planning Framework 3 and Scottish Planning Policy support modal shift of freight transport from road to rail, including planning for new or expanded rail freight interchanges. The development has a specific locational need, requiring a site adjacent to existing rail services, and would deliver an important strategic rail freight transport hub. Modal shift from road to rail results in a reduction of traffic congestion and a reduction in carbon emissions by 80 per cent for every tonne of freight moved by rail in comparison to road. The development would contribute to substantial carbon savings, estimated to be of the order of 140,000 tonnes of CO2 emissions annually due to reduction in HGV mileage, and Ministers have attached significant weight to this. Scottish Government’s ambition is to achieve at least an 80% reduction in greenhouse gas emissions by 2050, as set out in NPF3. It is also expected to contribute to significant economic benefit through job creation. On the most conservative assumptions over 1,000 net new transport jobs would be created by 2030. The loss of the green belt land would be offset to some extent by the proposed community green network and woodland, creating a green network of paths and woodlands that would act as a buffer to separate the proposed development from the residential areas. While a number of residential properties would be in close proximity to the site, Scottish Ministers note the potential to reduce the visual impact of the development through good design.

8. In considering the reporter’s report, in light of national policy supporting modal shift and facilitating freight movement by rail, Scottish Ministers have balanced the negative impacts and the fact it would be contrary to the development plan against the specific locational need of the development, the carbon saving benefits and the expected substantial economic benefits of the proposal. Overall, Ministers consider that the development would constitute sustainable development in terms of the principles set out in Scottish Planning Policy. They consider that the contribution of the development to sustainable development, particularly through enabling modal shift of freight transport from road to rail, is a material consideration and taking into account the contribution it will make to carbon savings and the positive impact on the local economy, the benefits of the application outweigh the conflict with the development plan. Consequently they consider that the reporter’s recommendation should not be supported”.

 

Conditions, in relatively standard form, were attached to the grant of planning permission. 

 

North Lanarkshire’s Council’s challenge

[24]      The appellants have presented an appeal under section 239 of the Town and Country Planning (Scotland) Act 1997 against the foregoing decision by Scottish Ministers.  The appeal proceeds on the basis that Scottish Ministers failed to give proper, adequate and intelligible reasons for their decision.  In particular, it is submitted that Scottish Ministers failed to explain adequately certain aspects of the economic impact of the proposed development;  first, Scottish Ministers did not properly explain why they disregarded the reporter’s concerns as to the impact of the proposed development on the Freightliner Terminal at Coatbridge and the economic risk to other facilities in Central Scotland;  and secondly they failed to explain whether they accepted the need highlighted by the reporter to take a cautious approach in the assessment of net economic benefits.  The appellants further submit that Scottish Ministers have failed adequately to explain their consideration of and conclusions about the effect of Scottish Planning Policy and the presumption in that Policy in favour of sustainable development.  Scottish Ministers further failed to explain why they had departed from provisions in the relatively recent Strategic Development Plan and Local Plan.  In particular Ministers had not explained whether they had carried out a balancing exercise, similar to that carried out by the reporter, in respect of the guiding principles for the assessment of sustainable development in Scottish Planning Policy, and in any event had failed to explain why they reached a different conclusion from the reporter in respect of the loss of Green Belt. 

 

Relevant legal principles

Status of the development plan:  grounds of challenge

[25]      The relevant legal principles were not seriously in dispute, at least at an abstract level.  Under section 25(1)(a) of the Town and Country Planning (Scotland) Act 1997, an application for planning permission must be determined in accordance with the development plan unless material considerations indicate otherwise.  Under section 37(2) of the same Act, any authority dealing with an application for planning permission (including Scottish Ministers) must have regard to the provisions of the development plan, so far as material to the application, and to any other material considerations.  The result is, in the words of Lord Clyde in City of Edinburgh Council v Secretary of State for Scotland, 1998 SC (HL) 33, at 43-44: 

“[T]he development plan is no longer simply one of the material considerations. Its provisions, provided that they are relevant to the particular application, are to govern the decision unless there are material considerations which indicate that in the particular case the provisions of the plan should not be followed……[I]f the application accords with the development plan and there are no material considerations indicating that it should be refused, permission should be granted. If the application does not accord with the development plan it will be refused unless there are material considerations indicating that it should be granted”.

 

[26]      Both section 25 and section 37 make use of the word “material”;  the meaning of that word was explained by Lord Keith in Tesco Stores Ltd v Secretary of State for the Environment, [1995] 1 WLR 759, at 764, where he agreed with the view of Bingham MR that “material” in the corresponding English legislation meant “relevant”.  Lord Keith continued: 

“It is for the courts, if the matter is brought before them, to decide what is a relevant consideration. If the decision maker wrongly takes the view that some consideration is not relevant, and therefore has no regard to it, his decision cannot stand and he must be required to think again. But it is entirely for the decision maker to attribute to the relevant considerations such weight as he thinks fit, and the courts will not interfere unless he has acted unreasonably in the Wednesbury sense (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223)”.

 

Thus the court may determine whether or not a particular matter is a relevant consideration, and if a matter is treated by the planning authority as relevant when it is not, or is treated as irrelevant when it is, that may be a good ground for quashing the authority’s decision.  If the decision maker has not erred in the foregoing respect, however, the weight accorded to a consideration is a matter for the decision maker, and the court will not interfere.  Statements of the law to similar effect are found in the speech of Lord Hoffmann in Tesco Stores Ltd, at 780, and in a number of more recent cases:  Moray Council v Scottish Ministers, 2006 SC 691;  [2006] CSIH 41, at paragraphs [28]-[30], per LJC Gill;  and Carroll v Scottish Borders Council, [2015] CSIH 73, at paragraph [54], per Lord Menzies.   

 

Duty to give reasons

[27]      Section 43 of the Town and Country Planning (Scotland) Act 1997, which provides for the method of dealing with applications by planning authorities, states in subsection (1A) that any notice given by the planning authority to an applicant for planning permission as to the manner in which an application has been dealt with must include a statement of the reasons on which the authority based its decision.  The classic statement of the form of reasoning that is required is found in Wordie Property Company Ltd v Secretary of State for Scotland, 1984 SLT 345, at 348 per LP Emslie: 

“The decision must, in short, leave the informed reader and the court in no real and substantial doubt as to what the reasons for it were and what were the material considerations which were taken into account in reaching it”.

 

In Moray Council v Scottish Ministers, supra, LJC Gill stated (at paragraph [30]): 

“In his decision letter [the reporter] must set out the process of reasoning by which he reaches his decision;  but that does not require an elaborate philosophical exercise. Nor does it require a consideration of every issue raised by the parties. The reporter is entitled to confine himself to the determining issues. So long as his reasons are intelligible and adequate, he is entitled to express them concisely”.

 

Similar principles apply to any planning decision, whether of a reporter or of a planning authority, including Scottish Ministers.  More recently, in Uprichard v Scottish Ministers, 2013 SC (UKSC) 219, Lord Reed considered the duty to give reasons (at paragraphs [44] et seq).  He indicated that, in considering the adequacy of reasons, it is necessary to take account of matters such as the nature of the decision in question, the context in which it has been made, the purpose for which the reasons are provided and the context in which they are given.  Reasons must be “proper, adequate and intelligible, and must deal with the substantive points that have been raised” (paragraph [47]).  Nevertheless, “It is… important to maintain a sense of proportion when considering the duty to give reasons, and not to impose on decision-makers a burden which is unreasonable having regard to the purpose intended to be served” (paragraph of [48]).  Thus in a case where a large number of objections were received, it could not be expected that the decision maker will address every nuance of every matter raised in every objection.  Nevertheless, in a case such as the present where the reasons in issue deal with the planning authority’s decision to reject the views of a reporter, it can be expected that those reasons will be relatively detailed, and that they will explain clearly and in some detail why the authority differs from the reporter. 

[28]      In South Bucks District Council v Porter (No 2), [2004] 1 WLR 1953, Lord Brown of Eaton-under-Heywood summarized the law (paragraph 36) in a way that is generally similar to the Scottish decisions.  He further made reference to earlier cases (at paragraphs 29-32), notably Save Britain’s Heritage v Number 1 Poultry Ltd, [1991] 1 WLR 153, and indicated that when a planning decision is challenged for lack of reasons the court must ask itself whether the interests of the person making the challenge have been substantially prejudiced by the deficiency of the reasons given.  It had been suggested that such prejudice could occur in three main cases:  where an application for planning permission has been refused and the reasons are so badly expressed as to raise substantial doubt as to whether the decision was within the relevant statutory powers, in which case there could be prejudice to the developer or to an opponent of the development;  secondly where a developer is prejudiced by inadequacy of reasons because he cannot reasonably assess the prospects of succeeding in an application for an alternative form of development;  and thirdly an opponent of development, which might include the local planning authority, might be prejudiced if the reasons were insufficiently explained to indicate what impact if any they might have in relation to decisions made on future applications.  On these matters, we would observe that there is a general public interest in ensuring that planning decisions are taken on proper grounds.  That is especially so in a case such as the present where there is a conflict between the local planning authority on one hand and Scottish Ministers on the other hand.  It is clear that there are substantial objections to the proposed development, and it appears to us that the appellants as the local planning authority have an obvious interest in knowing whether the decision to overrule their judgment has been taken for proper reasons that accord with the development plans.  For this reason we would resist any suggestion that the local authority did not have a sufficient interest to challenge Scottish Ministers’ decision;  it appears to us that they are manifestly interested in the outcome of the present proceedings. 

[29]      Finally, in discussing the relevant legal principles we should note the recent decision of the Court of Appeal in Horada v Secretary of State for Communities and Local Government, [2016] EWCA Civ 169.  The case was concerned with a compulsory purchase order that was intended to enable the redevelopment of the Shepherd’s Bush market in West London.  A public inquiry was conducted by a planning inspector.  The recommendation was that the compulsory purchase order should not be confirmed because the guarantees and safeguards for the traders and shopkeepers who currently carried on business in the area were inadequate.  That recommendation was reversed by the Secretary of State, on the basis that sufficient safeguards were available to protect the interests of existing traders and shopkeepers.  The Secretary of State was in turn reversed by the Court of Appeal on the ground that inadequate reasons had been given for it.  The case is in some respects analogous to the present appeal, and some of the remarks made by Lewison LJ in the course of the leading opinion are pertinent. After a detailed reference to the South Bucks case, Lewison LJ emphasized (at paragraph 36) that the Secretary of State was the primary decision maker;  he was not reviewing or conducting an appeal against the inspector’s decision.  Nevertheless (paragraph 37) 

“There is, ….. a corpus of authority that suggests that fuller reasons are required where the decision maker is disagreeing with a considered and recent recommendation”.

 

That is in our opinion exactly analogous to the present case.  As to the standard of reasons required, at paragraph 40 Lewison LJ stated: 

“It is of course the case that a duty to give reasons does not entail a duty to give reasons for reasons;  but nevertheless in disagreeing with the inspector’s recommendation the Secretary of State is, in my judgment, required to explain why he rejects the inspector’s view”.

 

[30]      In Horada the decision letter contained a number of general assertions about the proposal’s having the potential to bring about significant improvements in the physical environment of the area, boost the area’s economy and generate the social benefits associated with an improved market.  It was stated that the Secretary of State considered that sufficient safeguards were in place to ensure that “regeneration of the market to create a vibrant mixed use town centre development will be achieved and that the existing Market traders and shopkeepers or new operators with similarly qualitative and diverse offerings will be protected.  The Secretary of State is satisfied that the Council will ensure that the policy requirements of [the relevant policy] will be met through a series of planning conditions that will be reviewed and approved by the Council…”.  On that basis the Secretary of State declined to follow the inspector’s recommendation and confirmed the order.  It can be seen that the quoted passage, which is at the heart of the decision that was under appeal in that case, contains a series of mere assertions, without any more detailed reasoning.  The Court of Appeal described the wording that we have quoted as “laconic”, and held that it was essential that the reasons for disagreeing with the inspector’s recommendations should be stated explicitly (paragraph 49).  Lewison LJ’s conclusion is found at paragraph 54:

“In short, although it is clear that the Secretary of State disagreed with the inspector’s view that the guarantees and safeguards were inadequate he does not explain why he came to that conclusion. I do not consider that requiring a fuller explanation of his reasoning either amounts to requiring reasons for reasons, or that it requires a paragraph by paragraph rebuttal of the inspector’s views. But it does require the Secretary of State to explain why he disagreed with the inspector, beyond merely stating his conclusion that he did. The two critical sentences in the decision letter are, in my judgment, little more than ‘bald assertions’. The Secretary State may have had perfectly good reasons for concluding that the guarantees and safeguards were adequate. The problem is that we do not know what they were. In those circumstances I consider that the traders have been substantially prejudiced by a failure to comply with the relevant requirements”.

 

In our opinion that reasoning is directly relevant to the decision letter in the present case, for reasons that we will now discuss.

 

Adequacy of Scottish Ministers’ reasoning

[31]      The present case has been the subject of a very detailed report to Scottish Ministers, in which the reporter recommended that planning permission in principle for the proposed development should be refused, and that accordingly the appeal against the appellants’ refusal of planning permission should be dismissed.  That recommendation was rejected by Scottish Ministers, who in a short decision letter reached a contrary conclusion and granted planning permission in principle for the expansion of the Mossend railhead and the development of the Mossend rail freight park.  In our opinion that decision letter does not contain proper and adequate reasons for reaching a conclusion that is contrary not only to the reporter’s recommendations but also to the provisions of the Strategic Development Plan and Local Plan.  In particular, Scottish Ministers have failed to explain why they disagreed with the reporter on a number of critical issues, and why they consider that the provisions of two relatively recent development plans should not be followed.

[32]      The crucial part of the decision letter, paragraphs 7 and 8, begins by accepting the reporter’s finding that the proposal was contrary to the development plan.  That means, for the reasons stated at paragraphs of [25] and [26] above, that material considerations must exist to justify a departure from the plan. The decision letter then states that, taking into account all the merits of the proposal, Scottish Ministers considered that there were material considerations that carried sufficient weight to support the application.  That in itself appears to be a correct statement of the legal test setting out the circumstances in which a decision maker may decline to follow the provisions of the development plan.  Nevertheless, the court must determine whether the factors relied on by Scottish Ministers were indeed sufficiently material to justify reaching a different decision from that recommended by the reporter and to justify the departures from the development plan.  In doing so, it must examine the reasons given by Scottish Ministers, and determine whether those are “proper, adequate and intelligible”, leaving an informed reader and the court in no real and substantial doubt as to what they were;  and that those reasons deal with the substantive points that have been raised:  see paragraph [27] above, and in particular Wordie Property and Uprichard.

 

Paragraph 7

[33]      Paragraph 7 contains a list of factors that Scottish Ministers state were taken into account in deciding to grant permission for the proposal.  The paragraph does not, however, explain in any proper sense why those factors were considered to be decisive in overturning not merely the reporter’s recommendation but also the provisions of the Strategic and Local Plans and provisions of Scottish Planning Policy.  Such reasoning as there is to justify the granting of permission is found in paragraph 8 of the decision letter. 

[34]      So far as paragraph 7 is concerned, after the initial statement of Scottish Ministers’ conclusion the considerations that are thought to carry sufficient weight to support the application are set out.  These are six in number.  The first three relate to transport and can be considered together.  First, NPF3 and Scottish Planning Policy supported modal shift of freight transport from road to rail, including new interchanges.  Secondly, the development was said to have a specific locational need, requiring a site adjacent to existing rail services. Thirdly, it is noted that modal shift from road to rail results in a reduction of traffic congestion and a reduction in carbon emissions.  All of these factors were considered at length by the reporter, and his conclusions on them are summarized at paragraphs [8] and [20] above.  He noted that in NPF3 Mossend had not been designated as a national development;  priority developments in the freight sector were to be identified for inclusion in the forthcoming NPF4.  On that basis, the reporter thought that caution was necessary in assessing the weight to be assigned to NPF3.  That is in our opinion a highly material consideration in assessing the present proposal.  Nevertheless, at no point does Scottish Ministers’ decision letter indicate why that caution should be disregarded, or why it was appropriate at this stage to pre-empt the policy choices that might be made in NPF4.  That appears to us to be a serious deficiency in the reasoning of the decision letter.   

[35]      The reporter goes further;  at paragraph 2.29 of his report he identified three alternative sites, the Freightliner facility at Coatbridge, which had spare capacity, the Eurocentral terminal to the east of the appeal site, and a new site at Kilgarth designated in the development plan.  The reporter concluded that “A strong case can be made out for a strategic look at rail freight needs and priorities at the national (NPF4), regional (SDP review) and local (LDP) levels, so as to ensure the optimum pattern of development”.  This appears to us to be an important feature of the report, and it is a highly material consideration that is not addressed in the decision letter.  We consider that that is a significant deficiency in the reasoning.  We note that the need for a comprehensive review of suitable locations for rail freight terminals is repeated in the reporter’s conclusions, at paragraph 6.2, where it is noted that existing and proposed alternative sites for rail freight are likely to be eclipsed by the proposal, and paragraph 6.7.  As to the third factor, the reduction in traffic congestion and carbon emissions, that is obviously correct so far as it goes. Nevertheless it does not address the reporter’s emphasis on the need to consider alternative sites and the general caution that is thought appropriate.  It seems obvious that any suitable rail freight terminal would produce a shift of traffic from road to rail and a consequent reduction in carbon emissions.  Thus, at least in the manner in which it is stated in the decision letter, this is not a reason for preferring the Mossend site to other possible alternative sites in central Scotland. 

[36]      Fourthly, paragraph 7 of the decision letter refers to the fact that the proposal is expected to contribute to significant economic benefit through job creation.  The reporter’s conclusions on this matter are summarized at paragraph [17] above.  The reporter thought that if Mossend were to succeed in attracting business much of that would be displaced from other locations, especially in the field of distribution.  The reporter further thought that there would be a real prospect of closure of the Freightliner terminal and potentially a risk to other facilities in central Scotland.  He therefore suggested a cautious approach in assessing the net economic benefits.  These possible disadvantages are plainly material, but they are not addressed in the decision letter, and once again we consider that this is a clear deficiency in its reasoning;  the need for a cautious approach is clearly material to the assessment of the proposal’s economic impact, which is in turn put forward as a factor justifying departure from the development plans.  We should perhaps add that we have some scepticism about figures for the gain in transport jobs used by both the reporter and Scottish Ministers.  The immediate result of technical innovation is usually a loss of jobs in the sector concerned;  the point of innovation is to enable the same task to be performed more efficiently, which normally involves using less labour.  In the long term, of course, great benefits are likely to flow from the reduced costs of the improved technology, and these may result in an increase of employment, usually in other sectors whose costs have been reduced.  This is especially so with improvements in freight transport.  Freight transport is not an end in itself;  it involves the movement of goods from producer to consumer, usually through many intermediaries.  Consequently the growth of freight transport is dependent on increased production and consumption of goods rather than efficiencies in the transport system itself.  A recent example is the development of container transport, which produced substantial job losses in traditional docks and old-fashioned transit points.  It did, however, result in enormous efficiencies in freight transport as a whole, which reduced the cost of most goods to consumers.  It is not clear from the decision letter (or, it must be said, from the report) how the increase in transport jobs, as against related manufacturing jobs, is said to arise. 

[37]      Fifthly, paragraph 7 of the decision letter refers to the loss of Green Belt, and the fact that this would be offset to some extent by the proposed community green network and woodland.  The reporter’s findings on this matter are summarized at paragraphs [10]-[12] above.  It is clear that he considered that the loss of Green Belt was a matter of great importance.  It was contrary to both the Local Development Plan and the Strategic Development Plan.  If the extent of the Green Belt were to be reconsidered, the reporter thought that the Local Development Plan process provided the most appropriate vehicle for doing so.  The reasons for this appear to us to be obvious;  the Green Belt must clearly be considered as a whole, and that can best be done through a comprehensive development plan.  Furthermore, in the review of the Local Plan in 2011-2012 the case for excluding the site from Green Belt designation had been considered but rejected.  No reason is given in the decision letter for rejecting that conclusion.  The reporter further considered that the loss of Green Belt was significant, and that it was contrary to the Strategic Development Plan;  the proposal involved substituting built development for green fields for the full width of the corridor between Bellshill and Coatbridge, and the reporter considered that that would exceed reasonable scale and balance in encroaching on the Green Belt.  That was accordingly contrary to the spatial development strategy in the Plan.  He again emphasized these matters in his conclusions, which are summarized above at paragraphs [18], [19] and [21].  Those considerations are plainly material to the planning decision, but once again no reason is given in the decision letter for disregarding them, beyond the rather cursory statement that loss of green belt would be offset to some extent by the proposed community green network and woodland.  We do not think that this is anywhere near an adequate response to the reporter’s very clearly stated concerns about a matter of obvious importance. 

[38]      Sixthly, paragraph 7 of the decision letter refers to an adverse impact on residential properties in close proximity to the site, and notes that the visual impact could be reduced through “good design”.  Once again we do not think that this adequately answers the reporter’s concerns, which are summarized at paragraphs [13]-[14] and [21] above.  The reporter noted Policy DSP4 of the Local Plan, which required industrial and distributional uses to avoid an adverse impact, including an adverse visual impact, on adjoining residential areas.  The reporter thought that most of the impacts could be rendered acceptable, apart from the landscape and visual impact of the rail freight park.  On the latter point, however, the reporter thought that the proposed development would not relate well to the existing residential area.  There is thus a clear conflict identified by the reporter between the Local Plan and the proposal.  The decision letter only addresses this by acknowledging the close proximity of residential areas and indicating the possibility of “reducing” the visual impact through good design.  Once again, this appears to us to involve disregarding a material consideration.

 

Paragraph 8

[39]      It is when paragraph 8 of the decision letter is considered that its deficiencies become most obvious.  It is there narrated that Scottish Ministers had balanced the negative impacts and the fact that the development would be contrary to the development plan against the specific locational need of the development, carbon saving and the expected substantial economic benefits of the proposal.  We have already commented on these matters individually.  At a more general level, it is acknowledged by Scottish Ministers that the proposed development would be contrary to the development plan (clearly, both the Strategic Development Plan and the Local Plan).  Consequently good reasons must be given for departure from the plan:  see paragraphs [25] and [26] above.  That is especially important in view of the fact that both of the plans are relatively recent, having been developed and adopted in 2012.  Furthermore, as indicated in Horada, clear reasons are required when Ministers depart from the recommendations of a reporter.  Three reasons appear to be given for departure from the plan and the reporter’s recommendations, but none of these is properly explained.  The first is locational needs.  Here, however, the reporter expressly refers to the availability of three alternative locations that could be developed to provide modern freight terminals, those at Coatbridge, Eurocentral and Kilgarth.  Furthermore, the reporter indicated that, in view of the terms of the Strategic and Local Development Plans, it was appropriate to consider the best place for freight interchange in the context of revising those plans and developing NPF4;  it was NPF4 that would contain a full appraisal of freight transport interchanges at a national level.  Given these factors, we consider that clear and coherent reasons would require to be given by Scottish Ministers for departing from the Development Plans at this stage.  Such reasoning appears to us to be wholly absent;  all that is said is that the development has a “specific locational need”, but that begs the question of whether another location might be more in accordance with the Plans.  That issue appears to us to be highly material to the decision reached by Scottish Ministers, but it is nowhere addressed by them. 

[40]      The second reason put forward appears to be that the proposal would produce carbon saving benefits.  That could well be true, however, of any comparable freight interchange, in any of the possible locations.  Thus by itself this cannot be an adequate countervailing consideration.  No reason is stated to suggest that this particular location might have greater carbon saving benefits than any other possible location.  On the information given, it is impossible to understand how the carbon saving benefits of the proposal would be a reason for preferring it to an alternative site, but that is clearly a material consideration.  The third factor that is referred to is the expected substantial economic benefits of the proposal.  Here, however, the reporter advised that economic benefits be treated with caution, and it might be thought that a development on an alternative location could produce broadly comparable economic benefits.  No explanation is given as to why this particular development might have greater economic benefits.  Once again this is obviously a material consideration.  Overall, therefore, the explanation of the factors that are said to counterbalance the provisions of the Development Plans is wholly inadequate. 

[41]      Paragraph 8 continues by stating that Scottish Ministers considered that the development would constitute “sustainable development” in terms of the principles set out in Scottish Planning Policy.  That was said to follow especially from the modal shift of freight transport from road to rail, with consequent carbon savings and a positive impact on the local economy.  Once again, no explanation is given of what is involved here.  “Sustainable development” is defined in the glossary of the Strategic Development Plan;  it involves distinct elements of environmental, economic and social sustainability, based on the definition of sustainable development advanced by the Bruntland Commission of the United Nations in 1987.   No attempt is made in the decision letter to explore the concepts of environmental, economic and social sustainability, or to explain how this particular development promotes them in such a way as to overcome the presumption in favour of the Development Plans.  This applies in particular to two factors that weighed heavily with the reporter:  the damage to the Green Belt and the impact on nearby residential developments. No detailed explanation is given as to why those factors should be ignored, beyond the references, noted above, to the creation of a green network of paths and woodlands and the use of good design to reduce the visual impact of the development.  In our opinion these assertions cannot amount to an adequate reason for disregarding the Development Plans. Likewise, the reporter’s indication that the economic benefits of the proposed development should be treated cautiously appears to have been ignored in the decision letter.  Once again no reason is given for disregarding this factor, which appears to have been an important element in the reporter’s reasoning.  Overall, paragraphs 7 and 8 of the decision letter appear to be no more than a list of assertions similar to that considered by the Court of Appeal in Horada:  see paragraph [30] above.  

[42]      Finally, the reporter’s conclusions, which are summarized at paragraphs [18]-[22] above, appear to have been accepted by Scottish Ministers;  certainly no express attempt is made in the decision letter to disagree with any of the detailed conclusions put forward by the reporter in this part of his report.  The reporter’s conclusions are set out at length, and it appears to us that they are clearly and coherently expressed.  They identify significant disbenefits, including loss of Green Belt and visual and amenity impacts on neighbouring housing, and the risk of eclipsing existing and proposed alternative sites for rail freight.  The reporter further concluded that on balance the proposal was not consistent with the Spatial Development Strategy in the Strategic Development Plan and that it was incompatible with a number of policies in the Local Plan.  It was accordingly not in accordance with the development plan as a whole.  Further difficulties arose out of NPF3 and the need to develop a strategic view of future development priorities for rail freight in NPF4.  As to whether the proposal constituted sustainable development, the reporter accepted that there would be substantial economic benefits and carbon savings, but concluded (paragraphs 6.11) that these were outweighed by the adverse impacts on “quality of place, residential amenity and green space”.  On that basis, the reporter concluded that, in terms used by Scottish Planning Policy, the construction of a large rail freight park on Green Belt land would not be “the right development in the right place” (paragraph 6.12).  Further examination of alternatives was in the reporter’s view required, and mechanisms for that were provided in the Scottish Government’s freight study to inform NPF4, the review of the Strategic Development Plan and the preparation of the Local Development Plan.  The decision letter does not address these considerations, which appear to us to be of central importance to the reporter’s reasoning.  Furthermore they are in themselves cogent reasons for adhering to the Development Plans, and in our opinion an intelligible explanation would be required if these factors are to be disregarded. 

[43]      For the foregoing reasons we are of opinion that the reasoning in Scottish Ministers’ decision letter does not meet the standard of intelligibility required for a decision overturning the clear and reasoned recommendations of the reporter.  We consider that it could not be said the informed reader would be “in no real and substantial doubt” as to what the reasons for the decision were, and in particular as to what the material considerations were which were considered to overcome the statutory presumption in favour of the provisions of the development plans.  No doubt the decision maker is entitled to confine the letter to the determining issues, but in the present case no attempt is made to address a number of issues, arising out of the development plans and Scottish Planning Policy, which were highlighted by the reporter but appear to have been departed from, and indeed largely ignored, in Scottish Ministers’ final conclusions.  These included the Green Belt, the impact on local housing, and the effect on other actual or potential rail freight facilities in central Scotland.  

[44]      We accordingly hold that Scottish Ministers failed to give proper, adequate and intelligible reasons for their decision to allow the appeal by the interested parties.  For that reason we will allow the present appeal and quash the decision of Scottish Ministers.