Next Group Plc v First Secretary of State [2004] EWHC 2373 (Admin)

Case No CO/2310/2004[2004] EWHC 2373 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Monday, 11th October 2004
Strand
London WC2
B E F O R E:
MR JUSTICE SULLIVAN
Between
NEXT GROUP PLCClaimant-v-
Between
FIRST SECRETARY OF STATEDefendant
Computer-Aided Transcript of the Stenograph Notes ofSmith Bernal Wordwave Limited190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR M LOWE QC (instructed by Hammonds, Birmingham) appeared for CLAIMANTMR P BROWN (instructed by Treasury Solicitors) appeared for DEFENDANT
J U D G M E N TMonday, 11th October 2004
[1]MR JUSTICE SULLIVAN: This is an application under section 288 of the Town and Country Planning Act 1990 ("the Act") to quash a decision of one of the first defendant's inspectors which is contained in a decision letter dated 31st March 2004.[2]The Inspector dismissed the claimant's appeal and refused planning permission for the installation of a mezzanine floor of 1,000 square metres gross at its store in the Serpentine Green Shopping Centre, Hampton, Peterborough. The existing store has 1,015 square metres of gross floor space at ground floor level.[3]The background to the appeal in terms of the planning history and the relevant planning policies is set out in paragraphs 1 to 11 of the decision letter in terms which are not criticised by the claimant.[4]In brief, the Serpentine Green Shopping Centre ("the centre") is a free standing shopping mall with a total floor space of around 26,000 square metres of which just over 12,000 square metres gross is occupied by a Tesco Extra store.[5]Hampton is one of four township developments in Peterborough. At the top of the shopping hierarchy there is the city centre. The role of the township centres is described in paragraph 3 of the decision letter:
"The township centres would meet the regularly-occurring shopping needs over and above the daily requirements of populations of about 20,000-30,000."
[6]Normally the installation of a mezzanine floor would not require planning permission provided no external alteration was made to the building. In the case of the units in the centre, planning permission for the installation of mezzanine floors is necessary because conditions were imposed in the approval of reserved matters preventing the modification or alteration of the layout or size of the units in the centre without permission.[7]In terms of planning policy the Inspector referred to policies in the Peterborough Local Plan of 1996. Policy S5, amongst other things, limited the size of the food store at the centre to 6,000 square metres gross and the overall gross floor space of the centre to 26,000 square metres.[8]In paragraph 10 the Inspector noted that:
"The Peterborough Local Plan (First Replacement) 2nd Stage Deposit (March 2002) is at an advanced stage in its preparation and there is a relevant material consideration in this case. Policy R1 permits retail development in centres subject to certain caveats governing vitality and viability, retail and city centre strategy, scale and function, site search sequence."
[9]It was contended on behalf of the second defendant, the local planning authority, that the claimant's proposals failed three criteria in emerging Policy R1. Policy R1, so far as material, is in the following terms:
"Planning permission will be granted for new retail development within District and Local Centres where: (b) it would not put at risk the retail strategy or the city centre strategy or proposals for their implementation; and (c) it would be of a scale and nature appropriate to the scale and function of the centre and its catchment; and (d) it would not be more appropriately located at a higher level in the search sequence as indicated in Appendix IV, because of its scale and nature."
[10]It is fair to note at this stage that, as part of its case, the second defendant contended:
"Were the proposed development be permitted it would make other similar proposals for additional retail development within the Hampton Township Centre more difficult to resist. The cumulative impact of such development could inhibit retail proposals from coming forward in the city centre as a first preference, contrary to the thrust of PPG6."
[11]Against this policy background the claimant does not take issue with the Inspector's identification of the main issue as follows:
"... the main issue in this appeal is the effect of the proposed development on the role and function of the city centre having regard to the approved, adopted and emerging planning policies."
[12]In paragraph 13 the Inspector considered Peterborough city centre. He accepted the Council's view that new investment was needed in the centre and said that it was proposed to be in the North Westgate area, which had been earmarked for comprehensive development for city centre uses. That development was aimed at reinforcing the city centre's primacy in the retail field.[13]In paragraph 14 of the decision letter the Inspector dealt with the Serpentine Shopping Centre and said:
"... although destined to serve the southern township [it] has developed for various reasons into something larger than a mere district or township centre."
[14]In paragraph 15 the Inspector said this:
"I can appreciate that when granting permission for Serpentine Green, the council sought to enable and encourage the development to become a viable and successful district centre. In doing so, it seems to me, the local planning authority sought to achieve a balance between the size and content of the centre and its function within the retail hierarchy, the needs of the township and its impact on the city centre. The original floor-space restriction, Policy S5 of the adopted local plan and Policy R1 of the emerging local plan, and backed by the structure plan, all seek to achieve this balance."
He concluded that this "balanced" approach was consistent with government policy.[15]Pausing there, the claimant accepts that the Inspector was entitled to conclude, as a matter of planning judgment, that this was indeed the effect of the relevant planning policies.[16]The claimant's criticisms of the decision letter are confined to the Inspector's reasoning in paragraph 16:
"I consider that the question of precedent as a material consideration should be used with care. However, I am of the opinion that in this case it is reasonable to ask what the possible consequences would be if permission for this development were granted. In this regard, the construction of the proposed mezzanine floor in this unit could be regarded in itself as being relatively small when measured against the total floor-space of the centre. Yet by adding this extra floor-space the net sales area of this Next store would be almost doubled in size. Granting permission for this one development would make it very difficult to refuse permission for similar proposals in other stores in the centre. Hence, if mezzanine floors were installed in all the other units at Serpentine Green capable of being so extended (estimated at the inquiry to be about thirteen), it would be reasonable to assume that they too would be able to increase their sales area substantially. The net cumulative effect over time, albeit on an incremental, disjointed basis, could, and would, be to greatly increase the floor-space at the centre with a resultant increase in turnover. The role of the centre within the shopping hierarchy would change, posing a grave threat, in my opinion, to the long-term viability of the city centre."
[17]The Inspector therefore concluded in paragraph 17:
"The likelihood of such an outcome if this development were allowed is, I consider, real. It would seriously undermine the aforementioned planning policies aimed at securing the appropriate scale of development and the role and function of the various elements in the retail hierarchy of Peterborough. Accordingly, I consider that the appeal should be dismissed and planning permission refused ..."
[18]In the claim form it was contended that the Inspector's reasoning was inadequate because he had failed to address five matters:(i) that each application for an extension would be determined by the Council when it was made on its own merits as they existed at that time. On each occasion the Council could decide at that time whether the application before it, whether individually or cumulatively with other extensions of retail floor space already permitted at the centre, would harm the hierarchy of existing centres;(ii) that any mezzanine floor extension proposed to the Tesco Extra within the centre would be on a wholly different scale from the appeal proposal and might also be for convenience as well as durable goods. Since any extension to the Tesco Extra would be entirely different, this would dispose of the largest of the extensions under consideration and more than halve the potential increase if all the mezzanine floor extensions were thereafter approved;(iii) that the Council had already approved three (in fact two) mezzanine floor extensions within the centre, totalling 608 square metres of floor space which the Council's witness considered "too small to have any significant retail planning implications". It was contended that since the Council could determine those applications on their own merits and did not consider them a harmful precedent, there was no reason why the appeal proposal should be so regarded;(iv) that the claimant's planning witness had given evidence to the effect that the claimant would continue pursuing its active search for a larger store within the Peterborough city centre. For this reason the claimant's position could be distinguished from those of other potential applicants for permission for mezzanine floor space;(v) that there was a substantial number of retailers who were actively seeking new or additional space in the city centre. It was therefore said that the city centre should not be regarded as unduly sensitive to the appeal proposals.[19]The Inspector has provided a witness statement in which he explained that:
"Although the number of units referred to at the inquiry was given as an approximation, my understanding was that the thirteen units quoted [in paragraph 16 of his decision letter] were the smaller stores in Serpentine Green, and did not include the larger Tesco Extra store."
[20]Although there was initially objection to the Inspector's witness statement being produced in evidence, in his submissions before me Mr Lowe QC, who appeared on behalf of the claimant, very fairly accepted that the thirteen units referred to by the Inspector in paragraph 16 of his decision letter did indeed exclude the Tesco Extra store. Even if the Inspector's witness statement was disregarded, it is plain that this was the position from the exhibits to the second witness statement of Mr Wilson, the claimant's planning consultant. Those exhibits comprise an extract from the council's planning witness' proof and a plan of the centre from which it is plain that when the Inspector was referring to the thirteen units he was not including the Tesco Extra store which was on a wholly different scale and could not fairly be regarded as a "similar proposal".[21]Mr Lowe further accepted that ground (v) went more to the planning merits and it was not pursued in submissions before me.[22]In setting out his reasons, it is common ground that the Inspector was not required to deal with each and every detailed point that was raised before him. His conclusions must deal with the "principal important controversial issues" - see paragraph 36 of the speech of Lord Brown in South Buckinghamshire District Council and another v Porter (No 2) [2004] UKHL 33.[23]I agree with Mr Brown's submission on behalf of the Secretary of State that, on any basis, the matters complained of in grounds (iii) and (iv) are not in the category of principal issues which called for separate mention in the Inspector's reasoning.[24]Point (iv), the fact that the claimant was pursuing a search for a larger store within the city centre, was briefly mentioned at the conclusion of Mr Lowe's closing submissions to the Inspector. There is no reason to doubt Next's good faith, but its future intentions in the town centre could not realistically be made the subject of any planning condition and no section 106 agreement or undertaking was on offer. Planning permission runs with the land and thus there could be no guarantee that Next would stay either in the town centre or in the centre.[25]So far as point (iii) is concerned, two planning permissions had been granted for small mezzanine extensions. In aggregate they did not amount to the floor space proposed in the claimant's application. In my judgment, they did not require special mention. As the claim form points out, the Council's own witness had made the point that those two extensions were considered "too small to have any significant retail planning implications". The claimant's approach to this was, in effect, to endorse that judgment and to say (in Mr Lowe's closing submissions to the Inspector) that the message from this was "get real", "there is no harm". In the circumstances, since both parties were making the same point, that is to say there were no significant planning implications from those two permissions, it was not necessary for the Inspector to mention them, provided of course he realised that they would have been an illustration of the general proposition that each planning application has to be considered on its own merits.[26]That leaves ground (i), which was, in effect, the only ground relied upon by Mr Lowe in his submissions before me.[27]He fairly conceded that the Inspector must have been well aware of the general proposition that any further application for the installation of a mezzanine floor would have to be considered upon its own individual merits at the time the application was made. It is precisely for this reason that we find the Inspector saying in the first sentence of paragraph 16 that "the question of precedent as a material consideration should be used with care". The Inspector in making that point was, in my judgment, responding to the claimant's submissions in which it had been said: "Precedent is always the last resort of a negative decision maker. It must follow that considered in isolation the proposal is not harmful. The general rule is that each application should be considered on its own merits. If precedent is to justify the refusal of an otherwise acceptable proposal there should be a clear burden imposed on he who would refuse the application to demonstrate the likelihood of harm".[28]On any fair reading of paragraph 16 one would conclude that the Inspector recognised that, looked at in isolation, Next's proposal would not be harmful. As he says in the third sentence: "... the construction of the proposed mezzanine floor in this unit could be regarded in itself as being relatively small when measured against the total floor-space of the centre." (my emphasis) He clearly recognised that although there were other "similar proposals" which might come forward, they would come forward individually and have to be considered individually. Hence, his observation that the net cumulative effect of such permissions over time would be "on an incremental, disjointed basis".[29]Against this background, I find it impossible to accept Mr Lowe's submission that the Inspector's reasoning was in some way inadequate because he failed to deal expressly with the point that, when considering any further application for the installation of a mezzanine floor on its merits, the local planning authority would have to have regard to the position as it was at that time, and in having regard to policy S5 would be able to have regard to the extent at that time of the excess floor space over the 26,000 square metre threshold; or that it would be able under policy R1 of the emerging local plan to consider the effect of the proposal on the town centre in the light of the floor space that had been permitted at the centre by that time. In general terms, the claimant argues that if the amount of floor space permitted at the centre increased, so the local planning authority would find it easier to say that the excess over 26,000 square metres would be harmful to the town centre and/or that, applying the qualitative criteria in policy R1, the town centre was being placed at greater risk of harm.[30]Mr Lowe submits that that is a simple point. I agree. These are the kind of considerations that necessarily follow from the obligation to consider each application on its merits in the circumstances as they exist at the time when the application is made. In this context it will be noted that the Inspector was concerned with what the position would be "over time", and over time it is to be anticipated, all other things being equal, that the quantitative threshold in policy S5 of the 1996 Local Plan will in due course be replaced by the qualitative criteria set out in policy R1 of the First Replacement Local Plan.[31]As Mr Brown pointed out, if those qualitative criteria were to be applied and one was assessing whether the city centre strategy or proposals for its implementation were being put at risk, one would be considering that issue not against the benchmark of an upper limit of 26,000 square metres for the centre, but as against a benchmark of whatever the increased amount of floor space was in the centre at that time. As the Inspector said, in respect of other similar proposals it would be difficult to resist them on an individual basis given that, looked at individually, they would be no more or less harmful than the appeal proposal. Although granting Next's application would mean that there would be more than 26,000 square metres of space at the centre, it would follow that later proposals to add 1,000 square metres would result in a lesser percentage increase over the new benchmark figure even though, in absolute terms, there would be a further increase over the original figure of 26,000.[32]It is to be noted in this context that the claimant itself referred to the granting of permission for the two smaller planning permissions, making the point that it was necessary to "get real" because it was acknowledged that they had done no harm. In considering any subsequent application, the background position would be that permission would have been granted not merely for the two smaller applications but for Next's application, and no doubt the "get real" argument would be repeated.[33]These kinds of arguments are well familiar to those who are dealing with issues of precedent in the planning context. It is simply unrealistic to suppose that the Inspector lost sight of them. In my judgment, he was not required to rehearse them in his reasons; that would require him to give reasons for reasons. As Mr Brown put it, with a number of similar proposals, any one of which being "relatively small" in itself, it would be extremely difficult for the local planning authority to contend that any particular proposal would be "the straw that broke the camel's back". That, in essence, was the Council's argument and in substance that is the argument which the Inspector accepted in paragraph 16 of the decision letter. In so doing, in my judgment, he grappled adequately with the main issue that he had identified in paragraph 12.[34]It is submitted that the claimant is prejudiced by the lack of reasoning in paragraph 16 of the decision letter. The test is of course an omnibus one. In deciding whether or not the reasons are adequate, one must consider the question whether any alleged inadequacy substantially prejudices the recipient of the decision letter. The prejudice is put in this way in Mr Lowe's skeleton argument:
"the [decision letter] gives no indication to Next as to what extension proposals on a scale less than a full floor mezzanine or for purposes other than retail sales eg storage or administration would be likely to be acceptable"
. In his submissions before me he mentioned that Next had a very large number of stores and since this was either the first or one of the first applications to install a mezzanine floor Next wished to know where it stood.[35]As to the latter of those points, it is plain that this decision letter is rooted in the circumstances of this particular centre. The Inspector was not purporting to give any wider guidance as to the acceptability or otherwise of mezzanine floors.[36]As to the first of those points, I do not accept that there can be any prejudice. The Inspector was not asked to give consideration to a proposal for a mezzanine using up less than a full floor or a mezzanine for ancillary purposes such as storage or administration. He was being asked to approve a mezzanine proposal which, in effect, doubled the gross floor space of the store. He dealt with the merits of that proposal. He was not asked to, and did not therefore, give any guidance as to what other mezzanine proposals might or might not be acceptable within the Next store.[37]For these reasons, I am satisfied that the Inspector did grapple with the main issue that he identified, that he did deal with it adequately and that there has been no prejudice to the claimant. It follows that the application must be refused.[38]MR BROWN: My Lord, I am very grateful for that. In the circumstances I have an application for an order that the claimant pay the first defendant's costs. My Lord, I would ask for those costs to be summarily assessed. If I could pass the scheduled statement of costs to your Lordship, you will see the overall amount is that set out at the bottom of the second page, £5,984.

MR JUSTICE SULLIVAN: Is there any argument about either the principle first or the details?

[40]MR LOWE: My Lord, there is no argument as to either, and my instructing solicitor is quite satisfied with the costs claimed.

MR JUSTICE SULLIVAN: Thank you very much, that is very helpful.

[42]The formal order of the court is application dismissed, the claimant to pay the first defendant's costs, those costs to be summarily assessed in the sum of £5,984.