London Borough of Islington, R (on the application of) v Secretary of State for Communities & Local Government & Anor [2008] EWHC 1289 (Admin)

Case No CO/2005/2008[2008] EWHC 1289 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Monday, 12th May 2008
Strand
London WC2A 2LL
B e f o r e:
MR JUSTICE COLLINS
Between
THE QUEEN ON THE APPLICATION OF LONDON BOROUGH OF ISLINGTONClaimantv
Between
THE SECRETARY OF STATE FOR COMMUNITIES AND LOCAL GOVERNMENTDefendantSECURIVIN LTDDefendant
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
Daniel Kolinsky (instructed by the Solicitor to the Borough of Islington) appeared for ClaimantSarah-Jane Davies (instructed by the Treasury Solicitor) appeared for First DefendantDavid Elvin QC (instructed by David Cooper & Co) appeared for Second Defendant
J U D G M E N T
[1]MR JUSTICE COLLINS: This is a claim pursuant to Section 288 of the Town and Country Planning Act 1990 by the London Borough of Islington, seeking to quash the decision dated 17th January 2008 of an inspector appointed by the Secretary of State for Communities and Local Government, who allowed the appeal of a company called Securivin Limited, and granted planning permission for the demolition of the existing building and redevelopment for business and residential use at 16 Barnsbury Square, N1, which is within the London Borough of Islington.[2]In fact there were four appeals before the Inspector. One related to a certificate of lawful use. I do not need to go into that; it is not relevant to the issues before me. The second appeal was against the refusal to grant planning permission, that being the demolition of the existing building and redevelopment for business and residential use. That, essentially, is the appeal which is in issue. In addition, there was an appeal against a refusal to grant listed building consent, and a refusal to grant conservation area consent. Those two consents were granted by the Inspector, but they were parasitic upon the grant of planning permission, and, although they are not directly in issue, in the sense that it is not suggested that there was any error of law in the approach that the Inspector made to those issues, nonetheless those consents will become otiose if I were in favour of the Council on their Section 288 claim in relation to the planning permission.[3]As is obvious from the issues raised before the Inspector, the site in question is within a conservation area and is adjacent to a listed building. For present purposes, and again I need not go into any great detail, the building has a lawful use, because that is what the Inspector decided, which can be, broadly speaking, described as a possible industrial use, in the sense that it was used until the late 1980s for making mica products. That is a use which falls within Class B2. The argument was that that use was lost and the appropriate use should be a B1 use. The Inspector found that that was not correct, but the business use which is part of the development is a use which will not produce the undesirable effects, within a residential area, of industrial use. Indeed, I think that he proposed that the new use should be a B1 use and not a B2 use.[4]The key point at issue is whether there should have been the provision of affordable housing within the residential side of the development. The proposal was for 10 units. The precise detail of how those units would be set up was not part of the application, it was for what is described as a "shell" for the various units, and there were proposed four two-bedroom, two three-bedroom and four four-bedroom units. The suggestion on behalf of the Council was that the space that was available was quite sufficient to provide for at least 15 units. The significance of that was that the government policy which is in PPS3 is that if there are 15 units, there must, if possible, be included an element of affordable housing. The precise extent of that will depend upon the individual circumstances but, as I understand it, normally something in the order of 25 per cent of 15 would be what was considered appropriate.[5]As we shall see, the planning provisions in relation to less than 15 were at that time not so clear. What was clear was that the then Mayor of London's policy was that there should be affordable housing provided when 10 units were to be constructed, and if possible even when less than 10 because of the acute need for affordable housing in London. That acute need is especially the case in Islington, where the figures produced show a substantial number of people on the Council's housing list who are unable to receive accommodation at the moment, and who cannot afford the prices that are charged for accommodation in London unless that accommodation is in units for which the rent is very much lower than the market rent in the relevant locality. That is what affordable housing is all about. But equally, as is, I would have thought, self-evident, developers will, unless compelled to do so, be reluctant to provide affordable housing, because it obviously has an effect upon the profits that they anticipate making from the development and the returns that they would be able to receive. There are some developers who go in specifically for the provision of affordable housing, but the developers in this case, and this is no criticism, do not fall into that category.[6]The Inspector was clearly impressed with the development that was proposed, in the sense that his view was that it clearly fitted into the conservation area, and specifically to a development next door, which has been referred to as the Mica Development. It is to be noted that a number of residents of that development objected to this particular development, no doubt partly because they did not want this sort of residential development next door to where they were living. However, the Inspector took the view, and this view was not challenged, because it is clearly a question of his planning judgment, that the proposals fitted in, not only to the conservation area, but also to the developments nearby, including Mica. The Inspector was equally unimpressed with the quality of the existing building, which was due to be demolished. So his clear view was, and again this is not challenged, and cannot be, that the development was an appropriate development for the conservation area and would enhance that conservation area.[7]So far as the plan background is concerned, it is important to see what that was at the time, because it was to a degree in flux, which explains, to some extent, the slight difference of approach that was adopted by the witnesses for the Council, in the statements that were produced, and the evidence that in the end was relevant before the Inspector. The reason for the changes lay in the 2004 Planning Act, which, as everyone knows, introduced a new system. The RSS, for these purposes, is the emerging London Plan. The London Plan, in relation to affordable housing thresholds, adopted the approach:
"3.46 In that context and taking into account recent draft guidance, boroughs should set thresholds above which affordable housing requirements will apply at no greater than 15 units, and are encouraged to seek a lower threshold through the UDP process where this can be justified. Boroughs are encouraged to ensure that the affordable housing requirement applies to any site which has the capacity taking into account other policies of the plan to provide the minimum number of dwellings set in their threshold."
[8]I am told that that London Plan was one which came into effect in February 2004, which was before the new procedure was brought into force by the 2004 Act. The UDP provision in Islington picked up on that and provided, by policy H16, as follows:
"H16 Where a development involves 15 or more dwellings, and taking into account paragraph 10 of Circular 6/98, the Council will ensure that 25% of the proposed provision is affordable."
H16 was a policy which was not maintained in force by the Secretary of State under the new provisions, and fell out of the picture in September 2007, but there were retained some other relevant policies under the heading of "Variety of housing", the strategic policy being to ensure the provision of a variety and mix of housing that suited the widely differing social and economic needs of all Islington's residents, including an adequate number of affordable homes.[9]H14, under the specific heading "Dwelling mix, dwelling need and affordable housing", provided:
"H14 All proposals for housing development will be considered in the context of the need for a variety of different types of accommodation, including housing for single people, large and small families, people with disabilities and people with other special needs. The Council will pay particular attention to those households who cannot afford to purchase or rent suitable homes on the open market and will seek the provision and retention of a proportion of new housing as affordable units. The Council will seek the maximum contribution that each proposal can reasonably make to meeting local housing needs, taking into account the quality of the site, size, location and other relevant land use criteria. H15 Unless unsuitable on the grounds set out in policy H14, all schemes should include a mix of accommodation, suitable for small households and for families."
H15 goes on to deal with sites of more than 0.2 hectares, but this particular site is below that, being 1.1 hectare.[10]It is to be noted that in the narrative following these policies, at paragraph 4.3.6, this is said, so far as material:
"4.3.6... Land in Islington is extremely scarce and each site must to be used as efficiently as possible. For this reason, in accordance with advice contained in the government Circular 6/98, the Council has set a 'trigger level' of 15 or more units at which a proportion of affordable housing will be sought. As set out in policy H16 this proportion will normally be 25%. However, the Council will take account of the suitability of the site, the economics of provision and the need to achieve a successful housing development when considering the affordable housing element. In furthering the objectives of policies H14 - H16 the Council may request information from applicants to help it assess the contribution to meeting housing needs that a particular scheme may make."
That was what was in force at the time that the application was made to the Council, and before the opening of the inquiry. By the time the inquiry was held, in October 2007, as I have already said, policy H16 had fallen by the wayside. In fact, there was no specific policy in relation to the quantity of affordable housing that should be provided for sites of a particular level of development and higher. However, the Council had issued a supplementary planning guidance which sought to cover this gap in the planning provisions, reflecting the indication that a development of 10 or more should contain a proportion of affordable housing. What that precise proportion would be would depend upon the circumstances of an individual case.[11]In addition to that, the London Plan, which I am told has been given approval in the last 9 days of Mr Livingstone's mayoralty, contained provisions which indicated as follows:
"Boroughs should normally require affordable housing provision on a site which has a capacity to provide 10 or more homes, applying the density guidance set out in [the relevant policy of the plan]... Boroughs are encouraged to seek a lower threshold through the DPD process where this can be justified in accordance with Government guidance."
This particular policy was the subject of a review by a panel. In fact, in this context, I think the panel consisted of two planning experts, which considered the appropriateness of the inclusion of those particular provisions. That panel report was produced at the end of September 2007. What it said in relation to affordable housing, so far as material, at paragraph 6.53, was this:
"6.53 We make another point here. New Policy 3A.8i as written is not absolute [that is the relevant policy I just referred to about the threshold of 10]. It contains the word 'normally' — something which is not normal these days in planning policy-making; this occasioned some discussion at the EiP and the view was expressed that it was justified in this case to make clear that the policy was not rigid. It also sits alongside Policy 3A.7 (unchanged) which refers to the need to apply policy flexibly, taking into account site costs, the availability of subsidy, and other factors. Paragraph 3.41 talks about viability and the individual circumstances of the site. It is important to read the policy in the context of these statements and other supporting paragraphs. 6.54 The context for the debate is that there is a clear shortage of affordable housing in London. The TCPA [whatever that is] pointed out to us that since 1979 London has lost more than 260,000 affordable homes through the Right to Buy scheme. Last year 6,037 new affordable houses were provided and 11,549 sold through Right to Buy... The LCF gave us powerful evidence of the level of housing enquiries at Citizens Advice Bureaux. Furthermore, Policy 3A.7 of the London Plan — that 50% of provision should be affordable — is not being met (we were told that the current figure is 32%). We received evidence about the difficulties which Londoners have in affording to buy housing and we have no doubt that this is a very serious problem."
[12]I equally have no doubt that that was the evidence before the inquiry, and it was a point made with force by Islington in relation to its borough. At 6.62 they say:
"6.62. But we do accept that there may be special circumstances in some Boroughs which might mean that the London wide threshold was inappropriate; if arguments could be put for a higher or lower figure we would accept that as a result of the LDD process different outcomes might ensue. (The policy itself encourages Boroughs to go for lower thresholds where possible through DPDs. The Mayor comments on this issue in the last part of BN67). But we prefer to establish a policy, from which departures might be possible, rather than to establish no policy and to allow one to evolve."
[13]Finally they deal with viability, the point being that it had been argued before them that the figure of 50 per cent in 10, and indeed the principle itself, would make development unviable and reduce the number of houses that were being built. In 6.69 they say:
"6.69 The Mayor produced some figures which showed that in those Boroughs which had already adopted a threshold of 10 there appeared to have been no such damaging effect... All but one of the eight Boroughs which had been operating it for some time had exceeded their housing targets, with an average 126% of target across the eight (compared with 119% in London as a whole). And as we have noted the policy is not in any event a rigid one and it sits alongside others which do require viability in individual cases to be taken into account."
[14]The evidence before the Inspector was, and indeed the position is clearly, that it is by no means certain that 50 per cent of 10 will be a policy that comes into effect in Islington. First of all, it depended upon the policy in the London Plan being accepted in the end. That is now thrown into political limbo to some extent, because one does not know whether the new regime will or will not approve what the old one has set down. Having said that, it is now clearly the provision, or relevant provision, in the London Plan. That does not mean that the 10 threshold will necessarily be agreed in Islington. That will depend upon Islington's DPD, which will cover a number of issues other than this, and in respect of which, if there are objections, there may have to be an inquiry. So the position is not certain. That was accepted by the Council in the inquiry. And what was submitted on its behalf was that the SPG should be given some weight, but that what was in the London Plan, or what was proposed to be in the London Plan at that stage, should be given substantial weight.[15]The Inspector dealt with affordable housing and use of the site in paragraphs 51-59 of his decision. I should have said that one of the issues before the Inspector was that, again as I have already indicated, it should be 15 rather than 10; and that the mix provided, whether because it was less than 15 or because it did not provide for any affordable housing, was an inefficient use of the site, and thus was a development which should not have been permitted to go ahead. It certainly should not be permitted to go ahead unless there was at least proper consideration of the provision of affordable housing.[16]The Inspector set out the planning history in somewhat less detail than I have, but, as it seems to me, he covered the points. I do not propose to read out all the relevant paragraphs of his determination. He recorded the London Plan policy, and what it provided. He then went on in paragraph 53 to say:
"53. Further Alterations to the London Plan are in preparation, and following the Examination in Public the Panel has reported on these. The Panel came to the conclusions that a new policy should be included in the Plan setting out a threshold, but from which individual boroughs might make departures. They also came to the view that a threshold of 10 dwellings would be justified. The new Policy 3A.8i would state that Boroughs should normally require affordable housing provision on a site which has the capacity to provide 10 or more homes, and that they should be encouraged to seek a lower threshold."
That is a straightforward reflection of the position.[17]He then dealt with H16, which had expired, and made the point that the Council's draft core strategy sought a threshold of 10 units, but that had been withdrawn, not on that particular ground, but more generally because there were further matters to consider. So the Council adopted the draft as an SPG. But, as the Inspector rightly said, there was little to suggest when this might be, or whether it would be adopted in its present form. His conclusion, therefore, as to the approach that he should adopt is contained in paragraph 55 in these words:
"55. As it stands adopted national policy and policy for London sets a maximum threshold of 15 dwellings. However, there are indications that in London this may be reduced to 10. There must still be uncertainties about the policy that will eventually be adopted by the Council, but given the need to provide affordable housing in the Borough I have given some weight to the lower threshold in reaching my decision."
[18]Mr Kolinsky submitted that there were errors in paragraph 55 because the Inspector should have appreciated that a very much higher level of weight should be given to the threshold of 10, because that reflected not only what Islington had in its SPG, but also the approach in the London Plan. As it seems to me, in the light of the material that was before the Inspector, and the submissions that were made, it is quite impossible to say that the Inspector misdirected himself in indicating that it was appropriate to give some weight to the lower threshold and, for the reasons that he set out, he was not persuaded that it was appropriate to give any greater weight to it. In the end, as I understood him, Mr Kolinsky did not seriously pursue his arguments that the Inspector's approach was wrong; he concentrated on what he regarded as his best point, and it clearly was his best point, that the Inspector, having directed himself that some weight should be given to the lower threshold, then failed to grapple with that in the reasons that he gave for rejecting the need for any affordable housing in the circumstances of this case.[19]It, as the argument developed, was one which was more a reasons challenge than any other, the failure being, as we shall see in a moment, in the Inspector's conclusions in paragraph 59 of his decision. He dealt, in 56, with the submissions that schemes could achieve a greater number of dwellings withinthe same envelope, which was a point of issue before the inquiry. He accepted it was physically possible but he was not persuaded that it was, in the circumstances, something which was appropriate. There were problems with fire escape and building regulations requirements, and constraints in relation to residential amenity, listed building and conservation area interest that had to be taken into account.[20]He dealt with the issue which had been put forward, that there should be an imposition of minimum dwelling sizes, which will have produced a greater number of units within the development; and he decided that that was not appropriate. Indeed, what was proposed was relatively large, comparable with those in the Mica House Development next door, and there was sufficient variation to cater for a mix of accommodation. Importantly, what was put forward was that there would be accommodation for families in this scheme, and his conclusion was:
"57... In general, I consider this is a thoroughly considered scheme that makes efficient use of the site for the proposed uses. In those terms it would accord with the aims of UDP Policies Imp 6 & H15, which seek to make efficient use of sites and to ensure a mix of accommodation."
That was a planning judgment which he was entitled to form, and that conclusion in relation to efficient use is not one that can be attacked before me, and indeed, in fairness to Mr Kolinsky, it is not one which he directly attacks.[21]The Inspector went on:
"58. Given the difficulties in achieving an acceptable scheme for this site, the constraints in terms of its physical nature and character, and concerns about density of development and amenity of nearby residents, I am not convinced that a significantly greater number of dwellings would be feasible."
So again that went to the issue of whether more than 10 units were appropriate on this site. Accordingly, we have the clear conclusions, and in my judgment properly reasoned conclusions, that the quantity of residential units proposed for this site was appropriate, and indeed made the most efficient use of the site in question. We now have paragraph 59, which is at the centre Mr Kolinsky's criticisms of the Inspector's decision:
"59. Furthermore, uncertainties remain about the setting of any new threshold for affordable housing provision at both regional and local level. The scheme falls considerably below the indicative threshold of 15 units recommended by PPS3, and below the maximum threshold of Policy 3A.8 of the adopted London Plan. In general, I am not convinced that the need for affordable housing is sufficient to outweigh the considerable advantages in terms of the quality of the scheme and its enhancement to the area. I conclude on the third main issue in Appeal B that the proposals make efficient use of the site, and in the present policy climate that there need be no provision of affordable housing."
[22]The key point made by the Mr Kolinsky is that the Inspector has not grappled with the point. On the evidence before him it was apparent, he says, that the developers had not suggested, and certainly produced no evidence to support any contention that, given a provision of 10 units, it would not be economically viable to include a number of affordable housing units. And it was necessary, submits Mr Kolinsky, for the Inspector to deal with that in the reasons that he gives, and his failure to do so is an error. Further, the failure to give sufficient reasons is, in the circumstances, a matter which has been to the prejudice of the Council, and accordingly it is necessary to quash the Inspector's decision.[23]So far as the adequacy of reasons is concerned, the observations of Lord Brown in South Bucks District Council and another v Porter (No 2) [2004] 1 WLR 1953, at paragraph 36 on page 1964 are frequently cited, and perhaps represent the guidance for all Inspectors, and indeed all judges, in dealing with this issue. They are very well known, but they are central to the correct approach, so I will read them into this judgment. What he said was this:
"36. The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the 'principal important controversial issues', disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration. They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or, as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon future such applications. Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision."
[24]The Inspector, particularly in paragraphs 56-58, had made it plain that in his view this proposal was one which did provide for an efficient use of the site in question, that it fitted in properly with the conservation area and with the surrounding uses of the adjoining premises, and so was an entirely acceptable scheme for the site, having regard, as he put it in paragraph 58, to the constraints on the site, concerns about the density of development, the amenity of nearby residents and the physical nature and character.[25]He was clearly looking at the development as a whole. It is true that the developers had not expressly put forward an argument to show why the provision of affordable housing within the development would not be economically viable. Equally, the Council had produced no evidence which suggested that it would be economically viable and, as it seems to me, the Inspector was entirely entitled to take the view, without spelling it out, that the developers, aware of the problems of affordable housing, and in this instance aware that the Council had refused consent, on the basis, among other things, of the lack of affordable housing, would have appreciated what was necessary. As it happens, this was a decision made by the planning committee of the Council, contrary to the advice given by its officers. So there was no in-house evidence that the Council was able to produce to the Inspector. Instead they relied upon the evidence of a planning consultant, who put forward evidence that was in the end, I suspect, singularly unhelpful to the Council. But that is by the way.[26]What the Inspector had to decide was whether the scheme for the development that was before him was in his judgment, without the affordable housing, one which he could approve, having regard to its effect upon the nearby dwellings, and the physical nature and character of the area. This he did. It seems to me that, with the greatest respect to Mr Kolinsky, it is impossible to spell out an error of law from the omission that Mr Kolinsky says existed. The reasons may not be particularly detailed, but in my judgment they are sufficient to show how the Inspector exercised his judgment and why he exercised it in the way that he did.[27]He took the view that this particular development, looked at as a whole, was one which could properly be approved, even though it did not include the affordable housing. He was well aware of the pressure upon the Council in relation to the provision of affordable housing, pressure that existed London-wide, but which was particularly acute in Islington, and, as one knows, in other inner London boroughs. That was the main ground upon which Mr Kolinsky relied. He has spelt out other grounds, but they do not, in my judgment, add to his case.[28]In ground 4 he seeks to approach the matter from a slightly different direction. He submits that the Inspector did not deal with the aspect of the Council's case that, even if there were no changes to the proposed layout of the number of dwellings, still an element of affordable housing could be provided. In my view, he did not need specifically to spell that out, because it was plain that it was his view that the scheme as a whole was an efficient use of the site, and was appropriate, having regard to the impact on the neighbours, the impact on the conservation area and so on.[29]Ground 3 submitted that he failed to address and properly understand policies H14 and H15 and PPS3, paragraph 26. That, in my judgment, is clearly wrong. The only point that Mr Kolinsky could perhaps make is that there was no dealing with, he says, the point that the larger family unit, or rather the larger units used for family accommodation, were unsuitable because of the absence of recreational space, but it is plain from the way the Inspector phrased his decision that he must implicitly have accepted that the larger units were indeed suitable for family accommodation. He would not, and could not, have decided as he did if he had not so believed.[30]Ground 2 asserts an error in relation to his analysis of the policy threshold (that is the 10) and uncertainties, but in the end, as I have already said, I did not understand Mr Kolinsky to rely particularly strongly on that ground. He was right not to do so. It clearly is nota good point.[31]In all those circumstances, I am satisfied that there was no error of law in the Inspector's decision and accordingly this claim must be dismissed.[32]MS DAVIES: Thank you, my Lord.

MR JUSTICE COLLINS: You want some costs?

[34]MS DAVIES: Before I make an application, there are one or two points in your Lordship's --

MR JUSTICE COLLINS: Have I made some mistakes?

[36]MS DAVIES: Just very minor points, my Lord.

MR JUSTICE COLLINS: It is always the way with extempore judgments.

[38]MS DAVIES: Of course it is. I hope your Lordship does not mind.[39]MR JUSTICE COLLINS: No, of course not. If you mention them, they can be dealt with on the transcript in due course.[40]MS DAVIES: Indeed. At the outset of your Lordship's judgment, when your Lordship was referring to the site and the conservation area and the setting, your Lordship said, "the building in question is a listed building." In fact, the listed building is Mountfort House, which is adjacent to the site.[41]MR JUSTICE COLLINS: I am sorry. So it is the effect on the adjacent listed building.[42]MS DAVIES: Yes, the effect on the adjacent listed building.[43]MR JUSTICE COLLINS: I am sorry. I had assumed since there was listed building consent -- I had not gone into the detail -- that it itself was listed, although I noted the Inspector did not think much of it as a building.[44]MS DAVIES: Indeed, my Lord. It is the adjacent Mountfort House that is the listed building.[45]MR JUSTICE COLLINS: Okay. That can be corrected.[46]MS DAVIES: There was another matter. Your Lordship referred to the number of units, and your Lordship went on to describe there being four two-bedroom ones, and two three-bedroom and so on, but before your Lordship reached that point, your Lordship said there were four units, when in fact what your Lordship meant was that there were 10 units, and then, broken down, that is four of those.

MR JUSTICE COLLINS: That was a clear slip of the tongue.

[48]MS DAVIES: Indeed.

MR JUSTICE COLLINS: I have always known there were 10 units.

[50]MS DAVIES: Indeed, it follows logically from your Lordship's following sentence.[51]MR JUSTICE COLLINS: I am sorry. As I say, it was an obvious slip of the tongue.[52]MS DAVIES: Indeed. I just draw those two points to your Lordship's attention.[53]MR JUSTICE COLLINS: I am grateful. Mr Elvin, some more?[54]MR ELVIN: I wonder if your Lordship would take my notes as well. Your Lordship referred to the existing use of the property. It had originally started as mica production. It was only used as timber yard, though, in the last --

MR JUSTICE COLLINS: Yes, I said until the 1980s, I think.

[56]MR ELVIN: Yes.

MR JUSTICE COLLINS: The only point was that it was a B2 use.

[58]MR ELVIN: Exactly.

MR JUSTICE COLLINS: I do not think it terribly matters what it was used for.

[60]MR ELVIN: Absolutely not. The only other point of substance is that the date of the inquiry was October 2007 not January 2008.

MR JUSTICE COLLINS: I am sorry, the report was January 2008, was it not?

[62]MR ELVIN: Absolutely.

MR JUSTICE COLLINS: The inquiry itself was held back in October.

[64]MR ELVIN: Absolutely. I appreciate your Lordship is having to deal with a large number of pieces of paper.[65]MR JUSTICE COLLINS: I think it is desirable to try and give immediate judgment, but one does sometimes get details wrong.[66]MR ELVIN: Absolutely.

MR JUSTICE COLLINS: Any more, Mr Kolinsky, other than the conclusion?

[68]MR KOLINSKY: My Lord, no more.[69]MS DAVIES: In that case, may I hand up a schedule of costs to your Lordship? (Handed).

MR JUSTICE COLLINS: Yes, you have seen it, have you?

[71]MS DAVIES: My Lord, I am going to make one slight adjustment to it which, I am sorry, I have not had a chance to mention to my learned friends.

MR JUSTICE COLLINS: If it is upwards, they might object.

[73]MS DAVIES: It is upwards. Embarrassingly, it reflects my own fee, my Lord.

MR JUSTICE COLLINS: You mean you did not have enough on the original?

[75]MS DAVIES: Indeed, my Lord. My instructing solicitor was not able to liaise with my clerk, as I understand it, in terms of my own preparation time.

MR JUSTICE COLLINS: I know you have a good clerk, since she was my clerk in days past.

[77]MS DAVIES: Indeed. Your Lordship will see at the end £400 had been allowed for my preparation for the case and £700 for my attendance today. In fact that is a rate of £100 an hour.

MR JUSTICE COLLINS: It is very modest.

[79]MS DAVIES: That only allows me 4 hours.

MR JUSTICE COLLINS: Even for the Treasury Solicitor, that is modest.

[81]MS DAVIES: It is. My Lord, I have spent rather more than 4 hours.

MR JUSTICE COLLINS: What are you asking for now?

[83]MS DAVIES: 8 hours in total is closer to the correct figure. So, my Lord, if we could add another £400 into that box, then that raises the total figure by £400.

MR JUSTICE COLLINS: So does that make 56?

[85]MS DAVIES: That makes 56.

MR JUSTICE COLLINS: There is a bit of VAT, but we are not worrying about that.

[87]MS DAVIES: We do not trouble with VAT when it is the Treasury Solicitor, my Lord.

MR JUSTICE COLLINS: Do you not?

[89]MS DAVIES: We do not.[90]MR JUSTICE COLLINS: He still has to pay you VAT. When VAT was first introduced, when I was still at the bar, the Customs & Excise believed that they did not have to pay counsel's VAT, a good start since they were in charge of the tax. It was only after a time that they realised that they were wrong and they did have to pay counsel's VAT when instructing counsel. The Treasury Solicitor is in the same boat, is it not?[91]MS DAVIES: It is not reclaimed, my Lord. That is the position. They do pay my VAT, my Lord, but they do not reclaim it from the other side because of the way the provisions work.[92]MR JUSTICE COLLINS: That is very generous. All right, £5,600.[93]MR KOLINSKY: I do not resist.

MR JUSTICE COLLINS: I do not imagine you would quarrel with that.

[95]MR KOLINSKY: I do not resist an order for costs of £5,600.[96]MR JUSTICE COLLINS: Yes. You do not want a second one. You cannot really bring yourself outside Bolton, can you?[97]MR ELVIN: Well, if your Lordship would allow me a few minutes.

MR JUSTICE COLLINS: Of course.

[99]MR ELVIN: My Lord, Bolton, of course, says there is no general rule, and it criticised earlier cases for having fix a rule.

MR JUSTICE COLLINS: Yes.

[101]MR ELVIN: Of course a developer does not get their costs because he, she or they turn up. My Lord, I put forward in support, in the circumstances of this case, the long and complex history of the matter, and the fact that it is fair to expect the developer in this case -- the developer in this case, although it is fronted by a company, is Mr and Mrs Hodges who sit here. As Mr Hepher explained in his evidence, they were responsible for revitalising and refurbishing Mica House next door, they are local residents and they seek, and have sought for many years, to put forward an acceptable scheme on this site.

MR JUSTICE COLLINS: They have done well, then.

[103]MR ELVIN: This scheme has been running since 2001 and, as your Lordship has seen, it has involved them in considerable expense and difficulty, and it is perfectly reasonable to expect them to attend, and not reasonable to expect them to pay their own costs.[104]MR JUSTICE COLLINS: Mr Elvin, the fact that it is reasonable to attend, as you well know, does not carry with it, I am afraid --[105]MR ELVIN: I do, my Lord, which is why I was not stopping there. My Lord, it is not only reasonable for them to attend but, because of the effort that has gone into this case, and the fact that Mr Kolinsky has sought to do no more with your Lordship than to try to reopen matters that were argued very fully, over 6 days, before the Inspector, in my view it is perfectly acceptable, and indeed appropriate, for the second defendants to get their costs, because your Lordship is being pressed with the selfsame argument they spent 6 days defending against a public inquiry. And given your Lordship has had no difficulty in dispensing with the arguments put by Mr Kolinsky, which they have spent considerable time, personal effort and expense to deal with, it seems to me in these circumstances your Lordship could find that the general rule about developers is not satisfied and it would be appropriate to award the second defendants their costs.[106]MR JUSTICE COLLINS: Well, as I understand the approach, it really is if there is something that the developer needs to deal with which would not normally be dealt with by the --[107]MR ELVIN: Can I show your Lordship Bolton?

MR JUSTICE COLLINS: I have forgotten the precise terms of it.

[109]MR ELVIN: It is very short. I am sorry to trouble your Lordship, but it really is one of those cases where --[110]MR JUSTICE COLLINS: It is no trouble. I can well understand why your clients are concerned, but the trouble is, as you know, there are principles --[111]MR ELVIN: The one thing that people always forget with Bolton is it is a case where even the House of Lords allowed a second set of costs.[112]MR JUSTICE COLLINS: Yes, it is perfectly appropriate in many cases. I can see there is a very distinguished learned counsel involved.[113]MR ELVIN: Yes, and indeed I think that was a case where three sets of costs were being sought, but not allowed. My Lord, the principles start at the bottom of page 1178 and run to 1179. The real issue is: is there a good reason for giving a second set of costs, and in that case it was accepted, as your Lordship will see, about six lines down on the last page, that all the issues in that case had been capable of being run by the Secretary of State.

MR JUSTICE COLLINS: Well, it is number (2), is it not, that is the important one?

[115]MR ELVIN: The scale of development, the importance and outcome for the developers, the exceptional size and weight. My Lord, that is why I have stressed the particular role of the developers in this case, in this locality. It is not a development on the scale of the Bolton case, but in terms of my clients' interest and their impact on the area and their relationship with the area, it is a very close and personal one.

MR JUSTICE COLLINS: Yes, but, Mr Elvin, I am looking at the bottom of 1178, number (2):

"(2) The developer will not normally be entitled to his costs unless he can show that there was likely to be a separate issue on which he was entitled to be heard, that is to say an issue not covered by counsel for the Secretary of State; or unless he has an interest which requires separate representation."
[117]MR ELVIN: The difficulty with that is one needs to treat that slightly cautiously, firstly because Lord Lloyd was saying these are propositions; there are no rules, because it is costs.

MR JUSTICE COLLINS: I of course recognise that the court has a discretion.

[119]MR ELVIN: And of course he was dealing with the fact that up until this point there had been a rule of practice in the Administrative Court that a developer always got his costs.

MR JUSTICE COLLINS: Yes, that was overruled by --

[121]MR ELVIN: That was clearly wrong in the light of the fact that it is a matter for the discretion of the court. My Lord, when one comes to the next page, 1179, there Lord Lloyd, about six lines down, accepts that in that case there were matters clearly capable of being put by the Secretary of State. So it was not a case where it required counsel to attend for others, but there were good reasons, which included -- in that case there were difficult questions of principle; secondly, the importance of the development to the developers; and, thirdly, that there was a lot of other opposition. Well, my Lord, I am sorry trouble you, but can you just pick up --

MR JUSTICE COLLINS: Incidentally, did your clients apply for or get costs at the inquiry?

[123]MR ELVIN: They did not ask for costs. (Inaudible). If Mr King would allow me to do my job, please. Thank you. My Lord, the difficulty, as you can understand, is there needs to be a continuing relationship between a developer and a local authority, and frequently there are pragmatic decisions made about whether to make an application.

MR JUSTICE COLLINS: I fully understand that.

[125]MR ELVIN: Can I ask your Lordship, in the context of this case, which is a much more modest scheme, but important in the local context, if your Lordship would pick up Mr Hepher's evidence at tab 6, page 206?

MR JUSTICE COLLINS: Yes.

[127]MR ELVIN: It is paragraph 110 of his evidence. It just explains the importance of the development and the relationship of the development to the local community, and, as you see, it is Mr and Mrs Hodges who stand behind the company.

MR JUSTICE COLLINS: I fully understand the importance.

[129]MR ELVIN: And my submission is that Mr Kolinsky is going to rerun his inquiry case. It is not unreasonable to pay the costs of those who live and work locally, such as my clients, to come and ensure that the arguments that they put to the inquiry are similarly put before your Lordship.

MR JUSTICE COLLINS: Have you produced a schedule?

[131]MR ELVIN: Yes, I have.[132]MR JUSTICE COLLINS: Because I have not seen it. You have seen it, I take it?[133]MR KOLINSKY: Yes, I have.[134]MR ELVIN: (Handed). And it does include VAT.

MR JUSTICE COLLINS: You are not so generous as the Treasury?

[136]MR ELVIN: No.

MR JUSTICE COLLINS: Yes.

[138]MR ELVIN: Of course, even if your Lordship is not minded to allow the whole amount, if your Lordship considers there are grounds, your Lordship could make a partial award to reflect the particular circumstances of this appellant. This is not simply an anonymous developer carrying out speculative development.

MR JUSTICE COLLINS: Yes.

[140]MR ELVIN: Thank you.

MR JUSTICE COLLINS: Well, Mr Kolinsky?

[142]MR KOLINSKY: My Lord, can I deal with the principle first, and then insofar as my Lord wants to hear from me in relation to the quantum. In relation to the principle, my learned friend Mr Elvin cites Bolton. In my respectful submission, in Bolton there is a very clear indication that the starting point ought to be no second order as to costs, and moreover there is a very express indication that the interest of a party as a developer in and of itself is not going to justify a second set of costs. My Lord, I accept in Bolton itself this was seen as an exceptional case with special features, but when one just glances at those special features, in my submission the first point there is effectively a divergence of interest between the decision-maker, who is also the policy-maker, which led to -- the developers were concerned with the outcome of this particular appeal, and therefore there was a separate interest because of that divergence of interest. Well, there is no common law situation here. Secondly, the third point they make is it is an unusual case in the sense that the opposition came not from a local authority, but from the eight neighbouring authorities. So this was a truly exceptional case, and it was of a very large scale. In my submission, there are no indicators to that effect. Here we have a developer who -- there is no evidence of the means of the developer before you, and insofar as you can judge the issue on the quantum with reference to the schedule --[143]MR JUSTICE COLLINS: Well, I am not sure that "means" is in itself a guiding principle, although I suppose it could be relevant in the sense that if there are limited means, and this was a very important development in the context of the means and so on of the developer, that is a factor to be taken into account.[144]MR KOLINSKY: Well, my Lord, my learned friend tries to put his point on the basis, "Well, this is two individuals that effectively stand behind the company." Well, there is no evidence, if you like, of their particular relationship, which has been --

MR JUSTICE COLLINS: I am perfectly happy to assume that.

[146]MR KOLINSKY: And then the other plank on which my learned friend puts his case, he says, "Well, you know (inaudible) trying to rerun the inquiry." Well, this was effectively a challenge on a narrow point, but a point that is formulated as a point of law. It is a reasons challenge, which is --[147]MR JUSTICE COLLINS: I like you saying, "formulated as a point of law". I do not think you quite meant what lies behind that.[148]MR KOLINSKY: My Lord, I am not trying to seek to go behind my Lord's judgment, but the point is it is legal submissions that were capable of being addressed by the Secretary of State. My learned friend did not put any formal evidence before the inquiry, he expressly adopted the submissions made by the Secretary of State in his skeleton argument --

MR JUSTICE COLLINS: You mean before me?

[150]MR KOLINSKY: My Lord, yes.[151]MR ELVIN: My Lord, that is not fair. That is only because my learned friend and I agreed that the documentation I wanted, and would have put in by witness statement, could go into the bundle without the need for a witness statement.[152]MR KOLINSKY: We have two proofs, but there is no detailed witness statement. There is no separate --

MR JUSTICE COLLINS: There is nothing new.

[154]MR KOLINSKY: Exactly, there are no materials which were not capable of being relied upon by the Secretary of State. In my submission, this is the classic normal case where the normal rule of one set of costs is by far the appropriate one. My Lord, if I need to deal with quantum, can I deal with it separately, but that is my submission on --

MR JUSTICE COLLINS: Let us forget about quantum until I decide about whether I want to --

[156]MR KOLINSKY: Yes.

MR JUSTICE COLLINS: Anything you want to add, Mr Elvin?

[158]MR ELVIN: My Lord, no, other than the factors I have already pointed to.[159]MR JUSTICE COLLINS: Mr Elvin applies for a second set of costs on behalf of his clients, the developers. It seems to me quite clear in this case that the Secretary of State was capable of, and indeed did cover the various issues that were raised by the claimant. Thus, the only basis upon which it would be appropriate to award costs would be if I were persuaded that the developers had an interest which required separate representation. Mr Elvin points out that these are now effectively two individuals who are behind the company, and that for them this is indeed a very important development. That may be so, but I am afraid that in the context of the law that I have to apply, and the guidance given by the House of Lords in the Bolton case, I am not persuaded that this is a situation in which it would be appropriate to award a second set of costs. Accordingly, I am afraid I decline to do so, and there will be, so far as the developers are concerned, no order for costs.[160]MR KOLINSKY: I am grateful to My Lord. May I formally ask for permission to appeal?[161]MR JUSTICE COLLINS: You have formally asked for it. I will formally refuse it.[162]MR KOLINSKY: I am grateful, my Lord.[163]MR ELVIN: My Lord, may I ask for permission to appeal the costs in the order, because this is a matter -- the Bolton case is now many years old, it is 13/14 years old, and this is an issue of some concern to my clients.[164]MR JUSTICE COLLINS: No, I think I have applied the law as it is laid down by the House of Lords. If you want to take this case to the House of Lords on behalf of your clients then you have to persuade the Court of Appeal it is a good idea to try and do so.[165]MR ELVIN: Thank you, my Lord.

MR JUSTICE COLLINS: All right.

[167]MR ELVIN: My Lord, thank you.

MR JUSTICE COLLINS: Thank you for your assistance, all of you.