Atlantic Housing Ltd v Secretary of State for Communities & Local Government & Anor [2008] EWHC 1373 (Admin)

Case No CO/9418/2007

[2008] EWHC 1373 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Venue Royal Courts of Justice

Date Thursday 15 May 2008

The Strand

London

WC2A 2LL

B e f o r e:

MR JUSTICE COLLINS

Between

ATLANTIC HOUSING LIMITEDClaimant

B E T W E E N:

- v -

Between

SECRETARY OF STATE FOR COMMUNITIESDefendant

AND LOCAL GOVERNMENTDefendant

EASTLEIGH BOROUGH COUNCILDefendant

Computer Aided Transcription by

Wordwave International Ltd (a Merrill Communications Company)

190 Fleet Street, London EC4

Telephone No: 020 7421 4040

(Official Shorthand Writers to the Court)

Mr Mark Lowe QC and Mr Joseph Cannon (instructed by Messrs

Coffin Mew, Southampton) appeared for Claimant

Mr Stephen Tromans (instructed by the Treasury Solicitor)

appeared for Defendant

Judgment

Thursday 15 May 2008

[1]This is a claim under section 288 of the Town and Country Planning Act 1990 brought by the claimants who are the landowners of the Velmore Estate in Eastleigh, Hampshire. The estate provides affordable accommodation for elderly people. However, it is now somewhat outdated and recognised to be substandard and so the claimants are concerned that there should be a "master plan" for the redevelopment of the estate. It is to be redeveloped in stages. The appeals which have led to this claim related to two applications for planning permission which together constituted stage one of the development.

[2]There is no need to go into details of the differences between the two. The first is an application for planning permission which involves the demolition of six bungalows on a particular part of the estate and their replacement with a block of 32 two-bedroomed flats. The second is for the erection of a block of 24 two-bedroomed bungalows in the place of the existing 12 bungalows which would need to be demolished. Each of the applications was lodged with the local planning authority, the Eastleigh Borough Council, on 27 April 2006.

[3]The claimants had undertaken a "consultation exercise" because the elderly people who at present live in the bungalows on the site were concerned at the possibility of having to move and of having their accommodation pulled down and replaced. A report was obtained on behalf of Help The Aged, who had an interest on behalf of some of the existing residents, to comment on the consultation exercise that had been carried out on behalf of the claimants, and also to carry out a separate consultation into the reactions and aspirations of the residents. Dr Clark was instructed in February 2007 and his report is dated 19 April 2007. Although the report was commissioned by the council, it had been motivated to obtain such a report by Help The Aged. I do not need to go into the details; suffice it to say that Dr Clark's view was -- and it is a view which was reached because of the reactions of those whom he consulted -- that the exercise carried out by the claimants had been less than satisfactory. There had been a failure to deal with the existing residents in a sufficiently sensitive manner. The indication was that some degree of pressure had been brought to bear upon them. Dr Clark believed that the consultation exercise carried out on behalf of the claimants was flawed and that there had been a failure accurately to report the outcome.

[4]There was nothing put in by the claimants to the inspector who dealt with the appeals against the council's failure to reach a decision within the relevant time and thus there was a deemed refusal which led to the appeals. The claimants put in no material to contradict the findings of Dr Clark. In those circumstances Mr Lowe QC accepts that the findings of the inspector, insofar as they were consistent with the conclusion reached by Dr Clark, could not in any way be attacked.

[5]One of the problems that this case has highlighted is that the decision of the inspector was based upon written representations. There was no hearing. It is clear that the inspector was not provided with the quality and quantity of information with which he should have been provided. Mr Lowe recognises that there was failure by the claimant to present to the inspector a properly argued and properly evidenced application. It is that that has led to the defects that are alleged to exist in the inspector's decisions. Mr Lowe very properly does not criticise the inspector for the errors into which he asserts he fell because, as he recognises, he was not given the assistance to which he was entitled. It is equally clear that an inspector does not in general have the obligation to seek out material unless it is apparent on the face of things that he has been provided with something which may be clearly inconsistent with other material or there is something which is so obviously defective that it would be irrational not to investigate further and seek an explanation. That situation does not arise in the circumstances of this case.

[6]The relevant facts can be stated shortly. I have already indicated the nature of the two appeals. The two issues which were regarded as most material by the inspector were, first, the question as to whether there had been any breach of the human rights of those whose existing accommodation was to be demolished and thus who would need to be moved to other accommodation (at least temporarily and possibly permanently, although they may have been able to return to a new bungalow on the site where their old one had been). Secondly, there was an issue as to whether the proposed development would make adequate provision for infrastructure. So far as the provision for infrastructure is concerned, the claimants had entered into a section 106 undertaking which contained various obligations. There were issues about whether that undertaking was properly enforceable.

[7]So far as the human rights aspect is concerned, there were three articles which were alleged to be material. The first was article 2. An assertion was made on behalf of some of the residents, and in particular on behalf of a 96 year old lady in whose case there was medical evidence of the likely damaging effect upon her health which might be fatal if she had to be moved against her will. However, the inspector correctly took the view that article 2 was not engaged and that there was no question of any breach by the grant of planning permission. The suggestion that there was a possible breach of article 2 was little short of absurd.

[8]The key article was article 8, the right to private and family life. Any eviction would clearly be an interference with the right to private life under article 8. There was also reference made to article 1 of the First Protocol, the right to respect for property. It may well be that that right could be said to be involved, but it is not necessary to go into whether it was or it was not since it is common ground that the approach to whether there was a breach of that is the same as the approach to whether there was a breach of article 8.

[9]Article 8(2), on which everything turns, provides:

"There shall be no interference by a public authority with the exercise of this right except such as in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."

[10]Before the inspector there was evidence contained in Dr Clark's report about the tenancies which the relevant residents have. In his report Dr Clark said this in respect of the nature of the tenancies:

"The question 'what sort of tenancy do you have' in section 1 [of his questionnaire] was designed to enable me to discover how many respondents possessed a tenancy incorporating preserved rights on transfer (from Eastleigh Borough Council), as opposed to a newer 'redevelopment' tenancy incorporating a clause reserving the right to Atlantic Housing to consider redeveloping the property in the future (I was informed that 20 'newer' bungalow residents have such a tenancy). The answers to this question did enable me to accurately identify the number of respondents with a 'preserved rights' tenancy, but not those with the newer type. In fact, the answers to the first question in section 2 provided me with what I think is a more reliable indicator of the number of respondents belonging to the latter category (three)."

[11]The inspector dealt with this in his determination as follows. He said this:

"17. Article 8 ensures that everyone has a right to respect for their private and family life. The Council acknowledge that the proposed development would result in interference with this right, as existing tenants would lose their homes on being relocated. 18. Nevertheless, for residents with redevelopment tenancies, the relocation would be lawful as the Housing Act provides for the rehousing of tenants from areas to be redeveloped. However, the independent audit identified that some residents hold assured tenancies with preserved rights on transfer rather than redevelopment tenancies. This gives them the rights not to move and not to have their home brought up to current standards until the property is vacated. Without knowledge of the addresses of these tenants I cannot be certain that none lives on the appeal site. I consider therefore that I have insufficient evidence to conclude that the proposed development would not violate the Article 8 rights of all existing tenants."

[12]It seems to me that it is not easy to follow precisely what the inspector means by that paragraph. The first sentence of it appears to pick up submissions made by the council in which they said this in dealing with article 8:

"1. Firstly, would the strategy allowing this breach be in accordance with the law? The Housing Act provides for the rehousing of existing tenants from areas to be redeveloped to properties outside these areas."

[13]It follows, in my judgment, that the inspector's conclusion on the first main issue, that is to say the effect on the human rights, was manifestly wrong in law. Mr Tromans has correctly submitted that the inspector was not only entitled, but bound, to consider the question of the residents' human rights, but there are two aspects. In considering proportionality, the decision maker must have regard, first of all, to whether the aim of whatever is proposed is proportionate; and secondly, to whether the means whereby that aim is to be achieved are proportionate. Both end and means may be material in the decision whether planning permission should be granted, but in a case such as this it is possible -- and indeed in my judgment it is on the facts appropriate -- to approach this on the basis that the planning permission will go to whether the aim is proportionate and that will be the matter which should be considered at that stage. The means will be dealt with by the protection provided against eviction by the need to go through the court and for the judge to decide that it is reasonable.

[14]On the question of aim the inspector decided that the interference would have a legitimate aim and that it was necessary. In balancing the rights of the claimants and the rights of the residents, and looking to the desirability of the proposed new scheme as a whole, that conclusion was entirely unsurprising. Indeed the inspector had made the point himself. On his site visit he observed that the accommodation offered by the existing bungalows was outdated and unusually small; that the homes were substandard; and that the proposal would increase the number of affordable homes in the area. The council accepted that the proposed development was of strategic importance as it would enable existing residents of substandard housing to be rehoused and allow other areas of substandard housing within the estate to be vacated and replaced with higher density, well-designed new homes. Therefore the council did not object on any other grounds than that there should be the submission of a section 106 undertaking (which had not occurred by the time the council was considering the matter and the time for reaching the decision expired) and also it was necessary to consider the human rights issues raised by the existing residents.

[15]In paragraph 21 the inspector stated as follows:

"I therefore conclude that although the interference would have a legitimate aim and is necessary, it would not be proportionate. On the evidence submitted I am unable to determine that it would be lawful. Article 8 would, therefore, be breached."

[16]The other main ground was the question of infrastructure provision. This led Mr Tromans to submit that, even if the inspector was wrong on the human rights aspect, he would have dismissed the appeals on the basis of the other main issue, infrastructure. The difficulty with Mr Tromans' submission on that is that there was an error of law contained in the infrastructure decision. The error (and it is conceded that it is an error of law) is that the inspector took the view that because the 106 undertaking was not dated in the text, it was incomplete and thus unenforceable. It is accepted that as matter of law that is wrong.

[17]In addition, he took the point that the claimants had submitted a report on the title to the land which indicated that, although they were the owner, there was a charge in favour of the National Westminster Bank. In the absence of consent by the bank, he could not be certain that the undertaking was sufficient to secure the required contributions to the infrastructure provision. That was factually wrong. There was no charge in favour of the National Westminster Bank. There had been, but that charge had been taken over by the Prudential and had been discharged. Unfortunately, those responsible for giving the necessary information to the Inspectorate had simply stated that the Prudential charge had been disposed of, but unfortunately made no reference to the fact that the Prudential had taken over from the National Westminster. The documentation provided referred to the National Westminster charge. Accordingly, submits Mr Tromans, and correctly, there cannot be an error of law in a failure to have regard to evidence which was not before the inspector. He was entitled to rely on what was before him and that indicated on its face that there was an existing charge.

[18]Having said that, it seems to me that if that was the only outstanding possible objection it would have been unlikely -- certainly one cannot say for sure -- that the inspector would have reached the same conclusion because it would have been very simple to have dealt with that by way of, for example, a condition that the council must be satisfied that the money was available, or some provision which could have made it absolutely clear that the planning permission could not go ahead until the undertaking was clearly not only enforceable but in effect the claimants were good for the money. Had that been the only outstanding matter (in the sense of the only matter which worried the inspector), I would have been surprised if he had felt that on that ground alone he should have refused the grant of planning permission. It suffices if the court is in the position of not being able to say that the decision would have been the same had all the other errors been put on one side.

[19]There is a further aspect to the infrastructure argument in the second planning permission because the claimants were not owners of part of the site. The remainder apparently was owned by the borough council. The council had indicated in its submissions to the inspector, as he records, that Eastleigh had not formally consented and had not indicated that they were completely happy. Again, having regard to the council's approach, it would have been surprising if they had maintained a failure to consent had there been an indication by the inspector that the human rights aspects and the infrastructure aspects that were material were not a bar to planning permission. The council had never indicated that they were in principle against the master plan and the development overall. Indeed their evidence was that they recognised that it was desirable and, as the inspector himself records, necessary for the provision of proper accommodation instead of the substandard that existed, and also because it would provide a greater quantity of affordable accommodation for the elderly (of whom we are told there are likely to be more and more in the relevant area as time goes by).

[20]In all those circumstances I am entirely satisfied that this decision by the inspector cannot stand, that there was an error in law which has prejudiced the claimants, and in those circumstances this claim succeeds. I must quash both the decisions of the inspector and remit the matter to be reconsidered.

[21]So far as the method by which it is reconsidered, that is to say whether it should be on written material or there should be an inquiry, that is a matter that will have to be determined after a consideration of the submissions by the interested party. MR LOWE: I am grateful, my Lord. My Lord, I apply for my costs. As I indicated before the short adjournment, we would urge your Lordship to assess them today if at all possible. I am told that if my Lord were to take the course that you suggested, the resultant bill would be reduced from £34,000 something to £25,500. MR JUSTICE COLLINS: Yes, which is a reduction of what? MR LOWE: About £9,000. MR JUSTICE COLLINS: Nine out of 34 -- I am trying to work out the percentage; my arithmetic is poor at the best of times. It is about 25 to 30 per cent, is it not? Yes, what do you say? MR TROMANS: My Lord, what we say on costs is this essentially. On the point of principle, as was canvassed before the short adjournment, our submission would be that to a very considerable extent the claimants are authors of their own misfortunes here really on both points, on the human rights point and the infrastructure point, in failing to provide the inspector with the correct factual and legal information and indeed possibly by failing to opt for a hearing or an inquiry. That may be a secondary point. So what we say would be the just solution in this case would be an order that essentially the claimants' costs are paid in relation to the stages of this matter following -- MR JUSTICE COLLINS: Well, effectively the deduction that Mr Lowe has indicated would be appropriate. MR TROMANS: Yes. MR JUSTICE COLLINS: If that were the right approach. MR TROMANS: Yes, my Lord. We are not content with the quantum of the reduction. The reason we say that is this. The claim is very much a front-loaded exercise. A great deal of the costs would have been incurred in taking the witness statements, preparing the claim bundle and no doubt counsel's advice in the course of that and counsel's work in drafting the detailed grounds. Your Lordship may not have seen the claim bundle itself, but the bundle for the hearing -- and I do not think there is any dispute about this -- is essentially the same as the claim bundle. So there would not have been any substantial further work on the part of the solicitor following the lodging of the claim, other than attending the hearing. Also -- I hope there will be no dispute on this -- the skeleton argument put in very much follows the form of the grounds. MR JUSTICE COLLINS: Yes. Looking at the amounts claimed, the bulk is undoubtedly counsel's fees. I do not know whether the reduction, Mr Lowe, included any of counsel's fees? MR LOWE: It did. MR TROMANS: My Lord, so I do not necessarily want, unless your Lordship wishes, to get at this stage into the details of the figures. MR JUSTICE COLLINS: What do you want me to do? Do you want me to do a summary assessment or would you prefer that it goes to a detailed assessment? MR TROMANS: I think, my Lord, we would prefer that it goes to a detailed assessment where the breakdown can be properly justified in terms of the work done at the claim stage as opposed to subsequently. We can see that transparently in a way that is frankly not going to be possible by arguing back and forth on summary assessment. MR JUSTICE COLLINS: If I were to follow that, would you suggest that I should simply award a percentage of the costs to reflect that -- assuming I am with you on that -- or would it be better to say "costs from" because if there is going to be a detailed assessment I think "costs from" can be dealt with clearly by the Costs Judge. MR TROMANS: My Lord, I think it would have to be "costs from" -- MR JUSTICE COLLINS: I think it would be "costs from". MR TROMANS: -- because one would not have all the material to make a percentage assessment. MR JUSTICE COLLINS: No, it would be a rough -- MR TROMANS: A very rough estimate. MR JUSTICE COLLINS: I think if I were minded to go along that route it is probably better to say "costs from" whatever the date is when the claim was lodged. MR TROMANS: My Lord, that would be our submission. MR LOWE: My Lord, I am told the relevant date, which was employed by my solicitor over lunch, for assessing the reduction was 24 October 2007. MR JUSTICE COLLINS: That was when it was lodged? MR LOWE: Which is when it was lodged. I would urge my Lord to assess today. It is going to involve further costs to have a detailed assessment. MR JUSTICE COLLINS: Well, I know. MR LOWE: And we did try to engage with the Treasury Solicitor immediately after lodging these proceedings because it was a classic case where, having seen the explanation, one would have thought that the Treasury might have reconsidered and decided that this was a primary matter for reconsideration. MR JUSTICE COLLINS: Mr Lowe -- forgive me, I have not gone into the question of costs on a detailed assessment -- but does the Costs Judge have power to award costs on a detailed assessment application? I assume he does? MR LOWE: Yes, he does. MR JUSTICE COLLINS: It is open to you, is it not, to make an offer? MR LOWE: It is. MR JUSTICE COLLINS: And effectively if the Costs Judge awards an amount which shows that they have not beaten the offer, they will almost certainly have to pay your costs. MR LOWE: That is right. MR JUSTICE COLLINS: That is the way that that is dealt with. It is a bit like a payment in, I suppose. MR LOWE: On sums of this sort it seems a disproportionate exercise. MR JUSTICE COLLINS: Well, it is quite a lot of money, even by today's standards. MR LOWE: It is. MR JUSTICE COLLINS: You see, the difficulty is that I do not feel, where there is an issue such as this -- particularly where it is counsel's fees which form quite a substantial part -- it is perhaps invidious for me to reach conclusions not really being up to date on what are recognised to be the appropriate amounts, and also there may be an issue as to whether it was appropriate to use a Silk. MR LOWE: My Lord, I am happy to take it from 24 October. MR JUSTICE COLLINS: I think it is appropriate to recognise the fact that to a very considerable extent your clients have brought this on their own head by their failure to put the material that should have been put before the inspector in a proper way. But, having said that, it would have been necessary to make this claim in order to quash the decisions. So it seems to me that you should have the costs from the date that you lodged, which is 24 October, but not before that. MR LOWE: I am much obliged. MR JUSTICE COLLINS: And there will be detailed assessment if not agreed. Thank you both.