Sainsbury's Supermarkets Ltd, R (on the application of) v Wolverhampton City Council & Anor [2009] EWHC 134 (Admin)

[2009] EWHC 134 (Admin)Case No CO/3795/2008
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 03/02/2009
Before
Mr Justice Elias
Between
THE QUEEN (ON THE APPLICATION OF SAINSBURY’S SUPERMARKETS LTD)ClaimantWOLVERHAMPTON CITY COUNCILDefendantTESCO STORES LIMITEDInterested Party
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Christopher Lockhart-Mummery QC and David Forsdick (instructed by Sainsbury’s Supermarkets Ltd) for ClaimantNeil King QC and Guy Williams (instructed by Wolverhampton City Council) for DefendantChristopher Katkowski QC and Scott Lyness (instructed by Tesco Stores) for Interested PartyHearing Hearing dates: 20th and 21st January 2009
JudgmentMr Justice ELIAS:
[1]Wolverhampton City Council (“the Council”) has resolved to grant outline planning permission to Sainsbury and Tesco with respect to the same site. They each own land on the site. The Council has to determine which development should be permitted to proceed. What are the considerations which the Council can lawfully take into account when determining in whose favour to exercise their compulsory purchase order (CPO) powers conferred by section 226 of the Town and Country Planning Act 1990? That is the question arising in this judicial review application. The Background.[2]The decision under attack is the decision made by the Council to approve in principle the making of a compulsory purchase order in respect of land owned by the claimant, Sainsbury’s Supermarkets Ltd. The land in question constitutes some 86 per cent of all the land on a particular site known as the Raglan Street site (RSS) which has been the subject of proposals for comprehensive development. Most of the remaining 14 per cent of the site is owned or controlled by Tesco. The rest, which is principally the subsoil under roads passing over the site, is owned by the Council. Tesco entered into a conditional sale agreement with the Council on the 3 November 2005 for the sale by the Council of that land. The background.[3]It is necessary to set this case in context. The first application for planning permission with respect to the development of this site was made by the claimant, Sainsbury. The application was referred to the Secretary of State and was subsequently called in. There was a public inquiry and the application was later approved. At that stage the Council agreed that it would sell its land on the site to Sainsbury in order to achieve the development.[4]In early 2005 Sainsbury wrote to the Council indicating that they no longer wished to develop the site and that they were negotiating to sell their interest in the site to Tesco in order for Tesco to develop a revised scheme. The Council then committed itself to selling the relevant land in its possession to Tesco by the conditional sale agreement I have mentioned. At about the same time it committed itself in principle to approve the use of CPO powers in support of the Tesco development if the need should arise. It was anticipated that this could be required to purchase site property which was in the hands of anyone other than Sainsbury (or of course the Council) since it was not anticipated that compulsory purchase powers would be required with respect to Sainsbury’s interests.[5]Subsequently Sainsbury changed their mind and decided that they did after all wish to develop the site. They notified the Council accordingly. This led in December 2006 to a further consideration by the Council of what to do with the site. It was noted that Tesco and Sainsbury could not reach agreement with respect to its future development. Both applied for outline planning permission for mixed use development of the RSS site. It was proposed that the planning applications of the two companies should be considered in the normal way. That was done and the Council resolved to grant outline planning permission to both companies. The Cabinet also agreed to approve in principle the use of CPO powers should the need arise. It did not at that stage indicate in whose favour those powers should be used.[6]Subsequently, the Council considered both of the proposed schemes to determine in whose favour they should in principle make a CPO. Effectively this was a competition between the two companies. The Council adopted a detailed process designed to enable it to obtain full information from both companies and to test their proposed schemes against certain specified objectives. There has been no criticism of the procedure employed.[7]Council officers produced a report for consideration by the Council’s Cabinet. The report set out the background and the processes which had been adopted; the relevant planning framework; and it identified what the officers considered to be the principal considerations that were relevant to assessing the planning merits of the two schemes. Part 6 of the Report was headed “Economic, Social and Environmental Well-being”. This report carefully weighed up the merits of each of the schemes and compared one against the other. Each had its own particular virtues and the report concluded that:
“… both schemes would bring appreciable planning benefits and would promote and improve the economic, social and environmental well-being of the City.”
[8]However, the Tesco scheme was considered to enjoy what was termed “a decisive advantage” which had been identified as one of factors to feed into the “economic, social and environmental well-being” benefits. This was that it would enable the development of another site known as the Royal Hospital site (RHS) to be brought forward in a manner which was consistent with the Council’s planning objectives for that site. This site was a little over half a mile away from RSS and it is common ground that it is wholly unrelated to that site, save to the extent that Tesco and the Council have sought to link the two developments. The RHS site is owned by Tesco. The Council has for some considerable time been seeking to have that site developed in a manner which Tesco has always maintained was financially unviable. However Tesco have indicated that they would be willing to develop the RHS site in accordance with the Council’s wishes provided that they are allowed to develop the RSS site. They made a full/hybrid application for mixed use development of the RHS site and on 31 July 2007 the Planning Committee authorised the Director of Sustainable Communities to approve the application subject to a section 106 Agreement and conditions. Tesco concluded that it was not viable to develop the site unless they could also develop the RSS site so that in effect there would be a cross-subsidy with the profits from the RSS development subsidising the losses which Tesco anticipate would accrue from the RHS development.[9]Tesco had indicated that in the absence of a joint approach linking the two sites, they would seek to challenge the Council’s proposals concerning the development of the RHS site and would suggest a less costly and more commercially sustainable development. The report to Council accepted that the proposed development of RHS was unviable and that the linkage with RSS would have to be made if the RHS was to be developed as the Council wished. It says this (para. 6.20):
“…[the] development of the RHS site in accordance with the Council’s aspirations is unlikely to take place for the foreseeable future unless Tesco’s current proposals, which do meet those aspirations, are brought forward through a cross-subsidy from the development of the Raglan Street site.”
[10]It was this linkage between the two sites which caused the officers to recommend the Tesco scheme. Whilst both schemes had appreciable planning benefits, “the Tesco scheme enjoys a decisive advantage in that it will enable the development of RHS to be brought forward in the manner that is consistent with the Council’s planning objectives for that site. Making a CPO for the Tesco scheme will therefore result in a significantly greater contribution to the economic, social and environmental well-being of the Council’s area than would making a CPO for the Sainsbury’s scheme. On this basis and subject to the satisfactory resolution of the matters identified in the recommendations set out in the beginning of the report, there is a compelling case in the public interest to make a CPO to enable the Tesco’s scheme to proceed.” The decision of Cabinet made on the 30th January 2008 was to adopt this recommendation. The formal terms of the resolution were as follows:
“That approval in principle to be given to the making of a compulsory purchase order [for the RSS site]to facilitate the carrying out of : (i) a mixed use development [on the RSS site]; and (ii) a mixed use retail, office and residential development of the Royal Hospital site, subject to Tesco producing satisfactory evidence of a commitment to the carrying out of the development referred to at (ii) before consideration is given to a resolution to authorise the making of the CPO.”
[11]In addition, officers were authorised to continue negotiations with Tesco with a view to the making and implementation of the proposed CPO, and to ensure that Tesco indemnified the Council for its costs. The Statutory Background[12]Section 226 of the Town and Country Planning Act 1990, as amended, provides so far as is material:
“(1) A local authority to whom this section applies shall, on being authorised to do so by the Secretary of State, have power to acquire compulsorily any land in their area- (a) if the authority think that the acquisition will facilitate the carrying out of development, re-development or improvement on or in relation to the land; or (b) [which] is required for a purpose which it is necessary to achieve in the interests of the proper planning of an area in which the land is situated. (1A) But a local authority must not exercise the power under paragraph (a) of sub-section (1) unless they think that the development, re-development or improvement is likely to contribute to the achievement of any one or more of the following objects – (a) the promotion or improvement of the economic well-being of their area; (b) the promotion or improvement of the social well-being of their area; (c) the promotion or improvement of the environmental well-being of their area.”
I make certain observations about these provisions. First, the proposed development, redevelopment or improvement must be “on or in relation to” the land. Second, reference to “the land” plainly must be the land subject to the compulsory purchase order, a point confirmed by Laws J (as he was) in Chesterfield Properties PLC v Secretary of State for the Environment76 P&CR 117, 125. Third, subsection (1A) is a limitation on the power conferred by section 226(1)(a); it does not extend that power in any way. (In practice, however, it is unlikely to provide any real limitation since it is almost inconceivable that a proposed development will not have at least some of the benefits identified in that provision.) Fourth, it is the proposed development, re-development or improvement that must achieve, or at least contribute to the achievement of, at least one of the well-being benefits referred to in subsection (1A). These benefits may, however, extend beyond the area of the site itself and typically will do so. For example, creation of employment opportunities resulting from a commercial development will frequently benefit persons living away from the site but in other parts of the area falling under the local authority’s jurisdiction. The current guidance in relation to the section 226 powers is found in Appendix A to Circular 06/04. Paragraph 6, headed “The well-being power”, reflects subsection (1A) and in part states:
“The benefit to be derived from exercising the power is…not restricted to the area subject to the compulsory purchase order, as the concept is applied to the well-being of the whole (or any part of) the acquiring authority’s area.”
The Grounds of Appeal. Misconstruction of section 226.[13]The claimant advances three grounds for challenging the Council’s resolution, although the first two are simply different formulations of what is essentially the same ground. It is said that the terms of the Cabinet resolution, read in the context of the report on which it was based, make it plain that the Council was under the impression that the benefits which were to be derived from the development of the RHS site fell within subsection (1A). Mr Lockhart-Mummery QC, counsel for the claimant, in a powerful submission, contends that this was wrong. The terms of section 226(1)(a) are plain: the Council could only have regard to benefits which accrued from the development of the RSS site. These benefits may be felt outside the development site itself - for example, benefits resulting from improved employment opportunities typically are - but they must follow solely from the development in respect of which the CPO is being made, and not some separate independent development.[14]The Council was not entitled to have regard at all to the benefits which may accrue from the development of the RHS site since that was a distinct and wholly separate development. Those benefits might indeed accrue from the making of a CPO order in favour of Tesco because Tesco and the Council had linked- or at least were proposing to link - the two schemes such that they would have that effect. But that did not bring them within the scope of section 226(1A). The benefits identified in that subsection have to result solely from the development of the RSS site and not from any condition or obligation made in connection with that development. No doubt there will be well-being benefits resulting from the development of the RHS site which will be social, economic and environmental, and moreover they will be benefits relating to the area under the Council’s jurisdiction. But they would only fall into subsection (1A) with respect to any CPO which had to be made in relation to the RHS development; they are not well-being benefits with respect to the RSS development and the report to Cabinet was in error in treating them as such. It is not a proper exercise of power to seek to acquire land at site A in order to promote the prospective development of land at a wholly different and unrelated site B. Indeed, if the Council were correct, it would enable them compulsorily to acquire any commercially profitable opportunity in order to subsidise other unconnected development in some totally unrelated part of the authority’s area. It was wholly contrary to principle and the proper scope of section 226 to suggest that this could possibly be a lawful basis for compelling someone to sell their land.[15]Accordingly, any benefits to be derived from the RHS site were wholly immaterial to the decision to make a CPO in Tesco’s favour and by having regard to this factor, the Council misunderstood the scope of its powers and took into account a legally irrelevant consideration. The terms of the resolution leave no doubt that one of the reasons for approving in principle the exercise of the CPO in Tesco’s favour was the desire to facilitate the RHS development. The Council thereby erred in law.[16]Furthermore, even although the Council could lawfully have made a CPO with respect to the RSS site taken on its own, independently of any link with the RHS site, that would not justify the exercise of the CPO power in Tesco’s favour if the benefits of developing the RHS site in fact influenced that decision. In this case, but for those benefits, the decision in principle to invoke the CPO against the claimant might not have been made at all. The fact that the power could lawfully have been exercised had Sainsbury not been in the picture did not mean that it was lawfully exercised once they were in the picture. Their presence influenced the decision-making process. The focus has to be on the decision to make the CPO in Tesco’s favour, and the reasons for that. The benefits of the RHS development were a key consideration and that suffices to render the decision unlawful. If the choice as to which development to support had to be reached independently of the RHS benefits, then there must be a real chance that the CPO would be exercised in the claimant’s favour, given the extent of their landowning and the degree of intervention required to purchase their land. Predetermination.[17]The other principal ground of challenge is that the Cabinet did not properly consider and evaluate the two schemes because they had already determined to find in Tesco’s favour. This was the consequence in particular of the conditional sale agreement and the earlier “in principle” resolution to use their CPO powers in Tesco’s favour. As to the agreement, it has now become apparent - although only very late in the day - that it provides in terms that Tesco must carry out the development of RHS prior to the commencement of any development at RSS. In addition, clause 11 of that agreement is as follows:
“Subject to clause 52 the Seller (in its capacity as landowner only) will (at the buyer’s cost and expense) use all reasonable endeavours including facilitating the use of powers contained within sections 226 and 237 of the Planning Act to assist with acquiring all interests in the Site required to enable the Development to be built out and brought into use.”
[18]The test for predetermination or bias has been recently identified by the Court of Appeal in Persimmon Homes Teeside Ltd v The Queen (on theapplication of Kevin Paul Lewis) [2008] EWCA Civ 746. The question is whether there is a real risk that the mind of the decision maker was closed. It is submitted that the only reasonable inference here, in the light of the earlier history with respect to the site, is that it there is such a risk. The Council had given priority to developing the RHS site, and these contractual terms demonstrate how fixed its mindset was. There was no proper independent determination of the question in whose favour the CPO should be granted; the Cabinet was merely going through the motions. The response of the Council and Tesco.[19]Both the Council and Tesco, ably represented by Mr King QC and Mr Katkowski QC respectively, assert that the Cabinet decision was lawful. They do not suggest that the development at RHS can be treated as part of the RSS development, nor do they say that it is a development “in relation to” the RSS development, within the meaning of section 226(1)(a). It is accepted that they are two separate developments. Nonetheless, they submit that the two are plainly interlinked under the Tesco scheme since a proposed condition of the development - in all probability to be achieved by a section 106 agreement - is that Tesco’s proposed retail store on the RSS site could not be open for trading until the RHS development - or at least certain specified parts of it - has been completed. It follows that any change of use with respect to the RSS site cannot come into effect until the benefits of the RHS development have been achieved.[20]They both accept that section 226(1)(a) requires that the acquisition must promote the development in relation to the land being acquired, but they contend that that is clearly the position here. The report makes it plain that simply taking the RSS development independently of RHS, a CPO made with respect to either of the proposed schemes would fulfil the statutory purpose of “facilitating the carrying out of development…on or in relation to the land”. The only issue for the Council was which scheme was the more beneficial. In reaching that decision, it was legitimate for the Council to have regard to the benefits which would accrue from each of the schemes.[21]The decision to have regard to the RHS benefits could be justified on two bases. The first was that the RHS benefits were sufficiently linked to the RSS development that, to use the language of section 226(1A), they could naturally be described as being “contributed to” by the RSS development. The report had treated these well-being benefits as flowing from the RSS development, and it was right to do so. Section 226(1A) emphasises that the benefits may relate to the area under the Council’s jurisdiction, as indeed does Circular 06/04, and that is precisely the position here.[22]Second and in any event, even if the benefits could not be considered to fall under that subsection, in choosing which of two beneficial schemes should take the benefit of any CPO, the Council was not limited to a consideration of the matters referred to in section 226(1A). It was not disputed that a CPO could properly be exercised so as to facilitate either the Tesco or the Sainsbury development. The only question was in whose favour the power should be exercised. In those circumstances the Council was entitled to have regard to the whole raft of benefits which would flow from the rival developments, including those resulting from obligations or conditions undertaken in connection with the developments. It would unnecessarily constrain the Council from achieving the best deal for the area if the “off site” benefits of the RHS development had to be ignored even where the “on site” and related benefits flowing directly from the RSS development were sufficient in their own right to render the making of the order lawful. There was nothing in the statute which fettered the Council’s powers in this regard. Manifestly the general public interest favoured two developments rather than one; that was the best outcome for the Council taxpayers. There had to be a cogent statutory limitation to prevent the Council choosing that obviously desirable outcome, and there was none in this case.[23]As to the predetermination ground, both the Council and Tesco submit that it is entirely misconceived. The conditional sale agreement was carefully formulated so as not to fetter the Council’s planning powers. First it was expressly stated that it was entered into by the Council in its capacity as a landowner. Second, the Agreement specified in terms in clause 52 that nothing in the agreement was to prejudice the Council’s statutory powers and duties. The members of the Cabinet were referred in terms to that clause in the report, and they were told unequivocally that the terms of the Agreement were not material to the decision the Council had to make. There was no justification at all for assuming that the members had ignored that advice.[24]Furthermore, it is inconsistent with this ground that the Council entered into the process involving a comparison of the two development schemes at all. The report had carefully evaluated the two schemes and provided a cogent basis for recommending the Tesco scheme. In addition, at the time when the conditional sale agreement had been entered into, the claimant had indicated that they did not wish to develop the site; rather they wanted to dispose of their interest in it. In those circumstances the entering into the conditional sale agreement was fully understandable as was the “in principle” decision taken at the time to exercise CPO powers in Tesco’s favour. The claimant’s position subsequently changed in December 2006, and that is what led to a fresh consideration of what to do with the site. There was no basis for assuming or inferring that it was anything other than a proper and bona fide reconsideration of that issue. It is true that the earlier “in principle” resolution to exercise compulsory purchase powers in Tesco’s favour was not formally revoked, but it was plain that this was the effect of the Council’s action in reconsidering what should happen to the site.

Prematurity

[25]Before analysing the issues, a preliminary issue is whether this application for judicial review is premature. The decision is only one which has been taken in principle and it may be that the compulsory purchase powers will never in fact be sought to be exercised. It could be said that it is a waste of the court’s time to deal with this issue now. Initially the Council and Tesco took that line, but after further consideration they joined with the claimant in wishing me to resolve this issue. On reflection, I am satisfied that it would be right to do so. There are statutory restrictions on granting relief by way of judicial review once the CPO is made (see sections 23 to 25 of the Acquisition of Land Act 1981) but they do not apply to a resolution to make a CPO or any resolution in principle to do so: see R v Camden London Borough Council ex-parteComyn Chin Chee & Co (1984) 47P&CR 417. This is a major regeneration scheme and if the Council is approaching it in an unlawful manner, then it is desirable that this should be known to all parties sooner rather than later. Moreover, Tesco is currently incurring considerable expenditure on the assumption that the Council’s approach is in principle correct (whilst accepting, of course, that a different decision may be reached when the specific question of whether or not to make the CPO is taken). Accordingly I am satisfied that the interests of all the parties, and not least inhabitants of Wolverhampton, will benefit by a ruling on this issue now. I turn to consider the grounds of challenge. 26. I would make a number of preliminary observations before addressing the substance of the arguments. 1). It was resolved to give Tesco outline planning permission for the RSS site without any consideration at all of the RHS site. (Tesco had in fact sought to link them, but were told that this was not possible.) 2). I accept that section 226 makes it plain that the exercise of CPO powers under that section must be to facilitate the development on the land to be acquired i.e. in this case the RSS development. (The section stipulates that the development may be on or in relation to the land, but it is not contended in this case that the development is in relation to the land.) 3). It follows that if the purpose of the CPO is to facilitate the development of some land other than the development on the land to be acquired, then the conditions of section 226 would not be met and the exercise of power would be unlawful. I therefore accept the claimant’s submission that it is unlawful to acquire site A in order to develop site B. The only lawful purpose must be to facilitate the development of site A. 4). It is common ground that the report to the Cabinet makes it plain that Tesco’s development proposal for the RSS site has considerable planning merits even shorn of the RHS well-being benefits. It would plainly facilitate that development to exercise the CPO powers so as to enable Tesco to be in possession of all the land. That development of the RSS site would contribute to the benefits identified in section 226(1A). It follows that the terms of section 226 would then be satisfied. 5). In my judgment that would be so even if Tesco has given an undertaking –whether by way of a section 106 agreement or in some other lawful way- to develop some or all of the RHS site before developing the RSS site. In other words, there is no intrinsic reason why the purpose of exercising the CPO power should not be to facilitate the RSS development, even although a benefit of exercising that power is also the facilitation of the RHS development. 6). However, I would accept that if the Council would not have considered that the conditions for making the CPO at site A were met unless the benefits at site B were taken into account, that would be an unlawful exercise of the section 226 power. It is a condition precedent to the lawful exercise of that power that the authority is satisfied that the CPO will facilitate the development at site A irrespective of the site B benefits.[26]As the argument in this case developed, so it seemed to me that there are really two quite separate issues. The first is what I will call the formal issue; the second is the issue of substance.[27]The formal issue is this. Mr Lockhart-Mummery contends that if one reads the Cabinet’s resolution in the light of the report, it is quite clear that it thought that it was proposing to make the CPO for the purpose of facilitating both the RSS and the RHS developments. That is effectively what the resolution says. The “in principle” decision to make the CPO was stated in terms to be to facilitate both developments. The assumption in the report was that the well-being benefits of the RHS site fell within the terms of section 226(1A) with respect to the RSS development. Since it is unlawful to have regard to the RHS development, the resolution must be set aside.[28]I call this the formal issue since, as I have said, it is clear, and indeed common ground, that the CPO could have been made even if the RHS benefits had been ignored. In other words, and subject to what I term the substantive issue, the resolution could have simply identified that the purpose of the CPO - the reason it was being invoked- was to facilitate the RSS development, whilst perhaps noting that a consequential benefit of significant importance would be that the RHS development would also take place.[29]The more fundamental point –the substantive issue- however, is this: when determining in whose favour the CPO should be exercised, was the Cabinet entitled to have regard to these benefits of the RHS development, or was that an immaterial consideration? If they were entitled to have regard to them in deciding to exercise the CPO in Tesco’s favour, then any shortcomings in the form of the resolution, or indeed in the report, seem to me to be of no practical importance. The resolution could arguably be challenged for the form in which it was cast, but not for the substance of the decision it was intending to communicate. Any quashing of the decision would not be in the context of requiring the Council to reconsider the issue, but merely to require the resolution to be reformulated so that to make it clear that the purpose of making of the CPO was to facilitate the RSS development only.[30]If, on the other hand, the Cabinet could not have regard to the RHS benefits at all when making the comparison, then it is clear that they erred in their decision, since that was precisely what they did do, and the resolution would have to be quashed so that the issue could be reconsidered. I will first deal with the substantive issue and then the formal issue. The substantive issue.[31]The complication in this case arises because there is a competition with respect to the one site to determine in whose favour the CPO power should be exercised. The Council necessarily had to lend its support to one application or the other. The issue is what constraints operate when it exercises that choice.[32]I confess to having had some difficulty with the principal way in which the Council and Tesco ran their case. They have sought to argue that the benefits derived from the RHS development fall within the terms of section 226(1A). I assume that this is because the report sought to bring them into that category. The premise appears to be that the comparison as between the two proposals must be determined by having regard to the “well-being” benefits which fall within that subsection.[33]Strictly, I do not think that can be right. That subsection is not seeking to identify all the benefits which might result from a development; it is merely requiring that the development must contribute to achieving at least one of those benefits. A comparison which simply focuses on these benefits does not, therefore, necessarily exhaust all the possible benefits which might stem from the RSS development (although I accept that in practice there must be few benefits that could not be brought within one or other of the well-being categories.) Accordingly, even if the right approach is to focus on the benefits deriving directly from the RSS development, as a matter of law that would not limit the consideration to the factors falling within subsection (1A).[34]I would, however, accept that if the RHS benefits fall within section 226(1A), as the report suggests, then they must be legitimate considerations for the Council to take into account. However, I agree with the claimant that the RHS benefits do not fall within the terms of that subsection. They are of course well-being benefits which apply in the Council’s area, and they would plainly be subsection (1A) benefits in relation to any CPO that might have been necessary for the RHS site. But in that case it would surely not be legitimate to suggest that they are well-being benefits with respect to both developments. That would mean that a CPO with respect to two sites could be justified by well-being benefits directly generated by just one of them.[35]I accept the submission of Mr Lockhart-Mummery that in order to fall within subsection (1A) in relation to the RSS development, these benefits must flow from the RSS development alone, since that is the site covered by the CPO. The justification for the CPO is that it facilitates that development, not some other development at a different site. I do not accept that the fact that a link between the two developments can be achieved by a section 106 agreement (or some other linking device) entitles the Council to treat what are in reality well-being benefits resulting from the RHS development as if they were generated by the RSS development. Logically, that would mean that off site benefits resulting from a separate development would be sufficient to justify a CPO order in respect of a development which otherwise generated no well-being benefits at all. In my judgment that cannot be right.[36]I therefore reject the first way in which Tesco and the Council put their case. I turn to consider the second way, which is that in any event, when choosing between two developments either of which would in principle be facilitated by a CPO, the Council can have regard to all the benefits which will flow from the development when determining in whose favour the CPO should be exercised.[37]The logic of the claimant’s approach, it seems to me, is that the same considerations must be applied when choosing between the two rival developments as would be applied when determining whether the CPO can lawfully be made with respect to the development at all. If, as the claimant submits - and I accept - the benefits derived from the RHS development are immaterial to the latter decision, then they cannot inform the Council’s choice either.[38]I do not accept that submission. In my judgment when deciding which development should receive their support, the Council could have regard to all the benefits accruing from the proposed development, including any off site benefits achieved by way of a section 106 agreement. It seems to me that there are really two stages in the process. First, can a CPO lawfully be made in favour of a particular development? That must be determined by focusing solely on the benefits flowing from the development itself and the RHS benefits could not be taken into account at that stage. Second, if the power can lawfully be exercised, but there is more than one potential party in whose favour it could be exercised, to which development should the Council lend its support? At that stage I can see no reason why the Council should not have regard to its wider interests. It has established that there is in principle a proper basis in law for interfering with the rights of either of two (or more) owners of land on the site by compulsorily purchasing their interests; I see no reason why it should not select which landowner should be so affected by considering the overall benefits to the Council which the respective developments would provide.[39]The claimant says that this could allow a Council to support, say, someone who promised to make a financial payment to the Council and would thereby permit a party to buy development rights. I do not think that this follows. In order to constitute a valid section 106 agreement it is well established that in addition to satisfying the express terms of the section, it must be for a planning purpose and not be Wednesbury unreasonable: see Tesco Stores v Secretary of State for theEnvironment [1995] 1 WLR 759, 779D per Lord Hoffmann. It may well be that such a provision would fall foul of these principles. I would accept that the benefits to be considered must be planning benefits in a broad sense and if the benefit could not lawfully be achieved as part of, or in relation to, the development then it could not be properly taken into account. However, I do not think that Tesco’s undertaking in this case with respect to the RHS site would fall into that category. I would have thought that there is little doubt that the undertaking could in principle be entered into as part of a section 106 agreement. In any event, I have heard no argument to suggest otherwise.[40]It follows that in my view the Council could in principle take the decision it did and essentially for the reasons it did. The formal issue.[41]Even so, as I have indicated, strictly the Council did err in law in - at least implicitly - treating the RHS well-being benefits as being related to the RSS development. Furthermore, the terms of the resolution, when read in the context of the report, suggest that the Council was under the impression that one of the purposes for which they could exercise the CPO power was to facilitate the RHS development. As I have indicated, this is not strictly correct. They would have to justify the order solely by reference to the benefits of the RSS development, and the RHS benefits would have to be seen as an additional benefit.[42]Does this mean that the resolution should be quashed? The claimant says that it should since it is premised on a misunderstanding of the law, even if it be the case that in substance essentially the same decision can be taken. Mr Katkowski submits that this is pointless if the decision is in principle a proper one.[43]I agree with Mr Katkowski that the resolution does not need to be altered. Perhaps serendipitously, it does not state in terms that the purpose is to promote both developments, even if that was the Council’s understanding. It simply says that the CPO will facilitate the carrying out of both developments, and as a matter of fact, that is correct. The making of the CPO will in the unusual circumstances of this case, achieve precisely those results, and in my judgment it can do so lawfully. So I do not consider that it would be appropriate to quash the resolution.[44]Of course, the “in principle” decision is not a final one and the balance of considerations may have changed if and when the decision finally has to be made. But in my judgment the Council did not have regard to improper considerations when they made their decision in whose favour the CPO should be exercised, even if they may have misunderstood by what route they could properly have regard to the RHS well-being benefits. The predetermination challenge.[45]I turn to the third ground which alleges that the Council had predetermined this decision. I see no basis at all for concluding that there was a real risk that the Cabinet members had fallen into that error. They were expressly advised that the terms of the conditional sale agreement were irrelevant to the decision they had to reach, and I agree with the Council and Tesco that there is no proper basis for assuming that the members did not follow that advice. There was no cross examination of any of the members of Cabinet, and it would in my judgment be quite wrong to infer that the members collectively took a decision in order to give effect to a conditional agreement which they were told in terms to ignore. I decline to make that inference.[46]It is true that there never was any formal renunciation of the original “in principle” resolution to use the CPO powers in support of Tesco’s application. That might have been preferable, but in my view the failure to take that step comes nowhere near raising a serious question of bias or predetermination. That resolution was passed at a time when the claimant had disclaimed any interest in the site - indeed, it was never anticipated that the power would be exercised against the claimant because when that resolution was passed it was assumed that they would sell their interest to Tesco. Once the claimant’s position changed, there was a reconsideration by the Council of its position with respect to the site. It was obvious that the earlier “in principle” resolution would fall away, and that the position would need to be reassessed, as indeed it was.[47]I do not accept that the detailed and careful procedures involved in assessing the two proposed developments were merely a façade, a “going through the motions”. Moreover, it is difficult to think of what steps the Council could take on any reconsideration, in addition to those already taken, to make it plain that the earlier decisions should be ignored. All Mr Lockhart-Mummery could suggest was formally to revoke the earlier “in principle” resolution. As I have said, in my judgment it would have been obvious to all that this earlier resolution was of no continuing relevance, and no reliance was placed upon it in the report.[48]It may well be - although I speculate - that the officers and members anticipated that the benefits of the RHS development were likely to be decisive. But that would not amount to a predetermination even if it were the case. In my judgment the Council at all times behaved perfectly properly in the way they dealt with this issue. Disposal.[49]It follows that for the above reasons, this application for judicial review fails.

Cited in 1 later judgment