Royal Borough of Kensington And Chelsea v The Secretary of State for Communities And Local Government [2017] EWHC 1704 (Admin)

[2017] EWHC 1704 (Admin)Case No CO/1172/2017
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
PLANNING COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 13 July 2017
Before
NEIL CAMERON QC(Sitting as a Deputy High Court Judge)
Between
THE ROYAL BOROUGH OF KENSINGTON AND CHELSEAClaimantTHE SECRETARY OF STATE FOR COMMUNITIES AND LOCAL GOVERNMENTFirst DefendantAREF LAHHAMSecond Defendant
Mr Timothy Straker QC (instructed by Shared Legal Services Department, Royal Borough of Kensington and Chelsea) for Claimant for The First Defendant did not appearMr Christopher Lockhart-Mummery QC (instructed by Clyde and Co.) for Second DefendantHearing Hearing date: 27 th June 2017
Judgment ApprovedThe Deputy Judge (Neil Cameron QC):Introduction
[1]This is an application made by the Claimant local planning authority for an order pursuant to section 288 of the Town and Country Planning Act 1990 (“the TCPA Act”) to quash a decision of 3rd February 2017 of an inspector appointed by the Secretary of State for Communities and Local Government. By that decision, the inspector allowed the Second Defendant’s appeal against the decision by the Claimant to refuse to grant planning permission to develop land at 1 and 2, Pembroke Cottages, London W8 6PF (“the Site”) by amalgamation of two semi-detached dwellings to form one single dwelling.[2]By an order dated 26th April 2017 Holgate J granted the Claimant permission to make this application.[3]In the statement of facts and grounds the Claimant relies upon two grounds of claim: i) The inspector made a mistake of fact when calculating housing land supply as he deducted vacant units returning to use from the requirement whilst including those units in the supply. ii) The inspector made a mistake of fact by adding extant planning permissions to the housing land supply figure when those planning permissions were already accounted for in the calculated supply.[4]During the course of argument Mr Straker QC indicated that the Claimant no longer pursued ground 2.[5]The First Defendant, the Secretary of State, concedes that the decision should be quashed on the first ground of claim.[6]The Second Defendant contests the claim.

The Background Facts

[7]By an application dated 20th May 2016 the Second Defendant applied to the Claimant for planning permission to develop the Site by “Amalgamation of two semi-detached properties (1 and 2 Pembroke Cottages) to form one single dwelling”.[8]By a decision notice dated 17th August 2016 the Claimant refused to grant planning permission. The following reason for refusal was set out in the decision notice:
“The proposal would involve the loss of one residential unit which would reduce the supply and choice of housing available within the Borough. The development would therefore not contribute to meeting housing targets and housing needs for the Borough and London as a whole through ensuring a net increase in residential accommodation. This would be contrary to the aims of Development Plan, in particular Policies CH1 and CH3 of the Consolidated Local Plan and Policies 3.3 and 3.14 of the London Plan.”
[9]On the 8th September 2016 the Second Defendant appealed against the Claimant’s decision to refuse to grant planning permission.[10]The appeal was determined under the written representations procedure.[11]The Second Defendant’s Statement of Case submitted in support of its appeal included the following paragraphs relating to housing land supply. The figure of 0% in paragraph 4.34 is a typographical error and should be 20%:
“4.34 Paragraph 47 of the NPPF requires Councils to “identify and update annually a supply of specific deliverable sites to provide five years worth of housing against their housing requirements with an additional buffer of 5%” (0% where there has been a persistent under delivery of housing). 4.35 The Council’s 2015 AMR (Appendix 5) states: “10.13 The housing supply requirement from 1 April 2015 to 31st March 202 is 4,398 dwellings. This is made up of 5 years of the Borough’s annual supply target of 733 new homes, plus the 20% buffer required in the NPPF where there has been a record of persistent under-delivery against the Borough’s target. The current supply of deliverable sites during this period is expected to be 4,416 dwellings based on those sites assessed as deliverable in the housing trajectory above...” 4.36 Therefore, the Council is not only meeting the targets set out in the London Plan but also has a 5 year supply of housing available. 4.37 The completion figures produced by the DCLG are also encouraging. The figures for 2015-2016 showed gross completion to be 1040 units; again, a significantly higher completion rate than the London Plan target (appendix 6).” “10.13 The housing supply requirement from 1 April 2015 to 31st March 202 is 4,398 dwellings. This is made up of 5 years of the Borough’s annual supply target of 733 new homes, plus the 20% buffer required in the NPPF where there has been a record of persistent under-delivery against the Borough’s target. The current supply of deliverable sites during this period is expected to be 4,416 dwellings based on those sites assessed as deliverable in the housing trajectory above...”
[12]The Claimant’s Written Statement also addressed housing land supply, stating:
“2.5 The 2014/15 Authority Monitoring Report shows that the Borough’s five year housing supply requirement (1 April 2015 to 31st March 2020) is 4,398 dwellings (733 plus a 20% buffer). The current supply from deliverable sites during this period is estimated to be 4,416 dwellings. This demonstrates that although the Borough is able to meet its housing supply target, this is only very marginal with a buffer of less than 20 units. Given that the negative impact of amalgamations is yet to be factored into the small sites estimate element of the trajectory (due to planning permission only being required since August 2014 and the small sites data being drawn from approvals between 2004 and 2012), it is anticipated that this will reduce supply over the five year period by approximately 50 units per annum. Such a reduction in supply will result in the Borough being unable to meet its supply targets.”
[13]The inspector’s decision was set out in a decision letter dated 3rd February 2017.[14]At paragraph 2 of the decision letter, the inspector identified the main issue as being:
“The effect of the development upon the supply and choice of housing within Kensington and Chelsea.”
[15]At paragraph 5 of the decision letter, the inspector found that the proposed development would not breach policy CH2 in the Consolidated Local Plan. In relation to policy CH3 in the Consolidated Local Plan he concluded (at paragraph 6 of the decision letter):
“Taking these parts of the CLP together, the loss of a dwelling would not comply with paragraph ‘a’ of CLP policy CH3 and none of the exceptions at sub-paragraphs ‘a i’ to ‘a v’ apply. The conflict with CLP CH3 will need therefore to be weighed in the overall planning balance.”
[16]The inspector held, at paragraph 8 of the decision letter, that the loss of one unit of housing caused the proposed development to conflict with policy 3.14B in the London Plan.[17]The inspector considered Housing Needs and Supply at paragraphs 10 to 16 of the decision letter. Paragraphs 10 to 14 of the decision letter state:
“10. The Council’s 5 year housing requirement based upon LP policy 3.3 and factoring in a 20% buffer is 4,398 dwellings. The Council’s 2014/15 Authority Monitoring Report (AMR) figure for deliverable sites is 4,416 dwellings. This therefore indicates that there is likely to be an over-supply of 18 dwellings over that period. 11. According to the Council’s quoted figures, the numbers of net residential approvals in terms of units over the past 2 years of data that I am provided with, have exceeded the annual requirement. The number of completions has run below target in some years. However footnote 11 on page 12 of the Framework states that sites with planning permission should be considered deliverable until permission expires unless there is clear evidence that the schemes will not be implemented within 5 years. 12. The Inspector in the Drayton Gardens appeal decision refers to the new stock housing annual target could be reduced to 687 giving a 5 year target of 4,122. This figure is derived, according to paragraph 63 of the Inspector’s decision, from the LP which sets a figure of 46 vacant units returning to use. Taking account of deliverable sites of 4,416, there would be headroom of 294. I cannot go as far as the Inspector did in the Drayton Gardens appeals by increasing the allowance for returning vacancies even further because I do not have the additional evidence that lead to that the conclusions on that. 13. The Council is also concerned that the number of amalgamations of units could undermine the housing supply figures. The Council state that around 50 units are lost each year but accept that the figure is difficult to quantify. Prior to 2014, the Council considered amalgamations did not always require planning permission. The number of Lawful Development Certificates applied for to confirm whether permission was required, were the measure of this as well as the number of planning applications since 2014. It is not clear whether all applications would have been implemented. No reference is made to formal monitoring. It is not clear that these figures can be relied upon to give a clear picture regarding the number of units lost through amalgamations and I do not give them much weight. 14. The current housing supply requirements are being met and the number of planning permissions being issued provides further encouragement. The extent of over supply based upon evidence before me is not as great as it has been identified in other appeal decisions but it is significant. Further applications for the amalgamation of units may come forward and decisions can be reached on the evidence available at that time.”
[18]The inspector’s conclusions are set out at paragraphs 17 to 19 of the decision letter:
“17. The proposal conflicts with CLP policy CH3 and LP policy 3.14B as it would lead to a loss of 1 dwelling. From the available information it appears at this time that the Council is likely to meet and exceed its 5 year housing supply requirements. The loss of 1 residential unit would not make a significant impact upon housing supply. The proposal would not go substantially against what CLP policy CH1 and LP policy 3.3 are trying to achieve. 18. This proposal would involve the loss of a family home as well as the loss of a unit with fewer bedrooms. However, it would contribute to meeting the moderate need for larger 4+ bedroom properties identified by the SHMA as necessary for balancing the housing market in the Borough. Additionally, given that (according to the SHMA) smaller homes more likely to come forward in new developments, I do not consider the loss of a small unit would be particularly harmful to the grain and mix of housing across the borough which CLP policy CH2 seeks to provide. 19. In relation to the main issue, from evidence available I am of the view that the proposal would not have a harmful impact upon the supply and choice of housing within Kensington and Chelsea. There would be some conflict with CLP policy CH3 and LP policy 3.14B as the number of residential units will reduce. However given the insignificant effect upon the overall supply, grain and mix of housing, I do not consider that this should lead to the refusal of planning permission. Overall, the proposal would accord with the appropriate balance needed between the loss of residential units and the need for larger family homes articulated at paragraph 35.3.18 of the LP.”

The Legal Framework

[19]Section 288(1) of the TCPA 1990 provides: “288.— Proceedings for questioning the validity of other orders, decisions and directions. (1) If any person— … (b) is aggrieved by any action on the part of the Secretary of State or the Welsh Ministers to which this section applies and wishes to question the validity of that action on the grounds— (i) that the action is not within the powers of this Act, or (ii) that any of the relevant requirements have not been complied with in relation to that action, he may make an application to the High Court under this section.” … (b) is aggrieved by any action on the part of the Secretary of State or the Welsh Ministers to which this section applies and wishes to question the validity of that action on the grounds— (i) that the action is not within the powers of this Act, or (ii) that any of the relevant requirements have not been complied with in relation to that action,[20]The powers of the court when hearing a section 288 application are identified at section 288(5):
“(5) On any application under this section the High Court— (a) ………. (b) if satisfied that any such order or action is not within the powers of this Act, or that the interests of the applicant have been substantially prejudiced by a failure to comply with any of the relevant requirements in relation to it, may quash that order or action.” (a) ………. (b) if satisfied that any such order or action is not within the powers of this Act, or that the interests of the applicant have been substantially prejudiced by a failure to comply with any of the relevant requirements in relation to it, may quash that order or action.”
[21]The principles to be applied when considering an application made under section 288 of the Town and Country Planning Act 1990 are well established and were summarised by Lindblom J (as he then was) in Bloor Homes East Midlands Limited v Secretary of State for Communities and Local Government [2014] EWHC 754 (Admin) at paragraph 19:
“19 The relevant law is not controversial. It comprises seven familiar principles: (1) Decisions of the Secretary of State and his inspectors in appeals against the refusal of planning permission are to be construed in a reasonably flexible way. Decision letters are written principally for parties who know what the issues between them are and what evidence and argument has been deployed on those issues. An inspector does not need to “rehearse every argument relating to each matter in every paragraph” (see the judgment of Forbes J. in Seddon Properties v Secretary of State for the Environment (1981) 42 P. & C.R. 26, at p.28). (2) The reasons for an appeal decision must be intelligible and adequate, enabling one to understand why the appeal was decided as it was and what conclusions were reached on the “principal important controversial issues”
. An inspector's reasoning must not give rise to a substantial doubt as to whether he went wrong in law, for example by misunderstanding a relevant policy or by failing to reach a rational decision on relevant grounds. But the reasons need refer only to the main issues in the dispute, not to every material consideration (see the speech of Lord Brown of Eaton-under-Heywood in South Bucks District Council and another v Porter (No. 2) [2004] 1 W.L.R. 1953, at p.1964B-G). (3) The weight to be attached to any material consideration and all matters of planning judgment are within the exclusive jurisdiction of the decision-maker. They are not for the court. A local planning authority determining an application for planning permission is free, “provided that it does not lapse into Wednesbury irrationality” to give material considerations “whatever weight [it] thinks fit or no weight at all” (see the speech of Lord Hoffmann in Tesco Stores Limited v Secretary of State for the Environment [1995] 1 W.L.R. 759, at p.780F-H). And, essentially for that reason, an application under section 288 of the 1990 Act does not afford an opportunity for a review of the planning merits of an inspector's decision (see the judgment of Sullivan J., as he then was, in Newsmith v Secretary of State for [2001] EWHC Admin 74, at paragraph 6). (4) Planning policies are not statutory or contractual provisions and should not be construed as if they were. The proper interpretation of planning policy is ultimately a matter of law for the court. The application of relevant policy is for the decision-maker. But statements of policy are to be interpreted objectively by the court in accordance with the language used and in its proper context. A failure properly to understand and apply relevant policy will constitute a failure to have regard to a material consideration, or will amount to having regard to an immaterial consideration (see the judgment of Lord Reed in Tesco Stores v Dundee City Council [2012] P.T.S.R. 983, at paragraphs 17 to 22). (5) When it is suggested that an inspector has failed to grasp a relevant policy one must look at what he thought the important planning issues were and decide whether it appears from the way he dealt with them that he must have misunderstood the policy in question (see the judgment of Hoffmann L.J., as he then was, South Somerset District Council v The Secretary of State for the Environment (1993) 66 P. & C.R. 80, at p.83E-H). (6) Because it is reasonable to assume that national planning policy is familiar to the Secretary of State and his inspectors, the fact that a particular policy is not mentioned in the decision letter does not necessarily mean that it has been ignored (see, for example, the judgment of Lang J. in Sea Land Power & Energy Limited v Secretary of State for Communities and Local Government [2012] EWHC 1419 (QB), at paragraph 58). (7) Consistency in decision-making is important both to developers and local planning authorities, because it serves to maintain public confidence in the operation of the development control system. But it is not a principle of law that like cases must always be decided alike. An inspector must exercise his own judgment on this question, if it arises (see, for example, the judgment of Pill L.J. Fox Strategic Land and Property Ltd. v Secretary of State for Communities and Local Government [2013] 1 P. & C.R. 6, at paragraphs 12 to 14, citing the judgment of Mann L.J. in North Wiltshire District Council v Secretary of State for the Environment [1992] 65 P. & C.R. 137, at p.145).”[22]The principles relating to mistake of fact were considered by Carnwath LJ (as he then was) when giving the judgment of the court in E v. Secretary of State for the Home Department [2004] EWCA Civ 49: “61. As the passage cited by Lord Slynn shows, the editors of the current edition of De Smith (unlike Wade and Forsyth) are somewhat tentative as to whether this is a separate ground of review: “The taking into account of a mistaken fact can just as easily be absorbed into a traditional legal ground of review by referring to the taking into account of an irrelevant consideration or the failure to provide reasons that are adequate or intelligible or the failure to base the decision upon any evidence.” (para 5/-094).62. We are doubtful, however, whether those traditional grounds provide an adequate explanation of the cases. We take them in turn: i) Failure to take account of a material consideration is only a ground for setting aside a decision, if the statute expressly or impliedly requires it to be taken into account ( Re Findlay [1985] AC 318, 333–4, per Lord Scarman). That may be an accurate way of characterising some mistakes; for example, a mistake about the development plan allocation, where there is a specific statutory requirement to take the development plan into account (as in Hollis). But it is difficult to give such status to other mistakes which cause unfairness; for example whether a building can be seen (Jagendorff), or whether the authority has carried out a particular form of study (Simplex). ii) Reasons are no less “adequate and intelligible”, because they reveal that the decision-maker fell into error; indeed that is one of the purposes of requiring reasons. iii) Finally, it may impossible, or at least artificial, to say that there was a failure to base the decision on “any evidence”, or even that it had “no justifiable basis” (in the words of Lord Nolan: see above). In most of these cases there is some evidential basis for the decision, even if part of the reasoning is flawed by mistake or misunderstanding.63. In our view, the CICB case points the way to a separate ground of review, based on the principle of fairness. It is true that Lord Slynn distinguished between “ignorance of fact” and “unfairness” as grounds of review. However, we doubt if there is a real distinction. The decision turned, not on issues of fault or lack of fault on either side; it was sufficient that “objectively” there was unfairness. On analysis, the “unfairness” arose from the combination of five factors: i) An erroneous impression created by a mistake as to, or ignorance of, a relevant fact (the availability of reliable evidence to support her case); ii) The fact was “established”, in the sense that, if attention had been drawn to the point, the correct position could have been shown by objective and uncontentious evidence; iii) The claimant could not fairly be held responsible for the error; iv) Although there was no duty on the Board itself, or the police, to do the claimant's work of proving her case, all the participants had a shared interest in co-operating to achieve the correct result; v) The mistaken impression played a material part in the reasoning ………………….. 66. In our view, the time has now come to accept that a mistake of fact giving rise to unfairness is a separate head of challenge in an appeal on a point of law, at least in those statutory contexts where the parties share an interest in co-operating to achieve the correct result. Asylum law is undoubtedly such an area. Without seeking to lay down a precise code, the ordinary requirements for a finding of unfairness are apparent from the above analysis of CICB. First, there must have been a mistake as to an existing fact, including a mistake as to the availability of evidence on a particular matter. Secondly, the fact or evidence must have been “established”, in the sense that it was uncontentious and objectively verifiable. Thirdly, the appellant (or his advisers) must not been have been responsible for the mistake. Fourthly, the mistake must have played a material (not necessarily decisive) part in the Tribunal's reasoning.” “The taking into account of a mistaken fact can just as easily be absorbed into a traditional legal ground of review by referring to the taking into account of an irrelevant consideration or the failure to provide reasons that are adequate or intelligible or the failure to base the decision upon any evidence.” (para 5/-094).[23]The principles established in E v. Secretary of State for the Home Department are, in part derived from (E v. Secretary of State at paragraphs 58 and 59), and have been applied to planning cases including R (on the application of Patel) v. Secretary of State for Communities and Local Government [2016] EWHC 3354 (Admin) at paragraph 22.

Ground 1

[24]The Claimant and the Second Defendant are agreed that the inspector erred when at paragraph 12 of the decision letter he referred to ‘headroom’ of 294, being the excess of housing land supply over the requirement. The error arose because vacant units returning to use were deducted from the land supply requirement but included in the supply. At paragraph 12 the inspector calculated the requirement by taking an annual figure of 687, multiplying by five, and then adding the 20% buffer. The 294 ‘headroom’ is the difference between the inspector’s figure for the requirement (4,122) and the supply (from the Monitoring Report) of 4,416. In making that concession the Second Defendant places emphasis on the fact that the inspector, at paragraph 12 of the decision letter, states that housing annual target could be reduced to 687 (the figure omitting the allowance for vacant units returning back into use). The Claimant’s Submissions[25]Mr Straker QC emphasised that this ground of claim was based upon section 288(1)(b)(i) of the TCPA 1990, namely that the action of the Secretary of State was not within the powers of the Act. He submitted that by making the error, in relation to the housing land supply figures, the inspector had either taken into account an immaterial consideration or made a mistake of fact. He further submitted that the error played a material part in the inspector’s reasoning. The Second Defendant’s Submissions[26]Mr Lockhart-Mummery QC submitted that whether the ground of claim relied upon was categorised as taking into account an immaterial consideration or a mistake of fact giving rise to unfairness, the essential question to be considered is whether the error played a material (not necessarily decisive) part in the inspector’s reasoning.[27]Mr Lockhart-Mummery QC submitted that, the overriding principle to be derived from E v. Secretary of State for the Home Department is that decision should not stand if a mistake of fact gives rise to unfairness. He submitted that there was no unfairness as: i) The key reason for the decision was qualitative. The proposal would result in the loss of one unit of housing in a borough with approximately 87,000 housing units. ii) The decision of planning inspector relates to a finite dispute not to the exercise of a continuing responsibility as referred to in paragraph 43 in E v. Secretary of State for the Home Department. It is a ‘one off’ decision. iii) The draft local plan review policy CH1 does not seek to resist the loss of residential units through amalgamation when such amalgamation will result in the net loss of one unit only. iv) There is no claim by the Claimant that the decision is causing prejudice to them in determining current pending planning applications.[28]Mr Lockhart-Mummery QC further submitted that the dominant reason for the inspector’s decision, as expressed at paragraphs 17-19 of the decision letter, is that the proposal would result in the loss of one unit which is insignificant. He submitted that the only conceivable part of the inspector’s conclusions to which the error could be relevant is paragraph 17, where the inspector stated that the Council is likely to meet and exceed its 5 year housing land supply requirements. He also submitted that the final planning judgment (at paragraph 19 of the decision letter) is wholly independent from the alleged numerical error. Conclusion[29]There is no dispute between the Claimant and the Second Defendant that, in deducting vacant units from the housing land requirement, the inspector made a mistake of fact, and that the first three of the four criteria identified by Carnwath LJ in E v. Secretary of State for the Home Department are satisfied. In my judgment, whether categorised as taking into account an immaterial consideration or as a mistake of fact giving rise to unfairness, the dispute turns on whether the mistake played a material (not necessarily decisive) part in the inspector’s reasoning. The determination of that issue turns on the wording of the decision letter itself and raises no question of general principle or of general application.[30]Decision letters are to be construed in a reasonably flexible way. They are not to be construed as if they were a statute or contract.[31]At paragraph 14 of the decision letter the inspector described the extent of over supply as ‘significant’. In my judgment that finding was based upon the inspector’s erroneous conclusion, at paragraph 12 of the decision letter, that there would be headroom of 294 units.[32]When considering the inspector’s overall balance and conclusions at paragraphs 17 to 19 of the decision letter it is important to bear in mind the main issue which he had identified was the effect of the development upon the supply and choice of housing within Kensington and Chelsea.[33]The third sentence of paragraph 17 of the decision letter, in which the inspector states “The loss of 1 residential unit would not make a significant impact upon housing supply” must be read in context. The immediately preceding sentence reads “From the available information it appears at this time that the Council is likely to meet and exceed its 5 year housing supply requirements”. That conclusion is based upon the earlier analysis that there is ‘headroom’ of 294 units and that the extent of over supply is significant.[34]The issue to be determined is not whether the mistake played a decisive part in the inspector’s reasoning but whether it played a material part. In my judgment it is clear that the mistake played a material part in the inspector’s reasoning and decision. The mistake went to the extent of over supply which the inspector held to be significant.[35]In my judgment the error did lead to unfairness, as it caused the inspector to find that the extent of over supply was significant.[36]For those reasons I find that the ground of challenge is made out.

Discretion

[37]Mr Lockhart-Mummery QC submitted that the court has a wide discretion not limited to the issue identified in Simplex G.E. Holdings v. Secretary of State for the Environment (1989) 57 P & CR 306 (at pages 327 and 329). He placed particular emphasis on the fact that this decision is a ‘one off’ decision, and that his clients wish to be able to create and live in a family home.[38]Mr Straker QC submitted that, when considering the exercise of the court’s discretion regard should be had to the fact that, on 22nd February 2017, after the date of the decision letter, it has been discovered that there is an error in the calculation of the five year housing land supply figure in chapter 10 of the Claimant’s 2015 Monitoring Report, and that the supply of deliverable sites for the period 2015 to 2020 is 3,670, not 4,416 as stated in the 2015 Authority Monitoring Report. If the supply figure is 3,670 it is insufficient to meet the requirement, of 4,398.[39]Mr Lockhart-Mummery QC submitted that the mistake in the Monitoring Report relied upon by the Claimant is irrelevant.[40]Although the mistake in the Monitoring Report is relevant to the exercise of discretion, I accept the substance of Mr Lockhart-Mummery QC’s submission that, given the nature of the mistake and that it was discovered after the inspector had made his decision, it should have little bearing on the exercise of the court’s discretion.[41]The decision can still stand if the court is of the view that inspector would have reached the same conclusion if the error had not been made. For the reasons I have given the error was material. I cannot say that the decision would have been the same if the error had not been made, and therefore I do not exercise my discretion not to quash.

Conclusion

[42]For the reasons I have given I allow the application and quash the Secretary of State’s decision.

Cited in 1 later judgment