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Issue 55 – July 2008

Contents

Cases
Statutory Instruments

Features
Articles

News

Events
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Cases

1. Halifax plc and another v Curry Popeck and another

Citation: [2008] All ER (D) 281 (Jun)
Hearing date: 20 June 2008
Court: Chancery Division
Judge: Norris J
Relevant legislation: Land Registration Act 2002, sections 28, 29(1)
Summary: Land registration – Charge – Transfer

The proceedings arose out of mortgage fraud committed by two individuals, TW and JW, with the assistance of an apparently incompetent or fraudulent conveyancing clerk. The fraud consisted of various transactions in which a building society or bank advanced money to a borrower. In each case, the lender did so in the belief that repayment of the loan would be secured on a residential property worth comfortably more than the amount of the loan. In each case, the lender commissioned a valuation of the property put forward as security. That was usually represented by the borrower to be a property the borrower was proposing to buy with the assistance of the loan. In some cases, the borrower represented that he already owned the property, but it was subject to a mortgage he wished to redeem with the assistance of the new loan. For the lender to advance the money to a borrower, the lender would need to be satisfied that the borrower would have good title to the property that was the subject of the valuation and would form the security for repayment of the loan. Proceedings were brought by the lenders against the fraudsters and others involved in the transactions (see [2007] All ER (D) 425 (Oct)). The instant case concerned two lenders, Halifax and Bank of Scotland, which had since been merged into a new entity, Bank of Scotland plc. Their respective claims remained relevant due to the fact that the fund representing the sale of the property was insufficient to satisfy the claims, and each wished to pursue firms of solicitors for any shortfall. The potential liability of the different firms involved thus turned on the respective claims of the two banks. It was accepted that the claim of Halifax plc had priority in time; the Bank of Scotland relied upon the purported registration of a transfer from TW and JW to JW (under an alias), as constituting a transfer for value for the purposes of section 29(1) of the Land Registration Act 2002. The Inland Revenue questioned whether the transfer had been for value. It was told by the solicitors acting that the transaction had been for the value of £200,000, and stamp duty was paid accordingly. The Bank of Scotland contended that there were only three interpretations of the transactions: a transfer for nil consideration, a transfer for nominal consideration, or a transfer for real consideration.

The court ruled:

On the facts, the Halifax charge had priority. The correct interpretation of the transaction upon which the Bank of Scotland relied was not that it was a transfer for consideration, but rather one in pursuance of fraud, in which consideration was meaningless. It did not reflect a genuine sale. The burden was on the Bank of Scotland to show that it was a transfer for consideration; on the facts, it failed to discharge that burden.

Halifax's charge would continue to have priority.

Case annotations in other services: Halifax plc and another v Curry Popeck and another [2008] All ER (D) 281 (Jun); [2007] All ER (D) 425 (Oct)
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2. Bradbury Investments Ltd v Hicklane Properties Ltd

Citation: [2008] EWCA Civ 691
Hearing date: 19 June 2008
Court: Court of Appeal, Civil Division
Judges: Mummery, Moore-Bick and Toulson LJJ
Summary: Landlord and tenant – Lease – Rectification

A 30-year lease of premises was granted by Z, the freeholder, to the claimant tenant. Clause 20.2 of the lease conferred on the tenant a right of pre-emption of the freehold reversion as detailed in schedule 4 to the lease. The freehold premises subject to the lease was being acquired under the pre-emption, and the price to be paid was the “open market value” of the freehold. Paragraph 1.2 of schedule 4 provided “[…] the best price at which the sale of the freehold interest in the Premises [...] would have been completed unconditionally for cash consideration by private treaty at the date of the landlord's offer notice with vacant possession [emphasis added] on completion of the sale assuming [the assumptions are not material to this appeal] […]“. Z gave the claimant a notice of his intention to sell the freehold reversion subject to the lease. The claimant served a counter-notice exercising the right of pre-emption. The claimant subsequently offered to buy the freehold from Z for £275,000; however, the defendant purchased the reversion of the property from Z and agreed to be bound by his offer notice under the pre-emption provisions. The transfer to the defendant was duly made. The claimant made an offer to the defendant for the freehold reversion, which was rejected. Since the parties were unable to agree on a price, an independent valuer was appointed. The independent valuer concluded that paragraph 1.2 meant that the open market value was “with vacant possession” and that he proposed to value it accordingly. The claimant commenced rectification proceedings on the basis that the valuation provisions in schedule 4 failed to record correctly the agreement reached between the original contracting parties. The judge concluded that the legal requirements for rectification were fulfilled, since both parties thought they had been, in substance, talking about the same thing. He therefore found that the words “with vacant possession” in the lease did not correctly reflect the common intention of the parties that the open market value of the freehold interest was to be ascertained subject to the lease. Accordingly, the judge ordered the lease to be rectified by omitting the words “with vacant possession” and including consequential words to make the position plain.

The defendant appealed against that decision. It submitted that the case for rectification had not been made out on the evidence; that it was insufficient to show that the words “with vacant possession” did not accord with the common intention of the parties; and that the judge had ordered rectification on an impermissible selective basis.

The appeal would be dismissed.

The agreement between Z and the claimant, that the open market value of the freehold was to have regard to the continued existence of the lease, had not been correctly recorded in the lease. The rectification order and the judge's conclusion on whether the words “with vacant possession” in paragraph 1.2 reflected what had been agreed and intended by the parties to the lease made commercial sense. Far from there being any indication in the evidence that the parties had agreed or intended there to be a valuation formula based on an hypothetical assumed vacant possession valuation of the premises, the oral evidence, the written evidence and the inherent probabilities in the situation were clearly against any such agreement or common intention. While the parties had not used the same words to explain their respective perceptions, they had been in substance saying the same thing – the valuation of the freehold was subject to the lease. If paragraph 1.2 had not been rectified, the parties and their successors would be bound by a different bargain than the one they made. There was nothing to indicate that paragraph 1.2 failed in any other respect to reflect upon what had been agreed and intended by the parties to the lease. The only issue for the judge was on the words “with vacant possession” and their effect on the construction of the paragraph. He rightly decided that those words were there by mistake and should be removed by rectification.

Case annotations in other services: Bradbury Investments Ltd v Hicklane Properties Ltd [2008] All ER (D) 248 (Jun)
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3. Chilli Developments Ltd v Commission of the New Towns and another

Citation: [2008] EWHC 1310 (QB)
Hearing date: 18 June 2008
Court: Queen's Bench Division
Judge: Jack J
Summary: Contract – Enforceability – Lock-out agreement

In June 2003, the claimant was incorporated as a special purpose vehicle to undertake development on land near an enclosed area of water known as “Middlehaven”. That area was part of the history of Teesside. With the claimant's special purpose in mind, three of its representatives entered into negotiations with (i) English Partnerships (EP), a combination of the first defendant, the Commission of the New Towns, and a body called the Urban Regeneration Agency; and (ii) the second defendant Tees Valley Regeneration Ltd (TVR), which had been formed to encourage and coordinate regeneration in the area in question. The negotiations were terminated in July 2005. By that point, the claimant and EP entered into two lock-out agreements. In both agreements, EP agreed that it would not, inter alia, “invite tenders for or enter into negotiations for the sale, development, letting, or charging of the property” (the exclusivity clause) in respect of the land sought to be developed by the claimant. By clause 4.1.2, which was inserted into both agreements, the parties agreed that “each owes the other a duty of good faith”. The first agreement was dated 26 October 2004 and ran until 21 December 2004. The second agreement extended the first into 2005. By reference to the various emails and other documentation that passed between the parties during the period of negotiations and subsequent events, the claimant commenced proceedings claiming damages for, inter alia, EP's breaches of the agreements and against TVR for having induced those breaches. The defendants denied any wrongdoing. An issue arose as to whether there was any basis in respect of the claimant's assertion that EP and TVR had together gone through the motions of negotiating and let the claimant incur considerable expense when, in reality, the resultant agreements were a sham.

The court ruled:

In the instant case, not only had the documentary evidence provided no support for the claimant's assertion, the assertion should not have been made in the first instance. Despite the claimant's doubts about EP and TVR, both those bodies had shown goodwill towards the claimant. That was evident, for instance, from EP's willingness to extend the claimant's deadlines into 2005, by virtue of agreeing to a second lock-out agreement. Further, there had been a genuine willingness on the part of EP to enter into lock-out agreements with the claimant and no one else. EP's preferred developer had clearly been the claimant, which was supported by the insertion of the “exclusivity” clause into both agreements. Accordingly, judgment would be entered in the defendant's favour.

Walford v Miles [1992] 1 All ER 453 considered; Petromac Inc v Petroleo Brasileiro SA [2006] 1 Lloyd's Rep 121 considered.

Case annotations in other services: Chilli Developments Ltd v Commission of the New Towns and another [2008] All ER (D) 220 (Jun); Walford v Miles [1992] 1 All ER 453; Petromac Inc v Petroleo Brasileiro SA [2006] 1 Lloyd's Rep 121
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4. Crest Nicholson (Eastern) Ltd v Western and another

Citation: [2008] EWHC 1325 (TCC)
Hearing date: 16 June 2008
Court: Queen's Bench Division, Technology and Construction Court
Judge: Akenhead J
Summary: Sale of land – House in course of erection – Warranty and insurance as to defects

The claimant built a dwelling that was purchased by the defendants while it was in the course of construction. Clause 13 of the purchase agreement provided that the claimant undertook to provide “the form of Buildmark Scheme as prescribed by the National House-Building Council” (NHBC) and that its liability for defects would be governed in all respects by the terms of that agreement or scheme. In a document entitled “NHBC Buildmark: Your warranty and insurance cover – Applicable to newly built or converted properties registered with NHBC from 1 October 2005”, there was a section on “Complaints and disputes procedures” in which, after a reference to NHBC's resolution service, there was a description of different ways of resolving disputes, including arbitration. The reader was directed to the Chartered Institute of Arbitrators for further details on arbitration. The defendants purported to refer disputes concerning their home to an arbitrator, and, after receiving submissions from both sides, he concluded that he had jurisdiction. The claimant brought proceedings.

It argued, inter alia, that “the form of Buildmark scheme as prescribed by the National House-Building Council” in clause 13 of the purchase agreement referred to the warranty and cover document, that there was no arbitration agreement in that document, and thus that the arbitrator had no jurisdiction. The defendants contended that the reference in clause 13 was to the overall scheme promulgated by the NHBC such that the warranty and cover document had to be read with the NHBC claims charter and its rules for builders and developers registered with NHBC in which there were further references to arbitration.

An issue also arose as to whether the court had jurisdiction to award the claimant its costs of the arbitration if it was found to be abortive or invalid.

The court ruled:

(1) The reference to the “form of Buildmark Scheme” did not relate to some generic overall scheme or arrangement set up and operated by NHBC; it related to the insurance policy to be provided, and the complaints and disputes procedures therein did not contain an arbitration agreement.

The wording of clause 13 of the sale agreement suggested overwhelmingly that a document would be provided that would define and describe the Buildmark scheme, and the only document that readily fell into that category was the warranty and cover document. There was no intellectually proper ground upon which it could be argued that the rules were intended in some way to govern the relationship between builder or developer and the house owner; they simply and solely governed the relationship between the builder or developer and NHBC. The fact that the rules required the builder or developer in some respects to do things for the benefit of the house owner did not mean that it could ever have been intended that the rules should govern their relationship. Moreover, one could not read the complaints and disputes procedure in the Charter, which was clearly intended to govern the relationship between NHBC and the house owner, as containing an arbitration agreement between the owner, and the builder or developer.

Accordingly, there would be a declaration that the arbitrator had no jurisdiction to resolve the disputes between the parties.

(2) The court had no jurisdiction to make any order in relation to the costs incurred by the claimant in the abortive or invalid arbitration proceedings.

If the purported arbitration proceedings were invalid, the court could only have power to make an order in relation to those costs if there was some clear statutory power, but there was not.

Case annotations in other services: Crest Nicholson (Eastern) Ltd v Western and another [2008] All ER (D) 249 (Jun)
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5. Sutcliffe v Lloyd and another

Citation: [2008] EWHC 1329 (Ch)
Hearing date: 16 June 2008
Court: Chancery Division
Judge: Norris J
Summary: Equity – Equitable remedies – Enforcement of rights

The first defendant and his cohabitee, WL, owned N Ltd (the company). The company obtained options to purchase the sites of two former petrol stations for development (the D site and the W site). The claimant, an experienced developer and project manager, agreed to invest in and lend his expertise to the venture. In respect of the W site, the proposed mechanism of the venture had been equal ownership through the company. That understanding was subsequently modified, with the effect that in respect of the W site, the company would, upon exercise of the option to purchase, transfer it to a new company, the second defendant, to be owned and run by the first defendant and WL. That modification was reflected in a written shareholders' agreement dated 15 January 2002, setting out the terms upon which the company was to operate. By that agreement, the proposed venture was changed to a building or other contract by which the claimant would secure an interest in the profit of the development. In April 2002, the company transferred the option to purchase the W site to the second defendant, which exercised the option. Throughout 2002, the claimant took numerous steps in aid of the development. In March 2003, relations between the parties broke down. The claimant commenced proceedings seeking, inter alia, relief pursuant to the doctrine of proprietary estoppel in relation to the W site. The judge found in favour of the claimant, concluding that an equity had arisen in his favour that needed to be satisfied by the first defendant personally ([2007] All ER (D) 364 (Feb)).

The defendants appealed. The appeal was decided in favour of the claimant ([2007] All ER (D) 364 (Feb)). At a subsequent hearing, the parties sought determination of, inter alia, how the equity in the claimant's favour should be satisfied and by whom.

The court ruled:

The task was to identify the minimum equity to do justice. Relevant factors included the nature of the expectation created by the defendant, the detriment suffered by the claimant in reliance on those representations, the degree to which the defendant's conduct could properly be said to be unconscionable, and the need for some proportionality between the claimant's expectation and his or her detriment.

On the evidence, the minimum equity to do justice was that the claimant should receive the sum of £25,000, that sum to be supported by the personal guarantee of the first defendant. The claimant's only expectation had been to participate in any profit yielded by the development. The defendant had deprived him of that expectation and relieved him of that obligation. Any assessment of what was “just” to award him had to take that into account. Since he did not have to build at cost, the detriment that he suffered had been to devote his time and skills and deploy his knowledge and connection in promoting the company's development, rather than his own individual project. Any equity had to be proportionate to that detriment. It would be just to require the claimant to look first to the company, which had been the expected source of his profit share. In the circumstances, the sensible course was to assess in a very broad way the detriment to the claimant and then charge that as an expense in the company's accounts. That approach would not undervalue the claimant's contributions so as to render relief on that basis a travesty.

Cobbe v Yeoman's Row Management Ltd [2006] All ER (D) 01 (Aug) considered; Sutcliffe v Lloyd and another [2007] All ER (D) 364 (Feb) applied.

Case annotations in other services: Sutcliffe v Lloyd and another [2008] All ER (D) 188 (Jun); Cobbe v Yeoman's Row Management Ltd [2006] All ER (D) 01 (Aug); Sutcliffe v Lloyd and another [2007] All ER (D) 364 (Feb)
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6. Jones v London Borough of Merton

Citation: [2008] EWCA Civ 660
Hearing date: 16 June 2008
Court: Court of Appeal, Civil Division
Judges: Arden, Wall and Wilson LJJ
Relevant legislation: Housing Act 1985 part IV
Summary: Housing – Local authority houses – Possession

The defendant lived in Merton and was the tenant of a flat under a secure tenancy within part IV of the Housing Act 1985. The local authority was his landlord. On 11 February 2005, by virtue of an order for possession made against him on 14 January 2005, he became a tolerated trespasser in the flat. That order had required him to pay, before 11 February 2005, arrears of £388.11, which he had failed to pay. On 23 June 2005, two masked men broke into the defendant's flat and one of them shot him in the leg. The defendant immediately decided that he could never return to the flat. Shortly thereafter, the defendant made clear to the authority that he had decided not to return to occupy the flat. On 3 October 2005, there was a meeting between the defendant, his father and an officer of the authority. The defendant and his father made clear that they wanted him to be transferred to accommodation outside Merton. The officer pointed out that arrears on the “rent” account had risen to £1,231.76 and that a transfer was out of the question until the arrears were paid. The defendant's father paid the arrears. That led the authority to recommend that the defendant be subject to a “management transfer”. On 21 October 2005, the authority's housing needs officer told the defendant that, even though he was refusing to live at the flat, he remained liable for the “rent”. The officer also advised him not to end his “tenancy” until his re-housing arrangements had been finalised. By then, arrears were again accruing, and in November 2005, the authority wrote two letters to the defendant in which they pressed for payment of arrears of “rent”. Also in November 2005, the defendant caused a friend to visit the flat, collect his bed, television, computer and stereo and take them to the house of his grandmother, where they were stored. On 5 June 2006, the defendant was granted a tenancy of a flat in Hammersmith, and on 3 July 2006, that local authority informed the authority that it had done so. In the interim, the authority had written to the defendant stating that it intended to seek possession of the flat on grounds that he was in arrears of rent. On 25 May 2006, the authority issued proceedings against the defendant. The authority's particulars of claim were to the effect that the defendant was a secure tenant who was in arrears of rent due under the tenancy agreement. The authority sought an order for possession and a money judgment for arrears of rent until the date of the order and for mesne profits. The defendant submitted that the authority accepted his surrender of the tenancy at the meeting on 3 October 2005, and thereafter he had not been in possession of the flat. The claim was due to be heard in November 2006, but once counsel for the defendant recognised that it was significant that the defendant had, in fact, been a tolerated trespasser as a result of the order on 14 January 2005, the hearing was adjourned. Following a hearing in December 2006, the judge held that the principles by which a tenant effected the surrender of his tenancy also governed the circumstances in which a tolerated trespasser discharged his obligation to pay mesne profits to his former landlord. That led the judge to conclude, because the surrender of a tenancy required an unequivocal acceptance on the part of the landlord, that the tenancy should end; and because the authority had at no material time accepted that the liability of the defendant to pay mesne profits should end, that the defendant was liable to the authority for the arrears. The judge accordingly ordered the defendant to pay to the authority mesne profits referable to the flat for the period from 3 October 2005 to 25 September 2006. The defendant appealed against the order.

The issue arose as to whether a former secure tenant of a dwelling-house, who had become a “tolerated trespasser” and decided to cease to occupy it, was under a liability to pay mesne profits to his former landlord in respect of the dwelling-house when he gave up possession of it or whether liability continued until, additionally, his former landlord was notified that he was no longer in possession of it. The further issue arose as to when the defendant had intended to give up possession of the flat.

The local authority submitted that it was strongly in the public interest that the tolerated trespasser be required in law to give notice that his trespass was at an end. It further submitted that the tolerated trespasser should continue to be liable for mesne profits until his former landlord was notified thereof.

The appeal would be allowed.

(1) The judge's premise that the principles by which a tenant effected the surrender of his tenancy also governed the circumstances in which a tolerated trespasser secured discharge of his obligation to pay mesne profits to his former landlord was erroneous.

(2) The authority's submission that the court could graft on to the law a requirement that the liability of a tolerated trespasser for mesne profits should continue until his giving not only of possession but also of notification was invalid.

(3) In the circumstances of the case, the defendant intended to remain in possession of the flat until November 2005 when he removed his possessions from the flat. Accordingly, the judge's order that the defendant should pay £3,200.77 to the local authority would be set aside. In lieu, the defendant would be ordered to pay mesne profits to the local authority for the period from 10 October 2005 until 15 November 2005; and that such amounted to £343.36.

R (on the application of JA Pye Ltd) v Oxford City Council [2002] All ER (D) 458 (Jul) applied.

Case annotations in other services: Jones v London Borough of Merton [2008] All ER (D) 185 (Jun); R (on the application of JA Pye Ltd) v Oxford City Council [2002] All ER (D) 458 (Jul)
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7. Crown Estate Commissioners v Roberts and another

Citation: [2008] EWHC 1302 (Ch)
Hearing date: 13 June 2008
Court: Chancery Division
Judge: Lewison J
Relevant legislation: Act of Union 1535; Laws in Wales Act 1542
Summary: Land – Interest in land – Rights in respect of land

In July 2000, the first defendant was the successful purchaser of the Lordship Marcher of St David's, commonly called the Manor of the City and Suburbs of St David's, consisting of most of the ancient city of St David's together with tracts of land between the city and the sea. Title was transferred to the second defendant company, owned by the first defendant. In 2002, the Pembrokeshire County Council and the Pembrokeshire Coast National Park Authority applied to register leasehold title to a large part of the foreshore of the Pembrokeshire coastline. The applications were made on the basis that the land was comprised in leases granted by the claimant and formed part of the Crown demesne lands as a result of a presumption that the foreshore and the narrow sea belonged to the Crown. The defendants objected to the registration and claimed to be entitled to exercise royal prerogative rights based on ancient prerogative powers exercised by the Lords Marcher in Wales. Specifically, the defendants claimed a right in respect of, inter alia, wreck de mer. The claimant sought declarations as to its title on the basis that the foreshore was part of the Crown demesne or allodial land or, in the alternative, the Crown had acquired title to the foreshore by adverse possession. Subsequently, the defendants conceded that the Crown had acquired title by adverse possession but maintained their entitlement to exercise rights over the land.

The claimant contended, inter alia, that the status of Lord Marcher was essentially a jurisdictional franchise that had been abolished.

The court ruled:

Pursuant to the Charter granted by Henry I in 1115, subsequent charters, the Act of Union 1535 and the Laws in Wales Act 1542, any privileges that had belonged to the bishops in their capacity as Lords Marcher or as tenants in capite, which the defendants had claimed to succeed, had been abolished. The defendants, however, had established that the Lord of the Manor of the City and Suburbs of St David's had a franchise entitling him to a moiety of wreck, that had not been claimed in some supra-capacity as Lord Marcher, that had survived to be conveyed to them in June 2000. The defendants failed to establish any further rights over the foreshore or seabed.

Case annotations in other services: Crown Estate Commissioners v Roberts and another [2008] All ER (D) 175 (Jun)
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8. R (on the application of Latimer and another) v Chief Clerk to Bury Justices and another

Citation: [2008] All ER (D) 169 (Jun)
Hearing date: 13 June 2008
Court: Queen's Bench Division, Administrative Court
Judge: Simon J
Relevant legislation: Town and Country Planning Act 1990, sections 215, 217
Summary: Town and country planning – Untidy land notice – Appeal against notice

In November 2006, the local planning authority served the claimants, who were joint owners of property, with an “Untidy Land Notice” (the notice), pursuant to section 215 of the Town and Country Planning Act 1990. The claimants decided to undertake the works required of them by the notice; however, they also decided that they wished to appeal against the notice under section 217 of the 1990 Act. Accordingly, they sent an appeal letter by first class post to the second defendant magistrates' court. When the claimants inquired with the court whether the appeal letter had been received, the response from the court was in the negative. By July 2007, it was common ground between the parties that the letter had been lost, either in the post or somewhere within the court's premises. Solicitors acting on behalf of the claimants then made various telephone calls to the court to discover, inter alia, whether a date for an appeal hearing could be set, despite the absence of an appeal letter. In the event, the claimants were advised that a complaint for the purposes of section 217 of the 1990 Act could be drafted, and on that basis, a date for an appeal hearing would be set. Before the matter came to court, the authority issued a summons on the claimants alleging their non-compliance with the notice. At the appeal hearing, the court clerk advised the justices that there was no extant appeal. The justices agreed with that advice and, accordingly, refused to proceed with the hearing. The claimants applied for judicial review.

The issue involved whether the court clerk and justices erred in deciding that there was no extant appeal under section 217 of the 1990 Act, particularly when it was agreed that an appeal letter had been sent.

The application would be allowed.

When it was common ground that an appeal letter had been sent to the magistrates' court, but that the court's position was that it had not received it, the reasonable inference to be drawn would be that the posted letter had been received.

That was a presumption not of law, but based on the application of common sense.

In the instant case, the court clerk and the justices erred in deciding that there was no extant appeal. The clerk had not personally investigated the matter. He should have, for instance, asked himself whether the letter had been lost within the court's premises. The justices simply accepted the clerk's advice, which was a highly imperfect basis upon which to draw conclusions. Further, without any material capable of rebutting the reasonable inference that had to be drawn, it followed that an appeal hearing was to be held.

Accordingly, the justices' decision would be quashed. In addition, the matter would be remitted, with a different court clerk, for fresh consideration.

Case annotations in other services: R (on the application of Latimer and another) v Chief Clerk to Bury Justices and another [2008] All ER (D) 169 (Jun)
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9. Samuel Smith Old Brewery (Tadcaster) v Secretary of State for Communities and Local Government and others

Citation: [2008] EWHC 1313 (Admin)
Hearing date: 13 June 2008
Court: Queen's Bench Division, Administrative Court
Judge: Cranston J
Relevant legislation: Town and Country Planning Act 1990, sections 77, 288
Summary: Town and country planning – Permission for development – Material consideration

The third defendant, UK Coal Mining Ltd, was the owner of a defunct industrial site in the area of the second defendant local planning authority. In 2005, it made a planning application for the retention and reuse of certain buildings on that site, in particular four structures, namely an amenity block, a workshop, stores and a covered stockyard; landscaping; infrastructure; and rail sidings. The application was subsequently called in by the first Secretary of State, under section 77 of the Town and Country Planning Act 1990, specifically on the ground that it might “conflict with national policies on important matters”. An inspector appointed by the Secretary of State recommended the grant of planning permission subject to a number of conditions. The Secretary of State agreed with the inspector, stating, although the proposal was not in accordance with the relevant development plan as a whole and government policy relating to the location of employment uses and accessibility, that to grant planning permission with the conditions suggested would be appropriate for the purposes of ensuring sustainable development. She concluded, in particular, that “the proposal gains support from reusing a valuable asset [...], and there are significant benefits in bringing the site back into use for industrial or distribution uses that can make use of the rail connections and, therefore, foster the movement of goods by more sustainable means [...] the risk of harm caused by leaving unoccupied buildings in the open countryside would be sufficiently mitigated by the imposition of condition 7, requiring their removal in the event that they were not brought into use within five years of the date of granting planning permission.” The claimant objected to that conclusion, asserting, instead of putting the site to an alternative use, that it should be demolished. It consequently applied under section 288 of the 1990 Act, seeking an order quashing the Secretary of State's decision.

The claimant contended that the Secretary of State's decision to grant planning permission was flawed on three grounds. First, she completely ignored, or alternatively, she failed to consider properly, the claimant's evidence that it would not be financially viable to convert the structures in question. Second, there was no evidence of any demand for the use of the buildings, notwithstanding the fact that it was accepted that their availability was widely known by property consultants in the area. Third, condition 7 was manifestly deficient in that it failed to comply with the Secretary of State's own policy on the imposition of conditions and to have addressed the claimant's legitimate planning concerns.

The application would be dismissed.

In the circumstances, the Secretary of State had not erred in any of the respects suggested by the claimants. The Secretary of State neither completely ignored the claimant's evidence on financial viability, nor failed to consider that issue. She had, in addition, considered the issue of “need” or “demand” for the site to be put to alternative use. That could be gleaned from her conclusions about the benefits of bringing the site back into use for industrial or distribution uses or applying the principles of sustainable development to the site. As for the complaint about condition 7, the Secretary of State had been entitled to conclude, on the basis of all the available material, including the relevant policy on the imposition of conditions, that that condition was both reasonable and necessary, that it would achieve its stated purpose and that the risk of harm caused by leaving unoccupied buildings in the open countryside would be sufficiently mitigated.

Accordingly, the Secretary of State's decision to grant conditional planning permission would stand.

Case annotations in other services: Samuel Smith Old Brewery (Tadcaster) v Secretary of State for Communities and Local Government and others [2008] All ER (D) 162 (Jun)
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