Sustainable development

December 5th, 2016 by James Goudie KC in Planning and Environmental

In Trustees of the Barker Mill Estates v Test Valley Borough Council (2016) EWHC 3028 (Admin) Holgate J has said that the Judgment in Wychavon District Council v SoS for CLG (2016) EWHC 592 (Admin) had been wrongly decided.  That had stated that the NPPF contained a general presumption in favour of sustainable development.  However, said Holgate J, the only presumption in favour of sustainable development was, as stated in Cheshire East Borough Council v SoS for CLG (2016) EWHC 571 (Admin), that within the scope of paragraph 14 of the NPPF, which requires that Local Plans should meet “objectively assessed needs” unless either “… any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in the Framework taken as a whole; or specific policies in this Framework indicate development should be restricted”.

 

Housing benefit

December 5th, 2016 by James Goudie KC in Housing

Housing benefit is “a means tested benefit provided under section 130 of the Social Security Contributions and Benefits Act 1992 and subordinate regulations”. Its “purpose is to help claimants with their rental costs”. There is “a prescribed mechanism for determining in each case the appropriate maximum housing benefit”.

The two conjoined appeals in Birmingham City Council v SoS for Work and Pensions and Birmingham City Council v SA (2016) EWCA Civ 1211 about entitlement to housing benefit were concerned with the power of a housing authority such as the City Council to determine that the net eligible rent payable in respect of accommodation, and thus the amount of housing benefit payable in respect of that accommodation, be restricted. The City Council contended that the Upper Tribunal (Administrative Appeals Chamber) adopted an incorrect approach under Regulation 13(3) of the Housing Benefit Regulations 2006 (S.I. 2006/213) (“the 2006 regulations”), in the form substituted by paragraph 5 of Schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006 (S.I. 2006/217) (“the consequential provisions regulations 2006”), when considering, in the case of claimants in “exempt” accommodation, whether their rent was “unreasonably high by comparison with the rent payable in respect of suitable alternative accommodation elsewhere”. In particular, the City Council submitted that the Upper Tribunal erred in effectively applying, as criteria of comparability, the availability and amount of public funding which would have enabled the landlords in question to reduce the rents they charged.

When granting permission to appeal, Sales L.J. observed that the appeal raises this issue: whether, under Regulation 13(3)(b) it was “appropriate to take into account the degree of public subsidy received by the owner of the accommodation occupied and by the owner of any other accommodation said to be a suitable alternative; and in particular, how the [2006 Regulations] should be applied for the purposes of comparison in relation to accommodation owned by a charity, by a registered social landlord and by a private landlord”. A “registered social landlord” would include, for example, a housing association.

The Court of Appeal allowed the City Council’s appeals in both cases. There was, said Lindblom LJ, with whom Black and Beatson LJ agreed, a danger of overcomplication.  He said (para 30):-

“The concept whose meaning is in dispute in this appeal – the concept, in regulation 13(3)(b), of the rent payable for the claimant’s dwelling being “unreasonably high by comparison with the rent payable in respect of suitable alternative accommodation elsewhere” – envisages, I think, a relatively straightforward procedure which is neither unduly burdensome nor unduly complex. On its face, it requires a simple comparison between rents.”

Lindblom LJ continued:-

“40.    It seems to me therefore that the concept of a rent being “unreasonably” high in regulation 13(3) is that the rent is unreasonably high for the claimant to have to pay, rather than unreasonably high for a particular landlord to charge. An “unreasonably high” rent under regulation 13(3) will be a rent higher than the rent one could reasonably be expected to pay in what Evans L.J. in ex parte Gibson described as the “relevant active market in property of the relevant description, type or class” – the “ascertainable market rent”. I see no justification for reading into this concept artificial constraints on the relevant market in which that other accommodation exists, or on the market rent for such accommodation. If there is a “relevant active market” and an “ascertainable market rent” for suitable, alternative accommodation – supported by evidence of the range of rents being paid for accommodation of the appropriate type, occupied with the appropriate security of tenure, in the appropriate general location – the comparison between rents must be objective, realistic and complete.

  1. To manipulate the comparison of rents by excluding, for example, all but the levels of rent payable for suitable alternative accommodation which happens to be provided by a landlord in the private sector without the benefit of subsidy, or some other external source of funding, will render the exercise subjective, unrealistic and partial. It shifts the comparison from one between rental levels for accommodation of sufficiently similar type and tenure in the relevant area to one between rents only in one part of the market, and then, within that part of the market, to rents charged by landlords who happen to be funded in a particular way. This is to distort the market, and to produce a false and unreliable comparison. The same may be said of an approach that modifies the comparison of rents by making hypothetical adjustments for the individual circumstances of a particular landlord. Again, this is liable to produce a flawed comparison by reducing or eliminating real disparities between rents for relevant accommodation in the relevant market. Discovering the reasons why a particular landlord came to lose or to forego public funding, exploring the possibility of its being able to charge a lower rent if it were to operate in a different way, or speculating about its circumstances changing in the future, may not always be an impossible or even a difficult task. Such questions may not, in every case, require detailed scrutiny of a landlord’s accounts, or close investigation of the way it runs its business. Here, in the Upper Tribunal’s view, they did not. But they bring to the exercise of comparing rents under regulation 13(3)(b) a degree of artificiality which, in my view, is not merely unnecessary but also inappropriate.
  2. I think this understanding of regulation 13(3) sits well with the legislative intent. It recognizes the aim of protecting the public purse from excessive payments of housing benefit in cases where rents are, comparatively, “unreasonably high”. And it does not offend the purpose of protecting claimants from homelessness.
  3. In a case where a claimant was paying a rent that was, comparatively, “unreasonably high” – except where paragraph (4) applied and suitable alternative accommodation was not available to him – the authority would be able to reduce his eligible rent by an “appropriate” amount. Claimants within one of the special categories in paragraph (4), as SA and SS were, would be protected against any deduction in their eligible rent, in two ways: first, by the requirement that suitable “cheaper” alternative accommodation is, in fact, “available”; second, that it is reasonable to expect him to move from the accommodation he is in. In exercising the discretion in paragraph (3), the authority is not obliged to reduce the eligible rent by the full amount of the difference between the rent the claimant was paying for the accommodation he was in and the rent he would pay for suitable alternative accommodation elsewhere. The requirement is simply that, in judging what an “appropriate” reduction would be, it must have regard, in particular, to the cost of the suitable alternative accommodation. In Mehanne the House of Lords emphasized the breadth of the authority’s discretion (see paragraphs 8 to 13 in the speech of Lord Bingham, at p.544C to p.546C; and paragraphs 19 to 27 in the speech of Lord Hope of Craighead, at p.547B to p.549F). Relevant considerations could include any personal or financial circumstances of the claimant bearing on his “housing situation” (paragraph 13 in Lord Bingham’s speech).
  4. It follows, in my view, that the Upper Tribunal fell into error in the approach it took in the appeals of SA and SS. Its comparison of rental levels under regulation 13(3)(b) was not a true and full comparison between the rent payable by SA and SS for their accommodation in Roshni’s refuge and the rent payable for other accommodation of comparable type and tenure in the “relevant active market”. It effectively applied as criteria of comparability the availability and amount of public funding, or subsidy, which would enable the landlords in question to reduce the rents they charged. In undertaking the comparison, it adjusted upwards the real rent being charged by the only landlord whose accommodation it ultimately relied upon as comparable – “comparator 3” – to arrive at a range of hypothetical rents, on different assumptions of its own as to the percentage proportion of the landlord’s “accommodation costs” recouped from, respectively, subsidy and rent. This was not, in my view, an exercise consistent with the requirements of regulation 13(3).
  5. The Upper Tribunal was clearly anxious to reflect in its decision the fact that Roshni was a charity, providing – without the benefit of public funding – accommodation for women who had suffered domestic violence, and that, without subsidy, charities of this kind could not afford to operate refuges, leaving “victims of violence either homeless or at risk at the homes they wished to leave” (paragraph 33 of the interim decision and paragraph 3 of the final decision). It was aware of the very high demand for Roshni’s accommodation. It found that Roshni was meeting a need which “funded charities” were not able to meet or meet in full. And it was satisfied that Roshni had lost public funding as “the result of cutbacks and not of any failings on its part” (paragraph 35 of the interim decision and paragraph 13 of the final decision). All of these considerations it saw as relevant to the comparison of rents under regulation 13(3)(b). I do not think it was right to do so. Where concerns such as these go to the risk of vulnerable claimants finding themselves without accommodation suitable for them, the legislative scheme allows for them – in the discretion given to the authority under regulation 13(3), and in the provisions in regulation 13(4) and (9)(b). Where they go to the difficulties of private sector landlords – charities among them – providing accommodation in refuges without the advantage of public subsidy, the legislature has not identified them as relevant to the comparison of rents under regulation 13(3)(b). And in my view they do not bear on that exercise.”

 

Procedural Unfairness

December 2nd, 2016 by James Goudie KC in Planning and Environmental

SoS for CLG v Engbers [2016] EWCA Civ 1183 was a procedural unfairness challenge to a Planning Inspector’s decision following a Public Inquiry to dismiss an application for outline planning permission which had been refused by South Oxfordshire District Council.  Lewison LJ (with whom Hamblen and Henderson LJJ agreed) observed (para 3):-

“Leaving aside a determination by written representations, there are two procedures by which a planning inspector may determine an appeal: by hearing or by inquiry. A hearing is the less formal and more inquisitorial of the two. An inquiry is more formal and adversarial. Procedure at a public inquiry is regulated by the Town and Country Planning Appeals (Determination by Inspectors) (Inquiries Procedure) (England) Rules 2000 (“the Rules”).”

Lewison J set out the relevant rules for the purposes of the case, and continued (emphasis added):-

“5.       However, this is not a complete procedural code because the inspector is also required by the common law to conduct the inquiry in accordance with the principles of procedural fairness. One of the principal purposes of the Rules is to make the inquiry more focussed, so that the main protagonists (i.e. the appellant and the local planning authority) know what is in issue between them. At the same time, however, the ability of the public to participate in environmental decision making is of considerable importance, as recognised for instance by the Aarhus convention.”

Lewison LJ stated (para 6) that the leading case on procedural fairness in the context of planning inquiries is the decision of the Court of Appeal in Hopkins v SoS (2014) EWCA Civ 470, (2014) PTSR 1145, where Jackson LJ set out six relevant principles at para 62.  Principle (5) is in part that the Inspector will consider any significant issues raised by third parties, even if those issues are not in dispute between the main parties.  Principle (6) is that if a main party resiles from what had been common ground, the Inspector must give the other party a reasonable opportunity to deal with the new issue.

Lewison LJ in Engbers continued (emphasis added):-

“7.       The main debate in this appeal centres on principles (5) and (6). The mere fact that some aspect of the proposed development is not in issue between the developer and the local planning authority does not preclude the inspector from considering that aspect and to give it decisive weight, if it is raised by a third party. …”

“9.       The clear message … is that a developer cannot ignore the views of local residents, even if they are not supported (or are even contradicted) by the council. To hold otherwise would undermine the value of public participation in environmental decision making.”

At para 45, Lewison LJ said:-

“If a third party raises an issue which is at variance with the agreed stance of the appellant and the local planning authority, the inspector is in my judgment duty bound to consider it. Fairness to third parties demands no less. …”

He added (para 51):-

As I have said I do not consider that the fact that a particular matter is common ground between the developer and the local planning or highway authority debars the public from disagreeing. It may not be incumbent on an appellant to deal with every representation, but in the face of a clear consensus of opinion from local residents a developer takes a risk by failing to do so, …”

Lewison J also observed (para 12):-

“We were hampered to some extent in reconstructing the progress of events by the fact that some of the key documents were undated. I echo Jackson LJ’s observations in Hopkins at [15] that even in the specialist field of planning inquiries “people really should put dates on the documents which they send out”. It would be desirable for the Secretary of State or the Planning Inspectorate to incorporate that in clear written guidance.”

 

 

Main Work Requirement

December 2nd, 2016 by James Goudie KC in Decision making and Contracts

Case C-298/15, UAB “Borta”, in which Advocate General Sharpston gave her Opinion to the CJEU on 1 December 2016, concerns a tender specification for the award of a public works contract for constructing a quay at the port of Klaipėda (Lithuania). The specification in question contains provisions governing tenders submitted by joint-activity partners. These require each partner to perform a proportion of the contract equivalent to its contribution to establishing the partnership’s professional experience, at the level of the award of the public contract.

The Lithuanian Court asked whether EU law precluded a provision, such as Article 24(5) of the Lithuanian law on public procurement, referred to in the specification, which required that, in the case of public works contracts, the tenderer should itself carry out the “main work”, as identified by the contracting authority.

Advocate General Sharpston said:-

“43.    According to settled case-law, Articles 49 and 56 TFEU preclude any national measure which, even though it is applicable without discrimination on grounds of nationality, is liable to prohibit, impede or render less attractive the exercise by nationals of the European Union of the freedom of establishment and the freedom to provide services guaranteed by those provisions.

  1. As regards public contracts and the freedom of establishment and the freedom to provide services, the European Union is concerned to ensure the widest possible participation by tenderers in a call for tenders, even where directives on public procurement are not applicable.

That is in the interest of the contracting authority itself, which will thus have greater choice as to the most advantageous tender which is most suitable for its needs.

One of the principal functions of the principle of the equal treatment of tenderers and the corollary obligation of transparency is thus to ensure the free movement of services and the opening-up of undistorted competition in all the Member States.

  1. Subcontracting contributes to those objectives as it is likely to encourage small and medium-sized undertakings to get involved in the public contracts procurement market and therefore to increase the number of potential candidates for the award of public contracts.
  2. In the present case, a provision such as Article 24(5) of the Law on public procurement clearly limits the possibility for undertakings established in other Member States to exercise their rights under Articles 49 and 56 TFEU, in so far as it precludes them, if they tender for the contract, from either subcontracting all or part of ‘the main work’ as defined by the contracting authority or proposing their own services as subcontractors for that part of the contract. As the Commission correctly submits, Article 24(5) of the Law on public procurement therefore restricts the freedom to provide services and the freedom of establishment.
  3. However, such a restriction may be justified in so far as it pursues a legitimate objective in the public interest, and to the extent that it complies with the principle of proportionality in that it is suitable for securing the attainment of that objective and does not go beyond what is necessary in order to attain it.”

“49.   A contracting authority may legitimately seek to ensure that a public work contract will be effectively and properly carried out.

That applies in particular where the works in question are deemed necessary for safeguarding national security, which, according to Article 4(2) TEU, is among the essential State functions that the European Union must respect.

Thus, a tenderer may be required to produce evidence that it actually has available to it the resources of the entities or undertakings on which it relies, which it does not itself own, and which are necessary for the performance of the contract.

Accordingly, the contracting authority is entitled to prohibit the use of subcontractors whose capacities could not be verified during the examination of tenders and selection of the contractor for the performance of essential parts of the contract.

  1. However, the restriction on the freedom to provide services and freedom of establishment that Article 24(5) of the Law on public procurement involves does not appear proportionate to that objective.
  2. First, that restriction applies even where the contracting authority is in fact in a position to verify the technical and economic capacity of subcontractors during the contract award procedure. An alternative to that restriction would (for example) have been to require the main contractor to identify subcontractors when submitting his tender and to demonstrate both that he will actually have available to him the resources of those subcontractors necessary for the performance of the contract and that those subcontractors are suitable for carrying out the tasks he intends to entrust to them.
  3. Second, Article 24(5) is also both too rigid and too vague to satisfy the proportionality test. Although contracting authorities appear to enjoy flexibility when defining, for each contract, what ‘the main work’ is, the restriction on subcontracting resulting from that provision is defined in particularly broad terms. It applies regardless of the subject matter of the public works contract and is binding upon contracting authorities when they conclude any type of public works contract, even when they may consider that there is no obvious reason for imposing such a restriction at all.
  4. As the Commission submits, the restriction on subcontracting in Article 24(5) of the Law on public procurement differs in that regard from Article 79(3) of Directive 2014/25. That provision merely enables a contracting authority, in particular, to require that certain critical tasks be performed directly by the tenderer itself. Contracting authorities may thus assess whether such a limitation is opportune, depending on the circumstances. It follows that, even if, as the Lithuanian Government submits, Article 24(5) of the Law on public procurement were to be regarded as transposing Article 79(3) of Directive 2014/25 into Lithuanian law, that transposition would be incorrect.”

“57.   The principles that I have set out above regarding subcontracting are equally relevant to joint-activity partners pooling their capacities.

  1. As I see it, a requirement such as that laid down in paragraph 4.3 of the tender specifications is liable to limit the flexibility of joint-activity partners. It not only affects how they agree to share responsibilities at the time of submitting their common tender but also precludes them from modifying each partner’s contribution to the works contract at a later stage if the contract is attributed to them.
  2. Thus, the requirement in paragraph 4.3 of the tender specifications is capable of having a dissuasive effect on economic operators established in other Member States. It will affect operators wishing to establish themselves in the Member State concerned through the establishment of a permanent consortium, possibly composed of national and foreign companies. It will also affect operators wishing to offer their services by joining consortia of that kind already in existence, in order to be able to participate more easily in public tendering procedures launched by the contracting authorities of that Member State.

Such specification therefore constitutes a restriction within the meaning of Articles 49 and 56 TFEU.”

“61.   I have already indicated that the objective of ensuring proper performance of a public contract can justify a (non-discriminatory) restriction to the freedom to provide services and freedom of establishment.

Partners acting under a joint-activity agreement may be able to satisfy collectively the condition(s) relating to professional capacity (including professional experience) stipulated by the contracting authority when they submit a tender. That however offers no guarantee that each partner will then actually be entrusted with those specific tasks for which its professional capacity has been verified prior to the award of that contract. Articles 49 and 56 TFEU do not therefore in principle preclude a contracting authority from requiring tenders submitted under joint-activity agreements to specify how the various tasks will be distributed among the partners, from verifying the capacity of each partner to carry out the tasks for which it will be responsible and from monitoring that, following the award of the contract, each partner duly performs those tasks for which its professional capacity has been demonstrated.

  1. However, paragraph 4.3 of the tender specifications at issue here is not suitable for ensuring attainment of that objective.
  2. That paragraph requires there to be an arithmetic correspondence between the contribution of each partner to the professional experience requirement in paragraph 3.2.1 and the ‘volume’ (or money value) of tasks effectively carried out by that partner when performing the contract.
  3. As the Commission correctly submits, that specification is unrelated to the specific works or services required to perform the public contract at issue properly. For example, each partner under a joint-activity agreement might be able to demonstrate that it has acquired experience in seaport quay construction or reconstruction over the last 5 years. Collectively, the partners thus fulfil the professional experience requirement in paragraph 3.2.1 of the tender specifications. However, each of them might specialise in a different aspect of seaport quay construction, such as dredging harbour basins, laying foundation works, building grooved steel walls, or supplying and installing seaport quay equipment. The requirement set out in paragraph 4.3 does not preclude an individual partner from carrying out specific tasks for which it actually has no such experience (although, in arithmetical terms, those tasks might correspond to its contribution in fulfilling the requirement in paragraph 3.2.1 of the tender specifications and thus comply with paragraph 4.3 thereof).
  4. I therefore consider that the objective of ensuring proper performance of the public contract cannot, in a situation such as that in the main proceedings, justify the restriction on freedom to provide services and freedom of establishment which results from paragraph 4.3 of the tender specifications. That is all the more the case since even tasks which represent a small proportion of the total value of the contract may be critical to its proper performance.”

“69.    Did the principles of equal treatment and of non-discrimination on grounds of nationality flowing from Articles 49 and 56 TFEU, and the consequent obligation of transparency, preclude the Seaport Authority from modifying clause 4.3 of the tender specifications as it did?

  1. The Court’s case-law interpreting Article 2 of Directive 2004/18 offers useful guidance to answer that question. According to that provision, ‘contracting authorities shall treat economic operators equally and non-discriminatorily, and shall act in a transparent way’. That provision is therefore based on the principles of equal treatment and non-discrimination and the obligation of transparency which arise from the TFEU.
  2. Thus, the Court has held that both the principle of equal treatment and the obligation of transparency which flows from it require the subject matter of each contract and the criteria governing its award to be clearly defined from the beginning of the award procedure.

Equal treatment requires tenderers to be afforded equality of opportunity when formulating their bids. That implies that the bids of all tenderers must be subject to the same conditions.

Furthermore, the obligation of transparency is intended to preclude any risk of favouritism or arbitrariness on the part of the contracting authority. It means that all the conditions and detailed rules of the award procedure must be drawn up in a clear, precise and unequivocal manner in the contract notice or specifications so that, first, all reasonably informed tenderers exercising ordinary care can understand their exact significance and interpret them in the same way and, second, the contracting authority is able to ascertain whether the bids submitted satisfy the criteria applying to the contract in question.

  1. Therefore, a contracting authority cannot, even by means of corrections, change the meaning of the essential contractual conditions as they were formulated in the specifications, upon which the economic operators concerned legitimately relied in taking the decision to prepare to submit a tender or, on the other hand, not to participate in the procurement procedure concerned.
  2. The same principles apply where a contract not governed by Directive 2004/18 has a clear cross-border interest. …”

“78.    In the circumstances of the present case, I … conclude that the prohibition on discrimination on the grounds of nationality and the obligation of transparency which flow from Articles 49 and 56 TFEU preclude changes of the tender specifications such as those at issue in the main proceedings, which introduce restrictions concerning the demonstration of professional capacity by joint-activity partners that were plainly not included in the original version of the specifications.

  1. That conclusion is not called into question by the fact that the changes took place before any tender was submitted or by the fact that the Seaport Authority both published the changes in the Official Journal of the European Union and extended the deadline for submitting tenders. As I have explained, the successive amendments of paragraph 4.3 of the tender specifications by the Seaport Authority entailed an essential modification of the conditions under which a tender could be submitted by joint‑activity partners, without objective justification.
  2. Finally, I would emphasise that the analysis I offer here flows from the specific situation in the main proceedings. It therefore does not in any way prejudge how the principles of equal treatment and non-discrimination and the obligation of transparency arising from the TFEU would apply in different circumstances.”

 

 

Equal and Non-Discriminatory Treatment

December 2nd, 2016 by James Goudie KC in Decision making and Contracts

The Advocate General’s Opinion on 1 December 2016 in Case C-296/15, Medisanus v Murska Sobota, restates the requirement for contracting authorities to treat economic operators equally and non-discriminatorily. The Advocate General said:-

“76.    Under Article 2 of Directive 2004/18, the contracting authorities are required to treat economic operators equally and non-discriminatorily.

  1. According to the Court’s case-law, in application of the principle of equal treatment as between tenderers, the aim of which is to promote the development of healthy and effective competition between undertakings taking part in a public procurement procedure, all tenderers must be afforded equality of opportunity when formulating their tenders, which therefore implies that the tenders of all competitors must be subject to the same conditions.
  2. Strictly speaking, the national origin requirement distinguishes not between economic operators but between products, by excluding medicinal products not manufactured on the basis of Slovenian plasma.
  3. Nonetheless, it has consistently been held that the principle of equal treatment, of which Article 2 of that directive is a particular expression, prohibits not only overt discrimination based on nationality but also all covert forms of discrimination which, by applying other distinguishing criteria, in fact achieve the same result.
  4. A clause requiring that a medicinal product be manufactured on the basis of plasma collected in the national territory is liable to operate mainly to the detriment of economic operators of other Member States, since they will find it more difficult to have access to plasma collected in the national territory than the economic operators of the Member State concerned.
  5. In the circumstances of the main proceedings, the discriminatory effects of that national origin requirement are all the more apparent because the ZTM, a Slovenian body, is in practice the only economic operator capable of supplying medicinal products manufactured on the basis of Slovenian plasma, which precludes all operators in other Member States.
  6. I conclude from the foregoing that Article 2 of Directive 2004/18 of Directive 2004/18 must be interpreted as meaning that it precludes the national origin requirement.”

The national origin requirement was also contrary to Article 34 TFEU, as was a priority supply requirement.

The Advocate General also stated that the Hamburg Waste exemption was not applicable.  The Advocate General said:-

“72.    That judgment concerned a contract concluded for a period of 20 years between the City of Hamburg (Germany) and four Landkreise, for the purpose of establishing long-term cooperation between those local authorities for reciprocal treatment of waste. Thus, that contract, which had been concluded without launching a call for tenders, formed both the basis and the legal framework for the future construction and operation of facility intended to perform a public service, namely thermal incineration of waste. The Court held that such a contract was not required to be the subject matter of a prior call for tenders.

  1. Admittedly, the circumstances of the main proceedings bear certain resemblances to those of the judgment in Commission v Germany, and in particular the public nature of the contracting parties, namely Murska Sobota general hospital and the ZTM. However, in that judgment it was not the Court’s intention to exclude all contracts between public entities from the rules applicable to public contracts, but only those forming both the basis and the legal framework for long-term co-operation with the intention of carrying out a public service. That is not the case of the contract at issue in the main proceedings, the object of which is limited to the occasional supply of medicinal products manufactured on the basis of human plasma.
  2. Consequently, I consider that the contract at issue in the main proceedings does not come within the exception established by the Court in the judgment in Commission v Germany.”

 

 

 

 

CPO

December 1st, 2016 by James Goudie KC in Land, Goods and Services

Mapeley Beta Acquisition Company Limited v SoS for CLG (2016) EWHC 2997 (Admin) concerns the validity of a Compulsory Purchase Order (“CPO”) made by the Interested Party, Swindon Borough Council (“the Council”) and confirmed by the SoS. The CPO related to a strip of land in the centre of Swindon which was vital to the implementation of a Town-Centre Regeneration Scheme (“the Scheme”) in the Council’s Local Plan.

Kerr J observed:-

“2.      The law jealously guards the right of a property owner to enjoy its property, which has been called a constitutional right. A compelling case that the purchase is necessary in the public interest must be made out to take the right away without consent. The Secretary of State may only endorse the destruction of the owner’s property right if it is “clear that the Secretary of State has allowed those rights to be violated by a decision based upon the right legal principles, adequate evidence and proper consideration of the factors which sway his mind into confirmation of the order sought”: …

 

  1. … the draconian nature of the Order will itself render it more vulnerable to successful challenge on Wednesbury/Ashbridge grounds unless sufficient reasons are adduced affirmatively to justify it on its merits.

 

  1. The power of compulsory purchase may be exercised by a local authority 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” (Town and Country Planning Act 1990 (TCPA), section 226(1)(a)). The authority cannot exercise the power unless they think that the development, re-development or improvement is likely to contribute to achieving one or more of three defined objectives: promoting or improving the economic, social, or environmental well-being of the authority’s area (TCPA, section 226(1A)).

 

  1. As for the application of the Human Rights Act 1998 and article 1 of the first protocol to the European Convention, it is common ground that the question is whether the decision of the Secretary of State to accept the recommendation of the inspector and confirm the CPO was a proportionate interference with the rights of the objector and no more than necessary to accomplish the objective of the CPO; …”

 

7.       “… the Secretary of State’s primary task is to consider the issues raised by objections to the CPO, not to search for alternatives. But fairness may require him to “consider at least any obvious alternatives” … put forward by way of alternative to the CPO, “it might have thrown serious doubt over the need for the CPO”. Where, however, there is no such package before the inquiry, “the inspector was under no duty to devise one” (paragraph 22).

 

  1. … principles … require the decision maker to take account of relevant considerations.

 

  1. To do so requires an evaluation of the principal contested issues, including the viability of any proposed alternative advanced by the objector. Adequate and intelligible reasons must be given: South Bucks DC v. Porter (no. 2) [2004] 1 WLR 1953, per Lord Brown at paragraph 36. While there is only one standard of adequacy, the degree of particularity required to meet it will vary according to the nature of the issues falling for decision. Thus, fuller reasoning may need to be given where the inspector’s recommendation is rejected than where it is accepted …”

The Claimant had objected to the CPO on the basis that the Scheme could be delivered without its land. The Council’s case at the Inquiry was that the Claimant’s land was essential to successful implementation of the Scheme because (i) it provided a vital link walkway and (ii) there was no viable alternative.  There was a contest between two routes.

Kerr J held: (1) The CPO Inspector’s reasoning and conclusions on the viability of the link without the Claimant’s land could not be criticized; (2) the Inspector had been fully alive to the issue of preserving the Claimant’s ownership of its land and addressed that issue adequately in his Report, justifying the Inspector’s Conclusion that the CPO had indeed been used as a “last resort”; and (3) the Inspector’s Reasons duly let the Claimant know why it had lost and why the Council’s CPO had been confirmed by the SoS.

The interference with the Claimant’s property rights had been proportionate. The compelling public interest requirement in the case of a CPO does not generate any different or higher duty to give reasons than in other cases, especially where the reasons are addressed to an audience already very familiar with the issues: paragraph 53.

 

 

State Aid

November 30th, 2016 by James Goudie KC in Capital Finance and Companies

The Supreme Court (Lords Mance, Wilson and Hughes) on 28 November 2016 refused the application for permission to appeal in R (Sky Blue Sports and Leisure Ltd) v Coventry City Council (2016) EWCA Civ 453.  This was because the application does not raise an arguable point of law of general public importance which ought to be considered at this time bearing in mind that the case has already been the subject of judicial decision and reviewed on appeal.

 

Old development plans

November 24th, 2016 by James Goudie KC in Planning and Environmental

Should planning policies be given reduced weight on account of their age? No, says the Court of Appeal in Gladman Developments Ltd v Daventry District Council (2016) EWCA Civ 1146.  In accordance with paragraph 215 of the NPPF due weight should be given to relevant policies in existing plans according to their degree of consistency with the NPPF: the closer the policies in the plan to the NPPF, the greater the weight they may be given.

Sales LJ formulated the general approach to be adopted to consideration of development plan policies which are old in the following way:-

(1)       Since old policies are part of the development plan, the starting point, for the purposes of decision-making, remains Section 38(6) of the 2004 Act. This requires that decisions must be made in accordance with the development plan – and, therefore, in accordance with those policies and any others contained in the plan – unless material considerations indicate otherwise. The mere age of a policy does not cause it to cease to be part of the development plan. The policy continues to be entitled to have priority given to it in the manner explained by Lord Clyde in City of Edinburgh Council v Secretary of State for Scotland [1997] 1 WLR 1447, HL, at 1458C-1459G.

(2)       The weight to be given to particular policies in a development plan, and hence the ease with which it may be possible to find that they are outweighed by other material considerations, may vary as circumstances change over time, in particular if there is a significant change in other relevant planning policies or guidance dealing with the same topic. As Lord Clyde explained:

“If the application does not accord with the development plan it will be refused unless there are material considerations indicating that it should be granted. One example of such a case may be where a particular policy in the plan can be seen to be outdated and superseded by more recent guidance” (p. 1458E).

(3)       The NPPF and the policies it sets out may, depending on the subject-matter and context, constitute significant material considerations. Paragraph 215 sets out the approach to be adopted in relation to old policies, and as explained above requires an assessment to be made regarding their consistency with the policies in the NPPF. The fact that a particular development plan policy may be chronologically old is, in itself, irrelevant for the purposes of assessing its consistency with policies in the NPPF.

(4)       Since an important set of policies in the NPPF is to encourage plan-led decision-making in the interests of coherent and properly targeted sustainable development in a local planning authority’s area significant weight should be given to the general public interest in having plan-led planning decisions even if particular policies in a development plan might be old. There may still be a considerable benefit in directing decision-making according to a coherent set of plan policies, even though they are old, rather than having no coherent plan-led approach at all.

(5)       Paragraph 49 of the NPPF creates a special category of deemed out-of-date policies, i.e. relevant policies for the supply of housing where a local planning authority cannot demonstrate a five-year supply of deliverable housing sites. The mere fact that housing policies are not deemed to be out of date under paragraph 49 does not mean that they cannot be out of date according to the general approach referred to above.

 

Traffic regulation

November 24th, 2016 by James Goudie KC in Environment, Highways and Leisure

In Surrey County Council v Windsor and Maidenhead RBC (2016) EWHC 2901 (Admin) it was held that a local authority had not breached its obligation under Regulation 6 of the Local Authorities’ Traffic Orders (Procedure) (England and Wales) Regulations 1996 to consult other local authorities when making a Traffic Regulation Order (“TRO”).  It was acceptable to conduct that consultation at the same time as giving notice of the proposed TRO under Regulation 7 of the 1996 Regulations.

 

Local Plans

November 23rd, 2016 by James Goudie KC in Planning and Environmental

East Staffordshire BC v SoS for CLG [2016] EWHC 2973 (Admin) raised an issue about the scope and effect of paragraph [14] of the National Planning Policy Framework (“NPPF”) on the presumption in favour of the grant of planning approval to sustainable developments which are consistent with Local Plans. The application raised three issues of some wider significance: First, the existence and scope of the discretion to approve a development which is inconsistent with a Local Plan; second, the duty of decision makers to address the weight and significance of the particular reasons why a proposed development is inconsistent with a Local Plan; and third, the relevance of a finding by an Inspector that a proposed development which is inconsistent with a Local Plan is nonetheless “sustainable“.

The significance of the issues arising in relation to the scope of paragraph [14] NPPF was brought into sharp relief because that paragraph and the test it sets out have been the subject of conflicting decisions of the High Court. Paragraph [14] has also been applied in a number of different and inconsistent ways in decisions of Inspectors.

In this case the Inspector allowed an appeal from a decision of the Borough Council which had refused permission for the erection of up to 150 dwellings and other works. The Inspector decided to grant permission even though the proposed development was inconsistent with the Local Plan and in particular a variety of strategic policies (“SP”) in the Plan. Paragraph [14] NPPF creates a presumption in favour of sustainable development. It does this by reference to whether a proposal is consistent or otherwise in relation to a Local Plan; and it considers the position where no up-to-date Local Plan exists. On the application of the test set out in paragraph [14] it was common ground in this case that the Proposed Development was in conflict with the Local Plan. In coming to the conclusion that he could nonetheless approve the proposal the Inspector stated that he was entitled to apply a broader presumption in favour of sustainable development which operated outwith paragraph [14] and which applied wherever a decision maker concluded that a development (including a development inconsistent with the Local Plan) amounted to a “sustainable development“. The Council challenged the Inspector’s decision and argued that the Inspector had misdirected himself in law as to the test he should apply.

Green J concluded that the Inspector had erred in law and misdirected himself as to the test to be applied and the approach to be adopted to the assessment of the evidence.

Green J observed that the point of departure for the analysis was that the Proposed Development is contrary to SPs of the Local Plan and on the normal application of the NPPF the application for approval would be refused. He stated that the analysis of the issue must be performed in the context of: (a) paragraphs [6] – [16] of the NPPF which specifically covers sustainable development; and also (b), the remainder of the NPPF. The NPPF lays great store by the encouragement of sustainable development. Paragraph [7] NPPF identifies three ingredients of a “sustainable development“.  Paragraphs [11] – [16] NPPF describe and then explain the “Presumption in favour of sustainable development“.

Pursuant to Section 38(6) PCPA 2004 and Section 70(2) TCPA 1990 planning law stipulates that applications for planning permission should be determined in accordance with the Development Plan unless material considerations indicate otherwise. Paragraph [12] NPPF makes clear that the Framework does not change the statutory status of the Development Plan as the starting point of decision making. Importantly it also states that proposed developments consistent with an up-to-date Local Plan should be approved but proposed developments that conflict should be refused unless “other” material considerations indicate otherwise. The use of the word “should” presupposes a presumption of refusal which is rebuttable by other material considerations. Paragraph [13] NPPF states that the Framework constitutes guidance for local planning authorities and decision makers both in drawing up plans and as a material consideration in determining applications.

Paragraph [14] NPPF was at the core of this case. It described, in substance, a formula or test for determining when the presumption in favour of sustainable development applies and it creates as the pivot of the analysis the context and substance of an up-to-date Local Plan. It has three components: (i) a statement of principle (“the golden thread“); (ii) application of the principle in the context of plan-making; and (iii), application of the principle in the context of decision-making.

Paragraph [15] NPPF recognises that the concept of “sustainable development” is intrinsic to Local Plans so that application of the principles set out in a Local Plan will create a predictable and transparent means of securing sustainable developments.

Green J analysed first the existence of a discretion outside of paragraph [14] NPPF. He said:-

“21. The first point to address is whether paragraph [14] NPPF is an exhaustive and comprehensive test for the operation of section 38(6). Section 38(6) PCPA 2004 makes clear that, prima facie, it is the Local Plan that governs and prevails. As paragraph [12] NPPF makes clear (consistently with section 38(6)): (a) a proposal that is inconsistent with a Local Plan “should be refused“, unless “other material considerations indicate otherwise“; and (b), the Framework does not alter the statutory status of the Local Plan as the fons et origo of decision making. In itself the Local Plan is therefore a strong indication of where the answer lies in a given case. The NPPF is “guidance” which is relevant in both the drawing up of the Plan “… and as a material consideration in determining applications” (cf paragraph [13] NPPF).

  1. In the present case the point of departure, applying section 38(6), is that the proposal was in conflict with the Local Plan and therefore should be rejected absent “other” countervailing and overriding material considerations. Paragraph [14] NPPF is capable in principle of amounting to such a material consideration but on the facts of this case, as the Inspector recognised, its application led to refusal of the application. The limb of paragraph [14] NPPF dealing with “decision-taking” indicates that where a proposal is consistent with relevant up-to-date plans it should be approved. It is silent as to what happens in the converse situation, namely where it is inconsistent. However, in such a case where the proposal is inconsistent with relevant policies it must be implicit in paragraph [14] (a fortiori) that it should not be approved and this accords with paragraph [12] NPPF which indicates that a proposed development which is inconsistent with paragraph [14] should be refused approval. This is not an abrogation of the presumption in favour of sustainable development because that concept is thoroughly embedded in, and permeates throughout, the entire Local Plan in accordance with the “golden thread” which runs through both plan-making and decision-taking. If a proposed development is inconsistent with paragraph [14] it is not therefore a “sustainable development” at least as that term is understood in paragraph [14] NPPF. A decision that a proposal should not be approved because it is inconsistent with the Plan is a conclusion which, necessarily, therefore accords with the principles governing the existence and approval of sustainable developments in the NPPF.
  2. But there is an important caveat to this conclusion. Whilst the NPPF and, in this case, paragraph [14] thereof, is normally the preponderant or major part of the material considerations exception in section 38(6), it cannot altogether occupy the field of “material” considerations. In principle there must be some scope for a discretion to approve a proposed development which is inconsistent with the Local Plan. All the parties in this case including the Secretary of State, accept, in principle, this proposition. The dispute at base therefore is not as to the existence of a discretion so much as to the scope of this residual power.
  3. There are three reasons why in principle there must be some residual scope for the exercise of discretion. First, as a matter of elementary principles of public law this is the natural consequence of section 38(6) which cannot be construed as permitting policy guidance (i.e. the NPPF) to fetter the statutory discretion conferred thereby: See in this respect, R (West Berkshire District Council) v Secretary of State for Communities and Local Government [2016] EWCA Civ 441 at paragraph [19]. Secondly, this is acknowledged in footnote 10 to the NPPF which operates as a rider to the expression “for decision-taking this means…” in the body of paragraph [14]. When one combines that text with the footnote one gets: “for decision-taking this means, unless material considerations indicate otherwise…“. This therefore supports the conclusion that the test in paragraph [14] is not all-embracing. It acknowledges that the proviso to the section 38(6) may in principle cover a territory somewhat broader than paragraph [14]. Third, there is section 19(2)(a) PCPA 2004 which states, in relation to plan-making, that the local planning authority must have regard to national policies and advice contained in guidance issued by the Secretary of State. And of course the NPPF is the paradigm example of such national policies and advice. However section 19(2)(a) makes clear that local planning authorities are only required to “have regard to” such national policies and advice. They are not straight-jacketed by such policies and advice. This also suggests that, at least to some degree, there is a residual discretion operating outside of paragraph [14].”

Green J analysed next the scope of the discretion outside of paragraph [14] NPPF. He said:-

“30.    The crux of the dispute thus focuses upon whether the Inspector correctly delineated the ambit of his permissible discretion. In my judgment it follows from the principles of interpretation which govern the scope and effect of paragraph [14] set out above that its application in a given case will cover the preponderant or major part of the exercise of discretion inherent in the concept of “material considerations“. Paragraph [14] is essentially about process not outcome … There is no reason why it should not sensibly suffice to cover the generality of cases which arise. … The outcome inherent in paragraph [14] contemplates a two stage process with “plan-making” preceding “decision-taking“; and then, in the case of the latter, a bifurcated approach contingent upon the existence (or otherwise) of an adequate Local Plan. In both cases guidance is given as to the circumstances when the presumption in favour of sustainable development is to apply, but critically for the present case, it also indicates where it is not to apply or even is to be reversed (when read in the light of paragraph [12] NPPF). The test or algorithm uses as the pivot for a decision the Local Plan. There is in relation to decision making little scope in logic or substance for departing from the algorithm in paragraph [14] unless there is some reason to reject a Local Plan.

  1. Insofar therefore as paragraph [14] permits of a residual discretion it must be recognised that the outcome arrived at by the operation of paragraph [14] should carry considerable gravitational pull. It should yield only as an exception to the norm where there exists objective and substantial reasons which can be readily demonstrated to a high degree of probative value and which takes into account the particular reasons why a development has been found to collide with the Local Plan. I should add however (see paragraph [54] below) that I express no concluded view on exactly how exceptional “exceptional” actually is; this being an issue better explored in a case where that issue truly arises.
  2. When a decision is being considered in a case where the proposed development conflicts with the Local Plan (and is thereby prima facie to be refused under paragraphs [12] and [14] NPPF) it follows from all of the above that the starting point for analysis should not be that there is a presumption in favour of the development. This is because the outcome of the operation of the paragraph [14] algorithm is that the presumption has been rebutted. … In such a case, therefore, the decision maker’s starting point should be that the proposal conflicts with paragraph [14] and is not therefore consistent with the presumption of sustainable development. Applying paragraph [12] the development “should be refused“. The question which follows is whether, nonetheless, there are substantial and demonstrable objective benefits which outweigh this adverse starting point. My analysis leads me to favour a relatively narrow construction of the residual discretion outside of paragraph [14].”

Finally, Green J analysed considerations supporting the (relatively) narrow construction of paragraph [14] NPPF.   He said:-

“34.    There are a number of supplementary reasons which reinforce me in the conclusion that I have arrived at above. These may be summarised as follows.

  1. First, my conclusion is consistent with the core planning principle that planning decisions be made with a high degree of predictability and efficiency. …
  2. The paragraph [14] algorithm enables decision makers to take decisions by reference to the Local Plan and paragraph [15] NPPF (set out at paragraph [13] above) explains that by this route decisions on “sustainable development” will be taken. This means that decisions will be taken transparently and on the basis of transparent, and objectively determined, criteria. The desirability of clarity and transparency is not to be underestimated in an area of economic activity where predictability is critical to forward-looking business planning. The alternative analysis, whereby a broad discretion arises outside of paragraph [14] NPPF and notwithstanding a Local Plan, leads to uncertainty. … In my view a construction which furthers predictability and transparency based on adherence to the Local Plan is one which is to be preferred over one that leads to uncertainty.
  3. Second, paragraph [14] reiterates the powerful nexus between the Local Plan and “sustainable development” with the latter being defined by reference to the former. This is explicit in the “plan-making” component of paragraph [14]. But the primacy of the Local Plan is a theme which runs throughout the NPPF generally. For example, paragraphs [150] – [151] makes clear that Local Plans “… are the key to delivering sustainable development that reflects the vision and aspirations of local communities” (paragraph [150] NPPF). Local Plans must be prepared with the objective of contributing to the achievement of sustainable development and they should be consistent with the presumption in favour of sustainable development (paragraph [151] NPPF). Paragraph [182] NPPF makes clear that a Local Plan should be examined by an independent inspector whose role is to assess whether the Plan has been prepared in accordance with, inter alia, legal and procedural requirements, and whether it is “sound“. A local planning authority should submit a plan for examination which it considers to be “sound” because it is positively prepared, justified, effective, and: “consistent with national policy – the plan should enable the delivery of sustainable development in accordance with the policies in the Framework“. Paragraphs [183] and [198] emphasise that Neighbourhood Plans are intended to deliver sustainable development and that where a planning application conflicts with the Neighbourhood Plan that has been brought into force permission should not normally be granted. The upshot of this is that a concept of “sustainable development” is, and indeed must be, a driving principle behind every Local Plan as the predominant means of securing sustainable development. When this is taken into account as a guide to interpretation of paragraph [14] it underscores the considerable importance of planning decisions being taken consistently with the Local Plan. It does not permit of an interpretation which assumes that planning proposals which are inconsistent with the Local Plan remain subject to, and the beneficiary of, some extraneous presumption in favour of developments that an Inspector concludes is “sustainable” in disagreement with a Local Plan. Underpinning the primacy of the Local Plan in the NPPF is a recognition of the political importance of “localism“. The Local Plan is a document widely consulted over which reflects the balancing of a multiplicity of different, often competing, considerations. As such there is a very democratic reason why it must be accorded great weight. …
  4. This conclusion, namely that the concept of “sustainable development” is predominantly implemented via the Local Plan, is also reflected in the Impact Assessment (July 2012) which accompanied the NPPF. …
  5. The centrality of up-to-date Local Plans was also perceived as desirable to avoid the uncertainty which flowed from a set of rules which encouraged decisions to be made through systematic use of the appeals procedure: … The Impact Assessment is … consistent with the policy contained in the NPPF and supports the conclusion that it is through the Local Plan that sustainable development will be implemented and introduced. This is a consideration which lends support for the conclusion I have arrived at which is that the scope for the approval of developments which are inconsistent with a Local Plan is limited. It seems to me that, although my judgment does not turn upon it, the contents of the Impact Assessment are admissible as one source of guidance to an interpretation of the NPPF (by analogy with the principles governing the admissibility of pre-statutory material as a guide to construction of the subsequent measure: …
  6. Third, emphasis has been attached by both parties albeit in different ways to the phrases “golden thread” and “means” in paragraph [14]. The argument with regard to “means” (advanced by ESBC and the Secretary of State) is that it is to be treated as “equates to” or “must lead to” or some other proxy phrase indicating that the operation of the paragraph [14] test will inexorably lead to the correct result. In my view there is some force in this but, because I have accepted that there is scope for an element of discretion outside of paragraph [14], the phrase cannot lead to the conclusion that the operation of paragraph [14] leads to an unassailable and irrebuttable result in every case. It is nonetheless an indication that the test in paragraph [14] is intended to cover the overwhelming majority of cases. …”

Green J applied the above principles to the facts. He found the Inspector to have been in error in three respects.  The first was incorrect resurrection of the presumption.  The second was the omission of any balancing exercise taking into account the reasons why the proposed development was inconsistent with the Local Plan.  Green J said:-

“45.    In my judgment if a decision maker is to approve a proposal which is inconsistent with the Local Plan then the reasons for that (which include addressing the weight of the reasons why the development was inconsistent with the Local Plan) must be set out in the decision. …”

The third respect was the concept of “sustainable development”. The Inspector had not explained why the proposed development was “sustainable” when it prima facie was inconsistent with significant policies in the Local Plan.

Green J concluded with a postscript as to “how exceptional is exceptional”. He said, at paragraph 54:-

“There is one note of caution that I wish to make (flowing out of paragraph [31] above). I have recognised the existence of a discretion outside of paragraph [14] NPPF. I have suggested that it is likely to be the exception rather than the norm that it will be exercised in favour of approval. However it has not been necessary, in order to decide this case, to determine quite how exceptional, “exceptional” has to be. … The parameters are for another case to measure. … It may … be for other cases to explore the issue of the precise scope of the exception in greater detail when a case properly turns upon the point.”

 

 

 

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