October 13th, 2015 by James Goudie KC

In Kelton v Wiltshire Council [2015] EWHC 2853 (Admin) three challenges were made to a grant of planning permission on the ground of bias/disqualification.  Two challenges failed.  The third succeeded.  The planning permission was for a scheme of up to 35 custom built residential dwellings, including 9 affordable homes.  At issue was the participation of one of the councillors on the Council ‘s planning committee, Councillor Magnus Macdonald, whose vote carried the decision in favour of granting the outline planning permission. It is alleged that he was disqualified from participating in the planning committee on this matter, because he is a director of Selwood Housing Association (“Selwood”), a not for profit association, which has had an interest in the affordable housing part of the development. Cllr. Macdonald receives, as director, some £3000 per annum.

The first challenge was based on the rule of automatic disqualification for financial interest.  The argument was that Cllr. Macdonald was automatically disqualified as a result of his directorship of Selwood.  Selwood was involved in the application and had an interest in its fate given that the applicants for planning permission had identified it as, effectively, their affordable housing partner.

Cranston J held that Cllr. Macdonald had no direct pecuniary or proprietary interest in the planning application so as to be automatically disqualified from participating in the decision. The decision of the committee in the present case did not lead to Cllr. Macdonald obtaining any benefit. There are too many contingencies between the committee’s decision and any benefit to him as a director of Selwood for the rule to have any purchase.  Here Selwood was not a party to the decision. Cllr. Macdonald could not be regarded as promoting the cause of affordable housing through his voting on planning permission on this application.

The second challenge was statutory disqualification as a result of a disclosable pecuniary interest, contrary to  Section 31 of the Localism Act 2011 and the Schedule to the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012.

The argument was that, under Section 31, Cllr. Macdonald had a disclosable pecuniary interest in the matter before the planning committee. He was aware that Selwood stood to benefit directly from the grant of permission and accordingly was statutorily disqualified from participation in the meeting and should have withdrawn.

In the Judge’s view, however, Cllr.Macdonald had no disclosable pecuniary interest in the matter to be considered. Selwood was not the applicant for planning permission and at the point of the decision had no contract with the developers. It may have built up goodwill with its advice to them over a period, but at the time of the grant of planning permission the affordable housing part of the development was yet to be tendered. In the result, Cllr. Macdonald was not disqualified under Section 31.

Apparent bias was the third challenge.  Cranston J’s view was that Cllr. Macdonald’s participation in the decision to grant planning permission gave rise to an appearance of potential bias. It was plainly in Selwood’s interests and Cllr. Macdonald’s, as director, for the application to be approved. The reasonable and fair-minded observer, having the background facts, would have been aware that Selwood had committed time, resources and expertise to working with the developers over the design of the affordable housing part of the scheme. It was highly unlikely that Selwood would have gone to all the trouble it did unless it was seriously interested in delivering the affordable housing part of the scheme and had reason to believe that it stood a good chance of winning the tender once planning permission was granted. It had built up goodwill with the developers. The evident reality of the position then was that although it was not a done deal, Selwood was the front runner to deliver the affordable housing part of the scheme and would, barring something unforeseen, be appointed to do so in due course.

One element of the attack on Cllr. Macdonald’s participation was that he participated in a decision which furthered the cause of affordable housing, which as a member of Selwood he obviously supported, but that was only part of it.  The important distinction is that as a director of Selwood he also had a private interest.  In Cranston J’s view, Cllr. Macdonald’s directorship of Selwood will not be an issue in the great majority of housing applications likely to come before the committee, even those with an affordable housing element.  The position in this case was quite different.  Selwood, with Cllr. Macdonald as a director was not simply an affordable housing provider.  Here it was the only provider which had been willing to give assistance on the scheme, had expressed a clear interest in delivering it, had been named by the applicants as their potential partner, and had written in support and attended the planning committee meeting when it was considered.  In other words, its position was superior to that of any other interested providers of affordable housing because of its previous involvement and its prospects of winning the contract when the affordable housing part was tendered.  Because of that, Cllr. Macdonald’s private interests were engaged, as a director of Selwood, not just his interests in the cause of affordable housing. In all these circumstances it was wrong for Cllr. Macdonald to have participated in the meeting.

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