One of the issues in Whitstable Society v Canterbury City Council [2017] EWHC 254 (Admin) was whether the notification and consultation proceedings required by Section 123(2A) in relation to open space land owned by a local authority ought to have been gone through in respect of the sale of land owned by the City Council. Dove J held not, notwithstanding that the land had been acquired for development as open space and had not been formally appropriated to any other use. He said, at paragraph 78:
“In my view the key issue in applying section 123(2A) is whether, at the time of the disposal of the land, it consisted or formed part of an open space. That is the specific language of the section. In my view that is not solely determined by use, if in fact the land has been laid out as a public garden (the breadth of which term does not arise for determination in this case). If the land were to be a public garden the section 123(2A) requirements could not be evaded simply by excluding the public. Thus the phrase “consisting or forming part of an open space” would also include land which might not actually at the point of disposal be being used by the public but which, by virtue of the manner in which it had been landscaped, would consist of or form part of an open space.”
Dove J saw force in the claimant’s submission that the language of Section 123(2B) of the 1972 Act, which speaks of land being “held” for open space under Section 164 of the Public Health Act 1875 or Section 10 of the Public Health Act 1906, potentially supports a view that simply holding land for a proposed open space use might suffice to engage the requirements of Section 123(2A) of the 1972 Act. However, in Dove J’s view, that was not conclusive. He stated, at paragraph 81, that it is the language of Section 123(2A) which must itself be “determinative of the issue”, and “that language clearly requires land to consist or form a part of an open space at the time when disposal is being undertaken.”
Dove J continued at paragraph 82:
“I do not foresee any particular difficulty in the notion which this construction implies, that land could be held with the future intention of developing it to consist or form part of an open space without that occurring prior to disposal, and in those circumstances the requirements under section 123(2A) would not arise. It is simply that the section does not contemplate the consultation requirements of section 123(2A) arising in the case of land where there is merely the lost opportunity for it to potentially be developed so as to consist of or form part of an open space. As Mr Goudie pointed out in argument, the public has a remedy in the event that a local authority fails to bring land forward and develop it as open space, by virtue of section 10 of the 1906 Act.”
Dove J therefore rejected the claimant’s argument by reference to open space. He held however that the City Council had on the evidence breached the Section 123(2) duty to obtain best consideration on the land disposal, on the basis that the sum accepted was based on a valuation/predicated on it being inevitable that affordable housing would be required when this was not the case. However, he refused both a quashing order and declaratory relief. Dove J referred to Section 31(6) of the Senior Courts Act 1981. He said, at paragraph 108:
“This provision was recently considered by the Court of Appeal in the case of Gerber v Wiltshire Council [2016] EWCA Civ 84. Whilst the exercise of discretion to decline relief on the basis of delay will inevitably be fact sensitive and will depend on the circumstances of any particular case, it is instructive to note the following aspects of the exercise of discretion which were emphasised when considering this issue by Sales LJ in his judgment at paragraphs 66-69. Firstly, substantial weight was given to the length of delay and the absence of justification for it in bringing the proceedings. Secondly, substantial weight was given to the impact on the financial interests of third parties who had the benefit of the decision which had been reached. Thirdly, consideration was given to the impact of the unlawful decision upon the claimant and an assessment made of the weight to be given to the fact there had been found to be an unlawful decision. Fourthly, substantial weight was given to the need for finality in the decision-making process. These factors, in my view, must therefore bear upon the exercise of the question of whether or not relief should be refused as an exercise of discretion.”
The starting point for consideration of whether relief should be granted in relation to the City Council’s disposal decision was that the purchaser under the contract had a distinct and obvious interest in the decision which is under challenge, since in reliance on the decision they had committed themselves to purchase the land for a substantial sum of money. In addition, significant time, effort and resources had been expended by them in reliance upon that decision in prosecuting planning applications one of which led to the obtaining of a resolution to grant planning permission. The purchaser had therefore relied upon the validity of the decision, and acted to its financial prejudice in reliance on the decision being valid and thus its conditional acquisition of the site being reliable. They had proceeded for many months on the basis that the City Council’s decision was valid. Were substantive relief to be granted they would suffer substantial hardship and prejudice based on the time and resources they had expended on the basis of the legality of the County Council’s decision. This was a factor telling against the grant of relief to which substantial weight should be attached. A further factor in support of an exercise of discretion not to quash the decision was the importance of certainty and reliability in the City Council’s decision-making process.
Dove J said at paragraph 115:
“There is undoubtedly a requirement, and especially in relation to decisions affecting the entering into of commercial arrangements with third parties, for there to be certainty and reliability in a local authority’s decision-making process such that those decisions are not susceptible to challenge or disturbance many months after decisions have been made and have been acted upon. As has been emphasised in the authorities there is a clear need for finality in administrative decision-making. That is particularly the case in my view when dealing with financial arrangements of the local authority which are made with third parties, such as, for instance, the making of contracts or the giving of grants. There is a clear and obvious importance to good administration for both the local authority and such third parties to be able to know where they stand in relation to these arrangements, and for the authority and those with whom they deal not finding these arrangements subject to attack and disturbance many months after they have been decided upon. I am satisfied that if I were to grant relief that would give rise to significant detriment to good administration and that this is a further factor to which in my view substantial weight should attach.”
Dove J also addressed the issue of the claimant’s delay. The proceedings had been brought out of time. He said, at paragraph 118:
“An issue as to the test to be applied when considering whether a claimant had sufficient knowledge to bring a claim, and therefore for time to commence running for the purposes of any time limitation upon bringing a claim, arose before the Court of Appeal in Sita UK Limited v Greater Manchester Waste Disposal Authority [2011] EWCA Civ 156. That was a case concerned with public procurement. Drawing on the decision of the House of Lords in Haward and others v Fawcett (a firm) [2006] 1 WLR 68, which concerned a latent damage claim, Elias LJ endorsed in a public law context the test which had been applied by Mann J at first instance in relation to the standard of knowledge required for time to start running expressed in the following terms: “the standard ought to be a knowledge of the facts which apparently clearly indicate, though they need not absolutely prove, an infringement”. That in my view is the approach which must be adopted in the present case.”
Dove J concluded that the claimant had had sufficient information. Their delay weighed heavily against the grant of relief. He said:
“123. On the other side of the balance it is necessary to bear in mind that I have concluded that there was a public law error in relation to the Council’s decision to enter into the transaction, and, it is necessary to consider whether the claimants should have to suffer the unlawful decision. Whilst I am satisfied that best consideration was not achieved, and the fact that there was a breach of section 123(2) of the 1972 Act is a matter of substance and concern to which weight must be given in the exercise of discretion, this finding in the circumstances of the case is not in my judgment capable of outweighing the other factors supporting an exercise of discretion to refuse relief. In my view the factors which weigh against the grant of relief are extensive and weighty, and the decision to refuse relief is clear cut. Indeed, such is the weight to be attached to the detriment to good administration and delay in this case that on their own they would in my view justify the refusal of relief in this case.
- For the reasons which have been set out above I am satisfied that in the circumstances it would not be appropriate to grant any form of relief in relation to the decision of the Executive to enter into the contract with the interested party, whether in the form of a declaration (as sought) or in the form of quashing that decision if that point had been raised.”
Dove J finally considered Charles Terence Estates Ltd v Cornwall Council (2012) EWCA Civ 1439 and said, at paragraph 127:
“It follows from this, and I accept, that the defendant is correct that any illegality would not affect the private law arrangements entered into between the defendant and the interested party and that it would be inappropriate therefore to quash the private law contractual arrangements between the defendant and the interested party. Thus it would not be appropriate in any event to grant relief in the form of a quashing of the contract between the defendant and the interested party.”