I am pleased to send you the usual periodic offering of commentary on various technical developments in the law affecting commercial property and planning.
But of course all this pales into insignificance compared with the challenges we now face because of COVID-19.
Like most of you reading this I suspect, I am working from home and grappling with a new routine and the technological challenges of working remotely (successfully so far but it is early days…). Who can tell when this is going to end and indeed what the medium and long terms effects will be on the property market.
Already we are seeing a range of responses from landlords, ranging from the cooperative to the “I am going to hold you to the letter of your Contract” approach.
We are being approached by tenants for advice on how they can minimise their property outgoings; how they might escape, minimise or defer liability under contracts and leases which now turn out to be potentially extraordinarily onerous in the short term.
All this against the background that turnover, in most people’s businesses, has plummeted and regardless of the legal rights and wrongs, the reality is that many people just have no money or will have no money to pay rent or the balance of purchase prices or have access to mortgage funds and so on.
One of the more interesting (God help us!) things that may come out of this is the development of the doctrine of Frustration as it applies to property contracts. That doctrine has, in the past, been held to apply to such contracts (including leases) in theory but it has never been successfully applied so far. I wonder if that is about to change? It is a high bar.
As ever we are here to try to help you navigate your way through these tricky waters.
We would welcome feedback on the content covered below and any comments you may have on the future focus of this e-bulletin.
Nicholas Brent, Partner and Head of Druces’ Real Estate Team
1. Is a Printed Name at the Bottom of an Email a ‘Signature’? Yes, says Judge
Can a printed name at the bottom of an email be equivalent to a signature in law? In a case that broke new legal ground and will have widespread implications, a judge has answered that burning question in the affirmative.
A couple had been engaged in a right of way dispute with a neighbour concerning access to a scenic lake. Following negotiations with a view to settling the matter, a string of emails was exchanged between solicitors for each side by which the couple agreed to purchase a strategic plot of their neighbour’s land for £175,000.
The neighbour, however, subsequently denied that the emails amounted to a valid contract for the sale of land. That was on the basis that the critical email had not been signed in accordance with the strict formalities required in respect of such contracts by Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. It was submitted that only a signature in the email sender’s own hand, or a facsimile of such a signature, would have sufficed.
In ruling on the matter, the judge noted that, although the question of principle as to whether an automatically generated ‘footer’ at the end of an email can amount to a signature for the purposes of the Act had been discussed by academic authors, there was no direct legal authority on the point.
In the modern technological age, the judge found that such a footer was capable of being viewed by an ordinary person as a signature. The solicitor who wrote the email had clearly taken a conscious decision at some point to append his typed name and details to every email he wrote.
His intention in doing so was clearly to authenticate the contents of his emails and his inclusion of the typed words ‘many thanks’ just above the footer indicated that he was relying on the latter to sign off his name. The footer identified him with the email’s contents and was a sufficient act of signing to comply with the Act. The couple were granted an order of specific performance, requiring the neighbour to complete the land sale contract.
2. Public Procurement – Court of Appeal Plots Path Through Regulatory Maze
Public authorities are bound by procurement rules of ever increasing complexity in their commercial dealings with the private sector. The Court of Appeal, however, managed to find its way through the maze in ruling that the lease of advertising hoardings on local authority-owned land fell outside the regulatory regime.
The council put leases on two roadside digital advertising towers out to competitive tender. A company which was the incumbent leaseholder bid £600,000 per annum for a 10-year term, but the leases were awarded to a competitor who offered £1.7 million per annum. The company responded by launching proceedings against the council, seeking damages for alleged breaches of the Concessions Contract Regulations 2016. The claim was, however, dismissed by a judge.
In rejecting the company’s challenge to that outcome, the Court found as a matter of general principle that services to which the Regulations apply are those which would otherwise be provided by the contracting public authority as part of its statutory obligations or in furtherance of its strategic objectives. The advertising featured on the hoardings brought no direct benefit to the council or its residents and there had been no obligation on the council to provide it.
The Court found that an exemption from the Regulations in respect of the rental or acquisition of land, existing buildings or immovable property in any event applied to the leases. They could also not be viewed as contracts for pecuniary interest by means of which the council entrusted the company with the provision of advertising services. Even had the Regulations applied, the company would not have been entitled to damages, it is having underbid for the leases so comprehensively that the outcome of the tendering process could not have been in doubt.
3. High Court Boosts Plans for New Neighbourhood of 1,200 Homes
The mere fact that a development proposal may encounter difficulties and eventually prove undeliverable does not generally justify a refusal of planning permission. The High Court made that point in breathing new life into plans to construct a whole new neighbourhood of 1,200 homes.
In promoting the project, the would-be developer emphasised a shortfall in housing land in the area and that 30 percent of the new homes would be affordable. The local authority, however, refused consent, citing traffic congestion and air quality concerns. After a public inquiry, the Secretary of State for Housing, Communities and Local Government followed the advice of one of his planning inspectors and confirmed the refusal of planning permission.
In upholding the developer’s challenge to that decision, however, the Court found that a crucial part of the Secretary of State’s decision was something of a muddle. He had irrationally focused on concerns that the project would be undeliverable because the developer did not own playing fields through which a key access to up to 700 homes was proposed to run.
The Court noted that, as a general rule, the question of whether a proposal can be implemented is irrelevant to the decision whether to grant permission. There is no legal requirement that consent must be refused unless a developer commits itself to implementing a proposal. Doubts about the scheme’s deliverability were thus not a material consideration which should have weighed in the balance.
The Court rejected the developer’s argument that, by engaging in unrecorded and informal conversations with objectors to the proposal during the inquiry and a site visit, the inspector had given an appearance of bias. The refusal of planning permission was nevertheless quashed and the Secretary of State was directed to consider the matter afresh in the light of the Court’s ruling.
4. Cul-de-Sac Residents Succeed in Blocking Care Home Plans
Objecting to a grant of planning permission is one obvious means of trying to block a development to which you object – but there are others that are less well known. In a case on point, residents of a leafy cul-de-sac saw off a neighbour’s plans to demolish his property and replace it with a residential care home.
The neighbour had been granted planning permission for his proposal, but objectors who lived in 14 nearby homes were undaunted. They pointed to identical restrictive covenants which dated back to the 1920s, when the cul-de-sac was laid out, and which featured in the title deeds of their own and the neighbour’s properties.
The covenants, amongst other things, dictated that no more than a single dwelling house could be constructed on each of the original plots and that they must not be used for any trade, business or profession, save that of a medical practitioner. The original developer of the cul-de-sac was a local doctor.
The neighbour accepted that the covenants, as drafted, precluded the construction of a care home on his land. However, he applied to the First-tier Tribunal (FTT) under Section 84 of the Law of Property Act 1925, seeking an order modifying the covenants in such a way as to enable the development to proceed.
In dismissing his application, however, the FTT noted that the care home would be taller than the property it replaced and would have a much larger footprint. The development might be a reasonable use of the land, but it would for the first time bring a commercial element to the exclusively residential cul-de-sac.
The development would have a substantial impact on the objectors’ amenities and would reduce the market value of the nearest neighbouring property by up to 15 per cent. In the circumstances, the covenants were in no way obsolete and delivered continuing benefits of substantial value to the objectors.
5. Local Objectors Overturn Planning Permission for Waste Handling Facility
Waste handling facilities are frequently unpopular with residents, but they are a vital part of the nation’s infrastructure and have to go somewhere. However, as a High Court ruling showed, objectors to such developments can, with the right legal advice, make themselves heard and play a decisive role in the planning process.
A company proposed turning a vacant site, formerly used by a demolition contractor and scrap metal business, into a waste transfer and treatment facility. Capable of handling up to 85,000 tonnes of waste annually, the development would entail well over 100 heavy lorry movements daily through a residential area. The local planning authority (LPA) granted consent for the proposed change in the site’s use.
On behalf of local residents who objected to the scheme, a parish council took legal advice and mounted a judicial review challenge to the LPA’s decision. It expressed concerns about noise, odour and traffic emissions arising from the project and argued that increased nitrogen dioxide levels would harm human health.
In upholding the parish council’s case, the Court noted that the relevant site was not amongst those allocated for waste handling purposes in the local development plan. There was at least one site which was so allocated and there was evidence that it was available for development.
Members of the LPA’s planning committee had insufficient information before them to make up their own minds about the benefits and disadvantages of the proposal and there had been no investigation, or even consideration, of the suitability of alternative sites. The planning permission was quashed.
6. Vehicle Manufacturer Relieved of Consequences of Administrative Blunder
Even minor and inadvertent breaches of contractual obligations can have very grave consequences, particularly when it comes to occupation of land. That was certainly so in the case of a vehicle manufacturer whose failure to pay £50 in rent on time very nearly led to the forfeiture of rights essential to the running of its business.
Under a contract dating back to the 1960s, the manufacturer was granted a licence to construct a surface water and trade effluent drainage system across land owned by the operator of a canal which adjoined its plant. The licence was perpetual, but the manufacturer was required to pay £50 in annual rent to the operator within 28 days of that sum being demanded.
After an administrative oversight resulted in that deadline being missed, the operator exercised its contractual right to terminate the licence. As a result of its failure to pay the £50 on time, the manufacturer thus faced the prospect of having to negotiate a new licence – at a likely six-figure annual cost.
After the manufacturer launched proceedings, a judge granted it equitable relief from the forfeiture of its rights under the contract. That was on the basis that the outcome would otherwise be unreasonably harsh. The licence was effectively reinstated on condition that the manufacturer paid off any arears and certain other costs. The judge’s ruling was subsequently upheld by the Court of Appeal.
In dismissing the operator’s challenge to that decision, the Supreme Court rejected arguments that, in the context of land, equitable relief from forfeiture is only available in respect of property rights, such as formal leases, as opposed to contractual rights of possession. There was no logical or principled reason for treating rights over land and rights over other forms of property differently, and the distinction the operator sought to draw would have arbitrary results.
7. There’s Nothing Wrong with Lawful Tax Avoidance – High Court Ruling
One of the more draconian powers wielded by judges is to order compulsory winding up of companies that operate contrary to the public interest. However, the High Court ruled in a guideline case that two companies in the business of assisting their clients to avoid paying non-domestic rates (NDRs) do not fall into that category.
The companies operate a scheme whereby they establish single purpose vehicles (SPVs) in order to take leases of vacant commercial properties from their owners. That has the effect of shifting liability to pay NDRs from the owners – the companies’ clients – to the SPVs. The SPVs are themselves subsequently relieved of such liabilities by being placed into members’ voluntary liquidation.
The Secretary of State for Business, Energy and Industrial Strategy petitioned the Court under Section 124A of the Insolvency Act 1986, seeking orders compulsorily winding up both companies. It was submitted that their business models subverted the purpose of liquidations and that such misuse of the insolvency legislation demonstrated a lack of commercial probity.
In ruling on the matter, the Court acknowledged that the relevant arrangements were engineered solely to achieve a situation where the companies were able to obtain fees and their clients to avoid NDRs. The leases were artificial in the sense that they were not the product of arms-length negotiations, contained non-commercial terms and had no purpose other than to achieve those objectives.
In dismissing the applications, however, the Court noted that the Secretary of State did not contend that the incorporation of the SPVs, the grant of the leases or the entry into members’ voluntary liquidation were contrary to any specific provision of the insolvency legislation. Each transaction in the chain was legally genuine and effective and could not be viewed as a sham. The members’ voluntary liquidation genuinely involved the collection in and realisation of assets by liquidators with a view to distributing proceeds to members once all liabilities had been discharged.
The Court acknowledged that there was room for disagreement as to the ethics of the companies’ business methods. It could not, however, be said that to devise and implement a lawful scheme to avoid business rates is itself lacking in commercial probity or otherwise contrary to the public interest.
Whilst the schemes had revenue consequences for local authorities, there was no evidence that they caused harm to individual members of the public. As a matter of general principle, it was perfectly proper for companies as artificial constructs to be incorporated with a view to obtaining a fiscal advantage.
8. Preserving Heritage Assets – Food Store Planning Permission Overturned
Preservation of heritage assets is an important objective of the planning regime and even minimal harm to their setting will be weighed in the balance against developers. The High Court made that point in overturning planning permission granted for a food store within sight of a listed former textile mill.
A developer, acting in concert with a food retailer, wished to demolish a disused fire station to make way for the new store. The site was close to a conservation area, but planning consent was granted after the developer asserted that any harm the development might cause to views of the mill would be minimal or negligible.
In quashing that decision at an objector’s behest, the Court noted that there are only three categories of harm recognised in the National Planning Policy Framework – substantial harm, less than substantial harm and no harm. There is no intermediate category of minimal or negligible harm at the lower end. The harm that the development would cause therefore fell to be considered as less than substantial.
A planning officer’s report, on which the council based its decision, made no mention of the mill or other heritage assets and included no consideration of the project’s impact on the conservation area. Councillors thus had insufficient information on which to evaluate the harm the development would cause or to balance that against its public benefits. The Court concluded that the decision to grant planning permission had effectively been taken by the planning officer, rather than, by the councillors as it should have been.
9. Court Ruling Signals Clampdown on PVC Windows in Conservation Areas
A property’s location within a conservation area is often presented as a selling point by estate agents, but the designation brings with it heavy legal responsibilities. A flat owner found that out to his cost after installing a PVC bay window without planning permission.
The ground-floor window only required planning consent because the flat lay within a conservation area. After the local authority issued an enforcement notice requiring the owner to remedy the breach of planning control, he complained that about 90 per cent of front-facing windows fitted to other nearby properties were made of PVC but that no similar action had been taken against other homeowners.
In allowing his appeal against the notice, a government planning inspector found that the window’s installation did not materially affect the building’s external appearance. In doing so, the inspector defined the ‘building’ under consideration as the block of three terraced houses of which the man’s flat formed part. He noted that all of the ground-floor windows across the whole block were made of PVC.
In upholding the council’s challenge to the inspector’s decision, however, the High Court noted that, in common parlance, each house in a terrace is considered a building. The inspector had given no adequate reasons for his somewhat surprising conclusion that the relevant ‘building’ consisted of the whole terrace.
The inspector was required to focus solely on the visual impact that the window had on the building and the prevalence of PVC windows elsewhere in the conservation area was thus legally irrelevant. The inspector’s decision was quashed, and the Secretary of State for Housing, Communities and Local Government was directed to reconsider the matter in the light of the Court’s ruling.
10. Nationally Important Waste Incineration Plant Receives Judicial Blessing
Scientific views on the environmental impact of incineration plants and other waste processing facilities may differ widely but, as a Court of Appeal decision showed, judges are not in the business of second-guessing expert decision-makers.
The case concerned an environmental permit granted by the Environment Agency (EA) to the operator of an incinerator which was capable of recovering energy from about 585,000 tonnes of non-hazardous waste annually. Development consent had previously been granted for the plant, the construction of which was viewed as a nationally important infrastructure project.
A local campaign group argued that the permit was issued on the factually incorrect and scientifically erroneous basis that measures adopted for dealing with emissions from ash generated by the incinerator would prevent the discharge of heavy metals into surface water. It was submitted that there was a real risk of pollutants finding their way into drinking water supplies.
The EA and the operator conceded that there was an error in a document which provided information in support of the permit application. EA scientists, however, were adamant that there was no pollution risk and that any contaminated water would be successfully contained in a sealed system. The group’s judicial review challenge to the permit was rejected by a judge.
In dismissing the group’s appeal against that outcome, the Court found that the error had not affected the decision to issue the permit. Although there was a fundamental difference of opinion between experts as to the risks of surface water contamination, the EA’s conclusions were neither irrational nor based on incorrect science. The EA was entitled to a margin of appreciation in the exercise of its expert judgment and it was not the Court’s role to substitute its views for those of EA scientists.
11. Thinking of Doing a Property Deal Without Legal Advice? Think Again!
Entering into property transactions without expert legal advice is always a hostage to fortune. A restaurateur found that out after he was dishonestly induced to enter into an illegal sub-lease of commercial premises by a businessman whom he trusted as a friend.
Following a series of informal meetings, the restaurateur agreed to take a sub-lease of the premises from the businessman. A written agreement was drafted, although not by a qualified solicitor. There were two somewhat different versions of the agreement in existence, one of them signed, the other not. The signed version was replete with handwritten additions, sowing further confusion as to what had in fact been agreed.
The restaurateur launched proceedings against the businessman after the landlord found out that the premises had been illegally sublet and took possession of them. In upholding his claim, the High Court found that he had been induced to enter into the agreement by the businessman’s deliberate misrepresentation that he had obtained the landlord’s consent to subletting the premises.
The businessman had also falsely led the restaurateur to believe that the underlying lease, which was due to expire in under five years, had 16 years to run. The Court found that, had he known that the businessman’s representations were untrue, the restaurateur would have walked away and never entered into the agreement. The businessman was ordered to pay him £91,532 in damages, that sum representing the full extent of his losses and expenses arising from the agreement.
12. Need for Mobile Telecoms Coverage Trumps Private Property Rights
A rare exception to the sanctity of private property rights is that telecommunications apparatus can in certain circumstances be installed on land without the consent of its owner or occupier. The extent of such rights, which are far from universally popular with landowners, came under Court of Appeal scrutiny in a guideline case.
A mobile telecommunications operator was considering the installation of a mast on the roof of a university hall of residence. It served notice on the university under the Electronic Communications Code (ECC) requiring that access be given to surveyors and other professionals so that the viability or otherwise of the location could be ascertained. The university refused to grant such access.
The operator was not seeking any permanent right to install a mast, although it was likely to do so in the future in the event of a positive survey result. In ruling on the dispute, however, the Upper Tribunal (UT) found that it had power to impose upon the university an agreement permitting access to the building for the purpose of determining whether it was a suitable location for a mast.
In considering the university’s appeal against that ruling, the Court noted that the purpose of the ECC is to foster national mobile phone coverage by reducing the price payable by operators for the acquisition of rights to install masts and other apparatus on private property. Landowners stand to receive much less if compelled to confer such rights and thus prefer to operate outside the ECC if they can.
In rejecting the university’s appeal, the Court noted the reality that no electronic telecommunications equipment can be installed without prior performance of a viability survey. On a true interpretation of the ECC, the operator therefore had a free-standing right to enter the property in order to perform a suitability assessment and the UT was entitled to impose on the university an agreement to that effect.
13. High Court Sanctions Release of Green Belt Land for Housing Development
Metropolitan Green Belts are precious but, in an era of escalating housing demand, they cannot be viewed as sacrosanct. The High Court made that point in opening the way for the release of swathes of Green Belt land for construction of thousands of new homes over a 15-year period.
The case concerned a local authority area 89 per cent of which was protected by Green Belt policies. The need for more housing in the area, particularly affordable homes, was acute. Pursuant to the recommendations of an inspector following a public examination, the council adopted a local plan which involved the release of large tracts of Green Belt land for development.
The inspector calculated that 562 homes needed to be built in the area every year until 2034, equating to a total of 10,678 homes over the plan period. That rate of development far exceeded historic levels, but the inspector also recommended a buffer of about 4,000 homes, bringing the total to 14,602.
Emphasising the pressing need for more affordable homes in the area, the inspector found that the buffer was required to take account of unexpected contingencies, including slippage or non-delivery of development projects. There were exceptional circumstances justifying alterations to Green Belt boundaries which would not cause widespread harm to the openness of the area.
A local campaigner joined two parish councils in challenging the plan. They argued that the inspector’s assessment of future housing need was irrational. His adoption of such a substantial buffer meant that thousands more homes would be built over the plan period than the council objectively needed.
Dismissing their complaints, however, the Court emphasised the consequences that would arise if none of the sites in issue were released from the Green Belt and allocated for housing. That would, over the plan period, produce a shortfall of 6,295 homes when measured against the inspector’s target figure of 14,602.
There was nothing illogical in the inspector’s conclusion that a significant buffer was needed and its size was a matter for his planning judgment. He had justifiably concluded that the circumstances were exceptional, in that there was no prospect of the area’s employment, business and housing needs being met over the plan period without releasing parts of the Green Belt for development.
14. Registration of Town or Village Greens – Supreme Court Clarifies the Law
Registering land as a town or village green makes it sacrosanct against development and greatly reduces its value, at least in financial terms. A landmark Supreme Court ruling will, however, render such registration of publicly owned land a much greater challenge in future.
The case concerned areas of public authority-owned meadow and woodland which adjoined a school and a hospital. Local campaigners applied to register them as town or village greens under the Commons Act 2006 on the basis that they had been used by local inhabitants for recreational purposes, as of right, for at least 20 years. The applications were ultimately successful before the Court of Appeal.
In upholding the public authorities’ appeals against that outcome, however, the Supreme Court ruled by a majority that registration under the Act should not be permitted where land is acquired and held by a public authority for defined statutory purposes and its recognition as a town or village green would be incompatible with those purposes.
There was no indication in the registration provisions of the Act that Parliament’s intention was to prevent use of publicly held land for specific public purposes defined by statute. The Court emphasised that the embargo on registration of land held by public authorities for statutory purposes does not depend on how relevant sites have in fact been used at any particular point in time.
15. Deliverability of Housing Development Sites – Court of Appeal Guidance
How should the deliverability of potential sites for new housing be assessed? The Court of Appeal addressed that burning issue in rejecting a parish council’s bid to block construction of up to 229 new homes in its area.
The parish council challenged decisions of the local planning authority (LPA) to grant three planning permissions for residential developments in its area. The LPA agreed that none of the projects accorded with the local development plan, but concluded that it only had a sufficient supply of deliverable housing sites to last about three years. That being well below the five-year target set by the National Planning Policy Framework (NPPF), the LPA decided that the presumption in favour of sustainable development applied and that the consents were therefore justified.
The parish council argued that the LPA’s understanding of the NPPF was seriously flawed. It was alleged to have treated as deliverable only those sites where future housing development was certain, or even absolutely certain. The parish council’s complaints were, however, rejected by the High Court.
In dismissing the parish council’s appeal against that outcome, the Court of Appeal noted that it was for the LPA to decide, within the bounds of reasonable planning judgment, what degree of confidence should be applied to the deliverability of new housing on various sites. The LPA enjoyed considerable latitude when assessing whether there was a reasonable prospect of those sites being developed.
The question of whether a site is deliverable hinges not only on achievability, but on availability, suitability and viability, all of which ultimately depend on an exercise of planning judgment. The LPA had made no reference to certainty as a proxy for the concept of realistic prospect and, although it may have taken a more circumspect view of deliverability than some other local authorities, there was no indication that it had misunderstood or misapplied the NPPF.
The parish council also claimed that the LPA had caved in to pressure from developers and was inappropriately influenced by fear that, if it refused to grant the permissions, it would have to defend its decisions during costly appellate processes. In rejecting those arguments, however, the Court noted that there is nothing unlawful about an LPA wanting to have confidence that it will be able to robustly defend the judgments it forms on the deliverability of housing sites. All three decisions had been taken on the basis of proper planning considerations and had not been distorted by financial concerns.
16. High Court Ruling Eases the Way of HS2 Railway Line Development
Great crested newts and a rural area’s archaeological heritage were the focus of an important High Court decision which will significantly ease the path to development of the nationally important HS2 railway line.
The line’s developer wished to erect an earth embankment in a field so as to enable a community of newts to be relocated out of the way of a proposed new viaduct. The company had deemed permission to carry out the works under the High-Speed Rail (London-West Midlands) Act 2017, but was required to seek the local authority’s approval of its plans and the specifications of the proposed works.
The council refused approval on the basis that the design and external appearance of the works should be modified to preserve a site of archaeological interest and nature conservation value. It said that the development could reasonably be carried out elsewhere. A planning inspector subsequently agreed with the council, but the Secretaries of State for Transport and Housing, Communities and Local Government rejected his advice and upheld the developer’s appeal.
In rejecting the council’s challenge to that decision, the Court noted that the issues raised were potentially of importance to the determination of other applications for approval in connection with the HS2 project On a true construction of the Act, the onus was on the council to show that the design or external appearance of the earthworks should reasonably be modified to preserve the site of archaeological interest or that they could be carried out elsewhere. It had, however, put forward no evidence in support of those contentions.
The council’s and the inspector’s view that the application should be postponed until after archaeological investigations were complete was understandable, but it was ultimately not their decision to make. The developer was best placed to oversee the programme of applications needed to make HS2 a reality and it would have been a misuse of the council’s powers to withhold approval because it believed that the application was premature. That was not a permissible ground for refusal.
The developer had explained in detail how the earthworks’ potential adverse impact on the archaeology of the site would be mitigated. Trial pits would be dug, and surveys conducted, enabling appropriate action to be taken in the light of their findings.
17. Council ‘Seriously Misled’ Into Granting Residential Planning Permission
Official decision-making is only as good as the advice on which it is based. The High Court succinctly made that point in ruling that a local authority was seriously misled into granting itself planning permission for a residential development.
The case concerned a countryside meadow owned by the council, which was said by objectors to have been used for generations for community pastimes – including maypole dancing, dog walking, children’s play and Sunday school outings. After the council granted itself permission to build a large house on the meadow, a local campaigner mounted a judicial review challenge.
The council based its decision on a planning officer’s report which stated that the proposal, whilst conflicting with some local planning policies, was acceptable and would cause less than substantial harm to the conservation area in which the meadow was located. Any such harm was said to be outweighed by the public benefits of constructing a well-designed dwelling.
In quashing the permission, however, the Court noted that the report failed to make any mention of two key local countryside protection policies. The report’s assertion that the proposal complied with the local development plan, when read as a whole, was thus seriously misleading.
The Court also identified an unexplained inconsistency between the decision and previous resolutions of the same council to refuse planning consent for two similar developments. Had councillors received correct advice, the Court found that they might well have reached a different decision.
18. Luxury Hotel faces Insolvency After Residential Planning Consent Refused
Developing land for housing can provide the knock-on benefits of saving troubled businesses, thus preserving jobs and local economic health. However, as a High Court ruling showed, such advantages do not always outweigh planning objections.
The case concerned a luxury hotel in severe financial difficulties. Its owner argued that, unless it were permitted to build up to 200 homes in its grounds, the business – which employed about 200 people and was said to be worth over £4 million to the local economy annually – would face insolvency within five years.
The local authority, however, refused planning permission for the proposed scheme, in part because of concerns that it would lead to an increase in the number of recreational visitors to a protected area of coastal marshland which was about 2.4 kilometres from the site and which was home to a rich array of birdlife.
The site also adjoined a conservation area which included a stately home and its listed park and garden. A planning inspector, who upheld the council’s decision following a public inquiry, said that the development would permanently change the setting of those heritage assets and significantly harm the quality of the landscape and its distinctive local character.
In ruling on the owner’s appeal against the inspector’s decision, the Court found that she had in one respect misinterpreted advice given by Natural England, who had no objection to the proposals after the owner agreed make a financial contribution to the cost of visitor management measures and to provide alternative natural green space. She had also to some extent erred when assessing the weight to be given to the development’s contribution to affordable housing in the area.
In exercising its discretion to dismiss the owner’s challenge, however, the Court described those errors as minor. Given the weight of planning objections to the proposals, the errors had not affected the inspector’s ultimate decision and the refusal of planning permission was inevitable.
19. Inheritance Tax on Agricultural Land Depends on Open Market Value
Agricultural land, like any other asset, is ultimately worth what someone is willing to pay for it and the only sure means of assessing its value is to expose it to the open market. A tribunal made that point in ruling on an Inheritance Tax (IHT) dispute.
Four years after a sheep farmer’s death, the personal representatives of his estate sold about eight acres of his grazing land to a company owned by his daughter and son-in-law. The land was not put to market before the price was agreed at £500,000. HM Revenue and Customs took the view that this was not the best price that could reasonably have been obtained and valued it at £800,000 for IHT purposes.
In ruling on the estate’s challenge to that decision, the Lands Chamber of the Upper Tribunal (UT) noted that the land had development potential. It had in the past been the subject of a series of option agreements with developers, although none of them had reached fruition. The local authority had at one point resolved to grant consent for 100 new homes on the site, but that planning application was subsequently withdrawn due to the non-completion of an agreement under Section 106 of the Town and Country Planning Act 1990.
The UT noted that, by Section 190(1) of the Inheritance Tax Act 1984, the sale price of land sold by a deceased’s estate is taken to be the price for which the land is actually sold or, if greater, the best price that could reasonably have been obtained for it. On the basis of prices achieved in respect of comparable sites in the area, the UT found that a price of £645,000 would have been achieved had the land been placed on the open market. The estate’s appeal was upheld to that extent and that figure will be used to assess its IHT liability in respect of the site.
20. Court of Appeal Acts to Protect Gypsy and Traveller Human Rights
Gypsies and travellers are amongst the most vulnerable groups in British society but their freedom to pursue a nomadic lifestyle is enshrined in law. The Court of Appeal resoundingly made that point in discouraging attempts by some local authorities to ban them from every scrap of publicly owned open land in their areas.
A borough council applied for an injunction which would have the effect of banning persons unknown from entering, occupying or encamping on 171 sites in its area – effectively the entirety of public spaces in the borough, save highways and cemeteries. The application was refused by a judge, principally on the basis that such a borough-wide embargo was too broad and would fail to respect the rights of gypsies and travellers under human rights and equality legislation.
In dismissing the council’s appeal against that outcome, the Court noted that similar injunctions were currently in force in 38 local authority areas across the UK, but that this was the first such order to be challenged at appellate level. That was largely because members of the gypsy and traveller communities had not been legally represented during hearings at which the orders were granted.
Ruling that there was no basis for the Court to interfere with the judge’s conclusions, the Court observed that Romany gypsies and Irish travellers have been present in Britain for centuries, but that they remain particularly vulnerable minorities. The grave and long-standing shortage of gypsy and traveller transit sites throughout the UK had led to an inescapable tension between the law of trespass and the human right of gypsies and travellers to respect for their family lives.
Giving guidance for the future, the Court stopped short of ruling that such local authority-wide injunctions should never be granted. It was, however, incumbent on councils to regularly engage with the gypsy and traveller communities and such orders should be regarded as exceptional measures which could only be justified if they represented the only way forward.
Local authorities that applied for such orders would be required to demonstrate an understanding and respect for gypsy and traveller culture, traditions and practices. Evidence that councils had complied with their duties to provide sufficient authorised gypsy and traveller sites would also generally be required. Welfare assessments of individual gypsies or travellers, particularly children, would constitute good practice and the Court emphasised that it will never be enough for a council to argue that a travelling community can simply move elsewhere or occupy private land.
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This e-bulletin was first published on 3 April 2020.
