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Real Estate Newsletter – Spring 2022

Welcome to the Spring edition of our Real Estate Newsletter.

In our first edition of 2022, we round up some of the main planning and property stories of the last few months.

We would welcome feedback on the content covered below and any comments you may have on the future focus of this newsletter.

Nicholas Brent, Partner and Head of Druces’ Real Estate Team.

Property – General

1. Selling Land at Auction? You Have a Legal Duty to Disclose Defects in Title

It is hardly surprising that land auction brochures tend to describe properties on sale in positive terms. However, as an important High Court ruling underlined, sellers are under an overriding legal obligation to disclose defects in title that may have a significant impact on price.

A buyer successfully bid £130,000 for a plot of land at auction. The seller took legal action against her after she declined to complete the sale. Following a trial, she was ordered to pay the seller £43,440 in damages, that sum representing the difference between the price she had agreed to pay and the price the land eventually fetched on being reauctioned. Her argument that she was entitled to rescind the sale contract, and therefore to the return of her deposit and buyer’s premium, was rejected.

Ruling on her appeal against that outcome, the Court noted that the auction brochure made no mention of an overage covenant to which the land was subject and which entitled a third party to 50 per cent of any increase in its value arising from a grant of planning permission. The terms of the covenant were disclosed in a legal pack prepared for the auction, but the buyer did not read it before the sale.

Upholding the appeal, the Court noted that the principle of caveat emptor – or buyer beware – does not apply to defects in title to land. There is a well-established rule that sellers of property are under a duty to disclose such defects. Buyers’ imprudence in not making full inquiries does not relieve sellers of that duty and, in the absence of proper disclosure, contractual conditions of sale under which an auction is held do not serve to bolster a seller’s position.

The existence of the covenant was a defect in title to the land. The references in the brochure, and by the auctioneer, to the need to read the legal pack were insufficient to comply with the seller’s duty of disclosure. Such references were made in respect of each of the 35 properties auctioned on the day and did not put the buyer on notice of any unusual feature of the title in respect of the particular lot.

She was entitled to assume that the duty of disclosure had been complied with and that there would be no unusual defects revealed in the legal pack. Full and frank disclosure required the overage covenant to be specifically brought to her attention and that of other potential buyers in the auction particulars, in an addendum to those particulars or by way of specific reference by the auctioneer.

2. Empty Cinema Blaze Triggers Landmark Court of Appeal Ruling

When marketing commercial premises, they obviously have to be made available for inspection by prospective buyers, tenants or their representatives – but to what extent, if any, do such visitors owe the property owner a duty of care? The Court of Appeal addressed that critical issue in a ground-breaking decision.

The case concerned an empty cinema that was on the rental market. Acting on the instructions of a prospective tenant, a representative of a design firm was granted permission to make an unchaperoned inspection of the premises. On entry, he disengaged the alarm and was alleged to have left a door to the street unlocked. During his visit, an intruder was said to have gained access via the unsecured door and set a fire that gutted the premises. In those circumstances, the property’s owner launched a £6.5 million damages claim against the firm.

Following a preliminary hearing, which was conducted on the assumption that the facts alleged by the owner were correct, a judge noted that, by leaving the door unlocked, the visitor had increased the risk that an intruder might gain entry. Securing the door would have prevented the intruder from causing the damage. The owner’s claim was nevertheless struck out on the basis that, as a matter of law, it bore no real prospect of success.

The judge noted that the visitor’s failure to lock the door was a pure omission rather than a positive act. The fire was not caused by him but by an unconnected third party. He did not create the source of the fire or provide the means by which it was started. Neither he nor the firm owed the owner a duty of care in that mere possession of the keys to the premises was not sufficient to render them responsible for safeguarding them from fire damage.

Upholding the owner’s appeal against that ruling, the Court noted that the visitor was at the time the sole authorised occupant of the premises and had been entrusted with the keys. It was fanciful to suggest that he owed the owner no duty of care to take reasonable precautions as to security. Having gained access to the premises at his own request, he owed a duty to take reasonable care not to do, or fail to do, something that permitted another to burn them down.

Ruling the owner’s claim at least arguable, the Court found that, on the basis of the facts alleged, all the necessary ingredients of a negligence claim were present: duty, foreseeability, breach and causation. The visitor did not just provide the opportunity for the intruder to access the premises. Having taken the positive steps of turning off the alarm and unlocking the door, he chose not to relock it and left it unguarded. That arguably went beyond a mere omission and amounted to an actionable wrong. The ruling opened the way for the owner’s claim to proceed to a full trial.

3. Landlord’s ‘Unreasonable’ Behaviour Thwarted Seven-Figure Flat Sale

Residential tenants are commonly required to seek their landlord’s written consent before assigning their leases to others. However, as a High Court case showed, landlords are generally not entitled to withhold such consent unreasonably.

The case concerned the long leaseholder of a flat that was set above commercial premises owned by his landlord. The tenant wished to sell his flat by assigning his lease and had received offers in excess of £3 million for the property. Under the terms of his lease, however, he had to obtain his landlord’s consent to an assignment, such consent not to be unreasonably withheld.

The tenant launched proceedings on the basis that a number of attempts to achieve a sale of the flat had fallen through due to the landlord’s unreasonable behaviour in withholding consent to an assignment. The landlord asserted that he had acted reasonably throughout and was quite content for an assignment to proceed.

Ruling on the matter, the Court noted very material evidence of the landlord’s state of mind, in particular his desire to string the process of giving consent out for as long as possible. There was clear evidence that he had no intention of complying with his duty to consent in a reasonable time, without unreasonable preconditions. What he seemed to have done was embark on an extended campaign of delay.

The landlord’s unreasonable behaviour, the Court found, was the cause of the loss of one proposed sale of the flat. A further offer remained extant, but that sale had been delayed by the landlord’s conduct. The Court rejected claims that he had engaged in a preconceived strategy that he hoped would drive down the flat’s value and enable him to acquire it himself for less than it was worth. There was simply no evidence as to what the motives for his behaviour may have been.

Given its findings, the Court ruled that the obligation to obtain the landlord’s consent should be dispensed with and that the tenant could validly assign the lease to anyone he wished. The landlord would be powerfully incentivised to support the current proposed sale of the flat in that, if it failed to swiftly complete, he risked exposure to a potentially substantial damages claim.

4. Judges Uncover ‘Sham’ Arrangements to Avoid Non-Domestic Rates

Sham arrangements of varying levels of sophistication are all too often used in an attempt to avoid liability to non-domestic rates. As a High Court case showed, however, judges are adept at looking beyond appearances.

Two commercial properties were tenanted by limited companies (the tenants). They purported to grant licences to occupy the premises to two other companies. When the latter were dissolved, effectively ceasing to exist, the local authority was left holding substantial unpaid rates bills.

After the council sought liability orders in respect of those bills against the tenants, a district judge found that the purported licences were shams. The tenants in each case had never given up rateable occupation of the premises and had remained liable in respect of non-domestic rates throughout the relevant charging periods.

In rejecting the tenants’ appeal against that outcome, the Court found that the judge was entitled to look beyond the appearances given by the corporate structures and the purported licences in order to discern the reality of the situation. There was no error of law in the conclusions he reached on the evidence.

5. COVID-19 – Retailer Unlawfully Refused Government Financial Support

If you run a business and feel that you were wrongly denied government financial support during the COVID-19 pandemic, you should contact a solicitor straight away. A small fashion retailer who did just that succeeded in a High Court challenge.

The retailer, which operated from a unit on an industrial estate, applied for grant aid and business rates relief under schemes that were put in place to give emergency assistance to certain businesses during the pandemic. In rejecting the applications, a local authority refused to accept that the retailer was in occupation of the unit.

After the retailer launched a judicial review challenge, the council admitted that it had erred in law and accepted that the retailer was in some form of beneficial occupation of the unit when the pandemic took hold. It asserted, however, that it was highly likely that the applications would have been refused in any event. That was on the basis that the retailer had failed to show that the unit was mainly used as a shop, which was reasonably accessible to members of the public.

The Court found, however, that the council’s admitted legal error was a fundamental one which infected other aspects of its decision-making process. Its initial view that the unit was unoccupied was in part based on an extremely poor-quality inspection report that was directly contradicted by video evidence put forward by the retailer. The decision was overturned and the council was directed to consider the retailer’s applications afresh.

6. Renewal of Commercial Leases – Intention is More than Mere Contemplation

The legal right that many commercial tenants enjoy to have their leases renewed can be overcome if their landlords ‘intend’ to occupy the premises for their own business or residential purposes. However, as a High Court ruling made clear, the concept of intention involves more than mere tentative contemplation.

The case concerned the tenant of a restaurant whose lease was protected under the Landlord and Tenant Act 1954. The landlord served notice terminating the lease and opposed the grant of a new tenancy on the basis that he intended to open his own hospitality venue on the premises. Following a preliminary hearing, however, a judge found that he had failed to establish such an intention.

In rejecting the landlord’s appeal against that ruling, the Court noted that the case hinged on Section 30(1)(g) of the Act, which excuses landlords from the usual obligation to renew protected commercial leases if they intend to occupy relevant premises, or part of them, as their residence or for the purpose of themselves carrying on a business.

The Court noted that, for a project to be ‘intended’, it must move out of the realm of tentative, provisional or exploratory contemplation into the valley of decision. The judge made no error of law and, in considering the landlord’s state of mind, was entitled to find on the evidence that he lacked the firm and settled intention required by Section 30(1)(g).

7. Are You a Pandemic Home Worker? Do You Need Planning Permission?

Vast numbers of people have been prompted by the COVID-19 pandemic to take up working or running businesses from home – but do they need planning permission for a change of use? The High Court addressed that burning issue in the case of a personal trainer who fitted out part of a timber outbuilding in his garden as a gym for his clients.

The man argued that the business use of the outbuilding was ancillary to his use of a dwelling and that no planning permission was required. However, the local authority twice rejected his applications for a certificate of lawful use. Despite arming himself with an expert acoustics report and testimony from neighbours, his appeals against the refusals were rejected by planning inspectors.

The inspector who dismissed his most recent appeal noted that the training sessions appeared to be well controlled. She pointed out, however, that noise was not the only factor to be taken into account. The comings and goings of at least four or five clients a day down a narrow passageway could also be a disturbance to neighbours, particularly in a tight-knit residential area.

Paying visitors to the outbuilding would be clearly visible from the rear windows and gardens of neighbouring homes. As a matter of fact and degree, the inspector found that business use on such a scale was neither trivial nor incidental to the enjoyment of a dwelling. It resulted in an overall change to the property’s use and character for which planning permission was required.

Dismissing the man’s challenge to that outcome, the Court rejected arguments that visual disturbance to neighbours was an immaterial factor that the inspector should not have taken into account. Arguments that she failed to give adequate and intelligible reasons for her decision also fell on fallow ground.

8. Private Property Rights v Telecommunications Infrastructure Needs

One reason why the rooves of many tall buildings positively bristle with aerials is that private property rights sometimes have to take second place to the overriding need for a modern telecommunications network. As one case showed, however, property owners are not obliged to just sit back and allow telecommunications infrastructure to be foisted upon them.

An infrastructure company wished to have access to the roof of a tall commercial building so that surveyors could assess its suitability as a site for telecommunications apparatus. The building’s long leaseholder was willing to grant access in principle, but objected to the company’s proposal to perform invasive works, including drilling holes and cutting the roof covering in order to discern its underlying structure.

After a negotiated resolution could not be reached, the company referred the matter to the Upper Tribunal (UT). It urged the UT to exercise its power under Paragraph 26 of the Electronic Communications Code to impose an interim agreement on the leaseholder that would permit the works to proceed.

The leaseholder asserted that the building was for various reasons unsuitable as a location for telecommunications equipment. It accepted that the company had a good arguable case that an agreement should be imposed enabling surveyors to access the roof. In resisting the proposed invasive works, however, it pointed out, amongst other things, that the roof was coated with a proprietary material that would be very difficult to reinstate if pierced or damaged.

Ruling on the matter, the UT noted that any owner of a valuable, high-quality building might be understandably reluctant to allow contractors over whom it has no authority or control to interfere with its structure. The leaseholder had legitimate concerns that the company was seeking unrestricted rights to do undefined works, constrained only by the purpose for which they would be undertaken.

The UT declined to impose an agreement authorising invasive works on the roof at this stage. Once a non-invasive survey had been carried out, it would be open to the company to return to the UT and seek further rights, if considered necessary. The UT expressed the hope that the dispute could be resolved by agreement and that a further reference would not be required.

9. High Court Steps In to Unwind Former Friends’ Joint Property Venture

Friends who go into business together sadly often forget that personal relationships do not always stand the test of time. Trust alone does not provide a firm foundation for such ventures and, as a High Court ruling showed, legal formality at the outset should never be dispensed with.

The case concerned two married couples who entered into a joint buy-to-let property venture. After they fell out, a dispute developed as to how the venture was to be wound up. The disagreement focused on four properties. After they entered into mediation, a settlement agreement was reached.

The settlement resolved issues concerning each couple’s respective shares in the properties. It also provided for the appointment of a chartered surveyor to conduct independent valuations. With the objective of achieving a clean break, it sought to create mechanisms by which various properties would be sold or interests in them transferred between the couples.

One couple, however, asserted that the surveyor’s valuations were flawed. Further obstacles remained in the path of winding up the venture in that the couples could not agree on the correct interpretation of the settlement agreement. Proceedings were eventually launched with a view to achieving a final resolution.

Ruling on the case, the Court rejected arguments that the jointly instructed surveyor had departed from his brief. His valuations were binding on both couples. On a true interpretation of the settlement agreement, one couple was bound to assign to the other a beneficial interest in one of the properties. They were also obliged to cooperate in the open market sale of the other three properties.

In making orders of specific performance to give effect to its interpretation of the settlement agreement, the Court noted that a firm response was needed to bring about some degree of finality to a hard-fought dispute between former friends.

10. Parking Obstruction of Rights of Way – The Legal Principles Explained

The parking of cars along shared access routes is all too often a source of acrimony between neighbours. A High Court ruling provided a clear explanation of the legal principles commonly applied when resolving such disputes.

The case concerned a lane that provided access to two residential properties. The owner of one of them sought an injunction against the owners of the other restraining them from obstructing his right of way over the lane by parking vehicles along its length.

Whilst accepting that the claimant had a right to use the lane on foot, the defendants denied that he had a vehicular right of way. They asserted that they and their visitors were entitled to park along the side of the lane in single file and that such use did not conflict with the claimant’s pedestrian access.

Ruling on the matter, the Court noted that the claimant’s home had previously been occupied by his parents and grandparents. It was unclear who owned the lane and the claimant accepted that he had no express documentary right of way over it. However, the Court found that he and his predecessors had enjoyed unrestricted use of the lane for access purposes since at least 1953.

That use having commenced in excess of 20 years before the proceedings were lodged, the Court ruled that the claimant had established a right of way in respect of the lane, at all times and for all purposes. The defendants’ parking of cars along the lane amounted to a substantial encroachment on that right of way.

The defendants failed to establish that they had, by using the lane for parking for over 20 years, acquired a legal right to do so. The Court found that, in the past, they at most had a licence to park in the lane with the permission of the claimant’s predecessors. Since becoming owner of his property, the claimant had consistently disputed their entitlement to use the lane for parking.

The claimant was granted an injunction that forbade the defendants or anyone connected with them from obstructing the lane with parked vehicles, save with his express permission. However, the Court expressed the hope that the neighbours would be able to come to terms whereby vehicles could be parked along the lane, where necessary, by arrangement with the claimant.

11. Jersey-Registered Property Developer Faces English Winding Up Petition

Companies engaged in developing UK property are often registered abroad and that can pose legal difficulties for creditors. As a High Court ruling showed, however, in the event of insolvency proceedings, it is a company’s centre of main interests (COMI) that matters, rather than its registered office address.

A firm of architects was owed a judgment debt of £354,000 by a Jersey-registered property company. The debt arose from the firm’s engagement by the company to assist in obtaining planning permission for a hotel development in England. With a view to recovering its money, the firm lodged a winding up petition against the company.

The debt was not disputed and the company’s sole director also did not dispute that it was unable to pay its debts. The company argued, however, that its COMI was the same as its registered address in Jersey and the Court thus had no jurisdiction to hear the petition.

Rejecting that argument, however, the Court was satisfied that the company’s COMI was at all times in England. All the places in which it pursued its economic activities, held assets, conducted negotiations and exercised management functions pointed towards that conclusion.

The company’s sole economic purpose was to carry on business in the UK by developing the property, its principal asset. Its name itself indicated a likelihood that it was a special purpose vehicle. Its contracts were governed by English law and subject to English jurisdiction. Save for formal board meetings, which took place in Jersey, its head office administrative functions were conducted in England.

The company also failed to persuade the Court that its finances had been affected by the COVID-19 pandemic so that, by virtue of the Corporate Insolvency and Governance Act 2020, no winding up order could be made against it. Having accepted jurisdiction to consider the petition, the Court directed that it be listed for hearing in the general winding up list.

12. Commercial Premises – Where Does the Burden of COVID-19 Losses Fall?

Where the COVID-19 pandemic rendered the use of commercial premises illegal or unviable, should the resulting losses fall on the landlord or the tenant? The High Court pondered that burning issue in a decision of vital importance to property professionals and the hospitality industry.

The case concerned cinema premises that were required to shut during lockdowns. Even when permitted to open, continuing restrictions were said to have rendered the business unsustainable. Between the start of the first lockdown and 16 May 2021, the cinema was open for only 71 days and its takings were £247,000. During the same period in 2018-2019, takings were £8.92 million.

After the tenant ceased to pay rent in June 2020, the landlord launched proceedings to recover about £2.9 million in rent arrears and service charges. It sought summary judgment on its claim against the tenant, the original tenant under a previous lease and their parent company, which guaranteed sums due under both leases.

In resisting the claim, the defendants argued that they were not liable to pay rent and service charges relating to lockdown periods, during which the premises could not legally be open. They asserted that rent and service charges were only payable at times when the premises could be used as a cinema with attendance levels in line with those anticipated when the leases were entered into.

Ruling on the matter, the Court noted that the leases forbade use of the premises for any purpose other than that of a cinematograph theatre with associated services. However, the landlord expressly gave no covenant, warranty or representation that the premises could lawfully be used for that permitted purpose.

The Court found that the defendants had no real prospect of success in arguing that terms should be implied into the leases so as to relieve them from liability. Such terms were not so obviously necessary as to go without saying, nor were they required to give the leases business efficacy. The question of where the risk of the cinema being required to close should lie was a matter for negotiation. The fact that, as matters stood, the risk fell on the tenant did not lead to a conclusion that the leases lacked commercial or practical coherence.

The Court also rejected the defendants’ arguments that the cinema’s enforced closure amounted to a failure of consideration that undermined the whole basis of the leases. The leases continued to subsist and the tenant had remained in possession throughout. The ability to use the premises as a cinema was not fundamental to the basis on which the leases were entered into.

The defendants having no realistic prospect of successfully resisting the claim, the landlord was granted summary judgment. The sum payable on a summary basis was, however, reduced to take account of an arguable counterclaim in respect of certain insurance matters.

Property – Planning

13. What is a ‘Controversial’ Planning Application? High Court Gives Guidance

If you object to a planning application, you are perfectly entitled to encourage others to join you in voicing opposition. However, as a High Court ruling showed, the fact that objections may, in effect, come from a single source is relevant to the question of whether a proposed development should be viewed as controversial.

The case concerned a planning consent granted for a night shelter for the homeless in a listed building, another part of which was occupied by a dance studio. A total of 26 objections to the application were received, all but one of which related to the development’s impact on the studio and its customers.

Concerns were expressed that difficulties would be caused to dance students, some of them children, by homeless people congregating outside the studio and that homeless people resorting to the shelter would find it difficult to sleep so close to a business that played music late at night.

The consent was granted by a planning officer, using delegated powers, on the basis that the proposal was unlikely to be of a controversial nature. The studio contended that, given the number of objections, that view was irrational. In mounting a judicial review challenge to the consent, it asserted that the application should have been referred to the council’s development control committee for determination.

Rejecting the studio’s complaints, however, the Court observed that there is nothing inherently controversial in the provision of accommodation for homeless people. In assessing whether the application was controversial, the officer was entitled to have regard to the identity of the objectors and to the possibility that their opposition may have been sought or encouraged by the studio.

Any such encouragement did not indicate that the objections were insincere, but the Court observed that it might well indicate that the people concerned may not have felt strongly enough about the matter to object of their own accord. The officer was entitled to conclude that, rather than being controversial, the application was of interest only to a narrow group of people.

14. Empty Office Blocks, Property Guardian and Houses in Multiple Occupation

Does an office block lived in temporarily by so-called ‘property guardians’ have to be licensed as a house in multiple occupation (HMO)? In a case of importance to the commercial property sector, the Upper Tribunal (UT) has answered that question with a resounding ‘yes’.

The case concerned a five-storey office block which, between lets, was occupied by about a dozen property guardians under short-term licences. The benefits that their occupation offered to the property’s owner included protection against vandals and squatters and an opportunity to claim business rates relief.

The local authority took the view that the property was an HMO and that the failure to license it as such amounted to an offence. On that basis, the First-tier Tribunal issued the company that managed the building with rent repayment orders. It was required to reimburse three property guardians for £6,251 in rent they had paid over a seven-month period.

Ruling on the company’s challenge to that outcome, the UT noted that the standard definition of an HMO, as contained in Section 254(2) of the Housing Act 2004, includes a requirement that residents’ occupation of relevant living space must constitute the ‘only use’ of that accommodation.

The company argued that the building did not fit the statutory definition in that the property guardians’ occupation of its living accommodation did not constitute its only use. As their title indicated, they also used the premises to enable them to carry out the protective duties they were obliged to perform under the terms of their licences.

Dismissing the appeal, however, the UT noted that the property guardians were not service occupiers or otherwise employed to protect the building. A side effect of their presence in the building might be to dissuade trespass or damage but, from their point of view, they were there in order to have a roof over their heads: nothing more.

The UT noted that the property guardians were not permitted to conduct businesses or hold meetings on the premises and the only thing they were entitled to do with the living accommodation was to use it as their main residence. To a very large extent, the deterrent services they performed were the consequence or by-product of their use of the building as living accommodation.

15. Overlooked Homeowners Fall Foul of Ambiguity in Planning Permission

Finding your way around the intricacies of the planning system without professional advice is, for most people, a near impossibility. The point was powerfully made by the case of a couple whose intimate living space was overlooked by a skylight fitted to a neighbouring property.

The couple said that the top-floor bedroom, study and bathroom of their home were so badly overlooked by the skylight that they could only get undressed by hiding behind a bookcase. Their neighbour periodically installed a mannequin in the skylight, giving the impression that there was someone there, watching.

The clear glass skylight, which could be opened, was fitted to a side elevation of the neighbouring property as part of a loft extension. A condition attached to planning permission for the works required windows in the side elevation to be non-opening and to be fitted with obscured glass. In reliance on that condition, the couple asked the local authority to issue a planning enforcement notice against their neighbour. The council, however, declined to do so on the basis that the condition only applied to a dormer window and not to the skylight.

Ruling on the couple’s judicial review challenge to that refusal, a judge identified an ambiguity in the planning permission: a reasonable reading of the condition, which made no distinction between skylights and dormer windows, supported the couple’s interpretation. However, design drawings that formed part of the planning permission pointed in favour of the council’s arguments.

To resolve that ambiguity, the judge took account of extraneous evidence in the form of a planning officer’s report, prepared before the grant of planning consent. Viewed in combination with the drawings, the report made it abundantly clear that the obscured glass and non-opening requirements were only intended to apply to the dormer window, not to the skylight. The couple’s case was dismissed.

16. Council’s Asset of Community Value Decision Bore Appearance of Bias

The public have a right to expect that local authority decisions will be free from even the appearance of bias. In one case, the High Court found that a council’s refusal to register an open space as an asset of community value (ACV) failed to match up to that expectation.

The case concerned an urban green space that many local residents treasured as a venue for recreation, sports and community events. It had, however, been allocated for housing development. The local authority’s refusal to grant it ACV status, which would render it harder to develop, was challenged by a local community interest company (CIC) by way of judicial review.

Upholding the CIC’s complaints, the Court noted that an officer’s report on which the council based its decision contained a number of glaring omissions. In treating the council’s firm and settled intention to develop the site as decisive, the report was in some respects wholly one-sided. The council failed to properly consider whether it was realistic to think that community use of the space could continue.

Before appropriating the space for development, the council was obliged to advertise its intention to do so and consider any objections made. However, it had so far taken neither of those steps. There was also no consideration of the National Planning Policy Framework, which places significant weight on community access to open spaces and sports and recreation land, including playing fields.

The council owned part of the space and had entered into a sale agreement with a view to acquiring a further portion. The agreement included a commitment by the seller to use reasonable endeavours to ensure that the space was not granted ACV status. That by itself did not give rise to an appearance of bias. However, the terms of the agreement and the council’s failure to meticulously address all relevant factors before reaching its decision would, in combination, have led a fair-minded observer to detect such an appearance. The decision was quashed.

17. Green Belt Aggregate Extraction Proposal Receives High Court Green Light

Sometimes long-term environmental advantages can only be obtained at the price of shorter-term harm and disturbance to local people. In a case on point, controversial plans to extract millions of tonnes of pulverised fuel ash (PFA) from a Green Belt site received the High Court’s blessing.

The case concerned a site that was for many years used to deposit ash from coal-fired power stations. PFA, which is used in the manufacture of cement and concrete, is classed as a sustainable, recycled aggregate in the UK. It can help to cut carbon dioxide emissions and reduces the need for mining of virgin raw materials. The site had been partially restored to agriculture and decades of deposits had created a mound that formed a distinctive feature in the landscape.

A company planned to extract 23 million tonnes of PFA from the site over a 25-year period, following which it would be reinstated as a country park that would be fully open to the public. The proposal included construction of various buildings and upgraded access arrangements. By the casting vote of the chair of the local authority’s planning committee, planning permission was granted.

The local parish council had objected to the proposal, citing the heavy HGV traffic it would entail and the potential impact on local schools. Following the grant of permission, the parish council challenged the decision, alleging that it was based on a senior council officer’s flawed and misleading report to the committee.

Upholding the permission, the Court noted that the report advised councillors that the benefits of using PFA as a secondary aggregate outweighed the negative aspects of the proposal. Whilst the development was acknowledged to be inappropriate in the Green Belt, and therefore harmful by definition, the report stated that very special circumstances existed that justified the grant of permission.

All relevant harms, both to the Green Belt and to the amenities of local residents, had been taken into account. So far as the impact of new built elements of the proposal was concerned, the report rightly took account of existing buildings on the site. The wording of the report was in one respect infelicitous but the Court was satisfied that any errors it contained were neither major nor material and made no difference to the committee’s decision.

18. Land Adjoining the Highway and Occupiers’ Liability – Court of Appeal Ruling

To what extent, if any, do occupiers of land bordering highways owe a duty of care to road users? The Court of Appeal considered that important issue in the tragic case of a mother who drowned when she veered off a road into a reservoir.

The woman was said to have lost control whilst negotiating a sharp bend on a minor road. She crossed the oncoming lane, and went through a wire fence on the verge and down a stone embankment into the reservoir, where her car submerged. She was in her 20s, and her children aged one and four, when she died.

Her widower launched a compensation claim against the owner of the reservoir and a charity that had a licence to use it. His claim under the Occupiers Liability Act 1984 was, however, summarily dismissed by a judge, who found that it had no real prospect of success.

In rejecting his appeal against that ruling, the Court found that there is nothing in the duties of those occupying properties bordering a highway that extends to preventing motorists from driving off the road onto their land. There was also nothing in the state of the reservoir that created a foreseeable danger against which its occupiers could reasonably be expected to guard. The reservoir was not claimed to amount to a public nuisance and it could not be said that its presence would have deterred a prudent motorist from using the highway.

The Court nevertheless permitted the widower’s alternative case against the local highway authority to proceed to a full trial. His claim that the accident arose from the negligent design and construction of the road – in the form of an unacceptably acute bend – stood a real prospect of success and the judge had been wrong to strike it out. The widower’s appeal was, in that respect only, upheld.

19. Planning – High Court Upholds Councillors’ Right to Change Their Minds

When it comes to controversial planning issues, councillors changing their minds can be part of a perfectly lawful decision-making process. The High Court made that point in stymying a proposal for a rural housing development.

The proposal was to demolish an existing industrial estate and build 55 homes in its place. The estate had been the scene of unlawful processing of large volumes of waste and other materials that had been stored in a mound nearing 15 metres in height. That and noise and disruption generated by the estate had prompted some local residents to vociferously support the proposal.

A local authority planning officer, however, recommended refusal of consent on the basis that the isolated development would conflict with the local plan and harm the intrinsic character and beauty of the countryside. Councillors were also warned that a grant of planning consent would extinguish employment use of the site.

Following a meeting, the council’s planning committee nevertheless recorded that it was minded to grant planning permission. By the time a second meeting was held just over two months later, however, a number of councillors had withdrawn their former support for the proposal and planning consent was refused.

In dismissing a local resident’s judicial review challenge to that outcome, the Court found that the committee had, at the first meeting, come to a preliminary view in favour of the proposal but had not gone so far as to approve it in principle. It was entitled to defer a formal decision until the second meeting, by which time several members had reversed their positions in the light of further information.

The committee’s final decision was neither unconstitutional nor inconsistent and the Court observed that the fact that some members had changed their minds between the two meetings might be said to be evidence of open, rather than closed, minds. The local resident was given a fair opportunity to put his case and the procedure followed did not disclose any manifest unfairness.

20. Three-Hundred-Year-Old Village Pub Listed as Asset of Community Value

Pubs, many of which date back centuries, are under increasing threat of closure due to the COVID-19 pandemic and the general downturn in the licensed trade. As one case showed, however, with the right legal advice there are effective steps that community groups can take to preserve them for future generations.

The case concerned a pub that was the only such establishment in a rural village. There had been a hostelry on the site since 1686. With a view to ensuring its preservation as a pub, the local parish council nominated it as an asset of community value (ACV). The nomination was accepted by the district council and the pub was listed as an ACV under the Localism Act 2011.

In challenging the listing before the First-tier Tribunal (FTT), the pub’s owner argued that the registration was restrictive and might cause delays in any future sale of the property. She asserted that the pandemic had changed the nature of the pub’s business and that it was unfair that it had been listed when another property in the village that served a similar community function had not been.

Rejecting her appeal, however, the FTT noted that it is well recognised that pubs make an important contribution to the wellbeing of communities. There was no suggestion that the owner had any intention of changing the use of the property from that of a pub and any such change would require planning permission.

The pub, which was famous for its Chinese food, was put to numerous community uses, hosting, amongst other things, local fundraising events, celebrations and Christmas lunches for elderly villagers. It was realistic to think that, despite the pandemic, it would continue to serve local people into the future. The nomination was valid and there were no grounds for overturning the listing.

The listing meant that the owner could not sell the pub without first notifying the local authority. The parish council or other community groups would then have six weeks to put themselves forward as a potential bidder. If such a bid were made, there would be a six-month moratorium on any sale to give time for fundraising. It would, however, in the end be up to the owner to decide whether a sale went through, to whom and for how much. It would also be open to her to seek compensation from the council for any financial losses arising from the listing.

21. Council Pays Price for Falling Short of Five-Year Housing Land Supply Target

Local authorities that do not have in hand a five-year supply of deliverable sites for new homes are likely to have residential developments that they consider harmful foisted upon them. Exactly that happened in a High Court case concerning a proposal to build up to 50 new homes on the outskirts of a rural village.

Outline planning permission for the project was refused by the local council, but was granted after the would-be developers appealed to a planning inspector. She took that course despite finding that the development would conflict with local planning policy and cause some harm both to an area of outstanding natural beauty and to the locale’s character and appearance.

The inspector found that the proposal would bring significant benefits, not least in providing much-needed affordable homes. However, the decisive factor was her finding that the council’s current deliverable supply of housing land would only last 1.82 years. She viewed that figure as deeply concerning when compared to the five-year supply target enshrined in the National Planning Policy Framework.

In dismissing the council’s challenge to that outcome, the Court rejected arguments that, when calculating future housing land supply, the inspector was obliged to take into account that, in the preceding nine years, the council had exceeded its housing targets by more than 1,000 homes. In removing that past over-provision from the equation, she was entitled to take the view that residential sites that had already been developed could not be viewed as deliverable.

The Court stopped short of finding that a past over-supply of housing can never be taken into account. Even had the inspector done so, however, the council’s supply of deliverable housing land would still have fallen narrowly short of the five-year target. Given her concern about the trajectory of the council’s ongoing supply of residential development sites, the inspector’s exercise of her planning judgment could not be characterised as irrational.

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