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You are here: BAILII >> Databases >> Scottish High Court of Justiciary Decisons >> SOUTH LANARKSHIRE COUNCIL v. THE LORD ADVOCATE AS REPRESENTING THE SCOTTISH MINISTERS AND OTHERS [2001] ScotHC 95 (30th August, 2001) URL: http://www.bailii.org/scot/cases/ScotHC/2001/95.html Cite as: [2001] ScotHC 95

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SOUTH LANARKSHIRE COUNCIL v. THE LORD ADVOCATE AS REPRESENTING THE SCOTTISH MINISTERS AND OTHERS [2001] ScotHC 95 (30th August, 2001)

[1] In October 1995 planning permission was granted for the proposed M74 Northern Extension Phase II. One of the areas affected by that project included a 3.9 hectare site ("the site") lying east of Farmeloan Road to the north of Rutherglen Cross. Until local government reorganisation on 1 April 1996 the local planning authority for the area were the City of Glasgow District Council. On 20 March 1996 that Council refused the application of GKN Group Services Ltd. ("G.K.N."), the second respondents in the present proceedings, for outline planning permission for retail development on the site. On 1 April the local planning authority became South Lanark Council ("the Council") and on 12 June 1996, GKN served on the Council a purchase notice under Section 169 of the Town and Country Planning (Scotland ) Act 1972. The Council did not respond within three months and therefore the purchase notice was deemed to have been confirmed on 12 September 1996 with the effect that the Council were deemed to have been authorised to acquire GKN's interest compulsorily and to have served a notice to treat on that date.

[2] In such circumstances, as we shall see in more detail in a moment, under Section 25 of the Land Compensation (Scotland) Act 1963 as amended ("the 1963 Act"), GKN were entitled to apply to the local planning authority for a certificate of appropriate alternative development, stating for what classes of development planning permission would have been granted if the subjects had not been acquired compulsorily. On 12 December 1997 GKN applied to the Council for such a certificate in respect of the site. The Council did not determine the application and so, in terms of Section 26(4), the application was deemed to have been refused on 12 February 1998 and the appeal provisions in Section 26 then applied to it. At that time the appeal lay to the Secretary of State. GKN appealed on 17 February 1998 and the Secretary of State appointed Mr. Philip Hutchinson to act as reporter. He held a public inquiry in September 1998 and reported to the Secretary of State on 10 March 1999. The Scottish Ministers, who in the meantime succeeded to the Secretary of State's responsibilities in this matter, issued their decision on the appeal in a letter dated 5 May 2000.

[3] As set out in the letter, the Scottish Ministers allowed the appeal and granted a certificate of appropriate alternative development in respect of the site. The Ministers cancelled the certificate deemed to have been given under Section 25(4)(b). In its place they issued a certificate that at the relevant date, 12 September 1996, when the Council were deemed to have been authorised to acquire compulsorily GKN's interest in the site, planning permission would have been granted for any development for which the Council were to acquire the land and also for three alternative classes of development, but would not have been granted for any other development. The three classes were (a) non-food retail development consisting of approximately 8,360 sq. m. gross floor area, a petrol filling station, a restaurant and car parking, subject to certain conditions; (b) leisure development within classes 3 and 16 of the Town and Country Planning (Use Classes) (Scotland) Order 1989, including cinema, bowling/family entertainment centre, restaurant of approximately 10,800 sq. m. gross floor area and car parking, subject again to a number of conditions; (c) industrial/warehousing development within classes 4, 5 and 11 of the Town and Country Planning (Use Classes) (Scotland) Order 1989 of approximately 9,755 sq. m. gross floor area, subject also to a number of conditions. In each case the first of the conditions specified was in these terms:

[4] Under Section 29 of the 1963 Act the Council have appealed to this court against the Ministers' decision to grant the certificate, in so far as it indicated that planning permission would have been granted for class (a), non-food retail development. They have not appealed the other aspects of the certificate even though, as we have noted, in both (b) and (c) the Ministers indicated that the permissions would have been subject to the same first condition relating to access. In other words, they have acquiesced in the view that at the relevant date planning permission would have been granted for leisure development or industrial/warehousing development subject to a suspensive condition relating to access.

[5] As we have explained, the certificate of appropriate alternative development was granted in terms of Section 25 of the 1963 Act. Subsections (3), (4) and (5) of that section provide inter alia:

Section 26(4) provides that where the local planning authority fail to issue a certificate within the prescribed period, the provisions for appeal are to apply as though the authority had issued a certificate containing a statement of the kind mentioned in Section 25(4)(b).

[6] We break off to observe, since the point is of relevance to our consideration of one of the leading authorities, that the wording of the equivalent provision in the English legislation, Section 17 of the Land Compensation Act 1961 as amended, is slightly different. In particular subsection (4) is more elaborate and provides inter alia:

The words which we have placed in italics are not to be found in Section 25(4) of the Scottish Act.

[7] Speaking of an earlier version of Section 25(4) in Grampian Regional Council v. Secretary of State for Scotland 1984 S.C. (H.L.) 1 at p. 29, Lord Bridge explained the nature and purpose of certificates of appropriate alternative development in this way:

Later in his speech (1984 S.C. (H.L.) at p. 30) Lord Bridge put much the same point in a slightly different way when he said that certificates of appropriate alternative development form

[8] As Lord Bridge notes in the first of these passages, such certificates are, by definition, concerned with a hypothetical rather than an actual state of affairs. We enter the realm of the counterfactual. It is a realm in which certain historians now revel but in this particular corner of the law, defining the landscape of the hypothetical world has at times proved difficult and controversial.

[9] At the risk, therefore, of stating what may appear to be obvious, we make two points that have to be kept in mind when we are exploring this world.

[10] First, it is well settled that, usually at least, the certificate relates to the situation at the relevant date. The planning authority are to state what planning permission would have been granted or that planning permission would have been granted for the development for which it was being compulsorily acquired but for no other development. The planning authority can state this only on the assumption that, at the relevant date, the applicants would have placed before them a valid completed planning application in respect of the site. It must also be assumed that the planning authority would have considered the application on that date. What the planning authority must do is give their opinion as to whether or not planning permission, having been duly sought, would have been granted and, if so, for which kinds of development.

[11] Secondly, although the certificate usually relates to the relevant date, it may specify a later date. This is plain from the terms of Section 25(3)(a) and (5). For instance, the applicant may be of the opinion that, at the relevant date, planning permission would not have been granted for a particular development but that, because of some change in circumstances, it would have been granted at a later date. In that situation, when making his application, the applicant can state that "at a future time" planning permission for some development would have been granted and in their certificate the planning authority, if so advised, will specify the future time at which planning permission would have been granted. This can then be used for assessing compensation. See Grampian Regional Council 1984 S.C. (H.L.) at p. 33 per Lord Bridge. Since the planning authority are not, of course, bound by the terms of the application, it appears to us that, when considering it, they may specify a different future date. It also seems to us that, again if so advised, the planning authority may specify a future date even if not asked to do so, if they consider that, while planning permission would have been refused at the relevant date, due to a change in circumstances it would have been granted, say, six months later. A flexible approach of that kind would advance the aim of the system, to assist in determining the appropriate level of compensation for the acquisition of the interest in the land.

[12] Recently, in Fletcher Estates (Harlescott) Ltd. v. Secretary of State for the Environment [2000] 2 AC 307 the House of Lords gave further guidance on the approach that a planning authority must take when considering an application for a certificate under Section 17 of the Land Compensation Act 1961, the equivalent of Section 25 in the 1963 Act. In his speech, with which all the other members of the House concurred, Lord Hope of Craighead said ([2000] 2 A.C. at p. 319 B - C) that the issue in the appeal related to the meaning and effect of the direction in Section 17(4) that the local planning authority must issue their opinion regarding the grant of planning permission in respect of the land in question "if it were not proposed to be acquired by an authority possessing compulsory purchase powers". He added:

Lord Hope identifies the question in issue as relating to the implications of these particular words in Section 17(4) of the English Act and, as we have noted already, no such words appear in Section 25(4) of the Scottish Act. We attach no importance to that omission, however, since the same words appear in Section 25(3)(a) and must be implied into subsection (4), dealing with the local authority's decision on an application framed in terms of subsection (3)(a). That being so, we are satisfied that the reasoning in Fletcher Estates falls to be applied in construing the Scottish legislation. Counsel did not suggest otherwise.

[13] The conclusion of the House of Lords on the inference to be drawn from these words was ([2000] 2 A.C. at p. 322 H - 323 A):

Later his Lordship said ([2000] 2 A.C. at p. 324 D - F):

Lord Hope cited in support the passage from the speech of Lord Bridge in Grampian Regional Council (1984 S.C. (H.L.) at p. 31 where he explained his understanding of Bell v. The Lord Advocate 1968 S.C. 14 as being a case where the Secretary of State had relied on a planning policy that could be supported on planning grounds quite independently of any scheme for acquisition of the land as public open space.

[14] We must apply the guidance in Fletcher Estates to the circumstances of this case. The assumption which the reporter and the Scottish Ministers had to make related to the relevant date, 12 September 1996. They were to assume that the compulsory acquisition by the Council, together with the underlying proposal for the M74 Extension, was cancelled on that date, but they were not to make any assumption as to what might or might not have happened before that date. Moreover, they were to determine the matter in the light of the circumstances existing at that date and by the application of ordinary planning principles. In their application for the certificate GKN specified September 1996 as the time at which, in their opinion, the planning permission would have been granted.

[15] We turn now to the first ground of appeal which arises out of certain features of the actual planning landscape in September 1996.

[16] First Ground of Appeal

For the purposes of the appeal, at least, both parties were prepared to accept that in September 1996 there was operator interest in the development of up to 23,250 sq. m. of non-food retail floor space in South Glasgow. But GKN were not the only company interested in obtaining permission for such a development.

[17] At that time the Secretary of State had before him an appeal by British Rail Property Board against the failure of the former City of Glasgow District Council to determine their application for outline planning permission for inter alia a non-food retail development of 7440 sq. m. at the former Gushetfaulds Freightliner Depot on Cathcart Road, Glasgow. He also had before him an application by Castle AA Brothers Ltd. for outline planning permission for the demolition of existing premises for redevelopment to provide 15,040 sq. m. of non-food retail floor space at 515 Crown Street, Glasgow. On 4 September 1996 the Secretary of State appointed a reporter to hold a conjoined public local inquiry into these proposals and that inquiry was held over six days beginning on 19 November 1996. The reporter reported to the Secretary of State on 30 January 1997 and on 11 March 1997 the Secretary of State upheld the British Rail Property Board appeal and granted outline planning permission for non-food retail development, subject to certain conditions, on the Gushetfaulds site. He also granted Castle AA Brothers outline planning permission, subject to certain conditions, for a retail warehouse park and associated fast food outlets, petrol station and shop at the Crown Street site.

[18] At the inquiry in the present case the reporter heard evidence as to the Gushetfaulds and Crown Street applications, the argument for the Council at that stage being that these applications "would obviously have been taken into account in assessing any retail application in SE Glasgow in September 1996" (paragraph 3.64 of the report). In September 1996 the City of Glasgow District Council were supporting the Crown Street application and, argued Mr. Martin, Q.C., for the Council,

By contrast, the contention for GKN was that the two other applications were of no direct relevance since they were contrary to the Structure Plan and to the tone of a set of national planning policy guidelines. Mr. Cullen, Q.C., argued (paragraph 3.13):

[19] Having considered the evidence, the reporter concluded (paragraph 5.14):

It appears, therefore, that the reporter considered what would have happened if, in September 1996, instead of having before him only the two Gorbals applications, he had also had before him the GKN application. Applying ordinary planning principles, the reporter considered that in the "no scheme world" the Secretary of State would have been able to make a genuine comparison of all three applications. In that event, in the reporter's judgment, the GKN site would have been "at the front of the queue". In our view, in approaching the matter in this way, the reporter was in effect determining the issue as it had been formulated for him in the evidence and in the competing submissions of counsel at the inquiry.

[20] Somewhat surprisingly therefore, in view of their stance at the public inquiry, the principal submission for the Council before us, as originally advanced by Mr. Webster, appeared to be that the reporter had erred in considering the Gorbals proposals at all. By taking these applications into account the reporter and the Secretary of State had failed to apply the guidance given by the House of Lords in Fletcher Estates. The argument appeared to be that, since those proposals themselves had been made, before the relevant date, in the context of the 1995 grant of planning permission for the M74 extension, they should be eliminated from the scene on the basis that the basic assumption was that the M74 extension proposal was no longer extant.

[21] In our view that submission is misconceived. The crucial point in the recent guidance from the House of Lords is that it makes clear that, in determining an application for a certificate of appropriate alternative development, the planning authority are to assume that the acquisition scheme and the underlying proposal are cancelled on the relevant date, not that they have never existed prior to that date. That being so, we reject the argument that, because they grew out of a situation where planning permission had been granted for the M74 extension, the two other applications had to be disregarded. On the contrary, it appears to us that the assumption must be that these applications would have been before the Secretary of State, but the M74 extension would have been cancelled on the relevant date. The reporter and Scottish Ministers then had to decide how GKN's application would have fared in that situation. If it would have succeeded in that situation, then the certificate should reflect that. By contrast, if the other applications (or either of them) would have been preferred and GKN's would have failed, then the certificate should equally reflect that. It was not the least uncomfortable aspect of Mr. Webster's argument that he found himself having to contend that, in the second situation, the reporter and Scottish Ministers would have had to ignore the existence of the preferable applications or application and grant a positive certificate - thereby potentially inflating the compensation payable out of public funds - even though in their judgment the site would never have had the benefit of planning permission for such a development.

[22] In our view therefore, in September 1996, the proposals for the Gorbals sites formed part of the planning landscape which the reporter and Scottish Ministers required to take into account. It was the reporter's planning judgment accepted by the Scottish Ministers - and not open to review by this court - that the GKN site would have been preferable to the two other sites so that he did not regard the existence of these parallel applications as a reason for saying that outline planning permission would not have been granted for the GKN site. Moreover, it appears to us that, in deciding this issue as they did, not only did the reporter and the Scottish Ministers reach a decision that they were entitled to reach but they did so on the basis of the evidence and submissions at the inquiry.

[23] When he came to make the second speech on behalf of the Council, Mr. Martin began by adopting Mr. Webster's submissions but soon went on to make a somewhat different submission which did not depend on saying that the reporter and Scottish Ministers should have left the Gorbals applications out of account. Rather, he argued that in September 1996 the two applications for the Gorbals sites would have been awaiting their conjoined inquiry. If planning permission had eventually been given for non-food retail development on those sites, this would have satisfied the demand for that kind of development in this area. For that reason, if asked to grant planning permission on the relevant date, the Council would have refused it. So, a negative certificate should have been granted. Alternatively, and looking at the matter from a slightly different angle, it was likely that, if there had indeed been a planning application for this kind of development on this site on the relevant date, the Secretary of State would have called it in and would have conjoined it with the two other applications. Even if it were true, therefore, as the reporter had found, that the GKN site was preferable to the two others, this merely meant that, eventually after the public inquiry and due consideration by the Secretary of State, outline planning permission might have been granted for the GKN site in about March 1997. So the certificate granted by the Scottish Ministers should not have indicated that outline planning permission would have been granted at the relevant date but, in terms of Section 25(5), it should have specified that outline planning permission would have been granted at some later date, say, March 1997. The certificate was erroneous and should be quashed.

[24] We consider that the first of these submissions is unrealistic and we reject it really because of the point made in Mr. Martin's alternative submission. That submission appears to us to describe something like what might well have happened in the hypothetical world in September 1996. And, other things being equal, a certificate should be based on the planning authority's best estimate of what would have happened. So, we accept that, if the Council had led the necessary evidence and advanced a submission along those lines at the inquiry, it might well have been appropriate for the Scottish Ministers to issue a certificate to the effect that the permission for non-food retail development would have been granted, say, in March 1997. But, as is plain from the account which we have given, the idea of a conjoined inquiry involving GKN and the other developers and ending in a determination at a later date was never put to the reporter: what he was asked to consider was how the competition would have been resolved if it had been possible to make a genuine comparison of the three applications in September 1996. That being so, Mr. Martin is asking that the Scottish Ministers' decision should be set aside on the basis of an argument never advanced by the Council at the inquiry and which, if advanced, would have required the leading of appropriate evidence as to the likely duration of this larger conjoined inquiry involving an additional developer and another local planning authority. Not only, therefore, are the Council in effect asking to reopen a matter of fact but they are asking this court to allow that to be done on the basis of an argument dreamt up after the inquiry was over and after the Scottish Ministers had reached their decision. In reality, by advancing this argument, the Council were accepting that, on the evidence and submissions advanced at the inquiry, the Scottish Ministers' decision could not be successfully challenged under this ground of appeal. As we have explained, that is our view also. In those circumstances we must simply reject this ground of appeal.

[25] We acknowledge that, if the certificate should have specified a date some months later, a certificate saying that planning permission would have been granted in September 1996 may be unduly favourable to the developers. But in so far as the Council and their council taxpayers suffer prejudice from this, it is as a result of the Council's failure to identify the point at an earlier stage.

[26] Second Ground of Appeal

In their second ground of appeal the Council contend that the Scottish Ministers erred in law in failing to have proper regard, in terms of Section 18A of the Town and Country Planning (Scotland) Act 1972, to the status and provisions of the relevant development plan. Section 18A provides:

The effect of that section has been authoritatively described by Lord Clyde in City of Edinburgh Council v. Secretary of State for Scotland 1998 SC (HL) 33 at pp. 43 G - 44 A:

[27] As the reporter records in paragraph 1.13 of his report, at the relevant date the local plan relating to the site was the 1983 Farme Cross Local Plan. In that plan the site occupies an Industrial Land Use policy area for which paragraph 11.3 of the plan states:

The criticism which is made of the reporter is that, when he comes to deal, at paragraph 5.21, with "development plan conformity", he makes no mention of the local plan. Therefore, it was submitted, the reporter has failed to have regard to a material element in the development plan which was to govern his decision.

[28] In considering this argument, we must, as counsel for the respondents argued, take notice of the way in which the local plan was treated at the public inquiry. In effect, at the inquiry both the Council and GKN accepted that it was of negligible weight in the particular circumstances of this case. This emerges clearly from paragraph 4.12 of the reporter's report:

In our view this paragraph makes it plain that, in formulating his report and in reaching his decision, the reporter carefully considered the relevant local plan but decided that, as had been a matter of agreement between the parties at the inquiry, in the circumstances it was of negligible weight - because it was thirteen years old and circumstances had changed. Of course, the reporter was concerned with all the aspects of GKN's application. So he noted that, as was again a matter of agreement, there was in fact no planning policy objection of any sort to the industry/warehousing or leisure certificates of appropriate alternative development which GKN were seeking. The reporter made it clear that he had considered the weight to be attached to the local plan in the particular circumstances of this case by going on to point out that the plan would not always fall to be disregarded and might, for instance, be of greater weight if the supply/demand equation for industrial land in south-east Glasgow were radically altered.

[29] The report requires to be read as a whole. It is therefore wrong to look at the terms of paragraph 5.21 without bearing in mind what the reporter has already said about the local plan in paragraph 4.12. When the two passages in the report are considered together, we are left in no doubt, firstly, that in framing his report, the reporter had Section 18A firmly in mind; secondly, that he had had taken note of the terms of the relevant passage in the local plan and, finally, that, like the parties, he regarded the local plan as being of negligible weight for the purposes of the developments identified in GKN's application. These were, in our view, material considerations which justified the reporter and the Scottish Ministers in granting the certificate in question, even though it was for a development that was contrary to the local plan element in the development plan.

[30] In these circumstances, we do not find it necessary to consider Section 26(7) which provides that, for the purposes of the issue of certificates of appropriate alternative development, a planning authority are not to issue a negative certificate "by reason only" that planning permission would have involved development otherwise than in accordance with the provisions of the development plan relating to the site. Counsel did not address us on the subsection.

[31] The third and fourth grounds of appeal both concern access to the site. Since they overlap to some extent, at the hearing counsel really dealt with them as a unit. Although we take them separately, we recognise that the issues tend to run into one another.

[32] Third Ground of Appeal

As we recorded in paragraph 1 above, in the case of each of the classes of development the certificate was subject to a condition that the development was not to commence until details of the junction between the proposed access and Farmeloan Road had been approved by the Council and the development was not to be occupied until the junction had been constructed and all agreed road works and improvements at Rutherglen Cross had also been completed in accordance with the approved details. This type of suspensive condition has come to be known as a "Grampian condition" after the case in which it was approved by the House of Lords, Grampian Regional Council v. Secretary of State for Scotland 1984 S.C. (H.L.) 58.

[33] The argument for the Council was two-fold. First of all they submitted that at the relevant date in 1996, if matters relating to access had remained to be finalised, the Council would not have granted outline planning permission subject to a Grampian condition dealing with access, but would have issued what was described as "an intentions letter". This was an administrative device which had been recognised in circulars and decisions issuing from the central planning authorities in both Scotland and England. What happened was that, where - as here - a matter relating to access had to be sorted out, instead of granting a conditional planning permission, the planning authority would issue a letter indicating that they intended to grant planning permission, provided that agreement was reached in relation to the matter of access. At the same time the planning authority would indicate that they proposed to defer their formal decision on the planning application, in the first place, for a specified period of, say, three months. That is what would actually have happened. So the reporter had been wrong to grant a certificate subject to a condition, since outline planning permission subject to an equivalent condition would not in practice have been granted.

[34] In the submissions in this case we heard little about the development of the practice of issuing such intentions letters or as to why they, rather than Grampian conditions, had come to be favoured. Whatever the merits of this administrative practice may be, however, they cannot justify the Council in invoking the practice where the effect would be to defeat the operation of the legislation relating to certificates of appropriate alternative development. Section 25(5) of the 1963 Act makes express provision for the situation where planning permission would have been issued, but only subject to conditions. In that case, the certificate itself should specify those conditions. That is what the Scottish Ministers have done here. Not surprisingly, of course, nothing is said in the legislation about the informal practice of issuing intentions letters and so no provision is made for certificates to be issued in a form which would reflect that practice.

[35] It may be that the Council could have led evidence at the inquiry to the effect that, in practice, an intentions letter would have been issued and that any grant of planning permission would have come some months later. In that event they might have asked the reporter to say that the permission would have been granted at that later date. But, again, that was not how the matter was handled at the inquiry and we express no view about the validity of any such approach. Given the way the matter was in fact dealt with, the Council cannot now argue that a conditional certificate should not have been issued, simply because in practice the matter would have been resolved by issuing an intentions letter having equivalent effect. We must consider the Ministers' decision on the basis of the approach adopted at the inquiry and in terms of the planning legislation. On that approach, the reporter was entitled to find that the matter of access would have been dealt with by means of a Grampian condition. The Ministers' conditional certificate of appropriate alternative development faithfully reflects that conclusion. We accordingly reject this ground of appeal.

[36] Fourth Ground of Appeal

In their fourth ground the Council argued that the Scottish Ministers erred in fact in concluding that it was likely that a satisfactory solution to the problem of access to the site would have presented itself. As its very terms make clear, this ground of appeal invites the court into an area of fact and, indeed, of judgment. But we can deal with it very shortly. In paragraphs 4.46 and 4.47 of his report the reporter says this:

[37] From these paragraphs we note, first, that the reporter records in paragraph 4.46 that at the inquiry there was "no dispute" that "multiple possibilities" for access to the site were likely to arise. That being so, we see no basis upon which it could be said that the reporter and the Ministers erred in concluding that it was likely that a satisfactory solution to the question of access to the site would present itself. Moreover, for the reasons given in paragraph 4.47, we are satisfied that it could not properly have been required of GKN that they should have approached various proprietors to establish that they would have granted access in the hypothetical situation where such a development was to take place. We are therefore satisfied that the reporter was justified in concluding on the basis of the evidence and of his expertise that no difficulty would have remained if a suspensive condition was acceptable. For the reasons that we have given we consider that the matter of access could indeed have been properly regulated by means of a Grampian condition. It was open to the Scottish Ministers to reflect that position by issuing a conditional certificate in the terms that they did.

[38] For these reasons we refuse the fourth ground and, with it, the Council's appeal.