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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Sainsbury's Supermarkets Ltd, R (on the application of) v First Secretary of State & Anor [2004] EWHC 1726 (Admin) (01 July 2004) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2004/1726.html Cite as: [2004] EWHC 1726 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		1st July 2004

1. MR JUSTICE COLLINS: This is a claim under section 288 of the Town and Country Planning Act 1990, whereby the claimants seek to quash the decision of the Secretary of State refusing planning permission for an extension to an existing out of town store at Kidlington in Oxfordshire.
2. The store was opened in 1991 following planning permission which had been granted in 1988. It has a net sales floor space of 3,363 sq m. On 17th May 2001, an application was made to Cherwell District Council, the second defendants, for an extension which would provide an extra 1367 square metres of sales floor space. That would produce, following some reorganisation of the building, a total sales floor space of some 4,756 square metres, that is to say an increase of approximately 40 per cent. Negotiations with the Council were protracted, but eventually, after experts were employed on both sides, agreement was reached that need could be established, that there would be no adverse impact on any town centre and that all other obstacles to permission were overcome.
3. This agreement was put to the relevant committee of the second defendants and on 11th July 2002, by use of the chairman's casting vote, the committee resolved to grant planning permission subject to a number of conditions.
4. On 1st October 2002 the Secretary of State decided to call in the matter pursuant to section 77 of the Act. As a result, an inquiry was held between 8th and 11th April 2003. The Inspector reported following the inquiry on 11th June 2003 that planning permission should be granted subject to various conditions. In November 2003 the Secretary of State decided that he needed to ask the Inspector to answer two questions; one relating to quantitative need and the other to the impact on the viability of the relevant town centre.
5. The precise questions were formulated in this way:

"After careful consideration of the Inspector's report, the Secretary of State is of the view that he requires further information concerning the Inspector's conclusions on retail need in Kidlington and the potential impact on the vitality and viability of existing centres. In particular:

"the applicant's evidence on quantitative need stems from inquiry document SSL4 Tables 1-4. The Secretary of State would be grateful to know whether or not any other evidence was submitted on this matter and, if so, the nature of that evidence and whether or not the Inspector took it into account in concluding that there was evidence of quantitative need.

"The Secretary of State notes in paragraph 14.34 of the Inspector's report that the Inspector reports that both the applicant and the Council consider that even if one of the stores in Kidlington centre were to close, there would be no impact on the vitality and viability of the centre. The Inspector has also recorded in paragraph 14.21 of his report that there was significant under trading by other stores in Kidlington. The Secretary of State requires information from the Inspector on his findings with regard to these statements, and his conclusions on whether, taking account of the acknowledged under trading and potential closures, the proposed development would be likely to have any significant adverse effect on the vitality and viability of any nearby centres."

6. The Inspector answered the questions in the form of an addendum to his report and indicated that his recommendations remained the same. The Secretary of State, on the 10th December 2003, decided to reject the Inspector's recommendation and to refuse planning permission.
7. The refusal was based on one ground only, namely that quantitative need had not been established. The Inspector had made favourable findings on all material considerations. The Secretary of State agreed with those findings, except the one relating to quantitative need. Since the relevant plans were somewhat out of date, it was necessary to have regard specifically to the guidance set out in PPG6. PPG6 had come into existence in 1996, but there had subsequently been further guidance which had been in the form of two ministerial statements, one by Mr Caborn in 1999 and the other by Mr McNulty in 2003.
8. In fact, the McNulty guidance was dated 10th April 2003 and so came into existence, or was published, on the penultimate day of the inquiry before the Inspector. I am told that the Inspector offered an adjournment to enable the claimants and their advisers to consider whether there was any significant change resulting from that fresh guidance and whether any evidence needed to be produced, but the decision was that there was no need for any such adjournment and a hour or so to consider the guidance was all that was needed.
9. The objectives set out in PPG6 when assessing new retail developments are contained in heading 4. Under the subheading "Impact on the vitality and viability of existing centres", 4.3 reads as follows:

"In assessing applications for developments which may have an impact on a nearby town, district or local centre, local planning authorities should consider:

"the extent to which developments would put at risk the strategy for the town centre, taking account of progress being made on its implementation, in particular through public investment;

"the likely effect on future private sector investment needed to safeguard the vitality and viability of that centre;

"changes to the quality, attractiveness and character of the centre, and to its role in the economic and social life of the community;

"changes to the physical condition of the centre;

"changes to the range of services that the centre will continue to provide; and

"likely increases in the number of vacant properties in the primary retail area.

"Equally, local planning authorities should consider the likely effects on nearby centres if the proposed investment is not made. The information collected on the health of town centres should help in undertaking the assessment.

"4.4. In assessing impact it is essential that the local authority take a long-term view. Retailers may operate under long leases that discourage them from closing unprofitable branches in town centres until the end of the lease period. Accordingly, the full impact of the development may take some years to be felt."

10. Need was not specifically mentioned in PPG6 as something which had independently to be established. In November 1998, Dyson J, in R v Hambleton District Council ex parte Somerfield Stores Ltd [1999] ELCR 236, decided that that indeed was the position, and that a decision in which the local planning authority had been advised by its officers that need was something which had to be taken into account had consequently to be quashed.
11. In paragraph 47, Dyson J said this on age 256 of the report:

"An important change made by PPG6 in June 1996 was the introduction of the sequential approach."

12. Pausing there, that is simply that it was necessary to identify if possible sites in the centre, or as close as possible to the centre, before going to a site which was outside a centre. Going back to the quotation:

"By the application of this approach, and the other safeguards of PPG6, an applicant who seeks planning permission for a retail development out of a town centre, faces a series of stiff hurdles. He does not, however, have to show need as a precondition for the grant of permission, nor is need always a material consideration. I agree with the views expressed by the Inspector in his decision concerning a retail development in Richmond-upon-Thames. He said that he did not read paragraph 1.10 [that is of PPG6] as indicating that a developer had to show a need for the development before the sequential test was applied. He continued:

'...in relation to a particular proposal for a shopping development, it is my view that the likely impact of the development on the vitality and viability of town centres will indicate whether or not there is a need or capacity. A lack of impact will suggest spare capacity in the system whilst a considerable impact is likely to indicate that there is no need for further development of that type.'

To that extent, and in that way, need will often be relevant. But that is not to say that it is always relevant as a free-standing condition or material consideration."

13. Following that decision, what has been called the Caborn guidance was issued, he being then the relevant minister. What he said on 11th February 1999, so far as material, was this:

"Our policy on town centres, including retail and leisure development, is set out in Planning Policy Guidance note 6: Town Centres and Retail Development (PPG6). This aims to sustain and enhance the vitality and viability of our existing town centres by focusing new investment, particularly for retail and leisure uses within city, town and district centres."

14. Then a little further on he says this:

"Proposals for new retail and leisure development which accord with an up-to-date plan strategy or are proposed on sites within an existing centre, should not be required to demonstrate that they satisfy the test of need because this should have been taken into account in the development plan.

"However, proposals which would be located at an edge-of-centre or out-of-centre location and which:

"are not in accordance with an up-to-date development plan strategy; or

"are in accordance with the development plan but that plan is out of date, is inconsistent with national planning policy guidance, or otherwise fails to establish adequately the need for new retail and leisure development and other developments to which PPG6 applies, should be required to demonstrate both the need for additional facilities and that a sequential approach has been applied in selecting the location or the site.

"In the context of PPG6 and this additional guidance, the requirement to demonstrate 'need' should not be regarded as being fulfilled simply by showing that there is capacity (in physical terms) or demand (in terms of available expenditure within the proposal's catchment area) for the proposed development. Whilst the existence of capacity or demand may form part of the demonstration of need, the significance in any particular case of the factors which may show need will be a matter for the decision-maker.

"In the circumstances referred to above, the need for such proposals should be considered carefully when determining planning applications. A failure to demonstrate both the need for such proposals and that a sequential approach has been applied in selecting the application site would normally justify the refusal of planning permission unless there were weighty additional material considerations."

15. He also states that that new guidance would apply equally to applications for extensions to existing stores.
16. In April 2003, it was decided that it was necessary to add to that guidance, and so it was that what has been described as the McNulty Statement was issued on 10th April 2003. That confirmed that the purpose of the policy was to:

"... sustain and enhance the vitality and viability of town and other existing centres by focusing retail, leisure and other key town centre uses which attract a lot of people within those centres. PPG6 emphasises the plan-led approach ..."

17. It went on to point out that the Caborn statement further clarified the application of the test of need and the sequential approach as applying to proposals to develop at edge of centre or out of centre locations which are not in accordance with an up to date development plan strategy that is itself consistent with PPG6. It then went on:

"In summary, applicants must:

"demonstrate that there is a need for the development;

"having established that such a need exists, adopt a sequential approach to site selection;

"consider the impact on nearby centres; and

"provide evidence on the site's accessibility by a choice of means of transport, as demonstrated by a transport assessment (see PPG13), the likely changes in travel patterns over the relevant catchment area, and any significant environmental impacts.

"All these tests apply equally to proposals for extensions as well as to new developments."

18. It then went on to deal with need, repeating the Caborn guidance in relation to the necessity of establishing need, and stating:

"Some applicants have sought to make a distinction between quantitative and qualitative need for new retail facilities. PPG6 does not make this distinction although evidence on both has frequently been presented at planning inquiries. The First Secretary of State accepts that need can be expressed in quantitative and qualitative terms but considers that evidence presented on need is becoming increasingly and unnecessarily complicated. He therefore places greater weight on quantitative need for new retail provision to be defined in terms of additional floorspace for the types of retail development distinguished in PPG6, which are comparison and convenience shopping. Where both comparison and convenience goods are proposed to be sold within the same development, the First Secretary of State will expect to have evidence on the need of each type of goods."

19. In order to explain some terms which may not be immediately understood by those who are not involved in planning, I should say that qualitative need is concerned with the provision of greater variety, of better surroundings, of more goods, which will attract people to a store. Quantitative need involves that there should be a surplus of existing spending power in the catchment area, which means that one is not attracting people, effectively, to the detriment of existing stores or other stores which might in the future be introduced into the centres simply because they prefer to shop at the store in question.
20. As far as comparison and convenience shopping is concerned, convenience covers, essentially, goods which are not expected to have a very long life. Food is the obvious example, but household cleaning supplies, detergents and that sort of thing are other examples. Comparison goods are those where one would expect, so it is said, a shopper to want to go to various shops, or various outlets, in order to compare one with another. Essentially, they relate to what can be described as durables, for example clothing, furniture and that sort of thing, which are expected to have a longer term use.
21. I do not propose to read out great chunks of the Inspector's report, but it is necessary to see what he had to say about need. Inevitably, because of the McNulty guidance, which of course he took into account albeit it came towards the end of the inquiry, he considered need separately.
22. Before going to the Inspector's report, it is I think convenient to see how the claimants sought to establish quantitative need. The usual method, or the traditional method, of doing that is explained helpfully in the statement of Mr Ashworth, who is the solicitor who was acting for Sainsbury's in connection with the application for planning permission. In paragraph 33 of his statement he says this:

"The traditional way to identify quantitative need is to look at expenditure flows in the catchment area at the date of assessment. The date of assessment is normally the assumed opening date of the store/extension but can be other dates. Rather than doing a 'real life' assessment of actual turnovers, a model is created which assumes that all stores are trading at company average benchmark turnover levels. The cumulative total of all these benchmark turnovers is then deducted from the total expenditure available in the catchment area (derived as a straight multiplication of population in the catchment area and expenditure per head) to give a notional level of available expenditure.

"34. This approach is, obviously, subject to a number of potential refinements including an initial debate about the appropriate catchment area and the correct retention rates within that catchment area. Clearly there are few catchment areas that retain all the expenditure of residents within the catchment area although there will, inevitably, also be some inflow of expenditure.

"35. The Claimant did not submit this type of information at the inquiry. For the reasons outlined above in paragraphs 5-7 a conscious decision was taken that the complexities of the catchment area would render the results of such an analysis less meaningful than the findings on retail need arising from the undisputed overtrading of the store and the clear evidence of expenditure growth."

23. I should say that the Inspector and the Secretary of State accepted that the catchment area which was in the event chosen was correct and no criticism could be made of it. The way in which the claimants chose to approach this was then described by Mr Ashworth in paragraphs 36 and 37 of his statement. These read as follows:

"While the traditional route looks at the present day picture and makes assumptions about company benchmark turnover levels, an alternative approach is to look at the catchment area at an earlier point in time, assume that the available expenditure and store turnover was then in balance and then treat expenditure growth after that date as 'available'. Effectively, this is the approach that the Claimant took at the inquiry using a 1991 'assumed balance date'. 1991 was chosen on the basis that it was the last date when major retail floorspace was built in the catchment area."

24. That, of course, was the store in question:

"37. In practice, the approach needs to be refined for example to take account of changes since the 'assumed balance date'. Some stores will have been refurbished. New stores will have opened. Stores will have closed. Adjustments are normally made to the expenditure growth figures to allow for this."

25. Such an adjustment was made because there was a relevant Marks & Spencer store which was opened. Finally he points out that another possible way was to treat impact analyses as effectively part and parcel of a quantitative need analysis. If a new proposal did not cause an impact which would lead to the closure of competing facilities, it followed that there must be adequate expenditure capacity in the catchment area to support the new facility. That, as I say, was not the method used by the claimants, but the lack of adverse impact was something which they submitted and the Inspector accepted could be taken into account in considering whether, overall, quantitative need had been established. I will come to that in due course.
26. It is plain that either method that is described has to involve assumptions. One of the points of holding an inquiry is to enable assumptions to be tested. In this case, the evidence came from two experts, one called by the claimant, one by the local planning authority, which was supporting the claimant's case. Each of the experts agreed that the method adopted was an appropriate method and that in their view it did establish that there existed quantitative need, coupled which the evidence of the circumstances of the overtrading and the lack of adverse impact on the relevant town centres.
27. That, I hope, is sufficient to make sense of the Inspector's findings in relation to need. They are contained in paragraphs 14.15 to 14.25 of his report. He accepted the correctness of the catchment area, which in fact was three postcode zones, he noted that the population had grown since 1991 and was projected to increase, and he accepted that the figures formed a reasonable basis to assess an increase in expenditure in the primary catchment area. He identified the relevant figures in paragraph 14.18, saying this:

"The increase in convenience goods based expenditure in the Primary Catchment Area in the period 1991 to 2003 is estimated to be £8.5 m [7.20]. It is forecast to increase by a further £2.3m by 2006 [7.20]. The equivalent convenience business based figures are £28.6m and £8m. Allowing for the only significant foodstore development in the Primary Catchment Area since 1991, the Marks & Spencer food hall in Summertown (£6.5m), this would leave an increase in capacity of £4.3m on a convenience goods based basis or £30.1m on a convenience business based basis."

28. It is the goods based basis which the McNulty guidance indicates is the one to be preferred, and this is, I am told, a more conservative figure than that which applies to the business based basis. Indeed the figures that I have just quoted from the report I think make that obvious.
29. The Inspector noted, in 14.19, that it had been assumed, in estimating the turnover of the extended store, that the proposed additional floorspace would trade at a lower sales density than the existing store and it was assumed that this would be a third of the existing sales density. The additional turnover was estimated to be just over £7 million. That figure was accepted by all the parties and appeared to the Inspector to be a reasonable figure. He made the point on the figures that, on the assumption that comparison goods would amount to 15 per cent of the increased turnover and that only 70 per cent came from the primary catchment area, it was evident that on the business based expenditure figures, more than sufficient capacity existed for an extension. Then in 14.20 he said this:

"I was told that the existing store is trading at a sales density some 50% above the company average even after the opening of the Marks & Spencer store in Summertown [7.10]. Accepting that the turnover of that store might increase slightly from its present level, it is not expected to alter the overtrading situation at the Kidlington Sainsbury's store [7.10]. Although put forward as part of the qualitative need for the proposed extension, I consider that this degree of overtrading can also be regarded as an indicator of a quantitative need for additional floorspace.

"14.21. Set against those indicators of quantitative need is the evident underperformance of the existing supermarkets in Kidlington shopping centre. The reported sales figures for the stores accepted by all parties at the inquiry, when compared with those in the earlier MVM report which based the estimated turnover figures for Tesco and the Co-op on company average sales density figures, indicate £4.5m under-trading by Tesco and £1.5m under-trading by the Co-op [7.47]."

30. At 14.22 he went on:

"It is common ground between the parties that a qualitative need for the proposed extension can be demonstrated [7.12-7.17]. The overtrading referred to above leads to cramped conditions for customers and the need for frequent restocking of shelves [7.13, 7.17]. It is also claimed that the inability to carry as wide a range of products as other company stores also represents an element of qualitative need [7.13-7.15].

"14.23. I consider that the existing store layout appears a little dated and that it does not match the quality of more modern stores. Whilst the store is slightly cramped and is no doubt crowded at certain times, it appears that this does not deter customers to the extent that the store fails to attract them. In terms of the retail offer, whilst it may not match that of more modern stores such as Cobham, it appears to be superior to that provided by the Co-op and Tesco stores in Kidlington as demonstrated by the degree of undertrading in those stores.

"14.24. Whilst the additional convenience goods based expenditure in the period 1991 to 2006 of £10.8m would be sufficient to justify the need for the proposed extension and there are also indicators of a qualitative need, consideration needs to be given to balancing this against the theoretical capacity of the existing stores in Kidlington shopping centre. The apparent failure of the Tesco and Co-op stores to attract additional custom even when conditions at the Sainsbury's store appear to indicate that some customers might be deterred from shopping at the store, supports the view that those stores cannot match the existing retail offer at the Sainsbury's store. In my view it is highly unlikely that either could match the quality of the offer that the applicant is proposing in the extended Sainsbury's store.

"14.25. The growth in convenience expenditure in the primary catchment area has given rise to a quantitative need, whether it is assessed on the lower convenience goods basis or the higher convenience business basis. The 2 under-trading stores in Kidlington shopping centre are not meeting that need and the evidence points to that situation continuing. I conclude therefore that there is a substantive quantitative need for the proposed development on the Sainsbury's site, whether that is assessed on a convenience goods or convenience business basis. Moreover qualitative considerations further strengthen the case for the proposed development on grounds of need."

31. He then went on to consider sequential approach and decided that that had been properly met. He then considered retail impact and concluded that the proposed development was unlikely to have any significant adverse effect on the vitality and viability of any nearby centres, including of course the Kidlington shopping centre, and that conclusion was not disputed by the Secretary of State in due course, although he did raise, as I have indicated, a question relating to it.
32. The addendum to the Inspector's report, following the questions raised by the Secretary of State, point out that there was, in addition to the material put before him by the claimants, the evidence of Mr Goddard, who was the Council's retail consultant. He did not specifically refer to the statement of Mr Whittaker, who was the claimant's expert, whose tables in SSL4, appendix 1.4, were specifically referred to by the Secretary of State in the question. But of course that statement was among the papers which were before, and would no doubt have been considered by, the Secretary of State in reaching his decision.
33. The Inspector pointed out in paragraphs 7 to 13 of the addendum that Mr Goddard had expressed the view that there was clear evidence of retailer demand for the proposed extension and evidence of current and forecast capacity for further convenience and comparison goods shopping floorspace within the Kidlington area. He pointed out that there was evidence of congestion and overcrowding within the Sainsbury's store, particularly at peak periods, and that the store exhibited qualitative deficiencies compared with the current state of the art superstore and that there was both quantitative and qualitative need for the proposed development. He took the view that he did not consider the evidence of need was sufficiently strong to support the grant of permission unless it was clear that there was no sequentially preferable or alternative opportunities to improve the range and quality of food shopping facilities within the centre, or if there was any risk that the extension would undermine the vitality and viability of the town centre.
34. As I have said, the Inspector and the Secretary of State were both satisfied of the lack of any site other than this in relation to the sequential test and the lack of any risk that the extension would undermine the vitality and viability of the town centre. The Inspector went on in these words:

"I concluded in Paragraphs 14.18 and 14.19 of the main report that having regard to the increase in convenience goods based expenditure in the Primary Catchment Area in the period 1991 to 2003, there would just be sufficient capacity to accommodate the proposed extension. I also concluded that on convenience business based figures, there was more than sufficient capacity for the proposed store extension.

"11. In reaching those conclusions I had regard to Mr Goddard's evidence, which supported the evidence of qualitative need put forward by the appellant, and I accorded it considerable weight because of Mr Goddard's professional standing and expertise and his role and experience in advising the Council on retail planning matters over a number of years.

"12. However Mr Goddard's view that there is a quantitative need sufficient to support the grant of planning permission for the proposed extension, is subject to the caveat that there are no preferably sequential opportunities to improve the range and quality of food shopping facilities within the centre, or any risk to the vitality and viability of Kidlington centre. My conclusions on the suitability, viability and availability of sequentially preferable sites were addressed in Paragraphs 14.26 to 14.32 of the main report. I concluded that there were no alternative sequentially preferable sites."

35. He then went on to deal with the second question in relation to impact, and concluded, again by reference to both Mr Whittaker and Mr Goddard's evidence, that the limited impact of the proposed extension on the Tesco and Co-op stores in Kidlington was not likely to lead to closure in either store and, given the health of the centre at present and the interest of retail development in the centre, his conclusion was as set out in his main report, namely that there would be no likelihood of adverse effects on the viability and vitality of the centre. Accordingly, he repeated his recommendation.
36. The Secretary of State's decision letter deals with need between paragraphs 11 and 16. Again, I do not propose to read out all of them, but they are, of course, important because they are central to the claim now being made. Paragraph 11 states:

"The Secretary of State notes that the applicant has put forward a case for retail need using quantitative and qualitative indicators. He notes that the existing store is trading at a sales density some 50% above the company average [IR 14.20] and agrees with the applicant that this is an indicator of a qualitative need for the proposed extension. However, he does not agree with the Inspector that this can be regarded as an indicator of a quantitative need for additional floorspace; the fact that the store is trading better than other Sainsbury's stores does not demonstrate quantitative retail need in this location [IR 14.24]. Overall, having regard to the Inspector's conclusions in paragraphs 14.20 - 14.24, the Secretary of State considers that there is evidence demonstrating a qualitative need for the proposal."

"12. The McNulty Statement acknowledged that need can be expressed both in quantitative and qualitative terms."

37. He then went on to indicate the greater weight would be attached to quantitative need, and that the applicant had used both a business based and a class of goods approach to calculate quantitative need and he considered that more weight should be attached to the evidence contained within the goods based approach, and had considered the issue of quantitative need in that way. No criticism is made or could be made of the approach which the Secretary of State indicates there to be the correct approach following the McNulty Statement.
38. He then noted the basis upon which quantitative need had been assessed based on the estimated increase in expenditure on convenience and comparison goods in the primary catchment area between 1991 and 2006 compared to the estimated turnover of the proposed extension. He then agreed with the Inspector that the catchment area was correctly chosen, that the population figures were a reasonable basis to assess an increase in expenditure, and he accepted the figures which had been referred to by the Inspector, namely, expenditure on convenience goods had increased by £8.5 million by 1991 and 2003 and the likelihood of a further £2.3 million in the period to 2006. Then in paragraph 15 he said this:

"However, the Secretary of State disagrees with the Inspector that the estimated growth in convenience expenditure in the Primary Catchment Area is a demonstration of a quantitative need. This is because the applicant has not compared this estimated or potential growth in expenditure with actual existing expenditure. The applicant has submitted an assessment of a growth in expenditure, not evidence of a quantitative need for additional floorspace, over and above the existing floorspace, to satisfy an unmet demand in Kidlington. The applicant has not therefore demonstrated that there is expenditure in the catchment area that has not been, or is not being, met and that there is available capacity to justify a need for additional retail facilities [IR 14.25]. The Secretary of State does not agree, therefore, that the applicant has demonstrated a quantitative need for the proposal."

39. He went on to say that he considered that a qualitative need had been established, but not a quantitative need. Therefore he did not agree with the Inspector's overall conclusion on need, because he did not then consider the applicant had demonstrated a convincing need for the proposed extension to the store. He went on to accept, as I have said, sequential approach and to accept that the proposal was unlikely to have any significant adverse effect on the vitality and viability of any nearby centres. Highway accessibility, traffic, and so on, were all accepted as satisfactorily dealt with. Then in paragraph 26 in his overall conclusion he said this:

"The Secretary of State concludes that the proposed development is not in accord with an up to date development plan strategy. For the reasons given in paragraphs 11 to 16 above, he has concluded that it has not been demonstrated that there is a quantitative need for the proposal, contrary to a key objective of PPG6. He has considered whether there are any material considerations which could outweigh these conclusions, particularly as the Development Plan should be considered in the context of more recent Government policy guidance. He has taken into account the benefits mentioned in paragraph 25 above, but has concluded that there are no material considerations sufficient to outweigh the development plan and policy conflicts that he has identified."

40. He therefore formally decided to reject the application for planning permission.
41. Three grounds have been relied on. The first relates to paragraph 11 of the decision letter, in which the Secretary of State has said that he does not agree that the overtrading can be regarded as an indicator of quantitative need for additional floorspace. Mr Corner pointed out that in so stating, the Secretary of State said that the fact that the store was trading better than other Sainsbury's stores did not demonstrate quantitative retail need in this location. That suggested that it might in other locations, and there was produced before the Inspector a decision of the Secretary of State in relation to an application for an out of town store at Bicester, some ten miles away, which I think had been made by Tesco. In that, the Secretary of State had apparently accepted that overtrading could be regarded as an indicator of a quantitative need. However, it is fair to say that when that decision was reached, the distinction between quantitative and qualitative, and the importance of quantitative need, was not clear. Ms Lieven told me that the Secretary of State has effectively changed his approach and should not now, as a result of the McNulty guidelines, be tied to what he said in the Bicester case.
42. It is difficult in those circumstances to see what was meant by the limitation that appears to be made in paragraph 11. Ms Lieven tells me that that was essentially an error; that location did not mean what it appears to mean, was a mistake. In reality, the three words should not have been there at all because the Secretary of State was not intending in any way to indicate that there was anything site-specific about this approach. All I can say is that I am slightly surprised that words which would mean to anyone involved in a planning process that something was considered to be site-specific did not actually have that meaning.
43. In any event, I am entirely satisfied that the approach adopted by the Secretary of State was wrong. It seems to me, and I will develop my reasons for this when I consider the second ground, because grounds one and two overlap, that overtrading can be regarded as an indicator of quantitative need. It will, of course, depend on the circumstances of an individual case, whether that is the case.
44. Ms Lieven gave an example of a store which was so positioned as to attract shoppers from outside its catchment area, for example on a motorway junction or where commuters might easily be attracted to stop to do their convenience shopping whilst on their way back from work. In those circumstances overtrading might well not suggest a quantitative need. That, of course, is right, but in the circumstances of this case, and on the findings about the difficulties in the store, coupled with the lack of any evidence that its actual location was such as to attract a significant level of trade from outside the catchment area, together with the lack of any adverse impact on the nearby town centre, does, in my view, properly point to the existence of quantitative need as the Inspector decided. In those circumstances, it seems to me that the Secretary of State was wrong, particularly as in paragraph 11 he does not appear to take into account the conditions which the overtrading brings. He merely says that he does not agree that trading above the company average can be regarded as an indicator of quantitative need. No doubt by itself that is accurate, or may be accurate, if, as I say, the full circumstances are not considered. That is in my judgment an important error.
45. The second ground relates to paragraph 15. It is said that the reasoning there is, first of all, deficient in that, essentially, it is contained in one sentence and secondly, it is unintelligible. The assertion that the applicant had not compared the estimated or potential growth with actual or existing expenditure was, it is said, wrong because there was evidence of existing expenditure which could be established by a combination of the overtrading and the fact that there was leakage from the catchment area. This is something which the Secretary of State ought to have dealt with, because it was a material matter which he does not seem to have taken into account.
46. Furthermore, the assessment was based upon a methodology which is fully explained, and indeed which the Secretary of State refers to in terms in paragraph 13 of his decision letter. If the Secretary of State were to reject the approach, he should have explained and said why he was not able to accept that the assumptions made were correct, or rather were reasonable. As I have said, whatever method one adopts, there are going to be assumptions made. It is not unreasonable to expect that if criticisms are to be made of those assumptions, they would be raised at the inquiry, but here, not only were they not raised, but the experts agreed that the approaches were appropriate and would produce a reasonable basis for accepting that there was a quantitative need.
47. Of course, I fully recognise that the Secretary of State is not bound to accept the opinions of experts, however eminent, and is not bound to accept that the approach which was adopted was one which produced a reliable conclusion: but he should indicate why. It is not, in my view, enough simply to say that actual existing expenditure had not been used as a comparison. As Mr Corner has submitted, that was factually wrong and, in any event, it was impossible for the applicants to know whether, if they wished to put in any further application, they should change their methodology, and whether the Secretary of State was not going to accept an approach other than that which has been described by Mr Ashworth as the traditional approach. The reasoning in paragraph 15 simply leaves all that open.
48. Ms Lieven described Mr Corner's lack of understanding of the reasons as forensic. I do not agree with that. It seems to me that he has few grounds upon which to base his submissions.
49. Ms Lieven correctly submits that McNulty shows that there must be separate consideration of quantitative need. Accordingly it follows, she says, that the decision-maker should not rely on, and indeed an applicant cannot rely on, evidence which establishes qualitative need in order to establish quantitative need. But the McNulty guidance says nothing about how quantitative need is to be established. The objective of the policy is clearly set out, namely to avoid harm to town centres and to ensure that they are kept viable and vital both in the present and in the future. Thus, if it is accepted that there will be no adverse impact, then that must be a relevant consideration in determining whether the relevant need has been established. Equally, as I have said, overtrading can in my judgment be relevant depending on the circumstances.
50. Ms Lieven submits that to allow such matters to be used in order to assist in establishing quantitative need is to fail to follow the McNulty guidance. It fails to recognise that quantitative need has to have separate consideration, so that surmounting the other obstacles to obtain planning permission cannot itself be used to surmount this particular obstacle. I do not for a moment suggest that there is no objection to adducing evidence which seeks to establish quantitative need and which is additional to that which seeks to establish lack of adverse impact and qualitative need, but the decision-maker must consider all relevant evidence in reaching his conclusion on quantitative need, and that may include evidence which is primarily called for a different purpose if it bears on that conclusion.
51. It was suggested that unless the evidence which goes directly to establish quantitative need is sufficiently strong to raise at least a prima facie case, the additional material cannot be used. I do not agree. As I have said, it seems to me that all relevant evidence must be taken into account and put into the balance in deciding the crucial question for the purposes of this case, whether quantitative need is established.
52. Ms Lieven further submitted that the Secretary of State was construing his own guidance and so the court should not intervene. What was happening here does not seem to me to be construction. It was a failure by the Secretary of State to have regard to a material factor in assessing whether the quantitative need had indeed been established.
53. The combination of the error in paragraph 11, that is to say the failure to regard the overtrading as a possible indicator of quantitative need, coupled with the lack of proper reasoning in paragraph 15 does lead to a need to quash this decision, because it has those errors of law.
54. There is a third ground which was relied on. That relates to paragraph 26, where it is said that the failure to demonstrate quantitative need was contrary to a key objective of PPG6. That is obviously inappropriate language, because demonstration of quantitative need is not a key objective of PPG6. The key objective of PPG6 is the enhancing of the viability and vitality of town centres. Ms Lieven accepts that that is a misuse of language and wording such as "a key consideration in PPG6", or some wording which indicated that that was an important matter which had to be established, would have been appropriate.
55. That error by itself, as indeed Mr Corner accepts, would not have led to relief being given to the claimants. Its only relevance is that it does suggest that the Secretary of State was here regarding quantitative need in isolation and as something which was of central importance and had to be proved in isolation. However, it is not necessary to say anything more about ground three because, as I have said, it would not have been in itself determinative.
56. For the reasons that I have given, this claim succeeds. Ms Lieven, perhaps I went a bit far in referring to your observations about Mr Corner. I know and you know that no offence was taken, but perhaps for those who do not know it could read rather badly. I will amend that.
57. MS LIEVEN: My Lord, I only looked a little horrified because I certainly did not use the words "grievously forensic". I am quite happy to be quoted as saying "somewhat disingenuous", but I would not want somebody who read this judgment to think that I was being deliberately --
58. MR JUSTICE COLLINS: That is exactly why I thought, as I said, that I would change it and I will. Do not worry.
59. MS LIEVEN: I am very grateful, my Lord.
60. MS BUSCH: Thank you, my Lord. The parties have succeeded in agreeing costs so you need not make any specific order.
61. MR JUSTICE COLLINS: Well, you are applying for costs I take it?
62. MS BUSCH: Indeed.
63. MR JUSTICE COLLINS: I assume you cannot resist, Ms Lieven?
64. MS LIEVEN: My Lord, I am not resisting. The sum agreed to be assessed is the sum of £18,500.
65. MR JUSTICE COLLINS: In that case, I will make an order for costs in that sum in favour of the claimants.
66. MS LIEVEN: Before your Lordship rises, I do wish to ask for leave to appeal on this matter. My Lord, I do not want to waste the court's time on lengthy arguments at this stage, for obvious reasons, but your Lordship is aware that there are two grounds: real prospects of success and some other compelling reason. I do, my Lord, seek to rely on both.
67. There are really two errors of law that your Lordship has found in this case. One is the scrutiny of the reasons and the other is the approach to the policy and what was the material or immaterial consideration of the policy.
68. As far as reason is concerned, my Lord, I do suggest that there is a realistic prospect that the Court of Appeal will take the view that your Lordship's approach to reasons in this case has been over-scrutinised, if I can put it like that. My Lord, I know this is a slightly awkward situation to be in, but there is a judgment of the House of Lords this very morning given by Lord Brown, precisely on the reasons in planning decisions, where he gives the strongest possible indication that the court should be slow to quash planning decisions on reasons alone.
69. MR JUSTICE COLLINS: Well, I entirely agree and the pendulum has swung since the 80s I think when the courts tended to be over-pernickety.
70. MS LIEVEN: Yes and even since then it has probably swung even further.
71. MR JUSTICE COLLINS: But you say their Lordships have swung it even further still?
72. MS LIEVEN: They have, my Lord.
73. MR JUSTICE COLLINS: Well that may be, but I am bound to say that I think the reasons are so bad in this case that they will meet whatever tests their Lordships have applied.
74. MS LIEVEN: My Lord, there is no point my arguing the matter further. As far as the other aspect is concerned, that is, what is a material factor in policy, my Lord, I do rely on that both for real prospect of success and for some other compelling reason.
75. The Secretary of State takes the view that the making of policy and the application of policy is a matter of prime importance to him in planning. Obviously, I would submit to the Court of Appeal that your Lordship has stepped over that boundary between the role of the court and the role of the Secretary of State, but obviously your Lordship will take the view that you have not. That is why the first ground is always so difficult to succeed on in this court. But the second ground, that this is a matter of real importance, is one, in my submission, which is unarguable. The relationship between the view that the Secretary of State takes as to what his policy will or will not allow him to do, and the view that the court takes, is a matter that goes beyond Kidlington and indeed beyond PPG6 and McNulty, and into a whole range of policy issues.
76. MR JUSTICE COLLINS: Well, it certainly can do, I entirely accept that.
77. MS LIEVEN: And in my submission this is a case which is at least close to the boundary on that issue, because what your Lordship has found is that the Secretary of State failed to take into account a matter under policy, which the Secretary of State considered was immaterial under policy. Now certainly my submission to the court would be --
78. MR JUSTICE COLLINS: Well, I do not think it actually has much to do with policy, does it? I know that was your argument, but my view, I hope made clear in the judgment, is that this was merely the means whereby something had to be established by evidence. The policy is that quantitative need must be established, and must be established independently of the other matters, such as sequential and so on.
79. Now, as I said, the policy says nothing about how you establish that need. What I have decided is that the Secretary of State has to consider, and take into account, all the evidence that is capable of bearing on quantitative need and it will, in an appropriate case, include this evidence. That seems to me to be a matter of fact depending upon the circumstances of the individual case, and it has frankly nothing to do with policy. I follow the contrary arguments but that is the approach that I have adopted and therefore if I am right on that, then as I say, the concerns that you raise simply do not exist.
80. MS LIEVEN: My Lord, setting aside the first ground, prospect of success, and just looking at the second, just very briefly. On that analysis, my Lord, it certainly would be my submission to the Court of Appeal that the question of what evidence the Secretary of State accepts or does not accept in order to satisfy a policy test is a matter for the Secretary of State.
81. Now, your Lordship may disagree, of course does disagree, there is no point debating that, but in my submission that is a matter of considerable importance within the planning regime and that is why I rely on the second limb to appeal. But I do not think I can take it any further.
82. MS BUSCH: My Lord, we oppose the application on both of the relevant grounds, firstly, real prospect of success and, secondly, in the circumstances this case does not actually give rise to issues of public importance. As far as prospects of success are concerned, I think my task is easy by adopting the remark you made yourself: that the reasons are so bad in this case, there is no prospect whatsoever that it would be overturned by the Court of Appeal. I point simply to paragraph 15 in that regard and the fact that the reason that is given in a case in which both the claimant and the council adduced expert evidence that was to the same effect and there was no contrary evidence.
83. The reason it was given was stated in one sentence, which was in fact based on a pure mistake of fact as to the basis for the claimant's case. So in those circumstances, in my submission, there is absolutely no prospect that Court of Appeal will overturn your judgment in that regard.
84. As far as the application of policy is concerned, again in my submission this case does not in fact raise squarely the issue of interpretation and application of policy. It is simply a failure to take into account relevant considerations case, because, once again, of the Secretary of State's fundamental errors and failure to appreciate the nature of the claimants case, which was that, in the circumstances of this case, overtrading could be regarded as an indicator of quantitative need.
85. The Secretary of State did not even get to the position of making a decision on that aspect of the case. He simply failed to take it into account. Hence, in my submission, the question of the application of the relevant policy simply does not arise in the stage that this case has reached. Consequently, in my submission, there is no basis for permission to appeal.
86. MR JUSTICE COLLINS: Do you want to add anything, Ms Lieven?
87. MS LIEVEN: I do not think there is any point.
88. MR JUSTICE COLLINS: Well, I think this is a case where, if you wish to take this further, you will have to apply to the Court of Appeal. It does not seem to me that I have said anything which could worry the Secretary of State on policy, if he correctly interprets my judgment, and, as far as the reasons are concerned, as I have indicated when you were addressing me, I take the view, rightly or wrongly, that these reasons simply are so poor that whatever their Lordships may have said today (that is a bold thing to say) should not affect the situation.
89. MS LIEVEN: My Lord, I am not sure whether I need to ask, but in case I do, can I ask for an extension of time to apply to the Court of Appeal for 14 days after the production of the transcript?
90. MR JUSTICE COLLINS: Yes.
91. MS LIEVEN: I believe that is now a standard order.
92. MR JUSTICE COLLINS: Yes, I am happy to make that. If your side are concerned about time, it may be that the way to deal with that is to ask the shorthand writer whether she would be good enough to be rather speedy in producing the transcript. How you will prevail upon her to do that is up to you.
93. MS LIEVEN: I am grateful, my Lord.
94. MR JUSTICE COLLINS: I always feel that it is slightly unnecessary that we have to fill in this form as to why I am refusing leave to appeal, since it is all on the transcript, but anyway. I shall put "see transcript". Thank you very much.