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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 >> Perry, R (on the application of) v London Borough of Hackney & Ors [2014] EWHC 1721 (Admin) (23 May 2014) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2014/1721.html Cite as: [2014] EWHC 1721 (Admin)

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		23/05/2014

Introduction

1. The claimant seeks quashing orders in respect of two planning permissions and conservation area consents granted by the defendant, the London Borough of Hackney, for a mixed use retail and residential development on land at Wilmer Place, London N16. The first planning permission and conservation area consent was granted on the 8^th August 2013 (CO/13423/2013). I will refer to this hereafter as JR1. The second was granted on the 14^th February 2014 (CO/1377/2014) and which I will refer to as JR2. On each occasion the applicant for planning permission and conservation area consent was Newmark Properties, the Interested Party.
2. Permission to proceed to a substantive hearing in JR1 was granted by Mr Justice Collins on the 17^th December 2013. That was listed to be heard on the 19^th May 2014.
3. On the 8^th May 2014 Mr Justice Ouseley vacated the substantive hearing in JR1 and ordered that the hearing on the 19^th May should take place to determine the following;-

i) The claimant's application for disclosure in each action of the un-redacted viability assessment and related documents;

ii) Whether permission should be granted for permission in JR2;

iii) Whether JR2 should be linked with JR1;

iv) The issue of participation of all parties at the substantive hearing of JR1 should it proceed if permission is refused in JR2;

v) The claimant's application for a cost cap in JR2;

vi) Case management directions.

4. The hearing before me proceeded on that basis. Due to a lack of court time it was not possible to give judgment at that hearing. This judgment deals with all of those matters. I invite the parties to agree and submit an order for approval to reflect this judgement.
5. I deal first with the issue of disclosure and whether permission should be granted in JR2.

Disclosure

6. The claimant has made a specific application for disclosure (i) of the GL Hearn Financial Assessment on the viability of the development proposed,(ii) of the Jones Lang LaSalle review of that assessment, and (iii) of any other information held relating to the above.
7. The claimant's case is that the planning applications which led to the first and second planning permission were based upon the same viability assessment. That assessment is said to show that the maximum proportion of housing that could viably be affordable is 17%. The policy requirement under the council's Core Strategy policy 20 is that for residential development of more than 10 dwellings 50% of the residential provision should be affordable housing.
8. JR1 was accompanied by a financial assessment by GL Hearn. That was independently appraised by consultants (Jones Lang Lasalle) acting for the defendant. At no stage has either document been disclosed to the claimant. In JR2 the claimant was provided with a redacted version of the GL Hearne document. At no stage was he given any version, redacted or otherwise, of the report prepared by James Lang Lasalle.
9. The report to committee which sets out why a figure of 17% affordable housing was in fact acceptable reads as follows:

"6.9.12 As less than 50% affordable housing is proposed a 'GLA Three Dragons' viability" appraisal is required to be submitted to accord with London Plan policy 3.12 and Hackney Core Strategy policy 20. This appraisal has been submitted along with additional explanatory information with regard to sales values build costs and information on the existing use value of the site.

6.9.13 The appraisal and accompanying information have been reviewed by external consultants appointed by Property Services surveyors. The appraisal shows that provision of affordable housing is constrained by the site constraints such as proximity to a number of heritage assets, which limits the scale of development that can accommodated on site. When taking into account the existing use value of the site, build costs and associated professional fees for the development, alongside potential sales values from residential units and rental yield from the proposed retail unit, the amount of affordable housing proposed is the maximum amount that can be reasonably achieved on the site.

6.9.14 It should be noted that the Core Strategy 50% affordable housing target was developed at a time when grant funding was available from the Homes and Communities Agency to deliver affordable housing. When such funding was available the Council's Affordable Housing Viability Study which forms part of the evidence base for the Core Strategy noted that 50% affordable housing would be achievable in a high number of scenarios. When grant funding is not available then the 50% affordable target is only achievable in a limited number of scenarios, usually involving sites with low existing use values.

6.9.15 Both London Plan and Core Strategy policies therefore recognise that the 50% target is an aspiration and not a minimum standard, and lower proportions may be acceptable. This needs to be assessed on a site specific basis taking into account scheme viability. It should also be noted that a greater amount of affordable housing has been submitted in comparison to the previously refused scheme on this site (ref: 2009/1264, see history section). In addition the amount of affordable housing has been fully justified in terms of viability. As such the Planning Service consider that the proposed affordable housing provision complies with Core Strategy Policy 20, London Plan policy 3.12 and emerging DMLP policy 21."

10. The claimant submits that the reasons given for why the short fall in meeting the affordable housing target was acceptable are in fact not reasons. The decision maker was being asked to make a faith based decision. The members did not have copies of the financial viability reports either. All they had was an officer giving his headline version of the appraisal contents. That does not equate to reasoning.
11. The claimant submits that the documents are highly relevant to the issue of financial viability and whether there was adequate provision of affordable housing.
12. The claimant submits further that commercial confidentiality cannot be claimed in respect of the documents sought to be disclosed. There is no actionable breach of confidence and there is no way that the law of confidentiality precludes a decision maker from looking at the documents. The law of confidentiality is only concerned to protect against misuse of information. There is no misuse of confidential information if it is used for a purpose that a reasonable person would consider reasonable having regard to the purpose for which it was imparted: see Smith Kline & French Laboratories Ltd v Attorney General [1990] 1 AC 64.
13. The public interest here supports the disclosure of the documents. The case of R (on the application of Bedford) v London Borough of Islington and Arsenal Football Club PLC [2002] EWHC 2044 relied on by the defendant and interested party was dealing with different circumstances.
14. The appropriate test for the court to apply is that set out in Tweed v Parades Commission [2007] 1 A C 650 where Lord Bingham said [3],

"The test will always be whether, in the given case disclosure appears to be necessary in order to resolve the matter fairly and justly.

Where a public authority relies on a document as significant to its decision it is ordinarily good practice to admit it as primary evidence. Any summary, however contentiously and skilfully made, may distort. But where the authority's opponent chooses to summarise the effect of a document it should not be necessary for the applicant, seeking sight of the document, to suggest some inaccuracy or incompleteness in the summary, usually an impossible task without sight of the document. It is enough that the document itself is the best evidence of what it says. There may, however, be reasons (arising, for example from confidentiality, or the volume of the material in question) why the document should or need not be exhibited."

15. In dealing with the application of disclosure in judicial review Lord Carswell said at [32],

"… I do consider, however, that it would now be desirable to substitute for the rules hitherto applied a more flexible and less prescriptive principle, which judges the need for disclosure in accordance with requirements of a particular case, taking into account the facts and circumstances. It will not arise in most applications for judicial review, for they generally raise legal issues which do not call for disclosure of documents. ……This object will be assisted if parties seeking disclosure continue to follow the practice where possible of specifying which particular documents or classes of documents they require…"

16. An application has been made for disclosure of the documents under the Environmental Information Regulations which has not yet been decided. However, neither the act nor the regulations set parameters as to what should be disclosed. The decision of the First Tier Tribunal under reference EA/2013/0162 which was a decision by the general regulatory chamber on a request for a copy of a financial viability assessment submitted with a planning application by Lend Lease (Elephant and Castle) Limited ruled that the financial viability assessment had to be disclosed.
17. The defendant submits that the test is as set out in Tweed (supra). It is important to consider what is necessary. The problems of confidentiality are well known in the area of financial viability. It is important not to allow a party to go on a "fishing expedition". That is particularly so here. The claimant has produced no expert evidence of his own to suggest that the viability assessment submitted is in error.
18. Whether the documentation is confidential depends upon the particular category of information. This is a case where confidential information should be respected. The submission that there is a greater public benefit to disclose overlooks the interest of the party who has submitted the information. It overlooks also that a local planning authority will want to get as much information as possible from a developer to understand whether what is being suggested is appropriate. It is, therefore, the expert evidence of officers and independent consultants is under challenge. There should therefore be no disclosure.
19. The interested party submits that disclosure is an exceptional course. It should be ordered only when it is necessary to resolve the issue fairly and justly. The content of the documents for which disclosure is sought are not relevant to a single ground in the claim. The point on affordable housing is said to be one of procedural unfairness. To adjudicate upon that does not need sight of the documents.
20. In JR2 the claimant has had sight of a redacted version of financial appraisal. That financial appraisal is an updated version of the one for JR1. Were it to be disclosed it could give rise to financial embarrassment as it sets out the assumptions adopted which would undermine the ability of the interested party to negotiate in the market. Matters such as the number of registered providers who are interested and the offers they have made together with food store value are all highly sensitive items of information.
21. If the claimant is correct and all the financial appraisal documents have to be disclosed to enable the public to participate in the planning system there would be significant ramifications.
22. On the issue of public interest there were two further points. First that the Local Government Act recognises an exemption for confidential information. Second, the case of Bedford (supra) sets out the position clearly where it says [99]-[101],

"99. Moreover, fairness in the planning process is not confined to a consideration of the interests of the objectors. It also needs to respect the confidentiality of the applicant because it is to its figures rather than to DTZ's general appraisal that the claimants' point is addressed. It has the gist of the appraisal. It is this actual appraisal, and within that Arsenal FC's figures, that the claimants want. This is emphasised by their constant references to a £50 million funding gap drawn from an e-mail in which that is referred to. But it would be unfair to Arsenal FC for the local planning authority to be made to reveal what was handed to its advisers in confidence in the clear expectation that it would have a very carefully restricted circulation.

100. A planning authority needs to be able to examine matters in a confidential manner with applicants, as was done here, and for that purpose to use independent consultants to whom disclosure of the relevant information is made in confidence. This is the same process that the GLA went through. If a local planning authority cannot do that, it will be hindered in its negotiations with developers over the content of publicly beneficial packages such as the extent of affordable housing and other legitimate benefits related to the value of the development and its funding. The public interest would be harmed.

101. It is quite clear that the information is confidential and disclosure of it would be in breach of confidence. There is nothing unfair in the non-disclosure of that document, with the gist of the DTZ appraisal being available. "

Discussions and conclusions

23. In CRP Rule 1.1(1) the overriding objective is to "enable the court to deal with cases justly." The position with regard to disclosure in judicial review cases is as Lord Bingham set out in Tweed at [3].

"That the test will always be whether in a given case, disclosure appears to be necessary in order to resolve the matter fairly and justly."

As Lord Brown said in the same case disclosure orders are likely to remain exceptional in judicial review proceedings. The courts have to continue to guard against what appear to be "fishing expeditions".

24. As the Royal Institution Chartered Surveyors (RICS) guidance on financial viability in planning makes clear at paragraph 4.3.1,

"It is also often the case that the viability report submitted to a planning authority is required to be classified as confidential in part or as a whole. This is to encourage the applicant to disclose the maximum amount of information, which can then be reviewed and reported upon. LPAs should therefore be asked to treat and hold this information on a similarly reciprocal basis and respect that disclosure of confidential information could be prejudicial to the developer (applicant) if it were to enter the public domain. Information will usually be disclosed to the LPA department advisor but not the general public as it may be commercially sensitive."

25. As Ouseley J said in Bedford if a Local Planning Authority cannot examine matters in a confidential way it will be hindered in its negotiation with developers over the content of publically beneficial packages such as the extent of affordable housing. It is of fundamental importance that there should be discussion between a local planning authority and a developer to strike the optimum balance in the public interest with a development proposal. The ability to do that frequently rests upon sensitive commercial valuation. If it were to be the case that sensitive matters had to be disclosed to the public it could have most deleterious effect upon planning negotiations. A developer would be reluctant to disclose his land values because of the concern that those could effect his own negotiations with other parties and place him at a disadvantage in relation to other developers. The planning authority would similarly be hampered in the discharge of its duty to consider a planning application in the public interest.
26. In JR1 Collins J in granting permission considered that commercial confidentiality can properly mean that full details do not need to be disclosed. He expressed the view that 17% affordable housing was very low and the reasons given were less than informative. It is to be noted though that that was said in different circumstances to those in JR2 where a redacted financial assessment report was given to the claimant.
27. However, the real issue in JR1 is whether the council acted unfairly contrary to well recognised need for public participation in the planning process by failing to allow the public an opportunity to understand anything about the justification advanced for the reduced amount of affordable housing. The fundamental issue, therefore, is one of unfairness.
28. In JR2 in paragraph 50 of the Statement of Facts and Grounds the claimant submits that the defendant misdirected itself on the confidentiality of the information, the consequences of that confidentiality and failed to consider whether the information would be discloseable under the Environmental Information Regulations 2004. Whatever may have been the historic position there is now an application which is currently under consideration by the defendant for that information.
29. The decision on the part of the FTT which the claimant relies upon does not direct that all financial viability information be disclosed to the public. Far from it. The case involved an area of the Elephant and Castle badly in need of regeneration, the Heygate Estate. As a result of a procurement exercise which ended with the selection of Lend Lease as the preferred development partner in 2007 an application for outline planning permission was submitted supported by a viability assessment. That was said to be private and confidential on the basis it contained information which was commercially sensitive. The FTT concluded that the public interest impacted differently on different parts of the requested information. In considering Lend Lease's development model the tribunal concluded that the harm to Lend Lease's own interest taken alone outweighed the public interest. The FTT added that preventing disclosure of a trade secret might encourage other developers to maintain an open book approach to their local authority partners- although each case as they indicated will always be considered on its merits.
30. In considering information in the viability assessment about sales and rentals the FTT accepted that Lend Lease's calculations would commercially be of great sensitivity. If disclosed there was a real risk that future commercial customers would use Lend Lease's projections to their advantage in negotiations. That would be damaging to Lend Lease's profit and risk a knock on effect of if not the viability of the whole project at least the delivery of its social content. Again weighing the public interest in maintaining the exception outweighed the public interest in disclosing the information.
31. As in that case the instant application concerned information in the viability assessment on rights that would be subject to commercial negotiation between the developer and other businesses together with information about the development model. The FTT decision, therefore, does not assist the claimants.
32. The claimant sought to distinguish the case of Bedford. Initially, Mr Coppel QC, submitted that was wrongly decided but then amended his position to one where the case could be clearly distinguished. That was on the basis that there was no specific application for disclosure there and what was being pursued was a ground of challenge that it was unfair for the viability document not to have been disclosed which it should have been under section 100 D of the Local Government Act 1972. Certainly the provisions of the Local Government Act 1972 have not been relied upon as a basis for non disclosure here and there has been a specific application for disclosure. What is said though is that the information contained in the reports was confidential and disclosure of it would be in breach of that confidence. The information supplied had been scrutinised by independent consultants who could advise the authority which they had done. The defendant had engaged, therefore, in the proper approach of balancing the various aspects of the public interest which is not restricted to the members of the public wanting to participate in the planning application process.
33. The position here on procedural unfairness as a result of absence of the information is similar to the situation in R (on the application of English) v East Staffordshire Borough Council [2010] EWHC 2744 where Flaux J did not consider there was anything in the claimant's contentions that non disclosure of the financial report and its review was unfair. There was a balancing exercise to be carried out, as was recommended by Ouseley in the Bedford case, between the public's entitlement to information and the applicant's entitlement to confidentiality. That is what happened here with regard to disclosure of the relevant reports. Carrying out that balancing exercise I can see no basis to order the disclosure here. It would be a misuse of that information to disclose it to the public.
34. Equally, I can see no basis for Mr Coppel's initial submission that the case of Bedford was wrongly decided. I endorse the judgment where Ouseley J deals with the importance of confidentiality on matters of financial viability.
35. The above comments apply to both JR1 and JR2. Whilst I accept that there was no gist of the financial viability report in JR1 provided to either the public or the members as there was in JR2 Collins J in his grant of permission had no doubt that commercial confidentiality could properly mean that full details did not need to be disclosed publically. His second comment in relation to sight of the report is superseded by what happened in JR2.
36. Having heard full argument about disclosure and having considered the matter in the round the public interest here is such that it would be wrong to order disclosure of the reports requested.

Permission in CO/1377/2014

37. The claimant submits that the grant of permission in JR1 on the 17^th December 2013 in an almost identical planning application should be followed for the sake of consistency. Further, Ouseley J recognised that JR2 may be tainted as a result of a decision in JR1.
38. Ground one in JR2 is that the wrong direction was given to members in relation to the planning permission granted and subject to JR1. The advice that the committee needed to justify departure from its previous grant of permission was in error as the decision to approve JR1 was itself unlawful so that the defendant was required to consider JR2 in the context of flaws identified in the first claim for JR. By treating that grant as without any risk of being legally flawed there was no consideration to the risk that there were errors in JR1.
39. Ground two is a set of interrelated mistakes on policy and approach relating to

i) Misunderstanding and misapplication of Core Strategy policy 20;

ii) Misdirection is relation to the supposed confidentiality of information and whether that should be disclosed under the presumption of disclosure in the Environmental Information Regulations 2004;

iii) Failing to consider excluding the public from the meeting so that any claimed confidential material could be considered in camera;

iv) That the committee relied wholly and uncritically upon the planning officer's assertions about the maximum affordable housing provided and failed to make appropriate enquiries;

v) Failed to allow the plaintiff to scrutinise the question or test the information

All of those matters are individually or cumulatively at least arguable.

40. Ground three relates to the treatment of heritage policies in regards to heritage duties where the allegation is that the planning officer misunderstood the precedence as between the statutory Development Plan and the NPPF.
41. The final ground is one of irrationality and inadequate reasoning as the officer report failed to adequately engage with the principle controversial issues and justify the conclusions reached on the main issues.
42. The defendant submits that the grant of permission by Collins J was a limited grant. It was not part of that permission that there was a breach of policy or the Environmental Information Regulations.
43. On ground one it is submitted there is a complete answer as the committee were well aware of the ongoing judicial review from the officer's report and indeed from the claimant. A proper direction was given.
44. On ground two the Environmental Information Regulations were a separate process which should not need to be gone into again. Policy 20 in the Core Strategy was a target policy which was complied with in the circumstances here even if the target was not met.
45. There were two material differences since permission to proceed had been given on JR1. First, the court then did not have the decision in English before it. Second, the claimant had been given further information on financial viability in the form of the redacted report. The other matters including the alleged failure to place the section 106 agreement on the planning register were without substance as the claimant was sent a copy of the agreement on the 19^th February 2014. He had not objected to its contents.
46. The treatment of the heritage policies had been considered afresh and further advice from English Heritage had been obtained. The officer report then dealt with that issue in a logical manner.
47. Ground four on adequate reasoning and irrationality depends upon the other grounds which have been dealt with.
48. The decision of Collins J was not determinative.
49. The interested party submitted that there were a number of differences between JR2 and JR1 which were material.
50. To a great extent the interested party adopted the submissions on the part of the defendant. That was the case in its entirety on ground one. If I do not set out the grounds raised by the Interested Party it is because they overlap with those raised by the defendant.
51. On ground two the failure to consider disclosure under the EIR 2004 raised an issue of procedural unfairness which was overcome by the provision of a redacted copy of the financial viability appraisal. The failure to consider excluding the public to enable the committee to consider the viability appraisal in camera was not one that led to any procedural unfairness nor was the fact that the members were not provided with an un-redacted copy of the financial viability assessment.
52. Ground four dealing with the approach to heritage policy was misconceived as the officer had clearly set out in his report the statutory duties. English Heritage had taken the view that the harm was less than substantial. The exercise was to weigh the harm against public benefit. That had been done.

Discussion and conclusions

53. All the claimant has to show at this stage is that the grounds are arguable.
54. The fact of the overlap between JR2 and JR1 is such that although there are differences between the decision made by Collins J on JR1 and JR2 his decision is still a highly material consideration in the decision as to whether to grant permission in JR2. His decision, therefore, must inform that which is to be made on JR2.
55. Further, the inter relationship between the two claims which is acknowledged by the defendant as being one of considerable overlap means that there is a higher possibility of the second decision being infected by the first if the first is unlawful. In those circumstances ground one is arguable.
56. Ground two is a collection of points which in my judgment have varying degrees of arguability. What Core Strategy policy 20 says and means are matters of interpretation. How it was presented to the committee also are matters that are properly arguable.
57. The remaining points under ground two are just about arguable given the overlap with JR1.
58. Ground three on the treatment of the heritage policies and the inter relationship between the statutory duty under the Listed Building Conservation Areas Act which was set out to members and the inter relationship between that, the Development Plan and the NPPF is a matter which may benefit from further argument. At this stage it is arguable.
59. Ground four on adequacy of reasoning and rationality is clearly parasitic upon a decision on the earlier grounds.
60. In those circumstances I grant permission to proceed on all grounds in JR2.

Linking of JR1 and JR2 and the participation of the defendant and interested party in JR1

61. It is agreed that if permission is forthcoming JR2 should be linked with JR1. That is clearly a sensible course. Upon questioning Mr Coppel did not pursue the submission that the defendant and interested party should not be able to participate within JR1. It is clearly right and equitable that they do so.

Costs cap

62. It is agreed that the cost cap should be £5,000 in each of the JR challenges.

Case management directions

63. It is agreed that on a composite hearing the estimated length of hearing should be 2-3 days.
64. The defendant and interested party are to have 21 days to consider whether to, and if so advised, to file detailed grounds of resistance but as a composite document that would relate to both judicial review proceedings. That is to supported by such evidence as is thought to be appropriate which is to be filed within the same timescale.
65. It is also agreed that rather than the large number of lever arch files and volumes of authorities that were present before me there should be one core bundle of authorities agreed by all parties and a core bundle which contains the key documents that the court needs to consider.
66. Out of prudence it would be sensible to incorporate a provision of liberty to apply.