Neutral Citation Number: [2014] EWHC 62 (Admin)
Case No: CO/7138/2013
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 24/01/2014

Before :

MR JUSTICE CRANSTON
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Between :

	Islington Borough Council	Claimant	
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	Secretary of State for Communities and Local Government 	1st Defendant	
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	TGI Taverns	2nd Defendant	
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Sarah Sackman  (instructed by L.B. Islington) for the Claimant
Stephen Whale  (instructed by Treasury Solicitor) for the 1st Defendant
Daniel Kolinsky (instructed by David Cooper & Co) for the 2nd Defendant
Hearing dates: 15 January 2014
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Judgment
Mr Justice Cranston : 

Introduction
1.	The “Good Intent” public house is situated in Holloway, North London on the western side of Wedmore Street, immediately adjacent to Whittington Park.  It occupies an isolated position and the park surrounds it on three sides.  To the north east is a large, local authority estate dating from the early 20th century.  Private housing to the south and west is Victorian and the overwhelming land use in the surrounding area is residential.  A conservation area is nearby.
2.	On 1 May 2013 the Secretary of State for Communities and Local Government (“the Secretary of State”), acting through a planning inspector, approved an application for planning permission in respect of the “Good Intent”.  A developer, TGI Taverns, had applied some 12 months previously to demolish the public house and erect a 3 storey building comprising 6 townhouses.  The London Borough of Islington (“the Council”) did not determine the application within the prescribed period.  Consequently, the developer appealed against the non-determination under section 78 of the Town and Country Planning Act 1990 (“the 1990 Act”).  The planning inspector, Mr Tim Wood, heard the appeal and made the decision approving the proposal, subject to 12 conditions.
3.	This is an application by the Council under section 288 of the 1990 Act for an order quashing that decision.  The Council contends that the decision was based on an error of law by virtue of an express provision of Islington’s draft planning policy DM 27.  The case raises this question: despite an expressly worded criterion in a planning policy not being met, can planning approval nonetheless be granted on the basis that overall the policy’s aims have been satisfied?  
The inspector’s decision and DM 27
4.	The inspector had before him a statement prepared for the developer by Mr Jonathan Murch, a town planner with Savills.  Mr Murch explained in the statement that within the last 18 months three sets of operators had taken over the operations of the “Good Intent” but had not been successful in creating a financially viable establishment.  In the statement he sought to explain why the “Good Intent” continued trading: in some instances, the owners of a business will choose to continue to operate in the short term at a loss, with no reasonable prospects of the business reviving, since if the property is left vacant its owner will still incur maintenance and security costs.  These may not be much different from the costs of continuing to trade and during the period the fortunes of a business may just improve.  That was done with the “Good Intent” as the lesser of two evils although that did not make it a viable business.  
5.	Indeed, a report from property specialists in public houses, Davis Coffer Lyons, concluded that the “Good Intent” was not capable of operating profitably in its existing style, even with another operator.  The overall gross profit, some 67 percent, was a commendable level and there was no scope for the business to improve on that.  There was no commercial advantage in refurbishment.  The report set out the background to its conclusion: there was no scope for longer opening hours for the “Good Intent”, because of noise nuisance; given its location, it was a community pub, with limited passing or destination trade; and there was competition from a number of other community pubs in the area.   Under the heading “Marketing & Marketability” the report concluded that, if the property were available on the open market for sale, it would not be of any interest to any operator.  There was no potential for the “Good Intent” to trade at a profit and as such no pub company would look to acquire it.  
6.	The Council explained to the inspector that it had four objections to the development.  The first was that it would result in the loss of an existing public house; the second and third concerned the design of the proposed townhouses; and the fourth related to the provision of cycle space for residents.  Following negotiations between the parties by the time of the hearing before the inspector only the first objection remained.  The Council also described in its statement that it had sent letters to occupants of 218 nearby properties which produced 37 responses, 34 against the development.  Loss of the public house was only one among the objections, which raised issues such as design of the development and its impact on the park.  The Council’s statement referred to relevant planning policies and also to its emerging Development Management Policies, in particular draft policy DM 27, which it said was aimed at retaining public houses as part of the urban fabric and local communities.  In the statement the Council accepted the evidence of the developer that the “Good Intent” did not currently appear to be viable as a business.  However, there was no marketing evidence to demonstrate an absence of interest from other operators, which was required under DM 27.  
7.	The Council’s Draft Development Management Policies had been submitted to the planning inspectorate for examination in August 2012, and there had been hearings in December that year.  Subsequent to the planning inspector’s decision on the “Good Intent” application, a planning inspector approved the Council’s Development Management Policies, including DM 27, which as approved is now DM 4.10.  Draft Policy DM 27 read as follows:
“Public Houses
A. The council supports the retention of Public Houses, and opposes their redevelopment, demolition and Change of Use.
B. Applications for the Change of Use, redevelopment and/or demolition of a Public House must demonstrate that:
i) the Public House has been vacant for a continuous period of 2 years or more and continuous marketing evidence has been provided for the vacant 2 year period to demonstrate there is no realistic prospect of the unit being used as a Public House in the foreseeable future;
ii) the proposed alternative use will not detrimentally affect the vitality of the area and the character of the street scene;
iii) the proposal does not constitute the loss of a service of particular value to the local community; and
iv) significant features of historic or character value are retained.”
8.	The accompanying paragraphs to DM 27 stated that Islington’s public houses “form an integral part of the urban fabric, and many are closely associated with the life and identity of local communities”. Public houses “therefore play an important role in the historic character and community function of Islington’s neighbourhoods”: para 4.52.  Paragraph 4.53 recorded the fall nationally in the number of public houses, but noted that Islington “has retained a substantial number of historic public houses, which are valued by local residents and visitors”, despite a steady decline in their provision in recent years.  Paragraph 4.54 explained that the Council would resist proposals resulting in the removal of public houses, 
“particularly where these would detrimentally affect the street scene, result in loss of historic or character value and/or constitute the loss of a function of particular value to the community.  Continuous marketing evidence will be required demonstrating lack of demand for the public house”.
There was then a reference to Appendix 11, and the information to be provided in relation to the marketing of the vacant floor space set out in B(i).  Appendix 11 itself contained details of what was required for the marketing exercise.
9.	The inspector heard the appeal on 26 March 2013.  There was a site visit.  In his Decision Letter of 1 May 2013 he identified the two main issues in the appeal, first the effects of the loss of the public house and secondly, the effects of the proposal on the area and the users of the park.  Although the Council was only concerned with the first issue, the inspector considered the second because interested local people still objected to the impact of the development on the locality.  
10.	The inspector decided that he would attach some weight to draft policy DM 27, although at that point it had not been finally adopted.  He referred to none of the other planning policies the Council had canvassed before him in its statement.  After summarising draft policy DM 27, the inspector noted that the developer had not submitted any evidence of continuous marketing and that the “Good Intent” was not vacant.  However, the accounts showed it was operating at a loss.  He noted the submission regarding the cost of security and possible damage if the “Good Intent” were to be left vacant.  The developer had considerable experience in operating and turning around public houses.  The evidence, including the unchallenged expert evidence, was that the “Good Intent” was not capable of providing a viable business.  The inspector then said:
“8. On the face of it I accept that there is some conflict with the wording of Policy DM 27 due to the lack of marketing and the continued operation of the business.  However, the appellant has provided an answer to the vacancy issue and I agree that there is some sense to keeping the business running in the short term.  In relation to marketing, from the expert evidence submitted, I am satisfied that it has been demonstrated that it is unlikely that a realistic alternative public house operator would be attracted.
9. In addition, I noted the proximity of other public houses locally and it would not be realistic to sustain an argument that this premises is one which is of particular value to the local community.  Therefore, the overall aims of the policy have been satisfied in this individual case, even though there is a degree of conflict with the precise detail within it.”
11.	Turning to the second issue the inspector considered that the overall composition of the development was well considered, indeed it “would represent a respectful addition to the street-scene”.  Moreover, it would not be intrusive to users of the park, it would not prejudice the landscape value of the trees and it would not represent a harmful overlooking of properties the other side of the street.  No matter arises before me about this second issue of the effects of the proposal on the area and users of the park.  
The claimant’s case 
12.	In cogent and attractively advanced submissions, Ms Sackman contended that the inspector had misinterpreted the policy.  That meant an error of law, since while decision makers are entitled to exercise a judgment in deciding whether to attach any weight to planning policies, once they have recognised that they should do so they are required to have regard to a policy’s actual meaning.  Interpretation of planning policy is a matter of law and a failure to understand it is an error of law.  In this case the Secretary of State, through his inspector, erred in law by failing to give proper effect to the very precise requirements of  B(i) of DM 27, that a public house must be vacant for a continuous period of two years and that there be continuous marketing evidence during those two years.  That requirement was a bright line rule, a hard edged requirement, reinforced by Appendix 11, which lays down quite detailed guidelines as to exactly what the applicant must do in order to satisfy the requirement for marketing evidence.  Thus the wording of the test in DM 27 was a strict requirement, clear and unequivocal and should have been applied.  
13.	Ms Sackman accepted that the viability of the “Good Intent” as a public house might well have been a relevant consideration in determining whether there was a realistic prospect of its continuing use, but the test in B(i) of DM 27 was deliberately more exacting.  If the test had been simply concerned with viability it would have said so.  A public house which is not viable for one operator may nonetheless be viable for another.  It is precisely in these circumstances that the marketing evidence required by the test sought to establish not only whether a public house is viable, but what interest it has attracted during the two year period of vacancy.  It is a deliberately onerous requirement set out in a public document so all will know the policy the Council has chosen to adopt.
14.	In Ms Sackman’s submission the inspector, as she put it, had not fronted-up to the conflict with the policy.  He had disregarded the clear, hard edged policy which the Council had adopted, which was the retention of public houses.  The inspector’s failure to interpret the test correctly had led to a materially different outcome.  That jeopardised the further application of a number of policies in the Council’s Development Management Policies, which also used the two year vacancy and marketing evidence test set out in B(i) of draft policy DM 27.  
Discussion
15.	It is trite law, but valuably restated by Lord Reed in Tesco Stores Ltd v Dundee City Council [2012] UKSC 13; [2012] PTSR 983, that a planning policy is published in order to inform the public of the approach which will be followed unless there is good reason to depart from it, and is designed to ensure consistency and direction in the exercise of discretionary powers, while allowing a measure of flexibility. As in other areas of public administration, planning policies “should be interpreted objectively in accordance with the language used, read as always in its proper context.” [18]. Lord Reed continued his judgment with this important passage:
“[19] That is not to say that such statements should be construed as if they were statutory or contractual provisions. Although a development plan has a legal status and legal effects, it is not analogous in its nature or purpose to a statute or a contract. As has often been observed, development plans are full of broad statements of policy, many of which may be mutually irreconcilable, so that in a particular case one must give way to another. In addition, many of the provisions of development plans are framed in language whose application to a given set of facts requires the exercise of judgment. Such matters fall within the jurisdiction of planning authorities, and their exercise of their judgment can only be challenged on the ground that it is irrational or perverse: Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759 , 780, per Lord Hoffmann. Nevertheless, planning authorities do not live in the world of Humpty Dumpty: they cannot make the development plan mean whatever they would like it to mean.”
16.	This does not mean that a planning policy should be given a strained interpretation, but it does mean that the words have a context. A policy’s plain meaning, if there is one, must be seen in the light of its context and purpose. We are not in the realm of construing a commercial contract, even less a statutory provision. Here the draft policy’s aim was clear, to place considerable hurdles to the loss of yet further public houses in Islington. The means to securing that policy included B(i) of DM 27, under which the marketing exercise over the two year vacancy period had to be undertaken to demonstrate, as B(i) put it, that “there is no realistic prospect of the unit being used as a Public House in the foreseeable future”.
17.	The context in Islington’s planning policy is not the retention of every single public house.  In its Core Strategy in February 2011, the Council identified among Islington’s good cultural and leisure attractions its “historic public houses”.  The emphasis in DM 27 itself is on those public houses having the attributes mentioned, where closure would “detrimentally affect the vitality of the area and the character of the street scene”, or would result in the loss of something of “historic character or community value” or of “particular value to the community”.  Those attributes are spelt out in more detail in paragraphs 4.52-4.53, i.e. public houses with an historic character and community function, valued by the community and where their removal would have a detrimental effect on the street scene and would result in a loss of something historical or community value as described in paragraph 4.54.  
18.	Here the inspector accepted that there was “some conflict” with DM 27.  That was, as he pointed out, because the marketing evidence over the two year vacancy period had not been presented.  Despite that, the inspector concluded, as he was entitled to, that on the basis of other evidence the developer had demonstrated, as required by B(i), that there was no realistic prospect of the unit being used as a public house in the foreseeable future.  That evidence included the accounts and was accepted by the Council as demonstrating that the “Good Intent” had been operating at a loss.  There was evidence from Davis Coffer Lyons, property specialists in public houses.  That evidence demonstrated that there was no realistic prospect of the public house being resuscitated.  Thus, as the inspector concluded, the overall aim of the policy had been satisfied in that it was unlikely that a realistic alternative public house operator would present themselves.  
19.	Moreover, the inspector made no finding that the “Good Intent” formed an “integral part of the urban fabric” or was “closely associated with the life and identity of the local communities”, had “historic character” or “community function” or that its loss would have a “detrimental effect [on] the street scene” and be a loss of “particular value to the local community” if it ceased business.  In other words the inspector made no finding that the “Good Intent” was the type of public house which the Islington policy was keen to retain. To the contrary, in the passage I quoted earlier from the decision letter, paragraph 9, the inspector made a clear finding of fact that the “Good Intent” was not of particular value to the local community.  By contrast, later in his decision letter he concluded that the proposed town houses “would represent a respectful addition to the street scene”.
20.	In my view the inspector’s conclusion that the overall aim of the policy had been satisfied, even though there was a degree of conflict with its precise requirements, cannot be said to be in error.  There was no error of law since the inspector correctly understood the terms of the policy and acknowledged a conflict with its wording – that it was not vacant and that the continuous marketing evidence over a two year period was absent.  He applied his judgment to the significance of that conflict by assessing the purpose of the policy, the viability of the “Good Intent” and the evidence as to whether it was of value to the local community.  In my view he made an obviously thoughtful planning decision on a correct interpretation of the policy.  His application of the policy to the facts was a question of judgment and cannot be said to be flawed in public law terms.  
21.	I dismiss the appeal.