39 Essex 39ESSEX 2010SEMINAR ENVIRONMENTAL CASES OF 2009 Visit
JANE SARAH WILLIAMS
( A representative Claimant for 20 others comprising "The Sustainable Totnes Action Group")
Claimant- and -DEVON COUNTY COUNCIL
( A representative Claimant for 20 others comprising "The Sustainable Totnes Action Group")
Claimant- and -DEVON COUNTY COUNCIL
GPS ESTATES LIMITED- and -SECRETARY of STATE for COMMUNITIES and LOCAL GOVERNMENT
Heatherington (UK) Ltd v Secretary of State for the Environment and another Download | Print |
The appellants appealed to the High Court contending, principally, that the inspector had adopted the wrong approach to the decision-making process by failing to perform his duty under section 66(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990. In particular, the appellants argued that while the inspector had paid special regard to the desirability of preserving the building’s features of special interest when considering the restoration scheme which the appellants had proposed for the first floor while remaining in office use, he had not done so when considering the alternative of residential use as illustrated by schemes put forward by the council. Furthermore, the inspector’s own findings indicated that the schemes for residential use would harm features of special interest.
10 Held The appeal was allowed. While the opening words of section 66(1) indicated the occasion when the duty to have special regard arose, they could not be seen to confine the decision-maker’s attention to the effects of the proposed development alone. In practice, that might be all that was relevant. But sometimes there might be relevant effects from not granting permission, as in the present case, and those must fall within the duty to pay special regard under that subsection. The present case was one where the choice was between alternative uses, either of which would have effects on the listed building’s features: see p17B-D.
Whether the inspector had observed his statutory duty under section 66(1) was essentially a matter of interpretation of the decision letter. As a matter of interpretation, he may well not have in relation to residential use. On the balance of probabilities there was a breach of statutory duty and the matter should be remitted: see pp18E-19B.
Cases referred to in the judgment Bath Society v Secretary of State for the Environment [1991] 1 WLR 1303; [1992] 1 All ER 28; (1991) 89 LGR 834; 62 P&CR 565; [1991] 2 PLR 51; [1991] JPL 663, CA
South Lakeland District Council v Secretary of State for the Environment [1992] 2 AC 141; [1992] 2 WLR 204; [1992] 1 All ER 573; (1992) 90 LGR 201; 64 P&CR 128; [1992] 1 PLR 143, IIL
Appeal under section 289 of the Town and Country Planning Act 1990
This was an appeal under section 289 of the Town and Country Planning Act 1990 by Heatherington (UK) Ltd against the dismissal by the first respondent, the Secretary of State for the Environment, by his inspector, of an appeal against an enforcement notice issued by the second respondents, Westminster City Council, requiring cessation of use as offices of the first floor of 48 Park Street, in the City of Westminster.
Robin Purchas QC and Suzanne Ornsby (instructed by Tringhams) appeared for the appellants, Heatherington (UK) Ltd. Rhodri Price Lewis (instructed by the Treasury Solicitor) appeared for the first respondent, the Secretary of State for the Environment. Timothy Corner (instructed by the solicitor to Westminster City Council) appeared for the second respondents The following judgment was delivered. MR DAVID KEENE QC: No 48 Park Street is a Grade II listed building in the Mayfair area of London. Like the rest of the block within which it is situated, it has a basement, ground floor and four upper floors. At the date with which this case is concerned, the basement, ground floor and first floor were in use as offices being occupied by an airline company. There was a vacant residential flat at second-floor level and an occupied maisonette formed by the third and fourth floors together.
The office use of the basement and ground floor enjoyed the benefit of what I can call a permanent planning permission for such use, 11 granted to the freeholders of the property, Grosvenor Estate, in 1990. The first floor had had a series of temporary office planning permissions, extending back over many years, as had many buildings in the Mayfair area. However, by virtue of a condition on the latest of those planning permissions, the period during which office use was permitted on the first floor came to an end on December 31 1990. In due course, Westminster City Council served an enforcement notice alleging a breach of that condition because of the continuation of the office use.
Heatherington (UK) Ltd, the present appellants, appealed to the Secretary of State for the Environment against that enforcement notice. The appellant company held a long lease of the whole of 48 Park Street, expiring in the year 2009. The appeal proceeded on ground (a) of section 174(2) of the Town and Country Planning Act 1990, ie that planning permission ought to be granted. There was, of course, a deemed application for planning permission for office use by virtue of section 177(5) of the Town and Country Planning Act 1990.
The appeal was determined on January 22 1993 by an inspector acting on behalf of the first respondent. He dismissed the appeal and refused the deemed application. That decision is now challenged under section 289 of that 1990 Act.
The development plan context for the inspector’s decision is of importance. Although the draft Westminster unitary development plan had been placed on deposit and is referred to briefly by the inspector, little weight seems to have been attached to this in the decision.
Of far greater significance was the Westminster district plan. This had been adopted in 1982 and formed part of the statutory development plan. It contained within it a policy concerned with temporary office uses. This was set out at para 10.59 of the district plan and in so far as material to the present case it reads:
The City Council’s policies concerning temporary offices are:
(i) Planning permission for temporary office use of residential properties will not normally be approved.
(ii) Normally to require the reversion to residential use of formerly residential premises in temporary office use at the expiry of the temporary planning permission.
(iii) To give special consideration to the following areas:
(a) Mayfair: Within the area bounded by Oxford Street, Park Lane, Piccadilly and Bond Street, at the expiry of temporary for office use permission for renewal will not normally be granted. Exceptions may only arise where it can be shown to the satisfaction of the City Council that any house, or part of a house, either alone, or in combination with others, cannot be used or adapted for use for residential occupation of one kind or another. In such cases the continued use of the accommodation for office purpose may be considered. Apart from such cases, no further permissions or extensions of existing permissions for office purposes will be given, except in circumstances considered by the Council to be very special.
Earlier in that plan, it is stated at 10.54 that the city council will apply the policies set out in 10.59 (iii)(a), ie the Mayfair policy, in the following way:
12 First the Council will examine whether the following criteria can be met:
(a) whether the property is physically capable of reversion to residential use due to the form, size and internal layout of the property.
(b) whether a reversion, if undertaken, would result in an acceptable environment for the occupants of the residential accommodation.
(c) whether in the case of listed buildings, a reversion to residential use either alone or in conjunction with adjoining properties, can be undertaken without seriously affecting the special quality of the building.
Where any of these criteria cannot be met the city council will consider whether all or part of the premises, the subject of temporary office permission, should continue in office use subject to the Council being satisfied that the remainder of the building, if any, will revert to residential use. Where these criteria can be met the City Council will consider whether there remain any very special circumstances which may justify all or part of the premises, the subject of the temporary office permission, continuing in office use either for a further temporary period or permanently, subject to the Council being satisfied that the remainder of the building, if any, will revert to residential use. Should for example it be shown to the satisfaction of the City Council that there is no prospect in the foreseeable future of a reversion to residential use being financially viable on the basis of a freehold in possession (taking into account where appropriate the cost to the freeholder of acquiring possession) this may be considered a very special circumstance. In this connection one of the factors which the City Council will have in mind is that there have been changes in the nature of the demand in the residential property market in Mayfair and further changes could possibly occur in the future.
At the inquiry into the enforcement notice appeal, the appellants put forward a scheme for the improvement of the first floor so that its special architectural or historic interest would be enhanced while remaining in office use. Listed building consent had already been granted for those works, which were to consist of the removal of temporary partitions and a suspended ceiling, together with certain other works of restoration. A draft section 106 unilateral obligation was put before the inspector, obliging the appellants in effect to carry out those works, subject to permission being granted for office use for a period to at least 2009.
The city council at the same inquiry produced two illustrative schemes for the possible residential conversion of the first floor. The first, known as scheme B, would have produced a studio bed-sitter; the second, scheme C, showed a one-bedroomed flat with a separate living-room.
In his decision letter, the inspector noted that under the adopted policy 10.59 permission for renewal of temporary planning permission for office use would not normally be granted. He identified the main issue in the case as being:
. . . whether an exception should be made, based on listed building and financial viability considerations, to the development plan policy which resists continuing the temporary office use of the first floor of 48 Park Street.
He went on in para 12 to summarise the detailed criteria set out in13 para 10.54 of the plan as follows:
The three criteria are: whether residential conversion is physically possible, whether it would result in an acceptable residential environment and whether the special quality of listed buildings would be seriously affected. Where these three criteria cannot be met, then continued office use will be considered. Where the criteria can be met, an exception may be made on the basis that there is no prospect of a residential reversion because it is not financially viable.
On the first two of those three criteria, he concluded that there would be no serious physical or environmental shortcomings which would rule out the provision of a self-contained flat on the first floor of 48 Park Street.
He then turned to deal with the effect on the listed building that would result from office or residential use of the first floor. So far as the appellant’s restoration works associated with office use were concerned, the inspector seems to have regarded those as being beneficial. He commented that that scheme would preserve the special features of the first floor and so accord with the adopted policy on alterations to listed buildings. He then continued and I quote from para 16 of the decision letter:
Paying special regard to the desirability of preserving the special architectural or historic interest of any features of listed buildings as required by section 66 of the Planning (Listed Buildings and Conservation Areas) Act 1990, I consider that the design of your client’s proposed scheme favours the grant of planning permission. My appraisal of the council’s illustrative schemes is on the basis set out in the paragraph 10.54(c), that is, whether the works proposed would seriously affect the special quality of the building rather than whether they would preserve the special interest of the listed building. In this, I note that the council’s policy to promote residential reversion in Mayfair recognises that it may result in some compromise to a listed building.
Having thus described the basis on which he was going to appraise the council’s two illustrative schemes for residential use, he dealt with the characteristics of those schemes. On scheme B, he noted that the masking or removal of a door would be ‘an alteration of consequence’. There would also be some minor alterations, though the piping and ducting could be accommodated satisfactorily. He summed up on this scheme by saying that the main features ‘of special interest of the first floor would be affected by the works illustrated in scheme B, but not to an extent that would be considered serious’.
He then turned to scheme C. Scheme C for residential conversion had, according to the inspector, a greater impact. That he described as having ‘a marked impact on the features of special interest on the first floor but falling just short of the point where the effect would be serious’. He then said at para 22:
The council’s schemes are illustrative only and, in answer to my question, Mr Gradidge indicated that there might be other more acceptable ways of14 accommodating a residential use but did not elaborate. Be that as it may, the actual design of a residential unit which would be considered under adopted policy 13.43 and sections 16 and 66 of the Planning (Listed Buildings and Conservation Areas) Act 1990 is not before me to decide. I am satisfied that it has been demonstrated by the council that a residential flat can be accommodated in the first floor of 18 Park Street without serious effect on the special interest of the listed building. In relation to the adopted policy at 10.59, I conclude that it has not been shown that the premises cannot be used or adapted for residential occupation. I turn next to consider whether there [are] any very special circumstances which merit an exception to this policy in terms of the financial viability of the council’s schemes and any other matters.
He then went at some length through the evidence on viability and concluded that it had not been shown that the provision of residential accommodation would not go ahead because it would not be financially viable. After rejecting a further argument by the appellants that conversion to residential use would not be carried out because it would be too disruptive to the airline company on the ground floor and basement, he dismissed the appeal.
The first ground of challenge raised in this court by the appellants relates to the inspector’s approach to the effect of the residential conversion of the first floor on the features of special architectural or historic interest of this listed building. It is submitted by the appellants that the inspector adopted the wrong approach to the decision-making process by not performing his duty under section 66(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990. I shall henceforth refer to this for the sake of brevity as ‘the Listed Buildings Act 1990′. That subsection reads:
In considering whether to grant planning permission for development which affects a listed building or its setting, the local planning authority or, as the case may be, the Secretary of State, shall have special regard to the desirability of preserving the building or its setting or any features of special architectural or historic interest which it possesses.
I have been referred to two decisions dealing with a somewhat similar statutory duty arising under what is now section 72 of the Listed Buildings Act 1990 in respect of planning decisions or land within conservation areas. By virtue of section 72(1):
Special attention shall be paid to the desirability of preserving or enhancing the character or appearance of that area.
In the House of Lords’ decision in South Lakeland District Council v Secretary of State for the Environment [1992] 2 AC 1411 it was said that the intention of the equivalent section in the Town and Country Planning Act 1971 was that:
15 . . . planning decisions in respect of development proposed to be carried out in a conservation area must give a high priority to the objective of preserving or enhancing the character or appearance of the area. If any proposed development would conflict with that objective, there will be a strong presumption against the grant of planning permission, though, no doubt, in exceptional cases the presumption may be overridden in favour of development which is desirable on the ground of some other public interest.
1Also reported at [1992] 1 PLR 143.
– per Lord Bridge at p146 F-G.
Although this statutory provision in respect of conservation areas uses the expression ‘special attention shall be paid to’, while section 66(1) states that in respect of listed buildings the decision maker ‘shall have special regard to’, no party before me has suggested that any significance attaches to the difference in wording. Consequently, Mr Robin Purchas QC for the appellant placed reliance on the South Lakeland decision as indicating that an inspector observing his statutory duty under section 66(1) should give a high priority to the objective of preserving the listed building or its setting or any features of special architectural or historic interest possessed by such a building. He also relied on that case as establishing that the word ‘preserving’ in such a context means at least not harming the building or its setting or its features of special interest, so that it would follow that if material harm would be caused, then the items harmed would not be being preserved. On this proposition, there was no dispute between the parties.
In Bath Society v Secretary of State for the Environment [1991] 1 WLR 13031, another case dealing with the statutory duty in respect of conservation areas, the leading judgment of the Court of Appeal was given by Glidewell LJ, who at p1318F said:
I can summarise the conclusion I have reached about the proper approach which should be adopted to an application for planning permission for development in a conservation area as follows:
(i) If permission be sought for development on a site not within a conservation area, the person or body charged with deciding the matter — the local planning authority, the Secretary of State or his inspector on an appeal — is normally subject to one statutory duty, that imposed by section 29(1) and, in the case of an appeal, section 36 of the Act of 1971. The departmental policy embodied in paragraph 15 of Planning Policy Guidance Note 1 is in such circumstances a perfectly proper approach to the carrying out of that statutory duty.
(ii) If, however, the site of proposed development is in a conservation area, then the decision-maker has two statutory duties to perform — those imposed by section. 277(8) as well as section 29(1) of the Act. The question is: how are these duties to be performed in reconciliation with each other, and how do they relate to the policy in paragraph 15 of Planning Policy Guidance Note 1?
(iii) In my opinion, in a conservation area the requirement under section 277(8) to pay ‘special attention’ should be the first consideration for the decision-maker. It is true that the desirability of preserving or16 enhancing the character or appearance of the conservation area, is in formal terms a ‘material consideration’ within section 29(1). Since, however, it is a consideration to which special attention is to be paid as a matter of statutory duty, it must be regarded as having considerable importance and weight.
1Also reported at [1991] 2 PLR 5.
Again, Mr Purchas before me has emphasised the reference in that passage to ‘the first consideration for the decision maker’.
It is none the less important to bear in mind that both those cases were dealing with the law as it stood before section 54A of the Town and Country Planning Act 1990 came into force on September 25 1991. That provision reads:
Where, in making any determination under the Planning Acts, regard is to be had to the development plan, the determination shall be made in accordance with the plan unless material considerations indicate otherwise.
Section 54A makes the development plan more than just one material consideration. In effect, it requires the decision maker to determine whether the proposed development accords with the development plan or not, before considering whether there are any material considerations which indicate that the decision should not be in accordance with the development plan. Thus, it puts some emphasis on the development plan, giving rise to what has sometimes been described as a ‘plan-led system’ of decision making.
It is accepted by all parties that section 54A applied to the determination which the inspector in the present case had to make. That is so, by virtue of section 177(2) of the Town and Country Planning Act 1990, which requires him to have regard to the provisions of the development plan.
It follows that the inspector in this case had three statutory duties to perform under sections 54A and 177(2) of the Planning Act 1990 and section 66(1) of the Listed Buildings Act 1990, just as a decision maker in a conservation area was said in the Bath Society case to have two such statutory duties: see p1318H of that decision. What has changed since that case is the additional emphasis on the development plan arising by virtue of section 54A. The question raised in that case of how such duties are to be performed in reconciliation with each other arises now in this new situation.
The appellants argue that, while the inspector paid special regard to the desirability of preserving the building’s features of special interest when considering the appellants’ own restoration scheme for office use, he did not do so when dealing with the alternative of residential use as illustrated by the council’s schemes B and C. It is submitted that he merely applied the development plan test of asking whether those council schemes would seriously affect the special quality of the listed building. That is a different test from the one embodied in section 66(1). This is of some importance because the inspector’s own findings indicate that both schemes for residential use would harm features of special interest and, in consequence, argues the appellant, neither scheme would ‘preserve’ such features. Thus, it is submitted, the inspector failed to
perform his statutory duty under section 66(1).
The respondents do not contend that the decision maker’s duty under section 66(1) is confined to a consideration simply of the effects of the development for which planning permission is sought. For the Secretary of State, it is accepted that the performance of that duty may in appropriate cases require a consideration of the effects on the listed building, or its features of special interest, of refusing planning permission for that development. In the present case, that would have meant a reversion of the first floor to residential use, an alternative future to the office use proposed by the appellant and one of which the consequences were illustrated by the council’s schemes B and C.
That seems to me to be right. While the opening words of section 66(1) indicate the occasion when the duty arises, they cannot be seen, in my view, to confine the decision maker’s attention to the effects of the development proposed, when considering the desirability of preserving the listed building, its setting or its features. In practice, that may often be all that is relevant. But sometimes there may be relevant effects from not granting permission, as in the present case, and those must fall within the duty to pay ‘special regard’ under that subsection. The present case was one where the choice was not merely between the appellants’ restoration scheme with office use and preservation of the status quo. It was one where the choice, as recognised on all sides, was between two alternative uses, either of which would have effects on the listed building’s relevant features. The inspector clearly paid special regard to the positive benefits, as compared to the existing situation, of the appellants’ restoration proposals associated with office use. What remains to be determined is whether he paid special regard to the negative consequences of residential use, which was the alternative future for this part of 48 Park Street.
Both respondents accept that the inspector was obliged to perform his statutory duty under section 66(1) of the Listed Buildings Act, as well as his duties under section 177(2) and section 54A of the Planning Act 1990, which I shall refer to as ‘the development plan duties’. But the respondents contend that the inspector did perform all those duties, including that arising under section 66(1). They point to the fact that in para 16 of the decision letter, he expressly refers to that statutory provision, so that he must be seen as having had it in mind. Particular attention is drawn by the respondents to the final sentence of that paragraph, where the inspector notes that the council’s policy to promote residential reversion in Mayfair recognises that it may result in some compromise to a listed building.
This, it was submitted, indicates that the inspector was using the test contained in the Westminster district plan as a way of striking the balance between the desirability of residential provision in the borough and the harm to the listed building from residential use. That balance was one that was bound to be struck, given the development plan emphasis on residential provision and, argue the respondents, the development plan was in effect doing it for the inspector by prescribing the test of whether there would be a serious effect on the special quality of the building. He was, it is said entitled to rely on that balance.
17 In essence, this is an argument that the inspector did perform his statutory duty under section 66(1) as well as section 54A, but did so in a somewhat abbreviated fashion. In a way, it is an attractive argument because one would be reluctant to require the Secretary of State or his inspectors to have to use some particular verbal formula to indicate that those duties had been observed. I have no doubt that those duties are separate duties, but the court is only concerned to see that they have been performed and that is something to be ascertained by reading the decision letter as a whole and by looking at the substance rather than the form of the decision. This court would not wish to lay down a test which meant that the minister or his inspectors had to jump through a series of verbal hoops.
Neither respondent sought to argue that section 54A and the development plan policy in some way overrode section 66(1) of the Listed Buildings Act. Clearly, that cannot be the case. They are separate statutory duties. Nor can section 66(1) be ignored simply because the approach it embodies does not accord with a policy in the statutory development plan. Section 54A has given added emphasis to the development plan in development control decisions, but it is of course not the end of the process of consideration. Any decision maker still has to consider whether ‘material considerations indicate otherwise’. At its lowest, such material considerations must include the statutory obligation to have ‘special regard to the desirability of preserving’ a listed building, its setting or its relevant features. That objective thus remains one to which considerable weight should be attached, as was noted in the Bath Society case. If it points to a different outcome from that indicated by the development plan, it will be for the decision maker to weigh these matters and to arrive at a judgment.
Whether the inspector in the present case performed that exercise and in the course of it observed his statutory duty under section 66(1) is essentially a matter of interpretation of the decision letter. Nothing in that decision letter expressly indicates that he considered the residential alternative in the light of section 66(1). Is it to be implied, as the respondents suggest, that he none the less did so?
I am struck by the way in which the inspector, both in para 16 and again in para 22, emphasises simply the development plan policy 10.54 test of ‘seriously affect’ in relation to the residential use of the premises. In para 16, he expressly applies section 66(1) to the office proposals, but then says in terms:
My appraisal of the Council’s illustrative schemes is on the basis set out in the paragraph 10.54(c), that is, whether the works proposed would seriously affect the special quality of the building rather than whether they would preserve the special interest of the listed building.
Again, in para 22 he applies the same test to the council’s residential alternative, having previously said that the actual design of a residential unit ‘which would be considered under adopted policy 13.43 and sections 16 and 66 of the Planning (Listed Buildings and Conservation Areas) Act 1990 is not before me to decide’. That suggests that he was confining the application of section 66(1) to cases where a formal proposal for such18 a scheme existed.
It seems to me that, as a matter of interpretation, the inspector may well not have been performing the statutory duty under section 66(1) in relation to residential use, as well as observing section 54A. Both provisions must be observed. Certainly it is a long way from clear from the decision that he was applying section 66(1) to the residential alternative. That being so, I take the view that, on the balance of probabilities, there was a breach of statutory duty in the approach here adopted. Although Mr Timothy Corner argued for the council that in such an event the decision should not, as a matter of discretion, be remitted to the Secretary of State since the outcome would probably have been the same in any event, I am not able to take that view. I cannot forecast with any confidence what the outcome may be if both section 54A and section 66(1) are fully applied. On ground 1 of this appeal, therefore, this matter will have to be remitted to the Secretary of State.
However, a number of other grounds were also raised by the appellants, which need to be dealt with by this court, at least for the guidance of the Secretary of State to whom this matter is being remitted. As limited during the course of argument, these consisted of three grounds related to that part of the decision where the inspector dealt with the financial viability of residential use and a final ground, which concerned the prospects of residential use in practice irrespective of its viability.
The financial viability of residential use was a material consideration in the light of para 10.54 of the district plan. Both the appellant and the council produced viability calculations at the inquiry. The inspector in his decision noted that there were four main components in the viability exercise. No point is raised as to his findings in respect of the first two components, ie the sale value of the residential unit after the conversion works and the development costs. The other two items were the costs of acquiring freehold possession so as to be able to do the work and developer’s profit.
On the first of those, the assumption made on both sides seems to have been that the freeholder would be buying out the long leaseholder’s interest. Among the payments which the appellant asserted that the freeholder would have to make to the long lessee was a sum to compensate the latter for the fact that a reception area on the ground floor would no longer be usable by the airline company if the first floor were to be in residential use. That space would be required as the entrance hall for both the ground-floor office use and the first-floor residential use.
The inspector deals with the viability exercise in some considerable detail in his decision letter, devoting some eight paragraphs to it. The loss of the reception space formed only one item within one of the four main components of this exercise, but the inspector none the less dealt with it specifically. He concluded that ‘there was sound evidence put forward that the use of the ground floor hall as a reception space contravenes fire regulations regardless of the outcome of these appeal': see para 27. In an affidavit sworn in these proceedings, the inspector, Mr J T Griffiths, refers to evidence given before him on behalf of the19 council by the district surveyor, referring to a consent for the appeal premises in relation to means of escape in case of fire. The inspector refers to the district surveyor’s evidence that that consent did not show a reception desk in the ground-floor entrance hall. The affidavit continues:
The reception furniture currently in the entrance hall is a combustible item. As this is a means of escape route for the upper floors of the building, this is contrary to section 133 of the London Building Act 1939, relating to the maintenance of means of escape.
In this court, it is said by the appellant that that conclusion was not open to the inspector as a matter of law. This turns on the provisions of the London Building Acts (Amendment) Act 1939, which I shall henceforth refer to as ‘the 1939 Act’. Section 35 of that Act empowers a council to serve a notice on the owner of certain types of building, ‘requiring him to provide such means of escape as in the circumstances of the case can be reasonably required’. It is an offence not to comply with such a notice, subject to a right of appeal. The owner may himself put forward alternative proposals, which if accepted by the council must be carried out with all practicable despatch.
Section 133 of the 1939 Act deals with the maintenance of means of escape and of arrangements and safeguards against the spread of fire. By section 133(2) it is provided as follows:
All means of escape in case of fire and all safeguards to prevent the spread of fire, and any arrangements in connection therewith provided, in pursuance of the provisions of Part V (means of escape in case of fire) of this Act, or otherwise, shall be kept and maintained in good condition and repair and in efficient working order by the owner of the building, and no person shall do, or permit, or suffer to be done, anything to impair the efficiency of any such means of escape, safeguards, or arrangements.
The appellant submits that section 133(2) is concerned with the physical maintenance of provision of a means of escape made under section 35 and that the entrance hall cannot have constituted such provision because section 35 is only concerned with the positive provision in a physical manner of a means of escape. An existing area, it is said, cannot amount to such provision. Furthermore, it is argued that the provision of a desk and/or use of the hall as a reception area cannot amount to a contravention of section 133(2).
I have been shown some of the documentary material which was before the inspector, including the letter of January 1949 in which the council’s predecessor consented to proposals for means of escape in connection with the conversion of 48 Park Street into premises with office use on the ground and first floors and residential units above. That consent was expressly made under section 35 of the 1939 Act. Its conditions required new partitions enclosing the staircase and ground-floor entrance hall to be constructed of solid incombustible material. Those partitions and a lobby, to be constructed of similar material, were to be located between an area marked ‘offices’ on the ground floor and
the staircase and entrance hall, as condition 4 and the attached plans show. In those circumstances, it appears to me to have been open to the inspector to accept the evidence before him that the ground-floor hall was, under that consent, to form part of a means of escape in case of fire. The fact that the hall existed prior to the consent does not, in my view, prevent it from forming part of approved proposals of means of escape. Such means of escape are not confined to purpose-built fire-escapes added after the construction of a building.
In any event, section 133(2) is concerned with the maintenance of means of escape, whether provided under Part V of that Act or otherwise. As for the application of section 133(2) to the facts of the present case, it is to be observed that that subsection prohibits ‘anything to impair the efficiency of any such means of escape’. I bear in mind that the hall plus the staircase form the means of escape for the upper stories of this building. The conclusion that the use of the hall as a reception area and the presence of reception furniture therein would impair the efficiency of the means of escape, contrary to section 133(2), was a conclusion to which the inspector was on the evidence entitled to come. Furthermore, his reasons, while brief, were adequate for the point with which he had to deal. I can, therefore, find no error of law on this aspect of the case.
The final item within the cost of acquiring freehold possession was asserted by the appellant at the inquiry to be an incentive payment to the long lessee, particularly because there would be likely to be some disturbance to the occupiers of the building from the residential conversion works. The inspector concluded on this aspect of the case that ‘I can find little firm support in the evidence for the fourth figure for incentive and disturbance’.
The appellants now argue that the inspector failed to take into account the disruption caused by any residential conversion and the decreased security which would result. I do not accept that argument. The mere fact that the inspector was not persuaded by the appellants’ evidence to make a financial allowance on this score in the calculations does not indicate that he failed to take these matters into account. He had to make a judgment on the significance of these factors, including the degree of disturbance and on whether any such allowance should be made in financial terms. Having heard the evidence, he concluded that it should not. In my judgment, he was entitled to reach that conclusion.
His reasons on this aspect were again brief. However, bearing in mind the fact that this was one specific item within one main consideration in the viability exercise, I am of the view that his reasons were adequate.
The third and last ground on which the appellants attack the inspector’s conclusions on the viability exercise relates to his approach to the fourth main consideration, that of developer’s profit. It is contended that the developer, who was assumed to be the freeholder, would only carry out a residential conversion scheme if there was sufficient profit in it to provide for incentive and to cover risk. The submission is that the inspector failed to take this element into account and that he proceeded only on a hypothetical basis which ignored this factor.
Part of this argument concerns a written opinion provided to the20 council by Mr Michael Barnes QC, in which he dealt with the way in which the criterion of financial viability of residential use set out in para 10.54 of the district plan should be approached. In that opinion, Mr Barnes had acknowledged the relevance normally of a developer’s profit, but pointed out that under para 10.54 the assumption to be made is that the temporary office permission has ended. Thus, the freeholder in possession is faced with a choice between residential conversion and leaving the property unused, which would normally give rise, as he said, to a loss because of the inevitable outgoings. In those circumstances, the freeholder would merely choose the more advantageous course, without necessarily requiring a developer’s profit.
Mr Purchas for the appellant has argued that that is not the present case. Here, the freeholder is not in possession, but has the benefit of a continuing income from the head lessee. In addition, under a section 52 agreement signed in 1990, the freeholder in this case was in effect under an obligation to convert the first floor to residential use if he obtained possession of it and so it is argued he would wish to be sure of a developer’s profit from the scheme before seeking to obtain possession.
There seems to me to be force in this argument, so far as it goes. But the fact is that in para 29 of his decision, the inspector does identify a substantial developer’s profit on both residential schemes, to a level of a 21% return on cost on scheme B and a 27% return on scheme C. The appellants had been arguing at the inquiry for a 25% developer’s profit, which scheme C on the inspector’s findings met. Some detailed criticisms were made in argument of his calculations in respect of scheme B, but it was enough for the financial viability test if just one residential scheme were viable, which scheme C was clearly found to be.
It is true that the inspector does also go on in his decision to consider the position if developer’s profit were not to be part of the exercise, but that really amounted to him saying that on either basis, with or without developer’s profit, residential conversion seemed viable. His overall conclusion that the appellants had failed to show that residential conversion would not be viable was, in my view, not unsound as a matter of law. Consequently, that ground of challenge must fail.
The final argument of all raised by the appellants is that the inspector went wrong in dealing with a submission that, quite apart from viability, a residential scheme would not be carried out during the remainder of the lease. Among other factors, the appellants had referred at the inquiry to the risk of the airline company moving out because of the disruption from the works of residential conversion. On this, the inspector concluded, in para 32:
I note that the works required for the proposed office use would entail some disruption of occupants of the building, if allowed, and so I do not rule out the residential conversion on that count. Neither the landowner, Grosvenor Estates, nor the principal of the appellant company attended the Inquiry to give their view on options for the future and so I rely on the findings of the viability exercise which support reversion to residential use in normal market circumstances.
It is contended that there was no evidence before the inspector of any21 disruption that would result from the office works and that if he had raised this point at the inquiry he would have discovered that the disruption would be far less than that resulting from the residential conversion.
While an inspector is entitled to use his judgment and experience on such matters, there does seem to be something of a non sequitur in that first sentence of para 32. Merely because some disruption would result from the office works does not of itself demonstrate that the residential works would be acceptable. None the less, what the inspector had heard detailed evidence about were the two residential schemes and the extent of the works involved. He was in a very good position to assess the extent of the disruption which those works would cause and consequently the likelihood of that preventing such a scheme taking place. His decision letter on this aspect could have been more felicitously phrased, but it has been said many times that such decision letters are not to be scrutinised as if they are statutes or contracts. This was a single sentence in a lengthy decision letter and I do not regard it as revealing a point of law on which the decision can properly be challenged.
It is in the end, therefore, only on ground 1 that this decision will have to be remitted to the Secretary of State, that is to say in relation to the performance of the statutory duty under section 66(1) of the Listed Buildings Act 1990. But it will none the less have to be so remitted for redetermination in accordance with the opinion of this court. For that reason, this appeal is allowed.
Appeal allowed.
Law report
- Queen's Bench Division
- 15 June 1994
- Mr David Keene QC (sitting as a deputy judge of the Queen's Bench Division)
- [1994] 2 PLR 9
The appellants appealed to the High Court contending, principally, that the inspector had adopted the wrong approach to the decision-making process by failing to perform his duty under section 66(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990. In particular, the appellants argued that while the inspector had paid special regard to the desirability of preserving the building’s features of special interest when considering the restoration scheme which the appellants had proposed for the first floor while remaining in office use, he had not done so when considering the alternative of residential use as illustrated by schemes put forward by the council. Furthermore, the inspector’s own findings indicated that the schemes for residential use would harm features of special interest.
10 Held The appeal was allowed. While the opening words of section 66(1) indicated the occasion when the duty to have special regard arose, they could not be seen to confine the decision-maker’s attention to the effects of the proposed development alone. In practice, that might be all that was relevant. But sometimes there might be relevant effects from not granting permission, as in the present case, and those must fall within the duty to pay special regard under that subsection. The present case was one where the choice was between alternative uses, either of which would have effects on the listed building’s features: see p17B-D.
Whether the inspector had observed his statutory duty under section 66(1) was essentially a matter of interpretation of the decision letter. As a matter of interpretation, he may well not have in relation to residential use. On the balance of probabilities there was a breach of statutory duty and the matter should be remitted: see pp18E-19B.
Cases referred to in the judgment Bath Society v Secretary of State for the Environment [1991] 1 WLR 1303; [1992] 1 All ER 28; (1991) 89 LGR 834; 62 P&CR 565; [1991] 2 PLR 51; [1991] JPL 663, CA
South Lakeland District Council v Secretary of State for the Environment [1992] 2 AC 141; [1992] 2 WLR 204; [1992] 1 All ER 573; (1992) 90 LGR 201; 64 P&CR 128; [1992] 1 PLR 143, IIL
Appeal under section 289 of the Town and Country Planning Act 1990
This was an appeal under section 289 of the Town and Country Planning Act 1990 by Heatherington (UK) Ltd against the dismissal by the first respondent, the Secretary of State for the Environment, by his inspector, of an appeal against an enforcement notice issued by the second respondents, Westminster City Council, requiring cessation of use as offices of the first floor of 48 Park Street, in the City of Westminster.
Robin Purchas QC and Suzanne Ornsby (instructed by Tringhams) appeared for the appellants, Heatherington (UK) Ltd. Rhodri Price Lewis (instructed by the Treasury Solicitor) appeared for the first respondent, the Secretary of State for the Environment. Timothy Corner (instructed by the solicitor to Westminster City Council) appeared for the second respondents The following judgment was delivered. MR DAVID KEENE QC: No 48 Park Street is a Grade II listed building in the Mayfair area of London. Like the rest of the block within which it is situated, it has a basement, ground floor and four upper floors. At the date with which this case is concerned, the basement, ground floor and first floor were in use as offices being occupied by an airline company. There was a vacant residential flat at second-floor level and an occupied maisonette formed by the third and fourth floors together.
The office use of the basement and ground floor enjoyed the benefit of what I can call a permanent planning permission for such use, 11 granted to the freeholders of the property, Grosvenor Estate, in 1990. The first floor had had a series of temporary office planning permissions, extending back over many years, as had many buildings in the Mayfair area. However, by virtue of a condition on the latest of those planning permissions, the period during which office use was permitted on the first floor came to an end on December 31 1990. In due course, Westminster City Council served an enforcement notice alleging a breach of that condition because of the continuation of the office use.
Heatherington (UK) Ltd, the present appellants, appealed to the Secretary of State for the Environment against that enforcement notice. The appellant company held a long lease of the whole of 48 Park Street, expiring in the year 2009. The appeal proceeded on ground (a) of section 174(2) of the Town and Country Planning Act 1990, ie that planning permission ought to be granted. There was, of course, a deemed application for planning permission for office use by virtue of section 177(5) of the Town and Country Planning Act 1990.
The appeal was determined on January 22 1993 by an inspector acting on behalf of the first respondent. He dismissed the appeal and refused the deemed application. That decision is now challenged under section 289 of that 1990 Act.
The development plan context for the inspector’s decision is of importance. Although the draft Westminster unitary development plan had been placed on deposit and is referred to briefly by the inspector, little weight seems to have been attached to this in the decision.
Of far greater significance was the Westminster district plan. This had been adopted in 1982 and formed part of the statutory development plan. It contained within it a policy concerned with temporary office uses. This was set out at para 10.59 of the district plan and in so far as material to the present case it reads:
The City Council’s policies concerning temporary offices are:
(i) Planning permission for temporary office use of residential properties will not normally be approved.
(ii) Normally to require the reversion to residential use of formerly residential premises in temporary office use at the expiry of the temporary planning permission.
(iii) To give special consideration to the following areas:
(a) Mayfair: Within the area bounded by Oxford Street, Park Lane, Piccadilly and Bond Street, at the expiry of temporary for office use permission for renewal will not normally be granted. Exceptions may only arise where it can be shown to the satisfaction of the City Council that any house, or part of a house, either alone, or in combination with others, cannot be used or adapted for use for residential occupation of one kind or another. In such cases the continued use of the accommodation for office purpose may be considered. Apart from such cases, no further permissions or extensions of existing permissions for office purposes will be given, except in circumstances considered by the Council to be very special.
Earlier in that plan, it is stated at 10.54 that the city council will apply the policies set out in 10.59 (iii)(a), ie the Mayfair policy, in the following way:
12 First the Council will examine whether the following criteria can be met:
(a) whether the property is physically capable of reversion to residential use due to the form, size and internal layout of the property.
(b) whether a reversion, if undertaken, would result in an acceptable environment for the occupants of the residential accommodation.
(c) whether in the case of listed buildings, a reversion to residential use either alone or in conjunction with adjoining properties, can be undertaken without seriously affecting the special quality of the building.
Where any of these criteria cannot be met the city council will consider whether all or part of the premises, the subject of temporary office permission, should continue in office use subject to the Council being satisfied that the remainder of the building, if any, will revert to residential use. Where these criteria can be met the City Council will consider whether there remain any very special circumstances which may justify all or part of the premises, the subject of the temporary office permission, continuing in office use either for a further temporary period or permanently, subject to the Council being satisfied that the remainder of the building, if any, will revert to residential use. Should for example it be shown to the satisfaction of the City Council that there is no prospect in the foreseeable future of a reversion to residential use being financially viable on the basis of a freehold in possession (taking into account where appropriate the cost to the freeholder of acquiring possession) this may be considered a very special circumstance. In this connection one of the factors which the City Council will have in mind is that there have been changes in the nature of the demand in the residential property market in Mayfair and further changes could possibly occur in the future.
At the inquiry into the enforcement notice appeal, the appellants put forward a scheme for the improvement of the first floor so that its special architectural or historic interest would be enhanced while remaining in office use. Listed building consent had already been granted for those works, which were to consist of the removal of temporary partitions and a suspended ceiling, together with certain other works of restoration. A draft section 106 unilateral obligation was put before the inspector, obliging the appellants in effect to carry out those works, subject to permission being granted for office use for a period to at least 2009.
The city council at the same inquiry produced two illustrative schemes for the possible residential conversion of the first floor. The first, known as scheme B, would have produced a studio bed-sitter; the second, scheme C, showed a one-bedroomed flat with a separate living-room.
In his decision letter, the inspector noted that under the adopted policy 10.59 permission for renewal of temporary planning permission for office use would not normally be granted. He identified the main issue in the case as being:
. . . whether an exception should be made, based on listed building and financial viability considerations, to the development plan policy which resists continuing the temporary office use of the first floor of 48 Park Street.
He went on in para 12 to summarise the detailed criteria set out in13 para 10.54 of the plan as follows:
The three criteria are: whether residential conversion is physically possible, whether it would result in an acceptable residential environment and whether the special quality of listed buildings would be seriously affected. Where these three criteria cannot be met, then continued office use will be considered. Where the criteria can be met, an exception may be made on the basis that there is no prospect of a residential reversion because it is not financially viable.
On the first two of those three criteria, he concluded that there would be no serious physical or environmental shortcomings which would rule out the provision of a self-contained flat on the first floor of 48 Park Street.
He then turned to deal with the effect on the listed building that would result from office or residential use of the first floor. So far as the appellant’s restoration works associated with office use were concerned, the inspector seems to have regarded those as being beneficial. He commented that that scheme would preserve the special features of the first floor and so accord with the adopted policy on alterations to listed buildings. He then continued and I quote from para 16 of the decision letter:
Paying special regard to the desirability of preserving the special architectural or historic interest of any features of listed buildings as required by section 66 of the Planning (Listed Buildings and Conservation Areas) Act 1990, I consider that the design of your client’s proposed scheme favours the grant of planning permission. My appraisal of the council’s illustrative schemes is on the basis set out in the paragraph 10.54(c), that is, whether the works proposed would seriously affect the special quality of the building rather than whether they would preserve the special interest of the listed building. In this, I note that the council’s policy to promote residential reversion in Mayfair recognises that it may result in some compromise to a listed building.
Having thus described the basis on which he was going to appraise the council’s two illustrative schemes for residential use, he dealt with the characteristics of those schemes. On scheme B, he noted that the masking or removal of a door would be ‘an alteration of consequence’. There would also be some minor alterations, though the piping and ducting could be accommodated satisfactorily. He summed up on this scheme by saying that the main features ‘of special interest of the first floor would be affected by the works illustrated in scheme B, but not to an extent that would be considered serious’.
He then turned to scheme C. Scheme C for residential conversion had, according to the inspector, a greater impact. That he described as having ‘a marked impact on the features of special interest on the first floor but falling just short of the point where the effect would be serious’. He then said at para 22:
The council’s schemes are illustrative only and, in answer to my question, Mr Gradidge indicated that there might be other more acceptable ways of14 accommodating a residential use but did not elaborate. Be that as it may, the actual design of a residential unit which would be considered under adopted policy 13.43 and sections 16 and 66 of the Planning (Listed Buildings and Conservation Areas) Act 1990 is not before me to decide. I am satisfied that it has been demonstrated by the council that a residential flat can be accommodated in the first floor of 18 Park Street without serious effect on the special interest of the listed building. In relation to the adopted policy at 10.59, I conclude that it has not been shown that the premises cannot be used or adapted for residential occupation. I turn next to consider whether there [are] any very special circumstances which merit an exception to this policy in terms of the financial viability of the council’s schemes and any other matters.
He then went at some length through the evidence on viability and concluded that it had not been shown that the provision of residential accommodation would not go ahead because it would not be financially viable. After rejecting a further argument by the appellants that conversion to residential use would not be carried out because it would be too disruptive to the airline company on the ground floor and basement, he dismissed the appeal.
The first ground of challenge raised in this court by the appellants relates to the inspector’s approach to the effect of the residential conversion of the first floor on the features of special architectural or historic interest of this listed building. It is submitted by the appellants that the inspector adopted the wrong approach to the decision-making process by not performing his duty under section 66(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990. I shall henceforth refer to this for the sake of brevity as ‘the Listed Buildings Act 1990′. That subsection reads:
In considering whether to grant planning permission for development which affects a listed building or its setting, the local planning authority or, as the case may be, the Secretary of State, shall have special regard to the desirability of preserving the building or its setting or any features of special architectural or historic interest which it possesses.
I have been referred to two decisions dealing with a somewhat similar statutory duty arising under what is now section 72 of the Listed Buildings Act 1990 in respect of planning decisions or land within conservation areas. By virtue of section 72(1):
Special attention shall be paid to the desirability of preserving or enhancing the character or appearance of that area.
In the House of Lords’ decision in South Lakeland District Council v Secretary of State for the Environment [1992] 2 AC 1411 it was said that the intention of the equivalent section in the Town and Country Planning Act 1971 was that:
15 . . . planning decisions in respect of development proposed to be carried out in a conservation area must give a high priority to the objective of preserving or enhancing the character or appearance of the area. If any proposed development would conflict with that objective, there will be a strong presumption against the grant of planning permission, though, no doubt, in exceptional cases the presumption may be overridden in favour of development which is desirable on the ground of some other public interest.
1Also reported at [1992] 1 PLR 143.
– per Lord Bridge at p146 F-G.
Although this statutory provision in respect of conservation areas uses the expression ‘special attention shall be paid to’, while section 66(1) states that in respect of listed buildings the decision maker ‘shall have special regard to’, no party before me has suggested that any significance attaches to the difference in wording. Consequently, Mr Robin Purchas QC for the appellant placed reliance on the South Lakeland decision as indicating that an inspector observing his statutory duty under section 66(1) should give a high priority to the objective of preserving the listed building or its setting or any features of special architectural or historic interest possessed by such a building. He also relied on that case as establishing that the word ‘preserving’ in such a context means at least not harming the building or its setting or its features of special interest, so that it would follow that if material harm would be caused, then the items harmed would not be being preserved. On this proposition, there was no dispute between the parties.
In Bath Society v Secretary of State for the Environment [1991] 1 WLR 13031, another case dealing with the statutory duty in respect of conservation areas, the leading judgment of the Court of Appeal was given by Glidewell LJ, who at p1318F said:
I can summarise the conclusion I have reached about the proper approach which should be adopted to an application for planning permission for development in a conservation area as follows:
(i) If permission be sought for development on a site not within a conservation area, the person or body charged with deciding the matter — the local planning authority, the Secretary of State or his inspector on an appeal — is normally subject to one statutory duty, that imposed by section 29(1) and, in the case of an appeal, section 36 of the Act of 1971. The departmental policy embodied in paragraph 15 of Planning Policy Guidance Note 1 is in such circumstances a perfectly proper approach to the carrying out of that statutory duty.
(ii) If, however, the site of proposed development is in a conservation area, then the decision-maker has two statutory duties to perform — those imposed by section. 277(8) as well as section 29(1) of the Act. The question is: how are these duties to be performed in reconciliation with each other, and how do they relate to the policy in paragraph 15 of Planning Policy Guidance Note 1?
(iii) In my opinion, in a conservation area the requirement under section 277(8) to pay ‘special attention’ should be the first consideration for the decision-maker. It is true that the desirability of preserving or16 enhancing the character or appearance of the conservation area, is in formal terms a ‘material consideration’ within section 29(1). Since, however, it is a consideration to which special attention is to be paid as a matter of statutory duty, it must be regarded as having considerable importance and weight.
1Also reported at [1991] 2 PLR 5.
Again, Mr Purchas before me has emphasised the reference in that passage to ‘the first consideration for the decision maker’.
It is none the less important to bear in mind that both those cases were dealing with the law as it stood before section 54A of the Town and Country Planning Act 1990 came into force on September 25 1991. That provision reads:
Where, in making any determination under the Planning Acts, regard is to be had to the development plan, the determination shall be made in accordance with the plan unless material considerations indicate otherwise.
Section 54A makes the development plan more than just one material consideration. In effect, it requires the decision maker to determine whether the proposed development accords with the development plan or not, before considering whether there are any material considerations which indicate that the decision should not be in accordance with the development plan. Thus, it puts some emphasis on the development plan, giving rise to what has sometimes been described as a ‘plan-led system’ of decision making.
It is accepted by all parties that section 54A applied to the determination which the inspector in the present case had to make. That is so, by virtue of section 177(2) of the Town and Country Planning Act 1990, which requires him to have regard to the provisions of the development plan.
It follows that the inspector in this case had three statutory duties to perform under sections 54A and 177(2) of the Planning Act 1990 and section 66(1) of the Listed Buildings Act 1990, just as a decision maker in a conservation area was said in the Bath Society case to have two such statutory duties: see p1318H of that decision. What has changed since that case is the additional emphasis on the development plan arising by virtue of section 54A. The question raised in that case of how such duties are to be performed in reconciliation with each other arises now in this new situation.
The appellants argue that, while the inspector paid special regard to the desirability of preserving the building’s features of special interest when considering the appellants’ own restoration scheme for office use, he did not do so when dealing with the alternative of residential use as illustrated by the council’s schemes B and C. It is submitted that he merely applied the development plan test of asking whether those council schemes would seriously affect the special quality of the listed building. That is a different test from the one embodied in section 66(1). This is of some importance because the inspector’s own findings indicate that both schemes for residential use would harm features of special interest and, in consequence, argues the appellant, neither scheme would ‘preserve’ such features. Thus, it is submitted, the inspector failed to
perform his statutory duty under section 66(1).
The respondents do not contend that the decision maker’s duty under section 66(1) is confined to a consideration simply of the effects of the development for which planning permission is sought. For the Secretary of State, it is accepted that the performance of that duty may in appropriate cases require a consideration of the effects on the listed building, or its features of special interest, of refusing planning permission for that development. In the present case, that would have meant a reversion of the first floor to residential use, an alternative future to the office use proposed by the appellant and one of which the consequences were illustrated by the council’s schemes B and C.
That seems to me to be right. While the opening words of section 66(1) indicate the occasion when the duty arises, they cannot be seen, in my view, to confine the decision maker’s attention to the effects of the development proposed, when considering the desirability of preserving the listed building, its setting or its features. In practice, that may often be all that is relevant. But sometimes there may be relevant effects from not granting permission, as in the present case, and those must fall within the duty to pay ‘special regard’ under that subsection. The present case was one where the choice was not merely between the appellants’ restoration scheme with office use and preservation of the status quo. It was one where the choice, as recognised on all sides, was between two alternative uses, either of which would have effects on the listed building’s relevant features. The inspector clearly paid special regard to the positive benefits, as compared to the existing situation, of the appellants’ restoration proposals associated with office use. What remains to be determined is whether he paid special regard to the negative consequences of residential use, which was the alternative future for this part of 48 Park Street.
Both respondents accept that the inspector was obliged to perform his statutory duty under section 66(1) of the Listed Buildings Act, as well as his duties under section 177(2) and section 54A of the Planning Act 1990, which I shall refer to as ‘the development plan duties’. But the respondents contend that the inspector did perform all those duties, including that arising under section 66(1). They point to the fact that in para 16 of the decision letter, he expressly refers to that statutory provision, so that he must be seen as having had it in mind. Particular attention is drawn by the respondents to the final sentence of that paragraph, where the inspector notes that the council’s policy to promote residential reversion in Mayfair recognises that it may result in some compromise to a listed building.
This, it was submitted, indicates that the inspector was using the test contained in the Westminster district plan as a way of striking the balance between the desirability of residential provision in the borough and the harm to the listed building from residential use. That balance was one that was bound to be struck, given the development plan emphasis on residential provision and, argue the respondents, the development plan was in effect doing it for the inspector by prescribing the test of whether there would be a serious effect on the special quality of the building. He was, it is said entitled to rely on that balance.
17 In essence, this is an argument that the inspector did perform his statutory duty under section 66(1) as well as section 54A, but did so in a somewhat abbreviated fashion. In a way, it is an attractive argument because one would be reluctant to require the Secretary of State or his inspectors to have to use some particular verbal formula to indicate that those duties had been observed. I have no doubt that those duties are separate duties, but the court is only concerned to see that they have been performed and that is something to be ascertained by reading the decision letter as a whole and by looking at the substance rather than the form of the decision. This court would not wish to lay down a test which meant that the minister or his inspectors had to jump through a series of verbal hoops.
Neither respondent sought to argue that section 54A and the development plan policy in some way overrode section 66(1) of the Listed Buildings Act. Clearly, that cannot be the case. They are separate statutory duties. Nor can section 66(1) be ignored simply because the approach it embodies does not accord with a policy in the statutory development plan. Section 54A has given added emphasis to the development plan in development control decisions, but it is of course not the end of the process of consideration. Any decision maker still has to consider whether ‘material considerations indicate otherwise’. At its lowest, such material considerations must include the statutory obligation to have ‘special regard to the desirability of preserving’ a listed building, its setting or its relevant features. That objective thus remains one to which considerable weight should be attached, as was noted in the Bath Society case. If it points to a different outcome from that indicated by the development plan, it will be for the decision maker to weigh these matters and to arrive at a judgment.
Whether the inspector in the present case performed that exercise and in the course of it observed his statutory duty under section 66(1) is essentially a matter of interpretation of the decision letter. Nothing in that decision letter expressly indicates that he considered the residential alternative in the light of section 66(1). Is it to be implied, as the respondents suggest, that he none the less did so?
I am struck by the way in which the inspector, both in para 16 and again in para 22, emphasises simply the development plan policy 10.54 test of ‘seriously affect’ in relation to the residential use of the premises. In para 16, he expressly applies section 66(1) to the office proposals, but then says in terms:
My appraisal of the Council’s illustrative schemes is on the basis set out in the paragraph 10.54(c), that is, whether the works proposed would seriously affect the special quality of the building rather than whether they would preserve the special interest of the listed building.
Again, in para 22 he applies the same test to the council’s residential alternative, having previously said that the actual design of a residential unit ‘which would be considered under adopted policy 13.43 and sections 16 and 66 of the Planning (Listed Buildings and Conservation Areas) Act 1990 is not before me to decide’. That suggests that he was confining the application of section 66(1) to cases where a formal proposal for such18 a scheme existed.
It seems to me that, as a matter of interpretation, the inspector may well not have been performing the statutory duty under section 66(1) in relation to residential use, as well as observing section 54A. Both provisions must be observed. Certainly it is a long way from clear from the decision that he was applying section 66(1) to the residential alternative. That being so, I take the view that, on the balance of probabilities, there was a breach of statutory duty in the approach here adopted. Although Mr Timothy Corner argued for the council that in such an event the decision should not, as a matter of discretion, be remitted to the Secretary of State since the outcome would probably have been the same in any event, I am not able to take that view. I cannot forecast with any confidence what the outcome may be if both section 54A and section 66(1) are fully applied. On ground 1 of this appeal, therefore, this matter will have to be remitted to the Secretary of State.
However, a number of other grounds were also raised by the appellants, which need to be dealt with by this court, at least for the guidance of the Secretary of State to whom this matter is being remitted. As limited during the course of argument, these consisted of three grounds related to that part of the decision where the inspector dealt with the financial viability of residential use and a final ground, which concerned the prospects of residential use in practice irrespective of its viability.
The financial viability of residential use was a material consideration in the light of para 10.54 of the district plan. Both the appellant and the council produced viability calculations at the inquiry. The inspector in his decision noted that there were four main components in the viability exercise. No point is raised as to his findings in respect of the first two components, ie the sale value of the residential unit after the conversion works and the development costs. The other two items were the costs of acquiring freehold possession so as to be able to do the work and developer’s profit.
On the first of those, the assumption made on both sides seems to have been that the freeholder would be buying out the long leaseholder’s interest. Among the payments which the appellant asserted that the freeholder would have to make to the long lessee was a sum to compensate the latter for the fact that a reception area on the ground floor would no longer be usable by the airline company if the first floor were to be in residential use. That space would be required as the entrance hall for both the ground-floor office use and the first-floor residential use.
The inspector deals with the viability exercise in some considerable detail in his decision letter, devoting some eight paragraphs to it. The loss of the reception space formed only one item within one of the four main components of this exercise, but the inspector none the less dealt with it specifically. He concluded that ‘there was sound evidence put forward that the use of the ground floor hall as a reception space contravenes fire regulations regardless of the outcome of these appeal': see para 27. In an affidavit sworn in these proceedings, the inspector, Mr J T Griffiths, refers to evidence given before him on behalf of the19 council by the district surveyor, referring to a consent for the appeal premises in relation to means of escape in case of fire. The inspector refers to the district surveyor’s evidence that that consent did not show a reception desk in the ground-floor entrance hall. The affidavit continues:
The reception furniture currently in the entrance hall is a combustible item. As this is a means of escape route for the upper floors of the building, this is contrary to section 133 of the London Building Act 1939, relating to the maintenance of means of escape.
In this court, it is said by the appellant that that conclusion was not open to the inspector as a matter of law. This turns on the provisions of the London Building Acts (Amendment) Act 1939, which I shall henceforth refer to as ‘the 1939 Act’. Section 35 of that Act empowers a council to serve a notice on the owner of certain types of building, ‘requiring him to provide such means of escape as in the circumstances of the case can be reasonably required’. It is an offence not to comply with such a notice, subject to a right of appeal. The owner may himself put forward alternative proposals, which if accepted by the council must be carried out with all practicable despatch.
Section 133 of the 1939 Act deals with the maintenance of means of escape and of arrangements and safeguards against the spread of fire. By section 133(2) it is provided as follows:
All means of escape in case of fire and all safeguards to prevent the spread of fire, and any arrangements in connection therewith provided, in pursuance of the provisions of Part V (means of escape in case of fire) of this Act, or otherwise, shall be kept and maintained in good condition and repair and in efficient working order by the owner of the building, and no person shall do, or permit, or suffer to be done, anything to impair the efficiency of any such means of escape, safeguards, or arrangements.
The appellant submits that section 133(2) is concerned with the physical maintenance of provision of a means of escape made under section 35 and that the entrance hall cannot have constituted such provision because section 35 is only concerned with the positive provision in a physical manner of a means of escape. An existing area, it is said, cannot amount to such provision. Furthermore, it is argued that the provision of a desk and/or use of the hall as a reception area cannot amount to a contravention of section 133(2).
I have been shown some of the documentary material which was before the inspector, including the letter of January 1949 in which the council’s predecessor consented to proposals for means of escape in connection with the conversion of 48 Park Street into premises with office use on the ground and first floors and residential units above. That consent was expressly made under section 35 of the 1939 Act. Its conditions required new partitions enclosing the staircase and ground-floor entrance hall to be constructed of solid incombustible material. Those partitions and a lobby, to be constructed of similar material, were to be located between an area marked ‘offices’ on the ground floor and
the staircase and entrance hall, as condition 4 and the attached plans show. In those circumstances, it appears to me to have been open to the inspector to accept the evidence before him that the ground-floor hall was, under that consent, to form part of a means of escape in case of fire. The fact that the hall existed prior to the consent does not, in my view, prevent it from forming part of approved proposals of means of escape. Such means of escape are not confined to purpose-built fire-escapes added after the construction of a building.
In any event, section 133(2) is concerned with the maintenance of means of escape, whether provided under Part V of that Act or otherwise. As for the application of section 133(2) to the facts of the present case, it is to be observed that that subsection prohibits ‘anything to impair the efficiency of any such means of escape’. I bear in mind that the hall plus the staircase form the means of escape for the upper stories of this building. The conclusion that the use of the hall as a reception area and the presence of reception furniture therein would impair the efficiency of the means of escape, contrary to section 133(2), was a conclusion to which the inspector was on the evidence entitled to come. Furthermore, his reasons, while brief, were adequate for the point with which he had to deal. I can, therefore, find no error of law on this aspect of the case.
The final item within the cost of acquiring freehold possession was asserted by the appellant at the inquiry to be an incentive payment to the long lessee, particularly because there would be likely to be some disturbance to the occupiers of the building from the residential conversion works. The inspector concluded on this aspect of the case that ‘I can find little firm support in the evidence for the fourth figure for incentive and disturbance’.
The appellants now argue that the inspector failed to take into account the disruption caused by any residential conversion and the decreased security which would result. I do not accept that argument. The mere fact that the inspector was not persuaded by the appellants’ evidence to make a financial allowance on this score in the calculations does not indicate that he failed to take these matters into account. He had to make a judgment on the significance of these factors, including the degree of disturbance and on whether any such allowance should be made in financial terms. Having heard the evidence, he concluded that it should not. In my judgment, he was entitled to reach that conclusion.
His reasons on this aspect were again brief. However, bearing in mind the fact that this was one specific item within one main consideration in the viability exercise, I am of the view that his reasons were adequate.
The third and last ground on which the appellants attack the inspector’s conclusions on the viability exercise relates to his approach to the fourth main consideration, that of developer’s profit. It is contended that the developer, who was assumed to be the freeholder, would only carry out a residential conversion scheme if there was sufficient profit in it to provide for incentive and to cover risk. The submission is that the inspector failed to take this element into account and that he proceeded only on a hypothetical basis which ignored this factor.
Part of this argument concerns a written opinion provided to the20 council by Mr Michael Barnes QC, in which he dealt with the way in which the criterion of financial viability of residential use set out in para 10.54 of the district plan should be approached. In that opinion, Mr Barnes had acknowledged the relevance normally of a developer’s profit, but pointed out that under para 10.54 the assumption to be made is that the temporary office permission has ended. Thus, the freeholder in possession is faced with a choice between residential conversion and leaving the property unused, which would normally give rise, as he said, to a loss because of the inevitable outgoings. In those circumstances, the freeholder would merely choose the more advantageous course, without necessarily requiring a developer’s profit.
Mr Purchas for the appellant has argued that that is not the present case. Here, the freeholder is not in possession, but has the benefit of a continuing income from the head lessee. In addition, under a section 52 agreement signed in 1990, the freeholder in this case was in effect under an obligation to convert the first floor to residential use if he obtained possession of it and so it is argued he would wish to be sure of a developer’s profit from the scheme before seeking to obtain possession.
There seems to me to be force in this argument, so far as it goes. But the fact is that in para 29 of his decision, the inspector does identify a substantial developer’s profit on both residential schemes, to a level of a 21% return on cost on scheme B and a 27% return on scheme C. The appellants had been arguing at the inquiry for a 25% developer’s profit, which scheme C on the inspector’s findings met. Some detailed criticisms were made in argument of his calculations in respect of scheme B, but it was enough for the financial viability test if just one residential scheme were viable, which scheme C was clearly found to be.
It is true that the inspector does also go on in his decision to consider the position if developer’s profit were not to be part of the exercise, but that really amounted to him saying that on either basis, with or without developer’s profit, residential conversion seemed viable. His overall conclusion that the appellants had failed to show that residential conversion would not be viable was, in my view, not unsound as a matter of law. Consequently, that ground of challenge must fail.
The final argument of all raised by the appellants is that the inspector went wrong in dealing with a submission that, quite apart from viability, a residential scheme would not be carried out during the remainder of the lease. Among other factors, the appellants had referred at the inquiry to the risk of the airline company moving out because of the disruption from the works of residential conversion. On this, the inspector concluded, in para 32:
I note that the works required for the proposed office use would entail some disruption of occupants of the building, if allowed, and so I do not rule out the residential conversion on that count. Neither the landowner, Grosvenor Estates, nor the principal of the appellant company attended the Inquiry to give their view on options for the future and so I rely on the findings of the viability exercise which support reversion to residential use in normal market circumstances.
It is contended that there was no evidence before the inspector of any21 disruption that would result from the office works and that if he had raised this point at the inquiry he would have discovered that the disruption would be far less than that resulting from the residential conversion.
While an inspector is entitled to use his judgment and experience on such matters, there does seem to be something of a non sequitur in that first sentence of para 32. Merely because some disruption would result from the office works does not of itself demonstrate that the residential works would be acceptable. None the less, what the inspector had heard detailed evidence about were the two residential schemes and the extent of the works involved. He was in a very good position to assess the extent of the disruption which those works would cause and consequently the likelihood of that preventing such a scheme taking place. His decision letter on this aspect could have been more felicitously phrased, but it has been said many times that such decision letters are not to be scrutinised as if they are statutes or contracts. This was a single sentence in a lengthy decision letter and I do not regard it as revealing a point of law on which the decision can properly be challenged.
It is in the end, therefore, only on ground 1 that this decision will have to be remitted to the Secretary of State, that is to say in relation to the performance of the statutory duty under section 66(1) of the Listed Buildings Act 1990. But it will none the less have to be so remitted for redetermination in accordance with the opinion of this court. For that reason, this appeal is allowed.
Appeal allowed.
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