Tesco Stores Ltd v Secretary of State for the Environment & Ors

This appeal concerned the treatment of an offer by a developer to fund off-site infrastructure (the "West End Link") and whether that offer was a material consideration in competing planning decisions. The court confirmed that "material" means "relevant" under section 70 of the Town and Country Planning Act 1990 and that it is for the decision maker to determine the weight to be given to relevant considerations. The Secretary of State properly applied the policy in Circular 16/91 (Planning Obligations) in assessing Tesco's unilateral offer under section 106 and did not treat the offer as legally immaterial: he gave it careful consideration and lawfully concluded that it carried little or no weight in the planning balance. The court emphasised the distinction between (i) whether a matter is a material consideration and (ii) the weight to be attached to it, and reiterated that courts will not substitute their planning judgment for that of the planning authority except on Wednesbury irrationality grounds.

Background and procedural posture

Three competing applications for a retail food superstore near Witney were considered against the background of a local plan inspector's report which favoured a new relief road (the West End Link) and expressed a preference for Tesco's Henry Box site. Tesco offered to fund the West End Link by means of a unilateral planning obligation under section 106. The Secretary of State rejected the inspector's recommendation and refused Tesco's application, allowing a competitor's appeal. Tesco sought judicial review under section 288 of the Town and Country Planning Act 1990 to quash the Secretary of State's decision, arguing that the Secretary of State had failed to treat Tesco's funding offer as a material consideration. A deputy High Court judge quashed the decision, but the Court of Appeal reinstated the Secretary of State's decision. Tesco appealed to the House of Lords.

Nature of the claim and issues

• Nature of the claim: judicial review seeking to quash the Secretary of State's decision letter refusing Tesco's planning permission and allowing a rival's appeal.
• Principal issue: whether Tesco's offer to pay for the West End Link was a material consideration and, if so, whether the Secretary of State failed to have proper regard to it.
• Related issues: the effect and scope of Circular 16/91 on planning obligations and the relationship between section 70(2) and section 106 obligations.

Court's reasoning

The House of Lords held that "material" means "relevant" and that it is for the decision maker to decide weight. Circular 16/91 is a lawful statement of policy describing the circumstances in which planning obligations will be treated as bearing on the grant of permission; it cannot make legally irrelevant a matter that is in fact material. The Secretary of State had applied the tests and policy in Circular 16/91 and had explicitly considered the relationship, proportionality and necessity aspects of Tesco's offer. On the facts he concluded that the relationship between the development and the West End Link was tenuous, that full funding was not fairly and reasonably related in scale to the development, and that even a partial contribution was unreasonable. This was a matter of planning judgment and not a legal error. The court therefore dismissed the appeal.

Wider context: the judgment restated the limits of judicial review in planning: courts decide legality and materiality, but will not reassess planning merits except for irrationality. The decision clarified the application of Circular 16/91 and the distinction between material considerations and the weight given to them.

Appeal dismissed. The House of Lords held that Tesco's offer to fund the West End Link was a material consideration in law but that the Secretary of State had given the offer careful and lawful consideration under Circular 16/91 and lawfully attributed little or no weight to it. The court would not substitute its own planning judgment for that of the Secretary of State absent Wednesbury irrationality.

Deputy High Court judge (Nigel Macleod Q.C.) quashed the Secretary of State's decision on 7 July 1993 (held that the Secretary of State failed to treat Tesco's offer as a material consideration). Court of Appeal allowed the Secretary of State's appeal and reinstated the decision on 25 May 1994 (unreported; Court of Appeal Transcript No. 736 of 1994). Final appeal to the House of Lords, judgment [1995] UKHL 22 (11 May 1995).