Tesco Stores Ltd v Secretary of State for the Environment

In determining an application for planning permission, a “material” consideration means a relevant consideration. Relevance is a question of law, but the weight assigned to a relevant consideration is a matter of planning judgment. An offered planning obligation wholly unrelated to the proposed development is immaterial. A connection which is more than de minimis requires the decision-maker to consider the obligation.

The decision-maker may apply a lawful policy concerning necessity and proportionality when deciding weight. A relevant consideration may rationally receive little or no weight. Judicial intervention is justified where a relevant matter was ignored through legal error, or where the assessment was irrational in the Wednesbury sense.

Tesco applied for permission to construct a superstore at the Henry Box site in Witney and entered into a planning obligation to pay £6.6 million towards the West End Link road. A competing developer sought permission for a superstore at the Mount Mills site. The inspector preferred Tesco’s proposal, but the Secretary of State allowed the competing appeal and refused Tesco’s application after concluding that Tesco’s funding offer should carry no material weight under Circular 16/91.

A deputy High Court judge quashed the Secretary of State’s decision because the offer had not been treated as a material consideration. The Court of Appeal reversed that order in Court of Appeal (Civil Division) Transcript No. 736 of 1994. The central issue before the House was whether the Secretary of State had unlawfully disregarded Tesco’s offer or had permissibly considered it and assigned it little or no weight.

1. Disposition. Lord Keith of Kinkel delivered the leading speech. Lord Ackner, Lord Browne-Wilkinson, Lord Lloyd of Berwick and Lord Hoffmann agreed with his reasons. The House unanimously dismissed the appeal.

2. Per Lord Keith, “material” in section 70(2) of the Town and Country Planning Act 1990 means relevant. Whether a consideration is relevant is a question of law. If a decision-maker wrongly treats a relevant consideration as irrelevant and therefore fails to consider it, the decision cannot stand. The weight assigned to relevant considerations remains for the decision-maker, subject to irrationality in the sense established by Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223.

3. Per Lord Keith, an offered planning obligation having no relationship to the proposed development, other than its source, is not a material consideration. It is merely an attempt to buy planning permission. Where the relationship is more than de minimis, the decision-maker must have regard to the obligation. Its influence upon the decision is then a matter of planning judgment.

4. Per Lord Keith, the tests governing the validity of planning conditions in Newbury District Council v Secretary of State for the Environment [1981] AC 578 could not simply be transposed to determine whether an offered planning obligation was material. Section 106 governs the validity of planning obligations and does not require every obligation to relate to a particular development. The separate question in this appeal was whether the offer was relevant to the applications under consideration.

5. Per Lord Keith, Circular 16/91 lawfully stated the policy by which the Secretary of State would assess the necessity and proportionality of planning obligations. Its references to necessity meant that an obligation should receive weight only where planning judgment indicated that permission ought not to be granted without it. They did not convert an otherwise relevant obligation into an immaterial consideration.

6. Per Lord Keith, the decision letter showed that the Secretary of State had carefully assessed the relationship between the proposed superstore and the West End Link. He concluded that the relationship was tenuous, that full funding was disproportionate and that even a partial contribution would be unreasonable. He also considered the alternative position and decided that any permissible contribution would not alter the outcome. This was a lawful weighing exercise.

7. In additional concurring observations, Lord Hoffmann emphasised that courts supervise the legality of planning decisions rather than their planning merits. A decision-maker may rationally give a material consideration no weight. The choice between maximising related public benefits and applying a policy favouring proportionality and fairness between developers belongs to the planning authority or the Secretary of State.

1. House of Lords: In Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759, the House unanimously dismissed Tesco’s appeal and affirmed the Court of Appeal’s restoration of the Secretary of State’s decision.
2. Court of Appeal: Sir Thomas Bingham MR, Beldam LJ and Steyn LJ allowed Tarmac’s appeal and reinstated the Secretary of State’s decision: Court of Appeal (Civil Division) Transcript No. 736 of 1994. The court also rejected Tesco’s respondent’s notice.
3. High Court: On 7 July 1993, Mr Nigel Macleod QC, sitting as a deputy High Court judge, quashed the decision letter. He held that the Secretary of State had wrongly failed to treat Tesco’s funding offer as a material consideration.
4. Secretary of State: On 16 April 1993, the Secretary of State allowed the competing developer’s appeal concerning the Mount Mills site and dismissed Tesco’s application for the Henry Box site.