First Secretary of State & Anor v Sainsbury's Supermarkets Ltd

A planning decision-maker must consider evidence under every category to which it is potentially material. The decision-maker may determine what weight to give an inspector’s findings, but must act rationally and explain the decision intelligibly.

Reasons must disclose why the principal controversial issues were resolved as they were. Their required detail depends on the context, and a challenge succeeds only where inadequate reasoning causes substantial prejudice. A decision letter must be read straightforwardly and against the material known to its informed audience.

Policy must be applied as a guide rather than an inflexible rule. A decision-maker cannot insist on a single mode of proof. Evidence that a store outperforms a company-wide average does not, without more, establish unmet local demand.

The local planning authority approved an application to enlarge an out-of-town supermarket. The Secretary of State called in the application and refused permission, contrary to his inspector’s recommendation, because quantitative need had not been demonstrated.

On a statutory appeal under Section 288 of the Town and Country Planning Act 1990, Collins J quashed the refusal: [2004] EWHC 1726 (Admin). He held that the Secretary of State had wrongly excluded overtrading as an indicator of quantitative need and had inadequately explained his rejection of the applicant’s methodology.

The Secretary of State appealed. The issues were whether the decision letter adequately explained the treatment of overtrading and whether its reasoning about quantitative need was intelligible and lawful.

1. Appeal allowed. The Court of Appeal, in a judgment delivered by Sedley LJ for the court, held that the Secretary of State’s refusal decision was sustainable.

2. Evidence capable of affecting both quantitative and qualitative need must be considered under both headings. A planning decision-maker cannot allocate it exclusively to one category. On a called-in application, the inspector determines what evidence to accept, subject to the ordinary legal constraints. The Secretary of State decides what weight and significance to give the inspector’s findings and advice, acting rationally and giving an intelligible explanation.

3. A policy means what it says. Except where its language is ambiguous or unclear, its maker cannot impose a strained or unconventional interpretation which frustrates legitimate expectations. Ministers must nevertheless apply policy case by case, balancing its status as a guide rather than a rule with the principle that like cases should be treated alike. A decision-maker also cannot insist upon a single method of proving compliance with policy.

4. Applying South Buckinghamshire DC v Porter (No 2) [2004] UKHL 33, reasons must be intelligible and adequate. They must explain the resolution of the principal controversial issues, but need address only the main issues and must be read straightforwardly in the context known to the parties. A reasons challenge requires genuine substantial prejudice.

5. The decision letter did not exclude overtrading from consideration as a possible indicator of quantitative need. It lawfully concluded that trading above a company-wide average did not, by itself, demonstrate a surplus of local purchasing power over existing retail provision. Read as a whole, the relevant paragraph was logical and disclosed no error of law.

6. The Secretary of State’s rejection of the applicant’s quantitative methodology was intelligible when read with the inspector’s report and the material known to the parties. Extrapolating growth from an assumed equilibrium in 1991 did not establish a present disequilibrium. Without matching the estimated growth against current evidence of local spending power, the evidence did not have to be accepted as establishing unmet demand for further floorspace.

7. A court must not reconstruct an executive decision by reading into it greater coherence than it fairly bears. Equally, it must not quash a decision merely because it could have been expressed more clearly where, fairly read, it is intelligible and legally sound. The applicant remained free to make a further application addressing the reasons for refusal.

1. Court of Appeal (Civil Division): In [2005] EWCA Civ 520, allowed the Secretary of State’s appeal and held the refusal decision sustainable.
2. High Court, Administrative Court: Collins J, in [2004] EWHC 1726 (Admin), allowed the supermarket’s appeal under Section 288 of the Town and Country Planning Act 1990 and quashed the refusal decision for errors of law concerning overtrading and the adequacy of the reasons.