London Borough of Richmond Upon Thames v Secretary of State for Communities and Local Government & Anor

Planning policies must be interpreted according to meanings their words are properly capable of bearing. The court may intervene where a decision maker adopts an impermissible or absurd interpretation, even though planning policies may admit more than one reasonable meaning. Interpretation and application are distinct stages. In an affordable-housing contribution scheme, “equivalent provision” required valuation of the units that would notionally have been built on the appeal site, rather than an average of existing and new properties across a postcode area. The decision maker could use comparable transactions to inform a site-specific valuation. Because the inspector adopted the wrong interpretation before assessing viability and other material considerations, the planning decision could not stand.

The claimant local planning authority challenged under section 288 of the Town and Country Planning Act 1990 an inspector’s decision allowing an appeal by Princegate Estates (Hampton) Limited and granting permission for 28 retirement flats.

The authority and developer agreed that affordable housing would be provided through a financial contribution rather than on site. They disagreed about the market value to be used in the supplementary planning guidance formula: whether it should reflect units notionally built on the appeal site or average transactions in the wider postcode area, and whether existing properties could be included. The central issue was the proper interpretation and application of the relevant planning policy.

1. Claim allowed. The inspector’s decision could not stand because the inspector adopted an impermissible interpretation of the affordable-housing policy.
2. Planning policy interpretation is a question of law. A planning decision maker may adopt one of several meanings if the language is properly capable of bearing it, but the court must determine whether the chosen meaning falls within that range. An interpretation that produces an absurd result is not reasonable. The policy’s purpose and underlying objective may also constrain an apparently available linguistic meaning. [2006] EWCA Civ 189 and the authorities discussed in the judgment supported that approach.
3. Policy interpretation and policy application are separate stages. First, the decision maker must construe the policy. Only then should the decision maker assess material considerations, including viability and whether the calculated contribution might prevent the development proceeding.
4. Read in context, the supplementary planning guidance required the contribution to represent the value of equivalent provision: the new units that would have been built on the appeal site under the preferred on-site route. The appropriate exercise was a site-specific assessment of the market value of the proposed units, informed where appropriate by comparable transactions and professional judgment. Averaging all one-bedroom and two-bedroom transactions across the postcode area, including existing properties, ignored differences between properties and locations and could produce a contribution higher or lower than the true value of the proposed development.
5. The fact that the affordable-housing fund could later be used to refurbish or bring existing properties back into use did not alter the calculation required by the policy. The judgment expressed no view on the correct figure and did not determine the authority’s valuation to be right; it held only that the developer’s method was wrong.
6. The judge also observed that the dispute might have been better tested at a formal inquiry with cross-examination. That observation was not necessary to the decision. Judgment was entered for the claimant. Costs were awarded once, subject to a reduction of £1,500 plus VAT for conferences. Permission to appeal was refused, but the time for an appellant’s notice was allowed to run from receipt of the transcript.

The judgment describes a statutory challenge under section 288 of the Town and Country Planning Act 1990 to an inspector’s decision allowing the developer’s planning appeal. The Administrative Court entered judgment for the claimant. Permission to appeal was refused.