Libra Homes Ltd v First Secretary of State

In assessing whether the loss of tourist accommodation is justified by economic non-viability, a planning inspector may treat a way-of-life or owner-manager business as falling within the expression average competent operator where that form of operation is part of the relevant local market. The assessment must be objective, excluding individual quirks but not an established category of operator.

An inspector need not quantify every disputed repair cost where the valuation method recognises that higher refurbishment costs reduce current market value. Current market exposure may be the appropriate means of testing viability, particularly where earlier marketing evidence is out of date. A claimant bears the burden of demonstrating that the premises cannot be made viable.

The claimant challenged, under section 288 of the Town and Country Planning Act 1990, an inspector’s dismissal of appeals against refusal of planning permission and conservation area consent for the replacement of a hotel with flats.

The inspector accepted that the development would cause the loss of tourist accommodation contrary to local plan policies. The dispute concerned whether the supplementary planning guidance’s viability test supplied a material consideration sufficient to outweigh that conflict. The claimant challenged the inspector’s inclusion of way-of-life operators within the average competent operator test and his treatment of disputed mechanical and electrical reinstatement costs.

1. The claim was dismissed. The challenge concerning conservation area consent stood or fell with the planning permission challenge.

2. The supplementary planning guidance was directed to Bournemouth’s particular tourism market. It did not legally require the exclusion of way-of-life or owner-manager operators from the expression average competent operator. If that category formed part of the local hotel market, excluding it would conflict with the guidance’s purpose of preventing the loss of tourist accommodation.

3. The required assessment remained objective. It was proper to disregard the particular quirks of an individual owner, but there was no basis for disregarding an objectively established category of operator. The inspector was therefore entitled to assess viability by reference to the way-of-life market.

4. The inspector was entitled to prefer the local planning authority’s repair estimate and to regard the claimant’s proposed complete replacement of mechanical and electrical installations as excessive, while accepting that some work was necessary. He was not required to assign a separate figure or range to that work.

5. The valuation exercise treated refurbishment costs and current market value as interdependent. If prospective purchasers regarded the necessary works as more expensive, the current market value would fall correspondingly. Current exposure to the market was therefore capable of testing the true value and viability of the hotel.

6. The earlier marketing exercise was out of date, particularly because the property had deteriorated and the tourism market had changed. The claimant had not demonstrated that the premises were incapable of being made viable. The inspector was entitled to conclude that the material considerations did not outweigh the conflict with the development plan.

7. The Secretary of State was awarded costs assessed summarily at £10,000. The court also observed that an inspector’s witness statement should ordinarily be provided only where genuinely necessary, and that late service required a good explanation.

Not stated in the judgment.