Sainsbury's Supermarkets Ltd v Wolverhampton City Council

When exercising the compulsory purchase power under section 226(1)(a) of the Town and Country Planning Act 1990, a local authority must consider whether redevelopment of the compulsory purchase site is likely to contribute to the economic, social or environmental well-being of its area. That assessment may include wider benefits arising from the redevelopment process, including a cross-subsidy enabling redevelopment of another site within the authority’s area. The authority may decide the weight of that factor, subject to Wednesbury reasonableness. Confirmation by the Secretary of State and, where appropriate, a public inquiry provide safeguards against an unlawful sale or auction of compulsory purchase powers.

Sainsbury’s challenged Wolverhampton City Council’s approval in principle of a compulsory purchase order under section 226(1)(a) of the Town and Country Planning Act 1990. The proposed order would acquire land at the Raglan Street Site to facilitate either Sainsbury’s or Tesco’s redevelopment scheme. The Council selected Tesco’s scheme because its proposed cross-subsidy would enable redevelopment of the separate Royal Hospital Site.

On judicial review, Elias J rejected the formal challenge to the resolution but held that the Council could take the Royal Hospital Site benefits into account. The central issue on appeal was whether those benefits fell within section 226(1A), or were otherwise material considerations under section 226(1)(a).

1. Appeal dismissed. Sullivan LJ, with Mummery and Ward LJJ agreeing, upheld the order of Elias J. The Council was entitled to take the Royal Hospital Site benefits into account because they fell within section 226(1A) of the Town and Country Planning Act 1990.
2. Although section 226(1A) is expressed as a restriction, it positively requires a local authority considering the section 226(1)(a) power to assess whether redevelopment of the compulsory purchase site is likely to contribute to the economic, social or environmental well-being of its area. It broadens the matters requiring consideration beyond benefits accruing on the site itself.
3. The relevant consequences may include disturbance, relocation, employment created during construction, and direct or indirect catalytic effects on other sites within the authority’s area. A cross-subsidy may therefore be relevant where, as a matter of fact and degree, it forms part of a composite or related development and is likely to produce wider well-being benefits.
4. The Court declined to read across directly the restrictions governing planning conditions and section 106 obligations. The CPO context differs because financial viability is materially relevant and the order requires confirmation by the Secretary of State, with an independent inquiry where objections are made.
5. The weight given to the cross-subsidy was for the Council, subject to Wednesbury reasonableness, which was not in issue. The formal challenge to the wording of the resolution was also correctly rejected. The alternative submission under section 226(1)(a) did not require determination.

• Court of Appeal (Civil Division): appeal from the Queen’s Bench Division Administrative Court, where Elias J dismissed the application for judicial review. The Court of Appeal upheld that order and dismissed the appeal.