Sainsbury's Supermarkets Ltd, R (on the application of) v Wolverhampton City Council & Anor

Section 226 of the Town and Country Planning Act 1990 permits compulsory acquisition only where the purpose is to facilitate development on or in relation to the land acquired. Benefits arising solely from a separate site cannot establish that statutory condition. The authority must first be satisfied that the power can lawfully be exercised for each rival development by reference to that development’s own benefits. If more than one development qualifies, the authority may then choose between them by considering wider lawful planning benefits, including benefits secured through a section 106 agreement. A prior conditional agreement or earlier resolution does not establish predetermination where the decision-maker was properly directed and genuinely reconsidered the alternatives.

Wolverhampton City Council had approved in principle the use of compulsory purchase powers over land forming most of the Raglan Street site. Both Sainsbury’s and Tesco had outline planning permission for competing developments there. The Council selected Tesco’s scheme because it was linked to a proposed development of Tesco’s separate Royal Hospital site, whose development benefits would be supported by cross-subsidy.

Sainsbury’s sought judicial review, alleging that the Council had misunderstood section 226 of the Town and Country Planning Act 1990, had taken irrelevant benefits into account, and had predetermined the outcome through an earlier conditional sale agreement and resolution.

1. Statutory purpose. The purpose of a compulsory purchase order under section 226 must be to facilitate development, redevelopment or improvement on or in relation to the land acquired. It is unlawful to acquire land at site A in order to develop site B. The well-being benefits in section 226(1A) must flow from the development of the land subject to the order. Benefits generated by the separate Royal Hospital site could not be treated as benefits generated by the Raglan Street site merely because the developments were linked by a section 106 agreement.
2. Two-stage decision. The Council was nevertheless entitled to consider the Royal Hospital benefits when choosing between rival developments for the Raglan Street site. First, it had to establish that a compulsory purchase order could lawfully be made for each proposed development by reference to that development’s own benefits. Secondly, once that threshold was met, it could select the scheme producing the greater overall lawful planning benefits for the Council’s area. Such benefits could include off-site benefits secured by a lawful planning obligation. The proposed undertaking concerning the Royal Hospital site was capable in principle of being included in a section 106 agreement.
3. Formal error. The Council had implicitly treated the Royal Hospital benefits as falling within section 226(1A) in relation to the Raglan Street development. That was a legal misunderstanding. However, the resolution itself did not state that the purpose of the order was to promote both developments. It correctly recorded that the order would in fact facilitate both. The error therefore did not require the resolution to be quashed.
4. Predetermination. Applying the test in Persimmon Homes Teeside Ltd v Lewis [2008] EWCA Civ 746, there was no real risk that the Cabinet’s mind was closed. Members had been expressly advised to disregard the conditional sale agreement for the decision under challenge. The Council had undertaken a detailed comparison of the schemes, and the earlier resolution had been made when Sainsbury’s did not intend to develop the site. Formal revocation of that resolution was preferable but unnecessary.
5. Disposition. The judicial review application failed. The decision was not quashed.

First-instance judicial review decision. No prior appellate decision is stated in the judgment.