Vannes KFT v Royal Borough of Kensington and Chelsea & Ors

An inspector deciding a planning appeal must identify and reach a conclusion on each principal important controversial issue, but need not resolve every subsidiary evidential dispute by selecting one party’s figures. Where economic viability is one factor in the affordable-housing assessment, the inspector may conclude that competing viability evidence is too uncertain to support a reliable result and give that factor no significant weight. The inspector must still consider the other relevant policy factors, including the need to encourage rather than restrain residential development and the circumstances of the site. The weight given to those factors is a matter of planning judgment. A decision letter must be read fairly and in good faith; the court must not substitute its own planning view for that of the inspector.

The appellant challenged the refusal of planning permission for the conversion and redevelopment of a vacant hotel into residential units. On appeal under section 78 of the Town and Country Planning Act 1990, the Secretary of State’s inspector allowed the appeal. The local planning authority challenged that decision under section 288 of the Act.

The Administrative Court held that the inspector had failed to determine the economic viability of providing affordable housing on or off the site, treating that question as a principal important controversial issue, and quashed the decision. The central issue before the Court of Appeal was whether the inspector was legally required to choose between competing expert inputs and determine the development’s viability before deciding whether affordable housing should be required.

1. Appeal allowed. The order of the Administrative Court was set aside and the inspector’s decision was restored.
2. The inspector was required to decide whether the scheme should include affordable housing. That was the principal important controversial issue. Economic viability was a subsidiary part of that wider question, not a separate principal issue.
3. The inspector had to grapple with the competing expert evidence on the input values for the Three Dragons toolkit. He did so by analysing the disputed figures and evaluating their reliability. He was not required to select the least unreliable figures and use them to produce an economic-viability result that he considered inherently unreliable.
4. The inspector was entitled, and indeed required, to conclude that the competing input values were too uncertain to produce a sufficiently reliable toolkit result. It followed that the viability factor could receive no significant weight. The weight assigned to a material consideration is a matter of planning judgment, provided the consideration has been properly taken into account.
5. The inspector had regard to the relevant London Plan policies and the Housing SPG, including the need to encourage rather than restrain residential development, to consider the particular circumstances of the site, and to adopt a reasonable and flexible site-by-site approach. His conclusion that affordable housing should not be required was therefore not unlawful.
6. The inspector was entitled to take into account Vannes’ stated position that the scheme was unlikely to proceed if affordable housing were required. That was treated as a statement of its present position, not as dependent on acceptance of its expert viability evidence. The decision letter, read fairly and in good faith, disclosed no error of law.

• Court of Appeal (Civil Division) — [2010] EWCA Civ 1466. Appeal allowed; the order of the Administrative Court was set aside and the inspector’s decision allowing the planning appeal was restored.
• High Court, Administrative Court — Sir Michael Harrison, sitting as a Deputy High Court Judge, held that the inspector had failed to determine a principal important controversial issue concerning the viability of affordable housing and quashed the inspector’s decision.
• Planning appeal — An inspector appointed by the Secretary of State allowed the appeal against refusal of planning permission.