Zurich Assurance Ltd (t/a Threadneedle Property Investments), R (on the application of) v North Lincolnshire Council & Anor

A failure to satisfy the sequential approach for out-of-centre retail development engages the national policy direction that permission should be refused. The authority may nevertheless grant permission where other material considerations outweigh that policy. In performing that balance, it may consider the nature and extent of the failure.

Sequential assessments must be approached with flexibility and realism. An authority may rely on an operator’s commercial evidence about whether a town-centre alternative is viable without requiring disclosure of its detailed commercially sensitive calculations.

A fallback use is material where its occurrence is more than merely theoretical. A certificate of lawful existing use is not a legal prerequisite to considering evidence of that use.

The claimant owned a shopping centre in central Scunthorpe. It sought judicial review of the Council’s grant of planning permission for an out-of-centre retail park, including a large store intended for Marks & Spencer. The applicant had not demonstrated that the three smaller units could not be disaggregated onto sequentially preferable sites.

The claimant alleged that the Council had misapplied the sequential and impact policies in Planning Policy Statement 4, accepted inadequate evidence concerning disaggregation, relied unlawfully on a fallback retail use, and approved an insufficiently enforceable town-centre protection obligation. Two further grounds concerned a highways contribution and the environmental-impact screening opinion.

The central issue was whether the officer’s reports significantly misled the planning committee, or otherwise caused it to grant permission on an unlawful basis.

1. The claim was dismissed. Fairly read as a whole, the officer’s reports correctly stated that the applicant had failed the sequential test and that national policy consequently directed refusal. The references to the proposal not “fully” complying did not mislead the committee into treating sequential compliance as divisible.

2. Failure of the sequential test did not conclude the decision-making exercise. National policy could be displaced by other material considerations. When deciding whether that occurred, the committee could consider the nature and extent of the failure as well as the policy direction to refuse. It lawfully concluded that the development’s economic benefits outweighed the adverse considerations: paras [40]–[52].

3. The committee had sufficient evidence to accept that disaggregating the proposed Marks & Spencer operation between town-centre premises would not be commercially viable. Sequential assessment operates in the real world and concerns whether an alternative site is suitable for the developer’s proposal, subject to flexibility and realism. An operator need not disclose its precise commercially sensitive calculations before an authority may reach a view on viability: paras [53]–[64].

4. A fallback position may be considered if there is more than a merely theoretical prospect of its occurrence. It need not be probable; a very slight possibility or outside chance suffices, with weight remaining for the planning authority. Evidence of long-established open retail use could be considered without a certificate under section 191 of the Town and Country Planning Act 1990. The reports did not materially mislead the committee about the possibility of comparable retail development: paras [65]–[79].

5. The committee’s resolution required a section 106 agreement providing town-centre protection but did not prescribe its exact form. The agreement substantially secured that protection by preventing all but one regulated town-centre retailer from taking a unit. Any imperfection in enforcing the exceptional tenant’s promise to retain a town-centre presence did not invalidate the permission: paras [80]–[92].

6. The highways-contribution and screening-opinion grounds were formally dismissed. On the binding authorities cited, the alleged defects could not support quashing the permission, particularly where no different substantive decision was suggested: paras [37]–[38].

This was a first-instance claim for judicial review. His Honour Judge Gosnell, sitting as a judge of the High Court, granted permission to pursue the claim on 23 July 2012. The Administrative Court dismissed every ground of challenge to the planning permission.