Lochailort Investments Ltd v Secretary of State

A planning inspector’s decision on a costs application must give intelligible and adequate reasons. The decision letter must enable the reader to understand why the application was allowed or refused and how the principal controversial issues were resolved. Brevity is acceptable, particularly on an ancillary costs issue, but the reasoning must show that the relevant policy tests were understood and applied. Where the authority’s evidence is said to be sparse, vague or unsupported, the inspector must explain why the material relied on nevertheless provides a respectable basis for the authority’s stance. A decision which leaves substantial doubt as to whether that assessment was undertaken is unlawful and may be quashed.

The claimant successfully appealed against refusal of planning permission for three dwellings. It applied for a costs order against the local planning authority, alleging that the authority had acted unreasonably by pursuing inadequately supported reasons for refusal. The inspector allowed the planning appeal but refused the costs application.

The claimant sought judicial review of that refusal. The challenge was based principally on the adequacy of the inspector’s reasons, including whether the inspector had properly engaged with the allegations that the authority’s evidence was sparse, vague and unsupported, and with the requirements of Costs Circular 03/2009.

1. Reasons challenge. The court applied the approach stated by Lord Brown in South Bucks District Council & Another v Porter (No. 2) [2004] 1WLR 1953. Reasons must be intelligible and adequate. They must explain why the matter was decided as it was and disclose how the principal important controversial issues were resolved. The required degree of particularity depends on the issues, and the reasons need not address every material consideration.
2. Costs policy. The relevant question under Costs Circular 03/2009 was whether the material produced on appeal provided a respectable basis for the authority’s stance. The inspector was entitled to recognise that planning decisions involve matters of judgment and that local opposition could properly receive substantial weight where supported by valid planning reasons and substantial evidence.
3. Defect in the decision letter. The inspector referred to the need for objective analysis and concluded that the authority’s minutes and appeal evidence provided a respectable basis for its position. However, she did not clearly explain why that material satisfied the objective standard required to support the individual reasons for refusal, in the face of the claimant’s specific criticisms. The letter therefore fell just short of the standard required for an adequately reasoned decision and created substantial uncertainty about whether the relevant policy principles had been applied.
4. Disposition. The decision refusing the costs application was quashed. The matter was remitted to the inspector for further consideration.

Permission to apply for judicial review was granted by Haddon-Cave J. The judgment itself records no earlier merits decision of a court.