Galaxy Land Ltd, R (on the application of) v Durham County Council

A local authority’s disposal of land under Local Government Act 1972, section 123, is reviewable on ordinary public law principles where the decision has a public law element. Although section 123 does not prescribe a particular decision-making process, the authority must have regard to obviously relevant considerations and receive a fair, balanced evaluation from its officers. A disposal decision may also be unlawful where land is open space and the authority has failed to advertise the proposed disposal and consider objections under section 123(2A).

The claimant, a neighbouring property developer, challenged Durham County Council’s decision to join a limited liability partnership for the development and disposal of council-owned land at Sniperley Park. The challenge concerned whether the Council had lawfully exercised its power under section 123 of the Local Government Act 1972, including whether relevant matters had been considered and whether the statutory open-space advertising procedure applied to school playing fields.

The court also considered the legal effect of public recreational use of the playing fields and the Council’s decision to grant an option over them.

1. Judicial review and section 123. The grant of an option to purchase land is a disposal. A council’s decision to dispose of land is ordinarily a private-law matter, but a public-law element arises where the decision seeks to give effect to planning policy or other public objectives. The decision was therefore amenable to judicial review.
2. Relevant considerations. Section 123 does not require any particular disposal process, valuation, or marketing exercise. It nevertheless remains subject to ordinary public-law principles. Officers must digest the material, consider the competing arguments, and provide the decision-maker with a fair summary and balanced evaluation. The Cabinet was entitled to rely on that work, but the evidence showed that important matters had not been properly considered.
3. The Cabinet report did not adequately address the risks and loss of control under the LLP, the alternatives of joining or holding back, the implications of the long option period, or the arrangements for replacing the playing fields and waste-recycling site. It also failed to reflect the strategic importance of the Council’s landholding. Those omissions meant that the Cabinet lacked information about obviously relevant considerations. The decision was consequently flawed.
4. Open space. School playing fields may constitute open space for section 123(2A), notwithstanding the absence of public access as of right. Evidence of public recreational use was sufficient to establish the bare licence contemplated in R v Doncaster Metropolitan Borough Council, ex parte Braim (1989) 57 P&CR 1. In addition, the agreement to grant an option over the playing fields constituted an interest in land. The Council had therefore been required to advertise the intended disposal and consider objections before entering the agreements.
5. The claim for judicial review was granted. The court rejected the Council’s objections concerning standing and delay.