Swale Borough Council v Secretary of State for Housing Communities and Local Government & Anor

In planning appeals, costs may be awarded where a party behaves unreasonably and thereby causes another party unnecessary or wasted expense. “Unreasonable” bears its ordinary meaning, not the heightened Wednesbury standard. A refusal unsupported by substantial evidence is one possible example, but it is not the legal test. The inspector must apply the Secretary of State’s costs policy while retaining a broad discretion to consider the circumstances. A local planning authority may act unreasonably by maintaining a planning objection which could have been resolved through suitable conditions or obligations, or by failing to review its case promptly after an appeal. The High Court will intervene only where the inspector’s decision contains a reviewable legal or public-law error.

Swale Borough Council refused outline planning permission for development of up to 700 dwellings. The developer appealed, and the planning inspector granted permission after the Council withdrew its objections concerning affordable housing and highways following further evidence, proposed conditions and planning obligations.

The inspector awarded the developer its costs relating to those two issues, finding that the Council had acted unreasonably and caused unnecessary expense. The Council challenged that costs decision under the statutory review jurisdiction, alleging mistake of fact, irrationality and failure to take material considerations into account. The central issue was whether the inspector had lawfully applied the costs policy.

1. Application refused. The inspector’s costs decision was not legally flawed.
2. The Secretary of State was entitled to adopt a costs policy, and inspectors were required to apply it. Under that policy, costs could be awarded where unreasonable behaviour directly caused another party unnecessary or wasted expense. The term “unreasonable” had its ordinary meaning, rather than the Wednesbury meaning: [1994] 2 PLR 768.
3. The absence of substantial evidence capable of supporting a planning objection could indicate unreasonable behaviour, but it was not the exclusive legal test. The relevant question remained whether the unreasonable conduct caused unnecessary expense. The policy’s listed examples were guidance, not a checklist or substitute for that test.
4. As to affordable housing, the inspector was entitled to conclude that the Council had maintained an evidentially unsupported objection despite jointly commissioned viability evidence, had withdrawn it ambiguously, and had continued to raise the possibility of reallocating contributions. The Council’s eventual acceptance that no affordable housing contribution was possible came too late to prevent unnecessary expenditure.
5. As to highways, the inspector was entitled to find that the Council had failed to review its case promptly. The later agreement to a condition and traffic-calming contribution showed that the objection could have been resolved without the developer preparing and presenting the relevant evidence. The inspector had not ignored the Council’s expert evidence or the significance of the proposed mitigation.
6. A decision letter must be read straightforwardly, in the context of the issues and arguments known to the parties: [2004] UKHL 33. A different inspector might have reached a different conclusion, but that did not establish a reviewable error.

This was a first-instance statutory review challenge in the High Court. No earlier judicial decision in the same proceedings was stated.