Case No: CO/1198/2014
Neutral Citation Number: [2014] EWHC 3358 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 16/10/2014

Before :

THE HON MR JUSTICE FOSKETT
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Between :

	LOCHAILORT INVESTMENTS LIMITED	Claimant	
			
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	SECRETARY OF STATE	Defendant	

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MENDIP DISTRICT COUNCIL
 Interested Party  
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Martin Edwards (instructed by AWB Partnership) for the Claimant
Neither the Defendant nor the Interested Party appeared

Hearing date:  3 October 2014
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Judgment
Mr Justice Foskett : 
1.	This claim for judicial review is brought with permission granted by Haddon-Cave J.  It relates to a decision by a planning inspector acting on behalf of the Secretary of State concerning the costs of a planning appeal determined by written representations.
2.	The Claimant was the successful appellant.  The Interested Party was the local planning authority.
3.	The appeal to the Secretary of State concerned a planning application to demolish an existing dwelling in a village some seven miles from Bath in Somerset and to erect on the site three new dwellings.  As I have indicated, the inspector allowed the appeal against the refusal of the application by the Interested Party.  The Claimant’s planning consultant had submitted a written application for costs against the Interested Party in the normal way in the event that it was successful before the outcome of the appeal was known.  I will say a little more about the basis of the application shortly.  However, in due course, the inspector declined to make the order sought and it is that decision that is the subject of the present challenge.
4.	Mr Martin Edwards has advanced the application on the Claimant’s behalf and I am grateful to him for his assistance.  Unfortunately and most surprisingly, neither the Defendant nor the Interested Party acknowledged service of these proceedings and neither has been represented before me or made any other kind of written submission.  It is, of course, always helpful to have the countervailing arguments advanced even in a case, such as this, where the Claimant’s arguments have been advanced fairly and helpfully.  Furthermore, it is hardly fair to the inspector that someone has not taken a position on her behalf:  it could have been to argue that her decision letter cannot be impugned or, alternatively, it could involve a recognition that the decision letter was inadequate.  As it is, I am left in some doubt about the attitude of the Secretary of State.  However, notwithstanding that, I must consider the merits of the application.
5.	The Circular that sets the policy framework for consideration of issues of costs in this context is Costs Circular 03/2009.  I do not intend to extend this judgment by an extensive citation of extracts from the Circular, but I will refer to a few relevant paragraphs shortly.  Before doing so, I should summarise the local planning authority’s reasons for refusing the application for planning permission.  In order to understand those reasons it is necessary to appreciate that the development site adjoined an established property known as ‘The Old Vicarage’ and that the lane in which the site and this property were located was narrow and served as the highway access to the local primary school and the parish church.  The reasons given by the local planning authority for refusing the application for planning permission can be summarised as follows:  
a)	The layout and design of the development would not relate satisfactorily to its surroundings and would harm the visual character and appearance of the area contrary to certain local policies;
b)	The layout and design of the development would be “significantly overbearing and oppressive to the residential amenities of the Old Vicarage” contrary to other provisions of the local plan;
c)	The development would be likely to result in a significant increase in the vehicular traffic and create harm to highway safety contrary to the provisions of certain local plans.
6.	It is unnecessary to go into detail for present purposes, but the inspector was not satisfied that these grounds for refusal could be sustained and, accordingly, allowed the appeal and granted planning permission, albeit subject to conditions.  It should, perhaps, be noted that the decision of the local planning authority was contrary to the recommendations of its officers and was made by a narrow majority.  That is not, of course, an unfamiliar scenario.
7.	The costs application made by the Claimant’s planning consultants ran to some five pages and contained 29 paragraphs, a good number of which merely recited parts of the Circular and contained references to various well known authorities in this context.  The Interested Party put in a three page response.
8.	The application referred to various paragraphs in the Circular and, as I have indicated, I will refer to some of them, but the provisions of the Circular will be well known to those who practise in this field.
9.	The essential philosophy of the Circular can be found in the bullet points in paragraph A3.  I need not quote from it, but good behaviour and good practice is encouraged.  The Circular goes on to record that normally parties meet their own expenses and those statistics are given based on the records of the planning inspectorate.  Whilst it makes no difference to the outcome of the current application, it is noteworthy that, on average applications for costs are made in only 4% of appeals dealt with on written representations and the general rate overall of success in such applications is about 40%. 
10.	The conditions applicable to an award of costs are set out in paragraph A12 of the Circular as follows:
“Costs will normally be awarded where the following conditions have been met:
•	a party has made a timely application for an award of costs
•	the party against whom the award is sought has acted unreasonably and
•	the unreasonable behaviour has caused the party applying for costs to incur unnecessary or wasted expense in the appeal process – either the whole of the expense because it should not have been necessary for the matter to be determined by the Secretary of State or appointed Inspector, or part of the expense because of the manner in which a party has behaved in the process”
11.	Later in the Circular appears a definition, or at least an appreciation, of what “unreasonable” means in this context.  In a general sense this appears as paragraph A22 which is as follows:
“The word unreasonable is used in its ordinary meaning as established by the Courts in Manchester City Council v SSE & Mercury Communications Limited [1988] JPL 774.  Further explanation of what is likely to be regarded as unreasonable behaviour is set out in Part B of the annex.  The most common examples concern non-compliance with procedural requirements or failure by the planning authority to substantiate a stated reason for refusal of planning permission.”
12.	That paragraph refers to Part B of the Circular, the most pertinent paragraph of which for present purposes is paragraph B16 which reads as follows:
“Authorities will be expected to produce evidence to show clearly why the development cannot be permitted.  The planning authority’s decision notice should be carefully framed and should set out in full the reasons for refusal.  Reasons should be complete, precise, specific and relevant to the application.  Planning authorities will be expected to produce evidence at appeal stage to substantiate each reason for refusal with reference to the development plan and all other material considerations including any relevant judicial authority.  If they cannot do so, they risk a costs award against them for any unsubstantiated reason for refusal.  This continues to be the ground on which costs are most commonly applied for and awarded against a planning authority.  The key test will be whether evidence is produced on appeal which provides a respectable basis for the authority’s stance, in the light of R v SSE ex parte North Norfolk DC 1994 [2 PLR 78].”
13.	Although Mr Edwards helpfully referred me to a number of authorities (including R v Secretary of State for Environment ex parte Norfolk District Council [1994] 2 PLR 768) relating to the test to be applied when the court evaluates an inspector’s decision on the merits of an application for costs, I do not think it is necessary to refer to those authorities because he confirmed that his challenge was essentially a “reasons challenge”, submitting that the way in which the inspector articulated her reasons left uncertainty as to whether she had applied the right principles and had engaged with the process required by the Circular.  Since the application is in substance a “reasons challenge”, the well known approach set out by Lord Brown of Eaton-under-Heywood in South Bucks District Council & Another v Porter (No. 2) [2004] 1WLR 1953 at [36]:  
“The reasons for the decision must be intelligible and they must be adequate.  They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the “principal important controversial issues”, disclosing how any issue of law or fact was resolved.  Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision.  The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds.  But such adverse inference will to readily be drawn.  The reasons need refer only to the main issues in the dispute, not to every material consideration.  They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or, as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon future such applications.  Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced.  A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision.”
14.	In the application for costs the Claimant’s planning consultants asserted that the evidence to support the reasons for refusal was “very sparse” and that, whilst the appeal site was visible from within the local conservation area, the views were not significant and were not such that the local planning authority’s own conservation officer raised any objection.  It contended that there was no substantial evidence that the visual effect of the new development would be harmful, criticised the mistaken view expressed in the local planning authority’s evidence that The Old Vicarage was Grade II listed and repeated that the evidence was general and vague.
15.	In relation to the second ground of refusal (namely, the impact on The Old Vicarage), criticism was made that there was no assessment of the degree and nature of overlooking that property by the new properties and, in effect, there was no analysis of the position.
16.	As to the third ground of refusal, the criticism made was that the highway authority found that there would be no significant increase in vehicular traffic along the lane and that there was no evidence to support the contrary view.
17.	There was a response to that submission by the local planning authority.  As Mr Edwards correctly submits, it criticises the position taken by the local planning authority’s own conservation officer and the case officer and the deficiencies in their analysis were, it was said, made good by other information supplied to the planning committee meeting at which the decision was made.  It was said, in relation of the first ground for refusal, that the members considered the view and, it is to be inferred, took a different position in relation to this aspect.  As to the second ground of refusal, the local planning authority said that the Claimant had failed to apply certain British standards in evaluating the effect of the development on the adjoining property, that the officers’ report was silent on that issue and that the committee felt that “on balance the impact on the development was unacceptable.”  On the third ground, it was suggested that the position taken by the highways authority was “open to interpretation” as it highlighted “the potential for vehicular conflict as a result of the development.”
18.	The Claimant’s planning consultants lodged a brief rebuttal, suggesting that certain new matters had been introduced in the response that had not figured in the grounds for refusal and that the Circular (particularly paragraphs B16, B20, B22 and B23) had not been observed.
19.	The inspector’s decision refusing the application for costs referred to the Circular and the substance of the reasoning can be found in the following paragraphs:
“3.	The appellant’s application for an award of costs relies to a substantial extent on the fact that the Committee of the Council, when considering the planning application, failed to accept the recommendations of its Officers to grant permission.  As a consequence the Council has, it is submitted under Paragraphs B20 and B21 of the annex to the Circular, failed to support its decision.
4.		Consideration of planning applications and appeals, however, involves matters of judgement.  In this case I have found against the Council in respect of character and appearance, living conditions and highway safety, but am satisfied that the Council has adequately addressed these matters in its response to the appeal.
5.		It was not unreasonable for the local planning authority to give substantial weight to the objections received from the Parish Council and local residents rather than to the recommendation of its Officers to grant planning permission.  The appellant has referred to the committee being influenced in its decision by the objections of local residents.  However, advice at paragraph B21 is that ‘to carry significant weight, opposition should be founded on valid planning reasons which are supported by substantial evidence’.  In that respect at the appeal stage the neighbouring occupier provided an 8 page planning statement prepared by a planning consultant, and further evidence was provided by representatives of Norton St. Philip Primary School and the CPRE.
6.		Furthermore, in support of its case at appeal, the Council provided a 13 page appeal statement and 3 page costs statement which referred to the Planning Board minutes.  This documentation does provide the level of objective analysis of the scheme, and its impact, that paragraph B20 and B21 require to be provided in circumstances where there is substantial local opposition and members determine to overturn the recommendation of their officers.
7.		The key test is whether evidence is produced on appeal which provides a respectable basis for the authority’s stance (paragraph B16).  I do consider that the minutes and further appeal evidence provided by the Council were sufficient in that regard.  I am therefore satisfied that the Council has, overall, met its obligation to give proper consideration to the planning application and have justified the approach taken under paragraphs B20 and B21 of the annex to the Circular in this regard.
8.		I therefore find that unreasonable behaviour resulting in unnecessary or wasted expense, as described in Circular 03/2009, has not been demonstrated.”
20.	Mr Edwards contends first, that the decision letter does not grapple with the contention made by the Claimant’s planning consultants, namely, that the evidence supporting the grounds for refusal was sparse and that the decision to refuse was contrary to the views of the conservation officer.  He submits that the Claimant does not know how the inspector addressed the arguments or why they were rejected.  In relation to the paragraph of her decision letter relating to planning judgment (namely, paragraph 4), Mr Edwards submits that she failed to refer specifically to paragraph B18 of the Circular which reads as follows:  
“Planning appeals often involve matters of judgement concerning the character and appearance of a local area or the living conditions of adjoining occupiers of property.  Where the outcome of an appeal turns on an assessment of such issues it is unlikely that costs will be awarded if realistic and specific evidence is provided about the consequences of the proposed development.  On the other hand vague, generalised or inaccurate assertions about a proposal’s impact, which are unsupported by any objective analysis, are more likely to result in a costs award.”
He submits that it is difficult to know whether or not the inspector turned her mind to all of the matters set out in that paragraph for the purposes of her decision.
21.	In my judgment, the decision letter is on the cusp of acceptability in the light of Porter but, whilst I am reluctant to criticise, I consider that it does fall just short of acceptability in those terms.  There is nothing wrong with (and much to be said for) brevity, particularly on an ancillary issue such as costs where, of course, the parties know the issues.  There is, in my judgment, no need to set out the competing arguments in detail in a decision letter provided that it is clear that they are understood.  It might well be said that the inspector did address the relevant issues in the context of the application for costs – her reference to the need for an “objective analysis of the scheme” is one clue to the fact that she did.  However, there is no clear explanation of why she felt that the material she considered to have afforded a “respectable basis for the authority’s stance” did meet the objective standard necessary to support the reasons for refusal.
22.	Mr Edwards fairly accepted that the inspector might have expressed herself more fully in a way that justified the decision she made, but he contended that, as things stand, a sufficiently clear exposition of her view of the status of the material relied upon by the local planning authority had not been given.  On balance, I agree with him.
23.	Whilst I repeat that I would have valued submissions on behalf of the Secretary of State, I have concluded that it would be right to quash the decision to refuse costs and to remit the matter to the inspector for further consideration.