Flood zones – the Court of Appeal dives in

A recent Court of Appeal case on flood zones should serve as a warning to administrative decision makers to be most careful in the application of their policies to the particular facts, writes Christiaan Zwart.

In May 2013, the Court of Appeal in Manchester Ship Canal Company Ltd & Ors, R (on the application of) v Environment Agency [2013] EWCA Civ 542 dismissed an appeal by the Environment Agency against the decision of Lang J who quashed its decision to categorise sluices on the Manchester Ship Canal as ‘formal defences’ because they serve a dual purpose: both maintaining canal water levels for safe navigation by large ships and also passing to the sea the water impounded as a consequence of the original canalization of the river.

The original claim was brought by the Manchester Ship Canal Company and Peel Holdings (Land and Property) Limited because, between them, they owned and operated the canal and also owned land around it which it proposed to develop for housing.

The consequence of the Agency’s decision was to place the canal and nearby land within Flood Zone 3 when – if it were otherwise – that land would be in Flood Zone 2. The planning consequence of that Zoning was to place the land at the back of the (then) PPS25 (now NPPF) sequential test development queue so that land in Zones 2 and 1 was required by PPS25 to be developed first.

Since the original Agency decision, the Supreme Court decided Tesco Stores Limited v Dundee City Council [2012] 2 P&CR 9. In that case, the Court considered the terms of a development plan policy that favoured development on a “suitable” site but which were silent on the crucial question – “suitable” for what?. Therefore, the Court considered the policy terms and its actual context and considered the two potential candidate terms, before deciding against the planning authority’s interpretation.

In doing so, the Court helpfully categorised the circumstances in which it could not step into questions of planning judgement, and those other circumstances where it could.

The latter category included where the policy terms were silent. That case was the genesis of “Humpty Dumpty’s” world from which the planning authority was barred by that Court and no more entitled to make a policy’s terms mean what it desired the terms to mean.

In the canal case, the Agency (as lead advisor on flood risk matters) had discussed with the challenger’s experts for a considerable time the basis of that risk and how to categorise the canal’s flood risk: on the one hand it had been operated without failure for a long time; on the other, the very impounding of water as part of the original canalisation process meant that water had to be conveyed down to the sea or a flood may occur.

The Agency had formulated a policy in light of PPG25, and later PPS25, as to how it categorised defences as either formal flood defences (having ‘a’ primary purpose of flood relief) or as de facto flood defences. It had only two categories. That policy was issued to its internal staff and, whilst available if requested, not subject to formal consultation processes akin to a development plan. The Agency sought to square the two purposes of the canal by categorization of their sluices as formal defences. However, in doing so, the Agency did not choose between the two purposes and instead considered that the sluices had a twofold primary purpose.

The High Court gave a ‘comprehensive judgment’ and allowed the claim. The Agency appealed. In the Court of Appeal, Moses LJ gave the lead judgment and agreed with the High Court. The judgment shows the real difficulties that the Court itself had. But, Moses LJ identified that the absence of categorization of the whole canal as a formal flood defence showed the flaw in the Agency’s approach: “Either the whole of the canal and the structures by which it is operated are a formal flood defence or none of them are.”

He applied the Dundee case and ruled that the Agency had, in effect, created a third category between the two express policy categories. That new (implied) category was not something that today it was entitled to do. If it had wanted to have such a category, then it ought to have published a policy with that additional category in, or considered the sluices as an exception to its published policy. As it had done neither, it was not then further entitled to construe its own policy to mean what it thought it meant as opposed to what it did mean. The default position was that the sluices were to be treated as de facto defences (and in consequence the land affected became categorised as Flood Zone 2 rather than 3).

On that basis, the Agency’s judgement was outside of the range of responses available to it. That is, the actual (as opposed to implied) policy terms as construed by the Court of Appeal did not support the Agency’s expert judgment.

The High Court’s judgment raised a number of questions about the application of Tesco v Dundee, questions which the Court of Appeal did not take the opportunity to resolve.

Crucially, the question whether a policy must always have one uniquely correct meaning for the court to ascertain, or whether it is enough that the decision maker gives the policy a meaning it is legally capable of bearing, will have to be decided on another occasion.

The Court of Appeal ultimately decided this case on its particular facts. But the case is of interest as a warning to administrative decision makers to be most careful in the application of their policies to the particular facts.

The potential for three Lords Justices of Appeal to bring lawyers’ scrutiny to bear on a policy designed as a technical rather than legal document may be some distance from its original author’s mind. But, gone are the days when a decision maker may simply assume that approaching difficult policy questions can be justified by an unchallengeable consideration of their implied meaning or of their ‘spirit’. Today, more than ever before, claimants are seeking recourse to the Courts and the Courts are showing increased willingness to intervene where they can.

Christiaan Zwart is a barrister at 39 Essex Street. Together with Gordon Nardell QC, he appeared for the Environment Agency. Peter Village QC and James Strachan QC appeared for Peel Investments Limited.