Judge upholds challenge to decision by council to join housing consortium

A High Court judge has upheld a challenge to the decision by a council’s Cabinet to join a consortium promoting housing development on a site where the authority owned nearly 40 acres of land.

In Galaxy Land Ltd, R (on the application of) v Durham County Council [2015] EWHC 16 the claimant, Galaxy Land, was a property developer and owner of Sniperley Farm who had been a member of a limited liability partnership (Sniperley Park LLP1) established for promoting land in Sniperley Park for residential development.

Durham Council had not been a member of Sniperley Park LLP1 but its Cabinet decided on 16 April 2014 to join a second limited liability partnership (Sniperley Park LLP2) for promoting housing development at the site.

The local authority owned 37.87 acres of land at Sniperley Park, in four different parcels including in one case some playing fields.

Sniperley Park, which is green belt and situated to the north west of Durham City, had been one of eight sites identified by the council in 2009 to be released for housing.

Galaxy Land, which was not part of Sniperley Park LLP2, brought judicial review proceedings over the Cabinet’s decision.

The claimant set out two grounds of challenge:

1. The exercise of the council's power to dispose of its property at Sniperley Park under section 123 of the Local Government Act 1972 was unlawful. In particular there had been various failures to have regard to material considerations.
2. The council failed to recognise that the playing fields were open space within the meaning of section 336 of the Town and Country Planning Act 1990 and failed, consequently, to follow the procedure required by section 123 (2A) of the Local Government Act 1972.

Mr Justice Cranston upheld the claim. On ground 1 the judge found on the facts that the Cabinet had not been provided with the necessary information so that it could take into account obviously relevant considerations. He said he had three difficulties with the Cabinet report in this case:

• There was no evidence before him that the officers had considered and resolved a number of obviously relevant issues behind the recommendations being advanced. A property consultant had been called in by the council to give advice and his letter of 4 November 2013 contained some “pungent” comments on the control the council was ceding to the LLP. “The only evidence available as to whether these were considered is [the council’s asset service manager]’s statement that his overriding impression was that they were not material.”
• The asset service manager’s own draft report of January 2013 set out the advantages and disadvantages of the council joining the consortium or holding back. He recommended that the consortium be entered but only in principle and coupled with further negotiations. “The evidence is that this draft report did not get beyond his head of department to the senior officers under whose names the report of 16 April went to the Cabinet.” The asset service manager’s own evidence was that he was not involved in the preparation of the Cabinet report although he accepted that he was responsible for the positive recommendation which it advanced.
• The property consultant brought in had advised that the council held a strategic interest in the wider Sniperley Park site. The asset service manager “seemed to ignore that” and persisted in his witness statements “in the belief that the council's land was somehow landlocked and would be subject to ransom negotiations, so that its value would be reduced by anywhere between a third and a half.” That belief had infected the advice given by a director of a planning consultancy who gave a witness statement for the council. “Very fairly in argument Mr Drabble QC [Durham’s counsel] conceded that in the light of the evidence before me it was too simple to say the council's land was landlocked. To my mind the strategic nature of the council's landholding is an obviously relevant consideration which on the evidence was not considered by the officers and thus not fed through to the Cabinet.”

Mr Justice Cranston said the upshot was that the Cabinet decision was consequently flawed.

The judge said the second ground of challenge had also been made out. He rejected the council’s claim that the playing fields in question were not open space.

Mr Justice Cranston said: “In my view the evidence of public use of the St Leonard's playing fields is such as to constitute the bare licence contemplated by McCullough J in ex parte Braim. Moreover, the council has entered into a binding agreement to grant an option of the playing fields – an interest in land – subject to the requisite consents.

“In any event the relevant intention to dispose of the open space was already in existence at the time of the decision to enter the agreements. The failure to publicise that intention before the agreements were entered meant that it would not be possible for the council to consider any objections to the proposed agreement under the section [s. 123 (2A)].”

Mr Justice Cranston rejected the council’s objections to the claimant’s standing and also found the authority’s points about the claimant’s delay unpersuasive. He therefore granted judicial review.