The Court of Appeal has handed down a judgment on planning decisions relating to undefined boundaries of Green Belt land and cost orders in CAAD appeals. Oliver Capildeo examines the ruling.
On 19th February 2021, the Court of Appeal handed down its judgment in Leech Homes Ltd v Northumberland County Council  EWCA Civ 198 which confirmed the correct approach in determining whether a site is encompassed in Green Belt land where the precise boundaries are yet to be defined by local plans. There was also an important ruling on the limit of costs in CAAD appeals. This article will summarise the facts and ruling in the case before concluding with a brief analysis of the practical implications.
Northumberland County Council compulsorily acquired Leech Homes’ land for the purpose of constructing the Morpeth Northern By-pass.
Leech Homes made an application for a certificate of appropriate alternative development (a “CAAD”) in relation to the assessment of compensation under s.17 of the Land Compensation Act 1961. This required the Council to decide upon a hypothetical application for planning permission in respect of a residential development consisting of about 135 dwellings. The difference in compensation between the CAAD being granted and not being granted was estimated to be £42 million.
The Council rejected the CAAD application, deciding that this hypothetical planning permission would not have been granted because the site was Green Belt land. It was encompassed by the general strategic policy of Policy S5 in the Northumberland County and National Park Joint Structure Plan (2005), even though the precise boundaries were to be fixed by a future local plan. This decision was reached despite the Council and Secretary of State previously determining that the site was not part of the Green Belt when the development consent order for the By-pass was granted.
Leech Homes challenged the Council’s decision in the Upper Tribunal (Lands Chamber) (“UT”) pursuant to s.18 of the Land Compensation Act 1961. They were unsuccessful in doing so. Moreover, the UT ordered Leech Homes to pay the Council’s costs on the standard basis, applying Rule 10 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2020. The UT’s full decision can be found at  UKUT 328 (LC).
Leech Homes took their case to the Court of Appeal.
In the Court of Appeal, their Lordships were faced with two issues:
- Whether, for the purposes of assessing compensation on compulsory acquisition, the land belonging to Leech Homes Ltd is to be treated for planning purposes as land to which Green Belt policies apply; and
- Whether the Upper Tribunal had power to order the claimant to pay the acquiring authority’s costs in appealing against the CAAD.
First issue – green belt land?
The Court of Appeal, led by Lewison LJ, upheld the UT’s decision in this regard.
In approving the UT’s approach, his Lordship held that where Green Belt land is only set out in strategic plans without precise boundaries, the following two-stage test is required to ascertain whether a site does fall within those (imprecise) boundaries:
1. The decision-maker must start with the policy which shows that the site is capable of being included within the Green Belt;
It was established that since the land fell within the ambit of Policy S5, it was capable of being Green Belt land. To disapply Green Belt planning policies at this stage would be to remove options for designation as green belt that the local planning authority currently has.
2. And then, consider whether there is sufficient reason not to apply Green Belt policies to it.
The decision-maker must have a degree of confidence that the land in issue would fall outside the boundaries of the Green Belt once definitively fixed. The ultimate conclusion reached is a matter of planning judgment, evaluating the site against the five purposes of the Green Belt (National Planning Policy Framework (“NPPF”), paragraph 80):
- To check the unrestricted sprawl of large built-up areas;
- To prevent neighbouring towns merging into one another;
- To assist in safeguarding the countryside from encroachment;
- To preserve the setting and special character of historic towns; and
- To assist in urban regeneration, by encouraging the recycling of derelict and other urban land.
Lewison LJ agreed with the UT’s conclusion at this second stage that there was no reason not to apply Green Belt policies to the site, with nothing in the evidence or submissions identifying any reason not to do so. Indeed, Leech Homes’ own planning expert witness agreed that if the UT was satisfied that the site was “in the general extent of the Green Belt by reason of Policy S5”, then “Green Belt policies should apply to it”.
Hence, the Court found that the Council had correctly determined the CAAD application.
Leech Homes had heavily relied on the Council and Secretary of State’s decision in relation to the development consent order to demonstrate that the site did not actually fall within the Green Belt. Lewison LJ found that the UT was entitled to disregard previous decisions which had adopted the wrong legal approach in its planning judgment – “a decision maker is not required or permitted to repeat the mistakes of his predecessor”.
Second issue – costs?
Leech Homes’ appeal on this issue was allowed.
Rule 10 was created following a report on costs published by the Senior President of Tribunals entitled “Costs in Tribunals” in December 2011. CAAD appeals were not within the UT’s jurisdiction until April 2012. Lewison LJ therefore found that Rule 10 could not have been intended to have applied to CAAD appeals and so the UT could not rely on Rule 10 to order Leech Homes to pay the Council’s costs.
As a result, Lewison LJ found that s.17(10) of the Land Compensation Act 1961 governed the award of costs for CAAD appeals, given their sole purpose is as a step towards compensation. This provision limits recoverable costs to expenses incurred by the landowner, absent unreasonable behaviour. Accordingly, costs were not recoverable by the Council. His Lordship concluded that “it is a matter for the Tribunal Procedure Rules Committee to consider whether any change in the Procedure Rules is desirable”.
The first point to note is that this decision not only applies to hypothetical developments on CAAD applications, but also to planning applications and appeals for actual developments.
Determining whether a site falls within a Green Belt or not has the potential of severely affecting its developmental value. In terms of either theoretical or actual developments, the NPPF will substantially restrict what can be built on Green Belt land. It is therefore of great importance that the Court of Appeal has confirmed the test for assessing whether land falls within a Green Belt where strategic boundaries are left undefined.
Although landowners may be disappointed that the Court approved of the UT’s disregard of prior inconsistent planning decisions, some solace can be taken from the Court’s decision as to costs. In essence, the Court established that the costs risk of appealing a CAAD application in the UT is the same as appealing a planning decision to the Planning Inspectorate, in that there must be unreasonable behaviour on the landowner’s part for costs to be awarded against them. However, given Lewison LJ’s analysis and concluding comments, one may suppose that the Tribunal Procedure Rules Committee might look to close this gap by expanding the scope of Rule 10 in the near future.