Category Archives: Statutory Appeals

Hardship and imminence of appeal leads court to suspend planning injunction

In London Borough of Newham v Ali & Ors [2014] the trustees of a charity (“the Trust”) operated a faith centre at Abbey Mills Riverine Centre, Canning Road, London E15 (“the Centre”).

The 6.5 hectares of largely vacant land on which the Centre was constructed were of major strategic importance for the delivery of new housing and economic development, in accordance with the policies in the London Plan for growth, regeneration and housing. Policy S1 of the Respondent (“the Council”)’s Core Strategy (adopted in 2012) stated that the Council’s overriding priority was to ensure that growth contributed to achieving economic and social convergence with the rest of London. The site was allocated within the Core Strategy as a “strategic site” in Policy S2. Policy S10 specifically allocated the site for a mix of residential and employment uses so as to contribute to the creation of a new local centre near to West Ham Station.

The Trust intended to use the site as a Muslim foundation and submitted a planning application for change of use of the buildings for worship purposes and for permission for the building extensions already constructed. The Council granted a temporary planning permission for the current faith-based use which expired on 1 November 2006. In February 2010, the Council issued an enforcement notice which required faith-based use to cease and removal of unauthorised buildings, the mosque and the car park.

The Trustees appealed against the enforcement notice. During the resultant public inquiry, the Trust entered into a Unilateral Deed of Undertaking (“the Undertaking”) under section 106 of the Town and Country Planning Act 1990 (“the 1990 Act”). The Trustees covenanted within 12 months to submit a planning application for the “Development” i.e. a mixed use development which may include an element of community (including faith-based) use, proportionate to, and not dominating, the overall mix of uses”. In default, they would forthwith carry out the “Removal Works” specified in the enforcement notice.

The Planning Inspector allowed the appeal against the enforcement notice by granting a temporary planning permission for the current use up to 23 May 2013 to allow the Trust to bring forward, during that time, an application for a policy compliant mixed use form of development.

In the event, no valid planning application was made by 28 February 2012. The later application that was made was for a single faith-based use (inconsistently with both the Development Plan and the Undertaking). The application was refused by the Council on 20 December 2012. The Trust had appealed against that decision.

The Council then commenced proceedings to enforce the Undertaking.

The Trust applied to the Council to vary the condition attached to the Inspector’s temporary planning permission to extend it by two years. The Trust now appealed against the non-determination of that application.

The Council then issued an enforcement notice for overstepping the two year limitation on the Inspector’s temporary planning permission. The Trust appealed against that enforcement notice.

The three appeals were to be determined by the Secretary of State under para 3 of Schedule 6 to the 1990 Act because they involved “proposals giving rise to substantial regional or national controversy”. The appeals will be heard by a Planning Inspector at a three week Inquiry in June 2014. The Inspector was expected to make recommendations to the Secretary of State in October 2014.

The Court of Appeal declined to quash the injunctions granted by the High Court. Basically damages would be an inadequate alternative. But they granted a suspension of the injunctions on the following grounds:

First, the appeal against the refusal of planning permission for a single faith-based use was likely to be decided before the end of this year. If successful, the Council could hardly continue to enforce the Undertaking. The court could not predict the outcome of the appeal.

Secondly, to require the Trust to carry out the Removal Works would cause it and the community considerable hardship. That hardship would have served little practical value if the main appeal succeeded. Whilst the enforcement of planning obligations kept parties to their obligations, that purpose should not be given undue weight where a successful appeal would fundamentally change the planning future of the site and where compliance with the injunction would cause serious harm.

Thirdly, there was no particular planning detriment in allowing the current position to continue for a relatively short period until the planning future of the site was finally determined. The Council could not realistically do anything in relation to the site until the outcome of the appeals was known.

Fourthly, a refusal to suspend the injunction would in effect pre-empt the outcome of the appeal against the Council’s refusal to vary the temporary planning permission in such a way as to extend that permission until 23 May 2015.

The power to suspend an injunction under section 106(5) of the 1990 Act should be exercised sparingly. But the facts of this case were unusual. They justified a relatively short suspension in the context of the long and involved planning history of this site.

So the injunction should be suspended until the results of the appeals were known and a short period had been allowed for the parties to consider their positions.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Construction companies appeal rights excluded judicial review and restitution of penalties

After the following cases the Office of Fair Trading (“the OFT”) had functions taken over by the Competition and Markets Authority (“the CMA”). and the Competition Act 1998 (“the 1998 Act”), was amended accordingly.

References to the OFT below would, for subsequent, current and future cases, be to the CMA instead.

The 1998 Act conferred upon the OFT a power to investigate, and to decide, whether a person has committed an infringement of the 1998 Act.

The OFT had power to impose a monetary penalty on the infringer.

The 1998 Act permits the person penalised to appeal to a specialist tribunal against the imposition of the penalty and/or the amount of the penalty. The rules lay down time limits for such an appeal.

What if the person penalised does not appeal but instead pays the full penalty? Can they, within six years of paying the penalty, sue to recover the penalty, on the ground that the penalty should not have been imposed? Or if the person penalised does not appeal but does not pay the penalty, can it then defend a claim by the OFT to recover the penalty on the ground that the penalty should not have been imposed?

In Lindum Construction Co Ltd & Others v The Office of Fair Trading (OFT) [2014] the majority of those infringements were “simple” cover pricing, which occurs where one of those invited to tender for a construction contract (Company A) does not wish to win the contract, but does not want to show its lack of interest to the client, whose work it may wish to be invited to tender for in the future. So Company A requests a cover price from another company that is tendering for the same contract (Company B). Company B will want the contract and will have decided a tender price and may already have tendered. The cover price it provides to Company A would be high enough to ensure that Company A doesn’t win. Company A submits this price to the client as though a genuine tender. Company B would not reveal its own tender price to Company A – the cover price would be an inflated price.

The High Court asked whether Parliament would have contemplated that a statutory challenge permitting a full appeal on the merits, created by the 1998 Act, should co-exist with the Claimants’ version of a non-statutory challenge with narrower grounds of challenge which required them to show that the imposition of the penalty or the amount of the penalty were unlawful, on “judicial review grounds”. Although in all but exceptional circumstances, the court would refuse permission for a judicial review where the applicant had a right of statutory appeal which, had it been used, would have been appropriate to deal with the applicant’s complaint.

The Claimants were instead advancing the judicial review grounds as the basis of a common law claim for restitution or by way of a defence to a claim for an unpaid penalty.

Dismissing the application the court said it was highly improbable that, in addition to creating a right to a full merits statutory appeal, subject to controls and limitations, Parliament would have left open the possibility of:

1. a person defending a claim for the penalty on the ground that the unappealed penalty was not in fact due; and

2. a person who had paid the unappealed penalty later claiming restitution of it.

So, the 1998 Act should be construed as providing that the statutory appeal provided by the 1998 Act is the exclusive remedy for challenging a penalty.

If there was no successful appeal against a penalty:

1. the party which was affected by the penalty was bound by it; and

2. the OFT would not be acting unlawfully in receiving payment of such a penalty or taking proceedings to recover an unpaid penalty.

Accordingly, those Claimants who had paid the penalty imposed on them were not able to challenge that penalty by making a common law claim for its restitution. Lindum, which had not paid the full amount of the penalty, remained liable to pay the balance.

This blog has been posted as a matter of general interest. It does not remove the need to get bespoke legal advice in individual cases.