R (on the application of Derwent Holdings Ltd) v Liverpool City Council

Urban regeneration – Traffic regulation order (TRO) – Retail park – Claimant owning land adjacent to road – Defendant council failing to consult claimant or notify it of TRO – Claimant discovering existence of TRO after expiration of time limit for challenge – Whether defendants complying with procedural requirements – Application dismissedThe defendant council with others had established the first interested party in order to provide a brief for a project aimed at improving the eastern approach roads to Liverpool (Edge Lane). The claimant company was registered and based in Bermuda. It owned a retail park that abutted Edge Lane and had engaged in discussions with the first interested party with a view to developing the park. Its proposals would dramatically alter the streetscape and had to be accounted for in the Edge Lane project.In November 2006, the defendants made a traffic regulation order (TRO) that created a central reservation in Edge Lane, thereby making it impossible for traffic travelling in an easterly direction to turn right into three access roads leading to the retail park. That left one access way only, which necessitated the need to make a U-turn to enter two other roads. The TRO was made pursuant to powers conferred by sections 1, 2 and 84 of and Schedule 9 to the Road Traffic Regulation Act 1984. The claimant challenged the TRO.It was not disputed that the claimant had been unaware of the proposal to make, or the existence of, the TRO until June 2007, when the six-week period during which the TRO could be challenged had expired. The claimant applied, under para 35 of Schedule 9 to the 1984 Act, for an order quashing the TRO on the ground that the defendants had acted in bad faith and in breach of the procedural requirements of the Local Authorities’ Traffic Orders (Procedure)(England and Wales) Regulations 1996 (SI 1996/2485) in failing to notify it of the TRO. Alternatively, the claimant sought a declaration that para 37 of Schedule 9 to the 1984 Act, which in general prohibited any legal challenge to a TRO, was incompatible with Article 6 of the European Convention on Human Rights (ECHR). Held: The application was dismissed.The requirements of the 1996 Regulations had not been complied with in that the claimant, as a party likely to be affected by the TRO, should have been notified, and the targeting and notices in connection with the order were otherwise insufficient.Those responsible had done as little as they could to comply with the law, hoping that no objections would be made to delay the TRO. However, in order to establish bad faith, the claimant had to prove a deliberate or at least reckless approach to the disclosure obligations. It was necessary to show that those responsible had known, or had not cared, that they were acting in breach of the law; that had not been established in the instant case.TROs had a wide effect and it was important that, unless challenged within a limited time, no one should be able to impugn their validity. Since para 35 allowed a challenge to an order on the ground that any of the relevant requirements had not been met, it must have been contemplated that proper notice might not be given. It was irrelevant why notice had not been given. The effect upon aggrieved parties had been the same. Thus, even if bad faith had been established, it would not have overcome the ouster clause, which existed because of the importance of bringing certainty to the order: Smith v East Elloe Rural District Council [1956] AC 736; R v Secretary of State for the Environment, ex parte Ostler (1976) 238 EG 971; and R (on the application of Deutsch) v Hackney London Borough Council [2003] EWHC 2692 (Admin) considered.The court was prepared to assume without deciding the point that the making of a TRO engaged the claimant’s civil rights but, even if Article 6 of the ECHR applied, its very essence had not been impaired: De Geouffre de la Pradelle v France [1992] A253-B considered. However, the failure to comply with the procedural requirements of the regulations so that the claimant had been unaware of the existence of the TRO until it was too late to object to it provided a remedy. A declaration that procedural requirements had not been complied with would not challenge the validity of the order, but it would enable the claimant to apply to the defendants to modify it and, in effect, to consider the objections that would have been made. Since the defendants had been at fault, they had to consider properly any application to modify the TRO and had to bear the cost of any modifications that would have resulted had the objections been made at the material time. Paul Chaisty QC and Paul Tucker (instructed by Pannone LLP) appeared for the claimant; Stephen Sauvain QC (instructed by the legal department of Liverpool City Council) appeared for the defendants; Robert Palmer (instructed by the Treasury Solicitor) appeared for the second interest party; the first interested party did not appear and was not represented.Eileen O’Grady, barrister