R (on the application of Galaxy Land Ltd) v Durham County Council

Local authority – Disposal of land – Section 123 of Local Government Act 1972 – Claimant property developer applying for judicial review of decision of defendant local authority to dispose of land as surplus to requirements – Whether defendants failing to take account of material considerations – Whether defendants erroneously failing to recognise playing fields as open space and failing to follow statutory procedure – Application granted The defendant local authority owned land at Sniperley Park, Durham comprising 37.87 acres in four different parcels, one of which formed a nature area. The defendants identified eight sites around Durham which could be released for housing, including the Sniperley Park site, which was green belt and situated to the north west of the city. Private owners of the land were persuaded to form a limited liability partnership (LLP1) for the purpose of promoting land in the area for residential development and to enter into option agreements granting options to LLP1 over their individual land holdings. The defendant local authority was not a member. The members of LLP1 and two further companies entered into LLP2 under which land owned by those companies was optioned to LLP2. The defendants subsequently entered into three agreements: (i) a deed of adherence under which they became members of LLP2; (ii) an option agreement under which they granted an option in respect of the transfer of their land in Sniperley Park; and (iii) a deed of variation of the option agreement granting further option in respect of the playing fields. The defendants subsequently decided to dispose of their land at Sniperley Park as surplus to requirements under their emerging county development plan. The claimant was a property developer and the registered freehold proprietor of land in the relevant area and a member of LLP1. It applied for judicial review of the defendants’ decision to dispose of their land at Sniperley Park including certain school playing fields, as surplus to requirements, under section 123 of the Local Government Act 1972. It contended that: (i) the exercise of the defendants’ power to dispose of the land was unlawful because they had failed to have regard to material considerations; and (ii) the defendants had failed to recognise that the playing fields were open space within section 336 of the Town and Country Planning Act 1990 and, consequently, failed to follow the procedure required by section 123(2A) of the Local Government Act 1972. Held: The application was granted. (1) Under section 123 of the Local Government Act 1972, the grant of an option to purchase was a disposal of land. Ordinarily a decision of a council to sell land was a private law matter, not amenable to judicial review, except where there was a public law element to the decision-making process. An attempt to give effect to planning policy or objectives was sufficient to inject a public law element into a decision. The fact that a local authority was exercising a statutory function ought to be sufficient to justify the decision itself being subject in principle to judicial review if it was alleged that the power was being abused. In the circumstances of the present case, there was a public law element to the disposal: Trustees of the Chippenham Golf Club v North Wiltshire District Council [1991] 64 P&CR 527; [1991] EGCS 135, R v Bolsover District Council, ex parte Pepper [2000] 3 LGR 20; [2000] PLSCS 200 and R (on the application of Molinaro) v Royal Borough of Kensington and Chelsea [2001] EWHC (Admin) 896 considered. (2) Section 123(2) of the 1972 Act was directed at outcome. A disposal of council land had to obtain the best price reasonably obtainable and the section did not impose a duty to conduct any particular process and did not require valuation evidence. However, in the present case, the defendants’ cabinet had not been provided with the necessary information so that they could take into account obviously relevant considerations. While section 123 did not require any particular process, a purported discharge of a duty under the section could be impugned on ordinary public law principles. The cabinet did not need to be appraised of everything which was within the knowledge of the officers who were there to digest material and to bring to bear their expertise, which the cabinet members would not have. The cabinet could rely on the officers’ fair summary of relevant matters and their balanced evaluation of the implications. If the officers had given proper consideration to different arguments and then come to a conclusion, there was no necessary error should the report not refer to the different contentions. In the light of the evidence before the court, it was too simple to say the defendants’ land was landlocked. The strategic nature of the defendants’ landholding was an obviously relevant consideration which on the evidence was not considered by the officers and thus not fed through to the cabinet. Consequently, the cabinet decision was flawed: R (on the application of Salford Estates) v Salford City Council [2011] EWHC 2135 (Admin), [95] and R (on the application of Midlands Co-operative Society Ltd) v Birmingham City Council [2012] EWHC 620 (Admin) applied. (3) The evidence of public use of the playing fields was such as to constitute a bare licence and the defendants were obliged to follow the procedure required by section 123(2A), unless reasonable notice of termination had been given and had expired. Moreover, the defendants had 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 had already been in existence at the time of the decision to enter the agreements. The failure to publicise that intention before the agreements were entered into meant that it would not be possible for the defendants to consider any objections to the proposed agreement under the section: R v Doncaster Metropolitan Borough Council, ex parte Braim (1989) 57 P & CR 1 applied. Robin Purchas QC and Mark Westmoreland Smith (instructed by TWM Solicitors LLP) appeared for the claimant; Richard Drabble QC (instructed by Durham County Council) appeared for the defendants. Eileen O’Grady, barrister Read a transcript of R (on the application of Galaxy Land Ltd) v Durham county council here