Time to reconsider the asset register
A High Court judge recently considered whether a council had undertaken the appropriation process correctly. Antonia Murillo reports on the outcome.
Many councils will be in the process of updating their Asset Registers with a view to identifying liabilities and/or land with potential development value with a view to a sale. As creatures of statute, such disposals need to take into account not only the statutory powers of sale but also the council’s powers of appropriation. Often, by the time the principle of sale has been obtained by way of Cabinet, Committee or full Council, and a decision to proceed with the sale is made, it is may be too late to consider the issue of appropriation and obtain certain protections which the appropriation process can give[1].
It is fairly common practice that development agreements for the sale of land are entered into subject to the grant of a satisfactory planning permission, no applications to register land as a Town and Village Green (TVG) and latterly, subject to no applications to list the land or property as an Asset of Community Value (ACV). It is also possible that during the property transaction, appropriation by the council as landowner from one statutory purpose to another becomes crucial. One such case highlighting the need to consider appropriation has been reported which shows how crucial this can be.
The case of R (oao) Goodman v Secretary of State for Environment, Food and Rural Affairs [2015] EWHC 2576 concerns council owned land, the making of a TVG application and a decision of the Inspector whether appropriation for the land to the use for open space had been properly made. If appropriation had been undertaken correctly, the TVG application would fail as the use by a significant number of inhabitants of a locality, or a neighbourhood within a locality for lawful sports and past times (for a period of 20 years) would be deemed to be “by right” rather than “as of right” as required by a Section 15(2) Commons Act 2006. Alternatively, if the appropriation process by the council had not been undertaken correctly, the TVG claim would succeed and the land would remain as open space for public use. It would also mean the land would not then be available for development.
The TVG application was considered by way of public inquiry. The Inspector decided on the evidence that there was confusion about how the land had been held by the council in the 1990’s and there appeared to be no evidence of a formal decision to use some of the land in question temporarily as open space until it was needed for industrial development; the land was not listed as open space in the Asset Register however, the Inspector found that appropriation could be implied from certain Acts e.g. the laying of a the cycleway over the land (it also appear that appropriation could be implied by certain omissions). As a result, the TVG application was refused on the basis that use was “by right”. An application for a judicial review was made to quash the Inspector’s decision and the claim proceeded on two grounds:
1. reliance could not be placed upon the inference of re-appropriation by the council; and
2. failure to have regard to public ownership of the land and the nature and quality of the events held upon the land.
The judgment reviews sections 120 and 122 of the Local Government Act 1972 and the key features of the appropriation process namely:
1. Section 122(1) did not set out prescribed steps of the procedure required when a council appropriated land from one power and purpose to another;
2. A council will have to consider and determine that it no longer requires the land for the purpose for which it was holding the land up to the point of appropriation (or re-appropriation);
3. Where land is held as open space there is a prescribed statutory process to be followed as set out Section 122(2)A.
Mr Justice Dove held that for Section 122 to be satisfied, there must be some “conscious deliberative process so as to ensure that the statutory powers under which the land is held is clear and appropriation from one use to another cannot, in my view, be simply inferred from how the council manages or treats the land”[2]. The application for judicial review was successful and the Inspector’s decision was quashed.
This is a useful reminder to look behind the custom and practice in relation to publically held assets and land and to ensure that they are held by those bodies correctly for stated purposes. Such a review should minimise risks of challenge which can cause delay or prevent a sale of land or buildings but whilst also identifying those assets or land which may not be developed or disposed of by public bodies.
Antonia Murillo is an Associate at Bond Dickinson. She can be reached on 0191 279 9024 or This email address is being protected from spambots. You need JavaScript enabled to view it..