London borough defeats legal challenge over grant of planning permission for major redevelopment

The High Court has this month rejected a legal challenge to Southwark Council’s grant of planning permission for a major redevelopment of a large site that includes the Elephant and Castle Shopping Centre.

Southwark had granted planning permission to developer Delancey for the scheme on 10 January 2019. It would comprise a range of buildings up to 35 storeys tall, providing a mix of uses including 979 residential units and accommodation for retail office, education, assembly and leisure uses along with a remodelling of the London Underground station at Elephant and Castle.

The claimant, Jerry Flynn, has lived in Southwark’s administrative area all of his life. He is a campaigner with a keen interest in housing issues who is a member of the “35% Campaign”, a group dedicated to ensuring the delivery of 35% genuinely affordable housing in new developments in areas such as that administered by the council.

The three grounds of claim in Flynn v London Borough of Southwark [2019] EWHC 3575 essentially all related to criticisms of the affordable housing provision which was ultimately approved, Mr Justice Dove said. They concerned:

1. A submission that the decision to grant planning permission was infected by an error of law based upon the contents of the officers’ report. The focus of the claimant’s contention was the text of paragraph 371 of the officers’ report in which they advised members that the improved offer of 116 social rented units was a proposal which “reflects GLA grant funding, recently confirmed, which has facilitated an increase in the number of social rented units from 74 to 116.” The claimant contended that this observation was both factually erroneous and also misleading. It was also said to be clear from the correspondence with the GLA that in fact grant funding for the housing had not been applied for, let alone been “recently confirmed”. Furthermore, an increased offer in the number of social rented units had not been facilitated by grant funding at all, Mr Flynn argued.
2. Whether or not the section 106 obligation that was ultimately concluded was properly within the scope of the officers’ delegation.
3. The provisions in place in respect of the review mechanism were the Interested Party, Elephant and Castle Properties Co Limited, to choose to deliver the west site as a build to sell development. The claimant disputed the calculation on how many habitable rooms should be provided, arguing that there should be 49 rather than 15.

On ground 1 Mr Justice Dove said he was not satisfied that the officers’ report, when read as a whole including the addendums to it, materially misled members in relation to the question of whether or not grant funding for the increased affordable housing offer of 116 social rented units had been secured.

“True it is, as was conceded in the Defendant’s submissions, that paragraph 371 of the officers’ report was not framed with sufficient care. This concession was correctly made in the light of the fact that it refers to ‘GLA grant funding, recently confirmed, which has facilitated an increase in the number of social rented units from 74 to 116.’ In truth, as the correspondence establishes, grant funding had not been confirmed nor did that grant funding facilitate the increase in the offer of social rented units,” the judge said.

However, Mr Justice Dove said the officers’ report must be read as whole, including in particular the two addendum reports which were provided to supplement the original officers’ report. “When the addendum report and the officers’ report are read as a whole, whatever impression may have been created by paragraph 371 is, in my view, undoubtedly corrected by the further information provided in the addendum no. 1 to the officers’ report. In particular paragraph 11 of the addendum no. 1 to the officers’ report made clear that there was merely ‘an agreement in principle for grant funding from the GLA’. That position was further reinforced in paragraph 23 of the addendum no. 1 to the officer’s report.”

The judge said it would have been clear to members that grant funding had not been confirmed and thus the confirmation of grant funding was not what had facilitated the improved offer in relation to social rented units.

On ground 2, the judge said it was true that the solutions which were arrived at were not a literal reflection of paragraph 364 [of the officers’ report], in that they did not include for the provision of land and a substantial cash dowry to construct the social rented units. But he added that, in his judgment, that was not required in order to remain within the scope of the delegation granted by the members.

“Paragraph 364 read alongside the other aspects of the officers’ report, including the resolution, authorised the officers to secure a section 106 obligation which ensured that in the event of a failure to commence the west site triggering the obligation relating to non-delivery of the social rented units, the social rented units could be constructed through requirements in the obligation to provide both land and money or money’s worth to secure that delivery. I am thus not satisfied that the Claimant’s contentions in relation to the section 106 obligation being outwith the delegation authorised are well founded,” Mr Justice Dove concluded.

The judge also rejected the claimant’s contentions in relation to the third ground. He said: “There is no doubt that the conclusion that options 2 and 3 [which were set out in the s106 agreement in relation to the failure to complete the west site within 10 years of commencement of the east site] were fit to achieve the purpose of ensuring that the affordable housing was constructed required the exercise of professional development valuation judgment: there is in my view nothing in the Claimant’s redeployment of figures taken from the development appraisal (which is effectively a snap-shot in time to inform wider judgments) which supports the contention that the judgment reached by the Defendant was inappropriate or that the chosen mechanisms were outside the scope of the resolution of the members.”

He added that the context rendered the claimant’s task in seeking to demonstrate that what had been agreed exceeded the authority given by members to officers particularly difficult, if not impossible. “The officers were clearly left with a discretion as to the detailed mechanism for and product of the review.”

Mr Justice Dove said he was satisfied that whilst each of the claimant’s grounds were properly arguable and permission to apply for judicial review should be granted, he was not satisfied that in substance they should succeed. “It follows that, in the result, the Claimant’s claim must be dismissed.”

Responding to the ruling, Cllr Johnson Situ, cabinet member for development, growth and planning at Southwark, said:  “This decision means work can now begin to deliver a new home for the London College of Communications and a new Northern Line station with escalators, which TfL has stated is urgently needed to combat overcrowding. New homes, jobs and leisure facilities such as space for a cinema and a new live music venue have also been outlined as part of our ambitions to revitalise the Elephant and Castle.

“More immediately, this brings to an end a period of uncertainty for traders and we will continue to work with the businesses to support them and help them not just find a new home but also grow and thrive in it. However we recognise the concerns raised by some local people about aspects of the regeneration, and I would like to assure them, and the whole community, that we will continue to work with our residents, businesses and the developers to ensure no one is left behind.”

Paul Heron, solicitor from the Public Interest Law Centre, said: “Along with our client and local campaigners we are disappointed by this judgment. In our view the Court in this judgment has been far too forgiving of the advice that officers provided to the councillors which led to planning permission being granted.

“We will be studying the judgment carefully, and we would not rule out a challenge to the Court of Appeal.”

Jerry Flynn of Up the Elephant said: “We are naturally disappointed that the court has not found in our favour. We will be looking at the judgment very carefully with our lawyers and then deciding our next step, including the possibility of appeal.”