Standard Commercial Property Securities Limited+standard Commercial Property Developments Limited V. Glasgow City Council+atlas Investments Limited For Judicial Review Of Decisions Of Glasgow City Counil
| Jurisdiction | Scotland |
| Judge | Lady Paton |
| Date | 01 June 2004 |
| Docket Number | P1082/03 |
| Court | Court of Session |
| Published date | 01 June 2004 |
| OUTER HOUSE, COURT OF SESSION | |
| P1082/03
| OPINION OF LADY PATON in the petition of (FIRST) STANDARD COMMERCIAL PROPERTY SECURITIES LIMITED AND (SECOND) STANDARD COMMERCIAL PROPERTY DEVELOPMENTS LIMITED Petitioners; against (FIRST) GLASGOW CITY COUNCIL AND (SECOND) ATLAS INVESTMENTS LIMITED for Judicial review of decisions of Glasgow City Council dated 10 April 2003 relating to the use of compulsory purchase powers at Buchanan Street/Bath Street/West Nile Street, Glasgow Respondents: ________________ |
Petitioners: Currie, Q.C., J. Mure, Advocate; Semple Fraser W.S.
First Respondents: Sir Crispin Agnew, Q.C., Cowie, Advocate; Gill Lindsay, Acting Council Solicitor
Second Respondents: Hodge, Q.C., Borland, Advocate; Russel and Aitken
1 June 2004
Compulsory purchase for redevelopment
[1]There is a prime site in the centre of Glasgow at Buchanan Street/Bath Street/West Nile Street. It is badly in need of redevelopment. As one developer put it:
"The site is an eyesore that clearly requires urgent and comprehensive remediation."
Glasgow City Council agree. They wish to see the site redeveloped. But they face various difficulties. One is the multiplicity of owners and tenants, each with different views and interests. It has proved impossible to co-ordinate them. Accordingly one matter which is not in dispute in the present case is the need for the City Council to acquire the site by compulsory purchase to enable redevelopment to take place.
Relevant statutory provisions
[2]The City Council are empowered by section 189(1) of the Town and Country Planning (Scotland) Act 1997 to carry out a compulsory purchase of land which -
"... (a)is suitable for and is required in order to secure the carrying out of development, redevelopment, or improvement;
(b)is required for a purpose which it is necessary to achieve in the interests of the proper planning of an area in which the land is situated ..."
[3]Section 189(2) provides that when considering whether land is suitable for development, redevelopment or improvement, the local authority should have regard inter alia to "whether planning permission for any development on the land is in force".
[4]Section 189(4) entitles the local authority compulsorily to acquire land for the purpose of redevelopment where the redevelopment is to be carried out by others, such as private developers.
[5]Section 201 provides inter alia that any reference in Part VIII (sections 188 - 201) of the 1997 Act to the acquisition of land for planning purposes is a reference to the acquisition thereof under section 189 of the Act.
[6]Section 191 of the 1997 Act provides:
"(1) Where a planning authority -
(a)has acquired or appropriated any land for planning purposes, and
(b)holds that land for the purposes for which it was so acquired or appropriated,
the authority may dispose of the land to such person, in such manner and subject to such condition as may appear to them to be expedient for the purposes mentioned in subsection (2).
(2) Those purposes are to secure -
(a)the best use of that or other land and any buildings or works which have been, or are to be, erected, constructed or carried out on it, whether by themselves or by any other person, or
(b)the erection, construction or carrying out on it of any buildings or works appearing to them to be needed for the proper planning of their area.
(3)Subject to the provisions of subsection (7) [relating to persons living or carrying on business on the land], any land disposed of under this section shall not be disposed of otherwise than at the best price or on the best terms that can reasonably be obtained ..."
Financing compulsory purchase: back-to-back agreements
[7]Despite having the power to effect a compulsory acquisition, the City Council do not have the funds. If the Council were to spend funds on a compulsory purchase of the site, including claims for compensation, disturbance, expenses, and severance payments, and if no developer then showed an interest in the site, the Council would risk losing sums which they could ill afford.
[8]The Council's solution to financing was to try to obtain the commitment of a private developer (or developers) at a stage prior to the compulsory purchase of the site. The Council accordingly sought to identify a suitable developer or developers who would enter into a contractual commitment with them in the form of a back-to-back agreement. In that agreement, the Council would undertake to dispose of the land compulsorily acquired to the developer(s) for the purpose of the development, and the developer(s) would undertake to indemnify the Council of all costs arising as a result of the compulsory purchase.
Procedure for selection of developer(s)
[9]At an early stage in the history of the Buchanan Street/Bath Street/West Nile Street site, a challenge was made to the use of back-to-back agreements in anticipation of compulsory purchase. Lord Nimmo-Smith ruled on the matter on 15 August 2000, reported as Standard Commercial Property Securities Limited v Glasgow City Council, 2001 S.C. 177. In particular, he observed:
"[42] ... Section 189(4) makes it clear that the power under subsection (1) [compulsory acquisition for planning purposes] may be exercised even where the local authority propose that another person is to undertake the activity or achieve the purpose; ... Subsection (4) does not expressly authorise a local authority to enter into an agreement, such as a back-to-back agreement, with the other person. In my opinion authority to do this must be sought elsewhere, and is to be found in section 191. There is an obvious correlation between sections 189 and 191 by virtue of the definition in section 201 of the expression "planning purposes" in the latter by reference to the former. It does not appear to me to be a sound objection to reliance on section 191 that subsection (1) only authorises disposal of land which has both been acquired (or appropriated) and is held by the local authority. No doubt this would apply to land which has been held for some time but is found not to be required for the purpose for which it was originally acquired and is thus available for disposal as being surplus to requirements. But land may properly be described as being held by a local authority as soon as it is vested in them by virtue of a general vesting declaration following upon procedure for compulsory acquisition, and in my opinion section 191 applies as soon as the land has vested in the local authority. In considering whether to dispose of the land, however, the local authority would have to consider what manner of disposal, and what conditions to which it should be made subject, may be expedient for the purposes mentioned in subsection (2), which include the best use of the land and the erection on it of buildings appearing to them to be needed for the proper planning of their area. Section 191(3) does not prohibit such a disposal otherwise than at the best price that can reasonably be obtained. The expression in that subsection is "otherwise than at the best price or on the best terms that can reasonably be obtained" (my emphasis). It would therefore be for the local authority to consider not only the price (as related inter alia to the amount of compensation payable under the compulsory purchase procedure) but also the terms offered by any person to whom the disposal might be made. These terms would include those which would be most conducive to achievement of the purposes set out in subsection (2), and would thus include matters such as the likely ability of the person, on the basis, for instance, of past experience and financial soundness, to carry the development through to completion. Moreover, subsection (3) is subject to the provisions of subsection (7), so that consideration might require to be given to the interests of those who were carrying on business on the land and desired to continue to do so.
[43] Read together, sections 189 and 191 appear to me to provide a statutory framework within which a local authority may decide to acquire land compulsorily and to sell it to a developer under a back-to-back agreement, provided that proper account is taken of all the considerations I have mentioned, particularly the planning purposes in section 189(1). I thus reject the submission for Standard (which was in any event, as I understood it, departed from) that a decision to enter into a back-to-back agreement cannot competently be made at the same time as a decision compulsorily to acquire the land in question. I also reject the submission for the Council that the authority for the entering into a back-to-back agreement is to be found in section 189(4) and that section 191 has no application for this purpose. I accept the submission for Atlas as to the provisions of sections 189 and 191 which give rise to the exercise of a discretion. I prefer, however, to express this as a single, composite discretion rather than one to be exercised in stages, as I understood counsel for Atlas to submit. The over-riding consideration for the local authority, as it appears to me, is whether acquisition of the land by them and its development by the developer with which a back-to-back agreement is to be entered into are reasonably necessary for planning purposes ..."
[10]Accordingly the Lord Ordinary's judgement gave guidance as to the sort of matters which might appropriately be considered in any evaluation of developers' proposals - for example, financial soundness and experience of developments, bearing in mind the importance of having the development concluded timeously and successfully.
City Council's Framework
[11]As a direct consequence of Lord Nimmo-Smith's judgement, the Council's Development and Regeneration Services Committee approved a protocol dated 12 October 2000, entitled "Framework for the use of compulsory purchase powers and back-to-back agreements with developer(s) under the Town and...
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