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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> McDonald v Decision of the Scottish Ministers [2008] ScotCS CSOH_6 (16 January 2008)
URL: http://www.bailii.org/scot/cases/ScotCS/2008/CSOH_6.html
Cite as: [2008] ScotCS CSOH_06, [2008] CSOH 6, [2008] ScotCS CSOH_6

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OUTER HOUSE, COURT OF SESSION

 

[2008] CSOH 6

 

 

 

 

 

 

 

 

 

 

 

 

 

OPINION OF LORD MENZIES

 

in the application to the Court of Session

under the Town and Country Planning (Scotland) Act 1997, Sections 237 and 239

 

by

 

JAMES McDONALD

 

Applicant;

 

against a decision of the

Scottish Ministers

 

 

 

­­­­­­­­­­­­­­­­­________________

 

 

 

Applicant: Party

First Respondents (The Scottish Ministers): Mure; M. Sinclair, Office of the Solicitor to Scottish Executive

Second Respondents (Sanctuary Scotland Housing Association): Simpson; Paull & Williamsons

 

16 January 2008

Introduction

[1] This application relates to a proposal for the redevelopment of social housing in the Anderston area of Glasgow. There are approximately 495 flats which are the subject of the proposal. Most of these were constructed in the 1960s. After 1988, title to these properties was held by Scottish Homes, which let them out to individual tenants as social housing. Thereafter, title was transferred to the second respondents, Sanctuary Scotland Housing Association ("Sanctuary") and in July 2005 they submitted an application for outline planning permission to Glasgow City Council for the demolition of the existing 495 units and the erection of a new residential development for social housing in five phases. This application was considered by the council's Development and Regeneration (Development Applications) sub-committee on 2 March 2006, and on 9 March 2006 Glasgow City Council issued a notice of refusal of outline planning permission. On 6 April 2006, the applicant registered title to a garage at 57 Grace Street, Glasgow, which is within the area covered by the proposals. By notice dated 5 June 2006, Sanctuary appealed to the Scottish Ministers under Section 47 of the Town and Country Planning (Scotland) Act 1997 against Glasgow City Council's refusal of permission. In August 2006, Mr Ronald W. Jackson was appointed by the Scottish Executive Inquiry Reporters Unit to determine Sanctuary's appeal. By statement dated 25 October 2006, the applicant intimated his intention to address the reporter on certain preliminary issues. The reporter held a public local inquiry into the appeal on 9 and 10 November 2006, and by decision letter dated 11 January 2007, he intimated his decision to allow the appeal.

[2] The applicant questions the validity of the reporter's decision. He does so on four stated grounds of appeal. There is some degree of overlap between these grounds of appeal, but they raise essentially the same points as were raised by the applicant before the reporter at the public local inquiry. Stated shortly, they are (1) that the Scottish Ministers were prevented from considering the appeal because of the maxim "nemo debet esse judex in propria causa"; (2) that the Scottish Ministers were prohibited from considering the appeal by their being a party to the application; (3) that the reporter erred in law by not sustaining these arguments when they were put to him at the public local inquiry; and (4) that the applicant's right to a fair and impartial hearing before an independent and impartial tribunal in terms of Article 6(1) of the European Convention on Human Rights was breached.

 

Background

[3] Scottish Homes was established by the Housing (Scotland) Act 1988. Schedule 1 to that Act provided inter alia that Scottish Homes should be a body corporate with a common seal, that it should not be regarded as a servant or agent of the Crown, and its property should not be regarded as property of, or held on behalf of the Crown. Although its members were appointed by the Secretary of State for Scotland (and latterly by the Scottish Ministers), it was a separate legal persona. By the Housing (Scotland) Act 2001, provision was made for the transfer of the functions of Scottish Homes to the Scottish Ministers and for the subsequent dissolution of Scottish Homes. Transitional provisions were made with effect from 1 November 2001, and on that date, a new executive agency of the Scottish Ministers called Communities Scotland was created as a housing and regeneration agency for Scotland.

[4] As narrated above, title to 495 flats in the Anderston area of Glasgow was held by Scottish Homes; these flats were let out to tenants as social housing. In 2003 the Anderston Tenants and Residents Association selected Sanctuary as their preferred new social landlord. By a Minute of Agreement dated 27 June 2005, Scottish Homes sold all the flats to Sanctuary. By a separate Grant Funding Agreement of the same date between Sanctuary, Sanctuary Housing Association and the Scottish Ministers acting through Communities Scotland, arrangements were agreed for the financing by the Scottish Ministers, through Communities Scotland, of the proposed demolition of the existing flats and construction of new housing. This Grant Funding Agreement included provision for a phased programme of works and a profile of funding payments over a 5 year period. Clause 4 of the Grant Funding Agreement was headed "Grant for the Works" and provided as follows:

"4.1 Communities Scotland shall ensure that the Grant is made available to the Association following approval of the project proposals referred to in clause 4.2. Communities Scotland shall ensure that any approvals shall not be unreasonably withheld or granted subject to unreasonable conditions. The total Grant for the Works and the Owner/occupiers Repurchase shall not exceed 39,543,506 ("the total Grant"), payable over the period of the Programme. In the event that the Programme is altered in terms of the Agreement or otherwise by agreement between the Parties, the total Grant will be recalculated by Communities Scotland and may be reduced.

4.2 Prior to the Works Commencement Date the Association shall submit project proposals in relation to the Works to Glasgow City Council.

4.3 The offers of Grant shall be in the form of the standard HAG Offer and the following additional conditions

(a) The obligation on the Association to re-house all of the Existing Tenants of the demolished Houses prior to letting houses to new tenants; and

(b) preserving the right to buy of the tenants of Scottish Homes as at the date of the Agreement of the demolished Houses.

4.4 Where insufficient numbers of Owner/occupiers agree to transfer their properties to the Association to allow the demolition and replacement of the tenanted Houses to take place, the Parties will agree a revised Programme and the amount of Grant will be adjusted accordingly.

4.5 Communities Scotland shall ensure that the Grant is paid to the Association in accordance with the payment profile agreed between the Parties and forming Part 2 of the Schedule annexed hereto. In so far as Grant has not been drawn down up to the relevant annual maximum amount specified in Part 2 of the Schedule annexed hereto then the shortfall shall be available for drawing in subsequent years, subject to compliance at that time with the other provisions of this Agreement and with the standard conditions of the HAG offer on the basis that the total Grant paid does not exceed 39,543,506."

[5] After Sanctuary applied to Glasgow City Council for outline planning permission for the proposal, the Director of Development and Regeneration Services prepared a report to the Development and Regeneration (Development Applications) sub-committee dated 20 January 2006 (No. 7/6 of process), which recommended the granting of outline planning permission subject to conditions. Included in this report (at page 6) was the following passage:

"In terms of 'use of public funds' it is stressed that the Association's proposals have been subject to rigorous technical and financial scrutiny by Communities Scotland. A Grant Funding Agreement between the Association and the Scottish Ministers was entered into in June 2005."

In the conclusion of the report, it was noted that "the proposed redevelopment has been approved by both Scottish Homes and Communities Scotland and Sanctuary Scotland Housing Association has carried out extensive public consultation on their plans through a secret ballot, preparation of a master plan, publicity brochures, an open day meeting and regular working groups ..."

[6] Notwithstanding the recommendation for approval contained in the Director's report, Glasgow City Council refused planning permission for the following reason:

"The proposed demolition has not been adequately justified and would be detrimental to the amenity of the surrounding, established, residential area."

[7] Sanctuary appealed to the Scottish Ministers against this refusal, and Mr Ronald Jackson was appointed as reporter to determine this appeal. His letter of appointment was subject to conditions contained in a schedule attached to it. These included the following conditions:

"1. In determining this case, or in making a recommendation to Scottish Ministers for their decision, you appointed (sic) as an independent contractor and not as the servant, agent or employee of the Scottish Ministers.

2. In determining the procedural aspects of the case you must comply with all relevant legislation and guidance issued by the Inquiry Reporters Unit ...

9. You shall have duties of confidentiality and loyalty to the Crown in respect of this case. These require you to exercise care in the use of information which you acquire in the course of dealing with this case and to protect information which is held in confidence. You will be subject to the Official Secrets Act 1989."

[8] The applicant addressed the reporter in support of his statement (No. 7/9 of process) which raised the preliminary issues noted above and made reference to legislation, authorities and the report by the Director of Development and Regeneration Services. The reporter's determination is contained in the decision letter dated 11 January 2007. He recorded the applicant's submissions at paragraph 24 of the decision letter, and explained his conclusions at paragraph 26. He rejected the applicant's submissions. His reasons for doing so may be summarised as follows: The authorities on which the applicant relied referred to judicial proceedings which are different to a planning appeal which is an administrative quasi judicial process, and these cases had no relevance to the matters before him. Moreover, he had a statutory duty to determine the appeal and conduct the public inquiry in accordance with the statutory rules; it was not for him to take a decision as to whether the legislation was flawed. The applicant was adequately protected by his right to challenge the decision in this court.

 

Submissions for the Applicant

[9] The applicant submitted that it was trite law that no one can be a judge in his own cause. In support of this, he referred me to two well known authorities: R v Bow Street Metropolitan Stipendiary Magistrate and Others ex parte Pinochet Ugarte (No. 2) [1999] 1 All ER 577, particularly at pages 585 and 586; and Dimes v The Proprietors of the Grand Junction Canal [1852] 3 HLC 759. The terms of clause 4.1 of the Grant Funding Agreement obliged Communities Scotland (i.e. the Scottish Ministers) to ensure that any approvals shall not be unreasonably withheld. This suggested an obligation on the Scottish Ministers to have contact with Glasgow City Council regarding approvals, including planning approvals. An application for planning permission should be determined on its merits, and the Scottish Ministers should not influence the determination. By the date of the application for planning permission, the assets of Scottish Homes had been transferred to the Scottish Ministers. When one looked at Sanctuary's Master Plan, and the passage in the Director's report quoted above, one could reasonably infer that the Scottish Ministers were truly a party to the application. They had a financial involvement by reason of the Grant Funding Agreement, and they had persuaded Sanctuary to take over these properties from Scottish Homes. They were pursuing a policy to advance and favour the proposal.

[10] In support of his submission that the reporter erred in law in rejecting the applicant's arguments before him, the applicant referred me to R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2003] 2 AC 295. The applicant stated that he asked the reporter if he was able to entertain legal submissions, and the reporter said that he was able to do so.

The reporter claimed to be independent of the Scottish Ministers, and clause 1 of the schedule to his letter of appointment appeared at first sight to support this. However, clause 9, which required the reporter to have a duty of loyalty to the Crown, negated this. The Scottish Ministers were to be regarded as the Crown for this purpose - see Scotland Act 1998, section 99; M v Home Office [1993] 3 All ER 537. The reporter therefore owed a duty of loyalty to the Scottish Ministers, and was not an independent and impartial tribunal. The applicant pointed out that he did not have to prove actual bias on the part of the reporter; all that was necessary was that a reasonable man might have a suspicion in the whole circumstances that there was a chance, however remote, of bias on the reporter's part. He reiterated that no one should be a judge in his own cause, and the reporter should be as distant from the subject-matter of the application as possible. Looking at the whole circumstances and in particular the Grant Funding Agreement and the schedule to the reporter's letter of appointment, the reporter was not sufficiently distant from this application.

 

Submissions for the Scottish Ministers
[11] Counsel for the Scottish Ministers submitted that, properly construed, the Grant Funding Agreement was not concerned in any way with planning permission, but was simply concerned with the mechanism by which central Government funds were released to finance Sanctuary's development proposal. It was clear from clause 8 (and indeed from the terms of the whole Agreement) that funds from the Scottish Ministers were channelled through Glasgow City Council, who had assumed responsibility for the administration of Housing Association Grant. That is why clause 4.2 required Sanctuary to submit proposals to Glasgow City Council, and the approvals in clause 4.1 related to funding approvals. If the approvals envisaged in clause 4.1 had related to planning permission, one would expect the clause to provide that planning permission would not be refused; there was no reference to planning permission in the Agreement, because the Agreement had nothing to do with planning permission. The fair-minded and informed observer would know that Communities Scotland cannot deliver any particular result from a planning application made to a local authority; the applicant's interpretation to the contrary was startling.

[12] Counsel did not shrink from the fact that the Scottish Ministers had been involved in discussions as to how this area might be redeveloped and improved - this was clear from the Master Plan (No.7/5 of process) and from the report from the Director of Development and Regeneration Services. The Scottish Ministers were not themselves applying for planning permission, and there was nothing sinister in their involvement.

[13] With regard to the reporter's position, counsel did not suggest that he was wholly independent of the Executive - the Scottish Ministers appointed him and could recall his appointment. (The reason that it was made clear in clause 1 of the schedule to his letter of appointment that he was not an employee of the Scottish Ministers was for reasons of employment law. The reason for clause 9 was solely to maintain confidentiality.) With regard to the specific grounds for the present application, there was no merit in ground 2 (i.e. that the Scottish Ministers were a party to the application and so prohibited from considering any appeal on it). Although the applicant made reference in this ground to the minutes of the hearing of 2 March 2006, there was no mention at all in those minutes of the Scottish Ministers, nor was there anything to support the suggestion that the Scottish Ministers were a party to the application.

[14] Counsel submitted that the test for considering grounds 1 and 4 was the same - "the question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased." - Porter v Magill [2002] 2 AC 357 per Lord Hope of Craighead at 494; [2001] UKHL 67 at para.103. The law of Scotland before the introduction of the European Convention on Human Rights was accurately stated in London and Clydeside Estates Ltd v Secretary of State for Scotland 1987 S.L.T. 459 and City of Glasgow District Council v Secretary of State for Scotland (No.1) 1993 S.L.T. 198. On this basis, the applicant's arguments failed - in the present case, the involvement of Scottish Homes in discussing the Master Plan, and of Scottish Ministers in providing funding for social housing, was no greater (and was in fact less) than the involvement of the Secretary of State in those cases. Moreover, there was nothing to suggest that the individual reporter in the present case had any connection with any of the parties to the appeal. Government often had a peripheral involvement in developments - for example, industrial development where a company is only applying for planning permission because it has been offered Government grants, or National Health Service developments or roads proposals. The case of R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions (supra) contained examples where the Secretary of State's involvement was considerably greater than that of the Scottish Ministers in the present case. Alconbury concerned applications in which the Secretary of State's department had direct pecuniary interest, where land which was subject to development proposals belonged to Government departments (e.g. the Ministry of Defence and the Highways Agency) and where the decision was called in and was to be made by the Secretary of State himself. These decisions were still not held to be incompatible with Article 6(1), because of the power of the High Court in judicial review proceedings to review the legality of the decision and the procedures followed. Alconbury was a more extreme case than the present - here the decision was the reporter's and not that of the Scottish Ministers themselves. Any involvement of the Scottish Ministers took place before the planning application was made to Glasgow City Council. The applicant was not suggesting that this application to the Court of Session was inadequate to cure any lack of independence of the reporter.

[15] With regard to the third ground, the reporter was correct to reach the view that he did with regard to the applicant's objections. He was bound by the Town and Country Planning Appeals (Determination by Appointed Person) (Inquiries Procedure) (Scotland) Rules 1997, and the applicant had the remedy of this application to the Court of Session. For all these reasons counsel invited me to refuse the application.

 

Submissions for Sanctuary
[16
] Counsel for Sanctuary adopted in full the submissions made on behalf of the Scottish Ministers. As the applicant accepted the Alconbury decision as up-to-date law, this was determinative of the present proceedings. The interpretation of clause 4.1 of the Grant Funding Agreement urged by the Scottish Ministers was to be preferred to that urged by the applicant. Support for this was to be found from the fact that after Glasgow City Council refused Sanctuary's application for planning permission, Sanctuary did not sue the Scottish Ministers for breach of their (alleged) obligation to ensure that planning permission was not unreasonably withheld, but instead lodged an appeal against that refusal in accordance with the statutory procedures. Having regard to the context of the Grant Funding Agreement, it was inconceivable that Scottish Ministers would enter a contractual obligation which would have the effect of allowing any appeal to them from a refusal of planning permission by Glasgow City Council. However, counsel submitted that however clause 4.1 of the Grant Funding Agreement was construed, the matter was largely academic, because the present application was ill-founded as a result of the Alconbury decision.

 

Reply by the applicant
[17
] The applicant submitted that clause 4.1 went beyond mere funding approvals and extended to planning approvals. This was clear from a comparison between clause 4.1 and clause 4.5. The latter related to phasing of the development and approval of the release of funds, and the approvals referred to in the former must be something different. The whole basis of the Grant Funding Agreement was conditional on planning permission being granted for the project proposals. Grant Funding was put in place in order for the project proposals to take place, provided that planning permission was granted for them. This interpretation accorded with the recommendation of the Director in his report - "Grant subject to conditions".

[18] With regard to Alconbury, the applicant maintained that the Scottish Ministers have throughout pursued a policy objective of their own in this matter. They abdicated their responsibilities as landlords of these properties to Sanctuary, by Communities Scotland promoting and funding a change of landlord. This involvement was, the applicant maintained, greater than the involvement of the Secretary of State in Alconbury. The reporter should have disclosed his obligation of loyalty to the Scottish Ministers imposed on him by clause 9 of his letter of appointment. He reiterated that the Scottish Ministers were in effect judges in their own cause, and their actings were contrary to the statements of law set out in the Dimes and Pinochet cases. He invited me to reduce the decision of the reporter.

 

Discussion
[19
] The Scottish Ministers were not directly involved as a party to Sanctuary's application for planning permission. Scottish Homes appear to have supported the principle of the proposed development, and the Scottish Ministers were prepared, through Communities Scotland and Glasgow City Council, to provide funding for the proposal. No doubt the proposal was consistent with the policies of the Scottish Ministers. However, the Scottish Ministers did not have a direct pecuniary interest in the granting of planning permission for this proposal. Their interest was substantially less than the interest of the Secretary of State in the various cases decided in Alconbury. Moreover, unlike the examples in Alconbury, the Scottish Ministers did not determine themselves Sanctuary's appeal against the refusal of planning permission; instead, the determination of this appeal was delegated to a reporter instructed by the Scottish Executive Development Department Inquiry Reporters Unit. That reporter required to follow the procedures set out in The Town and Country Planning Appeals (Determination by Appointed Person) (Inquiries Procedure) (Scotland) Rules 1997. He also required to comply with all relevant legislation and guidance. It is not suggested that the reporter was himself interested in the proposals or motivated by actual personal bias when reaching his decision.

[20] The applicant relied heavily in his submissions on observations in the House of Lords in the Dimes and Pinochet (No.2) cases. However, these were authorities dealing with the decisions of judges when acting in a judicial capacity. It was accepted by the applicant that the reporter in the present case was acting in an administrative capacity, albeit in a quasi judicial function. It must be borne in mind that not all the principles that apply to actings performed in a judicial capacity apply to administrative decisions. As Lord Caplan observed in City of Glasgow District Council v Secretary of State for Scotland (No.1):

"I would accept that there are certain rules of natural justice that are so fundamental that they would apply to a Minister carrying out an executive responsibility as much as to a tribunal with a more exclusively judicial role. The obligation to act bona fide is an example of one. However, in regarding the authorities quoted I think it could be misleading to equate a Government Minister making an administrative decision with a body which has a neutral adjudicative role. A Minister cannot be expected to abdicate from his statutory responsibilities ...".

As was held in London and Clydeside Estates Ltd v Secretary of State for Scotland, a Minister is not disqualified from exercising a quasi judicial function merely because of support for a particular policy so far as related to a particular development.

[21] The applicant argues that, against the background of support for the development proposal from Scottish Homes and thereafter Communities Scotland, the terms of clause 4.1 of the Grant Funding Agreement and the terms of the reporter's letter of appointment are sufficient to make the fair-minded and informed observer, having considered the facts, conclude that there was a real possibility that the reporter was biased. Considering these factors, I am unable to reach the view that the fair-minded and informed observer would reach this conclusion.

[22] The earlier involvement of Scottish Homes, and thereafter Communities Scotland, in exploring possibilities for the regeneration and redevelopment of this area of Glasgow is in my view neither here nor there. Their involvement in the preparation of the Master Plan, whether through Scottish Homes or Communities Scotland, and their policy of providing grant funding by way of Housing Association Grant to housing associations such as Sanctuary, amount to no more than a peripheral interest in the proposals (and certainly very significantly less interest than that of the Secretary of State in the various developments considered in Alconbury). Turning to the proper construction of the Grant Funding Agreement, when read as a whole it is clear that this document (as its title suggests) is concerned solely with the mechanisms for providing central Government funding to enable Sanctuary to proceed with the proposal, by means of scheduled payments of Housing Association Grant through Glasgow City Council in accordance with the agreed phasing programme. There is no mention at any point in the Agreement of planning permission, nor of any matter linked to the grant of planning permission. There are however provisions for the appointment of a project monitor, and no doubt the phased release of grant funding would only be made on the approval of the project monitor, Communities Scotland and Glasgow City Council. It is in this context that the words on which the applicant focuses in clause 4.1 must be read. I can see no reasonable basis for interpreting the words "any approvals" so that they include the grant of planning permission. I consider that they can only reasonably be interpreted as referring to financial approvals necessary for the release of grant funding. Finally, with regard to the schedule attached to the reporter's letter of appointment, I cannot read the terms of clause 9, which imposes duties of confidentiality and loyalty to the Crown on the reporter, as binding him so closely to the Scottish Ministers that he must do their bidding and grant planning permission if told to do so. This clause relates to the care required of the reporter in the use of information and the protection of information held in confidence. Whether taken individually or cumulatively, I do not consider that these factors would cause the fair-minded and informed observer to conclude that there was a real possibility that the reporter was biased.

[23] In any event, even if I am wrong in my interpretation of the Grant Funding Agreement and/or the schedule to the reporter's letter of appointment, it seems to me that the Alconbury decision is a complete answer to this application. Neither the Scottish Ministers nor Sanctuary seek to suggest that the reporter was a completely independent and impartial tribunal - although again I observe that he was considerably more independent and impartial than the Secretary of State in the examples considered by the House of Lords in Alconbury. Be that as it may, the availability of a statutory application to this court to quash the decision of the reporter is sufficient to ensure compatibility with Article 6(1) of the European Convention on Human Rights, and is a complete answer to the applicant's arguments.

[24] For these reasons I sustain the pleas-in-law for each of the first and second respondents and refuse this application.

 


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