Neutral Citation Number: [2013] EWHC 973 (Admin)
Case No: CO/11203/2012
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Manchester Civil Justice Centre
1 Bridge Street West
Manchester M60 9DJ

Date: 02/05/2013

Before:

HIS HONOUR JUDGE SYCAMORE
(SITTING AS A JUDGE OF THE HIGH COURT)
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Between:

	(1) MARGATE TOWN CENTRE REGENERATION COMPANY LIMITED
(2) MARGATE CINEMA LIMITED
(3) MARGATE RIDE LIMITED
(4) DMS 3 LIMITED
(5) MIDOS SERVICES LIMITED
(6) MIDOS INVESTMENTS LIMITED
(7) CHARLES TOBY HUNTER, AS TRUSTEE OF THE HUNTER FAMILY SETTLEMENT No 2
(8) EMMA LOUISE HUNTER, AS TRUSTEE OF THE HUNTER FAMILY SETTLEMENT No 2
(9) DREAMLAND LEISURE LIMITED	

Claimants	
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	(1) SECRETARY OF STATE FOR COMMUNITIES AND LOCAL GOVERNMENT
(2) THANET DISTRICT COUNCIL	
Defendants	

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Richard Glover QC (instructed by Fladgate LLP) for the Claimants
David Forsdick (instructed by the Treasury Solicitor) for the 1st Defendant
Martin Edwards (instructed by Trowers and Hamlins LLP) for the 2nd Defendant

Hearing dates: 20 & 21 March 2013
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Judgment

His Honour Judge Sycamore: 
INTRODUCTION

1.	The town of Margate in East Kent was for many years a very successful seaside resort and was especially popular with holiday makers from London and the surrounding areas but like many British seaside towns has seen a decline in its fortunes in recent years.  It is now said to be one of the most deprived areas in the South East of England.  That Margate requires regeneration was common ground between the parties in this case and is recognised in the local plan for the area, policy T8 of the 2006 Thanet Local Plan (“the Plan”).  It was also common ground that a restored amusement park on the Dreamland site (“the Site”) is an important part of that regeneration.  The regeneration of the town has also included the Turner Contemporary Gallery which opened in 2011.
2.	Dreamland is the Site of the former amusement park in Margate and includes the Dreamland Cinema and a listed scenic railway, the oldest timber rollercoaster in the United Kingdom.  The Site was developed in 1919 as an amusement park based upon the Luna and Dreamland Parks at Coney Island, New York.  The fortunes of Dreamland fell into decline in the late 1990’s and it closed altogether at the end of 2002.  Between 2003 and 2006 various travelling fairground operators leased the Site and some supplemented the existing dwindling number of rides with their own rides.  The whole site was purchased by Margate Town Centre Regeneration Company Limited (“MTCRC”) in 2005.  In 2006, by which time all of the other rides had been sold off, the Scenic Railway operated for the last time.
3.	The second defendant, Thanet District Council, made a compulsory purchase order (“the Order”) for the acquisition of the land at Dreamland initially on the 27 May 2011.  By this time the Cinema building on the Site had been transferred, in 2010, by MTCRC to a new company Margate Cinema Limited and the Scenic Railway to Margate Ride Limited.  Both companies are subsidiaries of MTCRC with the same registered office and directors in common.  The Order was submitted to the first defendant, the Secretary of State, for confirmation.  The Order was for the whole site, all of which is subject to the Plan.  In the light of objections raised by the claimants the first defendant arranged for an inquiry to be held.  This took place in 2012 on the 10 to 13, 17 to 20 January, 15 to 17 February, 6 to 9 March and 26 March.  The Inspector reported to the first defendant on the 23 July 2012.  The first defendant accepted the Inspector’s recommendation by a decision letter (“DL”) of 16 August 2012 by which he confirmed the Order.  The second defendant published notice of confirmation of the Order on 12 September 2012.
4.	These proceedings are by way of an application under Section 23 of the Acquisition of Land Act  1981 (“the Act”) which, so far as material, provides:
(1)	 If any person aggrieved by a compulsory purchase order desires to question the validity thereof, or of any provision contained therein, on the ground that the authorisation of a compulsory purchase thereby granted is not empowered to be granted under this Act or any such enactment as is mentioned in Section 1(1) of this Act, he may make an application to the High Court.
(2)	If any person aggrieved by – 
a)	a compulsory purchase order, or 
b)	a certificate under part III of, or Schedule 3 to this Act.
desires to question the validity thereof on the ground that any relevant requirement has not been complied with in relation to the order or certificate he may make an application to the High Court.  
(3)	In subsection (2) above “relevant requirement” means – 
a)	any requirement of this Act, or of any regulation under section 7(2) above, or 
b)	any requirement of the [Tribunals and Inquiries Act 1992] or of any Rules made, or having effect as if made, under that Act.
(4)	An application to the High Court under this section shall be made within six weeks ….
5.	It is common ground that the claimants are “persons aggrieved” by the Order and that the various complaints upon which this claim is founded are ones which can properly form the basis of a Section 23 application.
6.	Section 24 of the Act provides:
(1)	On an application under section 23 above the court may by interim order suspend the operation of the compulsory purchase order or any provision contained therein, or of the certificate, either generally or in so far as it affects any property of the applicant, until the final determination of the proceedings.
(2)	If on the application the court is satisfied that – 
(a)	The authorisation granted by the compulsory purchase order is not empowered to be granted under this Act or any such enactment as is mentioned in Section 1(1) of this Act, or 
(b)	The interests of the applicant have been substantially prejudiced by any relevant requirement (as defined in section 23(3) above) not having been complied with, 
 the court may quash the compulsory purchase order or any provision contained therein, or the certificate, either generally or in so far as it affects any property of the applicant.
7.	These proceedings were issued on 19 October 2012 and originally contained thirteen separate grounds.  As Counsel for the claimants made clear in his skeleton argument the claimants did not pursue grounds 1, 2, 4 and 5.  Ground 1 was concerned with an alleged non-compliance by the second defendant with the pre-condition in Section 226(1A) of the Town and Country Planning Act 1990 and grounds 2, 4 and 5 were concerned with the financial viability of the scheme.
8.	On the 20 December 2012 Collins J, directed an expedited hearing and also granted the claimants’ application for an interim order under Section 24(1) of the Act ordering that the Order be suspended pending the final determination of the claimants’ claim at first instance.
THE LEGAL FRAMEWORK
9.	The correct approach to considering a challenge to the confirmation of a compulsory purchase order was set out by Lord Denning M.R. in Ashbridge Investments Limited v Minister of Housing & Local Government [1965] 31 W.L.R.
“Seeing that that decision is entrusted to the Minister, we have to consider the power of the court to interfere with his decision.  It is given in Schedule 4, paragraph 2.  The Court can only interfere on the ground that the Minister has gone outside the powers of the Act or that any requirement of the Act has not been complied with.  Under this section it seems to me that the Court can interfere with the Minister’s decision if he has acted on no evidence; or if he has come to a conclusion to which on the evidence he could not reasonably come; or if he has given a wrong interpretation to the words of the statute; or if he has taken into consideration matters which he ought not to have taken into account, or vice versa; or has otherwise gone wrong in law.  It is identical with the position when the Court has power to interfere with the decision of a lower tribunal which has erred in point of law.”
10.	That a challenge under Section 23 of the Act is not an opportunity for a review of the merits of an Inspector’s decision is well established.   In R (Newsmith Stainless Limited) v the Secretary of State for the Environment Transport & the Regions [2001] EWHC Admin 74, a case involving a decision by an Inspector, Sullivan J, as he then was, said:
“6.	An application under Section 288 is not an opportunity for a review of the planning merits of an Inspector’s decision.  An allegation that an Inspector’s conclusion on the planning merits is Wednesbury perverse, is in principle, within the scope of a challenge under Section 288, but the court must be astute to ensure that such challenges are not used as a cloak for what is, in truth, a re-run of the arguments on the planning merits.
7. In any case, where an expert Tribunal is the fact finding body the threshold of Wednesbury unreasonableness is a difficult obstacle for an applicant to surmount.  That difficulty is greatly increased in most planning cases because the Inspector is not simply deciding questions of fact, he or she is reaching a series of planning judgments.  For example:  is a building in keeping with its surroundings?  Could its impact on the landscape be sufficiently ameliorated by landscaping?  Is the Site sufficiently accessible by public transport? et cetera.  Since a significant element of judgment is involved there will usually be scope for a fairly broad range of possible views, none of which can be categorised as unreasonable.  
8. Moreover, the Inspector’s conclusions will invariably be based not merely upon the evidence heard at an inquiry or an informal hearing, or contained in written representations but, and this will often be of crucial importance, upon the impressions received on the Site inspection.  Against this background an applicant alleging an Inspector has reached a Wednesbury unreasonable conclusion on matters of planning judgment, faces a particularly daunting task ….”
11.	That the same approach applies in a challenge to the confirmation of a compulsory purchase order is clear.  In R (James Powell and Others) v Secretary of State for Communities and Local Government [2007] EWHC 2051 (Admin) Sullivan J, as he then was, said:
“3.  The grounds for a challenge under  Section 23 are constrained; that is to say this hearing is not an opportunity to re-run the merits of the compulsory purchase order, it is simply an opportunity to see whether there is any procedural or legal error in the process of confirmation….
8.  “…. The change in the rules reflected the reality in planning and compulsory purchase order enquiries and other inquiries of a similar kind.  It is very difficult to disentangle straightforward findings of fact from matters of a judgment or opinion and thus one very often sees finding of facts and conclusions and opinions mixed up …. If it can be demonstrated that in reaching his or her conclusions the Inspector has omitted to make an essential finding of fact, not a matter of disputed judgment, then that may form the basis of a legal challenge ….”
12.	As to the duty to give reasons in the planning context in South Buckinghamshire DC v Porter (No2) [2004] 1 WLR 1953 Lord Brown said:
“36. The reasons for a decision must be intelligible and they must be adequate.  They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the “principal important controversial issues”, disclosing how any issue of law or fact was resolved.  Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision.  The reasoning must not give rise to a substantial doubt as to whether the decision maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds.  But such adverse inference will not readily be drawn.  The reasons need only refer to the main issues in the dispute, not to every material consideration.  They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon a future such applications.  Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced.  A reasons challenge will only succeed if the party aggrieved can satisfy the Court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision.”
In Proudfoot Properties v Secretary of State [2012] EWHC 2043 (Admin) Lang J summarised the scope of the duty to give reasons which had been the subject of extensive review by the courts as follows:
“…. A decision letter must be read (1) fairly and in good faith, and as a whole without an unduly legalistic or critical approach; (2) in a down-to-earth manner, and not as if it were a legal instrument; (3) as if by a well informed reader who understands the principal controversial issues in the case:  see Clarke Homes v Secretary of State for the Environment (1993) 66 P&CR 263, at 271; Seddon Properties v Secretary of State for the Environment  (1981) 42 P&CR 26 at 28; and South Somerset District Council v Secretary of State for the Environment (1993) 66 P&CR 83.”
13.	In Clarke Homes Limited v Secretary of State (1993) 66 P. & C.R. 263 Sir Thomas Bingham M.R., as he then was, said at page 271:
“…. There are dangers in over-simplifying issues of this kind as also of over-complicating them.  I hope I am not over-simplifying unduly by suggesting that the central issue in this case is whether the decision of the Secretary of State leaves room for genuine as opposed to forensic doubt as to what he has decided and why.  This is an issue to be resolved as the parties agree on a straightforward down to earth reading of his decision letter without excessive legalism or exegetical sophistication….”
14.	In Prest v Secretary of State for Wales [1982] 266 EG 527 Lord Denning (MR) said at page 18E:
“…. To what extent is the Secretary of State entitled to use compulsory powers to acquire the land of a private individual?  It is clear that no Minister or public authority can acquire land compulsorily except the power to do so be given by Parliament:  and Parliament only grants it, or should only grant it, when it is necessary in the public interest.  In any case, therefore, where the scales are evenly balanced – for or against compulsory acquisition – the decision – by whomsoever it is made – should come down against compulsory acquisition.  I regard it as a principle of our constitutional law that no citizen is to be deprived of his land by any public authority against his will, unless it is expressively authorised by Parliament and the public interest decisively so demands …. If there is any reasonable doubt on the matter, the balance must be resolved in favour of the citizen.”
15.	Prest was considered in De Rothschild & Another v Secretary of State for Transport & Another 1988 57 P&CR 330 in which Slade LJ in considering Prest said:
“….Though all the judgments in Prest contained observations regarding onus, I, for my part, read them as doing no more than giving a warning that in cases where a compulsory purchase order is under challenge, the draconian nature of the order will itself render it more vulnerable to successful challenge on Wednesbury/Ashbridge grounds unless sufficient reasons are adduced affirmatively to justify it on its merits”.
16.	In Simplex GE (Holdings) Ltd v Secretary of State for the Environment [1988] 3 PLR 25 the Court of Appeal concluded that where a decision maker had taken into account an irrelevant consideration the decision should be quashed unless the Court is satisfied that the decision maker would necessarily have made the same decision, see Staughton LJ at 42g. 
“….. It is not necessary for Mr Barnes to show that the minister would, or even probably would, have come to a different conclusion.  He has to exclude only the contrary contention, namely that the Minister necessarily would still have made the same decision ….”.
THE STATUTORY BASIS FOR COMPULSORY PURCHASE
17.	Before I turn to the grounds of challenge I remind myself of the basis of the statutory powers for compulsory purchase.  The Order was made under Section 226(1)(a) Town & Country Planning Act 1990 which authorises compulsory purchase by a local planning authority “if the authority think that the acquisition will facilitate the carrying out of development, re-development or improvement on or in relation to the land,[…]”  
18.	Section 226 (1A) (inserted by Section 99 of the Planning and Compulsory Purchase Act 2004) provides an amendment to the basis on which a local authority may compulsorily acquire land for the carrying out of development, redevelopment or improvement:
(1A)  But a local authority must not exercise the power under paragraph (a) of subsection (1) unless they think that the development, re-development or improvement is likely to contribute the achievement of any one or more of the following objects – 
(a)  the promotion or improvement of the economic well-being of their area;
(b)  the promotion or improvement of the social well-being of their area;
(c)  the promotion or improvement of the environmental well-being of their area.
Crucially, the position is that a landowner may, in appropriate circumstances, be deprived of his land in the public interest.  A balance must be struck between the private interest of the landowner and the wider public interest.  The effect of the introduction of Section 226 (1A) in 2004 was to widen the power of local planning authorities to compulsorily acquire land for planning purposes by the introduction of the “well-being” requirement.
19.	The approach of the Secretary of State to Section 226 and provision of guidance to acquiring authorities are set out in Circular 06/2004.  See for example paragraphs 17, 19-22 and 24 of the Circular and paragraphs 2, 15 and paragraph 16(iii) of the Appendix to the Circular:
17	A compulsory purchase order should only be made where there is a compelling case in the public interest.
19  	If an acquiring authority does not have a clear idea of how it intends to use the land which it is proposing to acquire, and cannot show that all the necessary resources are likely to be available to achieve that end within a reasonable time-scale, it will be difficult to show conclusively that the compulsory acquisition of the land included in the order is justified in the public interest, at any rate at the time of its making.  Parliament has always taken the view that land should only be taken compulsorily where there is clear evidence that the public benefit will outweigh the private loss. The Human Rights Act reinforces that basic requirement.
20	In preparing its justification, the acquiring authority should provide as much information as possible about the resource implications of both acquiring the land and implementing the scheme for which the land is required.  It may be that the scheme is not intended to be independently financially viable, or that the details cannot be finalised until there is certainty about the assembly of the necessary land.  In such instances, the acquiring authority should provide an indication of how any potential shortfalls are intended to be met.  This should include the degree to which other bodies (including the private sector) have agreed to make financial contributions or to underwrite the scheme, and on what basis such contributions or underwriting is to be made.
21	The timing of the availability of the funding is also likely to be a relevant factor.  It would only be in exceptional (and fully justified) circumstances that it might be reasonable to acquire land where there was little prospect of implementing the scheme for a number of years.  Even more importantly, the confirming Minister would expect to be reasssured that it was anticipated that adequate funding would be available to enable the authority to complete the compulsory acquisition within the statutory period following confirmation of the order.  He may also look for evidence that sufficient resources could be made available immediately to cope with any acquisition resulting from a blight notice….
22	In demonstrating that there is a reasonable prospect of the scheme going ahead, the acquiring authority will also need to be able to show that it is unlikely to be blocked by any impediments to implementation.  In addition to potential financial impediments, physical and legal factors need to be taken into account…..
24	Before embarking on compulsory purchase and throughout the preparation and procedural stages, acquiring authorities should seek to acquire land by negotiation wherever practicable.  The compulsory purchase of land is intended as a last resort in the event that attempts to acquire by agreement fail…
Appendix A
2	The powers in Section 226 as amended by Section 99 of the Planning and Compulsory Purchase Act are intended to provide a positive tool to help acquiring authorities with planning powers to assemble land where this is necessary to implement the proposals in their community strategies and Local Development Documents.  These powers are expressed in wide terms and can therefore be used by such authorities to assemble land for regeneration and other schemes where the range of activities or purposes proposed mean that no other single specific compulsory purchase power would be appropriate enabling powers, and the statement of reasons should make clear the justification of using the Planning Act powers.  In particular, the First Secretary of State (‘The Secretary of State’ in this Appendix) may refuse to confirm an order if he considers that this general power is or is to be used in a way intended to frustrate or overturn the intention of Parliament by attempting to acquire land for a purpose which had been explicitly excluded from a specific a power.
15    It is also recognised that it may not always be feasible or sensible to wait until the full details of the scheme have been worked up, and planning permission obtained, before proceeding with the order. Furthermore, in cases where the proposed acquisitions form part of a longer–term strategy which needs to be able to cope with changing circumstances, it is acknowledged that it may not always be possible to demonstrate with absolute clarity or certainty the precise nature of the end-use proposed for the particular areas of land included in any particular CPO. In all such cases the responsibility will lie with the acquiring authority to put forward a compelling case for acquisition in advance of resolving all the uncertainties.
16 iii) the potential financial viability of the scheme for which the land is being acquired.  A general indication of funding intentions, and of any commitments from third parties, will usually suffice to reassure the Secretary of State that there is a reasonable prospect that the scheme will proceed.  The greater the uncertainty about the financial viability of the scheme, however, the more compelling the other grounds for undertaking the compulsory purchase will need to be.  The timing of any available funding may also be important.  For example, a strict time-limit on the availability of the necessary funding may be an argument put forward by the acquiring authority to justify proceeding with the order before finalising the details of the replacement scheme and/or the statutory planning position.
20.	That section 226(1)(a) does not require the Secretary of State to satisfy himself that the development underlying the Order will proceed before confirming the Order is clear from Chesterfield Properties v Secretary of State for the Environment (1997) P&CR 117 in which Laws J said:
“24. There are circumstances in which the Secretary of State might lawfully confirm a compulsory purchase order even though he cannot conclude that the related development would, or would probably, go ahead ….
34. There may very readily be cases where the Secretary of State concludes (a) that the public interest decisively requires the development to go ahead; (b) that it is less likely, or much less likely, to go ahead without a compulsory purchase order; (c) but that even if the order is made he cannot conclude that it will probably go ahead….”
21.	The position can be contrasted with that prior to the 2004 amendment when local planning authorities and the Secretary of State were required, when considering for the purposes of subsection (1)(a) whether the land was suitable for development, redevelopment or improvement, to have regard to the development plan so far as material, to whether planning permission for any development on the land was in force and to any other considerations which would be material in determining an application for planning permission for development on the land.
SUMMARY OF GROUNDS OF CHALLENGE
22.	As I have already indicated there were originally 13 grounds of challenge, four of which, grounds 1, 2, 4 and 5, were withdrawn by the claimants.  I mention specifically ground 1, essentially the claimants’ core ground of challenge, which challenged the vires of the second defendant’s approach to the pre-condition in Section 226 (1A).  That ground proceeded on the basis that for the Order to be lawful there must have first been a resolution of the second defendant to the effect that it was of the view required by Section 226 (1A) and second that that resolution was based only on relevant considerations.  In the light of the withdrawal of this ground I agree with the submissions of the defendants that it is beyond argument that the pre-condition of Section 226 (1A) was met by the second defendant and there was no procedural impropriety.  Grounds 2 to 5 were essentially challenges to the findings of the Inspector on the financial viability of the scheme.  Only ground 3 of this group of grounds of challenge remains by which the claimants challenge the Inspector’s reasons for finding that the second defendant had in place the funding necessary to carry out all of the works in phase 1 of the scheme.  Ground 6 is concerned with the question of the operational viability of the proposals.  Grounds 7 to 9 are concerned with the Inspector’s findings that it was necessary for the second defendants to acquire all of the Order Lands.  Ground 10 is concerned with an assertion of a material misdirection by the Inspector in relation to the cinema.  Ground 11 is a challenge on the grounds of unfairness it being suggested that the Inspector failed to show an even handed approach.  Ground 12 is a general attack on the inadequacy of the Inspector’s report.  Ground 13 asserts an unwarranted and disproportionate interference with the claimants’ rights under Article 1 of the First Protocol.
THE ORDER LANDS
23.	The Site comprises:
i)	The listed Dreamland Cinema on the Marina Terrace frontage (“The Cinema”).
ii)	An area to the rear containing the listed Scenic Railway and listed menagerie cages (the “HAP Lands”).
iii)	Two adjacent areas (referred to in the Inspector’s report as areas 5 and 6), one of which is used as a car park and the other, which is vacant.  The claimants all have an estate or interest in the Order Lands which cover three freehold interests, namely the Cinema and associated buildings (Margate Cinema Limited), the area containing the Scenic Railway (Margate Rides Limited) and the remainder (Margate Town Centre Regeneration Company).  With the exception of Dreamland Leisure Limited all of the other claimants have charges over one or more of the freehold estates.  Dreamland Leisure Limited has a lease for 99 years from the 6 April 2005 of the ground floor of the cinema building.
24.	The Site is a single planning unit and is all subject to the Plan.  It is fair to say that the claimants’ case concentrated on the HAP Lands and the aspirations of the second defendants in respect of that area.  It is clear that the Plan and the aspirations of the second defendants for regeneration extend to the whole site.  That this is the case is clear from Policy T8 which also provides that:
“Exceptionally, development of a limited part of the Site may be accepted as a part of a comprehensive scheme for the upgrading and improvement of the Amusement Park.  The scheme will be required to demonstrate that the future viability of the Amusement Park can be assured and the Council will negotiate a legal agreement to ensure that the proposed development and the agreed investment in the Amusement Park are carried out in parallel …. 
“…. ii) the predominate use of the Site being for leisure purposes (an element of mixed residential would be appropriate but only on such a scale as needed to support delivery of the comprehensive vision for the Site) ….”.
25.	A planning brief was adopted in February 2008 following a full consultation.  This emphasised the importance of the regeneration of the Site to the well-being of Margate.  It was envisaged 
•	at that time that there would be an element of enabling development (pursuant to Policy T8) to ensure “viable retention, improvement and future operation of the Park”.  In summary the development aspirations of the planning brief included retention and use of the cinema and scenic railway, an amusement park, car parking and a link road.  Any enabling development was to be limited to the residual area alongside Eastern Road to the east (area 6 and possibly area 5).  At that time the second defendants were in negotiation with the claimants and it was envisaged that funding in the region of £12.4 million pounds would be required.  It was envisaged that there would be funding provided as follows:
£4 million pounds from the Government’s Sea Change Programme (“SCP”). SCP was a scheme funded by the Department for Culture Media and Sport to assist in the regeneration of seaside resorts.
£4 million pounds from MTCRC
£4.4 million pounds from the Heritage Lottery Fund (“HLF”) and other grant funding.
26.	A memorandum of understanding (“The Memorandum”) between the claimants, the second defendant, Margate Renewal Partnership and the Dreamland Trust (“DT”) was agreed in 2009.  In essence it was agreed that the claimants would transfer the Cinema and HAP Lands to the Dreamland Trust for a nominal consideration and the enabling development on the remaining land would contribute at least £4 million towards the Amusement Park development.  DT is a registered not for profit company which in partnership with the second defendant sought funding for the re-establishment of the amusement park. It is intended that DT will play a major part in the future operation of the amusement park.
27.	In the event there were problems with the required delivery of the £4 million pounds required from enabling development.  The second defendants had questioned the viability of residential enabling development and the extent to which the claimants were being unrealistic in their expectations as to the quantum of residential development which was achievable.
EVENTS LEADING UP TO ISSUE OF THE COMPULSORY PURCHASE ORDER
28.	It is informative before considering the remaining grounds individually to record the history of events available to the Inspector which led up to the second defendant’s decision to issue the order.  The basic structure of the Memorandum was that the Cinema and the HAP Lands would be transferred for a nominal consideration by the claimants and the enabling development would contribute at least £4 million pounds towards the amusement park development.  As I have observed, by 2010 problems had developed with the proposed enabling development.
29.	The second defendants had sought to establish an amusement park on the whole site in various stages.  The centrepiece was to be a commercial heritage amusement park (“The HAP”) with historic rides and attractions.  Stage 1 of the development included the restoration of the scenic railway, stabilising the cinema complex, improving public facilities and restoring classic amusement park rides in a landscaped setting.  As I have already indicated the second defendant’s partner in the enterprise is DT. 
30.	The initially good relationship between the claimants and the second defendants began to falter in about 2008 when work on the second defendant’s then proposals for the HAP and the restoration of the Dreamland cinema began (the listing of the cinema had been upgraded to Grade II in April 2008).  As I indicated at paragraph 27 (supra) the second defendant had come to the conclusion that a scheme based on residential development (see part 2 of Policy T8) would not be viable and had decided to pursue grant aid for restoration of the whole site as an amusement park as envisaged by part 1 of Policy T8. An outline business plan and feasibility study funded and led by the Prince’s Regeneration Trust was prepared and attracted the offer of grants from both SCP and HLF.
31.	The claimants had produced a scheme of their own based on part 2 of Policy T8 which involved a Heritage Amusement Park based primarily on the restored scenic railway site together with an additional virtual reality attraction with the introduction of various uses to the cinema building.  The difference in approach was in relation to the funding which, on the claimants’ proposal, would have been by way of “enabling development” from residential development on about 49% of the Site.  Other difficulties emerged during 2008 when the second defendant served an urgent works notice on MTCRC under section 54 of the Planning (Listed Buildings and Conservation Areas) Act 1990 in relation to the need to secure the scenic railway following a fire there in April 2008.
32.	Towards the end of 2008 and into early 2009 the second defendant in collaboration with DT commissioned a feasibility study to develop proposals for HAP and restoration of the Dreamland cinema.  As I have mentioned the study was managed by the Prince’s Regeneration Trust and had a budget of £180,000.  It was intended to produce a proposal which could form the basis of a grant application to HLF and SCP.  A business plan was prepared by Locum Consulting and was submitted with the application to SCP.  There then followed the Memorandum on the 29 June 2009 and in July 2009 the stage 1 HLF funding was granted followed by the SCP funding in November 2009.
33.	During 2010 the negotiations between the second defendants and MTCRC continued to falter as the second defendants were unable to agree a development brief for the 40% of the Site which MTCRC sought to develop.  As I have already mentioned the second defendants had questioned the viability of the proposed residential enabling development and the quantum of residential development which the claimants were seeking.
34.	It was in that context that the second defendants made the decision to develop a funding package which was not reliant on the landowners contribution for phase 1.  The members of the second defendant resolved to authorise a compulsory purchase order if the negotiations failed.  In the event, the order was made on the 27 May 2011. The second defendant had also resolved to fill the gap in funding arising from the non-availability of the contribution from MTCRC by additional borrowing.  The report to the second defendant’s cabinet meeting of 29 April 2010 reads:
“Provided additional funding sources have been explored authority be given to the Director of Finance and Corporate Service to arrange and enter into such agreements as she considers prudent for additional borrowing up to a maximum of £1.8 million pounds to bridge the remaining funding gap.”
35.	By 2011 following the securing of grant funding it followed that enabling development was no longer essential for the restoration of the amusement park.  The report before the second defendant’s cabinet on 28 April 2011 read as follows:
“…. Policy T8 envisages the need for enabling development only in the context that the retention of an amusement park proved not to be viable.  The receipt of grant funding means that enabling development is no longer essential for the restoration of the amusement park.”  
THE GROUNDS PURSUED BY THE CLAIMANTS
36.	Ground 3:  This is concerned with the financing of the construction.  It is essentially a criticism of the reasons given by the Inspector for his finding that the second defendant had in place the funding necessary to carry out all the works in phase 1 of the scheme.  In essence the claimants attack the Inspector’s reasons for rejecting their submission that the contributions to the total construction costs from the second defendants and SCP were made before further changes to the scheme had taken place and that there was no evidence that both bodies were prepared to continue to fund the revised scheme.  
37.	Before I turn to consider the Inspector’s findings I remind myself of what is said in paragraph 16 (iii) of Appendix A to Circular 06/2004: 
“A general indication of funding intentions, and of any commitments from third-parties, will usually suffice to reassure the Secretary of State that there is a reasonable prospect that the scheme will proceed.”  
38.	That the Inspector expressly took into account the claimants’ submissions in relation to funding is clear from the reading of his report.  In summarising the claimants’ case the Inspector recorded as follows:
“108. The resolution to borrow £1.8 million pounds was made in May 2010, at which time the scheme was not the one before the Inquiry.  Members were advised that the proposal would generate 700,000 visitors and 200 jobs and that they could recoup the money by developing the non-HAP land.  TDC’s case now is that the scheme would now generate 350,000 visitors and that there would be 14 full time jobs at the HAP with a further 32 FTEs in the summer.  There is no intention of developing the non-HAP land.  Thus the benefits of the expenditure have been severely reduced and the means of recouping it gone.  The Secretary of State cannot assume that TDC members are still willing to borrow £1.8 million pounds in these very changed circumstances.  A new resolution is needed.”
“ …. As the works have already been severely pared down there is no room for savings and any increase in cost would have to be met by a reduction in the HAP offer.  The inadequacies of TDC’s case on this aspect are so many and manifest as to make it impossible to confirm the CPO.”
39.	It is thus clear that the Inspector took the claimants’ submissions into account in concluding as he did that paragraph 191 of his report as follows:
“191. The Council has in place the funding necessary to carry out all the works in Phase 1 of the scheme.  The objectors, for their part, assert that the Council is not in a position to carry out the works because, among other things, it has not made provision for the cost of acquiring the Order Lands”. 
40.	 The Inspector had rejected the submission that a change of the precise nature of the scheme would call the funding into jeopardy and in his overall conclusions at paragraph 223 reminded himself that the scheme enjoyed support from the Town District and County Councils, from national grant awarding bodies and from the local community.
41.	A substantial criticism made by the claimants was that the second defendants had failed to consider the cost of compensation.  The Inspector found that this was not a matter for the inquiry and can be seen from his conclusions at paragraph 192:
“192. It is, however, quite clear from the evidence that the question of compensation has been considered by the Council and that it has made provision for it.  The Council’s reluctance to divulge its estimate of the sum involved is entirely reasonable as this could prejudice later negotiations between the parties.  The amount of compensation payable is a matter to be decided quite separately and has no bearing on whether or not the Order should be confirmed.”  
42.	In my judgment, reading the DL and the Inspector’s report as a whole, as I am required to do (a copy of the Inspector’s report was annexed to the DL) and reminding myself that reasons can be briefly stated and that the second defendant need to show only “a general indication of funding intentions” (circular 06/2004) I am not satisfied that the claimants have established that there is any failure on the part of the Inspector to give adequate reasons on this point.
43.	Ground 6:  This ground is concerned with the issue of the operational viability of the second defendant’s proposals, as opposed to the questions in relation to acquisition and construction costs raised at grounds 3 and 4.  I remind myself that this challenge is not to be treated as an opportunity to re-run the merits of the claimants’ case as advanced at the inquiry.  The claimants assert that the Inspector’s report was either wrong or misleading in recording that three separate business plans had been produced for the HAP.  At paragraph 194 of his report the Inspector said:  “…. In all, three separate Business Plans have been produced for the HAP each prepared by a firm with specialist knowledge of the industry.”  There was no dispute that there were three financial plans for the Site namely:  
(1)	The Locum Consulting Business Plan which covered the overall Dreamland site but related to the HAP within that site.
(2)	The Brittan McGrath Business Plan which contemplated the overall eventual development but related specifically to the HAP on the part of the Site for which the HLF funding was sought.
(3)	The Business Plan prepared by Mr Michael Collins who had given evidence on behalf of the claimants at the inquiry.  This again covered the whole site but was in the context of the claimants’ alternative proposals for the Site which included a HAP.  
The Inspector found that all three plans concluded that an amusement park would be viable.  
44.	The Inspector clarified his position in his witness statement of the 9 January 2013 in the following terms:
“2. With reference to IR194, I would like to make a small correction.  Where I state that three separate Business Plans were prepared for the HAP I should have correctly stated that three separate Business Plans were prepared for the Site, of which two related to the HAP.  The point made by the Council was that all three showed the proposals for an amusement park on the Site would be viable.  I did not agree with the objectors that the Dreamland Trust had accepted that the Locum Business Plan was illogical.  It was clear from Mr Laister’s evidence that the Trust did not consider the Forum report to be illogical or defective.  It did, however, consider it to be on the optimistic side in its assessment of the HAP prospects.  It was for that the Dreamland Trust Board decided to get a second opinion.  Far from being a weakness in the case for the Council, this seemed to me to indicate how cautious the Dreamland Trust and the Council had been approaching an ambitious venture.”
45.	The Locum Business Consulting Business Plan was the first plan commissioned by the second defendant and was submitted with the support of MTCRC in support of the bid for funding from SCP.  The second plan was also commissioned by the second defendants and was prepared by Brittan McGrath.  The third, by Dreamland Contemporary (Mr Michael Collins who gave evidence on behalf of the claimants at the inquiry) was commissioned by the claimants.  That the Inspector had regard to all three reports is clear from a reading of his report and it is also clear that he had taken into account the evidence of Mr Collins in reaching his conclusions.  
46.	In particular the claimants maintain that the Inspector’s report is inadequate in its explanation as to why the evidence of Mr Collins was not accepted.  In my judgment his explanation at paragraph 194 makes it clear that his conclusions were ones that were reasonably open to him and were reached after a proper analysis of the relevant evidence, including that of Mr Collins.  In particular at paragraph 194:
“194. Much time at the Inquiry was taken up with discussions about the merits of the Business Plan.  Business planning is essentially a matter of judgment rather than science. The selection of data on which they are based and assumptions made about that data rely on experience and judgment. In all, three separate Business Plans have been produced for the HAP, each prepared by a firm with specialist knowledge of the industry.  Notwithstanding the dispute as to which of them should be preferred, all three conclude that an amusement park on the Dreamland site would be viable.  Moreover the difference between the two latest plans is small and depends on the selection of particular rides.  As the Council points out that is also a matter of professional judgment.”
47.	In dealing with viability the Inspector recognised that the grant funding did not have to be re-paid.  His conclusion that all three Business Plans concluded that an amusement park would be viable was one open to him on the information before him.  For example, the Plan put forward by Mr Collins showed that an amusement park on the Site would be able to break even after ten years albeit that for the first ten years an annual subsidy would be required fairly characterising showing that an amusement park on the Site would be viable once established, albeit it over a longer period.  Brittan McGrath concluded that “HAP would produce an excess of annual income over annual expenditure”.  The grant funding did not have to be repaid and in those circumstances the Inspector was entitled to characterise as this showing that the park was viable.
48.	The claimants also assert that the Inspector was wrong in characterising the differences between the Brittan McGrath plan and Mr Collins’ plan as small.  The Inspector recorded the second defendant’s submission that the claimants’ basis for maintaining that its proposals would succeed rather than the second defendant’s HAP proposal was that their plan was to have two signature rides (the scenic railway and a simulator ride, rather than just the restored scenic railway).  There is no basis, in my judgment, to conclude that in labelling the differences as small that the Inspector had made a material error of fact.
49.	Finally the claimants say that the Inspector erred in concluding that the second defendant’s plan had been the subject of intensive independent scrutiny.  He dealt with this at paragraph 195 of his report:
“195. The Business Plan has been independently assessed by the council, prior to its decision to become associated with the Dreamland Trust’s proposals, and again by central government, the Prince’s Trust and the HLF.  While there can be no guarantee that any Business Plan will prove be a wholly accurate predictor of future events the TDC/DT Business Plan has been subjected to intensive independent scrutiny and there is no reason to doubt its robustness.  In short the evidence suggests that there is no reason to doubt the viability of the HAP proposals.”
50.	At paragraph 3 of his witness statement of 9 January 2013 the Inspector deals with the point as follows:
“3.  It is said that I erred in finding that the Council/Dreamland Trust Plan had been subjected to intensive independent scrutiny.  What appears to be in dispute is whether “intensive …. scrutiny” was applied by each of these organisations.  The reference to “intensive” was meant to describe the overall process, whereby the Business Plan was subject to scrutiny by a number of different organisations, including grant making bodies.”
51.	 In my judgment there is no lack of clarity as to what the Inspector concluded.  The conclusions were ones reasonably open to him on the basis of the evidence before him and could be inferred from the history of the scheme and the nature and details of the successful funding bid applications and the nature of the funding organisations.
52.	For all of those reasons there is no basis to conclude that the Inspector made any error when considering the question of operational viability.
53.	Grounds 7 to 9:  These grounds together amount to a challenge to the Inspector’s finding that it was necessary for the second defendant to compulsorily acquire all of the Order Lands.  In particular the claimants’ assert that the Inspector failed to grapple with the claimants’ argument that the proposal for the Site could have been met without the need for the acquisition of areas 5 and 6 and second in finding that in the absence of a CPO areas 5 and 6 could not have been developed in a way that complied with policy, the Inspector took into account an immaterial consideration.
54.	The Inspector recorded the submissions made by the second defendant in relation to the treatment of the whole of the Site as a single planning unit as follows in his report:
“18. The recent subdivision of the legal title could create a false impression that the compulsory purchase order (CPO) seeks to acquire three separate and unconnected parcels of land.  Dreamland has, however, always been a complete site, a single planning unit devoted to a single purpose as an amusement park.  The CPO seeks to acquire all the land that has historically made up the Site.” 
“31. […] MTCRC’s proposals represent a complete break with the past, effectively splitting Dreamland in two and using almost half to build 474 dwellings.  The HAP would be unable to expand once half of the planning unit had been permanently taken for housing.  MTCRC’s proposals, whether to develop 49% of the Site for housing or simply to delete from the CPO some areas for which it has no firm proposals of its own, would radically alter the situation and create two distinct new and smaller planning units devoted to what might be incompatible uses.”  
55.	Policy T8 covers the entire site and stated:
“Proposals that seek to extend, upgrade or improve the attractiveness of Dreamland as an amusement park will be permitted, development that would lead to a reduction in the attractiveness leisure or tourist potential will be resisted.”
It was necessary that the whole site be acquired in order to allow for the future expansion of the HAP on to the remainder of the order land.  
56.	The Inspector dealt with this issue in his conclusion at paragraph 189:
“The exclusion of areas 5 and 6 would, therefore, restrict the regenerative effect of the proposed development, impede the implementation of Policy T8 and would be likely to result in the continued disuse of area 6.”  
57.	Against the background of the information available to him, in my judgment the Inspector’s conclusion at paragraph 189 cannot be faulted and was a planning judgment lawfully open to him on the available evidence.
58.	The further challenge that the Inspector took into account an immaterial consideration is in my judgment one which is without foundation.  The Inspector dealt with this element of the inquiry under the title “The need to acquire all the Order Lands” at paragraphs 184 to 190.  At paragraph 188 the Inspector concluded:
“Apart from retaining the existing car park, the objectors have not suggested how, if areas 5 and 6 were to be excluded from the order they could be developed in a way that complied with Policy T8. The argument that Policy T8 would be “spent” following the completion of HAP scheme, freeing the land for other forms of development, is not a good one.  The Policy seeks the restoration of the amusement park on the whole of the Site and would not become redundant simply because the HAP had been created on part of it.”
59.	The Inspector thus concluded that Policy T8 would continue to be the relevant development plan policy for areas 5 and 6 even if the CPO was confirmed for the remainder of the Site.  He found that there was a compelling case for acquisition for all of the land as a failure to do so would restrict the regenerative effect of the proposed development in the future.  In my judgment such a finding is entirely consistent with paragraph 15 of Appendix A to circular 06/2004 (paragraph 18 supra).
60.	The claimants maintain that the Inspector did not adequately consider the fact that the proposed use of areas 5 and 6 would only generate £25,000 per annum from the sixth year of operation onwards.  It is clear that the Inspector did take this into consideration in concluding that the exclusion of these areas would restrict the regenerative effect of the proposed development.  In his report at paragraph 104 in summarising the case for the objectors he said:
“… The Business Plan predicts an annual income of £25,000 from events within the HAP land for the first five years but envisages no income from areas 5 or 6.  Mr Laister suggested that these areas could produce an income of £25,000 from year 6 onwards.  He was not in a position to give evidence on this matter of opinion.  Moreover, if he was right, the proposal to compulsorily purchase this area of previously developed land in the heart of Margate on the basis that it would produce £25,000 in annual revenue in six years time is a measure of the quality of the Council’s case.”
And in his conclusions at paragraph 185 and 186:
“185. The objectors argue that the Order, if confirmed, should be modified so as to exclude two areas of land (areas 5 and 6) that did not form part of the HAP proposals and the leasehold part of the cinema.
186. Under the Council’s proposals areas 5 and 6 (a car park and vacant  respectively) would be used as a 250 space car park for the HAP, with the remainder providing space for overflow parking and for special events that would complement the activities in the HAP.  The objectors’ argument is that, apart from the 250 parking spaces – which could be provided without the need to acquire the land – these areas are not needed for the HAP and should be excluded from the order.”
  Finally in respect of this ground the claimants say that the Inspector was factually incorrect when he recorded at paragraph 184 of his conclusions as follows:
“184. The objectors have offered to transfer to the Council all the land needed for the HAP for £1.  This offer, was, however, made in the context of earlier discussions and was dependent on the Council agreeing to development on the rest of the land.  It was clear from the evidence at the Inquiry that the objectors’ position on this had not changed.”
There was no material factual inaccuracy in the Inspector’s report in this regard as was apparent from correspondence between the solicitors for the second defendants and the solicitors for claimants.
61.	Ground 10:  This challenge was in relation to the cinema.  The second defendants’ submission was that the acquisition of the cinema also formed part of a longer term strategy.  The Inspector recorded this submission at paragraph 29 of his report when summarising the case for the second defendants.
“29. Similar considerations apply to the cinema.  This important grade II listed building has had an unfortunate history while in the ownership of MTCRC.  TDC has already had to undertake major urgent works to protect the building and, as a responsible local planning authority, cannot sit idly by and watch it deteriorate further.  The Council has never shied away from the fact that its proposals for the cinema are less clear than for the rest of the land.  However as paragraph 15 of Appendix A of Circular 06/2004 acknowledges it is not always feasible or sensible to wait until full details of a scheme have been worked up.  Its acquisition forms part of a longer term strategy that needs to be able to change with changing circumstances.  It is for that reason that TDC needs to acquire the leasehold interests as well as the freehold of the cinema.  Without that the potential for future re-use of the building would be hampered.”
The conclusion in the report that there was a compelling case for the acquisition of the cinema was one which was open to the Inspector and consistent with the approach set out in paragraph 15 of Appendix A.
62.	Ground 11:  This appears to be an attack on the merits of the Inspector’s decision and the weight given by him to the evidence before him.  In particular in his conclusions at paragraph 211 the Inspector found that the grant funding from HLF and SCP was unlikely to transfer to the claimant’s proposal and the public grants were unlikely to be transferred to a private developer.  He dealt with it in the following way:
“211. The MTCRC scheme assumes that the grant funding from HLF and Sea Change has been offered to TDC/DT would also be available to MTCRC.  That assumption is not backed up by any evidence.  On their own admission the objectors have no knowledge of the terms and conditions attached to the offers made to TDC/DT and there is nothing to suggest that the grant funding bodies have ever be asked to consider the proposition.  As the two schemes are very different there can be no reasonable grounds for assuming that the grants could simply be transferred from one to the other.”
In my judgment this was a lawful conclusion for the Inspector to have reached on the evidence available to him and, in particular, the lack of any evidence from the claimants to support their assertion that the public funding would be transferred to their scheme.
63.	The claimants also criticised the Inspector in saying that he had adopted an inconsistent approach to the evidence submitted in both written and oral form.  The Inspector at paragraph 213, 215 and 216 of his conclusions explains why he rejects the evidence put forward by the claimants and explains his concern as to the lack of oral evidence to satisfy him.
“213. The MTCRC proposals also assume the availability of finance being provided at a favourable rate by a fellow objector, Close Brothers Limited.  The evidence of this is a letter from Close Brothers.  As the Council points out, however, this letter simply states MTCRC’s existing borrowing facility.  It makes no reference to any additional funding being available for the development and also states that the interest rate may be varied.
214. Furthermore, no witness from Close Brothers Ltd appeared at the Inquiry to explain or expand upon that document. Indeed, the only information about Close Brothers Ltd before the Inquiry was that it was a bank and a public limited company.  No documents were submitted relating to the size, experience and general background of the bank or to the extent of its financial resources. It remains an unknown quantity in so far as its willingness or, indeed, its ability to fund a development of the scale proposed by MTCRC is concerned. In those circumstances limited weight can be attached to its offer to provide funding for the scheme at preferential rates.
215. A further consideration is the ability of MTCRC to carry out the development.  While I acknowledge what was claimed at the Inquiry, there is not evidence before me to indicate that MTCRC has a track record of development.  It is described as a single purpose company put together with the aim of regenerating Dreamland.  Far from being regenerated, however, the Site has continued to de-generate since MTCRC acquired it in 2005.  Notwithstanding the difficulties to which the objectors drew attention at the inquiry, the fact remains that during MTCRC’s stewardship of the Site the amusement park has ceased to operate, the cinema has closed and the heritage assets on the Site have been allowed to fall into disrepair, to the extent that the Council has been obliged to take urgent measures to secure their survival.
216. There is no evidence to suggest that MTCRC has experience of carrying out any other developments in its own right.  Although individual directors of the company may have such experience they did not appear at the inquiry.  Consequently the extent of their contribution to the projects referred to could not be examined.  Under those circumstances little confidence can be placed in the ability of MTCRC to implement a development of this scale on its own.”
64.	In my judgment these findings amounted to a correct exercise by the Inspector of his planning judgment and do not demonstrate any inconsistent or unfair approach.
65.	Ground 12:  Is described as inadequacy of the Inspector’s report.  The claimants accepted that this was essentially a mop up ground.
66.	Ground 13:  Human Rights. In my judgement, read as a whole, the DL and the Inspector’s report in accepting the case for compulsory purchase made by the second defendants demonstrate that there is a compelling case for compulsory purchase in the public interest and that this balances against the private rights of the claimants. There is no disproportionate interference with the claimants’ human rights and this ground of challenge fails.
67.	For all of these reasons I am not satisfied that there is any merit in any part of this challenge and in those circumstances the claimants’ application is dismissed.