Decision or recommendation? Court will look at substance over form when assessing jurisdiction

In R (Rights Community Action Ltd) v Secretary of State for Levelling Up, Housing and Communities [2024] EWHC 359 (Admin), the High Court granted an application for judicial review by Rights Community Action Ltd (RCA), holding that planning inspectors (Inspectors) erred in law in relying on a Written Ministerial Statement (WMS) dated 2015 to remove net zero policy requirements. In doing so the court commented on various aspects of judicial review, including jurisdiction and the test for standing.

Key points

• In establishing the jurisdiction of the court, it is the substantive nature of the matter under challenge rather than the "nomenclature" that will be assessed. Where a "recommendation" has direct and unavoidable legal and practical consequences, the court will consider it a justiciable decision.
• While certain recent cases have called into question how narrowly standing should be assessed, this judgment confirms that a claimant must demonstrate that they are not a mere busybody, but is under no obligation to prove there is no "better placed claimant".
• In light of rapidly developing national policy on net zero, care must be taken to interpret policy in a holistic manner, taking into account more recent developments.

Background

West Oxfordshire District Council (the Council) (which was also the first interested party in the case) was the planning authority for a self-contained settlement in West Oxfordshire, which was to be built by the second interested party. The Council developed an area action plan (AAP) setting out its plan for the development as a mixed-use net zero settlement and submitted the AAP to the Inspectors under the Planning and Compulsory Purchase Act 2004 (PCPA) in February 2021.

In March 2023, the Inspectors, on behalf the Secretary of State for Levelling Up, Housing and Communities (SoS), issued their report on the AAP (Inspectors' Report) and recommended modifications, including finding that Policy 2 of the AAP concerning how the development would achieve net zero conflicted with national policy on energy efficiency, and in particular with the WMS. The WMS purported to control how energy performance requirements in new housing development would relate to the Building Regulations and the Code for Sustainable Homes.

The WMS set out that local planning authorities should not set conditions for energy performance requirements that exceeded the requirements of the 2013 Building Regulations until the then expected amendments to the Planning and Energy Act 2008 (PEA) in the then proposed 2015 Deregulation Bill came into force. The amendments in question were set to remove the right of local planning authorities to adopt more stringent energy efficiency policies than those under the Building Regulations. However, upon the Deregulation Act 2015 gaining Royal Assent, these proposed amendments were not commenced, and the Government confirmed in January 2021 that it no longer planned to amend the powers of local planning authorities to set local energy efficiency standards for new homes deriving from the PEA. Further, subsequent changes to the Building Regulations meant that the current energy standards are above those which the WMS told local authorities not to exceed.

On the basis of these significant changes to national policy on energy efficiency since the WMS, the claimant argued that the Inspectors misinterpreted the WMS in the Inspectors' Report because the premise of the policy set out in the WMS no longer existed. The SoS submitted that the court had no jurisdiction in the case, the applicant did not have standing, and that, even if the Inspectors had erred in their interpretation of the WMS, no relief should be granted as the outcome for the applicant would not be substantially different if the error of law had not occurred.

Judgment

1. Jurisdiction

In response to the SoS's argument that the challenge was premature on the basis that the Inspectors' conclusion on Policy 2 of the AAP constituted a "recommendation" under the PCPA rather than a decision, Lieven J clarified that the substantive nature of the matter under challenge must be assessed rather than the "nomenclature". Although s.20 PCPA refers to the Inspectors having to make "recommendations" with respect to any development plan submitted to them, if the Inspectors recommend non-adoption or modifications to the plan, the local planning authority is then unable to adopt the plan unless the recommended modifications are made. Therefore, in reality a "recommendation" from the Inspector under the PCPA binds the local planning authority with respect to its future formal decision making, limiting this to a binary choice to either accept the recommendations or abandon the plan entirely.

This form of "recommendation", which has direct and unavoidable legal and practical consequences, is to be distinguished from other situations involving what is normally understood by the word "recommendation", namely where the relevant decision maker has complete discretion as to whether it accepts a recommendation or not.

On this basis, the Inspectors' recommendation made with respect to Policy 2 of the AAP was considered a justiciable decision.

2. Standing

Lieven J also clarified questions around the relevant test for standing which has been called into question in recent cases including R (Good Law Project Ltd) v The Secretary of State for Health and Social Care [2022] EWHC 2468 (Good Law Project) (for our contemporaneous coverage of this case please refer to our previous blog). She reiterated that the test for standing in judicial review is simply whether the claimant has sufficient interest in the matter to which the application for judicial review relates. In assessing "sufficient interest" a judge will distinguish between a "mere busybody" and a person affected by or having a reasonable concern in the matter. However, Lieven J did not read the Divisional Court decision in Good Law Project as seeking to create a new test for standing, of whether there is a "better-placed claimant" to make the application for judicial review. Such a test would be a radical tightening of the test for standing, being a long step from the requirement that the claimant is not a busybody. It was noted that there may be many cases where someone other than the claimant was better placed to bring a claim but equally many reasons why that person chose not to challenge.

Although the Council could be seen as a "better-placed claimant" than the RCA in this case, the RCA was an organisation dedicated to the subject matter of the claim and clearly demonstrated a sufficient interest in the claim which met the standing test.

3. Interpretation of law was incorrect and relief not to be withheld

The judgment further held that the Inspectors' interpretation of the WMS as restricting local authorities' powers to set higher energy efficiency standards was plainly wrong in light of subsequent events as the premise of the policy set out in the WMS (i.e. the anticipated amendment of the 2013 Building Regulations which removed authorities' powers in this regard) no longer existed when the Inspectors issued their decision with respect to Policy 2 of the AAP. By analogy with statutory interpretation, the WMS as a policy had to be interpreted in accordance with the mischief it was seeking to address, and with an "updating construction", taking into account the changes since the date of its drafting. The Inspectors' interpretation did not make sense in the present context or in light of the mischief sought to be addressed.

Disagreeing with the SoS, Lieven J further held that relief should not be withheld under s.31(3C) of the Senior Courts Act 1981, which provides that the court should refuse relief if it is highly likely that the outcome for the claimant would not be substantially different if the error of law had not occurred. Here the Inspectors may have reached different conclusions and made no or alternative recommendations if they had properly understood and interpreted national policy.

Comment

Commercial organisations may take comfort in the clarification provided in this judgment that they are able to make an application for judicial review with respect to any recommendation, decision, or outcome from a public authority if in reality it significantly curtails their decision-making power, regardless of the label used.

Potential claimants will also be relieved to see the treatment of the speculation around a tightened test for standing following Good Law Project in this judgment, as the standard test for standing is clearly restated.

Finally, the judgment noted that the Government had issued documents and statements that pull in different directions, and that had made the interpretation of "policy" a difficult task. Given the rapidly changing landscape of net zero policy and legislation, it is not unlikely that similar scenarios will arise in future where various communications from Government may contradict or develop on each other. All parties must therefore take care to interpret the full range of sources of national policy holistically and consider whether any prior decision or communication has been overridden.