UK: Supermarket Wars

Last Updated: 19 November 2009
Article by Murray Shaw

On 9 October Lady Clark issued her decision in an application for judicial review by Sainsbury's in relation to a decision of Perth & Kinross Council. The facts are complicated but the judge made some interesting observations of general relevance.

Before dealing with the case it is probably worth just commenting on the background. It appears that one area of the Scottish economy that remains buoyant is supermarket development, possibly reflecting the fact that in the economic climate we currently face supermarket profitability has held up well. The "battle ground" between supermarkets appears to be focused however on some of the smaller towns in Scotland – the dispute in Kelso that is ongoing being a notable example of that. This decision involves Crieff and reflects that trend.

The case involved a Petition for judicial review. Lord Gill in his recent report has proposed changes to judicial review including a requirement that any case must be brought within 3 months and that leave must be sought to proceed with a judicial review petition. In England leave is a requirement but there is no such requirement in Scotland. Given the comments of the judge in this case it is interesting to speculate as to whether this petition would have proceeded had leave been necessary.

So far as the case is concerned as noted above it relates to possible developments in Crieff. In effect there were two competing sites in Crieff, the Market Place site and the Duchlage Farm site. The Market Place site was the site which Sainsbury's had an interest in. This was owned by Crieff Highland Gathering Limited but subject to a lease to Perth & Kinross Council until 2043. The Duchlage Farm site is the site in which Tesco had an interest. Perth & Kinross Council had an ownership interest but significantly in the capacity as planning authority preferred the Duchlage Farm location. Sainsbury's had however secured outline planning permission in relation to the Market Place site from a Reporter and indeed Perth & Kinross Council as planning authority had granted reserved matters approval in terms of that outline planning permission albeit subject to conditions which were both onerous and indeed impossible to fulfil given the "ownership" interest of Perth & Kinross Council in the Market Place site based upon the lease from Crieff Highland Gathering Limited.

Specifically the challenge related to decisions made by Perth & Kinross Council in December 2008 which affirmed a decision made in 2005 that Duchlage Farm was the preferred location for a new supermarket in Crieff in planning terms and reaffirmed the terms of a development brief for that site.

Sainsbury's in their arguments challenged the position of Perth & Kinross Council on a number of grounds. It was argued that their decisions were irrational and perverse having granted reserved matters approval on the Market Place site. It also argued that the factual matrix and documentation before the court evidenced an intention on the part of Perth & Kinross Council to frustrate the planning permission that Sainsbury's enjoyed resulting from a confusion between the Council's interest as planning authority and their interest as land owners in the "rival" site. It was also argued that the Council were not properly fulfilling their role as planning authority by placing undue weight on their interest as a land owner by being the lessee of the Market Place site. Separately it was argued that undue weight was put forward on planning offers (contributions) put forward by Tesco. In response to a challenge that they had no title and interest to sue, Sainsbury's argued that the fact there was an element of commercial interest did not mean they could not have title and interest, in any event they were objectors in relation to the Duchlage Farm site and the permission they held in relation to Market Place also gave them an interest.

The case is worth reading for the detailed analysis of the arguments which the judge (Lady Clark) went through which given their complexity are not rehearsed here. However specific points worthy of comment are as follows: -

a. Lady Clark observed that the role of the court in the judicial review was a limited one and appeared to contrast that with the role of Perth & Kinross Council as planning authority charged with a wide range of statutory functions;

b. Lady Clark thought that there was distinction between decision making and policy formulation and specifically observed that she did not consider that the policy development function of a Council was brought to a halt by virtue of a particular decision providing the significance of the decision was recognised in the policy making function;

c. She declined invitation to draw the inferences proposed by Sainsbury's in relation to the actings of the Council having regard to their land interest in the Market Place site. She specifically suggested that she found submissions on the part of the petitioners in this regard "unconvincing". She equally indicated that she thought that the fact that Perth & Kinross Council were planning authority did not affect their rights as holders of the lease. Specifically she indicated she did not think that simply because Sainsbury's had gained planning permission meant that the Council had to act differently having regard to their property interests even if those property interests were relevant to the implementation of the planning permission that Sainsbury's had obtained.

In dealing with a number of the aspects of the Petition and arguments put forward by Sainsbury's Lady Clark characterised their response as a "scatter gun" approach. She observed that while it was correct that Sainsbury's had secured a planning permission, that planning permission was the result of a specific consideration by the Reporter of a specific site, not a process which involved the detailed consideration of the rival site. In essence she considered that in reporting to members planning officials had correctly identified the relevant information for the members to take into account and that in reaching the decision they did the members had done so having regard therefore to the relevant information. Lady Clark did observe that at the time the guidance was made there was no "statutory" requirement in relation to the making of supplementary planning guidance. The position of course has changed now given the implementation of the new planning legislation, though given her views of the arguments of Sainsbury's it is difficult to conceive that she would have come to a different view even if the new legislation had been in effect.

The last issue which Lady Clark dealt with was title and interest to sue. She acknowledged that logically this would normally be dealt with before any consideration was given to the merits of the Petition. Given however what she considered the complexity of the issues she thought that it was relevant to "unravel the issues before addressing title and interest". The question of title and interest is one that is topical in the Scottish Courts, Lord Carloway having commented at some length on the issues in the case of Edgar Road Property Company LLP [29 May 2007]. In that case Lord Carloway had rehearsed the statutory provisions noting that there was limited formal right to object given and that was a relevant consideration in determining who had title and interest to sue. Lady Clark noted that the petitioners were objectors to the application for Duchlage Farm and were entitled to have their objections properly considered. She went on however that she did not consider that the decisions of the respondents which were challenged affected the petitioners' rights in that context. She therefore concluded that she did not think the petitioners had title at this stage to seek judicial review. She also indicated that in her view the primary interest of the petitioners was a commercial one and while she did not rehearse the arguments in detail, indicated that she did not accept that this gave them an interest to challenge policy particularly when the policy was intended to cover a range of objectives (the policy complained of while relevant to the supermarket development also touched upon related issues such as open space and school issues). Specifically she said "the mere commercial interest of the petitioners is not sufficient to found interest in relation this judicial review and I have difficulty in identifying what interest in law they have to challenge the planning policy". Interestingly enough she went on to say that such interest might arise if they had title but she had already concluded they did not.

The Petition was therefore refused – the impression being that Lady Clark had little difficulty in refusing the Petition.

A number of the comments in the case are interesting and likely to be of general application. The case does indicate the difficulties in pursuing a judicial review application. What is not clear from the decision is the extent to which the existence of a judicial review petition (which took some 10 months to determine) had in relation to the development and application of the Duchlage Farm site.

The issue of title and interest is one that Scottish Courts appear to be particularly interested in at the moment and there may be further developments – though of course these developments may well be overtaken by the proposed changes set out in Lord Gill's report.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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