Interpretation of "Actual Use" for Community Value Listings under the Localism Act 2011: Banner Homes Ltd v. St Albans City and District Council

Introduction

Banner Homes Ltd v. St Albans City and District Council & Anor ([2018] EWCA Civ 1187) is a pivotal case that delves into the statutory interpretation of "actual use" under the Localism Act 2011 (the "2011 Act") in England and Wales. The dispute centers around Bedmond Lane Field (the "Field"), Owned by Banner Homes Limited since 1996, located in the Metropolitan Green Belt area of St Albans, Hertfordshire. For over four decades, the local community utilized the Field for various peaceful recreational activities. However, Banner Homes' decision to fence off the Field in 2014 disrupted this usage, leading to its nomination as an "asset of community value" under section 88 of the 2011 Act by the Verulam Residents' Association.

The central legal issue in this appellate case is whether the local community's trespassory use of the Field qualifies as "actual use" for the purpose of listing it as an "asset of community value." Banner Homes contends that such unlawful use cannot meet the criteria outlined in the 2011 Act, invoking the principle of in bonam partem to argue against the listing.

Summary of the Judgment

The Court of Appeal upheld the decisions of the First-tier Tribunal and the Upper Tribunal, affirming that the local community's use of the Field, despite being trespassory, qualified as "actual use" under section 88 of the 2011 Act. The courts rejected Banner Homes' argument that only lawful use could fulfill this requirement. The judgment emphasized that the use must further the social wellbeing or social interests of the community, irrespective of its legal status, provided it does not involve significant unlawfulness.

Key determinations include:

The community's recreational use of the Field furthered social wellbeing, satisfying section 88(1)(a).
It was realistic to anticipate the continuation of such use in the future, meeting section 88(1)(b) and section 88(2)(b).
The principle of in bonam partem does not categorically exclude unlawful use from qualifying as "actual use" in this context.
Precedents like Welwyn Hatfield Borough Council v Secretary of State were considered but found not directly applicable due to differing factual and legislative contexts.

Consequently, the appeal by Banner Homes was dismissed, reinforcing the community's ability to have assets recognized as valuable even when their use involves minor unlawful activities.

Analysis

Precedents Cited

The judgment extensively references the case Welwyn Hatfield Borough Council v Secretary of State for Communities and Local Government [2011] UKSC 15, which dealt with statutory interpretation in the context of planning permissions and fraudulent conduct. In Welwyn Hatfield, the Supreme Court held that Deliberate deception in obtaining planning permissions cannot be overlooked by statutory provisions intended to protect public interests.

Additionally, the court cites cases like Barkas v North Yorkshire County Council [2014] UKSC 31 and Epping Forest District Council v Philcox [2002] Env LR 2 to illustrate the boundaries of lawful and unlawful conduct in statutory contexts. These precedents underscore the principle that public policy considerations can influence statutory interpretations, particularly when fraudulent or deceptive conduct is involved.

However, the court differentiated the present case from these precedents by highlighting that the unlawful use of the Field was minor, non-deceptive, and did not involve significant wrongdoing. Unlike Welwyn Hatfield, where deliberate fraud undermined the statutory framework, the community's use of the Field was peaceful and socially beneficial, lacking the malicious intent exhibited in the aforementioned cases.

Legal Reasoning

The crux of Banner Homes' argument rested on the interpretation of "actual use" in section 88 of the 2011 Act. They posited that since the community's use of the Field was trespassory and thus unlawful, it could not qualify as "actual use" for the purpose of listing the Field as an "asset of community value."

The court, however, adopted a more nuanced approach to statutory interpretation, emphasizing the purpose and context of the legislation. It acknowledged that while law generally disfavors unlawfulness, not all unlawful conduct inherently negates the fulfillment of statutory criteria, especially when the use in question contributes positively to social wellbeing.

The court reasoned that the 2011 Act's primary objective was to empower communities to preserve assets that significantly contribute to their social interests. Therefore, the use must be evaluated on its merits regarding social benefit rather than solely on its legal status. The judgment highlighted that:

The community's activities on the Field were peaceful and beneficial, enhancing social wellbeing.
There was no significant harm or extensive unlawfulness associated with the use.
The clause "actual use" was interpreted in line with the legislative intent to promote community interests.

Thus, the court concluded that minor trespassory use does not automatically disqualify an asset from being listed, provided the use aligns with the statutory purpose of fostering community wellbeing.

Impact

This judgment has significant implications for the application of the "assets of community value" scheme under the Localism Act 2011. Key impacts include:

Flexibility in Interpretation: The ruling provides a more flexible interpretation of "actual use," allowing for the recognition of community activities that may not strictly adhere to legal usage but serve a positive social function.
Empowerment of Communities: Communities can have greater confidence in nominating assets as valuable, even if their use involves minor unlawful activities, as long as these activities contribute to social wellbeing.
Clarification of Legal Boundaries: The judgment delineates the boundaries within which unlawful use may still qualify as "actual use," emphasizing that significant or malicious unlawfulness would negate the qualification.
Guidance for Future Cases: Future litigants and local authorities can refer to this judgment to understand how to assess "actual use" in diverse contexts, ensuring that community interests are appropriately balanced with legal considerations.

Overall, the decision reinforces the intention behind the Localism Act 2011 to prioritize community interests and social wellbeing in the preservation and recognition of local assets.

Complex Concepts Simplified

Asset of Community Value (ACV): Under section 88 of the Localism Act 2011, an Asset of Community Value is a building or land considered significant for the community’s social wellbeing or interests. Listing an asset as an ACV provides the community with certain rights to bid for the asset if it's put up for sale.

Moratorium Period: Once an asset is listed as an ACV, if the owner decides to sell it, they must inform the local authority. The community then has a six-week window to register as a potential bidder. If they do, the sale is paused for six months, allowing the community time to organize a bid.

In Bonam Partem Principle: A legal principle in statutory interpretation which suggests that a legislative provision should not be construed in a way that rewards unlawful or wrongful conduct unless there's clear intention by Parliament to do so.

Statutory Construction: The process by which courts interpret and apply legislation. It involves understanding the intention behind the law and applying its provisions to specific cases.

Welwyn Hatfield Precedent: Refers to the Supreme Court case that established that deliberate deception in obtaining planning permissions cannot be ignored by statutory provisions aimed at public interest. It set a high bar for when unlawful conduct could negate statutory qualifications.

Actual Use: In the context of the Localism Act, it refers to the current or recent use of land or a building that contributes to the social wellbeing or interests of the local community.

Conclusion

The Banner Homes Ltd v. St Albans City and District Council case serves as a crucial interpretation of the "actual use" requirement under the Localism Act 2011. By determining that minor unlawful use, provided it enhances community wellbeing, qualifies for asset listing, the Court of Appeal has broadened the scope for community recognition and preservation of valuable local assets.

This judgment balances the need to uphold lawful conduct with the imperative to recognize and support community-driven initiatives. It underscores that the essence of the Localism Act is to empower communities, ensuring their interests are safeguarded even in nuanced circumstances where strict legality might otherwise impede social benefits.

Moving forward, local authorities and community groups must carefully assess and document the social benefits of their proposed asset usages, ensuring they align with the statutory criteria while navigating the complexities of lawful and unlawful actions. This case sets a precedent that will inform future litigations and nominations, fostering a more inclusive and responsive framework for community value recognition.