Horada & Ors v Secretary of State for Communities and Local Government & Ors

Factual and Procedural Background

Shepherd's Bush Market, established in 1914, is a diverse and ethnically varied market comprising 137 retail pitches including railway arches, shops, and stalls. The market serves mainly the local population with a mix of small independent traders offering products in food, fashion, and household goods, providing both retail and social functions. The local planning authority, Hammersmith and Fulham London Borough Council ("the Council"), adopted policies aimed at regenerating the market while maintaining its unique character and supporting existing traders.

In 2012, the Council granted outline planning permission for a phased mixed-use redevelopment scheme including residential units, retail floorspace, and improvements to the market. Planning conditions required approval of market stall designs and a market management plan before development could proceed. The developer, Company A ("Orion"), entered into a section 106 agreement with the Council which included provisions to protect existing traders, such as a rent freeze during construction, limits on service charge increases, and a lettings policy promoting affordability and diversity of market traders.

In 2013, the Council made a Compulsory Purchase Order ("CPO") under section 226 of the Town and Country Planning Act 1990 to facilitate the redevelopment, aiming to improve the market's economic, social, and environmental well-being. A public inquiry was held, and the planning inspector recommended that the CPO should not be confirmed due to concerns that the scheme lacked adequate mechanisms to ensure retention of the existing number, mix, and diversity of traders, particularly regarding financial and physical conditions post-construction.

The Secretary of State disagreed with the inspector’s recommendation and decided to confirm the CPO, concluding that sufficient safeguards were in place through planning conditions and the section 106 agreement to protect traders and meet policy objectives. The case then proceeded to judicial review focusing on whether the Secretary of State provided adequate reasons for disagreeing with the inspector’s considered recommendation.

Legal Issues Presented

1. Whether the Secretary of State correctly identified the principal important controversial issues arising from the inspector’s report.
2. Whether the Secretary of State gave adequate and intelligible reasons for disagreeing with the inspector’s recommendation not to confirm the CPO.
3. Whether the Secretary of State’s decision complied with the duty to give reasons under relevant statutory provisions and case law.

Arguments of the Parties

Appellant's Arguments (Challenging the Secretary of State’s Decision)

• The Secretary of State’s decision letter was insufficiently reasoned and did not adequately explain why he rejected the inspector’s concerns about the adequacy of financial and physical safeguards for existing traders.
• The inspector’s concerns about the affordability of replacement premises after the construction period and uncertainty regarding the physical condition and size of replacement stalls and arches were central and required a clear response.
• The Secretary of State failed to properly address the principal controversial issues, thereby prejudicing the interests of the affected traders.
• The decision letter’s reasoning amounted to "bald assertions" lacking the clarity and adequacy required by established case law on the duty to give reasons.

Respondents' Arguments (Secretary of State and Developer)

• The decision letter was addressed to a well-informed readership familiar with the issues and arguments, so extensive elaboration was unnecessary.
• The Secretary of State’s reasons, particularly paragraph [15] of the decision letter, implicitly addressed the inspector’s concerns by referencing planning policy, enforceable section 106 safeguards, and the planning conditions.
• The inspector set an unreasonably high standard of "assurance" or "certainty," whereas the correct test is "sufficient likelihood" of achieving the objectives.
• Physical concerns, including refurbishment of the arches, were either covered by planning conditions or were not principal controversial issues requiring detailed explanation.
• The Secretary of State was entitled to make an evaluative judgment differing from the inspector without detailed paragraph-by-paragraph rebuttal.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully analysed the inspector’s report and the Secretary of State’s decision letter, focusing on the adequacy of reasons given for rejecting the inspector’s recommendation not to confirm the CPO. The inspector’s principal concern was the lack of robust guarantees and safeguards to ensure that existing traders could continue to trade post-construction, both financially (affordability of rents and service charges) and physically (size, form, and condition of replacement stalls and arches).

The Secretary of State’s decision letter contained brief assertions that sufficient safeguards existed, relying on planning conditions and the section 106 agreement. However, the court found these explanations were too terse and lacked clarity, failing to address the core concerns raised by the inspector, particularly regarding long-term affordability and physical conditions of replacement premises.

The court emphasised that the duty to give reasons requires that the decision be intelligible and adequate to enable affected parties to understand why the decision was made, especially when the decision maker disagrees with a reasoned recommendation. The Secretary of State’s reasons were found to be “bald assertions” that did not explain the rationale behind the disagreement and did not clarify whether the safeguards would indeed protect existing traders as the Council contended.

Furthermore, the Secretary of State did not explicitly address the physical concerns regarding the arches, which the inspector identified as vital to the market’s character. The court held that the failure to provide adequate reasons on both financial and physical safeguards substantially prejudiced the interests of the affected traders, who rely on clear assurances about their future trading conditions.

While the Secretary of State is entitled to make evaluative judgments differing from the inspector, such disagreement must be supported by clear and adequate reasons. The court concluded that the decision letter did not meet this standard and thus failed the relevant statutory and common law requirements.

Holding and Implications

The court ALLOWED THE APPEAL, finding that the Secretary of State failed to provide adequate reasons for disagreeing with the inspector’s recommendation not to confirm the Compulsory Purchase Order.

The direct effect of this decision is that the Secretary of State’s confirmation of the CPO was quashed on grounds of inadequate reasoning, thus protecting the interests of the existing market traders pending a properly reasoned decision. No new legal precedent was established; rather, the case reinforces established principles concerning the duty to give clear and adequate reasons when public authorities make decisions affecting property rights and livelihoods.