Factual and Procedural Background
This case concerns a planning application granted by the Respondent on 31 May 2023, permitting Company B to erect a retail unit and associated works at land west of 4 Main Street, The City. The site is accessed from Necessity Brae. The Petitioner seeks the reduction of this decision.
The application site falls within an employment site designated for employment uses under the Local Development Plan, which does not allocate the site for retail purposes. The relevant policies include Policy 7 ("Employment and Mixed-Use Areas") and Policy 13 ("Retail and Commercial Leisure Proposals") of the Local Development Plan 2 (2019).
Company B submitted a planning application in February 2021 for a Class 1 retail foodstore of 1,884 square metres gross floor area, intended as a replacement for its existing smaller store located elsewhere in The City. The application included a sequential assessment, an impact assessment, and sought to address deficiencies in local retail provision.
The Respondent initially issued a Report of Handling in May 2022 recommending approval subject to conditions, concluding the proposal complied with Policy 13 despite being contrary to Policy 7. The Respondent was minded to grant permission in June 2022.
Following the adoption of the National Planning Framework 4 ("NPF4") in February 2023, which became part of the Development Plan, the Respondent issued a Supplementary Report considering Policy 28 of NPF4 ("Retail"). This report reaffirmed the recommendation to grant permission subject to legal agreements and conditions.
The Petitioner made further representations challenging whether the development qualified as a "new small scale neighbourhood retail development" under Policy 28(c) of NPF4. On 31 May 2023, the Respondent granted planning permission.
The Petitioner then initiated these proceedings seeking reduction of the Respondent's decision on grounds relating to the interpretation and application of Policy 28 of NPF4.
Legal Issues Presented
- Whether the Respondent erred in law by failing to properly interpret and apply paragraph (c) of Policy 28 of NPF4, specifically the requirement that a retail development must be a "new small scale neighbourhood retail development" to be supported in an out of centre location.
- Whether the Respondent failed to provide adequate and intelligible reasons for concluding that the proposed development satisfied the criteria of Policy 28(c).
Arguments of the Parties
Petitioner's Arguments
- The Respondent failed to address the opening phrase of Policy 28(c) concerning whether the development was a "small scale neighbourhood retail development".
- The site is out of centre and not allocated for retail in the Local Development Plan, so the development is only supported if it meets Policy 28(c), which the Respondent did not properly consider.
- The Respondent’s reliance on the net increase in floor area (711 square metres) as qualifying the development as small scale was legally incorrect and unsupported by the decision documents.
- Policy 28 represents a tightening of retail policy compared to the Local Development Plan, and the Respondent’s interpretation undermines this by allowing a large store with a wide catchment area to qualify as a small scale neighbourhood development.
- Policy 28(c) requires the entire development to be small scale and neighbourhood in nature, not just a net increase; the Respondent’s interpretation improperly disregards the term "neighbourhood".
- The Respondent’s reasons for its conclusion were inadequate and unintelligible.
Respondent's Arguments
- The initial Report of Handling, adopted in the Supplementary Report, properly assessed the application under retail policy, concluding the development was primarily a relocation supported by Policy 13 of the Local Development Plan.
- The Respondent applied planning judgment in interpreting Policy 28, distinguishing between "new" retail proposals and relocations, focusing on the additional floor space rather than the total size.
- Paragraph (c) of Policy 28 is open-textured and requires planning judgment to determine whether a development qualifies as a small scale neighbourhood retail development.
- The development’s location is accessible by sustainable transport and contributes to local living, consistent with the Policy Intent and Outcomes of Policy 28.
- The Supplementary Report’s reference to the development not resulting in a significant increase in floor area implies it falls within the scope of paragraph (c), a reasonable exercise of planning judgment.
- The Respondent provided adequate and intelligible reasons for its decision, which were clear to the Petitioner and the court.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Tesco Stores v Dundee City Council [2012] SC (UKSC) 278 |
The correct approach to interpreting planning policy statements: objective interpretation in context, not as statutes or contracts; exercise of planning judgment can only be challenged if perverse or irrational. |
The court applied Lord Reed’s guidance to interpret Policy 28 objectively, recognizing the role of planning judgment while emphasizing the importance of proper interpretation. |
| Corbett v Cornwall Council [2022] EWCA Civ 1069 |
Development plan policies should not be construed exhaustively or with undue complexity; policies are flexible and require planning judgment; the court should consider the underlying aims of the policy. |
The court used this precedent to reject overly complex interpretations of Policy 28 and to affirm that planning judgment plays a key role in applying broad policy language. |
| Bloor Homes East Midlands Ltd v Secretary of State for Communities and Local Government [2017] PTSR 1283 |
When an alleged failure to grasp policy occurs, the court considers whether the decision maker misunderstood the policy by examining the issues addressed and reasons given. |
The court examined whether the Respondent misunderstood Policy 28 and found that the error was in the interpretation of the policy’s meaning rather than a failure to consider it. |
| City of Edinburgh Council v Secretary of State for Scotland 1998 SC (HL) 33 |
Requirements for adequate and intelligible reasons in planning decisions. |
The court found the reasons in the Supplementary Report sufficient to understand the Respondent’s approach to Policy 28. |
Court's Reasoning and Analysis
The court began by identifying the core dispute as the interpretation and application of paragraph (c) of Policy 28 of NPF4, which permits "new small scale neighbourhood retail development" in out of centre locations.
Applying the authoritative guidance from Tesco Stores v Dundee City Council, the court emphasized that development plan policies require objective interpretation in their proper context, not as statutes or contracts, and that planning judgment is central to their application.
The court rejected the Respondent’s argument that the word "new" in Policy 28(a) qualified "retail" narrowly, finding this to be an overly complex construction inconsistent with the Policy Intent and Outcomes, which emphasize sustainable transport and accessibility for all retail proposals.
Accordingly, all retail proposals must conform with the town centre first principle and the sequential approach, and out of centre proposals are only supported if they meet the exception in paragraph (c) of Policy 28.
The court interpreted the words "new small scale neighbourhood retail development" in paragraph (c) as requiring the development as a whole to be both small scale and neighbourhood in nature. The Respondent’s approach, which focused on the net increase in floor area rather than the overall scale and nature of the development, was found to be legally incorrect.
The court reasoned that the term "neighbourhood" qualifies the type of development and cannot be satisfied by merely a small addition to a larger development. This interpretation aligns with the Policy Outcomes supporting vibrant town centres and the town centre first principle.
Examining the Supplementary Report, the court found that the Respondent failed to explicitly consider whether the development met the criteria of paragraph (c) and instead inferred this from the net increase in floor area. The court held this was an error of law as the policy wording could not bear such a meaning.
However, the court concluded that the Respondent’s reasons were adequate and intelligible for the purposes of understanding its approach, rejecting the Petitioner’s second argument.
Holding and Implications
The court sustained the Petitioner's first plea-in-law and reduced the Respondent's decision dated 31 May 2023.
The direct effect of this decision is that the planning permission granted to Company B for the retail development at the site is quashed on the basis of the Respondent’s legal error in interpreting Policy 28 of NPF4. No broader precedent was established beyond the correction of the policy interpretation in this context.
Expenses were awarded to the Petitioner as the successful party.