29.Mar.2012

Tesco Stores Limited v Dundee City Council

A suitable site for a supermarket?

Location is of key importance to major retailers, so there is likely to be consternation if a rival store looks set to appear in the same patch.  Not all concerns of this kind escalate to the Supreme Court, but Tesco’s application for judicial review of a decision by Dundee City Council did just that.

Supermarkets in proximity

Tesco Stores Limited raised a judicial review against the decision of Dundee City Council to grant Asda planning permission for a new store in the west of Dundee. The location of the new store was in part on the former NCR factory site. At the time the judicial review was raised, Tesco operated a large store roughly 800 metres from the site of the proposed Asda store. They had previously operated a store in Methven Road in Lochee which they had closed once their new larger store had opened. 

Application of the “sequential test”

After both the Outer House and Inner House of the Court of Session refused Tesco’s petition, it appealed to the Supreme Court.  The main legal issue for them to address was whether the Council’s planning committee, in granting permission to Asda, had failed properly to apply the sequential test.The sequential test is an assessment laid down by Scottish Planning Policy (SPP) (and, for the purposes of the case, its predecessor policy document NPPG8) that requires retail development to be focused in different locations by order of preference. The most “sequential preferable” locations are town centres, followed by edge of centre sites, then identified commercial centres, and finally out of centre sites. 

When determining an application for retail development, a planning authority must consider the suitability of sequentially preferable sites. Judicial application of the word “suitable” was the central concern that the Supreme Court addressed in its decision.

In its judgement on 21 March, the Supreme Court made two principle findings.  

Development Plan policy

The first point was that a planning authority must always proceed on a proper understanding of the development plan when making a decision, because the sequential assessment was included within the development plan. It is a matter of established principle that: 
policy should be interpreted objectively in accordance with the language used, and read in its proper context, and 
policy should not be viewed in the same way as a statute or a contract (in other words, it should not be given an overly legalistic meaning). 

The general rule is that the meaning of the words in development plan policy is a matter for the Courts and must be objective, but the application of that policy to a particular set of facts is a matter of planning judgement.

Meaning of “suitable” in the sequential approach

The second issue related to the meaning of the word “suitable” in the development plan policy relating to the sequential assessment. The policy provided that retail developments over 1000 square metres would only be acceptable, where it can be established that: “no suitable site is available, in the first instance, within and thereafter on the edge of city, town or district centres”.

Tesco and the Council presented different arguments on the meaning of the word “suitable”.  Tesco argued that it meant that it must be “suitable for meeting identified deficiencies in retail provision in the area”, whereas the Council argued that it must mean “suitable for the development proposal by the applicant”.  The latter approach was held to be the correct one.

However, the Supreme Court qualified the definition of “suitable” to the extent that:

retail development proposals should have regard to the town centre when they are being prepared (in relation to format, design and scale);
they should give consideration to the scope of accommodating the proposed development in a different form, and, finally;
that sequentially preferable locations should be thoroughly assessed on that footing. 

The Court stressed that central to this approach was the requirement for flexibility and realism from all parties - developers and retailers, and also planning authorities.

If this approach is adopted, the final issue that is to be considered is “whether an alternative site is suitable for the proposed development and not whether the proposed development can be reduced or altered so that it can fit an alternative site”. 

What does this mean in practice?

The Supreme Court’s decision approved the approach taken by the Council. This means that retail proposals must be viewed “in the real world” and that all parties should take a flexible approach to sequential assessment. The suitability of any sequentially preferable locations must be considered in relation to whether or not it is “suitable for the development proposed by the applicant”, and not with a view to resolving any retail deficiencies within sequentially preferably locations.

To read the Supreme Court decision in Tesco Stores Limited v Dundee City Council, click here.

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