Ballymac Designer Village Ltd v Louth County Council

• Jurisdiction: Ireland
• Judge: FENNELLY J.
• Judgment Date: 31 July 2002
• Neutral Citation: [2002] IESC 59
• Court: Supreme Court
• Docket Number: [S.C.
• Date: 31 July 2002

BALLYMAC DESIGNER VILLAGE LTD v. LOUTH CO COUNCIL

BETWEEN

BALLYMAC DESIGNER VILLAGE LIMITED

Applicant/Respondent

THE COUNTY COUNCIL OF THE COUNTY OF LOUTH

Respondent/Appellant

[2002] IESC 59

Denham J.

Murray J.

Fennelly J.

No 193/2001

THE SUPREME COURT

Synopsis:

PLANNING AND ENVIRONMENTAL LAW

Planning

Refusal of planning permission - Claim for compensation - Notice by planning authority of opinion that planning permission ought to be given for alternative development - Whether planning authority can validly express such opinion where permission envisaged by notice would involve material contravention of development plan for area - Whether at moment of expression of such opinion planning authority must be endowed with unconditional power to grant permission - Local Government (Planning and Development) Act, 1990 section 13 (193/2001 - Supreme Court - 31/7/2002) - [2002] 3 IR 247 - [2002] 2 ILRM 481

Ballymac Designer Village Ltd v Louth County Council

Facts: (Fennelly J; Denham and Murray JJ concurring) the respondent applied for compensation to the appellant on the ground that none of the reasons for a refusal of planning permission for its development given by An Bord Pleanála came within the reasons which would have precluded payment of compensation, which reasons were set out in the third schedule to the Act of 1990. Section 13(4) of the Act of 1990 provides that no such compensation shall be payable where a notice under subsection (1) is in force. The appellant gave notice to the respondent of a document expressing its opinion, pursuant to section 13(1) of the Act of 1990 that the site was capable of other development for which permission under part IV of the Act of 1963 ought to be granted but which development would involve a material contravention of the development plan for the area. The respondent successfully brought judicial review proceedings in the High Court for an order quashing the notice. The appellants appealed that decision.

Held in allowing the appeal that the payment of compensation to a property owner for loss suffered by reason of a refusal to him of permission to develop that land, being paid out of the public purse, had to be just both to the owner and to the public. The opinion expressed by the appellant in the section 13 notice acted provisionally on the hypothesis that planning permission could be granted. The court should distinguish between the expression of an opinion that planning permission ought to be granted and the carrying out of the procedure for making and consideration of an application, which may or may not lead to permission being granted. That opinion was valid, though inchoate in the sense that other steps had to be carried out. Accordingly, the appellant's section 13 notice was not invalidated by reason of the fact that the planning permission it proposed could be granted only after the pursuit of a material contravention procedure under section 26(3)(a) of the Local Government (Planning and Development) Act, 1963.

1 JUDGMENT delivered the 31st day of July, 2002 by FENNELLY J. [Nem Diss]

2 It is part of the scheme of the planning acts that owners of interests in land can obtain compensation for the refusal of planning permission. When, for the benefit of the common good the owner of land is refused the right to develop it, it is considered just that the public should compensate him. Justice does not, however, require that compensation be paid in all situations and some large compensation claims have attracted public controversy. The scheme of compensation has been modified and, in some respects, restricted over the years. The Local Government (Planning and Development) Act, 1990("the act of 1990") replaced the original scheme contained in the Local Government (Planning and Development) Act, 1993("the act of 1963").

3 The present appeal concerns a particular point of interpretation of the act of 1990. It has an appeal from a judgment of Kelly J in the High Court He, in turn, followed the earlier judgment of Geoghegan J in the case of Browne v Cashel Urban District Council ( Unreported, 26th March 1993). The point is whether a planning authority can, in response to a claim for compensation, rely on a statutory notice its opinion that planning permission ought to be given for an alternative development. When that development would involve a material contravention of the development plan for the area.

THE FACTS

4 The respondent in this appeal is Ballymac Designer Village Limited, a company incorporated in England ("the claimant"). It is the purchaser, under two contracts, for a total sum of £1,075,000, of about 11.6 hectares of land at at Ballymascanlon Roundabout. Aghaboys, Dundalk, Co Louth about 3 kilometres north of Dundalk Town Centre("the site").

5 On 14th July 1998, the claimed applied to the appellant, Louth Council, the planning authority for County Louth, for planning permission for a development consisting of a factory outlet village, covering 19,045 metres, with over 100 shop units, three fast-food restaurants and 1,600 car-parking spaces. The development would adjoin Ballymascanlon Roundabout. The planning authority refused the application on 21st April 1999 and there was an appeal to An Bórd Pleanála ("the Board"). The Board on 18th November 1999 made a decision to refuse the appeal for two reasons. The material reason is as follows:

" The proposed development would contravene materially the provisions of the current Louth County Development Plan in relation to "protected routes" as set and in paragraph 7.27."

6 The development plan has as one of its objectives the restricting of new access or intensification of existing accesses onto the county road network, subject to certain designated criteria. The claimant accepts that access to the site and thus to the proposed development can be gained only from two roads designated in the development plan as protected routes. It is obvious that the development would involve new or intensified access to those roads and that this would entail a material contravention of the development plan.

7 The claimant, having an interest in the site pursuant to the two contracts of purchase, submitted a claim for £21.6 million compensation to the planning authority on 16th May 2000, arising from the decision of the Board. It stated that neither of the two reasons for refusal of planning permission given by the Board came within the reasons which would have precluded the payment of compensation which reasons are set out in the third schedule to the act 1990.

8 On 9th August 2000, the planning authority gave notice to the claimant of a formal document expressing its opinion, pursuant to section 13 of the act of 1990 that the site was " capable of other development for which permission under Part IV of the Act of 1963 out to be granted". In the schedule to that document it specified the development in question as:

" A hotel with a capacity of approximately 100 bedrooms and conference facilities for approximately 500 people together with the normal ancillary facilities for such a development".

9 It is common case that this proposed alternative development would also generate the sort of traffic movements which it was the objective of provision 7.27 of the development plan to avoid and that consequently any planning permission for such a development would involve a material contravention of that plan. This is what gives rise to the issue in the case. There is no question as to the bona fides of the decision to give the notice.

10 The claimant successfully brought judicial review proceedings in the High Court (Kelly J) for an order of certiorari, quashing the notice. The present appeal is taken from that order.

THE STATUTORY PROVISIONS

11 By virtue of section 11 of the act of 1990. Whenever it can shown that, following a refusal of planning permission, " the value of an interest of any person existing in the land to which the decision relates at the time of the decision is reduced subject to the provisions of this part, be entitled to be paid by the planning authority by way of compensation..."

12 In the absence of agreement the amount of compensation is determined in accordance with the rules contained in the First Schedule to the act. The matter is to be determined, by virtue of section 5 of the act of 1990, by one of the property arbitrators appointed pursuant to the Acquisition of Land (Assessment of Compensation) Act, 1919.

13 Section 12 restricts the types of refusal of planning permission which may give rise to a compensation claim and provides that compensation will not be payable where the refusal is for one of the reasons set out in the Third Schedule, as already mentioned.

14 The present appeal, however, turns exclusively on the provisions of section 13. It is necessary to set out in full, even though subsection one alone is relevant to the present appeal:

15 2 "13(1) where a claim for compensation is made under section 11, the planning authority concerned may, not later than three months after the claim is received and having to all the circumstances of the case, serve a notice in such form as may be prescribed on the person by whom or on behalf of whom the claim has been made stating that, notwithstanding the refusal of permission to develop land or the grant of such permission subject to conditions, the land in question is in their opinion capable of other development for which permission under Part IV of the Principal Act ought to be granted.

16 (2) For the purpose of subsection (1). other development means development of residential, commercial or industrial character, consisting wholly or mainly of the construction of houses, flats, shops office premises, hotels, garages and petrol filling stations, theatres or structures for the purpose of entertainment, or industrial buildings...