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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Global | Publication | June 2023
St. Ann’s Church is a grade I listed building and an important heritage site, having been completed in 1768 on a site used for worship since 1344. East Quayside 12 had applied for planning permission to construct 289 apartments nearby. The application was rejected by Newcastle City Council, and an appeal was lodged. The dispute arose in respect of the likely degree of harm that would be caused to the church as a heritage asset, by the inception of the proposed development. The inspector had assessed the level of harm, taking into consideration the Planning Brief, Historic England’s submissions and the Heritage Impact Assessment, and prepared a report accordingly.
In the concluding paragraph of the report, the inspector considered “the key constraints of the plot and the nature of the harm identified”. In reaching her conclusion, the inspector coupled together her consideration of the intrinsic harm that would be caused to the church, with any other, less harmful alternative design.
The court considered whether the inspector had regard to irrelevant considerations and/or acted irrationally, the essence of which, centred on the inspector’s words in the concluding paragraph. The issue was whether the inspector showed that she had brought into her assessment of the level of harm the irrelevant matter of the absence of an alternative design that would or might cause less harm within that category.
The inspector’s report was considered by a High Court judge, who was in “no doubt” that the conclusion to the report made it clear that the decision was partly based on the inspector’s consideration of a hypothetical alternative. The judge noted that the contested paragraph “relies expressly on the nature of the harm previously identified […] and in the same breath relies expressly upon the key constraints of the site”, where such constraints “were referred in several parts of the decision letter specifically in the context of considering alternative design solutions”. The judge concluded, therefore, that the inspector “took into account a legally irrelevant consideration when she reached her conclusion”.
The question for the CoA was whether the inspector’s reasons were legally defective, because these were not “intelligible and adequate”. The Court referred to the judgment of Lord Carnwath in R. (on the application of CPRE Kent) v Dover District Council [2017] UKSC 79, where the question is whether the decision-maker’s reasons leave “genuine”, rather than merely “forensic”, doubt over what was decided and why.
The judge at first instance had been correct to find the inspector’s decision unlawful as there was at least substantial doubt as to whether the inspector had taken into account a consideration that had been irrelevant. The CoA concurred with the High Court judge that, “even if the principal argument put forward by the council is over-stated, there is a deficiency in the inspector’s reasoning – because it is not clear what she meant in the contentious final sentence in [the concluding] paragraph [...]. Reading that sentence, in context, I simply cannot be confident that she did not take into account an immaterial consideration in assessing the level of harm to the listed building.”
As such, the inspector’s reasons were “sufficiently obscure to invalidate her decision”.
This case demonstrates how a handful of ambiguous words within the inspector’s report caused the entirety of her decision to be found to be invalid. Such words were determined to be sufficiently unclear, by both the High Court judge and later the CoA. However, it was due to the lack of clarity of the final sentence of the inspector’s conclusion paragraph that led the CoA to be unable to determine that only a material consideration had been taken into account.
The case assists practitioners in understanding why a planning inspector’s report that considered materially irrelevant matters was held to be unlawful. Case law in this area has established the following:
With thanks to Christopher O’Brien for his contributions
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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