Tesco fails in challenge to new Sainsbury’s store

Tesco argued that the decision by the local authority to agree to remove a condition in an agreement between itself and Sainsbury’s was “fundamentally flawed”, but a judge in the Court of Session said he could see “no basis” for saying the decision was “irrational or perverse”.

Lord Glennie heard that the agreement, in terms of section 75 of the Town and Country Planning (Scotland) Act 1997, was ancillary to the grant by the council of Sainsbury’s application for planning permission to construct and operate a large retail superstore with associated parking, petrol station and car wash, on a site in Perth just a few hundred yards from a Tesco supermarket.

Clause 6 of the agreement prevented trading at the new superstore until the local authority had let the contract for local road improvements, those improvements being regarded as necessary to prevent any net detriment to the road network as a result of trading from the new superstore.

However, Sainsbury’s later submitted an application to modify the section 75 agreement so as to de-couple the commencement of trading from the letting of the road construction contract and a council committee approved the variation after concluding that any development should result in “no net detriment” to the operation of the associated road network.

According to Tesco, the removal of that condition raised the prospect of the new superstore being open for business long before completion of the road improvement works needed to mitigate the resulting increased traffic congestion and without any guarantee that those works will ever be carried out.

Tesco’s complaints were that the council had failed properly to interpret its own development plan. In reaching its decision to delete clause 6, the committee failed to address the material issue, namely whether clause 6 was still necessary and/or still served a useful purpose, it was submitted.

It was also argued that the council failed to give adequate or intelligible reasons for its decision, and that having regard to the reasons why it was decided in May 2012 that a section 75 agreement containing clause 6 was needed, no reasonable planning authority could have concluded in November 2013 that it was appropriate to delete it.

On behalf the council, it was emphasised that this was not an application for planning permission, nor a challenge to the grant of planning permission, and there was therefore no reason to revisit that matter. Thus it was submitted that the court should only interfere if it was apparent that the committee proceeded on a clearly erroneous basis.

In refusing the petition, the judge observed that it was difficult to see any basis upon which the decision to remove clause 6 could be susceptible to challenge.

Delivering his opinion, Lord Glennie said: “The committee had regard to the relevant policy in the development plan. They considered that the proposal to delete clause 6 was consistent with the development plan despite there being a longer gap than previously contemplated between the commencement of trading and the opening of the new road junction. That is a matter for their judgement.

“Once it is accepted, as it is, that they could properly consider that the original proposal was consistent with the ‘no net detriment’ policy notwithstanding that there would be a detrimental effect on traffic on the local road network for a period before the new road junction was completed, they cannot be criticised for forming the view that a detrimental traffic effect for a rather longer period was still consistent with that policy.

“I did not understand it to be argued that as a matter of law they could not find the proposed deletion of clause 6 to be compliant with the ‘no net detriment’ policy unless they were absolutely certain that the road improvement scheme would go ahead. Any such argument would be bound to fail.

“In those circumstances the committee were entitled to treat the matter as one in which the deletion of clause 6 would simply lead to an extended period of traffic congestion before the improved road junction was complete, and were entitled to treat this extension of that period as consistent with the ‘no net detriment’ policy.”

It was further submitted on behalf of Tesco that the council had failed to give proper, adequate or intelligible reasons for its decision to delete clause 6, and that the decision to delete clause 6 was a decision which no reasonable planning authority properly instructed could have arrived at, but the judge also rejected those grounds of challenge.