Tesco Stores Limited, R (on the application of) v Welwyn Hatfield Borough Council

1. MRS JUSTICE LANG: This is a renewed application for permission to apply for judicial review of the decision of the defendant ("the Council"), dated 29 July 2024, to grant planning permission to the first interested party ("IP1") for the removal of condition 3 so as to allow the retail sale of food at Unit 1A at Oldings Corner Retail Park, Comet Way, Hatfield, Hertfordshire AL9 6JJ ("Unit 1A"). The proposed occupier of Unit 1A is the second interested party ("IP2").

2. The claimant operates a superstore at the retail park and was an objector to the grant of planning permission.

3. Permission to apply for judicial review was refused on the papers by Sir Peter Lane, sitting as a High Court Judge, on 17 February 2025.

4. Despite Mr Turney KC's skilful presentation of the claimant's case, I agree with Sir Peter Lane that the claim is unarguable and has no realistic prospect of success. Planning History

5. Unit 1A is situated in a retail park in an out-of-centre location, adjacent to junction 4 of the A1(M) motorway. Until early 2024, Unit 1A was occupied by Next, a Costa Coffee concession, and a travel agency. At that time, Unit 1A was arranged over the ground floor (2,115 square metres) and a mezzanine floor (1,715 square metres). Unit 1A is part of a building which also houses a Pets at Home store ("Unit 1B") and a B&M store ("Unit 2"). The Tesco Superstore is in a separate building.

6. Outline planning permission for the retail park was granted on 20 February 1987 for a "site for non-food retail warehouse". By condition 4, retail sale of food and drink was restricted, except for consumption on the property.

7. On 10 March 2011 permission was granted for the reconfiguration of Unit 1 to include the creation of additional floorspace. Condition 3 imposed a control on the retail use of the floorspace and restricted the retail sale of food by stating that "the type of goods that may be sold from the retail units hereby permitted shall be restricted" to "(a) non-food goods, (b) food soldfor consumption off the premises and (c) confectionary where this is ancillary to the principal ranges of goods sold."

8. On 20 December 2011, permission was granted pursuant to section 73 Town and Country Planning Act 1990 (" TCPA 1990 ") to amend the layout of the development. It included the same condition 3 that was imposed on 10 March 2011.

9. On 18 March 2016, planning permission was granted to allow the sale of food for consumption off the premises from Unit 2, including removal of condition 3 from the 1987 permission, subject to a specified maximum floorspace of 1,580 square metres to be used for the sale of food and drink.

10. On 3 May 2023, IP1 applied under section 73 TCPA 1990 to vary the permission of 20 December 2011 by removal of condition 3 so as to allow the retail sale of food for consumption off the premises from Unit 1, thereby permitting a change of use of Unit 1 to a food store. On 23 and 25 July 2024, the Council approved two applications pursuant to section 96A TCPA 1990 (non-material changes) to remove the reference to "non-food" from the description of development.

11. On 29 July 2024 the Council granted permission as follows: " Development : removal of condition 3 (sale of goods restriction) on planning permission S6/2011/2295/ S73 B to allow the retail sale of 'food'. At location : Unit 1 (former Next) (Oldings Corner Retail Park, Comet Way, Hatfield AL9 5JJ. … In according with the conditions listed below (1) The sale of food and drink within the premises shall not exceed a cumulative total of 1,350 square metres floor area. This limitation includes all areas designated for the display, preparation and sale of food and drink products, including both prepared and package items. REASON To safeguard the vitality and viability of nearby town centres in accordance with Policy SADM5 of the Welwyn Hatfield Borough Council Local Plan and the National Planning Policy Framework." The sequential test

12. The National Planning Policy Framework ("NPPF") sets out national policy on "ensuring the vitality of town centres" at paragraphs 90 to 95 (in the 2023 edition in force at the relevant time). Paragraph 91 provides: "Local planning authorities should apply a sequential test to planning applications for main town centre uses which are neither in an existing centre nor in accordance with an up-to-date plan. Main town centre uses should be located in town centres, then in edge of centre locations; and only if suitable sites are not available (or expected to become available within a reasonable period) should out of centre sites be considered."

13. Paragraph 92 provides: "When considering edge of centre and out of centre proposals, preference should be given to accessible sites which are well connected to the town centre. Applicants and local planning authorities should demonstrate flexibility on issues such as format and scale, so that opportunities to utilise suitable town centre or edge of centre sites are fully explored."

14. In R (Tesco Stores Limited) v Stockport MBC [2025] EWCA Civ 610 , the Court of Appeal, per Sir Keith Lindblom, Senior President of Tribunals, confirmed the correct approach to be taken in respect of a sequential test when granting an application for retail development, which is neither in nor on the edge of a town centre. In summary: (1) the purpose of the sequential test for retail development is to steer such development and other "main town centre uses" to town centres or sites on the edge of town centres in preference to out-of-centre locations. The test therefore sets out a clear order of preference or priority for the location of main town centre uses. Out-of-centre locations should be considered only if suitable sites are not available elsewhere at ([40] to [41]). (2) The sequential test says nothing about the identity of applicants for planning permission or the identity of retailers for retail development, (at [43]). (3) Whether a site in or on the edge of a town centre is available or suitable requires an exercise of planning judgment on the facts as at the date of the decision. The question of a site’s suitability calls for judgment about the form and scale of development on which to base the application of the sequential test. The policy leaves that judgment to the decision-maker, (at [44]). (4) Interpretating a planning policy ought to be straightforward and not generally involve the kind of linguistic precision the court would bring to the interpretation of a statute or contract. The purpose of the policy should be clear from its own provisions given their ordinary meaning and read in their context and be applied with realism and commonsense, at [36]. Grounds of challenge

15. The grounds of challenge may be summarised as follows. Ground 1. The Council misinterpreted policy SADM5 of the Welwyn Hatfield Local Plan (2016 to 2036). Properly construed, the relaxation of conditions on out-of-centre retail sites is resisted by that policy in all circumstances and not only those where the sequential test has been met. Ground 2(1). The conclusions reached in respect of highways impact rested on the false premise that the mezzanine floor in the unit was in place at the time of the grant. Ground 2(2). The claimant no longer pursues ground 2(2) which alleged that the transport assessment failed to consider the trip rates for a high intensity occupier, such as M&S rather than the trip rates for a discount store, such as Lidl and Aldi. Ground 3. The Council failed to have regard to the fact that the intended occupier, IP2, had traded from a proposed alterative site until recently, when discounting that site in a sequential test. Ground 1

16. Policy SB5 of the Local Plan sets out the Council's strategic policy on the quantity and location of retail development. It includes the sequential approach as follows: "Sequential approach If no suitable viable and available sites exist in the identified centres (taking account of reasonable flexibility in the format of the proposal) then proposals for sites on the edge of those centres will be considered. If no edge of centre sites are suitable, viable and available, out-of-centre sites will be considered. It is not accepted that specific classes of goods cannot be sold from in-centre locations. Developments will need to demonstrate flexibility in their operational requirements in terms of their format. Any retail proposals (including extensions) on sites outside centres in the retail hierarchy will be required to demonstrate compliance with the sequential approach to site selection. For those proposals exceeding 500 square metres gross floorspace, it will have to be demonstrated that the proposal will not have an unacceptable impact on existing town centres. For those proposals exceeding 300 square metres gross floorspace, it will have to be demonstrated that the proposal will not have an unacceptable impact on existing neighbourhood and village centres."

17. Policy SADM5 provides (so far as is material): " Individual Convenience Shops … Out-of-Centre Retail Except for Individual Convenience Shops of less than 280sq.m, proposals for new retail development in out-of-centre locations (including the extension of existing retail stores) will be resisted unless it has been demonstrated that no suitable, viable and available sites exist in sequentially preferable locations - see the Sequential Approach in Policy SP 5. The Council will also refuse planning permission for the relaxation or removal of conditions on the type of goods that can be sold from existence out-of-centre units."

18. A passage in the supporting text states: "8.22 The Council has identified sufficient sites to meet the floorspace likely to be generated by expenditure growth to 2033 within the hierarchy of retail centres. Directing retail investment to centres in the retail hierarchy helps to make sure that communities have easy access to day-to-day shopping facilities and that town centres can thrive. It is for these reasons that retail development is out-of-centre locations and the widening of the range of goods sold at out-of-centre locations will be resisted."

19. The claimant submits that the council erred in its interpretation of the local plan by failing to consider or apply correctly the final sentence of policy SADM5 which reads: "The Council will also refuse planning permission for the relaxation or removal of conditions on the type of goods that can be sold from existing out-of-centre units."

20. The claimant submits that the correct interpretation of this sentence is that any proposal for the relaxation or removal of conditions on the type of goods that can be sold from existing out-of-centre units will be refused, notwithstanding the outcome of any sequential testing. The wording of the final sentence of the policy is clear. There is no reference to the sequential test and inclusion of the sequential test cannot be implied in the way in which the defendant and IPs contend, from the preceding sentences in policy SADM5 or policy SP5.

21. The claimant submits that there is a difference between establishing new out-of-centre retail centres and the relaxation of restrictions imposed on existing ones. The policy deliberately imposes a presumption against relaxation of conditions at out-of-centre retail developments to ensure that the nature of the retail use cannot evolve beyond that limited use which was previously found to be acceptable in an out-of-centre location.

22. The claimant submits that this is not a policy of absolute refusal as the development plan must be read as a whole, and in any event the decision is governed by section 38(6) of the Planning and Compulsory Purchase Act 2004 , which provides that the determination must be made in accordance with the development plan unless material considerations indicate otherwise. Thus permission for a removal or relaxation of conditions could be granted, but only if the correct starting point was applied, namely, identifying that there was a clear conflict with policy SADM5. In this case the breach of policy was ignored.

23. The claimant also submits that, because the proposal was contrary to Policy SADM5, the application could not properly be determined under delegated powers. Part 3, paragraph 5.40 of the Council's constitution provides that applications which do not accord with the provisions of the development plan will be presented to the Development Management Committee.

24. In my judgment, the Council did not misinterpret or misapply Policy SADM5, for the reasons given by the Council and the IPs. The delegated report shows that the Council considered and applied the NPPF, Policy SP5 and Policy SADM5 as relevant policies. In accordance with these policies, an assessment of potentially sequentially preferable alternatives was carried out within the delegated report.

25. As Lord Reed said in Tesco Stores Limited v Dundee City Council [2012] PTSR 983 , at [18], planning policies should be interpreted objectively in accordance with the language used, read as always in a proper context. The proper context here is Policy SP5 which provides for the application of the sequential test to "any retail proposals", not distinguishing between proposals for new or extended retail floorspace and proposals to relax or remove conditions in existing developments. The application of the sequential test is consistent with national policy in the NPPF which states that local planning authorities should apply a sequential test.

26. The final sentence of Policy SADM5 relied on by the claimant has to be read in the context of the policy as a whole, in particular, the sentence that precedes it, which expressly applies the sequential test in Policy SP5. The inclusion of the word "also" in the final sentence indicates that what is said in that sentence is an extension of what came before in the preceding sentence, rather than a divergence from it. On my reading, the final sentence applies the same principle, i.e. the sequential test, to the removal or relaxation of conditions as it applies to proposals for new retail development and extensions in out-of-centre locations. That is further confirmed by paragraph 8.22 of the reasoned justification, which does not make the distinction between new retail floorspace and the widening of the range of goods which the claimant puts forward. If the Local Plan intended to introduce the distinction in respect of conditions that the claimant seeks to draw, it seems likely that it would have been expressly identified and explained in the Local Plan, as it is at odds with national and local planning policy which requires the application of the sequential test in respect of development of retail floorspace, not a blanket refusal of planning permission.

27. For these reasons I consider that ground one is unarguable and permission is refused. Ground 2(1)

28. Under Ground 2(1) the claimant submits that the conclusions reached in the delegated report dated 29 July 2024, in respect of the highways impact of the proposal, were based upon a false premise, namely that the mezzanine floor in Unit 1A was still in place when in fact it was removed in May 2024. The application should have been assessed on the basis that there was no mezzanine floorspace at the time of the determination. This was a material error of fact; alternatively, it was a failure to take into account an obviously material consideration.

29. The Transport Statement produced by TTP Consulting ("TTP") in June 2024 set out the basis of its assessment as follows: "2. The Park currently comprises of circa 7,595 square metres floorspace with permission for 1,580 square metres to be used for the sale of food and drink. Currently only 465 square metres is used for the sale of food and drink within the B&M store. This report has been prepared to support an application to remove condition 3 … along with increasing the overall quantum of floorspace permitted to be used for the sale of food and drink to 1,815 square metres with a mezzanine floor in Unit 3 removed thereby reducing the overall to 5,880 square metres."

30. Paaragraph 14 the Transport Statement also refers to the adjacent Tesco Superstore. Paragraphs 14 to 15 and Table 1 further confirm the assumption running through the Transport Statement that the mezzanine would be removed as part of the proposals and that the existing situation was the floorspace of 7,595 square metres. In paragraph 16 the approach was explained as follows: "The proposal is effectively seeking consent to increase the quantum of floorspace for the sale of food and drink by 235 square metres with a loss of 1,950 square metres of comparison/non-food floorspace when compared to the Base/Permitted scenario."

31. The Statement went on to say at paragraph 17: "The proposed additional floorspace used for the sale of food and drink represents a circa 2% increase when taking into account the Tesco which has an estimated ground floor area of nearly 9,000 square metres plus the petrol filling station. On that basis, the proposed development would have a de minimis effect on local traffic conditions as has been accepted by National Highways."

32. The Council and the IPs agree that the mezzanine floor was removed in about May 2024 after Unit 1A ceased to be occupied. The Council was aware of this when it made its decision in July 2024. Therefore, there was no error of fact in this regard on the part of the Council.

33. The Transport Statement was produced at a time when the site was vacant so it was not generating any traffic at all. I agree it would have been absurd to compare that scenario with the scenario if permission was granted. Therefore, two comparator scenarios were used. Table 1 compared: (a) the "Existing" position: 7,130 square metres of non-food floorspace and 465 of food floorspace; (b) a "Base/Permitted" scenario: 6,015 square metres of non-food and 1,580 square metres of food retail floorspace, which recognised that the site was under-used and had permission for more extensive food retail floorspace; (c) the "Proposed" scenario: 4,065 square metres of non-food and 1,850 square metres of food retail floorspace.

34. The Existing and the Base scenarios both included the mezzanine floorspace as that had been in place when the unit was previously occupied by Next.

35. The Transport Statement acknowledged that the mezzanine floor was due to be removed. The "Proposed" scenario thus correctly excluded the mezzanine floorspace and the additional floorspace was not treated as contributing to traffic generation. Admittedly, TTP were mistaken in their understanding that the removal of the mezzanine floor was part of the permission and had not yet taken place, but I do not consider that to be a fatal error in the assessment.

36. I agree with the Council that the claimant is essentially seeking to argue that TTP's methodology was faulty and that they were obliged to model a different scenario, without the mezzanine as a comparator. I agree with the Council that this submission is unarguable in law because, while it may have been open to TTP to model the scenarios differently, it was not obliged to do so. It did model a scenario without the mezzanine floor as "the Proposal". It would have been highly artificial and unhelpful to model a scenario that had not previously existed and was not proposed, namely a use of the unit without the mezzanine floor but without the food floorspace being increased.

37. The methodology that TTP did select was not challenged by the relevant highway authorities when they considered it as part of their assessment of the proposal, which they decided not to object to. The Council was required to give the views of the statutory highways consultees great weight and only depart from them for cogent and compelling reasons.

38. Furthermore, even if the assessment was flawed in the manner submitted by the claimant, I consider that section 31 (3C) and (3D) of the Senior Courts Act 1981 apply, as it is highly likely that the outcome for the claimant would not have been substantially different if the conduct complained of had not occurred. In particular, the conclusions in the delegated report on access, highway and parking considerations, set out at internal pages 11 and 12, would not have been substantially different. The last two paragraphs of that section at page 12 read as follows: "Given the small net increase in floorspace (235 square metres) to be used for the sale of 'food and drink' it is considered that the proposal would not result in a significant change in park and demand at the retail park. Taking account of the above, it is not considered that the proposal would have an unacceptable impact on either the highway or parking provision and it would therefore comply with the relevant policies in this regard." ( Quote unchecked )

39. For these reasons, permission is refused on Ground 2. Ground 3

40. The claimant submits that the Council failed to have regard to the fact that the intended occupier of Unit 1A was IP2 who had recently traded from a proposal alternative site, when discounting that site in the sequential test.

41. The Council considered the site at Unit 14, The Howard Centre as a potential alternative site and found it was not suitable, notwithstanding the claimant's representations to the contrary, pointing out that the first floor had previously been used as an M&S Foodhall.

42. According to the claimant, Nexus Consultants, who advised the Council, were not aware that IP2 (M&S) was the intended occupier and should have been informed of that.

43. To succeed on this ground, the claimant must show that the Council was legally obliged to have regard to the fact that IP2 was the intended occupier of Unit 1A. However, the intended occupier of a development is not generally a material consideration for the determination of a planning application or the application of a sequential test. It is not in dispute that the Council knew that the proposed occupant of Unit 1A was IP2 and that the Council knew that IP2 had previously occupied Unit 14 at The Howard Centre. IP2 vacated Unit 14 at The Howard Centre at the end of April 2022. Attempts to market it since then had been unsuccessful.

44. The delegated report fully considered the representations on suitable alternative sites and the assessments undertaken by Savills on behalf of IP1, MRPP on behalf of the claimant and Nexus, the Council's own consultants. Savills advised the Council in its letter of 11 January 2024 that Unit 14 was not suitable for a variety of reasons, including (1) the lack of dedicated and/or direct and level access parking provision; and (2) the unsuitable configuration of the premises to accommodate a "grocery" operation of the scale proposed, even when adopting flexibility. These reasons were not operator-specific, rather they reflected the requirements of larger format food store and grocery operators. The previous food hall operation at Unit 14 was not analogous to the kind of grocery provision contemplated for the proposed site.

45. Nexus took issue with some of the points made by Savills, but concluded that Unit 14 at The Howard Centre was not suitable. MRPP made detailed submissions in response to Savills in a letter of 12 February 2024, relying upon M&S's use of Unit 14 at The Howard Centre as a food hall, among other matters. It strongly criticised Savills' approach, as can be seen from the summaries set out in the delegated report.

46. I have had regard to the recent review of the law in the Stockport case. The application of the sequential test was a matter of planning judgment for the Council. I agree with the submissions made by the Council and the IPs that, on the material before it, it was manifestly open to the Council to conclude that Unit 14 was not suitable, for reasons that had nothing to do with the identity of the proposed occupier of Unit 1A. The key issue was the nature of the proposed business activity at Unit 1A and the Council was entitled to conclude that the consultants, including Nexus, had sufficient information about this in order to carry out their assessments.

47. Finally, even if the identity of IP2 had been disclosed, I consider that section 31 (3C) and 3D of the Senior Courts Act 1981 applies, as it is highly likely that the outcome for the claimant would not have been substantially different.

48. For these reasons I find that Ground 3 is unarguable and permission is refused. Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof. Lower Ground, 46 Chancery Lane, London WC2A 1JE Email: [email protected]