Open spaces might appear to be a relatively straightforward option when it comes to housing development. However, the case of R (on the application of Day) v Shropshire Council serves as a reminder that thorough due diligence is essential.
In a judgment handed down on 1 March 2023, the Supreme Court has overturned lower court decisions with regard to the development of public land.
Local residents who objected to the development judicially reviewed Shropshire Council (SCC)'s decision to grant planning permission for housing development on land owned by Shrewsbury Town Council (STC). The land was subject to a statutory trust as part of a recreation ground. SCC's Plan identified Shrewsbury as the primary focus for residential development in the county. This judgment will be of particular interest to developers buying land from public bodies.
The Public Health Act 1875 and the Open Spaces Act 1906 empower local authorities to acquire and provide recreation or open space to the public. If they do so, then the land concerned is subject to a statutory trust under either Act.
Disposing of land subject to a statutory trust
A predecessor of STC had bought the land in question in 1926 to meet local demand for playing fields. In 1942, part of the land was converted into allotments, but these subsequently fell into disuse and the land was used as a tree nursery until around 2000 when the land became overgrown and unmaintained fencing enabled the public to obtain access. STC, in the mistaken belief that the disused land was not part of the adjacent recreation ground, sold the land in 2017. SCC granted planning permission for residential development in 2018. Subsequently, research established that the land was bought as public land and subject to a statutory trust.
Under section 123(2A) Local Government Act 1972 (LGA 1972), before disposing of land subject to a statutory trust, the local council must first advertise its intentions in a local newspaper for two consecutive weeks and consider any objections which may be made. Not being aware of the statutory trust, STC did not do so. STC put forward an argument that section 128(2) LGA 1972 meant that failure to advertise was not fatal and a buyer need not concern itself whether the advertising requirement had been complied with.
The need for enhanced due diligence with open spaces
The Supreme Court held that the sale did not extinguish public access and recreation rights over the land granted under the statutory trust where STC had failed to comply with statutory consultation requirements prior to the sale. This was even though the developer had bought the land in good faith with no notice of these rights.
The Supreme Court held that:
1.1 The local authority held the open space in trust for the enjoyment of the public. Section 128(2) LGA 1972 could not be intended to extinguish such important public rights: hence they survived the transfer into private ownership.
1.2 SCC ought to have taken the trust into account as a "material consideration" when making its planning decision. Having failed to do so, the grant of planning permission was quashed. The lower courts had invoked the Senior Courts Act 1981, concluding that it was highly likely that if the Council had correctly consulted then the outcome of the planning application would have been substantially the same. The Supreme Court disagreed and held this was not a given.
The Shropshire case is a reminder that developers need to carry out enhanced due diligence when purchasing from local authorities and consider:
- Raising specific pre-contract open space enquiries;
- Asking for evidence of necessary compliance with the LGA 1972;
- Seeking an indemnity and other contractual remedies; and
- Examining historic maps and records as to land use.
Considering town and village green registration with open spaces
Open space also carries with it the potential risk of town and village green (TVG) registration. Land which has been used by local inhabitants for a period of 20 years can be vulnerable to TVG registration, provided that use is "as of right". The term "as of right", has been held to mean, not that land had been used by permission of the landowner, but used without permission and as if such permission had existed. Local authority ownership may be particularly relevant to this test.
The distinction between use "as of right" and "by right" was considered in the 2014 case of R (on the application of Barkas) v North Yorkshire County Council. The Supreme Court ruled that land held by a local authority for recreational purposes would not be subject to TVG registration. The local authority had laid out and maintained the land for recreational purposes pursuant to statutory powers. The land was held to be used by the public "by right", that is by consent, rather than "as of right". Therefore, this use did not satisfy the registration requirements of s15(2) Commons Act 2006.
These cases show that it is important for any potential purchaser to understand exactly how land is held by a local authority before proceeding.
For further information please refer to Emma Salvatore or Cecilia Busby.
