The case of Swish Estates has re-stated the Margate principles when considering the validity of a CPO where a landowner has put forward an alternative development proposal.
What was the background to Swish Estates?
The Swish Estates case concerns the London Borough of Enfield’s plan to redevelop the area surrounding the High Street into a mixed-use scheme of commercial, residential, retail and community uses. The development land included the property of Swish Estates. Between 2009 and 2015, Swish Estates had failed to reach agreement with the council for either the voluntary acquisition of its land or a joint development venture. In June 2015, Swish Estates’ planning application for a mixed residential and commercial development of its land was refused (as was the appeal).
In February 2016, the London Borough of Enfield made its Compulsory Purchase Order (CPO) to redevelop the area and Swish Estates objected, arguing that redevelopment of its plot of land could be completed separately to the CPO, yet still in coordination with the CPO’s development aims. The Inspector's report to the Secretary of State recognised Swish Estates’ objection, but noted the following:
- There was a lack of evidence of Swish Estates’ track record as a developer.
- An architect’s letter had questioned Swish Estates’ expertise for the development.
- A hybrid scheme would be costly – both in terms of time and cost.
In June 2016, the Secretary of State confirmed the CPO, accepting the findings of the Inspector’s report.
Swish Estates' Challenge
Swish Estates made a ‘section 23’ (Acquisition of Land Act 1981) application to quash the Secretary of State's decision, arguing the following:
- The Secretary of State had not properly considered its proposals to develop the land separately to the CPO scheme, alleging specifically that the Secretary of State had not followed guidance requiring examination of whether the purpose of redevelopment could be achieved by alternative means.
- The Secretary of State had considered an irrelevant consideration or acted irrationally by considering the architect’s letter.
- The CPO’s interference with Swish Estates’ rights was inconsistent with its human rights under Article 1 of the First Protocol of the European Convention on Human Rights.
What are the Secretary of State’s responsibilities in confirming a CPO?
In considering Swish Estates’ arguments, the court followed the approach set out in the case of Margate Town Centre Regeneration Co Ltd v Secretary of State for Communities and Local Government  EWCA Civ 1178, which authoritatively stated the principles to be addressed in the making of a CPO.
- A CPO should only be made where there is a compelling case in the public interest which justifies interfering with the human rights of those with interests in the affected land.
- The draconian nature of CPOs means CPOs are inherently vulnerable to challenges based on Wednesbury unreasonableness.
- The grounds of challenge under section 23 of the Acquisition of Land Act 1981 do not enable the court to revisit the merits of the decision, only to consider any legal or procedural error in confirmation.
- When deciding on confirmation, the Secretary of State must have regard to all material considerations and must not take into account any immaterial considerations.
By virtue of the Secretary of State's CPO guidance, the Secretary of State must also assess whether the CPO's purpose could be achieved by alternative means, including alternative development proposals made by affected persons.
What was the High Court’s judgment?
The High Court dismissed Swish Estates’ application to quash the Secretary of State’s decision. In considering the Margate principles and the Secretary of State’s guidance, the court concluded that the Inspector's report had fully summarised Swish Estates’ alternative development proposals and explained reasons for rejecting them, and the Secretary of State had correctly placed reliance on this in concluding there was no alternative scheme as deliverable as the CPO scheme.
The court also emphasised that the Secretary of State had considered the relevant guidance as this was referred to explicitly in the Inspector’s report. Consideration of the architect’s letter was not found to be irrelevant or irrational, because the London Borough of Enfield would need to be satisfied of Swish Estates’ competence to deliver a joint alternative development. Swish Estates’ human rights argument was dependent on the success of its other arguments, and therefore this ground was also unsuccessful.
What does this mean for future challenges to the validity of CPOs?
While Swish Estates does not amount to a statement of new law, it does provide a useful indication of the approach the court will take when assessing the validity of CPO confirmation decisions. The High Court’s restatement of the Margate principles highlights that confirming authorities should be mindful of their duty to ensure all material considerations have been appropriately considered and addressed in the supporting documentation to CPO schemes, particularly in statements of reasons and statements of case.
Where alternative development proposals are considered, it illustrates that time, cost, and expertise-related factors are all valid arguments against alternative development proposals put forward by objectors.