Summary: Planning permission for Chelsea’s new state-of-the-art stadium was granted in March 2017. However, one family’s tenacious defence of its rights to light threatened to de-rail the scheme until the London Borough of Hammersmith and Fulham resolved to engage its powers under s203 of the Housing and Planning Act 2016. This blog examines why the Council was able to engage these powers, bringing this long running dispute closer to an end.

Background

Chelsea Football Club’s (“CFC”) proposed new stadium at Stamford Bridge will interfere with the rights to light of approximately 50 registered owners and occupiers in the surrounding area. One of these owners, the Crosthwaites, issued a claim in the High Court for injunctive relief in May 2017, following two years of rights to light engagement with CFC. The case serves as a reminder that damages will not always be an adequate or accepted remedy for those affected and that rights to light issues have the potential to scupper development even after planning permission is granted.

The unique facts in this case allowed London Borough of Hammersmith and Fulham (“LBHF”) to resolve, on 15 January 2018, to exercise its powers under s203 (the successor to the old s237 power), which local authorities can be wary of using, to override the Crosthwaite family’s rights to light so that the development can proceed. We reflect here on this recently reformed power and how LBHF prevented the courts from pulling out an injunctive red card.

Under what circumstances can s203 be engaged?

To lawfully exercise its powers under s203, LBHF had to satisfy each of the following conditions:

  1. The land must have become vested in or acquired by a specified authority, or the land must be other qualifying land;
  2. There must be planning consent for the building or maintenance work, or use of the land;
  3. It must be the case that the specified authority could acquire the land compulsorily for the purposes of building or maintenance work, or for the purposes of erecting or constructing a building or carrying out any works, or for the use; and
  4. The building or maintenance work or use must be for the purposes related to the purposes for which the land was vested in or acquired by the specified authority.

Given the similarities between the engagement of s203 and the exercise of compulsory acquisition powers, it was important that LBHF and CFC were able to show a compelling need to exercise the powers in order to mitigate the risk of legal challenge; in particular CFC had to demonstrate that seeking LBHF’s help to engage s203 was in the public interest and was a last resort (even though there is no strict legal requirement to do so).

In this case, CFC’s engagement with the Crosthwaites (including consultation and negotiations) had been ongoing since 2015 and several offers and mediation had failed. CFC’s funding for the scheme was not available until the resolution of all rights to light risks, meaning that if s203 was not engaged, there was a real risk that the redevelopment (and the social, economic and environmental benefits that it promises to deliver) would not materialise.

What is the effect of s203?

Where s203 is exercised, a landowner whose rights to light are overridden loses the opportunity to stop the infringement of its rights by way of an injunction or seek damages in lieu. The loss of these rights is converted to statutory compensation which, in turn, gives the development in question the green light.

Compensation is calculated on the basis of any depreciation in the value of the landowner’s property as a result of the right to light being overridden. Any betterment attributable to the new development can affect the compensation, such that the compensation paid is considerably less than the ransom value of scuppering the entire scheme.

Whilst the effect of exercising the powers under s203 has a similar effect to compulsory acquisition powers, the rights of light are never extinguished (although in practice, it is unlikely that a landowner would ever claw back their benefit).

How s203 rescued CFC

The ability of LBHF to engage s203 turned on its facts. CFC and LBHF are prepared to enter into a sale and leaseback arrangement for the site to facilitate the stadium redevelopment, which appears to satisfy conditions 1 and 4 above.

Condition 2 is satisfied because planning consent for the new stadium had already been granted.

Condition 3 and the all-important question: ‘Could LBHF acquire the land compulsorily for the purposes of the redevelopment?’ presents more of a challenge for authorities to satisfy because of the ambiguity of the word ‘could’. To satisfy the test, there probably only needs to be an ability or a legal power to acquire the land compulsorily, but not that a compulsory purchase order would necessarily be confirmed. However, there is no case law yet to assist with interpretation. If a wider interpretation were adopted (i.e. that a CPO of the land would be confirmed if applied for) then the provision’s worth would be hugely diminished.

It appears, then, that because LBHF has the enabling powers to compulsorily acquire land, condition 3 is technically satisfied, giving LBHF and CFC a full house.

Does s203 give CFC the green light?

The Crosthwaites have said that they will use all legal action available to fight their corner, including judicial review. So the redevelopment does not have the green light yet. Unlike its predecessor (s237 of the Town and Country Planning Act 1990), s203 does not sit within one of the ‘planning acts’ for the purposes of Part 54 of the Civil Procedure Rules, so if the Crosthwaites do decide there are grounds to challenge the lawfulness of LBHF’s exercise of s203, they must do so promptly and, in any event, within three months (rather than six weeks) from the date of LBHF’s decision. This could be a tense and prolonged extra time for CFC.