South Holland District Council has been criticised by the Local Government Ombudsman for taking enforcement action against a housing developer contrary to legal advice and national planning policy guidance.
The watchdog has upheld a complaint from the developer and called on the council to make a full and unreserved apology to the company, Nestwood Homes Ltd. The Ombudsman also wants the local authority to pay what could be a significant amount of compensation.
The case was unusual as the Ombudsman rarely investigates complaints by developers about the planning process. The watchdog said the company suffered considerable injustice in terms of stress, damage to reputation, financial difficulties and losses and consequent strain on family and business relationships..
In this case a council officer approved plans submitted by Nestwood Homes Ltd to meet a planning condition. In approving the plans the officer inadvertently gave permission for raising the land levels on the site, so the new houses were built higher.
When work started on site, neighbouring residents began to object. The council sought counsel’s opinion, which was clear and unambiguous – the council had granted planning permission for the raised levels and that permission would remain valid unless quashed by a judicial review in the High Court.
Counsel drafted a letter to be sent to Nestwood. It differed from Counsel’s opinion in a very significant way. Whereas Counsel had advised that the planning permission was “not void but voidable”, the letter said that the permission was “void and voidable”.
Nestwood continued with the development. Reports were submitted to the planning control committee who visited the site. It decided to take enforcement action requiring four properties, three garages and much of the boundary walls and fencing to be demolished.
Meanwhile, prospective purchasers of the houses were deterred by local publicity and information provided by the council in response to local searches after enforcement action was agreed.
Nestwood appealed against the enforcement notices to the Secretary of State. A planning inspector ruled that the council had granted permission for the raised levels. He ordered the council should pay all the costs of the appeal, saying “in light of their own counsel's advice that enforcement action in relation to the raising of levels ... would be unlikely to succeed, and the relatively weak case put forward... I consider that the council behaved unreasonably in defending the appeals.”
Nestwood complained that the council acted unreasonably and unfairly, delayed making decisions, and unreasonably informed prospective purchasers that the development was unlawful.
The company director responsible for the development says he suffered a great deal of stress, family relationships were nearly destroyed, employees were at risk of redundancy, the company was vilified in the media, its reputation was severely damaged, it suffered additional costs and commercial losses amounting to £1.2 million.
The Ombudsman found maladministration on a number of points. The report highlighted that the officers’ reports to the Planning Control Committee were poorly structured, not clear and comprehensible and materially misrepresented Counsel’s opinion, and as a result a significant proportion of the Committee members did not have an adequate understanding of Counsel’s advice or of the relevant issues.
In addition the officer’s report recommended action that did not reflect the officer’s professional views and did not comply with national guidance that enforcement “should always be commensurate with the breach of planning control”.
Other failings identified in the report centred on the fact that a number of the committee members had predetermined their view about enforcement action before considering the issue at a meeting and were influenced by irrelevant negative interpretations of Nestwood’s actions that were not supported by any evidence.
The Ombudsman recommended that the council should acknowledge the maladministration and arrange for the chief executive and chairman to deliver an apology in person to representatives of Nestwood and then publish the apology on its website.
The watchdog also called on the local authority to appoint a suitably qualified independent accountant to assess the losses incurred by Nestwood from interest payments on loans taken out because of the situation, professional fees incurred in relation to the enforcement action, the costs of maintaining unsold properties on the development and solicitor's costs in making the complaint.
In addition the Ombudsman has urged the council to pay the company director who made the complaint £25,000 in recognition of the stress, strain on family relations and fear of damage to the company’s reputation caused by the maladministration.
A council spokesman said: “The ombudsman has reported and that report has to be considered by the council at its next meeting. Until the report has been considered by the council we are unable to make any further comment.”
6 May 2011