Welcome to the third issue of Bell & Scott’s Strategic Land Update.

In June last year we launched our Strategic Land Team, the first in Scotland to focus on legal advice on strategic land deals. For further information see our website.

This e-update is issued quarterly and will also be available to download from our website.

Strategic Land Update seeks to cover a wide range of topics of relevance to those interested in strategic land issues. In this issue, we comment on:

In addition, we include a number of other relevant news items.

If you wish to discuss any of the items in this edition or require advice on strategic land issues please contact either Bruce Anderson: DD: 0131 718 2399 e: b.anderson@bellscott.co.uk or Caroline Docherty: DD: 0131 718 2383 e: c.docherty@bellscott.co.uk

Implications of the Planning etc. (Scotland) Act 2006

Draft Regulations on the Planning Hierarchy

The Scottish Government has published its consultation document on the proposed hierarchy for planning in Scotland. The consultation document can be accessed here.

Bruce Anderson, Head of our Strategic Land Team, comments:

One of the difficulties of commenting on the Planning etc. (Scotland) Act 2006 until recently has been that so much of the reform package is designed to be implemented by way of Regulations outwith the Act. However, draft Regulations are now emerging from the Scottish Government thick and fast.

The Planning Hierarchy is central to the whole reform package and therefore these particular draft Regulations are of considerable importance. There has been much speculation about where the lines would be drawn between the various categories: now we have something concrete to discuss.

It may be helpful to go back one step. Under the current system, all planning applications are treated in much the same way. The purpose of bringing in a hierarchy of developments is to allow developments of different scales and complexity to be dealt with in different ways. That seems sensible; the interest lies in how the categories are defined.

There are three categories:

National Developments are to be those designated as National Developments in the new National Planning Framework. Once incorporated in the National Planning Framework, developments designated as National Developments will be deemed to be “needed”.

The recently published first draft of the National Planning Framework (NPF2) identifies the following nine projects, which are all infrastructure projects, as proposed National Developments:

It is interesting to note how well balanced these are in both geographic and political terms!

National Developments being taken care of by the National Planning Framework, the draft Regulations on the Planning Hierarchy are left to deal with the split between Major Developments and Local Developments. The approach which has been taken is to provide a definition of Major Developments, leaving Local Developments as all other developments which require planning permission.

In summary, the proposal is that the following are defined as Major Developments:

In some cases these proposed “thresholds” are quite far removed from earlier suggestions which included, for example, a threshold of 300 units for residential development. The consultation paper states that in setting the draft thresholds, an attempt has been made to pitch them at a level which will mean that developments will be treated as “Major” if they are “of a scale and nature which makes them of more than local significance”. Clearly that makes sense but one of the difficulties, which is recognised by the commentary, is that, arguably, different thresholds should apply to different areas of the country. Again, to use, residential development as an example, a development of 75 houses might be considered to be a “local development” in some areas, while it could be considered “major” in others. However, on balance, it may be preferable to have standardised thresholds across the country, rather than a complicated patchwork related to planning authority boundaries.

The significance of developments falling into the “Major” category will be:

With reference to that last bullet point, one may well wonder how extending time limits for determining applications fits into the stated objectives of the overall reforms! However, for major applications, it is probably more realistic and, if it is observed (there’s the rub!), it may be seen as an improvement on the current position.

If a Development is designated as “Local” the intention is that the decision making process will be local. Planning Authorities will be able to put in place schemes allowing applications for Local Developments to be dealt with under delegated powers and those schemes could vary from local authority to local authority. If an application is dealt with by Planning Officers under delegated powers, any “review” (appeal) will be carried out by a local review body rather than by Scottish Ministers. Nevertheless, it is envisaged that Councillors will continue to deal with complex or controversial cases. In addition, Scottish Ministers will have the power to direct that a particular Local Development should be dealt with as if it were a Major Development.

Given the difference in treatment of applications for Major and Local Developments under the new regime, raising or lowering the thresholds from those suggested will have significant implications. To use residential development as an example again, if the threshold were to be moved up to, say, 200 units, that would have the potential benefit to developers of decreasing the number of developments requiring pre-application consultation with the communities, but at the same time would potentially leave more applications at the mercy of local political considerations. How that will play out will depend partly on how willing Scottish Ministers will be to direct that particular Local Developments should be dealt with as Major Developments.

Comments on the draft Regulations are to be submitted by Friday 21 March. I would urge all those with a view to submit their comments by the deadline.

Pettigrew v George Wimpey UK Ltd

Mr Pettigrew was an estate agent. In 1992 he received a flyer from Wimpey, asking for suitable sites for development and promising commission if an “effective introduction” was made. Wimpey’s regional land manager, in its Hook office, sent a similar letter in 1996 and Mr Pettigrew sent him details of four sites, including a site in Chichester (the Site). He said that he would seek commission if the Site was purchased. The land manager asked Mr Pettigrew to register Wimpey’s interest in the Site, and he did so with the owner’s solicitor. The land manager left Wimpey and there were various changes of personnel within the company. The file relating to the Site was transferred to its “dead file” system. In the meantime, Mr Pettigrew continued to monitor the Site, and, occasionally, sent letters to Wimpey, which went unanswered. In 2000 the owner of the Site appointed a Mr Hilder to market and sell the Site. Mr Hilder made contact with Alfred McAlpine Homes and had a series of discussions with their land manager, a Mr Taylor, about the Site. Alfred McAlpine Homes were subsequently taken over by Wimpey. There was further correspondence about the Site and a number of meetings were held between Mr Hilder and Mr Taylor, who by that time was working for Wimpey, following the takeover. Mr Hilder sent out a tender pack and invited Wimpey and other developers to tender for the Site. Wimpey's tender was accepted and they purchased the Site in 2004.

Mr Pettigrew claimed that he was entitled to commission on Wimpey's purchase of the Site, and that, on the basis of his contract with Wimpey (comprising the exchange of letters between him and the land manager back in 1996), all he had to show was that he introduced the Site to them. Wimpey contended that under the law of agency, in order to be entitled to payment of commission, Mr Pettigrew had to show that he was the “effective cause” of Wimpey’s purchase of the Site.

The court ruled that no commission was due considering that the Site file and any lead within it was considered "dead" by Wimpey within the year. The court did not agree with Mr Pettigrew's assertion that the introduction of buyer to seller was sufficient. It held that:

• it was for the surveyor to establish that his actions brought about the relationship of buyer and seller;
• it is an implied term of this type of contract between agent and developer that the agent must be an “effective cause” of the purchase to obtain commission; and
• it was for the surveyor to prove that he was an "effective cause" and Mr Pettigrew had not done that.
  

Caroline Docherty, Partner in our Strategic Land Team, comments:

This is an interesting case for those working in the strategic land industry, as the circumstances are very familiar to us: developer acquires site, agent claims to have introduced site to developer and looks to developer for payment. So often, when reading the dry report of a legal case, one can only speculate on the relationships and background circumstances that gave rise to the litigation, but that seems to be particularly so in this case. The report contains comments by the judge about Mr Pettigrew’s demeanour in the witness box and his clear integrity which are reminiscent of the “Is she not fragrant?” comments of the judge in the Archer case. It is clear that the case did not arise from a “try on” on the part of Mr Pettigrew, but a genuinely held belief that he was entitled to commission.

What are the lessons to be learnt from the case? In the case of independent agents, who find and introduce sites to developers, it is obviously important to maintain contact with current personnel, and not rely on an historic relationship, given that those employed by developers tend to move job and company frequently, and it can take a considerable time to bring a strategic site through the planning process. So far as developers are concerned, obviously, they can be told about hundreds of sites every month, but the good news is that a developer will not find itself obliged to pay commission to an agent unless that agent can show that he not only had a contract with the developer, but that he was an “effective cause” of the purchase. An interesting side issue highlighted by the case is what would happen if two agents introduced the same site, and both could show that they were an effective cause of the purchase. The point did not need to be decided in this case as it was held that Mr Pettigrew was not an effective cause, and therefore it was not necessary to go on to consider whether the implied term in the contract required the agent to be the effective cause or an effective cause. The lesson to be learnt, however, is obviously that it is very important to keep careful records of the source of all introductions once they get to the stage where they are being actively pursued, so that the developer can show, should it be necessary, the source of the introduction and the decision making process that led to it being pursued.

Pettigrew v George Wimpey UK Ltd [2007] EWHC 2559 (QB) (29 June 2007)

A full text of the decision is available on the British and Irish legal Institute website accessible here.

Best practice in establishing Urban Regeneration Companies in Scotland

Urban Regeneration Companies (“URCs”) provide an opportunity to bring increased investment to areas of Scotland that have significant and complex regeneration needs. How they have gone about doing this is the focus of a new Scottish Government report. The report looks specifically at “best practice” in the set up and early operation of URCs in Scotland. It throws light on what works well – from governance structures through to structures for community involvement – and it also outlines some potential pitfalls for newer or even future URCs to avoid. The report can be accessed here.

Updated timetable for implementation of the Planning etc. (Scotland) Act 2006

The new timetable can be found here.

Current Planning Consultations under the Planning etc. (Scotland) Act 2006

(a) Development Management

The Scottish Government has issued a consultation on new secondary legislation on procedures relating to processing planning applications, or "development management" as the process is now known. The changes to development management are concerned specifically with: (1) making the processes around planning applications “fit for purpose” and responsive to different types of development proposal; (2) improving efficiency in determining planning applications; and (3) improving public involvement in the consideration of proposals requiring planning permission. The consultation is in two parts (1) “Consultation on Changes to Planning Application Procedures: Impacts on Business” and (2) “Consultation on Changes to Planning Application Procedures: Impacts on Communities”. The consultation can be accessed here. The closing date for responses is Wednesday 2 April.

(b) National Planning Framework for Scotland

The second National Planning Framework (NPF2) will guide Scotland's spatial development to 2030, setting out strategic development priorities to support the Scottish Government's central aim - promoting sustainable economic growth. The consultation can be accessed here. The closing date for responses is Friday 4 April.

(c) Draft Regulations on Development Plan Examinations

The Act has made development plan examinations largely mandatory. These draft Regulations set out proposals to govern examinations including provisions as to their scope, procedures and how their costs will be met. They seek to ensure that development plan examinations are carried out fairly and efficiently. The proposals include: (1) limiting the scope of the examination to issues raised in representations on the plan; (2) clarifying that it is for the reporter to decide from whom and on what topics further evidence is to be submitted; and (3) defining the parties on whom the reporters can call to give evidence to the examination. More detailed guidance on the procedures to be followed at examinations will be published in a new non-statutory code of practice. The consultation can be accessed here. The closing date for responses is Friday 4 April.

(d ) Draft Regulations for Development Planning

The Act introduced a new system of development planning in Scotland to be set out in Regulations. This consultation is on a draft set of these regulations. Matters covered include the content of strategic development plans and local development plans, procedures for the preparation of plans and procedures for related documents such as action programmes. These regulations will replace the Town and Country Planning (Structure and Local Plans) (Scotland) Regulations 1983. The draft regulations contained in the consultation document can be accessed here. The closing date for responses is Wednesday 20 February.

SPP 11: Planning Policy for Open Spaces

Scottish Councils will be required to prepare an open space strategy to protect and improve open space, as part of a new planning policy. The move will protect existing valued open space and identify requirements for new and improved spaces, helping to deliver greener, healthier and safer networks of open space. Strategies will then inform decisions on proposals in each council's development plan.

The new SPP 11 will make it a requirement that councils: (1) consult with the local community as part of the open space strategy; (2) set out specific requirements in the development plan for the provision of open space in new developments; (3) have new consultation procedures for planning applications affecting sports facilities, such as tennis courts and bowling greens; and (4) notify Ministers where development is proposed on land identified as open space in the development plan.

Each strategy will have to be reviewed every five years, reflecting new timescales for development planning in Scotland's modernised planning system.

Following responses to the consultation on the draft planning policy, there will not be nationally set minimum standards for the quantity of open space in new developments.

SPP 11 emphasises the importance of proper management and maintenance of open space. The policy makes it clear to developers and planning authorities that proper long-term arrangements for management of open space must be put in place for all new developments. The Scottish Government wants Local authorities to use their open space strategy and local development plan to make it clear to developers what open space is required to serve new developments and to ensure that this is appropriate for community needs.

The new notification and consultation procedures came into force on 1 January 2008. SPP 11 can be accessed here.

SPP 3: Planning for Housing Consultation Draft

The Scottish Government proposes a revision of SPP 3 Planning for Housing (“SPP 3”) and has issued a consultation document on its proposals. SPP 3 was first published in February 2003 to provide government policy direction on the provision of “well-located, high-quality new housing” through the planning system, including the provision of a sufficient supply of land and the creation of quality residential environments. Since its publication, there have been indications that SPP 3 has not been as effective as intended, particularly with regard to the issue of release of sufficient land for housing. Stakeholders in local government, housing associations and the development industry have indicated that the absence of an adequate land supply is a major impediment to the provision of new housing in Scotland. The consultation will provide the opportunity to consider this issue and other challenges facing the housing industry. The consultation document is accessible here. The closing date for responses is 31 March.

E-Planning Newsletter: Volume 1 Issue 8

This includes details of forthcoming events, and information on online applications and appeals, online planning information systems and online local plans. The Newsletter can be accessed here.