R (SAVE Britain's Heritage) v Secretary of State for Communities and Local Government & Lancaster City Council

Transcript date:

Friday, May 14, 2010

Matter:

Court:

High Court

Judgement type:

Substantive

Judge(s):

Pelling QC

Transcript file:

Neutral Citation Number: [2010] EWHC 979 (Admin)

Case No: CO/14802/2009
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Manchester Civil Justice Centre
1 Bridge street West
Manchester M60 9DJ

Date: 14/05/2010

Before :

HIS HONOUR JUDGE PELLING QC 
SITTING AS A JUDGE OF THE HIGH COURT
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Between :

R (on the application of
SAVE BRITAIN'S HERITAGE)
Claimant
and 
(1) THE SECRETARY OF STATE FOR COMMUNITIES & LOCAL GOVERNMENT
(2) LANCASTER CITY COUNCIL
Defendants
and
MITCHELLS OF LANCASTER (BREWERS) LTD
Interested Party

- - - - - - - - - - - - - - - - - - - -
Richard Harwood and Andrew Deakin (instructed by Richard Buxton, Solicitors) for the Claimant
James Maurici (instructed by Treasury Solicitors) for the First Defendant
The Second Defendant and Interested Party did not appear and were not represented. 
Hearing date: 27th April 2010 
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Approved Judgment

HH Judge Pelling QC: :

Introduction

1. The Issues

This is the hearing of an application for judicial review by which the Claimant seeks a declaration that paragraphs 2(1) (a) - (d) of the Town and Country Planning (Demolition - Description of Buildings) Direction 1995 ("the Demolition Direction") are unlawful and should not be given effect and that in consequence planning permission was and is required for the demolition of Mitchell's Brewery, Brewery Lane, Lancaster ("the Brewery"). The thesis that paragraphs 2(1) (a) - (d) of the Demolition Direction are unlawful depends upon a submission that the effect of the Demolition Direction is contrary to the requirements of the Environmental Impact Assessment Directive (85/337/EEC) (as amended) ("the EIA Directive"). This in turn depends upon a submission by the Claimant that the EIA Directive requires an Environmental Impact Assessment to be carried out prior to the demolition of a building. The First Defendant's case is that the EIA Directive does not apply to demolition works but even if he is wrong on that point, his case is that the point is academic as the demolition of the Brewery would not, in any event, be unlawful.

2. Preliminary Points

i) Originally, there were two further grounds of challenge - one based on an assertion that the Demolition Direction did not apply in any event and a further allegation that the Second Defendant had failed to comply with its obligations under the Habitats Directive (1992/43/EEC). Both these grounds had been abandoned by the time of the hearing before me. It is not necessary for me to take up time explaining why that was so
ii) The primary issues between the parties - whether the EIA Directive is capable of applying to demolition works- is an issue that it is likely will be resolved in Commission v Ireland (C-50/09) a case pending before the CFI of the ECJ. It was suggested that argument in that case was due to be heard at the end of June 2010 but that it was likely that there would be a significant delay before a judgment was promulgated. I suggested to the parties that it might be appropriate to stay the current proceedings pending the determination of those proceedings but neither party was inclined to agree with this suggestion. I was also informed that judicial review proceedings had been commenced by the Claimant in respect of a proposal at Trevethick Street, Bensham, Gateshead dated 12 November 2009 for the demolition of 154 houses and the top soiling and grassing of the site where the same issue arises. Again I suggested that it might be sensible for this case to be stayed and then listed for hearing with that case. However, again neither party was prepared to agree to this suggestion because the Gateshead case has not progressed very far and for reasons that are not clear at any rate to me were commenced in London in any event. My suggestion that the delay would not be entirely wasteful since the decision of the ECJ in Commission v Ireland (C-50/09) might by then be available again did not appeal to the parties. Notwithstanding this lack of enthusiasm I gave some thought during the hearing to whether I should in any event stay these proceedings, give directions concerning the transfer of the Gateshead proceedings to Manchester and for a stay of both until the decision of the ECJ had been promulgated. However, I have to say with some reluctance, I decided not to adopt that course taking the view that if both parties wanted the question addressed by me in this case it was my duty to proceed since the delay that might otherwise result could be considerable. I was also influenced by the fact that there is in this case (now) a continuing injunction which restrains demolition, that the First Defendant argues that the dispute concerning the effect of the EIA on the Demolition Direction is in any event academic on the facts of this case and also by the fact that neither the Second Defendant nor the Interested Party were before me and would not have the opportunity therefore to address me on the point.

The Factual Background

3. The Brewery is a redundant building that is unoccupied and has been for a number of years. It is in dilapidated condition. It consists of an 18th century malt house and low tower together with 19th and early 20th century additions, including a four storey brew house tower and associated range. There is also a more modern building which is attached to the older buildings I have described. The northern part of the Brewery site includes another modern building and yard.

4. On 3rd July 2008, Centros Miller LLP lodged an outline planning application together with a series of ancillary applications for listed building consent and conservation area consent for the redevelopment of the Lancaster Canal area. These proposals included demolition of the Brewery. This application covered 5.4 hectares and was accompanied by an Environmental Statement under the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999 ("the EIA Regulations").The applications by Centros Miller LLP were originally recommended for approval by the Council's Planning Committee in October 2008 but the First Defendant called the decision in following representations from, amongst others, the Claimant and English Heritage.

5. A public inquiry into the proposals was held by a planning inspector in Lancaster between 16th June and 2nd July 2009. Centros Miller LLP did not attend. The Council appeared initially and tendered evidence in support of the application, but withdrew from an active part in the inquiry on 25th June 2009 apparently after its Conservation Officer had accepted that the scheme was unacceptable in heritage terms. As is accepted by the Claimant in Paragraph 10 of Mr Harwood's skeleton submissions, by the time the Inquiry closed, "It was obvious that the prospects of planning permission for the Centros proposals being granted under these circumstances were remote." The Inspector's report dated 29th October 2009 recommended that the applications be refused and the First Defendant refused permission for the redevelopment scheme by a letter of 21st December 2009. Both parties rely on various extracts from the report as supporting their factual case but in my judgment they are immaterial to the issues I have to decide.

6. On 9th October 2009, the Interested Party submitted to the Council a notice under s.80 of the Building Act 1984 giving notice of intention to demolish the Brewery together with a map and accompanying Google photograph showing the demolition site. Although there was at one stage a dispute about whether the Google photograph was included or not, I am satisfied that the evidence demonstrates that it was - see Paragraph 3 of Mr Dobson's 2nd witness statement. He also gives evidence that is not disputed before me that the site as shown on the photograph is less than 0.5 hectares in area. The s.80 notice described the buildings as "redundant" and in a subsequent Application for Prior Notification dated 19th October 2009, the Interested Party gave as its reasons for wanting to demolish the building that it "... has been vacant for several years and is redundant to its previous use and in a condition which would make it financially unviable to restore". This document was faxed to the Second Defendant on 22nd October 2009 and gave 30th November 2009 as the proposed demolition date. This application appended a plan identifying a smaller area for demolition than that identified in the s.80 notice

7. Meanwhile, on 21st October 2009, the Claimant sent the Defendants a pre-action protocol letter in which it argued that paragraph 2(1)(d) of the Demolition Direction was not consistent with European Law, that in consequence effect should not be given to it and from that it followed that demolition of the Brewery would constitute "development" within the meaning of the Town and Country Planning Act 1990 ("TCPA") and as such planning permission for the demolition would be required. One of the other grounds subsequently abandoned was also identified.

8. On 28th October 2009, the Second Defendant wrote to the Interested Party saying that prior approval for the demolition of the buildings was required under the General Permitted Development Order 1995 given the proximity to residential dwellings of the buildings it was proposed should be demolished. The Council sought further details of the proposed works and also raised the matter of the necessity for a screening opinion under the EIA Regulations.

9. On 30th October 2009, the Second Defendant then wrote to the Claimant's solicitors saying that while the Council would not express a view on the lawfulness of the Demolition Direction (i) the Council would be serving a counter-notice to the s. 80 Notice within the prescribed time limits and (ii) that prior approval and a screening opinion would be required before demolition could properly take place. On 19th November 2009 the Council issued a notice under s.81 of the Building Act 1984 which imposed a number of conditions on the proposed demolition related to shoring up adjacent buildings, clearing waste, dealing with drainage and surfacing, noise, dust and grit. Following a challenge by the Interested Party to the Second Defendant's demand for Prior Approval, the Second Defendant obtained advice from counsel and then on 2nd December 2009, the Second Defendant wrote to the Claimant's solicitors informing them that it had changed its mind about the necessity for Prior Approval.

10. On 2nd December 2009, the Claimant was informed by a local resident that demolition of the Brewery had commenced. On 3rd December 2009, the Claimant obtained an injunction without notice preventing demolition. The parties appear to have proceeded on the basis that the Injunction remained in place down to today. At the start of the hearing before me it was submitted by both parties before me that the injunction had not survived the grant of permission to bring these proceedings. This was so because Owen J's order dated 7th December 2009 was expressed to be until determination of the application for permission or further order. The application for permission was determined by HH Judge Mackie QC on 5th January 2010 but he had not continued the Injunction. The Claimant asked me to re-grant the injunction over until after determination of the proceedings or further order. The First Defendant did not object to this course being adopted. I acceded to this request subject to a provision entitling the Interested Party to apply to vary or discharge that order on 48 hours' written notice to the Claimant's solicitors.

11. The only other factual points that need to be noted at this stage are that (a) on 2nd March 2010, the Malt house was given Grade II listed building status and (b) the Second Defendant is currently reviewing the boundaries of the Lancaster City and Castle Conservation Areas. However, the Second Defendant has decided not to progress the consultation process while these proceedings are pending. The Claimant relies on the fact that the consultants engaged by the Second Defendant to assist in this review have produced a report which concludes that the Brewery is of historical significance. There appears to be dispute about that but in any event it is immaterial to the issues I have to decide.

The legal Framework

12. In summary s.55 of the TCPA as amended treats development for which planning permission is required as including building operations, defines building operations as including demolition but excludes from the scope of development for which planning permission is required any demolition of any description of building specified in a direction issued by the First Defendant to LPAs generally or to a particular LPA. The current generic direction is the Demolition Direction which in so far as is material provides
"subject to sub-paragraph (2), the demolition of the following descriptions of buildings shall not be taken, for the purposes of the Town and Country Planning Act 1990, to involve development of land:
(a) any building which is a listed building as defined in section 1(5) of the Planning (Listed Buildings and Conservation Areas) Act 1990;
(b) any building in a conservation area;
(c) any building which is a scheduled monument as defined in section 1(11) of the Ancient Monuments and Archaeological Areas Act 1979;
(d) subject to sub-paragraph (3) any building other than a dwelling house or a building adjoining a dwelling house;
(e) any building the cubic content of which, measures externally, does not exceed 50 cubic metres;
(f) the whole or any part of any gate, fence, wall or other means of enclosure"
In summary the effect of these provisions is that planning permission is not required for demolition of any listed building; any building in a conservation area, any scheduled monument, or any building that is neither a dwelling nor adjoining a dwelling. This has no application to the partial demolition of any of those types of building and those types of building falling within (a) to (c) are subject to separate regulatory regimes. Whilst planning permission is not required for demolition within the scope of the Demolition Direction, such demolition is subject to the regulatory regime set out in s.80-83 of the Building Act 1984.

13. Turning now to the EIA Directive, its purpose is identified in the recitals as being that :
"... development consent for public and private projects which are likely to have significant effects on the environment should be granted only after prior assessment of the likely significant environmental effects of these projects has been carried out ..."

Effects are widely stated in the recitals as including human health, quality of life, maintenance of a diversity of species and the reproductive capacity of the ecosystem as a basic resource for life. This carries through into the Directive via Article IV which identifies a wide variety of factors to be considered as part of an EIA including effects on material assets, cultural heritage and the landscape. Article 1 provides that:

"This Directive shall apply to the assessment of the environmental effects of those public and private projects which are likely to have significant effects on the environment"

Article 1(2) defines "project" for present purposes as meaning:
" ...
- the execution of construction works or of other installations or schemes,
- other interventions in the natural surroundings and landscape including those involving the extraction of mineral resources"

I refer to these alternatives hereafter as respectively the first and second limbs. Article 2 imposes on member states the obligation to adopt all measures necessary to ensure that projects falling within the definition referred to in Article 4 are subject to a requirement for development consent and to an assessment with regard to their effects. Article 4 defines the projects which are to be made subject to assessment by reference to Annex I where an assessment is required in respect of all such projects and Annex II which leaves it to member states to determine either through a case by case examination or by thresholds or criteria set by the member state whether the project should be subjected to an EIA.

14. It is not necessary that I refer to Annex I save for one provision since it is common ground that if the EIA Directive applies at all, the demolition of the Brewery falls within Annex II if it falls within any part of the EIA Directive. The only Paragraph of Annex I I need refer to is Paragraph 2 (which is said to be relevant to the true construction of the Directive as a whole). It provides that:

"Thermal power stations and other combustion installations with a heat output of 300 megawatts or more, and nuclear power stations and other nuclear reactors including the dismantling or decommissioning of such power stations or reactors (except research installations for the production and conversion of fissionable and fertile materials, whose maximum power does not exceed 1 kilowatt continuous thermal load)." [Emphasis supplied]
In relation to Annex II, the Claimant contends that the demolition of the Brewery comes within one or more of Paragraphs 7(d), 10(b) or 13. Those paragraphs respectively provide that:

"7. Food industry
(a) Manufacture of vegetable and animal oils and fats;
(b) Packing and canning of animal and vegetable products;
(c) Manufacture of dairy products;
(d) Brewing and malting;
(e) Confectionery and syrup manufacture;
(f) Installations for the slaughter of animals;
(g) Industrial starch manufacturing installations;
(h) Fish-meal and fish-oil factories;
(i) Sugar factories
... [Emphasis supplied]
10. Infrastructure projects

...

(b) Urban development projects, including the construction of shopping centres and car parks;
...
13 - Any change or extension of projects listed in Annex I or Annex II, already authorized, executed or in the process of being executed, which may have significant adverse effects on the environment; ..."

15. In England & Wales, the EIA Directive has been given effect by the EIA Regulations. There is no separate EIA regime for listed building consent applications, conservation area consent applications or applications for the demolition of scheduled monuments. Thus if planning permission is not required for the demolition of such buildings, the fact that such demolition may require compliance with separate regimes applicable to buildings of that status does not mean that an EIA will be carried out in respect of the proposed demolition.

16. Where the EIA Regulations apply, the distinction drawn in the EIA Directive between Annex I and Annex II development has been maintained by the EIA Regulations. Development listed in Schedule 1 to the Regulations must be subject to EIA. Development listed in Schedule 2 to the Regulations must be assessed ("screened") in order to decide whether the project is likely to have significant effects and therefore whether EIA is necessary but, subject to one relevant exception, only if it exceeds the thresholds or criteria set out in column 2 to that Schedule. In relation to the Schedule 2 equivalents of Paragraphs 7(d), 10(b) and 13 of Annex II to the EIA Directive, Schedule 2 provides as follows:

Paragraph Column 1 Column 2
7 (d) Brewing and malting The area of new floorspace exceeds 1,000 square metres
10 (a) Industrial estate development projects
(b) Urban development projects, including the construction of shopping centres and car parks, sports stadiums, leisure centres and multiplex cinemas The area of the development exceeds 0.5 hectare.
The area of the development exceeds 0.5 hectare.
13 (a) Any change to or extension of development of a description listed in Schedule 1 (other than a change or extension falling within paragraph 21 of that Schedule) or in paragraphs 1 to 12 of Column 1 of this table, where that development is already authorised, executed or in the process of being executed, and the change or extension may have significant adverse effects on the environment; (a) (i) In relation to development of a description mentioned in Column 1 of this table, the thresholds and criteria in the corresponding part of Column 2 of this table applied to the change or extension (and not to the development as changed or extended).

The relevant exception to the general rule that Schedule 2 development only requires screening if it exceeds the thresholds or criteria set out in column 2 to that Schedule is contained in Regulation 4(8) of the EIA Regulations which provides that:

"The Secretary of State may direct that particular development of a description mentioned in Column 1 of the table in Schedule 2 is EIA development in spite of the fact that none of the conditions contained in sub-paragraphs (a) and (b) of the definition of ‘Schedule 2 development' is satisfied in relation to that development"

Discussion

17. As is apparent from Paragraph 32 and following of this judgment, I have come to the conclusion that the argument in this case concerning the effect of the EIA Directive on the Demolition Direction is academic on the facts of this case. It follows that what I say concerning the scope of the EIA Directive is not necessary for the purpose of arriving at my decision. I have considered whether to set out my views in relation to it at all. I have decided to do so because it was this argument that took up substantially the whole of the hearing before me and in case I am wrong in my conclusion that the issue is academic in the circumstances of this case.

18. The Scope Of The EIA

The logical starting point is to ask whether demolition other than demolition that is carried out as part of a wider development comes within the scope of the EIA Directive at all. As the Claimant accepts in Paragraph 83 of its skeleton submissions, that involves asking whether demolition is capable of being a "Project" within Art.1(2) of the EIA Directive. This involves construing Art.1(2) in the context of the Directive read as a whole. The jurisprudence of the ECJ emphasises that in construing this Directive, "... one must go to the purpose and general scheme of the directive..." and that the "...wording of the directive indicates that it has wide scope and a broad purpose..."- see Paragraph 31 of the Judgment in the Dutch Dykes Case (1996) C-72/95 [1996] ECR I-5403. To similar effect is Paragraph 28 of the Judgment in the Ecologistas Case (2008) C-142/07. As far as it goes, this is common ground between the parties. However, the context in which this principle has been articulated needs to be noted. In no case so far decided by the ECJ has it been suggested that demolition that does not form part of a wider project is capable of being a project for the purposes of the Directive. The issue that arose in Ecologistas for example was concerned with a contention that because Urban Roads were not mentioned within the Directive which referred only to motorways express roads and roads it followed that Urban Roads were not included. The ECJ unsurprisingly had no difficulty rejecting that contention on the basis that it would be contrary to the very purpose of the EIA Directive to allow any urban road to fall outwith the Directive simply because the Directive did not mention that kind of road - see paragraph 25 of the Judgment. What is required as the Court said at Paragraph 33 was implementation of the Directive in a manner that fully corresponds with its fundamental objective.

19. I turn first to the text of the Directive. Nowhere within either limb of the definition of "Project" contained in Art.1(2) of the Directive is demolition expressly mentioned. Demolition is not as a matter of language "construction works". It was argued by the Claimant this was not of itself decisive because the words "installations" and "schemes" are not controlled or restricted by the word "construction". Thus if those words are read alone demolition is capable of being a scheme at least arguably. I do not accept the premise of this argument for the reasons identified by Lord Hoffmann in R(Edwards) v. Environment Agency [2008] UKHL 22 [2009] 1 All E.R. 57 at Paragraphs 51-52 which I set out and consider further at Paragraph 25 below. However, even if the Claimant is correct in this submission, it is nevertheless the case that this article is not to be read in isolation. Article 2(1) is the main operative provision of the Directive. It defines the applicability of the Directive by reference not to projects but to projects as (further) defined in Article 4. Article 4 defines the applicability of the Directive by reference to projects (as defined in Article 1(2)) listed in either Annex I or Annex II This being so, to my mind the possibility that the word "schemes" when read in isolation might be capable of including demolition is not the end of the enquiry but only the start of it. With one possible exception, to which I turn below, none of the projects defined in either Annex I or II can fairly be described as extending to demolition alone.

20. The sole provision which is arguably capable of being construed as referring to demolition alone is in Paragraph 2 of Annex I which is set out above. The part relevant for present purposes is that underlined in the quotation set out above. It was argued on behalf of the Claimant that these words necessarily included demolition and, therefore, that the inclusion of these words suggested an intention to include demolition within the scope of the Directive. I reject that submission. First, in my judgment the fact that the Council of the EU felt the need to include the words underlined suggests that it was thought that without them, the works described would not fall within the scope of the Directive. Thus it is the absence of any general inclusion of demolition within the scope of the Directive that is significant. Secondly, the words underlined do not include solely demolition but much more than that. Finally, the inclusion of the words underlined in Paragraph 2 of Annex I does not even arguably lead to the conclusion that such words or some approximation of them should be implied into every other paragraph of Annex I or any of the paragraphs of Annex II.

21. I now turn to the specific paragraphs of Annex II on which reliance is placed by the Claimant. I turn first to Paragraph 7(d). In my judgment the phrase "brewing and malting" has to be read together with Art 1(2) for the reasons already given and thus is to be read (applying the first limb of Article 1(2)) as meaning "the execution of construction works or of other installations or schemes concerning brewing and malting". Thus understood I do not see how as a matter of language and even approaching the construction of that language in the manner mandated by the ECJ leads to the conclusion that demolition of an empty and redundant building that was formerly used as a brewery could come within that definition. It is brewing and malting that engages the Directive not its absence. This point applies a fortiori to an attempted application of the second limb within Art 1(2) to Paragraph 7(d) of Annex II.

22. I do not consider that Paragraph 10(b) can sensibly be held to apply to the demolition of such a building either. Demolition without reconstruction is not "development" (because such is on its natural meaning the construction of a new building or new buildings or the alteration or refurbishment of an existing building or buildings) but in any event the words "... including the construction of shopping centres and car parks" shows very clearly that this paragraph is concerned and concerned exclusively with construction. Indeed it is difficult to see how an urban development project could involve anything other than construction. At one time reliance was placed on Paragraph 10(a) - industrial estate development projects. That was not expressly relied on by the Claimant before me but as to that a redundant brewery is not an industrial estate and the demolition of such a building is not in my judgment a development project unless it is part of a wider scheme involving not merely demolition of an old building or buildings but the construction of a new building or buildings. The inclusion of the word "development" in Paragraph 10(a) refers to the building of a new industrial estate. Urban development projects that are the subject of Paragraph 10(b) are much wider in concept than the concept referred to in Paragraph 10(a) but the common theme in my judgment is the building on land of new buildings or the extensive modification or refurbishment of existing buildings. It cannot apply to the demolition of an existing building alone which involves destruction not construction or development.

23. Finally I turn to Paragraph 13 of Annex II. The Claimant maintains that demolition of the Brewery is a "... change ... of [a] project listed in ... Annex II already executed ...". I reject that submission as clearly unsustainable for the following reasons. First, in my judgment "change" is incapable as a matter of language of applying to the demolition, that is the destruction, of an existing building. Had it been intended by Paragraph 13 to include demolition alone it could and would have said so. What is here referred to is an alteration or refurbishment not destruction by demolition. Further, the word "change" cannot be read in isolation from "projects" in Paragraph 13. As I have already pointed out, that has to be read as defined not by Article 1(2) exclusively but by reference to Article 1(2) and the various paragraphs of Annex I and II that precede Paragraph 13. That means that for the demolition that is proposed in this case to be within Paragraph 13 it would have to satisfy the requirements of either Paragraph 7(d) or 10(a) or (b). The demolition of a redundant former brewery does not satisfy any of those paragraphs for the reasons already explained.

24. I have so far set out my conclusions as a matter of construction by reference to the terms of the Directive applying the rules of construction to which I referred at the outset. Next I consider whether any English authority or any of the jurisprudence of the ECJ leads to a conclusion that is different from that which I have set out above. Although a number of different English authorities were cited to me in the course of the elaborate submissions advanced on behalf of both represented parties, in my judgment those that actually assist are limited.

25. Turning first to the English authorities, in my judgment there is only one that is capable of impacting on the issues I have to decide and that is R (Edwards) v Environment Agency [2008] UKHL 22 [2009] 1 All E.R. 57. Before turning to that case in detail, I record that the Claimant referred to the judgment of the Court of Appeal when giving reasons for refusing permission to appeal in R(England) v. LB of Tower Hamlets [2006] EWCA Civ 1742. It was referred to I think for the purpose of suggesting that the point being argued before me was regarded by the Court of Appeal as at least arguable. I do not regard Paragraph 8 of Carnwath LJ's judgment as supporting this contention. Rather it appears to record a submission by Mr Buxton the solicitor who acted for the Claimant in that case. However, more importantly Edwards post dates that case.

26. Edwards was concerned with a cement plant where the fuel that was used was changed to the burning of unusable tyres. One of the grounds on which the decision of the Environment Agency to permit such a change was challenged was by reference to the EIA Directive. The lead judgment was that given by Lord Hoffmann. His remarks concerning the EIA Directive were in the end obiter. However, his remarks were adopted by at least a majority of the other members of the House of Lords. The submission that was being considered was that the conversion of the plant to one that burnt tyres was either a project within Paragraph 10 of Annex I or Paragraph 11(b) of Annex II as they were then. At Paragraphs 51-52, Lord Hoffmann said:

"51. Like my noble and learned friend Lord Hope of Craighead, whose speech I have had the opportunity of reading in draft, I have very considerable doubt as to whether this can be right. The first indent of the definition of "project" - "the execution of construction works or of other installations or schemes" - appears to contemplate the creation of something new and not merely a change in the way existing works are operated. The German version - "die Errichtung von baulichen oder sonstigen Anlagen" - makes this even clearer. "Errichtung" means erection or construction and "Anlage" means an installation or plant. (The French version is "la réalisation de travaux de construction ou d'autres installations ou ouvrages".)

52 The second indent - "other interventions in the natural surroundings and landscape including those involving the extraction of mineral resources" - clearly applies to activities, such as mining or quarrying, or dragging for cockles (Landelijke Vereniging tot Behoud van de Waddenzee v Staatssecretaris van Landbouw, Natuurbeheer en Visserij (Case C- 127/02) [2004] ECR-7405 ) which alter or destroy the natural environment. But this concept cannot easily be applied to changing the fuel in an existing installation. "

The First Defendant relies on the comments in relation to the first limb that it contemplates the creation of something new as supportive of its case as to the proper construction of the meaning of "project" and as being inimical to the notion that it includes demolition other than as part of a new build or refurbishment project. The First Defendant also relies on Lord Hoffmann's analysis of the second limb as supporting its submission that the scope of that limb is confined to interference with the natural landscape. Lord Hoffmann's conclusion on this issue is set out at Paragraph 54 where he says:

"Mr Wolfe referred to Commission v Italy (23 November 2006) Case C-486/04 , in which a power station fuelled by combustible material derived from waste and biomass had been built at Massafra in Apulia without any assessment under the EIA directive. The Court of Justice had no difficulty in holding that the plant came within paragraph 10 of Annex I . It seems to me entirely reasonable to describe the project as having been the construction both of an installation for the incineration of waste and an installation for the generation of electricity. It fell within both descriptions. But the present case does not involve the construction of anything and therefore in my opinion falls outside the directive"

It is clear that in Lord Hoffmann's view, the scope of the EIA Directive in relation to the first limb was confined to activity involving construction. Lord Hope concurred with this view, saying at Paragraph 68 that "[t]he definition of "project" in article 1 appears to contemplate the construction of something new, not a change to an installation or scheme which already exists ...". Lord Walker agreed with Lord Hoffmann. Lord Mance and Lord Brown differed in relation to the applicability of the EIA Directive (though as I have said that was a difference that did not in the end affect the outcome of the case) but it is noteworthy that the basis of the difference identified by Lord Mance was that he concluded that the change to tyre burning involved "... not inconsiderable physical adaptation of the Company's site and plant". Thus on analysis there does not appear to be a difference as to the principle identified by the majority but as to its applicability to the facts of the particular case.

27. In my judgment the analysis of at least a majority of the House of Lords in Edwards supports the views I have expressed above. Whilst the views expressed by the House of Lords were of course obiter they are entitled to the greatest respect and ought to be followed unless they can be demonstrated to be clearly wrong or to have been arrived at without consideration of a material authority. I am not satisfied that the views expressed by the majority were clearly wrong. It was not suggested that these views had been arrived at without consideration of a material authority.

28. There are no other English authorities that assist on the question I am now considering. The decision of the House of Lords in Shimizu (U.K.) Ltd. v Westminster City Council [1997] 1 W.L.R. 168 does not assist because it was concerned with the difference between "demolition" and "alteration" under the Planning (Listed Buildings & Conservation Areas) Act 1990 - that is with different language used in a different statute and a different context. Likewise I derive no assistance from the decision of the Court of Appeal in Cambridge City Council v Secretary of State for the Environment and Milton Park Investments Ltd. (1992) 64 P. & C.R. 257 because whilst that case was concerned with the meaning of "development" - which is the word used in Paragraph 10(d) of Annex II - it was used and being construed in a different statutory context to that which I am now considering. Finally, I derive no assistance from the decision in R(Mortell) v Oldham Metropolitan Borough Council [2007] EWHC 1526 (Admin) because that case was concerned with a project which involved both demolition and new build. It is not in dispute between the parties that activity of this sort is a project within the meaning of the EIA Directive and as such attracts the applicability of the EIA Regulations or that in such a case, the effects of demolition as well as construction have to be taken into account.

29. As to the jurisprudence of the ECJ, there is no case which impacts directly on the issue that I am now considering. I have mentioned some of the decisions that set out the approach to construction already. There are a number of others to similar effect which add nothing to what I have said already. In those circumstances I address the points made on behalf of the Claimant in Paragraph 85(ii)-(v) of the Claimant's skeleton quite shortly. The point made in Paragraph (ii) namely that the Directive must be implemented by Member States in a manner that fully corresponds to its requirement begs the question that I have to decide namely whether demolition of a building is of itself a Project. Paragraphs (iv) - (v) argue that the projects identified in Annex II include modifications and that the amended Directive cannot be circumvented by the splitting of projects. As I have already made clear, I do not accept that demolition constitutes a change. For similar reasons, I do not accept that demolition constitutes a modification. No question of circumvention arises on the facts of this case because on the evidence there is no suggestion that the demolition is part of any other project or is motivated by anything other than the need to demolish a redundant building for the reasons identified by the Interested Party and summarised in paragraph 6 above. The application to demolish was made after the time when, as the Claimant acknowledges, it had become apparent to all concerned that planning permission for the proposed development of the area including the Brewery was bound to be refused - see Paragraph 5 above. This point is also the answer in my judgment to the suggestion that the exclusion of demolition breaches the prohibition on the splitting of projects to avoid engaging the EIA Directive and/or Regulations. No such question arises on the facts of this case as they are known to me.

30. That leaves Paragraph (iii). There it is submitted that in interpreting the Directive, the decisive factor is whether what is proposed might have a significant effect on the environment within the meaning of the EIA Directive. It was submitted that if what is proposed is capable of having a significant effect, then it is to be treated as falling within the scope of the Directive. I do not accept that to be a correct analysis. Had the Council of the EU intended that the Directive should apply to all schemes of whatever description as long as they had or might have an effect of the sort described, then it could and would have said so subject to a threshold qualification save for activity such as that currently identified in Annex I. However that course was not adopted. The scheme of the Directive is to establish in effect an envelope of applicability and it is only projects falling within that envelope as defined that attract the application of the Directive. The issue that arose in the Dutch Dykes Case (ante) was an issue concerning whether a provision within Annex II that referred to canalisation and flood relief works was capable of including certain works (that it was accepted were otherwise projects within the meaning of the Directive) on a dyke running alongside a waterway. The relevant conclusion of the ECJ is that contained in Paragraph 31 which was to construe the relevant paragraph of Annex II as encompassing all works for retaining water and preventing floods. Paragraph 32 goes to a different point which was one concerning significant effect. That is not the issue in this case for present purposes. Waddenzee does not add anything to the issues now being considered.

31. For each of these reasons and all of them, I conclude that demolition other than demolition forming part of what would otherwise be a project within the meaning of the EIA Directive does not come within the scope of the EIA Directive.

32. The Effect Of The EIA Regulations In relation To The Proposed Demolition Of The Brewery
I accept the submission made on behalf of the First Defendant that EIA would not in any event be required for the demolition that is proposed even if the EIA Directive and thus the EIA Regulations were capable of applying to demolition. This is so because (a) in relation to Paragraph 7(d) of schedule 2 to the EIA Regulations (see paragraph 16 above), the applicable threshold is that "the area of new floor space exceeds 1,000 square metres". No new floor space will be created by the demolition that is proposed. In relation to Paragraph 10(a) and (b) of Schedule 2, the applicable threshold is that "the area of the development exceeds 0.5 hectare". Given that the area covered by the demolition the subject of the s.80 notice is less than 0.5 hectare that does not apply either. Finally in relation to Paragraph 13 of Schedule 2 the applicable threshold in relation to changes to developments of a description mentioned in Column 1 of the Schedule 2 table are the thresholds and criteria in the corresponding part of Column 2 of the table applied to the change or extension. For the reasons already explained this cannot apply to the proposed demolition.

33. The only issue left over is the applicability of Regulation 4(8) of the EIA Regulations. As to that, the Claimant submits that the principle point is not academic because it is inevitable that if an application was made to the First Defendant that he exercise his powers under that provision he would not do so because of the views he has concerning the effect of the Directive. The First Defendant rejects this analysis because it has been held that the insertion of Regulation 4(8) is not necessary in order to transpose the EIA Directive into English law having regard to the other terms of the EIA Regulation and because (a) no application has been made to the First Defendant that he exercise his powers under Regulation 4(8) and (b) it is clear that that there is no obligation on the First Defendant to exercise the power conferred by the Regulation. I consider this last point to be properly taken. For all I know there may be any number of reasons why the First Defendant may rationally choose not to exercise his Regulation 4.8 powers aside from the principle point considered above, any or all of which he may be entitled to rely on in addition to or in substitution for his position concerning the principle point. I consider that each of these points made by the First Defendant are well founded and to be supported by the first instance decision in Berkeley v Secretary of State for the Environment, Transport and the Regions [2001] Env. L.R. 32 that was upheld in the Court of Appeal ([2001] 3 C.M.L.R. 11). The potential importance of the third of these points derives significant support in my judgment from Paragraph 43 and the first sentence of Paragraph 44 of the first instance decision of Mr Duncan Ousley QC as he then was.

34. In those circumstances it is not necessary that I consider the second point identified in Paragraph 86 of the First Defendant's submissions. However it is right that I indicate that I doubt whether the point is correct essentially for the reasons identified by the Claimant in Paragraph 111 (v) and (vi) of the Claimant's skeleton.

Conclusion

35. For the reasons set out above, I conclude that this application ought to be dismissed because I do not accept that demolition other than demolition as part of a wider scheme comes within the scope of the EIA Directive, but in any event because whether it does or it does not is academic in the circumstances of this case given that what is proposed does not fall within Schedule 1 of the EIA Regulations and does not exceed the thresholds identified in relation to any of the paragraphs of Schedule 2 of the EIA Regulations that would apply if demolition was otherwise within the scope of the EIA Directive and Regulations.

Issues Arising

36. It was indicated by the Claimant that in the event that I reached that conclusion, they wished to apply for a reference to the European Court under Article 267 of the EC Treaty. All parties indicated that they would wish to make submissions concerning costs and other consequential relief but in the interests of keeping costs to a minimum wished to do so in writing. It was agreed that I would include directions for the filing and service of such submissions in the first draft of this Judgement. Accordingly I directed that:

i) The Claimant file and serve its list of typographical and other obvious errors and its submissions concerning costs, permission to appeal and Article 267 reference by no later than 4pm 5th May 2010;
ii) The First Defendant file and serve its list of typographical and other obvious errors and its submissions concerning costs permission to appeal and Article 267 reference by no later than 4pm 7th May 2010;
iii) The Claimant file and serve any submissions in reply to those filed by the First Defendant by no later than 4pm 11th May 2010.

I set out my conclusions in relation to each of these issues below.

37. Article 267 Reference

I do not consider that this is an appropriate case for the making of a reference because I consider the issue in respect of which a reference is sought to be academic on the facts of this case for the reasons set out above. It is likely to take many months if not years for a reference to be resolved. Aside from the costs implications, such an outcome would be unfair on the Interested Party because - no doubt - it would be suggested that the Injunction referred to above should continue in force until the Reference had been finally adjudicated upon. If the Claimant is able to obtain permission to appeal and if on the hearing of such an appeal it is decided that I am wrong in my conclusion that the issue in respect of which a reference is sought is academic, then it will be open to the Court of Appeal to consider whether either to determine the appeal without a Reference, direct a Reference or stay these proceedings pending the determination of Commission v. Ireland C-50/09.

38. Permission To Appeal

I refuse permission to appeal because in my judgment it is not realistically arguable that I am wrong in my conclusion that the issue concerning the effect of the EIA Directive on the Demolition Direction is academic on the facts of this case. Unless that is so, permission cannot be granted because to do so would be to ask the Court of Appeal to determine an academic question.

39. Interim Injunction

I direct that the Injunction referred to above should continue until either the expiry of the time within which permission to appeal can be sought if no application is made to the Court of Appeal for permission to appeal or further order of either this Court or the Court of Appeal in the event that an application for permission to appeal is made. The Injunction continues to be subject to a liberty to the Interested Party to apply to this Court or to the Court of Appeal to vary or discharge the Injunction.

40. Costs

The Claimant must pay the First Defendants' costs of and occasioned by these proceedings to be the subject of a detailed assessment on the standard basis if not agreed and subject to the £10,000 cap.

41. I reject the submission that the cap on the Claimant's recoverable costs should be increased. As I have already held (1) this case is not an appropriate on for a Reference and (2) permission to appeal is refused. Thus the appropriate court to determine an application to vary the cap on the Claimant's recoverable costs is the Court of Appeal.