Statutory incompatibility following historic NHS win in Supreme Court

January 28, 2020

By Bill Hanbury

Bill Hanbury, Head of the Property Department at Exchange Chambers, explains the importance of the recent Supreme Court decision in R (on the application of Lancashire County Council) (Appellant) v Secretary of State for the Environment, Food and Rural Affairs and another (Respondents) and R (on the application of NHS Property Services Ltd) (Appellant) v Surrey County Council and another (Respondents) [2019] UKSC 58. In this article, he explains why it is important to those clients who are public bodies facing hostile town and village green (TVG) applications.

At Chambers’ annual Local Government and Social Housing Seminar in 2018 I expressed the view that the Court of Appeal’s decision in the above case (reported at [2018] EWCA 721) was wrong. Fortunately, the Supreme Court now agree! But the case raised interesting legal questions which have by no means all been fully answered.

What is statutory incompatibility?

Statutory incompatibility is the concept whereby the use of land as a TVG is incompatible with the statutory purpose for which the land in question was acquired, appropriated or held.  It may therefore arise in a variety of situations and may be relied on by a wide range of landowners as illustrated in this and other cases.

Background and overview

The first case (R (on the application of Lancashire County Council) v Secretary of State for the Environment (the Lancashire case) concerned an area of land adjacent to a primary school. An inspector was appointed under a new pilot whereby a statutory regime for determination of TVG applications was introduced (under the Commons Registration (England) Regulations 2008). The inspector concluded that the land in question ought to be registered as a TVG and her recommendation was accepted by the Secretary of State.

In the second case the application for registration of land adjacent to Leatherhead Hospital held by the local NHS trust was dealt with in the old informal non-statutory regime. The inspector recommended refusal of registration on other grounds, holding that the land is not incompatible with future use by the NHS trust. However, Surrey County Council ignored the recommendation and acceded to the application for registration.

Both Lancaster County Council and the local NHS trust’s property services company in the Surrey case sought judicial review of those decisions.

Ouseley J in the Lancaster case decided that use as a TVG was not incompatible with statutory purpose for which the land was held (education) although such registration could be incompatible with some other purposes.

Gilbart J in the Surrey held that user as a TVG was incompatible. The inspector had therefore been right to recommend rejection, but he should have done so for reasons of statutory incompatibility.

The Court of Appeal upheld the decision is to register in each case. Giving the judgment of the court, Lindblom LJ decided that both the decision of Ouseley J in the Lancashire case and the decision of the Council in the Surrey case to accede to the registration application were compatible with statutory construction as explained by the Supreme Court in the case of R (on the application of Newhaven Harbour Port & Properties Ltd) v East Sussex County Council [2015] UKSC 7.

The Court of Appeal distinguished the Newhaven Harbour case by explaining that in its view that case turned on the specific legislation under consideration.

The court’s view in the cases before it was that the authorities in question were not under any statutory obligation to maintain or use their properties in a particular way or carry out any specific activities on their own land.  Therefore, whilst it might make more difficult for the land to be dedicated as a TVG, it did not make it impossible to continue to maintain their public functions as authorities. Indeed, the Court of Appeal believed it did not have any material effect on those statutory functions.

The authorities concerned did not agree and the unsuccessful parties (Lancashire County Council and in the Surrey case NHS Property Services Ltd) appealed to the Supreme Court.

The Supreme Court as is their wont has restored some sanity to this area of the law whilst admitting that it had become one of the hardest fought and least clear areas of property law in recent years.

The Supreme Court’s decision

The public interest expressed in numerous statutory powers, which are simply not mentioned in the Commons Act 2006, had to be grappled with in the case before the Supreme Court. The Supreme Court made the important distinction between land “acquired” for the purposes of a statutory function and land “imposed” with a particular function (or “appropriated” for a particular purpose as it would be expressed in local government law).

The public duties on the respective authorities were clear: Lancashire had a duty to safeguard the children under its care and promote their education. The health authority, through its property services company in the Surrey case, acquired and held the land in question for an NHS trust.  As such it was responsible for providing healthcare within the area. Consequently, the registration as a TVG in each case, had the effect of sterilising the land for all time, subject to a rectification application. This meant that neither area of land could be utilised at any time for the intended purpose.

Neither Lords Carnwath, Sales or Lady Black believed the Commons Act 2006 had been intended to frustrate the important public purposes for which land was acquired whether or not it had been allocated for a specific purpose. In their view statutory incompatibility did not really centre on the use to which the land was to be put but on the purpose for which it was acquired. This had the advantage of certainty and avoided the need for practical enquiry into the effects of acquisition when it was not required.

Lord Wilson expressed a minority view that Lord Carnwath’s “consolidation” of the law went further than merely interpreting it. He believed that interpreting the legislation in the way proposed by Lord Carnwath was too wide. As interpreted by Lord Carnwath statutory incompatibility was, in reality, not an exception but really a rule similar to a statutory rule.

Lady Arden also believed the test could be more subtly calibrated to the land in question by asking whether the land in question is likely to be reasonably required for future use pursuant to the relevant statutory power.

Why the case is important

1. The Supreme Court has not only reinstated the position as previously understood by practitioners and “consolidated the law”, as Lord Carnwath believed they were doing, but has actually interpreted the law widely for the benefit of all public authorities. This is effectively judicial legislation to stem the large amount of litigation over the extent of the Commons Act 2006 in recent years.
2. The practical effect of the case is to largely ring fence public authority land from hostile TVG applications. Therefore, clients acting for public authorities, in the widest sense of the word, including councils, may breathe a sigh of relief.

However, the 2006 Act does not envisage a blanket exemption for public authorities and later legislation which has given Parliament an opportunity to fill the gap, such as the Growth and Infrastructure Act 2013, has not done so. Therefore, the area of statutory incompatibility cannot be regarded as finally decided by the case-still less does this mean the end of TVG litigation. Many times, that has been predicted but many times the prediction has proved wrong!