Crystal Palace Campaign Case C-508/03,

L34 - Report for the Hearing in the European Court of Justice, Case C-508/03 - 22 June 2005

Commission of the European Communities v. United Kingdom of Great Britain and Northern Ireland

REPORT FOR THE HEARING *

(Failure of a State to fulfil obligations - Directive 85/337/CEE - Assessment of the effects of certain projects on the environment - White City Projects - Crystal Palace Project - Multi-stage consent procedures)

In Case C-508/03,

ACTION under Article 226 EC for failure to fulfil obligations, brought on 1 December 2003,

Commission of the European Communities, represented by X. Lewis and F. Simonetti, acting as Agents, with an address for service in Luxembourg,

applicant,

v

United Kingdom of Great Britain and Northern Ireland, represented by K. Manji, D. Elvin and J. Maurici, acting as Agents,

defendant,

By its application, the Commission seeks a declaration from the Court that,
- by failing to apply correctly Articles 2(1) and 4(2) of Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment (OJ 1985 L 175, p. 40) in relation to the proposed urban development projects at White City and at Crystal Palace as projects listed in Annex II point 10(b), to Directive 85/337, the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under that Directive;
- by failing to ensure the correct application of Articles 2(1), 4(2), 5(2) and 8 of Directive 85/337, as amended by Council Directive 97/11/EC of 3 March 1997 (OJ 1997 L 73, p. 5) when development consent was granted for projects in a multi-stage consent procedure, the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under Directive 85/337.
I - Legal background

A - Community law
Article 1(2) of Directive 85/337 in its original version defines 'development consent' as meaning 'the decision of the competent authority or authorities which entitles the developer to proceed with the project'.
Article 2(1) of that Directive provides:

'Member States shall adopt all measures necessary to ensure that, before consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to an assessment with regard to their effects..
These projects are defined in Article 4.'
Article 4 of that Directive provides:

'1. Subject to Article 2(3), projects of the classes listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.
2. Projects of the classes listed in Annex II shall be made subject to an assessment, in accordance with Articles 5 to 10, where Member States consider that their characteristics so require. To this end Member States may inter alia specify certain types of projects as being subject to an assessment or may establish the criteria and/or thresholds necessary to determine which of the projects of the classes listed in Annex II are to be subject to an assessment in accordance with Articles 5 to 10.'
Point 10(b) of Annex II to that directive refers to 'Urban-development projects'.
Directive 85/337, in particular Articles 2(1) and 4(2), and Annex II, was amended by Directive 97/11.
In its amended version, Article 2(1) of Directive 85/337 provides: 'Member States shall adopt all measures necessary to ensure that, before consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects. These projects are defined in Article 4'.
Article 4 of that Directive, as amended, provides:

'1. Subject to Article 2(3), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.
2. Subject to Article 2(3), for projects listed in Annex II, the Member States shall determine through:

(a) a case-by-case examination,

or

(b) thresholds or criteria set by the Member State

whether the project shall be made subject to an assessment in accordance with Articles 5 to 10.

Member States may decide to apply both procedures referred to in (a) and (b).

3. When a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account.

4. Member States shall ensure that the determination made by the competent authorities under paragraph 2 is made available to the public.'
The amended version of point 10(b) to Annex II to that directive now contains the words 'urban development projects, including the construction of shopping centres and car parks'.
B - National legislation
In the United Kingdom the principal legal instrument relating to land planning is the Town and Country Planning Act 1990, which codified the original Town and Country Planning Act 1947 and which lays down general rules with regard to the granting, amendment and withdrawal of planning consent. Detailed rules for implementing that Act are contained in the Town and Country Planning (General Development Procedure) Order 1995 and the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988.
Grant of development consent
Planning permission is required for the carrying out of any development under section 57(1) of the Town and Country Planning Act 1990, which includes, in particular, 'building ... or other operations in, on, over or under land ...', (section 55 of the Town and Country Planning Act 1990).
Planning permission may be granted in a variety of forms, including in particular outline planning permission.
Section 92(1) of the Town and Country Planning Order 1995 of the Town and Country Planning Act 1990 provides that 'outline planning permission' is 'granted, in accordance with the provisions of a development order, with the reservation for subsequent approval by the local planning authority or the Secretary of State of matters not particularised in the application ("reserved matters")'.
Article 1(2) of the Town and Country Planning Order 1995 defines such 'reserved matters' as 'any of the following matters in respect of which details have not been given in the application, namely (a) siting, (b) design, (c) external appearance, (d) means of access, (e) the landscaping of the site'.
However, in practice other matters are deferred for subsequent decision by the imposition of conditions requiring approval.
Under the Town and Country Planning Regulations 1988 certain projects must be subject to an environmental impact assessment before consent is granted.
Under Regulation No 4 of those Regulations, any Schedule 2 application must be subject to an environmental impact assessment.
A 'Schedule 2 application' is an application for planning permission for the carrying out of development of any description mentioned in Schedule 2, which is not exempt development and which would be likely to have significant effects on the environment by virtue of factors such as its nature, size or location, as determined in each case by the competent authority.
The classes of projects listed in Annex II to Directive 85/337, including urban development projects in particular, are set out in Schedule 2.
Revocation or amendment of permission
Under section 73 of the Town and Country Planning Act 1990, an application for an amendment to existing permission is effectively an application for a new planning permission and, if granted, the amendment takes effect as such.
Lastly, under section 97 of the Town and Country Planning Act 1990, in certain circumstances the competent authority has power to revoke or modify a planning permission.
C - Implementing measures
Circular 15/88 issued by the Secretary of State for the Environment provides guidance with regard to assessing the environmental impact of projects of more than local importance, projects in sensitive locations and projects with particularly complex and potentially adverse effects.
That circular lists indicative criteria and thresholds. Paragraph 16 of Appendix A to the circular states that an environmental impact assessment may be required where:
- 'the site area of the scheme is more than five hectares in an urbanised area; or
- there are significant numbers of dwellings in close proximity to the site of the proposed development, e.g. more than 700 dwellings within 200 metres of the site boundaries; or
- the development would provide a total of more than 10,000 square metres (gross) of shops, offices or other commercial uses.'
The circular also lays down the requirements with regard to information to be supplied by the parties. Paragraph 42 provides that '[t]he preparation of an environmental statement is bound to require the developer to work out his proposals in some detail; otherwise any thorough appraisal of likely effects will be impossible. It will be for the planning authority to judge how much information is required in the particular case. The information given in the environmental statement will have an important bearing on whether matters may be reserved in an outline planning permission. Where the information states or implies a particular treatment of any matter, it will not be appropriate to reserve that matter in the planning permission'.
That legislation has been supplemented by the following principles, which have been established by the national courts in order to ensure its compatibility with Directive 85/337 (R. v. Rochdale BC, ex parte Tew [1999] 3 P.L.R. 74; R. v. Rochdale BC, ex parte Milne [2001] 81 P. & C.R. 365.; R. v. Cornwall CC, ex parte Hardy [2001] Env. L.R. 26; R. v. LB of Hammersmith & Fulham, ex parte Trustees of the CPRE [2000] Env. L.R. 532; Smith v. Secretary of State for the Environment, Transport and the Regions [2003] EWCA Civ 262).
Under that case-law, (i) the application for permission must refer to the need for project evolution over time, (ii) the parameters of evolution must be clearly defined, (iii) the environmental impact assessment must have taken account of the likely significant effects of such a flexible project, (iv) conditions must ensure that the evolving project stays within the envisaged parameters, and (v) the planning authorities must have decided that the difficulties and uncertainties are not such that the degree of flexibility is unacceptable in terms of its potential environmental effect on the environment. To that end, the competent authorities must require the developer to provide sufficient information to enable them to ascertain whether or not an environmental impact assessment is required.
Where the competent authority fails to carry out an environmental impact assessment at the initial stage of granting outline planning permission, an interested third party may seek judicial review before the national courts, which may, if the application is successful, quash the planning permission.
II - Facts and prelitigation procedure

A - White City
In December 1993, Chesfield Plc ('Chesfield') applied to the London Borough of Hammersmith & Fulham ('Hammersmith & Fulham LBC'), the competent authority in planning matters, for outline planning permission to develop at White City about 58,000 square metres of retail and leisure facilities, including a major new road junction, car parking provision and a link to the underground network (the 'White City Project').
After considering the effects of the project as set out in a number of reports and following public consultation, Hammersmith & Fulham LBC determined that an environmental impact assessment was not required.
In March 1996 Hammersmith & Fulham LBC granted outline planning permission. The details were reserved for subsequent approval by Hammersmith & Fulham LBC.
In October 1997 Chesfield made the first application for approval of reserved matters.
On 12 October 1999 Hammersmith & Fulham LBC gave its approval of those reserved matters.
On 20 August 2002, following a complaint, and after giving the United Kingdom the opportunity to submit its observations, the Commission issued it with a reasoned opinion, stating that the United Kingdom was in breach of Articles 2(1) and 4(2) of Directive 85/337 in relation to the proposed urban development project at White City as a project listed in Annex II, point 10(b), to the Directive, and setting a time-limit of two months for that Member State to adopt the measures necessary to comply with it. Being dissatisfied with the response given by the United Kingdom Government in its letter of 29 October 2002, the Commission decided to bring the present action.
B - Crystal Palace
On 4 April 1997, London & Regional Properties Limited ('L&R') applied to the London Borough of Bromley ('Bromley LBC'), the planning authority, for outline planning permission for the development of leisure and recreational facilities, car park deck and surface car parking, covering 52 000 m2, in Crystal Palace Park ('the Crystal Palace Project at issue').
After consideration and taking into account a number of reports and additional information, Bromley LBC concluded that an environmental impact assessment was not required.
On 24 March 1998 Bromley LBC granted outline planning permission, leaving certain matters subject to conditions with regard to siting, design, external appearance, access, landscaping, building materials, car parking, noise insulation and lighting. The planning permission was accompanied by illustrative plans and documents regarding some of those matters. Details of such matters were to be submitted to and approved by Bromley LBC before any development was commenced.
On 25 January 1999 L&R applied to Bromley LBC for approval of certain matters subject to conditions, which had been reserved for final determination. The details of the Crystal Palace Project showed: (i) on the ground floor, 18 cinemas, a leisure area and an exhibition area; (ii) at the gallery level, restaurants and cafes, two leisure areas and public toilets; (iii) a roof top car park with a maximum of 950 spaces, four viewing areas and areas enclosing plant and equipment; (iv) the addition of a mezzanine floor of 800 square metres; and (v) changes to the construction of the external walls.
Those matters fell wholly within the parameters of the outline permission already granted.
However, at the meeting of Bromley LBC, held to decide whether the reserved matters should be approved, some councillors expressed the view that an environmental impact assessment should be carried out. Bromley LBC was advised, however, that as a matter of domestic law an assessment could be carried out only at the initial outline planning permission stage.
Bromley LBC issued notice of approval on 10 May 1999.
On 26 July 2001, following a complaint, and after giving the United Kingdom the opportunity to submit its observations, the Commission issued it with a reasoned opinion, stating that the United Kingdom was in breach of Articles 2(1) and 4(2) of Directive 85/337 in relation to the proposed urban development project at Crystal Palace as a project listed in Annex II, point 10(b), to the Directive, and setting a time-limit of two months for that Member State to adopt the measures necessary to comply with it. Being dissatisfied with the response given by the United Kingdom Government in its letter of 3 December 2001, the Commission decided to bring the present action.
C - Incorrect transposition of Directive 85/337 as regards the procedures for granting outline planning permission, subject to subsequent approval of reserved matters or conditions
On 26 July 2001, after giving the United Kingdom the opportunity to submit its observations, the Commission issued it with a reasoned opinion stating that some aspects of the United Kingdom's environmental impact assessment legislation, in particular regarding the procedure for granting outline planning permission subject to approval of reserved matters or conditions, appeared to it to be incompatible with Directive 85/337. It set a time-limit of two months for that Member State to adopt the measures necessary to comply with the reasoned opinion. Being dissatisfied with the response given by the United Kingdom Government in its letter of 3 December 2001, the Commission decided to bring the present action.
III - Brief summary of the observations lodged with the Court
The Commission submits two complaints in support of its action, the first of which is divided into two limbs.
Those complaints allege in essence:
- infringement of Directive 85/337, in that no assessment was made of the effects of the planned urban development project at White City on the environment;
- infringement of Directive 85/337, in that no assessment was made of the effects of the planned urban development project at Crystal Palace on the environment;
- incorrect transposition into national law of Directive 85/337, in that the United Kingdom system allows for the issue of outline planning permission subject to later approval of reserved matters or conditions, at which stage it is no longer possible to carry out an environmental impact assessment ('the system at issue').
A - The first and second limbs of the first complaint: infringement of the obligation to conduct an assessment of the effects of the White City and Crystal Palace projects on the environment (Articles 2(1) and 4(2) of Directive 85/337)

1. Admissibility
The United Kingdom Government claims that the first and second limbs of the Commission's first complaint are inadmissible, on the grounds (i) that the competent authorities enjoy wide discretion and (ii) that, in view of the considerable lapse of time since the planning permission in question was granted, the infringement proceedings breach the principle of legal certainty (Case C-188/95 Fantask [1997] ECR I-6783, paragraph 48, and Case C-78/98 Preston [2000] ECR I-3201, paragraph 33).
With regard to the White City project, it adds that the complaint that Hammersmith & Fulham LBC did not give prior consideration to whether an assessment was required was not mentioned in the application.
4With regard to the Crystal Palace project, the United Kingdom Government adds that the permission granted has expired without being implemented and that any infringement, even if established, is wholly theoretical.
4The Commission responds that, even if the planning permission for the Crystal Palace project did expire in March 2003 without being implemented, the breach is of more than theoretical interest because outline planning permission creates a legal presumption. Moreover, the planning permission was still valid when the time-limit laid down in the reasoned opinion expired.
2. Substance
With regard to the White City project, the Commission's essential claim is infringement of Articles 2(1) and 4(2) of Directive 85/337, on the grounds that Hammersmith & Fulham LBC did not give prior consideration to whether an assessment of the effects of the White City Project on the environment was required.
With regard to both projects, the Commission claims infringement of Articles 2(1) and 4(2) of Directive 85/337 on the ground that they should have been subject to an environmental impact assessment.
Since both the White City and the Crystal Palace projects were likely to have significant effects on the environment, the competent authorities could not reasonably have concluded from their prior consideration that the projects did not require such an assessment.
The response of the United Kingdom Government is that the competent authorities did give prior consideration to whether the projects at issue were likely to have significant effects on the environment and thus require an assessment. Indeed the Commission appears to have acknowledged in its application that such consideration was given.
The United Kingdom Government also contends that since the White City and Crystal Palace projects were not likely to have significant effects on the environment they did not need to be the subject of an assessment of their impact on the environment and therefore Articles 2(1) and 4(2) of Directive 85/337 were not infringed.
The United Kingdom Government is of the view that although, in the context of projects falling within Article 4(2) of Directive 85/337, the competent authorities are required to give prior consideration to whether an environmental impact assessment is needed, they have broad discretion in reaching their decision.
At the prior consideration stage, both Hammersmith & Fulham LBC and Bromley LBC gave comprehensive consideration to all the relevant facts.
B - The second complaint: incorrect transposition into domestic law of Articles 2(1), 4(2), 5(2) and 8 of Directive 85/337
The Commission claims that the system whereby, in the context of the procedure for granting outline planning permission subject to subsequent approval of reserved matters or conditions, it is no longer possible to carry out an environmental impact assessment at the later stage of approval of reserved matters or conditions, incorrectly transposes Articles 2(1), 4(2), 5(2) and 8 of Directive 85/337 into domestic law.
In the Commission's view, Directive 85/337 requires an environmental impact assessment to be carried out if it becomes apparent at the approval of reserved matters or conditions stage that the project is likely to have significant effects on the environment.
On the one hand, the system at issue is a multi-stage planning procedure, in which, at the later stage of approval of reserved matters or conditions, the project may be amended or clarified in a way that might influence the assessment of its effects on the environment, or in which the relevant circumstances may change with time. In such circumstances, approval of reserved matters must be regarded as forming part of the 'development consent' within the meaning of Article 1(2) of Directive 85/337.
On the other hand, the system at issue precludes a comprehensive assessment of the project, both as regards the prior consideration of the need for such an assessment (WWF, cited above, paragraph 45) and as regards the assessment to be carried out.
Furthermore, the system affords no possibility of rectifying a failure to carry out an environmental impact assessment at the initial stage (Case C-201/02 Wells [2004] ECR I-0000, paragraph 52).
Nor is there any possibility of taking into account a change of circumstances that may occur irrespective of any changes to the parameters of the project.
The Commission is therefore of the opinion that the system at issue is not compatible with Community law.
The United Kingdom Government replies that the system at issue constitutes a correct transposition into domestic law of Articles 2(1), 4(2), 5(2) and 8 of Directive 85/337.
In its view, Directive 85/337 does not require an environmental impact assessment to be carried out if it appears only at the approval of reserved matters or conditions stage that the project is likely to have significant effects on the environment.
On one hand, Article 249 EC provides that a directive is binding, as to the result to be achieved, upon each Member to which it is addressed, but leaves to the national authorities the choice of form and methods.
On the other hand, Article 2(1) of Directive 85/337 states clearly that a project that is likely to have significant effects on the environment must be subject to an assessment 'before consent is given'. 'Development consent' within the meaning of Article 1(2) of Directive 85/337 is given with the grant of outline planning permission (and not upon approval of reserved matters or conditions).
Moreover, the first recital in the preamble to Directive 85/337 makes clear the need to take effects on the environment into account at the earliest possible stage in all the technical planning and decision-making processes.
Thus, in view of the rigorous approach adopted by the national courts in this matter, an environmental impact assessment at the outline permission stage, and not at the later approval of reserved matters or conditions stage, is best able to give effect to the aims of Directive 85/337 (Wells, cited above, paragraphs 51 and 52).
Also, contrary to what the Commission asserts, the system at issue does not preclude a comprehensive assessment of the project.
Moreover, there is the possibility of rectifying a failure to carry out an environmental impact assessment at the initial outline planning stage by applying to the national courts.
Furthermore, since any changes to the parameters set out in the outline planning permission require a new application for planning permission to be lodged, there is no need to provide for an environmental impact assessment at the approval of reserved matters or conditions stage in order to take account of any change that may have occurred in the circumstances surrounding the project.
Lastly, the United Kingdom Government adds that the consent procedure at issue in Wells, cited above, was different and very specific.
The United Kingdom Government therefore considers that the system at issue is compatible with Community law.

P. Jann
Judge Rapporteur

* Language of the case: English.

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