Tesco launches legal challenge over rival store approval

Supermarket giant Tesco has launched a High Court fight to block plans by high street rivals, Asda, for a new store at Lydney in Gloucestershire.

London's Royal Courts of Justice
London's Royal Courts of Justice

Tesco is asking judge, Mrs Justice Patterson, to quash Forest of Dean District Council's decision to approve the out-of-town store to be operated by Asda.

The challenge is more bad news for the council after its decision to approve an out-of-town Asda in hearby Cinderford was torn up for the second time by the London court last week.

In the Lydney case, lawyers representing Tesco claim that the authority has failed to heed clear advice from judges on how to approach offers by developers of financial contributions that are intended to offset harm to town centres from retail developments located elsewhere.

And they argue that, in granting permission in March against the recommendation of its own planning officer, the council's planning committee wrongly put too much weight on the desire to keep Lydney's biggest employer, camshaft producer JD Norman Lydney, in the town.

The complex development approved by the council also allows JD Norman Lydney to move its finishing shop from land where its lease is set to run out at the end of the year to adjacent land it owns, with funding for that move to be boosted by financial assistance from developer Windmill Ltd, which has a deal in place to acquire part of the site, develop it and sell the store to Asda.

The planning committee took the view that the harm to the town centre would be mitigated by the developer's commitment to contributing funds to regeneration, including £30,000 for a new market square and £210,000 for further town centre improvements.

It also considered that the overall scheme would safeguard more than 200 jobs at JD Norman.
But Tesco - which says it will lose more than a third of its trade to the new Asda - claims that the planning committee took an irrational or illogical approach to the threatened loss of jobs, failing to explain why the business would close if permission was not granted.

Patrick Clarkson QC argued that, as with the Cinderford case - in which planning permissions have now been quashed twice by the High Court - no evidence has been given as to how the contributions would mitigate the substantial harm to the town centre.

The council has taken a backseat in the proceedings, and lawyers for the "interested parties" - including Asda and the developer - are defending it at the London court.

Paul Stinchcombe QC argued on their behalf that Tesco's claim was "misconceived" and amounted to "no more than a commercial spoiling tactic".

He said that the planning committee made no error of law and was entitled to depart from its officer’s recommendation, taking the view that all of the circumstances justified the grant of planning permission.

In light of the complexity of the case and its implications the judge will reserve judgment at the end of legal argument and give a decision in writing at a later date.

Tesco is seeking an order quashing the permission given by the council and order the council to reconsider its decision.

R on the Application of Tesco Stores Limited v Forest of Dean District Council. Case Number: CO/1830/2014


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