This is an absolutely bog standard case by the LA. At stage 1 you need to be arguing that the LA have not made the case that the school would be prejudiced by having one more pupil. What the LA have put down is absolutely standard words none of which are specific to show why there would be prejudice. You have effectively identified the SEN level in year 3 which the LA case should have been highlighting, 15 out of 60 is 25% which is more than the national average level (20%). The LAs comment "The requirements of pupils with a statement of special educational needs, or those on School Action/Action Plus, in terms of extra space, additional support staff and additional resources makes the need to admit only to the published number imperative" can be easily rebutted. Ask them what happens if a year 3 pupil with an SEN statement comes to the school. The answer has to be that they will be admitted above the PAN, they have to by law. So the idea that to only admit to the published number being imperative is nonsense. Also check how many TAs they have, it could well be that there is actually not a TA in that year group or 1 across the two classes, whcih again casts doubt on their arguement
I would also ask for the maximum number that has been in a junior class in the school in the last 3 years and hope that it is more than 30. You can then say there is therefore no reason not to admit a further pupil, done it in the past very successfully.
I suspect you will not manage to convince the panel that they have not proved prejudice but the aim has to be to reduce to an absolute minimum the level of prejudice, so that when it comes to part 2 of the appeal the prejudice level you have to overcome is minimised.
Different panels will have different views over the need for siblings to be together, so that is a weakish arguement. However I would make the point that your daughter now feels that they have been isolated as they are not at the same school. You also need to address the reason why you have moved the other sibling to the school, why did you not leave the two in one school? You need to explain that it was not your wish to have the two older children at the faith school but that there was no other places available when you moved in and the family has now been doubly disadvantaged by the fact that the youngest could not get a place at the faith school. (I am assuming there that your chosen secondary school is not a faith school and you can therefore argue that you did not really want a faith education)
You will also need to try and counter the arguement that there are other schools in the area by asking whether there is any school within walking distance that can offer a place to all three of your children - and hope that there is not! You can then argue that the LAs arguement is not valid as the whole purpose of this change is to get all three chldren into one non-faith school, not spread them out over 2 or 3 schools.
I would try and avoid saying too much about you have chosen the secondary school. It is a well used arguement but that is the secondary school we want / need and the panel will ignore it.
It would be ideal if you could say that it is impossible for the grandparents to continue to pick up your daughter but don't lie.
Try and find something out about the appealed for school which will allow you to say why it is the only one. If clubs generally is not realistic, is sport or drama or dance?