Comment
Hillside Supreme Court: Practical implications for implementing multiple planning permissions
Following on from our post on the then Court of Appeal outcome back in January 2021 [1], we are delighted to be joined by Charlie Banner KC of Keating Chambers in providing an update article considering the implications of last week’s Supreme Court judgment in the case of Hillside Parks Ltd (Appellant) v Snowdonia National Park Authority (Respondent) [2].
In this update we do not look into the specific circumstances of the case but seek to set out briefly the possible implications for the industry of this important judgment. The ramifications of it may be significant for large scale, multi phased developments, from town centre regeneration schemes through to strategic residential developments.
Charlie kindly offers some concluding thoughts, having acted as Lead Counsel for the Appellant.
Context
In summary, last week the Supreme Court rejected the appeal made by Hillside Parks Ltd against the previous Court of Appeal ruling which found against allowing further development under its original planning permission on its site within the Snowdonia National Park. The specifics of the case are complex and covered multiple planning permissions granted at the site since 1967, with the developer making the case that the subsequent planning permissions should be construed as “variations” to the original and seeking to confirm it could still lawfully deliver undeveloped elements of its original planning permission.
The case itself was dismissed, with the Supreme Court deciding that the planning permission did not comprise independent acts of development that could be implemented separately. Were this the case, it would have preserved some of the original permission in areas where there was no physical incompatibility.
This is not to say that this is the case for all planning permissions, and the judgment helpfully reaffirms that it may still be possible to formulate a planning permission as a series of independent acts, but this will need to be identified explicitly on the face of that planning permission.
The judgment however has broader implications. Whilst to some extent it allays concerns introduced by the previous Court of Appeal judgment, it raises wider questions regarding the use of ‘drop-in’ planning applications and the extent to which these are a valid mechanism by which to ‘vary’ an existing permission.
Takeaways from the Supreme Court judgment
Although as an outcome of this judgment the long-established use of ‘drop-in’ planning permissions will be restricted, the Supreme Court has provided several helpful points of clarification, as we summarise below.
The Pilkington Principle
Significantly, the judgment reaffirms the well-established “Pilkington principle”. This established that where a development has already been built in accordance with and under a “Permission A”, the ability to lawfully implement a second, normally full permission (“Permission B”) on part of the same defined site is dependent on whether it is physically possible to carry out that second permission, given what has been delivered under the first permission. This was sometimes referred to as a “drop-in permission”.
The judgment clarifies that:
“In essence, the principle illustrated by the Pilkington case is that a planning permission does not authorise development if and when, as a result of physical alteration of the land to which the permission relates, it becomes physically impossible to carry out the development for which the permission was granted (without a further grant of planning permission)... Where the test of physical impossibility is met, the reason why further development carried out in reliance on the permission is unlawful is simply that the development is not authorised by the terms of the permission, with the result that it does not comply with section 57(1).” [para. 45]
Paragraph 41 emphasises that the test of physical impossibility “applies to the whole site covered by the unimplemented planning permission, and not just the part of the site on which the landowner now wishes to build”.
This principle is taken further in the judgment in the analysis presented of the F Lucas & Sons Ltd v Dorking and Horley Rural DC (1964) 17 P & CR 116 judgment of which it is considered “clear that the case was wrongly decided” [para 49].
In reaching this view they consider that the judgment failed to make a clear distinction between two key propositions:
“The first is that, from a spatial point of view, a planning permission to develop a plot of land is not severable into separate permissions applicable to discrete parts of the site. The second is that, from a temporal point of view, development authorised by a planning permission is only authorised if the whole of the development is carried out. The rejection of the second proposition does not undermine the first.”
In rejecting Lucas, the judgment further emphasises the importance of the Pilkington principle.
Paragraph 68 summarises this, “In summary, failure or inability to complete a project for which planning permission has been granted does not make development carried out pursuant to the permission unlawful. But (in the absence of clear express provision making it severable) a planning permission is not to be construed as authorising further development if at any stage compliance with the permission becomes physically impossible.”
The Supreme Court noted that any departures from the Permission A must be “material in the context of the scheme as a whole” and “what is or is not material is plainly a matter of fact and degree” [para. 69] in order to satisfy the Pilkington principle.
It stated that it is therefore “possible in principle for a local planning authority to grant a planning permission which approves a modification of such an entire scheme rather than constituting a separate permission referable just to part of the scheme” [para. 100].
Lawfulness of earlier permissions
The earlier Court of Appeal judgment suggested that earlier implemented permissions that are subsequently subject of later ‘drop-in permissions’ may be deemed retrospectively unlawful. Helpfully, the Court of Appeal confirmed that where a scheme has been lawfully implemented, it does not in fact become unlawful of itself due to the subsequent implementation of any subsequent permission. In effect, that constructed development is ‘banked’ and it is only “subsequent development” which would be unlawful in these circumstances.
‘Mere incompatibility’
The Court of Appeal decision caused some concern regarding the ability to conform to earlier planning conditions. The Supreme Court has now clarified that where there is no physical conflict between permissions, and hence only “mere incompatibility with the terms of another permission already implemented” [para. 44], there should be no impediment.
An example of this may be where it is no longer possible to accord with a condition on earlier planning permission due to the subsequent consent. The Supreme Court has confirmed this would not result in the loss of the benefit of the original permission.
Variations of earlier permissions
What is clear from this judgment is that a later full planning permission cannot now generally be considered a ‘variation’ of an earlier planning permission.
However, it may still be possible to use ‘drop-in permissions’ alongside other applications to amend conditions (through Section 73) or through non-material amendments to a scheme (under Section 96(A)). Both will need to be considered on a case by case basis, but will need to be construed as a variation where it is ‘an appropriately framed additional planning permission which covers the whole site and includes the necessary modifications.’
In such cases we would expect there to be a requirement for the submission of a plan and other supporting information to demonstrate that the two planning permissions can work together as a coherent scheme.
Of course, the counter to that proposition is that if you need to utilise a drop-in permission, it must suggest that that change itself would be ‘material’. We can envisage a situation where this may represent a pragmatic solution, when the original permission description is so restricted under Finney, but in essence the change to the scheme itself is not ‘material’. As with many parts of this judgment, we envisage it will be subject to much disagreement and likely subsequent litigation as to what is ‘material’ in an individual case.
Implications for applicants
The difficulties in seeking a new permission in one part of a site and the resultant loss of the benefit of the original permission, and then having to apply for a fresh planning permission for the remaining development on other parts of the site, will be a concern to developers.
The Supreme Court however set a forward path, stating that:
“In our view…. where, as here, a developer has been granted a full planning permission for one entire scheme and wishes to depart from it in a material way. It is a consequence of the very limited powers that a local planning authority currently has to make changes to an existing planning permission. But although this feature of the planning legislation means that developers may face practical hurdles, the problems should not be exaggerated. Despite the limited power to amend an existing planning permission, there is no reason why an approved development scheme cannot be modified by an appropriately framed additional planning permission which covers the whole site and includes the necessary modifications. The position then would be that the developer has two permissions in relation to the whole site, with different terms, and is entitled to proceed under the second.” [para. 74]
On the back of this judgment, it is now necessary to be specific and clear on the structure and approach to phasing in any ‘Permission A’. Subsequently, any subsequent proposals on the same site will need to demonstrably fit within the confines of that original permission, when taken as a whole.
Developers and decision makers will also need to be alive to the materiality of the changes proposed in the context of that underlying permission, and any changes to site circumstances and the development plan.
The implications of this judgment are clearly significant to proposals for future departures to consented schemes – in terms of application scope, timings, application fees, serving notices to new owners, and the possible requirement for Environmental Assessment (and related workstreams). Then there is also the likely need for a new Section 106 Agreement (and for example, a question as to whether it would be necessary to seek signatures for existing homeowners on a part completed housing development).
There are further implications, including the findings of the Finney v Welsh Minsters [2019] EWCA Civ 1868 case, which concluded that it is unlawful to use Section 73 of the Town and Country Planning Act 1990 to amend or contradict the description of the development permitted by a planning permission.
The practical implications of this judgment are that it is likely that developers should consider the use of hybrid consents for multi phased schemes, with further flexible phases introduced within the outline element to allow for any future changes as the development progresses.
Given the possible ambiguity around whether a drop-in permission may be material or not, it may in some circumstances now be necessary to apply for planning permission for the whole site again (including that development which has already been built out and likely sold on).
Whether that applies retrospectively on now completed, or part-constructed schemes is not clarified in this judgment and should be considered on a case-by-case basis with due regard to the materiality of the change, and the extent to which the original permission has clear express provisions which make it ‘severable’. Paragraph 46 of the judgment confirms that:
“Where a planning permission is granted for the development of a site, such as a housing estate, comprising multiple units, it is a question of interpretation whether the permission authorises a number of independent acts of development, each of which is separately permitted by it, or whether it is to be construed as a single scheme which cannot be disaggregated in this way.”
There may therefore be circumstances where development can continue.
Final thoughts
We consider that there is now a real impetus to amend the provisions in the Town and Country Planning Act 1990 to allow for changes to planning permissions to explicitly facilitate the use of drop-in permissions, and their consideration against the development plan and other material considerations at that time.
Indeed, the judgment itself recognises this predicament and notes that "clause 98 of the Levelling-Up and Regeneration Bill currently before Parliament will, if enacted, insert a new section 73B into the 1990 Act giving the local planning authority power to grant a planning permission that varies an existing permission but only if the local planning authority is satisfied that “its effect will not be substantially different from that of the existing permission." [para. 25]
Establishing a new statutory framework for circumstances where there are multiple planning permissions on a site and allow for drop-in applications cannot come soon enough in light of this judgment.
Thoughts from leading counsel
Charles Banner KC kindly provides the following observations on the judgment:
The Supreme Court’s judgment is something of a mixed bag for those in the development industry.
On the one hand, it is a huge relief that the Court has clarified that the development authorised by a planning permission is not (as had been contended for by the National Park Authority and left open by the Court of Appeal) unlawful and vulnerable to enforcement action until it is complete. It is also welcome to have clarification that a planning permission can never be abandoned, and that the Pilkington principle only applies where a later permission makes it physically impossible in a material respect to build out development authorised by an earlier permission.
On the other hand, the judgment raises without expressly answering questions about whether and how material changes to muliti-phase developments can be made in the most effective and risk free way. The Court’s suggestion of a fresh “site-wide” permission will be unattractive save as a last resort due to the potential costs and delays. A combination of s.73 “slot-out” and a subsequent “drop-in” might still be possible in some circumstances, but great care will be needed. Deferring any changes to the final phase may also provide a workaround since by that stage there may be no further need to rely on the original permission (given the Court’s findings mentioned in the paragraph above) and therefore no downside to any potential Pilkington issues.
A fundamental note of caution is that the Supreme Court was not persuaded that considerations of convenience to the planning industry were decisive in its shaping of the law, and therefore it will be important not to assume that what at first sight appears to be a practical, common-sense response to the judgment will necessarily be what the Courts uphold. Careful consideration will need to be given to the application of the principles enunciated by the Court to the circumstances of any given case.
Charlie recently delivered a webinar discussing key aspects of the judgment, which can viewed here.
If you would like to discuss the implications of last week’s Supreme Court judgment in the case of Hillside further, please get in touch with Tim Burden or Rosie Cotterill.
8 November 2022
[1] Hillside Parks vs Snowdonia National Park: The practical implications
[2] The National Archives