Hillside: The Supreme Court’s view on inconsistent and overlapping permissions

Drop-in applications are a common tool to allow changes to be made to a development that exceed the thresholds for non-material or a section 73 application.  If successful, a drop-in application grants a new planning permission for an area within an existing planning application red line boundary.

Hillside Parks Ltd v Snowdonia National Park Authority [2022] UKSC 30 is the latest in a line of cases considering the lawfulness of reliance upon an original permission, where implementation of a second permission makes it impossible to fully complete development pursuant to the original permission.

Background

The facts to Hillside are fairly convoluted due to a development history beginning in 1967, however, by way of brief summary:

• Planning permission was granted in January 1967 (the 1967 Permission) for the development of 401 dwellings on just over 28 acres of land (the Site). The 1967 Permission incorporated a plan (referred to as the “master plan”) which showed the siting and dwelling types and the proposed internal road network.
• Development of the first two houses commenced in March 1967 but the approved location was found to be on the site of an old quarry. Planning permission was granted for the houses as built in April 1967, following which a number of permissions effectively treated as variations to the master plan were granted between 1967 and 1973.
• In 1986, the then local planning authority denied that the 1967 Permission was valid which led to proceedings in the High Court where a declaration was made that development permitted by the 1967 Permission had begun and could lawfully be completed at any in time the future.
• Hillside acquired the Site in 1988 and Snowdonia National Park Authority (the Authority) became the relevant authority in 1996. Between 1996 and 2011, permission for a total of 8 departures from the master plan were granted by the Authority (though not all of these appeared to have been treated as variations to the 1967 Permission).
• In 2017, the Authority contacted Hillside stating that the 1967 Permission could no longer be relied upon, because the developments carried out in accordance with the later planning permissions rendered it impossible to implement the original master plan.
• The High Court and Court of Appeal came to the same conclusion on the specific facts of the case that it was not possible for the 1967 Permission to be implemented in full (despite there being large parts of the development that could still be carried out in accordance with the master plan). Therefore, further implementation was not possible.  The Courts did however clarify that it could be possible for a later permission to be carried out without interfering with the work of another, but a “holistic” approach must be taken when interpreting permissions.

The Supreme Court decision

The question before the Supreme Court specifically turned on whether any further development may be lawfully carried out under the 1967 Permission.  In its judgment the Court made the following key findings:

• The decision of Pilkington was endorsed – this distinguishes between (1) it being physically impossible to carry out development under Permission A due to development under Permission B and (2) mere incompatibility between Permission A and B. Mere incompatibility would not be fatal to Permission A; rather, departures from an existing permission must be “material” in order for a developer to no longer rely on it.  What is material is a matter of fact and degree.  The test therefore is whether it is physically impossible to continue to develop under Permission A due to works done under Permission B.
• Generally speaking, permissions for multi-unit developments should not be construed as severable. Planning permission is granted as an integrated whole and, unless stated otherwise, it should not be interpreted as permitting a number of standalone parts.
• Considering the Sage case, the Court held that a scheme does not have to be fully completed for it to be lawful.

Practical implications

The Supreme Court’s decision ultimately reiterates existing law on inconsistent and overlapping planning permissions, so the question is, what are the practical implications?

As a starting point, it is important to remember that as with every case, Hillside turns on its own facts.  It also deals with full planning permissions, so it remains unclear whether the courts would treat an outline or phased permission differently – that uncertainty will only be resolved by further decisions of the court in due course, unless there is a change in legislation.  The circumstances in which part of a particular development might be treated as “severable” are uncertain.

The underlying issue is that developers cannot “mix and match” permissions because the resulting development scenario would not have been anticipated or assessed by the authority.

Hillside does not however establish a blanket rule against drop-in permissions.  Proceeding with a whole fresh permission may not be practical in every case and the options and associated risk, must be considered on a case by case basis.  Where a developer is looking to apply for a drop in permission, it could be crafted to sit together with the existing permission by ensuring:

• clarity as to what development will be constructed pursuant to which permission, so that for example phases are built under one or the other permission - or “slotting-out” the site of the proposed drop-in where practical;
• that all anticipated development scenarios have been adequately assessed; and
• the conditions and section 106 obligations can be discharged on that basis and are consistent with all potential scenarios.

The risk for transactions should also be addressed.  Buyers looking to acquire and develop out discrete parcels of a wider development site will want to ensure their due diligence confirms that there has not been, and cannot be, any inconsistent development carried out on the wider site.

Much like Hillside doesn’t establish a blanket rule against drop in applications, there is also no one size fits all approach to address the issues raised.  These will need to be considered on a case by case basis to ensure specific development scenarios do not fall foul of the Supreme Court’s decision.