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Supreme Court rules on overlapping planning permissions in Hillside case

Posted on 4 November 2022

On 2 November the Supreme Court handed down its judgment in Hillside Parks Ltd v Snowdonia National Park Authority. The judgment is of crucial importance for large, multi-phase development projects.

The case involved successive, overlapping planning permissions relating to the same site. What happens where a later permission changes part of a wider development, as originally approved in an earlier permission? Does the earlier permission become unimplementable?

On this key question, the Supreme Court ruled that the unimplemented parts of a planning permission dating back to 1967 could no longer be implemented. Those elements had been superseded by a series of more recent permissions granted at the same site since 1987.

This case had caused considerable concern within the developer community. It will take some time to fully consider the ramifications, although the Supreme Court decision goes some way to allaying these concerns.

Initial reflections on the Hillside judgment

1. Incomplete development

At an earlier stage, the Court of Appeal had suggested in a 2020 judgment that failure to complete some parts of a project pursuant to a planning permission might even make development already carried out under that permission unlawful. The Supreme Court have now stated clearly that this is not the case. We welcome this common-sense clarification.

2. Severability of permissions

In the absence of clear wording making it severable, a planning permission is not treated as authorising further development if at any stage compliance with the permission becomes physically impossible.

A court will be unlikely to infer such severability if there is any ambiguity. This reinforces the crucial importance of formally phasing multi-unit developments.

3. Material incompatibility

Where implementing a later permission (Permission B) means any of the development authorised by an earlier Permission A is physically impossible, Permission A cannot be implemented further unless the incompatibility is not material in the context of the scheme as a whole. The Supreme Court drew a distinction here between "physical impossibility" and "mere incompatibility".

4. Variation

The Supreme Court said that to vary Permission A, a developer should make a wholly new application for Permission B, incorporating the entire site (including elements which remain unchanged).

To be interpreted as such, the application for Permission B should be accompanied by a plan showing how the new permission incorporates the changes into a coherent design for the whole site. The governing permission for the whole site will then be Permission B, once implemented.

5. Practical points

The Supreme Court decision appears to limit the circumstances where planning permissions can be varied using "drop in" permissions in the absence of an amended consent which "slots out" that area of incompatibility. Careful consideration will need to be given to whether such an approach is feasible in light of the judgment.

The decision does not consider the nuances of other considerations relating to amended schemes which may have consequential impacts including those relating to section 106 planning agreements, CIL and Environmental Impact Assessments.

Nevertheless, we consider that the "slot out" and "drop in" approach is still lawful and will likely prove more attractive (and indeed cost effective) than the Supreme Court's proposed approach of submitting an application which incorporates the whole site due to the potential of inadvertent consequential issues which may arise.

Background to the Hillside case

Planning permission was originally granted in 1967 for the construction of 401 dwellings on a large site covering 29 acres in the Snowdonia National Park. In the following two decades further planning permissions were granted, some of which involved "substantial" (in the words of the Supreme Court) departures from the development authorised by the original 1967 permission.

In 1987, the High Court ruled that these subsequent permissions were variations of the original 1967 permission, and that the development authorised by that permission could still be implemented.

Further planning permissions were issued after 1987, most of which were described as "variations" of the original 1967 permission.

In 2019, the current owner sought to ascertain whether the scheme authorised by the original 1967 permission could still lawfully be completed. The High Court and Court of Appeal said no: the implementation of the post-1987 planning permissions now precluded implementation of the original permission.

There was disagreement in the industry regarding these lower court judgments. Some believed that Hillside had changed the law and rendered the common practice of "drop in" permissions unlawful. Others maintained that Hillside was merely applying established case law to a complex site.

However, most agreed that the Court of Appeal's decision left important questions unanswered. In particular, whether development already lawfully implemented over part of a scheme could be rendered unlawful by virtue of subsequent development carried out over the unimplemented part of the scheme pursuant to a newer permission.

The Supreme Court dismissed the site owner's appeal. It said the lower courts had correctly ruled that the unimplemented parts of the original 1967 permission could no longer be implemented, having now been superseded by several more recent permissions.

But the elements of the 1967 permission that had already been implemented were not rendered unlawful by subsequent development pursuant to a newer permission.

Should you have any questions regarding the above or if you have concerns regarding the planning position of your development, please contact a member of our Planning team.

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