Drop in applications – Practical ramifications post Hillside ruling

Background

In 1967, the local planning authority at the time, Merioneth County Council, granted planning permission for the development of 401 dwellings at a site known as “Balkan Hill” in Snowdonia (“the Old Permission”). The permission was to be implemented in accordance with a detailed plan which set out the proposed layout of the dwellings and roads within the development (“the Master Plan”). Subsequent to the Old Permission, a number of further planning permissions were granted to modify parts of the Old Permission.

The validity of the Old Permission was first called into question in 1985, when the local planning authority claimed it had not been implemented due to a condition of the permission not being fulfilled. As a result, the contended Old Permission had lapsed and therefore the development could not be lawfully carried out. The dispute was taken to High Court in 1987, who ruled against the local planning authority, concluding that the Old Permission had been begun and “may lawfully be completed at any time in the future”.

Following this decision, the site was acquired by Hillside Parks Limited (Hillside) in 1988. Between 1996 and 2011, Hillside applied for further additional permissions which were granted by the new local planning authority, Snowdonia National Park Authority (Snowdonia). These permissions were considered by Hillside to simply be variations of the Original Permission which only affected specific areas of the site (commonly referred to as “drop in permissions”), and some of the permissions were labelled as such. However, the dwellings constructed under the further permissions were implemented in a way which represented a significant departure from the Master Plan in the Old Permission. In particular, dwellings had been built in areas designated for roads and roads had been configured in areas designated for dwellings. Consequently, Snowdonia notified Hillside in May 2017 to stop all work on the site on the basis that the Old Permission could no longer be implemented in accordance with the Master Plan. This decision was challenged by Hillside in the High Court and Court of Appeal, both courts finding in favour of Snowdonia. The courts concluded that the works carried out under the additional permissions since the 1987 decision, rendered the Old Permission incapable of being implemented.

On appeal to the Supreme Court, Hillside sought to distinguish their case from the Pilkington test, the leading case which led to the determination of the High Court and Court of Appeal. Hillside also argued that the Old Permission was severable from the additional permissions, therefore permitting them to combine development on parts of the site with development on other parts of the site authorised by other planning permissions. Hillside went on to assert that the additional permissions were merely variations, and so the Old Permission was still valid and capable of further implementation.

Verdict of the Supreme Court

In dismissing Hillside’s appeal, the Supreme Court reaffirmed the Pilkington doctrine, namely that, though a site can have multiple planning permissions which may be mutually inconsistent with each other, once one of those planning permissions has been implemented in a way which renders it physically impossible to carry out the development permitted by the other permissions, the other permissions will no longer be valid. The Supreme Court also helpfully concluded the following:

• If a subsequent planning permission departs from the original planning permission in a way that is considered ‘material’, it would make it physically impossible and unlawful to carry out any further development under the original permission. This assessment will depend on the terms of the subsequent planning permission and the works that had already been carried out.
• A planning permission which permits a multi-unit development does not inherently have the ability to be severable.
• The principle of abandonment is not applicable to planning law and therefore it not possible for a planning permission to be extinguished by being abandoned.
• The failure by a developer to complete a development which planning permission has been granted does not render the completed part of the development unlawful.

Ramifications for Developers

The use of drop in applications had become a useful tool for developers to modify specific parts of a master plan of a previous permission, especially where changes were not permitted under section 73 or 96A of the TCPA 1990.

The recent ruling by the Supreme Court is expected to limit the widespread utilisation of drop in applications for larger multi-phased developments, due to the potential complications that may arise. With the facts of Hillside being so unique, its is important to stress that each scenario will be assessed based on its relevant facts. Regardless, the following points will serve as valuable guidance for developers contemplating drop in applications:

• If a developer intends to dispose of land which forms part of a larger site that benefits from planning permission, it will be prudent for the developer to ensure that the sale contract imposes restrictions on the proposed purchaser, aimed to limits their ability to make any subsequent planning application that would impact the implementation of the development granted by the original planning permission on the developer’s retained land.
• Where a developer is acquiring land which forms part of a larger site that already benefits from planning permission, the developer should make enquires to identify if any subsequent planning permissions have impacted the implementation of the development to be carried out under the original planning permission. A developer may seek to make the contract conditional upon written confirmation from the local planning authority that there is no conflict between the original and subsequent permissions. The contract should also contain a provision to ensure that the seller, any successor or any third party acquiring land forming part of the larger site, cannot make drop in applications which would in any way impact the original planning permission.
• When obtaining planning permission for a larger strategic site, a developer should seek to maximise the flexibility of the permission. This may be achieved by aiming for the permission to have an express condition purporting that there is a level of severability. A flexible planning permission may likely aid a future drop in application to be formulated in a way which will not be viewed as a material change from the master plan in the original permission. The plans submitted with the drop in application will also need to indicate that the new permission sought incorporates ‘the changes indicated into a coherent design for the whole site’.
• If a developer seeks to amend or vary a planning permission, they should first aim to do so within the parameters of section 73 or 96A of the TCPA 1990 if possible. This will likely alleviate any concern that the subsequent permission has voided the implement-ability of the original permission.
• If a drop in application is required for works which are to be implemented during the beginning or middle of the construction process, and the developer will inevitably need to go back and rely on the original planning permission after the implementation, there may be a greater risk of ‘material departure’.

The popularity of drop in applications is likely to diminish post Hillside, with the case emphasising the need for a greater degree of pragmatism to be exercised for large development sites. As previously, it will now be imperative for a developer to carefully consider the feasibility of developments which require amendments to existing permission to achieve the desired outcome.

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