Last month we blogged on the High Court’s judgment in Dunnett, which refused to quash the Secretary of State decision not to grant a Certificate of Lawfulness in respect of the use of office to residential Permitted Development rights where a condition on the office consent was effective in excluding GPDO rights. The condition stated that “The use of this building shall be for purposes falling within Class B1 (Business) as defined in the Town and Country Planning (Use Classes) Order 1987, and for no other purpose whatsoever, without express planning consent from the Local Planning Authority first being obtained.”

The Court of Appeal has now upheld the High Court’s judgment.

The result? Uncertainty prevails.

Trump reigns

The Court of Appeal noted that there is no bar to (cautiously) implying terms into planning conditions: doing so is an objective, fact-dependent exercise in which the Court asks ‘what a reasonable reader would understand the words to mean when reading the condition in the context of the other conditions and of the consent as a whole’ (applying Trump International ([2015] UKSC 74).

Deconstructing the condition

Against that backdrop, the Court of Appeal held:

1. The words ‘and for no other purpose whatsoever’ were, in this case, enough not only to control the B use of the property, but also to exclude future reliance on PD rights. The wording that followed – ‘without express planning consent from the Local Planning Authority first being obtained’ (the “Tail”) – just made the exclusion ‘the more abundantly clear’.
2. The Tail cannot sensibly include a planning permission granted through the GPDO. The appellant argued that it was necessary to read into the Tail ‘or the Secretary of State’ because of the unavoidable possibility of the Secretary of State granting planning permission on appeal against a refusal by the LPA. Once that is read in, the Appellant submitted, it must include Secretary of State decisions through the GPDO as well as Secretary of State decisions on appeal as there is no basis for including one but not the other. The Court rejected this: it is not necessary to imply ‘or the Secretary of State’ at all because appeal rights do not depend on conditions; they are conferred automatically by statute.
3. Further, if the Court were to accept the appellant’s argument, the Tail would include all means of granting permission and would therefore have no limiting effect at all. The LPA could not have intended to include useless wording.
4. The reason for the condition and the site’s planning history reinforced the findings above by reflecting the council’s intention to maintain close control over the site.

Comment – it depends

Unhelpfully, given Trump, implied meaning will always depend on context. That said, as a result of this judgment:

• It will be very hard to show that stating that uses are ‘limited to’ a particular use will, alone, be enough to exclude PD rights.
• Words such as ‘for no other purpose whatsoever’ will likely do the job, but ‘for no other purpose’ alone may hang in the balance.

The difficulty will be for wording that is more emphatic than ‘limited to’ but less emphatic than ‘for no other purposes whatsoever’.

It is not a great outcome for investors, who will have to puzzle over the endless and often pointless variations and contortions in condition wording pumped out by decision makers to understand what price planning freedom. A set of standard conditions embedded in the Planning Practice Guidance which make clear how PD rights should be dealt with and provide a level playing field would be welcome.

Article 3(4) of the GPDO 2015 provides that permitted development (PD) rights will not apply if they are ‘contrary to any condition imposed by any planning permission granted or deemed to be granted under Part 3 of the [TCPA 1990] otherwise than by this Order.’  Must such conditions refer explicitly to the GPDO? If not, what is enough?

Backstory

The Courts have held in some cases that conditions that do not expressly exclude PD rights do not implicitly restrict them (Carpet Décor (Guildford) Limited v Secretary of State for the Environment and Another (1981) 261 EG 56 and Dunoon Developments v Secretary of State and Poole Borough Council (1993) 65 P. & C.R. 101). The cases fall short of establishing that conditions cannot, legally, implicitly exclude PD rights:

• In Carpet Décor, the High Court held that a condition excluding PD rights had to be ‘in unequivocal terms’. This suggests a strict approach, though arguably it does not definitively rule out the possibility of implicit restrictions.
• In Dunoon, the Court of Appeal made several statements – some strict, some looser.  Indicating the strict approach, Farquharson LJ said: ‘The purpose of the General Development Order is to give a general planning consent unless such a consent is specifically excluded by the words of the condition.’ Indicating the looser approach, Farquharson LJ specifically addressed whether a preclusion of the GDO was ‘…to be implied from the words themselves, in the context in which they are used…’. He went on to consider whether the non-explicit wording of the condition was sufficiently ‘emphatic’, ‘conclusive’ or ‘wide’ to preclude the GDO. Sir Donald Nicholls VC, agreeing with Farquharson LJ , concluded that in this case there was ‘no explicit or implicit intention to negative development pursuant to any existing or future [GDO].’ These passages only make sense if implicit exclusion of PD rights is actually possible.

Who Dunnett?

In the first opportunity to revisit this in 2 decades, the High Court decision in Dunnett Investments Limited v SSCLG [2016] EWHC 534 (Admin) suggests that implicit exclusion of PD rights can work.

• The claimant relied on PD rights to change from Class B1(a) offices to Class C3 dwelling houses. Its existing permission included a restrictive condition:

“1. This use of this building shall be for purposes falling within Class B1 (Business) as defined in the Town and Country Planning (Use Classes) Order 1987, and for no other purpose whatsoever, without express planning consent from the Local Planning Authority first being obtained.

REASON: “In order that the Council may be satisfied about the details of proposal due to the particular character and location of this proposal.”

• The LPA failed to determine the claimant’s PD prior approval application and the claimant applied for a Certificate of Lawfulness (which the LPA refused, based on the condition).
• The claimant challenged the decision, relying on Carpet Décor and Dunoon as requiring the strict approach (i.e. that the language must be explicit and unequivocal to exclude PD rights).

The Court rejected this, on the basis that:

1. The second part of the condition serves no other purpose than to prevent the operation of the GPDO. “Without that meaning the second part is irrelevant to the condition”.
2. The words ‘for no other purpose’ prohibit any other purpose including any other purpose otherwise permitted by the GPDO.
3. The word ‘whatsoever’ is “emphatic and, in context, refers to any other use, howsoever arising or under any power. Read together, and considering the plain and ordinary meaning of the words used, in my judgment, it is clear that the GPDO is excluded”.
4. The words “without express planning consent from the local planning authority first being obtained” have no sensible meaning unless they remove GPDO rights.
5. The reason for the condition confirmed that, due to the particular character and location of the site, any other use would need to be the subject of an express application.

The judgment treats the loose approach as ‘entirely consistent with the cases of Dunoon and Carpet Décor’.

Clear as mud

For the time being, the outcome reflects the prevailing uncertainty for landowners, developers and LPAs, because:

• it is unclear which elements of the reasons at 1-5 above were decisive,
• the outcome was said to be fact sensitive.

Dunnett has been appealed to the Court of Appeal and will be heard this month (March 2017). The Court of Appeal could reject the loose approach altogether. If, however, the Court confirms the principle of implicit exclusion of rights, it would be helpful if it clarifies:

• the forms of wording which will do the job (and those that will not); or
• whether the effect of the condition entirely depends on the wording read in the context of the reason and the condition as a whole.

In a period where PD rights are increasingly valuable, the outcome will be important.