The cost of justice: certainty?

Are the Courts starting to be more generous to Councils when they make mistakes when granting planning permission?

The Court of Appeal confirmed the judgment of a lower court centred around an error by Wirral Borough Council. Wirral Borough Council mistakenly granted planning permission to Thornton Hall for three marquees within the Thornton Manor estate without any planning conditions. This Council had intended to issue the permission temporarily for a period of 5 years. This was apparent in the committee report and the section 106 agreement, which included a draft decision notice. The appellant waited 5 years and informed the Council that the marquees still stood.   

Exceptionally, the initial judgment granted a 5 year extension of time for the judicial review. The permission was quashed, with Thornton Hall’s knowledge of the error being cited as important. While the facts are extremely specific, it does open up the scope for judicial review way past the usual 6 week period. The decision prioritises proper planning outcomes over the need for a clear and certain planning record.

The Supreme Court supported Lambeth Borough Council on a similar case earlier in the month. The site involved a Homebase store originally granted permission in 1975. A section 73 application to vary an extant permission to sell a wider range of goods was granted to the site in 2010. The new consent explicitly stated that this was limited to ‘non-food goods’.  A further section 73 permission was granted in 2014, and did not include the ‘non-food goods’ condition. The landlord applied for a certificate of lawful use and argued that there were no restrictions on what could be sold. On appeal the inspector agreed and a certificate of lawful use was issued.

The Secretary of State was ruled to have acted correctly by the High Court and Court of Appeal. The Supreme Court overruled this judgment. It found that the conditions of the 2010 section 73 permission continued to have effect, so far as they were consistent with the 2014 permission.

This adds an element of uncertainty into the interpretation of the planning history of a site. It means applicants will have to pay close attention to previous section 73 permission(s) and their conditions and work out whether earlier restrictive conditions should be considered to be “rolled forward”.  That is a rather subjective approach.

In both cases the outcome was understandable.  Why should the public at large suffer, and the owner gain, from Council mistakes? On the other hand the decisions make it more difficult to be clear about what uses are lawful.  Justice comes at the cost of certainty and simplicity.

With thanks to George Fennell who assisted in preparing this blog post.

Reserved Matters approval can be amended

In R (on the Application of Fulford Parish Council) v City of York Council [2019] EWCA Civ 1359 the Court of Appeal has generously confirmed that the statutory power conferred by section 96A of the Town and Country Planning Act (“the Act”) to make non-material changes to a planning permission includes the power to make non-material changes to conditional approvals of reserved matters.

Persimmon Homes’ outline planning permission was granted for approximately 700 dwellings subject to a large number of conditions.  A conditional approval of a reserved matters application was granted by York City Council that included the requirement to submit for approval a detailed Bat Mitigation Strategy prior to any development taking place.  York City Council then approved an application for a non-material amendment that permitted changes to the bat house types and layouts, and changes to the strategy.  In response, Fulford Parish Council brought a judicial review on the basis that section 96A’s statutory power is limited to making non-material amendments to “planning permissions”, and the approval of reserved matters did not constitute a “planning permission”.

Referring to the primary source of the power to grant planning permission (s.70(1) of the Act), the court decided that the grant of outline planning permission is the grant of planning permission defined by the Act and since the grant is “subject to” conditions, the conditions must be seen as an intrinsic part of the grant; therefore the conditional approval of a reserved matters application is itself a condition to which the planning permission has been granted. 

In the court’s judgment:

  1. the “planning permission” referred to in s.96A refers to a package consisting of the grant of planning permission itself, together with any conditions to which it is subject, whether the conditions are imposed at the time of the grant or subsequently; and
  2. the application for an amendment to an approval (or conditional approval) of reserved matters is an application for the alteration of an existing condition, which is expressly permitted by s.96A(3)(b).

Importantly, the court stressed that the power under s.96A is restricted to non-material changes otherwise the need for public participation will again be required and the change will be outside of the powers of s.96A.

Whilst this judgment will be welcomed by developers, a word of caution –  as the term “non-material change” is not defined by the Act it will be important for both developers and local planning authorities to consider sensibly whether proposed scheme amendments can rightly be classified as “non-material changes” especially in those situations where there is organised local opposition to a proposal.  One possible, and ironic, outcome of the case is that authorities become even more cautious about what they will accept as non material amendments.

A reasoned approach

We look at a local planning authority’s duty to give reasons, in light of recent case.  In September 2016, the Court of Appeal ruled that Dover District Council had failed to give legally adequate reasons for its decision, against the advice of its planning officers, to grant planning permission for a controversial development partly in an area of outstanding natural beauty (AONB) (R (on the application of Campaign to Protect Rural England) v Dover District Council [2016]). This was one of several recent cases which have dealt with, and have generated some uncertainty about, the duty to give reasons.

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This article was first published in Property Law Journal (March 2018) and is also available at http://www.lawjournals.co.uk/

Update: When does a condition restricting use remove PD rights?

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.

When does a condition restricting use remove PD rights?

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.

The need for focus on conditions (and not descriptions) in Section 73 applications

The consequences of failing to restrict use by imposing a condition were highlighted in a recent appeal decision concerning a DIY retail unit in South West London.

Both the original planning permission for the retail unit and a subsequent section 73 permission (granted in 2010) included a condition to restrict the sale of non-food goods.  However, the final section 73 permission granted in 2014 contained no such condition.

In 2015, the appellant sought a lawful development certificate permitting use of the premises for purposes within Use Class A1 without restriction on the goods that could be sold. Notwithstanding the lack of a condition restricting use, the Council refused.  Consequently, the applicant appealed citing the decision in I’m your Man v Secretary of State [1999] 77 P. & C.R. 251, which held that where a limitation is to be imposed on a permission granted pursuant to an application, it must be done by condition.

The Council contended that the original conditions were incorporated by reference to the previous permissions or should be implied, referring to the Reid case which held that it is permissible to impose conditions by reference to an earlier planning permission.

However, the Inspector rejected the Council’s arguments, finding that the principles from Reid could not reasonably be extended to the creation and incorporation of an entirely new condition which does not appear on the 2014 permission other than in the description, in accordance with the decision in Dunnett Investments.  The Inspector held that no condition restricting the nature of the retail use to specific uses falling within Use Class A1 had therefore been imposed on the final planning permission.  Accordingly, the appeal was allowed and the lawful development certificate issued.

So what can we take away from the case?

  1. The importance of conditions controlling use.

The decision in Reid confirmed that, in the case of planning permissions granted under section 73, conditions can be imposed in various ways:

  1. impose fresh conditions mirroring the original conditions save for the variation; or
  2. impose only the varied condition and incorporate the unaffected conditions by cross-reference to the original permission.

However, whichever method is used, any differing conditions must be incorporated in full in the new permission. For certainty, LPAs must adopt a ‘belts and braces’ approach and set out all the conditions to which the new planning permission will be subject, restating any unchanged conditions in full rather than relying on cross-referencing.

  1. The myth that the description of development can be varied by way of a section 73 application persists.

Confusion often arises as a result of overly complex and unclear descriptions of development, which applicants and local authorities seek to amend to accord more closely with the section 73 proposals. However, there is no formal ability under section 73 to amend the description of development.  It is therefore better to avoid references to the use classes, floor areas and number of units in the description of development (where possible), as it invariably acts to constrain the ability to lawfully use section 73 amendments to amend schemes post approval.

Steering clear of amendments to the description of development can help to maintain the focus on varying the relevant conditions, reducing the potential for LPAs to fall foul of this issue. As is clear from the present case, LPAs cannot rely on undefined conditions being imposed or implied into new permissions granted under section 73.

As a final note, we are willing to bet that I’m Your Man will be overturned at some point by the Courts or will be ousted by legislation. A failure to constrain by condition something that was clearly described as limited in the description of development should not, as a matter of fairness, lead to a windfall for the owner and a cost to the community.

Amalgamation of units still at risk

As we have noted previously, the Town and Country Planning Act 1990 (“TCPA”) is clear that the conversion of a single unit into several units requires planning permission. Although the legislation is silent on amalgamation, it may too be a material change of use requiring planning permission (see our 13 May 2014 blog).

In the recent Cheyne Gardens appeal an Inspector dismissed an appeal against Royal Borough of Kensington and Chelsea (“RBKC”)’s decision not to grant a certificate of lawfulness for works to amalgamate two flats into a single dwelling. Planning permission had been refused and the applicant argued that a Certificate should be granted on the grounds that there was no material change of use requiring planning permission.  The analysis centred on two questions:

1          Is the change of use ‘development’?  ap

The appellant argued that the proposals should not be treated as development on the basis of Section 55(2)(f) TCPA and Article 3(1) of The Town and Country Planning (Use Classes) Order 1987. Both provide that where a building is used for a purpose of any class specified in the schedule to that Order, the use of that building for any other purpose within the same class shall not be taken to involve development of land. In Richmond upon Thames v SSETR & Richmond upon Thames Churches Housing Trust [2000] this was confirmed as engaged where the combined units were already in a single occupation.

The Inspector refused to apply Section 55(2)(f) and Article 3(1) on the basis that the two flats in this case were in use as two separate dwellinghouses, each occupied by a single household or person. The revised position would be one unit occupied by a single household or person.  Whilst the new arrangement, by virtue of the amalgamation, would be used for one of the uses within Class C3, it would not be the self-same building in the before and after scenarios.  The amalgamation was therefore development capable of amounting to a material change of use.

2          Is the change of use material in planning terms?

Richmond established that the extent to which a particular use fulfils a legitimate or recognised planning purpose (in terms of a purpose relating to the character of the land) is relevant in deciding whether a change from that use is a material change of use.   In particular, the loss of a particular type of residential accommodation where that loss was resisted by specific policies.

RBKC put forward evidence that de-conversions and amalgamations were anticipated to result in the loss of 400 homes over a five year period. Set against that, London Plan Policy 3.3 imposes a minimum 10 year housing building target of 7,330 dwellings for RBKC, with an annual monitoring target of 733 homes.  The Inspector considered that the loss of one unit should be considered against the annual target.  Despite accepting that this would be an “almost infinitesimal change” (and the loss of the single unit was under the 5 unit threshold set in the RBKC policy) he nonetheless decided that it would “as a matter of fact and degree have a significant impact in planning terms” concluding that circumstances had “changed significantly” since the adoption of that policy.

So what?

The focus of recent amalgamation appeals has been on the materiality of the change, rather than the question of whether there has been a change of use. The decision reflects the approach applied by the High Court in June, quashing CLEUD and Section 78 appeals on the basis that the Inspector should have taken account of generalised housing need arguments despite the lack of a specific policy threshold.

Although there is real scope to achieve permission on the basis that the loss of supply is clearly de minimis, the Cheyne Gardens decision confirms that decision makers will continue to treat general housing supply policies as a basis for regarding small amalgamations as material even though more specific policies on such changes do not necessarily warrant it.  The difficulties of doing so in the absence of such policies are illustrated by the 77 Drayton Gardens decision, in which the Inspector refused to grant a CLEUD (on the basis that a material change had occurred by virtue of amalgamation of two units, treating the existence of restrictive policies as weighing on the ‘threshold’ question of whether a change of use had occurred). He nonetheless quashed the related enforcement notice and granted permission on the basis that evidence of housing need (including for larger units) and actual supply outweighed the conflict with the development plan.

Vacant Building Credit – an own goal?

Vacant Building Credit (VBC) was re-introduced into the NPPG in May 2016 to less vocal opposition than it faced when originally introduced following a Ministerial Statement in November 2014.  The Statement remains intact following the Court of Appeal’s ruling that it should stand.

The broad premise of  VBC is that is acts as a credit which can be offset against the affordable housing requirement of new development.  The credit is equivalent to the existing gross floorspace of a vacant building brought back into use or demolished for redevelopment purposes.  However, neither ‘abandoned’ buildings or those vacated for the sole purpose of redevelopment are able to benefit from VBC.

Unhelpfully, the NPPG gives no guidance on how VBC is intended to be applied.  Two immediate issues arise:

  • buildWhat is meant by “vacant”?  There is a concern that VBC will incentivise landlords to force the vacation of offices, industrial buildings or even houses to benefit from VBC.  There is also little assistance on where the line can be drawn to assess whether a building is “vacant” or “abandoned”.
  • What is meant by the “gross floorspace” of the vacant building – GIA over GEA?  Once that has been confirmed, how that floorspace should be applied to calculate the off-set?

As a consequence, local authorities are left to make sense of how to apply VBC, and inevitably are creating methods and policies for approaching VBC in a way which will minimise its impact on affordable housing delivery.  Emerging practice includes:

(i)         interpreting “vacant” as being opposite to the “in use” building test set out in the CIL Regulations.  This ensures that a development is unable to benefit from both VBC and the demolition credit which can reduce the amount of CIL payable;

(ii)         requiring the entire building to be vacant, not just part of it;

(iii)        requiring the building for which VBC has been sought to have been actively marketed for a specified period (and for the method and details of marketing to be provided);

(iv)        requiring details of existing floorspace to be provided on a GIA basis when a planning application is submitted.

Of those local authorities that are putting in place policies for calculating VBC, it is clear that there is no standard approach; others will be reviewing whether they apply VBC at all.  The West Berkshire appeal confirmed that the VBC policy is a material consideration and is not capable of being applied in a “blanket” manner; many local authorities will be taking comfort from this, possibly even reviewing how Local Plan policies can be formulated to disapply VBC altogether.

VBC was introduced on the basis it would assist smaller developers deliver viable schemes, however the Government has failed again to build the necessary clarity into the guidance to ensure that it is only small developments which benefit from VBC.

Left to local authorities to put in place their own mechanisms provides no guarantee that VBC will assist those it was intended to; as a consequence VBC’s long-term impact on affordable housing remains potentially damaging at a time when the need for affordable homes remains critical, while the ability to rely on it to bring forward otherwise uneconomic schemes remains unclear.

Improving the use of Planning Conditions?

Too many unnecessary and overly restrictive conditions are still routinely attached to planning permissions, driving up costs and impeding development. It is against this backdrop that the Government proposed further reforms in the recently published Neighbourhood Planning Bill aimed at streamlining the use of planning conditions.

Long game

This is not a new objective. Since the Killian Pretty Review in 2008 successive Governments have been on a drive to minimise the use of unnecessary conditions. For instance, in April 2015 the Government introduced the concept of ‘deemed discharge‘, whereby an applicant can treat certain conditions as discharged if the LPA fails to reach a decision in the requisite time frame. Although the intention was admirable, it is debatable whether this reform has been effective given that the power is rarely relied upon in practice.  As we have pointed out before, part of the answer has to be improving the quality of some applications in the first place and giving a less risky route to appeal onerous conditions.

Current proposals

textThe DCLG consultation ‘Improving the Use of Planning Condition’ (the ‘Consultation’), which was launched in conjunction with the Neighbourhood Planning Bill, seeks views on the Government’s proposals to improve the use of planning conditions and closes on 2 November 2016.

There are 2 key elements to the Government’s proposals:

  1. Restriction on the use of pre-commencement conditions without prior approval by the applicant; and
  2. Prohibition of specific types of conditions.

1) Restriction on the use of pre-commencement conditions

LPAs would not be permitted to use pre-commencement conditions without prior approval by the applicant. By giving applicants an earlier opportunity to challenge unnecessary pre-commencement conditions, it is hoped that a consensus can be reached between the parties at the outset and the likelihood of appeals reduced.  Of course, there is a risk that front loading the process will lead to delays in planning applications being determined.  There are several practical implications:

  • Where an applicant refuses to accept a proposed pre-commencement condition the LPA will have a number of options at its disposal: (i) revising the condition so that it is agreeable to the applicant; (ii) allowing compliance with the condition post commencement; (iii) removing the condition in its entirety; or (iv) refusing planning permission.
  • The threat of refusal may do two things. Firstly, force applicants to consider whether they have really included adequate detail in the application itself. The answer will often be ‘no’. Secondly, accept unsatisfactory conditions in order to secure the permission (particularly where the grant of permission is a pre-requisite for the release of funds), and then use Section 73 to seek to remove the offending condition while avoiding an appeal scrutinising the merits of the entire application afresh.
  • The restrictions will not apply to outline permissions. The Consultation does not explain why.  However, the impact of delays caused by pre-commencement conditions is arguably lessened in the case of outline permissions given that development cannot commence until reserved matters have been approved in any event.

2) Prohibition of specific types of conditions

At present, LPAs have a broad power to impose “such conditions as they think fit” providing they meet the tests prescribed in the NPPF, its supporting guidance and case law.

The Government’s proposals are intended to provide greater clarity about conditions that do not meet these policy tests and should therefore be prohibited. The Consultation sets out examples of conditions that are categorised as unacceptable by existing planning practice guidance and seeks consultees’ views on whether such conditions should be expressly prohibited through legislation.

Given the relevant tests for using conditions are already enshrined in the NPPF and the example conditions set out in the Consultation are effectively prohibited (albeit through guidance rather than statute), the purpose served by this aspect of the reforms is questionable. A more productive use of this legislation would be to use the conditions as a benchmark for reasonableness, and allow binding decisions on them, via the mooted Dispute Resolution Service under the Housing and Planning Act 2016.

Conclusions

The reforms are unlikely to herald a new era in which conditions are used conservatively and pre-commencement conditions are consistently agreed upfront without the intention of resorting to Section 73. Bolder reform, providing a quicker right of appeal or up front, binding dispute resolution on this specific point, would be a much better outcome.

The risk of flooding

GLASDIR_2415520bA spate of major floods across the UK, warnings that global warming will lead to more frequent heavy rainfall events and increased risks of flooding have put the topic back at the top of the pile for planners. Recent appeal decisions have highlighted the conflict between planning policy preventing development in high risk areas and the need to build more housing, as well as the importance of mitigation strategies and conditions in securing consent.

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This article was first published in Property Law Journal (May 2016) and is also available at http://www.lawjournals.co.uk/