14 December 2020

Planning Update: Does Hillside spell the end of the drop-in application?

The recent Court of Appeal case of Hillside Parks Ltd v Snowdonia National Park Authority [2020] EWCA Civ 1440 has cast a question mark over the lawfulness of drop-in planning applications.

Drop-in applications are a well-used tool to enable changes to be made to an original planning permission where they exceed the thresholds permitted for non-material or minor material amendments. This approach is common in large-scale, long-term developments, where over time there is a need for substantial changes to the mix and type of uses.

The effect of a drop-in application is that a brand new planning permission is granted for an area within an existing planning application red line boundary. The two planning permissions can lawfully sit alongside each other, so long as the correct planning strategy is adopted. Well, that was what the industry thought.

The Hillside judgment follows a line of recent case law which sees a tightening up on the flexibility available to developers. In Hillside, the Court was asked to confirm a previous ruling that a masterplan permission from 1967 in Snowdonia National Park was no longer capable of being implemented. The Court held that due to the fact development had taken place at the site since 1987 which was wholly incompatible with the development authorised under the masterplan, the High Court had been correct in its finding that the 1967 permission was no longer capable of being implemented.

The Court referred to the line of case law on the incompatibility of planning permissions, beginning with the judgment of Pilkington. The decision in Sage was also highlighted, which held that planning permissions need to be construed holistically. Hillside Parks Ltd tried to argue (using the exception in the Lucas case) that large masterplan permissions are permissions for distinct, independent acts. The Court found that a planning permission should only be viewed in this light in very exceptional circumstances. A permission for a large housing scheme is, for example, likely to have highway and landscaping requirements which affect the development as a whole.

The claimant has stated that it will appeal. In the meantime, the judgment leaves a number of important and practical questions for developers unanswered. The upshot is where you have a full planning permission that is not phased, any development pursuant to the original permission which has not been carried out before the implementation of the drop-in permission could be rendered unlawful. The Court unhelpfully declined to address whether any development already carried out pursuant to the original permission could also be considered to be unlawful, but the industry considers this to be unlikely. The scope of the decision appears to be limited to non-phased full planning permissions. Most large-scale development will be phased (not least because of the benefits of phasing CIL payments) so the impact of this case may be limited. However, even on phased developments, Hillside may be applicable.

Those who find themselves in the middle of large masterplan developments, or who may have acquired part of such a site where development is still ongoing, will need to take care to ensure that this decision does not have ramifications for the lawfulness of their proposed development. There are a number of ways to avoid or de-risk these type of situations, and we are happy to advise and help formulate a strategy.

This decision, coupled with those in Lambeth and Finney, also raises the question of whether legislative intervention is required to stop the Court undermining the flexible planning system the Government appears to desire.

Alice Gordon-Finlayson is an Associate in the Planning team.

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