Revisiting Hillside – eight months on

Hillside and Pilkington

Last November, Hillside Parks v Snowdonia NPA was heard in the Supreme Court. Hillside concerned multiple and inconsistent planning permissions for the same site based in Snowdonia Park. In this article we will reflect on the practical implications of the case for the planning sector.

Without going into significant detail about the background of Hillside, the case concerned a series of full planning permissions for residential development on a site, dating back to a masterplan for 401 dwellings permitted in 1967. Only 41 of the houses had been built on the site but several later permissions had been granted. The Supreme Court decided following the principles in the case of Pilkington v SoS for the Environment 1973, that the development authorised by the original 1967 planning permission could no longer be built-out, as the intervening development of dwellings on the site had made it physically impossible to complete the original development in accordance with the 1967 permission. The case of Pilkington concerned mutually consistent planning permissions to the same site and held that where development has already been built in accordance with Permission A the ability to lawfully implement a second, normally full Permission B on the part of the same site, is dependent on whether it is physically possible to implement and carry out the second permission, given what has already been carried out under Permission A (the ‘Pilkington Principle’). This has been referred to in the planning world as a ‘drop-in permission’.

Drop-in permissions have been a common tool to allow changes to be made to a development that surpass the thresholds for non-material or a section 73 applications. If successful, a drop-in permission permits a new planning permission for an area within an existing planning application and will work alongside the original planning permission. Although Hillside goes some way to clarify the approach regarding multiple planning permissions, it raises questions regarding the use of drop in applications and the extent, they can be a valid way of varying an existing permission.

Headline 1: Physical impossibility – inconsistency and materiality

Hillside upheld the ‘Pilkington Principle’. The test of physical impossibility applies to the whole site covered by the unimplemented planning permission, and not just the part of the site on which the landowner subsequently wants to build. Hillside went further to clarify the principles and Pilkington:

1. ‘Physical impossibility’ of constructing the development authorised by the earlier permission is to be contrasted with ‘mere incompatibility between the 2+ permissions’ which is not fatal. The court referred to the earlier judgement of Prestige Homes case where two permissions involved the same site, the earlier one had a condition relating to the retention of trees. The later one was a condition relating to the removal of those trees. The later one was implemented. That did not preclude reliance on the earlier one because the development of the earlier one could still be built out it was just a condition of it that was no longer able to be complied with but the actual physical development was possible to complete. So, this was a case of mere incompatibility.
2. Physical impossibility does not require ‘exact compliance’. For example, deviations from a previous permission which are not material in the context of the development as a whole, would not be fatal to carrying out development pursuant to that permission. Where implementing permission B (later permission) means any of the development authorised by Permission A is physically impossible, Permission A is incapable of further implementation unless the incompatibility is not material in the context of the scheme as a whole The Court did not provide a definition of what is ‘material’ but they explained that “what is or is not material is plainly a matter of fact and degree” and it appeared to be analogous of the term with section 96A of 1990 Act in determining non-material amendments.

Headline 2: Severability

The court found that the 1967 planning permission was not severable as it did not comprise independent acts of development that could be implemented separately so they were not able to preserve some of the 1967 permission in areas where there was no physical incompatibility. However, the court clarified that it is down to interpretation whether it is a permission which authorises a series of independent acts of development, each of which was separately permitted by it. If it was for example, a large, phased permission then it may be possible to continue under the permission after works have been completed on part of the site under another permission.

Bringing together the courts analysis of the cases of Pilkington, Lucas and Sage the main point is “In summary, failure or inability to complete a project for which planning permission has been granted does not make development carried out pursuant to the permission unlawful. But (in the absence of clear express provision making it severable) a planning permission is not to be construed as authorising further development if at any stage compliance with the permission becomes physically impossible”. This confirms that there is no principle of abandonment of a planning permission in planning law, a planning permission can only be lost by the terms of the permission itself or by statute. It was also held that a part-completed development for which permission has been granted does not make the development already carried out unlawful.

Headline 3: Variation

Hillside established that a later planning permission cannot now generally be considered a variation of an earlier planning permission. The Court was not satisfied that the later permissions comprised ‘variations’ because “the development which took place under each of them is substantially at variance from what was shown in the Master Plan” and without plans showing how they integrated with the rest of the development “it cannot be said that these permissions authorised a new development scheme for the whole site”. A later permission would only be considered a variation of an earlier planning permission if the variation was to the scheme as a whole, and simply using the word variation in the later permission is not enough.

The court found that a developer could submit an additional application for permission that incorporates the wider site which benefits from an existing permission that has not been fully built out. Permission B can however be interpreted as authorising a “variation” to Permission A if it covers the whole site. This needs to be done by an appropriately framed additional planning permission which covers the whole site and includes the necessary modifications. The court suggested that this should include (re)submission of the documents relevant to the whole site including an EIA if required. The documents would have to demonstrate that the two planning permissions could work coherently together for the whole site. The courts suggestion to follow this approach rather than use the drop in application process, would mean that the developer would have a new second permission under which they could proceed. The governing permission for the whole site thereafter will be Permission B on it’s own and therefore not a drop in permission.

Practical takeaways

From the judgement there appears to be three ways to deal with multiple and inconsistent planning permissions:

1) Developers might be able to future proof a large consent by making it expressly severable. If the original planning permission is drafted explicitly and carefully (in particular thinking about the description of development and making sure there is no ambiguity) the permission may still be capable of making certain parts of the development severable. It is unlikely that reference to phasing conditions alone would be suitable, and for the foreseeable future be prepared to see creative and lengthy descriptions of development. This will only be helpful for future developments.

2) If the amendments needed to the existing permission are material changes, then the drop-in approach will not be suitable, instead the new Permission B should be treated as a variation to Permission A and should include a plan of the whole site which incorporates the development that can be built out under Permission A, which will become the overarching permission for the site once implemented. Proceeding with a whole fresh permission may not be practical in every case and the options and associated risk, must be considered on a case-by-case basis for example:

• the practicalities of re-submitting documents
• application fees
• potential implications for CIL payments and
• it is possible that the Local Authorities may require developers to require any interested parties in the wider site to be bound to any new section 106 agreement required which could cause issues and further delays.

3) If the proposed amendments are not material in the context of the scheme as a whole, then developers might be able to utilise the drop-in application process. It could be made to sit together with the existing permission by ensuring that clarity as to what development will be built out pursuant to which permission, so that for example, phases are built under one or the other permission. As part of this process, careful thought and assessment must been given to anticipated development scenarios. Points to consider with using the drop in application process include:

• This process could be attractive to developers where they do not want to proceed with a whole fresh permission which will come with associated costs and risks.
• Whilst it will be possible to use drop in permissions to preserve the ability to carry out further works under the original permission, materiality and inconsistency will be assessed on a case-by-case basis.
• Although it may still be possible to use drop in permissions alongside other applications to amend conditions through section 73, there could be further restrictions to using s73 as a result of the Finney [2019] judgement, which places a ‘web of restriction’ over large schemes for changes to be made without a fresh planning application. Finney established that section 73 can only be used to amend conditions and cannot be used to vary the description of the development. Although, in the recent case of Mikael the Court held that s73 is not limited in scope to “minor material amendments” which clarifies that there was a much wider scope for application of s73 and may see an increase of developers using it.

Conclusion

Although the judgement went some way to clarify some uncertainties within the planning and development sector such as that a planning permission can never be abandoned and that the Pilkington principle only applies when physical impossibility is engaged in a material rather than merely inconsistent manner, there are still questions about the best way to approach making material changes to multi-phase developments in the most risk-free and cost effective way. Developers are now awaiting the proposed new statutory framework in the Levelling-Up and Regeneration Bill which is currently before Parliament. this will insert a new section 73B into the Town and Country Planning Act 1990 giving the local planning authority power to grant a new planning permission that varies an existing permission but only if the local planning authority is satisfied that “its effect will not be substantially different from that of the existing permission”.

There are many take aways from the judgement and time will tell how they will operate in practice and whether the proposed new statutory framework will be welcomed by the sector.