Hillside in the Supreme Court: what next for ‘drop in’ permissions?

Mon, 07 Nov 2022

The Supreme Court handed down judgment in Hillside Parks Ltd v Snowdonia National Park Authority [2022] UKSC 30 on the 2 November 2022. It is a detailed judgment which delivers much-needed clarity in several areas of planning law. It also has potentially significant implications for the development industry and Local Planning Authorities (“LPAs”); considering applications known as ‘drop in’ permissions.

The issues in Hillside 

In 1967, Merioneth County Council granted planning permission for the development of 401 dwellings ("the 1967 Permission") on a site in Snowdonia National Park ("the Site"). Between 1967 and 1973, it made a total of seven further grants of planning permission in respect of the Site, each of which departed from the scheme of development authorised by the 1967 Permission.

Gwynedd County Council became the relevant LPA in 1974. In 1987, it argued in proceedings brought in the High Court by Landmaster Investments Ltd, which owned the Site at that time, that the 1967 Permission had lapsed ("the 1987 proceedings"). The High Court rejected that argument, deciding that the development authorised by the 1967 Permission could still be lawfully completed.

Snowdonia National Park Authority ("the Authority") became the relevant local planning authority in 1996. It made eight further grants of planning permission in respect of the Site between 1996 and 2011. In 2019, Hillside Parks Ltd ("Hillside"), which now owns the Site, brought a claim against the Authority, to ascertain whether the scheme of development authorised by the 1967 Permission could still be lawfully completed. The Authority argued that it could not be, as the development carried out pursuant to the additional permissions granted after 1967 was inconsistent with it. In particular, roads had been built in areas designated for houses, and houses had been built in areas designated for roads. This kind of argument was not made by Gwynedd County Council in the 1987 proceedings. Nonetheless, the High Court and the Court of Appeal allowed the Authority to raise the point and ultimately resolved it in the Authority’s favour. Hillside then appealed to the Supreme Court.

The issue for the Supreme Court.

Where there are successive planning permissions relating to the same site, and the later permissions are for changes to one part of a wider development approved in the original planning permission, is the effect of implementing the later permission(s) that the original permission is completely unimplementable? Or can the original permission still be implemented in relation to areas unaffected by the later permission(s)?

The Judgment

The Supreme Court unanimously dismissed the appeal, with Lord Sales and Lord Leggatt giving the judgment with which Lord Reed, Lord Briggs and Lady Rose agree.

Reasons for the Judgment

There are several ‘headlines’ arising from the Judgment.

  • Successive planning permissions and the ‘Pilkington principle’

First, the Court re-affirmed the leading authority of Pilkington v Secretary of State for the Environment [1973] 1 WLR 1527 relating to successive and mutually inconsistent planning permissions. Where there are two inconsistent permissions that have been granted for the development of land, it remains the case that the developer can choose which to implement.

In Pilkington it was decided that, where development has taken place under one permission (P1), then whether another permission (P2) may be lawfully implemented depends on whether it is still “physically possible”. Whether or not it is ‘physically possible’ will depend on the terms of P2 and the works that have actually been done under P1. Mere inconsistency between the two permissions does not prevent P2 being implemented: what must be shown is that the development in fact carried out (under P1) makes it impossible for P2 to be carried out in accordance with its terms [43].

Second, in the Supreme Court, it was argued by the Developer that Pilkington should be analysed as being contingent on a principle of P1 having been ‘abandoned’. That analysis was rejected [35]. The Court also revisited the House of Lords decision in Pioneer Aggregates (UK) Ltd v Secretary of State for the Environment [1985] AC 132 where it had been held that there is no such principle – and no room for such principle– that the planning permission may be extinguished by abandonment. The primary reason was that Parliament has provided a comprehensive code of planning control and the courts should not introduce into planning law principles or rules derived from private law unless expressly authorised by Parliament. Lord Scarman in Pioneer had emphasised the existence (or otherwise validity of a planning permission) should be capable of ascertainment by inspection of the planning register and of the land in question. The introduction of the principle of abandonment was said to be inconsistent with this [37]. 

  • The need to carry out the development ‘fully in accordance with the permission’.

Lord Hobhouse in Sage v Secretary of State for the Environment, Transport and the Regions [2003] UKHL 22 referred to the ‘holistic approach’ of planning law and had highlighted at para 23 that if a ‘building operation is not carried out…fully in accordance with the permission, the whole operation is unlawful.’ This had later been relied upon at para 20 of Singh v Secretary of State for Communities & Local Government [2010] EWHC 1621 (Admin) by Hickinbottom J who stated that “reflecting the holistic structure of the planning regime, for a development to be lawful it must be carried out fully in accordance with any final permission under which it is done, failing which the whole development is unlawful …”

On this issue, the Court gave some much needed clarity on development which had already been carried out. It was noted that in Sage no planning permission had been granted for any of the building operations carried out – and the remarks of Lord Hobhouse in that case were therefore obiter [62]. The Court also went further and said that a failure to conform exactly to a planning permission has been held not to prevent some development having taken place under the permission.

The Court did not support the analysis that failure to complete a building operation for which planning permission had been granted would render the whole operation unlawful. To illustrate why such a position cannot be right, the Court gave the example of a planning permission being granted for 200 houses, of which 150 were progressively built out in accordance with the plans and occupied. If such an analysis was correct, then all the buildings built and occupied would be unlawful unless and until the remaining 50 building were built out (even where 150 were in accordance with the plans, with no breaches of conditions). That proposition was found not to supported by authority and could not be right [66].  Importantly, the Court gave reassurance that the 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 [68]. That finding will be welcomed. The alternative (that all parts of the existing development which were lawfully built out at the time they were built then becomes unlawful) would have been entirely unfeasible.

  • Departures must be material

The Court mentioned that it was not argued that continuing authority of a planning permission is dependent on exact compliance with the permission such that any departure from the permitted scheme, however minor, has the result that no further development is authorised (unless and until exact compliance is achieved or the permission is varied).  Nonetheless, the Court provided guidance on that issue. It was said that the Pilkington principle should not be pressed too far, and that the approach taken should not be ‘unduly rigid’ (particularly in large multi-unit developments, see [69]). The ordinary presumption is that a departure will only have this effect if it is ‘material’ in the context of the scheme as a whole (Lever Finance Ltd v Westminster (City) London Borough Council [1971] 1 QB 222, 230. What is or is not material, is plainly a matter of fact and degree.

  • The Lucas Case and ‘multi-unit developments’

The Court considered the contention that a planning permission for a multi-unit development is properly interpreted as being severable into a discrete set of permissions to construct each individual element of the scheme. In so doing, the Court took the opportunity to review the judgment of Winn J in F Lucas & Sons Ltd v Dorking and Horley Rural District Council (1964) 17 P & CR 116. The Court gave helpful guidance on the nature of the need to complete a whole scheme – it was not to be treated as a condition precedent as that would mean that the development could never be started (because it would never be permissible to begin development). It was not to be treated as a condition subsequent either (because that failure to complete the whole scheme would retrospectively remove permission for what had been built out). The Court also had regard to the practicalities of requiring the permission to be ‘completed’ given that it could be unclear when a developer had stopped construction work, for example where they had run out of money (but it remained physically possible to complete the development) [53]. However, it was not correct to find that a planning permission was ‘severable’ as Winn J did. Accordingly, the court rejected the suggestion that planning permission was only authorised if the whole of the development is carried out.

  • ‘Drop-in’ permissions

[73] – [77] deal with the situation where a developer has been granted a full planning permission for one entire scheme and wishes to depart from it in a material way. Counsel for the developer argued that subsequent permissions were intended to operate along with the 1967 permission by authorising local variations of the original development scheme – it was suggested that it would ‘cause serious practical inconvenience if a developer who, when carrying out a large development, encounters a local difficulty or wishes for other reasons to depart form the approved scheme in one particular area of the site cannot obtain permission to do so without losing the benefit of the original permission and having to apply for a fresh planning permission for the remaining development on other parts of the site’ [73].

The Court’s approach on this issue is perhaps the most surprising, requiring an application to be an application for permission for the ‘whole site’, which could mean the submission of an application being required to be accompanied by certain documentation, such an environmental impact assessment. The Court considered that, where variations are comparatively minor and circumstances had not changed, then it ‘may be possible to re-use or update such documentation submitted in support of the application for the previous permission’ [77]. This will depend on the circumstances.

This part of the Judgment has potentially significant implications for the so-called practice of ‘drop-in’ applications. Such applications are common-place (but are not necessarily a creature of planning law or planning policy) and are frequently used on phased, larger developments by applying for a new planning permission, P2, whilst continuing to develop the rest of the site under an original permission, P1.

Continuing to use ‘drop-in’ permissions post-Hillside is going to require considerable care. It will likely need express consideration as to how land is divided up in P1 so that it can be later separated from it. Without such consideration, it appears that the correct approach is to submit a new application for the entire site (and not only the section subject to the ‘drop-in’ application). Care will need to be taken in how sites are developed going forward and greater resources will likely need to be devoted to LPAs assessing such applications.

Sioned Davies is a member of the Planning and Environment Group.

A link to the judgment can be found here.

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