Planning Quarterly Update - Case Law Edit

Judicial Review Permitted Out of Time

In the unusual case of R (oao Thornton Hall Hotel Ltd) v Wirral Metropolitan Borough Council and Thornton Holdings Limited [2018], an application for judicial review was allowed some five years after the permission had been granted.

In November 2011, planning permission was granted for the erection of three marques within the grounds of Thornton Manor.  Contrary to the planning committee's resolution to grant permission for a limited period of five years, the permission was granted without such limitation.  Following the expiration of the five year period, the error came to light resulting in the operator of a nearby hotel seeking to have the permission quashed.

The initial question for the court was whether to permit an extension of time of several years so that the application could proceed.  On the facts, the court found that justice required the extension to be granted.

In reaching its decision, the court took the view that the interested party (Thornton Holdings) bore considerable responsibility for the lateness of the claim because it knew of the error and chose to remain silent about it.  It only revealed its hand when it was asked, in 2016, to submit a further application for the retention of the marquees. 

The court went on to determine that the permission that was issued, without the requisite condition, was unlawful and as such, quashed it.

It should be noted that very special circumstances did exist, such as the fact that the development was in the green belt, the marquees had originally been erected without a planning application being submitted (and indeed were the subject of enforcement proceedings) and most notably, the behaviour of the interested party.

Further, cases of this nature are extremely rare.  In a 2016 decision (R (oao Gerber) v Wiltshire Council and others) the High Court allowed a claim to proceed 14 months after the grant of planning permission.  However, the Court of Appeal reversed the decision and found that no good reason existed for the extensive delay in bringing the claim.  Given that permission to appeal has been granted in this case, it will be interesting to see if this judgment is able to withstand the Court of Appeal's scrutiny.

From a practical perspective, the risk of other applications for judicial review following this route is low.  Accordingly, changes in practice are not likely to be necessary, but nonetheless, it is a decision worth bearing in mind.

Section 73 – A Cautionary Tale for LPAs

The next case demonstrates that errors in planning permissions don't always result in hardship for the recipient of the permission.  

In London Borough of Lambeth v Secretary of State for Communities and Local Government & Others [2018], planning permission was granted for a DIY store, subject to a condition that the unit could only be used for the sale of certain goods (excluding food and drink).  A section 73 application was made to vary this condition which was subsequently granted.

Although the description of development stated that the unit could only be used for the sale and display of non-food goods, this was not replicated in the conditions.  Subsequently, an application was made for a certificate of lawfulness of proposed use or development for open/unrestricted A1 retail purposes.  This was granted on appeal and following a challenge by the local planning authority (LPA), was upheld in the High Court.

The LPA then took the dispute to the Court of Appeal, who agreed with the lower court, concluding that the requisite condition could not be implied, nor could the court take an interpretive approach.

It noted that "[a]lthough the decision notice probably did not achieve the result that Lambeth wanted it to achieve [nothing had] gone wrong with the language of the decision notice.  What went wrong was Lambeth's failure to exercise a power that it had under the Act."

Accordingly, the certificate of lawfulness stood, allowing the unit to be operated on an open A1 basis.

The key message from this case is to ensure that conditions are accurately replicated when permission is granted pursuant to section 73 to avoid unintended consequences.

Mayor of London's Affordable Housing and Viability SPG

May saw the High Court hand down judgment in R (on the application of) McCarthy and Stone Retirement Lifestyles Ltd & Others v Greater London Authority [2018].

A consortium of developers of specialist housing for the elderly challenged the SPG on grounds including that it was unlawful because it contained new policy, rather than supplementing policies in the London Plan.

The claim on the whole failed, including its key aspect - that the SPG's adoption of a 35 per cent affordable housing threshold to avoid planning applications being viability tested was inconsistent with the London Plan.

However, it was successful in one respect – that the SPG's requirement for late stage viability reviews on all developments over ten units was unlawful.  This was on the basis that the language of the current London Plan does not permit the imposition of such a requirement for all sites over 10 homes.  It permits it only where, in general, the timescale or scale of development means that it is likely to take many years to complete a phase or the whole.

As a result, at least until the draft London Plan is adopted, London planning authorities will not be able to use the SPG as a lawful basis to impose late-stage viability reviews on developments that do not take 'many years' to build out.  

However, we note that in line with its publicly stated intentions, the GLA is already judging developments against the draft London Plan, including in respect of viability reviews.  Whilst the draft is a material consideration for planning purposes, at this early stage in the adoption process, the weight afforded to it should be limited.  If developers feel that the GLA is affording too much weight to the proposed policies, their recourse would be through the courts, but in our view, in light of this decision and given the timescales involved, any such challenge is likely to result in a pyric victory as best, but more likely, would be unsuccessful.

Benchmark Land Values (BLV)

Last year, in our Planning Nutshell: Benchmark Land Values - Buyer Beware we looked at the planning appeal decision relating to redevelopment proposals for a former Territorial Army centre in Islington.  A key aspect of the decision was how BLV should be calculated; the developer favouring a market value (MV) approach, the LPA an existing use value plus (EUV+) approach.

The Inspector found favour with the LPA's approach and dismissed the appeal.  The disgruntled developer took the view that the Inspector's decision was unlawful and challenged it in the High Court.

In Parkhurst Road Limited v Secretary of State for Communities and Local Government and LBI [2018], the judge rejected the challenge and added an interesting postscript to his judgment calling for the RICS to review its 2012 Guidance Note "in order to address any misunderstandings about market valuation concepts and techniques, the "circularity" issue and any other problems encountered in practice over the last 6 years".

Going forward, developers should anticipate a refusal to entertain a MV approach in all bar the most exceptional circumstances, but be ready for a battle over the premium necessary to incentivise a landowner to release its land for development as allowed for by the 'plus' element in the EUV+ approach.