The perils of Pilkington – when is a planning permission no longer capable of implementation?

This was the question considered in Hillside Parks Ltd v Snowdonia National Park Authority [2020] EWCA Civ 1440 where the Court of Appeal held that implementation of a masterplan pursuant to a 1967 permission was no longer possible due to developments carried out under later permissions. This decision is particularly relevant to developers of complex multi-phase developments - the Court has confirmed that planning permissions should be construed holistically, that it is unlikely that modern planning permissions could be interpreted as a "series of independent acts", and that therefore caution should be exercised with overlapping planning permissions. Also, this may not be the end of the story as regards the legal status of works undertaken under a permission which conflicts with a later, inconsistent permission. What are the implications of this judgment, and are there arguments for future reform?

The facts

Hillside concerned the development of a large housing site in the Snowdonia National Park. Planning permission was initially granted in 1967 for 401 dwellings based on a masterplan. The masterplan was subsequently “varied” several times by the grant of subsequent planning permissions but, despite development having been carried out pursuant to the subsequent permissions, in 1987 the High Court held that: the original 1967 permission had in fact been implemented and remained lawful; and that therefore the original development authorised by it could be completed at any time. The 1967 permission was thereafter varied a number of times and further standalone planning permission were also granted for additional building work within the masterplan area.

By 2017 the local planning authority contacted the landowner to say that, in its view, the 1967 permission could no longer be implemented because the developments carried out in accordance with the later planning permissions rendered it impossible to implement the original masterplan. All works at the site were therefore required to be stopped until the planning situation had been regularised.

The decision

At first instance, the High Court held that, owing to further development since 1987, development under the 1967 masterplan was now physically impossible (eg because roads had been built on areas shown as housing on the 1967 masterplan, etc). On appeal against the High Court’s decision, the Court of Appeal had to consider several questions including whether:

1. the High Court’s 1987 decision that the development could still be completed under the original 1967 planning permission was still binding;
2. the local planning authority could not now argue that the 1967 permission was not valid because it had accepted up until 2017 that the 1967 permission could be implemented; and
3. that the “Lucas exception” applied, which stems from a 1964 case (F Lucas & Sons Ltd v Dorking and Horley Rural DC [1964] 5 WLUK 27) which held that permission for a particular development was to be regarded as permission for the development to be carried out as a “series of independent acts”.

The Court of Appeal confirmed that the 1987 High Court decision was not now binding as works under permissions granted since 1987 had rendered development under the 1967 masterplan impossible. For the same reason, it was open to the local authority now to argue that the 1967 permission was no longer valid. The Court of Appeal also confirmed that, whilst it is possible that a particular planning permission might could grant permission for a development to take place in a “series of independent acts”, this was unlikely to be the way that a modern planning permission would be construed.

The consequences

This case confirms the general doctrine established by Pilkington v Secretary of State for the Environment and Others [1973] 1 WLR 1527 CA and subsequent cases (the “Pilkington doctrine”), namely that, whilst a landowner can make multiple planning applications for the same piece of land which may be inconsistent with each other, once one of those permissions has been implemented, and development has been carried out which makes it impossible to achieve development under another permission over the same piece of land, that other permission is no longer valid. Whilst not actually overruling Lucas, the Court of Appeal held that the case should be regarded as "having been decided on its own facts", meaning that it cannot reasonably be relied upon in relation to modern planning permissions for large masterplan developments. The Court of Appeal re-asserted that a developer cannot lawfully "pick and choose" different parts of a development to be implemented.

Hillside does not change the law, but it does represent yet another example of judicial assertion in the strongest terms that planning permissions must be construed holistically and that overlapping planning permissions for the same land should be approached with extreme caution. This makes life very difficult for developers who are building out complex multi-phase developments over many years and who, understandably, wish to amend their developments to reflect a changing market or specific tenant requirements. Combined with the recent Court of Appeal decision in Finney v Welsh Ministers [2019] EWCA Civ 1868, which prohibited the use of section 73 of the Town and Country Planning Act 1990 to vary a planning permission where that variation would be inconsistent with the description of development, many developers will be faced with the only option of re-applying for planning permission for the entire development. Given the scale of modern planning applications, this would clearly be disproportionate in the majority of cases.

The end?

What is particularly chilling about Singh LJ's judgment in Hillside is that he left open the question of whether development which has already lawfully taken place in accordance with one planning permission would be rendered unlawful simply by virtue of the fact that subsequent operations take place pursuant to another permission which is inconsistent with the first. This would mean that, until a development is completed in full, landowners, investors and tenants would be at risk of the earlier phases of development being rendered unlawful as a result of subsequent development potentially outside their control. This would present enormous difficulties in the case of multi-phase masterplan projects in fragmented ownerships or where early phases are sold off to realise capital receipts to fund the later phases. Singh LJ recognised these as "potentially important questions" but said that he would prefer to express no view on them because they did not need to be decided in the appeal.

All of this highlights the very urgent need to reform section 73 of the Town and Country Planning Act 1990 in order to provide a full power to amend existing planning permissions. It is an oddity of the English planning code that this power does not exist and a succession of reforms have tried to address this through a make-do-and-mend approach that is plainly no longer fit for purpose. It is disappointing that this straightforward planning reform was not picked up in the government's Planning White Paper, given that it would streamline the planning process for large projects, reduce bureaucracy for local planning authorities and help to unlock many developments that need to evolve to reflect changing demands. In the current market, where flexibility and adaptability will be essential to the success of development in a post-Covid economy (see here for our Future Cities research), this is something that the government should tackle urgently.

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