Supreme Court delivers ‘win’ for developers in ‘long-awaited’ nutrient neutrality ruling

The Supreme Court has upheld an appeal brought by a developer, ruling that new environmental policy cannot retrospectively undermine planning permission already granted.

The case concerned a residential development put forward by CG Fry & Son, for which Somerset West and Taunton Council granted reserved matters approval subject to conditions in June 2020.

When the developer sought to discharge the imposed conditions in 2021, the council withheld approval based on government guidance given two months after planning permission had been granted. 

The case came to the Supreme Court following successive appeals from the developer against the council’s decision to delay approval of the third, 190-home phase of the 650-home Jurston Farm scheme  in Wellington, Somerset.

The appeals were dismissed by a local authority planning inspector, the High Court and the Court of Appeal.

The appeal was based on two grounds. The first concerning the Conservation of Habitats and Species Regulations 2017 (the Habitats Regulations) was dismissed by the court. 

Ground one questioned whether regulation 63 of the Habitats Regulations requires an “appropriate assessment” to be undertaken before a local planning authority decides to discharge conditions requiring the approval of reserved matters in a grant of outline planning permission.

The second claiming that changes of scientific advice should not impact a grant of outline planning permission was accepted.

Ben Sharples, partner and head of natural capital at Michelmores, said: “The Supreme Court has today handed down its long-awaited judgment in CG Fry, addressing the extent to which the Habitats Regulations apply to the discharge of reserved matters following the grant of outline planning permission.

“While the court upheld the requirement for an appropriate assessment under regulation 63 where the approval of reserved matters authorises the project to proceed, it delivered an important win for developers by confirming that planning permission, once granted in respect of a Ramsar site, cannot be undermined by subsequent changes in government policy.”

In 2015, CG Fry & Son received outline planning permission to build on a site that falls within the catchment area of the River Tone, which comprises part of an area designated as a ‘Ramsar site’, which means it’s a wetlands site of international importance.

It [the court] delivered an important win for developers by confirming that planning permission, once granted in respect of a Ramsar site, cannot be undermined by subsequent changes in government policy 

Ben Sharples, partner and head of natural capital at Michelmores

While Ramsar sites are not protected by the Habitats Regulations, which implement EU law, they are covered by national planning policy. The Habitats Regulations continue to have effect post-Brexit as ‘assimilated law’, previously known as ‘retained EU law’.

In June 2020, the developer was handed reserved matters approval for phase three of the eight-phase development, subject to ten conditions.

It then applied to the council to discharge the conditions the following year, but approval was withheld based on scientific advice that was given by Natural England in August 2020, two months after approval was granted.

The government body advised that a Habitats Regulation assessment should be undertaken before determining a planning application as the development could put the Ramsar site at risk of eutrophication (the accumulation of excessive nutrients in the water).

Claire Fallows, partner at Charles Russell Speechlys said: “The appeal was ultimately allowed on the basis that the relevant protected site was not directly subject to the Habitat Regulations (only national policy required it to be given the same protection).

“Matters relating to habitat protection could not be taken into account in discharging conditions unrelated to such matters. This is a helpful reminder for authorities and developers that where an outline permission is granted, it is not open to a planning authority to revisit matters already approved in principle at the outline stage.”

Richard Broadbent, environmental lawyer at national law firm Freeths, said that the ruling has “potential (and short lived) benefits” for developers where local planning authorities will not need to carry out a Habitats Regulations assessment in “very specific circumstances only”.

He pointed out that these benefits will be removed once the government’s draft Planning and Infrastructure Bill receives royal assent. The legislation seeks to clarify that impacts on Ramsar sites “must be subject to habitats Regulations assessments as a matter of law (and not just planning policy under the NPPF).”

Broadbent also clarified that “in general however, the position is that (as per earlier judgments in this case) the impacts of development on European sites do need to be taken into account at the discharge of conditions stage if it transpires that the development is likely to affect those sites and no prior habitats regulations assessment was carried out by the local planning authority.”

“This conclusion by the Supreme Court is by no means a surprise and had been expected,” he added.

Philip Fry, managing director of CG Fry & Son, said: “CG Fry & Son are pleased that the Supreme Court has ruled in our favour. This marks the end of a time-consuming and costly process for us as an SME developer. It is deeply frustrating that it has taken over three years to reach this conclusion — a delay that could have driven many other small developers out of business.

“The prolonged legal proceedings have caused significant delays and unnecessary expenses in delivering both private and affordable homes, which are urgently needed in Wellington. Additional costs arising from such legal challenges further exacerbate viability issues across the industry, making it even harder for SME developers to deliver much-needed housing.”

Somerset Council said it is currently reviewing the implications of the Supreme Court’s decision in the case of C.G. Fry & Son Limited v Secretary of State for Housing, Communities and Local Government and Somerset Council.

A spokesperson for the council said: “We recognise the significance of this decision and its potential impact on planning decisions. However, we are not in a position to comment further until we have fully considered the legal implications and received appropriate advice.”