And indeed, in a sense, everyone was a winner. The Supreme Court’s decision allows CG Fry’s appeal on a relatively narrow basis, but it also reaffirms the strict and wide-ranging protections guaranteed by the Habitats Regulations.

However, in another, more practical sense, this was a victory for housebuilders and in particular, for CG Fry, an SME housebuilder that had pursued the litigation for three years through all stages of the appellate process, undeterred by refusals from an Inspector, the High Court, and even a unanimous Court of Appeal.

Crucially, the Supreme Court judgment confirms the approach to the interpretation of retained/assimilated EU environmental laws, applying ordinary principles of interpretation. It is also an important statement of the relationship between law and policy, which has implications for environmental protections in the UK, where Parliament has chosen to implement much of the UK's environmental protection through the planning system. As the Court of Appeal put it in Venn v SSHCLG [2014] EWCA Civ 1539 at §16, “… it is a characteristic of the UK's approach to environmental protection that much (if not most) of the detail is contained, not in statutory regulations, but in policies, both national policies adopted by the government (the NPPF), and local policies adopted by local planning authorities in their development plan documents”. This judgment therefore has broad and sweeping implications for environmental protections in the UK, particularly those arising from policy.

Fact

The essential context for this case is nutrient neutrality. Many rivers which are subject to runoff from farms, industry, and to a lesser extent, dwellinghouses, are resultingly overloaded with nutrients and phosphates. This causes eutrophication, which is essentially the nutrient overload generating excessive amounts of algae that block out light, devour oxygen, and starve other living organisms in the river. Where rivers are at risk of eutrophication, it follows that development which could increase nutrient overload and eutrophication should not be permitted under the Habitats Regulations, unless such developments are mitigated to have a neutral nutrient effect.

Nutrient neutrality requirements can be suffocating for housebuilding, in a way that is often said to be disproportionate to the environmental impact of houses on eutrophication (as compared to farms and industry). The Supreme Court recorded the industry body’s submissions as follows:

“18. … following Natural England’s advice note, the issue of nutrient neutrality has become a serious obstacle for house building in England. It was delaying an estimated 120,000 homes across the 27 catchments currently affected in England, with some 40 percent having already secured (as in this case) outline or full planning permission.  

19. … the availability of nature-based solutions, the government’s favoured mitigation, is extremely sparse. Three of the four Somerset local authorities were opposed to market schemes (buying credits), even if available. Solutions were unlikely to release many of the 18,234 homes delayed in Somerset. SME house building   companies were especially exposed to the issue of nutrient neutrality on their developments.”

Turning to CG Fry’s appeal: In December 2015 the Council granted outline planning permission for a mixed-use development of up to 650 houses, community and commercial uses, a primary school and associated infrastructure. Planning permission was subject to several conditions.

In August 2020 Natural England published their advice note to Somerset’s local authorities (including the Council’s predecessors) on development in relation to the Somerset Levels and Moors Ramsar Site. The note drew on the 2019 Dutch Nitrogen case (Coöperatie Mobilisation for the Environment UA v College van gedeputeerde staten van Limburg (Joined Cases C-293/17 and C-294/17) EU:C:2018:882; [2019] Env LR 27) and advised LPAs to scrutinise with rigour any developments which may have an effect on protected sites.

In June 2021 CG Fry sought discharge of various conditions that did not go to the principle of the development (e.g. on tree planting measures). The LPA did not determine the matter and so the developer appealed. The Inspector held that (i) the Habitats Regulations require an appropriate assessment of environmental impacts to be undertaken at conditions discharge stage if that was note done at outline stage, and (ii) Ramsar sites were protected in the same way as SPAs and SACs, not by virtue of the law, but by the effect of NPPF 181 (now 194(b)), which essentially  provided that such sites are to be protected as if they were a SPA or SAC under the Habitats Regulations. It was clear from the LPA’s ‘shadow’ appropriate assessment that the development, if allowed to proceed, would cause harm to the Ramsar site. Therefore, the conditions would not be discharged.

In other words, the case arose partly because of peculiar facts and timing. Natural England’s advice about nutrient neutrality and eutrophication arose after outline permission was granted but before irrelevant reserved conditions were discharged, prompting the LPA to argue that an appropriate assessment, and an all-clear for Ramsar impacts, was necessary before the conditions could be discharged.

Grounds of appeal

CG Fry’s case was essentially that phosphate impacts were immaterial and irrelevant to the conditions they were seeking to discharge. There was no connection in terms of subject matter between the conditions and nutrient neutrality, and in any case, there was no legal scope for an appropriate assessment to be required at the conditions discharge stage by the Habitats Regulations, properly construed.

Ground 1 was therefore that the Inspector misconstrued Habitats Regulations 2017; and Ground 2 was that NPPF 181 did not make immaterial nutrient neutrality matters legally material.

Decision

On Ground 1, the Supreme Court concurred with the Court of Appeal and the High Court, for essentially the same reasons. Lord Sales notes, however, that his analysis here was “not a critical point in [his] reasoning”, and indicated his remarks were technically obiter, given the appeal was disposed of under the NPPF ground (§43).

Lord Sales explained that one must read the Regulations on a purposive approach (§45); that the Regulations were enacted to “to ensure a high degree of protection for vulnerable habitats and sites” (§47); that they must be interpreted in light of the precautionary principle (§50); that the language of the provision, which includes the phrase “any other authorisation” is clearly intended to be broad and could embrace the discharging of conditions (§54); and that accords with established authorities like Adastral, Swire, and Wingfield (§57). Therefore, appropriate assessments could in principle be required at the conditions discharge stage.

On Ground 2, the basic question the Court had to resolve can be put in this way. If the discharging of a condition related to tree planting (for example) has the effect of authorising a scheme that will ultimately harm a Ramsar site, can the planning decision-maker take into account that harm in determining whether to discharge the condition, even if it has nothing at all to do with the landscaping and aesthetics and so on of tree planting?

The view of the High Court and Court of Appeal was that they could. The policy requires a decision-maker to treat Ramsar sites as if they were protected by the Habitats Regulations. Given the resolution of Issue 1, the protections of the Habitats Regulations are in play at the conditions discharge stage. Therefore, there is a sufficient “nexus”, as Cranston J put it, between the tree-planting condition and the effect on Ramsar sites, because discharging the condition will implement a scheme that will harm the Ramsar site.

The Supreme Court thought differently. They observed that “when planning permission is granted … it creates rights under the planning legislation for the developer to develop land in accordance with the permission” (§62). A developer has a right to rely on that permission subject to any conditions. But the conditions have a limited scope, and the developer also has a right to rely on the requirements of discharging them being limited to material matters related to the condition:

 “66. … the conditions specify in binding legal form the particular areas where the developer will need to satisfy the planning authority of certain matters before the development can proceed, and in this way they allow the developer to know where it stands in calculating whether it can safely incur costs in carrying the project forward. The stipulated conditions delimit the extent of the risk the developer takes in doing so.”

When determining whether to discharge conditions, one is therefore “confined to consideration of matters fairly related to that subject matter; it does not import a general power for the planning authority to refuse to give approval for a perfectly acceptable tree protection scheme in order to further some other purpose or policy objective” (§66).  

The Court observed that Ramsar impacts, but for the policy, are not connected with the objective of the conditions under consideration (§70). Indeed, the Ramsar issue arose after outline permission had been granted. It follows that Ramsar impacts are not material to the question of whether to discharge these particular conditions.

Indeed it would seem to be the case that the impact on sites protected by the Habitats Regulations, like SPAs and SACs, also have no real connection with the discharging of a tree-planting condition. The difference in those circumstances is that the law, not policy, forbids the granting of consent if harm will be occasioned. No such legal protection exists for Ramsar sites (§70).

Comment

Issue 1

The first issue concerns the proper interpretation of the Habitats Regulations, and was therefore of wide general relevance and application. The Courts were all agreed that the developer’s argument was, in Lord Sales’ words, “unsustainable”. The whole point of the Habitats Regulations regime is to obviate any harm being occasioned to a protected site, and the logic of the Appellant’s case, if accepted, would have created a “lacuna” in the law, as Cranston J put it. And that was probably putting it lightly; if it was a lacuna, it was a lacuna wide enough to accommodate a coach and horses. Sir Keith Lindblom put it best in the Court of Appeal decision:

“86. Of course, in a perfect world an appropriate assessment might always be undertaken when the opportunity first arises. But it would be a false logic to suggest for this reason that in a multi-stage consent process the failure to undertake an assessment at the outset makes it impossible or unnecessary to do so when the “implementing decision” is taken. To construe these provisions in that way would be incompatible with the legislative purpose of preventing harm to a protected site, to which regard must be had in arriving at their true interpretation (see paragraph 68 above).

87. The interpretation contended for by Lord Banner would in some cases leave the   authority powerless to prevent a project going ahead even though it was clear that if the   final authorisation were given for it the development was going to cause the kind of harm the Habitats Regulations are designed to prevent, and simply because the prospect of such harm was not recognised when outline planning permission was granted, or despite a change in circumstances such as occurred here when Natural England published its advice note in August 2020.”

The underlying application made by CG Fry reflected that; the shadow HRA made clear there would be harm to a Ramsar site that was already at risk of eutrophication if their conditions were discharged and the development proceeded absent mitigation.

To some degree it is hard to understand why the Appellate courts repeatedly indulged appeals contending that the Habitats Regulations could not in principle require an assessment to be undertaken at reserved matters stage. The Appellant’s position jarred with both the wording of the relevant legislative framework, its clear purposes and the precautionary principle, and with jurisprudence of the High Court and the Court of Appeal.

One explanation may be that it enabled the Courts to make some crucial statements about the interpretation of retained EU law. The Supreme Court agreed with the Court of Appeal that EU caselaw could be considered in determining the meaning of the Habitats Regulations. That was essentially because statutes must be construed on a purposive approach, and the legislature’s purpose in enacting the Habitats Regulations was to give effect to the Habitats Directive and the associated EU caselaw interpreting it (§51). That meant the legislation had to be construed in light of, inter alia, the precautionary principle (§52). Importantly, the justification for this approach was not said to be section 6 of the EU Withdrawal Act (which would have applied given, as the Court recognised at §2, the Habitats Regulations are retained and assimilated EU law). The principle relied on instead, which was that purposively construing legislation enacted to give effect to EU law justifies looking at European norms and caselaw, has much wider relevance for environmental laws in the UK which are based on EU environmental law. That is to say, even disregarding what the legislation on retained/assimilated EU law says, the Court’s approach tells us it is still relevant to consider EU case law as part of the ordinary principles of interpretation.

The dismissal of this ground of appeal is therefore a win for the environmental groups who participated, and they can breathe a sigh of relief that the settled legal landscape remains undisturbed. Where the site in question is protected by the Habitats Regulations (e.g. a SPA or SAC) it remains a requirement that an appropriate assessment is conducted before the scheme is given final consent, even if that means assessing at the conditions discharge stage. The decision-maker remains legally disabled from implementing a scheme that will have adverse effects.

Ultimately, the Supreme Court’s decision closes off a loophole that never really existed in the first place, except in the submissions of the Appellant.

Issue 2

The second issue has a narrower focus, because it is concerned only with sites which are not statutorily protected by the Habitats Regulations, which in this case was a Ramsar site.

The Supreme Court’s decision follows orthodox principles of planning law, but it has the effect of gutting what was NPPF 181 of much of its substantive content and meaning. Plainly Cranston J was right that if one actually assumes, as the policy instructs, that Ramsar sites are protected by the Habitats Regulations, then harms to them are material, for precisely the reasons the Supreme Court gave in disposing of Issue 1. As Cranston J put it:

“67. … to understand the scope of the discharge of conditions it is necessary to consider the legal consequences, and in this case one of these would be that a development with a potential impact on a Ramsar site protected by national policy would be authorised by the planning system. That creates the nexus to the NPPF’s policy on the protection of Ramsar sites. It is open to the Secretary of State to introduce such a consideration as a matter of national planning policy.”

In short, discharging the conditions would amount to consenting to a project that would harm the Ramsar site, and if it was protected by the Regulations, that would be unlawful, which makes the policy relevant to the discharging of conditions.

Following the Supreme Court’s approach, then, means NPPF 181 does not have the effect it purports to have. One does not treat Ramsar sites as if they were protected by the Habitats Regulations as a matter of law (as opposed to policy), at least in circumstances of this kind, despite clear government instruction to do so. That can only be achieved by legislative, and not policy, intervention.

Conclusion

And indeed, that is precisely what the government’s Planning and Infrastructure Bill currently proposes to do, by granting Ramsar sites protections under the Habitats Regulations. Should that become law, then local authorities would be entitled to refuse to discharge unrelated conditions where the effect of doing so would be to occasion harm to Ramsar site.

Importantly, even without the PIB, the Supreme Court’s decision leaves the door open for conditions that have a sufficient nexus to Ramsar protection and nutrient neutrality to pose a roadblock to development. If there is a connection between a condition and what is now NPPF 194(b), sufficient to make the latter a material consideration, then there would seem to be scope for a planning decision-maker to have regard to Ramsar impacts and the importance of preventing any harm to them.

For now, though, the most important lesson to take from CG Fry is that new policies and evidence that indicate a development will have an impact on protected sites under the Habitats Regulations may well create an unexpected roadblock at the conditions discharge stage. Developers and environmental rights groups need to be alive to that possibility.

And thinking back to the comments of the housebuilding industry, recited earlier in this article, one must note that this decision will do little to release the huge stock of development that is currently said to be bottlenecked by the Habitats Regulations. Achieving nutrient neutrality with respect to SPAs and SACs remains an ironclad legal requirement, and absent more viable mitigation schemes to make schemes nutrient neutral, there is nothing in this decision which will enable greater development in respect of those protected sites, if those developments are not nutrient neutral.

Armin Solimani is a barrister at Francis Taylor Building. He has a particular interest in the law relating to the protection of habitats and rivers, and his work on the latter has been published academically.