HERSCH SCHNECK v SECRETARY OF STATE FOR LEVELLING UP, HOUSING & COMMUNITIES

In a statutory challenge to a planning inspector’s decision, the court held that a development-plan policy requiring affordable housing subject to the economics of provision did not make the stated percentage mandatory where viability evidence established that no contribution was possible. A nominal and rejected offer did not itself begin an incomplete negotiation process or make the policy unsatisfied. The inspector was nevertheless entitled to consider the sequential flood-risk test for a rooftop extension to an existing building. A fallback based on permitted development rights is material where it is more than theoretical; certainty, probability or a high likelihood is unnecessary. The inspector applied too high a threshold by asking whether prior approval was certain and failed adequately to engage with the evidence that approval was at least possible.

The claimant challenged under section 288 of the Town and Country Planning Act 1990 an appeal decision dismissing his appeal against refusal of permission for 13 additional residential units in a rooftop extension to an existing mixed-use building. The inspector dismissed the planning appeal because the proposal made no appropriate affordable-housing contribution and failed to demonstrate compliance with the sequential flood-risk test.

Permission for judicial review was granted on the affordable-housing and flood-risk grounds. Permission was initially refused on the fallback ground, but the claimant renewed that application. The central issues were whether the inspector had properly construed the affordable-housing policy, lawfully applied flood-risk policy and guidance, and properly assessed the prospect that permitted development rights under Class AA of the GPDO would provide an alternative fallback scheme.

1. Ground 1 allowed. Section 38(6) of the Planning and Compulsory Purchase Act 2004 required the inspector to begin with the development plan, namely policy CS6. Properly construed, that policy made the stated affordable-housing percentages a starting point, subject to the economics of provision, negotiation and viability evidence. It therefore contemplated circumstances in which no affordable housing could viably be provided. The undisputed viability evidence established that position.
2. The claimant’s rejected offer of £25,000 was a nominal goodwill gesture, not the commencement of an unfinished negotiation which defeated compliance with policy CS6. The inspector therefore erred in concluding that the proposal breached CS6. Any concern that a development with no affordable-housing contribution was unacceptable in planning terms derived from the supplementary planning document as a material consideration, not from a breach of CS6. The inspector had consequently begun the section 38(6) exercise from the wrong premise.
3. Ground 2 dismissed. The inspector was entitled to raise flood risk on his own initiative and was not required to provide continuing updates about his thinking or warn that the claimant’s evidence might be rejected. The inspector’s consideration of the rooftop nature of the proposal showed a reasonable degree of pragmatism. He was entitled, as a matter of planning judgment, to require evidence that no suitable lower-risk site could accommodate the 13 units. His reasons were intelligible and adequate.
4. Ground 3 allowed on renewal. The relevant fallback test was whether the permitted-development scheme represented more than a merely theoretical prospect; a possibility was sufficient. The inspector’s reference to uncertainty as to whether prior approval would be granted applied too high a threshold. On the evidence, including the claimant’s analysis of the Class AA criteria and the Council’s response, the fallback was at least a possibility. The inspector also erred in treating Class AA rights as unavailable or inadequately established and gave inadequate reasons for attaching only limited weight to the fallback.
5. Grounds 1 and 3 succeeded and ground 2 was dismissed. The parties were invited to agree the appropriate order and, failing agreement, to make written submissions on the order and supplementary matters.

The judgment records that permission to proceed was granted on grounds 1 and 2 by Neil Cameron KC, sitting as a Deputy High Court Judge, on 15 July 2021. Permission was initially refused on ground 3 but was granted on renewal by this court. This court allowed grounds 1 and 3 and dismissed ground 2.