What does the recent High Court ruling in C G Fry & Son Ltd mean for house builders?

7 minute read
01 August 2023


The recent case of C G Fry & Son Ltd v SSHCLG [2023] EWHC 1622 exists within the context of nutrient neutrality. Without delving into the science too much, nutrient neutrality aims to mitigate against nutrients (such as phosphates and nitrates) leaching into protected water habitats causing eutrophication, a problem caused by agricultural practices and under-investment in water infrastructure. The threat to nutrient neutrality is exacerbated by water waste (particularly foul water) from new housing developments which contains phosphates. This has already proven to be a significant obstacle for house building in England (evidence from the Home Builders Federation suggests the issue is holding up the construction of 44,000 homes which already have planning permission).

Outline planning permission was granted for the development of 650 houses, a school, and other infrastructure on the Somerset Levels and Moors Ramsar Site in 2015. Despite also securing the discharge of Condition 4 of the outline planning permission (which required the approval of details of a site-wide surface water drainage system) and approval of reserved matters, both the Council and (upon appeal) the Secretary of State's Inspector refused to discharge several of the pre-commencement conditions attached to the planning permission. The refusal was because an appropriate assessment under the Conservation of Habitats and Species Regulations 2017 ("Habitat Regulations") had not been carried out. The Inspector's decision was influenced by Natural England's advice note to the Somerset authorities (2020), which emphasised the importance of carrying out an "appropriate assessment" of projects which threaten 'nutrient neutrality' by giving rise to additional phosphates from foul water discharge.

In this case, the claimant (house builders, C G Fry & Son Ltd) challenged the scope and application, following Brexit, of the Habitats Regulations and questioned whether an appropriate assessment was required at the point a planning condition was to be discharged.

In summary, the High Court dismissed the claimant's case.

This article takes a closer look at this recent decision; exploring the implications for housebuilders, the precautionary steps to take and what this case means for the future.

Summary of the decision

  1. Even if planning permission has already been obtained, an appropriate assessment will be required at the discharge of conditions stage and must be undertaken before a condition is discharged. This was decided following discussion of:
    1. Article 6(3) of the Habitats Directive (concluded to have effect in domestic law post-Brexit as a result of section 4(2)(b) of the European Union (Withdrawal) Act 2018) – requires that an appropriate assessment is undertaken at the discharge of conditions stage.
    2. Regulation 70 of the Habitats Regulations should be read alongside regulation 63 (which provides for the conditions under which an appropriate assessment should be made) so that an appropriate assessment is carried out before any consent or permission is granted for a project/development.
    3. Existing High Court case law which supports the proposition that an appropriate assessment is still required at the reserved matters or discharge of conditions stage, even if there has already been a grant of outline planning permission and the subsequent approval is the "implementing decision".
    4. The validity of planning permission – refusal to discharge pre-commencement conditions does not invalidate pre-existing planning permission.
  2. At the discharge of conditions stage, it is important to consider all legal consequences associated with authorising a development; an appropriate assessment is therefore required even for conditions not related to the impact of the protected site, such as the potential impact on a Ramsar Site. Despite Ramsar sites not being covered by the Habitats Regulations 2017, the National Planning Policy Framework (in paragraph 181(b)) gives Listed Ramsar sites the same protection as habitat sites.
  3. An appropriate assessment will consider the implications of the project as a whole and not just assess the implication caused by the condition to which the consent relates to – this was decided with reference to the following two cases:
    1. R (Barker) v Bromley LBC [2006] UKHL 52; and
    2. R (Wingfield) v Canterbury City Council [2019] EWHC 1974 (Admin)

Implications for housebuilders

This decision will likely be unpopular amongst the housebuilding industry where it is expected to exacerbate delays to housebuilding. Notwithstanding the decision to dismiss, the claimant's case emphasises the Inspector's conclusion: the delay in housing delivery is outweighed by the need to protect the Ramsar site.

The fact that the case clarifies that an appropriate assessment may be required at the condition discharge stage if one has not previously been carried out, even where such a condition is not related to the impact of the development on nutrient pollution, will force many developers back to the drawing board on several schemes.

Looking to the future

Since the judgment was issued, the claimant has been granted leave to appeal directly to the Supreme Court, emphasising the national importance of this legal issue. One thing that is certain is that the claimant is determined to appeal the ruling.

We can only hope that a balance is established between the increasing demand for new housing developments and the importance of protecting our water habitats in the future.

A common opinion among commentators is that the issue of additional phosphate loading is caused predominantly by the lack of investment by privatised water companies and whilst the UK Government are making efforts to force water companies to upgrade waste water treatment works, the issue will not be solved overnight, or even in the next few years. The fact remains that until decided otherwise, our clients will need to carry out an appropriate assessment of their development if not already done so at the reserved matters stage or at the condition discharge stage, and this will always need to be factored into the planning strategy on sites within catchment areas where water habitats are affected by the Natural England advice note.

An interesting development to watch out for will be the status of this judgment once the Retained EU Law (Revocation and Reform) Act 2023 repeals the applicability of the Habitats Directive in UK law. If this issue is litigated following 1 January 2024, the outcome could be very different, especially as the judgment in Fry found that there is no requirement for an appropriate assessment at the reserved matters stage in our domestic law (i.e. the Habitats Regulations), only in the Habitats Directive.

Gowling WLG's Planning and Environment team are advising many housebuilder clients on solutions to the nutrient issue where their developments fall within affected areas. If your site could be affected by the Fry judgment, please feel free to get in contact with one of the lawyers in our team.

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