House builder's triumph in Supreme Court over nutrient neutrality logjam
The UK Supreme Court has sided with a house builder over a planning decision related to nutrient neutrality rules, in a verdict that could give the green light to the construction of thousands of new homes around the country.
The Supreme Court dismissed CG Fry’s appeal on one issue, ruling that habitats regulations may require a habitat assessment on certain sites at the reserved matters planning stage.
However, it unanimously allowed the developer’s appeal on a second issue, confirming that planning permission once granted cannot be undermined by later changes in government policy.
CG Fry & Son has been blocked from building homes by Somerset Council since 2021 due to nutrient pollution rules, even though the builder received planning permission before the introduction of Natural England guidance on the issue.
Nutrient neutrality rules aim to prevent developments from increasing the levels of harmful nutrients, such as phosphates and nitrates, near protected wildlife areas. The rules have caused delays and stalled planning applications for thousands of homes across the country over the last few years.
CG Fry, a Dorset-based builder, has spent the last three years pursuing an appeal against both central government and Somerset Council over the delay to its development.
The developer lost appeals in the High Court and the Court of Appeal, both of which sided with the council. However, the Supreme Court disagreed.
Its verdict, presided over by Lord Reed and handed down on 22 October, said that rights given to developers through planning permission “cannot be overridden or diluted by general policies laid down by central government”.
Therefore, it was not open to the council to require additional measures to be taken by the developer to promote a different objective (the protection of the Ramsar site), before conditions could be discharged.
The story began in 2015, when CG Fry was given outline planning permission for a development of 650 homes at Jurston Farm in Wellington, Somerset. The scheme is near the River Tone, which feeds into the Somerset Levels, an area of low-lying wetland where wildfowl and beetles live.
CG Fry has been unable to build the third phase of the scheme, comprising 190 homes, after Somerset Council said it did not meet nutrient neutrality rules, which were introduced by Natural England in August 2020.
The builder appealed to the Planning Inspectorate, which dismissed the appeal in August 2022. The High Court and Court of Appeal subsequently upheld the inspector’s decision.
The case hinged on the proper interpretation of the Habitats Regulations 2017, the legal effect of the grant of an outline planning permission and the impact of a subsequent change in the application of policy.
CG Fry appealed to the Supreme Court in February, and on Wednesday the court, presided over by Lord Reed, delivered its judgment.
Caroline Waller, partner in law firm Clarke Willmott, which represented CG Fry, said: “This important decision will result in housing developments being able to proceed where the relevant planning consent has been obtained but is currently stalled due to nutrient neutrality.”
Lord Banner KC, who represented CG Fry, said: “Thousands of consented homes that were long held up across Somerset due to the stance taken by central and local government were unlawfully held up.
“When and where nutrient neutrality solutions in Somerset were finally identified, those developers making Section 106 contributions for them to unlock sites which had permission but could not get pre-commencement conditions discharged, will have parted with huge sums, which in light of the judgment should not have been demanded as a prerequisite of discharging these conditions.”
Philip Fry, managing director of CG Fry, said: “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.
“With this matter now resolved, we can focus on what the government has tasked us with: delivering high-quality homes for our communities.”
Ben Sharples, partner and head of natural capital at law firm Michelmores, said: “This decision will have significant practical implications, particularly in areas affected by nutrient neutrality requirements.
“Many developers, seeking to unlock reserved matters approvals, may have incurred substantial costs to purchase phosphate credits unnecessarily.”
Richard Broadbent, environmental lawyer at law firm Freeths, said: “Good news for CG Fry, whose persistence in this case against the government and Somerset Council has ultimately paid off.”
He said the Supreme Court verdict “has potential (and short-lived) benefits for developers in very specific circumstances only”.
However, he noted, the government’s Planning and Infrastructure Bill, which is currently passing through parliament, clarifies that impacts on wetland sites must be subject to habitat assessments as a matter of law, not just planning policy.
“Once the bill receives royal assent and is in force, the above benefit to developers will be removed,” he said.
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