CG Fry judgment: a mixed ruling?

Last October the Supreme Court handed down judgment in the long-running case of CG Fry & Son Ltd v Secretary of State for Housing, Communities and Local Government and another [2025] UKSC 35.

The case concerned habitats regulations assessments (HRAs) as a result of The Conservation of Habitats and Species Regulations 2017. A challenge was brought by a housing developer against the decision by an LPA to impose HRAs at the discharge of planning conditions stage, when the original outline planning consent had been granted before the requirement for HRAs had come into force.

The Supreme Court's decision has clarified that, when it comes to European sites, an HRA is needed prior to the final discharge of planning conditions being granted. However, when the issue is one of policy – as in the application to Ramsar sites – it has confirmed the primacy of the outline planning consent.

This is important to protect the environment because excess phosphates and nitrates contribute to the growth of algal blooms, leading to eutrophication, which causes oxygen levels for fish and other aquatic life to be reduced significantly.

In the UK, Natural England then issued guidance to several local planning authorities (LPAs) between 2020 and 2021 about the risk of permitting changes in land use and development in nutrient vulnerable areas.

This guidance confirmed that as a result of The Conservation of Habitats and Species Regulations 2017, LPAs now require HRAs for proposed changes in land use or development in affected areas.

This is to ascertain whether there will be any adverse effects due to the project's location, size or nature. Mitigation solutions have been required where adverse effects have been found.

The appropriate assessment mandated by the HRA must be carried out before an LPA will grant planning permission.

The planning permission was due to be implemented in eight phases, with the first two being commenced under separate reserved matters approvals.

In June 2020, the developer CG Fry (the claimant) obtained reserved matters approval for the third phase of 190 dwellings (the development). The approval was subject to a number of conditions but none of them related to nutrient neutrality.

Subsequently, in August 2020, Natural England published its advice note about nutrient neutrality to all affected local authorities, including Somerset LPA.

The development had the potential to adversely affect the nearby Somerset Levels and Moors Ramsar site, so an appropriate assessment was required under the 2017 regulations.

Crucially, while the 2017 regulations do not designate Ramsar sites as protected areas, the National Planning Policy Framework (NPPF) grants them the same level of protection. This was an important issue in the Supreme Court's decision.

In June 2021 the claimant sought discharge of a number of the conditions, none of which went to the principle of the development, which had been established under the outline planning consent. The Somerset LPA withheld approval on the basis that an appropriate assessment was needed.

The claimant therefore launched a claim for statutory review under section 288 of the Town and Country Planning Act 1990.

The first argument from the claimant was that the 2017 regulations only apply to the formal grant of planning permission and not the approval of reserved matters or discharge of conditions. The judge agreed with this strict interpretation but found that the appropriate assessment requirements applied due to article 6(3) of the Habitats Directive, and a purpose-based interpretation of their provisions and case law was binding.

The claimant argued that the Habitats Directive had no status in the UK legal system as there was no EU or UK case law predating Brexit; the judge disagreed, confirming that article 6(3) remains part of UK law.

Article 6(3) establishes that an appropriate assessment must be carried out before a planning project is approved. A planning consent is part of agreeing a project when it consists of implementing development. In turn, the discharge of pre-commencement conditions is a necessary step in the implementation of development.

The 2017 regulations demand a purposive interpretation so that they apply to subsequent consent stages such as reserved matters applications and discharge of conditions. This approach stems from the strict precautionary approach that applies to the assessment provisions of the Habitats Directive.

The judge's view was that existing case law provided authority for the proposition that an appropriate assessment can apply at the reserved matters or discharge of conditions stage, even if there has been a grant of outline planning permission under which the subsequent approval is the implementing decision.

All the cases concerned the interpretation of the Habitats Directive and the 2017 regulations, and the point that the facts were different was no basis for undermining the principles they established.

This Court of Appeal reject this argument and confirmed that the correct approach when construing legislation is to have regard to context and in the light of its purpose – legislation is enacted to solve real problems and must be construed with that in mind.

There is nothing in the 2017 regulations that excludes the requirement for an appropriate assessment to be carried out either when reserved matters are being approved, or when conditions are being discharged, if the authorisation in question is necessary for the project to be lawfully implemented. Regulation 63 is drafted in broad terms and refers to 'any consent, permission or other authorisation' for a plan or project.

If the appellant's argument were correct, an LPA could be powerless to prevent a development going ahead even though it had become apparent – since the granting of outline planning permission – that the granting of an implementing decision would cause the harm the 2017 regulations were designed to prevent.

The second ground of appeal was that the 2017 regulations do not extend to Ramsar sites and that paragraph 181 of the NPPF did not plug the gap.

The Court of Appeal determined that the NPPF policy in paragraph 181 was engaged as a consequence of the development being authorised and the object of the policy, which was to protect relevant sites which include Ramsar designations.

The third ground of appeal was that the LPA should only be considering the subject matter of the conditions in the context of an appropriate assessment. This was also rejected by the court as none of the relevant legislation qualifies the scope or content of the appropriate assessment – it is the impact of the development as a whole that is considered, not any individual element thereof.

The good news for developers is that, while the Supreme Court rejected the appeal in respect of the first issue, it allowed it for the second.

The granting of outline planning permission, subject to reserved matters being decided at a later date, is commonplace. The questions here concerned whether subsequent approval of those reserved matters is subject to the 2017 regulations requirements and of the impact of policy change on an outline consent.

On the first issue, the Supreme Court agreed with the Court of Appeal that an appropriate assessment under the 2017 regulations will be required when the effect of approval of reserved matters is to give authorisation for the project to proceed.

On the second issue, the Supreme Court considered the nature of a grant of planning permission and concluded that the rights conferred cannot be diluted by government policy. Any conditions attached to a planning permission must be considered objectively and there is no general power for a planning authority to refuse consent on policy grounds, such as Ramsar site protection, which are not fairly related to the subject matter of those conditions.

The reasons for granting or refusing consent must be within the ambit of the reserved matters – revisiting the principles of the original outline grant is not permitted.

The site in CG Fry was a Ramsar site and not a European site protected by the 2017 regulations. The decision on the first issue means that appropriate assessments under the 2017 regulations will still need to be carried out in respect of European sites but not for Ramsar sites. This is the same bad news for developers that the High Court and the Court of Appeal delivered.

However, this litigation has been rumbling on for a few years and some developers in Ramsar sites may well have bought phosphate credits to unlock development. If such mitigation was required to secure reserved matters approval, this judgment renders that mitigation potentially unnecessary and expensive.

Nutrient neutrality continues to be the focus of political and legal challenge. The Planning and Infrastructure Act 2025 also introduces an alternative way for developers to avoid the effect of the 2017 regulations by contributing to larger-scale mitigation projects, so the effects of CG Fry may be limited by that new option.

The private market for nutrient neutrality credits will arguably continue to operate and may well be an easier route for small-scale development. Advisers will therefore need to know how both systems operate, and the pros and cons of each depending on the requirements for any individual development project.