St Modwen wants to build 510 homes at Melton Park near North Ferriby, with 35 per cent of them affordable, along with a care home and other facilities. Alternatively, the company proposes 390 homes with 40 per cent affordable provision, falling to 25 per cent if it pays £6 million towards construction of a railway bridge.
East Riding of Yorkshire Council refused planning permission for the schemes in 2013 and 2014, saying they would lead to an unacceptable loss of employment land. A planning inspector, and later the then communities secretary, Greg Clark, backed the council.
St Modwen had argued there was an "urgent need" for more housing, particularly affordable homes, in the area. It attacked the inspector's conclusion that the council could realistically meet its target of providing almost 15,000 new homes over a five-year period.
The developer's challenge was rejected by a High Court judge last year and that ruling has now been confirmed by the Court of Appeal.
Lord Justice Lindblom rejected claims that the inspector had misinterpreted or misapplied national planning policies requiring councils to "significantly boost" housebuilding and to have in place a five-year supply of "deliverable" housing sites.
The judge said that national policy does not oblige the council to prove that sites it has targeted for housing will "certainly" be developed.
East Riding Council insists that it can deliver its housing targets, but St Modwen said that could not be "squared" with a record of actual delivery of only about 1,000 new homes annually.
The judge, however, said it would have been "most surprising" had the experienced inspector and the secetary of state misinterpreted the government's own policy. Both, he ruled, were entitled to "prefer" the council's estimate of deliverable housing land to that put forward by St Modwen.
The inspector had concluded that the "adverse effects" of the proposals would "significantly outweigh" the benefits. The loss of land that could be used to create new jobs would also be against local planning policies, she ruled.
Lord Justice Lindblom, sitting with Lords Justice Jackson and McCombes, said "a fair-minded approach" to the inspector's decision showed that the inspector had got it right.
No5 Chambers barrister Christopher Young, who is acting for St Modwen, said the developer is seeking leave to take the case to the Supreme Court.
"St Modwen wish to ask the Supreme Court whether a realistic prospect of a site being delivered within the next five years really means it doesn't have to be probable," he said.
St Modwen Developments Limited v Secretary of State for Communities and Local Government & Ors. Case Number: C1/2016/2001