Land promoter Gladman Developments unsuccessfully applied to Inverclyde Council in June 2018 for planning permission in principle for residential development of Carsemeadow, Quarriers Village, Kilmacolm. It applied to build about 50 homes, 25 per cent of which would be for affordable housing
The refusal of permission was upheld by a reporter - the Scottish equivalent of an English planning inspector - appointed by the Scottish Ministers in July last year.
In a guideline decision issued last week, however, the Court of Session ruled that, given a shortfall in housing land supply in the area, the reporter had failed to apply the tilted balance in favour of the development as she should have done.
"The starting point ought ... to have been that there was a presumption in favour of this development because ... it provided a solution, at least in part to the housing shortage," said the Lord President, Lord Carloway, who was sitting with Lords Menzies and Brodie.
In 2014, Scottish Planning Policy (SPP), the country's national planning policy document, introduced a "presumption in favour of development which contributes towards sustainable development" as a significant consideration when a local authority has a shortfall in its five-year effective housing land supply.
The policy is the equivalent of paragraph 14 in the English National Planning Policy Framework (NPPF), according to the judgment, where it is recognised that a shortage in a local authority's housing land supply results in a "tilted balance" in favour of the grant of planning permission.
Although the site encroaches onto the green belt, Gladman pointed to the economic benefits of development in boosting local employment and investment. The proceeds from the sale of the site would help to ensure the future of the Quarriers, a local charity which assists disadvantaged young people.
In refusing permission, however, the council said the scheme would be "significantly contrary" to both the strategic and local development plans.
It also accepted an officer's recommendation that there was "no need for additional housing land at this time".
Gladman and the council employed different methodologies in calculating the area's effective housing land supply.
Gladman said that the private housing land supply was "equal to less than two years" and the reporter accepted that there was "in all probability" a shortfall below the five-year target set by SPP.
In refusing planning permission, however, she pointed in particular to the site's location and sparse transport links. There was not, she said, "anything exceptional" about the proposed development's benefits that would render it sustainable.
Upholding Gladman's challenge to that decision, Lord Carloway noted that, under the SPP, a shortfall in effective housing land supply gives rise to a presumption in favour of sustainable development which must be treated as a "significant material consideration".
Rather than applying that tilted balance, as she should have done, the reporter had wrongly applied a conventional planning balance to Gladman's appeal, he ruled.
He told the court: "The exercise undertaken by the reporter was the customary one of determining whether there were exceptional reasons, such as the economic benefits to both Quarriers and the area generally, that would justify approving a development that did not constitute sustainable development.
"The starting point ought, on the contrary, to have been that there was a presumption in favour of this development because, amongst other things, it provided a solution, at least in part, to the housing shortage.
"Thereafter, the question was whether the adverse impacts, notably the other policies in the development plan, 'significantly and demonstrably outweighed' the benefits of the development in terms of the housing shortage and the economic gain."
He added: "A housing development which will remedy, to some extent, a housing shortage is something which almost inevitably 'contributes to sustainable development'...in one degree or another.
"It will do so also in terms of the economic benefits of construction and in other ways too. Whether it is, in overall terms, a sustainable development is another question. That is one for planning judgment, but it involves the use of a tilted balance."
The judge concluded: "The greater the shortage, the heavier the weight which tilts the balance will be. If Gladman's figures for the shortage are correct, that weight may well be very substantial."
The reporter's decision was quashed and Gladman's appeal was sent back to the Scottish Ministers for fresh consideration in the light of the court's ruling.
Burges Salmon’s Scottish planning and compulsory purchase team, led by partner Craig Whelton with support from associate Lynsey Reid, acted for Gladman. James Findlay QC and Alasdair Burnet, both of Terra Firma Chambers, appeared in one of the first virtual hearings before the Court of Session.
According to a statement from Burges Salmon, the decision is "set to have significant ramifications for planning in Scotland".
On the decision, Craig said: “We’re pleased to have supported Gladman with its successful appeal in this landmark case.
"The court’s judgment, and quashing of the appeal, should put planning decision-makers on notice as to the weight to be attached to SPP, and the proper application of the presumption and the tilted balance.”