A judge ruled that the failure of the London Borough of Hackney to abide by viability evidence transparency rules and its publication of "opaque and incoherent" material denied objectors a fair opportunity to voice their opposition to the scheme.
Developer GHL (Eagle Wharf Road) Limited applied to Hackney to partially demolish buildings at 49-50 Eagle Wharf Road and build 50 new homes and 5,644 square metres of commercial floorspace.
GHL was initially granted planning permission to develop the site in December 2016, but that was subsequently quashed by the High Court in November 2017.
Now a second consent, granted in August last year, has suffered the same fate.
The site is in Hackney's 'creative district' and is home to one of Europe’s largest photographic studio complexes, the court heard.
Holborn Studios, the leaseholder of the site, has objected to the proposals throughout, arguing that they would force closure of its photographic businesss.
Other media businesses which occupy parts of the site under licence also say they would have to vacate.
GHL argued that the buildings currently on the site are "mainly unattractive and basic and comprise a maze of small and larger spaces".
It said the massive refurbishment required to make the buildings attractive to modern office occupiers would not be financially viable.
The company pointed out that 24 per cent of the proposed new workspace would be affordable, fostering local employment opportunities.
Although it would not be viable to provide affordable homes on the site, GHL agreed to contribute £757,076 towards meeting affordable housing needs elsewhere in the borough.
Taken together with the developer's liabilty to pay £814,774 in community infrastructure levy charges, its overall financial contributions arising from the development would reach £2 million, the High Court heard.
Hackney's planning committee resolved to grant permission after its officers advised that the provision of 50 "high standard" residential units would support the council in meeting its housing targets. Heritage impacts, and the "likely loss" of Holborn Studios, were also considered "acceptable."
Challenging the permission, Holborn Studios' barrister, Richard Harwood QC, said that a large number of "background papers" concerning the scheme's viability had not been placed in the public domain before the committee reached its decision.
Documents that were made available to objectors were, he said, "incomplete, inconsistent and incomprehensible."
Upholding the complaint, Mr Justice Dove said: "I have no doubt that the council failed to comply with its obligations...not simply in relation to listing background papers but also in failing to provide them for inspection."
Whilst not all of the voluminous background material needed to be produced, objectors had a legitimate expectation to see documents on which the comittee based its conclusions on viability and the affordable housing contribution, he concluded.
Even if parts of the material were "commercially sensitive", the judge said there was a clear public interest in the contents of viability assessments being "placed in the public domain in order to ensure transparency, accountability and access to decision-taking for communities affected by development".
The judge added that much of the information which was placed in the public domain before the permission was granted was "inconsistent and opaque". Some of the figures provided were conflicting and "incapable of being reconciled", he said.
"The failure to provide the background material underpinning the viability assessment, in circumstances where such material as was in the public doman was opaque and incoherent, was a clear and material legal error in the decision-making process," he concluded.
The planning permission was quashed.