In January 2018, Redrow Homes was granted planning permission by Liverpool City Council to build 39 new homes on land adjoining Calderstones Park, and to convert Beechley House and its stable block - both Grade II listed buildings - into 12 apartments.
The council-owned site of about five hectares lies within the Calderstones/Woolton green wedge and was occupied by a council depot, a miniature railway, and stabling for horses.
Local campaign group the Liverpool Open and Green Spaces Community Interest Company last year mounted a successful judicial review against the planning consent.
In quashing the permission, and a separate permission in relation to the miniature railway, the High Court found that the council had misinterpreted and misapplied Policy OE3 of the Liverpool Unitary Development Plan (the UDP) and had failed to comply with its duty to have special regard to the desirability of preserving listed buildings and their settings.
However, the council then announced that it would take the case to the Court of Appeal because the ruling had "far-reaching consequences for local authorities in how they deal with land classed as green wedge".
Ruling on the council's challenge to the High Court decision, the Court of Appeal noted that the case was of great significance in Liverpool and also of wider public importance given the prevalence around the country of planning policies to protect green wedges.
According to the Appeal Court's judgement, in a lengthy report to Liverpool's planning committee, a planning officer noted that the proposal had "generated significant objection" and that it was "a finely balanced application where any identified harm must be carefully weighed against the wider benefits that the proposal would bring."
The officer recommended that the proposal was "on balance acceptable having regard to the wider public/regeneration benefits that it would deliver."
He noted that the site was "already characterised by built structures" and said that the development would have "no significant impact on the character and openness of the wider green wedge."
Following a "lively debate", the planning committee accepted the officer's recommendation, the judgement said.
In the High Court ruling last year, Mr Justice Kerr said that there was a "clear conflict between the proposals and Policy OE3" and that it was "indisputable" that the development would affect the open character of the green wedge. There had, he ruled, been a failure to "openly acknowledge and expressly take into account" the policy conflict.
Lord Justice Lindblom, however, took a different view and told the Appeal Court: "In my view the officer's assessment of the proposal against the provisions of Policy OE3 was based on a correct interpretation of the policy, and the policy was lawfully applied in a sequence of rational and clearly reasoned conclusions.
"This is not one of those cases where a local planning authority has misunderstood a policy in its own development plan."
The judge, who was sitting with Lady Justice Rafferty and Lord Justice Newey, noted that Policy OE3 is designed to achieve the objectives of protecting and improving the open character, landscape and recreational and ecological qualities of the city's green wedges.
It was, he ruled, "less restrictive" than the council's green belt policy in that, amongst other things, it does not state that planning permission will be refused for all new developments, save where "very exceptional circumstances" are demonstrated.
Policy EO3 posed two distinct questions - whether the development would affect the predominantly open character of the green wedge and whether it would reduce the physical separation between existing built up areas - both of which had been properly addressed by the planning officer, the judge ruled.
The policy "does not rule out any reduction, or net reduction, in unbuilt-upon land within a green wedge" and whether the development would affect the predominantly open character of the area was "quintessentially a matter of planning judgment" for the officer, the judge said.
Giving guidance for the future, the judge said: "What is required is a realistic assessment of the impact that this development, on this site, and in its own surroundings, will have on the 'the predominantly open character' of the green wedge. Whether that impact is acceptable, or not, is for the city council to judge, as decision-maker."
The officer did not "side-step" the issue and the judge found his conclusions "beyond criticism".
He added: "On a fair reading of the officer's reports, I see no basis for contending that the council failed to interpret Policy OE3 correctly...the officer's decisive planning judgment was unimpeachable."
However, the council's appeal in respect of the Redrow proposal was nevertheless dismissed on the basis that it failed to comply with its duty under Section 66(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990 to have special regard to the setting of Beechley House.
In making his recommendations to the council, the planning officer had made no mention of the fact that the council's urban design and heritage Conservation Team had expressed "strong conservation objections" to the construction of three homes within the grounds of the listed building, the judge said.
Those objections, said Lord Justice Lindblom, were an "obviously material consideration" which should have been drawn to the committee's attention.
The failure to take them into account was "a significant default in the council's performance of its duty under Section 66(1)."
The judge noted that Redrow had withdrawn its appeal against the High Court decision, but that the council had elected to pursue the case to the Court of Appeal given the importance of the green wedge policy issues both locally and nationally.
The council succeeded in persuading the court that the judge was wrong to overturn the separate planning consent which enabled the relocation of the model railway.
In all other respects, however, the council's appeal was dismissed and the High Court's refusal of the application still stands.
R on the Application of Liverpool Open and Green Spaces Community Interest Company v Liverpool City Council. Case Number: C1/2019/0388