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Cinema Wars: The Courts Awaken

10 April 2017

With entertainment space being much sought after in many new development schemes to generate footfall, we look at two cases decided within the last year which highlight the competitive nature of development in the cinema sector and, in particular, the role of the planning system.

The most recent was a case (VUE Entertainment Ltd v City of York Council CO/3840/2016) brought by VUE Entertainment Ltd challenging City of York Council's decision to grant consent for a change in the number of screens at a cinema. Consent had already been given for a leisure and entertainment scheme and the plans for that development showed a 12 screen cinema. The permission was granted subject to a clear condition requiring the development to be built out in accordance with the approved plans.  An application was subsequently submitted under s73 Town and Country Planning Act to 'vary' that condition, to amend the relevant plans to show a larger 13 screen cinema. 

VUE challenged the decision as it was worried about the effect the larger scheme would have on its own nearby cinema. It argued that the extra screen and therefore the increased capacity of the consented scheme was a fundamental change which should not have been dealt with under the s73 procedure. 

The Court held that it was necessary to look at the permission as a whole to determine that point, but that in any case the terms of s73 did not restrict consideration of a quite significant change, despite previous case law deciding that the precise terms of permission should not be altered by a s73 application. In this case, there was nothing in the terms of the existing planning permission which limited the size of the cinema to 12 screens and there was no planning bar to the Council allowing the change. 

The earlier case (R (C Hawksworth Securities Plc) v Peterborough City Council CO/5715/2015) also featured risks of competition and scheme viability. There, the claimant was a promoter of a regeneration scheme which relied on its proposed cinema as anchor tenant. It challenged the grant of consent for the redevelopment of a nearby shopping centre on the basis that the plans also included a cinema, to be operated by Odeon. 

The court held that the planning authority was under no express or implied duty to consider the merits of the regeneration scheme when determining the shopping centre's application. The shopping centre scheme was not inconsistent with the Council's development plan, which did not require one scheme to be prioritised above the other for fear of competition. This was despite the regeneration site being identified in the development plan as an area in need of development and the planning authority having been fully aware of the proposals. As it was, the shopping centre planning application was submitted first, and fell to be determined first (albeit at the same committee meeting as the regeneration scheme): its refusal was not justified by anything in the regeneration scheme proposals. 

In the absence of a specific policy, the role of the planning system is somewhat limited to protect existing operators or promoters of competing schemes. Given the primacy of planning policy in such matters, there is perhaps a cautionary tale in these cases about engaging with the policy making process early to ensure that your interests are protected as far as possible.