Cayman Islands: Ten Storeys: Setbacks And Other Restrictions

A recent decision of the Grand Court has affirmed the relevance of the 1997 Development Plan within Cayman's development and planning regime and in so doing has cast doubt over the Central Planning Authority's ability to effectively deal with 'high rise' developments exceeding seven storeys in height.

The Grand Court decision of Mr Justice Seymour Panton (Acting) in Grand View Strata Corporation v The Planning Appeals Tribunal and ors (unreported) 8 April 2016 adds to the small but growing and increasingly important list of development and planning law cases. The decision also serves to highlight issues arising at the confluence of large scale development and aging planning legislation.

A local developer applied to the Central Planning Authority ("CPA") for permission to build ten-storey and four-storey apartments, with an accompanying fence, pool and dock, on Seven Mile Beach. The application was contentious, with 19 letters of objection from nearby property owners and significant input from various Government agencies having been received. Having taken into account the comments of the objectors, the CPA reached a view that the objections were insufficient grounds for refusal and granted the application subject to stated conditions. The CPA's decision was upheld by the Planning Appeals Tribunal ("PAT") on appeal.

On further appeal to the Grand Court (the "Court"), an adjoining Strata corporation argued a number of grounds, the most important being (i) procedural unfairness, (ii) failure to comply with the 1997 Development Plan and the Development and Planning Regulations (2013 Revision) (the "Regulations"), and (iii) breach of natural justice in the CPA failing to provide reasons for its decision.

The key issue in the case relates to ground (ii), and the CPA's interpretation of setbacks for waterfront property, particularly for the relatively new introduction of allowances for ten-storey buildings, and the interaction between the Regulations and the 1997 Development Plan. In granting the application, the CPA exercised its discretion under the Regulations in respect of the setbacks of the proposed buildings. The Strata submitted that the CPA's decision was flawed, as firstly it failed to take into consideration the proximity between the two proposed buildings on the site and second, that the CPA's reasoning for the exercise of its discretion in this way was not articulated.

Under the Development and Planning Law (as revised) (the "Law"), the first Development Plan is recognised as having been prepared in 1977. Development Plans, broadly, are subject to a public consultation process intended to set out the national guidelines for, inter alia, roads and other rights of way, regulating and controlling the characteristics of buildings, community planning, amenities such as public open spaces, public utilities, the establishment, extension and improvement of transport and communication systems. However, despite a statutory requirement under the Law for the Development Plan to be revisited at least every five years, there had been no further updates since 1997.

Counsel for the PAT and for the developer both pointed to the age of the 1997 Development Plan, the fact that quite a number of Regulations had moved on since its publication and suggested that it was merely a guideline which should not be "slavishly followed". However, the Judge disagreed noting, "the age of the Development Plan is really irrelevant as long as it remains in force". Further and importantly, whilst the Judge stated his opinion that non-adherence to a Development Plan would only be fatal to planning applications where it was "in a significant way on a matter of great importance", he found that the provision for a building's proximity to roads and the coastline, i.e. setbacks, was very important- particularly in islands as small as the Cayman Islands.

In particular, Panton J identified the apparent loophole in the Regulations with regards to the setbacks to be observed for buildings over seven storeys in height in the hotel/tourism zone. In this regard the Regulations, on their face, provide for a 145 foot setback from the high water mark for buildings up to seven storeys in height but are silent for buildings between eight and the maximum ten storeys. Noting that in considering the setbacks for the developer's proposal, the CPA was required to have certain regard to matters such as elevation, geology, storm/beach ridge, the existence of protective reefs and the location of adjacent developments, the Judge was clear that, in the absence of regulations in respect of eighth, ninth and tenth storeys, the CPA should have clearly stated how it dealt with the setbacks. That was all the more the case, given the importance of setbacks as outlined in the 1997 Development Plan, the concern of the Department of Planning and the opposition to the developer's application. On this basis, the Court allowed the appeal, refusing the developer's application for planning permission.

The Court's reversal of the application highlights the important function of the 1997 Development Plan and the necessity for the CPA to take account of highly technical considerations in respect to large scale developments, particularly where coastal works are proposed. The position in respect of high rise developments is now uncertain, the Judge taking the position that the CPA lacked the authority to exercise discretion in respect of setback requirements with regards to buildings beyond seven storeys until such time as the Regulations were amended, as an "anything goes" attitude to setbacks for buildings over seven storeys was unacceptable. Against that background, amendments to the Regulations are urgently required in order to clarify the position in this regard.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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