The judge quashed and remitted the decision back to the SoS for reconsideration.
The application by the Oxford Diocesan Board of Finance had been refused by Wokingham Borough Council. The SoS subsequently upheld that refusal on appeal, agreeing with a planning inspector's report which said that the development would not be sustainable.
The judge, however, said that the decision did not consider or refer to the 'Planning for Growth' ministerial statement made by Minister of State for Decentralisation Greg Clark two months before the decision letter was issued.
The statement set out that the Government's "top priority in reforming the planning system is to promote sustainable economic growth and jobs".
"Government's clear expectation is that the answer to development and growth should wherever possible be 'yes', except where this would compromise the key sustainable development principles set out in national planning policy," the statement said.
It also said that the SoS would "take the principles in this statement into account when determining applications that come before him for decision."
The statement had been issued after the inspector's inquiry on the appeal had closed. The judge said that it was common practice that the inspector therefore did not, and should not, have taken the statement into account. However, she said that, as the statement had potential relevance to housing development and was a material consideration, it should have been taken into account by the SoS.
"In my judgment, all decision-makers were required to have regard to it, as the Statement itself indicates, and then to decide whether and to what extent it affected the decision to be made, on the facts of the particular planning application," the judge said.
She said that, since the decision letter referred to "every relevant provision" except the statement, and since other SoS decision letters did refer to the statement, she was "forced to conclude, on the balance of probabilities" that the statement had been overlooked by the civil servant responsible for drafting the decision letter.
"Regrettably the error was not identified when it was checked and signed on behalf of the Secretary of State. A possible explanation for this error is that it was not referred to in the Inspector's Report, and as it was relatively new, the author had not yet been alerted to the necessity to consider and refer to it, whether by way of checklist or template, I do not know," the judge said.
The judge dismissed five other grounds of challenge to the decision, including claims that the SoS had considered some local policies he should not have considered and that he had failed to apply community infrastructure levy regulations.