This is a decision of the High Court (Meade J) that permitted development rights, under the Town and Country Planning (General Permitted Development) (England) Order 2015 (the "GDPO 2015"), do not fall within Case B of the Agricultural Holdings Act 1986 (the "1986 Act").
The landlord served two notices to quit in September 2017, saying that it required possession of the whole holding because it intended to run a commercial game shoot. One of the notices was stated to fall within section 27(3)(f) of the 1986 Act. The other was stated to have been served pursuant to Case B in Schedule 3 of the 1986 Act and, specifically, Case B(b)(ii):
“The notice to quit is given on the ground that the land is required for a use, other than for agriculture … for which permission under [the enactments relating to town and country planning] is granted by a general development order by reason only of the fact that the use is authorised by … (ii) an order approved by both Houses of Parliament …”
The section 27(3)(f) notice to quit was not pursued by the landlord. On the Case B notice to quit, an arbitrator was appointed and the parties agreed to him determining, as a preliminary issue, whether permitted development rights under the GPDO 2015 were capable of falling within Case B. (It was the tenants’ case that the landlord’s proposed use did not fall within the permitted development rights in any event.)
The arbitrator, having received advice from counsel acting as his legal assessor, decided the preliminary issue in favour of the landlord. The tenants appealed to the High Court.
The GDPO 2015 is a statutory instrument enacted using the negative procedure in Parliament. Under this procedure, orders are laid before Parliament and then automatically become law unless Parliament decides to annul them.
The landlord’s case, in a nutshell, was that this negative procedure still produced an order which had been “approved” by Parliament, such approval being implicit in the absence of annulment. In support of its case, the landlord relied on the absence of a form of words – “approved by resolution” – which is commonly used in legislation to denote the affirmative procedure (i.e. where a statutory instrument only becomes law if approved by a positive vote of Parliament).
The tenants’ case was that the inclusion of the word “approved” in Case B(b)(ii) meant that it was restricted to orders which had been approved by Parliament using the affirmative procedure. The tenants argued that was consistent with the structure of Case B, specifically Case B(b)(i) and (iii), and also fitted with the history and evolution of Case B into its current form.
That current wording of Case B comes from the Agricultural Holdings (Amendment) Act 1990. This was enacted following the 1990 decision of the High Court in Bell v. McCubbin, where a landlord successfully obtained possession of a house, relying on the then wording of Case B, on the basis no planning permission was required to carry on the existing residential use. The decision in Bell v. McCubbin caused consternation at the time and resulted in a rapid amendment to the statute.
It is probably fair to say that most practitioners since then would have paraphrased Case B as applying where the landlord has obtained planning permission following an application to the local planning authority and in very limited other circumstances. It had generally been thought that the wide-ranging permitted development rights, under the GPDO 2015 (and previous orders), fell within section 27(3)(f), so that the consent of the Tribunal was required, to provide a degree of scrutiny to a landlord’s specific proposal.
In a careful judgment which looks in great detail at the wording of Case B and the surrounding legislation, the High Court found in the tenants’ favour and reversed the arbitrator’s decision, holding that general permitted development rights under the GPDO 2015 do not fall with Case B.
The decision confirms the position most practitioners had thought we were in anyway, but it is helpful to have clarity on a point which was previously at least open to debate. The practical effect is that tenants can once again rely on the Tribunal to scrutinise a landlord’s plans to extract land from 1986 Act tenancies in reliance on permitted development rights.
A copy of the judgment can be found here.
For further information, please contact Michael Johnstone.