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The High Court has just handed down the Judgment in Kirby & Ors v Baker & Metson Ltd  EWHC 2640 (Ch), determining that Permitted Development is not ‘planning permission’ for the purposes of a landlord recovering vacant possession upon the basis that the property is required for a non-agricultural use.
One of the limited and most popular grounds for recovering possession of land contained within a secure agricultural tenancy is Case B of Schedule 3 of the Agricultural Holdings Act 1986 (“1986 Act”).
Case B, like its fellow cases in Schedule 3 is important to landlords because it removes the safety net for tenants of serving a counter notice under section 27 of the 1986 Act. This requires the First-tier Tribunal to determine whether a fair and reasonable landlord would insist on possession.
Case B will apply where a notice to quit is given on the grounds that the land is required for a use, other than for agriculture:
a) for which permission has been granted on an application made under the enactments relating to town and country planning,
(b) for which permission under those enactments is granted by a general development order by reason only of the fact that the use is authorised by—
(i) a private or local Act,
(ii) an order approved by both Houses of Parliament, or
(iii) an order made under section 14 or 16 of the Harbours Act 1964,
The view to date has been that Case B is not applicable where the development is permitted by virtue of the Town & Country Planning (General Permitted Development) (England) Order 2015 (“the 2015 Order“) because that statutory instrument is not an order “approved by both Houses of Parliament.”
The landlord, Baker & Metson Limited, served a Case B notice to quit relying on ground (b) (ii) above on the basis that planning permission was granted as the use was permitted development under the 2015 Order. Interestingly, the permitted development proposed was use of the land for shooting for less than 28 days per year.
The tenant, Kirby, referred the matter to arbitration arguing that the 2015 Order was not approved by both Houses of Parliament and therefore that the notice to quit was invalid.
The issue which the case turns on is whether the wording of Case B “an order approved by both Houses of Parliament” requires that the 2015 Order be made by the affirmative procedure (as the tenant maintained) or is it permissible, as the landlord argued, for either the negative or affirmative routes to be taken?
Briefly, the affirmative procedure requires that the statutory instrument be positively approved by both Houses of Parliament whilst the negative procedure allows the order to become law unless either House objects to it.
This point of law was taken as a preliminary issue in the arbitration. The arbitrator ruled in favour of the landlord which prompted the tenant to appeal to the High Court under section 69 of the Arbitration Act 1996.
The 2015 Order was made law using the negative procedure so if the tenant is right then the notice to quit is invalid and Case B cannot be used where permitted development is intended.
The decision focussed on the ordinary meaning of the words of Case B and its legislative structure. The Judge derived little assistance from the legislative history of Case B or consideration of the Parliamentary debates leading up to its enactment.
The Judge decided that the use of the word “approved” in Case B was a clear indicator of active approval and therefore the affirmative procedure being required.
A distinction was also made between a “general development order” and “an order approved by both Houses of Parliament.” This was a point which greatly assisted the tenant. This is because if the landlord is right then any general development order would be made by either negative or affirmative procedure so rendering the wording of section (b) (ii) redundant as the conditions of approval would always be satisfied.
The Judge ruled in favour of the tenant and the arbitrator’s decision was overturned.
The position remains as previously understood namely that if permitted development is used then Case B is not the appropriate route. Section 27 (3) (f) must be used and this brings with it the additional protection of the fair and reasonable landlord test.
This article is for information purposes only, and is not a substitute for legal advice, and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.