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Lawbite: Developers take note - recovering land from agricultural tenants

  • United Kingdom
  • Litigation and dispute management
  • Real estate
  • Real estate litigation - LawBite

01-12-2020

Kirby -v- Baker & Metson Ltd [2020] EWHC 2640 (Ch)

The High Court has confirmed that a landlord will not be able to rely on permitted development rights if serving a notice to quit pursuant to the “Case B” procedure in order to recover land held under a secure agricultural tenancy. 

The Landlord, Baker & Metson, sought to terminate a secured agricultural tenancy using the “Case B” procedure, under the Agricultural Holdings Act 1986 (“the Act”).  The procedure, named after Case B(b)(ii) of the Act, in essence, provides that a notice to quit may be given where the land is required for non-agricultural use.  The notice can only be effective where the proposed use is one which has been permitted under the relevant legislation by a general development order and, crucially in this case, the order was an order approved by both Houses of Parliament. 

The landlord’s proposed non-agricultural use was a ‘permitted development’ under the Town and Country Planning (General Permitted Development) (England) Order 2015 (“2015 Order”). The tenant argued that the notice was invalid as the 2015 Order was not “an order approved by both Houses of Parliament”.  The tenant failed to persuade an arbitrator (who upheld the validity of the notice to quit) and appealed to the High Court under section 69 of the Arbitration Act 1996.

In considering the appeal the Court had to decide whether the words “an order approved by both Houses of Parliament” in Case B(b)(ii):

(i) require an order be made law by the affirmative procedure (as submitted by the tenant) – which requires a proposed statutory instrument to be laid before both Houses of Parliament and each to pass a resolution in favour of the instrument before the order passes into law, or,

(ii) permit the use of either the affirmative procedure or the negative procedure (as submitted by the landlord).  The latter being a procedure which requires the laying before both Houses of Parliament of the statutory instrument with the proviso that unless it is annulled by resolution the order passes into law

It was common ground that the 2015 Order was made law by the negative procedure.

The Court found that, as a matter of construction, the words in Case B(b)(ii) favoured the tenant’s case. The appeal was upheld and the notice to quit found to be invalid.

Key points

  • there is a distinction between the affirmative and negative procedures – the affirmative procedure requires an order to be approved by both Houses of Parliament before passing into law, whilst under the negative procedure an order will become law unless objected to by either House
  • The word ‘approved’ used in Case B(b)(ii) has an ordinary and contextual meaning  and there is a clear connotation of active approval requiring the use of the affirmative procedure
  • given the wide scope of ‘permitted development’ rights in the 2015 Order, the decision offers important clarification of the level of protection offered to tenants of agricultural holdings