Kirby v. Baker & Metson Ltd  EWHC 2640 (Ch) – Mr Justice Meade
On 7 October 2020 the High Court granted an appeal by an agricultural tenant, under s.69 of the Arbitration Act 1996, against the award of an arbitrator appointed under the Agricultural Holdings Act 1986: in which the arbitrator had upheld the validity of a notice to quit served under Case B(b)(ii) of Schedule 3 to the 1986 Act. The High Court found that, on its proper construction, Case B paragraph (b)(ii) did not apply to a permission arising by way of the permitted development rights contained in the Town and Country Planning (General Permitted Development) (England) Order 2015.
Catherine Taskis acted for the successful appellant.
The appellant was the tenant of an agricultural holding. The respondent landlord served a notice to quit relying on Case B(b)(ii) of Schedule 3 to the 1986 Act; which provides that a notice to quit may be given on the ground that land is required for a non-agricultural use for which permission under town and country planning legislation has been granted by a general development order by reason only of the fact that the use is authorised by an order “approved by both Houses of Parliament”. The court considered whether these words required that the relevant order be one made by the affirmative procedure (which requires the statutory instrument to be laid before both Houses of Parliament and approved by resolution of both, before passing into law); or whether the order could be made by either the affirmative or negative procedure (under which a statutory instrument laid before Parliament automatically passes into law, unless annulled by resolution).
The arbitrator, finding for the landlord, had determined that use of either the affirmative or negative procedure would suffice; and accordingly that the 2015 Order, which had been made by way of the negative procedure, was an order falling within Case B(b)(ii). The High Court allowed the tenant's appeal.
The court took the view that, on its ordinary meaning, the word “approved” carried a clear connotation of active approval. It was plain from the provisions of s.94 of the 1986 Act that Parliament had in mind the existence of, and distinction between, the affirmative and the negative procedures. Although the words of Case B(b)(ii) did not directly reflect the distinction used in this section, it was likely that, had the intention been that either procedure would suffice, the language used would have been closer to that in Case B(b)(i), which referred simply to an Act being in force. The court concluded that the words used favoured the tenant's argument (paragraphs 44 – 53 of the judgment).
So too, in the view of the court, did the structure of Case B(b)(ii) as a whole. The language specified two things: first, a permission given by a general permitted development order; and second, authorisation by an order approved by both Houses of Parliament. The judge agreed with the tenant's submission that the reader would consider them to be separate. However, the effect of the landlord's position was that since any general development order would be made either by the affirmative or the negative procedure, (ii) would always be satisfied whenever the introductory words of (b) calling for a general development order were met. So (ii) became redundant. The landlord's argument that the introductory language was simply cumbersome and used too many words was rejected: it had to be assumed as a starting point that words were there for a reason, and on the face of Case B it appeared that two separate things were needed. The landlord further argued that (ii) was limited to cases where the order itself authorised the use, and excluded the situation where an order allowed a local authority to grant the relevant permission (eg that envisaged by s.59 of the 1990 Act). However that would require the introductory words of Case B(b) to cover both delegation to a local authority and direct authorisation by the order concerned, otherwise (ii) would be no narrower than the introductory words and still be redundant: and this was not what the introductory words provided - the introductory words stated that permission was granted by the general development order. On the basis of these points, and the analysis of the ordinary meaning of the words in Case B(b)(ii), the judge was satisfied that the tenants were right, and the arbitrator was wrong in law in his conclusions (judgment at paragraphs 54 – 61).
The court also considered arguments concerning the legislative history of the 1986 Act and the consistency of limbs B(b)(i) to (iii), but its findings on the meaning and structure of the provision were determinative.
Comment: Given the scope of permitted development rights in the 2015 Order, and the potential scope of such rights in general development orders more broadly, the inclusion of such orders within the operation of Case B would have had far reaching implications for the security of tenure of tenants of agricultural holdings. The court's conclusion provides welcome clarification of the limits of the operation of Case B as a ground for recovering possession for non-agricultural use.
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