In the first English legal decision on the issue, Esther Stirling of our Agriculture and Rural Affairs team represented the successful tenant in the matter of the County of Herefordshire District Council v Bayliss, a case before the First Tier Tribunal (Property Chamber) dealing with notices to quit an Agricultural Holdings Act 1986 tenancy.
Such tenancies carry with them a formidable degree of security. Landlords can bring them to an end in limited circumstances, by service of a notice to quit or alternatively by service of a case notice. A ‘Case B’ notice is served where a landlord has planning permission for their non-agricultural use. This case deals with which route a landlord must follow, if they intend to use the land for a non-agricultural use which requires planning permission, but do not yet have that permission.
Certain rules apply, on the one hand to a general notice to quit and on the other to a case notice, if a tenant challenges the notice. The Tribunal has jurisdiction to determine whether a ‘general’ notice to quit should be upheld.
If a tenant serves a counter-notice to a ‘general’ notice to quit – as was done in this case – a landlord must satisfy the Tribunal that the case falls within one of the grounds set out in s.27(3) of the 1986 Act. The Tribunal must also be satisfied that a fair and reasonable landlord would insist on possession.
In this case, the landlord intended to develop the site for residential dwellings, a use that clearly would require planning permission. Rather than waiting until planning was in place and then serving a Case B notice, they served a general notice to quit and then argued that they fell within s.27(3)(f). That section applies where the landlord’s intended future use of the land will be non-agricultural in nature ‘not falling within Case B’.
We argued that this could not assist the landlord. Their intended use required planning permission, even if it was not yet in place. In essence, the words ‘not falling within Case B’ mean ‘not capable of ever falling within Case B’. We contended that the landlord had erred and should have waited until planning permission was in place before using a Case B notice.
The matter came before the Tribunal, headed by Regional Judge Bowles, at the end of June. In a judgment handed down on 6 September, the Tribunal accepted the tenant’s arguments that Case B must be used in all cases where a landlord’s intended use will require planning permission. A landlord cannot elect to use the s.26/27 procedure instead. If their intended use requires planning permission, they must wait until they have it and then proceed to serve a Case B notice.
The Tribunal rejected the landlord’s argument, based on the literal construction of the wording of s.27 (3) (f), that they were ‘not falling within Case B’ simply because no planning permission was in place at the date of the notice.
Had it found for the landlord, the unsatisfactory position could emerge in which a Tribunal had to ‘guess’ about whether planning permission would ultimately be granted at some future stage, when considering whether a fair and reasonable landlord would insist on possession. That cannot have been the intention of Parliament, when it enacted the 1986 legislation.
Until now, there has been no English decision on this point. This is perhaps surprising, on such an important aspect of the notice to quit regime. This case is of real importance, then, in clarifying the law.