4 Landlord and Tenant

12.44 Where the holding is held on a tenancy, the farmer may face problems if he proposes diversification into non- agricultural uses of land or buildings that require planning consent.

12.45 Planning consent can be applied for by the landowner, or even by a third party. The effect on the tenants position will depend upon whether his tenancy was granted prior to 1 September 1995, or whether it is a farm business tenancy under the Agricultural Tenancies Act 1995. In the former case, where planning consent is obtained, even for a limited diversification into non-agricultural use, this will give the landlord the right to serve notice to quit under case B to Sch 3 of the Agricultural Holdings Act 1986.⁹⁷ The policy of the 1986 Act is to confer protection on the farm tenant so long as the land is being used as agricultural land, but if it is no longer to be so used, the parties have once more the rights given to them by the common law and the tenancy agreement.⁹⁸ So, if the tenancy agreement authorises the resumption of possession of the whole or part of the farm for non-agricultural use on the giving of short notice, then the notice to quit can be shorter than the 12 months otherwise required by the 1986 Act.⁹⁹ If the landlord obtains planning consent for a diversified use the tenant could lose possession of part, or all, of the holding, with little recourse other than to claim compensation for disturbance under the 1986 Act.

12.46 The policy underlying Case B of the 1986 Act is that as the owner of a capital asset (land) the agricultural landowner should be entitled to any increase in value that may accrue from possible development. The tenant has no statutory defence to a notice under Case B, other than to challenge the veracity of the facts alleged by requiring arbitration eg as to whether the land is genuinely ‘required’ for non agricultural use, in the sense that the landlord has a present and settled intention to carry out the scheme authorised by the planning consent and the financial means to do so. He may be able to raise issues of fraud or estoppel under the general law to challenge the landlords right to use the planning consent as a ground for possession – but this will depend on the facts of the individual case. The important issues for decision arise, therefore, at the initial stage when the planning decision is made. An objection to development proposals made by a farm tenant, who will lose an important part of his holding, will be a material planning factor to be considered by the planning authority in coming to a decision on the application.¹⁰⁰ The weight to be given to it is for the planning committee alone to decide, however.

12.47 This can result in hard decisions. So, in Fowler v Secretary of State and North Wiltshire DC¹⁰¹ the tenants failed in their opposition to plans to develop an equestrian centre on their farm, even though their quitting the tenanted land would make adjacent land they also farmed difficult to work (the farm buildings were situated on the tenanted farmland).

12.48 Where the planning permission is obtained with the support of the tenant, however, the landlord may not be able to rely with confidence upon Case B to implement it where the circumstances initially envisaged by both parties have changed. In John v George¹⁰³ the landlord obtained two separate planning consents – to erect new dairy buildings and to convert an existing barn to residential use – as part of a composite scheme to finance the provision of a new dairy unit for the tenant. Having obtained both permissions with the co-operation of the tenant the landlord later sought to use the permission for the barn conversion to ground a Case B notice to quit, without implementing the rest of the redevelopment scheme.¹⁰⁴ The court of appeal here held that the landlord was estopped from relying on the planning consent to serve notice to quit.¹⁰⁵ By foregoing his right to object to the planning applications, in reliance on the landlord’s representation that he would be able to continue in possession of the buildings until the new unit was ready, the tenant had relied upon the landlord’s representation to his detriment. The additional element of unconscionability was readily found on the facts; ‘such unconscionability is clear for the landlords to seek to use for their own benefit and to the detriment of the tenant an advantage which they could not have obtained alone and which to their knowledge was obtained with the support of the tenant for a different purpose and for their joint benefit’.¹⁰⁶ This important decision provides a check on the landlords right to use the statutory forfeiture procedures following a grant of planning permission for redevelopment. Of necessity, however, its impact will be limited to cases where, on the facts, the tenant has acquiesced or co-operated in an application for planning permission.