Company occupying and using flats to provide temporary accommodation for employees visiting London from overseas – Council serving notices alleging breach of conditional planning permission – Whether use of premises in breach of condition – Whether accommodation provided for “consideration arising by reason of employment” within section 25(2)(a)(ii) of the Greater London Council (General Powers Act) 1973 – Notices quashed – Appeal allowed
On 2 April 1987 the appellant council granted conditional planning permission for the conversion of a property known as Crown Lodge, Chelsea, into a block of 130 self-contained flats. Condition 11 of the grant provided: “The premises subject of this permission shall not be used at any time for any purpose specified in section 25 of the Greater London Council (General Powers) Act 1973… “. The reason for the condition was stated to be: “To ensure the permanent retention of the accommodation for normal residential purposes.” Section 25(2)(a) provided: “‘use as a temporary sleeping accommodation’ means use as sleeping accommodation which is occupied by the same person for less that 90 consecutive nights and which is provided… for a consideration arising either (i) by way of trade for money or money’s worth; or (ii) by reason of the employment of the occupant…”.
The respondent company (LPS) acquired long leases of flats 8 and 9, in 1989 and 1992 respectively. It used the flats to provide accommodation for company employees, and, to a lesser extent, personal friends and acquaintances of directors of the company. The majority of the occupiers were senior employees of companies in LPS’s group, who were on holiday from overseas, sometimes with their partners and children. The various occupiers used the flats as sleeping accommodation for periods of up to two weeks, and no monetary payment was required and no tenancy agreements were entered into.
The council took the view that condition 11 had been breached and issued breach of condition notices under section 187A of the Town and Country Planning Act 1990. LPS sought judicial review of the council’s decision. The High Court employed a strict construction of the word “consideration” in section 25(2)(a) of the 1973 Act, and held that, on the facts, it had not been shown that any such consideration had passed from the occupying employees to LPS. On that basis, the court held that condition 11 had not been breached; the application was allowed and the notices were quashed. The Court of Appeal upheld the decision.
The council appealed contending that the word “consideration” in section 25(2)(a) of the 1973 Act should not be given the strict meaning it bore in the context of English contract law but a wider meaning in order to encompass the purpose of the provision and meet the mischief that the section sought to counter.
Held: The appeal was allowed.
1. The purpose of section 25 was to control the extent to which residential property could be put to use for certain forms of short-term transitory occupation. That was achieved, in the circumstances, by requiring the obtention of planning permission. Condition 11 had been imposed to preserve a sufficiency of permanent accommodation in the area.
2. The relative obscurity of the language of section 25(2) made it appropriate to find a solution that was reasonable and workable, and satisfied the purpose of the planning legislation.
3. The word “consideration” had to bear the same meaning in both subparas (i) and (ii) of section 25(2)(a). It was difficult for it to be read in subpara (i) as meaning valuable consideration in the strict sense. The words “by reason of” in subpara (ii) implied a degree of latitude and required the existence of some causal relationship between the employment and the provision of the accommodation. As long as it could reasonably be held that it was because of the recipient’s employment that he came to occupy the accommodation, that was sufficient for the matter to fall within subpara (ii). That broader construction gave a coherent meaning to the section and served the intention of the legislation.
4. Whether a case fell within section 25(2)(a)(i) or (ii) should be readily established without the need for too detailed an inquiry. In particular, it should not be necessary to examine the precise terms of an employee’s contract in order to discover whether or not he had an entitlement to the accommodation.
Mark Lowe QC and Thomas Cosgrove (instructed by the solicitor to Kensington and Chelsea Royal London Borough Council) appeared for the appellants; Michael Fitzgerald QC and Alun Alesbury (instructed by Travers Smith Braithwaite) appeared for the respondent.
Thomas Elliott, barrister