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On 1 July 2020 the Court of Appeal handed down Judgment in Rees v The Earl of Plymouth [2020] EWCA Civ 816. Back in April 2019 we reported on the High Court’s decision, which is one of only a handful of occasions the Court has considered the interpretation of exceptions and reservations contained in tenancy agreements, protected by the Agricultural Holdings Act 1986, against the back cloth of Case B Notices to Quit.
In 2016 the landlord was granted an interim injunction, restraining the tenant from interfering with the landlord’s rights of entry set out in the tenancy agreement. The High Court proceedings were to decide whether the landlord was entitled to a final injunction.
The Court decided that the landlord’s claim for a permanent injunction failed, the interim injunction granted in 2016 was therefore discharged and the Court determined that the landlord’s rights of entry set out in the tenancy agreements should be construed restrictively. Under those exceptions and reservations the landlord was not entitled to go onto the land and dig excavations, sink boreholes or erect structures, however the Court determined that the landlord could install remote bat detectors and discreet reference points on the land. That aspect of the decision was appealed by the tenant.
The Court of Appeal upheld the High Court’s decision.
As many will know, it is common place for a right of entry to be exercisable for a ‘reasonable purpose’. In an important passage from Lord Justice Lewison, who gave the leading Judgment, he said:-
“The right of entry is not a right to enter for entry’s sake. It is a right to enter for a particular purpose. So if a purpose is a reasonable purpose for which the landlords wish to enter the land, the proper interpretation of the right must surely enable them to do what is reasonably necessary to achieve that purpose. “Reasonably necessary” is not the same as “convenient” or “desirable”” But conversely, if what they want to do (or whatever is reasonably necessary to do) in order to achieve a particular purpose is highly intrusive then the purpose may be held not to be a reasonable one”.
This case considered two access clauses. The first was the usual “reasonable purposes” clause and the second was a basic right of entry for inspection purposes only. One of the notable aspects of this Judgment is that the Court of Appeal considered that the landlord had the same rights under both types of clause.
Whilst both decisions provide welcome guidance, there is no hard and fast rule as to the extent of a landlord’s right of entry.
The Judgment confirmed that access clauses should be interpreted in the same way as any other contractual provision. However, the principle that a landlord should not grant a leasehold interest with one hand and take back with the other, through the use of draconian clauses, that hamper the tenant’s usage, remains valid.
Guidance was provided though that this derogation from grant principle is only engaged where such interpretation would result in “substantial or serious interference with the tenant’s use and enjoyment of the leased property; or would frustrate the purpose of the letting. It does not require the Court to give a right of entry the narrowest possible interpretation”
Landlords therefore do not have an unfettered ability to secure access for all purposes. Where access is required for intrusive activities, which constitute breaches of the covenant for quiet enjoyment, or otherwise significantly compromise the grant of exclusive possession, then that may not be permitted.
Our own in house tenancy agreements already contain specific access provisions for such intrusive activities and these will continue to be necessary in the light of this judgment.
The Court of Appeal made it clear that one needs to look at the position in the context of all relevant circumstances and this is a question of “fact and degree”. What may be considered reasonable in one context may not be in another. Lewison LJ gave a specific contrasting example, that what might be intrusive in the context of a petrol filling station, might not be so in the case of a 51 acre farm.
However, the contextual matrix will always include the fact that the purpose of a lease is to grant exclusive possession of the premises to the tenant.
The degree of the intrusion should be balanced against the reasonableness of the intrusion. The reality is that landlords and their professional advisors still need to assess matters on a case by case basis. The rights conferred by a tenancy agreement will always need careful consideration before a landlord exercises rights of entry onto tenanted land.
Michelmores are looking forward to putting on another Agriculture Roadshow, between 3-7 February 2025. Following the success of our tour last year, we are going...
