Regina v Royal Borough of Kensington and Chelsea, Ex parte Lawrie Plantation Services Ltd

The House of Lords considered the meaning of the phrase "for a consideration arising . . . by reason of the employment of the occupant" in section 25(2)(a)(ii) of the Greater London Council (General Powers) Act 1973. The court rejected a narrow contractual construction of "consideration" and adopted a purposive, broader meaning which covers accommodation provided because of the employment relationship even if no enforceable contractual right or monetary payment exists. Applying that construction, the court held that the flats in question fell within section 25(2)(a)(ii) and that the planning condition had been breached.

Background and facts:

• The local planning authority granted conditional planning permission for the conversion of Crown Lodge into flats subject to condition 11, which prohibited use for purposes specified in section 25 of the Greater London Council (General Powers) Act 1973. The condition aimed to secure permanent residential accommodation.
• The respondent acquired long leases of two flats and provided them largely to senior employees (and to a small number of friends of directors) for short stays, typically up to two weeks; no rent was charged and no tenancy agreements were entered into.

Procedural posture:

• The appellant issued breach of condition notices under section 187A of the Town and Country Planning Act 1990. The respondent sought judicial review: the High Court quashed the notices and the Court of Appeal upheld that decision. The appellant appealed to the House of Lords.

Issues before the House of Lords:

1. Whether the phrase "for a consideration arising . . . by reason of the employment of the occupant" in section 25(2)(a)(ii) should be given the narrow meaning it bears in contract law (requiring valuable, enforceable consideration), or a wider purposive meaning consistent with the planning objective of controlling short-term, transitory occupation.
2. Whether the facts concerning provision of the flats to employees without payment brought the use within section 25(2)(a)(ii).

Court's reasoning and decision:

The court analysed the statutory language and purpose. It observed that subsection (2)(a)(i) explicitly requires money or money's worth and that the use of the word "arising" and the phrase "by reason of" in subsection (ii) point to a causal, not necessarily contractual, link between employment and the provision of accommodation. A purposive construction was appropriate in planning legislation: the provision should capture cases where accommodation is provided because of employment even absent strict contractual consideration or payment. It would be impractical and contrary to the statutory purpose to make entitlement depend on fine contractual distinctions. Applying the broader construction, the majority concluded the flats were provided by reason of employment and therefore the planning condition had been breached.

Appeal allowed. The House of Lords held that the phrase "for a consideration arising . . . by reason of the employment of the occupant" in section 25(2)(a)(ii) should be given a purposive, broader meaning rather than the narrow concept of contractual valuable consideration. It is sufficient that the accommodation is provided because of or flows from the employment relationship; applying that construction the condition had been breached.

The respondent obtained judicial review of breach of condition notices issued under section 187A TCPA 1990. The High Court quashed the notices and the Court of Appeal upheld that decision. The appellant's appeal to the House of Lords was allowed ([1999] UKHL 32; [1999] 3 ALL ER 929; [1999] 1 WLR 1415).