R v Kensington and Chelsea Royal London Borough Council, Ex parte Lawrie Plantation Services Ltd (Lawrie Plantation Services Ltd, Ex parte)

Under section 25(2)(a)(ii) of the Greater London Council (General Powers) Act 1973, accommodation is provided for a consideration arising by reason of employment when its provision is causally connected with the occupant’s employment. “Consideration” does not bear its strict contractual meaning. The occupant need not pay rent, supply money or money’s worth, possess a contractual entitlement, or use the accommodation for the employer’s immediate business.

It is sufficient that the accommodation is provided because of, or flows from, the employment relationship. This purposive construction enables planning authorities to control changes from permanent residential use to short-term occupation without examining the detailed terms of each occupant’s employment contract.

The respondent company held long leases of two flats subject to a planning condition prohibiting their use for any purpose specified in section 25 of the Greater London Council (General Powers) Act 1973. It made the flats available, usually for holidays of up to two weeks, principally to senior employees and their families. No rent was charged and no tenancy agreements were made.

The local planning authority issued breach of condition notices under section 187A of the Town and Country Planning Act 1990. The High Court quashed the notices, and the Court of Appeal upheld that decision. Both courts treated “consideration” in section 25(2) as valuable consideration in the strict contractual sense.

The central issue was whether accommodation supplied to employees without contractual entitlement, rent, or money’s worth was nevertheless provided “for a consideration arising” by reason of their employment within section 25(2)(a)(ii).

1. The appeal was allowed unanimously. Lord Clyde delivered the leading speech. Lord Slynn, Lord Goff, Lord Hope and Lord Millett agreed that the planning condition had been breached.

2. Per Lord Clyde, “consideration” in section 25(2) of the Greater London Council (General Powers) Act 1973 was not confined to valuable consideration sufficient to create an enforceable contract. In this planning context it could describe the provider’s motive, reason or purpose in supplying accommodation. It could therefore include accommodation supplied in recognition of past service or otherwise because of employment, although the recipient had no enforceable entitlement.

3. The statutory language and structure supported that broader construction. Section 25(2)(a)(i) expressly required both a transaction by way of trade and money or money’s worth. The absence of corresponding language from section 25(2)(a)(ii) showed that money, rent or its equivalent was unnecessary in an employment case. The words “arising” and “by reason of” also indicated a causal relationship rather than a contractual exchange.

4. Per Lord Clyde, section 25 was intended to control the use of permanent residential property for short-term, transitory occupation. It addressed commercial short-term accommodation and accommodation made available to employees. A construction requiring investigation of each employee’s contractual rights would impair that purpose and produce an impractical planning regime.

5. Section 25(2)(a)(ii) was satisfied where it could reasonably be held that the recipient occupied the accommodation because of the employment relationship. The provision did not require a contractual right or use connected directly with carrying on the employer’s business. Lord Slynn likewise considered it sufficient that provision of the flat broadly flowed from the employment relationship.

6. The overwhelming majority of occupants were senior employees who received the accommodation by reason of their employment. Their occupation therefore constituted temporary sleeping accommodation prohibited by the planning condition. The small minority of friends or acquaintances who were not employees fell outside section 25(2)(a)(ii), but did not affect the result.

1. House of Lords: Allowed the local planning authority’s appeal unanimously and held that the planning condition had been breached: [1999] UKHL 32; [1999] 1 WLR 1415.

2. Court of Appeal: Upheld the High Court’s decision. The court adopted a strict contractual understanding of valuable consideration. No citation is stated in the judgment.

3. High Court: Allowed the company’s application for judicial review and quashed the breach of condition notices. No citation is stated in the judgment.