Mellor and others v Secretary of State for Transport

Blight notice – Qualifying interest – Agricultural land – Agricultural unit comprising dwellings, buildings and land owned by different family members but farmed by their limited company – Claimants serving blight notice on respondent secretary of state requiring him to purchase land – Respondent raising objection – Preliminary issue arising – Whether family members or limited company entitled to a qualifying interest as owner-occupiers of the unit – Preliminary issue determined in favour of respondent The claimants ran an organic dairy farming business at Manor Farm, Blithbury, in Staffordshire across two separate blocks of land. The first block included Manor Farmhouse, Apple Tree Cottage, farm buildings and approximately 73 hectares of land at Blithbury (Manor Farm). The second block comprised 120 hectares of land near the village of Colton to the west of Blithbury (the Colton land). The proposed route of Phase 2(a) of the HS2 (West Midlands to Crewe) railway line bisected both blocks of land. The first four claimants were two generations of the same family. All four family members were also directors of the fifth claimant, a company which conducted the farming enterprise on the whole of the unit. On 12 September 2019, the claimants served a blight notice on the respondent under sections 150 and 158 of the Town and Country Planning Act 1990 requiring him to purchase the whole of both blocks of land, including the houses and buildings at Manor Farm. The respondent secretary of state served a counter notice under section 151(1) of the 1990 Act, objecting to the blight notice on grounds under sections 151(4)(f) and 159(1) challenging the claimants’ assertion that their interest in the land comprised in the blight notice was a qualifying interest; and taking issue with the claimants’ entitlement to rely on section 158 to include unaffected areas of their agricultural unit in the blight notice. The claimants referred the respondent’s objection to the Upper Tribunal which directed that the question whether the claimants were the owners of a qualifying interest in the land comprised in the blight notice should be determined as a preliminary issue. The issue was considered on written representations. Held: The preliminary issue was determined in favour of the respondent. (1) For the notice to be valid, section 168(2) of the 1990 Act required the claimants to have been, or to be treated as having been, “owner-occupiers” of the agricultural unit throughout one of the specified periods of six months. They must have occupied “the whole of that unit” and have been “entitled to an owner’s interest in the whole or part of that unit”. The issue for determination was whether the claimants satisfied those conditions on the facts. It was essential that both of the conditions for a person to be an owner-occupier were satisfied, or treated as satisfied, by the same person or persons. It was clear from section 168(2) that an owner-occupier was a person who satisfied both the occupation requirement and the ownership requirement. Where a blight notice was given by joint owners, they both had to satisfy both requirements. A blight notice could not be given jointly by A and B on the basis that A alone satisfied the occupation condition and B alone satisfied the ownership condition. (2) The claimant had sought to combine occupation of the whole unit by the fifth claimant with ownership of different parts of the unit (amounting in aggregate to the whole) by the individual family members but that was not what section 168(2) required. The ownership condition was agreed to be satisfied by all four of the individual claimants but it was not satisfied by the company. No freehold interest had yet vested in the company in respect of any part of the agricultural unit. It was therefore necessary for at least one of the individual claimants to satisfy the occupation condition; at least one of them must have occupied the whole of the agricultural unit during the whole of a period of six months ending on or not more than 12 months before 12 September 2019. (3) The obstacle which the claimants faced was that the first and second claimants occupied Manor Farmhouse and did not occupy the house in which the third and fourth claimants lived (Appletree Cottage) and vice versa. Even if all four were in occupation of the remainder of the unit in their capacity as directors of the fifth claimant, it would necessarily follow that neither couple could claim to have occupied the whole of the agricultural unit. Even if the fifth claimant was in occupation of the house in which the third and fourth claimants lived, and from which they conducted the business of the fifth claimant, that would not entitle the first and second claimants to say that they too were in occupation of the third and fourth claimants’ house because they were directors of the fifth claimant. There was nothing in the evidence to suggest that either couple had any physical presence in or control over the house occupied by the other couple.  How the occupation of farm cottages by employees might affect the operation of the blight notice regime in relation to other agricultural units might need to be worked out in other cases, but it did not affect the proper construction of the 1990 Act or its application in this case.  (4) The position would have been different if the business on the whole of the agricultural unit had been carried on by the partnership. In that event, section 164(2) would have enabled the occupation of any part of the agricultural unit by an individual partner to be treated as occupation by the firm. The firm would thus have been the occupier of Manor Farmhouse and Apple Tree Cottage, as well as of the rest of the unit.  A partnership firm had no separate legal personality and the four partners would themselves have been able to satisfy the occupation requirement by virtue of section 164(2). They would also have satisfied the ownership condition because some parts of the Colton land were jointly owned by all four family members. That solution was not available to the claimants since they had chosen to organise their affairs to take advantage of the benefits available to companies. Therefore, none of the claimants were “owner-occupiers” of the agricultural unit throughout either of the periods of six months specified in section 168(2). The blight notice was accordingly invalid and the respondent’s objection to it would be upheld.   Written representations provided by Barry Denyer-Green (instructed by Ansons Solicitors, of Lichfield) for the claimants and Stephen Whale (instructed by the Government Legal Department) for the respondents. Eileen O’Grady, barrister Click here to read a transcript of Mellor and others v Secretary of State for Transport