Rees v Earl of Plymouth [2020] EWCA Civ 816

Summary

The Court of Appeal has held that a landlord's right of entry did entitle it to install remote bat monitors and place discrete reference points on agricultural land as these fell under the umbrella of an "extended inspection". Broadly worded entry rights contained in a tenancy agreement may therefore allow landlords to conduct environmental, landscape or habitat surveys, although the precise terms of a given lease will be considered on a case-by-case basis.

Facts of the case

The tenant farmed a holding pursuant to the terms of two tenancy agreements protected by the Agricultural Holdings Act 1986. The landlord obtained outline planning permission to build a large-scale housing development on the holding.

In order to satisfy the environmental conditions of the planning permission, the landlord needed to carry out various habitat surveys on the holding, including leaving remote bat detectors on the land.

The issue

The issue was whether the landlord's express rights of entry contained in the tenancy agreements were sufficient to allow entry on to the holding in order to carry out various habitat surveys. The rights of entry were:

• "to enter on any part of the Farm lands and premises at all reasonable times and for all reasonable purposes"; and
• "at any time and at all times…enter upon the said premises…for the purpose of inspecting the same…or for any other purpose connected with [the landlord's] estate".

First instance decision

At first instance, the judge discharged the landlord's interim injunction preventing the tenant from interfering with the landlord's rights of entry and dismissed the landlord's claim for a final injunction. However, the judge held that the rights of entry did and did not entitle it to carry out the following:

Entitled to by rights of entry:

• Install remote bat monitors.
• Place discreet reference points.

Not entitled to by rights of entry:

• Dig excavations.
• Sink boreholes.
• Erect structures.

Appeal

The tenant appealed the conclusion that the landlord's rights of entry entitled it to install remote bat monitors and place discreet reference points, being forms of "extended inspection". The landlord's position was that the first instance decision should be upheld.

The Court of Appeal upheld the first instance decision and affirmed the following principles:

• The usual principles of contractual interpretation apply to rights excepted and reserved by a landlord in a lease.
• Derogation from grant is only applicable where interpretation of a right amounts to a "substantial or serious interference with the tenant's use and enjoyment of leased property; or would frustrate the purpose of the letting".
• If there is clear wording to that effect, a right of entry for all reasonable purposes or for the purposes of inspection may entitle a landlord to exercise those rights even if this causes material disturbance or damage to the tenant.
• There is no principle requiring a strict construal of rights of entry in favour of either landlord or tenant. This will always be a question of fact and degree to be interpreted in context when determining what is permitted by a right of entry.
• No decision was made on whether, in cases of ambiguity, a landlord's right of entry should be construed in favour of the landlord and against the tenant, although doubt was cast on this argument.
• If the landlord wishes to exercise a right of entry for a reasonable purpose, it is entitled to do what is reasonably necessary to achieve that purpose. However, this is distinct from what is convenient or desirable. It was added that there is no rule preventing a landlord from leaving anything on the land if it is reasonable to do so.

Our comment

Whilst each case will be decided on its own facts, a distinction appears to have been drawn between substantial or serious interference (which will amount to derogation from grant) and a material disturbance or damage (which may be permitted by an express right of entry).

In respect of any new agreements being negotiated, landlords can seek to insert express rights of entry, whereas tenants may wish to restrict the landlord's rights of entry or insert compensatory measures, depending on how these rights are exercised.

Some questions remain unanswered. In whose favour should ambiguous rights be construed in the context of landlord and tenant? What constitutes "material" disturbance or damage?