[2025] UKUT 280 (LC)

Finally, the respondent sought permission to appeal the FTT’s rejection of its argument that the appellant should covenant in the lease:

“3.8.2

not to object to any planning application the Landlord (or any third party acting with the authority of the Landlord) submits in relation to the Property and/or ay neighbouring land.”

The respondent’s concern here is to protect itself in the event that it applies for planning permission to develop the site. It anticipates that the appellant will be keen to object, because if the respondent wishes to redevelop that may mean that the appellant has to give up possession. The respondent led evidence to the effect that the appellant’s parent company had on occasions made planning objections containing erroneous statements about planning law and policy, and the FTT accepted that evidence. However, the FTT also accepted that an objection made by the appellant in relation to the site at Hexton (one of the sites in this appeal) “cannot be described as a “spoiler” application”. It went on:

“67…We also have regard to the integrity and robustness of the planning process involving public consultation and the opportunity for an applicant to respond to objections … Planning Officers are qualified to establish if an objection raises material planning considerations that should be taken into account in the decision-making process. In addition objections of the kind made by OT may not be the decisive factor. For example the application for prior approval at Courts Farm was refused, amongst other reasons, because of “visual impact”.

69… we have to consider whether such an obligation should be included to ensure least possible loss and damage is caused by the exercise of code rights. In our judgement the clause sought by APW does not touch or concern the exercise of code rights. It is sought by APW to regulate competition. We are not satisfied that the prohibition sought by APW relates in any way to the sites which are the subject of these references, or the code rights sought by OT. The exercise of code rights does not in any way concern the making of or objections to planning applications. Accordingly we find that there is no basis for imposing the term sought by APW.”

In its grounds for cross-appealing the respondent points out that it is not the policy of the Code to inhibit the ability of site providers to develop their land. And the appellant’s objection would arise from its exercise of Code rights, because it would be objecting in order to maintain its ability to exercise them. But for those Code rights the appellant would have no reason for objecting to planning applications. Furthermore, the FTT applied the wrong test; there is no “touch and concern” threshold in the Code; the FTT imported a restrictive test, and should not have done so. And a restriction on a tenant’s ability to object to its landlord’s planning applications is commonplace in leases.

At the hearing of the appeal Ms Schofield took me to the evidence given before the FTT by Mr Morrison, a planning expert called by the appellant. He was asked whether planning officers would be swayed by spurious objects, and his evidence was that faced with an objection they would not but that “it depends a bit on the planning officer”, and that “usually” an objection would be referred back to the applicant who would be given the opportunity to comment. Ms Schofield argued that that indicated that while a spurious objection would usually be referred for comment, sometimes it would not, and that sometimes a spurious objection would be accepted without question by a planning officer. On the other hand she argued that there was no real need for the appellant to object to planning applications; what legitimate point, she asked, could the appellant make that would not in any event have been made by others? I did not find either argument persuasive, nor even particularly relevant. The respondent’s complaint is that objections made by the appellant are “anti-competitive”; but these two organisations are legitimately in competition with each other and it is not the role of the Code agreement to inhibit that.

Ms Schofield also pointed out that the appellant had not shown that it had a business need to object to planning applications. There is no need for it to do so. It has the right to object to planning applications and does not need that right to be conferred by the agreement. Whether or not it is common for that right to be excluded in commercial leases does not seem to me to be relevant in the context of a Code agreement.

Going back to the grounds of appeal, it is said both that the FTT applied the wrong test (“touch and concern”) and that the term was necessary to prevent loss and damage to the respondent by the exercise of Code rights. I can deal shortly with both. I agree that the words “touch and concern” were unfortunate because they are redolent of other areas of law. But I have no doubt that the FTT was not imagining a new test. Instead it was trying to express the point that the Code requires that loss and damage to the respondent by the exercise of Code rights be minimised. That paraphrase was unnecessary, I think, but that is all it was. It was not the introduction of a new and restrictive test.

And any loss or damage caused to the respondent by objections to planning applications are not caused by the exercise of Code rights. They might, and probably would, be motivated by the wish to continue to exercise Code rights; but the making of a planning objection is not an exercise of Code rights. There is no prospect of a successful cross-appeal on this ground and permission to cross-appeal is refused.