Agricultural tenancy – Covenant not to share occupation – Tenant subcontracting farming operations to farming partnership – Landlord serving notice to quit – Whether farming operations of partnership amounting to occupation – Arbitrator and judge finding for tenant – Landlord’s appeal dismissed
The plaintiff was the landlord and the defendant was the tenant from year to year of an agricultural holding, Low Farm, Great Paxton, Huntingdon, under a tenancy agreement made on September 28 1989. By clause 5.16 the tenant agreed with the landlord not to assign, underlet, part with or share possession or occupation of the whole or any part of the holding. The tenant carried on the business of farming from the home of Mr and Mrs Barratt as did also a partnership, known as the MMB partnership, between Mr and Mrs Brian Barratt and their son, Michael Barratt. MMB was a joint lives partnership to carry on the business of farming and commenced business on July 1 1986. The holding in question was an arable farm of 299 acres on which there were no buildings. In any given year there were approximately 22 farming operations carried out over 35 to 40 days.
In 1986 it was let to Mr and Mrs Brian Barratt and Michael Barratt who on July 3 1986 assigned the tenancy to the tenant. The tenant had no capital and depended upon MMB for the necessary finance. The relationship between the tenant and MMB was regulated by the terms of a letter of March 26 1987. The present tenancy in favour of the tenant was entered into on September 28 1989 and included the covenant not to part with or share possession or occupation of the whole or any part of the holding. The landlord considered that the tenant was in breach of that covenant, and on October 9 1993 served a notice to quit on the tenant. The tenant responded with a notice under Article 9 of the Agricultural Holdings (Arbitration on Notices) Order 1987 referring the matter to arbitration. The arbitrator determined that the notice should not have effect and the landlord appealed. The judge upheld the arbitrator’s finding holding that, on the facts as found by the arbitrator, the tenant had not parted with or shared occupation of the holding with MMB. The landlord appealed.
Held The appeal was dismissed.
1. Where a tenant was a limited company, it could only operate through its servants or agents. Thus the occupation of the farm and execution of necessary farming operations must have been by servants or agents.
2. There was no necessary permanent physical presence where the farm in question was an arable farm with no stock and without buildings.
3. The activities carried out on the land were carried on by an agent within the scope of his authority and were the activities of the principal just as much as if the agent were an employee: see Hills (Patents) Ltd v University College Hospital Board of Governors [1956] 1 QB 90.
4. The facts found by the arbitrator showed that the farming operations on the holding in question were carried on by the partnership not on its own account but as agent for the tenant.
5.The partnership only went on the farm for the purpose of carrying out the farming operations required by the tenant, and there was no permanent presence. Therefore the holding was occupied by the tenant alone and there was no shared occupation, and hence no breach of covenant to support the notice to quit.
Michael Driscoll QC (instructed by Winters, of Huntingdon) appeared for the appellant; Jonathan Brock (instructed by Borneo Martell & Partners, of Bedford) appeared for the respondent.
