Tenancy — Agreement between plaintiff owners and defendant for use of grazing land — Plaintiffs also grazing horses on land — Whether exclusive possession — Whether creation of tenancy in defendant’s favour — County court finding against defendant — Court of Appeal dismissing appeal
The land in dispute comprised some 12 acres of grazing land and a barn and yard at Yew Tree Farm, Avon Dassett, Warwickshire. The farm was owned by E who bought it in 1985. The defendant, T, who owned a farm in the same locality, had already been using the 12 acres of land for grazing under licence from the previous owners.
In 1985, the two parties reached an agreement that for one year T was allowed to use the grazing for his cattle for £720. He could also use the barn and was required to maintain the fencing. E reserved “the right to graze his horses and any other livestock at any time and on any part of the land at Yew Tree Farmhouse”. Two horses were put by E on to the land. A further oral agreement on the same terms was entered into in 1986. In 1987, another agreement was signed between them in which the value of the grazing was again put at £720, but T was to undertake listed works in lieu of payment. Nothing was written in the 1987 agreement as to any reservation by E of any right to graze, although that had been the accepted basis of the agreements between the parties until then. According to E, the 1987 document was intended to set out the jobs to be done in lieu of rent and that essentially the 1985 agreement was intended to stay in force. A horse and two ponies, belonging to friends of E, were put on the land and remained there intermittently until 1989.
Differences then arose between the parties and at first instance T maintained that he was a protected tenant under the Agricultural Holdings Act 1986. It was accepted before the judge that for a licence to be capable of being converted into an agricultural tenancy under section 2, the grantee of the licence must have exclusive possession of the land. The judge found that “The reservation to graze horses or any other livestock on the land was the basis on which the 1985 agreement expressly had been entered into: this was the accepted basis on which … the 1986 agreement had been entered into, even if it was not an express terms of the 1986 agreement. I find this was also the basis [accepted by both parties] on which the 1987 agreement was also entered into. And hence it was unnecessary in the 1987 agreement to set out any express grazing reservation to E: it was accepted by both parties that such a reservation should continue as in the previous two years …”. The judge granted E an order of possession. T appealed.
Held The appeal was dismissed.
1. It was common ground that section 2 did not operate in the defendant’s favour unless he had right to exclusive possession: see Harrison-Broadly v Smith [1964] 1 WLR 456, which dealt with the statutory precursor to the present section 2.
2. The crucial issue was whether the judge was correct in deciding that the express reservation of the 1985 agreement continued in relation to the 1987 agreement and, whether that agreement was to be construed contra proferentem the plaintiffs.
3. It was clear that the judge accepted the evidence of the plaintiffs to show that their horses — as well as horses belonging to their acquaintances — had grazed between 1985 and 1988 on the land with the plaintiffs’ permission, together with the defendant’s livestock. The judge had been satisfied that T knew, or must have known, of the presence of the horses because he saw them on the land; that his permission had never been requested; and that T had never sought payment for them to graze.
4. In solely construing the 1987 agreement, without reference to the surrounding circumstances, T had to show that the agreement created an agricultural tenancy because it conferred exclusive possession. He had undertaken work of an estimated value of £729 for one year’s grazing rights and on the face of it that agreement expired in March 1988. The licence was terminated by E in August 1988. By its terms, the agreement clearly did not grant exclusive possession.
5. However, if it was appropriate — because the agreement was silent on that point or ambiguous — for the court to look at the surrounding circumstances, the judge’s findings were conclusively in favour of the plaintiffs who had placed their horses on the land without T’s permission or objection. The facts showed that the land had been shared so that the plaintiffs had been entitled to terminate the licence with T.
Jack Denbin (instructed by Savage & Wright, of Warwick) appeared for the plaintiffs; the defendant appeared in person.
