Agricultural holding — Tenancy agreement — Covenant not to sublet — Notice to quit under Case E — Whether counternotice valid — Conduct of landlord encouraged tenant to sublet cottages — Whether notice to quit served unconscionably and fraudulently — Landlord’s summons for declaration dismissed
The plaintiff is the landlord of an agricultural holding of some 647 acres let under a yearly agricultural tenancy to the defendant. In June 1988 the plaintiff gave a notice to quit to the defendant in accordance with section 26(2) of, and Case E, Schedule 3 to, the Agricultural Holdings Act 1986. The plaintiff asserted that the defendant had, in breach of the tenancy agreement, sublet several cottages by way of holiday lets. It was also said that the tenant’s counternotice was not valid as it failed to comply with the requirements of article 9 of the Agricultural Holdings (Arbitration on Notices) Order 1987 in that any question arising should be put to arbitration.
The plaintiff sought a declaration that the counternotice was invalid and that, on the expiration of the notice to quit on October 11 1989, the tenancy will determine. The defendant adduced evidence of correspondence from the plaintiff and his agents of an agreement in 1985 to the effect that, in return for the surrender of certain cottages, the defendant would be permitted to sublet others. The defendant contended that it was an implied term of that agreement that the plaintiff would not serve a notice to quit on the ground that the defendant was in breach of his covenant not to let or part with possession with any part of the holding. It was said that the plaintiff had acted unconscionably and fraudulently in serving the notice to quit, which was thereby invalid. Accordingly it did not matter that the counternotice might have been invalid.
Held The plaintiff’s summons for a declaration was dismissed with costs partly on an indemnity basis.
The evidence of the plaintiff and his agent, who had served the notice to quit, could not be relied on. They were indifferent to the correspondence produced to substantiate the defendant’s contention that the plaintiff knew of, consented and encouraged the subletting of the cottages. The plaintiff did not believe in the matters asserted in the notice to quit; there was an absence of honest belief on his part and it was an empty and dishonest document. The notice to quit was fraudulent on the principles set out by Lord Herschell in Derry v Peek (1889) 14 App Cas 337 at p 375.
Robert Pryor QC and Martin Rodger (instructed by Leathes Prior, of Norwich) appeared for the plaintiff; and Derek Wood QC and John Male (instructed by Burges Salmon, of Bristol) appeared for the defendant.
