Agricultural Holdings Act 1986 — Landlord’s action for possession — Notices to quit served in reliance on Case E and Case G in Schedule 3 to the Act — Effect of severance of the reversion — At first sight, odd position of tenants arguing in favour of notice to quit served on them — Whether notice to quit, which failed to take account of severance of the reversion, invalid — Cases discussed on implication of new tenancy after termination of previous tenancy — Whether only ‘objective’ evidence of intention admissible — Held Case E notice to quit invalid and Case G notice effective to terminate tenancy — Judgment for landlord
with curious and interesting features the landlord sought an order for
possession of four farms and adjoining land against the executors of a deceased
tenant — There had been some previous litigation between the parties concerning
agricultural holdings and partnership problems, but the events leading to the
present contest began with the transfer by the landlord of a narrow strip of
land to a relative, thus bringing about a severance of the reversion — Later in
the same year the landlord complained that the tenant, Mr Sykes, had cut down
two substantial trees on the holding — A Case E notice was served on Mr Sykes,
expiring on April 1 1988 — This notice took no account of the severance of the
reversion, being expressed in a way which included all the lands which were
subject to the tenancy before the severance — It should be mentioned that
although the tenants had served a notice requiring arbitration in regard to the
Case E notice within the time-limit laid down by article 9 of the Agricultural
Holdings (Arbitration on Notices) Order 1987, they failed to follow this up by
proceeding to the appointment of an arbitrator within the time prescribed by
article 10 — The result was to deprive the tenants of the right to contest the
reasons stated in the notice to quit — It did not, however, affect the question
of the possible invalidity of the notice to quit because of the severance of the
reversion
on March 5 1988 and the landlord’s solicitors duly served a Case G notice to
quit on all concerned — This notice, unlike the Case E notice previously
served, took account of the severance of the reversion and was expressed so as
to exclude the strip of land which had been transferred — No application for
succession to the tenancy of Mr Sykes had been made by any family claimant
within three months of his death as provided by section 39 of the 1986 Act —
The Case G notice would thus take effect on April 1 1989, assuming that
the Case E notice had not already terminated the tenancy on April 1 1988 —
Proceedings for possession of the holding, based on the Case G notice, were
issued by the landlord on June 1 1989 — Although the statement of claim
initially relied entirely on the Case G notice, it was amended to rely in the
alternative on the Case E notice when it was found that the defendant tenants
were relying on the Case E notice in their defence and counterclaim — The stage
was then set for a debate on both notices and for the revelation of the
strategy of the tenants in their, at first surprising, argument in favour of
the validity of the Case E notice
landlord’s case was short and simple — The Case E notice being in their
submission invalid, the tenancy vested in the executors of Mr Sykes and the
Case G notice, served properly in time, terminated that tenancy on April 1 1989
— The executor tenants’ case was less simple — They submitted that the Case E
notice was valid and terminated the tenancy on April 1 1988 — The tenants,
however, remained in possession and the inference to be drawn was that they did
so under an implied agreement with the landlord for a new tenancy — Even if
they were in possession only under a licence (unless purely gratuitous), the
effect of section 2 of the 1986 Act was to convert it into a fully protected
agricultural tenancy from year to year — Unfortunately for this line of
argument, the judge decided that the Case E notice had been invalid — The
landlord had been entitled to serve such a notice only in respect of the land
which remained in her ownership after the severance of the reversion — The
notice actually served did not make it clear that the strip of land transferred
out of her ownership had been excluded — The notice was at least ambiguous and
uncertain — After considering the wording used, the submissions of counsel and
a number of authorities, the judge held that the notice did not comply with the
vital requirement of certainty — A reasonable tenant would be confused or left
in doubt about it
was that, the Case E notice having been invalid, the landlord’s Case G notice
had been effective to terminate the tenancy — This was enough to decide the
case but, in deference to the argument on behalf of the tenants, the judge
expressed his view on what the position would have been if the tenancy had been
terminated by the Case E notice — After considering a number of authorities and
referring to the question of subjective and objective indications of intention,
he concluded that he would have found the evidence in support of the creation
of a new tenancy after April 1 1988 unconvincing
defendants were ordered to give up possession and their counterclaim for a
declaration that they held a protected agricultural tenancy was dismissed
The following
cases are referred to in this report.
Cardiothoracic
Institute v Shrewdcrest Ltd [1986] 1 WLR
368; [1986] 2 EGLR 57; (1986) 279 EG 69
Carradine
Properties Ltd v Aslam [1976] 1 WLR 442;
[1976] 1 All ER 573; (1975) 32 P&CR 12
Cawley v Pratt [1988] 2 EGLR 6; [1988] 33 EG 54, CA
Clarke v Grant [1950] 1 KB 104; [1949] 1 All ER 768, CA
Doe d
Cheny v Batten (1775) 1 Cowp 243
Doe d
Lord v Crago (1848) 6 CB 90; 17 LJCP 263; 12
Jur 705
Doe d
Williams v Smith (1836) 5 Ad & El 350
Frankland v Capstick [1959] 1 All ER 209; [1959] 1 WLR 204, CA
Hankey v Clavering [1942] 2 KB 326; [1942] 2 All ER 311, CA
Herongrove
Ltd v Wates City of London Properties plc
[1988] 1 EGLR 82; [1988] 24 EG 108
Javad v Aqil [1990] 2 EGLR 82; [1990] 41 EG 61
Legal
& General Assurance Society v General Metal
Agencies (1969) 20 P&CR 953
Longrigg,
Burrough & Trounson v Smith [1979] EGD
472; (1979) 251 EG 847, [1979] 2 EGLR 42, CA
Maconochie
Brothers v Brand [1946] 2 All ER 778
Marcroft
Wagons Ltd v Smith [1951] 2 KB 496; [1951] 2
All ER 271
Mountford v Hodkinson [1956] 1 WLR 422; [1956] 2 All ER 17, CA
Sector
Properties Ltd v Meah [1974] EGD 329; (1973)
229 EG 1097
Wride v Dyer [1900] 1 QB 23
This was an
action by Mrs Edna Lydia Land, the landlord, claiming possession of four farms
in Wyverstone, Stowmarket, Suffolk, from the defendants, Jasminia Felicia Sykes
and Wallace John Sykes, the executors of Kenneth William Sykes, who had been
the tenant of these farms. There was a counterclaim by the defendants for a
declaration that they held a protected agricultural tenancy.
Jonathan Brock
(instructed by Burges Salmon, of Bristol) appeared on behalf of the plaintiff;
Paul Morgan (instructed by Reynolds Porter Chamberlain) represented the
defendants.
Giving
judgment, MR TIMOTHY LLOYD QC said: I have before me an action in which
Mrs Edna Lydia Land claims possession of certain agricultural land at
Wyverstone, Stowmarket, Suffolk, from Jasminia Felicia Sykes and Wallace John
Sykes, who are the executors of, and respectively the widow and son of, the
late Kenneth William Sykes. To that action there is a counterclaim by the
defendants in which they claim a declaration that they are tenants of the land
in question with the protection of the Agricultural Holdings Act 1986.
On December 17
1985 Mrs Land granted to the late Mr Sykes an agricultural tenancy of ‘all
those farms, farmhouse buildings and land containing 291.24 acres or
thereabouts situate in the parish of Wyverstone in the County of Suffolk and
known as Grange Farm aforesaid Sudbourne Farm, Plough Farm, Crooksells Hall
Farm and adjoining land’. The tenancy ran for one year from April 1 1985 and
thereafter from year to year until determined at the end of the second or some
subsequent year by notice in writing. That lease, however, was by no means the
beginning of the relationship between Mrs Land and the late Mr Sykes.
Previously Mrs Land and the late Mr Sykes had been in partnership, farming the
land in question and indeed other land. The partnership, however, was brought
to an end by Mrs Land, and she sought at that stage to obtain possession of the
agricultural land from Mr Sykes. He did not accept her entitlement to do that
and proceedings in the High Court followed. These came to trial before the late
Judge Finlay QC, whose decision in favour of Mr Sykes was affirmed by the Court
of Appeal: see (1984) 271 EG 1264, [1984] 2 EGLR 8.
The grant of
the lease dated December 17 1985 was, I was told by counsel, part of the
working out of the consequences of the order made in those proceedings. Under
that lease the late Mr Sykes was tenant of the new holding, of a somewhat
reduced area compared to the previous holding, under a tenancy which could not
be determined before April 1 1987 and which, in relation to any attempt by Mrs
Land to determine it, enjoyed the significant protection afforded by the
agricultural holdings legislation. The year of the term was to run from April 1
in every year and the initial rent was the yearly amount of £12,900, subject to
increase in accordance with the provisions of the relevant legislation, and
payable in arrear by equal half-yearly payments on October 11 and April 6 in
each year. The lack of coincidence between the rent payments days and the
periods to which each year of the term ran gives rise to a minor point in the
case. I should say at once that, in my view, the position under that tenancy
was that on each payment day, that is to say October 11 and April 6, there was
payable by the tenant the sum of £6,450 but that those instalments of rent were
payable in respect of the period, not up to the payment day, but up to October
1 and April 1 respectively. Thus the effect of using those particular payment
days was to give the tenant a few days’ grace after the end of the relevant
half year in which to pay the relevant instalment of rent. No other point
arises on the terms of the tenancy, which are in fairly standard modern form of
an agricultural tenancy.
On April 4
1986 Mrs Land conveyed by way of gift to her grandson, a Mr G H Warner, in
contemplation and consideration of his marriage, a small plot of land. I am
told this was envisaged as a building plot and that it had formerly formed part
of the holding farmed by the partnership, but it was not included in the 1985
tenancy. Six months later, on October 24 1986, Mrs Land executed a further deed
of gift in favour of Mr Warner in relation to a narrow strip of land adjoining
the plot which she had conveyed by the previous deed. This strip was conveyed
expressly subject to the lease in favour of the late Mr Sykes but without any
part of the rent due under the lease being apportioned to the land conveyed to
Mr Warner. The effect of this second deed was that the reversion to the late Mr
Sykes’ lease was severed. By virtue of section 140 of the Law of Property Act
1925 each of the reversioners was entitled thereafter to exercise the rights of
a landlord in respect of that part of the land
take advantage of such planning or development potential as the plot may have
had but on December 15 1986 conveyed the plot together with the narrow strip to
a Mr and Mrs Chittenden. I was told that, in connection with the transfer of
the land to them, the late Mr Sykes and his family became aware of the fact not
only that the building plot had been conveyed but that there had also been
conveyed the small strip of land subject to the tenancy.
In September
1986, solicitors then acting for Mrs Land, Rustons & Lloyds, told the
solicitors then acting for the late Mr Sykes, Bankes Ashton & Co, that
their client Mr Sykes had cut down two substantial trees within the holding and
complained of this conduct as contrary to the terms of the lease. Messrs Bankes
Ashton denied that there was any breach of the terms of the lease.
In March 1987
Mrs Land instructed new solicitors, Farrer & Co, both in relation to the
issues which remained outstanding from the termination of the former
partnership, and in relation to the tenancy. Mr Jessel, a partner in that firm,
who had conduct of the matter on her behalf and who gave evidence at the trial,
told me frankly that his instructions were to secure vacant possession of the
holding if it could lawfully be done. He is a very experienced solicitor,
particularly with reference to agricultural property matters.
The first step
that he took in relation to the tenancy was to serve a notice to quit on the
late Mr Sykes to expire on April 1 1988, relying, by reference on the cutting
down of the two trees, on the ground set out in Case E of Part I of Schedule 3
to the Agricultural Holdings Act 1986. He served the notice, which I shall
refer to as the Case E notice, under cover of a letter of March 17 1987. The
first of the issues in the case turns on the Case E notice and arises from the
fact that it took no account of the severance of the reversion that had by then
taken place. This was known to both landlord and tenant, but not to Mr Jessel.
The notice is
headed ‘Re The Holding known as Grange Farm, Sudbourne Farm, Plough Farm,
Crooksells Hall Farm and all land held therewith’. It is addressed to Mr Sykes
and the crucial words in the operative part of the notice are:
All that
holding and premises known as Grange Farm, Sudbourne Farm, Plough Farm, Crooksells
Hall Farm and all land held therewith and situate at Wyverstone, Stowmarket
aforesaid which you hold of [Mrs Land] as tenant thereof
No point is
now taken on the validity or otherwise of the landlord’s reliance on the ground
in Case E. The point is taken, however, that the notice was invalid because it
was ambiguous, in that did not make it clear to the tenant whether he was being
required to give up possession of the whole holding including the narrow strip
or of only that part of the holding which he held from Mrs Land, that is to say
minus the narrow strip. One might expect that a point of that kind would be
taken on behalf of the tenant, and indeed in correspondence so it was. However,
a curious feature of this case, for reasons which will appear, is that it is
now the tenant who asserts that that notice was valid and the landlord that the
notice was invalid. I shall return to the question of its validity or otherwise
when I have dealt further with the facts.
The Case E
notice was sent both to the late Mr Sykes and to his solicitors Bankes Ashton.
On April 8 1987 the latter replied to Farrer & Co confirming that the
notices had been received and saying: ‘We understand that your client has
disposed of part of the freehold reversion and if that be the case we believe
the notices as served are invalid. We invite your comments on this point.’ That letter was sent by fax to Farrers on
April 8 and on April 10 Mr Jessel replied confirming receipt of the letter and
saying that he was investigating the points raised and hoped to come back
shortly on them. At about the same time the half-year’s rent due on April 6
1987 was paid.
The next thing
that happened was that on April 15 1987 Bankes Ashton sent both to Mrs Land and
to Farrers a notice under the 1986 Act stating that Mr Sykes wished to contest
certain matters arising out of the reliance on Case E and that he required all
questions so arising to be determined by arbitration. Receipt of the notice was
acknowledged by Farrers. On June 4 Mr Jessel wrote to Bankes Ashton saying: ‘We
have so far been corresponding on certain matters relating to the existing
tenancy and we appreciate that you are waiting to hear from us about the
possible severance of the reversion and we are still investigating that.’ He went on, in a longish letter, to deal with
a large number of points arising from the unresolved affairs of the former
partnership between the parties. On July 6 1987 Mr Jessel wrote again to Bankes
Ashton, this time replying substantively on the question of the severance. He
debated whether the little strip was actually included in the tenancy but said
that even if it was he did not think that the disposal invalidated the notice
and that he would be glad to know their reasons in law for taking the view that
the notices were invalid. He stated that in his view the notice was valid. That
challenge was never effectively taken up by Bankes Ashton.
Furthermore,
although in April they had served a notice requiring disputes out of the Case E
notice to be referred to arbitration, they failed to refer the matter to
arbitration within the mandatory three-month time-limit imposed by the
Agricultural Holdings Act, and it is not in dispute that the effect of that
omission is that the notice of April 15 is itself ineffective and that the
reliance on Case E became incontestable. On the other hand it is also not in
dispute that that step and that omission had no relevance to any invalidity of
the notice depending on ambiguity or inconsistency resulting from the
severance. In October 1987 Mr Jessel served a notice to pay rent due and in
November the rent was paid within the two-month time-limit.
On March 5
1988 Mr Sykes died. Mrs Land came to hear of that shortly afterwards and
thereby the news came to Mr Jessel. Mr Jessel realised that this gave a further
opportunity to seek to obtain possession of the holding, by serving a notice to
quit relying on Case G in Part I of Schedule 3 to the 1986 Act. Accordingly, on
March 21 1988 he served such a notice. The notice was sent to Mrs Sykes, the
widow, to Mr Sykes, the son, by name to the personal representatives, to the
solicitors, Bankes Ashton, and to the treasury solicitor acting for the
president of the Family Division, since Mr Jessel did not know what the
position was or would be as regards representation to the late Mr Sykes’
estate. No point is taken on the service of the notice.
Mr Jessel was
of course by then fully aware of the severance of the reversion and the notice
is drafted accordingly. It is headed ‘Re so much of the holding known as Grange
Farm, Sudbourne Farm, Plough Farm, Crooksells Hall Farm and land as is held
from Edna Lydia Land’. It is addressed to the personal representatives and to
the President and says in its substantive part: ‘Notice to quit . . . all the
holding and premises described above which was held of [Mrs Land] by the late
Kenneth William Sykes as tenant thereof until his death on or about March 5
1988 and now held by you as his personal representatives’; the notice was to
expire on April 1 1989.
In his letters
to Mrs Sykes, Mr Sykes and the personal representatives, Mr Jessel stated that
the notice was served without prejudice to the contention that the tenancy had
already been determined as a result of the Case E notice. The letter to the
solicitors enclosed copies of the letters to their clients, so they saw the
position in this respect as well. The statement that the notice was sent
without prejudice was not mentioned in the letter to the treasury solicitor. It
is not suggested that anything turns on that.
On April 1
1988 the Case E notice, if it was valid, expired. It would have been possible,
as Mr Morgan for the defendants has submitted to me, for Mr Jessel to start
proceedings there and then on behalf of Mrs Land in reliance on the Case E
notice, either using the procedure afforded by Ord 15 r 6A of the Rules of the
Supreme Court or simply joining Mrs Sykes and Mr Sykes and anyone else who
appeared to be in possession as defendants as being the occupiers. That,
however, was not the course that was taken, partly, as Mr Jessel told me in
evidence, for procedural reasons, namely that he preferred to wait until a
grant of probate had been taken out, so that he knew who the correct defendants
were, to be sued on behalf of the estate as the person in whom any tenancy had
been vested immediately before April 1 1988. Mr Jessel did not in fact start
proceedings until June 1989 following the grant of probate on April 27 1989.
Mr Jessel was,
however, faced with the fact that the rent which was unquestionably due on April
6 1988 in respect of the previous half year was not paid. On April 13 he wrote
a letter to Bankes Ashton saying:
We are
concerned to note the rent due at the end of the half year of the tenancy which
has just expired has not been paid. Our client does not wish unnecessarily to
serve a further notice to pay but we should be glad if you could arrange for
the executors to pay the rent to your firm as usual as soon as possible.
That produced
no response and so, on April 26 he sent, addressed to the personal
representatives of the late Mr Sykes and with a copy to Bankes Ashton and to
the Treasury Solicitor, a notice to pay rent in the statutory form which is
required if it is to be relied on later in support of a notice to quit relying
on Case D. That notice is in the familiar statutory form headed ‘Agricultural
Holdings Act 1986
the Holding’ by name, addressed to the personal representatives and to the
president, and it contains in a prominent box warnings such as ‘If you want
your tenancy to continue you must act quickly’. Just within the two-month
period, on June 27, the rent was paid. The rent was acknowledged by Mr Jessel
by a letter of July 4 1988 in which he said: ‘Thank you for your letter of 27th
June enclosing cheque for £6,450 representing the rent for the half year ending
on 31st March 1988.’ As is clear from
what I have already said, his view as to the period in respect of which the
rent was due coincides with my view of the true interpretation of the lease.
In the
meantime Mr Jessel set about trying to discover from Bankes Ashton, who were
the personal representatives of the late Mr Sykes, so that proceedings could be
commenced. Thus on June 1 1988 he spoke to Mr Gair of that firm and said that
he was now about to issue proceedings. Mr Gair told him that he had authority
to accept service of any proceedings, that he did not have the names of the
personal representatives, but that he would find them out from his probate
colleague. Mr Jessel frankly said that he could not recall whether he said
expressly that the proceedings which he was about to issue were proceedings for
possession of the holding, and his attendance note simply refers to ‘the
proceedings’. Mr Morgan pointed out that there might also have been proceedings
between the parties to do with the partnership. Mr Jessel was certain that what
he, in fact, had in mind was proceedings for possession, particularly because
he had then just received a draft of such proceedings settled by counsel, but
he could not recall whether in talking to Mr Gair he had actually said that the
proceedings would be for possession. I find that Mr Gair knew that what was
contemplated were proceedings for possession. I note that on September 9 1987
Mr Jessel had written to Mr Gair on the unresolved matters arising from the
termination of the partnership saying among other things: ‘We have therefore
been instructed that if there is further delay our client will regrettably have
to return to the Courts for an account as to the sums due to her as a result of
the termination of the [partnership].’
While the partnership matters needed to be resolved, there was not the
same reason for urgency on that account as there was in relation to possession
proceedings. Moreover, so far as I am aware, nothing had changed on the
question of the partnership to render proceedings more necessary or appropriate
by the summer of 1988, whereas in relation to the tenancy the Case E notice had
expired, giving the landlord for the first time the basis for a claim to
possession. In the context of the correspondence and communications that I have
seen it seems to me clear that from June 1988 onwards both sides knew that the
proceedings that were being talked about were proceedings for possession.
Some
consideration was given within Mr Jessel’s firm and indeed in discussion
between a Miss Brookes of Farrers (in the litigation department) and Mr Gair on
the telephone, for example on June 21 1988, as to the possibility of taking
proceedings against the estate in reliance on Ord 15, r 6A. For whatever
reason, that possibility was not pursued. It took a significant time before the
executors were even identified — it seems to have taken some time to find the
late Mr Sykes’ last will. Mr Jessel was not in fact told who the executors were
until a letter of August 25 1988 written by new solicitors, Cunningham John,
instructed to act for the Sykes family.
In the
meantime, however, a further significant time-limit had elapsed. Under the
Agricultural Holdings Act 1986, where an agricultural tenant has died, a member
of his family may, in certain circumstances, apply to the agricultural lands
tribunal for the right to succeed to his tenancy. Such an application must be
made within three months of the death. If such an application is made it may
provide a bar to a notice relying on Case G. No such application was made in
the present case on behalf of any member of the Sykes family within the three
months following the death of Mr Sykes. Accordingly, by the middle of June 1988
Mr Jessel knew that his Case G notice would take effect on April 1 1989
(assuming that the Case E notice had not already determined the tenancy) and
that there would be no defence to a claim for possession thereafter.
It was no
secret at the trial that following the involvement of Cunningham John there
were negotiations between the parties on a without prejudice basis for a
resolution of issues between the parties. It was also no secret that there were
or might be claims on behalf of the Sykes family against Bankes Ashton and
that, for that reason, other solicitors, Reynolds Porter Chamberlain, became
involved in the matter, on the instructions of Bankes Ashton’s professional
indemnity insurers.
The next event
in the history is that on January 23 1989 Cunningham John wrote to Mr Jessel
the following letter:
Dear Sirs,
Kenneth
William Sykes Deceased,
The personal
representatives of the above-named deceased have asked us to forward to you the
enclosed cheque for £6,450 being the rent due from 6th April to 11th October
1988.
That appears
to have come out of the blue and was one of relatively few occasions on which
rent was paid without prompting. Of course it was significantly late, but it
was nevertheless tendered. Mr Jessel told me that, while as he understood it
there was no love lost at all between the Land family and the Sykes family, he
gathered that Mr Sykes, the second defendant in the proceedings, felt less
antagonism for the Land family than his late father had done and that, perhaps
for that reason and also because as a matter of the effective working
relationship between his firm and Cunningham John there was an express attempt
on the part of both of them to reduce the antagonism, this payment might have
been tendered as a relatively friendly gesture. At all events the cheque was
tendered, but it put Mr Jessel in a quandary which was reflected in his letter
in reply of January 25. He thanked Cunningham John for the letter enclosing the
cheque and said: ‘We regret that so long as the notice to quit which was served
in 1987 and expired in 1988 remains outstanding our clients cannot accept any
rent for this holding. We shall therefore hold your cheque unpresented.’ Now, of course, if the Case E notice which
purportedly expired in 1988 was invalid, as Bankes Ashton had claimed, then
rent was undoubtedly due and there need have been no inhibition on Mr Jessel’s
accepting the cheque. If, however, reliance was to be placed on the Case E
notice (and he was not minded to abandon that possibility) it would be
inconsistent with that to accept the cheque tendered as rent. Cunningham John
on February 2 acknowledged and noted his letter of January 25.
The next
significant event occurred on April 10 1989. What had happened was that there
was a tragedy in the Land family which gave rise to an acute need for further
cash. Mrs Warner, Mrs Land’s daughter who acted for her throughout pursuant to
powers of attorney, told Mr Jessel of this and, I assume, asked him what he
could do to help and, in particular, if there was any way in which the family
could use the money represented by the outstanding cheque. He would clearly
have preferred not to present the cheque and to have continued to take the
cautious line that he had taken in January. However, in the circumstances what
he did was to speak both to Mr Connolly of Cunningham John and to a Mr Hadfield
of Reynolds Porter Chamberlain in an endeavour to obtain their agreement that
the cheque could be presented on a neutral basis. Although clearly credit would
be given for the payment, what he hoped to secure, on compassionate grounds,
was that the payment itself would be entirely neutral and without legal
consequences. As it happens he spoke first to Mr Hadfield, having been unable
to get hold of Mr Connolly when he first tried. He asked Mr Hadfield to take
instructions on the point, but Mr Hadfield said that his instructions were such
that he would deal with the point without reference to his clients. Mr Hadfield
told him, first, that he was unsure whether he was in a position to agree,
since he was acting not for the tenants but only for insurers, but he also said
that even if he had relevant authority it was not an undertaking that he felt
he could give. Effectively he said that Mr Jessel must take his own course. Mr
Jessel then spoke to Mr Connolly, explained the upshot of his discussion with
Mr Hadfield and made the same request. Not surprisingly, Mr Connolly said that
in the circumstances Mr Jessel could hardly expect that he would agree to the
proposition given that Reynolds Porter had not. Nevertheless Mr Jessel, despite
having failed to obtain the agreement that he had hoped for, proceeded to
present the cheque and on April 11 wrote to Mr Connolly to say that he had done
so.
Now, between
the tender of the cheque in January and its presentation in April, certain
correspondence had passed between Mr Jessel and Mr Connolly on which some
reliance is placed. Apart from minor matters such as the unconditional
surrender of an empty barn in Grange Farm, that correspondence is largely
concerned on Mr Connolly’s part with making Mr Jessel aware of the attempts
that he was making to ensure that Reynolds Porter Chamberlain took up a
definitive position in the matter. In the first of the relevant letters on
February 10 1989, after referring to Reynolds Porter Chamberlain
Mr Hadfield
does not rule out the possibility that the insurers will instruct us to
challenge any possession proceedings commenced by your client on the basis that
the Case D Notice of 6th April 1988
I interpose
that the reference must be to the notice to pay of April 26 1988
has the
effect of creating a new tenancy from year to year notwithstanding the admitted
validity of the notice to quit dated 17th March 1987 —
The latter is,
of course, the Case E notice.
On March 10 Mr
Connolly wrote saying among other things that he was instructed to accept
service of any process but asking that Mr Jessel would not commence possession
proceedings without prior notice to him. Mr Jessel was content to agree to
that. On April 7 1989 there was a telephone conversation between Mr Connolly
and Mr Jessel in the course of which Mr Jessel records in his attendance note
that he said: ‘Now that the anniversary had passed’, by which he was referring
to the expiry of the Case G notice on April 1 1989, ‘we needed to know the
position’. It is I think clear, as Mr Brock submitted, that throughout that
period and certainly on April 10 1989 those acting for the tenants, and no
doubt the tenants themselves, knew that the landlords had possession
proceedings either prepared or contemplated as imminent, that they were
pressing for the information which they saw as necessary for the institution of
those proceedings and, after April 1 1989, they were all the more likely to
take those proceedings, having by then an additional string to their bow in the
form of the Case G notice. Indeed, in due course on May 2 1989, Mr Connolly
wrote to Mr Jessel enclosing a copy of the probate which had been issued on
April 27 and saying: ‘May we take it that your clients will now be commencing
possession proceedings.’
The
proceedings followed in due course being issued on June 1 1989. Those
proceedings, it is right to record, rely in the statement of claim solely on
the Case G notice. They do not, as they could no doubt have done, rely in the
alternative on the Case E notice and, if that be found invalid, then on the
Case G notice. Reliance is, however, put in the alternative on the Case E
notice in the reply and defence to counterclaim, the defendants having by their
defence and counterclaim asserted the validity of the Case E notice and thereby
for the first time, as Mr Jessel said, enabled him to realise the significance
of the observation in the letter of February 10 1989 about the ‘admitted
validity’ of the Case E notice. There had been no admission of the validity of
that notice prior to the service of the defence and counterclaim. Against that
background the landlord’s case is short and simple. It is said that the tenancy
vested in the executors on the death of Mr Sykes, that the Case G notice was
duly served, that it expired on April 1 1989 and thereby the executors’ right
to remain in possession was brought to an end.
Mr Morgan, for
the tenants, says that the position is far from being so simple. First, he
says, the Case E notice was valid and terminated the tenancy created by the
agreement of December 17 1985 on April 1 1988. He goes on to say that the
executors remained in possession of the farm after April 1 1988, as undoubtedly
they did, and that, unless their status at that time was that of trespassers,
they must have been in possession on one basis or another which would result in
their now having the benefit of a new tenancy quite distinct from that vested
in the late Mr Sykes. Such a tenancy would have the protection of the Agricultural
Holdings Act 1986, so that it could not be terminated except in accordance with
the provisions of that Act. He points out that if they were tenants of any kind
for an interest less than from year to year, or licensees under anything other
than a purely gratuitous licence, the effect of section 2 of the 1986 Act is to
convert whatever interest they would have had contractually and at common law
into a tenancy from year to year with the protection of the 1986 Act.
Accordingly, he says the crucial question is to examine the status of the
executors as between themselves and Mrs Land in relation to the holding
following April 1 1988.
Mr Brock, for
Mrs Land, says that the Case E notice is invalid, but even if it is valid, he
says the executors can only be entitled to possession if there was created, by
agreement between Mrs Land and them, after April 1 1988, a new separate
consensual interest in the land by way of a tenancy (on the footing that there
is really no case for anything other than a tenancy) and he says that the
necessary basis for a creation of a tenancy is simply not made out on the facts
of the present case.
I must
consider first the issue as to the validity or otherwise of the Case E notice.
I have already quoted the material parts of the Case E notice and referred to
the circumstances of the severance of the reversion which is relied on in
relation to the contention that the notice was invalid. The effect of that
severance was that Mrs Land was entitled to serve such a notice only in relation
to that part of the land comprised in the 1985 tenancy agreement the reversion
to which was vested in her. She was not entitled to serve such a notice in
relation to the narrow strip that had been conveyed away, at all events unless
she did so on behalf of and with the authority of the then owners of that
strip, Mr and Mrs Chittenden. It is not suggested that she had that authority
or that she held herself out, or was held out, as having any such authority.
It is well
known that the severance of the reversion to a single tenancy often gives rise
to problems. It is also well known that problems have often arisen, either at
common law or in the context of one or other of the various legislative regimes
affecting the relationship of landlord and tenant, from unclear, ambiguous or
mistaken notices served by one party on the other. So far as I am aware, there
is no reported case in which these two types of problems have coincided. There
were cited to me various cases concerning problems arising on notices, some of
which were concerned with errors as regards the date for which notice was given
and others with problems as regards the extent of the premises in relation to
which the notice was given. The latter, however, have always given rise to a
contention that the notice related to less land than was comprised in the
tenancy. In this case, by contrast, the suggestion is that the notice relates
to more land than that in relation to which the landlord was entitled to give a
notice.
It is a basic
principle that a notice to quit must be clear and certain, so as to bind the
party who gives it and to enable the party to whom it is given to act upon it
at the time when it is given. It may not be ambiguous. On the other hand the
court will not strain to find doubts, difficulties or ambiguities but will
construe the notice as a whole in the light of the relevant surrounding
circumstances and by reference to its effect on a reasonable tenant reading it.
There was cited to me Goulding J’s decision in Carradine Properties Ltd
v Aslam [1976] 1 WLR 442 where at p 444 the judge referred to a number
of early authorities which he said showed a general principle that the court
allows common sense to enter into the interpretation of an inaccurate notice to
quit. He relied on passages such as the following:
It is not
required that a notice should be worded with the accuracy of a plea. This is
not drawn with strict precision; but I think it is sufficiently clear.
See Doe d
Williams v Smith (1836) 5 Ad & El 350.
I agree,
however, with the rule laid down . . . that we must look at the intention of
the landlord, and that when language is used which leaves the effect of the
notice open to doubt, the rule of construction is to make it sensible and not
insensible.
See Wride
v Dyer [1900] 1 QB 23, at p 25.
But what is
the rule of construction of such documents as this? . . . The court . . . will give an
interpretation to the notice consistent with the intention of the party serving
it, if clear.
Ibid at p 26.
The learned
judge summarised the position in the following words:
I would put
the test generally applicable as being this: Is the notice quite clear to a
reasonable tenant reading it? Is it
plain that he cannot be misled by it?
That was a
case in which it was possible for the court to say not only that it was obvious
that there was a mistake but also that it would be obvious to a reasonable
tenant what the correct text should have been. That is because the notice was
served in 1974 and it was expressed to be served in relation to a date in 1973
and the error in the circumstances was clearly a slip for 1975. Thus at p 446D
the learned judge said:
If that is
right, I think a benevolent approach could be applied in this case, as in the Duke
of Bedford’s case, (1796) 7 Term Rep 63, because reasonably read by a
reasonable tenant the mistake is obvious on the face of it, and there is no
doubt what the mistake was.
As examples of
the application of this principle there were cited to me two more recent cases.
The first is Cawley v Pratt [1988] 2 EGLR 6*. This was an
agricultural case in which a notice to quit was headed ‘Re the holding known as
The Old Cow Shed and Buildings at the rear of the Wentloog Castle, Castleton,
Newport, Gwent’ and it was suggested that that was invalid because it referred
to only part of the
notice in relation to part only. That argument was rejected by the county court
judge and by the Court of Appeal. Stocker LJ, at p 8M, said:
It seems to
me that any reasonable tenant receiving the notice would see that he had to
give up possession of ‘all that holding’ and ‘holding’, though the learned
judge did not cite the section, is that which I have already cited as defined
in section 1(1) of the Act of 1986.
*Editor’s
note: Also reported at [1988] 33 EG 54, [1988] 2 EGLR 6.
Accordingly
the notice was held to be valid.
The second
case was Herongrove Ltd v Wates City of London Properties plc [1988]
1 EGLR 82* which was concerned with a notice under section 25 of the Landlord
and Tenant Act 1954. In that case the premises demised consisted of the ninth
floor of a building in the City of London and two sets of storage premises and
car-parking spaces physically substantially removed in distance from the office
premises on the ninth floor. The notice, however, stated that it related to
ninth-floor premises at the relevant address. Again this was a case in which it
was not open to the landlord as a matter of law to serve notice in relation to
only part of the premises contained in the demise. Harman J, applying the test
enunciated by Goulding J, asked himself whether a reasonable tenant in the
circumstances of the actual tenant, in his own premises, knowing what he has
and with access to his own lease, being a businessman or business company, and
receiving a notice which says that it relates to ninth-floor premises at the
relevant address, would know what was meant by it. Would it be quite clear to
such a person that the notice includes not only the ninth floor but also the
other parts of the demised premises? He
answered that question as follows, at p 83:
To my mind, it
is not [clear]. To my mind, any reasonable tenant knowing his position and
knowing that he had other premises [elsewhere] in the same building, might well
say, ‘I wonder if they are meaning to take back these offices but not to take
back the car-parking and the storage spaces. I know that there is a great deal
of talk about redevelopment of office premises. Perhaps all they want is to
redevelop this floor as a whole of which I have only a part, and that they are
going perhaps to offer me some other premises in the building and allow me to
keep my car-parking spaces.
Of course
there is no evidence, and there could not be any evidence, that the tenant
actually thought that. There is in fact a simple, straightforward counternotice
by the tenant . . . Such being the facts, it is pure speculation as to what
result this notice had upon the tenant, but I have never had any doubt since I
first looked at it that in fact this notice does not tell a reasonable tenant,
knowing the position on the ground, that he is expected to give up the whole of
his premises. It might leave him in genuine doubt as to whether he is to give
up part, that is the ninth floor, or not, and a notice that has an ambiguity of
that sort about it seems to me to be fatally flawed.
*Editor’s
note: Also reported at [1988] 24 EG 108, [1988] 1 EGLR 82.
It seems to me
that that case is of some assistance, bearing in mind that if the tenant had
had access to legal advice he would have been told that the landlord was not in
fact entitled to serve the notice except in relation to the whole of the
demised premises, just as here the tenant would have been told that Mrs Land
could serve a notice only in relation to the holding less the strip. There was
also cited to me Frankland v Capstick [1959] 1 WLR 204, which
contains useful citations of two earlier cases, Mountford v Hodkinson
[1956] 1 WLR 422 and Hankey v Clavering [1942] 2 All ER 311.
Mr Morgan points out that the judgments of the Court of Appeal in Frankland
v Capstick support the proposition that the court does not allow a
notice to be invalidated on merely technical points if the meaning is so plain
that it cannot be misunderstood by the reasonable recipient. There was some
debate as to whether the case supports the proposition that one may have regard
to what the parties in fact knew about the relevant facts and circumstances. In
my judgment, nothing turns on that question in this case. It is clear, for
example from Mountford v Hodkinson, that what matters is not the
effect of the notice on the actual recipient but its effect on a reasonable
recipient: hence Harman J’s observation ‘there could not be evidence’ as to
what the tenant actually thought. It is, however, also clear that one must have
regard to the actual facts and circumstances, including, here, the severance of
the reversion. Both landlord and tenant knew of the severance, and it seems to
me, therefore, that it matters not whether one takes an objective test, by
reference to the actual facts, whether known, or takes the reasonable recipient
but endows him with the actual recipient’s actual knowledge.
Mr Brock,
arguing for ambiguity such as to mislead, confuse and leave in doubt a
reasonable recipient tenant, says that there is a contradiction between that
part of the notice which says that it relates to ‘the holding known as Grange
Farm etc and all land held therewith’ on the one hand and that part of it which
says that it relates to the land ‘which the tenant holds of Mrs Land as
tenant’. He says that ‘the holding’ is a well-known term in agricultural law
and means, as it is defined by the statute, the whole of the land comprised in
the contract of tenancy. Therefore, on the one hand, the heading to the notice
and the first part of the words defining the subject-matter of the notice in
its operative part refer to the land including the narrow strip. On the other
hand, he says that part of the notice which says ‘the land which you hold of
her as tenant’ refers to the severed reversion retained by Mrs Land and
therefore excludes the narrow strip.
Mr Morgan by
contrast, arguing for validity, says that that approach is not consistent with
the attitude taken by the courts. He says that the notice must be taken as a
whole, and construed together and in favour of consistency rather than of
inconsistency. He points out particularly, in relation to the operative part of
the notice, that the phrase ‘All that holding and premises known as Grange Farm
etc and all land held therewith and situate at Wyverstone etc which you hold of
her as tenant thereof’ must be taken as a whole, and that the words ‘all that
holding and premises’ belong as a matter of grammar with the words ‘which you
hold of her as tenant’. He therefore says that on its true construction the
notice relates only to Mrs Land’s reversion and therefore relates only to that part
of the land in relation to which she was entitled to give a notice.
Alternatively, he says that even if it is expressed to relate to the whole
there is no reason why it should not be given effect in relation to the part.
In my
judgment, while I can see the force of Mr Morgan’s contentions as a matter of
the true construction of the notice, it is Mr Morgan who is using the wrong
test. The question is not what construction is given to the notice by a judge
after argument at a trial. The question is, as enunciated by Goulding J: is the
notice quite clear to a reasonable tenant reading it? Is it plain that he cannot be misled by
it? In my view, a reasonable tenant,
following the severance, would be confused or misled or left in doubt by this
notice. He would see an apparent contradiction between the heading and the
first part of the operative phrase, which on its face relates to the whole of
the land in his contract of tenancy, and the words at the end which on their
face relate to the whole minus the narrow strip. It seems to me that it is
nothing to the point that the reasonable tenant might be aware that it was only
in relation to the part that Mrs Land could give a valid notice unless, which
he had no reason to suppose, she was doing so with the authority of the owners
of the narrow strip, and would, therefore, conclude that that was all that was
comprised in the notice. That could have been an answer to the argument for the
invalidity of the notice in Herongrove v Wates (above). Mr
Morgan’s alternative approach, that though it is expressed to relate to the
whole it could be given effect as regards part only, seems to me to put the
recipient of the notice in just as much of a state of doubt and confusion.
Accordingly, I
hold that the Case E notice was invalid, as not complying with the requirements
of certainty which the law imposes as a condition of the validity of a notice
to quit. It follows that the tenancy created by the 1985 tenancy agreement did
not expire on April 1 1988 and that it was eventually brought to an end by the
Case G notice on April 1 1989. It is common ground that on that footing the
plaintiff is entitled to possession.
That being so,
it is not strictly necessary to consider the other matters, which were argued
at length before me, as to the effect of what happened after April 1 1988 if
the tenancy had been brought to an end by virtue of the Case E notice. In
deference to the arguments of counsel, which on this as on all aspects of the
case were admirably clear, cogent and economical, and having regard to the
importance of the case to the parties I propose to address those issues
briefly.
It is clear,
as Mr Morgan submits, that if the defendants remained in possession after April
1 1988, the tenancy having expired under the Case E notice, as anything other
than trespassers or on a purely gratuitous basis, they must have acquired an
interest, whether licence or tenancy, which, if it was not itself a tenancy
from year to year, would be converted into such a tenancy by section 2 of the
Agricultural Holdings Act 1986. It is, however, also clear that they can have
acquired only such an interest by agreement with Mrs Land, albeit possibly by
an agreement implied from the acts of the parties and the circumstances. It is
therefore necessary to consider what was said and done after April 1 1988 in
order to assess the defendants’ contention that a new agreement was reached.
As regards the
legal principles relevant on this point, there was little at issue between
counsel on this aspect of the case save on one point. It is common ground that
a new tenancy or other interest can arise only by virtue of an agreement. Mr
Morgan contended that, in line with the general principles as regards formation
of contracts, the acts and words of the parties have to be considered
objectively, and that evidence of their subjective intention is irrelevant and
inadmissible. For this reason, he said, he would not call any of those
concerned with the relevant dealings on the defendants’ part, and, though not
objecting to it being heard de bene esse, he argued that evidence from
Mr Jessel of his subjective intention, not communicated to the other side, was
inadmissible. He relied in particular on a recent, and not fully reported,
decision of the Court of Appeal in Javad v Aqil on May 15 1990,
reported in the New Law Journal on September 7 1990 at p 1232*.
*Editor’s
note: Now reported at [1990] 2 EGLR 82.
Mr Brock,
however, pointed to a line of cases concerned with the allegations of the
creation of a new tenancy. These have usually been concerned with the position
after the expiry of a previous tenancy, although it is agreed between counsel
that there should be no difference in principle between this situation and a
case, such as Javad v Aqil, where the court is concerned to
determine the legal position resulting from informal dealing in advance of a
contemplated, but never concluded, formal tenancy. In these cases the court has
repeatedly said that what matters is the real intention of the parties: the
earliest of these is Doe d Cheny v Batten (1775) 1 Cowp 243, in
which Lord Mansfield made this much quoted observation, at p 245:
The question
therefore is, quo animo the rent was received, and what the real
intention of both parties was?
In support of
this argument Mr Brock also relied on Maconochie Brothers Ltd v Brand
[1946] 2 All ER 778, Legal & General Assurance Society v General
Metal Agencies (1969) 20 P&CR 953, Sector Properties Ltd v Meah
(1973) 229 EG 1097, Longrigg, Burrough & Trounson v Smith
(1979) 251 EG 847, [1979] 2 EGLR 42 and Cardiothoracic Institute v Shrewdcrest
[1986] 1 WLR 368† . Mr Morgan filled out the citation of the authorities
relevant to this point with Doe d Lord v Crago (1848) 6 CB 90, Clarke
v Grant [1950] 1 KB 104, and Marcroft Wagons Ltd v Smith
[1951] 2 KB 496 as well as the very recent Court of Appeal case Javad v Aqil
mentioned above. It is fair to say that most of the cases can be explained
consistently with ordinary principles of the law of contract: either the
references to the intentions of the parties could be to those intentions
ascertained objectively, or, where a mistake on the part of one side is
involved and has been held relevant, its admission in evidence can be explained
as one which the other party caused or contributed to (as in Doe d Lord
v Crago), or one which the other party must have been aware of (as in Legal
& General v General Metal Agencies). But this does not account
for all the cases. In Clarke v Grant the landlord was allowed to
adduce evidence that rent had been accepted in a mistaken belief that it was
due in arrear for a period of the expired tenancy, although there was no
indication that the tenant knew of or had caused or contributed to that
mistake. Because of the mistake it was held that there was no new tenancy,
because the landlord had not, in fact, had the intention to create one. That
was a judgment of the Court of Appeal, as was Sector Properties Ltd v Meah
in which it was specifically argued for the tenant that only an objective test
could be used, but the Court of Appeal rejected this argument: see p 1103.
Consistent with those cases is an observation of Lord Scarman in the Court of
Appeal in Longrigg, Burrough & Trounson v Smith (1979)
251 EG 847 at p 849. In that case, after the expiry of a tenancy of business
premises, money described as rent was paid and accepted over a considerable
period, but a partner in the landlord firm said in evidence that he thought it
was being accepted as mesne profits and Lord Scarman said that that was
evidence to which the court ought to have regard. Mr Morgan suggested that, at
most, there is a special exception from the ordinary rules of contract law
allowing the admission of evidence of a unilateral mistake, but that evidence
of subjective intention may not be admitted more widely. That, however, would
not be consistent with Lord Scarman’s observation in Longrigg and, while
this area may require re-examination and rationalisation, it is not
appropriate, especially as it is not strictly necessary, for me to undertake
that task.
† Editor’s
note: Also reported at [1986] 2 EGLR 57.
The
defendants’ case for saying that a new interest was created is pleaded as
relying on two different matters: the service of the notice to pay rent on
April 26 1988 and the tender, and ultimately acceptance, of rent in 1989. I do
not see how the first of those can afford the basis for such a contention. The
rent demanded was due entirely in respect of a period during the already
expired tenancy, up to April 1 1988. Nothing therefore turns on the demand and
payment of the rent as such. The statutory notice is, of course, couched in
terms appropriate to a continuing tenancy, since the point of it is to lead, if
the notice is not complied with, to a further ground for obtaining possession.
Mr Morgan does not say that he can use this notice as part of a sequence of
offer and acceptance necessary to the creation of the contract, and I accept Mr
Brock’s contention that that is fatal to Mr Morgan’s submission. It was an
appropriate notice to serve, both because, in the past, service of such a
notice had often had to be resorted to in order to obtain payment, and because
the tenant had contended that the tenancy had not been brought to an end by the
Case E notice. Mr Morgan, in his submissions, relied on the landlord’s failure
to serve a notice under section 83 of the 1986 Act within two months after April
1 1988 as an indication that the landlord was treating the defendant as
lawfully entitled to possession. Such an omission, however, is entirely
equivocal.
The
substantial part of Mr Morgan’s case in this respect turns on the tender, by
the letter of January 23 1989, of £6,450, expressed to be rent for the (in my
view inappropriately calculated) period April 6 to October 11 1988 — after the
expiry of the Case E notice — and the presentation of the cheque on April 10 or
11 1989 in the circumstances which I have described. Mr Morgan says that that
sum was tendered as rent for that period, that its character as such could not
be altered without an agreement which was sought but not forthcoming, and that
it was accordingly accepted as rent, with the result that the defendants cannot
be treated as having been anything other than tenants for the period in respect
of which rent was paid. The force of that argument is clear and if there were
an irrebuttable presumption that payment and acceptance of a sum labelled as
rent created a tenancy, the result would follow. But one has to look further,
undoubtedly, at the surrounding circumstances, and also, according to the line
of authority discussed above, at the real intentions of the parties — in
particular here of Mr Jessel — even if not manifested to the other party.
Highly
relevant among the surrounding circumstances is the fact that the defendants
undoubtedly had had the benefit of a tenancy with the protection of the
Agricultural Holdings Acts, that the tenancy had (on this assumption) expired
but that the tenants denied its expiry, that on any footing they were liable to
pay for their use and occupation of the land, at not less than the rate
tendered, and that the tender was consistent with the contention they made,
namely that the original tenancy still continued. It was not, indeed, or might
not be, consistent with a new and different tenancy, since rent should on that
footing have been tendered as from April 1 or 2 1988 — but that is a minor
point. I bear in mind in this context, particularly, the facts, the decisions,
and certain observations of the judges in both Marcroft Wagons v Smith
and Longrigg, Burrough & Trounson v Smith. Among many
relevant passages in those judgments, I refer particularly to Denning LJ in Marcroft
Wagons Ltd v Smith [1951] 2 KB 496, at p 506:
In these
circumstances, it is no longer proper for the courts to infer a tenancy at
will, or a weekly tenancy, as they would previously have done from the mere
acceptance of rent. They should only infer a new tenancy when the facts truly
warrant it. The test to be applied in Rent Restriction Acts cases is the same
test as that laid down by Lord Mansfield in cases of holding over
— and he
quoted the observation already quoted above.
If the
acceptance of rent can be explained on some other footing than that a
contractual tenancy existed, as, for example by reason of an existing or
possible statutory right to remain, then a new tenancy should not be inferred.
From the
judgments in Longrigg, Burrough & Trounson v Smith again
there are a number of relevant passages and I refer in particular to the
following passage in Lord Scarman’s judgment at p 849:
Indeed one
would have thought that today, where tenants have in one respect or another the
protection of the law for possession of premises to which they would have at
common law no contractual entitlement, the courts would not be as quick to
infer a new tenancy as in the old days they would have been where there was
nothing to explain the presence of a defendant upon the premises or upon the
land other than a trespass or a contract.
Mr Morgan
makes the point that that approach may be all very well, but the question is,
given the payment of money in respect of the
tenants? And he points out that in Marcroft
Wagons v Smith Denning LJ said that the occupier was there as
licensee, which was sufficient to exclude the application of the Rent
Restrictions Acts, but would not have been sufficient to exclude the operation
of the Agricultural Holdings Acts. I bear in mind that point but it seems to me
that, where one is concerned with one single payment made substantially after
the period in respect of which it was tendered, it is not necessary to conclude
that the occupier is doing anything more than making a payment for or on
account of the liability which undoubtedly existed to pay for the benefit that
he has of the occupation of the premises, whether it be by way of rent or by
way of mesne profits or damages for the use and occupation of the land, a
liability which, if not discharged, would or might well also attract a further
liability to interest.
What is also
relevant among the circumstances of this case is that the landlord was, to the
knowledge of the tenant, wishing to commence possession proceedings, and
intending to do so as soon as his solicitors had what they regarded as
necessary information for the preparation and institution of the proceedings.
That is clear even without regard to the correspondence between February 10
1989 and April 7 1989, but it is even more clear from those documents. To
suggest that the landlord could be supposed, by the tenant, to have intended to
create a new tenancy in those circumstances by the acceptance of rent, on April
10 1989, just as the issue of proceedings was becoming, at last, very close,
given the progress on the probate side, seems to me fanciful. I am reminded of
the trenchant words of Henn Collins J in Maconochie Brothers v Brand
[1946] 2 All ER 778 as follows at p 779:
That they did
receive and pay into their bank a cheque paid in respect of a quarter’s rent in
advance, that quarter being after the expiration of the notice to quit, is
true, but it is equally true that the question is: Was a new tenancy thereby
created? That is, not a tenancy to be
discovered by some act of law, but a tenancy created by two assenting minds. It
is obvious that the one thing which the landlords wanted was possession of
these premises, and to tell me that they assented to the creation of a new
tenancy is to tell me what I do not believe. Therefore, if I have to find that
there was a new tenancy, it would have to be because of some legal ingenuity
and in face of what my mind informs me is not the fact.
If reference
is made to Mr Jessel’s evidence as to what was in his mind, the position is
made that much clearer. However, in fact, it seems to me that it is already
abundantly clear, even without regard to that evidence, from what passed
between him and the various solicitors acting for the defendants, especially Mr
Connolly. I record that, if I had to decide the point, I would not reach a
different conclusion if I had not heard that part of Mr Jessel’s evidence which
was concerned with his uncommunicated state of mind.
Thus it seems
to me that Mr Morgan’s submissions rely on too formalistic an approach and
disregard matters to which, even on his contentions, the court is required to
have regard. The observations of Ormrod LJ in Longrigg, Burrough &
Trounson v Smith seem apposite in this context:
The old
common law presumption of a tenancy from the payment and acceptance of a sum in
the nature of rent dies very hard. But I think the authorities make it quite
clear that in these days of statutory controls over the landlord’s rights of
possession, this presumption is unsound and no longer holds. The question now
is a purely open question; it is simply: Is it right and proper to infer from
all the circumstances of the case, including the payments, that the parties had
reached an agreement for a tenancy? I
think it does not now go any further than that.
In the light
of what was said and done between the parties and what was known to each party,
if the question had arisen as necessary for decision, I would have held that
the tender and acceptance of £6,450 in 1989 did not in the circumstances
demonstrate or constitute an agreement to treat the defendants as having been
tenants, either for the period mentioned in the letter of January 23 1989 or,
more straightforwardly, for six months from April 1 1988, but would have
treated it as paid, in the circumstances then prevailing, on account of an
undoubted liability on the defendants’ part to pay for their use and occupation
of the land either, as they then contended but now deny, as rent under the 1985
tenancy or by way of mesne profits or damages for their use and occupation of
the land, if that tenancy had already been brought to an end. I would not,
therefore, have held that the defendants were entitled to a new tenancy by
virtue of anything done after April 1 1988.
As it is,
however, for the reason that the Case E notice was not valid, I hold that the
tenancy of December 17 1985 was terminated (in respect of the plaintiff’s part
of the severed reversion) by the Case G notice with effect from April 1 1989
and I will order the defendants to give possession accordingly, and dismiss the
counterclaim.
The defendants
are liable to pay mesne profits since then at a rate that has been agreed
between the parties of £13,500 pa but taking credit for any sums that may have
been paid on account as interim payments.
