Agricultural holdings — Ministerial consent to five-year tenancy — Whether conditions of ministerial consent satisfied by grant of tenancy — Whether Pahl v Trevor applied
By an agreement dated February 11 1992,
the plaintiff tenant was granted a tenancy by the defendant landlord
‘commencing on the 13th day of November 1991′ of 47.32 acres of agricultural
land for a term ending on November 13 1996. In March 1991 both parties in these
proceedings had made a joint application under section 5 of the Agricultural
Holdings Act 1986 to the Secretary of State for approval to the grant of a
tenancy for a term commencing on November 13 1991 to which section 3 of the Act
would not apply. On April 12 1991 the Secretary of State gave his approval
under section 5 for a tenancy of five years’ duration from November 13 1991.
The tenant applied for a declaration that the tenancy was not one within the
meaning of section 5 and that he had security of tenure under the 1986 Act. In
particular that the Secretary of State’s approval was subject to a condition
that the tenancy should be for a term commencing on November 13 1991 and in
fact it was not granted until February 11 1992.
dismissed. All the requirements of section 5 of the 1986 Act were satisfied. In
particular, the mere fact of the joint application presupposed that both
parties agreed before the application to the Secretary of State that the
tenancy should be one to which section 3 of the Act should not apply. It was
not a condition of the Secretary of State’s approval, when properly construed,
that the tenancy agreement had to be entered into prior to November 13 1991.
The following cases are referred to in
this report.
Bradshaw v Pawley [1980] 1 WLR 10; [1979] 3
All ER 273; (1979) 40 P&CR 496; [1980] 1 EGLR 49; [1980] EGD 100; 253 EG
693
Keen v Holland [1984] 1 WLR 251; [1984]
1 All ER 75; (1984) 47 P&CR 639; [1984] 1 EGLR 9; [1984] EGD 9; 269 EG
1043, CA
Pahl v Trevor [1992] 1 EGLR 22; [1992]
25 EG 130
Roberts v Church Commissioners for England
[1972] 1 QB 278; [1971] 3 WLR 566; [1971] 3 All ER 703, CA
This was the hearing of an application by
the plaintiff tenant, Trefor Jones, for a declaration that he held a tenancy
protected by the Agricultural Holdings Act 1986 from the defendant landlord,
Doris Melhuish Owen.
William Batstone (solicitor advocate,
Burges Salmon, of Bristol) appeared for the plaintiff; Joanne Moss (instructed
by Birketts, of Ipswich) represented the defendant.
Giving judgment, JUDGE WEEKS QC
said: I have to decide a preliminary issue between the parties to this action
under Ord 14A of the Rules of the Supreme Court. The plaintiff, Mr Trefor
Jones, is the tenant of 47 and a half acres of agricultural land in Wales, and
the defendant, Mrs Owen, is the owner of the Llynon Estate, of which that
holding forms part. The issue I have to decide is whether Mr Jones’ tenancy
enjoys the protection of the Agricultural Holdings Act 1986 or came to an end
when the term of his agreement expired on November 13 1996.
The agreement between the parties is dated
February 11 1992, made between Mrs Owen, called the landlord of the one part,
and Mr Jones, called the tenant, of the other part. In clause 1, the landlord
agrees to let and the tenant agrees to take, the agricultural holding, known by
the name of Bryn Palma and Part Llynon, hereinafter called the holding, the
particulars of which are set out in the first schedule, which specifies 47.32
acres of permanent pasture and rough grazing
for a tenancy commencing on the 13th day
of November 1991, and having regard to the fact that the Secretary of State for
Wales has approved, on the April 12 1991, the grant of the letting by virtue of
Section 5 of the Agricultural Holdings Act 1986, the tenancy shall end on the
November 13 1996 and it is further agreed that Section 3 of the aforementioned
Act shall not apply.
Clause 2 deals with the rent which
commences at £100 pa and is payable half yearly in two equal instalments, on
May 13 and November 13, the first instalment to be paid on May 13 1992 and the
last payment, in advance, on May 13 1996.
The rent, which shall be payable
effective from November 13 1992 and, thereafter, shall be as set forth in the
fourth schedule hereto.
The fourth schedule shows increasing
rents which start at £100 pa for 1992–1993 and increase to £1,200 for the last
year of the tenancy.
Before that tenancy was granted, Mr Jones
had been in occupation of the holding since November or December 1990, under
the terms of a grazing licence, outside the protection of the Agricultural
Holdings Act. Mr Jones has said, and it is not in dispute, that the licence
came to an end on October 31 1991.
The land was in poor condition and in
early 1991 Mrs Owen and I discussed the idea, which she proposed, that, on the
expiry of the grazing agreement, I should be granted a proper long-term tenancy
of the holding, so that I could bring it back into condition. However, her
husband died before those discussions were concluded, and instead it was
suggested by Mrs Owen’s son in law, Mr Alexander, that I should take a five
year Ministry Consent Tenancy.
Mr Alexander was, I understand, at the
time in the Navy, and the period of five years was agreed, so that Mr Alexander
could review the position when he left the Navy and returned to civilian life,
before the expiry of that five years.
Mr Jones goes on in the affidavit that he
has sworn:
Given the circumstances, I agreed to this
in principle, and Jones Peckover, who are the land agents employed by Mrs Owen,
wrote to the Welsh Office asking for their formal consent.
Jones Peckover did rather more than that.
What they did was draft a letter to the ministry and sent it to Mr Jones for
his signature, because it took the form of a joint application to the Welsh
Office, Agriculture Department, for approval under section 5 of the
Agricultural Holdings Act 1986, which I shall read in due course.
Jones Peckover received the letter back
from Mr Jones, signed by him, on March 16 1991 and, on March 18, they forwarded
it to the Welsh Office. The application reads:
We, the undersigned,
— that is Jones Peckover,
as agents for and on behalf of Mrs Owen, landlord, and Trefor Jones, tenant —
hereby make joint application to the
Secretary of State for Wales for approval to the grant of a tenancy by Mrs
Owen, as landlord, to Mr Trefor Jones, as tenant, of the above land for a
period of not more than five years from the 13th November 1991 until the 13th
November 1996 of 47.46
— there is a slight discrepancy there on
which nothing turns —
acres of agricultural land for the reason
that, for good estate management purposes, time is needed over the next five
years, before a decision can be taken, as to the long-term future of the
holding.
The landlord wishes to make temporary
arrangements up until the November 13 1996 in regard to the occupation of this
land, whereby, as is the intention of the landlord’s daughter, Mrs Alexander
and her husband Commander Alexander, will take over the holding at the end of
the five year period. Commander Alexander is at present in the Navy and will
retire in due course.
It should be noted that, although
Commander and Mrs Alexander live elsewhere, they are in fact the owners of the
house known as Bryn Palma which, as can be seen from the attached plan, is
situated within the land to be occupied under the short-term letting. The land
is currently occupied by the same Mr Trefor Jones as above mentioned, under a
grazing licence, from the 30th December 1990 until the 31st October 1991, and
the land is run in conjunction with Mr Jones’ tenanted holding of Llynon Bach,
which extends to 95 acres.
In addition, Mr Jones is also the tenant
of a council smallholding. Mr Jones now wishes to carry out cultivations and
acts of husbandry on the 47.46 acres and has, therefore, felt this can be
satisfactorily accomplished under a short-term letting rather than a series of grazing licences.
On April 12 1991, the Welsh Office
replied to Jones Peckover.
I refer to your letter dated the 8th
March
— it was in fact March 18 —
1991, seeking the Secretary of State’s
approval to an agricultural tenancy to be granted to Mr Trefor Jones for a five
year period commencing on the November 13 1991. I herewith enclose an approval
of a letting to occupy Bryn Palma land comprising 47.46 acres for a period of
five years, commencing 13th November 1991.
The letter is signed by a divisional
executive officer, who has also signed, on behalf of the Secretary of State for
Wales, the accompanying formal approval by the Secretary of State under section
5.
That approval reads:
In exercise of the powers conferred upon
him by Section 5 of the Agricultural Holdings Act 1986, the Secretary of State
for Wales, hereby approves, but only for the purposes of the said Section, the
agreement between agents for the landlord, Messrs Jones Peckover and Mr Trefor
Jones, and Section 3 of the Act shall not apply to a tenancy to be granted after
the date hereof by the said Messrs Jones Peckover (sic) to the said Mr
Trefor Jones of the Bryn Palma land, situate in the parish of Llanddeusant in
the county of Gwynedd, comprising 47.46 acres or thereabouts, and edged red on
the plan annexed hereto, signed by the undersigned for a term of not less than
two and not more than five years, commencing on the day of 13th November 1991.
After receiving that formal approval,
Jones Peckover, on Mrs Owen’s behalf, wrote to Mr Jones on April 24 1991.
I now write to confirm that the Welsh
Office, Agricultural Department, has granted approval under Section 5 of the
Agricultural Holdings Act 1986 for a tenancy of five years duration from the
November 13 1991 in respect of land at Bryn Palma, extending to 47.46 acres or
thereabouts, to be entered into between the estate and yourself.
I am also required to agree with you that
Section 3 of the Act shall not apply to the tenancy to be granted as from the
November 13 1991. I shall be most grateful, therefore, if you could please
arrange to sign, where indicated, one copy of this letter as soon as possible.
I have discussed the matter of rent with
Mrs Owen. We feel that it should be as follows during the period of tenancy
and an escalating rent is then set out.
I assume that this will meet with your
approval. I shall arrange to send you a copy of the proposed draft tenancy
agreement for your approval in due course.
With that letter was a note in this form:
I, Trefor Jones, hereby agree that
Section 3 of the Agricultural Holdings Act 1986 shall not apply to the proposed
tenancy under Section 5 of the same Act, effective as from the November 13
1991.
Mr Jones did not trouble to reply
speedily to that letter and, on May 14 1991, Jones Peckover sent a reminder
asking him to sign and return one copy of the letter so that they could arrange
to have the new tenancy agreement drawn up.
On June 7, Jones Peckover wrote again,
referring to the previous letters and saying that they had since spoken to Mr
Alexander:
In regard to your proposed tenancy, Mr
Alexander did mention that you were going to be in touch with me so that the
arrangements for letting the land to you could be proceeded with.
On July 12, Jones Peckover wrote again:
As you will be aware, I have still not
heard from you in regard to the above land, in particular as to the proposed
rent arrangements. I am afraid I can do little more until you have made contact
with me, and, as you will appreciate, Mrs Owen is most anxious to have the
matter completed.
On August 20 1991, the gentleman from
Jones Peckover wrote:
Further to my letter of the 12th July, I
note that, following my return from holiday, you have still not responded in
connection with the proposed new tenancy agreement in respect of this land. If
you have a counter proposal in regard to rent, I should be happy to put it to
Mrs Owen.
On October 9 1991, Jones Peckover wrote
again.
Further to previous correspondence, I now
understand that you have had a meeting with Mrs Alexander and that, as I
understand it, you are generally in agreement with the terms of my previous
letter of April 1991, a copy of which I enclose for your information.
It would be helpful if you could please
let me have your approval of the proposed phasing of rent for the five year
period and also if you would please sign and return the copy of the letter that
was sent to you, whereby it was agreed that Section 3 of the 1986 Act will not
apply. You will appreciate that time is running extremely short and until the
proposed rents are agreed, I cannot submit to you, for approval, a draft
tenancy agreement to run from November 13 1991 and which will have to be agreed
and signed by the parties by that date.
I would be grateful, therefore, if you
would please give the matter your urgent attention, so that I can deal with it
as quickly as possible. You will be aware that the grazing licence comes to an
end on October 31 1991 and I, therefore, enclose a letter for you to sign at
that date confirming that your stock has been removed from the land.
This letter finally prompted Mr Jones
into action and he signed, on October 18, and returned to Jones Peckover the
note that I have already read, appended to the April letter and agreeing
formally in writing that section 3 should not apply to the proposed tenancy.
On October 31 1991, Jones Peckover wrote
to him, having apparently met him.
Further to our meeting, I have now
discussed the matter further with the estate and it is felt that the rent for
the five year period should be phased as follows, so that a rent approaching my
original figure for year five can be achieved.
There is set out the phased rent which
is, I think, the same as that contained in the schedule to the tenancy
agreement which I have read.
The letter continues:
In anticipation of your approval, I
enclose for your perusal and return to me, the draft tenancy agreement. Perhaps
you could let me have your approval to this so that I can prepare the final
copies for signature by the parties. I look forward to hearing from you as soon
as possible.
Again they had to write a reminder to Mr
Jones on November 20.
As you will appreciate, the proposed date
of commencement of the proposed new tenancy agreement in respect of the above,
has now passed. I should be grateful if you would please confirm that the terms
of the new agreement are acceptable so that I may proceed to draw up the final
copies for signature.
Jones Peckover spoke to Mr Jones in
December and wrote to him on December 10:
Further to our telephone conversation
last week, I should be grateful if you would please send the draft tenancy
agreement back to me as quickly as possible so that I may proceed with drawing
up the final copies for signature by Mrs Owen and yourself. Please be kind
enough to initial the draft tenancy agreement before sending it to me.
At or around Christmas, apparently Mr
Jones did send back the draft to Jones Peckover because, on January 14 1992,
Jones Peckover sent to Mr Jones the engrossed copy of the tenancy agreement and
asked him to arrange to have this signed and witnessed where indicated. Then
they would arrange to have Mrs Owen to sign the other copy which would be sent
to him.
Again Mr Jones, who must have had other
things on his mind, had to be prodded. On January 24 1992 Jones Peckover
referred to their letter and trusted that he had received it and would be
grateful if he would return the document as quickly as possible. He did so, in
February 1992, and it was then executed by Mrs Owen as well, dated February 12,
and a copy was sent to Mr Jones with a covering letter on February 12 1992.
Mr Jones’ contention in this matter is
that his tenancy, consisting of the agreement that I have already read, is one
to which the Agricultural Holdings Act 1986 applies and is not exempted by the
ministerial approval. If that is so, he is, of course, a very fortunate fellow,
because the basis on which he took the tenancy was that it was to be outside
the Act. That was the clear understanding, I find, of both Mr Jones and Mrs
Owen through her agents at the time.
That finding, however, is quite
immaterial to the point which I must decide because the intention and
understanding of the parties are neither here nor there, when one comes to the
application of the Act which applies, irrespective of the agreement the parties
had made.
Section 3 of the Agricultural Holdings
Act 1986 provides that:
Subject to Section 5 below, a tenancy of
an agricultural holding for a term of two years or more shall, instead of
terminating on the term date, continue as from that date, as a tenancy from
year to year but otherwise on the terms of the original tenancy so far as
applicable,
unless one of two conditions is
satisfied, and it is accepted that those conditions do not apply.
So, unless section 5 takes the tenancy
agreement outside the Act, then Mr Jones is protected by section 3 and is
entitled to a yearly tenancy as from the termination date, November 13 1996 of
his tenancy, which was for a term of more than two years.
Continuing with the Act to section 5,
subsection (1) makes it clear that section 3 has effect notwithstanding any
agreement to the contrary. A fortiori, any understanding, any belief, by
the parties as to their rights is quite beside the point and there can be no
estoppel by convention or otherwise to exclude this statute.
Subsections (2) and (3) of section 5 are
important. They read:
Where before the grant of a tenancy of an
agricultural holding for a term of not less than two, and not more than five,
years —
(a) the persons who will be the landlord
and the tenant in relation to the tenancy agree that section 3 above shall not
apply to the tenancy, and
(b) those persons make a joint
application in writing to the Minister for his approval of that agreement, and
(c) the Minister notifies them of his
approval,
section 3 shall not apply to the tenancy
if it satisfies the requirements of subsection (3) below.
(3) A tenancy satisfies the requirements
of this subsection if the contract of tenancy is in writing and it, or a
statement endorsed upon it, indicates in whatever terms that section 3 does not
apply to the tenancy.
Those two subsections contain what
Stuart-Smith LJ has helpfully summarised as seven conditions which must be
satisfied before a tenancy agreement is taken out of section 3 by section 5 of
the Act. I will go through the terms of the subsections themselves to see
whether they are satisfied.
Subsection (2) starts:
Where before the grant of a tenancy of an
agricultural holding for a term of not less than two, and not more than five
years.
It is accepted that the tenancy agreement
in the present case grants a tenancy of an agricultural holding for a term of
not less than two and not more than five years. It is not necessary to consider
whether a tenancy, commencing on November 13 1991 and expressed to end on
November 13 1996, creates a term of more than five years, because it is
accepted that the term cannot commence before the grant of the tenancy itself.
If authority is required for that
proposition, it will be found in Roberts v Church Commissioners for
England [1972] 1 QB 278 and specifically in relation to agricultural
holdings in Keen v Holland [1984] 1 WLR 251*. The tenancy
agreement in the present case, therefore, creates a term, commencing on the
date of the agreement February 11 1992 and terminating on November 13 1996,
that is a term of more than two and less than five years.
*Editor’s note: Also reported at [1984] 1
EGLR 9
Going back to section 5(2), (a) requires
that the persons who will be the landlord and the tenant in relation to the
tenancy, agree that section 3 shall not apply to the tenancy. The parties in
the present case clearly agreed, before the grant of the tenancy, that section
3 should not apply to the tenancy, because Mr Jones signed and returned to
Jones Peckover the note on the letter that I have referred to. That was done
after the minister’s approval however, and it is submitted to me that the
agreement must ex-hypothesi precede the ministerial approval, because
the minister cannot give his approval unless the agreement is already in place.
There seems to me force in that
submission but, for it to be relevant to the present case, I would then have to
go on and find that there was no agreement prior to the application to the
ministry. It seems to me that the mere fact of the joint application
presupposes agreement that the section should not apply, otherwise, why are the
parties going through the farce of applying ministry for approval?
I have, however, the express words of Mr
Jones in his affidavit, sworn in support of his application, that he did agree
that section 3 should not apply to the tenancy because Mr Jones says, in the
passage which I have already read,
it was suggested by Mr Alexander that I
should take a five year ministry consent tenancy. Given the circumstances I
agreed to this in principle.
That, I take to be an agreement that
section 3 should not apply to the tenancy that he was going to take. So, I find
that para (a) is satisfied in the present case.
Paras (b) and (c) are easier. They
require that:
those persons should make a joint
application in writing to the Minister for his approval of that agreement and
the Minister should notify them of his approval.
The joint application was duly made and
notification of approval was given on April 12 1991.
There is no problem with subsection (3)
which requires that the contract of tenancy should be in writing, as it was in
the present case, and a statement in the tenancy clearly indicated that section
3 should not apply to the tenancy.
The basic submission, given those
findings, in the present case is similar, if not identical, with one advanced
by the tenant to the county court judge and to the Court of Appeal in Pahl
v Trevor, a case decided on November 26 1991 and reported at [1992] 1
EGLR 22.
In that case the minister had given
consent, under section 3(b) of the Agricultural Holdings Act 1948 as amended,
to a tenancy to be granted of agricultural land in Dorset. Section 3(b) is, for
all material purposes, the same as section 5 of the Agricultural Holdings Act
1986.
The minister was faced with an
application for a five-year tenancy in that case, and he gave his consent in
these terms:
In exercise of the powers conferred upon
him by Section 3B of the Agricultural Holdings Act 1948 as amended, the
Minister of Agriculture, Fisheries and Food hereby approves (but only for the
purposes of the said Section) the agreement between Malcolm D Cockburn and
Roger P Trevor that Section 3 of that Act shall not apply to a tenancy to be
granted after the date hereof by the said Malcolm D Cockburn to the said Roger
P Trevor of the land at Lower Farm for a period of not less than two years
commencing on the 1st day October 1984 and ending not later than the 31st day
of September 1989.
The Court of Appeal was split in Pahl.
Dillon LJ gave a dissenting judgment in which he construed the word ‘period’ in
that approval as meaning ‘term’, and reached the conclusion that it was a
condition of the minister’s consent, that the tenancy should be for a term
commencing on October 1 1984 and, by implication, created by an agreement
executed on or before October 1 1984. Since the tenancy agreement was granted
after that date, and under Keen v Holland the term could not run
from a date before the tenancy agreement was granted, Dillon LJ held that the
tenant was protected, and upheld the recorder’s decision to make a declaration
to that effect; or would have upheld it if the others had agreed with him.
I infer from that, where the minister has
used is the approval itself the word ‘term’, Dillon LJ would have been in
favour of Mr Jones in the present case.
I must, however, consider the majority
judgments in Pahl v Trevor, because it is by them that I am bound, and they
constitute the law which I must apply to the present case. Glidewell LJ said,
at p25F:
On the face of it, all the requirements
of Section 3(b) were satisfied. This was a tenancy for more than two but less
than five years, the landlord and tenant had agreed that Section 3 should not
apply. They had applied to the Minister for his consent for that agreement. On
the face of it, he had given his consent and that fact was recorded in the
agreement for lease itself.
The argument advanced by Miss Moss for Mr
Trevor, which convinced the learned Recorder, was that the minister’s
approval was subject was not satisfied. Since the condition was not satisfied,
the approval never took effect.
Pausing there, I found that all the
requirements of section 5 were satisfied in the present case and the argument
must, in substance, be the same in the present case, that the minister’s
approval was subject to a condition which was not satisfied, namely that the
term should commence on November 13 1991 and therefore the agreement should be
executed on or before that date.
I should also mention that it was faintly
argued that the reference to a tenancy to be granted after the date hereof by
Jones Peckover to the said Mr Trefor Jones, requires that the agreement should
be executed by Jones Peckover on the landlord’s behalf. I observe that, in the
consent itself, Jones Peckover are described as agents for the landlord. They
were described as such too in the letter of application. The landlord was
named. It does not seem to me to be any material to the consent that Mrs Owen,
as landlord, granted the tenancy herself without the intervention of any
agents.
The serious and substantive point is
whether the minister made it a condition of his approval that the tenancy
should be for a term commencing on the date of November 13, and so granted by
an agreement executed on or before that date.
Returning to Glidewell LJ’s judgment, he
goes on to say that the decision in Keen v Holland does not
assist in the decision on this particular point, and I respectfully agree. He
draws attention to the fact that, in the middle of the consent that he is
dealing with, are the words ‘a tenancy to be granted after the date hereof’,
not, at that point, specifying the date upon which the tenancy is to be
granted. I have the same words in the present approval granted by the Secretary
of State for Wales on April 12 1991.
Glidewell LJ says:
It is clear that the Minister was
consenting to the grant of the tenancy for any period which fell within the
ambit of Section 3(b), that is to say not less than two or more than five
years.
Again, it seems to me that that
observation is apt to the present case; the Secretary of State for Wales was
consenting to the grant of any tenancy for any period which fell within the
ambit of section 5, that is not less than two or more than five years, although
his covering letter refers to a period of five years.
Glidewell LJ then goes on and poses the
question:
Did the Minister require that the term
should commence on October 1 1984, which itself meant, if it was to take effect,
that the agreement for the lease had to be executed not later than that date,
three days after the Minister gave his consent, two days presumably after it
was received by the parties? The time interval is different in the present case
but the question which I have to ask is the same. Was it a requirement of the
approval which would invalidate the approval if the tenancy did not commence on
the date specified by the Minister?
Glidewell LJ then differs from Dillon LJ,
because he picks up the reference to a ‘period’ in the consent of the minister
in that case, and construes that as having a different meaning to ‘term’. I
have the words, I think, used indiscriminately in that the application is for a
period of not more than five years. The covering letter giving the approval
refers to a period of five years, and the approval itself refers to a term of
not less than two and not more than five years. It seems to me that the words
‘term’ and ‘period’ were used interchangeably by the Secretary of State,
without indicating that that was to be used in the strict literal sense shown
by Keen v Holland, and leading to an implication that the
agreement itself must be executed before the term could commence.
With some hesitation, I reach the
conclusion that the reference to a term in the present case is not sufficient
in itself to make a difference from Pahl v Trevor, and I am assisted by the
other factors taken into account by Glidewell and by Stuart-Smith LJJ.
Glidewell LJ went on:
The parties here were, no doubt, concerned
that their obligations under the tenancy, particularly the payment of the rent,
should commence on October 1 1984, but I cannot see why the Minister should
have wished to grant consent to a tenancy which would commence on a precise
date. I can see that he would not wish to grant a consent which would be, as it
were, left in limbo for a very long period, that he would hope this was indeed
the case that it would be acted on in the near future, but as to whether it was
part of his concern that the term of the agreement should commence on a
particular date, I can find no reason to justify that, if indeed, it is right
to consider the practicalities of the matter.
Now, the parties in the present case were
no doubt concerned that the obligations under the tenancy, particularly the
payment of the rent, should commence on November 13, but again I can’t see any
reason why the minister should have wished to grant a consent to a tenancy,
commencing on that particular date, and to no other tenancy, and to impose it as
a condition of his approval that the term should commence
extent of approving a range between two and five years.
The significance of the words ‘commencing
on the day of November 13 1991’ are, in my judgment, to impose a stop date, in
that, a tenancy which went on beyond November 13 1996, would not be one that
the minister wished to approve, and I can see reasons for that. But, I can see
no good reason for construing the approval of April 12 1991 as being
conditional on the tenancy being executed before November 13 1991.
I now ought to consider Stuart-Smith LJ’s
reasons for allowing the appeal. He, very helpfully, as I said, set out the
seven conditions now contained in section 5 of the 1986 Act and I have already
found that all those conditions were complied with in my case, as indeed they
were complied with in the case before Stuart-Smith LJ. He went on to say:
The question is whether, on the true
construction of the consent, the minister in fact imposed a further condition
specifying that the term of the tenancy had to begin on October 1 1984. It may
well be that in an appropriate case the minister can, if he sees fit, impose
further conditions other than those required in the statute. But in this
particular case, for my part, I can see no point in his having done so,
particularly since he expressed the consent in terms of great flexibility,
namely that the term should be not less than two years or not more than five.
It is very common to find that leases are executed on a particular day but are
expressed to run from some prior date. Where this happens there is no tenancy
or estate or interest in land prior to the execution of the document. But the
parties can relate the time of their obligations to such a date.
The whole of that paragraph seems to me
to be of particular importance in the present case. It is carefully phrased, so
that the lord justice contemplates the possibility that, in an appropriate
case, the minister could, if he saw fit, impose further conditions, but there
was no point, in that case, in his having done so, particularly as the consent
was expressed in terms of great flexibility.
In the present case, again, I can see no
point in the minister making a condition of the term commencing on November 13
1991 or the agreement being executed before that date, particularly as the
consent is expressed in terms of great flexibility as it was in Stuart-Smith
LJ’s case.
Stuart-Smith, LJ after referring to Bradshaw
v Pawley [1980] 1 WLR 10*, went on to say:
This case, in my judgment, turns solely
on the construction of the consent granted by the minister and it is to be
noted, as it seems to me, that if the minister had wished that the grant of the
lease should be made from October 1 and no other date, he could easily have
said so. In fact he did not use that language but he specified that the tenancy
was to be granted on a date after the date of the consent itself, which was
September 28 1984. I can see no good or rational reason why he should want the
parties to exchange lease and counterpart on that date in particular,
especially as it would be extremely difficult.
There is no difficulty in the present
case, of course, but again the minister has specified that the tenancy is to be
granted on a date after the date of the consent, and I can see no rational
reason why he should want the parties to exchange lease and counterpart before
November 13 1991, in the present case.
Stuart-Smith LJ goes on:
As it seems to me, all he was concerned
with was that the tenancy should be granted within the full and wide words of
the limits of the statute, namely that it should be for not less than two years
or more than five.
Again, that seems to be a reason
applicable to the present case.
Stuart-Smith LJ then goes on to give what
I think is an alternative ground for his decision. He says:
*Editor’s note: Also reported at [1980] 1
EGLR 49
Now, it is true that, in the present
case, the Secretary of State has used the words of the statute ‘a term of not
less than two and not more than five, years’, but I can, in my judgment,
construe the approval in the context of the application and the covering letter
and, in my judgment, the use of the word ‘term’ there is insufficient to impose
a condition in the present case.
I note that Stuart-Smith LJ goes on:
In my judgment, the minister must be
taken to have known the common practice of backdating leases to a date prior to
the actual execution of it, and, in my judgment, that is the likely
interpretation or it is likely that he had that practice in mind when he used
those words at the end of the consent.
Now, if the Secretary of State for Wales
had that practice in mind, it is strange that he should use the word ‘period’
in the covering letter and the word ‘term’ in the consent itself, unless
perhaps he did not have in mind as well the authorities such as Keen v Holland,
which show that the term cannot precede the grant of the tenancy itself.
Stuart-Smith LJ concludes that he does
not think that the interpretation of this consent requires the imposition of
what he would regard as an unreasonable and unnecessary condition by the
minister.
Now, it is quite correct that the time
interval was much shorter in Pahl v Trevor and that the minister
used the word ‘term’ in the approval before me and the word ‘period’ in the
approval before the Court of Appeal, but again I do not think that the
interpretation of the approval requires the imposition of what I would regard
as, at least, an unnecessary condition by the minister, namely a condition that
the tenancy agreement should be exchanged before November 13 1991.
I confess that I reach this conclusion
without great reluctance, because it is apparent from the correspondence which
I have read, that the delay in executing the agreement can be laid largely, if
not exclusively, at the tenant’s door, and it would be ironic if, by failing to
respond promptly to letters, the tenant had secured for himself a wholly
unanticipated windfall in the shape of agricultural protection for his tenancy,
but that is not a factor which I take into account in construing the agreement.
I simply hold that it was not a condition of the approval by the Secretary of
State that the tenancy should be granted by Jones Peckover before November 13 1991,
or for a term which, otherwise than by some impermissible retrospective effect,
commenced on November 13 1991.
I will, therefore, dismiss the present
application for a declaration that Mr Jones’ tenancy is protected. I will hear
submissions as to what consequential orders I should make, if any.
