Agricultural Holdings Act 1986 — Death of tenant — Notice to quit served by landlord relying on Case G in Schedule 3 to 1986 Act — Whether notice to quit was served not later than the end of three months beginning with the date of a relevant notice — Whether return of rent demand coupled with a cheque in payment by tenant’s executors constituted a relevant notice — Position as to notice to quit if no valid relevant notice served — Appeal from decision of county court judge who held that the executors had served a relevant notice on the landlord and that the notice to quit, having been served more than three months later, was not effective for the purpose of Case G — Landlord’s appeal allowed
were somewhat unusual inasmuch as the landlord who claimed that he had not
received notice of the tenant’s death had been present, together with his
agent, at the tenant’s funeral and was certainly ‘aware of’ the tenant’s death
within days — This apparently odd result was, however, a consequence of the
method adopted by Parliament to deal with the unfairness to a landlord of not
hearing of his tenant’s death until it was too late to serve a notice to quit
under the then current legislation — Case G in its present form (as amended by
the Agricultural Holdings Act 1984) excludes from the need to obtain an
agricultural land tribunal’s consent a notice to quit, following the death of a
tenant, where the notice is given not later than the end of the period of three
months beginning with the date of any ‘relevant notice’ containing the
requisite statement — The ‘relevant notice’ is a notice in writing served by
the executor or administrator of the tenant’s estate, informing the landlord of
the tenant’s death (the alternative sources of information in connection with
succession proceedings had no application in the present case) — A payment of
rent fell due shortly after the tenant’s death and a rent demand was addressed
to his executors — The rent was paid by a cheque drawn on the personal account
of one of the executors and the cheque, together with the rent demand, was sent
to the landlord’s agents and duly acknowledged — The landlord more than three
months later served a notice to quit purporting to terminate the tenancy in
accordance with the provisions of Case G — The sole question raised in the
appeal was whether the return of the rent demand to the landlord’s agents,
together with the cheque in payment, constituted the ‘relevant notice’
mentioned in Case G and para 12 in Schedule 3 to the 1986 Act — The judge below
had decided that it was and that the landlord’s notice to quit, having been
served more than three months later, was invalid for the purpose of Case G —
If, however, what was served was not a ‘relevant notice’, the question of the
time of service did not arise
referring to three authorities, two of them dealing with rent review clauses
and the third, BSC Pension Fund Trustees Ltd v Downing, an agricultural
holdings case raising the same point as the present case, the Court of Appeal
were firmly of the opinion that the judge below was in error — The ‘relevant
notice’ must be expressed in terms sufficiently clear to bring home to the
ordinary landlord that the executors are purporting to exercise the rights
given to them by the Act — The landlord in the present case ‘could not possibly
reasonably, let alone necessarily, have concluded from those documents that the
clock had started to tick against him’ — The fact that the landlord was
otherwise aware of the tenant’s death was irrelevant — The position was therefore
that no relevant notice within the meaning of para 12 of Part II of Schedule 3
had been served — What then was the position in regard to the notice to quit
given by the landlord? — The Court of
Appeal did not discuss the matter in principle but held that ‘the notice to
quit was served in time’ — The judge had been in error and the appeal was
allowed
The following
cases are referred to in this report.
Amalgamated
Estates Ltd v Joystretch Manufacturing Ltd
[1981] EGD 84; (1980) 257 EG 489, [1981] 1 EGLR 96, CA
BSC
Pension Funds Trustees Ltd v Downing [1990]
1 EGLR 4; [1990] 19 EG 87
Nunes v Davies Laing & Dick Ltd (1985) 51 P&CR 310; [1986]
1 EGLR 106; 277 EG 416
Shirlcar
Properties Ltd v Heinitz (1983) 268 EG 362,
[1983] 2 EGLR 120, CA
This was an appeal
by the plaintiff landlord, Sir Thomas Lees, from a decision of Judge McKinney,
at Poole County Court, holding, in favour of the executors of the deceased
tenant, Frank Tatchell, Mrs Mary Diana Tatchell and Mrs Melita Trent, that a
notice to quit served by the appellant was not effective. The notice related to
an agricultural holding at Lytchett Minster, Dorset.
Robert
Bailey-King (instructed by Preston & Redman, of Bournemouth) appeared on
behalf of the appellant; Peter Rawson (instructed by Coles Miller, of Poole)
represented the respondent executors.
Giving the
first judgment at the invitation of Slade LJ, PARKER LJ said: Mr Frank
Tatchell was the tenant of premises under a tenancy agreement dated May 24 1957
which commenced on September 29 1957 and was terminable on 12 calendar months’
notice in writing, expiring at the end of any year of the tenancy.
The premises
concerned consisted of an agricultural holding entitled to the protection
afforded by the provisions of successive Agricultural Holdings Acts. The
relevant Act for present purposes is the Act of 1986, which consolidated
previous enactments and made certain amendments.
The tenancy
was still in being when, on March 19 1987, Mr Tatchell died. The appellants are
the executors of the will of Mr Tatchell. They are his wife, Mrs Tatchell, and
one Melita Trent. The appellants’ land agent became aware of the death on the
following day, or possibly the day after that. The plaintiff landlord himself
became aware of the death very shortly after and attended the funeral of Mr
Tatchell. There can therefore be no doubt that, within a matter of a few days,
both the landlord himself and his agent were aware of Mr Tatchell’s death.
The rent due
under the tenancy, which had existed for such a long time, became due on March
25 and shortly thereafter a rent demand was addressed to the executors of Mr
Tatchell — I say ‘the executors’ although they did not formally become
executors until probate was granted on June 12.
The rent
demanded was paid by a cheque drawn on Mrs Tatchell’s personal account. That
cheque, together with the demand itself, was returned to the landlord’s agent,
who issued a receipt dated April 7, which was addressed to the executors.
Thereafter, by
a notice to quit dated July 1 1987 but not served until August 1 1987, the
landlord purported to terminate the tenancy under the provisions of Case G in
Part I of Schedule 3 to the 1986 Act.
At this point
it is right to refer to the Act itself, and first to section 26, which brings
into play Schedule 3. Section 26(1) provides:
Where —
(a) notice to quit an agricultural holding or
part of an agricultural holding is given to the tenant, and
(b) not later than one month from the giving of
the notice to quit the tenant serves on the landlord a counter-notice in
writing requiring that this subsection shall apply to the notice to quit,
then, subject
to subsection (2) below, the notice to quit shall not have effect unless, on an
application by the landlord, the Tribunal consent to its operation.
(2) Subsection (1) above shall not apply in any
of the Cases set out in Part I of Schedule 3 to this Act; and in this Act ‘Case
A’, ‘Case B’ (and so on) refer severally to the Cases set out and so named in
that Part of that Schedule.
(3) Part II of that Schedule shall have effect in
relation to the Cases there specified.
Part I of the
Schedule sets out the various cases, and Case G is in the following terms:
The notice to
quit is given —
(a) following the death of a person who
immediately before his death was the sole (or sole surviving) tenant under the
contract of tenancy, and
(b) not later than the end of the period of three
months beginning with the date of any relevant notice,
and it is
stated in the notice to quit that it is given by reason of that person’s death.
There is no
doubt in the present case that Mr Tatchell was the sole surviving tenant and
that the notice to quit was given following his death. It is also plain that
provided it was given not later than the end of the period of three months
beginning with the date of any relevant notice, it was within Case G, for it
was properly stated in the notice to quit that it was given by reason of Mr Tatchell’s
death.
Part II of the
Third Schedule contains the provisions which are applicable to the particular
Cases, and para 12 deals with Case G. It provides:
For the
purpose, of Case G —
(a) ‘tenant’ does not include an executor,
administrator, trustee in bankruptcy or other person deriving title from a
tenant by operation of law, and
(b) the reference to the date of any relevant
notice shall be construed as a reference —
(i) to the date on which a
notice in writing was served on the landlord by or on behalf of an executor or
administrator of the tenant’s estate informing the landlord of the tenant’s
death or the date on which the landlord was given notice by virtue of section
40(5) of this Act of any application with respect to the holding under section
39 or 41, or
(ii) where both of those
events occur, to the date of whichever of them occurs first.
A notice by
virtue of section 40(5) will be in respect of an application under section 39
or 41 for a transfer of the tenancy to a member of the tenant’s family who has
survived him, and such application must be made within three months of the date
of death. There is, however, no limitation on the time within which the notice
in writing referred to in para 12 (b)(i) is to be given.
No application
was made under section 39 or section 41; therefore the question which arises in
this case — and it is the sole question — is whether a notice in writing was
given earlier than three months before the date of the notice to quit. The only
such notice which is contended for is a notice which is said to consist in the
return of the rent demand to the landlord’s agents, together with the cheque.
The cheque
itself is plainly no notice of anything; it is simply a payment of rent, which
was in any event due. It was a cheque which was drawn on Mrs Tatchell’s
personal account and the learned judge held, rightly in my judgment, that it
did not assist the matter.
The learned
judge also correctly held that the knowledge of the landlord himself, and the
landlord’s agent, did not assist the matter and could not be of any relevance.
As I have said, the sole question is whether the two documents can be taken to
be notice.
Before I refer
to the authorities to which our attention was drawn, it is convenient to
mention that under the Agricultural Holdings (Notices to Quit) Act 1977, Case G
applied only where the landlord served his notice within three months of the
relevant death. That put the landlord in a position that he might well lose his
right to serve a notice under Case G before knowing that he ever had such a
right, because in some cases he might not learn of the death until after the
three months had expired or, even if he did learn of it before the three months
had expired, he would not have the full three months which it was plainly intended
that he should have, within which to exercise his right under Case G. It is
plain that when Case G was first amended, which was in 1984, Parliament
intended to remove that plain unfairness to the landlord. They could, as it
seems to me, have taken one of two views; one was that the injustice, or
unfairness, could be cured by providing that the notice could be served by the
landlord within three months of the time at which he first became aware of the
relevant death. Had that course been taken, there might have been a great deal
of argument as to the point of time at which he first become so aware. As it
appears to me, the result was that Parliament took a view that it was entirely
necessary that the matter should be put beyond argument, so that the landlord
might know exactly when the clock began to tick against him, and when he would
have three months within which to serve his notice. It therefore provided in
Case G, first in 1977* and then, by repetition, in the 1986 Act, that the clock
would begin to tick only when the landlord was given notice in writing by or on
behalf of the executors informing him of the death. It may well be that the
occasions on which that part of para 12 applied will not be very many, for in
very many cases a surviving member of the family will make an application under
section 39 or section 41. But it appears to me that the intention of Parliament
was plain, namely that the landlord should be given a notice which would bring
home to him that he had three months and no more within which to serve his
notice.
*Editor’s
note: The amendment was first made in the Agricultural Holdings Act 1984,
section 6(5).
We were
referred to three cases on the subject of notices generally — two cases on
notices of a different sort and one case referring to a notice of the kind with
which we are here concerned. The first of the cases to which we were referred
is Shirlcar Properties Ltd v Heinitz (1983) 268 EG 362, [1983] 2
EGLR 120. That case dealt with a rent review and is therefore not directly
applicable. However, the principles which are set out in that case in the
judgment of the Court of Appeal appear to me to be principles which are of
general application.
At p 364, in
the first judgment, which was given in that case by Lawton LJ, there appears
the following; I quote only from the very last paragraph of the judgment. He
says this:
Since there
is an argument both ways about this matter and as, in my judgment, it is an
argument which is reasonable on both sides, it seems to me that it cannot be
said that the tenants, on receiving this letter, would necessarily and
reasonably have inferred that it was an effective trigger notice for the
purpose of the lease. There is doubt about its meaning and as there is doubt it
seems to me that the letter was ineffective for the purposes of the rent review
clause in the lease. I would dismiss the appeal.
Kerr LJ and
Dillon LJ took the same view; I read from the last paragraph of Dillon LJ’s
judgment, where he said:
On the whole
I feel that a reasonable tenant might regard this as merely a provisional
figure. Therefore the meaning of the notice is not so plain that the notice can
be taken as a valid stipulation of a rent which sets the review provisions in operation.
The next, and
perhaps the most helpful, case is Nunes v Davies Laing & Dick Ltd
[1986] 1 EGLR 106. In that case, at p 107E-H, the Vice-Chancellor said:
The short
question raised by the originating summons is whether the letter of December 6
1984 from the tenants’ agents constitutes a valid counternotice for the
purposes of para (c) of proviso (iii) of clause 2 of the lease. If it does, the
rent for the final six years of the term will be such rent as is determined by
an independent surveyor. If it is not a valid counternotice, the rent will be
the £23,000 per annum specified in the landlords’ trigger notice.
The same
question has arisen on rent review clauses in identical or very similar terms
in no less than five reported cases to which I have been referred. It appears
that the clause is based on a precedent in the Encyclopaedia of Forms and
Precedents, 4th ed. In a number of those decided cases the question for
decision has been characterised as a question of construction of the letter
from the tenants which is alleged to be an election under para (c); but, as the
argument in this case proceeded, it emerged that there are in reality two
questions:
(a) what in law is required to constitute a valid
election under para (c)?
(b) does the letter of December 6 1984 satisfy
those requirements?
I will in due
course consider those separate points in turn but, before doing so, I should
explain why, in my judgment, those are the two relevant questions. In an
ordinary case of construction the court is bound either to give the document
under construction some meaning or to hold that it is void for uncertainty,
against which the court always leans. Often, the true construction of a
document in court is a marginal decision which the court reaches with some doubt.
In other types of case — for example, notices to quit, and, in the employment
field, notices of dismissal — the law requires not simply that a document on
its true construction has a particular meaning but that the document should
clearly have that meaning so as to bring home to the mind of the recipient of
the notice what is intended by it. So, in cases of the kind before me, the
first question is whether the law does require of a notice under para (c) not
merely that on its true construction it communicates an intention to have the
rent fixed by an independent surveyor but that it should satisfy some higher
standard such as that it should be clear or unequivocal.
The
Vice-Chancellor then concludes that in the particular case it was the second
matter which applied. At the end of that section he says (at p 107K):
In my
judgment, the test is that applied by the Court of Appeal in the Amalgamated
Estates case, namely that the counternotice should be in terms which are
sufficiently clear to bring home to the ordinary landlord that the tenant is
purporting to exercise his right under para (c), and that is the test which I
propose to apply.
The third, and
last, of the authorities to which I need refer is an unreported decision of His
Honour Judge Blackett-Ord, sitting as a deputy judge of the Chancery Division
in BSC Pension Fund Trustees Ltd v Downing.* That was a case which brought into
question the very matters that we have to consider now. On p 6 of his judgment
the learned deputy judge says:
Para 12
speaks of a notice in writing being served on the landlord by or on behalf of
an executor or administrator. As to what is or is not a notice in writing, I
will adopt a quotation from a judgment of the present Vice-Chancellor which was
itself adopted by Mr Justice Scott in the case of Norwich Union v Sketchley
plc [1986] 2 EGLR 126 at p 128C. I should say that this was a case of a
counternotice under a rent review clause. The learned Vice-Chancellor and Mr
Justice Scott took this view, reading from the quotation:
Then he reads
that which I have already read. The deputy judge goes on:
I would say
that a notice under para 12 must be in terms which are sufficiently clear to
bring home to the ordinary landlord that the tenant is purporting to exercise
his right under the Act. The documents relied on are in my judgment not enough;
they do not meet that test.
*Editor’s
note: See p 4 ante.
In my view,
the Amalgamated Estates* test, which was applied by the learned deputy
judge, was rightly so applied. It cannot have been within the contemplation of
Parliament that a landlord should be required to add two and two together and
to infer from documents such as these — those which are under consideration in
the present case — that a notice was given to him, even if there was an
intention to give such a notice. But Mr Lawson properly accepted that the
sending back of the rent demand, together with the cheque, was not intended, or
did not purport, to be a notice within para 12, and on no basis could it be
said, in my view, that those documents constituted any such notice. The
landlord could not possibly reasonably, let alone necessarily, have concluded
from those documents that the clock had started to tick against him.
*Editor’s
note: This refers to Amalgamated Estates Ltd v Joystretch
Manufacturing Ltd [1981] EGD 84; (1980) 257 EG 489, [1981] 1 EGLR 96 (CA).
Accordingly,
in my judgment, the notice to quit was served in time, and I would allow this
appeal.
SLADE and GLIDEWELL LJJ agreed and did not add anything.
The appeal
was allowed, with costs in the Court of Appeal and below; dismissal of
plaintiff’s claim for possession was set aside; defendants to deliver up
possession to plaintiff on or before July 31 1990.
