Agriculture (Miscellaneous Provisions) Act 1976–Widow’s application for a tenancy under succession provisions–Appeal from decision of agricultural land tribunal–Tribunal decided that widow should be treated as eligible by virtue of section 21 of Act, but held that she was not suitable to become the tenant of the holding–Tribunal’s finding based on the view that widow’s experience was too limited to enable her to farm to the standard which would produce the anticipated future level of market rent–Tribunal’s assessment of a probable five-fold increase in rent not put to parties for comment during hearing and not based on evidence–Tribunal guilty of breach of ‘audi alteram partem’ rule of natural justice and in error in excluding evidence of market rent–Question also as to adequacy of tribunal’s reasons–Decision quashed and case sent back for matter to be redetermined–Parties to be allowed to lead evidence on economic rent and potential income from farm–Submission rejected that tribunal’s decision could not be quashed unless court was satisfied that no reasonable tribunal could have come to such a conclusion
This was an
appeal by case stated by the Agricultural Land Tribunal for the Northern Area
under section 6 of the Agriculture (Miscellaneous Provisions) Act 1954. The
tribunal’s decision was challenged by the applicant to the tribunal, Elizabeth
Ann Dagg, widow of Matthew Smith Dagg who had been the tenant of Wark Farm,
Cornhill-on-Tweed, Northumberland. The applicant had been unsuccessful in
obtaining the tribunal’s direction entitling her to a tenancy of the farm,
following the death of her husband. The landlord, the respondent, was Rowland
Haddon Lovett. A report of the tribunal’s decision was published in (1979) 251
EG 75.
Leolin Price
QC and Grant Crawford (instructed by Heald & Nickinson, agents for
Sanderson, McCreath & Edney, of Berwick upon Tweed) appeared on behalf of
the applicant; Peter Langdon-Davies (instructed by Travers Smith, Braithwaite
& Co) represented the respondent.
Giving
judgment, SIR DOUGLAS FRANK QC said: This is an application under section 6 of
the Agriculture (Miscellaneous Provisions) Act 1954 by case stated by the
chairman of the Agricultural Land Tribunal (Northern Area). The material facts
are as follows:
The farm
concerned is known as Wark Farm. It is situated largely adjoining the River
Tweed and is mainly arable land. Matthew Smith Dagg occupied the farm from
1951, first as a joint and subsequently as sole tenant. In 1972 Mr Dagg began
to suffer ill-health and his state deteriorated over the year. In 1974 he
underwent a serious operation and thereafter his involvement with the farm
became less and his wife virtually took over the management of the farm. In
June 1976 he and his wife entered into a deed of partnership. On September 14
1977 Mr Dagg died and his widow made applications under sections 20 and 21 of
the Agriculture (Miscellaneous Provisions) Act 1976 for a direction entitling
her to a tenancy of the holding. The landlord thereupon served notice to quit
on the personal representatives and there followed the various statutory
notices. The hearing before the tribunal took place for three days in September
1978 and for three days in January 1979. The tribunal gave their decision in
writing on February 14 1979. The decision is in three parts. The first deals
with the application under section 21, in which the tribunal held that Mrs Dagg
was not an eligible person under section 18(2)(b). However, they then went on
to determine under section 21(2) of the Act that she should be treated as a
suitable person. The third part of the decision, and this is the material part,
was directed to the question to be determined under subsection (2) of section
20 whether Mrs Dagg in the opinion of the tribunal is a suitable person to
become the tenant of the holding.
In paragraph
33 of their decision the tribunal stated that ‘the serious challenge to her
suitability, in summary, was that she had no formal training in agriculture and
her experience was too limited to enable her to farm Wark to a satisfactory
level and enable her to find the increased rent which the landlord would
require and market forces would determine.’
It is apparent from that statement and from other parts of the decision
that the crucial question was whether the applicant would, and again I quote,
‘have sufficient ability to farm the land to a level where the landlord would
receive a fair rent for the farm and the tenant a reasonable standard of
living.’ That was the test applied by
the tribunal and they found ‘Mrs Dagg produced no evidence to rebut the
landlord’s suggestion that her output would barely meet the envisaged rent
level’, and accordingly they dismissed the application.
In the case
stated the tribunal set out four grounds for dismissing the application, and
they can be summarised as follows:
(a) There was no evidence that the applicant
would be able to farm the land profitably if an economic rent were charged.
(b) The applicant had taken no steps to improve
or expand the existing records, which the tribunal considered were inadequate
by any standards.
(c) The applicant had only a shallow knowledge of
farming and no practical experience and when tested, albeit not to any great
length, her knowledge was found to be lacking.
(d) The amount to which the applicant would be
forced to rely on her steward was considered undue in a farm of this size and
importance.
I deal first
with what was undoubtedly the crucial question, namely, whether the applicant
would be able to meet the market rent. It was common ground that the present
rent is too low and that upon the grant of a tenancy to the applicant the
landlord would be entitled to charge a substantially higher rent which, if not
agreed, would fall to be determined by arbitration. However, there was no
argument as to what the market rent is, and the tribunal declined to allow
evidence to be directed to that question. It is true that their decision was
prompted by an objection voiced, albeit faintly, by Mr Price who appeared for
the applicant. It may be that if the matter had rested there, as Mr Price had
raised the objection, it would not lie with the applicant to complain. However,
the tribunal, relying on the knowledge of what it called its lay members, came
to the conclusion that it was likely that the rent would increase in the region
of five times the present level. That assessment was not put to or communicated
to the parties during the hearing, and so they had no opportunity of dealing
with it, although it was essential to the tribunal’s conclusion that the farm’s
output would barely meet the envisaged rent level. In my judgment the
tribunal’s actions in assessing the possible rent in the way they did was a
clear breach of the rules of natural justice, and in particular the rule known
as audi alteram partem. Indeed, Mr Langdon-Davies, who appeared for the
respondent, did not seriously challenge that proposition. On that ground alone
I would quash the decision. Furthermore, however, it appears from the case as
stated that, taking into account the last farm accounts and the rent as
estimated by the tribunal, the applicant would be able to pay the rent and
would be left with what was described as ‘a comfortable net profit of
£9,000.’ In that respect, therefore,
there seems to have been a misdirection or miscalculation by the tribunal, or
at least there is an ambiguity.
I must now
consider whether the tribunal were right in excluding evidence of market rent.
On the one hand the tribunal said they would not allow the proceedings to
become a trial run for rent arbitration, and on the other hand that the
question of an economic rent did affect the applicant’s ability to make a
success of the farming enterprise. This was an element in considering her
suitability. It would appear necessarily to follow from the second limb of the
tribunal’s reasoning, and indeed from the main contention of the landlord, that
the amount of the market rent was an essential question for decision. I
appreciate that that might be a question to be determined later by arbitration,
but that does not seem to render it inadmissible in the tribunal’s proceedings,
and there was certainly no ground for the tribunal making their own assessment
without hearing evidence. In my judgment, evidence on market rental was
admissible and should not have been excluded.
Another ground
of criticism advanced by Mr Price was that the tribunal had imposed a burden of
proof not imposed by Parliament. Without rehearsing the arguments, in my
judgment the position is this: The tribunal had to form an opinion whether the
applicant is a suitable person and by necessary inference whether, on the other
hand, she is an unsuitable person. That is an opinion to be derived from the
facts and no question of burden of proof there arises. That burden is upon he
who asserts any fact which he wishes the tribunal to take into account in
arriving at their opinion. However, I cannot say with confidence that in
holding that ‘the onus of satisfying us that she is a suitable person (under
section 20 of the Act) to be a tenant of the farm in question falls on the
applicant’ necessarily establishes that the tribunal misdirected themselves on
the burden of proof. On the other hand, I am left in real doubt as to whether
the tribunal expected more than is envisaged by the scheme of the Act. It
cannot have been the intention that only those having graduated at Wye or
Cirencester who had, say, five years’ experience of management would qualify.
The very fact that widows are included in the scheme negates any such test. Yet
on the decision as it stands, apart from the question of rent, it is not clear
what facts the tribunal relied upon for their conclusion that the applicant’s
knowledge of agriculture was found to be lacking. Moreover, I find it difficult
to understand how the tribunal, having found that the farm had been reasonably
managed since the death of the applicant’s husband, were not convinced that the
applicant was competent to farm the holding adequately on a long-term basis. It
is true that in the case stated the tribunal say: ‘Our decision was made in the
light of all the evidence we heard and the facts we found: It should not be
viewed in isolation in respect of certain items of the evidence but taken as a
whole.’
A ‘blanket’
reason of this kind will not do. It is incumbent on the tribunal, having regard
to the Tribunals and Inquiries Act, to give reasons for their decision. It is
well settled that those reasons must be adequate and not only intelligible but
also can reasonably be said to deal with the substantial points that had been
raised: see Re Poyser and Mills’ Arbitration [1964] 2 QB 467. Further,
the reasons must not leave in the mind of an informed reader such real and
substantial doubt as to the reasons for the decision and to the matters which
were or were not taken into account: see Givaudan & Co Ltd v Minister
of Housing and Local Government [1967] 1 WLR 250. If, in fact, the
tribunal, as is said in the case, relied only on the applicant’s failure to
recognise the meaning of the term pH and correctly to name the three nutrients
which make up a normal compound fertiliser, then having regard to the
applicant’s past performance, I would have difficulty in concluding that the
decision was reasonable. Moreover, I do not think that the applicant could
reasonably have been expected, without notice that it was to be an issue at the
hearing, to have improved the farming records without knowing whether she was
to be allowed to retain the farm.
I am left in
no doubt that the decision must be quashed and that the correct course is to
send the case back to the tribunal to redetermine the matter. It will be
necessary for them to allow the parties to lead evidence on such matters as the
economic rent and the potential income from the farm. I do not accept Mr
Langdon-Davies’ submission that I am not entitled to quash the decision unless
I am satisfied that the only decision a reasonable tribunal could have come to
was to allow the application. It is for the tribunal, having heard the evidence
and applying their minds to the relevant questions, to reach an opinion: that
jurisdiction is vested in them, not in the court, and in my opinion rightly so.
It is with
some regret that I reach this conclusion, for the tribunal are to be
congratulated on the form of their decision and the great trouble they have
taken with this matter. So far as the first two parts of the decision are
concerned, not only is it unassailable but, if I may say so, should serve as a
model in dealing with this kind of application.
The applicant
was awarded costs. The respondent was refused leave to appeal.
