Agricultural Holdings Act 1948, section 2 — Whether agreement to grant grazing rights only under the proviso to section 2(1) or a fully protected agricultural tenancy — There had been a history of grazing agreements, but the defendants had been in the habit of using the land in question as if they were tenants, keeping cattle there in the winter as well as the summer — With that background a question arose as to the effect of a particular agreement in 1979 — The plaintiff owner had in mind a grant of limited grazing rights only, whereas the defendants contemplated using the land for farming throughout the year — However, the county court judge found that the male defendant appeared to be making a request only for grazing rights and this was what the plaintiff understood — The judge held that in these circumstances there had been no consensus ad idem and therefore no agreement — Held by Court of Appeal that the judge had
come to the wrong conclusion on the facts found — He should, applying the objective view of consensus as expressed in the classic statement by Blackburn J in Smith v Hughes, have come to the conclusion that there had been an agreement to grant limited grazing rights — The defendants had so conducted themselves that they must be taken to have entered into such an agreement — As a consequence, the proviso to section 2(1) applied — In the result, however, although by a different route, the court agreed with the decision of the county court judge that the defendants had failed to establish that they had become entitled to a fully protected agricultural tenancy — Defendants’ appeal against possession order dismissed
This was an
appeal by the defendants, John G Bower and his wife, Mrs C S Bower, against a
decision of the county court judge at Hyde County Court granting a possession
order in favour of Mrs Genevieve Chaloner, plaintiff in the action and owner of
Robin Hood Farm, Mottram, Longdendale, Greater Manchester, over which the
dispute arose, and respondent to this appeal.
J R Foster
(instructed by Abson, Hall & Co, of Stockport) appeared on behalf of the
appellants; J A D Gilliland (instructed by Bowdens, Shipton & Tomlinson, of
Manchester) represented the respondent.
Giving
judgment, EVELEIGH LJ said: The plaintiff is the owner of a farm called Robin
Hood Farm. It was previously owned by her husband who died in 1972. The
defendant is a neighbouring farmer. It was agreed between the plaintiff’s
former husband and the defendant that the defendant should have grazing rights
in the summer of 1961 and there was some consideration — it matters not what —
for this. For the following few years until 1966 or thereabouts someone else
used the land.
The defendant
gave evidence to the effect that the husband then asked him to farm the land
properly and that thereafter he did so. In that way it was said a tenancy was
created; but the judge rejected that evidence and he found that each year Mr
Bower, the defendant, visited the plaintiff’s late husband to ask for the
grazing. He found that on the occasion of those visits the effect of the
request, and I use the judge’s words, ‘was to graze for another season’, and
that continued until 1976, when he visited her at her home for that purpose. He
found that the same pattern was repeated in 1977. In 1978 Mr Bower contemplated
buying the land and went on to the land and was allowed to do so with a
presumption that he was going to buy it. In fact the sale went off and,
although there is no express finding by the learned judge to this effect, it is
clear that Mr Bower was on the land in 1979 also.
The plaintiff,
by the particulars of claim, alleged that for the 1979 summer grazing season
there was an amount agreed to be paid by the first defendant of £70.
The learned
judge found that in fact the defendant used the land for a number of years as
if he were the tenant and carried on various activities on it, such as keeping
cattle there in winter as well as summer — although fewer cattle in the winter
— and he manured and fertilised it. He also found that the plaintiff must have seen
the cattle on the land at times other than the grazing season, but, he said,
cattle were to her a familar sight; they made no particular impact, in effect.
He said: ‘Their presence did not print itself on the memory of Mrs Chaloner’ or
of others concerned, and he then made this finding:
On the visits
paid by Mr Bower to Mr Clough
that is the
plaintiff’s late husband
and later to
the plaintiff in the middle 1970s up to 1978 he had in mind the use to which he
had put the land in earlier years, ie cattle all the time, some mowing, and . .
. the right to decide whether to manure and fertilise, and if so with what
products and the rate of application. Mrs Chaloner, on the other hand, had in
mind what had been contractually agreed in the more remote past, viz grazing
for a season from May to September.
On those facts
the question that had to be determined in this case was whether or not there
was a tenancy which was protected under the Agricultural Holdings Act of 1948.
The plaintiff served a notice on the defendant and in the action was claiming
possession. The defendant relied upon the Act and in particular upon section 2.
Subsection (1) of that section reads as follows:
Subject to
the provisions of this section, where under an agreement made on or after the first
day of March, nineteen hundred and forty-eight, any land is let to a person for
use as agricultural land for an interest less than a tenancy from year to year,
or a person is granted a licence to occupy land for use as agricultural land,
and the circumstances are such that if his interest were a tenancy from year to
year he would in respect of that land be the tenant of an agricultural holding,
then, unless the letting or grant was approved by the Minister before the
agreement was entered into, the agreement shall take effect, with the necessary
modifications, as if it were an agreement for the letting of the land for a
tenancy from year to year.
Then there is a
proviso which, in so far as is relevant for the purposes of this case, provides
that ‘this subsection shall not have effect in relation to an agreement’ which
is made ‘in contemplation of the use of the land only for grazing or mowing
during some specified period of the year’.
The learned
judge came to the conclusion that in the circumstances of the case there was no
agreement at all because the parties were not ad idem. He said that in
this case there was no consensus and that in a case where the landlord thinks
one thing and a tenant another there is no letting and there is no grant of a
licence. He therefore came to the conclusion that, as there was no agreement
within the meaning of section 2, there was no agricultural tenancy. He was then
asked by counsel for the defendant to make a further finding as to whether the
proviso would apply if he had found that there was an agreement. He said that
this was asking him to perform a feat of mental gymnastics, because he had come
to the conclusion that there was no consensus. However, he went on to make some
further findings of fact. He said this:
Neither
defendant contemplated using the land
I should have
mentioned that there are two defendants here: Mrs Bower is also a defendant
only for
grazing or mowing for a specified period of the year. They contemplated use for
farming as they thought fit for the whole of the year. On the other hand Mr
Clough and the plaintiff in the 1970s did contemplate the use of the land only
for grazing or mowing . . . In the 1970s they contemplated that the use of the
land would be for grazing or mowing for a specified period of the year, that is
May to September inclusive.
It has been
submitted in this court that the learned judge was wrong in concluding that
there was no agreement. It is said that he ought on the facts of this case to
have come to the conclusion that there was, and I think that this is not an
unfair way of putting it, at least a grant of a licence by the plaintiff to the
defendant to use the land for agricultural purposes, and that the grant was
pursuant to an agreement between the parties. He says: the defendants were in
occupation; they in fact used the land for agricultural purposes; they were
there with permission, and the contemplation of the parties was that the land
should be used for agricultural purposes. The contemplation differed in a vital
respect, however, that is, as to the extent of that occupation, both in time
and for purpose. He said that while there was this difference there must have
been at least an agreement for the land to be used for agricultural purposes.
That, he submitted, means that there was an agreement for a licence within the
meaning of section 2 of the Act. Thus he had brought himself within the words
of section 2(1) and if the defendants were to be denied the protection of the
Act the burden was on the plaintiff to bring the case within the proviso. This,
it was submitted, the plaintiff could not do, because, on established
authority, the contemplation of use for grazing or mowing purposes for a
limited period had to be one that was in their mutual contemplation, but as, on
the facts found in the further findings of the learned judge, that was not
within the contemplation of the defendants, the proviso did not apply.
I have to ask
myself whether or not in the first instance the learned judge was right in his
finding that there was no agreement. He arrived at that conclusion as if it
followed inevitably from his finding that there was no true consensus between
the parties. Now it seems to me that when the learned judge said in his
judgment that the effect of the defendants’ request was to graze for another
season (I pause to say that season clearly meant another summer season) the
judge was saying that he was making that proposition to the plaintiff or to the
plaintiff’s husband. When he finds as a fact that the plaintiff herself had in
mind the grant of grazing rights for a limited period and a continuation of the
arrangement that had started first in 1970, he was saying that the plaintiff so
understood the defendant to be offering; in other words, she understood the
defendant to be asking for grazing rights. The defendant appeared to be making
such a request and that is what the plaintiff granted.
On that view of
the facts, it seems to me that the learned judge
agreement to grant grazing rights for a limited period. I quote the well-known
words of Blackburn J on this matter in the case of Smith v Hughes
(1871) LR 6 QB 597 at p 607, where he said:
If, whatever
a man’s real intention may be, he so conducts himself that a reasonable man
would believe that he was assenting to the terms proposed by the other party,
and that other party upon that belief enters into the contract with him, the
man thus conducting himself would be equally bound as if he had intended to
agree to the other party’s terms.
Those words in
my opinion cover this case. The defendant did so conduct himself that he must
be taken to be asking for, and entering into an agreement for, a licence for
grazing purposes for a limited period. What is the result of that? The result in my view is that the proviso
would then apply. While there would be established an agreement within section
2(1), even though there is a finding that the defendant did not actually
contemplate letting for grazing for a specified period only, he none the less
will be taken to have contemplated such a licence.
A similar
situation arose in the case of Scene Estate Ltd v Amos [1957] 2
QB 205, where there was a written agreement which was for a limited period for
grazing purposes, the period being initially for three months. At p 213 Parker
LJ said this:
If the
agreement is express on the subject, then I do not think that one is entitled
to look beyond it unless it is for the purpose of showing that the agreement is
a complete sham. In other words, in the case of a genuine agreement which
expressly says that the lease is for grazing or mowing only, and expressly says
that the period is a period of less than a year, there is no right, in my view,
to look beyond the agreement itself.
He was
referring to the contention that in truth the parties had contemplated that the
agreement would be a continuous one and not merely for a specified period of
the year.
In the present
case it is true that we have no agreement in writing, but we have an agreement,
as I see it, the terms of which are clear. We have an agreement for a licence
for grazing purposes for a limited period. The defendant is bound to the terms
of that agreement. He cannot therefore be permitted to say that he did not
contemplate such a limited agreement in order to avoid the operation of the
proviso, any more than he is allowed to say that he did not contemplate this
kind of agreement when he has so conducted himself as to lead the other side to
conclude an agreement upon the assumption that the defendant was agreeing to a
grazing agreement for a limited period. On that ground I would dismiss this
appeal and uphold the judgment of the learned judge to the effect that the
Agricultural Holdings Act does not apply to this case.
However, the
ingenuity of the other argument, indeed the main argument, that was addressed
to this court by Mr Foster demands that I should say something about that. If I
were of the opinion that the parties were not ad idem, then I would take
the view that it is not possible to spell out of the facts of this case some
other lesser agreement than that contended for by either side or some different
agreement from that contended for by either side so as to produce an agreement
for a licence that would fall within section 2(1) of the Act. An agreement
under that section has to be a contractual agreement, an enforceable agreement
between the parties, and if one starts by saying that there was no agreement
with terms which were acceptable to either one of the parties there can be no
contractual agreement at all. That, it seems to me, is the basic flaw in Mr
Foster’s argument and it is not necessary to deal with the deduction he then
makes from that base. What he is doing is to ask us to say that, where the
parties failed to reach agreement, it is possible to find in their negotiations
some common ground and the court should take that common ground and give to it
the character or the legal status of a legal agreement. That is a contention
that I could not possibly accept. Mr Foster says that the defendant could not
be held to be a trespasser: he was there with permission. That may well be so,
but the grant of permission to enter land does not necessarily mean that there
has come into being a contractual agreement. I therefore would be prepared, if
it is wrong to come to the conclusion that there was an agreement such as I
have found, to say that the learned judge was right in his approach to the
case, but primarily, for myself, I would prefer to base my decision upon the
finding that there was an agreement, but it was an agreement of the kind that
comes within the proviso to section 2. I therefore would dismiss this appeal.
Agreeing that
the appeal should be dismissed, SIR DAVID CAIRNS said: Mr Foster in the course
of his submissions to this court summarised his arguments very helpfully in
eight brief propositions: (1) the defendants were in occupation of this land;
(2) they were using it for an agricultural purpose; (3) they were there with
the permission of the plaintiff; (4) the contemplation of the plaintiff on the
one hand and the defendants on the other as to the terms on which they were
there differed; (5) there was an agreement for use of the land for agricultural
purposes; (6) the agreement was of such character as to constitute a licence
within section 2(1) of the Agricultural Holdings Act 1948; (7) section 2(1)
therefore applies unless the case is within the proviso; (8) to be within the
proviso the contemplation must be mutual and it was not mutual here.
In my view the
two weak points in the series of propositions are at (5) and (8). It does not
follow that, because one person is using land with the knowledge of another,
therefore there must be an agreement for such use. It may be that there is mere
acquiescence without anything more or it may be, as the learned judge found
here, that there has been something passing between the parties which each of them
regarded as constituting an agreement, but there was such a fundamental
difference between them that there was no real agreement at all, as in the case
which every law student knows (which I knew as a law student, but I have
forgotten the name of it now) where there was an agreement about a ship and one
party thought it was ship A that was being referred to and the other thought it
was ship B, because they both happened to have the same name.
I think it was
a possible view in this case that there was such a difference between the
parties as to what they thought they were agreeing to that there was no
consensus and the parties were not ad idem, as the learned judge found,
but I, like my Lord, would prefer to reach a conclusion in favour of the
plaintiff in a different way. That is because under Mr Foster’s eighth
proposition it is quite clear from the case of Scene Estate Ltd v Amos
that what has primarily to be looked at is to see what was the effect of the
agreement that was entered into, and it is not open to a party to say that he
had in contemplation something different from the agreement if indeed the terms
are clear.
Are the terms
of the agreement, if there was an agreement, clear? I think they are. I read from p 5 of the
learned judge’s judgment where he said:
I find as a
fact that each year, Mr Bower visited her
that is, the
plaintiff’s
late husband
and, as she said, visited her after Mr Clough’s death, to ask for the grazing.
After a
reference to some refreshments he said:
I find that
on these occasions the effect of his request was to graze for another season,
and that this continued to 1976, when he visited her for that purpose at her
new home in Stalybridge. There is no evidence about 1977 from Mrs Chaloner, but
I find that the same pattern was repeated.
Then, after a
rather different situation in 1978, both counsel agreed that by 1979 the
position was the same as it was in the years up to 1977.
It seems to me
that there can be no doubt on that finding that the agreement was an agreement
to graze for a season, which obviously means not a year but a summer season,
and that that was the agreement that was made, the defendants having requested
it and the plaintiff having consented to it. That having been agreed in one
year, it was continued from year to year thereafter so as to set up the course
of dealing between the parties which was the one that was in effect in 1979.
For these reasons I agree that this appeal should be dismissed.
The appeal
was dismissed with costs. The order for possession was suspended for four weeks
from October 5 1983. Legal aid taxation ordered.
