Agricultural holdings — Agricultural Holdings (Notices to Quit) Act 1977, Case D(a) in section 2(3) — Appeal by landlord from decision of county court judge on case stated by arbitrator — Preliminary notice under Case D(a) requiring payment within two months of rent alleged to be due by tenant — Notice alleged that amount of rent due was £650 — In fact the amount of rent due, being one quarter’s rent, was £625 — Tenant did not pay the £650 demanded or the £625 which was in fact due and the landlord served on him a notice to quit on failure to comply with the preliminary notice — It was held by the county court judge that, as a result of the misstatement of the amount of rent due, the preliminary notice was not a valid notice non-compliance with which would enable the landlord to serve an effective notice to quit — Held by Court of Appeal, upholding the decision of the county court judge, and following Pickard v Bishop, that the preliminary notice was invalid and consequently the notice to quit (which the tenant had challenged in arbitration proceedings) did not take effect — Court pointed out that proceedings under Case D were analogous to forfeiture proceedings and the steps must be complied with strictly — They were thus to be distinguished from such cases as Frankland v Capstick, Carradine Properties Ltd v Aslam and Germax Securities Ltd v Spiegal, where courts were able to take a more or less
This was an
appeal by the landlord, Reginald Ernest Dickinson, from a decision of Judge
Clapham at Sittingbourne County Court in favour of the tenant, Robert William
Comyn Boucher, on a special case submitted by an arbitrator. The case concerned
a notice to quit a holding known as Lower Newlands Farm, Teynham, Kent, on the
ground of alleged non-compliance with a notice to pay rent due.
Michael Segal
(instructed by Attersoll Smith, of Reigate) appeared on behalf of the
appellant; Geoffrey Jaques (instructed by Robbins, Olivey & Blake Lapthorn,
agents for Burges Salmon & Co, of Bristol) represented the respondent.
Giving
judgment OLIVER LJ said: This is an appeal from an order of His Honour Judge
Clapham made in the Sittingbourne County Court on December 16 1982, by which he
answered a question posed in a special case propounded by an arbitrator under
the Agricultural Holdings Act 1948 in the sense that a particular notice (to
which I will refer a little later) on January 23 1981, given by the landlord of
an agricultural holding to a tenant of an agricultural holding, did not comply
with the provisions of Case D(a) of section 2(3) of the Agricultural Holdings
(Notices to Quit) Act 1977. His Honour refused leave to appeal from his ruling,
but leave was subsequently granted by this court and so the appeal comes before
us.
The position
is this. The tenant in the arbitration was a Mr Boucher, who was the tenant of
an agricultural holding known as Lower Newlands Farm, Teynham, in Kent. The
landlord was Mr Dickinson. The rent payable for the holding was a rent of
£2,500 a year payable quarterly. That meant that the quarterly payments came to
£625. That rent appears not to have been paid with quite the regularity which
the landlord was entitled to expect. Accordingly, on January 23 1981 he gave a
notice under the provisions of section 2 of the Agricultural Holdings (Notices
to Quit) Act 1977 (a section which replaced section 24 of the Agricultural
Holdings Act 1948) requiring payment of the rent within two months.
Turning now to
that section, it provides as follows in subsection (1):
Where — (a)
notice to quit an agricultural holding or part of an agricultural holding is
given to the tenant thereof; and (b) not later than one month from the giving
of the notice to quit the tenant serves on the landlord a counternotice 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 the Tribunal consent to its operation.
Then there is
an important qualification of that in subsection (2), which provides:
‘Subsection (1) above shall not apply in any of the Cases set out in subsection
(3) below’. Subsection (3) details a number of Cases starting ‘Those Cases are’
and I can go to Case D, which is the only material one for present purposes:
at the date of
the giving of the notice to quit the tenant had failed to comply with a notice
in writing served on him by the landlord, being either — (a) a notice requiring
him within two months from the service of the notice to pay any rent due in
respect of the agricultural holding to which the notice to quit relates; or
and then there
is an alternative which I need not bother about
and it is
stated in the notice to quit that it is given by reason of the matter
aforesaid.
So one sees
the scheme of the Act. Notice to quit can be given but it is not to take effect
without the tribunal consenting to its operation, except in certain Cases. The
protection which is furnished by subsection (1) is destroyed or forfeited if a
case can be brought within one of the Cases in subsection (3) and in particular
in relation to this case failure to comply with a notice to the statutory
effect.
The notice in
this case was in this form. It was headed:
Agricultural
Holdings (Notices to Quit) Act 1977. Re the Holding known as Lower Newlands
Farm, Teynham, Kent. To: R W C Boucher, Esq, Noads Farm, Teynham, Kent. We,
Crow, Watkin & Watkin, Agents for your Landlord, Reginald Ernest Dickinson,
hereby give you Notice requiring you to pay within two months from the service
of this Notice the rent due in respect of the above holding as set out below:
Rent due in arrear to January 6 1981 — £650.
Then it is
dated and signed. As I have already mentioned, the rent payable was not £650
but £625. It is common ground that the tenant did not pay the rent of £650
demanded or the rent of £625 which was due, and accordingly notice to quit was
given, a counternotice was served and the matter was referred to arbitration.
There were a number of points arising. First, whether the notice was a valid
notice, non-compliance with which would enable the landlord to take advantage
of subsection (2) of the section to which I have referred, and also questions
as to the validity of the service of the notice and of the subsequent notice to
quit.
The matter
having come, as I have said, on special case from the arbitrator to His Honour
Judge Clapham, His Honour decided, following a case in this court of Pickard
v Bishop (to which I shall have to refer), that the notice was not a
notice non-compliance with which brought subsection (2) into operation and
that, therefore, he found it unnecessary to decide the other two questions
which had arisen about the service of the notice and of the subsequent notice
to quit.
I do not think
I need refer in any detail to Judge Clapham’s helpful and clear judgment. It
really rests upon the case of Pickard v Bishop (1975) 31 P&CR
108.* That was a case in which a farm
had been let to the tenant Pickard on a half-yearly tenancy. Some four years
after the farm had been let the landlord, Mr Arkwright, had transferred the
ownership of the farm to two trustees on the trusts of a discretionary
settlement. The tenant had not been informed of that. The same agents, who had
dealt with the farm while it was owned by Mr Arkwright personally, continued to
deal with it and in 1972 they sent to the tenant a notice under section
24(2)(d) of the Agricultural Holdings Act 1948, which is for material purposes
in exactly the same terms as the section of the 1977 Act to which I have
referred. That notice was a notice which concluded ‘Mr J L H Arkwright . . .
One half year’s rent due on September 29, 1972 £1,060.10’ and then it was
signed by the agent. Perhaps I should read the whole of the material part of
the notice — it was cited in the judgment of Lord Denning MR:
Seeing that
the question is whether the notice was valid, I must describe it. Much of it is
printed. At the top in small print in a box it says: ‘This notice is to be
regarded as a notice within the provisions of section 24(2)(d) of the
Agricultural Holdings Act 1948’. Next the name in print: ‘Drew, Gibbins &
Pearce, 14 Cathedral Close, Exeter’. Then in handwriting: ‘Mr C A J Pickard,
Owlacombe Farm, Roborough, Winkleigh, Devon’. Date: ’29 September 1972′. That
was a Friday. Then in print: ‘Dear Sir or Madam, We hereby give you notice to
require you to pay within two months from the service of this notice the rent
due to’ — so far in print. Then in handwriting: ‘Mr J L H Arkwright one half
year’s rent due 29 September 1972, £1,060’. Finally in print: ‘Yours
faithfully, Drew, Gibbins & Pearce’. That was the entire demand. There were
no words saying ‘on behalf of’ or ‘as agents’, or anything like that. At the
bottom there is a note in print saying that cheques should be payable to
Messrs. Drew, Gibbins & Pearce,
and it repeats
the address.
*Also
reported at (1975) 235 EG 133, [1975] 2 EGLR 1
The court
decided in that particular case, although Browne LJ dissented, that the notice
to pay, although it did not have to comply with any prescribed form under the
1948 Act, must comply strictly with the requirements of the section; that the
notice must get the landlord right; that the notice in that case had not
purported to be served by the landlords — who were, of course, the trustees of
the discretionary settlement — and could not be said to have been properly
served on their behalf; and that accordingly it was a bad notice. The judgment
of the Master of the Rolls, which I need not read in full, I think, makes it
clear what the ratio of the decision was. He refers to the meaning in
the Act of the word ‘landlords’ and then he goes on, in reference to the
notice:
It requires
payment of the rent due to Mr Arkwright, the previous owner, who was not the
‘landlord’. Mr Pickard says that the notice is equivalent to a notice signed
‘Drew, Gibbins & Pearce on behalf of Mr Arkwright’: which would plainly be
bad.
Then he goes
on:
In construing
section 24(2)(d) it must be recognised that it is a provision which enables the
landlord to forfeit the tenant’s interest and obtain possession, to the great
advantage of the landlord and great loss of the tenant. Now it is a settled
rule of construction that forfeiture clauses are to be construed strictly. The
party who seeks to enforce a forfeiture must comply strictly with every
requirement leading to it. So I would construe section 24(2)(d) strictly so as
to require the landlords to fulfil it to the letter.
Then he goes
on a little later:
So far as the
cases are concerned, the courts have construed the notices strictly. In Jones
v Lewis in this court we held that a service on one only of two
joint tenants was bad. It should be served on both of them. In Magdalen
College, Oxford v Heritage a notice demanding rent was bad because it
did not mention the two months.
So, as a
matter of principle, these notices must comply strictly with the provisions of
the statute. This notice does not satisfy this strict test. It did not purport
to be served by the ‘landlord’, that is, by Mr Bishop and Mr Cotton. Nor was it
served on their behalf. It was served by Drew, Gibbins & Pearce on behalf
of Mr Arkwright. At any rate, that is how I construe it. It required payment of
the rent due to Mr Arkwright. That imports that they were giving the notice on
behalf of Mr Arkwright and making the demand on behalf of Mr Arkwright and
serving it on his behalf. Now he was not the ‘landlord’. I know that Mr Bishop
and Mr Cotton are only trustees under a discretionary trust which was founded
by Mr Arkwright. But that does not cure the notice. In point of law it is the
same as if Mr Arkwright had sold to someone else for a vast sum. In order to be
good, these notices must get the landlord right. This one did not.
We were
referred to Frankland v Capstick [1959] 1 WLR 204. A notice
claimed arbitration. It contained a mistake. It said: ‘As solicitors for your
landlord Raven Frankland . . . we hereby give you notice . . .’, etc., whereas
the real landlord was Edward Frankland. The county court judge held that
the notice was bad. This court held that it was good because the operative word
was ‘your landlord’ and the tenant knew perfectly well who the real landlord
was. That case is quite distinguishable from this case. It was not concerned
with a forfeiture. And here Mr Pickard, the tenant, did not know anything about
Mr Bishop and Mr Cotton at all.
Sir John
Pennycuick, who agreed with the Master of the Rolls, said this:
So far as now
material, that paragraph
he is
referring to section 24(2)
directs that
two requirements must be satisfied, namely, (1) the notice must be served by
the landlord, and (2) the notice must require payment of the rent due.
So far as the
first requirement is concerned, I have no doubt the notice may be served by the
landlord’s agent. That is not in dispute. So far as the second requirement is
concerned, it seems to me that the word ‘pay’ contemplates payment to the
landlord or his agent. That is, I think, the natural meaning of the words ‘pay
any rent’ in this context. It seems to me that an instruction to the tenant to
pay rent or the equivalent of rent to a third party, whatever may be the
consequence of such an instruction, would not constitute a requirement to pay
rent, or, in more technical parlance, a demand for rent.
Then he goes
on to deal with the construction of the notice and concludes:
Mr Blum for
the trustees contended that the words ‘Mr J L H Arkwright’ in the notice should
be treated as a mere misdescription such as the misdescription in Frankland
v Capstick, or alternatively as a conventional description of the
Arkwright estate, by reason that the trustees were in fact the trustees of a
family settlement made by Mr Arkwright. I am unable to accept that contention.
The trustees are persons totally different from Mr Arkwright. The words ‘Mr J L
H Arkwright’ could not be regarded as a mere misdescription of Mr Bishop and Mr
Cotton, or as a conventional description of them in their capacity as trustees
of Mr Arkwright’s settlement.
The claim of
the tenant in this case, of course, is that inasmuch as that case establishes a
strict approach to the construction of the section and inasmuch as a strict
construction requires that the notice to be complied with must be a proper and
accurate notice, the notice in this case was bad and that the learned judge,
therefore, was bound to come to the conclusion that the question raised before
him must be answered in that way as a result of the case to which I have just
referred.
In the instant
case Mr Segal, on behalf of the landlord, argues that this was no more than an
unnecessary embellishment or misdescription in the notice — that is to say, the
reference to £650. He points out that section 2(3), Case D(a), refers to a
notice requiring the tenant to pay ‘any rent due’. He says the words ‘any rent
due’ means ‘any rent which was due at the date of service of the notice’. The
notice, he says, does not, if you look at the terms of the statute, have to
specify the amount of the rent that is due, because the tenant will know what
this is. Indeed, I think without deciding the point that that may well be
right. The difficulty that arises, as it seems to me, in this case, is that
where the notice does go on to specify what the rent is and gets it wrong, it
is then difficult to say that the tenant has failed to comply, if he does not
pay what is demanded, with a proper notice under the Act. It is not simply that
the notice to quit is allowed to operate if the tenant does not, within two
months of the service of the notice, pay the rent due at the date of service to
the landlord. The notice to quit is to operate if, at the date of the giving of
the notice to quit, the tenant had failed to comply with a notice in writing
served on him by the landlord. So one is to ask, did the tenant fail to comply
with a proper notice, ie one with which he was bound to comply? Of course, he failed to comply here with the
obligation which was cast on him by the lease to pay his rent, but what was
required by the notice was that he should pay a sum of £650, that being
erroneously described as the rent due, and though no doubt he did not comply
with that, he was not, of course, bound to do so. Mr Segal submits that if the
notice does not — and I will assume this is right — have to specify the amount
of rent that is due, then, provided it requires the tenant to pay the rent due
in respect of his holding, it is not invalidated, he says, by the addition of
an incorrect amount. Finally, he submits it is not invalidated if it does not
mislead the tenant.
He referred us
to a number of cases which indicate a more liberal approach to notices of this
type — I say ‘of this type’ although in fact they were concerned with rather
different situations, but he submits they are applicable to notices of this
type and show a different approach from that which was taken by this court in Pickard
v Bishop. The first of those cases is Frankland v Capstick
[1959] 1 WLR 204. That was a case where, after the landlord and tenant had made
an agreement for the surrender of a tenancy of an agricultural holding, the
solicitors for the landlord made a claim for dilapidations and served a notice
on the tenant in respect of them. That notice was expressed to be given ‘as
solicitors for your landlord Raven Frankland’, whereas in fact the landlord’s
name was Edward Frankland. It was held that the notice was ambiguous but it was
clearly given on behalf of the landlord and it was valid; the tenant could not
rely on the obvious blunder, which had in no way affected her or her
understanding as to what the proceedings and her obligations were. But that, as
was pointed out by Lord Denning in the case of Pickard v Bishop,
to which I have referred, was not a forfeiture case and therefore Lord Denning
in his judgment implies that a more liberal approach was permissible.
In a case of Carradine
Properties Ltd v Aslam [1976] 1 WLR 442 there was a provision in a
lease that either party could terminate the lease at the end of the first 7 or
14 years on 12 months’ prior notice in writing. A notice was served on the
tenant dated September 6 1974 and it said:
. . . we
hereby give you notice that we intend to determine the term created by the
lease on September 27 1973, and that we require you to quit and deliver up
possession . . . on that date.
Of course, the
date in the notice should have been September 1975, because it was given at a
time when the date of expiry was already passed. On the question of whether the
notice to quit was invalidated it was held by Goulding J that ‘applying legal
principles to the landlords’ notice and adopting a benevolent approach, the
court would treat the giving of a date past for termination of the lease as a
slip which would be obvious to a reasonable tenant reading the notice’.
Goulding J says at p 444, and this statement has been subsequently approved,
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?’
Applying that
test, he held the notice in that case was valid.
In case of Germax
Securities Ltd v Spiegal (1979) 37 P&CR 204* there was a similar
problem but connected this time with a notice under section 25 of the Landlord
and Tenant Act 1954 purporting to determine the lease on February 27 1977. That
was admitted to be wrong. On November 25 1976, the plaintiffs’ solicitors
served by post another notice under section 25. A draft of that notice was
prepared in the appropriate prescribed form but while preparing the actual
document for despatch to the defendant its date of issue was put as March 25
1977, instead of November 25 1976, the actual date when it was despatched. The
covering letter dated November 25 1976 stated that a fresh section 25 notice
terminating the tenancy on the following June 24 was enclosed. Of course, it
required the tenant in the usual way to notify in writing whether he was
willing to give up possession of the premises. No counternotice was served and
proceedings were issued in the county court seeking a declaration that the
notice served on the defendant with the date stated was a good and effective
notice. The court in that case applied the Carradine Properties Ltd case
as the test, to which I have referred,
206 of the report:
Mr Yajnik has
submitted that in the present case the notice served by the landlords is open
to the construction that it was intended by the landlords to take effect only
from March 25 1977; but, reading the notice with the covering letter, I do not
think it can be said that any reasonable tenant would have been misled here.
The mistake in this case was not in the operative part of the notice; it is
merely a mistake in relation to the date at which the notice purports to have
been given by the landlord. That that was a mistake is clear from association
of the notice with the covering letter.
*Also
reported at (1978) 250 EG 449, [1979] 1 EGLR 84.
There again,
of course, we were not dealing with a strict requirement of a section such as
the present, which is designed to operate on non-compliance by the tenant with
a notice containing a particular formula. It seems to me that the approach of
this court in Pickard v Bishop is one which, albeit in that case
applicable to a misdescription of the landlord, must equally be applicable to
the misstatement of the requirement with which the tenant is notified that he
must comply.
With some
little regret, I consider that Pickard v Bishop was, as His
Honour Judge Clapham found, binding upon him and it is binding upon us and is
not readily distinguishable from the circumstances of the present case. In that
case, Sir John Pennycuick observed at the termination of his judgment:
This is a
highly technical point and I venture to think the mistake is a piece of
outstanding good luck for Mr Pickard. The fact remains that the notice to pay
is made by section 24 of the Act of 1948 the foundation of forfeiture of an
agricultural tenancy, and it is of general, and I think generally recognised,
importance in connection with forfeiture that the requirements of the relevant
statute or the lease, as the case may be, should be strictly complied with.
I think that
that equally applies in the present case and, albeit with some little regret
and a similar expression of my feelings that the tenant has been extremely
fortunate in this case, I think that His Honour Judge Clapham was right in the
conclusion to which he came and that this appeal must be dismissed.
Agreeing that
the appeal should be dismissed for the reasons given by Oliver LJ, O’CONNOR LJ
added: For my part I must not be taken as assenting to, or deciding, the
proposition in this case as to whether a notice under Case D, paragraph (a)
which does not specify the amount of rent required is a good notice.
The appeal
was dismissed with costs.
