Agricultural holdings — Agricultural Holdings (Miscellaneous Provisions) Act 1976 — Succession — Appeal by case stated under the Agriculture (Miscellaneous Provisions) Act 1954 from the dismissal by an agricultural land tribunal of a son’s application for a new tenancy on the death of a father with whom he farmed in partnership — Eligibility — ‘Only or principal source of livelihood’ under section 18(2)(b) of the 1976 Act — Accounts for the seven years ending with the death in 1983 of the father, who had been unwell from 1978 onwards, showed a deteriorating financial position in the farm business in 1981, 1982 and 1983 — In applying section 18(2)(b) the tribunal considered the whole seven-year period, not the five-year period ending in 1981 which the applicant had chosen to put forward — The tribunal also concluded that the applicant’s drawings for the year 1981, amounting to £889.52, which were his only income, could not be treated as his livelihood derived from his agricultural work on the holding — This was because the father had paid into their joint bank account, which was the only farm bank account, the father’s pension, disability attendance allowance, and certain capital sums — Held by Hodgson J that the tribunal were in error in considering the whole of the seven years and not the five years which the applicant had selected — Held also that the tribunal were in error in deciding that the applicant did not fulfil the only or principal livelihood requirement in 1981 because of the payments made by the father into the joint account — This revealed a confusion in the minds of the tribunal — During the year 1981 the applicant had worked on the farm as in previous years and had drawn from the business the only money to which he was entitled — For both reasons the case would be remitted to the tribunal to reconsider in the light of the judgment — Leave to appeal granted, if leave necessary
No cases are referred to in this report.
This was an appeal by case stated by the applicant, Leslie Bailey, from the decision of the Yorkshire and Humberside Agricultural Land Tribunal dismissing his application for a new tenancy by succession on the death of his father.
G Lakin (instructed by Willows & James, agents for Barber Robinson, of Harrogate) appeared on behalf of the appellant; Christopher Priday QC (instructed by Robbins, Olivey & Blake Lapthorn, agents for Burges Salmon, of Bristol) represented the respondents.
Giving judgment, HODGSON J said: This is an appeal by way of case stated under section 6(1) of the Agriculture (Miscellaneous Provisions) Act 1954 by the Agricultural Land Tribunal for the Yorkshire and Humberside area in respect of a decision of theirs on October 18 and 19 1984 when, on the application of the applicant under the Agriculture (Miscellaneous Provisions) Act 1976, they refused him the right to a new lease. The facts are somewhat unusual.
At the time of the application, the applicant was a man of 49 years of age. In 1961 he had formed a partnership with his father. The terms of the partnership, certainly later on and perhaps from the beginning, were that the profits would be shared, four-fifths to go to the applicant and one-fifth to the father, but that the liability for losses would be shared equally. That no doubt reflected the fact that it was the applicant who was actually working the farm.
The lease of the holding to which this case relates was made in 1964. From 1964 onwards, the holding was farmed by the applicant. Until 1971, the father took a part in the working of the farm, but in that year he retired. Thereafter, the applicant farmed the holding, along with another very small holding, on his own.
In 1978, the father was unfortunate enough to have a stroke. That had the effect that from 1978 onwards, after the stroke, the applicant had to spend a great deal of time looking after his father. Consequently, he had to hire help on the farm which had the effect of reducing the profit that the farm could make. The father died on October 25 1983. The father was in receipt of a pension and he was also in receipt of a substantial attendance allowance owing to his disability. There was also a deposit account which, I think, was in the father’s name. Unfortunately, because it led to considerable confusion later, the father and the applicant had one bank account. It was a farming bank account. They did not have any other bank account, so into that account the pensions and attendance allowance were paid. For the purpose of the application the applicant produced the accounts of the partnership during the seven years preceding the father’s death. As the applicant had, during those seven years, worked on the farm and worked nowhere else and had no other source of income, save only in so far as the pensions payable to his father could be called a source of income, the applicant and his advisers no doubt approached the application with feelings of substantial confidence. But just before the case was due to come on, the solicitor then appearing for the respondents told counsel appearing for the applicant that at the end of the opening of the applicant’s case he was going to make a submission, the nature of which was not made clear at that time. What the respondents had done, I understand, was to take the accounts provided by the applicant and from them make what they called an analysis of the capital position which was marked ‘ARP7’. Those accounts show that in 1977, 1978, 1979 and 1980 the business made net profits of which the son’s entitlement amounted to something over £14,000 of which he drew less. However, in 1981 the course of the business went totally wrong and during that year there was a net loss of something over £14,000 made. The position at the bank had deteriorated from something over £9,000 in 1977 to just over £1,300 at the end of that disastrous year in 1981. In 1982 and 1983 the trend continued. At the end of 1983, on the father’s death, the position at the bank was that there was an overdraft of something over £9,000, although the business, I am told, was worth some £35,000 for probate.
The tribunal based their decision entirely, so far as it seems to me, on ‘ARP7’. There was never any doubt that the applicant fulfilled the requirements of section 18(2) as to the definition of an ‘eligible person’, so far as (a) and (c) were concerned. But what the tribunal found was that he did not fulfil the requirement in (b). That reads as follows:
. . . in the seven years ending with the date of death his only or principal source of livelihood throughout a continuous period of not less than five years, or two or more discontinuous periods together amounting to not less than five years, derived from his agricultural work on the holding or on an agricultural unit of which the holding forms part . . .
The latter is relevant in this case because there was a very small unit farmed along with the agricultural unit.
The first place where, it seems to me, the tribunal went wrong, is that they never did more than look at the total period of seven years. (I have now been provided, as well as with the case, with the decision, which I did not have before we started this hearing.) I can find
nothing in the decision or the case to indicate that they ever had any regard to the five-year period which counsel tells me is the one that he attempted to choose, that is the period between 1977 and 1981. That error in law would, in my judgment, be sufficient for me to send this case back to the tribunal with an expression of opinion that they should consider not the whole seven years but the five years which the applicant was entitled to choose.
The tribunal seem to have gone on to conclude that the applicant’s actual drawing of £889.52 for the year 1981 could not have come from the net profits of that year; and therefore, necessarily, he could not fulfil the requirement that his livelihood derived from his agricultural holding in that year. That cannot be right if that was what the tribunal were deciding. What they seem to have focused on is the fact that in that year, 1981, the father not only paid his attendance allowance and pension into the joint account but also, as he had done in the previous year, paid into the business and into his capital account in the business two sums from his deposit account. Therefore, what is said is that during that year, the £889.52 which the son drew from the business as the result of his agricultural work was not derived from his agricultural work but was derived from his father’s pension, attendance allowance and deposit account. It seems to me that that is an awfully muddled and wrong way to look at the matter. During that year, as he had done during the previous four years, the applicant had worked the farm and had drawn the only money that he drew from anywhere from the business. The mere fact that during that year, 1981, some part of the capital employed in the business came from the father cannot, in my judgment, affect the matter at all. The tribunal appears to have been equating the position of the applicant and his father with the position of husband and wife, merely because they lived in the same house and the applicant, as well as doing his farming work, looked after his father in his illness.
The analogy to me seems wrong. It was almost accidental that the money from the pension and the attendance allowance was paid into the joint account and was shown in the joint account. If it had been paid into a separate account for the father, and he had then, from time to time, invested some of that money into the farm and into his capital account for the farm, I do not think that the tribunal could ever have been led into the error which they seem to me to have been led into. The son, over those five years, drew a small but steady income from the farm. There was no evidence and it was never suggested that he drew any money from anywhere else and it seems to me that when, as they must, the tribunal look again at the five years from 1977 to 1981, they should be more careful than they were to identify what part of the total expenditure on the livelihood of the household was the applicant’s and what was the father’s. It seems to me, and I so hold, that the tribunal clearly went wrong in considering the seven years and not the five years which the applicant contended for. The tribunal almost certainly went wrong in their analysis of the living arrangements of the father and the son during those five years. Clearly it is not a case which I could possibly decide on the facts and evidence revealed in the papers. Therefore, I think that the correct course is to remit the case with this judgment to the tribunal for them to rehear it.
The appellant was awarded costs of the hearing in the High Court. Leave to appeal, if necessary, was given to the respondents.
