Agricultural holding — Preliminary notice requiring payment within two months of rent already due–Notice expired on December 22–Cheque posted on December 20 and delivered to one of joint landlords on December 24–Cheque addressed directly to landlord’s home, not to agent’s office as previously instructed–Notice to quit based on alleged failure to comply with notice to pay–Whether
The appeal was
brought by George Ernest Mason, the tenant of East Heslerton Wold Farm, North
Yorkshire, from a decision of Judge Lauriston at Malton County Court on March
10 1977. Judge Lauriston’s decision was given on a question of law stated in
the form of a special case by the arbitrator, Colin Thomson FRICS, in the
course of an arbitration following a notice to quit by the landlords, Mary
Kathleen Beevers and Janet Mary Eddells. The notice to quit had alleged
non-payment of rent within two months of the service on the tenant of a valid
notice requiring payment of rent due. The question for the court was whether
the tenant, in the circumstances found by the arbitrator, had failed to pay the
rent due within the two months as alleged. Judge Lauriston answered this
question in the affirmative. He decided that the tenant had failed to pay the
rent due within the two months required by the notice under section 24(2)(d) of
the Agricultural Holdings Act 1948.
Paul Kennedy
QC and John Hitchen (instructed by Burton, Yeats & Hart, agents for Pinkney
& Marshall, of Bridlington) appeared on behalf of the tenant; John Colyer
QC and John Collins (instructed by Wedlake Bell, agents for R A & C P
Heptonstall, of Goole) represented the landlords.
Giving the
judgment of the court, SHAW LJ said that the parties to the arbitration were
the landlord and tenant of a holding of some 475 acres known as East Heslerton
Wold Farm in North Yorkshire. It was held by the tenant under an agreement in
writing dated March 27 1946 from April 6 1946 for one year and so on from year
to year. Under the tenancy agreement the rent was payable half yearly on
October 11 and April 6. However, the original landlord, the late John Beevers,
had apparently been satisfied if payments were made by January 1 and July 1
following the respective due dates. Mr Mason had tended to be late in his
payments of rent. In 1974 the landlords instructed Neville Townend, chartered
surveyor, to collect the rents on their behalf. He subsequently wrote to the
tenant requesting that in future the rents of the farm should be paid direct to
him at his Goole office. The half-year’s rent due on October 11 1975 not having
been paid, Mr Townend sent a letter dated October 21 by first-class post and
recorded delivery enclosing a notice requiring the tenant to pay the rent due
on October 11 within two months of the service of the notice. The letter stated
‘Your cheque should be made payable to the trustees of John Beevers and
forwarded to me at this office’ (ie at Goole). The notice was received by the
tenant on October 22 1975 and receipt of that notice was not challenged. The
two months for payment of rent thus expired on December 22 1975. Mrs Beevers,
one of the landlords, received at her home on Christmas Eve, December 24 1975,
a cheque for the amount of rent due up to October 11 1975. The cheque was dated
December 20 1975 and was delivered in an envelope bearing a first-class postage
stamp, and franked ‘December 22 1975–York,’ with a covering letter signed by
the tenant.
Solicitors
instructed by the landlords served 12 months’ notice to quit in January 1976 to
expire on April 5 1977, on the ground that the tenant failed to comply with the
notice in writing requiring him to pay within two months the rent due to the
landlords. A notice was served by the solicitor for the tenant contesting the
landlords’ notice and requiring the matter to be determined by arbitration.
Section 24(1)
of the 1948 Act provided that notice to quit an agricultural holding should
not, if a counter-notice were served by the tenant not later than one month
from the giving of the notice to quit, have effect without the consent of the
Agricultural Land Tribunal, but section 24(2)(d) made an exception where the
tenant had failed to comply with a notice in writing served on him requiring
him within two months from the service of the notice to pay any rent due in
respect of the holding. The material question was whether, in the circumstances
found by the arbitrator, the tenant had failed to pay the rent due within two
months of the service on him of a valid notice requiring such payment. If so,
the notice to quit had been effective to determine the tenancy. In substance
the question was, having regard to the history outlined, whether the cheque for
the half-year’s rent, stated by the tenant to have been posted in Sherburn, a
village close to the farm, before 10.30 am on Saturday, December 20 1975, satisfied
a requirement for payment expiring on Monday December 22 when the cheque was in
fact delivered to one of the landlords, Mrs Beevers, at her home on December
24. The learned county court judge had thought not. He had cited the case of Pennington
v Crossley & Sons Ltd (1897) 13 TLR 513 where a cheque sent by post
was purloined in the course of transmission and cashed by the thief. In an
action by the unpaid seller for the price, Lord Esher MR said at p 514 that the
defendants always sent cheques by post and the plaintiff, on receipt, sent back
the receipt duly signed, and that it would be monstrous to infer from those
circumstances that a request to send the cheque by post had arisen. But in Norman
v Ricketts (1886) 3 TLR 182, where the circumstances were not
dissimilar, it was said that, if the creditor asked for payment through the
post, the putting of the letter into the post with the money was sufficient.
It was clear
from the arbitrator’s findings that over the years the accepted mode of payment
had been for the tenant to send a cheque by post to the landlords. So long as
the cheque came into their hands and was duly met the rent had been paid. The
case was silent as to whether the cheque of December 20 was met, but since the
question was not whether the rent was paid at all, but whether it was paid in
time, the inference was that the cheque was presented and paid.
On general
principles the landlord should have the rent in cash in his hands by the due
date, though this requirement could be waived by express arrangement or
necessary implication. Such inferences were not too readily to be drawn, but
where the facts supported them clearly and emphatically they were not to be
dismissed: see per Lord Uthwatt at p 101, and Lord du Parcq at pp 103 and 105 in
Tankexpress A/S v Compagnie Financiere Belge des Petroles SA (The
Petrofina) [1949] AC 76.
The judge in
the present case had based his conclusion on the fact that the request made by
the agent by letter on March 11 1975, that the rents should in future be paid
direct to him at his Goole office, had not been complied with in as much as the
envelope containing the cheque had been addressed to the landlord. The judge
considered that the prescribed mode of payment had thus not been strictly
followed, so that the tenant could not rely on the posting of the cheque as a
payment made when the letter was put in the post.
Their
Lordships thought this an unduly narrow view on the facts of the case. Where
over the years the course of dealing had been such as to show that the sending
of a cheque by post to the landlord was the accepted mode of payment, a request
to send the cheque to the agent did no more than provide an alternative
destination for the cheque. Payment direct to a creditor, other things being
equal, could hardly be less effective in law than a payment made in the same
way and in the same conditions to the agent. It might be otherwise if, for
example, the creditor was out of England, or his whereabouts were uncertain.
Here the cheque was sent to a known address, and was delivered. If in the
circumstances the post was properly to be regarded as the agent of both
landlord and tenant in regard to the transmission of the rent
was immaterial that, despite the request referred to, the cheque was sent to
the landlord direct. When the cheque was put in the post then, subject only to
its being honoured, the rent was paid. The postmark showed that this was not
later than December 22, ie within two months of the demand. Accordingly, their
Lordships answered the question in the special case in the negative and allowed
the appeal.
The appeal
was allowed with costs.
