Arbitration — Special case stated — Article 9 of Agricultural Holdings (Arbitration on Notices) Order 1987 — Provision that tenant’s notice requiring arbitration must be served on landlord within one month after service of the notice to quit — Notices to quit served by landlord under Case D in Schedule 3 to the Agricultural Holdings Act 1986 alleging failures to pay rent and to comply with notices to remedy — Notices requiring arbitration served by one only of two joint tenants — Whether such notices were in the special circumstances of the case valid and effective for the purpose of article 9 of the 1987 order — Held by assistant recorder, after considering various submissions, that the notices constituted valid and effective demands for arbitration
The following
cases are referred to in this report.
Featherstone v Staples [1986] 1 WLR 861; [1986] 2 All ER 461; (1986) 52
P&CR 287; [1986] 1 EGLR 6; 278 EG 867
Jacobs v Chaudhuri [1968] 2 QB 470; [1968] 2 WLR 1098; [1968] 2 All
ER 124, CA
Newman v Keedwell (1977) 35 P&CR 393; 244 EG 469, [1977] 2 EGLR
4
A special case
was stated by the arbitrator, Mr John Pallister FRICS, in relation to notices
requiring arbitration served by the respondent tenant, Mrs Julia Gumbrill, in
purported pursuance of article 9 of the Agricultural Holdings (Arbitration on
Notices) Order 1987 (SI 1987 no 710). The agricultural holding concerned was
Royal Oak Farm, Longhurst, Mellor, near Stockport. The applicant landlords were
Joan Evelyn Combey and Hilary Georgine Gallagher.
H A C Densham,
of Burges Salmon, Bristol, appeared on behalf of the applicant landlords;
William George (instructed by Cooper Sons Hartley & Williams, of Buxton,
Derbyshire) represented the respondent, Mrs Gumbrill.
The factual
background leading to the case stated was as follows.
The tenancy in
question was granted to Mr and Mrs Gumbrill in 1975 as joint tenants. The
couple were divorced in 1982. Certain orders made in the course of the divorce
proceedings were relevant to the present issue. These included an undertaking
by Mr Gumbrill to vacate the holding; a prohibition of access by him (except to
see the children); a recital that it was the intention that Mrs Gumbrill
should, be entitled to Mr Gumbrill’s interest in the holding; an order for Mr
Gumbrill to assign his interest to Mrs Gumbrill, not to dispose of it to anyone
else or surrender it to the landlords; and generally a recognition that Mrs
Gumbrill had full power to conduct the farming business. In fact the tenancy
was never formally assigned to Mrs Gumbrill. There were a number of disputes
and proceedings prior to the notices to quit and notices requiring arbitration
which gave rise to the present issue.
The three
notices requiring arbitration in response to three notices to quit from the
landlords were served by Mrs Gumbrill’s solicitors on behalf of her alone. The
landlords submitted that these notices requiring arbitration were invalid as
contravening the general principle that notices should be given by both joint
tenants, as together constituting ‘the tenant’, and not by one only. There was
one possible exception, which did not apply here, namely where the landlord was
also one of the joint tenants. Reference was made in support of this contention
to Newman v Keedwell (1977) 244 EG 469 and Featherstone v Staples
[1986] 1 EGLR 6. It was recognised that these cases had been concerned not with
the construction of the word ‘tenant’ in what is now article 9 of the 1987
order but with ‘tenant’ in what is now section 26, [1977] 2 EGLR 4(1)(b) of the
Agricultural Holdings Act 1986. It was not, however, suggested on behalf of Mrs
Gumbrill that any valid point could be made of this distinction; that attitude
was clearly correct.
Two
submissions of importance were made on Mrs Gumbrill’s behalf. The first,
although unsuccessful, was interesting and deserves mention. The legal estate
in the tenancy remained vested jointly in Mr and Mrs Gumbrill, but the effect
of the orders in the matrimonial proceedings was to entitle Mrs Gumbrill to the
whole beneficial interest in the tenancy. Mr Gumbrill held his interest in
trust for Mrs Gumbrill beneficially. The assistant recorder accepted this
proposition but did not accept the consequence which it was sought to draw from
it. It was argued that as the sole beneficial owner of the tenancy Mrs Gumbrill
was ‘the tenant’ within the definition in section 96(1) of the 1986 Act. This
definition reads:
‘tenant’
means the holder of land under a contract of tenancy, and includes the
executors, administrators, assigns, or trustee in bankruptcy of a tenant, or
other person deriving title from a tenant.
It was argued
that as the sole beneficial owner Mrs Gumbrill was a person ‘deriving title
from a tenant,’ namely from herself and her husband, or possibly from her
husband alone. Reference was made to an observation during an argument by
Harman LJ in Jacobs v Chaudhuri [1968] 2 QB 470 at p 478, but not
mentioned in the judgment; the decision was that the applicant, one of two
joint tenants and solely beneficially entitled to the tenancy, was not ‘the
tenant’ within the meaning of section 24(1) of the Landlord and Tenant Act
1954. In the present case, in the context of notices to quit, counternotices
and notices requiring arbitration, the assistant recorder held that the 1986
Act and the 1987 order meant by ‘tenant’ the person or persons in whom the
legal interest was vested, not equitable interests lying behind the legal
estate. In the opening words of section 96(1) of the 1986 Act, ‘the context
otherwise requires’ that ‘tenant’ does not cover a person entitled in equity
only under a trust of the tenancy.
Mrs Gumbrill
was, however, successful in a final submission. It was clear law that a valid
notice in the present context may be given by one or some but not all joint
tenants if the person or persons giving the notice have the authority of the
other joint tenants to do so. Authority for this, if it is needed, can be found
in Newman v Keedwell and in Featherstone v Staples.
In the present case Mrs Gumbrill did not have any express authority to give a
notice under article 9 on Mr Gumbrill’s behalf. The assistant recorder held,
however, that, on the true construction of the orders made in the matrimonial
proceedings, she had full and complete authority to conduct the farming
business and that this covered the giving of notices under the agricultural
holdings legislation, including a notice requiring arbitration under article 9.
An objection made on behalf of the landlords that the notice given under
article 9 did not purport to be authorised by Mr Gumbrill as well as Mrs
Gumbrill was rejected. Although an agent with limited authority may give a
valid notice only if he purports to give it on behalf of his principal, this
rule does not apply where the person giving the notice has a general authority
to manage the property. It was undesirable to add further technicalities to an
already formalistic system.
The result was
that the notices requiring arbitration were valid notices for the purposes of
article 9 and that the arbitrator had jurisdiction to determine the validity or
otherwise of the reasons stated in the three notices to quit.
Editor’s
note: This decision, although given in December 1988, did not come to the
notice of Estates Gazette until recently. It is thought to be of
sufficient interest to agricultural practitioners to be reported in spite of
the delay.
