Agriculture (Miscellaneous Provisions) Act 1954–Case stated by agricultural land tribunal under section 6–Consent to notice to quit–Allegation of "greater hardship" by landlords–Previous abortive certificate of bad husbandry proceedings–Tribunal not entitled to take into account in determining the issue of hardship matters connected with previous proceedings, including course adopted by tenant’s advisers–Matter sent back to tribunal to modify decision in the light of the court’s opinion–Order for costs of application
In these
proceedings by way of a case stated by the Agricultural Land Tribunal for the
South Eastern Area the applicant, David Farrow Talbot, the tenant of Grove
Farm, Beckley, Oxfordshire, sought the opinion of the High Court in accordance
with section 6 of the Agriculture (Miscellaneous Provisions) Act 1954 on points
of law arising from an application by the landlords for consent to a notice to
quit served on the tenant. The landlords, the respondents to the present
application by the tenant, were Michael John Cooke, Charles Bromby Cooke and
Donald Gilchrist, the personal representatives of Hilda Mary Cooke.
James Comyn QC
and C Priday (instructed by Robbins, Olivey & Lake, agents for Burges,
Salmon & Co, of Bristol) appeared for the applicant, and L Hoffmann
(instructed by Linnell & Murphy & Taylor & Co, of Oxford)
represented the respondents.
Giving
judgment, LORD WIDGERY CJ said: This is a case stated under section 6(1) of the
Agriculture (Miscellaneous Provisions) Act 1954 by the Agricultural Land
Tribunal for the South Eastern Area seeking the opinion of this court on a
number of points of law. The matters arise out of a tenancy of a farm known as
Grove Farm, Beckley, Oxfordshire. It comprises some 57 acres in extent and is
let under a tenancy agreement made on December 31 1964 between a Mrs Cooke as
landlord and David Farrow Talbot, who is the applicant before us today and to
whom I will refer as the "tenant" hereafter. Hilda Mary Cooke has
died since the completion of the tenancy agreement, and the respondents today
(who are two persons of the name of Cooke and one Donald Gilchrist) are her
personal representatives and represent the landlord’s interest in that sense.
The
applications which were before the tribunal and out of which the points of law
arise are these: the first was an application dated January 2 1976 under
section 27 of the Agricultural Holdings Act 1948 for a certificate that the
tenant was not farming in accordance with the rules of good husbandry. The
second application before the tribunal at the same time was one dated April 7
1976. It was brought under section 25(1) of the same Act for the consent of the
tribunal to the operation of a notice to quit dated March 12 1976 on the ground
that, inter alia, (1) consent should be given in the interest of the
sound management of the estate; and (2) greater hardship would be caused by
withholding than by giving consent to the operation of the notice.
It is
convenient at that point to remind oneself of what the terms of the statute are
in regard to these matters. The Agricultural Holdings Act 1948 introduced a
system of security of tenure for agricultural tenants. The form which it took,
unlike methods adopted by other types of tenancy, was to render a notice to
quit ineffective unless certain preliminaries had been undertaken. Section
24(1) provides: "Where notice to quit an agricultural holding or part of
an agricultural holding is given to the tenant thereof, and not later than one
month from the giving of the notice to quit the tenant serves on the landlord a
counter-notice in writing requiring that this subsection shall apply to the
notice to quit, then, subject to the provisions of the next following
subsection, the notice to quit shall not have effect unless the Agricultural
Land Tribunal consent to the operation thereof." That is the initial restriction on obtaining
possession of agricultural holdings. Subsection (2) details a number of
situations in which the landlord can recover possession under the old-fashioned
rules, if I may so describe them, without the necessity of obtaining permission
from the agricultural land tribunal first. Notably among those is the one
contained in section 24(2)(c), which is the one upon which the present case
turns. By that subparagraph it is provided that "the Agricultural Land
Tribunal, in pursuance of an application in that behalf made to them in
accordance with the following provisions of this Act not more than six months
before the giving of the notice to quit, were satisfied in relation to the holding
that the tenant was not fulfilling his responsibilities to farm in accordance
with the rules of good husbandry, and certified that they were so satisfied,
and that fact is stated in the notice."
If the landlord can obtain from the tribunal what is sometimes called a
"bad husbandry certificate" and serves notice to quit within six
months of the application for that certificate, the protective provisions of
the section do not apply to the tenant and he can be removed from possession at
common law.
However, in
section 25 there are certain provisions in respect of the circumstances in
which the tribunal can give consent to the operation of a notice to quit. These
instances are of course relevant where no certificate of bad husbandry is
obtained in the first instance but where the landlord wishes to obtain the
consent of the tribunal to the operation of a notice to quit nevertheless.
Section 25(1) says: "The Agricultural Land Tribunal shall consent under
the last foregoing section to the operation of a notice to quit an agricultural
holding or part of an agricultural holding if, but only if, they are satisfied
as to one or more of the following matters, being a matter or matters specified
by the landlord in his application for their consent, that is to say–(a) that
the carrying out of the purpose for which the landlord proposes to terminate
the tenancy is desirable in the interests of good husbandry as respects the
land to which the notice relates, treated as a separate unit; or (b) that the
carrying out thereof is desirable in the interests of sound management of the
estate of which
or . . . (d) that greater hardship would be caused by withholding than by
giving consent to the operation of the notice. . . ." There is then a proviso which governs the
whole of that subsection: "Provided that, notwithstanding that they are
satisfied as aforesaid, the Tribunal shall withhold consent to the operation of
the notice to quit if in all the circumstances it appears to them that a fair
and reasonable landlord would not insist on possession." The structure of these important provisions
is clear enough. If a landlord has the grounds to do so and moves in time, he
can get a certificate of bad husbandry before giving notice to quit at all. If
he gets that, then the notice to quit, if given in time, will operate as at
common law. If he is not in a position to do that, he can go to the tribunal
for consent to the operation of his notice to quit on any of the grounds
specified in section 25. If he succeeds on one of those, he is left with but
one hurdle only, that is to say to satisfy the proviso, the proviso that,
notwithstanding that they are satisfied of the aforesaid, the tribunal should
withhold consent because a fair and reasonable landlord would so act.
What are the
facts in this case upon which those principles have to be applied? The chronological history of the case is as
follows. On April 2 1975 (which is where the story begins) the landlords made
an application to the tribunal for a certificate of bad husbandry and the
application was opposed by the tenant. The tribunal began to hear the first
application on July 22 1975, some three months after the application had been
made. They spent a long day in the field on July 27, and at 7 o’clock or
thereabouts suggestions were made that there might be some means of settling
this dispute once and for all. The tribunal favoured an attempt at settlement,
and indeed co-operated to the extent of suggesting to the parties what form the
settlement might take. But, although they had been assisted to that degree,
final agreement was not possible, and so it became apparent to everybody that
they would have to stop for the day. The chairman of the tribunal intimated
that they would have to stop for the day and said that, owing to the
commitments of the members of the tribunal, it would not be possible to
continue the hearing before the month of November 1975. Although nobody at the
time, I think, realised it, that decision or announcement that there would be
an adjournment into November was a critical matter as far as the landlords were
concerned, because they had already made their application for a certificate of
bad husbandry, and the six months’ period provided by section 24(2)(c) of the
Act was therefore running and would expire on October 2 1975. Consequently,
unless the matter was completed and the notice to quit served before October 2
the landlord would lose the benefit of his bad husbandry proceedings whether he
would otherwise have been successful or not. No one at the time seems to have
been conscious of that fact.
In the
intervening three or four months before the matter was again before the
tribunal in November Mr Hawkins on behalf of the landlords had attempted to
stimulate the tribunal to some action and indicated that he thought that the
proceedings should be resumed, but he was lulled into a false sense of security
by being told by the secretary of the tribunal that there would be power to
extend any time intervals if necessary. The vital date of October 2 passed
without any further action on the part of the landlords. There was a further
hearing, as I have already indicated, in November, and a final hearing of this,
the first application, in January 1976. The decision of the tribunal in January
1976 was that the landlords had made out their case for a bad husbandry
certificate, but of course all that effort had gone to waste because the six
months’ period had long since run out.
The landlords
start again in January 1976, and they start the proceedings to which I have
already made some general reference. We can now go on to consider what the
tribunal found in regard to all these matters when they came to consider the
matter, as it were, the second time round. We are now in June 1976 and the
hearing of course relates to the new applications started in January of that
year. The tribunal, in the case stated, having recited those facts and certain
other matters as well, said: "The inability of the applicants" (I
will call them the "landlords" hereafter) "to serve a valid
notice to quit was no fault of theirs and was due partly to mistakes made by
the tribunal and partly to the tactics employed by the respondent’s" (whom
I will call the "tenant’s") "advisers." A reference to the "tenant’s
advisers" is a reference to Mr Densham, a solicitor who was acting for the
tenant in the early part of these proceedings. It is quite clear that it came
to Mr Densham’s notice before October 2 that that was a vital date, and that if
that date passed, the landlords’ application would founder. He did not find it
necessary to advise the landlords of this. He allowed matters to move gently on
until the date had passed, and a great deal of the heat which one detects in
this case is due to resentment on the part of the landlords of Mr Densham’s
conduct. Whether justified resentment or not, resentment was there. That is
what the tribunal mean when in paragraph 13 of the case they use the phrase
which I have already read: "The inability of the" landlords "to
serve a valid notice" the first time was partly due to the tribunal and
partly due to the tactics employed by Mr Densham. Then they go on:
"Between the conclusion of the hearing of the first application and the
hearing of the application mentioned in paragraph 1(1) above"–which is the
1976 application–"the condition of the holding had greatly improved and
the tribunal therefore did not think it right to grant a certificate of bad
husbandry pursuant to the latter application."
I pause there
to observe that that meant of course that the tenant had taken advantage of the
time available to him to get the holding back into order, and when it was
inspected the second time on the second application for a certificate of bad
husbandry the decision was not that which had prevailed before, namely, that
the landlords succeeded, but exactly the converse applied. The tenant was
upheld and the application for a certificate of bad husbandry failed. That left
the landlords with only two strings to their bow, if that is an advantage.
Firstly, they could proceed on the basis of greater hardship, and, secondly,
they could proceed on the basis of good estate management. In regard to the
latter matter the tribunal gave them short shrift. I go on reading the case:
"Between the conclusion of the hearing of the first application and the
hearing of the application mentioned in paragraph 1(1) above, the condition of
the holding had greatly improved," and, as I said, the tribunal decided
that the certificate of bad husbandry must be refused. They go on: "The
present arrangements for the farming of the" landlords’ "estate are
that parts are let to two separate tenants," the tenant "and a Mr
Cox, who occupy separate buildings in the same farm yard." The tribunal were unable to find that the
landlord had made out a case that it was consistent with good estate management
that the notice to quit should be allowed to operate. That meant that the
landlords were down to one argument only, and that was the argument that greater
hardship would be caused by refusing to give effect to the notice to quit and
not granting it. The tribunal continued:
The
applicants propose, if they are able to obtain possession of the holding, to
let part on a grazing tenancy and to let the remainder at open market value.
The tribunal considered that these proposals had substance and that if
implemented, they would increase the income of William Cooke, the principal
beneficiary in the estate of Mrs H M Cooke, who has no income other than his old
age pension.
The repairing
obligations put upon the landlords by the present tenancy agreement are a heavy
burden and the Cooke family do not have the money with which to carry out these
repairs.
If the
[tenant] lost possession of the holding he would (unless he altered the policy
of his farming on his other land) have to
expanding gunsmith’s business in Banbury at which he works two or three days a
week.
The tribunal
say that they have considered those above-mentioned facts and they present an
overwhelming case for the giving of consent to the notice to quit on the
grounds of greater hardship. They go on to say: "It is also considered
that having regard to the reasons for delay and the behaviour of the [tenant]
through his advisers, a fair and reasonable landlord would insist on
possession." Accordingly they
certified that the notice to quit should be allowed to take effect on that
ground. It is before this court argued that the tribunal were guilty of error
of law in a number of respects arising out of the findings which I have just
read and to which they came. First of all, it is said that if they had no plans
to develop the estate, or no plans for better estate management, there was no
room for saying that an argument based on greater hardship. They go on to say:
"It is also considered heavy repairing obligations placed on the landlords
by the tenancy agreement were not a proper consideration to take into account
when deciding where the greater hardship lay. In my judgment neither of these
arguments is sound. The phrase "greater hardship" is a very wide
phrase. This court and the Court of Appeal have emphasised that in the past,
and it seems to me that if the landlords were unable to make the most
profitable use of the land, that was a measure of hardship bearing against
them. That was a measure of hardship, even though in theory at all events there
can be an arbitration in regard to an agricultural holding, and the dangers of
shortage of money might have been alleviated to some degree by that means. In
my view none of these matters is to be overlooked when one is considering the
question of greater hardship, and I therefore reject Mr Comyn’s argument on
those two points.
The real point
is the question of whether the tribunal, in deciding the greater hardship
issue, were entitled to have regard to Mr Densham’s behaviour of the previous
year, and whether they were entitled to have regard to the disappointment and,
indeed to some degree, loss which the landlords may have suffered through being
unable to pursue the certificate of bad husbandry which they eventually
obtained in the earlier proceedings. It is argued on behalf of the landlords
that this was a proper consideration for the tribunal to take into account, and
Mr Hoffmann does not seek to contend that the tribunal did not take these
matters into account. I confess for myself that I have not found it altogether
easy, reading the case, to decide exactly how far these matters were taken into
account by the tribunal, but Mr Hoffmann does not raise any point on that, and
so I proceed on the footing that they did rely to some extent upon the
behaviour of the tenant’s representatives and upon the loss and inconvenience
which the landlords suffered by having a year’s delay before they could proceed
to obtain possession on the basis of bad husbandry, and then finding that they
could not proceed on that footing at all. Mr Comyn says that the tribunal had
no business to listen to those arguments. He says they were not matters
properly to be taken into account on the issue of greater hardship. Mr Hoffmann
says that they were properly taken into account. He asks us to say that the
conception of greater hardship is a wide conception, and it enables the
tribunal to try to set at rest all matters of dispute between the parties and
produce a fair settlement of all the matters of difference between them. He
says accordingly that, with the landlords smarting under the defeat which they
had suffered in the previous year thanks in part to Mr Densham, it was only
right for the tribunal when settling matters finally on February 2 to try to
make up for that disadvantage and disappointment by allowing the notice to quit
which they wished to serve to go.
In my judgment
the position is as set out by Mr Comyn. I would hold that it is not open to the
tribunal to take into account the conduct of Mr Densham or the other
disappointments of 1976, if I may so describe them, and my reason for saying
that is, it seems to me, that the language of the Act leaves no room for any
other view. It will be remembered that the provision of section 25 dealing with
greater hardship requires proof before the notice to quit can go that greater
hardship would be caused by withholding than by giving consent to the operation
of the notice. In my judgment what that means is simply this: the tribunal have
to look at the situation as displayed before them, and they have to ask
themselves whether, if the notice is allowed to take effect or not allowed to
take effect, as the case may be, any hardship will result to the tenant in the
first instance and to the landlord in the second. If the tribunal come to the
conclusion that no hardship is going to arise in the path of anyone, then the paragraph
does not apply. There is no scope for its operation at all, and the notice
cannot go on that ground. But if, as is far more likely, there is the fairly
formidable list of disadvantages or hardships which may follow a decision,
either in the first instance to let the notice go, or in the second to refuse
to let it go, then the tribunal must look at those instances of hardship and
they must take into account all the factors of hardship which can be said to
have been caused by the grant or withholding of permission for the notice to
go. It is the causal element, that the hardship is caused by giving or refusing
to give the notice to quit, which is the essential factor here. It seems to me
that what Mr Densham said and its consequences, and indeed the disappointments
of 1976, although they may have bitten deeply into the landlords’ position,
were nevertheless not caused by any decision of the tribunal in regard to the
second proceedings which were before them. It seems to me, therefore, on Mr
Hoffmann’s concession that the tribunal took this matter into account, that
they were wrong in law so to do.
As far as the
proviso is concerned, I would take a different view. It seems to me that the
proviso is quite deliberately inserted in this Act to comfort the tenant into
this belief, that even if at some time in some way this landlord is able to
prove one of the grounds of section 25 against him, yet the tenant knows full
well that he still will not have to leave the holding if a fair and reasonable
landlord would not require him to do so. Therefore, on the proviso when they
come to apply it, the tribunal are required to look at all the circumstances.
The section says "all the circumstances," and they must all be looked
at. The tribunal must then prepare, as it were, a balance sheet of hardship.
They must prepare an appreciation of the hardships to be suffered by the
landlord if notice to quit is not allowed to go and the hardships to be
suffered by the tenant if notice to quit is allowed to go. Having done that, they
must then make up their minds, what is essentially a layman’s problem, as to
whether greater hardship would be caused by withholding the notice than by
allowing it to go. I can find no fault in the present case in the tribunal’s
treatment of the proviso. In my judgment they were at fault, and at fault only,
in the treating as part of the material upon which to form their conclusion the
behaviour of Mr Densham and the landlords’ disappointments by not being able to
have a decision in their favour when they first brought proceedings. I do not
wish to say any more about Mr Densham. If that sounds like a criticism, it is
not intended to be a criticism of him. We just do not know enough about the
case to express an opinion about him, and in any case it is not relevant that
we should do so. But I would send this case back to the tribunal and, subject
to the argument from counsel before the matter is finally determined, it seems
to me that the way in which we deal with this is provided for us by section
6(5) of the Agriculture (Miscellaneous Provisions) Act 1954. That says:
Where, after
an Agricultural Land Tribunal have given their decision in any proceedings,
they refer a question to the High
High Court for an order directing them to do so, effect shall not be given to
the Tribunal’s decision unless and until the Tribunal otherwise order after the
proceedings in the High Court and any proceedings arising therefrom have been
concluded (or the right to take or continue any such proceedings has lapsed);
and any such order of the Tribunal shall, where necessary, modify their
decision so as to give effect to the decision on any reference to the High
Court and, in a case relating to a notice to quit, may postpone (or further
postpone) the date at which the tenancy is to be terminated by the notice, if
it has effect.
We must send
the matter back to the tribunal with instructions that they must modify their
decision consistent with the opinion of this court, and that means, as I see
it, that they must be told in answer to the number of questions which they have
raised in the case that if and so far as they relied upon the evidence of Mr
Densham’s behaviour, or the previous proceedings, they erred in law by so doing
and they should reconsider the circumstances of the case in the light of that
opinion from this court, that is to say ignoring the matters which previously
they had wrongly taken into account. I do not think it possible to comply with Mr
Comyn’s suggestion that this matter should go back to a different tribunal. We
could only so order if the Act of Parliament gave us authority to do so and, as
I have already said, it seems to me that the matter is finally concluded by the
language of section 6(5), although I would be prepared to listen to further
argument about the remedy if counsel wishes to present such an argument after
hearing the other two judgments.
Agreeing,
EVELEIGH J said: It seems to me that the landlord in this case is saying that
he should be entitled to invoke as an element of hardship the resentment that
he feels at having failed to obtain an effective remedy under another section,
namely, section 27. In my view that is not an element of hardship at all, but
it is worth just mentioning that the date upon which the landlord might have
obtained possession, had he been successful under section 27, would be exactly
the same date for possession as is notified in the notice to quit which we are
here today considering. In other words, by the proceedings which we are now
considering, were he to be successful, his date for possession would be exactly
the same as it would have been under the 1975 proceedings. I agree with
everything that my Lord has said.
Also agreeing,
WIEN J said: I agree that the matter should be sent back to the tribunal with
the opinion of this court that it was wrong to take into account the conduct of
the applicant’s advisers. Since Mr Densham’s conduct has been criticised by the
tribunal, I think it right to point out that the reasons for the tribunal’s
decision were given, and among those reasons were the following: "The
tribunal therefore asked Mr Carter whether his side"–that is the tenant’s
side–"was aware that if no decision was reached by the tribunal on or before
October 2 no effective notice to quit could be served. In reply to this, Mr
Carter informed the tribunal, ‘it would be improper to say we did not know the
significance of October 2.’ Mr Carter
added that this fact had not interfered with their preparedness to negotiate.
The tribunal is prepared to accept that, but the inescapable fact emerges that
the respondent’s advisers had from some date either on or after July 22 and
before October 2 deliberately avoided carrying on the negotiations. . . ." In my view there is very little substance for
saying that the tenant’s advisers had deliberately avoided carrying on the
negotiations. The correspondence makes it quite clear that negotiations were
carrying on. Furthermore, as has been pointed out, the conduct of the
applicant’s advisers had no relevance to the second application, and the date
of serving a notice to quit and for obtaining possession were not affected in
any way. Other than those brief matters I have nothing which I can usefully
add.
Lord Widgery
said that the application would be allowed with costs against the respondent
landlords. There would be no order for costs against the tribunal: "people
sitting judicially do not get costs against them for doing their best." For the assistance of the tribunal the court
expressed the view that the operation of the notice to quit should be postponed
(under the powers conferred on the tribunal by section 6(5) of the Agriculture
(Miscellaneous Provisions) Act 1954) for a reasonable time in order to allow the
matter to be finally disposed of.
