Agricultural tenancy — Joint tenancy — Notice to quit — Whether one joint tenant can compel other tenant to join in service of counternotice — Whether interlocutory mandatory injunction can be granted
By an
agreement dated March 25 1974 the plaintiff and defendant, who are brothers,
were granted an annual agricultural tenancy of a holding. In 1977 the defendant
ceased working on, and in 1983 he ceased to reside at, the holding. The
plaintiff farmed the holding at first in partnership with his father, then in
partnership with his mother, and latterly on his own account. In 1991 the
family agreed not to deal with the arrangements of the defendant’s beneficial
interest in the tenancy. A notice to quit dated July 31 1996 was served by the
landlord on August 7 on both brothers requiring possession of the holding on Lady
Day 1998. The plaintiff issued proceedings and, in applying for an
interlocutory mandatory injunction ordering the defendant to join in the
service of a counternotice under section 26(1) of the Agricultural Holdings Act
1986, offered an undertaking that if at trial it was found that the defendant
should not have been compelled to join in the service of the counternotice, the
plaintiff would take steps to surrender or otherwise bring the tenancy to an
end.
the family agreement of 1991 it was agreed that the plaintiff would remain as
the occupying tenant. The plaintiff therefore arguably had an equitable
interest to be protected. It was therefore effectively agreed that the
defendant would remain locked into the tenancy and its obligations. The balance
of convenience required the counternotice to be served to prevent the notice to
quit taking effect save with the consent of the agricultural lands tribunal.
The fact that the defendant had been a no-rent paying absentee tenant since
1977, and that the plaintiff had offered the undertaking, were factors in
exercising the balance of convenience.
The following
cases are referred to in this report.
Bull v Bull [1955] 1 QB 234; [1955] 2 WLR 78; [1955] 1 All ER 253
Dennis v McDonald [1982] Fam 63; [1982] 2 WLR 275; [1982] 1 All ER
590, CA
Doe d
Aslin v Summersett (1830) 1 B&Ad 135
Featherstone
v Staples [1986] 1 WLR 861; [1986] 2 All ER
461; (1986) 52 P&CR 287; [1986] 1 EGLR 6; 278 EG 867, CA
Hammersmith
and Fulham London Borough Council v Monk
[1992] 1 AC 478; [1991] 3 WLR 1144; [1992] 1 EGLR 65; [1992] 09 EG 135, HL
Harris v Black (1983) 46 P&CR 366, CA
Henderson
v Eason (1851) 17 Ad & Ell R QBD 701
Sykes v Land [1984] 2 EGLR 8; (1984) 271 EG 1264, CA
Warren,
Re [1932] 1 Ch 42
This was an
application by the plaintiff, Roger Stanley Cork, by notice of motion in
proceedings brought by him against the defendant, his brother and co-joint
tenant, Anthony George Cork.
Martin Rodger
(instructed by Lanyon Bowdler, of Shrewsbury) appeared for the plaintiff; Piers
Feltham (instructed by Keely Smith Primmer & Partners, of Lichfield)
represented the defendant.
Giving
judgment, Knox J said:
This is an application by the plaintiff, Mr Roger Stanley Cork (‘Mr Roger
Cork’) for an interlocutory mandatory injunction against his brother, Anthony
George Cork (‘Mr Anthony Cork’), requiring the latter forthwith to join with Mr
Roger Cork in signing a counternotice under section 26(1) Agrictural Holdings
Act 1986 in a form which is scheduled to the notice of motion and is in
standard form in regard to a counternotice to a notice to quit. It is common
ground between the parties the notice to quit was dated July 31 1996 and served
by the landlord on August 7 following. The notice will in fact take effect, if
it is valid and not successfully the subject matter of a counternotice, on Lady
Day of the year after next, that is to say 1998.
This concerns
a Lady Day annual tenancy (‘the tenancy’) in standard form for agricultural
lettings of a farm called Harriets Hayes Farm, Cotshall Wood in Shropshire. It
would appear that originally the farm was let to the parties’ father, Mr Eric
Alfred Cork (‘the father’) but that was superseded — and the original tenancy
does not now matter — by a tenancy agreement which is in evidence and is the
operative one dated March 25 1974 in favour of the father, Mr Roger Cork, and
Mr Anthony Cork, who are together called ‘the tenant’.
It was, as I
have indicated, an annual tenancy from Lady Day 1974 until the tenancy should
be determined at the end of any year of the tenancy by either party giving to
the other not less than 12 months’ previous notice in writing, at a rent. There
was the usual form of division of responsibility for repairs between landlord
and tenant, which I need not go into in any detail. There was the usual
absolute covenant against assignment in agricultural tenancies. There was a
requirement that:
… At all
times during his tenancy [the tenant] shall personally reside on the farm
The
indications are that Mr Anthony Cork did continue to reside at the farm until
1977 and worked there at the same time. Thereafter it appears that he did not
leave the farm so far as his residence was concerned, but he had ceased to work
on it. He went to work elsewhere on land that he farmed. But in 1983 he also
ceased to reside at the farm. There is some obscurity in the evidence about the
basis upon which Mr Roger Cork went on farming. He certainly did go on farming
throughout, but whether there was a partnership from 1980 onwards with his
father and mother is not very clearly set out in his evidence before me. The
father died in 1983, and there certainly was a partnership which arose
thereafter between the father’s widow and Mr Roger Cork. That went on until
1991 when there ensued negotiations for dealing with a variety of questions
concerning notably the father’s estate but also, perhaps somewhat peripherally,
what should be done with regard to Mr Anthony Cork’s interests in the tenancy.
In the midst
of correspondence between the solicitors about the various issues that were
being discussed regarding the other aspects of the administration of the
father’s estate in particular, there was a correspondence about what, if anything,
should be done about Mr Anthony Cork’s interests in the tenancy. That
correspondence is in fact in evidence, but the correspondence was inconclusive.
It included originally a proposal on September 10 1991, made on behalf of Mr
Roger Cork to the solicitors for Mr Anthony Cork and indeed their mother, in
the following terms:
Mr AG Cork
[Mr Anthony Cork] To assign his share in the tenancy of the adjoining farm [the
farm with which I am concerned] To Mr RS Cork.
The reply to
that was:
You do not
say how much Mr RS Cork is offering for Mr AG Cork’s share. Please clarify.
The reply to
that was:
We do not see
there is any basis for a payment.
Without going
through the rest of the correspondence, the effect clearly was that the parties
agreed to leave things as they stood. In particular, one of the proposals which
was finally taken up and this is from Mr Anthony Cork’s solicitors to Mr Roger
Cork’s solicitors:
Mr Anthony
Cork will not be required as part of the settlement to assign his share in the
tenancy of the adjoining farm to Mr RS Cork.
That was
effectively agreed upon. The actual answer was:
It is agreed
that we are not to be concerned with this at the present time.
So at that
stage it seems to me that the parties through their solicitors agreed to leave
the beneficial interest as it was. The evidence, apart from the
inter-solicitors’ correspondence, is primarily contained in an affidavit sworn
by Mr Roger Cork in support of this application. Para 6 reads as follows:
There had
been no discussion in 1977 of any continued involvement by my brother in the
tenancy of the holding.
I pause to
observe that ‘the holding’ means the farm with which I am concerned. The
paragraph continues:
Discussions
concerned the dissolution of the partnership which began in 1991, encompassed
other family property issues which had been left unresolved following the death
of my father in 1983. Anthony sought to use his status as joint tenant of the
holding (which it was agreed I would continue to farm in my own right) to
improve his bargaining position in relation to the purchase by him of other
land belonging to me but occupied by the partnership at Poplars Farm. An
assignment of the tenancy was not agreed at that stage although the dissolution
of the partnership was agreed in principle with effect from 31st May 1991.
He then goes
on to state what is not in any dispute, namely that the partnership between Mr
Roger Cork and his mother was finally dissolved by a deed of retirement which
is also in evidence, and one of the provisions regarding that operation was
that Mrs Cork senior, Mr Roger Cork’s mother, was described as ‘the retiring
partner’; Mr Roger Cork was described as ‘the continuing partner’, and clause
3.4 of this deed of retirement reads:
The retiring
partner hereby declares that she holds all and any interest in the
partnership’s tenancy of Harriets Hayes Farm on trust for the continuing
partner and will continue to comply with all her obligations under the tenancy.
The affidavit
that has been sworn by Mr Anthony Cork challenges the claim that is made
elsewhere in an affidavit of Mr Roger Cork that he, Mr Roger Cork, was
beneficially entitled to all or more of the beneficial interest in the tenancy
of the farm. What Mr Anthony Cork says on that score is:
I do not
accept that Roger owns all or most of the beneficial interest in the tenancy of
the farm. On 25th March 1974 we entered into a joint tenancy with our father of
the farm. Our father farmed the farm as a sole trader under his name EA Cork.
He employed Roger and me in the farming business. I left in 1977 and the land
was thereafter farmed, I believe, by Roger and our father in partnership, and
by Roger and our mother in partnership, and then by Roger. However, I have
never formally or informally assigned my interest in the tenancy, and have
continued to maintain that I own a share of it. I have not contributed to the
rent since 1977, but I have not had the benefit of occupation of the farm, nor
have I received any account of the profits that have been made by Roger on his
own and in partnership with each of my parents.
I maintain that I continue to be entitled to an equal share of the
tenancy, and I am likely to benefit if anything from the taking of an account
in respect of Roger’s outgoings on the farm, occupation thereof and profits
therefrom.
Mr Feltham
prudently did not seek to support that last proposition that after, as he
accepts, he left in 1977 and permitted his brother Roger to continue farming,
at first in partnership and subsequently solo, now in 1996 or hereafter it
would be open to Mr Anthony Cork to claim an account of Mr Roger Cork’s farming
enterprises. That, Mr Feltham recognised
rightly would be clearly flying in the face of what was said in Dennis v
McDonald [1982] Fam 63 by Sir John Arnold; and, indeed, if one wants
ancient authority on the subject, what was said by Baron Clark in Henderson
v Eason (1851) 17 Ad & Ell R QBD 701. I need not pursue that aspect
of the matter.
The other
thing that is to be observed with regard to Mr Anthony Cork’s affidavit is that
he does not challenge the passage in brackets which I read from Mr Roger Cork’s
affidavit that it was agreed that he, Mr Roger Cork, would continue to farm the
holding in question in his own right. Indeed, as a matter of commonsense, it is
fairly clear that the parties must in practice have come to such an agreement.
There is no problem, so far as I am concerned, in accepting that proposition.
The resistance
that is made to the application by Mr Roger Cork is primarily based, so far as
a matter of law is concerned, on the decision of the House of Lords in Hammersmith
and Fulham Borough Council v Monk [1992] 1 AC 478*, which
conclusively decided that a single joint tenant could bring a periodic tenancy
to an end without the concurrence of the other joint tenant by alone serving a
notice to quit. I was referred in particular to the passage in the speech of
Lord Bridge at p490 in a judgment with which three of their lordships, that is
to say Lords Brandon, Ackner and Jauncey, agreed. The passage reads as follows:
*Editor’s
note: Also reported at [1992] 1 EGLR 65
The second
submission for the appellant is that, whatever the law may have been before the
enactment of the Law of Property Act 1925, the effect of that statute, whereby
a legal estate in land vested in joint tenants is held on trust for sale for
the parties beneficially entitled, coupled with the principle that trustees
must act unanimously in dealing with trust property, is to reverse the decision
in Summersett ‘s case and to prevent one of two joint tenants
determining a periodic tenancy without the concurrence of the other. It is
unnecessary to reconsider the position where the parties beneficially entitled
are different from those who hold the legal interest. But where, as here, two
joint tenants of a periodic tenancy hold both the legal and the beneficial
interest, the existence of a trust for sale can make no difference to the
principles applicable to the termination of the tenancy. At any given moment
the extent of the interest to which the trust relates extends no further than
the end of the period of the tenancy which will next expire on a date for which
it is still possible to give notice to quit. If before 1925 the implied consent
of both joint tenants, signified by the omission to give notice to quit, was
necessary to extend the tenancy from one period to the next, precisely the same
applies since 1925 to the extension by the joint trustee beneficiaries of the
periodic tenancy which is the subject of the trust.
Lord
Browne-Wilkinson, who did give a judgment with reasons, unlike the other
members of their lordships’ House than Lord Bridge, said at the end of his
speech at p493:
The trust
property in question was a periodic tenancy. As between the lessor and the
lessees the nature of the contract of tenancy cannot have been altered by the
fact that the lessees were trustees. The tenancy came to an end when one of the
lessees gave notice to quit. It may be that, as between the lessees, the giving
of the notice to quit was a breach of trust, theoretically giving rise to a
claim by Mr Monk against Mrs Powell for breach of trust. Even this seems to me
very dubious, since the overreaching statutory trusts for sale imposed by the
Law of Property Act 1925 do not normally alter the beneficial rights inter
se of the concurrent owners: …
He cites Re
Warren [1932] 1 Ch 42 and Bull v Bull [1955] 1 QB 234 and
goes on:
But even if,
contrary to my view, the giving of the notice to quit by Mrs Powell was a
breach of trust by her, the notice to quit was not a nullity. It was effective
as between the lessor and the lessees to terminate the tenancy. The fact that a
trustee acts in breach of trust does not mean that he has no capacity to do the
act he wrongly did.
He finds that
the notice was good.
That of course
is unchallengeable authority for the proposition that, as a matter of landlord
and tenant law, a joint lessee can give a valid notice without the concurrence
of his fellow lessee in a periodic tenancy.
What their
lordships did not in terms deal with is a trilogy of cases in the Court of
Appeal in which this was contemplated at least as a possibility — and in one
case at least the actual event occurred — of the court directing that one of
several trustees who were co-owners of a tenancy should concur in serving a
counternotice of one sort or another in relation to the tenancy. Not all three
cases were concerned with agricultural properties. One was a business tenancy
case. That was Harris v Black (1983) 46 P&CR 366. The term
there was a term of 14 years, so we are not dealing with a periodic tenancy,
but the headnote states the conclusion of the Court of Appeal, which consisted
of Slade and Robert Goff LJJ, in the following terms:
Although the
Court had jurisdiction in an action by one trustee to make an order compelling
his co-trustee to join him both in signing a counter-notice and applying to the
Court for a new lease, there was no principle requiring that order to be made
in every case concerning business tenancies in that the matter was one for the
discretion of the Court in the exercise of its equitable jurisdiction depending
on the particular circumstances of the particular case.
In that case
the parties who were at law the joint tenants had been in partnership but had
dissolved the partnership and had retired, so to speak, into separate parts of
the demised premises. In the exercise of the court’s discretion the court
decided, more especially as the one who did not want to go on was in fact
paying rather more rent than the one who did want to go on as a tenant, that
the jurisdiction to make an order compelling the co-trustee to join in serving
the counternotice in that case, under the Landlord and Tenant Act 1954 (Part
II) would not be exercised. But the significance of the case, of course, is
limited for my purposes to the recognition of the existence of the jurisdiction
in the first place.
The second
case was Sykes v Land [1984] 2 EGLR 8. This was an Agricultural
Holdings Act case. There is not strictly speaking a headnote but it is the sort
of heading that one finds in Estates Gazette Law Reports, the operative
part of which reads as follows:
Plaintiff and
defendant carried on a farming business in partnership in pursuance of an
agreement which provided inter alia that on the dissolution of the
partnership otherwise than by death the plaintiff was to be entitled to
purchase the defendant’s share in the capital and profits of the partnership —
The farm which was to be the subject of the present litigation was demised to
the plaintiff and defendant and became a partnership asset — Subsequently the
defendant became entitled, on the death of her husband, to the freehold
reversion expectant on the determination of this tenancy — In her capacity as
landlord she gave the partnership notices to quit, the first of which was
invalid as not purporting to terminate the tenancy on the correct date, but the
second was correct in point of form — She also gave notice of intention to
terminate the partnership — The plaintiff gave notice of his intention to
exercise his rights under the partnership agreement to purchase the defendant’s
share of the partnership assets, including the tenancy if it continued — No
counternotice was served in response to the second notice to quit but the
parties agreed that no objection would be taken on the ground of the
time-limit.
The issue then
arose as to whether or not there should be an order on the lady, who had become
entitled to the reversion, to serve a counternotice, then under the
Agricultural Holdings (Notice to Quit) Act 1977, but it is the same legislation
as now enacted in the Act with which I am concerned. In that case the judgment
was given by Fox LJ. At p10J it includes the following:
By serving a
notice to quit, therefore, Mrs Land [the lady who had become entitled to the
reversion and whom it was sought to compel to serve the notice] is not of her
own motion bringing about an impossibility of performance. The crucial matter
is not whether Mrs Land can serve notice to quit (I think she can) but whether
she can refuse to join in the service of a counternotice under the Act of 1977;
it is common ground that a counternotice served by one only of the joint
tenants would be invalid. To that question I now turn.
Upon Mr
Sykes’ completing the purchase of Mrs Land’s share under the provision of
clause 10 he will, on the view which I have taken as to the construction of
clause 10, become the absolute beneficial owner of the entirety of the assets
of the partnership including the lease. Section 26(3) of the Law of Property
1925 provides that trustees for sale under statutory trusts (which the trusts
of the lease are)
‘shall so far
as practicable consult with persons of full age for the time being beneficially
interested in possession in the rents and profits of the land until sale and
shall, so far as consistent with the general interest of the trust, give effect
to the wishes of such persons …’
In pursuance
of that provision it seems to me that Mrs Land and Mr Sykes as trustees would,
as from the completion of the purchase, be required to give effect to the
wishes of Mr Sykes as to the service of a counternotice. Such service would
certainly be in the general interests of the trust since it would preserve
trust property.
So in that
case the order was made. That also recognises of course the jurisdiction in the
court to do this in a much closer set of circumstances to the present, in that
we are dealing here with the Agricultural Holdings (Notices to Quit) Act 1977.
The third and
last of the trilogy of cases in the Court of Appeal, which I need not go into
in any detail, is Featherstone v Staples [1986] 1 WLR 861*. In
that case it was also held that the counternotice under the Agricultural
Holdings (Notices to Quit) Act 1977, as it then was, needed to be served by all
the joint tenants, and a special decision (which does not impinge on this case)
decided the case, namely that where the tenants included the landlord public
policy required that tenants other than the landlord should have authority to
serve an effective counternotice. That is not a point that arises in the
present case but what it does do, in my judgment, is to review and recognise
the earlier cases, not of course Monk‘s case which had not then yet been
decided, but it does recognise and treat as valid the case which Monk‘s
case confirmed as binding, namely Doe d Aslin v Summersett (1830)
1 B&Ad 135.
*Editor’s
note: Also reported at [1986] 1 EGLR 6
So the
principles upon which the House of Lords decided the Hammersmith and Fulham
Borough Council case were recognised in Featherstone v Staples
and were not treated by Slade LJ as being inconsistent with the possibility of
the court, in an appropriate case, directing one of two or more joint tenants
at law, who were also trustees for sale, to serve a counternotice, if the
equitable considerations under the trust for sale so dictated.
On this
application, which is an interlocutory one, at a fairly late hour of the day, I
do not propose to enter into a lengthy debate on the extent to which the Hammersmith
and Fulham Borough Council v Monk case is consistent with those
three authorities in the Court of Appeal, which recognised the jurisdiction
that I am being asked to exercise in this case. In my view, it is at least
arguable that they can perfectly well coexist. It seems to me that the speech
of Lord Browne-Wilkinson recognises explicitly in the Hammersmith and Fulham
case the possibility of there being trust considerations existing which might
in an appropriate case (and if the court had an opportunity of intervening at
an early enough stage) have an effect upon the way in which the trustees for
sale should be directed to behave. Monk‘s case was concerned with what
the results of what one of the two trustees for sale had actually done vis à
vis the landlord. That is a different situation, in my judgment, from what
I am asked to look at, which is how the trustees for sale should be directed to
behave vis à vis the landlord. So I see no incompatibility between those
two lines of authority.
On the other
hand, I think Mr Feltham is right in his submission that the plaintiff does not
establish even a serious issue to be tried on the question of whether he has
the sole beneficial interest in the tenancy of this farm. He certainly started
out life just as a beneficial joint tenant in 1974 when the tenancy was first
granted. Although there have been subsequent dealings, the express agreement
not to deal with Mr Anthony Cork’s beneficial interest in the tenancy when the
family arrangement was arrived at in 1991 seems to me very strongly against any
proposition that Mr Anthony Cork went so far as to divest himself of that
beneficial interest.
That, however,
does not conclude the question because, in my judgment, what the court has to
look at is whether there are equitable interests which operate to vary the prima
facie position which certainly obtained in 1974, namely that either of the
two (or any of the three, as it was in those days) joint tenants could serve a
tenant’s notice to quit at an appropriate time under the tenancy at law, and,
had a notice under the relevant legislation been served by the landlord, could
have declined to serve a counternotice.
On that issue,
are there any such equitable interests which arise, it seems to me that it is
arguable that a result was achieved, consequent upon the family discussions in
1991 and thereafter, leading up to the deed of retirement, which positively had
the effect of an agreement that Mr Roger Cork should remain as the occupying
farming tenant of this farm. It is true that the evidence on this score is thin
but this is an interlocutory application, and the evidence is there and is not
actually in terms disputed, that there was an agreement that Mr Roger Cork
would continue to farm this farm in his own right. Mr Feltham
situation which I have described, governed by what we now know from Hammersmith
and Fulham Borough Council v Monk, and that the effect of such an
event would have been that Mr Anthony Cork would be locked into the tenancy and
the obligations that it imposes on the tenants, notably to pay the rent and do
the repairs that are required, for as long as the plaintiff, Mr Roger Cork,
thought fit. It seems to me that the answer to that argument may well be that
that was what was effectively agreed, because the agreement as it is stated
very succinctly in the affidavit is without any sort of qualification or
provision for determination. Just as the agreement, as reported, does not say
that it was agreed that Mr Roger Cork would remain the occupying tenant farming
in his own right so long as he wanted, so equally it does not say that Mr Roger
Cork would only continue to farm as the occupying tenant so long as Mr Anthony
Cork saw fit to allow that state of affairs to continue. The matter simply was
not gone into so far as one can tell from the evidence.
In those
circumstances, the door seems to me wide open to considerations of balance of
convenience. I think there is absolutely no doubt where the balance of
convenience lies because it is perfectly obvious that, if the counternotice is
not served, signed by both tenants, the notice to quit will take effect;
whereas, if the counternotice is served, there is not in fact any evidence
before me that the Agricultural Land Tribunal, which would be seized of the
matter if the landlord wished to enforce the notice to quit, would have
material upon which to allow that to happen. That is a matter which is not by
any means certain, but what is clear is that, if the counternotice is not
served, there will undoubtedly be a risk of determination.
I appreciate
of course that all this hinges on the true construction of a somewhat vague
family arrangement some few years ago, and that at this present interlocutory
stage and without the benefit of seeing any of the witnesses it is by no means
certain that what I have held is an arguable proposition will turn out at the
end of the day to be actually the correct and precise result of what this
family did agree. In those circumstances I should contemplate the possibility
that it will turn out at the end of the day, when the trial of this matter
comes (if the parties cannot agree), that Mr Anthony Cork is right and that he
is in the unqualified position of a joint tenant, as was the tenant in question
in the Hammersmith and Fulham Borough Council v Monk case.
That is
covered, fortunately, by an undertaking which was offered on behalf of Mr Roger
Cork, and which I am prepared to accept, that, if at the trial it is felt that
Mr Anthony Cork was not compellable to sign the counternotice, the plaintiff,
Mr Roger Cork, will either concur in effecting a surrender or take such other
steps as may be necessary to bring the tenancy to an end, when it would, had no
counternotice been served, have determined, that is to say Lady Day of the year
after next. That seems to me to take the sting out of the possibility, which I
cheerfully accept as being a lively one, that I may have reached the wrong
tentative conclusion in this matter, and will foreseeably protect Mr Anthony
Cork against the more serious consequences of my granting an injunction against
him, should it at the trial turn out that the injunction should not have been
made.
I am fortified
in taking what may on the face of it be a rather robust attitude of granting a
mandatory interlocutory injunction by the additional factor that Mr Anthony
Cork has, so far as one knows, without suffering any hardship, in fact been an
absentee non-rent-paying joint tenant in respect of this farm since 1977. That
too I put in the scales on questions of balance of convenience.
For all those
reasons, I propose to grant the injunction that is sought, but on the
undertaking that I have mentioned that was offered me by the plaintiff.
