Agriculture (Miscellaneous Provisions) Act 1976–Appeal from decision of Sir Douglas Frank QC, sitting as a deputy judge of the Queen’s Bench Division–Agricultural land tribunal decided that widow of deceased tenant should be treated as eligible for a tenancy under succession provisions but was not suitable–Tribunal’s finding based on view that widow’s experience was too limited to enable her to farm to standard which would produce the anticipated future level of market rent–Judge quashed tribunal’s decision mainly on the ground that the tribunal’s assessment of a probable five-fold increase in market rent was not put to the parties during the hearing for comment–Held by Court of Appeal, reversing decision of Sir Douglas Frank, that it must have been obvious to everyone that the rent, which had been extremely low for years, would have to be considerably higher–There was no breach of the ‘audi alteram partem’ rule–There was no error of law by the tribunal in this respect or in putting the burden on the applicant to show that she would be a suitable tenant–It could not be said that the decision was one to which no reasonable tribunal could come–The tribunal in this case, ‘experienced, careful, hearing all the evidence over a period of six days’ made no error and ‘they put their reasons together as well as any I have seen’ (Lord Denning)
This was an
appeal to the Court of Appeal from a decision by Sir Douglas Frank QC who, on
an appeal by case stated by the Agricultural Land Tribunal for the Northern
Area under section 6 of the Agricultural (Miscellaneous Provisions) Act 1976,
quashed the tribunal’s decision and sent the matter back to be redetermined.
The tribunal’s decision had been challenged by Elizabeth Ann Dagg, widow of
Matthew Smith Dagg, who had been the tenant of Wark Farm, Cornhill-on-Tweed,
Northumberland. She had been unsuccessful, on the ground of unsuitability, in
obtaining the tribunal’s direction entitling her to a tenancy of the farm on
the death of her husband. The landlord, the present appellant, was Rowland
Haddon Lovett. A report of the tribunal’s decision was published in (1979) 251
EG 75 and a report of Sir Douglas Frank’s decision in (1980) 254 EG 993, [1980]
1 EGLR 8. Sir Douglas Frank refused leave to appeal, but leave was given by the
Court of Appeal, who then proceeded to hear the appeal.
L H Hoffman QC
and Peter Langdon-Davies (instructed by Travers Smith, Braithwaite & Co)
appeared on behalf of
Nickinson, agents for Sanderson, McCreath & Edney, of Berwick upon Tweed)
represented the respondent.
Giving
judgment, LORD DENNING MR said: In the North of England, on the bank of the
River Tweed, there is a large farm of 831 acres. It has a high reputation as a
productive farm. It was farmed for many years by Mr Matthew Dagg. He had been
the tenant of that farm since 1951. Mr Dagg ran the farm for many years. He
married in 1956. He and his wife had three children–a daughter now aged 23 and
two sons now aged 21 and 19. I expect they hoped to follow their father in the
farm.
Unfortunately
Mr Dagg became ill in 1974 and died in 1977. The sons were too young then to
apply for a tenancy. So his widow applied herself. She applied under the
provisions of the Agriculture (Miscellaneous Provisions) Act 1976. She had to
show that she was an ‘eligible person’ or was to be ‘treated as eligible’ and
was ‘suitable’ to be a tenant. The owner resisted the claim. He was Mr Rowland
Lovett. He lived 30 miles away at Alnwick. He had bought the farm fairly
recently and wanted to put his daughter into it.
Mrs Dagg (the
widow) failed to show that she was an ‘eligible person’ for that purpose. Under
section 18(2)(b) she had to have derived ‘from her agricultural work on the
holding’ her principal source of livelihood for five years beforehand. As many
farmers’ wives do, she had looked after the home and had taken an interest in
her husband’s business and the farming. She had no doubt discussed with him the
affairs of the farm and how it was managed. During his last three or four years
she had helped a great deal. But the tribunal found that she had not derived
her principal source of livelihood ‘from her agricultural work.’
Nevertheless
the tribunal found that she should be ‘treated as eligible’ under section
21(1), (2) and (3). That enables the tribunal to treat a person as eligible if
it is ‘fair and reasonable’ and if ‘to a material extent’ she has satisfied the
conditions. The tribunal held in favour of Mrs Dagg that she should be treated
as eligible.
The remaining
question for the tribunal was whether she was ‘a suitable person to become the
tenant of the holding.’ Section 20(2)
provides:
Where only
one application is made under this section the Tribunal, if satisfied that the
applicant is an eligible person, shall determine whether he is in their opinion
a suitable person to become the tenant of the holding.
Subsection (7)
provides:
Before making
a determination under subsection (2) above in the case of any applicant the
Tribunal shall afford the landlord an opportunity of stating his views on the
suitability of that applicant.
It seems to me
implicit in those provisions that the applicant (in this case the widow) had to
show that she was a suitable tenant for this important farm.
A great deal
of evidence was brought before the tribunal. The landlord made it clear in the
course of the case that he wished the tenancy to come to an end. He had given
notice to quit so as to put his daughter into the farm and turn Mrs Dagg out.
The case was heard over six very full days–three in September 1978 and three in
January 1979. Then the tribunal unanimously found that Mrs Dagg was not
suitable to be a tenant of this farm. They gave their decision on February 14
1979.
The tribunal
considered the matter most carefully. They put their reasons together as well
as any I have seen. Mrs Dagg appealed to the High Court. There is a provision
in the Agriculture (Miscellaneous Provisions) Act 1976 whereby questions of law
can be referred to the High Court by way of case stated. The tribunal were
asked to and did state a case for the decision of the High Court. It was heard
by Sir Douglas Frank, sitting as a deputy judge. He, on March 12 1980, came to
the conclusion that the tribunal had erred. He quashed the decision and held that
there should be a new hearing. Now before us today there is an application for
leave to appeal from that decision. We give leave to appeal and proceed to
decide the appeal.
The one point
in the appeal arises on Mrs Dagg’s suitability. The tribunal were most
impressed by Mrs Dagg’s keenness and enthusiasm: but they felt that she had not
sufficient ability to work the farm profitably. They thought that she might not
be able to meet the rent which was likely to be charged in the future. For many
years the rent had been very low. It had been only £8 an acre. But the landlord
had not increased it. Now the landlord had determined to increase it. He was
entitled to increase it to the market rent. Could Mrs Dagg pay it?
Now here comes
the difficulty. Mrs Dagg’s counsel took objection to the actual amount of
market rent being investigated. He submitted that it might prejudice Mrs Dagg’s
subsequent negotiations or in a subsequent arbitration. His objection was
upheld by the tribunal. So they did not go into the actual amount of the market
rent which was likely to be charged in the future if Mrs Dagg was granted a
tenancy. I must say that I think that counsel’s objection was unfortunate: and
that the tribunal’s ruling was unfortunate. It is quite plain–and it was agreed
on all hands before us–that one of the matters to be considered on suitability
is whether the tenant will be able to meet the anticipated increase in rent.
I will read
the important finding of the tribunal which they made upon that matter.
The present
rent level of just over £8 per acre was low and it was not disputed that a rent
increase would have to be negotiated if Mrs Dagg was successful. The amount of
this increase as such did not primarily concern the tribunal. It did concern
them indirectly however. They would not allow the proceedings to become a trial
run for rent arbitration but the question of an economic rent did affect the
question of the applicant’s ability to make a success of the farming enterprise
and this was an element in considering her suitability. The rent was the
subject of some conjecture but the likelihood is that it would increase in the
region of five times the present rent. This rental would virtually absorb the
profit shown, in the accounts, for the last two years, affecting the viability
of the holding as it was being farmed. This must be taken into account on the
question of suitability. If the farm was to finance this rent, profitability
would have to be increased.
That is the
important paragraph in the tribunal’s decision. Mr Price submitted that the
tribunal ought not to have said, as they did, that there was a likelihood that
it would be increased to five times the present rent. He submitted that they
ought not to have made such a statement, or have been influenced by it, unless
they had first given an opportunity to Mrs Dagg or her advisers to query it.
For that purpose he relied upon the case of Moxon v Minister of
Pensions [1945] KB 490.
I cannot help
feeling that Mr Price has brought all this trouble on himself: by taking
objection to the investigation of the actual market rent. Even if they were not
to investigate the actual market rent, I see no reason why they should not
consider what the likely rent would be. You must remember that they have among
them, besides the legal chairman, a representative farmer on the farmer’s side
and a representative owner on the owner’s side. They were from the same
locality in the North. They would know, I feel sure, without any need of
evidence, what the likelihood was. Even if they did not go into details, they
could look at the matter in the light of their own experience. Just as in some
circumstances arbitrators can–as Lord Goddard said in Mediterranean and
Eastern Export Co Ltd v Fortress Fabrics (Manchester) Ltd [1948] 2
All ER 186.
I agree that,
in the ordinary way, if the tribunal is to consider matters itself which have
not been considered by the parties, they must give the parties an opportunity
of dealing with them. But it seems to me that this case does not come within
that category at all. This is a simple case. It must have been obvious to
everyone who was there that the rent had to be considerably higher if Mrs Dagg
was to remain as
able to improve the farm and run it sufficiently well to be able to pay what no
doubt would be a much higher rent?
Upon that it
was quite rightly said that Mrs Dagg had the help of a steward since her
husband’s death–and for a time before it–and she has done very well there. The
tribunal took that into account. A great deal was to be said in her favour. On
the other hand, this is the conclusion to which they came:
Against her,
on the other hand, was a similar weight of opinion that she was not suitable
and would not survive if an economic rent was charged, unless changes to the
farming policy, designed to improve productivity and profits were effected. In
effect, much of the landlord’s misgivings were based on an implicit suggestion
that her approach was not businesslike enough to make a go of the farm in this
progressive age. Few records had been maintained during the former tenant’s
lifetime and none had been innovated since. Mrs Dagg was seeking the tenancy
but could offer only the vaguest of suggestions as to her future plans. Her
knowledge of actual farming was shallow and she would need to rely too heavily
on an inexperienced steward.
Having
deliberated carefully over all that we have seen and heard, the tribunal’s
unanimous decision was that the landlord was correct and Mrs Dagg had failed to
show that she was a suitable person to succeed to this tenancy.
Those were the
findings of the tribunal–experienced, careful, hearing all the evidence over a
period of six days. Neither the judge nor this court could interfere with that
decision unless there was some error in point of law, or unless it was a
conclusion to which no reasonable tribunal would have come.
I must say as
to the points of law which were suggested, firstly, whether the tribunal were
right to look at the likelihood of an increase in the rent, it seems to me that
there was no error of law in their looking at it as they did in all the
circumstances of this case. The next point was whether they were right in
putting the burden on her, as they did. Equally it seems to me that they were
right. There was no error of law in that. In the situation that has arisen, I
am afraid I cannot see that the tribunal made any error in point of law at all.
It is
unnecessary, therefore, to go into the question of what the judge’s powers were
as to quashing the decision or the like, such as was suggested. I can see no
want of natural justice. Indeed I can see no error in the way the tribunal
handled the case.
I must say
that I feel great sympathy with Mrs Dagg–and her family. But I am comforted to
read paragraph 43 in the tribunal’s decision:
The tribunal
were conscious of the importance of this decision and its consequences on Mrs
Dagg and her family. They very much regret that she has been disappointed in
her aspirations. They felt, however, that the landlord had been helpful and
sympathetic to her husband during his lifetime, and are confident that he will
be especially helpful to Mrs Dagg in the position in which she now finds
herself.
It is a
comfort to this court–at all events to me–to feel that the landlord is going to
be helpful to her and I hope her sons as they come along. But, so far as this
court is concerned, it seems to me that the tribunal made no error. The appeal
from the judge should be allowed, and the tribunal’s decision restored.
Agreeing
CUMMING-BRUCE LJ said: I regard the facts of this case, having regard in
particular to what happened before the agricultural tribunal, as being very
special. The special feature was this. The tribunal was charged with forming an
opinion on whether Mrs Dagg was suitable as a tenant. It is obviously
impossible to form a view about that without forming a view about the farm; and
one of the oddities of the situation in this particular farm was that the rent
had not been raised for years and was far, far below what everybody realised
would be the market rent. So Mrs Dagg was asked a question by the landlord’s
counsel about the expected increase in rent. Then Mrs Dagg’s counsel objected
and objected for a good reason, that he was afraid that if the hearing
included, as it might have done, a lot of evidence about the rise in rent, it
might cause difficulties later on if Mrs Dagg became the tenant and was
involved in an arbitration about the appropriate future rent. The tribunal
acceded to Mr Price’s objection, if objection is the right word, but I rather
gathered from Mr Price’s submission that the tribunal went rather further than
he expected them to and they made a ruling that they were not going to hear any
evidence on the subject of the rise in rent.
Having arrived
at that decision, they were still, however, faced with the practical problem
that they had for the purpose of discharging their duty to form a view about
the kind of farming worth and the kind of administrative and practical business
competence that was called for on the part of the tenant who was faced with
what on any view was going to be a greatly increased rent. As I see it, it was
impossible for the members of the tribunal to avoid grasping that nettle, and
the language that they used, which my Lord has quoted, indicates that they were
careful in the way in which they expressed themselves. They said that future
rent was the subject of some conjecture, and they then talked about a
likelihood of an increase, and they gave a multiplier.
In my view, it
has not been shown that, by taking the line they did in forming that opinion
which they expressed, they went outside the reasonable scope of the way in
which such a tribunal may use its own experience; but we have been reminded of
the caution with which it is appropriate for tribunals who are hearing evidence
to dispense with evidence and use their own personal knowledge. Moxon v Minister
of Pensions is a good example. I am not conscious of any conflict between Moxon
and the line of cases that express the same view and the decision of the court
in this case, because it seems to me that the situation in which the tribunal
was put after they decided to accept the force of Mr Price’s objection made it
impossible for them to discharge their duty properly in any other way.
I agree with
the other reasons given by my Lord, and I would allow the appeal.
Also agreeing,
ACKNER LJ said: One needs to bear in mind in the material respects the unusual
facts of this case. Firstly, that the rent of £8 per acre was fixed 12 years
ago; secondly, that before the agricultural land tribunal Mr Price conceded
that the current market rent was substantially greater; thirdly, that it was
the landlord’s case that the tenant’s output would barely meet the envisaged
market rent; fourthly, that an arbitration, assuming the tenant succeeded, was
likely to take place to fix the market rent; and, fifthly, that Mr Price
intervened in the course of the cross-examination on the subject of rent and,
as a result, it is quite clear that the tribunal took the view, and so used the
expression, that there should not be a trial run of that arbitration.
Accordingly they excluded evidence on the subject of actual market rent.
Clearly they
could not, however–and this again is conceded–leave out of account what would
be the approximate level of the market rent. As the tribunal rightly pointed
out, it was essential that the applicant for the tenancy should show the
tribunal that she was capable of taking over the farm and had sufficient
ability to farm the land at a level where the landlord would receive a fair
rent for the farm and the tenant would achieve a reasonable standard of living.
In my judgment, in those circumstances, the tribunal were clearly entitled to
proceed on the basis that the tenant was content to submit to the tribunal’s
assessment of the approximate level of market rent. She cannot now complain
that the tribunal decided that the possible, although by no means conclusive,
level of market rent was in the region of five times the present rent. There
was no precision in the tribunal’s decision about the market rent. Nor did
there have to be, because the precise increase was not crucial. What was
important was the substantial nature of the
which my Lord, the Master of the Rolls, read:
If the farm
was to finance this rent, profitability would have to be increased. Further
intensification and perhaps diversification to other crops would need to be
examined and evaluated. One serious omission in the applicant’s case was that,
faced with the task of showing to the Tribunal’s satisfaction that she was a
suitable tenant, no real evidence was brought to demonstrate that she was
really alive to, or actively aware of the difficulties of the task upon which
she wished to embark. There was not only a paucity of evidence of forward
planning, including a prospective budget, but indeed a laissez-faire
attitude as to what would happen if she was successful.
In my
judgment, there was clearly material on which the tribunal were entitled to
decide that the tenant was not suitable within the meaning of section 20 of the
Agriculture (Miscellaneous Provisions) Act 1976 and accordingly, for the
reasons given by my Lords in both judgments, I also would allow this appeal.
The appeal
was allowed with costs in the Court of Appeal and below. Leave to appeal to the
House of Lords was refused.
