Agricultural Holdings Act 1948, section 2 — Question as to application of the provision in section 2 (1) which prevents a letting made with the prior approval of the minister from being converted into a tenancy from year to year — Following the expiry of a previous 364-day tenancy to which the minister had given his prior approval, the minister approved the grant of a further tenancy of the land in question for 364 days — On this occasion, however, negotiations did not result in any agreement — The occupier remained in occupation and paid rent, which was accepted for the first two quarters of the 364 days but subsequently rejected — It was common ground that a new tenancy for 364 days had been created, but there was a dispute as to the status of the tenancy resulting thus from the implication — The tenant contended that it had been converted by section 2(1) into a full tenancy of an agricultural holding with security of tenure — The landlord submitted that the effect had been to create the precise tenancy contemplated in the minister’s approval, namely, a letting excluded by the exemption in section 2(1) from conversion into a tenancy from year to year — Held that the landlord’s submission was correct, that the letting had not created an agricultural holding, and that the landlord was entitled to possession
This was an
action by the plaintiff, the Borough of Epsom and Ewell, against the defendant,
C Bell (Tadworth) Ltd, for possession of certain land in the Horton Country
Park and Bufferland which had been occupied by the defendant for agricultural
purposes.
E H Scamell
(instructed by Sharpe Pritchard & Co, agents for the Borough Secretary and
Solicitor, Epsom and Ewell Borough Council) appeared on behalf of the plaintiff;
A Dinkin (instructed by Down & Co, of Dorking) represented the defendant.
Giving
judgment, JUDGE RUBIN said: The plaintiff, the Borough of Epsom and Ewell, is
the owner of certain land in the borough described as the Horton Country Park
and Bufferland which it acquired for amenity purposes. It has for some time
past allowed the defendant company to use a substantial part of that land for
carrying on various agricultural activities.
I can start
the story for the purposes of these proceedings by a tenancy agreement which
was dated January 9 1976. It was an agreement under which the plaintiff let the
relevant land to the defendant for a term of more than 12 months and less than
two years; a term which did not then create a secure tenancy for the purposes
of the Agricultural Holdings Act. I need say no more about that tenancy
agreement. It expired by effluxion of time on January 31 1977, and on the next
day a new tenancy agreement was granted to
agreement, the approval of the minister had been obtained under section 2 of
the Act of 1948. Again I need say no more about that term because nothing turns
on it, other than it expired in due course by effluxion of time on the
expiration of the 364 days created by that term.
In the
meantime certain events had occurred. It is clear that the appropriate officers
of the plaintiff authority contemplated that at the end of that term a further
like term of 364 days would be granted to the defendant company, because the
officers of the local authority applied to the minister for a further consent
and that was granted on October 3 1977, well before the original term of 364
days had expired. As so much turns on that permission perhaps I should read it in
full. It is headed
The
Agricultural Holdings Act, 1948
Approval by
the Minister of a short-term letting of land
In exercise
of the powers conferred upon him by section 2 of The Agricultural Holdings Act
1948, the Minister of Agriculture, Fisheries and Food hereby approves, but only
for the purposes of the said section, the letting by an agreement to be entered
into after the date hereof of the land, the particulars of which are as
follows:
It then sets
out the particulars.
259 acres
approximately forming part of the Horton Country Park and Bufferland and shown
edged red on the plan annexed hereto signed by the undersigned for use as
agricultural land for the period of 364 days commencing on January 31 1978.
It is signed on
behalf of the minister. There is no issue in this case about the identity of
the land. Nobody suggests that the 259 acres referred to in that permission are
not the land with which I am concerned in this case.
After the
grant of that approval by the minister, negotiations took place between the
plaintiff and the defendant’s advisers in contemplation of the grant of a
further term of 364 days at the expiration of the then existing term. Certainly
the plaintiff had that in mind. What was in the mind of the defendant and its
advisers is not so clear from the correspondence. The plaintiff council went to
the extent of even preparing a lease, or a draft of a lease, in which they
included the date of execution, which is somewhat unusual in a draft, being of
course the very day after the expiration of the existing 364-day term.
Be that as it
may, those negotiations were fruitless and no new tenancy agreement was
executed at all. However, on the expiration of the existing term of 364 days
the defendant company remained in possession of the land, and indeed remain in
possession, as far as I am aware, to this day. At the end of what would be a
quarter of either a new year or a new term of 364 days, the defendant company
tendered a quarter of what would have been the full rent payable under a
364-day lease on the terms of the previous 364 days’ term, and that rent was
accepted by the plaintiff. At the end of the second quarter a like sum was
tendered and again accepted by the plaintiff. For the remaining two-quarters
like sums were tendered, but by now somebody in the local authority no doubt
realised the dangers involved and rejected those two tenders of rent. So out of
the 364 days, if they came into being on the expiration of the original 364,
one-half of the rent has been paid.
Now, it is
common ground between the parties that the effect of the defendant company
holding over, and the acceptance of rent by the borough council was by
implication to create a new term of 364 days. Now, perhaps it is convenient
that at this stage I refer shortly to one case which was cited during the
course of argument, and that is the decision of the Court of Appeal in Reid
v Dawson [1955] 1 QB 214. That was a case under the proviso to section 2
of the 1948 Act which deals with short tenancies let in contemplation of grazing
of the land. It is not directly a point in the present case but I think it is
interesting to look at part of the judgment of Morris LJ towards the end of his
judgment on p 220, where he is dealing with the decision of the learned county
court judge on the facts of that case that the holding over had in fact created
a tenancy of one further period of 364 days. At the end of his judgment (p 220)
he said this:
But in regard
to that part of the case an additional argument has been addressed to us, that
insomuch as this further period was a period that arose by implication, then it
was not for some specified period of the year; for it is said that if the
period arises by implication it cannot be ‘specified’. In my judgment, that
reasoning is not sound. For the later period there was a necessity to resort to
some extent to implication, but that merely means that, in the absence of a new
agreement in writing, or in the absence of terms wholly and completely orally
expressed, the judge found that there was material from which he could infer or
imply what the new contract was. But it is quite clear what the new contract
was and what were the terms that the parties agreed. They were terms similar to
those that they had previously agreed. Therefore, in the new contract they
agreed to terms one of which was that the period was to be 364 days, which, in
my judgment, is a specified period within the meaning of the words of the
proviso.
Now, of
course, I am not troubled with that sort of problem in this case because the
parties agree that the term to be implied was indeed one further term of 364
days. It is said, of course, on behalf of the defendant that the effect of this
grant of a term by implication was to create an agricultural holding and,
accordingly, the defendant has security of tenure. Let me go straight to the
section which is concerned, since at the end of the day the problems I have to
solve to a very large extent depend on the true construction of section 2 of
The Agricultural Holdings Act 1948. Let me read the relevant parts of it.
Subject to
the provisions of this section, where under an agreement made on or after the
first day of March nineteen hundred and forty-eight . . .
and of course
the agreement which arose by implication is quite clearly one made after that
date.
. . . any
land . . .
and I
emphasise those words and will come back to them later in this judgment
. . . is let
to a person for use as agricultural land for an interest less than a tenancy
from year to year . . .
and that quite
clearly is this case
. . . or a
person is granted a licence to occupy land for use as agricultural land, and
the circumstances are such that if his interests were a tenancy from year to
year he would in respect of that land be the tenant of an agricultural holding
. . .
and that is
clearly so in this case, and then one comes to the vital part of the section
. . . then,
unless the letting or grant was approved by the Minister before the agreement
was entered into, the agreement shall take effect, with the necessary
modifications, as if it were an agreement for the letting of the land for a
tenancy from year to year
with the
inevitable consequence, of course, that it would be a protected tenancy under
the Act.
The section
then goes on in the proviso to deal with short tenancies of land let in
contemplation of the use of the land only for grazing or mowing during some
specified period of the year. There, one clearly has to look at the
contemplation of the parties at the time of the letting to see whether it was
for the use for that particular purpose in the sense that one is there looking
at a possible future event.
Now, it is
argued by Mr Dinkin, on behalf of the defendant, first of all that as a matter
of law the minister had no power under that section to authorise or to approve
the grant of a tenancy by implication of this land which arose in the events
which occurred. It is secondly argued on behalf of the defendant, if that is
wrong, that the particular approval granted by the minister did not approve
that particular type of tenancy. Now, the first point, of course, is
essentially a question of construction of the section. I was referred to one
case — as far as I am aware it is the only case which deals with the
construction of this part of the section — Finbow v Air Ministry [1963]
1 WLR 697. Mr Dinkin argues that the case was wrongly decided, and that as it
is a case at first instance, the decision is not binding on me. I need not go
into the rather complicated facts of that case, other than to note that the
permission granted by the minister in that case was an approval stating that he
approved of the grant to any of the government departments or the persons
specified in the schedule — so, in a sense, it was a block approval granted to
a large number of people — ‘of every licence to occupy and use as agricultural
land any land which belongs to any of the scheduled authorities’ — those are
the persons I have mentioned — ‘for any state or interest therein whatever’.
Now, the relevant part of the judgment of McNair J appears at p 710. Perhaps I
ought to start reading from the first complete paragraph, when he says this:
It is next
submitted on behalf of the plaintiff that section 2 does not contemplate a
blanket approval but requires an approval given ad hoc after consideration of
the terms of the proposed agreement or at least the circumstances relating to
the particular letting or grant.
It was argued
that, if a blanket approval to lettings or grants by the named service
authorities were held to be valid, the Minister would equally have power in
advance to approve all lettings or grants by whomsoever made, and that this, in
effect, would enable the Minister to deprive section 2 of any effect at all.
This argument seems to me to be fallacious since, if a blanket approval of all
lettings and grants were attempted, it would be clear that the Minister had not
applied his mind to any relevant circumstances. In the present case, by
confining his approval to lettings or grants by specific named authorities, it
is clear that he has applied his mind to the general circumstances relating to
such grants.
Then he deals
with two authorities which I need not mention. The learned judge then went on
to say this:
I can find
nothing in the language used in section 2(1) or in the policy of the Act to be
deduced from its provisions, which requires or supports the submission that the
approval must be given ad hoc. If anything, the use of the words, requiring the
approval of ‘the letting or grant’ rather than ‘of the terms of the proposed
agreement’ seem to point the other way and suggest that the Minister may
approve lettings or grants of particular types without considering the
particular proposed letting or grant. The form of words used follows a familiar
statutory form
and then he
went on to deal with some other matters with which I am not concerned in this
case. Now, Mr Dinkin criticises that judgment, primarily by looking at the
section itself, saying and submitting that the judgment is inconsistent with
the language used by the draftsman of the section. Now, with all respect to the
learned judge, I can see considerable force in that argument, but I think there
is a danger of carrying that argument too far. What the words of the section
are, are these:
Then unless
the letting —
and Mr Dinkin
emphasises these words —
or grant was
approved by the Minister before the agreement was entered into
then certain
consequences shall follow.
Now it seems
to me that one cannot have a letting or grant in the abstract. It has got to be
a letting or grant of something, and, in my judgment, one has got to look back
to the earlier part of the section to see what the letting or grant was in
contemplation of the draftsman when he used those words. The only reference, of
course, could be to the ‘any land’ at the beginning of the section. Therefore,
it seems to me that upon its true construction one here has to read this
section as if it read: ‘Unless the letting or grant of the land which was
ultimately let was approved by the minister before the agreement was entered
into.’
I find myself
driven to a conclusion that what the minister has to apply his mind to is the
letting or grant of a particular piece of land. However, I agree with the
learned judge when he decided that the minister was not concerned with the
particular terms of the agreement to be entered into. Again, as a matter of
construction of the section, what was required was that: ‘Unless the letting or
grant should be approved by the minister.’
There is nothing there which requires the minister to approve of the
terms of the agreement which, ex hypothesi, had not then been entered into and,
indeed, may not by then have been finally settled. That seems to me, again, to
be consistent with the general policy of the Act, and in particular this
section which was dealing with security of tenure in respect of particular
land, and the minister was concerned with that aspect of the matter only. He
was not concerned with other aspects of the agreement of letting, the rent, or
anything else of that nature and, therefore, in my judgment, on the true
construction of this section the minister had to apply his mind to the
circumstances of the particular land and to the letting or the grant in respect
thereof. He was not concerned with the terms of the particular agreement.
It seems to
me, therefore, that applying that to the present case, when the application
ultimately came before the minister on October 3 1977, what he had to apply his
mind to was the letting of a particular piece of land; that he duly applied his
mind to that subject one can see from the very nature of the approval itself. I
have, therefore, come to the conclusion that the minister had power under the
section to grant the approval which he did grant.
The next
question, of course, is — did that approval in fact apply to the particular
tenancy which in fact came into being by the implication arising from the
holding over and of the payment of rent?
Now, again, it seems to me when one looks at the section, as the
minister is not concerned with any particular agreement, one has got to look
from the section to his approval, see what it means and see whether it can
fairly be said to apply to the events which, in fact, occurred. What the
minister, in fact, approved was this: ‘The letting, by an agreement to be
entered into after the date hereof.’
Now, of course, when one sees those words, an immediate reaction to them
may be that the agreement was to be an agreement in writing.
It is accepted
that one can create a tenancy of agricultural land for 364 days or, indeed, for
any other period, by an agreement in writing, by an agreement under seal,
orally or, indeed, by implication arising from a holding over and a payment of
rent, and that the agreement which comes into being, whatever way it comes into
being, is none the less an agreement, and, what is more, it is none the less an
agreement which is entered into after the date of the approval, so I can see,
at the end of the day, no difficulty over that. There is certainly no
difficulty over the land, because it is common ground that the 259 acres,
approximately, referred to in the minister’s approval is indeed the land
occupied by the defendant company. ‘To be used for agricultural land’ — well,
again, there is no dispute over that, that that amply fits the land which was
indeed let. Then the minister in his approval has limited his approval to a
particular type of tenancy: ‘For a period of 364 days, commencing on January 31
1978.’ Well, again, the tenancy which,
in fact, came into effect by implication was, it is agreed between the parties,
a tenancy for 364 days. Moreover such tenancy must have commenced on January 31
because the previous tenancy expired by effluxion of time on the day before.
For these reasons, in my judgment, without looking at the correspondence or the
intention of the parties or what was in their contemplation, what in fact
happened was the creation of the precise tenancy which is indicated by the
minister’s approval and is, indeed, a letting approved by the minister, and
accordingly, as a result of section 2 of the Agricultural Holdings Act, it is
exempt from taking effect as a tenancy from year to year and accordingly is not
an agricultural holding and there is no security for tenure. It follows from
this — we will have to look at the precise terms of the relief in a moment —
that the plaintiff is entitled to its order for possession.
The plaintiff
was granted an order for possession, with arrears of rent and mesne profits,
the order for possession to be suspended as agreed by the parties.
