Agricultural holding — Status of Gladstone v Bower tenancy — Confirmation of view that a tenancy of agricultural land of more than one year but less than two years is a tenancy of an agricultural holding within the Agricultural Holdings Act 1986, although without security of tenure — Submission that the tenancy was a business tenancy within Part II of the Landlord and Tenant Act 1954 rejected — Parliament has chosen by masterly inactivity to accept the existence of gap in security of tenure — Court of Appeal sets at rest a doubt which has remained alive for more than 30 years — Comprehensive discussion of arguments and authorities — Gladstone v Bower settled law
the present case brought the issue directly before the court — The landlord let
a farm of about 120 acres to the tenant for a fixed term of 23 months — No
notice to quit was given — The tenant claimed that he was entitled to remain in
possession at the end of the term on the ground that the tenancy was a business
tenancy under Part II of the Landlord and Tenant Act 1954 and had not been duly
terminated by notice under that Act — The landlord contended that the tenancy
was the tenancy of an agricultural holding excluded from the 1954 Act by
section 43(1)(a) thereof
controversy, which has been the subject of discussion for years, centres on the
meaning of a ‘contract of tenancy’, which is an essential part of the
definition of an ‘agricultural holding’ in the Agricultural Holdings Act 1986
(and earlier Acts) — A ‘contract of tenancy’ is defined as ‘a letting of land,
or agreement for letting land, for a term of years or from year to year’
(section 1(5)) — Clearly a tenancy for 23 months was not a tenancy from year to
year — Was it a tenancy for a term of years? — The county court judge in the
present case held that it was a tenancy for a term of years — This was the view
accepted by Diplock J and the Court of Appeal, although without exhaustive
discussion of the point, in Gladstone v Bower itself — On this view the tenant,
although tenant of an agricultural holding, did not have security of tenure —
He fell between two stools, receiving support from neither section 2 nor
section 3 of the Agricultural Holdings Act — This was considered in Gladstone v Bower to have
been a casus omissus on the part of Parliament, but it was pointed out in the
course of the present hearing that there had been at least 11 measures passed
by Parliament since Gladstone v Bower in which the opportunity to amend the law in this respect
could have been, but was not, taken
the present case put forward the bold contention in the Court of Appeal that
Diplock J and the Court of Appeal in Gladstone v Bower had been wrong in
holding that a term of more than one year but less than two years was a term of
years within the definition of a ‘contract of tenancy’ — On this contention a
‘term of years’ meant a term of at least two years, a view supported by certain
passages in the Bishop of Bath’s case and Land Settlement Association Ltd v Carr — However,
in the opinion of the present Court of Appeal the relevant passages in both
these cases were obiter and therefore not binding on the court — Further, full
attention was given in Gladstone v Bower to the judgments in the Land Settlement
Association case, in which Diplock J had appeared as junior counsel — It was
beyond dispute that Diplock J in Gladstone v Bower decided that a
tenancy for a term of between one and two years fell within the definition of a
contract of tenancy, gave rise to an agricultural holding to which the Act of
1948 applied, and consequently fell outside the scope of the Landlord and
Tenant Act 1954 — In the Court of Appeal in that case, although Pearce LJ felt
that the matter was not wholly free from doubt, Devlin LJ accepted Diplock J’s
construction without qualification — Lord Denning MR in Bernays v Prosser and
Oliver LJ in Keen v Holland also accepted it as established law that a tenancy of
agricultural land for more than one year but less than two years created a
tenancy of an agricultural holding without security of tenure
general question of construction of a ‘term of years’, it was pointed out that
in a conveyancing context the phrase could include a term for any fixed period,
including a period of less than a year, and that in some statutes it covered a
period of less than a year, or of one year, or of a year plus a fraction, or of
any whole number of years, or of any whole number of years plus a fraction —
The question was what did it mean in the Agricultural Holdings Act — In the 1986
Act the references in section 3 to ‘a term of two years or more’ and in section
36(2)(b) to ‘a fixed term of more than one but less than two years’ indicated
that the draftsman did not regard the Act as inapplicable to fixed terms of
between one and two years
was accordingly dismissed
The following cases are referred to in
this report.
Barras v Aberdeen Steam Trawling &
Fishing Co Ltd [1933] AC 402
Bernays v Prosser [1963] 2 QB 593; [1963]
2 WLR 1255; [1963] 2 All ER 321; [1963] JPL 588, CA
Bishop of Bath’s case (1606) 6 Co Rep 34b
Esso Petroleum Co Ltd v Secretary of State for
the Environment (1973) 23 P&CR 55
Farrell v Alexander [1977] AC 59; [1976]
3 WLR 145; [1976] 2 All ER 721; (1976) 32 P&CR 292; [1976] EGD 343; 240 EG
707, [1976] 2 EGLR 69, HL
Galloway v Galloway [1956] AC 299; [1955]
3 WLR 723; [1955] 3 All ER 429, HL
Gladstone v Bower [1960] 2 QB 384; [1960] 3
WLR 575; [1960] 3 All ER 353; 58 LGR 313, CA
Keen v Holland [1984] 1 WLR 251;
[1984] 1 All ER 75; (1984) 47 P & CR 639; [1984] EGD 9; 269 EG 1043, [1984]
1 EGLR 9, CA
Land and Premises at Liss, Hants, Re [1971] Ch 986; [1971] 3 WLR
77; [1971] 3 All ER 380; (1971) 22 P&CR 861
Land Settlement Association Ltd v Carr [1944] KB 657
Maunsell v Olins [1975] AC 373; [1974] 3
WLR 835; [1975] 1 All ER 16, HL
R v Bow Road Justices (Domestic
Proceedings Court), ex parte Adedigba [1968] 2 QB 572; [1968] 2 WLR 1143;
[1968] 2 All ER 89, CA
R v Brixton Prison (Governor of), ex
parte De Demko [1959] 1 QB 268; [1958] 3 WLR 624; [1958] 3 All ER 360, CA
This was an appeal by Julian Moore, who
was the tenant of a piece of agricultural land consisting of about 120 acres,
referred to as ‘the farm’, at Scollock Bill, from a decision of Judge Michael
Evans QC, at Haverfordwest County Court, holding that the landlord, EWP Ltd,
was entitled to possession of the land on the expiration of a letting to the
tenant of a fixed term running from January 1 1988 to November 30 1989.
Terence Cullen QC and Miss Fernanda Pirie
(instructed by Price & Son, of Haverfordwest) appeared on behalf of the
appellant;
Ellesmere) represented the respondent.
Giving the first judgment at the
invitation of Bingham LJ, NOLAN LJ said: By an agreement dated April 8
1988 the plaintiff agreed to let a piece of land known as Scollock Bill to the
defendant. In that agreement, Scollock Bill is referred to as ‘the farm’. It
consists of about 120 acres of agricultural land. The letting was for a fixed
term expressed to run from January 1 1988 to November 30 1989, that is to say,
for a period of 23 months.
The plaintiff claims, and the learned
judge in the court below has held, that the tenancy came to an end by effluxion
of time on November 30 1989. The defendant maintains that his tenancy is a
business tenancy which is protected by Part II of the Landlord and Tenant Act
1954 and that he is therefore entitled to remain in possession until his
tenancy is validly determined by a notice to quit under that Act. It is common
ground that no such notice has been served. The plaintiff’s case is that the
defendant’s tenancy is not protected by the 1954 Act because it is a tenancy of
an agricultural holding and, as such, is excluded from protection by section
43(1)(a) of that Act.
An agricultural holding is defined by
section 1(1) of the Agricultural Holdings Act 1986 (so far as material) as land
‘comprised in a contract of tenancy which is a contract for an agricultural
tenancy’. The crucial phrase for the purposes of the present appeal is
‘contract of tenancy’. This is defined by section 1(5) (so far as material) as
‘a letting of land, or agreement for letting land, for a term of years or from
year to year’. It is common ground that the tenancy in the present case was not
a tenancy from year to year. But was it a tenancy for a term of years? The plaintiff says ‘Yes’. So did the learned
judge. The defendant says ‘No’. If the defendant is right, then Scollock Bill is
not an agricultural holding and, accordingly, the defendant’s tenancy is not
excluded from the protection of the 1954 Act but, on the contrary, qualifies
for protection under that Act.
If the plaintiff and the judge are right,
the curious result follows that the defendant’s tenancy is not protected
against termination by either the 1954 or the 1986 Act. The 1986 Act protects
tenancies for a term of two years or more: see section 3. It also protects
tenancies from year to year, a phrase which is extended by section 2(2) to
cover, as a general rule, lettings for an interest less than a tenancy from
year to year, and even licences. Tenancies for a period of between one and two
years remain wholly unprotected. Tenancies from year to year have been
protected against termination save upon 12 months’ notice to quit since the
enactment of section 33 of the Agricultural Holdings Act 1883 (though until
1920 the 12 months could be reduced to six by agreement). Tenancies for a term
of two years or more have been protected from termination (in effect by treating
them as tenancies from year to year once the contractual term has expired)
since the enactment of section 13 of the Agriculture Act 1920. Section 28 of
the same Act made 12 months the mandatory period for notice to quit, subject to
certain exceptions. The phrase ‘contract of tenancy’ was originally defined in
section 61 of the 1883 Act as ‘a letting of or agreement for letting of land
for a term of years, or for lives, or for lives and years, or from year to
year’. Section 40(1) of the Agriculture Act 1947 introduced the provision, now
contained in section 2(2) of the 1986 Act, which bring lettings for an interest
less than a tenancy from year to year and licences within the protection
accorded to tenancies from year to year. Sections 31 and 32 of the 1947 Act
introduced a number of restrictions on the landlord’s right to serve a notice
to quit, greatly increasing the tenant’s security of tenure. The Agricultural
Holdings Act 1948 (which, like the 1986 Act, was primarily a consolidating Act
but also made certain amendments to the law) altered the definition of
‘contract of tenancy’ to exclude the reference to lettings for lives: see
section 94(1). That was the state of the relevant law when the case of Gladstone
v Bower came before Diplock J (as he then was) in 1959 and subsequently
the Court of Appeal. The law remains the same today under the 1986 Act save for
a further amendment which now appears as section 36(2)(b) of that Act.
The tenancy under consideration in Gladstone
v Bower was for 18 months. Plainly it did not qualify for the protection
conferred on tenancies for two years or more by section 3 of the 1948 Act (the
then current re-enactment of section 13 of the 1920 Act). The tenant argued,
however, that the tenancy was for an interest less than a tenancy from year to
year and so was protected as a result of section 40(1) of the 1947 Act. The
gist of the argument, shortly stated, was that since a tenancy from year to
year was terminable only on 12 months’ notice dating from the end of the
current year, it was bound in practice to last for at least two years, and
therefore a contractual tenancy which could not last for more than 18 months
amounted to a tenancy for a lesser interest. In the alternative, the tenant
argued, as does the defendant in the present case, that his tenancy was
protected by Part II of the Landlord and Tenant Act 1954; he argued, in other
words, that his tenancy agreement was neither a contract for a tenancy from
year to year nor one for a term of years and so fell outside the scope of the
Agricultural Holdings Act.
Diplock J rejected both of these
arguments. It would not be helpful to set out the grounds upon which he
rejected the first argument, since they are not directly relevant to the
present case, but I would quote two passages from the first part of his
judgment in which he referred to the situation of a tenancy for a term of
between one and two years. His judgment is reported at [1960] 1 QB 170 and the
first passage appears at p 174 as follows:
The fixed term of 18 months, which is
unusual and, indeed, normally quite inappropriate for a farming tenancy, was
admittedly chosen with the object of avoiding bestowing on the tenant the
security of tenure which the Act confers on most tenants of agricultural
holdings, but it is right that I should say — although it cannot affect the
matter of construction which I have to determine — that the circumstances were
unusual and it is not suggested that there was anything discreditable in the
plaintiff’s desire to achieve this object, if the law so permits. Whether he
has done so is the sole matter which I have to decide.
Then, after rejecting the argument that
the 18 months’ tenancy was for a lesser interest than a tenancy from year to
year, he referred to the comments of counsel for the tenant who had contended
that such a result was contrary to the plain scheme of the Act, namely that all
occupiers of agricultural land, save those expressly excluded, should be
entitled to remain in possession until their occupation was determined by a
notice to quit. He said at p 179:
If it were permissible to speculate at
large as to the intentions of Parliament, I should be tempted to guess that
Parliament simply overlooked the case of a lease for a fixed term of between
one and two years. If it had considered such tenancies and thought that tenants
thereunder should be given greater security of tenure, the obvious way to do so
would be to amend . . . section 3 of the Act of 1948, by removing the
restriction of its application to tenancies for a term of two years and
upwards. But I cannot speculate as to Parliament’s intention.
Turning to the alternative argument of
the tenant, invoking the Landlord and Tenant Act 1954, Diplock J said at p 180:
Mr Cripps’ alternative defence under Part
II of the Landlord and Tenant Act, 1954, I can deal with shortly. Section
43(1)(a) expressly excludes from the provisions of Part II ‘a tenancy of an
agricultural holding’. By section 69 an ‘agricultural holding’ has the same
meaning as in the Agricultural Holdings Act, 1948. This holding, being a
holding of agricultural land comprised in the contract of tenancy for a term of
years, is an agricultural holding in the meaning ascribed to it in section 1 of
the Agricultural Holdings Act, 1948, and thus excluded from the operation of
Part II of the Landlord and Tenant Act, 1954.
The decision of Diplock J was upheld by
the Court of Appeal, whose decision is reported at [1960] 2 QB 384. In argument
before the Court of Appeal, counsel for the tenant indicated that he had felt
bound to concede at the hearing before Diplock J that a tenancy for 18 months
was a tenancy for a term of years within the meaning of the Act. At p 390 of
the report Pearce LJ said:
Both parties are agreed for the purposes
of the case that (although the matter is not wholly free from doubt) this
letting, being in excess of one year, comes within the definition of ‘a term of
years’, and the judge dealt with the matter on that basis.
He went on to say, at p 391:
The Act in general gives protection to
tenants of agricultural holdings. If the judge is right in holding that section
2(1) does not apply to this tenancy, there is a gap in that protection which he
felt (as a guess) was probably due to an omission on the part of the
legislature.
Pearce LJ rejected the arguments put
forward on behalf of the tenant for substantially the same reasons as those
given by Diplock J and concluded his judgment by saying:
I arrive at this conclusion with
reluctance, but it seems to me inevitable. If the gap in the protection given
by the Act was accidental and leads to the evasions which Mr Cripps envisages,
it is for Parliament to remedy the matter. I wholly agree with the judge’s
lucid judgment and would dismiss the appeal.
Devlin LJ began his judgment at p 394 by
saying:
In my judgment Diplock J has given to
this Act the only meaning which it can possibly bear. I cannot hope to equal
the clarity and economy of his
my judgment on the true construction of the Act.
I may add that I am, of course, concerned
about the fact that the Act as interpreted in this way applies to tenancies
over two years or under one year but not to those between one and two years. I
can see no sense in this distinction and cannot believe it to be intended.
Later in his judgment, at pp 395-6, he
says:
I think, therefore, that this is simply a
casus omissus and that the Act is defective. If it were ever permissible for
the court to repair a defective Act of Parliament I should be very glad to do
so in this case. The court would always like to allow the intention of a
statute to override the defects in its wording, but its ability to do so is
limited by the recognised canons of interpretation. The court may, for example,
prefer an alternative construction which is less well fitted to the words but
better fitted to the intention of the Act. But here, for the reasons given by
the judge, there is no alternative construction. It is simply a case of
something being overlooked. We cannot legislate for a casus omissus.
Since that decision ‘Gladstone v Bower‘
tenancies have become a familiar feature of the law. They are referred to in
all of the textbooks, though not with universal approval. For example, in Muir
Watt on Agricultural Holdings, 13th ed, at p 21, the learned author says
that their pedigree is not even yet beyond doubt; and after referring to the
authorities, some of which I consider below, he concluded on p 22 that:
On the whole, it is thought that if the
issue comes directly before the courts the probable decision will be that the
tenancy is a tenancy of an agricultural holding, even if the argument for the
opposite conclusion is in some respects more satisfying.
Mr Gaunt, leading counsel for the
plaintiff, invites us to fulfil that expectation. He says, and I accept, that
innumerable tenancies must have been granted during the past 30 years on the
assumption that the decision in Gladstone v Bower could be
regarded as settled law. Furthermore, he points out that the definition of
‘contract of tenancy’ upon which that decision turned has been reproduced
without alteration in the 1986 Act. He relies on the speech of Lord Buckmaster
in Barras v Aberdeen Steam Trawling & Fishing Co Ltd [1933]
AC 402 at pp 411-12 for the principle that when a word of doubtful meaning has
received a clear judicial interpretation the subsequent statutes, which
incorporate the same word or the same phrase in a similar context, must be
construed so that the word or phrase is interpreted according to the meaning to
which it has previously been assigned. I note that the same principle was
applied to a consolidating Act by Lord Evershed MR in R v Governor of
Brixton Prison, ex parte De Demko [1959] 1 QB 268 at p 281, though as Mr
Cullen, leading counsel for the defendant, points out the majority of the House
of Lords had declined to apply the Barras principle to a consolidating
Act in Galloway v Galloway [1956] AC 299.
Finally, Mr Gaunt submitted that not only
section 3 but also section 36 of the 1986 Act clearly pointed to the inclusion
of a 23 month tenancy within the scope of the Act. Section 36, which deals with
succession to an agricultural holding on the death of a tenant, expressly
excludes a holding under a tenancy for a fixed term of more than one but less
than two years: see section 36(2)(b). This plainly pointed to the inclusion
of such tenancies for other purposes of the Act, such as those dealt with by
sections 10, 15 and 64.
Mr Cullen relies on the presumption that
a consolidating Act does not alter the existing law. He submits that Diplock J
was wrong in holding that a term of 18 months was a term of years within the
1948 Act and says that in order to discover the true meaning of the phrase it
is necessary to go back to the Act of 1883 and look at the matter wearing 1883
spectacles.
Mr Cullen has guided us with great skill
and erudition through the provisions of the 1883 Act and those of the numerous
amending and consolidating measures which have been enacted since then. He
submitted that the various protective measures enacted in 1883 for the benefit
of tenants proceeded on the assumption that an agricultural tenant, whether
occupying from year to year or for a term of years, would normally remain a
tenant for at least two years. In the case of a tenant from year to year, this
assumption was reflected in the requirement that 12 months’ notice, expiring
with a year of tenancy, was necessary as a condition of terminating the tenancy
unless the parties agreed to six months: see section 33. In the case of a
tenancy for a term of years, the plural word ‘years’ made it plain that two or
more years were contemplated. That assumption formed the basis of, for example,
the provision in section 59 that no compensation for improvements would be
payable to the outgoing tenant if he began them within one year of the end of
the tenancy.
Mr Cullen referred us to passages in pre-Gladstone
v Bower editions of leading textbooks showing that the phrase ‘term of
years’ in the 1883 Act was understood to refer to terms of two or more years:
see, in particular, Woodfall on Landlord and Tenant, 13th ed (published
in 1886) at p 770. He also referred us to venerable authority to the same
effect; see Bacon’s Abridgement 1740 vol III, citing the Bishop of Bath’s
Case (1606) 6 Co Rep 34b for the proposition that:
If a man makes a lease for years without
saying how many this shall be a good lease for two years certain, because for
more there is no certainty and for less there can be no sense in the words.
This authority was cited by the Court of
Appeal in Land Settlement Association Ltd v Carr [1944] KB 657.
In that case, which was, of course, decided before the enactment of section
40(1) of the Agriculture Act 1947, and which led to the amendment made by that
subsection, the term granted by the tenancy agreement was for successive
periods of 364 days and came to an end only on the giving of three months’
notice. The Court of Appeal held that this did not constitute a letting for a
term of years. At p 661 of the report Scott LJ said:
It is true that there is authority for
saying that, if a contract of tenancy indubitably contains a terminus ad quem
sufficiently certain to satisfy the phrase ‘term of years’, the certainty of
the end will not be affected by a power to determine earlier, but Mr Lamb is in
the difficulty of being unable to find in cl I any ‘term’ to the tenancy
whatsoever. The tenancy is expressed to continue indefinitely, period by
period, subject only to the right of either party to bring it to an end at any
time by a three months’ notice. How can that be called a ‘term of years’? The mere presence in a tenancy agreement of
expressions showing that the parties contemplated (as in the agreement of
October 20, 1939) that it would last for more than one year does not make a
yearly tenancy become a tenancy for two years at least.
At p 662 he added:
In the Bishop of Bath’s case it
was made clear that no time shorter than two years could constitute a ‘term of
years’.
At p 667 of the report Luxmoore LJ, after
referring to the Bishop of Bath’s Case, said:
Here the term is for a period of time
which is, in fact, 364 days and not a year. It is described by reference to the
first and last day of the period, namely, October 1, 1939, to September 29,
1940. The habendum in the agreement continues ‘and thenceforward from September
30, 1940, for the term of 364 days and thereafter for successive periods of 364
days’. This is a tenancy for two periods of 364 days certain and not for two
years certain, and, therefore, cannot be described as for a term of years.
Mr Cullen submits that these passages
from the judgments of Scott and Luxmoore LJJ are not merely obiter dicta
but represent an essential part of their decision. With respect, I am unable to
accept that view. The essence of their decision was that a tenancy for
successive periods of 364 days was not a tenancy for a term of years. In
reaching that decision it was unnecessary for them to determine whether a term
of between one and two years could constitute a term of years, and I do not
think that they can be taken to have decided the point. Their observations,
albeit obiter, must none the less carry considerable weight if, as Mr
Cullen says, we must construe the phrase ‘term of years’ as it appeared in the
1883 Act and without regard to subsequent amendments none of which, as he
submits, has altered the original meaning of that phrase.
Mr Gaunt submitted that, so far from
going back to 1883, we should construe the phrase ‘term of years’ in the
context of the 1986 Act. He referred us to the speeches of Lord Diplock and
Lord Simon in Maunsell v Olins [1975] AC 373 and to the speeches
of Lord Wilberforce and Lord Simon in Farrell v Alexander [1977]
AC 59 for the most recent guidance on the construction of a consolidating Act.
It will, I think, be sufficient if I quote from the speech of Lord Wilberforce
in the latter case at p 72E where he said:
On this argument it is necessary to
decide what consequences follow from the fact that the Rent Act 1968 was a
consolidation Act. This question has already concerned this House: see Maunsell
v Olins [1975] AC 373 which, I much regret to say, contains more
discussion than conclusion. I will try to clarify the latter. The case was
concerned with the meaning of the word ‘premises’ in another section of the
Act, and led to sharp differences of view. There were those who thought that
the meaning of this word was clear (Lord Diplock and Lord Simon of Glaisdale)
and there were those who thought it ambiguous (Lord Reid, Viscount Dilhorne and
myself). It was because I thought that the word has no primary or certain
meaning, except perhaps in a conveyance or lease, and that the section in
question ‘admits, almost invites, opposing constructions’ (p 385) that I found
it necessary to look at the antecedents of the section, and Lord Reid and
Viscount Dilhorne took the same view. Lord Diplock and Lord Simon of Glaisdale,
on the other hand, thought the word
into the legislative history. If I may say so, on that hypothesis I would agree
with them. I would agree and endorse the principle that it is quite wrong that,
in every case where a consolidation Act is under consideration, one should
automatically look back through the history of its various provisions, and the
cases decided upon them, and minutely trace the language from Act to Act–a
process, which, incidentally, has led to an argument of four days’ length in
this House. In recent times, because modern statutes have become so
complicated, the courts, myself included, (cf Inland Revenue Commissioners
v Joiner [1975] 1 WLR 1701) rather too easily accept this process,
whether under persuasion of counsel or from their own scholarly inclinations.
But unless the process of consolidation, which involves much labour and careful
work, is to become nothing but a work of mechanical convenience, I think that
this tendency should be firmly resisted; that self-contained statutes, whether
consolidating previous law, or so doing with amendments, should be interpreted,
if reasonably possible, without recourse to antecedents, and that the recourse
should only be had when there is a real and substantial difficulty or ambiguity
which classical methods of construction cannot resolve.
Mr Gaunt submits that in the context of
the 1986 Act there is no difficulty or ambiguity about construing the phrase
‘term of years’. It includes any term in excess of a year. If this were not so,
there could be no purpose whatever in limiting the operation of section 3 to
tenancies for two years or more. Moreover, section 36(2)(b) is quite
explicit. It deals with a ‘holding’, and therefore with a contract of tenancy,
for a fixed term of more than one but less than two years. It is therefore
neither necessary nor legitimate to delve back into the legislative history of
the matter. There is much force in this argument; but the meaning of the phrase
‘term of years’ in different contexts has given rise to so much difficulty that
I regard it as legitimate to consider its legislative history. I do so the more
readily because of the anomalous consequences which the plaintiff’s argument
produces. I do not say that they are anomalous as between the plaintiff and the
defendant — the materials before us disclose no reason why the defendant should
not, in justice, be held to the 23 months’ tenancy to which he agreed — but the
difference in treatment, if the landlord is right, between a 23-month and a 12-
or 24-month tenancy is so illogical that it cannot, to my mind, be accepted as
part of our law without the most careful inquiry into the circumstances in
which it has arisen. I cannot, however, accept Mr Cullen’s argument that the
inquiry should go back as far as 1883. It is true that the central part of the
definition of ‘contract of tenancy’ has not changed since then, but the
enactment of sections 13 and 28 of the 1920 Act and of sections 31 and 32 of
the 1947 Act cannot be ignored, in my judgment, in determining whether the
definition was intended to bear the same meaning in the more recent Acts.
The principal difficulty lies in
ascertaining the intention of Parliament when using the phrase ‘term of years’.
In his helpful skeleton argument Mr Cullen acknowledged that, in a general
conveyancing context, the phrase ‘term of years’ can include a term for any
fixed period, including a period of less than a year, and can also include a
tenancy from year to year. There is ample authority for this proposition in
textbooks going back to the period when the 1883 Act was passed: see, for
example, The Law of Real Property by W H Burton, 3rd ed, 1884, at p 295,
A Compendium of the Law of Property in Land by W D Edwards, 1888, at p
39. As Mr Cullen points out, this meaning cannot have been adopted in the 1883
Act, which plainly does not treat a tenancy from year to year as falling within
the phrase ‘term of years’. For the true meaning of ‘term of years’ in that Act
Mr Cullen relied, as I have said, upon what was said in the Bishop of Bath’s
Case incorporated as it was in Bacon’s Abridgment. The proposition
that a term of years is a term of two years or more was accepted, on the
authority of that case, by the Court of Appeal in the Land Settlement
Association case, and also it seems, at any rate as a general proposition,
by Goulding J in Re Land and Premises at Liss, Hants [1971] 3 WLR 77. In
Esso Petroleum Co Ltd v Secretary of State for the Environment
(1971) 23 P&CR 55, a decision of the Lands Tribunal, Sir Michael Rowe QC
said:
There is no doubt that at common law a
‘term of years certain’ means and has meant for centuries a term for at least
two years certain.
Both that case and the case decided by
Goulding J were concerned with the phrase ‘term of years certain’ which appears
in the Landlord and Tenant Act 1954 and the Land Commission Act 1957. Goulding
J observed, obiter, that since the Interpretation Act 1889 allowed the
plural to be read as including the singular the reference to a term of two or
more years in the Bishop of Bath’s Case could be construed, for the
purposes of the 1954 Act, as including a tenancy for a single year. Sir Michael
Rowe, however, dissented from this view.
Mr Gaunt submitted boldly that the only
authority for the proposition that the common law use of the phrase ‘term of
years’, confining it to terms of two or more years, differed from the much
broader conveyancing use, which would include terms certain of less than a
year, was the Bishop of Bath’s Case, and that that case decided nothing
of the sort. He referred us to the full report of the case, from which it
appears clearly that the crucial words quoted in the later authority were not
merely obiter but were unconnected with the subject-matter of the
decision, which related solely to the commencement date of a lease. He pointed
out that the crucial words were not even concerned with the meaning of the
phrase ‘term of years’: they were directed to the hypothetical and improbable
case of a man making ‘a lease for years without saying how many’. Mr Cullen,
for his part, accepted that this part of the judgment in the Bishop of
Bath’s Case was obiter but relied upon its unquestioning acceptance
by Bacon and by the Court of Appeal in the Land Settlement Association
case. He further accepted, when asked how it could be that the common law
meaning of the phrase differed from its general conveyancing meaning, that at
the end of the day the meaning must be determined according to the context in
which the phrase is used.
At the end of the day, therefore, if I am
right in thinking that the search into the past cannot usefully be extended
further than the 1948 consolidation Act, or at the most the 1923 consolidation
Act, we are left with such help as we can get from the guidance given in
relation to those Acts by the Land Settlement Association and Gladstone
v Bower decision. Mr Cullen urged us, in effect, to prefer the former to
the latter. But, as I have indicated, the relevant passages in the judgments of
the Court of Appeal in the Land Settlement Association case were, in my
judgment, obiter and therefore are not binding upon us. Further, when Gladstone
v Bower came to be decided, it cannot be supposed that anything less
than full attention was given to the judgments in the Land Settlement case.
Diplock J had appeared in it as junior counsel and it was discussed both in his
judgment and in the judgments of Pearce and Devlin LJJ in the Court of Appeal.
It is beyond dispute that, at first
instance in Gladstone v Bower, Diplock J decided that a tenancy
for a term of between one and two years fell within the definition of a
contract of tenancy, gave rise to an agricultural holding to which the Act of
1948 applied, and consequently fell outside the scope of the Landlord and Tenant
Act 1954: see the passage from his judgment at p 180 which I have quoted above.
In the Court of Appeal, though Pearce LJ felt that it was ‘not wholly free from
doubt’ that such a tenancy fell within the scope of a term of years, Devlin LJ,
in the passages which I have quoted above, assented without qualification to
the construction placed upon the 1948 Act by Diplock J. Both Pearce and Diplock
LJJ viewed the anomaly created as one that should be cured by Parliament. In Bernays
v Prosser [1963] 2 QB 592, which also turned on the Agricultural
Holdings Act 1948, Lord Denning MR made it clear that he regarded Gladstone
v Bower as settled law. He said, at p 596 of the report:
It has been held by this court that there
is a lamentable gap in the statute. A tenant of an agricultural holding for a
fixed period between one and two years is not entitled to the protection of the
Act at all. He has to go out of his holding at the end of his term without any
protection (see Gladstone v Bower). The gap has not been closed
by Parliament even to this day, although we are told there is an agricultural
Bill before Parliament at the moment.
Mr Gaunt tells us, in this connection,
that there have been at least 11 measures passed since the decision in Gladstone
v Bower in which the opportunity to amend the law could have been taken.
Finally, in Keen v Holland [1984] 1 WLR 251, Oliver LJ (as he
then was) at p 256 referred to:
a tenancy for a term exceeding one year
but less than two years, which the decision of this court in Gladstone v
Bower . . . had established as being an agricultural tenancy not
protected by the Act of 1948.
On p 257, after referring again to
tenancies falling within Gladstone v Bower, Oliver LJ said:
Although the provisions of . . . the Act
of 1948 were re-enacted in 1977, no step was taken to bring such tenancies
within the Act and it must therefore be assumed that the legislature was
content to permit such tenancies to be created free from the restrictions on
termination applicable to other agricultural tenancies.
Mr Gaunt forbore to rely on these
remarks, taking the view that they could be regarded as consistent either with
the view that a term of between one and two years was within the Act but not
protected
of the Act altogether — a view which, of course, he would strenuously resist.
The context of the remarks was, however, confined to termination and I would
not, for my part, have taken Oliver LJ to be saying that such tenancies were
taken wholly outside the scope of the Act. If that had been his view, I would
not have expected him to refer to the Gladstone v Bower decision
without qualifying comment.
I accept that there are difficult aspects
both to that decision and to the law with which it deals. I cannot accept that
those who framed the 1986 Act remained in ignorance of it and failed to take it
into account. The re-enactment of what is now section 3 and the enactment of
section 36(2)(b) must, in my judgment, be taken to have established its
acceptance by Parliament as part of our law.
I would therefore dismiss this appeal.
Agreeing, STAUGHTON LJ said: It is
clear that in some statutes the phrase ‘term of years’ means, or includes, a
period of less than a year, or of one year, or of a year plus a fraction, or of
any whole number of years, or of any number of years plus a fraction. That is
the meaning, as Mr Cullen concedes, in sections 3 and 13 of the Conveyancing
Act 1881. It is the meaning in the Law of Property Act 1925, because the
definition section says so. I do not share the view of Goulding J in re Land
and Premises at Liss [1971] Ch 986 at p 990 that the definition was
inserted because the legislature considered that without it a term of years
would not necessarily include a term of less than a year.
In contrast, there is what I take to have
been the opinion of Diplock J in 1959, that the meaning of ‘a term of years’ in
the statute was too well known to need elucidation. The same meaning is to be
found in the Rent Act 1977, Schedule 15, Cases 13 and 14, which refer to ‘a
term of years certain not exceeding 8 months’ and ‘a term of years certain not
exceeding 12 months’. It is to be found again in section 5 of the Law of
Property Act 1969, which inserted a new subsection in section 38 of the
Landlord and Tenant Act 1954: see the Land at Liss case.
Why, then, should one give a different
meaning to the expression ‘term of years’ in the Agricultural Holdings Act
1986? It is not clear to me that justice
requires us to reach that result if we can. On the contrary, one requirement of
justice is that those who have arranged their affairs, as the saying is, in
reliance on a decision of these courts which has stood for many years, should
not find that their plans have been retrospectively upset, although this
principle does not necessarily apply to all aspects of human activity: see R
v Bow Road Justices (Domestic Proceedings Court), ex parte Adedigba
[1968] 2 QB 572 at pp 582-83.
In my opinion, the expression ‘term of
years’ in section 1(5) of the 1986 Act has the meaning which I have stated. It
is true that by reason of section 2(2) a tenancy for a period of less than one
year is to be treated as if it were a tenancy from year to year. That does not
convince me that the words ‘term of years’ have any different meaning.
For the reasons given by Nolan LJ I would
dismiss this appeal.
Also agreeing, BINGHAM LJ said:
The short but elusive issue in this appeal is whether the appellant’s tenancy
of agricultural land for a term of more than 12 months and less than 24 months
is a letting for ‘a term of years’ within the meaning of section 1(5) of the
Agricultural Holdings Act 1986. If, as the tenant contends, it is not, he has a
measure of security under the Landlord and Tenant Act 1954. If, as the landlord
contends, it is, the tenant has no security either under the 1954 Act or under
the 1986 Act.
Since the 1986 Act is very largely a
consolidating Act, the answer to the question must be sought first in the Act
itself. But the expression ‘terms of years’ in section 1(5) is not defined, and
it is not a term of art with a clearly understood legal meaning unaffected by
the context in which the expression is used. So it is necessary to ask whether
the use of the expression in this Act makes clear what the draftsman meant by
it. In my opinion, the references in section 3 to ‘a term of two years or more’
and in section 36(2)(b) to ‘a fixed term of more than one but less than
two years’ do indicate clearly, if not conclusively, that the draftsman did not
regard this Act as inapplicable to fixed terms of between one and two years, it
being clear that fixed terms of one year or less were the subject of section 2.
So if the matter rested there I would incline to hold, although without much
confidence, that the landlords’ construction of the Act is to be preferred.
Three considerations banish my
hesitation:
(1)
In Gladstone v Bower Diplock J held, apparently as a
matter of decision, that an 18-month tenancy was for a term of years. Despite
some doubt the Court of Appeal did not reject, and on balance endorsed, that
ruling.
(2)
The attention of Parliament has been clearly drawn to the apparent
anomaly that agricultural business tenants for terms between one and two years
alone lack the security granted by the Acts of 1954 and (now) 1986. Yet,
despite abundant opportunities, Parliament has not acted to cure the anomaly,
which cannot have escaped the attention of departmental lawyers and
administrators. The inference must be either that this apparent anomaly is not
regarded as such or that it is regarded as a desirable or tolerable anomaly.
(3)
Although the reasoning of Gladstone v Bower has not
escaped criticism, it has been generally regarded as laying down the law. I do
not doubt that it has been widely acted on, in good faith and on legal advice,
by landlords who wish to let land without fettering their rights to recover it
and tenants willing to take land on that understanding. I regard this as a
paradigm situation in which it would be mischievous to disturb a settled rule
on which parties have relied in organising their affairs.
For these reasons, as well as those more
fully given by Staughton and Nolan LJJ, I also would dismiss the appeal.
The appeal was dismissed with costs,
leave to appeal to the House of was refused.
