Agricultural holdings —- Whether appellant held agricultural tenancy —- Determination of rent —- Repairs —- Notices to quit —- Whether landowner in dispute about existence of tenancy entitled to initiate statutory arbitrations relating to rent and repairs —- Statutory arbitrator —- Whether arbitrator entitled to determine appropriate course of action where existence of tenancy being disputed —- Whether misconduct by arbitrator
In June 1970 a partnership, consisting of four members of the
appellant’s family, was granted a tenancy of 330 acres of land. In December
1992 two brothers, AM
it was the contention of the Websters that any tenancy in favour of the partnership
ceased, for the most part, as a result of notices to quit and by an agreement
in the 1970s and, for certain small areas, as a result of a further notice to
quit in 1988 and a later agreement. Following a claim by the appellant, the
sole surviving member of the partnership, to a tenancy of the land, the
Websters sought to protect their position. In March 1997 they gave notice under
section 12 of the Agricultural Holdings Act 1986 requiring the rent to be
referred to arbitration; the accompanying letter stated that the notice was
without prejudice to their position that the appellant had no tenancy. In July
1997 the appellant commenced county court proceedings, which, by amendment,
sought a declaration that he held an agricultural tenancy of all the land. In
September 1997 notices were served on behalf of the Websters requiring the
remedying of breaches of the repairing and maintenance obligations of any
tenancy agreement. Following a notice on behalf of the appellant, an arbitrator
was appointed in relation to the alleged breaches. The arbitrator then gave
various directions and made certain orders, in particular that the arbitration
should await the outcome of the county court proceedings. The appellant
commenced further county court proceedings, seeking the removal of the
arbitrator for misconduct in failing to make an award within the statutory
time-limit prescribed by Schedule 11 to the Agricultural Holdings Act 1986, in
vacillating in the various directions he gave and in seeking an extension of the
time-limit from the president of the RICS without reference to the parties. In
December 1998 the recorder dismissed those applications. Meanwhile, a second
arbitrator had been appointed in respect of the rent review arbitration. He
stated a case for the opinion of the county court raising a number of questions
arising out of the rent review notice. The appellant appealed the decisions of
the recorder in relation to the repairs arbitration and of the assistant
recorder in relation to the rent review arbitration. On his behalf, it was
contended that it was an abuse for the Websters to invoke or maintain the
jurisdiction of the arbitrators under the 1986 Act ‘without prejudice’ to a
contention that there was no tenancy.
principle why a freeholder could not serve a notice or take arbitral steps to
protect his position pending the resolution of an outstanding dispute as to
whether a tenancy existed. The scheme of the Agricultural Holdings Act 1986 was
not flouted. The validity of the notice or arbitral step did not depend upon
the will of either party, or require any unconditional acknowledgement of a
tenancy by either party. Such validity depended upon a matter of objective fact
and law, namely whether there was a tenancy and what kind of tenancy it was,
that was independent of either party’s expression of view, unless that
expression of view itself gave rise to some new contract or estoppel. It was
open to each arbitrator to take the course referred to in R v Fulham,
Hammersmith and Kensington Rent Tribunal, ex parte Zerek [1951] 2 KB 1 and
to stay further proceedings while the issue of jurisdiction was resolved in
court. The mere fact that the first arbitrator had not issued an award within
the 56-day time-limit could not be misconduct, certainly not misconduct that
could conceivably justify a court setting aside the arbitrator’s appointment
under para
expectation that, after the resolution of the instant appeal, the president of
the RICS would exercise his power to grant such further extensions of the time
as might be necessary to enable both arbitrators to issue awards within the
time so extended. The first arbitrator had not misconducted himself by
vacillating in his directions; arbitrators doing their best to address
difficult situations might be forgiven, perhaps commended, if they were
open-minded enough to reconsider the appropriate course. Even if the first
arbitrator erred in not informing the parties that he was unilaterally seeking
an extension of time from the president, that was not misconduct.
The following cases are referred to in this report.
Christopher Brown Ltd v Genossenschaft
Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe GbH [1954] 1 QB 8;
[1953] 3 WLR 689; [1953] 2 All ER 1039; [1953] 2 Lloyd’s Rep 373
David Blackstone Ltd v Burnetts
(West End) Ltd [1973] 1 WLR 1487; [1973] 3 All ER 782; (1973) 27 P&CR
70
Grimaldi Compagnia di Navigazione
SpA v Sekihyo Lines Ltd (The Seki Rolette) [1999] 1 WLR 708; [1998]
3 All ER 943; [1998] 2 Lloyd’s Rep 638
Halliday v Semple 1960
SLT 11
Kirby v Robinson [1965]
EGD 236; (1965) 195 EG 363
Luanda Exportadora SARL v Wahbe
Tamari & Sons Ltd [1967] 2 Lloyd’s Rep 353
Northern Regional Health Authority
v Derek Crouch Construction Co Ltd [1984] QB 644; [1984] 2 WLR 676;
[1984] 2 All ER 175
Pratt v Swanmore Builders
Ltd [1980] 2 Lloyd’s Rep 504
R v Fulham, Hammersmith and
Kensington Rent Tribunal, ex parte Zerek [1951] 2 KB 1; [1951] 1 All ER
482; (1951) 1 TLR 423; 49 LGR 275, DC
Segal Securities Ltd v Thoseby
[1963] 1 QB 887; [1963] 2 WLR 403; [1963] 1 All ER 500
These were appeals by Mr GS Grammer from a decision of Mr Recorder
Wigoder in Leicester County Court dismissing the appellant’s applications to
have an arbitrator dismissed for misconduct, and from a decision of Mr
Assistant Recorder Burgess in Nottingham
the appellant, by an arbitrator; both arbitrators having been appointed under
the provisions of the Agricultural Holdings Act 1986.
John McLinden (instructed by M&S Solicitors, of Leicester)
appeared for the appellant; Richard Hedley (instructed by Hibbert Durrad
Davies, of Nantwich) appeared for Mr Alan N Lane FRICS, the first arbitrator;
William Batstone (instructed by Burges Salmon, of Bristol) represented the
Websters; Mr Roger Stone FRICS, the second arbitrator, did not appear and was
not represented.
Giving the judgment of the court, MANCE LJ said: In June 1970 JR Grammer & Sons, a
partnership consisting of four members of the Grammer family, took from the
then freehold owner, Hoveringham Gravels Ltd, a tenancy of some 330 acres of
farmland known as Ivy House Farm in Derbyshire, at a rent of £1,148 pa. The
appellant, Mr GS Grammer (Mr Grammer), asserts that the tenancy was in 1976
extended to include an additional 11.14 acres at an additional rent of £70 pa.
If necessary, he also relies on other alleged agreements or arrangements for
possession at dates after 1971 and 1974 to establish a tenancy. Mr Grammer has
been since 1992 the sole surviving member of the partnership. On 18 December
1996 two brothers, Mr AM and Mr HD Webster (whom I will call the Websters),
acquired the freehold. It has at all times since then been the Websters’
contention that any tenancy in favour of the Grammers, or Mr Grammer, had
ceased prior to the Websters’ acquisition of the freehold. The Websters contend
that it ceased, for the most part, as a result of notices to quit and by
agreement in the 1970s, and, in respect of other small areas, as a result of a
further such notice in 1988 and a later agreement, while any presence that the
Grammers or any of them had thereafter was by way of licence. Since December
1996 any such presence has been very confined and the land has been effectively
farmed by the Websters. But the dispute whether there was and is an outstanding
tenancy remains unresolved, and has given rise to associated litigation with
which this appeal is concerned.
The context of this litigation is found in the provisions of the
Agricultural Holdings Act 1986 relating to: (a)
notices to quit. The substantial questions raised are: (1) whether a landowner
involved in a dispute about the existence of a tenancy may make use of such
provisions and either initiate, or participate in, statutory arbitration to
protect his position while the dispute is being resolved, in case it should be
resolved against him; and (2) what course(s) are open to a statutory arbitrator
faced with such a situation.
As regards rent, by section 12(1) of the Act a landlord may by
notice in writing served on a tenant:
demand that the rent to be payable in respect of the holding as
from the next termination date shall be referred to arbitration under this Act.
The ‘next termination date’ means the next day following the date
of the demand when the tenancy could have been determined by notice to quit
given at the date of the demand: section 12(4). On such a reference the
arbitrator shall determine the rent properly payable at the date of the
reference and shall, with effect from the next termination, increase, reduce or
confirm the rent from the next termination date accordingly: section 12(2). But
section 12(3) provides that a demand for arbitration under section 12 shall
cease to be effective for its purposes unless, before the next termination date
following its date, either an arbitrator has been appointed by agreement or an
application made to the president of the Royal Institution of Chartered
Surveyors (the president) for appointment of an arbitrator by him. Schedule 2
contains supplementary provisions relating to such an arbitration.
Section 26 of the Act relates to both repairs and notices to quit.
Under section 26(1), where a notice to quit an agricultural holding is given to
a tenant and, not later than one month after its service, the tenant serves a
counternotice invoking this subsection, then, subject to section 26(2), the
notice to quit shall not have effect, unless, on an application by the
landlord, the Agricultural Land Tribunal (established under Part V of the
Agriculture Act 1947) (the tribunal) consents to its operation. Section 26(1)
does not apply in cases set out in Schedule 3. Case D para (b) includes the
situation where, at the date when notice to quit is given, the tenant has
failed to comply with a notice in writing served on him by the landlord
requiring him, within a reasonable period specified in the notice, to remedy
any breach by the tenant that was capable of being remedied of any term or
condition of his tenancy not inconsistent with his responsibilities to farm in
accordance with the conditions of good husbandry.
By section 29, the Lord Chancellor is empowered by order to provide
for matters specified in Schedule 4. One such matter is:
8. The determination by arbitration under this Act of any question
arising under such a notice as is mentioned in paragraph (b) of Case D, being a
notice requiring the doing of any work of repair, maintenance or replacement…
The power was exercised by The Agricultural Holdings (Arbitration
on Notices) Order 1987 (SI 1987 No 710), which provides, inter alia:
3(1) Where a tenant on whom a notice to do work has been served
wishes to have determined by arbitration under the 1986 Act any of the
following questions, namely —-
(a) his liability under the terms or conditions of his tenancy to
do any of the work specified in the notice,
(b) the deletion from the notice of any item or part of an item of
work on the ground that it is unnecessary or unjustified, or
(c) the substitution, in the case of any item or part of an item
of work, of a different method or material for the method or material which the
notice would otherwise require to be followed or used,
he shall do so by service of notice requiring the question or
questions to be determined by arbitration under the 1986 Act.
(2) A notice under paragraph (1) above shall be in writing, and
shall be served on the landlord within one month after the service on the
tenant of the notice to do work.
…
4(1) Where the tenant on whom a notice to do work has been served
wishes to have determined by arbitration under the 1986 Act in addition to a
question specified in article 3(1) any other question arising under that
notice… he shall do so by serving on the landlord within one month after the
service of the notice to do work a notice in writing requiring the question to
be so determined.
…
9. Where it is stated in a notice to quit an agricultural holding
or part thereof that the notice is given for one or more of the reasons
specified in Case A, B, D or E and the tenant wishes to contest any question
arising under the provisions of section 26(2) of, and Schedule 3 to, the 1986
Act relating to any of the reasons so stated, he shall within one month after
the service of the notice serve on the landlord notice in writing requiring the
question to be determined by arbitration under the 1986 Act.
10. A notice under article 9 requiring arbitration under the 1986
Act shall cease to be effective three months after the date of service of that
notice unless before the expiry of those three months —-
(a) an arbitrator has been appointed by agreement between the
parties, or
(b) (in default of such agreement) an application has been made by
the tenant or the landlord under paragraph 1 of Schedule 11 to that Act for the
appointment of an arbitrator,
for the purposes of that arbitration.
Section 84 of the 1986 Act provides, first, that any matter
required by the Act or order to be determined by arbitration shall,
notwithstanding any agreement under the contract of tenancy or otherwise, be
determined by the arbitration of a single arbitrator in accordance with any
order under section 84 together with the provisions of Schedule 11, and,
second, that Part 1 of the Arbitration Act 1996 shall not apply to any such
arbitration. Para 1 of Schedule 11 provides for the appointment of an
arbitrator to be by agreement between the parties or, in default of agreement,
on application of either party, by the president of the Institution of
Chartered Surveyors, and for any appointment by the president to be made as soon
as possible but, in the case of an arbitration under section 12, not earlier
than 4 months before the next termination date. By para 14:
14(1) Subject to sub-paragraph (2) below, the arbitrator shall
make and sign his award within fifty-six days of his appointment.
(2) The President may from time to time enlarge the time limited
for making the award, whether that time has expired or not.
Schedule 11 further provides:
26. The arbitrator may, at any stage of the proceedings…, state in
the form of a special case for the opinion of the county court any question of
law arising in the course of the arbitration and any question as to the
jurisdiction of the arbitrator.
27(1) Where the arbitrator has misconducted himself, the county
court may remove him.
(2) Where the arbitrator has misconducted himself, or an
arbitration or award has been improperly procured, or there is an error of law
on the face of the award, the county court may set the award aside.
28(1) The county court may from time to time remit the award, or
any part of the award, to the reconsideration of the arbitrator.
…
30. The provisions of this Schedule relating to the fixing and
recovery of the remuneration of an arbitrator and the making and enforcement of
an award as to costs together with any other provisions in this Schedule
applicable for the purposes of or in connection with those provisions, shall
apply where the arbitrator has no jurisdiction to decide the question referred
to him as they apply where the arbitrator has jurisdiction to decide that
question.
The issues presently before us relate to the following steps taken
by the Websters to protect their interests in relation to Mr Grammer as regards
rent, repairs and the obtaining of possession, in case they were wrong in their
primary contention that he had no tenancy. Firstly, under cover of a letter
dated 19 March 1997, Burges Salmon, describing themselves as ‘agents of the
landlords’, served on Mr Grammer the following notice:
TAKE NOTICE that pursuant to the Agricultural Holdings Act 1986
Section 12 AM and HD Websters, the landlords of 69 Town Street, Sandiacre,
Nottingham demand that the rent to be payable in respect of the above holding
as from the next termination date as defined in that Act shall be referred to
arbitration. This notice is given without prejudice to any other notice or act
in connection with the tenancy which has been or may after the date of this
notice be given or done by the landlords or on behalf of them or any other
interested party.
The covering letter explained:
The enclosed Notice is served entirely without prejudice to our
clients’ contention that your client has no tenancy of any of the land
purchased by them and is served in order to ensure that, in the unlikely event
that your client does establish a tenancy to any of our clients’ land, our
clients are entitled to be paid a proper rent with effect from 25 March 1998.
Assuming, contrary to our clients’ contention, that your client
will establish a tenancy of some of the land the subject of the Tenancy
Agreement between Hoveringham Gravels Limited and Joseph Russell Grammer, Frank
Alec Grammer, John Brian Grammer and your client dated 4 June 1970, this Notice
is served upon your client as the sole surviving tenant pursuant to that
Agreement.
On 2 July 1997 Mr Grammer commenced proceedings in Nottingham
County Court (Case No NG780969) in which he claimed, initially, a declaration
that he was tenant of two small areas of the land totalling around 20
so acres, which, he said, had never been the subject of any notice or agreement
to quit, and, subsequently, by amendment on 15 September 1997, a declaration
that he was tenant of the rest of the land as well. A defence and counterclaim
were served on 30 September 1997 and a reply on 3 November 1997. These county
court proceedings remain undecided. Directions were only recently given, on 5
October 1999, for a trial in March 2000, estimated to last three days.
On 19 September 1997 Wintertons, chartered surveyors, describing
themselves as duly authorised agents of the landlords, served on Mr Grammer a
‘notice to tenant to remedy breach of tenancy by doing work of repair,
maintenance or replacement’ within six months. This was headed ‘Agricultural
Holdings Act 1986, Schedule 3, Part 1, Case D’ and stated that it was served in
accordance with Case D. Although no covering letter is included in the bundle
before us, it is clear that there was one from the response of Berry Bros &
Hopkinson, chartered surveyors acting for Mr Grammer, who wrote on 8 October
1997 pointing out that the notice:
appears to be served upon our client without prejudice to the
contention that there is no tenancy.
We do not accept the notice on this basis and this may well affect
indeed the validity of the notice or other Claims…
What exactly do you mean by the words ‘without prejudice’? Do you
require our clients [sic] to perform the work set out under that Notice or
not?…
You cannot sit on the fence on this issue… It is a serious Notice
and you are not entitled to serve such a Notice and try to ‘back your horse
both ways’.
On behalf of Mr Grammer, Berry Bros also gave notice of arbitration
inviting agreement on various names, but did this without acknowledging that
the Websters’ notice was a good notice. On the contrary, they asserted that it
was a bad notice, a matter which they said would form part of the arbitration.
By a letter dated 13 October 1997, Mr Grammer’s solicitors pursued the request
for clarification of the Websters’ position. They said that Mr Grammer would
like to start work and have access to the land for that purpose immediately,
while at the same time giving notice of his wish to have determined by
arbitration the questions whether he was under any liability under the terms
and conditions of his tenancy to do any of the work. Following an application
made on Mr Grammer’s behalf, the president of the Institution of Chartered
Surveyors on 10 November 1997 appointed Mr Alan N Lane as arbitrator.
By a letter dated 11 November 1997, Mr Lane ordered the parties to
exchange statements of case by 16
dated 19
preliminary points needed resolution, the most important of which was ‘whether
there is a tenancy of the land owned by our clients at all’. They invited
Mr
to allow that issue to be resolved by the Nottingham County Court and for the
arbitration to be proceeded with only if a tenancy is judged to be in
existence’, and said that, if this issue was considered in the arbitration,
they would be inviting a special case. A suspension of the arbitration was
resisted by Mr Grammer’s solicitors, who maintained that the arbitration could
and would deal with the issue whether there was a tenancy far quicker than
court proceedings, and also contended that the Websters, by serving a notice to
repair under the 1986 Act, were estopped from denying a tenancy.
Statements of case were exchanged on or about 15
1997. Mr Grammer’s statement asserted a tenancy, admitted certain alleged
breaches, but contended generally that the notice dated 19 September 1997 was
not valid. It also contained a specific alternative contention that, if the
notice was not invalidated by the accompanying letter, expressing it to be
‘without prejudice’ to the issue whether there was a tenancy, it was
unreasonable to expect Mr Grammer to do any work. The Websters’ statement of
case dated 16
contention that there was no tenancy.
By a letter dated 18 December 1997, Mr Lane questioned whether the
arbitration was under both Articles 3 and 4 of the 1987 Order, indicated his
view that he might have jurisdiction under Article 4 to consider the existence
of a tenancy, but said that in view of the Websters’ request for a special
case, this would be a duplication of the existing Nottingham County Court
proceedings. Unless both parties were agreeable to his issuing an interim award
dealing with the matters arising under Article 3 only, to be followed by a
final award following the outcome of the county proceedings, he proposed to
delay fixing any preliminary meeting or hearing until that outcome was known.
By a letter dated 24 December 1997, Mr
was no such thing as a ‘without prejudice’ arbitration, that the Websters must
either accept Mr
and that it was not open to Mr Lane to postpone his award in view of the period
of 56 days for its issue in Schedule 11. That period expired on 6 January 1998,
on which date Mr Lane wrote indicating that, since it was now clear that Mr
Grammer sought arbitration under both paras 3 and 4 of the 1987 order, he
proposed to hold a preliminary hearing to receive submissions on the validity
of the service of a ‘without prejudice’ notice to remedy. By a letter dated
15
challenging the suggestion that Mr
included any question under para 4, let alone that identified by Mr
They expressed concern that Mr
costs if the arbitration proceeded and it transpired that he had no
jurisdiction. In making this submission, they (and indeed everyone else
involved, until the matter came before us) appear to have overlooked the
provisions of para 30 of Schedule 11 to the 1986 Act. They urged both Mr
Grammer to agree and Mr Lane to order a postponement of any further steps in
the arbitration, as originally proposed by Mr
outcome of the Nottingham County Court proceedings. On 19
Lane wrote affirming his view that the arbitration had been sought under both
paras 3 and 4 of the order, but continuing:
Notwithstanding the above, I must now consider the doubt raised as
to my jurisdiction: no tenancy —- no jurisdiction.
I now accept that the costs of a hearing of any description until
my jurisdiction is clarified are at risk, and unless either party is prepared
to underwrite these costs, both mine and the other side’s, I can see no merit
in proceeding with this case any further until the tenancy issue is settled in
the Nottingham County Court.
I therefore revoke my proposal to hold a preliminary hearing as suggested
in my letter of 6 January 1998.
By a letter dated 2 February 1998, those representing
Mr
make an award within 56 days of appointment, invited him to resign and
indicated that, if he did not, they would apply to remove him for misconduct.
In reply, on 3 February 1998, Mr Lane said that he had no reason to resign and
did not intend to, and that the president was empowered to grant an extension
‘with or without the concurrence of the parties’. On the same day, though
without informing the parties, Mr Lane sought such an extension, and on 4
February 1998 the president extended the time for an award until 6 April 1998.
On 5
27(1) of Schedule 11 to have Mr
1998 Mr Lane applied to the president for a further extension, to which the
response on 16 April 1998 was:
The President will not grant an extension of time at this stage on
the basis that there are Court Proceedings current. The President will await
the outcome of these Proceedings and abide by any Order or recommendation of
the Court.
The president was probably referring to the application dated 5
March 1998 to remove Mr Lane for misconduct. But he was not indicating that no
extension would or will be forthcoming, if that application fails. To meet any
suggestion that the extension granted to 6
could not have been guilty of misconduct at the date of the first application
dated 5 March 1998, a further application was issued on behalf of Mr Grammer on
15 December 1998 to remove Mr Lane for misconduct.
These two applications in Leicester County Court came before Mr
Recorder Justin Wigoder, who, on 23
and clearly expressed reasons, he held that Mr Lane had reason to believe that
he was being invited to decide issues that Nottingham County Court had
concurrently under consideration, and was entitled on that basis to suspend the
arbitration. He also rejected submissions that Mr
himself: (a) by vacillating in his letters dated 18 December 1997 and 6 and 19
January 1998; and (b) by not informing the parties on 31 March 1998 that he was
seeking a further extension from the president. By a notice dated 28 April
1998, and with permission of the single judge, Mr Grammer appeals against Mr
Recorder Wigoder’s decision, the primary ground of appeal being that the
recorder was wrong to hold that the question of the existence of the tenancy
was an issue before the arbitrator. That is the first matter now before us.
During the course of its hearing, we acceded to an application for late service
of a respondents’ notice, raising as an alternative ground for upholding the
recorder’s decision that, if there was any misconduct, it was, on the facts,
not such as should justify the court, in the exercise of its discretion,
removing Mr Lane as arbitrator.
To identify the other matter in issue before us it is necessary to
regress a little. If the notice that the Websters had served on 19 March 1997,
referring to section 12 of the 1986 Act, was to have its intended protective
effect, an arbitrator had under section 12(3) to be appointed by 25 March 1998.
The Websters on 23
appointment. Both the application and a covering letter made clear that the
parties were in dispute whether there was any tenancy and that the application
was without prejudice to the Websters’ contention that there was none. The
president on 14 April 1998 appointed Mr
A similar issue at once arose, whether Mr Stone should proceed or,
as the Websters submitted, stay further proceedings pending the outcome of the
Nottingham County Court proceedings. Mr Stone held a meeting with the parties,
at which the Websters submitted in the alternative that, if Mr Stone was not
prepared to stay the arbitration, he should state a case for the opinion of the
county court under para 26 of Schedule 11 to the Act. They said that, if he was
not prepared to take either of these courses, they intended to apply to the
county court to restrain him from pursuing the arbitration until after the
outcome of the Nottingham County Court proceedings in Case No NG780969. Mr Stone
decided to state a case, and, by a special case dated 30 October 1998, he
submitted for the opinion of Nottingham County Court (Case No NG823893) the
following questions:
5.1 Is there any objection in law to a notice pursuant to section
12 of the Agricultural Holdings Act 1986 being served by a landlord on a person
who claims to be his tenant without prejudice to the landlord’s contention that
the person is not a tenant?
5.2 Does service of a notice pursuant to section 12 of the
Agricultural Holdings Act 1986 without prejudice as aforesaid invalidate the
effectiveness of the notice to any extent?
5.3 If the answer to the question posed in the foregoing
sub-paragraph is in the affirmative to what extent is the notice invalidated?
5.4 Is the landlords’ notice pursuant to section 12 of the
Agricultural Holdings Act 1986 valid and effective to secure a review of the
rent for any tenancy that the tenant may establish with effect from 25 March
1998?
5.5 Does service of a notice pursuant to section 12 of the Agricultural
Holdings Act 1986 without prejudice as aforesaid have any impact on the
Landlords’ contention that no tenancy exists whether by virtue of the doctrines
of estoppel or waiver or in any other way?
5.6 If the answer to the question in the foregoing sub-paragraph
is in the affirmative, what impact does such a notice have on the landlords’
contention?
5.7 Should the arbitration proceedings be suspended to allow the
preliminary issue that arises therein to be resolved by the conclusion of the
proceedings in Nottingham County Court despite the fact that the suspension
will mean that the arbitrator will not be able to make and sign his award until
very much longer than 56 days have elapsed from the date of his appointment?
5.8 If the question in the foregoing sub-paragraph is not in the
opinion of the court a question of law for the opinion of the court but a
question for the Arbitrator to determine in the exercise of his discretion,
what guidance, if any, can the court give to the arbitrator as to how his discretion
should be exercised in all the circumstances?
5.9 Is the landlords’ statement of case dated 18 May 1998 a valid
statement of case served pursuant to paragraph 7 of Schedule 11 to the
Agricultural Holdings Act 1986 susceptible of amendment on the application of
the landlords at the discretion of the arbitrator?
This special case duly came before Mr John Burgess, sitting as an
assistant recorder, who, on 23 March 1999, answered the above questions as
follows:
Question 5.1: No.
Question 5.2: No. Both parties were agreed on this.
Question 5.3 is accordingly not applicable.
Question 5.4: Yes. Again both parties were agreed.
Question 5.5: No.
Question 5.6 is accordingly not applicable.
Question 5.7: Yes.
Question 5.8 is therefore not applicable.
Question 5.9: Yes.
By notice of appeal dated 2 June 1999, and with leave granted by Mr
Burgess in the light of the permission given by the single judge to appeal from
Mr Wigoder’s decision, Mr Grammer now appeals against Mr Burgess’ decision, and
seeks to have questions 5.1 and 5.5 answered affirmatively, question 5.7
answered negatively and question 5.8 answered in the same sense as
question
Although not directly before us, I must mention one other set of
proceedings before the Agricultural Land Tribunal. On 25 March 1998 the
Websters served a notice to quit claiming to determine on 25 March 1999 any
tenancy that existed. Again, they did so expressly without prejudice to their
contention that Mr Grammer had no such tenancy. On 9 April 1998 Mr Grammer
served a counternotice, and, on 11 May 1998, the Websters applied to the
tribunal, in each case under section 26(1) of the 1986 Act. Inevitably, this
gave rise to a dispute similar to that arising in each arbitration. On
23
sadly deceased, heard an application by the Websters to adjourn generally,
until after the outcome of the first Nottingham County Court proceedings, the
hearing of the Websters’ application for consent to the operation of the notice
to quit. The tribunal, after considering the judgment of Mr Recorder Wigoder
given earlier on the same day in Leicester County Court, took the view
(expressed in reasons delivered on 25 January 1999) that its only jurisdiction
was to give or decline leave for the notice to quit on the footing that there
was a tenancy, and that this issue, which it had to determine, was quite
different from any before Nottingham County Court in Case No NG780969. The
tribunal later gave notice that it would sit to determine this issue on 27
April 1999. On that date, the tribunal heard a further application for
adjournment. After considering the position in both the arbitrations, it
reaffirmed its previous refusal and refused to state a case for the opinion of
the court. The solicitor acting for the Websters then withdrew from further
participation before the tribunal. The tribunal (as set out in reasons given on
20 May 1999) accordingly dismissed the Websters’ application under section
26(1) of the 1986 Act and awarded costs against the Websters.
I turn to the issues argued before us on the two appeals from the
decisions of Mr Recorder Wigoder and Mr
John McLinden, appearing before us for Mr Grammer, put at the forefront of his
submissions the proposition that the Websters had invoked a jurisdiction that
postulated the existence of a tenancy. They had done so in the case of the
arbitration before Mr Lane by serving the notice to repair dated 19 September
1997, to which Mr
done so in the case of the arbitration before Mr Stone by serving their notice
of 19 March 1997 and by following it up a year later by invoking arbitration.
Before us, Mr
Websters to attempt to invoke or maintain the arbitrator’s jurisdiction under
the 1986 Act ‘without prejudice’ to a contention that there was no tenancy;
that neither arbitrator had jurisdiction to decide whether a tenancy existed;
and that it was the arbitrator’s duty in each arbitration to proceed to decide
the issues before him within the time limited by the 1986 Act. Mr Lane should
therefore have called upon the Websters either to proceed with the relevant
arbitration, accepting the existence of a tenancy, or to withdraw from further
pursuit of or participation in it. Mr Lane was thus wrong to stay the first
arbitration. In respect of the arbitration before Mr Stone, the notice of
appeal raised as further points that the recorder should have held: (a) that
the demand for a rent review bound the Websters to accept the existence of a
tenancy; or (b) that the commencement of arbitration by the Websters had the
like effect; or, in the further alternative, (c) that Mr
called upon the Websters to proceed with the relevant arbitration, accepting
the existence of a tenancy, or to withdraw from further pursuit of it.
Before engaging with the detail of the parties’ respective
submissions, it is as well in my view to stand back and look at the overall
picture. The fundamental questions with which this court is concerned are,
firstly, whether it is open to a freeholder involved in an unresolved dispute
with a person claiming a tenancy to serve protective notices, ‘without
prejudice’ to his denial of a tenancy, in order to protect his position in case
a tenancy should be established, and, secondly, whether such a freeholder may,
for the same protective purpose and on the same ‘without prejudice’ basis,
participate in any arbitration that the other party may invoke, as happened in
the case of the Lane arbitration, or himself invoke arbitration, as happened in
the case of the Stone arbitration.
In addressing these questions, the starting point is the 1986 Act.
Its relevant provisions, under which the notices were served and arbitration
pursued, all postulate the existence of a tenancy. If Mr Grammer is right in
his contention that a tenancy survives in some degree or other from the 1970s,
the notices and arbitration will prove to have been soundly based. If the
Websters are right that there is no tenancy, the notices and arbitration will
lack foundation. We are, in short, concerned with a statutory scheme of notices
and arbitration, the effective operation of which depends on the existence of a
tenancy. But whether or not any and what tenancy survives in Mr Grammer’s
favour is a matter of objective fact and law. It will be ascertained in the
first Nottingham County Court proceedings. It does not depend upon what either
party says, or upon what notices or arbitral steps either party serves or
takes, unless of course such notices or steps should themselves be viewed as
giving rise to some contract or estoppel.
The scheme of the 1986 Act requires notices to be served and
arbitration to be invoked within particular time-limits. If these are not
observed, a party’s rights may be affected. So, if a proper rent is to be
obtained, it can only be obtained as from the next termination date after
service of a notice demanding arbitration under section 12, and even then the
demand will become ineffective unless it is followed up by agreement upon, or
appointment by the president of, an arbitrator before that termination date.
And if a landlord wishes to have any breach of tenancy remedied or, if
necessary, to base a notice to quit upon its continuance, then a notice is
first necessary under Case D. That in turn may lead to a tenant serving a
counternotice and commencing arbitration to protect his position under Articles
3, 4, 9 and 10 of the 1987 Order, within the short time-limits there specified.
Other cases in Schedule 3 to the 1986 Act provide further examples of
time-limits to be observed if a landlord is to protect his position. I take
only the one further example of Case G, which allows a landlord to take advantage
of section 26(2) to support a notice to quit after a tenant’s death only if he
gives notice to quit within three months of the death.
Is it impossible or improper for a freeholder in the Websters’
position to take protective steps, by way of service of notices or
participation in an arbitration on a ‘without prejudice’ basis? I see no reason
in principle why a freeholder cannot serve a notice or take relevant arbitral
steps to protect his position pending the resolution of an outstanding dispute
whether any tenancy exists at all. The scheme of the Act is not flouted. The
validity of the notice or arbitral step does not depend upon the will of either
party, or require any unconditional acknowledgement of a tenancy by either
party. On the contrary, it depends upon a matter of objective fact and law,
namely whether there is any, and if so, what tenancy, that is independent of
either party’s expression of view, unless that expression of view itself gives
rise to some new contract or estoppel.
Mr McLinden’s general submission, that it is abusive to act as the
Websters did, fails, to my mind, to take into account that, if there does prove
to be a tenancy, Mr
the notices or the arbitration, and, if there proves not to be, then the
Websters’ conduct was a reasonable reaction in the face of Mr Grammer’s (on
this hypothesis unfounded) suggestion of a tenancy. If and in so far as a
tenant in Mr Grammer’s position reacts to the notices served, eg by serving
counternotices, commencing arbitration or even doing repairs (though there is
no evidence that Mr Grammer has in fact done repairs), that is his decision. If
there proves to be a tenancy, he cannot complain. If there proves not to be, he
will have been backing his case, in full knowledge that it was in issue and
might be wrong. In an ideal world, as soon as a dispute arose as to the
existence of a tenancy, it would be possible for the parties to go at once to
court and to receive an immediate answer. In practice, it takes longer —-
although the first Nottingham County Court proceedings have taken far longer
than they should on the face of it have done (or than would now be possible
under the new rules) —- a matter for which Mr Grammer as claimant can hardly
disclaim all blame. In my judgment, the law should, if it can, allow parties to
protect their legitimate interests while the law’s process takes its time in
resolving the issue of substance between them. This is not a case of
proceedings initiated by the Websters that they
forum to preserve a time-limit against the possibility that proceedings afoot
in another preferred forum might be stayed for lack of jurisdiction or on
grounds of forum non conveniens.
During the hearing, I mentioned a decision in the context of the
Arbitration Act 1996, Grimaldi Compagnia di Navigazione SpA v Sekihyo
Lines Ltd (The Seki Rolette) [1999] 1 WLR 708, where I considered the
situation that not infrequently arises when a party denying that a contractual
time-bar applies wishes none the less to protect his position, in case he is
wrong, by making an application to the court for an extension of time within
which to arbitrate under section 12. Section 12 provides:
(1) Where an arbitration agreement to refer future disputes to
arbitration provides that a claim shall be barred, or the claimant’s right
extinguished, unless the claimant takes within a time fixed by the agreement
some step —-
(a ) to begin arbitral proceedings, or
(b) to begin other dispute resolution procedures which must be
exhausted before arbitral proceedings can be begun,
the court may by order extend the time for taking that step.
(2) Any party to the arbitration agreement may apply for such an
order (upon notice to the other parties), but only after a claim has arisen and
after exhausting any available arbitral process for obtaining an extension of
time.
(3) The court shall make an order only if satisfied —-
(a) that the circumstances are such as were outside the reasonable
contemplation of the parties when they agreed the provision in question, and
that it would be just to extend the time, or
(b) that the conduct of one party makes it unjust to hold the
other party to the strict terms of the provision in question.
(4) The court may extend the time for such period and on such
terms as it thinks fit, and may do so whether or not the time previously fixed
(by agreement or by a previous order) has expired.
The court’s power under section 12 of the Arbitration Act 1996 is
thus to extend time where the claim would otherwise be barred or the right
extinguished by a provision in the arbitration agreement. If no such provision
exists barring the claim or extinguishing the right, the court does not need
and does not have any power. The position is similar to that under the 1986
Act, where, if no tenancy exists, the provisions relating to service of notices
and arbitration do not apply. I held in Grimaldi that it was for the
arbitrators to determine whether any provision existed barring the claim or
extinguishing the right. But I saw no difficulty in accepting that a party
could seek relief under section 12 without prejudice to his primary case that
there was no consensual time-bar at all. I said at pp718G-719B:
(d) If the claimant wishes to have an application under section 12
decided first, or wishes to pursue it concurrently with proceedings before the
arbitrators to determine whether there is any applicable consensual time bar,
he may ask the court to consider the section 12 application on an assumption
that there is an applicable consensual time bar. The court may, as in International
Tank and Pipe SAK v Kuwait Aviation Fuelling Co KSC [1975] QB 224,
proceed on such an assumption. Where, however, the claimant may wish in the
arbitration to adopt a stance which contradicts that assumption (for example,
as in the present case, by denying in arbitration the incorporation of the
Hague Rules upon which any time bar depends) the claimant would appear well
advised to ask the respondent to agree that the section 12 application should
proceed without prejudice to the [claimant’s] right to adopt that contrary
stance before the arbitrators. If the respondent does agree to this, the court
may, as in Vosnoc Ltd v Transglobal Projects Ltd [1998] 1 WLR
101, be prepared to proceed on that basis, and no problem will then exist. If
the respondent does not agree to this, the court may, if appropriate, stay the
section 12 application pending the arbitrators’ resolution of the issue whether
there is any consensual time bar applicable in the absence of any extension.
By the time the present appeal came before us, it was common ground
that a notice under section 12 of the 1986 Act is not invalidated by
being expressed to be ‘without prejudice’ to the unresolved primary contention
that no tenancy exists. If so, the same must apply to a notice to repair under
Case D. However, each side accepted such a proposition on a different basis.
The Websters’ contention has always been that both the notice and the
reservation are effective. Mr Grammer’s contention (at least in respect of the
section 12 notice relating to rent) was that the reservation ‘without
prejudice’ must be wholly disregarded. Reliance was placed on the rule that a landlord
cannot avoid a waiver of forfeiture by expressing his acceptance of, or demand
for, further rent to be ‘without prejudice’ to his right to forfeit: Segal
Securities Ltd v Thoseby [1963] 1 All ER 500, and David
Blackstone Ltd v Burnetts (West End) Ltd [1973] 3 All ER 782. In
these cases the question ‘quo animo‘ the rent was accepted or demanded
by the landlord, and any express qualification ‘without prejudice’ that he
attached was held irrelevant.
Before us, Mr McLinden did not, either in his skeleton or orally,
address substantial submissions to us in support of the contention in his
client’s notice of appeal that the service ‘without prejudice’ of a notice
under section 12 committed the Websters unconditionally to accept the existence
of a tenancy. In my view he was right not to do so. The cases of Segal
and David Blackstone do not assist. They concern the situation where a
tenancy exists, and the question is whether the landlord has foregone a right
to forfeit for breach of its terms. Sachs J in Segal at pp505I-506A
expressly points out that the principle there recognised —- that the intention
with which the rent is received or demanded is irrelevant —- does not apply
after the expiry of a lease by effluxion of time or notice.
In the present situation, if there is otherwise no tenancy, a new
tenancy can only have come into existence either by the making of a new
contract or possibly by conduct estopping the Websters from denying the
continuation of some previous contract. In either case, the court is concerned
to ascertain and consider the Websters’ intentions objectively expressed by
their words and conduct. Here, there was at all relevant points a clearly
expressed reservation, which prevents any conclusion that the Websters at any
point either offered or entered into any new tenancy, or represented that there
existed any surviving tenancy. For reasons I have indicated, I consider that a
party may protect his interests in the manner in which the Websters sought to
do, and I see no basis for stigmatising the Websters’ conduct as involving any
kind of abuse.
This brings me to consideration of the courses open to the
arbitrators when faced with the problem presented by the unresolved dispute
about the existence of a tenancy in the arbitration proceedings, invoked in one
case by Mr Grammer (under the 1987 Order) and in the other case by the Websters
(under section 12 of the 1986 Act). The arbitrators had power to consider the
facts and law relevant to the existence or otherwise of their statutory jurisdiction.
They could have embarked on investigation of the history and position relating
to the 1970 tenancy and other agreements or arrangements. But a statutory
arbitrator cannot by such an investigation and a ruling confer on himself a
jurisdiction that he would not otherwise have had. See generally on these
points R v Fulham, Hammersmith and Kensington Rent Tribunal, ex parte
Zerek [1951] 2 KB 1, Christopher Brown Ltd v Genossenschaft
Oesterreichischer Waldbesitzer Holzwirtschaftsbetriebe GbH [1954] 1 QB 8
and also, in the context of agricultural arbitration, Kirby v Robinson
(1965) 195 EG 363. In the agricultural context, two qualifications arise under
paras 26 and 30 of Schedule 11 to the 1986 Act. Para 26 allows an arbitrator
appointed under the Act to state for the opinion of the court any question
arising as to his jurisdiction. That is the course that Mr Stone adopted in
respect of limited questions relating to the admissibility and effectiveness of
the ‘without prejudice’ notice and to Mr Grammer’s argument that the notice in
one way or another precluded the Websters from denying the existence of a
tenancy (though not in respect of the basic question whether any tenancy
otherwise survived from the 1970s). If an arbitrator states a case under para
26, the parties will become bound by the court’s determination of any question
of law raised by that case. But findings of fact that the arbitrator may make
relevant to jurisdiction can be no more binding if an arbitrator states a case
than if he does not. Para 30 caters, most obviously at least, for the situation
where an arbitrator rules that he has no jurisdiction to decide the substantive
question remitted to him. He can still make a valid award as to his
remuneration and party costs.
In Muir Watt & Moss on Agricultural Holdings (14th ed)
(1998) at para 16.32, the following view is expressed:
Arbitrators, like other Tribunals of limited jurisdiction, are
entitled to enquire into their own jurisdiction, with a view to deciding
whether to continue with the arbitration, but they can never give themselves
jurisdiction by deciding that they have it if in fact they have not. Their
decision as to jurisdiction, if erroneous, can have no effect on the parties’
rights. An arbitrator, faced with a doubt or challenge as to his jurisdiction,
must use his judgment about the appropriate action in the light of all the
circumstances. He must make up his mind either:
(a) to state a case for the opinion of the County Court on
jurisdiction;
(b) to decide that he has no jurisdiction and make an order as to
costs only;
or
(c) to make an award on the assumption that he has jurisdiction,
leaving it to be determined, if necessary, in court proceedings whether his
assumption was correct.
Para (c) must presumably have been intended by the editors to cover
the (doubtless not unfamiliar) situation where, in the face of a challenge to
his jurisdiction, the arbitrator, after a more or less detailed review, forms a
sufficiently confident view that jurisdiction exists to feel justified in all the
circumstances in proceeding without stating a case. As appears from my
observations in the Grimaldi case, quoted above, I also see no
difficulty in an arbitrator proceeding by agreement on an assumption that
jurisdiction exists, without prejudice to one or other party’s contrary
contention being pursued elsewhere. Apart from these situations, guidance as to
the courses open to an arbitrator where a question exists about his
jurisdiction is found in a number of authorities, concerning both statutory and
consensual arbitration. In ex parte Zerek, cited above, Devlin J said at
p13:
Although tribunals may in my view and in default of any
alternative have to determine for themselves in the first instance the extent
of their jurisdiction, nothing that I have said means that they should take
upon themselves unnecessarily the examination of questions such as those in Rex
v Hackney, etc, Rent Tribunal; ex parte Keats [1951] 2 KB 15, or in
cases where charges of fraud or forgery and the like are raised. Their own good
sense will tell them that. While they will not allow every empty threat to
their jurisdiction to deter them from their proper business of fixing
reasonable rents, they will likewise appreciate that they are not by their
nature equipped for the trial of matters which in the ordinary civil courts
would be determined after pleading and discovery had been given and evidence on
oath tested by cross-examination, and possibly, also, after trial by jury. The
tribunal cannot be required to determine summarily such an issue if it involves
a point of substance and if one or other of the parties is willing to have it
determined in the ordinary civil courts; an adjournment can always be granted
to allow that to be done. This will avoid an inconclusive inquiry by the tribunal
and safeguard the tenant against the danger of being presented with an order
which may afterwards turn out to be illusory. It may well be that if the
tribunal itself insist, notwithstanding that there is a practicable alternative
offered to them, in going into points of the sort which they purported to
determine in Rex v Hackney, etc, Rent Tribunal; ex parte Keats
there is power in this court to prevent them from doing so. It is quite
unnecessary that I should even consider that in relation to the present case,
for this tribunal were quite willing that the validity of the alleged agreement
should be determined by the ordinary courts, and I think that that would be the
attitude of most tribunals.
In the Christopher Brown case Devlin J returned to the
subject, and, in the context of consensual arbitration, the position is
similar: see Mustill & Boyd on Commercial Arbitration (2nd ed) pp572
and 574-576; Luanda Exportadora SARL v Wahbe Tamari & Sons Ltd
[1967] 2
general law, it is clear that paras 16.32(a), (b) and (c) in Muir Watt &
Moss do not exhaust the possibilities open to an arbitrator in any
particular case. As the earlier text in para 16.32 correctly states, it is for
an arbitrator to use his judgment about the appropriate action in the light of
all the circumstances of each case.
The particular circumstances here include the fact that, at all
material times, the dispute relating to the survival of a tenancy dating from
the 1970s has been awaiting resolution in Nottingham County Court. Bearing this
in mind, to investigate and state a case in respect of the preliminary question
whether a tenancy survived from the 1970s, when the same matter was already
before the county court, would have made poor sense, bearing in mind the
complexity of the issues and the costs involved, quite apart from the fact that
any decision about the facts would not bind; and to investigate this
preliminary question, one way or other, without stating a case would have no more
sense. On the face of it, it was open to each arbitrator to take the course
mentioned by Devlin J in ex parte Zerek in the passage cited above, and
to stay further proceedings while the issue of jurisdiction was resolved in
court. This is reinforced by the provision in para 26 of Schedule 11 to the
1986 Act for stating a case. If an arbitrator can state a case on jurisdiction,
he must be able to await the outcome of that case before proceeding. If it is
unnecessary to state such a case, because the issue of jurisdiction is already
before the county court in pending proceedings, he must be able to await the
outcome of those county court proceedings.
Mr McLinden submits that this conclusion overlooks, generally, the
duty of an arbitrator to proceed with the reference, and, specifically, the
special time-limits applicable to agricultural arbitrations under the 1986 Act
and 1987 Order. On the general duty to proceed, he cited words of Donaldson LJ,
as he was, in Northern Regional Health Authority v Derek Crouch
Construction Co Ltd [1984] QB 644, under the heading ‘To what extent can
the arbitrator refuse to decide issues?’:
This problem only arises in the unusual situation of concurrent
overlapping proceedings before the court and before an arbitrator. The primary
duty of an arbitrator is to decide all issues referred to him. However, an
arbitrator is subject to the supervision of the court and it is well settled
that the court has jurisdiction to restrain an arbitrator from deciding issues
which are being litigated before the court. If, therefore, an arbitrator has
reason to believe that he is being asked to decide issues which the court
concurrently has under consideration, he should ask himself whether the court,
if asked, would be likely to enjoin him from proceeding. If the answer is ‘Yes’
he should indicate his view and give the parties an opportunity of applying to
the Court for a mandatory injunction requiring him to proceed. If the answer is
‘No’ he should indicate his view and give the parties an opportunity of
applying to the court for a prohibitory injunction restraining him from
proceeding. This is analogous to the duty of an arbitrator when his
jurisdiction is challenged.
Those words were delivered in the context of issues of substance
that arose concurrently in different proceedings before the court and
arbitrators. Here, Nottingham County Court is concerned with the issue whether
a tenancy survives from the 1970s, an issue that only arises before the
arbitrators in so far as they have to consider their jurisdiction as a
preliminary matter or decide to state a case upon it. Mr McLinden submits that
makes all the difference. In one sense, of course, there is an important
difference. The arbitrator, by going into the matter of jurisdiction, could not
bind the parties (at least except in so far as he stated a case that led to the
determination of matters of law). The court would not, therefore, have reason
to injunct the arbitrator from considering his jurisdiction in order to avoid
the risk of an arbitral decision pre-empting a court’s decision. But, in
another sense, it is less desirable that an arbitrator should spend time and
money investigating factual issues on which his decision will not even be
binding, when the same issues will be determined in binding manner in pending
county court proceedings. Donaldson LJ was not, in my opinion, addressing the
problems arising in the context of a jurisdictional issue at all, although,
like Devlin J in ex parte Zerek, I leave open as a possibility that an
arbitrator might in some circumstances be restrained from continuing with an
arbitration, where an issue of jurisdiction exists and is being determined in
another binding forum.
Mr McLinden also submits that the conclusion I have suggested
undermines the specific requirement in Schedule 11 para 14(1) that an
arbitrator shall make and sign his award within 56 days of his appointment. He
points to the intention, supported by Schedule 11 para 1(3), that any rent
arbitration shall take place as near as possible in time to the relevant
termination date from which any rent fixed will run. True though this may be,
and realisable in the great majority of arbitrations under the Act, the 56-day
limit is not and cannot be absolute. The president is given power by Schedule
11 para 14(2) ‘from time to time [to] enlarge the time limited for making an
award’. A case stated on jurisdiction, as expressly permitted by para 26, is
most unlikely to be prepared or resolved within 56 days, or indeed anything
like that period —- as the course of events in the case of Mr
special case suggests: he was appointed on 14
on 30 October 1998 and it was determined on 23 March 1999. Where a
special case on jurisdiction was outstanding, the president would normally, no
doubt, be prepared to extend the time for making an award, either prospectively
or retrospectively if and when jurisdiction was confirmed.
Mr McLinden submits that, in the absence of any extension beyond 6
April 1998, Mr Lane was and is guilty of misconduct through not having already
issued his award by that date. That submission cannot be accepted. The
president is given specific power to enlarge the time for making an award, even
after time has expired. The mere fact that no award has been issued within 56
days cannot be misconduct, certainly not misconduct that could conceivably
justify a court in setting aside the arbitrator’s appointment under
para
has done is decided, understandably, to await the outcome of the present
application(s) to set aside Mr
applications will enable him to consider the question of a further extension,
in the knowledge that Mr Lane’s appointment stands. Halliday v Semple
1960 SLT 11 (Sheriff Court of Dumfries), on which Mr McLinden relied, has
no relevance. It concerned an arbitrator who, without obtaining any extension,
issued an award outside the two-month period prescribed by the Agricultural
Holdings (Scotland) Act 1949. Neither Mr
any award outside the relevant statutory period. Nor, I am sure, has either any
intention of so doing. Each no doubt envisages that, in the peculiar
circumstances of this case, the president will, after the resolution of the
present appeal, see fit to grant such further extensions as may be necessary to
enable them to issue awards within the time as so extended. Without prejudging
the president’s exercise of his power, the expectation is on the face of it
reasonable, and there is certainly no ground for considering that either
arbitrator has acted unreasonably.
The only respect in which either arbitrator may have fallen into
error consists in Mr Lane’s assumption that any order that he might make
relating to his own or either party’s costs of further pursuit of the
arbitration would be ineffective, if it transpired that he had no jurisdiction.
For this assumption Mr Lane cannot be blamed, since it derived from the
Websters’ solicitors and was not corrected by Mr Grammer’s solicitors. If it
makes any difference to the exercise of his discretion, he will be able to
reconsider the matter. But the general undesirability of incurring large costs,
which may be wasted if Nottingham County Court holds that there is no tenancy
at all, is clearly a powerful factor, even though a valid order may under para
30 be made against one or other party in respect of them.
The suggestion that Mr Lane misconducted himself by ‘vacillating’
in his letters dated 18 December 1997 and 6 and 19 January 1998 was only
faintly pursued before us and has nothing to commend it. Arbitrators doing
their best to address difficult situations may be forgiven, indeed perhaps
commended, if they are open-minded enough to reconsider the appropriate course.
They should not be vexed with allegations of misconduct. While misconduct is a
term of art not itself having any moral significance, there is a considerable
distinction between error (even were this arbitrator to be viewed as having
made any) on the one hand and either misconduct or incompetence on the other
hand: see eg Pratt v Swanmore Builders Ltd [1980] 2 Lloyd’s Rep
504 at pp508-509. There seems to me equally little merit in the suggestion,
even less visible before us, that Mr Lane’s appointment should be set aside
because he sought a further extension from the president without notice on
3
should give the parties notice of his intention to seek such an extension. But
the 56-day time-limit is intended to achieve early finality between parties,
and I am inclined to think that it would normally be good practice for an
arbitrator to keep the parties informed when seeking an extension. They might
in some circumstances wish to make representations to him or the president. But
the procedure for seeking and granting an extension should not be regarded, or
allowed to develop into, any form of mini-arbitration. The shortness of the
time-limit and the president’s very limited role indicate that it should be
dealt with in summary fashion. On the facts here, it was clear that
Mr
made clear — it appears without eliciting any immediate objection
— that he viewed such an application as one that could be made ‘with or without
the concurrence of the parties’. Even assuming that he erred in not informing
the parties that he was actually seeking such an extension, he clearly acted
bona fide, and any error on this point throws no doubt on his competence and
cannot constitute misconduct that could conceivably justify his removal.
The rulings made by the Agricultural Land Tribunal are not the
subject of proceedings before us. Essentially, they were based on conclusions
that the tribunal’s sole function was to decide the issues of substance before
it, that it had to proceed on the basis that it had jurisdiction and that it
did not lie in the mouth of a party invoking the jurisdiction of the tribunal
to seek consent to the operation of a notice to quit at one and the same time
as challenging its jurisdiction. This reasoning does not appear to take full
account of the possibilities that are on any view open to a tribunal when a
respondent challenges its jurisdiction, and, for reasons I have already given,
I take a less restrictive view of the conduct and attitude open to an applicant
invoking arbitration as a protective measure, particularly when the issue
governing jurisdiction is due to be determined in another binding forum.
In my judgment, Mr Recorder Wigoder was correct to dismiss the
applications to set aside the appointment of Mr Lane, and the appeal by Mr Grammer
against his decision fails. It follows also that the answers given by Mr
Assistant Recorder Burgess to questions 5.1 to 5.6 all stand. With respect to
questions 5.7 and 5.8, although this is not a point to which any party before
us attached significance, I consider that it was and is for the arbitrator and
not the court to determine what course should be adopted in the arbitration.
Accordingly, the answer to question 5.7 should have been ‘Not a question of law
for the court to answer’, and the answer to question 5.8 is that such guidance
as the court can offer on the relevant principles is to be found in this
judgment. In particular, it is open to Mr Stone, if, in his discretion, he
considers it otherwise appropriate and believes that he will be able in due
course to obtain a sufficient extension of time for any award, to await the
outcome of the Nottingham County Court proceedings on the issue whether Mr
Grammer has any and what tenancy surviving from prior to December 1996. With
that minor amendment, the appeal against the judgment of Mr Assistant Recorder
Burgess also fails.
WILSON J and PETER GIBSON LJ agreed and did not
add anything.
Appeal dismissed.
