Landlord and tenant — Agricultural land — Possession action — Estoppel — Agricultural Holdings Act — Appeal from decision of county court judge — Appellant, who believed that he had an agricultural tenancy protected by the Act (then the Agricultural Holdings Act 1948), challenged the judge’s decision that he did not even have a subtenancy, as the person who purported to grant him an interest was not himself a tenant — The facts were that after the death of the owner of the subject property, then about 10 1/2 acres of agricultural land, the executors allowed one of their number, one S, to occupy the land, paying £12 per acre; his exact status in law remained uncertain — Appellant approached S, thinking that he owned the land, and obtained what purported to be a term of two years and thereafter from year to year — Some years later S, then the sole surviving executor, carrying out the trusts of his father’s will, assented to the vesting of the land in himself and the other two respondents as tenants in common in equal shares — They then served on S a notice to quit which became effective as S did not serve a counternotice pursuant to the 1948 Act — Appellant was informed that as S’ head tenancy had been terminated the appellant’s subtenancy had perished with it — Appellant refused to quit and possession proceedings followed
court judge decided, after considering various submissions on behalf of the
appellant, that as S had no tenancy he could not grant a subtenancy and
therefore the appellant had no answer to the claim for possession — The Court
of Appeal agreed with the judge’s decision and dismissed the appeal but in so
doing discussed and determined a number of points which had been raised on the
appellant’s behalf
to the appellant he must as an executor have bound the estate — The answer to
this, apart from the requirement that all the executors had to concur, was that
he was not acting as an executor so as to bind the estate; he thought
(incorrectly) that he himself had a headlease out of which a subtenancy could
be created — (2) It was then suggested that the appellant could rely on
estoppel; S was estopped by the grant of the term from denying the existence of
a demise and when later he became solely entitled as executor to a legal estate
in the land the doctrine of ‘feeding the estoppel’ applied so as to perfect his
title — The objection to this suggestion was that, according to authority, the
estoppel could only have been ‘fed’ if S had acquired the legal estate in his personal
as opposed to his representative capacity as an executor and trustee — (3) The
next point was ‘more formidable’ and more complex, based on the Agricultural
Holdings Act 1948 and a principle of the common law — It was contended that S
when allowed into possession after the death of his father had at least a
licence which, by virtue of section 2(1) of the 1948 Act, took effect as ‘an
agreement for the letting of the land for a tenancy from year to year’ — S was
therefore able to create a subtenancy — But by joining in a notice to quit
served on himself and then refraining from serving a counternotice under
section 24(1) of the 1948 Act he brought himself within the principle of Mellor
v
Watkins and Brown v Wilson: a tenant cannot by his own voluntary act in putting an end
to his own tenancy destroy or impair the interest which he has granted to a
subtenant — In that case the appellant would be entitled to remain in
possession until his interest was properly terminated and subject to any
safeguards provided by the 1948 Act — The Court of Appeal’s answer to this
contention was that the notice to quit was not a voluntary step in the ending
of S’ own interest; it was a document sent on behalf of all S’ landlords
formally determining his tenancy ‘in the mistaken belief that one existed’ —
(4) The appellant’s last argument was that the claim for possession was a
breach by S of the covenant for quiet enjoyment in the lease; but if the lease
created no tenancy there was nothing on which the covenant could bite — Appeal
dismissed
The following
cases are referred to in this report.
Brown v Wilson (1949) 208 LT 144; (1949) 93 SJ 640; 156 EG 45
Fountain
Forestry Ltd v Edwards [1975] Ch 1; [1974] 2
WLR 767; [1974] 2 All ER 280
Keate v Phillips (1881) 18 ChD 560
Mellor v Watkins (1874) LR 9 QB 400
Metters v Brown (1863) 1 H&C 686
Rye v Rye [1962] AC 496; [1962] 2 WLR 361; [1962] 1 All ER 146,
HL
Street v Mountford [1985] AC 809; [1985] 2 WLR 877; [1985] 2 All ER
289; [1985] 1 EGLR 128; (1985) 274 EG 821, HL
Universal
Permanent Building Society v Cooke [1952] Ch
95; [1951] 2 TLR 962; [1951] 2 All ER 893, CA
This was an
appeal by Raymond Nigel Wing, the occupier of about 9 acres of agricultural
land at Roman Bank, Long Sutton, Lincolnshire, against the decision of Judge Whitehead,
at Lincoln County Court, in favour of the plaintiffs (present respondents),
Samuel Horace Harrison, Kathleen Brouwer and Stella Margaret Seymour, in an
action for possession of the land in question.
Andrew Cosedge
(instructed by Pearson & Fife, of King’s Lynn) appeared on behalf of the
appellant; Patrick Moloney (instructed by Mossop & Bowser, of Long Sutton)
represented the respondents.
Giving
judgment, CROOM-JOHNSON LJ said: This appeal from Lincoln County Court is about
9 acres of land at Roman Bank, Long Sutton. It is occupied by the defendant as
agricultural land. He purported to occupy it by virtue of a lease in writing
dated June 18 1976 wherein the first plaintiff, Samuel Horace Harrison, was
described as the ‘landlord’ and the defendant as the ‘tenant’.
The land
originally belonged to Horace Harrison, the father of Samuel Harrison. Horace
Harrison died in 1955 and by his will he appointed his widow, Lily Elizabeth
Harrison, Francis Leach, and his son Samuel as executors, to whom probate was granted.
Samuel was given the option to purchase the land, then about 10 1/2 acres.
Later, small pieces have been released by the defendant and sold off as
building plots. Samuel Harrison could not afford to take advantage of the
option, and at a meeting of the executors held two months after the death of
Horace Harrison it was arranged that Samuel should rent the land at £12 an acre
and pay the rent to his mother. Samuel occupied the land and farmed it until
1974.
Horace
Harrison left his property in trust for sale to his wife for life and then to
his children, who are the three plaintiffs in this action.
By the early
1970s Samuel’s mother indicated she did not require him to continue paying rent
to her. Also at that time the land began to be neglected because Samuel did not
have the time, the capital or the equipment to enable him adequately to farm
it. In 1974 (as the judge found) the defendant approached him at his house with
a view to taking the land. There were two versions of the conversation. Samuel
Harrison’s version was that he told the defendant it was not his land, that he
paid his mother rent, and agreed with the defendant that the defendant could
have the land rent free for two years to clean it. He said that after two years
they met again and agreed that the defendant could have it at £30 per acre. The
defendant’s evidence was that Samuel did not tell him he was not the owner. The
judge’s finding on that matter was that he doubted whether the question of ownership
was ever mentioned between the parties. He thought that the defendant assumed
that Samuel was the owner and thought he was obtaining an agricultural tenancy
protected by the Agricultural Holdings Act 1948 whereas in fact (assuming
Samuel Harrison was the tenant) the defendant was obtaining only a subtenancy
which was
by Samuel.
The defendant
wanted a written agreement. Samuel Harrison said the defendant would have to
pay the cost. The agreement was drawn up by the defendant’s solicitor. It was
the agreement dated June 18 1976, prepared on the instructions of the
defendant, who paid the cost of it. It was presented in its completed form to
Samuel Harrison, who executed it. It purported to grant to the defendant a term
of two years from April 6 1976 and thereafter from year to year.
The widow,
Lily Elizabeth Harrison, died on August 3 1981. On February 19 1982 Francis
Leach died. Samuel Harrison thus became the sole surviving executor of his
father’s will. On August 2 1984 Samuel Harrison, in execution of the trusts of
his father’s will, assented to the vesting of the land in the three plaintiffs
as tenants in common in equal shares. On September 11 1984 solicitors acting as
agents for the three plaintiffs served on Samuel Harrison a notice to quit
expiring on October 11 1985. He did not serve a counternotice pursuant to the
Agricultural Holdings Act 1948, so the notice became effective on that day. On
October 17 1985 the plaintiffs’ solicitors wrote to the defendant informing him
that the head tenancy had come to an end and therefore his subtenancy had come
to an end and asking him to vacate not later than November 8 1985. He did not
do so and the plaintiffs brought this action for possession.
In both the
county court and this court the first point has been that the oral tenancy
which the executors purported to give to Samuel in 1955 really gave him
nothing. There were two reasons for this. The first was the common law rule that
three persons could not let to one of their number by an oral tenancy: Rye
v Rye [1962] AC 496. Another reason was that personal representatives in
general have only the powers of trustees for sale (Administration of Estates
Act 1925, section 39) and trustees for sale have the powers of a tenant for
life of settled land: Law of Property Act 1925, section 28. The leasing powers
of a tenant for life of settled land require, inter alia, that the
letting should be by deed: Settled Land Act 1925, section 42. If in the result
Samuel Harrison had no oral tenancy from year to year, he could not grant any
subtenancy to the defendant. That in the end was the view which the trial judge
took and that therefore Mr Wing had no right to be there, because nothing can
come of nothing.
Mr Wing was
therefore put to it to show that he does have a right to be there. Before the
judge his counsel submitted that when Samuel granted the lease he must be
treated as acting as the agent of all the executors. This was rejected, and in this
court could not be sustained, because there was no evidence that the other two
executors knew about the lease. Nor were there any other circumstances out of
which an agency could be spelled.
The next
suggestion was that the plaintiffs were estopped from denying that Samuel acted
as their agent. At trial, this seems to have been put forward, somewhat
illogically, as depending upon an oral representation said to have been made by
Samuel that he was the owner of the land. It was put in the alternative that
Samuel was at any rate estopped from joining with the other plaintiffs in
requiring the defendant to give up the land. In view of the finding of fact
that no such representation was made, those arguments failed in limine.
The
defendant’s third contention was based on an alleged surrender by Samuel
Harrison of his own term. This was rejected by the judge because he found that
Samuel did not have a term to surrender.
In this court
counsel for the defendant has based his appeal on a number of points.
The first was
that when Samuel granted the lease, he must have bound the estate because he
was acting as an executor. The plaintiffs’ answer to that is that all the
executors must concur in such a conveyance; see Administration of Estates Act
1925, section 2(ii) and section 55(i) and (iii). Samuel Harrison was not acting
so as to bind the estate; he granted the lease because he thought, wrongly,
that he had a head lease out of which to carve a sublease.
The case of Fountain
Forestry Ltd v Edwards [1975] Ch 1 on which the defendant sought to
rely as showing that Samuel could bind his co-executors by granting the lease
in his own name as ‘landlord’ really supports the plaintiffs. Its facts are a
long way from the facts in the present case. Moreover, the judge in the present
case made a finding that Samuel thought he was doing no more than grant a
sublease to his own tenancy. The word ‘landlord’ in the lease is the only
indication contained in it as to the capacity in which Samuel purported to
grant the term.
The defendant’s
next point was based on estoppel, but it was put differently from the way in
which it was put to the trial judge. On the assumption that when the lease was
granted in 1976 Samuel had no estate or interest (other than as executor) out
of which to demise any term, he was nevertheless estopped by the deed from
denying the existence of a demise. It was then said that when Samuel became the
sole executor, on the death of Francis Leach in 1982, he became solely entitled
to the legal estate in the land, and the effect of that was to feed the
estoppel. Thereafter, the estoppel was effective to prevent Samuel and anybody
taking title from him denying Mr Wing’s right to remain in possession of the
land on the terms of the 1976 lease. Reliance was placed upon Universal
Permanent Building Society v Cooke [1952] Ch 95, in which an oral
representation by a landlord that she had completed the purchase of a flat
persuaded the tenant to enter into possession by a subtenancy. It was held to
be binding on a building society who took a mortgage, because for a brief
period the landlord did subsequently complete and so become the owner of the
flat. But Mr Moloney, on behalf of the plaintiffs, has replied by submitting
that the lease, on its face, only indicates that Samuel was letting to Mr Wing
in his personal capacity. The lease itself, drawn up by Mr Wing’s solicitor,
contained no recital as to his [Samuel’s] title; it merely described him as
‘landlord’, a description which conceals a latent ambiguity and on which the extrinsic
evidence clearly indicates his intention was to contract as a lessee himself
and not as an executor. Therefore, he submits, any estoppel which might arise
from the deed can only be fed if he later acquired the legal estate to the land
in his personal capacity and not in his representative capacity as sole
surviving trustee. He relies on Metters v Brown (1863) 1 H&C
686. In such circumstances Samuel would be a ‘stranger’ to the estoppel. He
also relies on Keate v Phillips (1881) 18 Ch D 560.
In my view,
the submission on behalf of Samuel is correct. The interest later acquired by
him was insufficient to feed the estoppel.
Mr Cosedge’s
next point is more formidable. It is that the defendant acquired a term by
virtue of the operation of the Agricultural Holdings Act 1948; protection under
that Act has never been extended to subtenancies, and the facts in the present
case do not allow any suggestion that here was a sham transaction designed to
avoid its application. But section 2(1) of the 1948 Act provides:
Subject to
the provisions of this section, where under an agreement made on or after the
first day of March 1948, any land is let to a person for use as agricultural
land for an interest less than a tenancy from year to year, or a person is
granted a licence to occupy land for use as agricultural land, and the
circumstances are such that if his interest were a tenancy from year to year he
would in respect of that land be the tenant of an agricultural holding, then .
. . the agreement shall take effect . . . as if it were an agreement for the
letting of the land for a tenancy from year to year.
The argument
is that Samuel went into exclusive possession in 1955 with the consent of the
executors (who were the freeholders), paying rent therefor, and thus had such a
licence or agreement as would, by section 2, be treated as a tenancy from year
to year; accordingly it was within his power to grant the subtenancy to the
defendant Mr Wing. The argument continues that the actions of Samuel on
September 11 1984 in joining in serving on himself a notice to quit and in
failing to serve any counternotice amounted to a voluntary termination of his
own tenancy such as could not be allowed to prejudice the defendant; in other
words it was tantamount to a surrender by him of his tenancy from year to year.
In those circumstances Samuel could not by his voluntary act, by surrendering
or otherwise, affect the interest of Mr Wing, who could remain in possession
until his subtenancy was determined properly and subject to any safeguards
provided by the Agricultural Holdings Act: see Mellor v Watkins
(1874) LR 9 QB 400.
There are thus
two issues to be decided: one, what was the effect of the invalid lease granted
to Samuel in 1955 and, two, what was the effect of the notice to quit given in
1984?
The letting in
1955 purported to be a letting from year to year, but was not valid. It could
not be a letting ‘for an interest less than a tenancy from year to year’. The
defendant says that it could then only be a licence, and so took effect as if
it were an agreement for the letting of the land for a tenancy from year to
year, under section 2(1). The plaintiffs submit that an invalid tenancy does
not become a licence and that Samuel’s occupation was unlawful. The money paid
by Samuel to his mother, which was called ‘rent’, is, they say, appropriate
only to a purported tenancy and not to a licence, and they rely on the
importance attached to the use of that word in Street
even though an invalid one.
While Street
v Mountford lays down that what must be regarded is the reality of the
transaction and not just the language used, I do not think that that case means
that the occupation of the land by Samuel was no more than that of a
trespasser. He was there by the consent of all the executors. He was making
(and obliged to make) regular payments for the right to be there. I agree that
he must be regarded as having the leave or licence of the owners of the
freehold. Accordingly, I conclude that, although he did not have a tenancy,
because of Rye v Rye and the Settled Land Act 1925, section 42,
yet the oral agreement ‘took effect’ by virtue of the Agricultural Holdings Act
1948 section 2(1) ‘as if it were an agreement for the letting of the land for a
tenancy from year to year’.
The plaintiffs
concede that, if such were the position, then Samuel had the power to create a
subtenancy. Accordingly, one reaches the second question: what was the effect
of the notice to quit in 1984?
In Mellor
v Watkins (1874) LR 9 QB 400 there had been an underletting to the
defendant by the lessee of a part of certain premises. Subsequently, the head
landlord and the lessee agreed upon a surrender and the landlord relet the
premises, including the portion which had been so sublet, to the plaintiff
Mellor, and Mellor claimed inter alia the possession of the premises
from the defendant, the underlessee. The court decided that the voluntary
surrender of the lease could not affect the defendant’s underlease.
The effect and
ratio of Mellor v Watkins was discussed and applied in Brown
v Wilson, reported, it seems, only in (1949) 208 LT 144*. In that case
there was no surrender. The tenant determined his lease by himself giving a
notice to the landlord of his intention to quit. Hilbery J held that Mellor’s
case was based not on there having been a surrender by the tenant but on his
having voluntarily put an end to his tenancy, and that in Brown v Wilson
the notice given by the tenant could not determine the subtenancy. That
subtenancy involved consideration of certain provisions of the Agricultural
Holdings Act which have not been mentioned or argued before us but which may
possibly have application in the present case if the defendant’s submission is
correct.
*Editor’s
note: See also (1949) 156 EG 45.
On the
assumption that Samuel had a licence, counsel for the plaintiffs has submitted
that the notice to quit in 1984 was not the voluntary ending by Samuel of his
own interest. It was a document sent by the solicitors acting on behalf of all
three plaintiffs as Samuel’s landlords to him as tenant formally determining
his tenancy, in the mistaken idea that one existed. Counsel submits that where
Samuel was concerned in two capacities, one of them as a landlord and the other
of them as tenant, it is the action as landlord which requires to be
considered. As tenant he could not derogate from his grant; as landlord he was
under no such duty, particularly since he was a trustee for sale and owed a
duty to all the beneficiaries of the trust. It makes no difference if, instead
of saying ‘landlord’ and ‘tenant’, one says ‘licensor’ and ‘licensee’.
In my view, that
is the correct approach. Counsel develops the point by submitting that, as a
matter of causation, any one or two of the plaintiffs could have authorised the
giving of the notice to quit without the participation of Samuel, and so have
determined the defendant’s tenure.
Accordingly,
the defendant’s point that he is entitled to remain in possession because of
the Agricultural Holdings Act 1948, section 2(1) (or its successor) fails.
The defendant’s
last point is that the claim for possession is a breach by Samuel of the
covenant for quiet enjoyment given by him in the lease. The covenant was for
quiet enjoyment ‘during the tenancy hereby created’. If, as happened, the lease
created no tenancy, there was nothing on which the covenant could bite. The
defendant counterclaimed damages for breach of that covenant against the first
plaintiff, Samuel alone. The trial judge dismissed the counterclaim on the
basis that, without any tenancy having been created, on the wording of the
covenant the counterclaim fell to the ground. In that he was correct.
I would
dismiss the appeal.
SIR DENYS
BUCKLEY agreed and did not add anything.
The appeal
was dismissed. The question of costs was adjourned.
