Agriculture (Miscellaneous Provisions) Act 1976–Date for determination of ‘eligibility’ of applicant for tenancy under family succession provisions–Appeal from decision of Sir Douglas Frank QC that eligibility was to be determined as at date of deceased tenant’s death–Held by majority of Court of Appeal that eligibility requirement has to be satisfied at date of application and at date of hearing, not at date of death–Nothing objectionable in arranging matters after the death, eg by divesting oneself of interest in a commercial unit, so as to achieve eligibility at date of application to agricultural land tribunal–Dissenting judgment by Brandon LJ–Leave to appeal to House of Lords granted
This was an
appeal by Graham Christopher Jackson from a decision of Sir Douglas Frank QC,
sitting as a deputy judge of the Queen’s Bench Division, holding that the
appellant was not eligible to apply to the Agricultural Land Tribunal for the
Yorkshire and Lancashire Area for a new tenancy of Grange Farm, Keyingham,
under the provisions of the Agriculture (Miscellaneous Provisions) Act 1976
following the death of the tenant, his father. The landlords were William
Horner Hall and Geoffrey Alan Marr, the trustees of Geoffrey Edwards Marr
deceased, Sir Douglas Frank had decided that the appellant did not satisfy the
conditions of eligibility because he was an occupier of a commercial unit,
White House Farm, otherwise than as a licensee, at the date of his father’s
death.
E C
Evans-Lombe QC and C Joseph (instructed by Warren, Murton & Co, agents for
Stamp, Jackson & Proctor, of Hull) appeared on behalf of the appellant; G O
A Sebestyen (instructed by Collyer-Bristow, agents for Chambers, Thomas &
Williamson, of Hull) represented the respondents.
Giving
judgment, LORD DENNING MR said: Under the Agricultural Holdings Act 1948 the
tenant of a farm was given security of tenure during his life: but it ceased on
his death. When he died, the landlord could turn out his widow and family. He
could give them notice to quit so long as he did it within three months after
the tenant’s death–see section 24(2)(g) of the 1948 Act. In 1976 Parliament
extended this protection so as to give security to a member of his family after
his death. Take for instance a son. If he had been working on his father’s farm
for the last five years, and had no other farm of his own, he could apply for a
new tenancy to himself. But he had to show that he was an ‘eligible
person.’ The question in this case is
whether he has to be an ‘eligible person’ at the date of his father’s death, or
whether it is sufficient if he is eligible at the date of his application to
the tribunal. The point has given rise to differences of opinion between the
various agricultural land tribunals. So we have to settle it.
Such being the
question, I will state the facts which give rise to it. The farmer here was
James Jackson of Keyingham, north of the Humber. He died on March 22 1977,
leaving two sons, Graham and Martin Jackson. The father had farmed two
holdings, which I must describe. One was Grange Farm of 519 acres. It was owned
by the Marr trustees. The father was the legal tenant. But he and his two sons
were partners in a farming business and they carried on Grange Farm as
partners. The other was White House Farm of 400 acres. It was next door to
Grange Farm. It was owned by the father himself, but he had let it on a legal
tenancy to the partnership of himself and his two sons; and they carried on
White House Farm as partners. White House Farm was a ‘commercial unit’ within
section 40 of the Agriculture Act 1967 because it was large enough to give
full-time employment for an occupier and one man. No doubt the partners carried
on the two farms together as one unit of agriculture. That was obviously the
most efficient and economical way of running the business.
The father
died, as I have said, on March 22 1977. The two sons were, of course, secure in
White House Farm because of their succession to their father, who was the
owner. But they were not secure in Grange Farm because that was owned by the
Marr trustees. These trustees, on the father’s death, gave them notice to quit.
As a result, the sons would have had to quit Grange Farm unless they could take
advantage of the 1976 Act so as to claim a family succession. To do this the
two sons, or one of them, had to be an ‘eligible person.’
‘Eligible
person’ is defined in section 18(2) of the 1976 Act. It has three requisites
(a), (b) and (c). Each of the two sons satisfied (a) the family relationship of
being a ‘child,’ and (b) the length of service, not less than five years on the
farm. But there was this third requisite: ‘(c) he is not the occupier of a
commercial unit of agricultural land within the meaning of Part II of the
Agriculture Act 1967 or, if he is, occupies it as a licensee only.’
Now, at the
date of the father’s death, neither of the sons could satisfy that
requirement because at that date they were the occupiers of White House Farm,
which was a ‘commercial unit’ and they occupied it as tenants and not as
licensees only. But, soon after the father’s death, the two sons took
legal advice and in consequence they took steps to get Graham out of White
House Farm. On June 22 1977 Graham assigned to his brother, Martin, all his
interest in White House Farm. So, thereafter, Martin was the sole owner of
White House Farm. If Graham should visit it afterwards, he would do so as a
licensee only: see Harrison-Broadley v Smith [1964] 1 WLR 456.
Having taken
those legal steps, on the very next day, June 23 1977, just within the
permitted three months from March 23 1977, Graham applied to the tribunal for a
tenancy of Grange Farm. He said that at that date–the date of his
application–he was an ‘eligible person.’
He satisfied all the requirements (a), (b) and (c). In particular he
satisfied (c) because he was no longer the occupier of a commercial unit at
White House Farm, or, if he was, he occupied it as a licensee only.
The tribunal
seems to have regarded the assignment by Graham to Martin as a
‘contrivance.’ The judge regarded it as
a ‘subterfuge.’ So regarding it, they
made short work of it. They said that the material date was the date of the
death and not the date of the application to the tribunal. I do not so regard
the conduct of the two sons. This was a legitimate transaction done so as to
keep the two farms together. To keep them in the family and to farm them as one
efficient and economic unit. If they had to give up Grange Farm and be confined
to White House Farm only, it might be disastrous for their business. The
transaction may or may not have achieved the desired result–that I will soon
consider–but I would not subscribe to the view that there was anything
discreditable in it–any more than there was anything discreditable in the Duke
of Westminster paying his gardener his wages by way of a deed of annuity: see
[1936] AC 1. It was a legitimate way of avoiding a stern law.
So I turn to
the question of law in the case stated. In order to qualify as an ‘eligible
person,’ what is the material date? Is
it the date of the death of the deceased? Or is it the date of the application? To my mind this question is solved by
reference to the actual words of section 20(1) and (2). These read: ‘(1) Any
eligible person may within the relevant period apply to the Tribunal for a
direction entitling him to a tenancy of the holding. (2) Where only one
application is made under this section the Tribunal, if satisfied that the
applicant is an eligible person, shall determine whether he is in their opinion
a suitable person to become the tenant of the holding.’ Note the present tense. Under subsection (1)
the words refer to the date of the application. Under subsection (2) they refer
to the date of the hearing by the tribunal. Taking the two subsections
together, it seems to me that the applicant must, in the ordinary way, satisfy
the requirement of being an ‘eligible person’ both at the date of the
application and at the date of the hearing. But not at the date of death. This
solution is similar to that reached by the court in cases under the Rent
Restrictions Acts: see Kimpson v Markham [1921] 2 KB 157; Benninga
(Mitcham) Ltd v Bijstra [1946] KB 58; Zbytniewski v Broughton
[1956] 2 QB 673: and under the Landlord and Tenant Act 1954, see Betty’s
Cafes v Phillips Furniture Stores Ltd [1959] 1 AC 20.
On the other side
emphasis was placed on the words ‘survivor of the deceased’ in the definition
of ‘eligible person’ in section 18(2). But that seems to me to be neutral. At
the date of the application the son is a ‘survivor of the deceased.’ Likewise, at the date of the hearing he is a
‘survivor of the deceased.’ In order to
insist on the date of death, you would have to insert the words ‘at the date of
the death of the deceased’ after the words ‘in which case’ and before the words
‘the following conditions are satisfied –(a) . . ., (b) . . . and (c). . .
.’ I see no reason to insert those
words.
Other matters
were raised which were said to point in favour of one or other construction.
But these all seem to me to be neutral. One thing, however, which does
influence me is that, before the date of the death, the family could make an
arrangement so as to ensure the succession of one son. So why should they not
do it after his death? The clever
far-sighted families will consult their lawyers before the death. The nice good
natured ones will wait till after the old man has died. I would not let them
lose on that account. I would hold that a family can, by appropriate
arrangements, ensure that a son shall be an ‘eligible person’ so long as the
transaction is carried out before the date of the application.
I would allow
the appeal and hold that eligibility is to be determined, not at the date of
death, but at the date of the application and hearing.
Agreeing that
the appeal should be allowed, LAWTON LJ said: By the Agriculture (Miscellaneous
Provisions) Act 1976, Parliament gave four classes of persons, who were
‘eligible’ as defined in the Act, the right to apply to an agricultural land
tribunal for a tenancy of an agricultural holding of a deceased tenant. These
tribunals have a legally qualified chairman and two members who are not
lawyers. It was such a tribunal, sitting in the Yorkshire and Lancashire area,
which had to construe a definition section (section 18(2)) which has thrown up
for the consideration of this court niceties of grammar and of the meaning of
one word. Mr Sebestyen for the freeholder argued for grammatical purity and a
restricted meaning; Mr Evans-Lombe for the applicant for a wider meaning.
The
grammatical purity for which Mr Sebestyen contended is said by him to come from
the correct phrasing of the words
eligible
person means . . . a survivor of the deceased in whose case the following
conditions are satisfied–(a) he falls within paragraphs (a) to (d) of
subsection (1) above; (b) in the seven years ending with the date of death his
only or principal source of livelihood throughout a continuous period of not
less than five years, or two or more discontinuous periods together amounting
to not less than five years, derived from his agricultural work on the holding
or on an agricultural unit of which the holding forms part; and (c) he is not
the occupier of a commercial unit of agricultural land . . . or, if he is,
occupies it as a licensee only.
If a survivor
of the deceased means, and can only mean, a person who is to be identified as
going on living at the moment of the tenant’s death, that person to be eligible
must then have all the qualifications set out in paragraphs (a), (b) and (c);
and for the purpose of specifying those qualifications at that moment the use
of the present tense in paragraph (c) is both appropriate and correct. Mr
Sebestyen went on to submit that this construction of a statutory definition
slots easily into the sections of the Act in which it has to be applied, the
most important being section 20. Eligibility is fixed by reference to the past
and must continue up to the dates of application and determination (see section
20(1) and (2)).
There is much
force in Mr Sebestyen’s suggested construction. It is a possible one. But is it
the only one? If there is another
construction, which should be preferred?
The alternative construction is derived from the concept that a survivor
of a deceased lives on. His state as such continues until he himself dies. In
the ordinary usage of the English language this is a common meaning as is shown
by such phrases as ‘he is a survivor of the First World War.’ If being a survivor is a continuing state,
then the qualification set out in paragraph (c) is one which an otherwise
eligible person can acquire within any relevant period and it need not be one
acquired on the tenant’s death. The use of the present tense in paragraph (c)
ensures that the person applying under section 20(1) then has the necessary
qualification and continues to have it when the tribunal considers his
application. This construction finds some support in the use of the passive
tense in section 18(1) in the words ‘the sole tenant of an agricultural holding
dies and is survived by any of the following persons. . . .’
In my judgment
the alternative construction is the one which would the more easily be given by
literate persons, especially as paragraph (c) omits any reference to the time
of death which might well have been there in the interests of clarity. This
seems to have been the construction put upon paragraph (c) by the draftsman of
the statutory form which has to be used when an application is made to a
tribunal under section 20–see the Agricultural Land Tribunals (Succession to
Agricultural Tenancies) Order 1976 (SI 1976 No 2183), rule 2 and the appendix
to that order. Paragraph 11 of the form is as follows: ‘(a) I occupy as
owner-occupier/tenant/licensee the following agricultural land [give
particulars of the land occupied, including area]: (b) I do not occupy any
other agricultural land.’ The form does
not require the applicant to state what agricultural land he occupied when the
tenant died, as it would have done had the draftsman thought that section 18(2)
should be construed as Mr Sebestyen submitted it should be. The form cannot, of
course, be a guide to the construction of section 18(2). Such value as it has
lies only in showing what a draftsman, used
I can see
nothing in the policy of the Act which should lead me to prefer Mr Sebestyen’s
construction to that of Mr Evans-Lombe. The broad policy of the Act is
clear–anyone taking over a deceased tenant’s holding must not be an occupier of
another ‘commercial unit’ when he applies for a direction entitling him to do
so. Anyone having another ‘commercial unit’ may divest himself of it in
expectation of the tenant’s death–and probably will do so if he takes legal
advice. Such a divesting would not be contrary to the policy of the Act. In my
opinion a divesting between death and an application under section 20 would be
no more contrary to the policy of the Act than one before death. If applicants
enter into colourable transactions which are mere sham divestings, the tribunals
can disregard them.
I would allow
the appeal.
Dissenting,
BRANDON LJ said: Part II of the Agriculture (Miscellaneous Provisions) Act 1976
(‘the Act’) provides for the succession to tenancies of agricultural holdings
by survivors of deceased tenants after their deaths. Applications for such
succession are made to and decided by the agricultural land tribunal for the
area concerned.
Under section
20(1) of the Act the right of a survivor of a deceased tenant to apply to the
tribunal for a direction entitling him to become the tenant of the relevant
holding depends on his being an ‘eligible person.’ Further, under section 20(2) the tribunal to
which the application is made must first of all, before deciding whether the
applicant is suitable to become the tenant, be satisfied that he is an
‘eligible person.’
Under section
18(2) an ‘eligible person’ means a survivor who possesses three specified
qualifications. Qualification (a) is that he should have been either the spouse
or a sibling or a child (actual or by treatment) of the deceased. Qualification
(b) is that his only or principal income should, during a specified period or
periods before the death, have derived from his agricultural work on the
holding or on an agricultural unit of which the holding forms part.
Qualification (c) is that ‘he is not the occupier of a commercial unit of
agricultural land within the meaning of Part II of the Agriculture Act 1967 or,
if he is, occupies it as a licensee only.’
The question
for decision in this appeal is at what time or times an applicant has to
possess qualification (c) above in order to have the right, as an ‘eligible
person,’ to apply under section 20(1), and in order to enable the tribunal to
be satisfied that he is such a person under section 20(2). The Agricultural
Land Tribunal (Yorkshire and Lancashire Area) and the High Court (Sir Douglas
Frank QC sitting as deputy judge) on a case stated by that tribunal, have both
decided that the relevant time is the deceased’s death. The appellant, who does
not, if that view is correct, possess qualification (c) in this case, appeals
against the latter decision, contending that there are two relevant times and
that these are, firstly, the time of the application to the tribunal, and,
secondly, the time of the hearing before it.
In support of
the appellant’s contention reliance has been placed on the use of the present
tense, firstly, in the phrases ‘he is not the occupier’ and ‘or, if he is,
occupies it as a licensee only’ in paragraph (c) of the definition of eligible
person in section 18(2), and, secondly, in the phrase ‘that the applicant is an
eligible person’ in section 20(2). The appellant’s interpretation of the Act
was further said to be supported by Kimpson v Markham [1921] 2 KB
157, a decision on the Rent Acts. In my judgment the contention for the
appellant is wrong, and the decisions of the tribunal and Sir Douglas Frank QC
are right, for the following reasons.
First,
‘eligible person’ is defined in section 18(2) as ‘a survivor of the deceased in
whose case the following conditions are satisfied,’ the conditions concerned
being those set out in paragraphs (a), (b) and (c) following. It seems to me
that this subsection, by making the test of eligibility whether certain
conditions are satisfied in the case of a survivor, that is to say (to use the
related language of section 18(1)) a person by whom the deceased is survived,
must by necessary implication be providing that the test should be applied at
the time of survivorship, that is to say the time of the deceased’s death.
Second, the
question whether conditions (a) and (b) are satisfied in the case of a survivor
clearly fall to be decided by reference to the time of the deceased’s death. It
is, therefore, a natural interpretation of the definition of ‘eligible person’
as a whole that the question whether condition (c) is satisfied should also be
decided by reference to the same time.
Third, the use
of the present tense in the phrases ‘he is not the occupier’ and ‘or, if he is,
occupies it as a licensee only’ in paragraph (c) of the definition of ‘eligible
person’ in section 18(2) is no more significant than the use of the same tense
in the phrase ‘he falls within paragraphs (a) to (d)’ in paragraph (a), or in
the phrase ‘agricultural unit of which the holding forms part’ in paragraph
(b). The latter phrase, despite the use of the present tense, must surely
relate to the time of death.
Fourth,
section 20(1) provides that an ‘eligible person’ may apply to the tribunal
within ‘the relevant period,’ which is defined in section 18(2) as being
(subject to certain exceptions which are not material) the period of three
months beginning with the day after the date of the deceased’s death. It seems
to me that, if an ‘eligible person’ can apply at any time from one day after the
deceased’s death to 91 days or thereabouts after it, the test of his
eligibility must be a test as applicable on the first day as on any subsequent
day up to the last. This will only be so if the question whether condition (c)
is satisfied in his case is decided by reference to the time of the deceased’s
death.
Fifth, the use
of the present tense in the phrase ‘that the applicant is an eligible person’
in section 20(2) is not significant. ‘Eligible’ means the same as
‘qualified.’ The question whether a
person is presently qualified in one respect or another will, more often than
not, depend on whether certain conditions were satisfied in his case in the
past. For instance a barrister is presently qualified if he was called to the
Bar in the past, and a doctor is presently qualified if he acquired the
necessary medical qualifications in the past. That being so, there is no
difficulty in interpreting the phrase ‘that the applicant is an eligible
person’ in section 20(2) as meaning ‘is eligible because he possessed the
necessary qualifications, including qualification (c), at the time of the
deceased’s death.’
Sixth, the
contention for the appellant that there are two relevant times for the
satisfying of condition (c), namely the time of the application and the time of
the hearing before the tribunal, itself necessarily involves interpreting the
phrase ‘that the applicant is an eligible person’ in section 20(2) as
referring, so far as the earlier of those two times is concerned, to the past.
If there were any problem, therefore, about the use of the present tense in
that phrase (which I do not think, for my fifth reason set out above, that
there is) the applicant’s interpretation would not eliminate such problem.
Seventh, it
seems to me more consistent with any policy of the Act which can reasonably be
attributed to the legislature that the test of eligibility for succession
contained in paragraph (c) of the definition of ‘eligible person’ in section
18(2) should be applied by reference to the situation of a survivor as it
exists at the time of the deceased’s death rather than by reference to some
different situation of his which has come into existence between the time of
the deceased’s death and the time of such survivor’s application to the
tribunal anything up to three months later.
So far as Kimpson
v Markham, the authority of the Rent Acts relied on by the appellant, is
concerned, I would only say that, since it is a decision on a different
statute, I do not think it affords any real assistance in the interpretation of
the statute here concerned. In any case it cannot be in any way decisive of
such interpretation.
My conclusion
on this matter differs from that of the other two members of the court and I
express it therefore with diffidence. For the reasons which I have given,
however, I would dismiss the appeal.
The appeal
was allowed, with costs in the Court of Appeal and below. Leave to appeal to
the House of Lords was given.
