Agricultural Holdings Act 1986 — Claim by landlord for possession — Severance of reversion — Case E notice to quit served — Effect of severance of reversion on validity of notice — Second notice to quit under Case G — Whether first notice to quit valid — Whether implication of new tenancy after determination of previous tenancy — Appeal by tenant dismissed
the respondent landlord granted the late Kenneth Sykes an agricultural tenancy
of some 291.24 acres — The tenancy was for a fixed term of one year from April
1 1985 and thereafter from year to year at an annual rent of £12,900 payable
half yearly in arrears on October 11 and April 6 in each year — By a conveyance
dated October 24 1986 the landlord conveyed by way of gift a small strip of
land which was comprised in the tenancy — The strip of land was a rough track —
There was no apportionment of the rent — Following allegations that Mr Sykes in
breach of covenant had cut down trees, on March 17 1987 the landlord served a
notice to quit pursuant to Case E, Part I of Schedule 3 to the Agricultural
Holdings Act 1986 — The solicitors acting for Mr Sykes failed to seek
arbitration to prevent the Case E notice from taking effect but contended that
by reason of the severance of the reversion the notice was invalid — On March 5
1988 Mr Sykes died — The appellants in this appeal were appointed by his will
as his executors — On March 21 1988 the landlord’s solicitors served a notice
to quit under Case G, a letter accompanying the notice stating that it was served
without prejudice to the contention that the tenancy had already been
determined by the previous notice — The Case G notice to quit was drafted
having regard to the severance of the reversion — The Case E notice expired on
April 1 1988, but notwithstanding this the landlord’s solicitors served a Case
D form of notice to pay rent — No application was made by Mr Sykes’ son for a
succession tenancy of the holding within the period of three months after Mr
Sykes’ death
1989 the appellants’ solicitors sent a cheque for £6,450 stating that it was
the rent due from April 6 to October 11 1988 — By April 1989 the landlord
became in urgent need of money and the cheque for £6,450 was presented for
payment, the landlord’s solicitors writing to the executors’ solicitors asking
that the executors would not take the point that the money was tendered either
as rent or as mesne profits — Proceedings for possession were commenced on June
1 1989
below the judge accepted the submissions on behalf of the landlord that the
Case E notice was invalid — The Case G notice had been effective to terminate
the tenancy and the executors were ordered to give up possession — On appeal
the executors submitted that the Case E notice was valid and that the tenancy created
by the lease terminated on April 1 1988 — The Case G notice was irrelevant — It
was submitted further, however, that in the period between April 1 1988 and the
commencement of proceedings on April 10 1989 the landlord granted the executors
a new tenancy of the farm or, alternatively, a licence that was enlarged into a
tenancy to be implied from conduct, namely the notice to pay rent of April 26
1988 and the presentation of the cheque sent in January 1989 expressly as rent
of a notice to quit is summarised in Carradine Properties Ltd v Aslam,
subject to the qualification that the reasonable tenant reading the notice is
to be taken to have had the knowledge of the surrounding facts and
circumstances which the actual landlord and tenant enjoyed — Following the
expiration of the Case E notice the executors became tenants on sufferance — No
implied grant of a tenancy had been established — The notice to pay rent and
the acceptance of the cheque were inadequate taken singly or together to
justify imputing to the landlord an intention to grant a new tenancy or licence
to occupy to the executors
The following
cases are referred to in this report.
Carradine
Properties Ltd v Aslam [1976] 1 WLR 442;
[1976] 1 All ER 573; (1975) 32 P&CR 12
Doe d
Cheny v Batten (1775) 1 Cowp 243
Frankland v Capstick [1959] 1 All ER 209; [1959] 1 WLR 204, CA
This was an
appeal by the defendants, the executors of the will of the late Kenneth Sykes,
from a decision of Mr Timothy Lloyd QC, sitting as a deputy judge of the
Chancery Division (see [1991] 1 EGLR 18; [1991] 16 EG 125), in an action by the
respondent, Mrs Edna Lydia Land, for possession of Grange Farm and other land
in Wyverstone, Suffolk.
Paul Morgan
(instructed by Reynolds Porter Chamberlain) appeared on behalf of the appellant
executors; Jonathan Brock (instructed by Burges Salmon, of Bristol) represented
the respondent landlord.
Giving the
first judgment at the invitation of Parker LJ, SCOTT LJ said: This is an appeal
from the judgment of Mr Timothy Lloyd QC, sitting as a deputy judge of the High
Court. It raises a point regarding the efficacy of a notice to quit an
agricultural holding given by the plaintiff, the landlord, to the defendants,
the executors of the deceased tenant, and a point regarding the alleged implied
grant of a new tenancy to the defendants.
The facts
relevant to the issues that have been argued on the appeal can be quite shortly
stated.
The plaintiff,
the landlord, is Mrs Land. The deceased tenant was Mr Kenneth William Sykes. By
a lease dated December 17 1985 Mrs Land granted Mr Sykes an agricultural
tenancy of ‘all those farms farmhouse buildings and land containing 291.240
acres or thereabouts situate in the parish of Wyverstone in the County of
Suffolk and known as Grange Farm aforesaid Sudbourne Farm Plough Farm
Crooksells Hall Farm and adjoining land’.
Particulars of
the premises were specified in the first schedule to the lease. The premises
included a 1.105-acre plot, part of OS no 227. The tenancy was granted for a
fixed term of one year from April 1
£12,900 payable half yearly in arrears on October 11 and April 6 in each year.
The deputy judge held, as a matter of construction, that the instalments of
rent were payable in respect of half yearly periods up to April 1 and October 1
in each year. It has not been suggested that this was wrong. The terms of the
lease did not permit the tenancy to be brought to an end by notice to quit
until April 1 1987 at the earliest.
The lease was
granted as part of the working out of a court order made in contentious
litigation between Mrs Land and Mr Sykes. They had at one time been in
partnership farming the land comprised in the lease and other land as partners.
Mrs Land terminated the partnership and sought to obtain possession of the land
from Mr Sykes. She brought possession proceedings in the High Court. Her action
failed. She appealed. The Court of Appeal dismissed her appeal*.
*Editor’s
note: Reported at (1984) 271 EG 1264, [1984] 2 EGLR 8.
By a
conveyance dated April 4 1986 Mrs Land conveyed to her grandson, Mr Warner, by
way of gift a small plot of land adjacent to the part of OS no 227 that was
comprised in the lease. The plot conveyed was not itself comprised in the
lease.
By a later
conveyance dated October 24 1986 Mrs Land conveyed to Mr Warner, again by way
of gift, a small strip of land, roughly 9 ft wide and 200 ft in length lying on
the boundary of the plot she had already given him. This strip of land was part
of OS no 227 and was comprised in the lease. It was, apparently, a rough track
leading from the public road. The conveyance of the strip of land to Mr Warner
was expressed to be subject to the lease ‘but without any part of the rent
payable under the said lease’.
It was found by
the deputy judge, and was, I think, common ground, that Mr Sykes and his
family, which would include both defendants, were aware at all material times
that Mrs Land had conveyed this strip of land. The conveyance made no real
difference at all to Mr Sykes. He still had to pay the whole rent to Mrs Land.
There had been no apportionment of rent. He could, of course, continue to use
the track for the purposes of his farm as he had previously done.
In September
1986 complaints were made by Mrs Land’s solicitors that Mr Sykes, in breach of
covenant, had cut down trees on the land comprised in the lease. And on March
17 1987 Mrs Land’s solicitors served on Mr Sykes and his solicitors a notice to
quit expressed to be given under Case E: see Part I of Schedule 3 to the
Agricultural Holdings Act 1986. The cutting down of the trees was relied on as
justifying the service of the notice.
The notice was
headed:
Re: the
Holding known as Grange Farm Sudbourne Farm Plough Farm Crooksells Hall Farm
and all land held therewith
and commenced
as follows:
As Solicitors
for and on behalf of your Landlord Edna Lydia Land we hereby give you notice to
quit and deliver up to her possession of all that holding and premises known as
Grange Farm Sudbourne Farm Plough Farm Crooksells Hall Farm and all land held
therewith and situate at Wyverstone Stowmarket aforesaid which you hold of her
as Tenant thereof on the 1st day of April 1988 or at the expiration of the year
of your tenancy which shall expire next after the end of twelve months from the
date of service of this Notice . . .
The solicitors
acting for Mr Sykes failed to take the steps available to be taken under the
terms of the 1986 Act in order to prevent the Case E notice from taking effect.
They did, however, contend that the notice was invalid. By letter dated April 8
1987 they said:
We understand
that your client has disposed of part of the freehold reversion and if that be
the case we believe that the Notices as served are invalid. We invite your
comments on this point.
The point
taken was based on the conveyance to Mr Warner of the 9 ft by 200 ft strip of
land. Mrs Land’s solicitors responded by saying they would inquire into the
point. The point thereafter remained an open one.
Subject to the
point that had been taken and in view of the failure of Mr Sykes’ solicitors to
make use of the relevant procedures provided by the 1986 Act, it is accepted
that the effect of the Case E notice would be to bring the tenancy to an end on
April 1 1988.
On October 20
1987 Mrs Land’s solicitors served a notice on Mr Sykes requiring him to pay the
£6,450 rent that had fallen due on October 11 1987. This notice was given by
means of the printed form usual for such notices. Failure to pay in accordance
with the notice would have given Mrs Land the right to serve a Case D notice to
quit. It must be remembered that the validity of the Case E notice had been
challenged.
On March 5
1988 Mr Sykes died. He left a will by which he appointed his widow and his son,
the defendants in this action, his executors. They proved the will on April 10
1989. They are the appellants before us.
Mr Sykes’
interest under the lease vested by operation of law in his executors. It was
not, of course, known to Mrs Land or her solicitors whether Mr Sykes had died
leaving a will or whether he had died intestate.
On March 21
1988 Mrs Land’s solicitors served a second notice to quit. This notice was
served under Case G. Their letter to Mrs Sykes, the first defendant, enclosing
the notice said:
We are sorry
to hear of the death of your late husband. We regret that it is necessary for
us to serve a notice to quit following your husband’s death.
This Notice
is served without prejudice to the contention that the tenancy has already been
determined as a result of a previous notice served on behalf of our client.
That, of
course, was a reference to the Case E notice that had been served.
A copy of the
letter and of the Case G notice were sent to Mrs Sykes’ solicitor, who had
previously been Mr Sykes’ solicitor.
The Case G
notice to quit was so drafted as to avoid the point on which the alleged
invalidity of the Case E notice had been based. It was headed:
Re: So much
of the Holding known as Grange Farm, Sudbourne Farm, etc. and described the
premises to be delivered up as follows:
ALL THE holding
and premises described above which was held of her by the late Kenneth William
Sykes as tenant thereof until his death on or about the 5th day of March 1988 .
. .
Delivery up of
the land was sought ‘on the 1st day of April 1989 or at the expiration of the
year of the said tenancy which shall expire next after the end of twelve months
from the date of service of this Notice’.
It is easy to
understand why this second notice was served. The validity of the Case E notice
had been challenged on a technical point of form. The point had not been
resolved. If the point were a good one the Case E notice would be invalid. The
service of the Case G notice, expressed to be given without prejudice to the
validity of the Case E notice, represented an adoption of the belt and braces
principle.
On April 1
1988 the Case E notice expired. But the defendants, Mr Sykes’ widow and son,
continued in possession of the land comprised in the lease. They showed no
signs of vacating possession voluntarily.
On April 13
1988 Mrs Land’s solicitors wrote to the defendants’ solicitors about the rent
for the half year which had ended on April 1 1988. The letter said:
We are
concerned to note that the rent due at the end of the half year of the tenancy which
has just expired has not been paid. Our client does not wish unnecessarily to
serve a further Notice to Pay but we should be glad if you can arrange for the
executors to pay the rent through your firm as usual as soon as possible.
The rent was
not paid and on April 26 1988 Mrs Land’s solicitors served a Case D form of
notice to pay the rent. The form was the same as that which had been used on
the previous occasion to which I have referred. The form of this notice makes
no sense where the tenancy under which the unpaid rent had become due has
expired. The form is consistent only with a continuing tenancy. Accordingly, Mr
Morgan, for the defendants, has contended that by sending this notice to pay
Mrs Land, through her solicitors, was implicitly recognising that the
defendants were in possession of the land under a continuing tenancy.
If, as the
solicitors for Mr Sykes had originally contended, the Case E notice had been
invalid, Mrs Land would have had to rely, if she were to succeed in recovering
possession, on the Case G notice. The weakness of the Case G notice, however,
was that for a period of three months after Mr Sykes’ death on March 5 1988 it
would have been open to the second defendant, Mr Sykes’ son, to apply for a
succession tenancy of the holding. No such application was, however, made. By
June 5 1988 it was too late for such an application to be made. The result of
this state of affairs was somewhat paradoxical. If the Case E notice were
invalid, the defendants would have no possible answer to the Case G notice
requiring them to deliver up the premises on April 1 1989. So it was no longer
in the interests of the defendants to argue that the Case E notice was invalid.
Instead, it
taking effect.
On January 23
1989 the defendants’ solicitors sent to Mrs Land’s solicitors a cheque for the
sum of £6,450. The cheque was enclosed with a letter which said:
The Personal
Representatives of the above named deceased have asked us to forward to you the
enclosed cheque for £6,450 being the rent due from the 6th April to 11th
October 1988.
This was
fairly remarkable. It had not been the custom for Mr Sykes or for the
defendants to pay rent that had fallen due without first being pressed to pay.
The cheque sent on January 23 1986 was not sent as a result of any pressure.
Mrs Land’s solicitors, not surprisingly, regarded the cheque as a Trojan horse,
as indeed I think it was intended to be. If Mrs Land were to accept rent for a
period after April 1 1988, there might be an implication that she was
recognising that the defendants were tenants in respect of that period. If the
Case E notice was valid, Mr Sykes’ tenancy would have come to an end on April 1
1988. So, any tenancy thereafter enjoyed by the defendants could be
attributable only to a new tenancy granted by Mrs Land to the defendants. It
could not be attributable to the tenancy created by the lease. That, on this
hypothesis, had come to an end on April 1 1988.
It is, I
think, easy enough, with the advantage of hindsight, to follow the tactics
being employed, entirely properly, on behalf of the defendants. They would
assert the validity (not the invalidity) of the Case E notice. It would then be
sought to establish that since April 1 1988 the defendants had acquired a new
tenancy of the holding. The Case G notice, served on March 21 1988, and
directed to bringing to an end the original tenancy, in case the Case E notice
should turn out to be ineffective, would have no bearing on the new tenancy.
That was the plan.
Mrs Land’s
solicitors did not, however, accept the Trojan horse. They replied by letter of
January 25 1989 in these terms:
Thank you for
your letter of 23rd January, enclosing cheque for £6,450. We regret that so
long as the notice to quit, which was served in 1987 and which expired in 1988,
remains outstanding, our clients cannot accept any rent for this holding. We
shall, therefore, hold your cheque unpresented.
There for a
while the matter rested.
Then, on April
10 1989, after, be it noted, the expiry of the Case G notice but before any
proceedings for possession had been commenced, a family tragedy struck Mrs Land
and she became urgently in need of money. Her solicitors still held the cheque
for £6,450 which had been sent as rent on January 23 1989. Her solicitors
explained the circumstances that had arisen to the defendants’ solicitors and
pressed them to agree that, if the cheque were presented, the point that there
was thereby an implied acceptance that the defendants were tenants would not be
taken. The defendants’ solicitors refused to bind the defendants not to take
the point. But on April 11 1989 the cheque was presented none the less. Mrs
Land’s solicitors wrote a letter to the defendants’ solicitors on that date in
these terms:
We refer to
our telephone conversation on 10th April, and write to confirm that we have
presented the cheque in the sum of £6,450 dated 19th January.
For the
record, we have explained to you the somewhat unusual circumstances in which we
have been instructed to present this cheque, and we would ask that if the
matter comes to the point, your client will not take the point that the money
was tendered either as rent or as mesne profits. We fully appreciate, however,
that circumstances may mean that your client will not be able to comply with
this request.
Proceedings
for possession were commenced by writ issued on June 1 1989. It is important to
notice that these possession proceedings had been consistently threatened ever
since June the previous year. On June 1 1988 Mrs Land’s solicitors had asked
the defendants’ solicitors if they had instructions to accept service of
proceedings. During the 12 months between then and the issue of the writ there
was never a time when the defendants could have been in any doubt but that
possession proceedings would be instituted in due course. The correspondence,
through which we were taken by Mr Brock, for Mrs Land, makes that clear. Those
are, to my mind, the facts relevant to this appeal.
The first
issue, albeit a minor issue, that I should deal with relates to some
correspondence. The correspondence is not marked ‘without prejudice’. It was
argued before the deputy judge that the correspondence was, by implication,
without prejudice and should not be admitted into evidence. The deputy judge
rejected that submission and allowed the correspondence into evidence but gave
leave to appeal against his decision. Mr Morgan, for the appellants, has argued
that the correspondence followed on from, and formed part of, earlier
correspondence consisting of a number of letters which were expressly marked
‘without prejudice’ and in which the parties had been negotiating a settlement.
In my judgment, however, the judge was quite right. The letters in question
contain no reference to or flavour of negotiations. They are simply letters in
which the defendants’ solicitors are giving certain information to the
plaintiff’s solicitors. The author of the letters did not choose to mark these
letters ‘without prejudice’. I can see no reason why he should have done so,
and I can see no reason why the court should assume to correct the author on
this point. I would dismiss the interlocutory appeal.
The next issue
concerns the validity of the Case E notice. Although initially the defendants’
solicitors contended that the notice was invalid in form and, presumably, Mrs
Land’s solicitors thought it was valid, the positions are now reversed. If the
notice is invalid, then the Case G notice rules the field and the indicia
relied on by the defendants as establishing the grant of a new tenancy are no
more than indicia of the continuing tenancy granted by the lease and
due, by reason of the Case G notice, to expire on April 1 1989. If the Case E
notice is invalid it is accepted that the plaintiff’s case must succeed and the
defendants’ appeal must fail. So it is Mrs Land who is arguing for invalidity
and the defendants who are arguing for the validity of the Case E notice.
The case for
invalidity is based upon the alleged lack of certainty as to whether the
premises described in the Case E notice and of which delivery-up was sought
consisted only of the premises of which Mrs Land was landlord, ie excluding the
9 ft by 200 ft strip, or whether the notice, properly construed, purported to
call for the delivery-up of all the premises comprised in the lease, ie
including the strip.
The effect in
law of the conveyance of the strip to Mr Warner was that Mrs Land could serve a
notice to quit only in respect of the premises that remained vested in her. She
had no power to serve a notice to quit in respect of the strip: see section
140(2) of the Law of Property Act 1925. So, if the notice, properly construed,
did include the strip, Mrs Land was, to that extent, acting outside her power.
The notice was, to that extent, calling upon the tenant to do that which he
should not have been called upon to do.
The
requirements of certainty that, at common law, a notice to quit must have if it
is to be valid are dealt with in two authorities to which we were referred.
In Frankland
v Capstick [1959] 1 WLR 209 the notice under review had misstated the
name of the landlord. But the Court of Appeal rejected the proposition that
that error invalidated the notice. Sellers LJ said at p 208:
there is no
indication in the case . . . that the widow was in any way deceived by this or
was under any misapprehension as to who the landlord was.
and on the
same page, he said:
The
intervening negotiations for the dilapidations arising out of the termination
of the tenancy had taken place with the son, who she knew to be the agent
acting on behalf of his father, and the solicitors throughout were solicitors
acting on behalf of the landlord. There cannot have been any mistake about it.
It is a technical error: it is indeed a slip which I think in no way affected
the widow, her rights, or her understanding of what the proceedings were and
her obligations thereunder.
In Carradine
Properties Ltd v Aslam [1976] 1 WLR 442 Goulding J summarised the
law in this way at p 444:
I would put
the test generally applicable as being this: ‘Is the notice quite clear to a
reasonable tenant reading it? It is
plain that he cannot be misled by it?’
At p 10 of his
judgment the deputy judge said*:
It is a basic
principle that a notice to quit must be clear and certain, so as to bind the
party who gives it and to enable the party to whom it is given to act upon it
at the time when it is given. It may not be ambiguous. On the other hand the
court will not strain to find doubts, difficulties or ambiguities but will
construe the notice as a whole in the light of the relevant surrounding
circumstances and by reference to its effect on a reasonable tenant reading it.
*Editor’s
note: Reported at [1991] 1 EGLR 18 at p 22J.
In my
judgment, subject perhaps to the qualifications that the reasonable tenant
reading the notice is to be taken to have had the knowledge of the surrounding
facts and circumstances which the actual landlord and tenant enjoyed, that
passage, in my view, accurately states the law. But while I agree with the
direction that the judge thereby gave himself, I do not, I regret, agree with
his
said*:
. . . is the
notice quite clear to a reasonable tenant reading it? Is is plain that he cannot be misled by
it? In my view a reasonable tenant,
following the severance, would be confused or misled or left in doubt by this
notice.
*Editor’s
note: Reported at [1991] 1 EGLR 18 at p 23 J.
The
construction of the notice should, I agree, in general be an objective one. But
the objective approach must, in my opinion, take into account the surrounding
facts and circumstances that were common knowledge to this landlord and to this
tenant. Both Mrs Land and Mr Sykes knew that Mrs Land had divested herself of
the strip. Both knew that the strip was not part of the land ‘which you [ie Mr
Sykes] hold of her as tenant . . .’.
The learned
deputy judge thought there was a contradiction between the heading ‘the holding
known as Grange Farm . . .’ etc on the one hand and the reference to the land
‘which you hold of him as tenant’ on the other hand. I do not think there is
any contradiction. The removal of the strip from the 291-acre holding would not
make in the least inaccurate the description of the land of which Mrs Land
remained the owner as ‘the holding known as Grange Farm’ etc. Of what
materiality, so far as the description of ‘the holding’ is concerned, is a 9 ft
by 200 ft strip in the context of this 291-acre farm? The common-sense answer and the answer I
would give is ‘None’.
I do not think
the description in the Case E notice of the land to which it applied would have
been in the least confusing to a reasonable tenant with knowledge that Mrs Land
was not the owner of the strip. For my part, even if the tenant had not had
that knowledge, I would have upheld the notice. The proposition that a notice
to quit this 291-acre farm was confusing and invalid because it purported to
include the 9 ft by 200 ft strip that the landlord no longer owned is not one
that I am prepared to accept. The maxim de minimis non curat lex is one
that I would, if necessary, apply. In my judgment, the Case E notice was valid.
On this part
of the case I would add that, in my opinion, if a notice to quit in fact
communicates the correct information to the recipient tenant, I do not think
that it is any business of the courts, or that there is any requirement of the
law of landlord and tenant that operates, to deprive the notice of validity by
reference to what some hypothetical reasonable tenant might have thought the
notice meant. I agree that, if objectively construed in the light of the facts
known to both landlord and tenant the meaning of the notice is clear, that is
an end of the matter. But if, in fact, the tenant was not confused, I for my
part think that that would suffice. I regard the approach of Sellers LJ in Frankland
v Capstick as authority.
It follows
from the validity of the Case E notice that the tenancy created by the lease
terminated on April 1 1988. It was conceded by Mr Morgan that, if that were so,
then, immediately after April 1 1988, the defendants’ continued occupation and
possession of the farm was a trespass. It may be that the better view is that
the defendants became tenants on sufferance rather than trespassers: see Woodfall
Landlord and Tenant vol 1 p 269. Their position as tenants on sufferance
would, however, have been no more favourable, for the purpose of the points
argued on this appeal, than their position as trespassers.
It also
follows from the validity of the Case E notice that the Case G notice,
expressed to be given without prejudice to the Case E notice, becomes irrelevant,
except perhaps for the purpose of explaining why certain things were done or
not done in the ensuing months.
Mr Morgan
contends that in the period between April 1 1988 and the commencement of
proceedings on April 10 1989 Mrs Land granted the defendants a new tenancy of
the farm or alternatively a licence that was enlarged into a tenancy by the
provisions of the 1986 Act. An express grant is not suggested. What is
contended is that the grant is to be implied from conduct. So, on the footing
that immediately after April 1 1988 the defendants were trespassers, it is
necessary to ask whether anything happened thereafter to enable them to claim
an agricultural tenancy or licence for the purposes of section 1 of the 1986
Act.
Mr Morgan
relies on two particular matters. He relies on the terms of the notice to pay
rent of April 26 1988 and he relies on the presentation of the cheque that had
been sent on January 23 1989 expressly as rent for the period April 1 1988 to
October 1 1988.
He did, in
addition, rely on certain other matters that I should briefly mention. He drew
attention to the failure of Mrs Land’s solicitors to serve any notice under
section 83(2) of the 1986 Act within two months of April 1 1988. This failure,
he said, was indicative of the acceptance of the defendants as tenants. For my
part, I do not think that inaction, where there was no obligation to take any
action, gives any support at all to a case of implied grant of tenancy.
He relied on
the service of the Case G notice. But this notice was given expressly without
prejudice to the Case E notice. It catered for the possibility that Mr Sykes’
old tenancy might continue beyond April 1 1988. It is inconsistent with, rather
than supportive of, an implied intention on Mrs Land’s part to grant a new
tenancy after April 1 1988.
And finally Mr
Morgan relied on certain paragraphs in the statement of claim that was served
in June 1989. These paragraphs do not, in my judgment, assist Mr Morgan in
establishing the alleged implied grant of a tenancy.
So I return to
the two matters of substance on which he relied.
Does the
service of the notice to pay on April 26 1988, coupled with the acceptance by
Mrs Land in April 1989 of the £6,450 that had been tendered as rent in January
justify imputing to her an intention to grant the defendants a new
tenancy?
The learned
deputy judge held that an implied grant of a tenancy had not been established.
But he appears to have taken into account subjective evidence of the lack on
Mrs Land’s part of any intention to grant the alleged tenancy. He referred to a
number of authorities and concluded that evidence of subjective intention was
admissible. One of Mr Morgan’s grounds of appeal is that the judge was in error
in this respect and that the test to be applied to the conduct relied on in
order to determine whether or not an intention to grant the tenancy (or for
that matter licence) should be implied therefrom was an objective one.
My instinctive
reaction is that Mr Morgan must be right. I do not see any reason why the
approach to formation of contract in landlord and tenant cases should be any
different from the approach to formation of contracts generally. The judge
cited an observation of Lord Mansfield in Doe d Cheny v Batten
(1775) 1 Cowp 243 at p 245 that:
The question
therefore is, quo animo the rent was received, and what the real
intention of both parties was?
This
observation does not deal with the manner in which the intention is to be
ascertained and, for my part, I think it should be ascertained by an objective
approach to what has been said and done.
In this court,
however, we have not been referred to any subjective evidence of Mrs Land’s
intention. Argument has proceeded on the basis of what intention can or cannot
properly be inferred from the matters on which Mr Morgan relies, considered in
the context of the surrounding facts and circumstances known to both sides.
This is the objective approach. So it is not necessary for us to decide whether
the learned deputy judge was right in concluding that subjective evidence of
Mrs Land’s intention was, on authority, admissible. I will leave the point with
my deep reservations already expressed.
As to the two
matters on which Mr Morgan relied, they are, in my judgment, inadequate whether
taken singly or together to justify imputing to Mrs Land an intention to grant
a new tenancy or a licence to occupy to the defendants.
The notice to
pay rent related to rent that had become due for the period October 1 1987 to
April 1 1988. The fact of the demand was not indicative of an intention to
continue the tenancy or grant any licence beyond April 1 1988. The language of
the form that was used was, I agree, inept in relation to a tenancy that had
expired and indicative of a continuing tenancy. But in the context of the correspondence
that had been passing between the parties’ respective solicitors and in view of
the persistent attempts that were being made on behalf of Mrs Land to regain
possession of the farm, an implication from the formal language of parts of the
form of an intention on the part of Mrs Land either to grant a new tenancy or
to authorise the defendants to remain in occupation seems to me unreasonable.
It has not been suggested that the defendants read the notice in that sense. If
the notice constituted an offer it has not been suggested that there was any
overt acceptance of that offer.
From June 1988
onwards there were consistent references in the correspondence between the
solicitors to the imminence of possession proceedings. This was the context in
which the communications between the solicitors regarding the cheque for £6,450
tendered as rent in January 1989 is to be considered. Mr Morgan submitted that
the cheque was tendered as rent and accepted
accepted as rent. It was simply accepted as money to be set against the
undoubted indebtedness of the defendants to Mrs Land. The defendants had been
in occupation and possession of the farm since April 1 1988 initially, the Case
E notice being valid, as trespassers, or, perhaps, as tenants on sufferance.
Either they owed the £6,450 as rent, if the Case E notice had not been valid,
or they owed at least that sum as mesne profits. The circumstances in which the
money was accepted by Mrs Land and the language used by her solicitor when
communicating with the defendants’ solicitors about the cheque could not, in my
judgment, have led the defendants, or any objective observer, to suppose that
Mrs Land was accepting the defendants’ status as tenants or licensees or was
intending to grant them a new tenancy or licence.
On this part
of the case, I am in complete agreement with the learned deputy judge. At p 17*
he said:
To suggest
that the landlord could be supposed, by the tenant, to have intended to create
a new tenancy in those circumstances by the acceptance of rent, on April 10
1989, just as the issue of proceedings was becoming, at last, very close, given
the progress on the probate side, seems to me fanciful. I am reminded of the
trenchant words of Henn Collins J in Maconochie Brothers v Brand
[1946] 2 All ER 778 as follows at p 779:
‘That they
did receive and pay into their bank a cheque paid in respect of a quarter’s
rent in advance, that quarter being after the expiration of the notice to quit,
is true, but it is equally true that the question is: Was a new tenancy thereby
created? That is, not a tenancy to be
discovered by some act of law, but a tenancy created by two assenting minds. It
is obvious that the one thing which the landlords wanted was possession of
these premises, and to tell me that they assented to the creation of a new
tenancy is to tell me what I do not believe. Therefore, if I have to find that
there was a new tenancy, it would have to be because of some legal ingenuity
and in face of what my mind informs me is not the fact.’
*Editor’s
note: Reported at [1991] 1 EGLR 18 at p 25 B.
The learned
deputy judge said at p 18 that he ‘would not, therefore, have held that the
defendants were entitled to a new tenancy by virtue of anything done after
April 1 1988’. Nor would I. The same applies to the argument regarding licence.
I would, therefore, dismiss the appeal.
Agreeing, FARQUHARSON
LJ said: The two main issues in this appeal are, first, whether the Case E
notice to quit, which was expressed to expire on March 17 1988, was valid, and,
second, if so, whether a new tenancy was agreed between the parties on or after
April 6 1988.
In my
judgment, the Case E notice was valid on the terms of the document itself when
it stated that the solicitors on behalf of the landlord ‘hereby give you notice
to quit and deliver up to her possession of all that holding and premises which
you hold of her as tenant’. That phrase could not include the strip of land
which had been severed from the landlord’s reversionary interest because the
tenant did not hold the strip as her tenant but as Mr and Mrs Chittenden’s
tenant. In the particular circumstances of this appeal, there was in any case no
room for ambiguity in the terms of the notice, because the tenant knew
perfectly well that the strip of land had been conveyed to the Chittendens.
Mr Brock, for
the respondent, submits that the tenants’ knowledge of the situation is
irrelevant when construing the terms of the notice. One has to consider, he
says, on an objective basis what a reasonable tenant would understand by the
service of the notice upon him. In my judgment, that imports an air of
unreality into the situation. In deciding whether the notice is void for
ambiguity one has to have regard to the circumstances that existed at the time
when it was served. Otherwise the clear understanding of the parties as to
their rights is frustrated by a strict application of the rules of
construction.
So far as the
second point is concerned, it is apparent from all the letters and documents
passing between the parties from April 1988 to April 1989 that the landlord had
in this context a single purpose and that was to issue proceedings for
possession of the land. Looking at the position as a whole, there can be no
room for any suggestion that the parties agreed upon the creation of a new
tenancy. I agree with the observations of Scott LJ in this connection
concerning the notice to pay of April 6 1988 and the treatment of the cheque
tendered as rent on January 23 1989.
I, too, would
dismiss the appeal.
PARKER LJ agreed and did not add anything.
Appeal
dismissed with costs.
