Rent arbitration — Surrender of farmhouse — Reduction in rent agreed — Whether three-year bar on demand for rent arbitration applied — Whether farmhouse fixed equipment — Appeal by landlord allowed
The appellant is the owner of Common Farm, Billingford, Norfolk; the respondents are the yearly agricultural tenants of the farm under a tenancy agreement dated September 28 1970. With effect from May 1 1985 the respondents surrendered one of the dwellings, Brick Kiln Farmhouse, and the rent was reduced by £100 pa. A rent arbitration was demanded by the respondents by a notice of October 2 1986. Two additional parcels of land were added to the holding with effect from October 11 1987 and the rent was further varied by agreement.
The appellant disputed the validity of the arbitrator’s appointment on the grounds that the parties had agreed the rent on May 1 1985 and that pursuant to para 4 of Schedule 2 to the Agricultural Holdings Act 1986 a demand for arbitration could not be effective in respect of a tenancy termination date within three years of that date. The appellant landlord appealed the decision of His Honour Judge Hyam in the Norwich County Court (November 22 1989) contending that the exception to the three-year bar on rent arbitrations in para 4(2)(b), where there is “any reduction of rent agreed between the landlord and the tenant of the holding in consequence of any change in the fixed equipment provided on the holding by the landlord”, did not apply.
Held The appeal was allowed.
By reason of the definition in section 96(1) of the 1986 Act, Brick Kiln Farmhouse was not “fixed equipment”; accordingly, the surrender of the farmhouse was not a change in the fixed equipment within para 4(2)(b) of Schedule 2 to the Act. The reduction in rent attributable to the surrender of the farmhouse fell within para 4(1)(b) of the schedule and thus the demand for arbitration was ineffective as the next tenancy termination date was within three years of May 1 1985.
Paul Morgan (instructed by Burges Salmon, of Bristol) appeared for the appellant; and Robert Bailey-King (instructed by Howes Percival) appeared for the respondents.
