Agricultural Holdings Act 1986 — Case D(a) in Schedule 3 to the Act — Notice to pay rent due — Rent not paid within two months of service of notice — Notice to quit — No notice by tenant requiring arbitration — Dispute as to whether tenant was given a licence to carry on farming after expiration of notice to quit in order to obtain the benefit of the harvest — Estoppel pleaded in the alternative by tenant — Landlords’ action for possession succeeds
in question was a Lady Day (old style, April 6) tenancy, the rent of which was payable
half-yearly, in arrear, in October and April — There had been a recent history
of rent arrears, reminders, notices and warnings, culminating in events
following the rent due in October 1986 — A notice to pay rent under Case D(a)
was dated November 18 1986 (date of service not recorded) requiring payment
within two months from service of the notice — Payment of rent was made on
February 6 1987, which was after the expiry of the two-months’ period (a cheque
having been returned for representation) — Accordingly, notice to quit was sent
on March 23 1987, terminating the tenancy on April 6 1988 — It should be
mentioned that the tenant complained that he had in fact had less than the two
months for payment as the notice to pay had been placed by the postman on the
top of a freezer in the porch at the entry to the farmhouse and was not
discovered until some weeks later — Throughout the period concerned in the case
the landlords and their agent appear to have been meticulous in warning the
agent of the risks to his tenancy by delaying to take action and in giving him
opportunities to discuss his difficulties — He had both financial and
matrimonial problems and sought advice and help from the Agricultural
Development and Advisory Service in regard to farming policy, although he did
not follow out their recommendations fully
meeting took place on August 7 1987, at the request of the tenant, attended by
representatives of the landlord company, the land agent and the tenant — There
was conflicting evidence as to what took place — The tenant said that he had
been given a promise to be allowed to stay on the farm until October 1988 and
that he would be granted some kind of licence for this purpose — The landlords’
representatives said that no such promise had been given; all that had been
given was sympathy and a promise to review the tenant’s position after the 1987
harvest — In fact the 1987 harvest was bad; no review took place in September,
but the land agent visited the farm in January 1988 and considered that it was
going downhill — It was made clear to the tenant that there was no question of
his being able to continue on the farm after April 6 1988
case at the trial was that a licence had been given to him to carry on the farm
until October 1988 and that the effect of section 2 of the Agricultural
Holdings Act 1986 was to convert this licence into a fully protected
agricultural tenancy — Alternatively, the tenant pleaded that the landlords
were estopped from claiming possession, on the ground that, in reliance on the
assurance alleged to have been given at the meeting on August 7 1987, he had
carried out husbandry operations and planted 67 acres — It was admitted that
the allegation of estoppel was based on precisely the same statements as were
relied on for the purpose of claiming the creation of a licence and that the
two claims stood or fell together
accepted the evidence of the landlords’ representatives and the land agent that
the tenant had been given no promise that he would be allowed to remain on the
farm after April 6 1988 or that he should be granted a licence — His position
had been reviewed and it had been decided that he should not be given any new
rights after April 6 — He had failed to establish his claims under licence or
estoppel — Judgment in favour of plaintiff landlords for possession
No cases are
referred to in this report.
This was an
action by the plaintiffs, Milton (Peterborough) Estates Co, the landlords,
against the defendant, Martin William Harris, the tenant, for possession of a
farm known as Lower Lodge Farm, Upton, Cambridge. The farm was mainly an arable
farm of some 127 acres.
Andrew Gore
(instructed by Hegarty & Co, of Peterborough) appeared on behalf of the
plaintiffs; Martin Collier (instructed by Buckle Mellows, of Peterborough)
represented the defendant.
Giving
judgment, MR DAVID GILLILAND QC said: This is an action which has been brought
by the plaintiffs, Milton (Peterborough) Estates Co, against the defendant, Mr
Martin William Harris, claiming possession of a farm known as Lower Lodge Farm,
Upton, in the County of Cambridge. It is accepted that the plaintiffs are the
freehold owners of the land, and the defendant became the tenant of the farm
under an agreement dated April 24 1967 made between the plaintiffs and himself.
That tenancy is a formal written tenancy agreement and is in a form commonly
found in many agricultural tenancies. It created a yearly tenancy with rent
payable half-yearly in April and October of each year. The tenancy was expressed
to commence on April 6 1967 and the rent was payable, as I read the agreement,
half-yearly in arrears.
The evidence
is that the defendant’s father and mother had effectively been the tenants
successively since 1933; and at the time these proceedings were commenced in
1988 the tenancy of this farm had therefore effectively been in the defendant’s
family for something over 50 years.
The farm is
principally an arable farm and extends to approximately 127 acres. From time to
time pieces of land have been added to or taken out of the tenancy by
agreement. Also over the years the rent has been successively increased to take
account of inflation and other matters.
The tenancy
was conducted perfectly satisfactorily as far as the landlords were concerned
up to 1983, but then the defendant fell into arrears with his rent. He was late
in payment of the instalment due in October 1983, and in fact that rent was not
finally cleared until March 23 1984. I have had evidence from Mr J M S Thompson
[FRICS], who
the estate on behalf of the plaintiff company, that the normal practice of the
estate is not to seek to serve formal notices under the Agricultural Holdings
Act the moment a tenant defaults. As indeed any good landlord will do, the
landlord is anxious to retain the goodwill of his tenant and will not,
particularly where a tenant has been a good tenant for many years, seek to
enforce the strict letter of the law.
What happened
in 1983 was that Mr Harris was sent a reminder when one month had elapsed after
the rent had become due, with a further reminder a month later. So effectively
he was given two months; and it was only after there had still been no payment
of rent that in 1984, I think it was, a formal notice to pay rent in respect of
the rent due in October 1983 was served upon the defendant. This matter is
recorded in correspondence in the bundle. A letter dated January 13 1984 from
Mr Thompson addressed to the defendant reads:
Dear Mr Harris,
Thank you for telling my secretary that
your rent cheque will be in the office by January 22. She probably did not
mention that I had already prepared a rent notice for you due to it being so
outstanding, and this I now enclose to protect the landlord’s position. I do
urge you to try and keep up-to-date with your rent payments to avoid the
necessity of my having to serve notices on you in the future.
That was sent by recorded delivery.
Mr Harris was
not able to pay the full amount of the rent immediately. He in fact paid a
substantial part of the rent — £1,631.34 — on March 1; and on March 15 1984 Mr
Thompson wrote effectively a reminder in the following terms:
You will be aware that you have not paid
your rent in full by the time stated in the rent notice I sent you on January
13 which entitles the landlord to terminate your farm tenancy by service of a
notice to quit. I am astonished you have not been to see me personally on this
matter, and I take an extremely serious view of your position here. I suggest
you make an appointment to see me next Tuesday, 20th or Wednesday 21st March,
during the morning any time after 10 am and will you please telephone my
secretary to confirm the details. If you wish to remain a farm tenant at Milton
I shall expect you to bring to the meeting a copy of your latest audited
accounts and full details of your present financial position. I shall obviously
want to know what proposals you have in mind for paying future instalments of
rent.
In fact, Mr Harris was able to pay the
balance of the rent in two further payments on March 16 and March 23, thereby
paying in full the amount of £2,650 which had fallen due.
On May 10 1984
Mr Thompson had occasion to write a further letter to Mr Harris in relation to
the rent due in April 1984:
It is now May 10 and you promised to pay
your Lady Day rent by April 30. This was the agreement reached when you came to
see me on March 20, when we agreed together on a time programme for future
rents. You also promised to let me have a copy of your 1983 farm accounts from
Mr Robinson, and these have not arrived either. In order to protect the
estate’s position I have no alternative but to serve another formal notice to
pay rent, and I trust you will take immediate steps to honour the agreement we
reached together in my office.
A copy of that notice was dated May 10
1984. The notice was served just over one month after the rent fell due, and
that again accords with Mr Thompson’s evidence that where the position was that
the tenant was, in his view, deliberately delaying in payment of the rent, the
practice of the estate was to serve a formal notice fairly speedily. One can
well understand why that notice was served in May if there had been an
agreement as indicated that the rent would be paid by April 30 and that rent
had not been paid. It would seem from a report which was obtained some time
later from ADAS that in 1982 and 1983 Mr Harris had had some bad results,
financially at any rate, from his farming and was in difficulty in paying the
rent. No doubt that was the reason why he was in difficulty in paying the rent
in 1983.
The position
appears to have improved. The rent which fell due in October 1984 was paid
within five days of the due payment date, but the position deteriorated in
respect of the subsequent instalments of rent. According to the agreed schedule
of rental payments, the position was that the rent which was due in April 1985
was not paid until August 1985 and that was only after a notice to pay rent had
been served. Similarly, the rent due in October 1985 was not paid until
February 21 1986, again after the service of a notice to pay rent. Again, the
rent which was due in April 1986 was not paid or satisfied until July 31 1986.
No money was in fact paid by Mr Harris in respect of that rent payment. It was,
however, satisfied by the estate — that is, the landlord — purchasing a Dutch
barn from Mr Harris. The barn had been erected by Mr Harris or at his request,
and it would appear from the evidence that the barn belonged to Peterborough
Development Corporation, or at any rate had been erected by them at his
request, because Mr Harris was, as he said in evidence, paying rent to them in
respect of it.
The
development corporation came into the matter in this way. Lower Lodge Farm is
within the area of the Peterborough Development Corporation, and it seems to
have been the proposal of the development corporation that they should acquire,
or might acquire, the farm in due course in connection with their development
plans for Peterborough. The effect of this was — and it is not disputed in the
evidence — that the estate as landlords were somewhat reluctant to spend
substantial sums of capital on the farm by way of improvements if the estate
was going to be compulsorily acquired in the foreseeable future. Again, Mr
Harris in his evidence accepted that this was the position and he did not
object. Mr Harris was, in the 1980s, carrying on an arable farming business on
the land and was also engaged in pig breeding and rearing. I think it is
perhaps not accurate to say ‘in pig breeding’, in the sense that he was not
breeding pedigree pigs: what he was doing was raising pigs on the land, and in
connection with his piggery business he was anxious that there should be suitable
premises in which he could keep his pigs. It would seem that he did approach
the estate to ask if they would assist in connection with the provision of a
Dutch barn, but they were not willing to do so and suggested he might approach
the development corporation. In due course Mr Harris did so approach them and
the net result was that a Dutch barn was erected which belonged either to Mr
Harris or to the development corporation; probably, I think, to the development
corporation. But in connection with the payment of the rent due in April 1986
an agreement was reached between Mr Harris and the estate, acting by Mr
Thompson, to the effect that the estate would take over the barn, pay off
whatever was necessary to the development corporation and use the balance to
discharge the rent. That was done and is recorded in the bundle of
correspondence.
The next
instalment of rent fell due for payment on October 11 1986. The amount in
question was £2,950. That amount represented an increase on the previous rent
to reflect the fact that the estate had now taken over the barn and that
accordingly it was entitled to an increased rent because of the outlay it had
incurred in providing what was now, I take it, a landlord’s improvement. The
rent increase was agreed by consent and this again is recorded in the documents
in the bundle.
Mr Harris
unfortunately did not pay the rent when it fell due in October 1986 and that
gave rise, as previously, to the service of a notice to pay rent served on him.
He did not comply with that notice by paying the rent in full within the period
of two months specified therein and accordingly the position arose that the
estate was then entitled, as indeed it had been earlier in 1984 in respect of
the non-payment of the rent due in October 1983, to serve a notice to quit. In
1984 no notice to quit had in fact been served; but in respect of the late
payment of the October 1986 instalment of rent, a notice to quit was served.
Under the agricultural holdings legislation such a notice cannot be queried except
by means of a reference to arbitration, and if the rent is not paid within the
specified period it is not in dispute that a notice to quit served in pursuance
of a valid notice to pay rent which is not complied with will in law take
effect. It is not disputed in the present case that a valid notice to pay rent
was served in respect of the October instalment, nor is it disputed that a
valid notice to quit had been served on the defendant following his non-payment
of the money which was due.
Again, it is
not in dispute that in fact the instalment of rent due in October 1986 was paid
by the defendant, and according to the agreed schedule of rent payments that
payment was made on February 6 1987. But this was some two weeks or so outside
the permitted period.
A valid notice
to quit under the agricultural holdings legislation must give at least 12
months’ notice to quit to the tenant, and accordingly the notice, which was
served on Mr Harris in 1987, was to take effect at the expiry of the year of
the tenancy in April 1988.
The notice to
pay rent in respect of the rent due in October 1986 was dated November 18 1986,
and following the service of that notice, which required payment of rent within
two months, a cheque was in fact received from the defendant but was not met by
his bankers. There is a letter on the file dated January 22 1987 from Barclays
Bank addressed to Mr Thompson referring to a letter from Mr Thompson of January
21 acknowledging receipt of the cheque drawn
on our above customer’s account
— that was the defendant, Mr Harris —
for £2,950, which you have asked us to
re-present. I confirm that it was returned unpaid by us originally on January
20 and apologise for the lack of date in our letter. At the time of writing
this letter we are still unable to clear the cheque but are currently having
discussions with Mr Harris and his solicitors, Buckle Mellows. It is possible
that if the bank is able to obtain additional security which we are discussing
with Buckle Mellows we may be able to clear the cheque in the short term. I
have therefore retained the cheque until Monday January 26 when I will contact
you again by telephone.
A manuscript note is written by Mr
Thompson on that letter:
M. Harris’s cheque for rent finally
passed through Milton’s bank on February 6 1987.
As I say, it
is not in dispute that the landlords were entitled to serve a notice to quit in
the circumstances of this case. However, as one would expect with responsible
landlords dealing with a tenant who had found himself in difficulty, the
landlords were not about to serve a notice to quit merely because there had
been a short delay in payment. The position was that Mr Thompson, the agent,
had a meeting with Mr Harris on February 13 1987 at which Mr Thompson inquired
into Mr Harris’ personal and financial position, and in particular was
concerned to inquire as to what debts he had and to whom they were owed. There
is a manuscript note from Mr Thompson in the bundle and there is a typed copy
of it. The position at that time was that Mr Harris’ wife had left him; he had
had matrimonial difficulties and was living at the farmhouse with his two sons,
Richard and Timothy, who were respectively aged 14 and 18. At the time,
according to Mr Thompson’s notes, Mr Harris had some 43 sows with offspring on
the land in connection with his farming business. Mr Harris was indebted to
suppliers for feed in respect of his pig business in a substantial sum of some
£14,000. He also had a substantial overdraft with his bank, and Mr Thompson was
obviously concerned as to how Mr Harris would be able to pay the April rent.
It would seem
that at this meeting Mr Harris told Mr Thompson that he had asked ADAS, the
Government advisory service, to look at his farm business and to advise on the
restructuring of the farm. Mr Thompson in his evidence said that he was
surprised, and I think encouraged, by Mr Harris’ attitude in that he was
apparently seeking to take expert advice in connection with the running of the
farm.
Mr Thompson
wrote a letter on February 16 1987 to Mr Harris following his meeting on
February 13:
Further to our discussion on Friday
afternoon I would just like to record what we agreed should happen during the
next few weeks prior to Lady Day to enable the directors of the company to
reach a decision about your future.
— That, of course, is a reference to the
question whether the plaintiff company would serve a notice to quit or not–
As you are aware, your rent cheque was
paid after the required date in the notice and that delay entitled the landlord
to serve on you a valid notice to quit. We obviously do not wish to take this
step unless we consider it is essential from the estate’s point of view, and it
is up to you to demonstrate to us that you can start farming profitably and pay
your rent promptly in the future. I understand ADAS are advising you and I
shall want to see a copy of their report together with a cash flow projection
for your trading up to April 1988. I shall also need a full statement of your
present cash position after you have used the bungalow net proceeds of sale for
settling some of your debts.
The reference to the bungalow is a
reference to a bungalow which Mr Harris in evidence said had been left to him,
I think by his uncle, and which had been transferred into the joint names of himself
and his wife. Unfortunately, because of matrimonial difficulties, there were
some problems about realising the bungalow. But it was certainly Mr Harris’
intention at this time to use the net proceeds of sale of the bungalow to
settle at least some of his debts, and no doubt he hoped that this would put
him in a position to pay future rent instalments.
Mr Thompson
concluded his letter in the following terms:
Will you please see that all this
information is available to me by the end of the second week in March so that
we can give proper consideration to your position before the end of the month.
The information which is being sought
there clearly is the ADAS report and the cash flow projection for Mr Harris’
trading position up to April, and Mr Thompson was giving effectively a clear
month to Mr Harris to produce this documentation so that the estate could
consider the position at the end of March.
On March 13
1987 Mr Thompson wrote again to Mr Harris:
Dear Mr Harris,
I am very surprised you have not been in
touch with me since my letter of February 16 when I asked for a full update on
your financial position by the end of the second week in March. That time has
now arrived and I am bound to say that I cannot give your position further
sympathetic treatment unless you let me have the information I need by Friday
morning next, March 20 at the latest.
It would seem that no response was
received to that letter, and on March 17 Mr Thompson wrote again to Mr Harris:
Further to my letters of February 16 and
March 13 I must point out that they were written without prejudice to the
landlord’s right to serve a notice to quit on you for non-compliance with a
notice to pay rent served on you on November 18 last. This is an extremely
serious matter and failure to produce the information I require is likely to
lead to the loss of your tenancy.
Unfortunately, it would again seem that
Mr Harris did not reply. In evidence Mr Harris said, and I accept his evidence
on this point, that by this time things had got rather on top of him. His wife
had left him and he was living on the farm with his two sons. I am in no doubt
it may be that he had problems in connection with his two sons, although he did
not elaborate on them. But certainly he said effectively that things had got on
top of him, and unfortunately from his point of view he failed to approach Mr
Thompson and to explain what was going on.
The result was
that on March 23 1987 Mr Thompson sent to Mr Harris a notice to quit. The
accompanying letter was sent by recorded delivery and it is not disputed that
it was duly served on Mr Harris. The letter states simply:
In view of the fact you have failed to
communicate with me at all since my letter of February 16 last, I have no
alternative but to serve the enclosed notice to quit on you to take effect at
Lady Day 1988. I am very sorry that matters have come to this point, and if you
think it would be beneficial for you to give possession earlier than that date,
I would be pleased to discuss arrangements with you, including the provision of
alternative accommodation.
Then the notice to quit copy appears in
the bundle. As I read it, that was a notice to quit on April 6 1988 or at the
expiration of the year of his tenancy which should next expire at the end of 12
months from the date of the service of the notice, and the notice was stated to
be given on the ground specified in para (a) of Case D in Schedule 3 to
the Agricultural Holdings Act 1986. As I have mentioned, it is open to a tenant
who wishes to dispute the validity of such a notice, or at any rate the grounds
on which the notice is served, to apply for arbitration. It is not suggested in
the present case that Mr Harris did seek arbitration on the grounds.
Mr Harris,
however, was not entirely passive (if I may put it this way) at that time,
because he was in contact with ADAS. On his evidence, which I accept again on
this point, he says that he first approached ADAS round about the end of
December 1986, and he certainly asked them to prepare a report. His evidence
was that he got in touch with them again, and there is in the bundle of
documents a report from ADAS which bears on the front page the date of March
1987. The report refers to the fact that there was a visit by the officials or
officers who were responsible for preparing the advice. They visited the farm
on March 23 1987. Mr Harris’ evidence is that he did not receive the ADAS
report until the beginning of June 1987, and it is common ground that he left a
copy of the ADAS report at Mr Thompson’s offices on or about June 12 — or,
indeed, I think it is slightly before that date. There is a letter dated June
12 from Mr Thompson referring to the fact that Mr Harris had dropped the ADAS
report ‘in at the office the other day’, but that there was no particular
message attached to it.
I have taken copies for my file and
obviously I would like to have a discussion with you about the future. I will
be free to call and see you on Thursday June 18 at, say, 2.15 pm and may I take
it that unless I hear to the contrary this will be convenient to you.
So the
position was that, although Mr Thompson had asked in February for the ADAS
report within four weeks and cash flow projections, it was not until the
beginning of June that it was in fact supplied to Mr Thompson. Notwithstanding
that Mr Thompson had not received the report in March when he asked for it, and
notwithstanding that a notice to quit had been served, it is quite clear that
the attitude of the estate was that the door was not entirely closed after the
service of the notice to quit on the possibility that Mr Harris might be able
to stay on on the farm. It is clear from all the evidence that the estate did
not wish to act unfairly towards Mr Harris and, as was said in evidence — I
think it was by Lady Hastings — the estate were bending over backwards to be
fair and helpful to Mr Harris. This was the attitude of Mr Thompson himself,
because a meeting took place on June 18 with Mr Harris in which his financial
position
manuscript notes and these appear in the bundle.
Mr Thompson
was, I think it fair to say, somewhat distressed by the position as he saw it
on the farm on his visit in June. He had, as I indicated, by this time been
provided with a copy of the ADAS report, which effectively indicated that it
might just be possible for him to continue farming profitably at the farm, but
it was somewhat of a knife-edge decision. One of the features about the ADAS
report was that it was written on the assumption that Mr Harris would still be
able to continue with his production. When Mr Thompson visited the farm he saw
that Mr Harris was not in fact sticking to the farming policy indicated in the
ADAS report, and that is recorded in a letter of June 19 written by Mr Thompson
to Mr Harris after his visit.
Following our meeting yesterday I am most
concerned that you do not appear to be sticking to the farming policy which was
recommended in the ADAS reports, and therefore your financial position must be
deteriorating seriously from its present very low base. I was also surprised
that you told me you had 43 sows on the farm, and when we counted them the
number was 35, only four of which had litters. The building, pig pens and yards
were in a very dirty and untidy state too. As I pointed out to you, I am quite
convinced that financially you will be better off if you give up your farm
immediately after harvest rather than become involved in planting a new crop
and trying to stay on in the farm to Michaelmas 1988. I repeat what I said in
my letter of March 23, namely, that we would help you find alternative
accommodation on a rented basis if you agree to leave the farm this September.
I hope that on reflection you may reconsider your decision.
It would appear from that letter that Mr
Harris was at this time saying that he wanted to stay on at the farm, not
merely to the expiry of the notice to quit in April 1988 but until harvest that
year. It is quite clear from the evidence of Mr Harris that indeed this was his
desire. His wish was that he should be able to take the benefit of the 1988
harvest because he hoped that, with a successful crop that year, he might be
able to pay off his debts.
It is also
clear from the letter of June 19 1987 that this proposal did not commend itself
to Mr Thompson, whose view was in essence that Mr Harris should leave as soon
as possible. Mr Thompson clearly took the view that the longer Mr Harris stayed
there the worse his financial position was likely to become. It is common
ground that the passage I have read in the third paragraph of that letter did
fairly reflect Mr Thompson’s view that he was quite convinced that financially
it would be in Mr Harris’ interests to give up the farm immediately rather than
to seek to become involved in a new crop and try to stay on. However, Mr Harris
clearly did wish to stay on.
The next
material event is that a meeting took place on August 7 1987. This was a
meeting attended by Mr Harris, Lady Hastings, her husband Sir Stephen Hastings,
and Mr Thompson. It was a meeting which took place at the estate office and as
a result of a telephone call made by Mr Harris to Lady Hastings. It seems clear
that it was Mr Harris’ wish to have a meeting in order to see if he could
persuade his landlord to allow him to stay on, at any rate until October 1988,
and have the benefit of the 1988 crop. There is a conflict of evidence as to
what in fact took place at that meeting, and it is on what was said or not said
at that meeting that this case essentially turns.
The
defendant’s case as pleaded in paras 5 and 6 of his defence is as follows:
On or about August 7 1987 the plaintiffs,
by their agent Lady Hastings, granted the defendant a licence to carry on and
farm the said premises
— that is Lower Lodge Farm —
and remain there until October 1988. It
was an implied term of the said licence that the defendant should pay for his
occupation at the said yearly rate of £6,422 per annum. The defendant contends
that the said licence was converted into a tenancy from year to year by virtue
of section 2 of the Agricultural Holdings Act 1986.
It is not
disputed by the plaintiffs that if in fact Lady Hastings did give the defendant
a licence to carry on and farm the premises until October 1988 at this meeting,
it would be implied that Mr Harris would continue to pay rent at the same rate
as he was paying under his current tenancy, which of course had not at this
time expired; and it is not disputed, as I understand it, by the plaintiffs
that, if there were such an agreement, that licence, if it were a licence,
would be converted into an agricultural tenancy under the Agricultural Holdings
Act 1986.
Para 6 of the
defence pleads an estoppel as follows:
Further or alternatively, in reliance on
the said licence and statements made by the said Lady Hastings, the particulars
of which are contained in paragraph 4 of the defendant’s first affidavit
— that, I think, is a reference to an
affidavit sworn in connection with an application for an interlocutory
injunction which the plaintiffs had brought in the present case but which was
in fact adjourned to the trial of this action —
the defendant prepared, drilled,
harrowed, rolled, fertilised and planted some 67 acres of the premises. In the
premises the defendant will contend the plaintiffs are estopped from
instituting any proceedings for possession prior to October 1988.
In his
submissions Mr Collier, on behalf of the defendant, very fairly admitted that
the allegations of estoppel effectively are based on precisely the same statements
as are relied on for the purpose of creating a licence and that the two claims
stand or fall together. In my judgment, that is clearly correct.
The issue I
have to determine is whether in fact any such licence as is referred to in para
5 of the defence and counterclaim was granted by Lady Hastings at the meeting
on August 7 1987.
In relation to
this matter I have heard evidence from Mr Thompson, who was present at the
meeting and made notes. They are somewhat brief and are in the form of
manuscript. I shall have occasion to refer to them later. Evidence was also
given by Lady Hastings, by Sir Stephen Hastings and by Mr Harris. They were the
only persons present at the meeting.
Mr Thompson’s
evidence in relation to the meeting was as follows. He stated the meeting took
place in the estate office. Present were Sir Stephen Hastings, Lady Hastings
and the defendant. The meeting took place at the request of Mr Harris, and Mr
Thompson’s recollection was that he thought Mr Harris started the ball rolling
and that he was pleading to be able to stay on at the farm. Mr Harris’
approach, as Mr Thompson recollected it, was that if he could only stay on and
have the harvest in 1988 he would be able to pay off his debts. It was again Mr
Thompson’s recollection that Mr Harris was, at this meeting, suggesting that
the estate had been unfair on him and was picking on him. There was then
discussion and reference by Mr Harris to the circumstances in which the notice
to pay rent in relation to the October instalment of rent had been served on
him, and it would appear (and this was not disputed in evidence) that there had
been an unfortunate occurrence so far as Mr Harris was concerned in that
although, as Mr Harris put it, the notice to pay rent had been served by
recorded delivery, it had not in fact been handed by the postman to him. Mr
Harris said the postman had signed for it himself and had then left the notice
on top of a freezer in the porch at the entrance to the farmhouse. Mr Harris’
evidence was that the front door of the porch was always left open, and
presumably what Mr Harris was saying was that the postman, because he did not
want to come back and make another visit, simply signed for it and left it on
top of the fridge.
However,
whatever may have happened, Mr Harris’ evidence was that he did not find the
notice until he had occasion to move the fridge in the beginning of January,
shortly after his wife had left, and it was only at that time that he found the
notice to pay rent, and Mr Harris was saying that therefore he did not really
have the full two months’ period in which to find the money to enable him to
pay the rent in due time.
Mr Thompson
recollects that something to that effect was said at this meeting and that what
Mr Harris was doing was asking the estate to allow him to stay on at the farm
until September 1988 to achieve his additional harvest. Mr Thompson did not
recall there was any reference to staying on generally and he did not think Mr
Harris ever said that. Mr Thompson then referred to the fact that Lady Hastings
was the chairman of the plaintiff estate company and that she chaired the
meeting. She said, according to Mr Thompson’s recollection, that she respected
Mr Harris’ wish to go on farming so as to be able to pay his debts and that she
was impressed by what he was trying to do; but Mr Thompson said that his
recollection of what Lady Hastings said was that she would ‘leave this to me to
decide’ following further inspections of the farm and it was left at that. Mr
Thompson had no recollection that anything was said at that meeting referring
to a licence. At one meeting Mr Thompson had said that he had pointed out to Mr
Harris that if he went on to farm until September 1988 there were dangers. Mr
Thompson recollects that he had said at some stage that if a licence were given
to Mr Harris to farm the land, that licence would create a tenancy.
Lady Hastings
gave evidence in relation to the meeting on August 7. She said it was a sad
meeting; it was very stilted. There had been a close relationship with Mr
Harris over many years, and her recollection was that she said very little. She
remembers her husband,
day. Perhaps you can tell us your position’. Lady Hastings recollected
reference being made to the notice to pay rent and to the deep freeze. She did
not recollect Mr Harris saying anything about the estate’s treatment of him at
the meeting, although she did recollect he did refer to that subsequently.
That, as appeared from her evidence, was in a telephone conversation the
following March. She accepted that Mr Harris may have explained why his cheque
had bounced, but she could not recall the details. She could not remember if
the ADAS report was mentioned, though Mr Thompson may have mentioned it; but,
as far as she could recollect, Mr Harris did not mention it. She then went on
to say:
I did say how very sorry I was about it.
I think I may have said, much better not to make a bad position worse.
Then she referred to the break-up of his
marriage and how she was very surprised and it was obviously a distressing
matter. She had thought their marriage was as sound as the Bank of England. She
did remember the defendant asking if he could stay on until the autumn. Her
recollection of what the defendant’s words were was to the effect that:
If I can stay on for Michaelmas I think I
can get matters sorted or straight.
Lady Hastings added:
I know my husband said, ‘We’ll ask Mr
Thompson to keep in touch and look at it at the back end’.
Lady Hastings
did not recollect Mr Harris saying anything to the effect that he would want to
continue farming on the land all the time. Her recollection of the way the
meeting went was that Mr Harris was speaking to the meeting in general and not
to her in particular when he said he wanted to stay on and that she was merely
expressing her sympathy with him. She did not recall referring to a licence as
having to be drawn up, and she went on to say that she did not really know of
the existence of licences, though she had heard of a licence from the
development corporation. So far as she was concerned, her evidence was that a
person was either a tenant of agricultural land or he was not and there was no
sort of half-way house between a tenancy and the absence of any right to remain
on the land.
In
cross-examination Lady Hastings accepted that she knew there had been
discussion about a cheque but could not recall if the defendant had explained
why the cheque had bounced; that he had expressed a wish to stay on; that she
would not and could not have said there was no objection to his staying on; and
that she did know it was very important not to make statements which might be
misinterpreted. She had not discussed this question of staying on before. Mr
Thompson had mentioned that Mr Harris had wanted to stay on, but that was out
of the question. She did accept, however, in cross-examination that she said
the position would be reviewed after the harvest. Then she referred to the
possibility that if there was a miracle, an economic miracle and improvement,
there might have to be some discussion to see what they could do. But her
evidence was quite clear that as far as she was concerned there would be nothing
more than a review of the position after the 1987 harvest at the back end of
the year. She denied saying that if the harvest was good he could stay, and she
denied once again saying anything about drawing up a licence, and referred then
to her statement that: ‘I did not know of the existence of that kind of
tenure’, as she put it.
Sir Stephen
Hastings in his evidence-in-chief said he was a director of the plaintiff
company and that he was aware of the general position concerning Mr Harris
before the August meeting. It was not a particularly formal meeting, he said,
but it was sad. The tenor of the discussions could be described as, I think,
that there were four equal participants. He says he thinks he started the
meeting and said to the defendant that he realised the position was regrettable
and very sad, and perhaps he would say where he, that is the defendant, stood.
Then Mr Harris tried to explain why he was so far behind with the rent. Sir
Stephen could not recall the precise details, but he did recollect statements
to the effect that the cheque had bounced because of the difficulty over the
sale of the house and the trouble with Mr Harris’ wife and that there was
mention of the notice to pay rent being lost behind the freezer and that is why
Mr Harris had not responded.
Again, Sir
Stephen does not recollect anything being said by Mr Harris at that meeting
about how the estate had treated him. Sir Stephen’s recollection was that Mr
Harris simply said that if he could carry on farming through the harvest he
would get out of his difficulties, and that he did not say he wanted to farm
permanently. Sir Stephen said:
I think possibly my wife and I in due
course said the position might be kept under close review until the autumn, and
this seemed to be the conclusion of the meeting. Nothing was said about his
having rights after April 1988; nothing at all to cause the defendant to
believe he could stay on. I think both my wife and I expected that there would
be a further report, but no question of our having a direct dealing with the
defendant.
In
cross-examination, Sir Stephen Hastings effectively reaffirmed what he had said
in chief. He accepted that the whole atmosphere of the meeting was in terms of
sympathy for Mr Harris and that this has been the fact of the matter throughout
the history of this unfortunate event. Sir Stephen said it was quite clear to
him what was said. He took no notes, but he was quite satisfied that the
conclusion of the meeting was that the matter would be reviewed at the end of
the harvest in 1987.
The defendant
also gave evidence in relation to this meeting. The defendant’s
evidence-in-chief was that he thanked Sir Stephen and Lady Hastings for giving
their time. Mr Thompson was present but did not speak: he was taking notes. Sir
Stephen said it was sad; the estate had always wanted to help; and the
defendant explained the reason why he was behind with the rent was because he
had not received the notice to pay rent in time. He then referred to the
incident of the freezer and the difficulty he had with raising the money. Then
the defendant said he asked if he could continue at least until October 1988 so
that he could take another harvest off the land so that he could clear his
debts and his name. The defendant said Lady Hastings said that it was very
admirable for him to want to do so, and that she would have to talk to Mr
Thompson about the methods of allowing him to carry on until October 1988 in
some form of licence.
To the best of my memory she said I was
trying to do an honourable thing to carry on, and by doing so a licence would
have to be created.
The defendant
then continued:
The meeting came to an end and drew to a
close and they said they would direct Mr Thompson to keep an eye on things
until I had at least gathered the 1987 harvest, and the situation would be
reviewed. I thought I had had a very fair meeting and a very fair hearing of my
situation. I thought in my own mind Mr Thompson had been harassing me, and with
the break down in my marriage I had not been in a position to argue with him. I
thought I would be given a chance to carry on farming at least until October
1988, and thereafter if they thought I was sufficiently worthy of carrying on.
The defendant
then said he took the harvest and it was a very bad autumn. He ploughed and
cultivated, he said, some 35 acres with winter barley, 20 acres with winter
wheat, and that by January 1988 there were only some 14 or 15 acres which were
still unploughed. The defendant said that three of his next-door neighbours had
decided to assist him and they had effectively arranged with him that they
would each plough one-third of his farm and not charge him. But in the event
they were unable to plough all the land before Christmas, and there were some
24 acres left to plough at that time. Mr Harris said Mr Wilson, a next-door
neighbour, had offered to provide him with spring barley for sowing. That was
barley that Mr Wilson had grown from pedigree seed and it had been dressed. He
said Mr Wilson said he would give him sufficient to enable him to sow the land.
In
cross-examination the defendant, in relation to the meeting of August 1987,
said he had sold the bungalow by this time. The bungalow had been sold in March
and the money came in March; and that he still owed some £18,000. He had always
been of opinion that he could work his way out of his trouble.
I took the view that if I disposed of my
pig business which was the source of the losses I would be able to work my way
out of trouble.
Then in relation to what Lady Hastings
had said, the defendant said:
To the best of my knowledge, Lady
Hastings said she would have to talk to Mr Thompson if I were to stay on, and
would have to discuss some licence with Mr Thompson. She said that it was
admirable that I wanted to stay on to pay my debts. Lady Hastings would have to
speak to Mr Thompson about a licence to allow me to do this, and Mr Thompson
would review the position in September.
He was asked
in cross-examination and it was put to him that there was no commitment on the
part of the estate, and his reply was that Lady Hastings had said she would
review it with Mr Thompson. When asked whether, if the review were favourable,
a licence would be granted, his answer was ‘Yes’, but he accepted there were no
dealings with the estate as such following the August meeting.
The question I
have to decide is whether in fact, as Mr Harris has pleaded in para 5, Lady
Hastings did say to the defendant that he
of Mr Thompson, Lady Hastings and Sir Stephen Hastings is clear. They all say
that no such promise or statement was made or given. In my judgment, although
Mr Harris was seeking an extension of the notice to quit, or seeking the right
to stay on until Michaelmas or October 1988, it is clear from what Mr Thompson,
Lady Hastings and Sir Stephen all say in evidence that they did not say that he
could stay on. The furthest their evidence goes is that the matter would be
reviewed after the harvest at the back end of the year.
The defendant’s
evidence does not, in my judgment, essentially differ in its material or
essential elements on this point, because it is clear from that evidence,
particularly in cross-examination, that he accepted that the position would be
reviewed in September. That was said specifically in cross-examination, but it
really confirms what the defendant also said in evidence-in-chief. I have
already mentioned the passage where he referred to the meeting coming to an
end; and even on the defendant’s view of matters, he says the plaintiffs — that
is, Lady Hastings and Sir Stephen presumably, as representing the company, and
possibly Mr Thompson — were saying they would direct Mr Thompson to keep an eye
on things until ‘I had at least gathered the 1987 harvest and the situation
would be reviewed’.
I appreciate,
of course, that there is a conflict, and a direct conflict, of evidence as to
whether there was any reference to the question of a licence being mentioned at
all; but on the question of a review it is quite clear that all the parties
accept that there would be a review of the position by Mr Thompson in September
1987 when the harvest had been gathered in at the end of the year. That was
said in the context of a request by the defendant to be allowed to stay on
after the notice to quit would expire in April, until at least the autumn, in
order to take the crop.
That that was
the position is confirmed by Mr Thompson’s manuscript note which was made at
the meeting — and it is not in dispute that Mr Thompson did, as the defendant
says, take notes at the meeting. Mr Thompson’s note of the conclusion of the
meeting was that it was left that JMST (that is Mr Thompson) would make a
further inspection after the harvest and assess the position probably in early
September.
In the light
of that evidence, which is essentially not disputed by the defendant, it seems
to me quite impossible to infer that any definite promise was made at the
meeting of August 7 1987 to the effect that Mr Harris would definitely have the
right to stay on the land until at least October 1988. Such a promise would, in
my judgment, be quite inconsistent with a review of the position in September,
because the only purpose of a review in September would be to consider whether
in fact Mr Harris should be able to stay on. I can see no other reason in the
context of that meeting why there should be a review at all, and the position,
in my judgment, was simply this: that although Mr Harris was seeking to stay on
and he explained why he had got into difficulties with his rent, the landlords,
acting by Lady Hastings and Sir Stephen Hastings, were not rejecting that
request out of hand and saying ‘No there is no possibility of your having the
right to stay on’; they were saying ‘Well, we will review the matter in
September’. It may well be they were simply trying to be kind to Mr Harris and
that they did not really think he could successfully carry on farming the
business. It was certainly the view of Mr Thompson that Mr Harris would only
get himself into deeper financial trouble the longer he stayed on the land, and
I have no reason to doubt that this was probably what both Lady Hastings and
Sir Stephen Hastings also believed. But in the event they were not prepared at
this stage to say ‘No, there is no possibility’: the door was left open.
But it follows
from that, in my judgment, that no licence was granted in August 1987 at this
meeting as claimed in para 5 of the defence and statement of claim. It also
follows, in my judgment, that no sufficiently precise statement or
representation was made to the effect that Mr Harris would be entitled to stay
on the land after the notice to quit expired in accordance with its terms so as
to found an estoppel.
What in fact
happened was that, following the meeting, it does not seem that any review did
take place in September as had been contemplated at the meeting as recorded in
Mr Thompson’s note of the meeting. What occurred was that Mr Harris failed to
pay the October instalment of rent, and he was sent a reminder on November 17
that the rent was then five weeks overdue, and payment was requested within
seven days. That was sent by Mr Thompson and was followed up on December 7 by a
further letter from Mr Thompson addressed to Mr Harris:
I think it is time we had another talk
and I made a further inspection of your farm. Looking ahead to next week,
Wednesday December 16 would suit me best if I was to call at, say, 8.45 am. I
hope this will be convenient to you, and if by any chance it would not be, will
you please telephone me or my secretary, Pam Scott, to arrange for an
alternative suitable time.
Mr Thompson did in fact visit the farm on
January 5. According to his notes, some 20 acres of the land was at that time
sown in rape and had been sown and drilled and was growing rape, and some 35
acres were growing barley. Mr Thompson in evidence said that his recollection
was that that was the only land which had been tilled, and in particular he
said that the rest of the land effectively had been left to grow couch-grass
and was in a bad or poor condition. His general view was that the farm was
going downhill. The position at this time, of course, was that Mr Harris was
working full-time and he could only spend time on the farm in the evenings and
at weekends. He would, of course, have had the assistance of his elder son, but
bearing in mind this was wintertime, there would be not a great deal that the
defendant could in fact do sensibly and realistically at that time of the year.
The defendant’s evidence was that he carried out various repairs to the
buildings, repairing downspouts and so on. I think that the suggestion of the
defendant was that he was doing this work, which seems to me to be of a fairly
minimal nature, in reliance on a promise from Lady Hastings that he would be
able to stay on. As I have indicated, I am quite satisfied that no such promise
was made, and the doing of that kind of work is as much consistent with the
tenancy’s ending as with Mr Harris thinking he had any right to stay on,
because of course a tenant is liable for dilapidations if he does not do any
repairs on quitting his tenancy, and that would affect any compensation to
which he might be entitled for improvements and so on under the Agricultural
Holdings Act.
Therefore it
is clearly in the interests of the tenant to keep the farm in reasonable
condition even though he may be quitting. Such work as the defendant did does
not indicate to me that the defendant actually thought he had at this time the
right to stay on the land; and indeed there is one piece of evidence which
indicates to me quite clearly, and which I accept, that the defendant did not
really think at this time he had the right to stay on on the land. That is that
when Mr Thompson visited in January, and also when he visited the land again at
the expiration of the tenancy in April, he asked Mr Harris for payment of the
rent which had fallen due in October. Mr Harris’ response, as recounted by Mr
Thompson, was that he, Mr Harris, would pay the rent if he could stay on. That
evidence I accept. It has the ring of truth about it. It is the kind of thing
which a person who wanted to stay on would say, but it seems to me it is
consistent, and only consistent, with the view that Mr Harris did not himself
actually think he could and did have the right to stay on at this time. I think
the position was this: that Mr Harris hoped that he would be able to stay on,
and he kept hoping against hope that something would turn up which would enable
him to stay on.
I cannot
accept the defendant’s evidence that at the meeting of August 7 Lady Hastings,
or anyone else at that meeting, said that Mr Thompson either would be
instructed to or would have to prepare a licence. I accept and prefer the
evidence of Sir Stephen Hastings and Lady Hastings on this point. It seems to
me that Lady Hastings was clearly stating what she understood the legal
position was when she said that as far as she was concerned there was not any
half-way house and that either a person was a tenant or he was not.
The reference
to a licence seems to me to be a matter which probably was something which
possibly the defendant hoped would be granted if he were given permission to
stay on. It would seem that he had had a licence to farm land from the Peterborough
Development Corporation, because he occupied some adjacent land to the farm,
and he told me that he occupied it under a 364-day licence, this being not
merely a grazing licence but a licence to farm the land. It would be possible
for there to be such a licence which would not attract security of tenure if
such a licence were approved by the minister before it was granted. It may well
be the case that the defendant did in fact occupy the land he held from the
development corporation under a licence which did not in fact attract security
of tenure. But that is, and was accepted by the defendant to be, an unusual
situation, and it seems to me — and I accept Lady Hastings’ evidence on this
point — that as far as she was concerned there was no question of a licence.
Either he would be a tenant or not, and it seems to me that if there had been
any reference to a licence at that meeting,
remembered it.
As I say, on
this point I prefer the evidence of Lady Hastings and of Sir Stephen to that of
the defendant on the question whether any licence was in fact mentioned.
When Mr
Thompson visited the land in January 1988, as I indicated, he found a position
which did not encourage him at all, and although there had been no review in
September it very quickly became clear that Mr Harris would not be granted any
extension of his tenancy. On January 19 1988, no doubt following Mr Thompson’s
visit on January 5, the plaintiffs’ solicitors, Hegarty & Co, wrote a
formal letter to Mr Harris stating that they were instructed by the plaintiffs
and ‘you will no doubt by now have received a warrant for distraint in respect
of the growing crops on the farm’. That is a reference to the fact that rent
had not been paid in respect of the October instalment, and therefore distress
was being levied by the plaintiff company. There was evidence by the
certificated bailiff, Mr Batson, of his visit in January. He had attended on
January 18 1988 to levy execution, and he did take walking possession. This
letter, although initially written in relation to that item, went on to state:
Your tenancy in respect of the farm
terminates in April of this year and our clients are anxious to gain access to
the land that you have not drilled this year so that a crop can be planted as
soon as possible. Our clients will be prepared to forgo any claim in respect of
dilapidations on the termination of your tenancy if you immediately allow them
to gain access to the land, and for the land to be farmed by our client prior
to the termination of your tenancy in April. Our clients do however require
your written confirmation by Wednesday January 27. If you are in doubt as to
your legal rights then you should consult a solicitor.
It was Mr Batson’s evidence that the
defendant had already been to solicitors and was seeking legal advice as to
whether he was in a position to challenge the notice to quit which had been
served on him.
But one thing
is quite clear, that the letter of January 19, if nothing else, must have made
it perfectly clear to the defendant that there was no question of his being
able to continue on the farm after April of that year.
There is one
further matter perhaps I should mention for the sake of completeness, though it
does not affect the conclusion to which I have come. That is that in March
1988, shortly prior to the commencement of the proceedings, the defendant
telephoned Lady Hastings. The telephone call was originally in connection with
an entirely different matter. Lady Hastings is connected with a well-known firm
of auctioneers, and the defendant had in fact entrusted some items, I think
some paintings, to her for sale, but they had not been sold. In March the
defendant telephoned Lady Hastings to ask effectively that the items should be
put into a sale. The telephone call was made to the office from which she
operates, but because her secretary was engaged on another line Lady Hastings,
although she was engaged with a client, took the call herself. It would seem that
in the course of that call Mr Harris raised the question of his being able to
stay on the land, but even on the defendant’s own version of the conversation
he was not saying that he had been promised any right to stay on the land, and
the main burden of the conversation seems to have been that the defendant was
asking Lady Hastings whether, even if he could not stay on on the land, could
he at any rate stay in the house, which after all had been his home and the
home of his family for many years. Lady Hastings said that that was a matter
which was out of her hands; it was really a matter to be dealt with by Mr
Thompson, and that the defendant would have to see Mr Thompson about it. Lady
Hastings recalls that in the course of her conversation the defendant did
complain about the way he had been treated by the estate, saying he had been
picked upon and so on; but she denied that the defendant had said words to the
effect that Mr Thompson had had a knife at his back, or ‘his knife in me’, or
anything like that.
In relation to
this conversation it seems to me that it re-emphasises and supports the view I
have already reached, that Mr Harris did not, even as late as March 1988, think
he had any right or any legal right to stay on the land. The request to stay on
in the house if he could not stay on the land is more consistent, it seems to
me, with at the most merely a hope on his part that he might still nevertheless
be able to stay on the land, although I think it must be that by this stage he
could not realistically and reasonably have thought that that was the position
after having received the letter from Hegarty & Co in January or indeed
after Mr Thompson’s visit.
The result,
therefore, in my judgment, is that the defendant fails to establish that he was
granted any right to remain on in the premises after the expiration of the
notice to quit; and accordingly it must follow, in my judgment, that the
plaintiffs are entitled to possession of the land.
