Agricultural Holdings Act 1948, section 2(1)–Status of occupier who claimed to be a tenant, but was originally alleged to be a trespasser, subsequently asserted to be a contractor, and finally held by Court of Appeal to be a licensee for value–Issue on the pleadings before the trial judge confined to whether the occupier entered on the land as a contractor or tenant–Question whether he was a contractual licensee not then discussed–On appeal by the occupier from the deputy High Court judge’s order for possession, Court of Appeal gave leave to amend his pleading to raise the issue as to whether he was a contractual licensee who could claim the benefit of section 2(1) of the 1948 Act–Court of Appeal held that, without sending the case back for a further hearing they could draw the inference that the present appellant had been let into possession as a licensee for value, the consideration being his undertaking to clear up the land–He accordingly became a tenant from year to year by virtue of section 2(1) and his appeal against the possession order must be allowed, but, for reasons which are clear from the report, not with costs
This was an
appeal by Arthur Ernest Farrow, defendant, from a decision of Vivian Price QC,
sitting as a deputy High Court judge in the Chancery Division, granting an
order for possession and mesne profits to the plaintiffs, Harry Edward Mitton
and Harold Elijah Bradfield, executors of the will of Archer Harvey Arnold,
deceased. The action related to about 108 acres of agricultural land at Hessett
in Suffolk which had been owned by the deceased.
Sir Frederick
Corfield QC and Jonathan Haworth (instructed by White & Leonard, agents for
Taylors, of Newmarket) appeared on behalf of the appellant: Michael Essayan QC
and D J T Parry (instructed by Kenwright & Cox, agents for Gudgeons,
Peacock & Prentiss, of Stowmarket) represented the respondents.
Giving
judgment, BUCKLEY LJ said: This is an appeal from a judgment of Mr Vivian Price
QC, sitting as a deputy judge of the Chancery Division on April 10 1979, in an
action relating to approximately 108 acres of agricultural land at Hessett in
Suffolk. The land was owned at the time of his death in fee simple by one
Arnold, who died on June 18 1974. The plaintiffs are the executors of his will,
who have obtained probate; the defendant is in occupation of the land.
On July 2 1975
the plaintiffs issued a writ against the defendant claiming possession of the
land. The learned judge held in favour of the plaintiffs, making an order for
possession, with mesne profits. It is against that decision that the present
appeal is brought.
The plaintiffs
sued the defendant on the footing that he was a trespasser. Paragraph 2 of the
amended statement of claim is in the following terms:
On or about
June 6 1974 the defendant unlawfully and without the consent of the deceased
entered and took possession of the said land and has thereafter wrongfully
remained in possession thereof.
Paragraph 2 of
the amended defence was to this effect:
By an oral
agreement made between the deceased, one William Norman Valentine, and the
defendant on or about May 29 1974 the deceased and/or the said William Norman
Valentine let to the defendant the said land for a term of three years from the
said date, the first year to be rent free and the rent for the second year to
be £5 per acre and for the third year £10 per acre.
So the issue
between the parties on the pleadings at the trial was whether the defendant was
a trespasser or a tenant.
Notwithstanding
the form of the terms of the paragraph of the defence which I have read, it is
clear on the evidence and from the learned judge’s judgment that Mr Arnold and
the defendant, Mr Farrow, were the only parties to the relevant conversation,
in the course of which it is suggested that the alleged oral agreement was
reached. As I have said, Mr Arnold unhappily died on June 18 1974, so that he
was not available at the trial to give any evidence as to what then took place.
The judge rightly directed himself that in such circumstances, Mr Arnold being
dead, he must scrutinise the evidence with reference to the alleged oral
agreement with particular care.
The land was
at this time in a derelict condition; it had not been farmed at all for a
number of years–at least four years and possibly as much as 14 years; it was in
a ruinous state. Apparently Mr Valentine owned a neighbouring piece of land in
relation to which he had planning permission for the erection of a house upon
that land. He may also have had an interest in minerals underlying part of the
108 acres, and it would seem that it was because of his interest in those
minerals that some doubt arose as to whether the lessors, or the proposed
lessors, of the land to Mr Farrow were to be Mr Arnold himself or Mr Arnold and
Mr Valentine, but I do not think at this stage anything really turns upon that
obscurity.
Mr Farrow’s
story, put shortly, is to the following effect, that Mr Arnold came to him and
said that he was anxious to have the land restored to a sound agricultural
condition, and that on May 29 1974 Mr Arnold agreed to let the land to Mr
Farrow rent free until Mr Farrow had cleaned it and then at a rent of £5 per
annum for one year and £10 per annum thereafter.
It is common
ground that Mr Farrow entered upon the land on June 6 1974 with machinery and
equipment for the purpose of reclaiming the land and putting it back into a
good agricultural state, and that he then began setting about that work. He has
remained in occupation ever since. The learned judge found as a fact that Mr
Farrow entered on the disputed land with his equipment to the knowledge of, and
with the consent of, Mr Arnold, and that he did so well before June 18 1974.
When the
matter came to trial the case was not presented on the plaintiffs’ behalf upon
the basis of the defendant being a trespasser; it was asserted on their behalf
that he had gone on to the land as a contractor to carry out the work of
reclamation. But, as the learned judge said in his judgment, there was no
cogent evidence–indeed, there was virtually
. . I do not accept that Mr Farrow entered upon the land as a trespasser. Nor
does it seem to me that there is any cogent evidence adduced before me to
support the assertion that Mr Farrow entered upon the land as a contractor
hired by Mr Arnold to clear it.’ The
judge held that Mr Farrow had not established any oral agreement for a tenancy;
the way in which he expressed it at the end of his judgment was this: ‘I am
not, therefore, satisfied on the evidence that there was an oral agreement
between Mr Farrow and Mr Arnold as alleged or at all.’ He made that remark in the context of a trial
in which the issue had been, as I have said, whether Mr Farrow was a tenant or
whether he was a contractor. In my judgment that sentence is not to be read as
expressing any conclusion by the learned judge upon any question of whether Mr
Farrow was in as a licensee or, if he were so, what the terms of the licence
were. If Mr Farrow was not a trespasser, was not a contractor and was not a
tenant, it seems to me that the only inference which can be drawn from that
state of affairs is that in the circumstances of this case he was in occupation
as a licensee of some kind. This, however, was not pleaded at all; nor was any
argument addressed to the learned judge upon that aspect of the case, beyond
this, that in the course of his speech to the learned judge after he had closed
his case, Sir Frederick Corfield, for Mr Farrow, said: ‘It has not been argued
that the defendant was a licensee, but even if he were, he would be
protected’–that is to say, he would be protected by the provisions of the
Agricultural Holdings Act 1948. As I understand it, that brief and passing
reference was the only mention of a licence throughout the trial.
But this
appeal has been fought upon the ground that Mr Farrow had in the circumstances
been granted such a licence to occupy the land for use as agricultural land as
is referred to in section 2(1) of the Agricultural Holdings Act 1948. Section
1(1) of that Act provides as follows:
In this Act
the expression ‘agricultural holding’ means the aggregate of the agricultural
land comprised in a contract of tenancy, not being a contract under which the
said land is let to the tenant during his continuance in any office,
appointment or employment held under the landlord.
Section 2
provides, in subsection (1):
Subject to
the provisions of this section, where under an agreement made on or after the
first day of March, nineteen hundred and forty-eight, any land is let to a
person for use as agricultural land for an interest less than a tenancy from
year to year, or a person is granted a licence to occupy land for use as
agricultural land, and the circumstances are such that if his interest were a
tenancy from year to year he would in respect of that land be the tenant of an
agricultural holding, then, unless the letting or grant was approved by the
Minister before the agreement was entered into, the agreement shall take
effect, with necessary modifications, as if it were an agreement for the
letting of the land for a tenancy from year to year.
Then there is
a proviso, which deals particularly with lettings for grazing or mowing for
periods of less than a year; we are not concerned with those.
Subsection (2)
of section 2 provides:
Any dispute
arising as to the operation of the foregoing subsection in relation to any agreement
shall be determined by arbitration under this Act.
I do not think
I need refer to section 3.
Section 5
contains provisions for securing written tenancy agreements and is in the
following terms:
Where there
is not in force in respect of a tenancy of an agricultural holding, whether
created before or after the commencement of this Act, an agreement in writing
embodying the terms of the tenancy, or there is such an agreement in force but
it contains no provision for one or more of the matters specified in the First
Schedule to this Act, the landlord or the tenant of the holding may, if he has
requested his tenant or landlord to enter into such an agreement containing
provision for all of the said matters but no such agreement has been concluded,
refer the terms of the tenancy to arbitration under this Act.
(2) On any such reference the arbitrator shall by
his award specify the existing terms of the tenancy, subject to any variations
thereof agreed between the landlord and the tenant, and, in so far as those
terms as so varied make no provision therefor and do not make provision
inconsistent therewith, make provision for all the matters specified in the
First Schedule to this Act having such effect as may be agreed between the
landlord and the tenant or, in default of agreement, as appears to the
arbitrator to be reasonable and just between the landlord and the tenant.
(3) On any such arbitration the arbitrator may
include in his award any further provisions relating to the tenancy which may
be agreed between the landlord and the tenant.
Schedule 1
sets out a list of nine matters in respect of which provision is to be made in
written tenancy agreements, the first four of which relate to what are always
regarded as essential terms in any tenancy agreement; they are:
1. The names
of the parties.
2.
Particulars of the holding with sufficient description, by reference to a map
or plan, of the fields and other parcels of land comprised therein to indentify
the extent of the holding.
3. The term
or terms for which the holding or different parts thereof is or are agreed to
be let.
4. The rent
reserved and the dates on which it is payable.
I need not read
the remaining five paragraphs.
I do not
propose to read section 8, but merely to mention the fact that it contains
provisions for arbitration on terms of tenancies as to rent.
These sections
were brought to the notice of the learned judge at the trial; we were told that
they were all read to him, not only by counsel for the plaintiffs but also by
counsel for the defendant. That was because in the lower court Mr Farrow was
relying on section 2(1) on the basis that the land had in fact been let to him
and that he was a tenant. No reliance was placed on the licence provisions in
section 2(1), except by the passing reference which I have already mentioned.
It is not surprising, therefore, that that provision was not in the forefront
of the judge’s mind when he came to deliver judgment and that he made no
reference to it; but, as I have said, in this court that provision has been the
basis of the appellant’s argument.
It is evident
that Mr Arnold, Mr Farrow and Mr Valentine were all well acquainted with one
another, and the transactions which passed between them relevant to the matters
with which we are concerned all seem to have been conducted with the greatest
degree of informality. Mr Farrow’s evidence about what exactly was agreed was
very confused. Mr Valentine was called on behalf of Mr Farrow, and his
evidence, so far as it was admissible (for it was very largely hearsay
evidence, but it may be that it was admissible hearsay because Mr Arnold was
dead and Mr Arnold was the source of very much of Mr Valentine’s evidence) was
also very confused. The judge rightly treated the burden of proof in
establishing the defence as resting on Mr Farrow. He said: ‘In order to
establish that there was a binding contract between himself and Mr Arnold, Mr
Farrow in my judgment must show that the terms of that contract were clearly
defined and clearly agreed. Without such evidence Mr Farrow must fail, since no
contract can be asserted in a court of law unless its terms are clearly defined
and clearly agreed.’ Having regard to
the terms of section 5 of the Act, I think that may be putting the matter too
high. It is true that section 5 postulates the existence of a tenancy of an
agricultural holding. Under the general law a tenancy imports a concluded
contract between the parties whereby all the essential terms are agreed, but it
seems to me at least arguable that, having regard to section 5(2) and the
matters to be found in the First Schedule, particularly paragraphs 1 to 4 which
I have read, this may not be in all respects essential for the purposes of
section 5 of the Act, but I do not think it is necessary to decide that in the
present case.
The finding
that there was no oral tenancy agreement is not now disputed. In Goldsack
v Shore [1950] 1 KB 708 this court held that a gratuitous licence was
not sufficient to
which had been given by the plaintiff to the defendant for the defendant to
graze his sheep on a mountain in Denbighshire. The plaintiff alleged in his
particulars of claim that he had granted such permission without consideration.
The defendant by his defence pleaded that he had a tenancy from year to year.
The plaintiff gave evidence which, if accepted, established that he had
gratuitously granted a licence to the defendant to place his sheep on the
mountain and that he had subsequently revoked the licence; and that despite
that revocation the plaintiff had continued to graze his sheep on the land. At
the close of the plaintiff’s case the county court judge stopped the case on
the following basis; I quote from the county court judge’s judgment: ‘From what
I have heard it would appear that the plaintiff at least agreed to grant the
defendant a licence. This is one of the situations mentioned in section 2(1) of
the Act. I hold that section 2(2) applies and that I have no jurisdiction to
try the issue.’
This court
held that the county court had jurisdiction to decide whether or not the case
fell within the section; only if the case fell within the section was the
court’s jurisdiction ousted in favour of the arbitrator. This court could,
perhaps, have stopped at that point without deciding anything further, sending
the matter back to the county court judge to hear and determine the issue
whether the facts of the case were such that section 2(1) did or did not apply.
But the court went on to consider the question whether a voluntary licence was
one to which the section did apply, and held that to fall within the section
the licence must be supported by consideration moving from the grantee. The
case was accordingly remitted to the county court judge to decide whether there
was such a licence in that case, or whether there was a licence to which the
section applied. I think this court clearly intended to decide that further
question, the question about the applicability of section 2(1) to a voluntary
licence, and in my judgment that decision is binding upon us in that respect.
Accordingly, I
proceed upon the basis that section 2(1) does not apply in the present case
unless Mr Farrow was in occupation of the land as a licensee under an agreement
supported by consideration. That question was, through no fault of the learned
deputy judge, not considered and not decided below; nor was it supported by the
defendant’s pleading in any way. But the defendant now seeks leave to amend the
defence by the introduction of the following additional paragraph:
(3A) Alternatively on or about the said date the
deceased granted to the defendant a licence for his exclusive occupation of the
said land for use as agricultural land in consideration of the defendant’s
entering and working upon the said land with a view to the cleaning thereof. On
or about June 6 1974 in pursuance of the said licence the defendant entered and
worked the said land, whereby he became a licensee thereof for value. In the
premises by reason of section 2 of the Agricultural Holdings Act 1948 the said
licence took effect as if it were an agreement for the letting of the said land
for a tenancy from year to year, and the defendant is the lawful tenant of the
said land.
The plaintiffs
resist the application for leave to amend, saying that it would be unfair at
this stage to allow such an application and amendment, on the grounds that the
facts were particularly within the knowledge of the defendant; that they were
all available to him at the time when he framed his original defence; and that
it would be prejudicial to the plaintiffs now to allow the amendment.
The difficulty
seems to have arisen from the fact that nobody among the defendant’s advisers
seemed to have appreciated its possible significance and, as I have said, the
learned judge never applied his mind to it. At one stage of the argument I was
inclined to the view that if the amendment were allowed the case would have to
be sent back for further hearing on new issues of fact. I do not think that
that could be a proper course. It seems to me that similar considerations would
arise in considering whether to take that course as must arise when this court
is asked to admit further evidence on the hearing of an appeal, and in the
present case if further evidence were of relevance that further evidence would
have been evidence which would have been available to the defendant at the time
when the matter was before the learned judge, and the point is one which ought
to have been raised then. On further consideration (and I hope very careful
consideration) I have changed my mind. As I have said, if Mr Farrow was not a
tenant, not a trespasser and not a contractor, he must, it seems to me, have
been a licensee and the question for consideration is whether he was a licensee
under an agreement within the meaning of the section: that is to say, was he a
licensee for consideration?
Rather similar
considerations arose in the case of Verrall v Farnes [1966] 2 All
ER 808. In that case the defendant had formerly been employed by the plaintiff
as his cowman. He was anxious to start farming on his own account and the
plaintiff was willing to assist him. The plaintiff bought a farm of some 88
acres and offered to let the defendant into possession of 75 acres of those 88
acres for a trial period of a year. The terms on which the defendant went into
possession were the outcome of oral discussions; nothing was reduced into
writing. The arrangement was that the defendant was to farm 75 acres for a year
without paying any rent and on the footing that he was to be entitled to any
profits; he was to be free to sell any of the live or dead stock which he did
not want, paying over the proceeds of sale to the plaintiff, who had bought the
live and dead stock; at the end of the year the plaintiff’s accountant was to
examine the books to see how the defendant had been doing. It was the
expectation of both parties that the defendant would remain in possession after
the end of the year, paying an appropriate rent as from the expiry of the year,
and paying the plaintiff for the live and dead stock of which he had not
disposed during the year by instalments which were suitable to his capacity to
pay. The difference between the plaintiff and the defendant in regard to the
terms agreed was this. The plaintiff said that the defendant was ‘on trial’ for
the 12 months, so that the plaintiff was to be at liberty to refuse to allow
him to become tenant or to purchase the stock; the defendant said that he
became tenant at once and owner of the stock at once, though he was not liable
to pay any rent or anything for the stock, save in so far as he might have
disposed of it, during the first 12 months. Unfortunately the parties fell out.
The plaintiff sought to recover possession from the defendant before the end of
the first 12 months, and so the action arose.
Cross J,
before whom it came, held that the defendant did not succeed in establishing an
agreement for a tenancy; he also held that the defendant could not be said to
have been the holder of any appointment, or employment, under the plaintiff so
as to be outside the provisions of the Act under section 1, and he went on to
deal with the licence position in this way at p 813 at I:
It could not
of course, be argued that the defendant’s position–once he had gone into
occupation–was that of a mere gratuitous licensee whose licence could be
terminated at any time on reasonable notice. The plaintiff was plainly obliged
to allow him to remain on the land for the twelve months’ probationary period.
Nevertheless, it was argued that there was not really any enforceable contract
between them such as would take this case out of the scope of the Goldsack
decision, since the defendant was under no obligation to the plaintiff to
remain on the land. The position was that the plaintiff having represented to
the defendant that if he went into occupation he would be allowed to remain in
occupation rent free for twelve months in order to prove his capacity, would be
estopped from going back on his word once the defendant had taken him at his
word by going into occupation; but it would be wrong, so the argument runs, to
say that there was any enforceable contract between them. Even if that were a
correct analysis of the position, I am by no means sure that the defendant
would not be in occupation under an agreement within the meaning of section
2(1) of the Act of 1948; but in fact I do not think that the arrangement was as
one-sided as the argument suggests. Once
months with the right to take any profits he could not abandon the farm and the
stock as and when he chose. At the very least he would have to give the
plaintiff reasonable notice of his intention to go out of occupation. In my
judgment, the arrangement under which the defendant was allowed to go into
occupation was a legally enforceable contract.
–and so the
judge came to the conclusion that the defendant in that case was entitled to be
treated as though he were a tenant from year to year.
In the present
case it is common ground that Mr Farrow entered on the 108 acres for the
purpose of carrying out reclamation work. There is no suggestion or hint of any
kind of any intention that Mr Farrow should be remunerated for doing that work.
No doubt, if the parties had fallen out and Mr Arnold had refused to allow him
to go on doing the work, Mr Farrow might have had some remedy against Mr Arnold
on the basis of a quantum meruit for such work as he had done; but I think it
is impossible to find any basis, or any suggestion, in the evidence that there
was an agreement that Mr Farrow should be remunerated as a contractor. It seems
to me to be inconceivable that Mr Farrow should embark gratuitously on what
must have been a very expensive exercise. The learned judge found as a fact
that a contractor would have charged as much as £138 an acre to clear the land,
so it is clear that the work upon which Mr Farrow embarked, and which in the
outcome he completed, was work of very substantial value, and expensive work.
In these
circumstances it seems to me that the only possible inference to be drawn is
that if Mr Farrow agreed to clear the land, and did so, he should have some
beneficial enjoyment of the land; that is to say, that Mr Arnold and Mr Farrow
agreed that he should be let into possession as a licensee in consideration of
his agreeing to reclaim the land at his own expense and upon the understanding,
and with a common expectation, that the parties would negotiate a tenancy
agreement and that in the meantime, pending those negotiations, Mr Farrow
should be entitled to whatever benefit he could obtain from the use of the land
for himself. If the facts and the evidence justified such a conclusion, in my
judgment it would not matter that the terms of the licence agreement may not be
capable of being more precisely spelt out; it would be clear that Mr Farrow had
gone into possession under a licence supported by consideration.
Are we, in
this court, entitled to draw such an inference?
I have given some anxious consideration to that question and I think
that we are. The only witness who could give any first-hand evidence about what
was said by Mr Arnold and Mr Farrow on May 29 was Mr Farrow himself. He gave
evidence before the learned judge about that occasion, and he was stringently
cross-examined on it. I cannot suppose that any further information could have
been extracted from Mr Farrow about that conversation, even if counsel who
cross-examined him had in mind that there might be a point about a licence, rather
than a point about a tenancy agreement, in issue. Having read the evidence, I
cannot believe that anything further could emerge now if the matter were to be
recanvassed with Mr Farrow in the witness box from that slightly different
aspect.
The question of
the effect of what was said by Mr Arnold and Mr Farrow on that occasion and
whether it amounted to a licence, and if so whether such licence was a
gratuitous licence or a licence for consideration, is in my judgment really a
question of law. If it is not strictly a question of law, it must be a question
of secondary fact arrived at by inference from the proved primary facts and I
think we are in as good a position to arrive at a conclusion on that as a judge
of first instance could be.
There is no
doubt about it that Mr Farrow was confused as to the details of the proposed
tenancy–such matters, for instance, as the date from which the tenancy would
run, the length of the period during which he was to be entitled to occupy the
land rent free and matters of that kind. But there is no doubt, I think, about
the general tenor of the conversation. Mr Farrow’s evidence about that is to be
found in the transcript of the evidence. He was asked this:
Turning to
the question of how you came to be on the Hessett land can you remember what
arrangements were made? (A) Exactly. (Q)
How did it come about? (A) One morning,
I can’t tell you what day of the week, but one morning Mr Arnold drove into the
yard, and he always wanted to know–,
and then the
witness was interrupted and a little later on he went on in these words–
He said: ‘Will
you hire it’? I said: ‘On certain
conditions.’
He said:
‘Will you state the conditions’? and I
said: ‘I want it rent free until I get it cleaned and then I will pay you £5
per acre for the first year and then £10 for the second.’ He said: ‘That’s fair enough, it’s
yours.’ I said: ‘Thank you very much, Mr
Arnold, when do I start?’ He said:
‘Today if you like.’
Mr Farrow was
of course cross-examined, but I do not think he was in any way shaken on that
part of his evidence.
Mr Valentine,
as I have said, derived his knowledge of what had then taken place only through
Mr Arnold. He said that he had had a conversation with Mr Arnold in the earlier
part of the day and these are his words:
We sat in his
car and discussed all sorts of alternatives and eventually came up with the
idea we had to farm the land, to get the land in heart, and this was the gist
of it, and then who could we get to do it. Mr Farrow and son came up and he
said he would go and see Mr Farrow and make the arrangements there and then and
get on with it. When he came back to see me at lunchtime he told me that Arthur
Farrow had agreed to it, to come in and farm the land, and what did I think
about rent. I said he would have to have it rent free for a period and
thereafter maybe £5 an acre and then £10 an acre. Then the final settlement was
rent free for the cleaning period and £5 for the second period and £10
thereafter.
The witness
was asked:
Was it
discussed at all as to whether, from the point of view of financial benefit,
giving Mr Farrow a tenancy or agreement of the nature you have indicated would
be a disadvantage? (A) If we gave Mr
Farrow a tenancy then we had no money to find, no investment to make in the
farming operation, no supervision. The word ‘contractor’ has cropped up on many
occasions, which I am immensely surprised to hear, because if a contractor had
come in that would mean somebody would have to pay the contractor and somebody
would have to do supervision, and neither Mr Arnold nor myself could ever have
attempted to do the supervision. It was a clear advantage to let Mr Farrow have
a tenancy.
Mr Valentine
was also cross-examined, but again I do not think he was shaken on that part of
his evidence.
The learned judge
expressly refrained from commenting on the veracity of the witnesses. He said:
‘A strong attack was made by the plaintiffs’ counsel on the veracity and
reliability of both these gentlemen’–that is, Mr Farrow and Mr Valentine–‘but
in the view that I take, I do not need to pronounce upon their evidence in
these respects, and I will not do so.’
But the learned judge did not reject any part of Mr Farrow’s evidence in
the sense of saying that he thought that it was untrue, or directed to
misleading the court or anything of that kind, or that it was unworthy of
credit. In these circumstances, I have come to the conclusion that we can
properly draw our own inferences from the primary facts which the learned judge
has found and from those facts which are common ground and so not in dispute.
The learned
judge drew attention to inconsistencies between Mr Farrow’s evidence and his
pleaded defence, and to inconsistency between Mr Farrow’s evidence and Mr
Valentine’s evidence, and to the lack of any conclusive evidence as to the
terms of the alleged oral contract. But he is there referring quite clearly, I
think, to the suggestion that there was a tenancy agreement, and there are
undoubtedly good grounds in the evidence for saying that the parties did not
arrive at any clear conclusion upon what the terms of the tenancy should be.
But that does not, I think, bear upon the question of whether or not any
licence under which Mr Farrow went
The conclusion
that I have reached is that Mr Farrow was let into possession, before any
tenancy had been agreed but in anticipation of such a tenancy, in consideration
of his undertaking to clean the land and for the purpose of his carrying out
works to that end. In my judgment he was let into possession as a licensee and
the grant of the licence was supported by consideration moving from him; that
is to say, his undertaking to clean the land. That the reclamation of the land
would benefit the freeholder is, I think, clear; the consideration was valuable
consideration. Mr Farrow could not have abandoned the work of reclaiming the
land without becoming liable for at least nominal damages for breach of
contract. The consideration moving from Mr Arnold to Mr Farrow was the promise
that he should have the benefit of any crops that he took off the land pending
the outcome of negotiations for a tenancy.
On those
grounds I have reached the conclusion that there was in this case a licence
within the terms of section 2(1) of the Act, and that accordingly Mr Farrow
falls to be treated for the purposes of the Act as though he had been a tenant
from year to year, and consequently the plaintiffs are not entitled to
possession of the land. I would grant leave to make the proposed amendment and
I would allow this appeal.
Agreeing, SHAW
LJ said: I respectfully agree with the conclusion stated in the judgment which
has been delivered by Buckley LJ, and with his reasons. The ultimate question
for decision in this court, after the scope of the pleading has been enlarged
by amendment is: What are the inferences which can and should be drawn in
regard to the status of the appellant as a licensee from the findings of fact
arrived at by the learned deputy judge?
He naturally
addressed himself in his judgment to the area of controversy delimited by the
pleadings as they then stood and by the contentions of counsel on either side.
He therefore considered the effect of the evidence only in relation to the
issue of whether the appellant had established the existence of a tenancy
agreement between him and Mr Arnold. Whether the appellant was a licensee and,
if he was, whether the licence had been granted for value are matters which did
not arise–not at any rate manifestly–in the context of the appellant’s case as
it was canvassed in the court below.
However, the
findings of fact which are stated by the learned deputy judge, together with
that part of the evidence which was not seriously in dispute, are in my opinion
adequate to provide a basis for determining, by inference, whether the true
status of the appellant on entering Mr Arnold’s land was that of a contractual
licensee. It seems to me further that the deputy judge’s findings lead to the
conclusion, on the balance of profitability, that the appellant entered into
the occupation of the land, not as a licensee in anticipation of a tenancy
agreement, but as a licensee for value. He was both entitled and obliged to go
on to the land, put it into good heart and to work it. He is therefore in my
view entitled to invoke the provisions of section 2 of the Agricultural
Holdings Act 1948 and to assert the consequences that flow from its operation.
That the
appellant saw himself as a tenant, a status more easily comprehensible to him
than that of a licensee, does not preclude this court, after due amendment of
the pleadings, from deciding on the facts found in the court below what his
true status was. I agree that leave should be given for the amendment sought,
and in the result I, too, would allow the appeal.
BRIGHTMAN LJ
also agreed.
The court
ordered that the appellant, although successful in the appeal, should pay the
costs both in the Court of Appeal and below. Leave was refused to the
respondents to appeal to the House of Lords.
