Agricultural holding — Unfortunate family dispute — Litigation between brother and sister — Application of section 2(1) of Agricultural Holdings Act 1948 (the Act in force at the material time) — Whether arrangement constituted an exclusive licence granted for valuable consideration — Whether equitable principle in Gascoigne v Gascoigne applied — Plaintiff’s action for possession fails — Harrison-Broadley v Smith and Bahamas International Trust Co Ltd v Threadgold considered
within family — The father, who died in 1985, had a number of agricultural
interests and it was the eventual disposition of and accession to these
interests which gave rise to the present proceedings — Four farms featured in
the chain of events, although the proceedings in court related to one farm only
— The father had made a partial distribution of his assets in 1966, as a result
of which his son, the defendant, came into possession of the tenancies of two
farms — However, the defendant, a university trained agriculturalist, was both
desirous of and capable of managing more of the family land — After the
father’s death he obtained by succession a third of the family farms, but only
following two years of protracted litigation — The fourth farm, known as Butts
Farm, the subject of the present proceedings, had been left by will to the
deceased’s daughter, the plaintiff in the present case
Butts Farm had been left by will to the plaintiff, it was in fact in the
occupation of the defendant — This was the result of a long-standing
arrangement between the defendant and his father, by which the defendant,
although not a tenant or a farming partner, had in fact carried out farming
operations on the land — He harvested and marketed the produce, retained the
proceeds of sale, and paid his father an annual sum calculated on an acreage
basis — The father towards the end of his life suffered a couple of strokes and
became incapable of managing his affairs — The defendant in the meantime
continued to farm Butts Farm
did not wish the freehold of Butts Farm, which she had inherited, to be
encumbered by an agricultural interest in favour of the defendant — Efforts to
solve the matter by agreement having failed, the plaintiff issued a writ
seeking possession — In reply the defendant claimed to hold a protected
agricultural tenancy — At first his claim as pleaded extended to the whole of
the farm, but later it was restricted to the arable acres only — This was
apparently because he was advised that he could not substantiate rights under
the Agricultural Holdings Act in relation to the pasture land
then was whether the defendant’s occupation of Butts Farm, which was supported
by consideration, amounted to a licence within the meaning of section 2(1) of
the 1948 Act, with the consequence that it took effect as if it were an
agreement for the letting of the relevant land for a tenancy from year to year
— It was contended on behalf of the plaintiff that the arrangement did not
qualify under section 2(1) on the ground that it did not confer on the
defendant an exclusive licence but only a permission to come on the land as a
manager — The judge held, however, in the light of the evidence, and after
considering the cases of Harrison-Broadley v Smith and Bahamas
International Trust Co Ltd v Threadgold, that the defendant had acquired an exclusive licence
which satisfied the provisions of section 2(1) — The judge dismissed a
suggestion that the defendant was estopped from claiming a tenancy by the
equitable doctrine exemplified in Gascoigne v Gascoigne (a party not
permitted to rely on his own default or unconscionable behaviour) — It followed
that the plaintiff’s action for possession failed — Judgment on claim and on
counterclaim for a declaration in favour of defendant
The following
cases are referred to in this report.
Bahamas
International Trust Co Ltd v Threadgold
[1974] 1 WLR 1514; [1974] 3 All ER 881; [1975] EGD 1; (1974) 47 EG 233, HL
Gascoigne v Gascoigne [1918] 1 KB 223
Harrison-Broadley v Smith [1964] 1 WLR 456; [1964] 1 All ER 867; [1964] EGD
293; (1964) 189 EG 513, CA
This was an
action by the plaintiff, Mrs Molly Elizabeth Padbury, against the defendant,
Kenneth York, for possession of a holding in the occupation of the defendant,
known as Butts Farm, Earls Barton, near Northampton. Mrs Padbury died during
the proceedings and the proceedings were continued under Ord 15, r7(2) by her
executor.
Andrew Walker
(instructed by Field Fisher Waterhouse) appeared on behalf of the plaintiff;
Jack Denbin (instructed by Bridgeman Scott & Fowler) represented the
defendant.
Giving
judgment, MR E C EVANS-LOMBE QC said: The plaintiff in these proceedings
when they were initially commenced by writ dated August 7 1987 was Molly
Elizabeth Padbury (hereafter ‘Molly’). She died on April 3 1989 and, as a
result of an order to carry on, made under Ord 15 r 7(2), the proceedings have
subsequently been continued by an executor of her estate.
Molly was the
daughter of George York, who died on May 18 1985 (hereafter ‘George’). Molly is
survived by her husband, Christopher. The defendant, Kenneth York (hereafter
‘Kenneth’), is George’s son, now some 56 years old. It follows that in these
tragic proceedings the original plaintiff and the defendant were sister and
brother. The events from which these proceedings spring are hardly in issue and
I will now set them out. The motives of the various dramatis personae
behind their actions are very much an issue.
In 1945 George
retired as the managing director of York’s Coaches Ltd in order to take up farming.
York’s Coaches was and remains a successful enterprise in which the family
retain substantial shareholdings and which is profitable, having a turnover in
the millions. In 1945 George acquired from the Northampton Estate the tenancy
of what now consists of rather more than 63 acres of land known as Longstaffs
Fields.
In 1947 George
obtained the tenancy of Roe Farm near Longstaffs Fields, some 67 1/2 acres in
extent with a farmhouse and buildings. He
In 1950 George
purchased Butts Farm, some 36 acres in extent, of which 23 acres are arable and
the remainder pasture. This farm is the subject-matter of these proceedings.
In 1961 George
obtained the tenancy from the Little Houghton Estate of a farm called Church
Farm, originally of some 250 acres but which has gradually been reduced by
gravel working and road widening to about 133 acres including a substantial
stone-built farmhouse and buildings.
Kenneth, who,
as I have said, is now 56 years of age, is a university trained
agriculturalist, latterly employed until 1962 by the Colonial Office in Fiji.
After briefly working for the Potato Marketing Board as an assessor, Kenneth
came to work for his father in 1963 and continued to do so at a wage until
1966. In that year, George made a distribution of part of his assets in favour
of his children. As a result of that distribution, Kenneth was granted a
tenancy of Roe Farm and obtained an assignment of the lease of Longstaffs
Fields from the Northampton Estate. At the same time, Kenneth was offered a
tenancy of Butts Farm but declined it because in 1966 there was available a
scheme of subsidy for small farms. Had Kenneth accepted a tenancy of Butts
Farm, the acreage under his control would have exceeded the maximum permitted
to attract this subsidy.
After 1966
Kenneth and George farmed in co-operation but not in partnership. By this I
mean that Kenneth’s farming business on the land made available to him by his
father was a separate business with separate income from the crops and
livestock produced by it, as was the business of George on the land,
principally Church Farm, retained by him. However, they co-operated in that
they shared the agricultural machinery required for their businesses; thus
there may have been one combine harvester and one corn drill belonging to
either of them, but which were used to plant and harvest the crops on both
farms. The father and son operated a system of cross-accounting whereby roughly
every six months they settled up between them the costs that each had incurred
in the farming operations on the other’s farms and a balance was paid by one to
the other. It is common ground that this system of accounting was not conducted
on a strictly commercial basis and thus no attempt was made accurately to
evaluate the value of the work that each did for the other.
In 1976 there
came into force the provisions entitling the relatives of tenants of
agricultural holdings to succeed to those tenancies now contained in Part IV of
the Agricultural Holdings Act 1986. Those provisions were of considerable
significance to Kenneth, who might have been in a position to succeed to his
father’s tenancy of Church Farm.
The next significant
event was the sudden death in 1980 of a Mr Bill Jones, a man employed by George
as tractor driver and omnium factotum. It is common ground that this
death had a severe effect on George, who was by now becoming an old man. Mr
Jones was an important link in George’s farming operation and he had to be
replaced or someone found to do his work. It seems that, thereafter, there was
a series of discussions between George and Kenneth on this subject. In these
discussions, Kenneth was pressing his father to go into partnership with him so
that their combined acreages could be farmed genuinely as one unit. Such a
reorganisation would improve Kenneth’s chances of succeeding to the tenancy of
Church Farm on the death or retirement of George. He was also pressing for a
lease of Butts Farm. It seems that George had lost interest in arable farming
but wished to continue with the cattle side of his activities.
These
discussions concluded in a meeting on October 20 1980 at which George and
Kenneth were present with a Mr David Barber who was George’s accountant and who
gave evidence before me.
Kenneth had
had a meeting with Mr Barber two days before this meeting, at which he had
urged his case for a partnership and a lease of Butts Farm. At the meeting,
George rejected both these proposals, to the great disappointment of Kenneth,
later expressed in correspondence which is before the court.
However, it
seems that shortly after this meeting George partially repented of this
decision. At a further meeting with Kenneth, alone, in the first week in
January 1981 it seems that he told Kenneth to take over and run himself the
arable acreage on Butts Farm (some 22 acres) and on Church Farm, the combined
arable acreage on those two farms being approximately 115 acres. There is much
dispute about the terms upon which George entrusted the farming of these acres
to Kenneth and his intentions in doing so. It is, however, not in dispute that
from January 1981 Kenneth assumed entire responsibility for the arable farming
on those acres, to the exclusion of George, who played no part and did not seek
to play any part in the farming operations thereafter.
George
transferred to Kenneth his remaining arable farming machinery at book value,
which, it is accepted, was substantially less than that equipment would have
fetched at a sale on the open market. Kenneth harvested and sold the arable
crops growing on those acres in the harvest year of 1981 and thereafter and
kept the proceeds of sale and accounted for them as part of his separate farming
business. Kenneth commenced paying George a sum of money, initially £35 for
each of the acres entrusted to him, which was intended to be a sum equivalent
to the rent which George was paying for each acre of Church Farm to the Little
Houghton Estate.
In the bundle
of documents before the court there appears a document carrying the date
January 26 1982. The original of this document was produced in court. It is
accepted that it is a composite document forming a partial record of what
Kenneth and George agreed at their meeting in early January 1981. On the
left-hand side in the handwriting of Kenneth appears a list of the arable
equipment being transferred to him by his father, together with the value at
which those items were transferred. On the right-hand side in the writing of
George (it seems) added at a later date and in blue biro is set out a
calculation for an amount payable at the rate of £35 per acre on 23.7 acres of
land at Earls Barton (ie Butts Farm), namely £829.50 and 91.3 acres of land at
Little Houghton (ie Church Farm), namely £3,195.50; the total being £4,025.
In the same
bundle there is a copy of a document in Kenneth’s handwriting recording the
settlement up between himself and his father for the harvest year of 1980. It
seems clear from this document that the process of settlement proceeded through
three stages, but it is also clear that the figure of £4,025 was taken into
account in this process of settlement as being an amount payable by Kenneth to
George.
In evidence
were extracts from Kenneth’s cashbook. The relevant pages show a payment of
£4,025 described as ‘rent’ for the year in question. Also in evidence were the
accountants’ working papers of Coopers & Lybrand who prepared Kenneth’s
accounts. An extract from those working papers demonstrates that this sum of
£4,025 was, presumably on the instructions of Kenneth, to be treated in his
accounts not as a charge to rent but as a charge to feeding stuffs and included
in a much larger sum under the latter heading. Kenneth’s evidence-in-chief was
given by means of a written statement provided to the court and to the
defendant, as is the modern practice. Describing his father’s accounts for the
years 1981 and 1982 at para 27, the following passage appears in that
statement:
For the year
ending September 30 1981 I believe the rental entry for Butts Farm is included
in the figure for sales of £50,705. Similarly for September 30 1982 Butts Farm
rent is hidden in the figure for general sales, £42,746. Father’s accountant
David Barber was fully aware rent was being paid in respect of Butts Farm but I
believe that for father’s sake he included the rent as earned income rather
than unearned income because of the additional tax burden of investment income
surcharge.
If George by
the arrangement in early June 1981 handed over to Kenneth complete control of
the arable acres including those comprised in Church Farm, he would have been
acting in breach of the covenant restricting subletting or parting with
possession of any part of Church Farm contained in the lease to him by the
Little Houghton Estate. Such a breach would have entitled the landlord to bring
proceedings for forfeiture. There was a clear incentive, therefore, for both
Kenneth and George to seek to conceal from the Little Houghton Estate the changed
arrangements under which the Church Farm land was being farmed, if there had
been such a surrender of control by George. That all parties were alert to this
problem is emphasised by a letter from Fisher & Co, agents for the Little
Houghton Estate, to Mr Barber, dated November 4 1982 and the reply to that
letter which was written by solicitors then acting for the Yorks, dated May 25
1983. Mr Barber gave evidence before me, in which he was concerned to emphasise
that it was not George’s intention to mislead the Little Houghton Estate nor to
put at risk his tenancy of Church Farm. Kenneth said in evidence that the
description of the debit of £4,025 was changed deliberately in order to avoid
the Little Houghton Estate being alerted to the change in control of the arable
land on Church Farm.
George
continued, after the arrangements of early January 1981, to pay all the rent
due for Church Farm to the landlords. When in 1982 the Church Farm rent was
increased, the payments made by Kenneth in respect of the 115 acres of arable
land were similarly increased.
In October
1982 George suffered a relatively mild stroke. It is not in issue that prior to
this stroke, although becoming an old man and being somewhat forgetful from
time to time, he was competent to take decisions about his own affairs, which
he was able to appreciate. It is also common ground that after his stroke,
although remaining very physically fit for a man of his age, he could not be
trusted to deal with his affairs sensibly. Accordingly, Mr Barber was given
certain powers to deal with his affairs, in particular the signing of cheques.
In April 1983
George suffered a second and much more serious stroke. Thereafter he required
continuous nursing. An application was made to the Court of Protection with
relation to his affairs and Kenneth and Molly were appointed his joint
receivers.
On May 18 1985
George died. Consequentially upon his death an application was made by Kenneth
on August 2 1985 to the agricultural land tribunal to succeed to George’s tenancy
of Church Farm. After protracted litigation extending over a period of some two
years, that application was ultimately successful.
There is an
issue between the parties as to the precise time at which the dispute between
Kenneth and Molly came into the open. It is at any rate clear that this took
place in mid to late 1983. It is also clear that Kenneth and Molly had at all
material times been aware of the contents of George’s will, made some time
prior to his death. By that will, he, inter alia, left Butts Farm in fee
simple to Molly. The dispute arose because Molly did not wish that fee simple
to be encumbered in whole or in part with an agricultural tenancy in favour of
Kenneth.
Mr Read, the
senior partner in Sharman Jackson & Arthur, solicitors instructed for the
purpose of the Court of Protection proceedings and thereafter to deal with the
estate of George, described his efforts to settle the dispute between brother
and sister by consent. Those efforts proved unsuccessful. Meanwhile, Kenneth
continued to farm Butts Farm.
On August 7
1987 a writ was issued on behalf of Molly claiming possession from Kenneth of
Butts Farm, together with damages.
On September
22 1987 an amended defence was filed in the proceedings, setting up an
agricultural tenancy of the whole of Butts Farm, including the pasture, as a
defence to the claim for possession. However, it was later apparently accepted
on Kenneth’s behalf that the arrangement pleaded with relation to the pasture
did not confer a right of occupation to which the statutory protection could
attach, and accordingly the case has proceeded before me on the basis that
possession is resisted only as to the arable land of Butts Farm. Because in
order to make good his defence the burden rested upon Kenneth to establish an
agricultural tenancy, the case before me was opened by counsel for the
defendant Kenneth.
As I have
said, what actually happened with relation to the Butts Farm land as opposed to
the motive or motives behind the various dramatis personae is not
substantially in issue. The material events are that in January 1981 Kenneth
took over arable operations on Butts Farm, extending to the rather more than 23
acres of arable land. Thereafter he harvested and sold the produce of those
operations and retained the proceeds of sale in his business. For this he paid
his father George a sum calculated on an acreage basis, which was initially £35
an acre and was subsequently increased when the rent of Church Farm was
increased by the landlords of that farm. This arrangement, although between
father and son, was, in my judgment, contractual in the sense that the parties
intended legal relations to result therefrom. Indeed I do not understand this
proposition to be contested on the part of the plaintiff.
Mr Barber said
in evidence that, in the negotiations between father and son which led up to
the meetings on October 20 1980 and early January 1981, he was concerned to see
that George got a reasonable return from the arable acres which he was giving
up. It follows from this that Kenneth had, as against George, his father, a
right by contract to occupy the arable land, including the Butts Farm arable,
supported by consideration. The vital question, therefore, is whether that
contractual arrangement conferred upon Kenneth a licence attracting the
protection of the Agricultural Holdings Acts. The relevant provisions for the
purpose of this action are section 2(1) of the Agricultural Holdings Act 1948,
which do not differ in any material respect from the provisions of section 2 of
the Agricultural Holdings Act 1986.
Section 2(1)
of the 1948 Act provides as follows:
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 the necessary modifications, as if it were an agreement for the
letting of the land for a tenancy from year to year:
Such a tenancy
from year to year would attract the special protection of the Act.
There is a
substantial issue between the parties as to what George’s intentions were when
he entered into the new arrangements with relation to the arable land at his
meeting with Kenneth in the first week of January 1981 and, in particular,
whether or not he intended to constitute Kenneth an agricultural tenant of the
land as a result. It is, however, conceded that if the effect of his actions
was to confer on Kenneth a licence within the meaning of section 2(1) of the
1948 Act his intentions are irrelevant to the result.
In Harrison-Broadley
v Smith [1964] 1 WLR 456 there appears the following passage in the
judgment of Harman LJ at p 464. This was a case where possession was being
sought in respect of land which had been farmed by a partnership consisting of
the freehold owner and another, and possession was sought on dissolution of
that partnership. Harman LJ says at p 464:
Thus it is
said that the partnership was a person having a licence to occupy the land for
use as agricultural land. It was certainly for use as agricultural land, and
the question is whether the partnership had the right as a partnership to
occupy the land. The effect of its occupancy is said to be that it becomes a
tenant of the land, and you therefore arrive at this extraordinary position,
that the second plaintiff has created a tenancy in favour of herself and the
defendant so that she is both landlord and tenant. When you produce a result as
bizarre as that, it is time to pause and consider whether the statute really
obliges you to do so. Furthermore, this is not, I think, really a licence to
the partnership, because I cannot give myself a licence, and I think I cannot
give myself a licence jointly with somebody else, for I already have a right to
go on the land, and it is tautologous to talk of myself as allowing myself to
go on my own property. It seems to me that the section cannot operate in
circumstances of this kind. In other words, the person to whom the licence is
granted must be somebody other than the grantor of the licence. In other words
again, it means that the person to whom the licence is granted will have the
right to exclude the grantor of the licence from the land, as any other tenant
has a right to exclude his landlord for the purposes for which the tenancy is
made. If it is a tenancy, that is to say, something giving the grantee the
right to exclude the grantor from the land for farming purposes, that results
in the anomaly that the defendant and the second plaintiff can exclude the
second plaintiff as landlord though she may come on the land as tenant; and the
result is really so bizarre and ridiculous that I think, even without the
proviso, which might have helped in this respect if it had been available, one
cannot hold that what is aimed at in the section is a circumstance of this
sort, where A, being the owner of the land, takes somebody else into
partnership in the way that the second plaintiff has done. If so, it is a trap
into which she has fallen. On the whole, I think she has not; and the result
(as I say) of the reading of the section which the judge has adopted seems to
me so strange that we ought not to adopt it if we can get on without it, and I
think we can, because I think that the licence must be limited to a licence not
to a manager, not to an agent, but to some outside person, not to the grantor him
or herself.
Later in the
case, Davies LJ said at p 470:
But, in my
judgment, one cannot give a licence to oneself to occupy one’s own land. There
cannot be a licence to occupy land for use as agricultural land if the licensor
remains in occupation for the same purpose. This is really the same as saying
that there cannot be such a licence without a right of exclusive occupation
during the currency of the licence in the licensee as against the licensor for
that purpose.
In the speech
of Lord Diplock in Bahamas International Trust Co Ltd v Threadgold
[1974] 1 WLR 1514 at p 1527 the following passage appears:
Clause 3 is
the only clause of this unique agreement which allows Mr Threadgold to make any
use of Sycamore Farm and the adjoining block of land for agricultural purposes.
Upon its true construction the licence thereby granted is non-exclusive. It
gives him no right to prevent the freeholders themselves or other licensees of
theirs from making whatever contemporaneous use of the land for agricultural purposes
they think fit so long as this would leave enough grazing for whatever numbers
of Mr Threadgold’s original dairy herd were still remaining on the land as the
licence ran its course until October 31, 1959.
To come
within section 2(1) of the Agricultural Holdings Act 1948 the licence granted
under an agreement must be a ‘licence to occupy land for use as
agricultural land’. To satisfy this requirement the right of occupation for
agricultural purposes must be an exclusive right under which the grantee is
entitled to prevent the grantor and any other person authorised by the grantor
from making any use of the land, at any rate for agricultural purposes, during
the period of the grant. The application of section 2(1) of the Act to licences
to occupy land for use as agricultural land was, in my view, correctly stated
by
where he said: ‘. . . there cannot be such a licence without a right of
exclusive occupation during the currency of the licence in the licensee as
against the licensor for that purpose.’
The vital
words of section 2(1) are ‘where . . . a person is granted a licence to occupy
land for use as agricultural land’.
In my
judgment, in the light of the authorities which I have cited, those words are
to be construed as meaning that where the agreement in question has the effect
of conferring on the grantee party a right to exclude the grantor otherwise
entitled to possession from agricultural exploitation of the land, the
provisions of the subsection are satisfied and the agreement attracts the
protection of the Act.
The plaintiff
contends that the arrangement of early January 1981 did not confer on Kenneth
an exclusive licence for agricultural purposes but simply a licence to come on
the arable land as George’s manager, and the arrangements which emerge from the
parties’ subsequent practice as to the cultivation and cropping of that land
were simply an idiosyncratic means whereby Kenneth was paid for those
managerial services.
I bear very
much in mind the caution with which courts must approach evidence of
contractual arrangements made between parties, one of whom is dead and in
respect of which no evidence is available from the deceased party’s side as to
the precise terms of the agreement. However, bearing that in mind, I find it
very difficult to accept the submission. Albeit that this was an arrangement
between father and son, it seems to me entirely inconsistent with such
conclusion, as seems to be confirmed by the documents, that George was to be
paid on an acreage basis whereas Kenneth was to retain the profits or meet the
losses resulting from agricultural operations on the land after making those
fixed payments to George.
It is accepted
for the plaintiff that such criticism might well properly be made if what was
proposed was a contract of management between third parties but is not so
strange when one bears in mind that this arrangement was between father and
son. However, it seems to me to be important in this context to bear in mind that
the uncontested evidence is that the father went out of his way to keep his
agricultural business separate from that of his son, refusing him a partnership
when such would have assisted his son’s prospects of succeeding to his father’s
tenancy.
Mr Barber gave
evidence for the plaintiff, his evidence-in-chief also being given by means of
an exchanged statement. At para 17 of that statement, in describing his
involvement in the preparation of George’s accounts, he says:
My
involvement in assisting with these calculations arose entirely from
instructions given to me by George and, from those instructions, I was sure
that George York considered that the arrangement was such that his son was
farming on a subcontract basis both in relation to arable land at Church Farm
and Butts Farm and the grassland at both farms. My view on this is strengthened
by the fact that I was constantly made aware of George York’s concern that his
son would not act in any way that would jeopardise George’s tenancy of Church
Farm. George York was fearful that this would occur if he allowed Ken York to
farm on his own account.
Mr Barber
expanded on that passage in oral evidence which he gave. As I understood his
use of the word ‘subcontract’, he meant that Kenneth was at all material times
cultivating the arable land as a contractor for George, as he understood
George’s instructions to him.
It seems to me
that the unchallenged evidence of what happened on the ground is even more
inconsistent with the idea that Kenneth was acting as an agricultural
contractor than the idea that he was acting as a manager. In no sense were his
agricultural operations on the arable land separately contracted for and paid
for by George.
In my
judgment, subject to the point with which I will now deal, I am satisfied that
the licence given to Kenneth as a result of his meeting with George in early
January 1981 was a licence which attracted the provisions of section 2(1) of
the 1948 Act.
Mr Walker’s
second main submission on behalf of the plaintiff was based on the line of
authorities of which the leading case is Gascoigne v Gascoigne
[1918] 1 KB 223. The principle enshrined in that case and in subsequent cases
is that the court will not permit a party to advance a contention of fact which
results in that party admitting that he has been guilty of some breach of the
law or unconscionable dealing, to which, as a matter of public policy, the
court will not turn a blind eye.
It was said
that the defendant was in this case, in effect, estopped from contending that
he was an agricultural tenant of the arable land at Butts Farm on two grounds.
The first ground was that, if such were the case, he would necessarily have
been involved with George in a conspiracy to defraud the Revenue by assisting
George to pass off money paid as rent as money resulting from sales of produce.
In my judgment, notwithstanding the passage from the evidence of Kenneth, which
I have quoted earlier in this judgment, there was no evidence that Kenneth was
involved in any intention to defraud the Revenue as opposed to a concealment
from the landlords of Church Farm that George had parted with possession of the
Church Farm arable land. It is of note that what George was in fact receiving
from Kenneth were payments which indemnified him against the payments which he,
George, had to make as rent for the Church Farm arable land.
The second
ground was that the contention that an exclusive licence had been granted
necessarily involved a breach of the covenants in the lease of Church Farm, a
breach which, on Kenneth’s evidence, he and George were concerned to conceal
from the landlords of that farm by misrepresenting the nature of the payments
by Kenneth to George in both their accounts. The first point to be made against
this contention is that I am concerned here with the licence granted over the
arable land of Butts Farm in respect of which George was the freehold owner and
able to give an exclusive licence without any breach of covenant. Second, it
seems to me that I am concerned with what the parties actually did on the
ground and, on the evidence before me, I have found that, whatever George’s
intentions were, what he actually did was to give his son an exclusive licence
for agricultural purposes on the arable land of both Church and Butts Farms.
That may have created a situation where the landlords could have launched
proceedings for the forfeiture of the lease of Church Farm. It does not follow
that those proceedings would necessarily have been successful, ie that George
could not have obtained relief, but, more importantly, it follows that Kenneth
is able to make his case as to an exclusive licence of Butts Farm without
having to have recourse to establishing the nature of the licence under which
he farmed the Church Farm arable acres.
Third, there
does not seem to be any indication that the accounts were used as a means to
deceive the landlords of Church Farm. Such accounts would not in the normal way
come to their attention. They might be expected to come to the landlords’
attention if an application was launched, as subsequently happened, for
succession to the tenancy; but at the time of the arrangement the evidence is
that George was not contemplating and was not prepared to co-operate with any
such application. When the application was launched, Kenneth does not seem to
have attempted to conceal what he now maintains to be the position. In his
statement of evidence to the tribunal he says:
From January
1 1981 I was effectively farming all the land entirely on my own account, with
the exception of the grassland at Church Farm and the grassland at Butts Farm
on which my father ran his cattle until he gave up in the Winter of 1982/83,
and from then on I farmed all the land on my own account, receiving the
proceeds of the arable, the grassland and the livestock enterprises generally.
I gave up pigs in about 1982/83.
For these
reasons, in my judgment, the principle in the case of Gascoigne v Gascoigne
does not stand in the way of Kenneth’s contention, which I find otherwise to be
well founded, that the arrangement under which he occupied the 23 acres of
arable land on Butts Farm attracted the protection of section 2(1) of the 1948
Act. It follows that, in my judgment, the plaintiff’s action fails and the
defendant’s counterclaim succeeds to the extent that he is entitled to the
declaration contained in para 1 of the prayer of the counterclaim.
Judgment was
given for the defendant with costs.
