Agricultural Holdings Act 1948, section 2 — Whether arrangements constituted a 364-day tenancy or licence for grazing within the proviso to section 2(1) of the 1948 Act or whether they created a fully protected tenancy of an agricultural holding — Effect of town clerk’s reassurance to male tenant in response to the latter’s concern about his security of tenure — ‘Don’t worry. You worry too much’ — Form of agreement had on the face of it been an agreement for 364-day tenancy or licence only, but it contained some ‘curiosities’ which suggested a yearly tenancy — Town clerk’s reassurance held by judge to have been given in the course of a conversation which was contractual and to have conferred a yearly protected agricultural tenancy on the tenants — Held also that the ‘curiosities’ in the agreement and subsequent events, such as renewal without any break in occupation and quarterly rent receipts covering a complete year, supported the view that the tenancy was a yearly one and that the proviso to section 2(1) of the 1948 Act did not apply — Judgment in favour of the tenants — Case which ‘should have been settled’
The plaintiffs
in this case were the South West Water Authority, successors in title to
Plymouth Corporation, and owners of 3,895 acres of agricultural land at
Walkhampton Common in Devon. The plaintiffs claimed possession of the land from
the defendants, Ernest Frederick Palmer and Betty Eve Palmer, on the basis that
a 364-day grazing tenancy or licence had been duly determined and the
defendants had no protection.
Seddon Cripps
(instructed by Q L Gray, South West Water Authority) appeared on behalf of the
plaintiffs; the defendants appeared in person.
Giving
judgment, COMYN J said: This agricultural case should, in my view, have been
settled long ago and could be settled even still. I will expand on those views
in a moment when I have given an outline of what the case is about.
It concerns
3,895 acres of what is undoubtedly agricultural land, but of very poor quality,
being entirely moorland. It is situated at Walkhampton Common in Devon and
surrounds a very large reservoir, for which it is a catchment area. The
plaintiffs, the South West Water Authority, are the owner-landlords, having
succeeded to the property from Plymouth Corporation on April 1 1974. They claim
possession of the land on the determination of an alleged 364-day grazing and
mowing tenancy or licence. In this context the words ‘tenancy’ and ‘licence’
are interchangeable and either is appropriate. The defendants-tenants resist
the claim and say that they are protected agricultural tenants. They live in a
26-acre holding of their own nearby and the male defendant has been associated
with the land in question for over 40 years with not a single complaint against
him and indeed, from the Plymouth Corporation, much praise for him.
The plaintiffs
frankly state that if they get possession of the land they will probably let it
on a protected agricultural tenancy. That is one of the reasons which prompted
me to express more than once the view that this action ought to be settled, and
we even reached the stage, through interventions of mine, where it seemed that
the parties were in complete agreement on all the essential terms save rent,
which I was told was not envisaged to cause any trouble. But nothing was done
or had been done and there has been the melancholy scene of ideal landlords
locked in legal battle for several days against ideal, indeed exemplary,
tenants. Unusual though it is, I would ask them to see even after judgment
whether something cannot be done.
The case has
been lengthened by the defendants appearing in person with the male defendant
as the spokesman. He was often long and irrelevant, and I had great sympathy
with Mr Cripps in seeking to cross-examine him. However, much assistance was
obtained by Mr Palmer producing a 14-page handwritten statement which by common
consent was happily treated as his evidence-in-chief and which was a clear,
well-expressed and relevant document.
The matter of
a 364-day tenancy arises under the proviso to section 2 of the Agricultural
Holdings Act 1948 and is a device designed to defeat a tenant getting a
protected agricultural tenancy. Such a scheme if truly and properly entered
into and carried out has, as I will show, been held by the Court of Appeal to
be valid and to achieve its purpose.
Section 2 of
the Act reads as follows:
2.– (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 the necessary
modifications, as if it were an agreement for the letting of the land for a
tenancy from year to year.
Then comes the
all-important proviso:
Provided that
this subsection shall not have effect in relation to an agreement for the
letting of land, or the granting of a licence to occupy land, made (whether or
not the agreement expressly so provides) in contemplation of the use of the
land only for grazing or mowing during some specified period of the year, or to
an agreement for the letting of land, or the granting of a licence to occupy
land, by a person whose interest in the land is less than a tenancy from year
to year and has not by virtue of this section taken effect as such a tenancy.
The
arbitration provision is not applicable here, because the case involves a
fundamental dispute between the parties as to the nature of the relevant
agreement, which is a matter for the court (see Goldsack v Shore
[1950] 1 KB 708). I may say that neither party sought arbitration.
The crucial
matter here is the proviso. With the coming into force of the 1948 Act a device
grew up intended to get round secured tenancies, and that was a letting or
licence for grazing or mowing for 364 days. In cases where this was a true,
properly observed tenancy the Court of Appeal held in Reid v Dawson
[1955] 1 QB 214 that it came within the proviso and did not create a protected
tenancy. The headnote in that case reads thus:
By an
agreement between the then owner of the land and the defendant the latter was
granted the exclusive right to mow for hay and to depasture only sheep and
cattle on three fields for a term of 364 days. At the end of that period the
defendant held over for another 364 days and was then given notice
to quit by the plaintiffs, who had become owners by purchase. The defendant
claimed the protection of section 2(1) of the Agricultural Holdings Act 1948:–
Held, that the letting was made in contemplation of the use of the land for
grazing and mowing during a ‘specified period of the year,’ and therefore came
within the proviso to section 2(1); and that the plaintiffs were accordingly
entitled to an order for possession. Decision of Jones J affirmed.
It was held in
that case therefore that a 364-day tenancy or licence was for a specified
period of the year and therefore came within the proviso.
An even more
favourable decision to like effect was a case in the Court of Appeal two years
later: Scene Estate Ltd v Amos [1957] 2 QB 205. The headnote in
that case reads as follows:
Landlords by
an agreement in writing let pasture land to a tenant for grazing purposes only,
for a period of three months, and subsequently, by letters, extended the
letting for further periods, each of three months. After several years the
landlords gave notice to the tenant terminating the letting and brought
proceedings to recover possession of the land. At the time of the agreement
both parties thought that it would be extended for periods exceeding a year in
aggregate, although nothing was said between them on the matter. The landlords
contended that the agreement fell within the proviso to section 2(1) of the
Agricultural Holdings Act 1948, as one ‘made (whether or not the agreement
expressly so provides) in contemplation of the use of the land only for grazing
or mowing during some specified period of the year,’ and that the tenant was
not therefore entitled to the benefit of the Act:– Held, that in the case of a
genuine written agreement it was not permissible to look outside it except to
ascertain terms on which it was silent; in the ordinary way the courts, in
ascertaining the ‘contemplation’ of the parties within the meaning of the
section should be guided by the terms of the agreement, express or implied, and
by nothing else. Accordingly, in the present case the agreements must be looked
upon as successive arrangements for grazing for three months, one period of
three months following another, and each arrangement came within the proviso
and was not protected by the Act. Per Parker LJ ‘Specified period of the year’
is equivalent to ‘specified part of the year’ . . . The word ‘only’ must apply
not only to the use but to the period. Decision of Hallett J affirmed.
(But see also
the Court of Appeal decision in Short Bros (Plant) Ltd v Edwards
(1979) 249 ESTATES GAZETTE 539.)
The ‘magic’ of
364 days is that the Court of Appeal have held that a tenancy for one year
exactly — 365 days — gives a protected tenancy from year to year in Bernays
v Prosser [1963] 2 QB 592.
At least from
the time of the 1948 Act it was the general practice of Plymouth Corporation to
grant 364-day tenancies or licences, but they were very good about renewing
them. For at least 40 years until 1972 a partnership called A Palmer & Sons
(no relation of the defendants) had either a yearly tenancy or latterly (since
1948) a 364-day tenancy or licence in respect of the 3,895 acres here in
question. All that time the male defendant was one of their subtenants
nominated to and duly authorised by Plymouth Corporation. He grazed certain
wide areas, it being impossible with this unfenced land to keep to any strict boundaries.
The male
defendant was very helpful to the Plymouth Corporation in problems about the
land and in other local problems as well. A very friendly relationship
developed between him and the corporation and its officers.
The male
defendant got various grants from the Ministry of Agriculture based, as I would
have thought, (a) on their belief that he was a secured tenant and (b) on
knowledge by Plymouth Corporation. However, I reject the claim to protection on
the ground of any grants, because there is no evidence from the Ministry of
Agriculture, their file having been lost or destroyed, and there is no evidence
of any knowledge in or acquiescence by Plymouth Corporation.
During 1971 it
became clear that, because of death and illness, the partnership of A Palmer
& Sons would not be able to carry on for the 1972 season. The male
defendant was very anxious to take over. For that reason he wrote the letter to
Plymouth Corporation dated September 1971, to be found at Bundle A p 39, which
gave rise to the correspondence immediately following it. Page 39 is addressed
to the estates and development valuer, Plymouth City, and says:
Dear Sir, Re
Burrator Catchment Area. As you are aware we are approaching the time when
discussions will be taking place with the Common Commissioners relating to
ownership of land and common rights etc. This will include your Catchment Area
here at Burrator and as I have been one of your tenants for over 40 years I am
very concerned with what is happening. You may think it better if your land
here at Burrator was put on a better footing by you accepting me as your
tenant. For your consideration I will make you a formal offer of £600 per annum
for this your catchment area. I have had discussions with a member of the staff
who will be able to explain my position to you. To safeguard our position from
another angle I registered any common rights which may be applicable to the
land. During these 40 years I have done all I can to look after your land here.
We are on the moor nearly every day and have been able to stop fires on several
occasions from spreading. Also we are always on call here should there be any
animal found in need of attention. Yours faithfully, E F Palmer.
There is a
letter from the City of Plymouth estates and development valuer at p 41 dated
September 24 1971.
Land at
Walkhampton Common, Burrator, 3,895 Acres. Further
to your telephone conversation with my assistant, Mr Stivey, I write to confirm
that it has been decided to offer you the 364-day grazing licence of the above
land as from March 19 1972, when the present licensees term expires. In the
meantime, however, I shall be grateful if you will prepare a list of suitable
sub-graziers whom you may wish to be named in the formal agreement.
Page 42 is a
notice to A Palmer & Sons reminding them that the licence expires on March
19. Page 43 is from Mr Palmer. Again it is to the estates and development
valuer.
Land at
Walkhampton Common, Burrator, 3,895 acres. Thank
you for your letter of the 24th inst. I accept your offer of the grazing
licence of the above land as from March 19 1972. The rent as we agreed in
previous correspondence at £600 per annum. The sub-graziers I propose to
approach at a later date to ask if they are interested in the grazing on the
western boundary of this land are
and he gives
certain names. At the end he says,
I will be
grateful if the agreement can be put in the name of E F Palmer & Sons.
There is an
internal note at p 45 to the estates and development valuer from the water
engineer and manager: ‘Thank you for your memo of the 4th October. I am pleased
to note that you have confirmed the offer of the grazing to Mr E F Palmer.’
These letters
establish clearly that he is to have the land, but when we come to the final
stages the acute question is: as what?
On p 43 he
writes in acknowledgment of the estates valuer’s letter, as we have seen. There
then follow what I would call heads of agreement dated March 9 1972 (p 48),
subject to formal agreement. Those heads of agreement are for a 364-day grazing
licence of the land in question. There are certain terms and conditions which
are not material, except perhaps in regard to the rent. Clause 2 says, ‘The
rent of £600 per period, exclusive of all rates and other outgoings will be
payable quarterly in advance. The first payment of £150 shall be paid prior to
the commencement of the licence.’ At the
end the letter of offer says in clause 14:
The licence
will be the subject of a formal agreement to be prepared by the Town Clerk, and
which shall contain such other terms and conditions as he shall consider
necessary, the cost of such agreement to be borne by the grazier. If these
terms are acceptable to you I shall be grateful if you will sign the attached
copy letter and return it to me as soon as possible, together with the first
payment of £150 and the definite list of those whom you wish to propose as
sub-graziers.
The male
defendant duly signed and returned that with an accompanying letter (p 50).
After giving the reference of the land in question, he says,
Thank you for
your letter of the 9th inst. I agree to the terms as set out by you. The
sub-graziers I propose to graze on the western side of this land are
and he sets
out the names again. He says further down.
All the
sub-graziers will be expected to sign a similar agreement with me as set out by
you in
certain
conditions.
If possible I
would like the agreement to be in the names of E F Palmer & Sons, Lambs
Park. I enclose my cheque for £150 as requested.
The formal
agreement — because it is to be remembered that the heads of agreement were
subject to formal agreement — are to be found at p 56 of Bundle A and at
subsequent pages. I need only read parts. The date is given as April 24 1972.
BETWEEN THE
LORD MAYOR ALDERMEN AND CITIZENS OF THE CITY OF PLYMOUTH (hereinafter called
‘the Corporation’) of the one part and
of Lambspark Sheepston Yelverton in the County of Devon (hereinafter called
‘the Graziers’) of the other part WHEREBY it is agreed as follows:– 1. The
Corporation let and the Graziers take ALL THAT the right of grazing with cattle
sheep and ponies over that portion of Walkhampton Common shown edged red on the
plan hereto annexed . . . FROM the Nineteenth day of March One thousand nine
hundred and seventy two for a period of Three hundred and sixty four days
determinable nevertheless as hereinafter provided PAYING THEREFOR rent at the
rate of Six hundred pounds for the period payable quarterly in advance and so
in proportion for any period less than one quarter.
Clause 3(i)
provides that the graziers ‘pay the said rent on the days and in manner
aforesaid’.
That then is
the formal document signed by the Lord Mayor and the Deputy Town Clerk and by
Mr Palmer and Mrs Palmer. On the face of it that agreement is undoubtedly one
for a 364-day tenancy or licence.
There are
curiosities about the agreement and what happened under it, but the first and
most important question of all is whether, as the male defendant contends, the
Town Clerk of Plymouth made an agreement with him varying the proposed terms to
a full year and accordingly protection.
I find that
the male defendant knew by March 1972 the important difference between a true
364-day tenancy and a yearly tenancy.
When he opened
his case to me from the document he had prepared and when he deposed to its
truth in the witness box it contained this paragraph:
The only
thing wrong with this agreement is the 364-day tenancy clause. I took this up
with the Town Clerk and he said, ‘Don’t worry about that’, and I also contacted
the Ministry of Agriculture and was told, ‘That cannot be operated without our
consent.’
When asked if
he knew where the town clerk was now, he said, ‘No’, and presumed that he had
retired long since. Unexpectedly, the plaintiffs produced the now-retired town
clerk, Mr Haydon, next day and asked leave to call him in the middle of the
defendants’ case, which leave I granted. Mr Haydon confirmed the long and
friendly relations between Plymouth Corporation and the male defendant, whom he
had known extremely well. He could not remember the occasion of which the male
defendant spoke, but it could well have happened and he could well have said,
‘Don’t worry. You worry too much.’ They
were the sort of things he did say. He thus provided, through the plaintiffs,
corroboration of the defendants’ evidence given when the defendants could not
have anticipated his being called.
I am
abundantly satisfied that what the male defendant says happened did happen: he
was worried about the tenancy being for only 364 days and thus not protected,
he made a special journey to the town clerk’s house and told him about that
worry, whereupon Mr Haydon replied, ‘Don’t worry’ or ‘Don’t worry about that.
You worry too much.’
Mr Haydon does
not recall the occasion, but, as I interpret his evidence, he is prepared to
accept what the male defendant says about it. Neither the male defendant nor Mr
Haydon is able to say just when this meeting took place, but, in my judgment,
everything points to its having been before the formal agreement was signed and
very probably before the heads of agreement were signed. In answer to Mr Cripps
Mr Haydon said that if the event happened he would not have intended anything
contractual, certainly not a protected tenancy, and he did not report the
matter to his council or his officials. In further answer to Mr Cripps he said
that he would have intended the words in the sense of reassurance that
everything would turn out all right.
I am satisfied
that Mr Haydon had authority to bind his corporation on a matter such as this.
As town clerk he had extensive powers over all the corporation’s affairs and he
had had many dealings with the male defendant over the years concerning this
land and other matters about which the defendant had helped the corporation.
This defendant had also been in touch with him many times about trespass on the
land.
Incidentally,
the letter on p 55 [of the bundle] was not signed by Mr Haydon personally.
What am I to
make of the event and conversation which, as I hold, undoubtedly took place
between the male defendant and the town clerk at the town clerk’s house:
nothing at all, as the plaintiffs say; or the creation of a protected tenancy,
as the defendants say? The male
defendant was seriously worried about the prospect of having only a 364-day
tenancy. He made a special journey to the town clerk’s house to tell him so and
to ask his help. It was a serious matter and occasion, and I cannot treat it as
being meaningless, as the plaintiffs suggest. I consider that the conversation
was contractual and conferred a yearly protected tenancy on the defendants.
What else can the words ‘Don’t worry’ or ‘Don’t worry about that’ mean? I can think of no other meaning. The town
clerk was giving the male defendant formal reassurance not to worry about what
was worrying him, namely only having a 364-day tenancy. I believe that both
contemplated, as a result of the conversation, a protected yearly tenancy. In
my judgment, the conversation cannot have been in contemplation of anything
else. Mere reassurance would have been meaningless.
The
curiosities about the agreement which I mentioned earlier seem to me
inconsistent with anything else but a yearly tenancy. Firstly, the rent was
payable quarterly in advance and it was demanded and paid on the usual quarter
days, of which there are, of course, four in a year. Receipts for the rent are
unfortunately not set out in sequence, but are to be found in Bundle A at pp
53, 62, 70, 76, 83, 92, 95 and 102.
I take, for
example, the first year 1972 to 1973. For that purpose one looks at pp 53, 62
and 70. Page 53 is a receipt from Plymouth addressed to the defendants. The
material part reads as follows: ‘Rent due for period 19 3 1972 to 24 6 1972 in
advance quarterly £161.54 Less paid’ — and the payment will be remembered from
an earlier reference — ‘£150’, leaving a balance of £11.54. The point to note
there is that the rent is due for the period March 19 (starting date) to June
24 1972. While on that page one gathers in not the next receipt, but a later
one: ‘Rent due on 25 Dec. 1972 in advance quarterly £150.00’.
At p 62 the
September quarter appears as the first item: ‘Rent due on 29 Sep. 1972 in
advance quarterly £150.00’. So we have now got June, September and December. On
that page also is ‘Rent due June 24 72 in advance quarterly’, and that is
covered by an earlier reference.
On p 70 comes
a receipt for the next quarter day: ‘Rent due on 25 Mar 1973 in advance
quarterly £150.00’, and above it: ‘Rent due on 24 Jun 1973 in advance quarterly’.
One therefore
finds for the year 1972 to 1973 complete quarterly demands and receipts, so
that the tenants have paid not only for a complete year but also for some extra
days, because, it will be remembered, the first receipt relates to 19 3 1972 to
24 6 1972. That then is the first curiosity which seems to me inconsistent with
anything else but a yearly tenancy.
Secondly, when
the agreement was renewed in 1973 there did not occur — not had there ever
occurred in any of these so-called 364-day tenancies — any break in the
continuity of the holding. There was no turning off the land, actual or even
symbolic. There was no actual or symbolic taking of possession. The sheep and
the cattle grazed on the 365th day as they had before.
The defence of
protected tenancy was pleaded when the defendants had solicitors and counsel,
but not on the grounds I have mentioned. In the circumstances of this case,
where they have not been taken by surprise, where the whole matter has been
fully argued and where they were able to call Mr Haydon, I gave leave to the
defendants to amend to plead this defence, which I regard as being the reality
of the matter, and I gave and give the plaintiffs leave to amend to join issue
on that defence.
The defendants
held over for the 1973 season and the 1974 season on the same terms, being, as
I find, protected yearly tenants. The plaintiffs so inherited them when they
took over on April 1 1974 and since then they have held over with a dispute as
to their status. I find it to be that of protected tenants under the
Agricultural Holdings Act.
Mr Cripps
sought to persuade me that to find as I have would be to regard the written
agreement to be ‘a sham’. I interpret ‘sham’ as being deliberate
misrepresentation. That I certainly do not find here. What I find is a
contractual representation and agreement by Mr
tenancy into a protected yearly tenancy. I also find in regard to rent and
rates — two matters I mentioned a moment ago — that these are consistent, in my
judgment, only with a yearly tenancy.
Rent has not
been accepted by the plaintiffs since the dispute began and, on my judgment,
will fall to be determined by arbitration under the Act, as will the terms of
the tenancy generally, and I so direct. Subject to that, there will be judgment
for the defendants on the claim and for the declaration counterclaimed.
The remainder
of the counterclaim I dismiss. It first complains of the plaintiffs allowing
and charging large numbers of tourists to come on to the land. It is in the
nature of an open space. What the defendants complain of are numbers and untied
dogs which worry their sheep. I would have hoped that agreement could be
reached about numbers and dogs — perhaps it still can be. But this practice
having gone on for many, many years and the defendants having accepted it —
save as to numbers and dogs — and having proved no actual damage, I reject this
head of counterclaim.
The other item
of counterclaim relates to the occasional and varying use of parts of the land
by the Army. However, both the plaintiffs and the defendants get substantial
annual sums — be it noted annual — from the Army for this: the plaintiffs
£2,500 and defendants £5,000, I believe. The defendants, in my judgment, can
have no claim on that score.
There will
therefore be judgment for the defendants on the counterclaim for a declaration,
but for the plaintiffs on the remainder of the counterclaim.
No order was
made for costs.
