Landlord and tenant – Agricultural Holding – Succession on retirement of tenant – Tenant giving retirement notice and nominating respondent as successor – Eligibility dependent on nominated successor deriving principal livelihood from holding for five years “in the last seven years” – Whether livelihood condition having to be satisfied for seven-year period prior to tribunal’s determination of successor’s application for new tenancy as well as seven-year period prior to tenant’s retirement notice – Appeal dismissed
The appellant was the freehold owner of the agricultural holding known as Milnerfield Farm, Gilstead, Bingley, West Yorkshire. The tenant of the holding was the respondent’s father. The tenancy was one to which Part IV of the Agricultural Holdings Act 1986 applied. On 30 March
2011 the tenant served on the appellant a notice under section 49(1)(b) of the 1986 Act stating that he wished the respondent to succeed him as tenant of the holding as his “nominated successor”. The respondent applied to the First-tier Tribunal (FTT) under section 53 of the Act for a direction entitling him to a tenancy of the holding. The appellant opposed the respondent’s application. In its statement of case, the appellant argued that the respondent had to satisfy the “livelihood condition” in section 50(2)(a) of the 1986 Act both at the date of the retirement notice and when the application was determined.
In Shirley v Crabtree [2008] 1 WLR 18, Beatson J decided that the livelihood condition need only be satisfied for the period of seven years expiring on the date of the retirement notice. That decision was binding on the FTT. Therefore, the FTT ordered that the relevant part of statement of case be struck out. The appellant appealed with the permission of the Upper Tribunal. The issue on appeal was whether, under section 53(5) of the 1986 Act, the FTT had to be satisfied that the respondent fulfilled the livelihood condition solely in respect of the period of seven years up to the retirement notice as the respondent contended; or in respect of both that period and also the period of seven years up to the determination of the respondent’s application, as the appellant contended.
Held: The appeal was dismissed.
(1) The 1986 Act conferred security of tenure in respect of tenancies of agricultural holdings. The provisions for succession on the death, or retirement, of the tenant were parallel codes with many similarities. The issue in this case related to “the livelihood condition,” one of the qualifications for being an “eligible person”. The definition of, and qualifications for, being an eligible person were embedded in the provisions conferring the right to apply for a new tenancy under both succession codes: see sections 36, 49, 50 and 59 of the 1986 Act. Sections 39(3) and 53(5) did not deal with the definition of eligibility. They simply required the FTT to be satisfied: (a) that the person was an “eligible person” either at the date when the tenant died or the date when he gave his retirement notice; and (b) that he had not ceased to be an eligible person solely as regards those qualifications for eligibility which were capable of being lost. The livelihood condition had to be positively satisfied in order to qualify for eligibility, whereas the occupancy condition was expressed negatively so that where it was not satisfied a person was disqualified from eligibility. There was no requirement for the occupancy condition to be satisfied before the triggering event under either code. The language used to describe the livelihood condition in the retirement code was not sufficient to show that Parliament intended to depart from the “linguistic register” for the livelihood condition in the code for succession on death, to require that condition to be satisfied for more than one seven-year period or to overlap temporally with the operation of the occupancy condition. The linguistic register used by Parliament indicated that the livelihood condition in the retirement code referred to a single period of seven years: Shirley v Crabtree [2008] 1 WLR 18 followed.
(2) Once it was concluded that the phrase “the last seven years” in section 50(2)(a) referred only to a single period of seven years, rather than two (or more) such periods, the appellant’s construction was impossible. There was no room left for that phrase to refer to a period of seven years ending with the determination of the successor’s application, given that it had to refer (as was common ground) to the seven-year period ending with the retirement notice in order to make the legislation workable. It also followed that there was no merit in the appellant’s forensic point that the draftsman could have drafted section 50(2)(a) so as to refer explicitly to the seven-year period “ending with the date of the giving of the retirement notice”. That meaning was sufficiently clear from the wording of that provision when read properly in context.
Moreover, once it was concluded that section 50(2)(a) referred to a single period of seven years, and that that period ended with the giving of a retirement notice, there was no basis for distinguishing the decision of the House of Lords in Jackson v Hall [1980] AC 854 that once the qualification in section 36(3)(a) was achieved, it could not subsequently be lost. The same logic applied to section 50(2)(a) and therefore section 53(5)(b) was incapable of applying to the livelihood condition in the succession on retirement code. Instead the satisfaction of the livelihood condition had to be considered by the FTT under section 53(5)(a), which referred solely to eligibility as at the date when the retirement notice was given.
(3) If Parliament had intended to impose a requirement that the livelihood condition had to be satisfied in relation to two separate seven-year periods, so as to depart from the model of the single seven year requirement in section 36(3)(a), it would have used plain language in section 50(2)(a) to that effect. It did not do so. Furthermore, the language used by Parliament when it introduced the succession on retirement code showed a plain intention to adopt a single seven-year period for the livelihood condition.
Stephen Jourdan QC (instructed by Michelmores LLP) appeared for the appellant; Oliver Radley-Gardner (instructed by Loxley Solicitors) appeared for the respondent.
Eileen O’Grady, barrister
Read a transcript of The Kingsbridge Pension Fund Trust v Downs here
