Agricultural holding–‘Unique’ agreement held not to confer a right of exclusive occupation on licensee–Not, therefore, to take effect under Agricultural Holdings Act 1948, section 2 (1), as a tenancy from year to year–Licensors awarded possession of small dairy farm in temporary charge of deceased tenant’s son
This was an
appeal by Mr Joel Threadgold, of Sycamore Farm, Bickerton, Malpas, Cheshire,
from a decision of the Court of Appeal dated July 10 1974 awarding the
respondent landlords, Bahamas International Trust Co Ltd, an order for
possession of the property.
Mr M C Nourse
QC and Mr J A D Gilliland (instructed by Riders, agents for Bellyse & Eric
Smith, of Nantwich) appeared for the appellant, and Mr O M W Swingland QC and
Mr G Nurse (instructed by Mackrell & Co, agents for Bartlett & Son, of
Chester) represented the respondents.
In his speech,
LORD DIPLOCK said: This appeal is about the right to possession of a small
dairy farm in Cheshire, known as Sycamore Farm, Bickerton. It consists of a
farmhouse and some 11 acres of grazing land. The respondents (‘the
freeholders’) are the owners of the freehold. Before her death intestate in
January 1968, the farm was held by the appellant’s mother, Mrs Threadgold, upon
an agricultural tenancy from year to year. The appellant (Mr Threadgold) helped
her in the management of the farm. He was her sole next-of-kin, and after her
death he would, upon obtaining letters of administration, have become entitled
to the residue of the term. The freeholders exercised their rights under the
Agricultural Holdings Act 1948 to terminate the tenancy by notice to quit
expiring on March 25 1969. Upon the expiry of this notice, Mr Threadgold was
permitted by the freeholders to remain on the farm under the terms of an
agreement dated March 27 1969. That agreement reads as follows:
‘WHEREAS JOEL
THREADGOLD agrees: 1. That the tenancy of Sycamore Farm and also the tenancy of
two adjoining blocks of land in the name of Effie Threadgold terminated on
March 25 1969 and that he will pay the half-year’s rent due on that date.
‘THE COMPANY
agrees: 1. To allow Joel Threadgold to live in the farmhouse rent and rates
free until February 28 1970. The company reserves the right to terminate this
occupation by fifty-six days’ notice at any time. 2. To pay Joel Threadgold the
sum of ten shillings (10s.) per week as caretaker of Sycamore Farm and the
adjoining block of land until his occupation of the farmhouse ceases on
February 28, 1970. These payments will automatically end if Joel Threadgold
ceases to live in the farmhouse or if his occupation of the farmhouse is
brought to an end by fifty-six days’ notice before February 28, 1970, in which
case payments will cease at the expiry of fifty-six days. 3. To allow Joel
Threadgold to retain his cows and other livestock and to sell milk until
October 31, 1969, subject always to the provisions of the Milk and Dairies
Regulations. The company will be under no liability to remedy any defects which
might exist under these regulations.’
Mr Threadgold
did not comply with the terms of the agreement. He kept his cattle on the farm
after October 31 1969, added to their number, and refused to give up occupation
of the farmhouse after February 28 1970. The freeholders, after considerable
forbearance, ultimately took proceedings in the Crewe County Court to obtain
possession of the farm. Their claim to possession was resisted by Mr Threadgold
on the ground that under section 2 (1) of the Agricultural Holdings Act 1948
the agreement took effect as a tenancy of an agricultural holding from year to
year, and so gave him the security of tenure provided by that Act. On October
31 1973 the county court judge upheld this contention. He refused to make an
order for possession. On July 10 1974 his judgment was reversed by the Court of
Appeal. That court made an order for possession, but gave leave to Mr
Threadgold to appeal to your Lordships’ House. Despite the fact that they had
given leave to appeal, the Court of Appeal refused a stay of execution beyond a
period of 56 days, to which the freeholders were willing to consent. The effect
of this refusal of a stay of execution would have been that Mr Threadgold and
his cattle would have been evicted from the farm long before the appeal could,
in the ordinary course of events, have been heard by your Lordships’ House; the
freeholders had however undertaken not to let the farm to any other person
until the appeal had been determined. It was not brought to the attention of
the Court of Appeal that in the present state of the farming industry in
Cheshire, the practical result of his eviction would have been that it would
have been impossible for Mr Threadgold to find anywhere else to keep his
cattle. He would have been compelled to sell them at a sacrificial price and to
abandon his milk business. So even if he succeeded at the hearing of the
appeal, he would have sustained so serious a financial loss that he would have
been unable to re-stock the farm so as to enable him to resume his milk business.
In these circumstances, an application was made to this House for a stay of
execution until after the hearing of this appeal. In the ordinary course of
events, this would not have taken place until the Easter Term of 1975. In the
meantime, the freeholders, in the event of the appeal’s failing, would have
been kept out of possession for another six months. In these circumstances, to
avoid inevitable injustice to one or other of the parties, it was found
possible to make arrangements to hear the appeal forthwith.
The agreement
of March 27 1969 is idiosyncratic in its terms. The only question in this
appeal is whether, upon its true construction, it is caught by the provisions
of section 2 (1) of the Agricultural Holdings Act 1948 and is accordingly to
‘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.’ Before the Court of Appeal the case was
argued by counsel for the freeholders on the basis that clause 3 of the
agreement gave Mr Threadgold an exclusive licence to occupy the land. The Court
of Appeal, without further analysis, accepted this as being the true
construction of the clause. Upon this construction, the case did raise
questions of law of some difficulty and some general importance as to the
construction of section 2 (1) of the Act and the correctness of the
interpretation of it which had been suggested in two previous decisions
of the Court of Appeal, viz Goldsack v Shore [1950] 1 KB 708 and Harrison-Broadley
v Smith [1964] 1 WLR 456. It was for this reason that leave to appeal to
this House was granted.
In a case
which turns, as this one does, upon the construction to be given to a written
document, a court called upon to construe the document, in the absence of any
claim for rectification, cannot be bound by any concession made by any of the
parties as to what its language means. This is so even in the court before
which the concession is made; a fortiori in the court to which an appeal
from the judgment of that court is brought. The reason is that the construction
of a written document is a question of law. It is for the judge to decide for
himself what the law is, not to accept it from any or even all of the parties
to the suit; having so decided, it is his duty to apply it to the facts of the
cases. He would be acting contrary to his judicial oath if he were to determine
the case by applying what the parties conceived to be the law, if in his own
opinion it was erroneous. Your Lordships must accordingly approach the
construction of the agreement of March 27 1969 untrammelled by any concession
as to its meaning that may have been made in the course of the argument before
the Court of Appeal. This is a necessary preliminary step to the determination
whether it is such an agreement as falls within section 2 (1) of the
Agricultural Holdings Act 1948.
The first
clause, numbered 1 in the agreement, is in part a recital and in part a
covenant by Mr Threadgold. It contains an acknowledgement by him that the
previously-existing tenancy of Sycamore Farm and two other blocks of land
terminated two days earlier, on March 25 1969, and a personal covenant by him
to pay the half-year’s rent due on that date. Its significance for present
purposes is that it acknowledges that any actual or potential legal
relationship between the freeholders and Mr Threadgold arising out of the
previous agricultural tenancy of Sycamore Farm had come to an end. The
subsequent clauses, of which the first is also numbered 1, which I will call
clauses 1, 2 and 3, regulate what is to be the new relationship between the
freeholders and Mr Threadgold as respects Sycamore Farm. Clause 1 grants to Mr
Threadgold a licence to live rent and rate free in the farmhouse until February
28 1970 unless the licence is terminated earlier by 56 days’ notice. His living
there is described in this clause and in clause 2 as ‘occupation’ of the
farmhouse. The capacity in which he is to live there is indicated in clause 2.
He is to be employed as caretaker of Sycamore Farm and the adjoining block of
land for a remuneration of 10s. per week, and his continuing to live in the
farmhouse is made a condition of this employment. As respects the remainder of
Sycamore Farm apart from the farmhouse, and the adjoining block of land, clearly
no right to occupy any of the land or the farmbuildings was granted by clause
2. The most that this clause gave to Mr Threadgold was a personal right to
enter upon the land and buildings in the course of his employment by the
freeholders as caretaker.
Clause 3 is
the crucial clause in this appeal. Whatever licence it grants is independent of
those granted by clauses 1 and 2. It is for a fixed period until October 31
1969. It would terminate before the licences granted by clauses 1 and 2 if they
ran their full course to February 28 1970. It would continue to subsist after
they had terminated if notice of termination were given more than 56 days
before October 31 1969. The licence granted to Mr Threadgold by clause 3 is
expressed to be ‘to retain his cows and other livestock and to sell milk.’ It is a necessary implication from the
context that he is to be allowed to keep the cattle he retains upon the land
comprised in Sycamore Farm and the adjoining block of land referred to in
clause 2, and to use the farmbuildings for the purpose of milking them and
preparing their milk for sale. The use of the verb ‘to retain’ indicates that
the cows and livestock referred to are confined to those which were on the land
at the date of the agreement, together with any progeny born to them during the
fixed period of the licence. He is not entitled to put on to the land any fresh
livestock.
In my view the
meaning of this clause is clear and unambiguous. It grants to Mr Threadgold the
right for the stipulated period to let any cattle of his which were on the land
on March 27 1969 continue to graze on the pastures, and to milk them and
prepare their milk for sale in the farmbuildings. In this clause there is no
reference to ‘occupation’ by Mr Threadgold of the land or farmbuildings, as
there was in clauses 1 and 2 to his ‘occupation’ of the farmhouse. As a matter
of construction, I see nothing in the words which either expressly or by
necessary implication gives to Mr Threadgold any right to exclude the
freeholders from the land or the farmbuildings, or to stop them from making
whatever use they please of the land or buildings, so long as that use does not
prevent his reasonable exercise of the rights conferred upon him by the
licence. The only limitation upon the freeholders’ right to enter upon the land
and use it for their own purposes is such as would result from the application
of the principle that a grantor cannot derogate from his own grant. Whether any
particular kind of use of the land by the freeholders would conflict with that
principle would depend upon the circumstances existing at the time when that
use was sought to be made.
If at the date
of the agreement Mr Threadgold had had only two cows on the 11 acres of pasture
I do not think that it could have plausibly been argued that the freeholders
were debarred by the terms of clause 3 from bringing on to the pasture such
number of additional livestock of their own as would be consistent with good
farming practice having regard to the total amount of grass available, or from
ploughing up and growing cereal crops on such part of the land as was not
needed for the keep of Mr Threadgold’s two cows. According to the evidence, he
had 11 cows on the farm at the date of the agreement. There was no evidence as
to whether or not this was the maximum number of livestock of all kinds that
the pasture could support consistently with good farming practice throughout
the period until October 31 1969. Such evidence, however, would be relevant to
the construction of clause 3 only if Mr Threadgold had been bound to keep up
the number of cattle on the land throughout the period of the licence; whereas,
though he could not increase their number, he was entitled to reduce them to as
few as he wished or to none at all if that suited his convenience. So even if
at the beginning of the period of the licence it would have involved a
derogation from the grant for the freeholders to put any livestock of their own
upon the land, this would not necessarily remain the case throughout the period
of the licence.
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 1969. 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 Davies LJ in Harrison-Broadley v
Smith [1964] 1 WLR 456 at 470, 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.’ I would accordingly dismiss this appeal upon
the ground that the agreement of March 27 1969, the terms of which must be
unique, did not upon its true construction grant to the appellant the right to
use the land for agricultural purposes to the exclusion of its use for
agricultural purposes by the respondents. The question of law of more general
application discussed in the judgment of the Court of Appeal accordingly does
not arise. The instant appeal does not
LORD DILHORNE
and LORD SIMON agreed, and Her Majesty was advised accordingly.
