Agricultural holdings — Notice to quit — Tenant farming arable land through partnership — Whether tenant in breach of covenant not to part with or share possession or occupation
The appellant was the landlord and the
respondent company the tenant under a tenancy agreement dated September 28 1989
of an agricultural holding of 299 acres consisting entirely of arable fields;
there were no buildings or livestock. The tenancy contained an agreement by the
tenant not to assign, underlet, part with or share possession or occupation of
the whole or any part of the holding. On October 9 1993 the landlord served a
notice to quit alleging that the tenant had breached the agreement by farming
the holding through a partnership. The tenant depended on the partnership for the
necessary finance and to carry out all necessary farming works, cultivations
and harvesting. The individual partners were related and held most of the
shares in the tenant company. Following an arbitration of the notice to quit,
the arbitrator found that the relationship between the tenant and the
partnership did not involve a sharing of occupation of the holding and the
notice to quit should not take effect. The landlord appealed the decision of
the assistant recorder who upheld the arbitrator’s decision following an appeal
by way of a case stated.
tenant is a company it can only operate through servants or agents. Where a
farm is an arable farm, so that there is no stock, and it is without buildings,
so that there is no human habitation, there is not necessarily any permanent
presence. Activities carried on by an agent within the scope of his authority
are, ordinarily, the activities of the principal just as much as if the agent
were an employee. The farming operations on the holding were carried on by the
partnership as agents for the tenant. The members of the partnership or its
employees only went to and remained on the holding for farming operations
authorised by the tenant. The only proper inference was that the holding was
occupied by the tenant alone. Something more than farming operations carried
out by an independent contractor on arable land was required to amount to a
sharing of occupation in breach of the covenant.
The following cases are referred to in this
report.
Hills (Patents) Ltd v University College
Hospital Board of Governors [1956] 1 QB 90; [1955] 3 WLR 523; [1955] 3 All
ER 365, CA
Pegler v Craven [1952] 2 QB 69; [1952] 1
All ER 685; [1952] EGD 207; (1952) 159 EG 215, CA
Willis v Association of Universities of the
British Commonwealth [1965] 1 QB 140; [1964] 2 WLR 946; [1964] 2 All ER 39,
CA
This was an appeal by the landlord,
Samuel Lyle Wallace, from a decision of Assistant Recorder Whitehurst, who had
dismissed an appeal by the landlord, by way of a case stated, from the award of
an arbitrator, the second respondent, George William Tudor Lock, that a notice
to quit served by the landlord on the first respondent, C Brian Barratt &
Son Ltd, was ineffective.
Michael Driscoll QC (instructed by Winters,
of Huntingdon) appeared for the appellant; Jonathan Brock (instructed by Borneo
Martell & Partners, of Bedford) represented the first respondent; the
second respondent did not appear and was not represented.
Giving the first judgment at the
invitation of Sir Richard Scott V-C, MORRITT LJ said: Mr Wallace, the
appellant, is the landlord and the respondent, C Brian Barratt & Son Ltd,
the tenant from year to year of an agricultural holding called Low Farm, Great
Paxton, Huntingdon, Cambridgeshire, pursuant to a tenancy agreement made on
September 28 1989.
By Clause 5.16 the tenant agreed with the
landlord:
not to assign underlet part with or share
possession or occupation of the whole or any part of the holding.
The landlord considered that the tenant
was in breach of that agreement and on October 9 1993 served a notice to quit
on the tenant. The tenant responded on October 18 1993 with a notice under
article 9 of the Agricultural Holdings (Arbitration on Notice) Order 1987
referring the matter to arbitration.
On February 12 1996 the arbitrator
determined that the notice to quit should not have effect. On the application
of the landlord to Peterborough County Court under Schedule 11, para 27 (2),
Agricultural Holdings Act 1986 District Judge Whitehurst, sitting as an
assistant recorder, decided that there was no error of law on the face of the
award and dismissed the application. This is an appeal of the landlord, brought
with the leave of the assistant recorder, from that decision.
The issue is whether on the facts found
by the arbitrator the tenant had ‘parted with or shared occupation’ of the
holding or any part of it with a partnership, known as MMB Partnership, between
Mr and Mrs Brian Barratt and their son Michael Barratt. Those facts may be
summarised as follows.
The MMB Partnership was constituted as a
joint lives partnership to carry on the business of farming. It commenced
business on July 1 1986. Its business, as well as that of the tenant and
another company with which the Barratt family are connected, was and is
conducted from Toseland Hall, Toseland, Huntingdon, Cambridgeshire, the home of
Mr and Mrs Barratt. As the arbitrator put it, ‘the Barratt Family … operate a
number of agricultural parcels in varying ownerships’.
The holding is an arable farm comprising
299 acres on which there are no buildings. In any given year there are about 22
farming operations which are carried out over 35 to 40 days. In 1962 it was let
to Mr Brian Barratt. In 1986 it was let to Mr and Mrs Brian Barratt and Michael
Barratt, who on July 3 1986 assigned the tenancy to the tenant.
The tenant has an issued share capital of
120 shares of £1 each; 62 are held by Michael Barratt and 19 by each of his
parents. The remaining 20 shares are held by third parties. The tenant has no
capital
relationship between the MMB Partnership and the tenant was and, in substance,
still is regulated by the terms of a letter dated March 26 1987, which states:
Following our earlier discussions, a
meeting of the Directors of this Company has been held and it was agreed that
you be requested to carry out the following Contract Works on behalf of this
Company:
(1) General Management and supervision of
all farming works necessary.
(2) Purchase and supply of all seeds,
fertilizers and sprays, either direct from the merchants or your Partnership.
The purchase of such to be to our mutual advantage.
(3) To carry out all acts of cultivation
and harvesting as required, with all ancillary works to produce the best
possible marketable products.
(4) All contract works to be invoiced at
current market rates.
(5) All farm sales to be undertaken at
the discretion of MMB Partnership and management works to be recompensed by a
percentage on sales to be agreed, subject to profitability.
(6) The directors reserve the right to
cancel or amend this agreement on giving three months notice at any time.
The arbitrator found that the second part
of para (5) was never operated but, by implication, that the other terms were.
The present
tenancy in favour of the tenant was entered into on September 28 1989. It is a
tenancy from year to year commencing on October 11 1988 at an initial rent of
£12,000 pa. The tenant was required to use the holding for agricultural
purposes only and to cultivate and manage it according to the rules of good
husbandry. The full terms of the covenant in clause 5.16 are:
Not to assign underlet part with or share
possession or occupation of the whole or any part of the Holding provided always:
5.16:1 if the Tenant shall share
occupation of the Holding with his wife or child or children that shall not
operate as a breach of the terms of this clause.
5.16:2 the Tenant may permit any cottages
and gardens comprised in this Agreement to be occupied under service agreements
by agricultural workers employed by the Tenant full time on the Holding but not
so as to create any tenancy of any of the cottages and gardens and only if the
occupation of any of the cottages is necessary in order to enable the
agricultural worker adequately to perform his duties under a service agreement
and provided that each cottage is occupied by only one such agricultural worker
and his family.
5.16:3 the Tenant shall be entitled to grant
a licence for a season to such person or persons and upon such terms as he may
think fit to exercise some or all of the sporting rights referred to in para 6
of the Second Schedule below without obtaining any of the consents required
under this clause.
After the execution of that tenancy the
operation of the farm continued as before in accordance with the terms of the
letter agreement between the partnership and the tenant. The arbitrator found
that those operations were carried out by Michael Barratt and three employees
of the partnership. After September 1989 the seeds, fertilisers and sprays used
on the holding, as well as on the other land farmed by the partnership, were
bought in the name of the partnership, but no invoices for the purposes of VAT
passed between the tenant and the partnership. The crops when harvested were
taken from the holding and stored in buildings on land within the control of
the partnership called Hollow Farm, whence they were sold and delivered in the
name of the partnership. The crops were insured in the joint names of the
tenant and the partnership, but, as found by the arbitrator, that was to
protect the interests of both parties when such crops were stored on the
partnership’s land. Twice a year, on March 31 and June 30, the accounts between
the partnership and the tenant were settled by debit and credit notes passing
between them recording the sums received for the sale of the crops which were
credited to the tenant and the amounts spent for seed, fertilisers and sprays,
labour and other services (calculated on an acreage basis) were credited to the
partnership. However, the balance in favour of the tenant was not settled by
payment; instead the partnership put the tenant in funds with which to make any
direct payments as and when required.
On April 2 1992 the landlord served on
the tenant a notice to remedy alleged breaches of the tenancy agreement
consisting of failing to cultivate the holding and parting with possession or
sharing possession or occupation with the partnership. In consequence the
following day ‘a letter was drafted from the tenant to the partnership’
terminating the arrangements agreed in the letter dated March 26 1987. The
arbitrator made no finding whether the arrangements were thereby terminated but
recorded that the farming activities on the holding and the method of
accounting for them continued to be carried out by the partnership in much the
same way. In addition the tenant was credited with wayleave payments received
by the partnership in relation to the holding but debited with £25,500 for
general supervision and overheads (for example, the use of machinery owned by
the partnership) and £21,350 for gateways, drains and ditch and bank repairs
carried out since 1989. The applications for the area aid payments in respect
of the holding were made in April 1993 and 1994. They were completed by
‘Michael Barratt MMB Partnership’ pursuant to express written authority from
the tenant.
The
arbitrator, who sat with a legal assessor, rejected the allegation of the
landlord that the holding was farmed by a partnership consisting of the tenant
and the MMB Partnership. That contention was not pursued. But he also held that
the relationship between the partnership and the tenant whereby the former
carried out the farming operations on the holding with the agreement of the
tenant did not involve the sharing of occupation of the holding in breach of
the covenant. He did not agree with the submissions of counsel for the landlord
that the covenant would be broken by the appointment of an agent to carry on
the farming activities. At para 27 he said:
There seems
to be nothing in the Tenancy Agreement which supports the suggestion that there
is a breach of covenant if the Tenant appoints an agent to cultivate and manage
the farm on its behalf, provided that the agent is retained to and does act
solely on behalf of the Tenant in carrying out the activities on the farm i.e.
any occupation by the agent is occupation on behalf of the tenant.
The arbitrator referred to the judgments
of Denning and Morris LJJ in Hills (Patents) Ltd v University College
Hospital Board of Governors [1956] 1 QB 90, to which I shall refer later.
The arbitrator concluded in para 29:
In the present case, the arrangement
between the Tenant and the MMB Partnership was such that all activities carried
out on the land by the MMB Partnership through Michael Barratt and the
employees of the MMB Partnership were carried out on behalf of the Tenant: the
Tenant was debited for each farming operation carried out and the Tenant was
credited for the crops removed from Low Farm and sold. Although the Tenant may
well have shared occupation with the MMB Partnership of the land away from Low
Farm where the crops were stored together with crops belonging to the MMB partnership
harvested from other holdings, I conclude that the arrangement between the MMB
Partnership was such that it did not carry out activities on Low Farm otherwise
than on behalf of the Tenant and that the activities were not such that the
Tenant could be said to be sharing occupation in breach of the covenant.
In para 30 the arbitrator added by
reference to the submission of the landlord that the business was conducted on
Low Farm by the partnership on its own account:
… on the 35
to 40 days of the year on which people are to be found on Low Farm they are
there carrying out activities on behalf of the Tenant, the Tenant being debited
for the cost of the operations and credited for the benefit of the crop
harvested …
Para 27(2) of Schedule 11 to the Agricultural
Holdings Act 1986 provides:
Where the Arbitrator has
misconducted himself, or an arbitration or award has been improperly procured,
or there is an error of law on the face of the award,
the county court may set the award aside.
Para 28
contains various other provisions about what the county court can do in any of
those events.
In his
application to Peterborough County Court, pursuant to that provision, the
landlord asserted that there was an error of law on the face of the award in
that:
the Partnership was carrying on its own
farming business from the Holding and adjoining lands as principal and
therefore the Tenant, which permitted the Partnership to carry on that business
from the Holding but not to have any tenancy thereof, was sharing occupation of
the Holding with the Partnership; or in the further alternative that the
Partnership was farming the Holding as agent for the Tenant but because the
Partnership’s management of the farming operations was so extensive and
complete, its position as agent was analogous to that of the board of governors
in Hills (Patents) Ltd v University College Hospital Board of
Governors [1956] 1 QB 90 and of UCCA in Willis v Association of
Universities of the British Commonwealth [1965] 1 QB 140, and therefore
there was a sharing of occupation between the Tenant and the Partnership.
The
assistant recorder disagreed. He considered the rival arguments and the
authorities to which he had been referred. His conclusion is expressed on p19
of his judgment. It is no disrespect to him if I refer merely to the final
sentence which was:
In my judgment in conducting that
balancing exercise in making the Award, the Arbitrator was not plainly wrong in
law on the face of the Award, and as a result I must, and do, dismiss the
Landlord’s application.
Counsel for the landlord submits that
there was an error of law on the face of the arbitrator’s award and that the
assistant recorder was wrong not to have recognised it. He contends that
occupation is an ordinary English word meaning physical presence with some
degree of permanence. He points out that in certain contexts occupation may be
shared by, for example, husband and wife, a brewery and its manager of an inn,
the Ministry of Health and the board of governors of a hospital.
He contends that one consequence of that
is that if an owner licenses an independent contractor to come on to his land
and remain there with some degree of permanence both owner and licensee will
share its occupation even though, if he were an employee, the occupation would
be that of the employer alone. He acknowledged that his case involved the
contention that if all the agricultural operations are carried out on behalf of
the owner or tenant by one contractor then that contractor is in occupation of
the land. In the alternative he relied on the facts that in this case the
contractor, in the form of the partnership, was also the banker to the tenant
and in practice enjoyed the net profit from the agricultural operations through
its management charges.
The starting point must be the terms of
the covenant. It was suggested that the provisos expanded the normal meaning of
the word ‘occupation’. I do not agree. It is quite plain from the first and
second provisos that the draftsman gave no thought at all to the nature of the
holding. The only proviso which could have any application to the holding is
the third but that does not indicate any intention to give some special meaning
to the word ‘occupation’ rather than to make plain that such a licence as that
postulated would not involve a breach of the covenant as a whole.
We were referred to a number of
authorities on the nature of occupation and how it may be enjoyed or shared. I
propose to refer to three only.
The first is Pegler v Craven
[1952] 2 QB 69. The question there was whether commercial premises were
occupied by the director of the company or by the company itself. The director
was the tenant but the business carried on in the premises was that of the
company. This court held that the company was in occupation.
Jenkins LJ, dealing with what he called
vicarious occupation, said (p74):
I quite agree that the conception of
‘occupation’ is not necessarily and in all circumstances confined to the actual
personal occupation of the person termed the occupier himself. In certain
contexts and for certain purposes it obviously extends to vicarious occupation
by a caretaker or other servant or by an agent. Clearly the tenant of a retail
shop who through persons in his employment carries on business there for his
own benefit under a tenancy with respect to which he was tenant, would properly
be described as the occupier of the shop and the person carrying on business
there, though not himself in actual personal occupation of it.
That quotation indicates, as one would
expect, that in the ordinary case occupation by an agent is the occupation of
the principal.
The second
authority is Hills (Patents) Ltd v University College Hospital Board
of Governors [1956] 1 QB 90. The question there was whether the premises would
be occupied by the board of governors of a National Health Service hospital or
by the Ministry of Health. The relationship between them was governed by the
National Health Service Act 1946. It was decided by a majority that the board
of governors of the hospital would occupy the premises. Denning LJ (as he then
was) said (p98):
Mr Wilson would have us treat this as a
parallel case and say that the governors are but agents of the Minister, and
cannot resist a new lease, seeing that they require it, not for themselves, but
for the Minister.
I cannot accept this argument, because,
in my opinion, the board of governors of a teaching hospital are in a position
far superior to that of an ordinary agent. They are a body corporate and are
entrusted with the task of managing the hospital and of running it themselves.
The Minister himself cannot take that task out of their hands. He is not
allowed by the Act of Parliament to run the hospital himself. The board of
governors are the people to do it. Furthermore, they appoint the officers and
staff of the hospital, and under the wording of the Act of Parliament those
officers then become the officers of the board of governors, not the officers
of the Minister. The governors are, of course, accountable to the Minister for
the way in which they carry out their task, and he can give directions to them
in much the same way, I suppose, as the Minister of Transport can give
directions to the British Transport Commission. But as I read this Act of
Parliament, the Minister must leave the actual running of the hospital to the
governors themselves.
Mr Wilson says that the Minister will
occupy the premises. That may be true, but I think that the board of governors
will occupy them also. Possession in law is, of course, single and exclusive;
but occupation may be shared with others or had on behalf of others. I think
that the board of governors are in such a responsible position in regard to
this hospital that they are occupiers.
To the same
effect is the judgment of Morris LJ (p106) where he said:
The last question, therefore, is whether
the board of governors will be in occupation. It is said that it is the
Minister who will be in occupation, and that the board of governors will be
merely his agents, and Pegler v Craven is referred to. The
position of the board of governors in the present case seems, however, to be
entirely different from that of an agent for a limited company. Though the
governors are subject to the directions of the Minister, they have a very
special position. The decision in this case really depends on its own facts,
and on an examination of the position and functions of a board of governors as
prescribed under the Act of 1946. They manage and control the hospital. They
maintain it. They do all the providing. They appoint officers and servants who
may be their officers and servants. They are a body corporate.
In my view, this case confirms also that
in the ordinary case occupation by an agent is the occupation of the principal.
It was only the extraordinary features of the statutory relationship between
the Minister of Health and the board of governors which led to the conclusion
that the board of governors would be the occupant. Those features were
extraordinary in every sense and are not to be found in the instant case; it
was, as Morris LJ observed, a decision on its own facts.
The third authority is Willis v Association
of Universities of the British Commonwealth [1965] 1 QB 140. The question
in that case was whether the landlord, the Association for the Universities’
Central Council for Admissions, was in occupation. The relevant circumstances
and the conclusion are indicated in the judgment of Lord Denning MR (p148 B–F)
where he said:
Accepting that the council is a separate
entity, it seems to me that each of these bodies, the council and the
landlords, carries on an activity at No 29, Tavistock Square. The council
carries on there the activity of a central organisation for admissions. The
landlords carry on there the activity of providing accommodation, equipment and
staff for all the detailed administration of the scheme. This activity of the
landlords is, I think, an ‘activity’ within section 23 (2) of the Act of 1954.
Each of them, the council and the landlords, occupies the lower floors of No
29, Tavistock Square, for the purpose of its activity. Each of them wishes to
occupy the top floor for its purpose. It is, I think, quite possible for two
bodies to share accommodation in
Hospital: ‘Possession in law is, of course, single and exclusive; but
occupation may be shared by others or had on behalf of others’.
Pearson LJ agreed with the judgment of
the Master of the Rolls. Salmon LJ put it slightly differently (p153) where he
said:
Accordingly, though the council may be
carrying on an activity on the premises, namely, the direction of policy, so
are the landlord, since it is part of their business to supply all the
necessary accommodation, staff, equipment, etc, necessary for the council’s
purposes. Having regard to all that the landlords do in relation to these
premises it is in my judgment impossible to say that they do not occupy them
even if they do so in conjunction with the council. To my mind the landlords
and the council are in a sense partners, one concerned with administration, and
the other with policy, and they both occupy and carry on their respective
activities upon the premises.
For my part, I do not think that that
case helps. Counsel for the landlord sought to draw an analogy with this case
by suggesting that the partnership carried on a separate activity on Low Farm
from that of the tenant. But that submission is inconsistent with the facts as
found by the arbitrator. The services were not provided by the partnership from
Low Farm but from elsewhere. Although the services of the partnership were
undoubtedly used at Low Farm, they were so used by the tenant’s engagement of
an independent contractor to do the farming. There was only one activity and
that was the farming operation carried on by the partnership as agent for the
tenant.
I can now state my conclusions relatively
shortly. First, where, as here, the tenant is a limited company it can, of
course, only operate through servants or agents. Thus the occupation of the
farm and the execution of the necessary farming operations must be by servants
or agents. No distinction is to be drawn in this respect between an employee
and an agent. Second, where the farm in question is an arable farm, so that
there is no stock, and it is without buildings, so that there is no human
habitation, there is not necessarily any permanent physical presence. In those
circumstances the court must examine the activities carried on on the land and
decide by whom they are carried on. Activities carried on by an agent within
the scope of his authority are, ordinarily, the activities of the principal
just as much as if the agent were an employee: see Pegler v Craven
[1952] 2 QB 69 and Hills (Patents) Ltd v University College Hospital
Board of Governors [1956] 1 QB 90.
The primary facts as found by the
arbitrator clearly show that the farming operations on Low Farm were carried on
by the partnership, not on its own account but as agents for the tenant.
Further, the individual members of the partnership or its employees only went
to and remained on the holding for the purpose of carrying out the farming
operations authorised by the tenant and for so long only as those operations
required. There was no presence, permanent or otherwise, save what was required
to carry out the necessary agricultural operations as agent for the tenant. The
only proper conclusion in law from those facts is that Low Farm was occupied by
the tenant alone.
Thus, I agree with the arbitrator that
the engagement of a single agricultural contractor to carry out the farming
operations on an arable farm could not ordinarily result in the farm being
occupied by the contractor. The circumstances relied on in this case to suggest
that this was no ordinary agricultural contractor do not, in my judgment,
dictate a different result. The arbitrator rejected the suggestion that there
was a partnership between the tenant and the MMB Partnership. Whether
originally suggested or not he made no finding that the letter of engagement
dated March 26 1987 or the various accounting documents were shams. There is no
finding that the management or contracting charges were not in line with those
charged by agricultural contractors to farmers to whom they were not related.
Thus, it cannot be disputed that the farming operations on the holding were
carried out by the partnership as agents for the tenant.
The fact that the partnership also
financed the tenant in the way found by the arbitrator and reaped a benefit
from the profits made on the holding by the charge for its management fee
cannot alter the physical relationship of the tenant and the partnership with
the holding. It follows that, in my judgment, there was no shared occupation
and, therefore, no breach of covenant to support the notice to quit.
In my view the arbitrator and the
assistant recorder were both right and this appeal should be dismissed.
Agreeing, SIR RICHARD SCOTT V-C
said: The tenancy agreement dated September 28 1989 contained a covenant by the
tenant, ‘not to assign underlet part with or share possession or occupation of
the whole or any part of the Holding’. The holding was Low Farm.
The only issue on this appeal is whether
on the facts as found by the arbitrator, there has been a breach of that covenant.
The facts have been described by Morritt
LJ. I gratefully adopt them and need not repeat them. It is not in dispute that
the tenant, C Brian Barratt & Son Ltd, entered into a contractual
arrangement with the MMB Partnership (consisting of Mr Brian Barratt, his wife
and his son Michael) under which the farming operations on Low Farm were to be
carried out by the partnership as agents for the tenant. Low Farm consists
entirely of arable fields. There is no farmhouse. There are no farm buildings.
There are no livestock. The crops planted on the fields are, we have been told,
either cereals or beans. The farming operations carried out on the land
consist, therefore, of ploughing, tilling, fertilising and sowing the land and
of spraying and harvesting crops. There are, in addition, drains, banks,
boundary fences and gateways to be maintained. Each and every one of these
operations is an operation for which a farmer might employ an independent
contractor. The arbitrator found that ‘there are about 22 farming operations in
each year and there are only between 35 and 40 days in each year when there is
any activity on the farm’.
The case argued before us by Mr Michael
Driscoll QC on behalf of the appellant, the landlord of the farm, is that in
arranging for the farming operations to be carried out by the partnership, the
tenant put itself in breach of the contractual obligation to which I have
referred. It is not contended that there has been an assignment or an
underletting or that the tenant has parted with or shared possession of the
farm. But it is the case that the tenant has shared occupation of the farm with
the partnership.
Mr Driscoll began his submissions with
three propositions, each of which I would readily accept, namely (i) occupation
requires physical presence on the land; (ii) occupation requires that the
physical presence should have some sufficient degree of permanence; and (iii)
occupation may be shared.
It is not in dispute that the
partnership, in carrying out the 22 farming operations referred to by the
arbitrator, had a presence on the land. It is not in dispute that the
contractual arrangement between the tenant and the partnership has been in
place since 1987. But it does not follow that the relationship between the
partnership and the farm has been one that is properly described as occupation
by the partnership.
The concept of ‘occupation’ when applied
to arable fields devoid of buildings is one that I find somewhat elusive. The
ordinary indicia of occupation are bound to be absent. Mr Driscoll suggested
that in such a case ‘occupation’ of the fields would be demonstrated by use of
the fields for agricultural purposes. He carried his thesis to the logical
conclusion of submitting that an independent contractor engaged to harvest,
say, a corn crop would be in occupation of the fields while the harvesting was
in progress. But whether or not the word ‘occupation’ would ever be apt to
describe the relationship between the independent contractor and the cornfield,
I am clear that the harvesting of the cornfield by the independent contractor
would not be a breach of a tenant’s covenant in an agricultural tenancy ‘not to
part with or share occupation’ of the cornfield. The ambit of that phrase in
the tenancy agreement of September 28 1989 is a matter of construction. The
construction of any agreement must be undertaken in the context of the factual
background known to the parties. The use of independent contractors to carry
out specific farming operations on arable land on behalf of the farm owner is so
common as, in my judgment, to make it impossible to attribute to the word
‘occupation’ in the September 28
contractor for that purpose.
For there to be a breach of the covenant
something more must, in my judgment, be shown than that farming operations were
carried out on the tenant’s behalf by a contractor.
Mr Driscoll submits that, in the present
case, much more can be shown. In the present case, it was not simply specified
farming operations, but all farming operations that were to be carried out by
the partnership. As to this, however, the land is arable land. The farming of
arable land lends itself to being broken down into a series of sequential
operations. The farming operations do not involve or require the day to day
attention required of, say, a dairy farmer or a sheep farmer. The fact that on
only 35 to 40 days in each year is there any activity on the farm makes the
point. The fact that on 35 to 40 days in each year the partnership was present
on the land in order, as agent for the tenant, to carry out the sequential
farming operations does not, in my judgment, justify the conclusion that the
tenant has parted with or was sharing occupation of the farm.
Mr Driscoll relied also on other
responsibilities undertaken by the partnership in connection with the farming
of Low Farm. After harvest, the practice has been for the grain to be removed
for drying and storing to other farming premises owned or controlled by the
partnership. The partnership are responsible for selling the produce of Low
Farm and for the purchase of seed, fertilisers and sprays. But these activities
are not conducted physically on Low Farm and cannot, it seems to me, assist in
constituting the partnership as occupiers of Low Farm. Moreover, these
activities, and indeed the farming operations on Low Farm themselves are all
carried out by the partnership as agents for the tenant. Such activities on Low
Farm as the partnership has carried out were carried out as agent for the
tenant. In my judgment, an agricultural tenant who allows on to the
agricultural holding an agent for the purpose of the agent carrying out farming
operations on the land for the tenant does not thereby put himself into a
shared occupation of the holding with the agent.
I agree, therefore, that this appeal must
be dismissed.
Appeal dismissed.
