Landlord and tenant — 999-year lease of farmhouse — Alleged breach of covenant by lessee — History of differences between the parties — Conversion of cowshed into cottage and store — Cottage occupied by couple performing services for lessee and his wife — Breach alleged was of covenant that the premises demised should be used only for the sole occupation and use of the tenant and the family of the tenant — Meaning of ‘family’ — Whether, if there was a breach of covenant it had been waived or acquiesced in — Whether, if not, relief against forfeiture should be granted without a condition requiring cessation of breach — Action dismissed
premises in this case comprised a substantial 17th-century Hertfordshire
farmhouse called Knightsland Farm, with outbuildings, gardens and some 15 acres
of agricultural land — The lease was for 999 years — The relationship between
the landlords and the tenant had been difficult — The tenant had wished to
convert part of a dilapidated cowshed into a cottage, his intention being to
offer the accommodation to a couple who would do some work in the house and
grounds and whose presence would provide some security against burglars or
prowlers, the farmhouse being relatively isolated — The tenant succeeded in
obtaining planning permission for the conversion but failed to obtain the
landlords’ consent — However, considering the refusal of consent unreasonable,
the tenant went ahead with his plan — The cowshed was duly converted and the
tenant engaged service occupiers to work for himself and his wife — Eventually
the landlords served a notice under section 146 of the Law of Property Act 1925
on the tenant alleging that the occupation of the cottage by service occupants
was a breach of the covenant to use the premises for the sole use and
occupation of the tenant and his family — An action claiming forfeiture
followed
breach of covenant? Could the service
occupants be regarded as part of the tenant’s family? The judge was referred to the definition of
‘family’ in the Shorter Oxford English Dictionary, which gave as one of its
primary
including parents, children, servants etc’ — It was objected on behalf of the
landlords that the service occupants in the cottage did not qualify as ‘family’
— They constituted a household of their own and their work was mainly outside,
in the gardens and grounds — It was suggested that the dictionary definition
contemplated indoor servants in the employer’s house — Hoffmann J rejected this
distinction as material and decided that the service occupants were part of the
tenant’s family within the meaning of the covenant — Hence there was no breach
of covenant — This was sufficient to dispose of the matter, but in case it went
further the judge dealt with two other points which had been argued — He would
have held that, if there had been a breach of covenant, there was not evidence
that it had been waived or acquiesced in by the landlords — He also expressed
the view that if he had been called upon to grant relief against forfeiture he
would have done so only on condition that the breach of covenant should cease
was dismissed
No cases are
referred to in this report.
This was an
action by the plaintiffs, Wrotham Park Settled Estates, seeking the forfeiture
of the lease of Knightsland Farm, Barnet, Hertfordshire, held by the defendant
tenant, Christopher Naylor, on the ground of breach of covenant.
Kirk Reynolds
(instructed by Boodle Hatfield) appeared on behalf of the plaintiffs; Simon
Berry QC (instructed by Denton Hall Burgin & Warrens) represented the
defendant.
Giving
judgment, HOFFMANN J said: This is an action for forfeiture of a
999-year lease for breach of covenant. The lease was granted by the plaintiff,
which then had a slightly different name, to the defendant on September 6 1968.
The demised
premises are a substantial 17th-century Hertfordshire farmhouse called
Knightsland Farm, with its outbuildings, gardens and some agricultural land
amounting in all to about 15 acres. The reversion forms part of a large family
estate called the Wrotham Park Estate in which the beneficial interest is held
by a company controlled by Mr Julian Byng.
The background
to the grant of the lease is that Mr Julian Byng and the defendant, Mr Naylor,
are cousins and were both beneficiaries under the will of their late
grandfather, the Earl of Strafford. By an arrangement under the Variation of
Trusts Act 1958, which was approved some months before the grant of the lease,
Mr Naylor and his mother and brother were each given options to acquire
999-year leases of houses on the estate. The terms of the leases, which were in
very similar form, had been negotiated as part of the arrangement. All three
beneficiaries exercised their options and the leases were duly granted.
For the
purposes of this action I need consider only two of the tenants’ covenants in
the lease. First, by clause 3(13)(i) the tenant covenanted not without the
licence in writing of the lessor first obtained, which consent shall not be
unreasonably or vexatiously withheld, to erect or suffer to be erected any new
buildings on the premises or without such licence as aforesaid make any
alteration or addition whatsoever in or to the exterior of any building now on
the premises. The other was by clause 3(22) a covenant to observe certain
regulations specified in the fifth schedule to the lease, of which I need to
refer only to the first two.
1. The
premises shall be occupied and used only as a private dwellinghouse with garage
and gardens for the sole occupation and use of the tenant and the family of the
tenant.
2. That
neither the premises nor any part thereof shall be used for business or trade
purposes other than agriculture and horticulture.
In 1970 Mr and
Mrs Naylor decided to convert part of a dilapidated cowshed into a cottage. The
advantage for the Naylors was that they would be able to offer the cottage as
accommodation to a couple who would in return act as caretakers and do some
work for them in the house and grounds. The gardens and hedges were at that
time very much overgrown and the ditches needed to be cleaned out. The house
itself required to be maintained. Mr Naylor, who had then recently left the
army and gone into industry, did not have much time to do the work himself. Mrs
Naylor had a new baby, and it was also particularly important for the Naylors
that they should have someone living near the house. Knightsland Farmhouse is a
relatively isolated building and a resident caretaker and his wife would be a
protection against burglars and prowlers.
There were,
however, some potential problems about planning permission. The farmhouse was
in the green belt and the planning authority were very unlikely to give consent
for the creation of a new residence, other than for agricultural workers. But
Mr Naylor appears to have been advised that someone who did some work of an
agricultural nature would for this purpose count as an agricultural worker even
though most of his work had nothing to do with agriculture at all. There was
some work of an agricultural nature to be done on the ditches, hedges, fields
and the farm track which gave access to the house, and Mr Naylor thought that
this would be enough to satisfy the planning condition. I do not have to decide
whether this was a correct interpretation of the law. It was a view which Mr
Naylor genuinely and honestly held and in the event he has had no trouble from
the planning authority over the 20 years in which he has acted on that view.
This was not
in fact the first time that the possibility of having resident employees at Knightsland
Farmhouse had been considered. Back in 1959, shortly before the Naylors
actually moved into the house, there had been discussion between them and Mr
Naylor’s aunt and Mr Julian Byng’s mother, Lady Elizabeth Byng, who was then
tenant for life under the settlement and farming Knightsland Farm and other
holdings, about the possibility of having farm employees residing near the
farmhouse. With that in mind, Lady Elizabeth applied in May 1959 for planning
permission for the erection of a pair of semi-detached agricultural cottages at
the farmhouse. That permission was granted subject to a number of conditions,
including a standard condition that the ‘buildings be used only as dwellings to
be occupied by persons engaged or employed in the use of Knightsland Farm for
agriculture as defined in the Town and Country Planning Act, and during such
occupation by their spouses and issue’.
Mr Naylor’s
first thought in 1970 had been to implement that permission. A change in the
law in 1968 had introduced a time-limit for old planning permissions and Mr
Naylor was aware that unless implemented within the near future it would
expire, and so on June 28 1970 he wrote to Mr J B Farnsworth, who was a partner
in the firm of Berry Bros & Legge, who were acting as land agents to the
estate at the time, saying that he was thinking about erecting cottages under
that permission. He said that he thought that the effect would be to improve
the value of the estate, that it would make use of a permission which was
otherwise about to expire and ‘It would mean that the farmhouse is not so cut
off and would have some resident farm labour’.
Mr Farnsworth
referred this letter to Mr Byng and Mr Byng declared himself puzzled about what
Mr Naylor could have in mind. The effect of the grant of the lease was that
Knightsland Farmhouse had been severed from the agricultural holdings of the
estate. Mr Naylor was not a farmer. Even the 15 acres which were comprised in
the lease were being farmed by Lady Elizabeth, together with the rest of her holdings.
The farmhouse had therefore no need for resident farm labour.
It seems to
me, however, that provided one does no more than credit Mr Naylor with an
intention to make a meaningful statement, the meaning is plain enough. The
purpose of building the cottages was to have employees resident at the
farmhouse so that it would not be so cut off, and they would also be able to
work as agricultural workers for the estate. No doubt, in addition, Mr Naylor
expected that they would be able to render some services for him as well.
Mr Byng’s
reaction to this proposal was to instruct Mr Farnsworth to write back and
suggest instead that the estate would be willing itself to construct the
cottages in return for Mr Naylor’s agreeing to the lease being terminable on
its 21st anniversary and every subsequent 21 years thereafter after the death
of Lady Elizabeth. This proposal did not appeal to Mr Naylor. He felt that he
had taken some trouble to negotiate a 999-year lease and was not going to see
it cut down to 21. He also took the view that refusal of consent would be
unreasonable. By October, however, he had changed his mind about implementing
the planning permission and decided instead to convert one half of the cowshed
into a cottage. The other half was to serve as a garden store. On October 8
1970 he wrote to Mr Farnsworth enclosing the outline plans which he was
submitting for planning permission. It was part of the planning application
that Mr Naylor
by Lady Elizabeth. Mr Byng objected to this course and made representations
against it to the planning authority. He felt that the permission had been
obtained for the benefit of the estate and that if Mr Naylor was not going to
use it at Knightsland Farm it should be transferred to somewhere else on the
estate. Mr Naylor, on the other hand, not only took the legal point that the
permission enured for the benefit of the land of which he was tenant but also
said that the permission had been originally obtained by Lady Elizabeth
specifically so that she could have employees living at the farmhouse.
In the event,
the planning authority granted permission in accordance with Mr Naylor’s
application, once again subject to their standard condition for agricultural
occupation. That permission was granted on August 11 1971.
On May 15 1972
Mr Naylor wrote to Mr Farnsworth formally applying for consent under the lease
for the conversion of the cowshed, and on May 24 Mr Farnsworth wrote back
refusing permission. No further reasons were given and Mr Farnsworth merely
referred back to his earlier letter in which he said that the estate would
refuse permission for the construction of the two cottages originally proposed,
and one must therefore assume that the ground for refusal was that the planning
permissions ought to have been transferred to somewhere else on the estate. Mr
Naylor, having been advised that the refusal of permission was unreasonable,
went ahead and carried out the conversion.
On November 1
1972 the plaintiff served a notice under section 146 of the Law of Property Act
1925 alleging that the conversion was a breach of the covenant against
alterations. No action was, however, taken upon that notice.
Mr and Mrs
Naylor engaged a couple to come and live in the farmhouse. They were Mr and Mrs
Steed. They stayed a year or two and have since been succeeded by others.
Meanwhile the dispute between the Naylors and Mr Byng rumbled on but did not
ever come to a head until in 1979 new agents were appointed, Bidwells, and the
senior partner, Sir Francis Pemberton, advised Mr Byng that something ought to
be done to regularise the relationship between the plaintiff and Mr Naylor. The
ground rent of £15 a year had not been accepted since about 1970 and Sir
Francis thought that a licence should be negotiated and the matter once more
put upon a proper legal footing.
Negotiations
for the licence were carried on over the next few years but came to nothing,
and eventually, on November 12 1985, Mr Naylor issued a summons in the Barnet
County Court in which he claimed declarations, first, that the right to forfeit
the lease pursuant to the 1972 notice was statute barred and, second, that
consent to the alterations had been unreasonably withheld. There was no answer
to the first claim for a declaration that forfeiture was statute barred and so
on January 9 1986 Mr Byng was constrained to write a letter confirming that he
was not entitled to forfeit under that notice. Within a few days, however, Mr
Byng struck back. He asked his agents to arrange for an inspection of the
premises in order to discover whether there were any other breaches of
covenant, and that inspection took place on April 11 1986.
Mr William
Shearer [FRICS] of Bidwells carried out the inspection. He looked over the
cottage and asked who was occupying it. Mr Naylor told him that they were Mr
and Mrs Larman, who were there as service occupants performing work for the
Naylors. The result of that inspection was a further section 146 notice dated
December 29 1986 alleging that the occupation by the Larmans was a breach of
the regulation to use the premises for the sole occupation and use of the
tenant and the family of the tenant. The Larmans subsequently moved out and another
section 146 notice was served alleging a breach in terms sufficiently general
to cover any couple who might be living as service occupants in the cottage.
The present action is based upon that notice.
The first
question which I have to decide is whether on those facts there has been a
breach of covenant. It was at first alleged that there had been a parting of
possession or occupation, but the terms upon which the Larmans and their
successors, who are at present a couple called Mr Sheffield and Miss Flint,
occupy the cottage show that the possession remains in the Naylors and that the
Naylors equally occupy the cottage by their employees. The dispute therefore
comes down to the question of whether the cottage occupant can be described
within the meaning of regulation 1 in the fifth schedule as being a part of the
family of the tenant.
What in this
context is the meaning of the word ‘family’?
I was referred to the entry in the Shorter Oxford English Dictionary which
tells me that the English word ‘family’ comes from the Latin word familia,
meaning a household, and it gives as one of its primary meanings ‘the body of
persons who live in one house or under one head, including parents, children,
servants, etc.’
Mr Reynolds,
who appeared for the plaintiff, and Mr Byng in his own evidence, accepted that
family in this context had to have a wider meaning than blood relations and
that it was a meaning more in accordance with the passage from the dictionary
which I have quoted. Mr Byng said that the farmhouse had originally
accommodation for staff on the second floor and that he could not contend that
indoor servants living in that accommodation would not fall within the
description of family in the lease. But Mr Reynolds submitted that the couple
in the cottage fell outside this description for two reasons: first, because
they constituted a separate household. They had their own family life in the
cottage. Their relation to the Naylors was entirely one of employer and
employee, and the nature of their work had meant that they had little social
contact with the Naylors. The second reason was that apart from coming into the
house occasionally to do odd repairing or decorating jobs, all their work was
outside in the gardens and grounds. They were, in the old-fashioned
distinction, outdoor servants rather than indoor servants.
I have to look
at what this word ‘family’ may have been intended to mean in a lease granted in
1968 having regard to the social conditions of those times. As part of the
factual background I think that I am also entitled to have regard not only to
what was actually going on at the time at Knightsland Farmhouse but also to
what was happening in the other two houses which were the subject of leases in
this respect in identical terms. One of the other leases was for a house called
Dancers Hill, which Mr Byng said was a somewhat grander house occupied by Mr
Naylor’s mother, Lady Mary Naylor. She, it appears, had at the time of the
grant of the lease a couple named Mr and Mrs Paine living in a cottage in the
grounds. I do not know what Mr Paine did but Mrs Paine had apparently for many
years been Lady Mary’s cook. It is quite clear that nobody thought that the
continued occupation of the cottage by the Paines would be a breach of covenant
on the part of Lady Mary, and that, in my view, provides some guidance to what
the parties intended it to mean. It does not affect the distinction which Mr
Byng drew between indoor and outdoor servants, but it does show that the fact
that the servants did not live within the house and take their meals in the
same kitchen was not thought to affect the question of whether they were in
this sense a part of the family. Mr and Mrs Paine no doubt had their own little
household in the cottage at Dancers Hill in much the same way as the couples
living in the cottage at Knightsland Farmhouse.
That seems to
me to be in accordance with the passage from the dictionary which speaks of the
body of persons who live in one house or under one head, including
parents, children, servants, etc. It suggests that one can have a house with
other cottages or dependent accommodation in which servants live and that they
will constitute a family provided that they are all subject to one head, which
in this case would be Mr and Mrs Naylor. That, therefore, leaves the
distinction drawn by Mr Byng between indoor and outdoor servants. In my
judgment, no such distinction was intended in this lease in 1968. I very much
doubt whether it was contemplated in 1968 that any of the occupants of this
house during its 999-year term would necessarily have indoor servants at all.
The kind of services commonly performed by couples who are given accommodation
in largish houses in the country in this way, namely a bit of help in the house
and work in the grounds and in the garden, was a perfectly common form of
employment even in 1968.
The evidence
shows that almost invariably the occupants of the cottage have not been solely
employed by Mr and Mrs Naylor. That would have been quite impracticable because
they were not paid any wage. They were simply given the right to reside in the
cottage in return for a certain amount of work. So the present incumbent, Mr
Sheffield, in fact has a full-time job working for London Buses and also, in
return for his accommodation, does a certain number of hours a week for Mr and
Mrs Naylor. None the less, the occupant couple are, in my judgment, a part of
the Naylor household or family living in dependent accommodation and working
very much subject to the directions of Mr, and in particular Mrs, Naylor as to
the things which they do from day to day.
For those
reasons I do not consider that the position of the occupants of the cottage can
really be distinguished from what would have been the position of employees
living within the house and,
of the tenant within the meaning of the regulation, and that their occupation
does not give rise to any breach of covenant. That conclusion is really
sufficient to dispose of the case but, in case it should go any further, I
should say something about the other two points which were argued, namely that
if there was a breach of covenant it had been waived or acquiesced in and,
second, that even if it had not, relief against forfeiture should be granted
without any condition requiring the breach of covenant to cease in the future.
Let me deal
first with the question of waiver and acquiescence. Mr Byng’s evidence was that
until he received the report from Bidwells in 1986 telling him that the cottage
was occupied by the Larmans he had no knowledge that there was an occupant
there such as to constitute a breach of the regulation. The defendants on the
other hand say that Mr Byng must have known quite enough to constitute
knowledge that someone doing the kind of work which the Larmans were doing and
having the kind of relationship with the Naylors which they had was occupying
the cottage. I think that in the end the dispute is not so much over what Mr
Byng actually knew but about the amount of detail and certainty which is
necessary to constitute knowledge for this purpose. For example, while Mr Byng
very likely had no firsthand knowledge of who was occupying the cottage, or
indeed that anybody was occupying the cottage, it seems to me that if at any
moment he had addressed his mind to the question he must have acknowledged that
it was highly improbable that the cottage was unoccupied. If it was occupied,
who would Mr Byng have thought it was occupied by?
In an internal
memorandum dated April 7 1975 Mr Byng, in the course of saying various
uncomplimentary things about Mr Naylor, said that he had made alterations
without consent so as to convert the ‘hideous existing cowshed into a bungalow
for a so-called agricultural worker’. That is a reference to the planning
consent, but it also suggests that Mr Byng was scornful about the occupant of
the flat being capable of being described as an agricultural worker in the true
sense. If that is so, who did Mr Byng think he was? Mrs Naylor said in her evidence that in the
spring or early summer of 1971 she had had a conversation with Mr Farnsworth,
the agent, and had on that occasion explained to him exactly why they wanted to
convert the cowshed. She had told him about the need to have someone to work in
the grounds and in particular about the need to have someone to caretake the
premises. It seems to me unlikely that in some form or another that information
was not conveyed to Mr Byng. Equally, when Sir Francis Pemberton went to see
the Naylors in 1981 and had a general discussion about the matters in dispute,
it seems to me unlikely that the question of the nature of the occupation of
the cottage did not surface or that it was not touched upon in Sir Francis’
report to Mr Byng. In so far as it was not specifically touched upon, the only
reason why mention of it would have been omitted, it seems to me, was that
there was nothing which either party thought needed to be discussed. The nature
of such occupation was perfectly clear to everyone.
Accordingly, at
all material times, in my judgment, Mr Byng knew enough to enable him to allege
that the occupation was a breach of covenant if, upon the true construction of
the regulation and contrary to the finding which I have made, a couple living
there and doing the work which the occupants were actually doing at the time
did not constitute a part of the family. Knowledge, however, is not sufficient
in itself to give rise to an inference of acquiescence. The authorities to
which I have been referred show that the question is whether in the end it is
permissible to draw the inference that the breach has in fact been acquiesced
in. Inaction for a very long time in the face of knowledge of the breach is
certainly a fact from which such an inference can be drawn.
In this case,
however, I find it very difficult to draw the inference that Mr Byng ever
acquiesced in anything. On the contrary, it seems to me that throughout the
relevant period Mr Byng was making it clear that he objected, and in so far as
he did not object specifically to the occupation of the cottage, it was only
because he was objecting to the very existence of the cottage and the nature of
its occupation was therefore not material.
There came the
moment in 1986 when Mr Byng had to acknowledge that he could no longer object
to the existence of the cottage because his right to complain of a breach of
covenant, if any, was statute barred. Accordingly, he acknowledged that in his
letter of January 1986, to which I have referred, and it seems to me that the
only way in which a case on acquiescence can be put is that in all the
circumstances that acknowledgment also necessarily involved a concession that
he could no longer object to the way in which the cottage had been occupied
over the previous 16 years. Now if that withdrawal of objection had taken place
before the building of the cottage and if in reliance upon such withdrawal the
Naylors had built the cottage then I think there would be a strong case for
saying that Mr Byng must be taken also to have consented to the way in which it
was clear that the Naylors would use it. But that was not the case here. This
was a case in which Mr Byng was forced to admit that by reason of the
Limitation Act he had lost the right to object to a once-and-for-all breach, if
such it was, which occurred in 1972. That admission, not in any way thereafter
separately acted upon by the Naylors, does not, in my judgment, necessarily
involve an admission that he was unable to enforce any other breach of covenant
which might exist or which might occur in the future.
Consequently,
although it is not necessary for me to decide this point, I think that if I had
been required to decide the question of acquiescence I would have been
constrained to say that the breach of covenant had not been acquiesced in.
Finally, there
is the question of relief from forfeiture. Mr Reynolds realistically conceded
that the defendants would be entitled to relief. The only issue is whether it
would be a condition of such relief that the hypothetical breach of covenant
should not take place in the future. Mr Berry submitted that since the court
has a complete discretion in the matter it would be proper in this case not to
impose such a condition. I accept that the discretion of the court is perfectly
general, but I find it impossible to see how it could be a proper exercise of
the discretion not to impose such a condition in this case. It would involve my
saying that although I found that there had been a breach and although I found
that there had been no acquiescence in the continuation of that breach,
nevertheless the tenant could have the lease reinstated without any assurance
that no breaches could take place in the future. In those circumstances it
seems to me that the inevitable consequence would be that the landlord would be
entitled to serve another notice under section 146 and the parties would find
themselves back in court again. Mr Berry suggested that if I had on this
occasion granted relief without imposing such a condition a subsequent court
would be bound also to do so and it would therefore be frivolous and vexatious
for the plaintiff to start proceedings which would inevitably end in the same
way. I find that a very unappealing prospect because it involves the
proposition that it is frivolous and vexatious to attempt to enforce a covenant
which the court has specifically held to be still valid and enforceable. That
seems to me an impossible position for the court to put itself in, and,
therefore, if I had been called upon to exercise my discretion and to grant
relief I would have done so only upon the condition that the breach of covenant
should cease. That too, however, is not a matter on which I am, in the event,
called upon to decide.
For those
reasons the action will be dismissed.
