Agricultural holding—Tenancy—Death of tenant

Queen’s Bench Division (Administrative Court)
Beatson J
27 June 2007

On an application by a nominated successor for a direction under s 53 of Agricultural Holdings Act 1986 (AHA 1986) entitling her to a tenancy on the retirement of the tenant, the nominated successor has to satisfy the livelihood condition in s 50(2)(a) by reference only to the seven years ending with the date of the giving of the retirement notice, rather than the seven years ending with the date of the tribunal hearing.

Martin Rodger QC (instructed by Mills & Reeve) for the landlord.
Caroline Hutton (instructed by Nigel Davis) for the tenant.

The proceedings concerned a holding of some 80.9 hectares in Derbyshire (the property). The property was let to the tenant, F, who had a farming partnership with his daughter, the defendant. In March 2004, F gave a retirement notice pursuant to s 49(1) of AHA 1986 stating that he intended to retire in March 2005. He nominated the defendant to succeed him as the tenant. In April 2004, the defendant applied under s 53(7) of AHA 1986 for a direction entitling her to the tenancy. The landlord opposed her application. It was agreed that the defendant was a suitable person for the purposes of s 53(5). The issue was whether she satisfied the eligibility criterion in s 50(2)(a), which required her principal source of livelihood in the relevant period or periods to be derived from her agricultural work on the holding.

The Agricultural Land Tribunal found that in five of the six years ending April 1999 to April 2004, the defendant had derived her only or principal source of livelihood from her agricultural work on the holding. It held that that satisfied the statutory requirement, and it therefore ruled in favour of the defendant. At the request of the landlord, the tribunal stated a case for the opinion of the High Court. The case stated asked whether, on an application by a nominated successor for a direction under s 53 of AHA 1986 entitling her to a tenancy on the retirement of the tenant, the nominated successor had to satisfy the livelihood condition in s 50(2)(a) not only by reference to the seven years ending with the date of the giving of the retirement notice, but also by reference to the seven years ending with the date of the tribunal hearing.

BEATSON J:

Section 50(2)(a) of AHA 1986 provided: “(2) For the purposes of ss 49 to 58 of this Act, ‘eligible person’ means (subject to the provisions of Part I of Sch 6 to this Act as applied by sub-s (4) below) a close relative of the retiring tenant in whose case the following conditions are satisfied—(a) in the last seven years his only or principal source of livelihood throughout a continuous period of not less than five years, or two or more discontinuous periods together amounting to not less than five years, derived from his agricultural work on the holding or on an agricultural unit of which the holding forms part…”

The issue had not been considered by the court and there was a division of opinion in the text books. In his Lordship’s judgment the tribunal did not fall into error in concluding that the livelihood condition had to be satisfied in respect of the period ending with the retirement notice, and that once established, that qualification could not be lost. His Lordship considered that the sub-section should be construed in a purposive manner and that the words “in the last seven years” should be given their ordinary and natural meaning: see Jackson v Hall [1980] AC 854, [1980] 1 All ER 177 in relation to “the occupier” and Wellby v Casswell [1995] 2 EGLR 1, [1995] 42 EG 134 in relation to “livelihood”. The subsection could have been clearer, but in the context of the eligibility conditions in AHA 1986 and its predecessors, the ordinary and natural meaning of “in the last seven years” was the period of seven years expiring at the date of the retirement notice.

It was submitted on behalf of the landlord that the definition in s 50(2)(a) was furnished for the purposes of ss 49-58 so that it was wrong to look to the reference in s 50(1) to the retirement notice as providing the temporal context for the phrase in s 50(2)(a). It was, however, important to note that s 49(3) provided that “eligible person” had the meaning given by s 50. While the definition of “eligible person” was to be applied to all the provisions concerning retirement neither s 49, nor ss 51 to 58 affected the definition.

There were no indications in s 50(2)(a) that eligibility by reason of livelihood at the date of the retirement notice could be lost thereafter. The statutory provision was that the livelihood condition was to be satisfied in a period of five out of seven years, the years to be chosen by the applicant: see Bailey v Sitwell [1986] 2 EGLR 7, 8. There was nothing in s 50(2)(a) itself to indicate that it was to be satisfied in two separate periods of five out of seven years. In the instant case the effect of accepting the landlord’s submissions would have required livelihood eligibility to be satisfied over a period of nine years.
The date of the hearing might be a considerable time after the date of the retirement notice. Indeed in the instant case the hearing took place over a year after the date on which the tenant originally proposed to retire. Whether or not a delay in the substantive hearing resulted from unavailability of a tribunal or witnesses, time for negotiation, or the need for procedural hearings it was not satisfactory that such delay should require the applicant to revise and renew the case for eligibility under the livelihood condition or lose such eligibility.

The appeal would therefore be dismissed.