England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE PRESTON COUNTY COURT
HIS HONOUR JUDGE MAHON
PR204595

		Royal Courts of Justice Strand, London, WC2A 2LL
		22 October 2004

Mr Justice Lindsay:

1. The Agriculture (Maintenance, Repair, etc.) Regulations 1973 ("the Regulations") and the Agricultural Holdings Act 1986 ("the Act") include provisions as to repairs and replacements which are the responsibility of the landlord. If the tenant serves an appropriate notice on the landlord (or, in some specified cases, on an agent) requiring repairs or replacements to be done then, if such notice is not contested as the Regulations provide and if the work is not done, the tenant may himself carry out work and then recover the cost from the landlord as is there provided. In order to trigger any such liability in the Landlord he has to have received the notice or it has to have been given or served upon another for him in one or more of the ways described by the Act.
2. That the Claimant below, the Respondent before us, was, at the material time, the tenant of an agricultural holding held on an oral tenancy has not been in question, nor has been the applicability of the Act or the Regulations. Nor is there any doubt but that a notice intended to fall within the Regulations was served. But the chief question raised below and before us has been whether that notice was served on the Landlord or in any of the other ways prescribed by the Act. That question required an inquiry as to just who was the Landlord at the relevant time and whether any agency then existed such as would enable the service that was effected to be regarded as falling within the Act and the Regulations. His Honour Judge Mahon sitting at Lancaster County Court dealing, by consent between the parties, only with the question of liability, held that the notice that had been given sufficed to trigger liability under the Act and by his Order of 2^nd April 2004 he granted relief on that basis; the defendants below, whose identity I shall later explain more fully, now appeal. Permission to appeal was refused by the Judge but was granted by Carnwath L.J..
3. Before I turn to the facts it would be as well to set out the material provisions of the Act and of the Regulations. Section 93 of the Act, headed "Service of Notices", includes two sub-sections upon which Miss Katherine Dunn, for the Respondent tenants, heavily relies, as follows:-

"………….

(iii) Any such instrument to be given to or served on a landlord or tenant shall, where an agent or servant is responsible for the control of the management or farming, as the case may be, of the agricultural holding, be duly given or served if given to or served on that agent or servant.

…………..

(v) Unless or until the tenant of an agriculture holding has received –

(a) notice that the person who before that time was entitled to received the rents and profits of the holding ("the original landlord") has ceased to be so entitled, and

(b) notice of the name and address of the person who has become entitled to receive the rents and profits, any notice or other documents served upon or delivered to the original landlord by the tenant shall be deemed for the purposes of this Act to have been served upon or delivered to the landlord of the holding."

4. Section 96, the interpretation section of the Act, includes:-

""landlord" means any person for the time being entitled to receive the rents and profits of any land."

It is plain that for the purposes of the Act it is not necessarily the owner of the legal estate who will be the landlord; such legal owner could have agreed, or the law or events could have imposed upon him, some direction such that someone but he was, as between that person and the tenant, to receive the rents and profits by way of entitlement. In the ordinary way, though, and in the absence of proof to the contrary, it will be the owner or owners of the legal estate who is or are so entitled. It is equally plain that a mere receipt of the rent falling short of an appropriate entitlement to receive it will, again, not confer the title of landlord on the recipient.

5. As for the provisions of the Regulations which were here incorporated into the oral tenancy, they include, at Part I of the Schedule to the Regulations, a very detailed description of the nature of the works which may in appropriate circumstances be required of the landlord. As the learned Judge did not deal with any questions other than liability he was not required to go in any detail into the nature of the shortcomings that existed at the holding. That there are some material dilapidations and that they are extensive is not disputed. Regulation 12 provides:-

"(1) If the landlord fails to execute repairs other than repairs to an underground water pipe which are his liability within 3 months of receiving from the tenant a written notice specifying the necessary repairs and calling on him to execute them, the tenant may execute such repairs and, except to the extent to which under the terms of Part I hereof the tenant is liable to bear the cost, recover (subject to the landlord's right to require arbitration under sub-paragraph (5) below) the reasonable costs from the landlord forthwith."

Regulation 12 provides a different manner in which there may be recovery by the tenant where what is required to be done can properly be regarded as a replacement rather than a repair. The learned Judge had no need to investigate any possible issues as to whether any particular work was of replacement or was of repair.

6. Regulation 12 (5) (a) provides as follows:-

"(5) (a) If the landlord wishes to contest his liability to execute any repairs or replacements specified in a notice served upon him by the tenant under sub-paragraph (1), (2) or (3) above he shall within 1 month of the service of that notice serve a counter-notice in writing upon the tenant specifying the grounds on which and the items of repair or replacement in respect of which he denies liability and requiring the question of liability in respect to be determined by arbitration under the Act;

(b) Upon service of a counter-notice on the tenant which relates to a notice served on the landlord under sub-paragraph (1) or (3) above, the operation of the notice so served under sub-paragraph (1) or (3) (including the running of time thereunder) shall be suspended, insofar as it relates to the items specified in the counter-notice, until the termination of an arbitration determining the question of liability in respect of those items.

(c) Upon service of a counter-notice on the tenant which relates to a notice served on the landlord under sub-paragraph (2) above, the tenant's right under that sub-paragraph to recover the reasonable cost to the repairs specified in the counter-notice shall not arise unless the question of liability to execute those repairs is first determined by arbitration in favour of the tenant, and shall thereupon arise from the termination of the arbitration."

Regulation 15 is a general provision such that where a claim, question or difference arises between landlord and tenant under the foregoing provisions of the Regulations then there shall be arbitration unless the problem is solved by agreement.

7. With that legislative background in mind I turn to the facts; no oral evidence was given below; the facts had to be derived from the papers produced. The papers showed that land and buildings called "Higher Core" at Chipping in Lancashire had been owned by the Parkinson family for many years. It may be taken that "Higher Core" included the farmhouse and land now known as "Higher Core Farm" and the nearby land farmed with it known as "Fell Foot".
8. On the tenant's side, Mr John France, by way of what had originally had been two oral tenancies from year to year made as long ago as 1953 and 1961, became, and until recent events remained, the tenant of both premises which, at any rate by the 20^th March 1970, had become one holding under one oral tenancy. The rent, left at 1950 levels, was low; only some £260 per annum gross. On the landlord's side, whilst the conveyancing records as to the legal title were not produced below and now very probably will never be found, the papers did include documents relating to an arbitration under the predecessor of the Act in 1970. At that time both sides had been professionally represented. The arbitration award of the 20^th March 1970 describes Mr France as tenant and Mr E.C. Dickson, Katherine Coulthurst and Mrs Helen Longton as the landlords. If they were then the landlords by way of being owners for the time being of the legal estate (and no other entitlement of theirs to the rents was suggested) they necessarily held as trustees. Mrs Katherine Coulthurst was a member of the Parkinson family and had some beneficial entitlement to all or a proportion of the rents and profits of "Higher Core". It is not clear whether Katherine Coulthurst's co-trustees conferred on her an entitlement to receive the rent on their behalf as one of three trustees or as the or a person beneficially entitled to the rents but in practice Mr France paid his rent, payable half-yearly, to her or (less likely but possibly) to her husband, Mr Fred Coulthurst, the First Defendant, over very many years. During Mrs Coulthurst's lifetime and possibly for a while afterwards the rent went into a joint account in the names of her and her husband.
9. On the 15^th January 1999 Katherine Coulthurst died intestate survived by her husband, who was born in September 1918. Mr France learned of her death; indeed, he went to her funeral. Just over three weeks after Mrs Coulthurst's death, Mr France on 8^th February 1999 assigned the tenancy, which was of the farmhouse and, overall, some 112 acres, to Lodgepower Limited, a company of which he is a director. The assignment in writing, the effect of which is not challenged, was gratuitous but was signed as a deed. By Notice of Assignment dated the 9^th February 1999 notice of the assignment to Lodgepower was given to Mr Fred Coulthurst by solicitors acting for both assignor and assignee. Then, under a week later, the notice intended to be within Regulation 12, (which I shall call "the notice to remedy") the notice at the heart of the proceedings, was signed by Lodgepower's agents. It is headed:-

"To: The Executors and Mrs Katherine Coulthurst deceased c/o 17 St Andrew's Avenue, Ashton, Preston, PR2 1JL."

10. That had been Mrs Coulthurst's address at her death. Of course, she had no executors, she had died intestate. Nor had there been any grant to administrators by that date. The notice to remedy says that it was given on Lodgepower's behalf and it says, after asserting that the addressees were liable to execute repairs, that that company "requires you to execute such repairs or replacements and that if you fail to carry out any such repairs or replacements within three months from the date of service of this notice the Company shall exercise its rights under the Regulations to execute any such repairs or replacements and recover the reasonable cost incurred by the Company from you immediately except to the extent if any to which the Company is liable to bear the costs under the terms of the above Regulations". The Schedule set out in broad outline works which Lodgepower said were the liability of the executors and which, so said Lodgepower, required to be done.
11. Mr Fred Coulthurst, who at his wife's death was already 80 years of age and who now describes himself as not in the best of health and as having a poor memory, not unnaturally opened the envelope addressed to his late wife's executors and thus received the notice to remedy. He did not acknowledge receipt of either the Notice of Assignment or the notice to remedy until the 31^st March 1999 when, by separate letters to the two separate senders of those documents, he apologised saying he had suffered not only his wife's death but that he himself had been sent to hospital. The notice to remedy had, he said, gone by Recorded Delivery to what was at the time an empty house, had then been taken by the GPO but that he had "eventually" recovered it. He added:-

"You will realize that I am in no condition to deal with your letter. As soon as I am mobile I want to consult several farming friends and then ask the solicitor who is dealing with my wife's estate."

12. Lodgepower instructed surveyors and a more detailed description of what were claimed to be the necessary works was drawn up but no agreement that those or any other works had become the responsibility of anyone on the landlord's side emerged. On the 19^th February 2003 Letters of Administration to the Estate of Katherine Coulthurst were granted to Mr Eric Paul Gardner, solicitor, and to Joan Elizabeth Taylor, daughter of Mr Fred Coulthurst and his late wife. In September 2003 Lodgepower issued proceedings against, as First Defendant, Mr Fred Coulthurst and, as second and third defendants respectively, Mr Gardner and Mrs Taylor.
13. The Amended Particulars of Claim asserted, inter alia, that Katherine Coulthurst had been landlord until her death, that during her lifetime both she and Mr Fred Coulthurst had dealt with the management of the tenancy and that Mr Fred Coulthurst had acted as her agent in that regard. Lodgepower sought relief including an order requiring the defendants to carry out works or, alternatively, damages which it estimated at £69,500. The Amended Defence of Fred Coulthurst and, later, that of the Second and Third Defendants denied Lodgepower's entitlement to any relief and denied that Katherine Coulthurst had been sole landlord during her lifetime, denied that Mr Fred Coulthurst had been his late wife's agent in the management of the tenancy.
14. Rent becoming payable after Katherine Coulthurst's death has been paid by Lodgepower to Mr Fred Coulthurst although it is not said that Mr Coulthurst himself or anyone on his behalf requested that. It seems that at first he banked cheques into what had been the joint account between himself and his wife but he accepts that, at any rate later, by which time the account had become one solely in his own name, the cheques must have been made payable to him.
15. No counter-notice under Regulation 12 (5) was ever served.
16. Of the three trustees who had appeared to be trustees of the legal estate in 1970 as I have explained above, Mrs Helen Longton is thought to be dead. Were she to be alive she would by now be over 100. But, happily, Mr E.C. Dickson, a solicitor, is alive.
17. The learned Judge held on the facts that the notice to remedy had been so served upon or for the landlord within the provisions of the Act and Regulations as to have caused liability to arise under Regulation 12. Whilst several other questions could well have arisen before any order for specific performance or damages was made, the validity of the notice to remedy (in terms of whether it had been addressed to and served on the correct person) was the principal question before the learned Judge and became the only question before us.
18. The learned Judge held that upon Mrs Katherine Coulthurst's death the landlord, as sole survivor of Mr Dickson, Mrs Longton and Mrs Coulthurst, was Mr Dickson. That is not challenged by Miss Dunn and it follows, argues Mr Creaner for the Appellants, that the notice to remedy, addressed only to Mrs Coulthurst's executors and requiring only them to do work, was not received by "the landlord" within the meaning of the Act and Regulations nor that it called on "the landlord" to execute works. I accept that; any contrary view would, in my judgment, be quite unarguable. However, the learned Judge, recognising that there had been no service on the landlord, Mr Dickson, nonetheless held the notice to remedy to be valid under section 93 (3) of the Act by way of its having been served on Mr Coulthurst as the landlord's (i.e. Mr Dickson's) agent after her death. There was, though, no evidence whatsoever that as at the date of the notice to remedy in February 1999 Mr Dickson had authorised Mr Fred Coulthurst to collect or receive the rent or knew that he was going to do so or had in any other way constituted Mr Coulthurst as his agent. Nor had any such agency been pleaded. Mr Dickson had not held out Mr Coulthurst as his agent in any way and it is equally plain that in February 1999 Mr Coulthurst had little or no awareness of where the legal estate lay and cannot be held to have contemplated, even were this relevant, that he was receiving rent as agent of Mr Dickson or any other landlord. Section 93 (3) of the Act requires, if service on an agent is to suffice as being service on the principal, that there should be a present agency and one such that that present agent should be at the time responsible for the control of the management of the agricultural holding. The learned Judge held:-

"Mr Coulthurst effectively managed the landlord's obligations under the tenancy for 40+ years. If he did not continue to do so after his wife's death then who did or could, certainly not Mr Dickson."

Any agency which Mr Coulthurst had for his wife must have ceased on her death. The fact, even supposing it to be such, that he was, after her death, responsible for the control of the management of the holding, would not suffice to enable service on him to be valid for the purposes of the Act and Regulations where his agency had plainly already come to an end. The finding that Mr Coulthurst was the landlord's agent after Mrs Coulthurst's death is, in my judgment, unsustainable.

19. As an alternative to the notice to remedy thus being good by way of section 93 (3) the learned Judge had held it to be good by way of section 93 (5). As for that, I shall assume that the "notice" contemplated by section 93 (5) (a) does not have to consist of some formal notice that the original landlord has ceased to be entitled to the rents and profits but that it suffices that information to such effect has come to the attention of the tenant. I shall therefore assume that Mr France's knowledge of Mrs Katherine Coulthurst's death (he being also a director of Lodgepower Ltd.) was "notice" within section 93 (5) (a). But whether that is right or not, section 93 (5) (b) requires there to have been notice served on or delivered to "the original landlord" (namely, on this footing, the late Mrs Coulthurst). That, of course, was impossible as at February 1999. Could there, though, be service within section 93 (5) (b) by way of service on an agent of the original landlord within section 93 (3), as Miss Dunn urges? It may well be (it is unnecessary to decide) that a document required to be served on "the original landlord" within section 93 (5) (b) can be regarded as effectively served by way of the provisions as to service on "a landlord" within section 93 (3) but it is, in my view, not possible to read section 93 as treating as valid service on an erstwhile agent of the original but past landlord. Indeed, given that only a month is allowed for an effective counter-notice, one can see that any such enlargement of those who could be said to have been sufficiently served with the notice to remedy could work great unfairness. As at February 1999 Mr Fred Coulthurst could, at most, be regarded only as an erstwhile agent of an erstwhile principal, the original landlord. I thus cannot see service on him as being service on the landlord within section 93 (5). Moreover, the sense of the notice was not to require either the landlord, Mr Dickson, or "the original landlord", Mrs Coulthurst, to do works but that Mrs Coulthurst's executors should do so.
20. Miss Dunn sought to derive from Egerton –v- Rutter [1951] 1 KB 472 the proposition that even a wrongly addressed notice, so long as it came to the attention of the person most likely, in practical terms, to be most affected by it, was to be considered valid. The notice to remedy came to Mr Fred Coulthurst's hands and attention; he was the person most likely, in practical terms, to be affected by it and hence the service was good.
21. In Egerton supra a tenant of an agricultural holding died intestate leaving her son and daughter in actual possession. Almost two months after the tenant's death and before any Grant of Letters of Administration the landlord served a notice to quit addressed to the executors of the late tenant. The son and daughter received the notice. They claimed to be in possession as tenant and had paid the rent. Lord Goddard CJ held that the notice to quit was valid. He held that the notice could properly have been served on the President of Probate, Divorce and Admiralty Division as the temporary tenant under the Administration of Estates Act 1925 but that on the facts the son and daughter could be regarded as agents for that President. There was thus service on an agent of the tenant within section 92 (3) of the legislation as it then was, that provision then corresponding to the present section 93 (3). However, in my view, that line of reasoning is not open in the case at hand. That finding depended on Lord Goddard's holding:-

"…… it was necessary that the farm should be carried on, acts of husbandry performed and the animals tended and fed ……"

There was thus, as Longmore LJ pointed out in the course of oral argument, a case for there being an agency of necessity in Egerton. No corresponding argument is available to show that Mr Fred Coulthurst, by some necessity, became agent of Mr Dickson and had so become his agent by the time of the service of the notice to remedy only a few weeks after the death of the preceding landlord.

22. Lord Goddard alternatively held that the fact that notice had been addressed to the executors of the late tenant was mere "falsa demonstratio"; the position was obvious and no-one was misled into thinking that it could have been addressed to anyone but "those really interested, namely, the defendants who were in possession". It is possible to see force in such a view where the notice is a notice to quit and is received by those in and claiming properly to be in possession; they are obviously likely to be affected. But there is no corresponding obviousness about the notice to remedy; it cannot be said that it should have been obvious to Mr Fred Coulthurst, on his opening the notice to remedy, that although on its face it required the executors of his late wife to execute repairs it truly meant that he should have had them executed. There is thus, in my judgment, no support either in Egerton supra (or in Wilbraham –v- Colclough and others [1952] 1 All ER 979 which followed Egerton) for Miss Dunn's suggested proposition. Indeed, by its incorporation of so loose a concept as "he who was most likely in practical terms to be most affected by the notice" any such proposition, so far from providing a useful rule of thumb as to service, would be likely to cause as many problems as it would solve.
23. Accordingly, none of the routes by which the learned Judge concluded that the notice to remedy was valid was, in my judgment, open to him. I add two things. Firstly, the learned Judge took the view that service on Mr Dickson would have been pointless; he said:-

"However, given Mr Dickson's advanced age and lack of memory, the likelihood is that the notice if sent to him would have meant nothing to him and would have achieved nothing."

There was no evidence that the notice would have meant nothing to Mr Dickson or would have achieved nothing. As Mr Dickson is an elderly solicitor, presumably no longer in practice, it could have been reasonably expected of him, had the notice been served on him, that he would refer the matter to the partners in his erstwhile firm or to other solicitors. Certainly there was no evidence that nothing would have been achieved. In any event it is seldom part of an inquiry into whether a notice is valid or not to enquire whether it would have achieved anything.

24. The second matter I add is this: any finding in this Court that the notice to remedy was ineffective leaves open the ability of the tenant to serve a fresh notice. Given that the nature of the repairs which a valid notice to remedy is likely to require to be done will either not be in dispute or would well only marginally be in dispute between the parties, a finding that the present notice to remedy was not valid may do little more than generate yet further expense and delay. It may well be that an understandable wish to avoid that undesirable end pressed the learned Judge towards the conclusion to which he came. However, for the reasons I have given, for my part I cannot see the notice to remedy to have been sufficiently addressed and served so as to have generated either rights in the tenant under Regulation 12 or the more comprehensive relief which the learned Judge ordered. Accordingly I would allow the appeal and set aside the order made on the 2^nd April 2004.

Lord Justice Longmore:

25. I agree.

Lord Justice Peter Gibson:

26. I also agree, but as we are differing from the judge, I add a few words of my own.
27. The definition of "landlord" in s. 96 (1), by reference to entitlement to receive the rents and profits of any land, must in my judgment refer to entitlement as between landlord and tenant. Where the land is held in trust, the entitlement of a beneficiary to the rents and profits as against the trustee is not relevant.
28. Mrs. Coulthurst was prior to her death one of what originally were three trustees holding the legal estate as joint tenants but who in all probability were reduced to two by the death of Mrs. Longton before then. On Mrs. Coulthurst's death, the land automatically vested in the surviving trustee. The judge was plainly right to find that Mr. Dickson alone was the person entitled to the rents and profits after Mrs. Coulthurst's death. We are told that prior to her death the trustees held the land upon trust as to 36/43rds of the proceeds of sale for Mrs. Coulthurst absolutely and as to the remaining 7/43rds for Mrs. Coulthurst for life with remainder to her daughter, Mrs. Taylor. Thus the death of Mrs. Coulthurst did not mean that the entire beneficial interest in the land was comprised in her estate, because of Mrs. Taylor's 7/43rds. It follows that it was inappropriate for Lodgepower to serve a notice addressed to Mrs. Coulthurst's executors (as it would have been even if the notice was addressed to her personal representatives) because the land remained in trust and Mrs. Coulthurst as a deceased trustee fell out of the picture. Whilst Mr. Coulthurst may take the lion's share of the beneficial interest in the land in Mrs. Coulthurst's intestacy, he is not the only person with a beneficial interest in the rents and profits because of Mrs. Taylor's interest.
29. The fact that Mr. Coulthurst read the notice addressed to Mrs. Coulthurst's executors does not in my judgment mean that there was service of the notice on the agent of the landlord within s. 93(3). The notice was not addressed to Mr. Dickson nor to Mr. Coulthurst as Mr. Dickson's agent. Nor was it pleaded that Mr. Coulthurst was Mr. Dickson's agent, nor did Mr. Dickson do anything to constitute Mr. Coulthurst his agent. I am also unable to accept that s. 93(5) was satisfied in the present case by the notice reaching Mrs. Coulthurst's agent, when the agency had ceased with her death. There is nothing in s. 93 (5) to suggest that service on a former agent of a former landlord suffices.
30. Miss Dunn in her submissions in support of the judge's conclusion drew attention to the practical difficulties facing a tenant who wishes to serve a notice on a landlord when a death has occurred. But in the present case it does not appear that any real attempt was made to find the right person to serve. Mr. France knew or should have known that in 1970 at the time of the arbitration not only Mrs. Coulthurst but also two others were the trustee landlords. Barely 3 weeks had expired from Mrs. Coulthurst's death before Mr. France assigned the tenancy to Lodgepower and the purported service on Mrs. Coulthurst's executors came only a week later. A little more time taken in seeking to ascertain who was the landlord might have avoided the waste of time and money which has consequently occurred.
31. For these as well as the reasons given by Lindsay J., I too would allow the appeal.

ORDER: Appeal allowed; the claim is dismissed; the first respondent to pay the appellant's costs of the appeal, the costs to be the subject of a detailed assessment in default of agreement; the first respondent to pay the appellant's, the second respondent's and third respondent's costs of claim, such costs to be the subject of a detailed assessment in default of agreement; in complying with paragraph 4, the first respondent to repay to the appellant the sum of £5,000 paid to the first respondent as an interim payment on account of his costs as ordered by the judge on 29 March 2004.

(Order does not form part of approved judgment)