ON APPEAL FROM Exeter County Court
His Honour Judge Cotter QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE ETHERTON
LORD JUSTICE PITCHFORD
| BRIAN JAMES POTTER
|- and -
|STEPHEN GERARD CRISPIN DYER
Mr Stephen Jourdan Q.C. (instructed by Wilsons Solicitors LLp) for the Respondent
Hearing dates : 12th October 2011
Crown Copyright ©
LORD JUSTICE ETHERTON :
"Firstly I want to relieve you of liabilities which you may have through being a joint tenant of Little Heath, so please do not be concerned at anything I say, or figures that I quote, they are examples and not threats!
You may want to take your own advice on this matter, but as promised I have spoken to my solicitor and asked him how he would advise you. He suggested:
1. That you should give notice to quit the tenancy, because this will serve to stop the build-up of any liabilities that you may have.
2. If you do so before November 19th 2007 this will stop you from being joined as Tenant in the current Arbitration. Up to now it has only been Brian because you were not known, but now Brian has revealed you as a tenant the notices and the costs will apply to you too.
3. Given the rather draconian liability clauses in the Assignment, and the fact that you did not (?) have independent legal advice in 1987 before signing the document you should have a fairly strong case to avoid any claims from Brian Potter in relation to rent, arbitration, legal costs, or the costs of remedying the state of the farm or Dilapidation charges on leaving the Tenancy.
Technically as Tenant you do have a liability to me for legal costs, repair costs, dilapidations and so on, but I will be happy to release you from all such liabilities if I receive the signed notice to quit before the Arbitration starts on Nov 19th 2007 which is when heavy costs might be applied to yourself.
I have attached a notice to quit which gives about 12 months notice. Legally you have to give that long a notice, but I will release you from all liabilities immediately on receipt of the signed document, and will write to you to that effect.
If you decide to give up your tenancy please sign and date the attached notice and send it to me by fax and the original by post."
"Thank you for your recent communication regarding my joint tenancy of Little Heath.
As I stated on the phone the tenancy agreement is an area that I have not reflected on for a good number of years and I was unaware that it was still in existence.
I would like to give up my tenancy of Little Heath as soon as possible and so I am signing and returning the notice that you sent to me.
Thank you once again for explaining the situation about the tenancy agreement to me. I hope that you will be able to work something out with Brian over Little Heath in the near future."
"Stephen sent me a fax explaining his side of the story promptly the next day or so and a letter to sign to end my part of the Tenancy on 2nd November. He had spoken to me prior on the phone and I remember asking him what would be the significance of the letter. He told me that all it would mean is that he would have to deal with one tenant rather than two and it would make it much easier at the arbitration hearing that would take place on November the 19th. I signed and returned the letter/notice to quit in good faith hoping to make things easier for you and Stephen to come to some agreement. I was clearly under the impression that the arbitration would still proceed and that you would continue to be the sole tenant.
I received another fax from Stephen on 19th November to say that he had received my Notice to Quit and had accepted it.
I have not intended to make anything difficult for you but I wish to end my connection to Little Heath as soon as possible for once and all".
"I do not want to be caught up in the argument between you and the landlord. I want nothing to do with Little Heath; I left the country about 15 years ago."
"Yes I do remember asking S. Dyer what difference it would make if I ended my tenancy agreement He told me that it would be easier for him to deal with arbitration with only one tenant not two (especially as I was here). He did not explain that in any way Brian's part of the tenancy would become invalid and that I would be affecting Brian in any way I thought he would become the sole tenant.
It is interesting to note how quickly Mr Dyer wanted me to act on signing the paper to end the tenancy At that time everything was hurried letters sent by fax etc - maybe he knew I wouldn't sign if I had known that Brian's part of the tenancy would also come to an end. Letters from S. Dyer are no longer sent by fax -
I have not had 2 way communication with S. Dyer since 8th Nov and signing the notice that was the last time I contacted him."
"I was very surprised when Mr Dyer contacted me in October 2007 and told me that I was a joint tenant of Little Heath. I had no reason to believe though that he would not be telling the truth. He knew that I had not used a solicitor when I first signed the joint tenancy agreement with Brian because he asked me.
I had been out of the country for so long and definitely didn't want any further ties with Little Heath.
We spoke on the phone and I definitely asked him how I signing the agreement would affect Brian. He said that it would make no difference to Brian. It would just mean that in future he could talk to Brian without contacting and involving me, Brian would be the sole tenant. So I thought it would be in the best interest to sign the Notice to Quit.
On reflection I do feel that I was misled by Mr Dyer on two key points:
1. That I was not a joint tenant anyway (because of the later agreement with Brian and Mrs How) as I have said I had absolutely no correspondence about Little Heath since I left England in the early 1990's. I wonder if this was just a set up to get me to sign the paper! It is very interesting that Mr Dyer said he needed the Notice to Quit signed so promptly and spoke of the involvement of solicitors and Tribunals. He encouraged me to use faxes and to do everything rapidly not really giving me time to make careful considerations as what to do.
2. The fact that he said it would not effect [sic] Brian and the end of my part of the tenancy would just mean that Brian would be the sole tenant. In this regard I have been completely misled, by Mr Dyer. I would never have agreed to sign this if I had known what would be happening in the future. I would have chosen to get in touch with Brian and find out what was going on."
"(3) On 1 November 2007 the Claimant telephoned Mrs Goscomb at her home in New Zealand and informed her that, by reason of the assignment of 13 November 1987 she was still one of the joint tenants of Little Heath Farm and that she remained potentially liable for the costs of the arbitration and for costs of repair, dilapidations and other sums under the tenancy.
(4) Mrs Goscomb was very surprised by the Claimant's statement and was keen not to have any liability in respect of the Farm, with which she had not been involved in any way for at least 15 years.
(5) The Claimant informed Mrs Goscomb that she could terminate her liabilities by giving a notice to quit to him.
(6) Mrs Goscomb asked the Claimant during the telephone call what effect her giving a notice to quit would have on the Defendant.
(7) The Claimant informed Mrs Goscomb that the notice to quit would make no difference to the Defendant and would just mean that in future the Claimant and the Defendant could deal with each other without involving Mrs Goscomb and that the Defendant would be the sole tenant.
(8) On 2 November 2007 the Claimant sent Mrs Goscomb, by fax, a letter enclosing a draft of the Notice to Quit prepared by his solicitors and offering to release her from all liabilities for legal costs, repair costs, dilapidations and so on if she signed and returned the notice to quit to him before the arbitration hearing on 19 November.
(9) In reliance on the representation that the notice to quit would have no effect on the Defendant Mrs Goscomb signed and returned the Notice to Quit to the Claimant on 6 November 2007.
(10) The representation as to the effect of the Notice to Quit on the Defendant was false and was known by the Claimant to be false, or alternatively was made recklessly, without caring whether it was true or false. The Claimant intended and believed that the Notice to Quit would determine the Defendant's tenancy and enable the Claimant to recover possession of the Farm.
(11) Mrs Goscomb would not have given the Notice to Quit unless the Claimant had reassured her that it would have no effect on the Defendant.
(12) Accordingly, the Notice to Quit was void and of no effect."
"14. Then late 2007 I "out of the blue" was approached both by the Claimant and Defendant. I cannot now be sure who approached me first but think it was the Claimant. He certainly was the one who was in the most contact.
15. He spoke to me at some length on the telephone, largely in a polite and friendly manner. In view of what he said to me and the way he did I quite simply believed what he was telling me, namely that there was a joint tenancy still in existence.
16. Against this backdrop it was of course the case that I wanted to have nothing further to do with Little Heath and so and as I said in my letter to him of 6 November 2007 "I would like to give up the tenancy of Little Heath as soon as possible and so I am signing and returning the notice that you sent to me. Thank you once again for explaining the situation about the Tenancy Agreement to me. I hope that you will be able to work something out with Brian over Little Heath in the near future". I had indeed been very surprised when the Claimant did contact me and told me I was a joint tenant and had no reason to believe he would not be telling the truth.
17. I must however say how now I feel I was misled by the Claimant. Although keen not to have any liability in respect of the farm there quite simply is no way that I would have done something to prejudice the Defendant's rights in respect of Little Heath.
18. When the Claimant spoke to me about giving notice on the telephone, I definitely asked him how I signing the agreement would affect the Defendant. His reply to me was that it would make no difference to the Defendant. It would just mean that in future he could talk to him without contacting and involving me. He added that the Defendant would be sole tenant.
19. By these comments he indeed persuaded me to give the Notice to Quit and I feel completely misled by him. I would never have agreed to sign this if I had known that he was later to use this as a lever to try to evict the Defendant.
22. To sum up therefore I do not actually consider that I remain a tenant of Little Heath after the Defendant's arrangements with Mrs How. If however it was to be concluded that the joint tenancy created by the deed in 1987 indeed remained in place then I feel as mentioned above that the Claimant misrepresented the position to me. As a result of what he said to me I signed and served the Notice to Quit in the belief that all that did was to remove me of any liability and that it had no affect on the continued occupation by the Defendant. I did not give my Notice to Quit ever even thinking that it might impact on Brian in any way at all."
" [Mr Dyer] says there was no binding agreement with Mrs How, and the original tenancy continued. If he wins on that point, the notice to quit becomes very important. If the notice to quit was effective, then the tenancy is now at an end. If it was ineffective, the tenancy still continues.
If, as you claim, Mr Dyer induced you to serve the notice to quit by misrepresentation, then you have a choice as to whether to treat the notice to quit as valid. You can make that choice by a clear statement to us, on behalf of Mr Dyer, as to what your choice is.
In deciding what choice to make, you need to consider the consequences for yourself. If you choose to treat the notice to quit as valid, then the tenancy ended on 24 March 2009. Mr Dyer has already made clear that, in that event, he will not seek to enforce against you any liability you may have under the tenancy.
If you choose to treat the notice to quit as invalid, then the tenancy is still continuing. As one of the two joint tenants under the tenancy, you are and will continue to be, jointly and severally liable to pay the rent, and to perform the tenant's obligations under the tenancy.
The position, in our view, is that you have not made a decision as to whether or not the notice to quit should take effect. You have that choice but before you make it you should take independent legal advice. Mr Dyer advised you to do this back in November 2007 and the need for that advice is even more pressing now.
If you do choose to treat the notice to quit as being of no effect, or fail to make any choice, then Mr Dyer will apply to the Court to have you added as Second Defendant in the claim. We enclose draft Amended Particulars of Claim which show the sort of claim you would be facing. There are two reasons for needing to join you as a party. The first is that if the Court decides that there was no misrepresentation, then your allegation that you were misled will have led to additional costs which will be sought from you. The second reason is that, if the misrepresentation claim leads to the court deciding that the original tenancy is still in effect, you are a joint tenant and will be directly affected by the decision.
We should point out that, if the original tenancy still continues, with you as one of the joint tenants, then it is Mr Dyer's case that there are obligations on the tenants to repair and maintain the holding. There was an arbitration about the extent of those obligations, and the arbitrator made an award, in which he determined the works that need to be done to the holding to comply with the tenant's obligations. Mr Potter is seeking to have that award set aside by the High Court, but Mr Dyer contends that it correctly determined the extent of the tenant's obligations."
" we are instructed to inform you that our client does not wish to be involved in the proceedings. Similarly she does not wish to pursue Mr Dyer in respect of any claim for misrepresentation relating to the Notice to Quit which our client signed in 2007. Accordingly, your previous request that our client participate by way of video conference as a witness in relation to her statement dated 14 January 2010 is rejected.
Although our client had not been aware that she remained a tenant of the agricultural land at Little Heath Farm after she had moved away the Notice to Quit signed in November 2007 was sufficient to terminate her interest in the tenancy."
"As we have confirmed in the accompanying letter our client has no wish to be involved in the pending proceedings as a witness or as a party in her own right and consequently acknowledges that the Notice to Quit that was served in 2007 on your client was sufficient to determine any interest that she may have had in Little Heath Farm at the time."
"34. If it did have a prospect of success I would then have had to go on to consider the position in relation to the prejudice afforded to the defendant. In this regard the defendant faces, on the second morning of the trial, an application in handwriting by way of an amendment to the defence, with an uncertain legal basis, clear shifting sands, and a lack of full appreciation of the position of Ms Goscombe. But perhaps most importantly the claimant has no ability to join Ms Goscombe to these proceedings and argue any claim in the alternative. When the amendment first arose as a potential development in this case in March and April the defendant took steps to consider joining Ms Goscombe, indeed such steps may well have provided a substantial inducement for her to serve the notice to quit, but now that simply would not be possible. The claim would have to stop, there would have to be considerable reamendment, the case wholly recast, and consideration of the joining of Mrs Goscombe. Within this there are considerations of speed, of costs thrown away, the ability of the defendant to pay such costs, and the overriding justness principle.
35. It seems to me at this stage that were I convinced of the possibility that this argument had some legal foundation I would not at this stage in any event have allowed the amendment, however I should state quite clearly that the principal ground upon which this judgement is based is that in law the argument, as advanced in the pleading, in relation to the notice to quit is, in my judgement, doomed to failure."
60. it is my judgement that no formal agreement was signed. In my judgment it is also likely that there were conversations between Mrs How and the defendant prior to the 18th that concerned her intentions in respect of the farm and farmhouse towards the defendant. However she wished to have a concluded agreement, and without a concluded agreement I do not believe that she orally agreed any specific terms. Conversations had only been in terms of generalities. She was happy for the defendant to re-enter and live in the farmhouse in contemplation of an agreement she anticipated would be concluded. After all, she was being very generous towards the defendant and was in many ways his saviour. I think it is highly unlikely than she went further than suggesting what she had by way of outline intention to the defendant before asking Mr Pugsley to prepare a draft agreement."
"63 In effect, it is my judgement that her instructions were just to leave the matter alone, leave it, as it were, unresolved."
"64 It was, therefore, a position whereby the stalemate as to precise agreement did not cause the defendant any prejudice and Mrs How, having failed to finally get an agreement, simply left the matter there.
"68. So as to my relevant findings of fact, they are that there was no written agreement of any form signed, and secondly that the steps prior to the attempt to sign had been a lead up to an agreement. They never constituted an agreement, they did not constitute steps which were then enshrined with an agreement, rather an agreement to be reached. The dispute, such as it was a dispute, in relation to the liabilities for repair was one upon which the defendant had taken advice, and one that he pursued before Mr Pugsley. It was never resolved. Accordingly, it seems to me, there was never any oral agreement reached in relation to the occupation of the farmhouse such that what had happened is that he had been allowed to enter the farmhouse in anticipation of there being agreement, such agreement subsequently never transpiring. As to the surrounding farmland, he held that on a 1971 Act agreement and continued to do so. He paid the same rent and little altered. The real change was that the person who was the landlord had no malevolence towards the defendant, and that he well knew."
"26 If this route, and route it is, is followed from contractual licence through Section 2 through the model clauses to the obligations it would in the present case not be anything other than diametrically opposed to what the parties had in mind at the time that the defendant was allowed to go into occupation. It would not merely simply be transforming or modifying the agreement, it would be turning it on its head. For that reason it seems to me that even if I were satisfied that there were not in fact merely a gratuitous licence but a contractual licence of some form, biting upon the consideration that Ms Gowling urges me to take as set out within the defendant's witness statement, then in any event it would be improper to find that Section 2 then transformed it into one that had the necessary protection that she now urges me to find. To do so would be quite against the agreement such that it was that she proved."
"31. In the current case the house had been occupied by, initially the defendant's parents, as a farmhouse in what many people would understand to be the traditional sense. Then there became a divergence of ownership of the farm from the tenancy of the land and eventually and unhappily there came a point when the farmhouse became derelict and it had remained and deteriorated as such.
32. The house, it appears to me, was a house that was closely connected to the farm. It also had surrounding land which is the subject of an additional agreement of some form, either by way of gratuitous licence, as I have indicated, or as Ms Gowling would have it contractual licence, to accompany it. By that I mean there must have been land curtilage around the farmhouse which was relevant to the farming occupation.
33. Whilst it may well be that the defendant had lived in a dairy and in a barn and managed to use an office elsewhere, it seems to me that were one to stand back and have a look at the reality of the position this was in fact a farmhouse as part of a farm.
34. It seems to me the fact that it had been derelict and was capable of being occupied as a house separate from it does not defeat the argument."
"17. In August 1990 we visited Mrs How, I apologised for Christine. Mrs How explained that she wanted to buy the farm for me (not Christine, I think she upset Mrs How).
a. She wanted complete regime change. I would never be harassed for the rest of my life as I had been by my brother.
b. she was not going to spend any money on repairs and she would not hold me liable for repair, but she wanted no rent from me, she said I could use this for repairs.
c. she wanted me back in the house as soon as possible and the whole farm was mine for my lifetime in trust to me.
d. If ever Little Heath was sold it would continue to be mine on the previous lines but I would have first refusal to buy the farm if it was for sale.
e. She would give me a written agreement on the lines she had explained.
f. She also said that she wanted hunting on the farm and would put it in the bagery trust if I did not mind. I did not as she was buying it for me. I agreed because these terms would prevent a return to my brother's regime."
"21. We looked in the back door. The hall ceiling was down, she said you can put that up Brian I agreed we could not have a cup of tea because there was no water or electricity 'you can do that Brian' she said I agreed. She again wanted me in the house as soon as possible. She again said she would spend no money on the place and certainly would not force me to either it was up to me to sort everything out. It was mine for my lifetime. She did not even expect me to farm it, I could get a job and go to work (she had previously offered me one when Gordon Pullen gave up). But I had always liked farming so I did not want a job. I also told her what a relief it was to have my brother off my back and thanked her. She said that she would get me a written agreement next."
"27. Later in 1991 and 1992 Philip Parnham helped me put the house in liveable order. We put a new water pipe from the well to the house. Fitted a gas water heater, slated the roof, put electricity in, using a generator, repaired windows and doors, put up ceilings, opened the fireplace in the front room with mantel and surround, plumbed hot and cold water in the kitchen and bathroom, painted the kitchen, hall, front room and put a phone line in etc. Mrs Williams brought carpets and curtains over for the front room, stairs, bedroom etc, she also tidied up for me until the late 1990's. I paid Phil for putting the house in order. Mrs How was pleased with what we had done, especially the fireplace which she thought Phil had done a good job on."
"7. I helped him to mend windows and doors, clearing up, whitewashing walls and opening up a fireplace. I recall at the time he himself did other work. He mainly focussed at the beginning on the kitchen living room and hallway and bathroom upstairs. I remember him plumbing in the kitchen and bathroom.
8. The Defendant paid me for the work I did.
9. It was plain from the then state of the farmhouse that until this was done, he was not able to live in it."
"10 . Brian and his friend Phil put the house in order mending the roof, putting in water and electric run by a generator. I brought over curtains, carpet and some furniture. I did tidy the house up until I became ill in 2003."
"6. In conversations which began in about August 1990 (and accordingly before completion of her purchase of the Farm) Mrs How and the Defendant agreed orally that:
b) Neither party would be under any obligation to repair or maintain the Farm, including the Farmhouse and farm buildings."
b) Mrs How first presented the Defendant with a draft of a standard form of tenancy agreement, which included tenant's repairing obligations. The Defendant pointed out to her that they had agreed that neither would be responsible for repairs and that he could not in any event afford to repair the farmhouse, which was in very poor condition. Mrs How agreed that this draft agreement did not reflect the oral agreement at paragraph 6 and took the first draft agreement away, saying she would get it altered."
(2) The agreement for occupation of the Farmhouse included, and was made in consideration of the Defendant and Mrs How agreeing that neither would require the other to carry out any works of repair to the Farm or the Farmhouse (which would otherwise have been each of their responsibility under the Agriculture (Maintenance, Repair and Insurance of Fixed Equipment) Regulations 1973) "
The Respondent's Notice
Lord Justice Pitchford
Lord Justice Ward