England and Wales Lands Tribunal

[2000] EWLands CON_145_2000 (27 November 2000)

CON/145/2000

LANDS TRIBUNAL ACT 1949

Reference by consent - Purported assignment of tenancy without deed - Estoppel by representation or convention - No reliance to detriment – Limited application of Law of Property Act,1925, s.144 - Surrender and regrant - No unequivocal act accepting end of tenancy - Unprofessional conduct not amounting to unconscionable conduct

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN THE TRUSTEES OF ST JOHN'S HOSPITAL Claimants

and

FREDERICK WILLIAM GEOFFREY KEEVIL Defendants

and ROSS WILLIAM KEEVIL

Re: Land Off London Road

Batheaston

Somerset

Tribunal Member: His Honour Judge Michael Rich QC

Sitting in public at 48/49 Chancery Lane, London WC2A 1JR

Tuesday 21, Wednesday 22 and Thursday 23 November 2000

The following cases are referred to in this decision:

Camdden London Borough Council v Alexandrou [1997] 30 HLR 534

Crago v Julian [1992] 1 WLR 372

John v George (1995) 71 P&CR 37

Mattey Securities Ltd v Ervin (1998) 77 P&CR 160

Rodenhursst Estate Ltd v W H Barnes Ltd. [1936] 2 AER 3

Troop v Gibson [1986] 1 EGLR 1

Appearances: Ann McAllister instructed by Thring Townsend, solicitors of Bath for the Claimants

Mr A P S DeFreitas instructed by Forrester & Forrester solicitors of Chippenham, Wilts. for the Defendants.


 


DECISION OF THE LANDS TRIBUNAL

Terms of Reference

1. This is a reference by consent of certain issues arising in the claims for compensation made by the parties in respect of some 2.8 acres of agricultural land compulsorily acquired by the Highways Agency for the construction of the Batheaston Bypass. The Claimants are the freehold owners. The Defendants are respectively father and son. I shall refer to them simply as Frederick and Ross. One or other of the Defendants is the tenant, not only of the subject land, but also of the rest of the field of which it forms part and also of another field on the other side of the A4 Road unaffected by the bypass, extending in all to just over 5 acres.
2. If Ross became the tenant as a result of the transactions which fall to be considered, it is contended by the Claimants that his tenancy is subject to a clause permitting them to serve notice to quit in respect of part only of the land, so that their compensation is to be assessed on the basis that they could obtain vacant possession of the subject land. As the land is to be valued on the basis that it could be developed for residential purposes that right would have significant value. If, however, the tenancy is not subject to such "part resumption clause" the Defendants will claim that their compensation should be assessed on the basis that they are entitled to part of the development value of the subject land. I am told that the Highway Agency accept that the value of the land with vacant possession is some £865,000; they agree to be bound, for the purposes of assessing the parties' respective compensation, by the Tribunal's determination of the questions ordered by an Order dated 10th April 2000, to be disposed of at this hearing.
3. Those questions were:

1. Which of the Keevils is tenant;

2. Whether any tenancy was protected by the Agricultural Holdings Act 1986;

3. If so, on what terms did either Frederick and/or Ross Keevil hold the land in question and in particular, was there any clause by which the Trustees of St John's Hospital could obtain early possession of the land or part of it?

The parties are now agreed that whichever of the Defendants is the tenant the tenancy is protected by the Agricultural Holdings Act 1986. The other questions remain for determination.

Findings of Fact

4. The parties have been able to agree the majority of relevant facts. In so far as my findings are based on disputed evidence I will indicate in setting out the facts, that that is the case. Accordingly, I find the following material facts:

1. By an agreement dated 4th October 1961, the Claimants granted to Frederick a yearly tenancy of parts of fields OS 250 and 252 amounting to some 5.189 acres from 29th September 1961. Rent was payable half-yearly in arrear on 25th March and 29th September. Clause 7 of the Agreement was a tenant's covenant, in absolute terms, "Not to assign underlet or part with possession of the said lands during the tenancy".

2. Rent of what I will call "the Bailbrook land" was reviewed every three years as permitted by the Agricultural Holdings Acts, and at a meeting to review the rent from Michaelmas 1989 with Mr Timothy Gray, ARICS, acting as the Claimants' land agent, Frederick, who was then aged 66 and "looking to retire" told Mr Gray that his "basic strategy is for transfer" to Ross who was then aged 29. The rent was agreed to be increased to £140 a year.

3. The Bailbrook land was pasture land. Frederick used it to pasture his dairy herd. I accept the Keevils' undisputed evidence that Ross did not wish to continue dairy farming, but did wish to use the Bailbrook land for other stock and began to do so from about this time or even earlier. Indeed he also took, in 1991, from a third party, a grazing licence of adjoining land in his own name. He did not have any formal partnership arrangement with his father in respect of the farm which extended to about 100 acres of freehold and tenanted land. Each kept his own stock and accounted between each other on a family basis for expenses.

4. Although on 25th September 1989, Mr Gray wrote to Frederick to say that the Claimants were willing for Mr Gray to discuss a transfer, possibly from Michaelmas 1990, nothing more was done immediately about "transferring" the Bailbrook land to Ross, for more than two years. Frederick did however follow his strategy to the extent that he negotiated to dispose of his milk quota, which took him until June 1992.

5. Before that date, Ross sent a cheque drawn on his own account for the March 1992 rent. By letter dated 7th April 1992 the Claimants accepted Ross's rent cheque but only as paid on behalf of his father.

6. I accept that Mr Gray thought that the Claimants would be able to resist any claim that Ross might make to succeed to his father's tenancy under the Agricultural Holdings Act in the event of Frederick's death. He did not think that he would be able to justify an increase in rent at Michaelmas 1992, and so served no notice before September 1991. He thought that the Keevils' evident desire to "transfer" the tenancy would however provide an opportunity to negotiate some small advantage for his clients. On 27th April 1992, he wrote to Ross proposing a meeting to agree terms for his "succession" to his father. He wrote "as I explained in 1989 [the claimants] would.. be looking for a rent review and the inclusion of a resumption clause in the present tenancy agreement", although as he accepted when he gave evidence that that was the first mention of such terms. I accept that he thought such clause was fair having regard to the landlord's losing the opportunity to obtain vacant possession on Frederick's death or retirement, and therefore regarded it as something of a routine matter. I also accept that Ross did not know what was meant by a rent resumption clause. On the other hand nor did he ask.

7. Ross did not respond to this letter and only after two reminders did he finally meet with Mr Gray on 17th September 1992. Meanwhile the Compulsory Purchase Order affecting the subject land had been confirmed by a decision letter dated 30th June 1992, but, strange as it may seem, I accept that neither Mr Gray nor the Keevils had been aware of this. Neither party had been objectors. I also accept Mr Gray's evidence that he did not have in his mind the possible effect upon compensation on compulsory purchase that the introduction of a part resumption clause might have.

8. Mr Gray arrived at the meeting with a draft memorandum of agreement already prepared. Having heard both his evidence and that of Mr Ross Keevil, I find that the meeting was short, that there was no discussion of the terms, save that Mr Gray indicated that the rent was to be increased to £180 a year, but Ross was told that if he got his father to sign the memorandum then, and this is in my judgement a matter of importance, subject to the Claimants' formal approval, the tenancy could be transferred to him. Specifically I find that there was no discussion of the part resumption clause, which forms clause (f) of the memorandum, nor was it drawn to Ross's attention. On the other hand, I accept that Mr Gray did not give any assurance that the document was not one which Ross needed to worry about, nor did he misrepresent it to Ross. Nevertheless, I do accept that Ross was left with the impression that the document contained no terms which were to his disadvantage save the rent increase which was spelled out.

9. I think it convenient to interpolate in this account of the facts some conclusions at which I have arrived on certain of Miss McAllister's submissions on behalf of the Claimants. I accept that Mr Gray owed the Keevils no duty of care: none has been suggested. Nor was he under any duty to ensure that the Keevils were independently advised. Miss McAllister has however asked me to find specifically that Mr Gray's conduct was entirely proper. I do not so conclude. I would not have expected a professional man to introduce such a term as the part resumption clause into a document proffered in this way, without specifically and expressly discussing and agreeing it with the layman with whom he was in negotiation. I find as a fact that he knew that Ross was not professionally advised on this matter, even though his father was so advised in regard to the sale of the milk quota. Indeed he had in his letter of 27th April advised Ross that he might manage without such advice. I am sure that in doing so he was acting honestly and with good intentions. He was however as mistaken as he was in assuming that he was himself competent to document the transaction which he was negotiating.

10. I append a copy of the memorandum which Mr Gray drafted. It was signed by the Keevils and returned to Mr Gray, no later than 2nd October. I find on the balance of probability that it was so signed on or before 29th September, and that the intention of Frederick in signing the memorandum was to transfer the tenancy to Ross. My reason for so concluding is that by a letter dated 30th September Ross wrote to the Clerk to the Claimants:

"Please find enclosed the remittance advice sent me for the period from 29.9.92"

I interpolate that this appears to be a mistake that rent was paid in advance, but whether or not the basis of payment had been changed it seems that rent demands were by now sent either to Ross in place of his father or at least not specifically to Frederick. No copy of any rent demand was before the Tribunal, but the inference from the letter is that this one was for £70, and if it was addressed to Ross it was as agent for his father in accordance with the letter of 7th April, for the letter accompanying the Michaelmas cheque continues:

"Please find enclosed cheque for £90 for said period. This follows my recent discussions with Mr Gray .. in which a rent increase was agreed in principle with my takeover of tenancy from my father..

If in confusion over this amount, could you please contact myself or Mr Gray who currently holds the transfer papers."

11. The Claimants did not immediately pay in the cheque for £90, but held it according to their internal memorandum, "until the new arrangements are agreed by the Board".

12. On 15th October, 1992, the Claimants resolved to approve that "the tenancy be transferred to ..Ross Keevil with effect from Michaelmas 1992." On 16th October Mr Gray signed a counterpart of the memorandum, as the duly authorised agent of the Claimants and returned it to Ross. In doing so he had it retyped with the word "for" inserted after the date in the sixth line, but I do not think that is material, except for the purpose of identifying the documents.

13. The Claimants on the same day recorded in their rent register that £90 was received, but recorded the tenant merely as "Keevil", and do not seem to have made any amendment to show any change of tenant. Nor, in spite of the Clerk's having formed the view that the memorandum required stamping, presumably as a disposition of land, did the Claimants have it stamped.

14. Thereafter Ross treated himself as the tenant of the Bailbrook land. I do not accept that he was confused as to his status. He considered the memorandum signed by his father as "the transfer papers". He made claims for agricultural subsidy on the basis that he was the tenant and paid the rent and undertook fencing on the land for the benefit of his livestock which he kept on the land. On the other hand, in conformity with the informal arrangements operating over the rest of the farm, he used his father's cattle feeder on the land, and treated the land merely as part of the farm on which both father and son continued their separate enterprises, in exactly the same way as they treated those parts owned by Frederick or still held on other tenancies. Frederick retained the 1961 tenancy agreement, but when Mr Gray returned the counterpart of the memorandum Ross retained that document.

15. So far as the Claimants are concerned, they thereafter accepted rent from Ross without the stipulation with which they received the March 1992 rent or the delay when they received the Michaelmas rent.

16. I conclude and find as a fact that all three parties believed that the effect of the execution of the memorandum prepared by Mr Gray was to transfer the tenancy held by Frederick to Ross on the terms set out therein. Although I accept Ross's evidence that he did not consider the part resumption clause when he signed the memorandum, there is not raised any such plea as to make it ineffective if the memorandum was otherwise binding upon him.

17. On 27th October 1993 the acquiring authority served notice to treat on Frederick, and entered on the land on 28th February 1994, by which time surveyors acting for the Keevils had told the authority that Ross was the tenant rather than his father.

18. On 23rd December 1998, solicitors then instructed for both the Keevils wrote to the Claimants' solicitors asserting for the first time that the tenancy was held by Frederick because the memorandum was no more than a licence to assign and an assignment required a deed. They referred to Crago v. Julian which is reported at [1992] 1 WLR 372.

The Law

5. Miss McAllister accepts that a deed is necessary to effect a legal assignment of a tenancy, and that the memorandum is not a deed.
6. In my judgement the memorandum does not constitute an assignment not merely because of such formal defect. There is no provision in it which purports to be an assignment or even an agreement between the Keevils to assign the tenancy. Miss McAllister relies on clause (a) as recording an assignment which has taken place. In form it is a permission to assign "on 29th September 1992 and no other date" granted on 16th October conditional on such assignment being acknowledged by the Keevils to be a "succession" for the purposes of the Agricultural Holdings Act. I accept that a licence can be granted retrospectively. But the document when executed by the Keevils on or before 29th September did not amount to an assignment on that date. The most that can be said is that Frederick executed an inappropriate document with the conditional intention of effecting an assignment. If one is to spell out his intentions from his conduct however, I do not see how he can be said to have been intending irrevocably or unconditionally to assign on the material date. The document was given to Ross on the basis that it was not to have any effect until the Claimants had approved the transaction. If they had not done so on 15th October, could it be said that the signature of the memorandum by Frederick evidenced an assignment on that date, or if the assignment was not to take effect until approved by the Claimants, how can it be said to have been effected on the only date permitted?
7. Miss McAllister relies on the decision of the Court of Appeal in Rodenhurst Estate Ltd v W H Barnes Ltd [1936] 2 AER 3 as justifying the conclusion that the Keevils are estopped from denying that there was, none the less, a legal assignment. In that case Mr Barnes the tenant agreed to sell the whole of his business to a company formed for that purpose and to assign all existing leases. He obtained the landlord's consent to an assignment of the premises the subject of dispute in that case. Unknown to the landlords, he did not execute an assignment as permitted, but the company took possession, so that the goods on the premises were its property, it put up its name on the premises and paid the rent. The County Court Judge held (see p.7) that the "plaintiffs agreed to defendants being in possession as assignees and not otherwise". The Court of Appeal held that these actions amounted in all the circumstances to a representation that a legal assignment had been executed and that the landlord had in reliance upon such representation acted to its detriment. As Scott LJ said at p 12:

"It is quite clear that an equitable assignee does not become privy to the estate as between himself and the lessor of the lease, and consequently, a lessor cannot sue an equitable assignee as such for either the rent or breach of covenant. Where, however, the equitable assignee leads the lessor to understand quite definitely that he, the equitable assignee, is more than an equitable assignee and has the term as a legal assignee, then, if the landlord acts on that representation in such a way as to alter his position, you have every constituent of a common law estoppel."

8. The facts of this case are quite different. I, at least, doubt whether Ross is, as against his father, an equitable assignee. I doubt that there was any enforceable agreement to assign for no consideration as a family arrangement. It may be that as between each other the subsequent conduct of father and son could give rise to an estoppel as to whether Ross was either entitled to demand or to refuse the tenancy, but the Defendants are content jointly to treat Frederick as being the tenant. As against the Claimants they cannot be said to have made any representation to the contrary. Mr Gray advised them merely to sign his memorandum. The Claimants must have assumed that that was what they did. Even if they did not know for certain that there was no other document executed by them, the Keevils never did anything to lead them to suppose otherwise. There was no change in the possession of the land: the animals on the land both before and after the 16th October belonged to Ross, the cattle feeder belonged to Frederick. Rent both before and after was paid by Ross. Ross's letter dated 30th September 1992 contains no representation of a transfer other than by "the transfer papers" held by Mr Gray. It might be that the tendering of the memorandum by Mr Gray would found an estoppel against the Claimants if they had wished to deny that there was a legal assignment and the Keevils to assert one, but there is in my judgement no representation by the Keevils upon which the Claimants relied or can now rely.
9. The reality is that there was a common mistake, induced by Mr Gray, as to the true position in law, and, as I have found the parties acted under such common misapprehension. This gives rise not to what Scott LJ called "a common law estoppel", an estoppel by representation, but to an estoppel by convention. It is sufficient to found such estoppel that there should have been a common mistake of fact or law, it is not necessary that the defendant should have induced the mistake. In order however for the Claimants to rely upon such estoppel it is necessary, as indeed for estoppel by representation, that the person pleading the estoppel should have relied upon it to his detriment (see John v George (1995) 71 P&CR 375). The parties pleaded their respective cases in Points of Claim and of Reply and an Answer. I pointed out to Miss McAllister at the pre-trial review that no detriment was alleged in either the Points of Claim or the Answer. The pleadings have not been amended nor was the matter addressed by Mis McAllister in her skeleton argument lodged in accordance with directions then given. It was only in the course of Mr De Freitas' closing submissions that Miss McAllister intervened to identify certain passages in Mr Gray's Witness Statements which were being relied upon as evidence of the Claimants' having acted to their detriment in reliance upon a common mistake. Although this gives rise to the risk of unfairness, I have not excluded consideration of whether I am so satisfied by the paragraphs to which she referred.
10. The evidence, so identified, however, was to the effect that since Mr Gray believed that Ross would not be entitled under the Agricultural Holdings Act, to succeed his father upon his death, he, Mr Gray, would not have consented to the tenancy's being assigned to Ross, without the introduction of the part resumption clause. This, in my judgement, is not to the point. If it were held that the Keevils were estopped by convention from denying that Ross is the tenant, then it can equally be that the estoppel should prevent his repudiating the part resumption clause. This does not mean that the Claimants have acted to their detriment in accepting Ross as the tenant. It merely means that if the true position is adopted they will fail to enjoy an advantage arising from the mistaken position that Frederick had assigned the tenancy and thereby abandoned his ability to reject a notice to quit served by the Claimants in respect of part only of the land.
11. Miss McAllister, no doubt realising this difficulty put the matter differently again in her final submissions. She claims that but for the convention that Ross was the tenant, Frederick might have retired before the service of the notice to treat, which is the date by reference to which the interests of the parties in the subject land are to be determined. This submission is, in my judgement, hopeless on the facts. Frederick has neither died nor retired to this day. The farm continues to be used either for his business or that of Ross, without regard to the limits of his title or that of Ross. There is absolutely no reason to think that if the Claimants had refused to permit an assignment or the parties had not mistakenly believed that there was an assignment, Frederick would have surrendered his tenancy rather than carrying on in precisely the same way as he had for the three years after the original meeting with Mr Gray in September 1989.
12. An estoppel by convention also differs from an estoppel by representation, in that its effect will, unless equity otherwise requires, come to an end when the true position becomes known: see Troop v Gibson [1986] 1 EGLR 1. Since the Claimants cannot show that they have altered their position to their detriment in reliance upon the convention, the discovery of the true position must bring the convention to an end.
13. Mr De Freitas submits that the requirement that the assignee should enter into a part resumption clause, amounts to a fine, contrary to s.144 of the Law of Property Act 1925. Even if that were so, it would not, in my judgement, render any assignment which did take place void, nor am I by any means clear that it would render the provision for part resumption unenforceable. I do not however have to consider these questions which were not argued before me, because in my judgement it is clear that the section does not affect an agreement to permit the assignment of a tenancy notwithstanding an absolute covenant against assignment as opposed to one where the covenant is only against assignment without licence or consent.
14. He relies also on the nature of the imposition coupled with the circumstances in which it was agreed, as set out in paragraphs 8 and 9 of my findings of fact, as disqualifying the Claimants from equitable relief. I think however that it is right that the Keevils wanted the transfer and were careless as to the terms. I do not think that they can be said to have been tricked into the proposed agreement, whatever they may now feel with the benefit of hindsight. I do not think that, if the Claimants were otherwise entitled to equitable relief, their conduct has been so far unconscionable as to make it appropriate for the Court to deny it.
15. Miss McAllister's alternative submission is that the failed assignment takes effect as a surrender and regrant. She relies firstly on the final observation of Sir Donald Nicholls V-C in giving the Judgement of the Court of Appeal in Crago v Julian [1992] 1 WLR 372. In that case Mr Julian the tenant had undertaken in matrimonial proceedings to transfer the tenancy of a flat to his wife, the defendant. He had not done so and the Court held that the absence of a deed meant that he remained the tenant as against the plaintiff landlord. The Vice-Chancellor said at p378:

"Mrs Julian never became the tenant. Of course a deed would not have been necessary if Mrs Crago or her agents had expressly or impliedly agreed to Mrs Julian becoming the tenant and had accepted her as the tenant in place of her former husband. There could then have been a new tenancy, which could have been created orally. Unfortunately for Mrs Julian that never happened."

In these words the Vice-Chancellor contrasts the position in regard to the creation of a tenancy taking effect in possession for a term not exceeding three years at a full market rent, which may be created orally, and the assignment of such tenancy for which writing and a deed is necessary.

16. In Camden London Borough Council v Alexandrou (1997) 30 HLR 534, the Court of Appeal held that where the husband tenant had written to the Council landlord saying that:

" I .. do hereby state that the above flat is no longer my responsibility as I am unable to pay for the upkeep.

My wife wishes to keep the said flat and pay rent to which I agree"

there had been a surrender by operation of law notwithstanding that the letter had in the pleadings been relied upon as an assignment. The husband had, after writing the letter left the premises; the wife had assumed the burden of the tenancy and some two years later the Council had granted her a new tenancy. Aldhous LJ said at p540 that:

"Surrender by operation of law will arise if it becomes clear that that was the intention of the parties as inferred from their conduct which in this case includes the conduct of Mr Alexandrou. The doctrine rests on the principle of estoppel."

17. I have no doubt, indeed I have already held that it was the intention of Frederick to transfer the tenancy to Ross and of the Claimants that Ross should be their tenant under the tenancy agreement of 1961, as varied by the 1992 memorandum, and it was the mistaken belief of all the parties that such transfer had taken place. Their conduct in signing the memorandum, however, is quite inconsistent with the grant of an oral tenancy. Their contention must therefore be construed from the memorandum. Clause (c) is only consistent with the continuation of the tenancy recited at the outset of the document whose "stipulations conditions and provisos" the "Successor" covenanted by clause (e)(i) to observe. The agreement in clause (b)(i) is for an increase in the rent under the "Tenancy". That again is only referable to the already existing tenancy not to a new tenancy to be granted on its surrender.
18. I, of course, accept that a tenant's act of giving up possession of premises may be accepted by the landlord as a surrender. It does however require that there should be some act which estops the tenant from denying that that was the effect. In Mattey Securities Limited v Ervin (1998) 77P&CR 160 Bracewell J. sitting in the Court of Appeal said after citing a passage from the 28th Edition of Woodfall, at p. 163:

"The conduct of the parties must unequivocally amount to an acceptance that the tenancy is ended for the doctrine to apply Although a surrender by operation of law does not require that there is an intention of the parties to surrender the lease, it does require that there is some unequivocal act which has the effect of estopping the parties from asserting that the lease is still extant."

By s.34 of the Agricultural Holdings Act 1986, the rights of succession in respect of agricultural holdings available in respect of tenancies granted before 12th July 1984, do not apply in respect of tenancies granted after that date unless one of the exceptions set out in s. 34(1)(b) applies. For the "successor" to be entitled to the benefit of Part IV of the 1986 Act, giving rights of succession, it would be necessary for the purposes of s.34(1)(b)(iii) to construe the memorandum as the grant of a tenancy by "a written contract of tenancy .. indicating that .. Part [IV] of [the 1986] Act is to apply." This would do violence to the words of the memorandum which contain no words of grant.

19. It is clear however from the terms of the memorandum that it was assumed that the rights of succession did apply and Ross's succession was to be treated as an occasion of succession for the purposes of the Act. The common intention was therefore that the tenancy should continue. That, of course, is only consistent with the clear intention of the parties that the transfer, which they envisaged and indeed intended. would be effected by an assignment. The words of the document which they used for that purpose, in my judgement make it quite impossible to say that Frederick or indeed the Claimants performed any unequivocal act which amounted to an acceptance that the tenancy was ended. On the contrary their acts assumed that it had not. I therefore conclude that the Claimants fail on this alternative basis also.
20. I should for completeness refer to two further arguments advanced on behalf of the Defendants by Mr De Freitas. He repeated his argument that the imposition of the part resumption clause amounted to a fine such that by reason of s. 29(3)(b) of the Charities Act 1960 the Claimants had no power to enter into an assumed regrant to Ross without an order of the Court or of the Charity Commission. Even if the imposition of the clause as a condition for consent to an assignment were properly to be construed as a fine for the purposes of the Law of Property Act, 1925, I do not think that its inclusion as a term of a newly granted tenancy could possibly be so construed for the purposes of the Charities Act 1960; but even if it were it would still by virtue of s. 29(2) "be valid in favour of a person who .. in good faith acquires an interest in .. land for money or money's worth", which would include Ross who, in my judgement could not take the benefit without the burden.
21. On the same basis I dismiss equally Mr De Freitas' submission that, if the transaction were to be construed as a surrender and regrant, Ross is entitled to claim the benefit of such regrant without the burden of clause (f) of the memorandum. It is expressed specifically as a covenant by the "successor". That is why it would have effect if, on the true construction of the transaction, Ross were held now to be the tenant. In my judgement the tenancy remains vested in Frederick but since he was not a party to the Clause (f) it must be upon terms which do not include the part resumption clause.
22. I therefore answer the outstanding questions ordered to be determined as follows:

1. Frederick is the tenant.

2. The tenancy is on the terms of the Agreement dated 4th October 1961 and contains no clause by which the Claimants could obtain early possession of the land or any part of it.

Costs

23. During the course of the hearing on the first day Miss McAllister found it necessary to seek an adjournment so that the Claimants could prove that they had duly resolved to enter into the agreement evidenced by the memorandum. I granted such adjournment only upon terms that the Claimants should pay the costs of and occasioned by the adjournment on an indemnity basis. I record that, in my judgement, the hearing would, perhaps with a little late sitting have been concluded within two days but for the need for such adjournment.
24. That special order aside, the parties agree that costs should follow the event. I accordingly award that the costs, except as otherwise ordered shall be paid by the Claimants to the Defendants to be assessed on a standard basis if not agreed. The Defendants' costs should also be assessed under the Legal Aid Act.

Dated: 24 November 2000

Signed: MICHAEL RICH

APPENDIX

IT IS HEREBY AGREED between THE TRUSTEES OF THE HOSPITAL OF ST JOHN THE BAPTIST with the CHAPEL OF ST MICHAEL annexed in the City of Bath (hereinafter called the 'Landlords') and FREDERICK WILLIAM GEOFFREY KEEVIL ESQ (hereinafter called the 'Tenant') parties to an Agreement dated the fourth day of October 1961 the land comprising OS234 and part OS250 in the Parish of Batheaston (hereinafter called 'The Land') and ROSS KEEVIL (hereinafter called 'The Successor'). WHEREBY:-

25. The Agricultural Holdings Act 1986 applies to the Tenancy and in particular (since the Tenancy was granted before the 12 July 1984 (pursuant to Section 32(1) of the 1986 Act Part IV of the Act applies to the Tenancy.
26. Notwithstanding Clause 7 of the Tenancy Agreement the Landlords are willing to permit the Tenant to assign to the Successor (on this one occasion and by virtue of this Memorandum but without prejudice to the continuing effect of the said Clause 7) on the conditions herein set out.
27. The Successor is a 'close relative' of the Tenant and is also an 'eligible person' within the meaning of and for the purpose of Part IV of the 1986 Act.
28. The parties have agreed that the assignment hereby permitted shall constitute an 'occasion' within the meaning of Section 37(I) and 37(2) of the 1986 Act.

NOW THIS MEMORANDUM WITNESSETH AS FOLLOWS:-

a. PROVIDED and on the basis that (as the Tenant and the Successor hereby respectively acknowledge) the assignment hereby permitted shall constitute an 'occasion' for the purposes of Section 37(I) and 37(2) of the 1986 Act the Landlords hereby permit the Tenant (notwithstanding the provisions of Clause 7 of the Tenancy Agreement) to assign the benefit of the Tenancy Agreement to the Successor on the 29 September 1992 and on no other date.

b. THE TENANT and the Successor hereby further acknowledge and confirm that:-

i. The rent payable in respect of the Tenancy shall from the 29 September 1992 be £180 per annum exclusive of value added tax.

ii The Successor is a 'close relative' of the Tenant and is an 'eligible person' for the purposes of Part IV of the 1986 Act.

c. THE Landlords, the Tenant and the Successor hereby respectively agree and confirm that:-

i. In view of the increased rent payable from the 29 September 1992 that date namely the 29 September 1992 shall be a date as from which there took effect an increase of rent for the purpose of paragraph 4(1)(b) of Schedule 2 to the 1986 Act.

ii. Save as amended hereby all the terms, provisos and conditions of the said Agreement will remain in full force and effect and in particular nothing shall affect or prejudice the future effect and application of the said Clause 7.

d. THE Successor will immediate after taking possession of the premises comprised in the Tenancy release the Landlords from all liability (if any) to make compensation to the Tenant or to make any other payments to him in respect of any matters arising under the Tenancy Agreement or otherwise.

e. THE Successor hereby covenants with the Landlords that:-

i. As from the date of completion of the assignment to him he will observe and perform the Agreements stipulations conditions and provisos contained in the Tenancy Agreement on the part of the Tenant and will pay the rent thereby reserved.

f. THE Successor further agrees that with effect from 29 September 1992 the Tenancy Agreement dated the fourth day of October 1961 shall be deemed to include an additional clause making it lawful for the Landlords at any time upon giving to the Successor not less than three months previous notice in writing to expire on any quarter day to resume possession and determine the tenancy of any part of the holding for any purpose not being the use of the said land for agriculture and whether the use of the land for any of such purposes is to be made by the Landlord or by a purchaser, lessee, assignee or other person deriving title from or through the Landlords.

WITNESSED the hands of the Tenant, the Successor and of Smith Woolley duly authorised Agents of the Landlords this day of 1992.

Signed by the Tenant ………………………………..

In the presence of ………………………………

Signed by the Successor ………………………………………….

In the presence of …………………………………………..

Signed by Smith-Woolley …………………………………………...

Duly authorised Agents

of the Landlord

In the presence of ………………………………………