Could partnership claim section 2 AHA 1986 tenancy against partner?

Section 2 of the Agricultural Holdings Act 1986 (AHA) provides that:

“(1) An agreement to which this section applies shall take effect, with the necessary modifications, as if it were an agreement for the letting of land for a tenancy from year to year unless the agreement was approved by the Minister before it was entered into.
(2) Subject to subsection (3) below, this section applies to an agreement under which—
(a) any land is let to a person for use as agricultural land for an interest less than a tenancy from year to year, or
(b) a person is granted a licence to occupy land for use as agricultural land,
if the circumstances are such that if his interest were a tenancy from year to year he would in respect of that land be the tenant of an agricultural holding.”

In the recent case of Kingsley and others v Kingsley and another (2019) the defendant alleged an “informal agreement” amounting to a new agricultural tenancy within the meaning of section 2 of the [AHA] 1986 granted by the owner to himself, and his partners as joint tenants, they having agreed that they would have exclusive possession of the land at an agreed yearly rent.

It was further alleged that an agreement had been made with a previous owner for the Partnership’s exclusive use and occupation of another field and that that agreement also amounted to a new agricultural tenancy within the meaning of section 2 of the AHA 1986.

The partners were thereby joint tenants of the whole as yearly joint tenants under two agricultural tenancies both within the meaning of section 2 AHA 1986 with statutory security of tenure.

This argument was flawed.

If the Partnership ever occupied either title, then it did so as a consequence of the lead partner’s ownership of one field and his rights as “contract farmer” (not tenant) in respect of the other.

The Partnership could not acquire an agricultural tenancy over land which is already owned by one of the partners, as the partner could not grant himself a licence over land that he already owns even if that licence is also granted to the other partners. Here the plaintiff relied on Harrison-Broadly v. Smith [1964].

Accordingly the “statutory magic” of section 2 AHA 1986 would not operate to give rise to an agricultural tenancy.

Further in a document written by the lead partner a few months before his death when he was trying to get his affairs in order, he said that in relation to the first field, this would “have to be subject to a formal agreement written up and signed. This will need to be on a rolling one year agreement”. Had he believed that the Partnership had the benefit of an AHA 1986 tenancy, there would have been no need to refer to a “rolling one year agreement”.

There are authorities on the question of whether one partner as owner of a property can grant an AHA agricultural tenancy to the partnership. This is because it is an essential characteristic of a tenancy that it grants the tenant exclusive possession and the continued possession of the owning partner as partner prevents this. In the light of the previous findings being sufficient to dispose of the defence, the court tantalisingly found it unnecessary to consider the implications of this doctrine for this case.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in particular cases.

Principles applicable to Interim Rights under New Telecoms Code

One important feature of the new Electronic Communications Code (“the Code”) is the obligation it places on the Tribunal to resolve dispute without delay.

Regulation 3(2) of the Electronic Communications and Wireless Telegraphy Regulations 2011, referred to in paragraph 97 of the Code, requires the Tribunal to determine applications for the grant of rights to install electronic communication networks apparatus within 6 months of receiving the application.

That obligation is imposed in the public interest, rather than for the convenience of operators, and it is not one which the parties are free to dispense with.

Nevertheless the view taken by the Tribunal has been that the obligation arises in the case of applications concerning new sites, rather than sites over which rights already exist which an operator seeks to renew and which will continue pending the determination of the application.

Paragraph 26 of the Code provides that an operator may apply to the Tribunal for an order imposing an agreement conferring Code rights on an interim basis on the operator and a site provider.

Interim rights under the new Code are available under a summary procedure. Extensive disclosure, is not required nor, usually, would the evidence be subject to cross-examination. An application for interim rights should be decided on the basis of paper submissions to the Tribunal. However unfairness must not be caused to a respondent and the Tribunal will not generally assume things in favour of an operator if the operator could have provided evidence.

On an application for interim rights an operator does not have to establish that the pre- conditions under paragraph 21 are met on the balance of probability, but must establish a good arguable case. That case need not be free of all doubt or uncertainty at this stage but it must have a certain amount of strength and persuasiveness about it.

Interim rights will last only until the expiry of the period for which they are granted, usually until the determination of the paragraph 20 application they support. That gives the landowner some protection. Interim rights do not enjoy the same restrictions on the landowner’s right to have apparatus removed, including the requirement of 18 months’ termination notice, that full Code rights benefit from. This reduces interim rights’ risk to a site owner and mean that any interim rights being opposed is not as serious or lasting as the imposition of full Code rights.

In the Upper Tribunal (Lands Chamber) Case of EE Limited and Hutchison 3G UK Ltd –v- Islington Borough Council (2018) the claimant had an existing telecommunications site on the roof of Leroy House only a short distance from the Council’s Threadgold House. The owners of Leroy House required the claimants to remove their equipment from it for demolition, and the claimants had identified Threadgold House as an appropriate alternative site to which they wished to relocate.

Since the Tribunal was obliged to reach a final decision on a claim within six months, the claimants’ claim here for interim rights had to be determined speedily and significantly within the period of 6 months applicable to applications for full code rights.

The Tribunal has a discretion but that discretion has to be exercised judicially.

If a party has shown itself willing in principle to accept the installation of equipment on its land that may be relevant to the exercise of the paragraph 26 discretion.

The Tribunal will have greater confidence in imposing an agreement where it is apparent that the rights sought are not objectionable to the site owner in principle, subject to appropriate financial terms. The way that the parties have behaved towards each other in negotiations may be relevant. This is something reluctant landowners need to watch.

Here negotiations with Islington had achieved a substantial level of agreement before the new Code came into force on 28 December 2017 but they were never completed. The issue separating the parties concerned financial terms.

The test for making an order is in paragraph 21 included whether the prejudice caused to the site owner and anyone claiming under it by the making of the order is capable of being adequately compensated by money.

The fact that the parties were negotiating for the imposition of rights in return for an appropriate payment, and fell out only over the amount of that payment seemed to the Tribunal to indicate that money is capable of compensating the land owner.

As to the second (public interest) pre-condition in paragraph 20 of the new Code, if that corner of Islington lost the mobile phone coverage provided by the claimants, for no matter how short the inconvenience, it was likely to be regarded by the public as an unacceptable break in a service they expected to be available to them at all times. It would be damaging to the public interest identified in paragraph 21. So the Tribunal accepted that there was a risk.

The Tribunal should not approach an application for interim rights on the basis that a Code operator should be required to extract the maximum delaying tactics for the rights it may enjoy elsewhere. The operators could not be expected to forego the sensible commercial approach that they begin work at Threadgold House, complete it in an orderly manner and then decommission at Leroy House all within a timescale agreed with the landlord of Leroy House.

The Tribunal was therefore satisfied that the claimants had made out a good arguable case that the paragraph 21 conditions were met, subject to one additional point.

If it transpired that planning permission was not obtained for the re-development of Leroy House, so that the removal of the claimant’s equipment was not required, the balance of public interest against private prejudice would tip the other way. The claimants would then be able to remain in their current location and the public would not be disadvantaged. So it seemed appropriate here that an order for the imposition of interim rights should be conditional on planning permission being granted to the owners of Leroy House to enable them to carry out the works of demolition and reconstruction which they proposed.

While the position in relation to planning permission was uncertain there may be some interim rights, such as to undertake a non-intrusive survey, which might further the design of the claimants’ intended works and which it would be sensible to allow straightaway. There should be no need for intrusive works, and no requirement for scaffolding, equipment, cranes, noisy or inconvenient works on the roof of Threadgold House until it was known whether the planning permission was available for the re-development of Leroy House.

The claimants’ proposed agreement under paragraph 20 need not be an elaborate document if it is only going to be of 3 or 4 months duration. It ought to impose no obligations on the site owner other than an obligation not to derogate from the rights which had been granted. It should require no other covenants or undertakings from the site owner. It should put the full risk of the operation which the operators wished to undertake on the operators and none of the risk on the site provider.

As to the consideration payable to the Council, the Tribunal directed that the claimants make payments on account of the final consideration at the £2,551.00 per annum they had suggested. The Tribunal would determine the appropriate consideration when it determined the paragraph 20 application for full Code rights. If the Tribunal fixed a higher figure it would be payable retrospectively by the operators.

This blog is posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Does the new Telecoms Code permit preliminary site suitability surveys?

Does the new Telecoms Code give the tribunal power to impose an agreement allowing access to a building to investigate it’s suitability for the installation of electronic communications apparatus?

The procedure in paragraph 26 of the new code enables interim rights to be obtained without the operator having to prove that the pre-conditions in paragraph 21, which apply to the imposition of a full Code agreement, are met. That is because under paragraph 26(3)(b) the operator need only satisfy the tribunal that it has “a good arguable case” that qualifying tests in paragraph 21 are met.

The recent Upper Tribunal (Lands Chamber) case of Cornerstone Telecommunications Infrastructure Limited – v- The University of London (2018) was the first decision given under the new code.

The claimant (CTIL) wanted have access to the roof of the University’s building to carry out a survey and other non-intrusive investigations to establish whether the site was as suitable as its desk top assessments suggested.

Access was likely to be required on three or four occasions in one twenty- eight day period for visits of about 2 hours by members of the claimant’s staff.

The rights sought were not temporary rights, but were interim Code rights. Here code rights may be imposed by the tribunal on an interim basis for a specified period or until the occurrence of a specified event (paragraph 26(2)).

The tribunal concluded that the right conferred by paragraph 3(a) to install apparatus on over or under land must include a right to enter on the land and to carry out each step required to achieve the permitted installation.

The fact that the code makes no mention of “entry” or of any specific works (such as excavation or tunnelling) did not mean that no right of entry has been conferred or that works were not envisaged as being an essential part of the process of installation permitted by paragraph 3 (a).
The fact that paragraph 3 (f) included a specific right to enter land to inspect, maintain etc., apparatus already on that land did not mean that paragraph 3 (a) precluded a right of entry to install and so must the taking of other necessary steps be included, since otherwise the grant of the right would be illusory.

The right to “install” was intended to permit an operation involving a series of distinct steps and the single word was sufficient to connote, as a component of the right, each of those steps. No electronic communications apparatus could be installed without some preparatory work, including a “multi skilled visit”, being undertaken.

The permitted preparatory work included site investigations and surveys, including those required to design works.

So the right to undertake preliminary surveys or “MSVs” is a Code right within paragraph 3(a) or, failing that, paragraph 3(d).

It cannot have been intended that an operator must first negotiate outside the scope of the Code to acquire a right of entry to undertake essential preliminary surveys before it could insist on the acquisition of Code rights.

Such an interpretation would enable landowners to hold operators to ransom negating operator’s ability to acquire code rights for payments assessed on a favourable “no network” basis which was contrary to the principles on which the new Code has been designed.

The University also objected that the claimant’s application for interim rights of survey and inspection was unaccompanied by any request for rights on permanent terms.

The tribunal said an operator can apply for interim code rights without a request for the same (or any) permanent rights being made concurrently. Such an application would be anyway pointless till the building’s suitability was confirmed by the inspections.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Lease arrangement rectified

If two parties agree what the legal consequences of a contract should be, English courts might be able to rectify any defective provisions of the contract that are at variance with those shared aims.

However this did not seem to apply where one or more of the parties had deliberately added or omitted the relevant wording.

However a recent case has confirmed that the omission of a document left out could be rectified by the court where such omission was deliberate but based on the mistaken belief that the document was not actually necessary to meet the parties’ shared objectives for their lease contract.

Corporate Veil applied in Construction Case

Oakapple Homes (“OH”) used sister company Oakapple Construction (“OC”) to convert an old Derbyshire Mill to a large flat and retail complex. As part of the build contract arrangement OH novated the appointment of their Architect, DTR, over to OH. As the novation substituted OC for OH as Employer under the appointment DTR gave OH the usual duty of care warranty.

The Mill burnt down and also DTR went into liquidation and the liquidator disclaimed their appointment. So the issue arose to what extent DTR’s indemnity insurers were liable for DTR’s duty of care warranties that had been given to OH and some occupiers.

DTR tried to say that OC had contributed to the building being destroyed by negligently departing from their designs.

They said the beneficiaries of the warranties had to have their damages reduced because the warranties DTR gave them said that DTR owed them no greater liability than it did to the Employer under the Employer’s appointment of them, and that Employer was contributorily negligent for departing from their designs.

The court ruled that, even if OC had been contributorily negligent, and, even if OC were OH’s sister company, they were separate bodies and OH could not have had its damages affected by what another company had done. That principle applied whether OH’s damages had been under the appointment, had it never been novated, or under the collateral warranty it had got from DTR at novation.

Secondly the court said that when the warranties talked about the Employer under the appointment, they meant the original appointment, before the novation changed the Employer under that appointment from OH to OC, and, since OH wasn’t guilty of any contributory negligence that would have reduced its damages (on whichever basis), neither would the beneficiaries suffer any such reduction under their warranty claims. Also it was that original unreduced liability DTR’s insurers had agreed to insure, under the indemnity policy, not the measure of DTR’s liablity to OC, which the insurer’s were claiming to have been reduced by OC’s alleged contributory negligence.

As if that wasn’t enough the court thought the relationship between the beneficiaries of the warranties and DTR was totally contractual so statutory damages reduction for contributory negligence did not apply any way. DTR and their insurers would have had to show that the beneficiaries claims against DTR and their insurers were based common law of negligence (which it could not) and that to the extent there was also the contractual duty under the warranties that it was coextensive with, and triggered by, what was in all other respects common law negligence.

Professional indemnity insures will have taken note of a case which has potentially wide implications for them and perhaps greater protection for occupiers and other beneficiaries where property developers offer a one stop shop of development, construction and sometimes design, quantity surveying and project managment from subsidiaries within their Group.

At the same time insurers can be expected to vigorously contest claims where a professional has accepted no supervisory or inspection obligation to pick up a third party’s failure to adhere to its competent designs.

Danger of failing to buy on “practical completion”

If your new property is being built your obligation to complete your purchase usually turns on whether the archtect or other contract administrator has certified the building work is “practically complete”  – basically whether it can be used for its intended purpose which may include an initial fit out by the proposed occupant.

Linda Burgess was sued by a property renovation firm, Elmbid Ltd.,  after failing to complete the purchase of a £1.3m retirement home Bottom End Barns, in Norfolk, as the  work had not been “satisfactorily” finished.

But a judge ruled in the  High Court that Elmbid was entitled to damages and to  keep a £110,000 deposit she had paid.

The court expressed the view that her duty to complete the purchase was triggered by the issue of the certificate of practical completion even if that was wrong.  But she had failed to prove even that.  As useful future guidance the court said the kind of defects and the cost of putting them right relative to the total purchase cost were relevant factors in deciding whether practical completion had occurred.

The Big Bang under the Legal Market

 

The Legal Market is undergoing a “Big Bang”.  There will be more demand than ever but most services will be commoditised with the emphasis shifting more to cost effective technical access, research and delivery than traditional legal firms and (except for 20 or so yellow book firms) not from prestigious Ivory Towers in the City.  Other delivery will be online retail by  law companies working from cheap out of town premises with perhaps a token city centre presence,  virtual law firms of people working from home and sole practitioners with a laptop to visit clients with, a home office and indemnity insurance.  More on my Twitter Page @PhilipJTaylor1.

Those traditional law firms tied into long leases of largely redundant city centre office space will be lugging their millstones behind virtual firms unincumbered by that now greatly unnecessary infrastructure.

 

“Non compliant” Tenant break notice worked!

 

News

Siemens Hearing Instruments Ltd v Friends Life Ltd (2013) was a High Court Decision that contradicted the orthodoxy that a Tenant’s break right in a lease is an option clause and (as such) must be adhered to strictly.  The clause said the notice must be expressed to be given under Section 24(2) of the Landlord and Tenant Act 1954 and it wasn’t.

That requirement was an old one designed to stop tenants coupling a break with a statutory request for a new tenancy to secure a reduced rent for the same premises in a falling market.

The Court ruled that the break clause’s draftsman should have spelt out the consequences of non compliance with the condition if they were intended to be fatal.  Since he had not the Court felt it was left to it to decide the result of non compliance and it decided that it was not fatal to the Tenant’s break notice being effective.

The case offers hope to Tenants but should not be treated as a “get out of jail card” for any failure to comply with drafting requirements when it comes to preparing break notices.  Tenants should not drop their guard and should make sure they comply with all the conditions. .

 

clause expressly provided that the break notice “must be expressed to be given under Section 24 (2) of the Landlord and Tenant Act 1954”. – See more at: http://www.bonddickinson.com/insight/publications/tenants-given-another-break#sthash.I0FY0DDM.dpuf
clause expressly provided that the break notice “must be expressed to be given under Section 24 (2) of the Landlord and Tenant Act 1954”. – See more at: http://www.bonddickinson.com/insight/publications/tenants-given-another-break#sthash.I0FY0DDM.dpuf

Planning Permissions to “Firm Up” Earlier

From 1 July 2013  the  time limit for bringing judicial review proceedings against England & Wales’ local authority planning permissions was reduced from three months to six weeks.  So land contracts being drawn up to be conditional on planning can now become unconditional much sooner.

So anyone thinking of legally challenging a planning permission must  act very quickly:

Claimants won’t be allowed a hearing in person if a judge rules  their initial written application “totally without merit”.  And even if they are allowed that hearing  they will now have to pay a £215 court fee.  It used to be £60.

Tenant refunds under break clauses?

In a recent case the court implied into a break clause a term which entitled the tenant to a refund.

Hitherto the balance of opinion was that a tenant was not entitled to a refund unless it was covered by an express term.

This makes no difference to the legal position that the tenant must pay the lease payments in full on each payment date preceding or on the break date and apply for a refund of the unused portion after that date.