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.