Barrett and Others v Morgan
| Jurisdiction | UK Non-devolved |
| Judge | LORD SLYNN OF HADLEY,LORD WOOLF M.R.,LORD NICHOLLS OF BIRKENHEAD,LORD HOPE OF CRAIGHEAD,LORD MILLETT |
| Judgment Date | 27 January 2000 |
| Judgment citation (vLex) | [2000] UKHL J0127-1 |
| Date | 27 January 2000 |
| Court | House of Lords |
[2000] UKHL J0127-1
HOUSE OF LORDS
Lord Slynn of Hadley
Lord Woolf
Lord Nicholls of Birkenhead
Lord Hope of Craighead
Lord Millett
And Others
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend Lord Millett. For the reasons he gives, I too would allow this appeal.
My Lords,
I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Millett. For the reasons which he gives I too would allow the appeal.
My Lords,
I have had the advantage of reading a draft of the speech of my noble and learned friend Lord Millett. For the reasons he gives I too would allow this appeal.
My Lords,
I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Millett. I agree with it, and for the reasons which he has given I too would allow the appeal.
My Lords,
Section 26 of the Agricultural Holdings Act 1986 entitles the tenant of an agricultural holding who is given notice to quit to serve a counter-notice on his landlord. If he does so within one month after the service of the notice to quit upon him, the notice to quit has no effect unless it is confirmed by an Agricultural Land Tribunal. The Section applies to a notice to quit given to a sub-tenant by the head tenant as it applies to a notice to quit given to a head tenant by the head landlord. But a sub-tenant is given no protection from the automatic determination of his sub-tenancy at common law on the determination of the head tenancy out of which it is derived. There is no provision in the Act to extend the tenancy of a sub-tenant after the determination of the head tenancy. Nor is there any requirement in the Act or in any statutory regulation made thereunder to require a head landlord to serve a copy of the notice to quit on a sub-tenant or to enable a sub-tenant to serve a counter-notice on the head landlord. The Lord Chancellor has been given power by Section 29 of the Act and paragraph 6 of the Fourth Schedule to make provision for sub-tenancies, but this power has never been exercised.
A head landlord can, therefore, by his own unilateral act in serving notice to quit on the head tenant bring a sub-tenancy to an end if the head tenant fails to serve a counter-notice. This much has been clear ever since Baron Sherwood v. Moody [1952] 1 All E.R. 389 and is common ground before your Lordships. The question in this appeal is whether such a notice served by pre-arrangement with the head tenant and on the common understanding or agreement that the head tenant will not serve a counter-notice is effective at common law to determine the sub-tenancy as well as the head tenancy.
The facts are set out at length in the judgment of the Vice-Chancellor reported in [1999] 1 W.L.R. 1109, and I need not repeat them in full. The Respondent Mr. Morgan has farmed a holding of several parcels of farmland in County Durham since November 1980. At the material time he was in occupation of the land under a sub-tenancy from John Scott the Fifth Earl of Eldon and his brother Mr. Simon Peter Scott. They in turn held the land as yearly tenants of the Appellants, who held the freehold as trustees for Mr. Scott'S children.
In April 1992 Mr. Scott's children wanted to raise capital by a sale of the land with vacant possession. This required both the tenancy and the sub-tenancy to be determined. This could not be achieved by a surrender of the head tenancy, as this would still leave Mr. Morgan's sub-tenancy on foot. For reasons which will become apparent, it was thought that a notice to determine the head tenancy served by the head tenants on the head landlords would be equally ineffective.
Mr. Morgan's sub-tenancy, however, was undoubtedly terminable by notices to quit served by the "the freeholders" on the head tenants, and it was decided to adopt this course. The head tenants had the right to challenge any notice to quit by serving a counter-notice, and any agreement which purported to exclude or curtail that right would be unenforceable: see Johnson v. Moreton [1980] A.C. 37. But, as the freeholders knew, the head tenants were equally desirous that the land should be sold with vacant possession and had no intention of serving counter-notices. Accordingly, after discussions between the parties in which it was informally (but unenforceably) agreed that no counter-notices would be served, the freeholders duly served notices to quit on the head tenants. As expected, the head tenants did not serve any counter-notices. Mr. Morgan refused to give up possession, and the freeholders brought the present proceedings for possession.
The Deputy High Court Judge (Mr. Peter Smith Q.C.) found that the freeholders wanted to obtain vacant possession and Mr. Morgan's sub-tenancy was the only obstacle in their way; that the head tenants were equally anxious that the freeholders should obtain vacant possession; that the head tenants never consulted their own interests as tenants and never contemplated serving any counter-notices; that the freeholders would not have served notices to quit (because they would have served no purpose) if they had not known that the head tenants would not serve counter-notices; and that the whole object of the arrangements was to destroy the sub-tenancy.
The question for decision, therefore, is whether the fact that the notices to quit were served by the freeholders pursuant to an agreement or understanding in that behalf with the head tenants deprived them of the effect which they would have had if they had been served without any prior agreement or understanding.
The Court of Appeal held that it did. They observed that a sub-tenancy is not determined by the surrender of the head tenancy and, while they recognised that the head tenancy had not in fact been surrendered, they treated a notice to quit given by a landlord by prior arrangement with the tenant as tantamount to a surrender because both transactions are consensual. As Sir Richard Scott V.-C. put it:
"It is unilateral notices to quit that destroy sub-tenancies; it is unilateral acts determining the head tenancies that destroy sub-tenancies. Consensual acts done by arrangement between landlord and tenant do not, in my opinion, do so."
Now this is, with respect, a very curious doctrine. If correct, it means that a person cannot achieve with consent what he could achieve without it. It also means that parties whose interests happen to coincide must take care not to discuss the matter beforehand or risk failing to achieve together what either could achieve on his own. One would suppose that, if a person is entitled to achieve a particular result by unilateral action on his part without the consent of another party, he can achieve that result whether or not he obtains the consent of that party. I think that the Court of Appeal confused two different senses in which a transaction may be said to be consensual. Some transactions (and a surrender of a tenancy is one of them) are consensual in the sense that they are dependent for their effectiveness on the consent of some other party. Other transactions (such as the determination of a tenancy by notice to quit) are effective whether or not the other party gives his consent to it. If such consent is forthcoming, the transaction may no doubt be described as consensual; but that does not alter the fact that its effectiveness does not depend on consent.
I propose first to consider the question as a matter of principle and then to review the principal authorities on which the Court of Appeal relied for their conclusion.
A lease or tenancy for a fixed term comes to an end by effluxion of time on the date fixed for its determination. A periodic tenancy comes to an end on the expiry of a notice to quit served by the landlord on the tenant or by the tenant on the landlord. As Lord Hoffmann explained in Newlon Housing Trust v. Alsulaimen [1999] A.C. 313 at p. 317, it also comes to an end by effluxion of time. In each case the tenancy is determined in accordance with its terms. By granting and accepting a periodic tenancy with provision, express or implied, for its determination by notice to quit, the parties have agreed at the outset on the manner of its termination. The parties and their successors in title, including those who derive title under them, are bound by their agreement.
A lease or tenancy may also be surrendered at any time by the tenant to his immediate landlord. A surrender is simply an assurance by which a lesser estate is yielded up to the greater, and the term is usually applied to the giving up of a lease or tenancy before its expiration. If a tenant surrenders his tenancy to his immediate landlord, who accepts the surrender, the tenancy is absorbed by the landlord's reversion and is extinguished by operation of law.
A surrender is ineffective unless the landlord consents to accept it, and is therefore consensual in the fullest sense of the term. In Coke on Littleton II 337b the nature of a surrender is described as follows:
"'SURRENDER', sursum redditio, properly is a yeelding up an estate for life or yeares to him that hath an immediate estate in reversion or remainder, wherein the estate for life or yeares may drowne by mutuale agreement betweene them" (my emphasis).
On its surrender the tenancy is brought to end prematurely at a time and in a manner not provided for by the terms of the tenancy agreement. In this respect it differs from the case where a tenancy is determined by notice to quit. It is because the landlord or his predecessor in title has not, by granting the tenancy, previously agreed that the tenant...
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