Rous v Mitchell
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GLIDEWELL,LORD JUSTICE NOURSE,LORD JUSTICE PURCHAS |
| Judgment Date | 31 July 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J0731-7 |
| Docket Number | 90/0729 |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 1990 |
[1990] EWCA Civ J0731-7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ALDOUS J.
Royal Courts of Justice
Lord Justice Purchas
Lord Justice Nourse
and
Lord Justice Glidewell
90/0729
MR. R. PRYOR Q.C. and MR. M. RODGER (instructed by Messrs Wedlake Saint, London Agents for Messrs Leathes Prior) appeared on behalf of the Appellant (Plaintiff).
MR. D. WOOD Q.C. and MR. J. MALE (instructed by Messrs Robbins Olivey & Blake Lapthorn, London Agents for Messrs Burges Salmon) appeared on behalf of the Respondent (Defendant).
The action
The plaintiff is the freeholder of the Henham Estate which includes farms known as Valley and Green Farms, Henham in Suffolk. The defendant is, and has since 1953 been, the tenant of those combined farms which he has farmed since that time. The farms include a farmhouse which was erected in about 1956 and a number of cottages. By a notice dated 3rd June 1988 the plaintiff required the defendant to quit and deliver up possession of the farms on 11th October 1989. In this action, begun by writ issued on 10th November 1988, the plaintiff claimed that no valid counter-notice requiring arbitration was served by the defendant. The plaintiff therefore claimed a declaration that the defendant's tenancy would determine on 11th October 1989.
By his defence the defendant contended that the purported notice to quit was not a valid notice on three grounds, namely that it was uncertain, that the plaintiff acted fraudulently in serving the notice, and that there was an agreement between the parties that the plaintiff would not serve a notice to quit for the reasons relied on in the notice. The defendant also contended that he has served a valid counter-notice, and thus counter-claimed an injunction restraining the plaintiff from taking any steps to enforce the purported notice to quit and a declaration that a letter and counter-notice dated 16th June 1988 served on his behalf constituted a valid counter-notice.
The action came for trial before Aldous J., who, on 15th July 1989, gave judgment in favour of the defendant. The judge found in favour of the plaintiff on three of the arguments advanced on behalf of the defendant, viz. he found that the notice was not uncertain, that there was no agreement not to serve a notice to quit, and that no valid counter-notice had been served. However, he concluded that the plaintiff acted fraudulently in instructing his solicitors to serve the purported notice to quit, which therefore was invalid and of no effect.
The plaintiff now appeals against this decision. By a respondent's notice, the defendant indicated that he wished to re-argue all the matters on which the judge had concluded against him. However, at the hearing before us Mr. Wood, for the defendant, expressly did not advance any argument against the judge's conclusions on uncertainty and on the issue of an agreement not to serve a notice to quit. He does, however, maintain his argument that a valid counter-notice was served. We have not so far heard submissions on this issue which will only arise if we decide to allow the appeal in relation to the issue of fraud. This judgment is therefore confined to that last issue.
The background facts
These were carefully set out by the learned judge and for the most part I gratefully adopt and repeat what he said.
In 1953 the defendant took a tenancy of Valley Farm, Henham, from the fourth Earl of Stradbroke, who then owned the Henham Estate. A farmhouse was built for the defendant in or about 1956, and Green Farm was added to his tenancy. The holding now comprises some 647 acres. On 9th August 1958, the defendant entered in to a tenancy agreement granting him a tenancy of the combined farms. The agreement includes a covenant not to assign, let or part with possession of the farms or any part thereof, except cottages and gardens let to workmen on the farms. As I have said, the tenancy includes a number of cottages. From time to time cottages have been added to and deleted from the holding.
In about 1980 the fourth Earl granted a tenancy of that part of the Henham Estate which was not already tenanted to a company. The fourth Earl's brother, who was the plaintiff's father, objected to the grant of the lease. In 1981 the plaintiff started proceedings in his father's name and on his instructions seeking to set aside that tenancy. That litigation was settled in 1984, with the result that the tenancy was set aside; and from October 1984 the plaintiff became responsible for running the estate and for the farming of the non-tenanted part.
On 14th July 1983 the fourth Earl of Stradbroke died, leaving no son, and four days later his brother died. The plaintiff, as his eldest son, inherited the title and the estate and therefore became the freehold owner of Valley and Green Farms.
The plaintiff has lived in Australia for 32 years and is resident there. He has a number of business interests in Australia. Prior to July 1983 he visited England on a number of occasions, but most of his time was spent in Australia with his family.
In December 1983 the plaintiff came to England and it was made clear to him that he would have to pay a considerable amount of capital transfer tax. He paid about £300,000 and was advised that he would have to make further payments of about £66,000 per annum. Towards the end of 1984 it became clear that he would obtain possession of the land which had been in-hand prior to the grant of the tenancy to the company, and therefore had to make arrangements for it to be managed and farmed. He met the defendant, liked him and his family and was impressed by the way that he farmed. The plaintiff and the defendant discussed the idea that they would farm the in-hand land in partnership with the plaintiff having first call on the profits to enable him to make the C.T.T. payments. While this was being considered, arrangements were made for the defendant to manage the farming of the in-hand land; this agreement was recorded in a letter of 2nd October 1984 written by the plaintiff to the defendant. Under that agreement the defendant was to act as farm manager for £2,000 a month; he would provide all the necessary machinery and labour for which he would be paid normal contract rates; he would supply all materials which the plaintiff would pay for at cost, and as it was an interim arrangement either party could give seven days notice to determine the agreement. This appeared to be a satisfactory arrangement for both parties as the plaintiff contemplated that the profit would enable him to meet the C.T.T. payments, and they appeared to be in complete agreement as to what they hoped could be achieved.
About this time the plaintiff started to exploit certain ideas by which further revenue would be forthcoming from the estate, and was also advised not to enter into a partnership agreement with the defendant. The matter was discussed with the defendant and in a letter dated 26th June 1985 the terms they agreed were recorded. The defendant was to manage the estate and would receive £2,000 a month and 10% of all income from new projects, such as caravans, steam rallies and a skeet shooting club. The defendant was to make any decision he saw fit as regards the farm, lands, wood, shoot and all items on the estate, except for tenanted cottages and houses which the plaintiff would control from Sydney. To enable this to be done the plaintiff made arrangements for banking facilities at Barclays Bank with an overdraft limited to £500,000.
In accordance with those arrangements the defendant managed the estate with the support of the plaintiff from June 1985. However, the profit anticipated by the plaintiff did not materialise and by December 1985 the full overdraft facility had been taken up. The plaintiff, in January 1986, considered a number of ways to prevent more money being spent on the estate and to achieve a satisfactory return. In March he terminated his arrangement with the defendant for managing the estate, but continued to use him as the contractor. Soon after, upon advice which he seems to have obtained from a Mr. Rod Jones, he came to the conclusion that the defendant's charges for contracting were too high. By harvest time of 1986 the relationship between the plaintiff and the defendant had broken down. The defendant's services were dispensed with and he ceased to have any dealings with the in-hand land. The plaintiff refused to pay the defendant his contracting charges and issued proceedings, claiming over £100,000 because of alleged overcharging. The defendant counter-claimed for the amount he alleged that he was owed for his contracting charges. This action has now been settled by agreement between the parties.
In August 1986 the plaintiff instructed Messrs W.H. Brown, a firm of chartered surveyors and land agents, to seek from the defendant an increase of rent in respect of his holding. Messrs Brown served on the defendant the appropriate notice requiring that the rent payable with effect from 11th October 1987 be referred to arbitration. From July 1987 onwards Mr. Nigel Wild of Messrs W.H. Brown was in charge of these negotiations on behalf of the plaintiff. An arbitrator was appointed, but the arbitration was deferred while negotiations took place. By May 1988 the negotiations had resulted in the basis of an agreement being reached, but at that stage the plaintiff's solicitors on his instructions served the notice to quit upon which this...
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