Taylor v Lancashire County Council and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DYSON,SIR MURRAY STUART-SMITH |
| Judgment Date | 17 March 2005 |
| Neutral Citation | [2001] EWCA Civ 174,[2005] EWCA Civ 284 |
| Docket Number | Case No: B3/2000/0143,Case No: B2/2004/0889 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 March 2005 |
[2001] EWCA Civ 174
Lord Justice Waller
Lord Justice Dyson and
sir Murray Stuart-Smith
Case No: B3/2000/0143
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM PRESTON COUNTY COURT
HIS HONOUR JUDGE GEE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr D. Wood QC and Miss J. Moss (instructed by Messrs Napthen Houghton Craven) for the Appellant
Mr P. Morgan QC (instructed by Solicitor for Lancashire County Council) for the Respondent
This is an appeal from the decision dated 10 September 1999 of Judge Gee sitting at Preston County Court in relation to an arbitrator's award made under the Agricultural Holdings Act 1986 (“the Act”). The arbitration was concerned with disputes which had arisen under an agricultural tenancy agreement dated 19 October 1962 in relation to Pollards Farm, Hutton, Lancashire, between Joseph Taylor as tenant and the Lancashire County Council (“the Council”) as landlord. Pollards Farm is a holding which comprises 72 acres of land. By clause 4(13)(i) Mr Taylor covenanted to use the holding “primarily as a Dairy and Mixed Holding”, and by clauses 4(20)(b) and (21) not to use it for any other purpose than “agriculture”. From the very outset, he used part of the holding for importing, processing, packaging and selling milk and fruit juices that were not produced on the holding. I shall refer to this part of his business as “the importation activities”. The arbitrator (Mr David Claxton) found that the importation activities were in breach of clause 4(13)(i). There has been no challenge to that part of his award. Mr Taylor admitted that the importation activities were also in breach of clauses 4(20)(b) and (21).
It will be necessary to examine the history of the dealings between the Council and Mr Taylor in relation to the importation activities in a little detail later in this judgment. For present purposes, it is sufficient to state that the Council served on Mr Taylor three successive notices to remedy the breaches of covenant. These notices were purportedly served under Schedule 3 Part 1 Case D of the Act. The first notice was dated 13 January 1994, and required the importation activities to cease within 12 months. The second was dated 27 October 1994. This required the breaches to be remedied within 3 months. The third notice was dated 2 November 1994, and required the breaches to be remedied within 12 months. Each of the notices to remedy was followed up with a notice to quit. Mr Taylor challenged all three of the notices to quit, and Mr Caxton was appointed as arbitrator to determine the disputes arising from those challenges.
Mr Claxton published his award on 10 March 1998. In short, he found that the first two notices to quit were of no effect, but that the third notice to quit was valid and effective. He found that the first notice to remedy was invalid since it did not specify the breach of covenant relied on. He also found that it was invalid because the 12 month period specified in it had been “impugned”. What he meant by that was that, in the events that happened (to which I shall come shortly), the period for complying with the notice was to be treated as having been suspended until 14 November 1994. As regards the second notice, he found that it was of no effect because 3 months was too short a period in which to remedy the breach. But he upheld the third notice, rejecting the argument advanced on behalf of Mr Taylor that 12 months was too short to remedy the breach.
Mr Taylor issued proceedings seeking the removal of the arbitrator for misconduct, an order setting aside or remitting the award on the grounds of his misconduct and/or for error of law on the face of the award. A number of grounds were relied on, not all of which are relevant to the present appeal. The judge disagreed with the finding that the first notice was “impugned”. He dealt with the other criticisms of the award, and dismissed the applications.
The history in more detail
Before I come to the award and judgment in more detail, I need to set out some of the history a little more fully. The arbitrator found that the Council only became fully aware of the importation activities in February 1990. It first served a notice on 4 May 1990 giving Mr Taylor 8 months in which to remedy the breaches. Mr Taylor accepted that the business would have to move, and he negotiated Supplementary Agreements with the Council in August 1990 and September 1992. The arbitrator held that during the periods of the Supplementary Agreements, which were designed to allow the tenant time for him to relocate his business, the business was to continue at the same level as previously. By the agreements, the Council agreed to withdraw the notice to remedy, and to suspend its enforcement until 31 December 1993. Both agreements contained a term which entitled the Council to rescind them if the importation activities were expanded without the Council's consent. Mr Taylor substantially increased the level of milk production between December 1992 and December 1993, and did not cease the importation activities on 31 December 1993. Thus it was that the Council served the three notices to remedy to which I have referred. The notices to quit relying on failure to comply with the notices to remedy were served on 16 January 1995, 30 January 1995 and 16 January 1996 respectively.
Meanwhile, two other things had happened which are of some relevance. First, in January 1993, the Council decided to sell a large number of smallholdings, and Mr Taylor confirmed his interest in buying Pollards Farm. On 14 January 1994, the Council wrote to Mr Taylor indicating that it would sell the holding to him. Three days later, however, it wrote again saying that the earlier letter had been sent in error, and that it would defer a decision as to whether to offer Pollards Farm for sale pending a report on the legal and other issues arising from the importation activities. It was not until 14 November 1994 that the Council made its position clear on the sale issue. By its letter to Mr Taylor of that date, it stated that it would retain ownership of the holding, and would continue to seek to enforce the notice to remedy.
Secondly, on 31 August 1993, South Ribble Borough Council served an enforcement notice under the Town and Country Planning Act 1990 on both Mr Taylor and the Council alleging that the unauthorised change of use from Dairy Farm to mixed use of Dairy Farm and the importation activities was a breach of planning control. Mr Taylor appealed against the enforcement notice. An inquiry was held in July and August 1994. By his decision letter dated 13 September 1994, the Inspector allowed the appeal and quashed the notice.
The relevant statutory provisions
Section 26 of the Act contains provisions restricting the operation of notices to quit agricultural holdings. The notices to quit that were served in the present case were governed by Schedule 3 to the Act, since these were cases where consent of the Agricultural Land Tribunal to their operation was not required. They came within Case D which provides:
“ At the date of the giving of the notice to quit the tenant had failed to comply with a notice in writing served on him by the landlord, being either—
a.
…or
b.
a notice requiring him within a reasonable period specified in the notice to remedy any breach by the tenant that was capable of being remedied of any term or condition of his tenancy which was not inconsistent with his responsibilities to farm in accordance with the rules of good husbandry,
and it is stated in the notice to quit that it is given by reason of the said matter ”
Schedule 3 paragraph 10(1) states that a notice to remedy must be in the prescribed form. Article 9 of the Agricultural Holdings (Arbitration on Notices) Order 1987 SI 1987 No 710 provides:
“Where it is stated in a notice to quit an agricultural holding or part thereof that the notice is given for one or more of the reasons specified in Case A,B,C,D or E and the tenant wishes to contest any question arising under the provisions of section 26(2) of, and Schedule 3 to, the 1986 Act relating to any of the reasons so stated, he shall within one month after the service of the notice serve on the landlord notice in writing requiring the question to be determined by arbitration under the 1986 Act.”
Arbitrations under the Act are not governed by the Arbitration Acts: see section 84(1) of the Act. Instead, they are governed by Schedule 11 of the Act, which so far as material provides that where an arbitrator has misconducted himself, the county court may remove him (paragraph 27(1)); where the arbitrator has misconducted himself, or there is an error of law on the face of the award, the county court may set the award aside (paragraph 27(2)); and the county court may from time to time remit the award, or any part of the award, to the reconsideration of the arbitrator (paragraph 28(1)).
The arbitration and the award
The arbitrator was appointed on 15 March 1995 in respect of the first two notices to quit, and on 18 March 1996 in respect of the third notice to quit. The issues raised before the arbitrator all concerned the validity and effectiveness of the notices to remedy that had preceded the notices to quit. It is necessary to examine the relevant parts of the award. There are five appendices annexed to it. Appendix 1 contains the arbitrator's “findings of fact”. It is the main source of the history that I have earlier recounted. As I have already said, he held that the first notice was invalid since it did not specify the breach....
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