Case C: Certificate of Bad Husbandry
7.72 The landlord can recover possession where the first tier tribunal has issued a certificate to the effect that the tenant is not fulfilling his responsibilities to farm in accordance with the rules of good husbandry.
To this end the landlord can apply to the tribunal for a certificate of bad husbandry, and if satisfied that the tenant is failing to fulfil his obligation the tribunal must issue a certificate.161 The procedure is subject to several drawbacks, not least that it can be difficult to persuade a tribunal to issue a certificate other than in cases of clear and obvious bad husbandry. Additionally, the tribunal will usually inspect the holding immediately prior to the hearing, which will be some time after the Landlord’s initial application, a factor that gives the tenant some time to rectify obvious instances of poor husbandry where this is possible.7.73 When deciding whether to grant a certificate the tribunal must disregard any practice adopted by the tenant, the object of which is either:
(a)the conservation of flora or fauna, or of geological or physiological features of special interest, or
(b)the protection of buildings or other objects of archaeological, architectural or historical interest, or
(c)the conservation or enhancement of the natural beauty or amenity of the countryside, or the promotion of its enjoyment by the public.
7.74 This disregard only applies, however, if conservation objectives are pursued pursuant to a term of the tenancy or other agreement with the landlord.162
7.75 Whether the tenant is in breach of the rules of good husbandry will be considered by reference to the rules set out in s 11 of the Agriculture Act 1947. These are considered above, para 6.23 ff. The test to be applied by the tribunal when considering whether a breach has occurred is a pragmatic one: the tenant’s breach of the rules ‘must significantly affect the holding, so that it can broadly be said that a reasonable standard of efficient production has not been maintained, nor the unit kept in such a condition as to maintain such a standard in the future’.163 The tribunal must not focus solely on the physical condition of the holding at the date of the hearing, but on the ‘state of affairs’ existing at that time.164 The terms of the tenancy agreement will be a relevant factor to be taken into account.
If the tenancy contains unusual clauses, the observance of which prevent the tenant from implementing practices that would otherwise be relevant to the proper performance of the rules of good husbandry, this must be taken into account – this will be part of the ‘state of affairs’ to which the tribunal will have regard.1657.76 The rules of good husbandry were introduced in 1947 and reflect the immediate post-war policy to increase output and efficiency. They sit uncomfortably with modern environmental and agricultural policy. Two issues, in particular, are problematic in the context of modern farming:
•Environmental Land Management. It is unclear to what extent environmental management practices might be pleaded as ‘good’ husbandry in proceedings under Case C, especially if their overall effect is to reduce the agricultural output of the holding. If the tenancy agreement includes a conservation covenant, this must be taken into account (above). But in other cases the position may be unclear. The decision in R (Davies) v Agricultural Land Tribunal and Philipps166 provides an example of the problems the Case C procedure poses for a tenant farmer participating in an agri-environment scheme. The Welsh Tribunal issued a certificate of bad husbandry in circumstances where the tenant was burying waste on farmland (a clear breach of the rules of good husbandry). The tenant had also left semi-natural grazing land unmanaged – allegedly under the terms of an agreement under the Tir Cynnal agri-environment scheme. On the evidence the tribunal found that there had been no management at all of the land in question, and that approximately one third of the holding had been ‘abandoned’. The issues of husbandry must be assessed by looking at the tenant’s husbandry across the whole of the agricultural unit. The husbandry on the remaining two thirds of the holdings was adequate, but not impressive. On the facts, therefore, the High Court refused to overturn the tribunal’s findings and upheld the certificate of bad husbandry.
This decision is authority for the proposition that the tribunal must focus exclusively on the agricultural management of the unit, taken as a whole. It cannot, it is submitted, be authority for the wider proposition that land management under an agri-environment programme (such as Environmental Stewardship) cannot be ‘good’ husbandry. If land is being actively managed in accordance with the terms of a management agreement167 it may be arguable that the system of production is the most economically efficient in the context of the farming operation concerned, and payments under an agri-environment schme will be relevant to the economic efficacy of the arrangements for the farming of the holding. The ‘abandonment’ by the tenant of the land that had been entered into the Tir Cynnal agri environment scheme in R (Davies) v Agricultural Land Tribunal and Philipps may well have been a breach of the terms of the scheme, in any event, although the tribunal was not called upon to adjudicate upon that. The decision underlines the importance of dialogue between landlord and tenant prior to the tenant entering into an agri-environment scheme, and of dealing with these issues in a variation of the tenancy agreement if necessary.168•Financial and personal factors. The rules of good husbandry require a consideration of the farming practice of the tenant, and exclude wider factors of a financial, or personal, nature. There is little direct authority. However, in construing the parallel rules in the Agricultural Holdings (Scotland) Act 1949, the Scottish Land Court has held169 inter alia that: (i) the rules are to be construed by reference only to the husbandry of the agricultural unit. The illness of the tenant was irrelevant;170 and (ii) leasing of milk quota was not here accountable (it is not ‘husbandry’), even if it is a good business practice. It was not good husbandry, therefore, to lease out the whole of a farm’s milk quota, and cease dairy production, even if it was on the facts financially expedient to do so.
7.77 Notice to quit must be served within six months of the grant of the certificate of bad husbandry. When granting its certificate the tribunal can specify a minimum period of notice for termination of the tenancy of not less than two months. They can direct that this shorter period shall apply instead of the normal statutory notice period (ie 12 months expiring on a term date of the tenancy). Short notice given in accordance with the terms of a certificate of bad husbandry need not itself expire on a term date of the tenancy. Arbitration is not available to challenge notice to quit under Case C.