Case F: Insolvency of tenant
7.123 Notice to quit under Case F can be served where the tenant is insolvent. The protection given to agricultural landlords against the tenant’s bankruptcy is extensive, and was further strengthened by amendments introduced in the Agricultural Holdings Act 1984.
A tenant is insolvent for these purposes where either:(a)if he is an individual, he has become bankrupt or has made a composition or arrangement with his creditors, or has had a receiving order made against him; or
(b)Where the tenant is a company, a winding-up order has been made against it, or a resolution for voluntary winding-up has been passed with respect to it. A resolution for a voluntary winding-up will not have this effect if it is passed solely for the purposes of a reconstruction, or for an amalgamation with another company.266
7.124 Where the tenant is insolvent, notice to quit does not have to be of 12 months’ duration and short notice can be given.267 Most leases will include a proviso for re-entry on bankruptcy, and so the landlord will have the option of proceeding instead by way of forfeiture proceedings under the general law. Under s 146(1) of the Law of Property Act 1925 the court has limited power to suspend forfeiture in bankruptcy cases. However, in the case of agricultural property even this limited power is excluded.268
7.125 Arbitration is not available to challenge a Case F notice to quit. The tenant will only be able to defend possession proceedings by alleging the notice to quit is bad in law, or that Case F does not apply at all (for instance because he is not bankrupt as alleged).