12 No contracting out
9.56 Section 78(1) of the 1986 Act provides that, save as expressly allowed in the Act itself, in any case for which compensation is provided by the statutory provisions, a tenant (or landlord) will be entitled to compensation in accordance with those provisions ‘and not otherwise, and shall be so entitled notwithstanding any agreement to the contrary’.
This provision does not prevent the parties agreeing that compensation additional to that provided for in the Act should be payable, but to be enforceable such additional matters must be contained in a written agreement.132 Section 78(1) will prima facie void any agreement purporting to exclude or reduce a statutory claim for compensation.133 There is, however, a question whether the parties can agree that no compensation at all will be payable on termination, as a condition for the granting of landlords consent to an improvement. In the old case of Mears v Callender134 it was held that a stipulation that no compensation would ever be payable was void. This decision has, however, been consistently criticised and has not been followed in the Scottish courts.135 In the absence of clear guidance the accepted view would appear to be that an agreement providing for no compensation to be payable would not infringe the terms of the Act.136 Section 78 will also invalidate any clause in the tenancy purporting to give the landlord a right to repossess without sufficient time being left to the tenant to enable service of notices to claim additional compensation for disturbance or for ‘high’ farming, eg a short notice clause137 or a proviso for re-entry138 providing for less than one month’s notice of re-entry.
1Compensation for dairy quota at the end of a tenancy was considered in detail in Chapter 16 of the 3rd edition of this work at paras 16.60 et seq.
to which reference can be made as necessary.2Agricultural Holdings Act 1986, s 83(1).
3Section 83(4) ibid.
4Deregulation Act 2015, s 113(3)(a) and Sch 4.
5See Lady Hallinan v Jones (1984) 272 EG 1081 (C), Langton Davies QC.
6See House of Commons Regulatory Reform Committee, Proposal for the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, Sixth Report of Session 2005/6, at paras 26–30.
7See Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, SI 2006/2805, reg 6.
8SI 2006/2805, reg 6(8).
9For example, by way of an agreed succession under the statutory succession scheme in Part IV of Agricultural Holdings Act 1986. It is not possible, other than in very limited circumstances set out in Agricultural Tenancies Act 1995, s 4, to grant a tenancy of an agricultural holding on or after 1 September 1995: see Chapter 3 para 3.26 ff.
10See Kent v Conniff [1953] 1 QB 361 CA.
11Agricultural Holdings Act 1986, s 71(2).
12As set out in the Agriculture (Model Clauses for Fixed Equipment) (England) Regulations 2015, SI2015/950, and see Chapter 6, para 6.75 ff above.
13See Barrow Green Estate Co. v exors. of Walker decd [1954] 1 WLR 231 CA.
14See Evans v Jones [1955] 2 All ER 118, 121, CA for judicial consideration of the relationship between the two claims.
15[1955] 2 All ER 118, CA.
16Agricultural Holdings Act 1986, s 72(2).
17Ibid, s 71(5).
18See Smiley v Townshend [1950] 2 KB 311 CA.
19See Hanson v Newman [1934] Ch 298, CA.
20Family Management v Gray (1979) 253 EG 369, CA.
21See Jones v Herxheimer [1950] 2 KB 106, CA.
22Ebbetts v Conquest [1895] 2 Ch 377, 384, CA.
23Family Management v Gray (1979) 253 EG 369, CA.
24Williams v Lewis [1915] 3 KB 493.
25See Agricultural Holdings Act 1986, s 71(4).
26Namely 1986 Act, s 7 and SI 2015/950 (the ‘model clauses’).
27Boyd v Wilton [1957] 2 QB 277, CA.
28See ibid, [1957] 2 QB 277 at 287 per Jenkins J.
29See Agricultural Holdings Act 1986, s 72(2).
30Ibid, s 72(3).
31On the relationship of the claim under s 72 to that under s 71 see generally Evans v Jones [1955] 2 QB 58, CA.
32Agricultural Holdings Act 1986, s 72(4).
33As to which see above para 9.04 ff.
34[1953] 1 QB 361 CA.
35In Kent v Conniff itself the corresponding provisions in the Agricultural Holdings Act 1948 were at issue.
36SI 2006/2805, Art 6.
37See ibid, Art 6(4).
38See ibid, Art 6(8).
39Ibid, Art 6(4).
40As to which see Chapter 3, para 3.34 above.
41See Art 6(5) inserting a new s 73(2) into Agricultural Holdings Act 1986.
42As to which see Law of Property Act 1925, s 140.
43This amendment was originally introduced by the Agricultural Holdings Act 1984, Sch 3, para 14, and is now consolidated in s 74(3) of the 1986 Act.
44See Agricultural Holdings Act 1986, ss 60(1), 64(1), 65(1), and 70(1).
45‘Where the tenant of an agricultural holding has remained in the holding during two or more tenancies…...’: s 69(1) ibid.
46See s 69(2) ibid.
47Ibid, s 66(1).
48Ibid, s 67(2).
49To do so would, of course, severely prejudice his bargaining position regarding subsequent compensation and its quantum.
50This will now be the First Tier Tribunal for land situated in England, and the Agricultural Land Tribunal for land in Wales. These are collectively referred to as ‘the tribunal’ in the text for brevity.
51Ibid, s 67(4).
52(1997) Agricultural Land Tribunal (Eastern Circuit) (Unreported).
53The power of an arbitrator under the Agricultural Tenancies Act 1995, when considering conditions attaching to the landlord’s consent to improvements, is more circumscribed: see further Chapter 4 para 4.74 ff.
54Agricultural Holdings Act 1986, s 67(5) and SI 1978/259, rule 7(2).
55See s 67(6) ibid.
56Section 67(6) ibid.
57This has been held not to extend to the planting of hedges: see Matheson v Trustees of the Wynnstay 1987 Settlement (2011) ALT Wales 6271. Compensation for planting hedges will therefore not be available under Sch 7, Part 11.
It was here held that the installation of a hedge involves planting hedging plants, not trees or bushes and that the Tribunal therefore had no jurisdiction to grant consent.58Ie, under s 11 ibid. See above Chapter 6 para 6.53 ff.
59See para 9.28 below.
60Ibid, s 68(2)(b).
61Ibid, s 68(5).
621986 Act, ss 64(1), 69(1).
63As to which see Lewis (Jenkin R) & Son Ltd v Kerman [1971] Ch 477.
64SI 2006/2805, Art 6.
65See ibid, Art 6(4).
66See ibid, Art 6(8).
67See para 9.20 above.
68Ibid, Art 6(1) amending s 69(1) of the Agricultural Holdings Act 1986.
69As to which see Chapter 3 para 3.34 ff.
70See ibid, Art 6(2) inserting a new s 69(1A) into the Agricultural Holdings Act 1986.
71These are governed by Sch 9 to the Agricultural Holdings Act 1986 as amended by the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, SI 2006/2805, reg 6(6), (7).
72SI 1978/809 as amended successively by SI 1980/751, SI 1981/822 and SI 1983/1475. Repealed in England by The Agriculture (Calculation of Value of Compensation) (Revocation) (England) Regulations 2015, SI 2015/327.
73SI 1978/809, Sch 1, para 4.
74Schedule 1, para 6 and tables 2–5.
75The Agriculture (Calculation of Value of Compensation) (Revocation) (England) Regulations 2015, SI 2015/327.
76Schedule 12, para 6 to the 1986 Act.
77See Sch 12, para 6(2).
78Ibid Sch 8, para 7.
79Schedule 8, para 8.
80Schedule 8, para 9.
81See Sch 8, para 10.
82See SI 1978/809, Sch, para 11.
83Schedule 8, para 11.
84SI 1978/809 as amended (above).
85Ibid, Sch, Part 2, paras 8 and 9.
86Section 65(2).
87As to which see Agriculture Act 1947, s 11 and see Chapter 6 para 6.23 ff.
88Agricultural Holdings Act 1986, s 70(1).
89Ibid, s 70(3).
90Ibid. s 60(7).
91Ie, under Ibid, s 32 (above para 7.38).
92Disturbance compensation is not chargeable to Capital Gains Tax, as it represents compensation to the tenant for the losses incurred by him in vacating the holding, and no chargeable gain therefore arises: see Davis v Powell [1977] 1 All ER 471, Drummond (Inspector of Taxes) v Austin Brown [1983] STC 260.
The quantum of disturbance compensation can be agreed by the parties, but in this case the agreed terms should carefully avoid any implication that they record a surrender of the tenancy. Sums other than disturbance compensation may be chargeable to capital gains tax or income tax, depending on the recipient’s financial and business circumstances; Kestell v Langmaid [1950] 1 KB 233, CA.93Preston v Norfolk County Council [1944] KB 775.
94See Gulliver v Catt [1952] 2 QB 308, CA.
95Westlake v Page [1926] 1 KB 299, CA.
96Kestell v Langmaid [1950] 1 KB 233, CA (contravention of Defence (General) Regs 1939 rendering notice to quit thereby ‘null and void’. Compensation for disturbance payable).
97[1926] 1 KB 299, CA.
98See the doubts expressed in Kestell v Langmaid [1950] 1 KB 233, 239, CA, per Evershed MR. Cf however Thomas v National Farmers Union Mutual Insurance Society Ltd [1961] 1 WLR 386.
99Kestell v Langmaid [1950] 1 KB 233, 240, CA.
100See Agricultural Holdings Act 1986, s 60(2).
101See Dodds v Walker [1981] 2 All ER 609, HL and E J Riley Investments Ltd v Eurostile Holdings Ltd [1985] 2 EGLR 124, CA.
102Howson v Buxton [1928] All ER Rep 434, CA. And see Lloyd v Sadler [1978] QB 774, CA; Featherstone v Staples [1986] 2 All ER 461, CA; Combey v Gumbrill [1990] 27 EG 85 and, further, para 7.139 ff above.
103Whether such opportunity has been given is a question of fact for the arbitrator: Dale v Hatfield Chase Corpn [1922] 2 KB 282, CA.
104Section 60(3)(b), Agricultural Holdings Act 1986.
105Dunstan v Benney [1938] 2 KB 1, CA.
106See Re Evans and Glamorgan County Council’s Arbitration (1912) 76 JP 468.
107See para 9.51 below.
108To the same effect see the more expansive discussion by Muir Watt and Moss, Agricultural Holdings (14th ed. Sweet & Maxwell 1998) at para 13.17.
109Above para 9.44.
110Agricultural Holdings Act 1986, s 61(3)(b).
111Ie, s 27(3)(f) ibid.
112Section 61(4) ibid.
113Ie, s 27(3)(b) ibid.
114Ie, s 27(3)(f) ibid, above.
115For instance, where a landlord serves notice to quit on his tenant, and the latter then fails to serve a counter notice claiming the protection of the 1986 Act, any sub tenancy carved out of the mesne tenancy will terminate by operation of law upon termination of the mesne tenancy: Bendall v McWhirter [1952] 2 QB 466 CA. And see above, Chapter 7 para 7.147.
116Section 63(3).
117See Agricultural Holdings Act 1986, s 78 discussed below.
118See Dean v Secretary of State for War [1951] 1 All ER 344, CA. Here the tenant was subsequently able to claim loss of profits.
119See Agricultural Holdings Act 1986, s 25(2)(b).
120Ibid, s 62(2).
121Section 74(1) ibid.
122Section 74(2), as to which see Chapter 6 paras 6.38, 6.37 ff above. Note Coates v Diment [1951] 1 All ER 890; Re Disraeli’s Agreement [1939] Ch 382; Parry v Million Pigs Ltd (1980) 260 EG 281 on the requirement of sufficient notice of repossession if such a clause is to be valid.
123See ibid, s 74(2)(b).
124Aboveparas 9.21, 9.22 ff.
125Ibid, s 75(2).
126Ibid, ss 75(2) and 96(1).
127As to which see s 14 of the 1986 Act and Chapter 6 para 6.24 ff above.
128Ibid, s 76(1).
129See s 76(1)(b).
130Ibid, s 76(2). For these rights and the duty of reinstatement see s 15.
131See s 76(1); ‘notwithstanding anything in this Act or any custom or agreement...’
132Section 78(3) ibid and see Dean v Secretary of State for War [1950] 1 All ER 344, CA.
133For an example see Mears v Callender [1901] 2 Ch 388.
134[1901] 2 Ch 388.
135See Turnbull v Millar 1942 SC 521 (and especially at 535 ‘the text books show that during the last forty years the opinion of Cozens-Hardy J has not been adopted by the settled practice of the profession and the agricultural community, and has remained the subject of discussion and controversy’).
136See Moss and Muir-Watt, Agricultural Holdings (14th Edition) at para 13.46, Scammell and Densham’s Law of Agricultural Holdings (8th Edition) p 377, and see dicta in Johnson v Moreton [1980] AC 37 at p 58, HL, per Lord Hailsham LC.
137Coates v Diment [1951] 1 All ER 890; Re Disraeli’s Agreement [1939] Ch 382.
138Parry v Million Pigs Ltd (1980) 260 EG 281.