4 Procedure on Rent Review

(a)Arbitration Notice

3.133 Unless the statutory review procedures have been excluded (as to which see above), then either party to a farm business tenancy may, by notice in writing given to the other, require that the rent properly payable in respect of the holding be referred to arbitration under the 1995 Act.²⁶⁰ The statutory review notice must state the review date from which the rent review is to take effect, and the review date must be at least 12 months but not more than 24 months after the day on which the statutory review notice is given.²⁶¹ The review date, it will be recalled, may be either a contractually agreed date, or in default the next review date dictated by the statutory minimum 3 yearly review cycle.

3.134 Where the parties have exercised their right under the 1995 Act to contract out of the statutory review provisions, by adopting one of the options for review in s 9,²⁶² the right to trigger a review by serving a statutory review notice will be inapplicable. This is because, if s 9 is used to establish an alternative rent review basis (eg by agreeing fixed (or staged) rent increases at fixed points in the tenancy) then the whole of Part I of the 1995 Act is rendered inapplicable. This includes, of course, the procedures in ss 10 and 12 for triggering reviews. In such cases, which are unlikely to be the norm in the practice, it will therefore be essential for the parties to clearly define the terms on which a trigger notice motivating a review can be served, and by whom. It may not be necessary to do so in all cases eg it will be superfluous where the tenancy agreement clearly stipulates the amount of a staged rent increase and when it is to take effect.

(b)Appointment of Arbitrator or Independent Expert

3.135 Once a statutory review notice has been given, the parties have three options. They can either

(i)agree the rent, or

(ii)Agree on an arbitrator to determine the rent, or

(iii)Agree the appointment of an independent expert to determine the rent.

3.136 The facility to appoint an independent expert to determine the rent on a basis agreed by the parties is preserved by s 12(b). This is the case whether or not the instrument creating the tenancy provides for the rent payable from the review date to be referred to an independent expert.²⁶³ Prior to the Regulatory Reform (Agricultural Tenancies) Order 2006 it was possible to appoint an independent expert by agreement, but either party could opt back into the arbitration procedure by resiling on the agreement and triggering the application of the statutory arbitration process. The TRIG report considered this unduly restrictive and recommended the introduction of the flexibility to agree on the binding use of independent experts to value the rent, provided this was done in the farm business tenancy agreement.²⁶⁴ The practical effect of the implementation of the TRIG reforms is to prevent either party from resiling on their agreement to refer disputes to an independent expert, by later referring the rent to arbitration under the Act²⁶⁵ – but only where the use of an independent expert is stipulated in the tenancy agreement. If this is not the case, then the parties can still refer the dispute to an independent expert,²⁶⁶ but each will retain the right to resile from their agreement and trigger a statutory rent arbitration should they wish to do so.

3.137 This duality of applicable procedures creates some difficult questions as to the possible redress available to an aggrieved party where the other resiles from a contractually binding agreement to refer the dispute to an expert, and then requires arbitration under the 1995 Act instead.²⁶⁷ If the parties contemplate using an independent expert to adjudicate in rent disputes, it is therefore advisable to incorporate their agreement to this effect in the tenancy agreement, thus closing off this possibility.²⁶⁸

(c)Appointment of Arbitrator by President of RICS

3.138 Section 12 of the 1995 Act provides a fall back procedure enabling either party to apply to the President of the RICS for the appointment of an arbitrator if

(i)An arbitrator has not been appointed by agreement made since the notice was given, and

(ii)No person has been appointed by agreement since the notice was given to determine the question of the rent otherwise than as arbitrator on a basis agreed by the parties.

3.139 The application to the RICS for an appointment must be made during the period of six months ending with the review date.

3.140 If an arbitrator is appointed by agreement, he can only determine the rent on the free market basis provided for in the 1995 Act.²⁶⁹ If the parties agree the appointment of an independent expert to value the rent, however, he can do so on an alternative basis agreed by the parties.²⁷⁰ The basis of valuation could be included in the tenancy agreement, or may be agreed subsequently. It should be appreciated, however, that s 12 makes it clear that the arbitrator or expert (whichever is appointed) must be appointed by the parties after the service of the statutory rent review notice: he cannot be appointed by agreement before this eg in the tenancy agreement itself. If the parties choose the Alternative Dispute resolution route, and agree the appointment of an independent expert to value the rent, the option of applying for an arbitrator under the 1995 Act is closed off at the point when the expert is appointed by agreement. There is no alternative route down the s 13 statutory review path, and no going back on the alternative dispute resolution path, once the independent expert has been appointed. Whether the parties are then bound to implement his award is a matter of construction of the contract between them as to his appointment. Note also that the statutory route is only closed off if a third party (eg an expert) is appointed to determine the question of the rent.²⁷¹ It will not be barred where the parties agree the appointment of a mediator, whose role in the dispute is not to make an adjudication of the rent, but rather to facilitate an agreement being reached by the parties themselves. In this case, either party could, if dissatisfied with the result, trigger a statutory review by applying to the RICS for the appointment of an arbitrator – subject to the requirement to do so within the six months period ending on the review date.

3.141 If no agreement has been reached, and no arbitrator or independent expert has been appointed by six months before the review date, either party can apply to the President of the RICS for the appointment of an arbitrator. The application must be in writing, and be accompanied by such fee as the President considers reasonable.²⁷² The application does not have to be made by the party who served the statutory review notice triggering the review – it can be made by either party. The arbitration will be conducted under the Arbitration Act 1996.

1Section 2(1), Agricultural Tenancies Act 1995.

2Section 1(1) ibid.

3Section 1(2) ibid.

4Section 1(3) ibid.

5Section 1(4) ibid.

6Ie using the notice facility in s 1(4) of the Agricultural tenancies Act 1995. See below.

7Section 2 ibid.

8Section 4 ibid. discussed more fully at 3.26 ff below.

9Section 4(1) ibid.

10Section 4 (1) (b), (c) and (d) ibid.

11Section 4(i)(e) ibid.

12Section 4(i)(f) ibid. as amended by the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, SI 2006/2805, art 12(4). See below.

13Section 4 (1)(g) ibid, added by the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, SI 2006/2805, art 12(5).

14See s 38(1) of the Agricultural Tenancies Act 1995 and s 96 of the Agricultural Holdings Act 1986. Cf. the definition used in some other ancillary statutes, such as the Rent (Agriculture) Act 1976, which are different in some respects. For the latter see Ch 11 para 11.15 ff.

15SI 1987/1949.

16SI 1988/1125, made under the Farmland and Rural Development Act 1988.

17Section 1(1), Agricultural Tenancies Act 1995.

18Section 1(2), Agricultural Tenancies Act 1995.

19Section 1(1), Agricultural Tenancies Act 1995.

20Section 1(3) of the Agricultural Tenancies Act 1995.

21[1988] 1 EGLR 1, discussed further below para 3.16.

22[1980] 2 All ER 530.

23See s 38(1), Agricultural Tenancies Act 1995. This repeats the definition to be found in s 96 of the Agricultural Holdings Act 1986, with one minor amendment to the definition of ‘livestock’.

24By name or otherwise eg by Ordnance Survey field references.

25Note that it is the character of the tenancy that has to be primarily agricultural at the outset. The terms of the tenancy agreement go to this question, as well as the nature of the land let. If, therefore, the tenancy agreement expressly contemplates (or requires) diversification into non-agricultural business use to the point where business user predominates from inception, there could be a question whether the character of the tenancy is actually primarily agricultural from the outset. It is not impossible that a tenancy agreement drafted in such terms could be held to be a business tenancy within the Landlord and Tenant Act 1954. This is a particular problem where land is relet following a farm business tenancy under which substantial diversification has taken place (see para 3.18 below). It could also arise on the grant of the initial tenancy if it is not carefully drafted.

26That is, the date on which the tenant enters into possession – s 38 ibid. For suggested forms of notice under s 1(4) ibid see inter alia the Royal Institution of Chartered Surveyors’ Guidance Note on the 1995 Agricultural Tenancies Act (RICS Books,1995) at p.14; Sydenham and Mainwaring, Farm Business Tenancies (Jordans, 1995) at pp.173, 174.

27Section 1(5) ibid.

28Section 1(6) ibid.

29Section 1(2), Agricultural Holdings Act 1986.

30See Weatherall v Smith [1980] 2 All ER 530.

31[1988] 1 EGLR 1.

32Compare Short v Greeves (above n. 31) with Lord Monson v Bound [1954] 3 All ER 228.

33Section 36 ibid assists by stipulating rules for due service of notices under the 1995 Act.

34Section 1(4)(b) ibid.

35This issue has also been identified by research sponsored by DEFRA as likely to cause increasing problems in the future, as diversified farm business tenancies come to an end and are considered for renewal: see An Economic Evaluation of the Agricultural Tenancies Act 1995, (University of Plymouth 2002) at para 7.25.

36See the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003, SI 2003/3096 arts 21 and 22, Schs 1-2, introducing a new s 38A to the Landlord and Tenant Act 1954. The tenant must make a declaration that he has received and accepted the consequences of the landlords notice. A court application was formerly required under s 38, Landlord and Tenant Act 1954.

37See eg Sydenham and Mainwaring, Farm Business Tenancies: the Agricultural Tenancies Act 1995 (Jordans, 1995) at p.18.

38[1988] 1 All ER 74 (HL).

39See Lord Glendyne v Rapley [1978] 1 WLR 601.

40McPhail v Greensmith (6 August 1987, Unreported) noted at [1993] 2 EGLR 228.

4McLinton v McFall (1974) 272 EG 295.

41For the management options for land under the Basic Payment Scheme see Chapter 15, paras 15.12–15.13 below.

42See for example Cambusmore Estates v Little [1991] SLT 33 (leasing of dairy quota not good husbandry,whatever financial benefits to the enterprise accrue). This view is reinforced by the interpretation taken by the ECJ in dairy quota cases, where it has been held that only farmers selling milk or milk products can be considered as ‘producers’: see Ballmann v Osnabruck [1991] ECR 1-35.

43Hemens v Whitsbury Stud and farm Ltd [1988] 1 All ER 74, Belmont Farm Ltd v Minister of Housing and Local Government (1962) 13 P&CR 417.

44See s 1(8) ibid.

45The cases are difficult to reconcile – see para 3.33 ff below

46See Jenkin R.Lewis & Son v Kerman [1971] Ch 477.

47Take Harvest Ltd. v Lui [1993] AC 552, esp at 565-566, applying dicta in Jenkin Lewis v Kerman [1971] Ch 477, 496.

48Friends Provident v British Railways Board [1995] 2 EGLR 55.

49See Trustees of JW Childers v Anker [1996] 1 EGLRI (CA).

50See Clarke v Grant [1950] 1 KB 104.

51Note that s 3(1) does not specify that the new tenancy be with the same landlord as under the old tenancy, only the same tenant.

52This will be a question of fact. Semble some small variations that are de minimis will fall to be disregarded without nullifying the application of the deeming provisions in s 3.

53As required by s 1(4)(b) ibid. (the second notice condition).

54The qualifying conditions for protection under the Agricultural Holdings Act 1986 are discussed in Chapter 5, para 5.05 ff below. If a tenancy is granted for business purposes that are not substantially agricultural the tenancy might be a business tenancy within Landlord and Tenant Act 1954, Part I.

55Section 38 of the Agricultural Tenancies Act 1995.

56Section 4(1)(a) ibid.

57See Chapter 8, para 8.04 ff below for a full discussion of the succession regime under the 1986 Act.

58See s 4(1)(b) – (d), Agricultural Tenancies Act 1995.

59Ie under ss 39 or 53 of the Agricultural Holdings Act 1986.

60Ie in circumstances within s 45(6) ibid.

61Section 4(1)(d) of the Agricultural Tenancies Act 1995.

62Ie s 4(1) (d) ibid., especially the definition of ‘agreed succession’ in s 4(2) ibid.

63As to which see Chapter 8 below.

64See para 3.28 of the 2nd edition of this work for commentary on these interpretative difficulties.

65Tenancy Reform Industry Group Report (TRIG), Final Report (DEFRA 2003) at para 4.2.5.

66As to which see Chapter 8, para 8.16 below.

67Section 4(2) and 4(2A) ibid., as amended by art 12(7) and (8), Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, SI 2006/2805.

68Section 4(1)(e) ibid.

69see further Chapter 10, para 10.03 ff for a full discussion of the compensation rights under the Evesham Custom.

70See para 3.23 above

71This was apparently the view of the government when the provision was introduced: see 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 para 74.

72Section 4(1)(f) as amended by Regulatory Reform (Agricultural Tenancies) Order 2006, art 12(4).

73Section 4(2C) ibid, inserted by Regulatory Reform (Agricultural Tenancies) Order 2006, art 12(10).

74Section 4(1)(g) ibid. inserted by Regulatory Reform (Agricultural Tenancies) Order 2006, art 12(5). This provision reverses the effect of the original exception, which did not apply to express agreements to surrender and then grant a new tenancy.

75(1993) 28 E.G. 127.

76Section 37 of the Agricultural Holdings Act 1986 provides for two generation succession rights in a somewhat cumbersome fashion by providing that no application for succession can be made once a tenancy has been obtained on two occasions either under a tribunal direction or in circumstances where an agreed succession has taken place to a qualifying successor. If the addition of a further tenant is achieved by surrender and regrant this will count as one succession for this purpose. If it is effected by novation – as in Saunders v Ralph (above) – the effect will be to include the successor as a joint tenant without using one of the two available successions under the 1986 Act, Part IV.

77See the Agriculture (Model Clauses for Fixed Equipment) (England) Regulations 2015, SI 2015/950.

78Section 6 of the Agricultural Holdings Act 1986, discussed below Chapter 6, para 6.06 ff.

79In either case the term created by the tenancy must be of certain duration. In the case of a fixed term the ultimate term created must be expressed with certainty, or by reference to something which can render it certain; Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 (term of uncertain maximum duration, expressed to continue until the landlord wanted the land for road widening purposes, held void for uncertainty). Provided it is of certain duration, however, the term can be for a fixed period of less than one year: in Land at Liss, Hants. [1971] Ch 986, decided under the Landlord and Tenant Act 1954 Part I, a term of six months was held to be a ‘term of years certain’. And see to the same effect EWP Ltd. v Moore [1992] 2 EGLR 4. In the case of a periodic tenancy, each period of tenancy is treated as a separate term: the tenancy will, however, be of uncertain duration if the tenancy agreement deprives either party of the right to serve notice to quit bringing it to an end, for then the ultimate duration of tenancy cannot be rendered certain: Prudential Assurance Co.Ltd v London Residuary Body (supra).

80See below Chapter 7, para 7.01 ff.

81Section 25 of the Agricultural Holdings Act 1986.

82Section 6(1)(c), Agricultural Tenancies Act 1995, amended by Regulatory Reform (Agricultural Tenancies) Order 2006, art 13. The latter removed the requirement that the notice be given less than 24 months before the date on which it is to take effect. Notice to quit of longer than 24 months can therefore be given.

83This might appeal to some institutional ‘conservation’ landlords who wish to promote environmental management, for example.

84Section 10(1) and Sch 2 of the Agriculture Act 1958.

85See notes 87 and 88 below.

86Cf. R (Davies) v Agricultural Land Tribunal and Philipps [2007] EWHC 1395 (Admin), decided under the Agricultural Holdings Act 1986. A certificate of bad husbandry was issued by the Welsh Tribunal against a tenant who had entered the Tir Cynnal agri-environment scheme. The High Court refused to overturn the Tribunal’s decision on the facts. And see further Chapter 7, para 7.71 below.

87Sch 3 case C to the 1986 Act gives the landlord a ground for possession where the agricultural land tribunal has issued a certificate of bad husbandry. This is applicable whether or not the rules have been made a term of the tenancy agreement itself. See further Chapter 7, para 7.67 ff below.

88If the rules had been incorporated as a term of the tenancy agreement, and additional ground for serving notice to quit – breach of tenancy – would also be available to the landlord under Case D in Sch 3 to the Agricultural Holdings Act 1986.

89[1916] 2 KB 91, 100.

90Auworth v Johnson (1832) 5 C&P 239.

91Tucker v Linger (1882) 21 ChD 18, 34.

92See Hutton v Warren (1836) 1 M&W 466. Also Wigglesworth v Dallison (1779) 1 Doug KB 201; Senior v Armytage (1816) Holt NP 197.

93See Williams v Lewis [1915] 3 KB 493.

94Section 14 of the Agricultural Holdings Act 1986. As to freedom of cropping see s 15 ibid. And see further Chapter 6, para 6.26 ff below.

95See s 22 of the Agricultural Holdings Act 1986. Below para 6.33.

96Cf, Agricultural Holdings Act 1986, s 20.

97Regulatory Reform (Agricultural Tenancies) Order 2006, art 13.

98See the Tenancy Reform Industry Group Report (TRIG), Final Report (DEFRA 2003) at para 4.2.6; House of Commons Regulatory Reform Committee, Proposal for the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, Sixth Report of Session 2005/6 (HC1309) at paras 90–93.

99See the House of Commons Regulatory Reform Committee, Proposal for the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, Sixth Report of Session 2005/6 (HC1309) at paras 91ff. for a discussion of the implications of the new rule.

100See also, Evans, D. Agricultural Tenancies Act 1995 (Sweet & Maxwell, Annotated legislation Series, 1995) at 8–17; and Scammell Densham and Williams Law of Agricultural Holdings (10th ed 2015) at 12.24 passim.

101Section 7(1), Agricultural Tenancies Act 1995, above para 3.51.

102Or if there is no quarter day applicable to the tenancy on one of the usual quarter days.

103Section 7(3) of the Agricultural Tenancies Act 1995.

104Most forfeiture clauses in fact now go beyond providing for forfeiture and re-entry for non payment of rent, breaches of covenant and bankruptcy to include, for example, the appointment of a receiver, the presentation of a bankruptcy petition, the calling of a meeting of creditors or (in the case of a company tenant) the presentation of a winding up petition or analogous proceedings for the appointment of an administrator, and the entering into of compulsory or voluntary liquidation. See for example the RICS Standard Form Agreement for a Farm Business Tenancy (fixed term of two years or less) cl 10: similarly Encyclopaedia of Forms and Precedents, Vol 2(1) Agricultural Tenancies Farm Business Tenancy Agreement Form 3 (long form – more than 2 years) p 61 at p 79, Sch 10.

105See further Chapter 4, para 4.15 ff.

106See Parry v Million Pigs Ltd (1980) 260 EG 281. A clause allowing for less than one month’s notice of re-entry and forfeiture was declared void as an attempt to contract out of the tenants right to claim compensation under the 1986 Act, which required the tenant to give notice of his intention to claim at least 1 month before the end of the tenancy.

107Section 22(2) of the Agricultural Tenancies Act 1995. See further para 4.46 ff below.

108Section 8(1) of the Agricultural Tenancies Act 1995.

109Commentators disagree on the need for notice in this context. Compare Sydenham and Mainwaring Farm Business Tenancies (Jordans 1995) at 5.4.11, and the Guidance Note on the Agricultural Tenancies Act 1995 (Royal Institution of Chartered Surveyors, 1995) at 3.2.3. And for the counter argument (ie that the clause need not provide for reasonable notice to be given), persuasively put, see Scammell Densham and Williams Law of Agricultural Holdings (10th ed 2015) at 11.14.

110See Coates v Diment [1951] 1 All ER 890, Parry v Million Pigs Ltd. (1980) 260 EG 281.

111See Church v Brown (1808) 15 Ves 258.

112See Chapter 6, para 6.06 ff below.

113Unless the oral terms of the tenancy agreement permitted assignment and subletting: see s 6(5)(a) of the Agricultural Holdings Act 1986.

114The standard covenant taken in many leases will now restrict the sharing of possession or occupation by the tenant, in addition to prohibiting the assignment, subletting or parting with possession of the whole or part of the holding. For judicial interpretation of alienation clauses in the context of Case E to Sch 3 of the Agricultural Holdings Act 1986.

115Section 19(4) of the Landlord and Tenant Act 1927.

116Section 19(4) of the Landlord and Tenant Act 1927, inserted by Agricultural Tenancies Act 1995 Sch para 6.

117[1986] Ch 513.

118[1986] Ch 513 at 520 per Balcombe LJ.

119See Ashworth Frazer Ltd. v Gloucester CC [2001] 1 WLR 2180.

120See s 19(1E), Landlord and Tenant Act 1927, added by the Landlord and Tenant (Covenants) Act 1995, s 22. A ‘Qualifying Lease’ is for these purposes a new tenancy granted on or after 1 January 1996. Most farm business tenancies will therefore be included in this category.

121This provision does not apply where there is a subletting of the premises, however.

122Section 19(1A) ibid.

123See s 5 ibid.

124See s 16 ibid. There are controls over what can be included in an authorised guarantee agreement.

125See Pavilion Property Trustees Ltd v Permira Advisers LLP [2014] EWHC Civ 145 (Ch).

126See ss 16(4)–(8), 17 and 18, Landlord and Tenant (Covenants) Act 1995.

127Section 18(1)–(3) ibid.

128Scala House Ltd. v Forbes [1974] QB 575; Expert Clothing Service and sales Ltd. v Hillgate House Ltd. [1986] 1 Ch 340; Akici v LR Butlin Ltd [2005] EWCA Civ 1296, [2006] 2 All ER 872 (see especially Neuberger LJ., Judgement at para 67). Cf. under the 1986 Act the assignment of an agricultural holding in breach of covenant would give the landlord the right to serve notice to quit under Case E to Sch 3 of the 1986 Act. It has now been held, however, that subletting in breach of covenant will not enable the landlord to rely upon Case E: there will be no damage to his reversion as the sub tenancy will fall with the tenancy, even if an upwards notice to quit is served by the tenant on the landlord (see Pennell v Payne [1995] 1 EGLR 5). Arbitration is not available to a tenant served with notice to quit under case E. See further Ch 7 para 7.13 ff below. The landlord’s remedy for breach of covenant in a farm business tenancy will be for forfeiture under the general law.

129Ie under s 146 Law of Property Act 1925: see below Chapter, paras 4.15 ff.

130Akici v LR Butlin Ltd [2005] EWCA Civ 1296, [2006] 2 All ER 872 (see especially Neuberger LJ., Judgement at para 62 ff.); PF Smith (2006) Conv. 382.

131Cook v Shoesmith [1951] 1 KB 752.

132Field v Barkworth [1986] 1 All ER 362; Troop v Gibson [1986] 1 EGLR 1.

133Lam Kee Ying Sdn. Bhd. v Lam Shes Tong [1975] AC 247, esp. at 255-256

134In Akici v LR Butlin Ltd [2005] EWCA Civ 1296 the court of appeal held that the distinction must also be applied to the construction of clauses against sharing possession, which must not be viewed as synonymous with merely sharing physical occupation of premises. In so doing they disapproved dicta to the contrary in the earlier decision in Tulapam Properties Ltd v De Almeida [1981] 2 EGLR 55; see [2005] EWCA civ 1296 judgement at paras. 27 ff (Neuberger LJ.).

135[2009] EWCA Civ 1311.

136[1986] 1 EGLR 1.

137See generally Amalgamated Investment and property Co v Texas Commerce International bank ltd. [1982] QB 84.

138Warboys v Carter [1987] 2 EGLR 1.

139Old Grovebury Manor Farm Ltd v W Seymour Plant Sales and Hire Ltd (No 2) [1979] 3 All ER 504.

140[2002] EWCA Civ 145.

141The word ‘only’ introduced an element of exclusivity to the user envisaged by the clause here.

142[2003] EWCA Civ 1957.

143The tenants here had sold the land and then took a leaseback on a farm business tenancy of part of the land sold.

144See s 1(2) of the Agricultural Tenancies Act 1995.

145Section 17(1) ibid.

146Section 19(5) ibid.

147See generally Chapter 13, paras 13.125 ff below.

148See Sch 3, para 9(2) of the Agricultural Holdings Act 1986.

149See generally Bishop, J Reforming Land Tenure: Farm Business Tenancies and the Rural Environment (1996) Conv. 243.

150Lloyds Bank Ltd v Jones [1955] 2 QB 298.

151Sumnal v Statt (1984) 49 P&CR 367, 375 per Cuming-Bruce LJ.

152Lloyds Bank Ltd v Jones [1955] 2 QB 298, 324.

153Sumnal v Statt (1984) 49 P&CR 367.

154Sumnal v Statt ibid at 377.

155See Chapter 4, paras 4.15 et seq.

156See Agricultural Holdings Act 1986, s 7 for the incorporation provisions for 1986 Act tenancies, and further Chapter 6 below.

157SI 2015/950, which came into force on 1 October 2015.

158SI 1973/1473.

159See Chapter 6, paras 6.47 and 6.63 ff. And see Appendix 3 below.

160For the discrete enforcement procedures available to enforce the model clauses see Ch. 6 para 6.91 ff infra.

161See Whitehead, I How are Farm Business Tenancies Working? Royal Institution of Chartered Surveyors, 1997. The survey conducted for the RICS found that 44% of al new farm business tenancies granted were on full tenants repairing terms, and 35% adopted the old model clauses basis of repairing liabilities.

162A consideration of the common law of Waste is beyond the scope of this work. See generally Woodfalls (Lewison, Dowding, Morgan, Rodger, Peters, Eds) Landlord and Tenant.

163Section 11 Landlord and Tenant Act 1985.

164Schedule, para 31 of the Agricultural Tenancies Act 1995.

165Schedule, para 8 of the Agricultural Tenancies Act 1995, s 7(1): Leasehold Property (Repairs) Act 1938.

166Evans v Jones [1955] 2 All ER 118. For more detailed discussion of the general law see West & Smith’s Law of Dilapidations (11th ed 2001, Estates Gazette).

167[1987] 1 All ER 1055, 1065.

168Cf. Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716; Quick v Taff-Ely BC. [1985] 3 All ER 321.

169Ravenseft properties Ltd v Davstone (Holdings) Ltd [1979] 1 All ER 929.

170See Elmcroft Developments Ltd v Tankersley-Sawyer (1984) 15 HLR 63, and Quick v Taff Ely BC [1985] 3 All ER 321.

171Smedley v Chumley and Hawke Ltd (1981) 126 Sol Jo 33.

172Lister v Lane and Nesham [1893] 2 QB 212; Sotheby v Grundy [1947] 2 All ER 761.

173(1890) 25 QBD 42, CA.

174[1987] 1 All ER 42.

175And for more detailed discussion see Chapter 15, paras 15.05 ff below.

176The reference amount was the three year average of the total amounts of payments which the farmer was granted under the relevant support schemes in each of calendar years 2000, 2001 and 2002: Council Reg 1782/2003, art 37.1 (OJ L 270/1, 21.10.2003).

177The Common Agricultural Policy Single Payment and Support Schemes Regulations 2005, SI 2005/219, reg 6.

178See further the third edition of this work at para 3.95.

179The Common Agricultural Policy Basic Payment and Support Schemes (England) Regulations 2014, SI 2014/3259, reg 6; The Common Agricultural Policy Basic Payment and Support Schemes (Wales) Regulations 2015, SI 2015/1252 (W84), reg 4.

180Article 41.1 and 2 of Regulation (EU) 1307/2013 of the European Parliament and of the Council of 17 December 2013 OJ L347/608 (20.12.2013).

181Article 43 ibid.

182Article 46.1 ibid.

183Article 31 (1)(b) ibid.

184A difficulty recognized by the CJEU in R v Minister of Agriculture Fisheries and Food ex parte Country Landowners Association, Case C – 38/94 [1995] ECR 1-3875. See judgement, para 24.

185See s 13(2) of the Agricultural Tenancies Act 1995, discussed further below para 13.125 ff.

186Regulation (EU) 1307/2013 of the European Parliament and of the Council of 17 December 2013 OJ L347/608 (20.12.2013), preamble (22).

187Kornelis van Dijk v Germeente Kampen [2010] ECR 1-603, Case C-470-08, ECJ at para 43.

188See Scammell Densham and Williams, Law of Agricultural Holdings (10th ed 2015) at 65.121 (M. Cardwell). An ECJ ruling on dairy quotas is pressed in aid of this interpretation: see Wachauf v Bundesamt fur Ernahrung und Forstwirtschaft [1989] ECR 2609. Query however: dairy quotas were expressly attached to the holding (to ‘areas used for dairy production’) by the relevant EU legislation, whereas basic payment entitlements are not.

189The landlord will not necessarily be an ‘active farmer’ for these purposes. See Chapter 15 at para 15.28 and comments by the Scottish Land Court in Morison-Low v Paterson (2010) SLC/233/08 at para 131.

190See above, paras 3.67 ff.

191Regulation (EU) 1307/2013 of the European Parliament and of the Council of 17 December 2013 OJ L347/608 (20.12.2013).

192Common Agricultural Policy (Control and Enforcement, Cross-Compliance, Scrutiny of Transactions and Appeals) Regulations 2014, SI 2014/3263.

193The Common Agricultural Policy (Integrated Administration and Control System and Enforcement and Cross Compliance) (Wales) Regulations 2014 SI 2010/3223 (W328).

194See Chapter 15, para 15.15 ff below.

195Article 31(1)(b) of the Regulation (EU) 1307/2013 of the European Parliament and of the Council of 17 December 2013 OJ L347/608 (20.12.2013)

196See Puncknowle Farms Ltd v Kane [1985] 3 All ER 790.

197Reg 9 of SI 2005/465.

198For example pursuant to grazing lets for less than 10 months or a licence.

199But note Pennell v Payne [1995] 1 EGLR 5 (underletting in breach of covenant will not be an irremediable breach entitling the service of a Case E notice to quit, as the sub tenancy falls with the mesne tenancy, and the landlords reversion is not materially prejudiced). See further Ch 7 para 7.113 below.

200Reg 38 Dairy Produce Quota Regs. 2005 SI 2005/465.

201[1987] 2 EGLR 12 (decided by the Dairy Produce Quota Tribunal).

202[1987] 2 EGLR 12, 14.

203The use of clauses drafted with a view to the older marketing schemes (eg the potato or milk marketing schemes, now discontinued) is likely to be more commonly encountered in older tenancies governed by the Agricultural Holdings Act 1986. It will only be problematic under the 1995 Act if an attempt is made to try to use an old fashioned type of precedent as the basis for a farm business tenancy agreement. This should be avoided, for the reasons outlined above.

204[2009] EWHC 2023 Ch. The share-farming contract in this case had also come to an end before the payment entitlements awarded to the farmer came into effect under the single payment scheme.

205[1987] 2 EGLR 12.

206Ie sheep annual premium and suckler cow premium under the (former) Sheep Annual Premium and Suckler Cow Premium Quotas Regulations 1997, SI 1997/2844.

207A not uncommon scenario in upland areas of England and Wales where livestock rearing is the principal agricultural activity.

208Article 39 of the Commission Regulation 3886/92 (suckler cow premiums); Art 5A.4 Council Regulation 3013/89 as amended (sheep annual premiums).

209See Art 94 of Regulation 1306/2013 of the Council and the Parliament on the financing, management and monitoring of the CAP (the ‘horizontal’ regulation), OJ 2013 L347/549. The statutory management standards and GAEC criteria are set out in Annex 11 ibid. and relate to the prevention of soil erosion, maintenance of soil organic content and soil structure, carbon capture, protecting water courses and groundwater supply, and landscape features.

210See Chapter 15, para 15.32 ff.

211See The Common Agricultural Policy Basic Payment and Support Schemes (England) Regulations 2014, SI 2014/3259, reg 13.

212See Rural Payments Agency, The Basic Payment Scheme in England 2015: Guidance for Farmers about the Basic Payment Scheme in 2015 (2015 Rural Payments Agency), esp. p. 37ff.

213See Art 32.1 of the Regulation (EU) 1307/2013 of the European Parliament and of the Council of 17 December 2013 OJ L347/608 (20.12.2013).

214Article 32.2 ibid.

215Article 4.1(b) ibid.

216See Morison-Low v Paterson (2010) SLC 233/08, (2010) CS1H10. And further below Chapter 6, paras 6.133 and 6.134.

217See Chapter 6, para 6.129 et seq below.

218See Chapter 6 para 6.135 ff below.

219See Tenancy Group Industry Group (TRIG) Final Report (DEFRA, 2003) at para 4.2.2.

220Regulatory Reform (Agricultural Tenancies) Order 2006, reg 14.

221The tenancy must be created by a written ‘instrument’ that records the agreement as to rent – section 9 ibid. And see Law of Property Act 1925, s 205(1)(viii) for the definition of ‘instrument’ for this purpose.

222Section 9(a) of the Agricultural Tenancies Act 1995.

223Section 9(b)(i) ibid.

224Section 9(b)(ii) ibid. Italics added.

225Section 9(c) ibid. added by Regulatory Reform (Agricultural Tenancies) Order 2006, reg 14(1). And see House of Commons Regulatory Reform Committee, 6th Report of Session 2005/2006, at paras 59 et seq.

226Regulatory Reform (Agricultural Tenancies) Order 2006, art 14 (3).

227Section 9(c)(ii), added by Regulatory Reform (Agricultural Tenancies) Order 2006, reg 14(1).

228See Tenancy Group Industry Group (TRIG) Final Report (DEFRA, 2003) at para 4.2.2

229Regulatory Reform (Agricultural Tenancies) Order 2006, reg 14(3).

230See s 10(6) ibid.

231Section 10(3) of the Agricultural Tenancies Act 1995.

232Sections 10(6) and 38(4) ibid.

233See s 10(6)(b) ibid.

234See for example Mann v Gardner (1991) 1 EGLR 9 (CA) (surrender of buildings held not to be a change of fixed equipment, and three year cycle therefore triggered); Secretary of State for Defence v Spencer [2002] EWHC 2116 (surrender or addition of land can be treated as a variation of other terms of the tenancy, and should therefore be discounted when applying the three year rule). Both cases were decided under the 1986 Act. Mann v Gardner was held in Secretary of State for Defence v Spencer [2002] EWHC 2116 to have been decided per incuriam, and is no longer good law. See further Chapter 6, para 6.128 below.

235See Sch 2 para 4(2) Agricultural Holdings Act 1986, below Chapter 6, para 6.127 ff.

236The rule in Jelly v Buckman [1974] QB 488.

237The express terms will then take effect under s 10, as discussed above.

238Section 9 ibid. Discussed above.

239Section 13(1) ibid.

240Cf. under the Agricultural Holdings Act 1986 the rent is to be determined at ‘the next termination date following the date of the demand for arbitration’; s 12(2) Agricultural Holdings Act 1986 as amended by the Regulatory Reform (Agricultural Tenancies) Order 2006, art 3. There was, until the introduction of the reform in the 2006 Order, a discrepancy in 1986 Act rent arbitrations between the valuation date (which was the date of the arbitrators appointment) and the review date when the alteration in rent took effect.

241Section 13(2) ibid as amended by the Regulatory Reform (Agricultural Tenancies) Order 2006, art 15.

242Note, however, that although this hypothetical assumption is the starting point for the valuation, the fact that the tenant is, on the actual facts, akin to a ‘special purchaser’, will be relevant. This might be, for example, because he can take advantage of marriage value if the land is farmed together with other land of his in close proximity to the holding: see further note 217 below.

243See the rent formula in Sch 2 para 1(1) of the 1986 Act, discussed below Chapter 6, para 6.129 ff.

244Section 13(2) of the Agricultural Tenancies Act 1995, as amended by the Regulatory Reform (Agricultural Tenancies) Order 2006, art 15.

245Enfield LBC v Pott (1990) 34 Estates Gazette 60.

246See Trustees of JW Childs v Anker [1996] 1 EGLR 1, discussed further Chapter 6, para 6.132 below.

247(2010) SLC/233/08 (Scottish Land Court); (2012) CS1H 10 (Court of Session).

248The same logic would apply to the basic payment scheme, which in this repect is similar to its predecessor, the single farm payment, which was the subject of the appeal in Morison – Low v Paterson (above note 249).

249See (2012) CS1H 10, at [79]. If entitlements are rented to the tenant with the land the issue is of course more straightforward and they will be accountable as a relevant factor on rent review.

250Trustees of JW Childer v Anker [1996] 1 EGLR 1. This approach to marriage value was also endorsed in Morison – Low v Paterson (2012) CS1H 10, at [95]: ‘the principle is different where the holding under review offers marriage value to local farmers. If there is reliable evidence that an open market letting of the subject holding would attract a premium element by reason of such marriage value, that element must be taken into account’.

251See Enfield LBC v Pott [1990] 34 Estates Gazette 60.

252Section 13(3) ibid.

253Section 15 ibid.

254Section 18(1) ibid.

255Section 13(3) ibid.

256Section 13(4) ibid.

257Ie the additional value to the tenant arising from the fact that he has additional land nearby which can be more conveniently farmed together with the subject holding.

258See Land Securities PLC v Westminster City Council [1995] 1EGLR 245, described by the authors of Muir Watt and Moss on Agricultural Holdings (14th ed 1998) as ‘an extremely inconvenient case’ (ibid. at p 65). They suggest modes for circumventing this restriction, based (for example) on the parties’ agreement to require the arbitrator to consider all expert and arbitral determinations of comparable rents.

259Sch 2 para 1(1), (3), Agricultural Holdings Act 1986.

260Section 10(1) ibid.

261Section 10(2) ibid.

262As to which see above para 3.110 ff.

263Section 9(c) ibid added by Regulatory Reform (Agricultural Tenancies) Order 2006, art 14.

264See Tenancy Group Industry Group (TRIG) Final Report (DEFRA, 2003) at para 4.2.2

265Section 28(5) ibid. Inserted by Regulatory Reform (Agricultural Tenancies) Order 2006, art 14(2).

266Under s 12(b) ibid.

267Compare the contrasting views of the authors of Muir Watt on Agricultural Holdings (14th ed.) at p 52 and Scammell Densham and Williams Law of Agricultural Holdings (10th ed 2015) at 7.88, 7.89.

268As provided in s 28(5).

269Ie in accordance with s 13, above.

270Section 12(b) ibid.

271Section 12(b) ibid.

272Section 30(2) ibid.