14 Voluntary succession on retirement
8.105 Section 37(2) of the 1986 Act provides that if a tenant retires, and the landlord grants a new tenancy to one of his close relatives who would (had the tenant died) have satisfied the ‘eligibility’ test in s 43(3), then the tenancy granted to that close relative is to be treated as one succession for the purposes of the scheme of statutory succession.
This is intended to encourage voluntary, agreed, retirements without the necessity and expense of a Tribunal application. No age limit is specified for retirement, and thus a tenant can retire at an earlier age than 65. From the landlord’s point of view, a voluntary succession will not extend security of tenure from two generations to three. Following reforms introduced by the 1984 Act, agreed succession can be effected by assignment of the current tenancy, and can be to part only of the original holding. It will also count as one succession if the landlord grants a joint tenancy to persons one of whom would be eligible and suitable to succeed to the tenancy in the event of the tenant’s death.
1The introduction of retirement succession followed suggestions made by the Northfield Report in 1979. See the Report of the Committee of Inquiry into the Acquisition and Occupancy of Agricultural Land (1979) Cmnd 7599 paras 626–31.
2And, of course, all they would lose if the scheme were abolished would be the uncovenanted for benefit that the scheme granted to tenants with tenancies in place when the 1976 Act came into force: see Law Comm No 145, ‘Landlord and Tenant: Reform of the Law’ (1987), paras 4.65 and 4.66.
3Agricultural Holdings Act 1986, s 34(1)(a).
4See s 34(1)(b) ibid.
5See Agricultural Tenancies Act 1995, s 4(1)(b), (d).
6Section 46(1)(a) ibid.
7See Chapter 3.
8Agricultural Holdings Act 1986, s 34(1)(b)(iii).
9Agricultural Holdings Act 1986, s 2(1) (above Chapter 5 para 5.27 ff).
10See Meatyard v Nutland [2010] ALT SW/1/1149. The deceased had here held a succession of grazing lets for less than 12 months going back to the 1960s. Several of these temporary arrangements had, up to 1992, involved consensual use for arable cropping, a user outside the grazing exemption from statutory conversion, and which had therefore created a protected annual tenancy. However, the protected tenancy thus created had been effectively surrendered by the deceased, who had subsequently entered into further grazing lets on the same land. At his death he held a grazng let, not a tenancy, and Part IV of the 1986 Act did not, therefore, apply to enable his son to claim a tenancy of the land under the succession scheme.
11Agricultural Holdings Act 1986, s 35(1)(a).
121986 Act, s 35 (2).
13Section 39(1) ibid.
14See s 39(2) ibid.
15Kellett v Alexander (1980) 257 EG 494 (Woolf J).
16As to which, see s 44, (below para 8.57 ff).
17Section 39(5) of the 1986 Act.
18Section 39(6) ibid.
19Section 39(7) ibid.
20Section 39(4) ibid.
21This is not very clearly expressed in s 39(4), as the provision does not deal with ruling out an ineligible ‘designated’ applicant other than by referring to a ‘determination under sub-section (2)’.
22Section 40 ibid.
23See s 40(2) ibid.
24Section 40(3) ibid.
25Section 36(2)(a) ibid.
26Section 36(2)(b). Such tenancies do not enjoy statutory security (Gladstone v Bower [1960] 2 QB 384, CA).
27See s 38(1), (2) and (3) ibid.
28See s 38(4) ibid.
29Cf Saul v Norfolk County Council [1984] QB 559, CA, reversed by statutory amendment in the 1984 Act.
30Agricultural Holdings Act 1986, s 38(5).
31Section 37(1) ibid.
32Section 37(2) ibid. For the definition of ‘close relative’ for those purposes see below.
33Sections 37(2)(b) and 37(5) ibid. These provisions only apply to tenancies granted, or assignments made, after 12 September 1984: s 37(8) ibid. Agreed retirement successions were possible prior to the 1984 Act, under Agriculture (Miscellaneous Provisions) Act 1976, s 18(6).
The 1984 Act relaxed the provisions by providing (a) that it could be done by assignment; (b) it need not be to the whole of the holding and (c) it could be to joint tenants of whom only one was within the eligible degrees of kindred (Sch 1, para 2(7) to the 1984 Act). These amendments are now consolidated into s 37(2) of the 1986 Act.34(1993) 66 P&CR 335 [1993] 2 EGLR 1.
35Section 37(6) ibid.
36[2009] EWHC 3657 (Ch) (HHJ Raynor QC).
37[2009] EWHC 3657 (Ch) at [15]. As a matter of interpretation it was held that ss 37(1) and (2) must be read together. Section 37(2) deems a consensual succession by agreement to be an occasion when a tenancy has been obtained by direction of the agricultural land tribunal. If a pre-1976 event were held to ‘count’ this would produce the illogical result that a tenancy would have to be deemed to have been granted by a direction of a tribunal that did not exist at that point in time.
38Section 36(3) ibid.
39Section 35 (2) ibid as amended by the Civil Partnership Act 2004, s 81 and Sch 8, para 36(1), (2).
40Section 36(3) ibid.
41Littlewood v Rolfe [1981] 2 All ER 51.
42(1983) 272 EG 1287 at 1292.
43See Pickard v Howard [2011] ALT/Y/5/59.
44And see (1987) Conv 387 (CR).
45Helm v ALIH (Properties) Ltd [2010] ALT E/1/1130.
46Pickard v Howard [2011] ALT/Y/5/59.
47See Roberts v Holmes [2009] ALT/W/ 6230 (distinguished on the facts by the Tribunal in Pickard v Howard, where the applicants spouse had no independent right of occupation). In Roberts v Holmes the applicant shared occupation of the farmhouse with his mother (the former tenant) and sister: the tribunal valued his occupation at one third of the assured shorthold valuation of the occupancy.
48See Pickard v Howard [2011] ALT/Y/5/59.
49Not the cost to the landlord of providing the benefit: see Helm v ALIH (Properties) Ltd [2010] ALT E/1/1130.
50‘Agricultural unit’ is defined by section 109(2) of the Agriculture Act 1947:
‘… the expression “agricultural unit’’ means land that is occupied as a unit for agricultural purposes, including –
(a)any dwelling-house or other building occupied by the same person for the purpose of farming the land, and
(b)any other land falling within the definition in this Act of the expression “agricultural land’’ which is in the occupation of the same person, being land as to which the Minister is satisfied that having regard to the character and situation thereof and other relevant circumstances it ought in the interests of full and efficient production to be farmed in conjunction with the agricultural unit, and directs accordingly.
Provided that the Minister shall not give a direction under this subsection as respects any land unless it is for the time being not in use for any purpose which appears to him to be substantial having regard to the use to which it may be put for agriculture.’
It follows from the wording of the section that, if different parcels of land are to be treated as one agricultural unit, they must be in single occupation.
51See Tenancy Reform Industry Group (TRIG) Final Report (DEFRA 2003) at para 4.3.1, and House of Commons Regulatory Reform Committee, Sixth Report of Session 2005-06, Proposal for the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, HC1309, at paras 17ff.
52Agricultural Holdings Act 1986, s 36(6), amended by Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, SI 2006/2805, reg 5.
53The changes introduced by the 2006 Order came into force on 19 October 2006: Art 1 ibid.
54Note that the deeming provision in s 36(4) operates only in favour of a widow, and not in the case of a widower applicant.
55Klinkenberg v Klinkenberg [2013] ALT/SW/1/1252. The widow here separated from the tenant in 1993, and visited the farm to assist the deceased tenant with the farm accounts from time to time. Her principal source of livelihood was derived elsewhere. The litigation was in the event settled, but the tribunal’s approach on this point would appear sound.
56Bailey v Sitwell [1986] 2 EGLR 7 The question whether the five years chosen must be consecutive was left open in Welby v Casswell [1995] 2 EGLR 1.
57Agricultural Holdings Act 1986, Schedule 6, para 2.
58Welby v Casswell [1995] 2 EGLR 1, reversing (on this point) Bailey v Sitwell [1986] 2 EGLR 7. And see Collins v Spofforth [2009] ALT SW/1/1057.
59For an example of this approach see Monkman v Mitchelson [2010] ALT/Y/5/59.
60Agricultural Holdings Act 1986, s 36(3)(a).
61Agricultural Holdings Act 1986, s 41(4).
62Agricultural Holdings Act 1986, s 41(7), inserted by Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, SI 2006/2805, reg 5.
The landlords written consent must have been given on or after the date on which the Order came into force, ie 19 October 2006.63[1981] 2 All ER 51.
64[1981] 2 All ER 51, at 58 (Judge Edgar Fay QC).
65See for example Dagg v Lovett (1980) 256 EG 491, CA.
66[1985] 1 EGLR 3.
67[2006] EWHC 473 (Admin).
68(1985) 275 EG 374.
69Section 36(3) ibid.
70Section 36(3)(b) ibid.
71(1985) 275 EG 374 (above para 8.26).
72Agricultural Holdings Act 1986, s 36(3)(b).
73Trinity College Cambridge v Caines (1983) 272 EG 1287.
741986 Act, Sch 6, para 3(1).
75Horton v Commissioners for Crown Lands (2011) ALT/SW/1/1226, esp decision at para 4.4.
76For an example see Horton v Commissioners for Crown Lands (2011) ibid.
77The current order is the Agricultural Holdings (Units of Production) (England) Order 2015, SI 2015/1745. This expires on 6 November 2016. The order currently in force in Wales is SI 2015/1975 (W 296).
781986 Act, Sch 6, para 5.
79[1980] AC 854.
80[1980] AC 854. The judgments in both appeals were delivered together in the House of Lords.
811986 Act, Sch 6, para 7.
821986 Act Sch 6, paras 6–10, considered below.
831986 Act Sch 6, para 6.
841986 Act, Sch 6, para 6(dd), added by Agricultural Tenancies Act 1995, Sch, para 32. For farm business tenancies see Chapter 3 above.
85That is, unless it is on a long fixed term of 5 years or more in duration.
86‘A curiously worded provision in relation to periodic tenancies but underlying the logic of the statute is presumably the assumption that the longest period of any periodic tenancy is likely to be 12 months’: Muir Watt and Moss, Agricultural Holdings (14th ed 1998), p 450 fn 55.
87As to which see Chapter 4 para 4.35 ff.
88Ie under 1986 Act, s 2 – above Chapter 5 para 5.87 These are now mostly spent.
89As provided for in 1986 Act, s 5 – above Chapter 5 para 5.62 ff.
90Above Chapter 5 para 5.27 ff.
91[1964] 1 All ER 867.
92(1985) (Unreported, Queens Bench Div., 1985 Co No 1552, 31 July 1985).
93Partnership Act 1890, s 38.
94See for example (1986) Conv 320 (M Slatter) for a helpful discussion of the problems engendered by the interpretation adopted in Brooks v Brown ibid. The editors of Scammell and Densham’s Law of Agricultural Holdings (9th ed, PR Williams) comment that the decision ‘does not sit comfortably with the decision of the court of appeal in Harrison-Broadley v Smith’ (para 35.61). Note also that the wording of s 18(2)(c) of the 1976 Act (occupation ‘as a licensee only’), on which this decision was based, differs slightly from that of the 1986 Act (‘occupies it only … (e) as a licensee’), although it is not thought this effects any change of substance to the exclusion.
951986 Act, s 2, above Chapter 5 para 5.53 ff.
96Agricultural Holdings Act 1986, Sch 6, para 9(1).
97Sch 6, para 6(2) ibid.
98Sch 6, para 10 ibid.
99Sch 6, para 1(2) ibid.
100Semble, also, Sch 6 has no application on the devise of a ‘commercial unit’ of land on discretionary trusts with a power of appointment, which latter is then exercised in favour of the deceased tenant’s issue after a tribunal direction for succession has been obtained. For further discussion of points arising from the occupancy condition see inter alia, (1984) Conv 207 and (1985) Conv 111 (CR), and (1986) Conv 320 (M Slatter).
101Sch 6, para 8 ibid.
102And see s 42(2) and (3) as to order of determination of applications where there are multiple holdings. Below para 8.56.
103Agricultural Holdings Act 1986, s 39(2).
104Dagg v Lovett (1980) 256 EG 491 CA.
1051986 Act s 39(8).
106(1980) 256 EG 491 CA.
107See Stokes v Bradford Rural Estates Ltd. [2011] ALT/W/5/389 and 390.
108Section 42(2)(b) of the 1986 Act.
109Section 42(3) ibid.
110As to notice to quit on death see generally Chapter 7 para 7.122 ff above.
111Or, if later, one month after the delivery to him of the application by the Tribunal secretary: SI 2013/1169, reg 27(4)(c).
112SI 2013/1169, reg 27(4)(d). The time limit in Wales is one month.
113SI 2013/1169, reg 30(3).
114As to which see Chapter 7 para 7.20 ff.
115SI 2013/1169, reg 27(a).
116See Agricultural Holdings Act 1986, s 44(7).
117Section 39(5) ibid.
118Sections 45(1) and 47 ibid. This is subject to the caveat that a covenant against assignment or subletting will be implied if there was none in the former tenancy: s 47(3).
119Section 36(2)(a) ibid.
120See s 46(2) ibid.
121Section 47(3) ibid.
122Section 39(1) ibid.
123Section 39(10) ibid.
124SI 1977/1215.
125SI 1977/1215, reg 2(1).
126See SI 1977/1215, Sch, para 2.
127Section 48(5) and (8) ibid.
128Section 48(6) ibid.
129See s 48(9) ibid. On the rent valuation provisions in Sch 2 see generally Ch 6, paras 6.129 ff above.
130Schedule 2 to the 1984 Act, whch introduced the provisions, gave effect to the recommendations of the Northfield Committee (1979) Cmnd 7599, paras 633–636.
131As allowed for by 1986 Act, s 34(1)(b)(iii).
1321986 Act, s 49(1)(b).
1331986 Act, s 25(1), (5).
1341986 Act, ss 49(2) and 34(2).
1351986 Act, s 51(2).
1361986 Act, s 53(10).
1371986 Act, s 37(1)(b).
1381986 Act, s 37(6).
139Agricultural Holdings Act 1986, s 50(2)(a).
140Agricultural Holdings Act 1986, s 50(5), inserted by Art 5, Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, SI 2006/2805, reg 5. The landlord’s written consent must have been given on or after the date on which the Order came into force, ie 19 October 2006.
141The uncertainty was caused by the difference in the wording of s 36(3)(a), which requires the livelihood condition to be satisfied ‘in the seven years ending with the date of death’, and s 50(2)(a) which requires it to be satisfied ‘in the last 7 years’. Neither Scammell and Densham’s Law of Agricultural Holdings (8th ed 1997 at pp 285, 286) nor Muir Watt and Moss Agricultural Holdings (14th ed 1998 at para 14.103) had dealt expressly with the question whether the applicants eligibility must, in addition to being established at the date of the retirement notice, continue up to and including the date of the tribunal determination.
142[2007] EWHC 1532 (Admin). See especially para 38 of Beatson J’s judgment. The contrasting views of the commentators are discussed at paras 34–38 of the judgment of Beatson J.
143Section 50(2) ibid.
144See above para 8.17 ff.
145Agricultural Holdings Act 1986, s 50(4).
1461986 Act, ss 50(1) and 53(1)–(3).
147Section 53(5) ibid.
148Section 53(6) ibid.
149Hopkins v Trustees of the Dyffryn Llynfi Estate [2006] ALT6197 (Agricultural Land Tribunal (Wales)).
150See [2006] ALT6197 ibid at para 107 of the Reasons for the Decision of the Tribunal.
151The greater hardship rule was introduced to parallel the right on a ‘death’ application of a landlord to seek consent to this notice to quit. In a retirement application no notice to quit would normally be in prospect. See Sch 2 para 5(6) to the 1984 Act.
152Agricultural Holdings Act 1986, s 53(10).
153Agricultural Holdings Act 1986, ss 38(1) and 51(1) ibid.
154Sections 38(2) and 51(1) ibid.
155See s 38(3) applied by s 51(1) ibid.
156See s 51(5) of the 1986 Act.
157Section 51(6) ibid.
158See s 52(2) and (3) ibid.
159Section 52(4) ibid.
160Section 52(1) ibid.
161See s 52(5) ibid.
162Section 57(4) ibid.
163Sections 55(1) and s 56(1) ibid.
164Section 56(2) ibid.
165Agricultural Holdings Act 1986, s 55(6) ibid.
166See s 55(8) ibid.
167And see para 8.64 above.
168Sections 56(3) and 48 ibid.
169Section 57(2) ibid.
170Section 57(3) ibid.
171Section 57(4) ibid.
172Section 36(3)(b) ibid. Above para 8.56 ff.
173See s 38, applied by s 51(1) of the 1986 Act, with modifications.