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Carr v Evelyn

On 16 August 2019 and 8 April 2020, the FTT issued its decisions in Carr v Evelyn. Stephen Jourdan QC acted for the successful tenant, Mr William Carr.

The Tribunal:

• held that Mr Carr was entitled to a succession tenancy of Home and Pishill Farm, Stonor under Part IV of the Agricultural Holdings Act 1986;
• dismissed the application by the landlords for consent to their notice to quit on the sound estate management ground;
• ordered that the landlords pay Mr Carr’s costs of the sound estate management application, to be assessed on the indemnity basis.

The decisions include the determination of a number of points of principle of importance. These are summarised below.  

How the Tribunal should assess the suitability of an applicant for a succession tenancy

1. A suitable applicant for succession must:

• have the appropriate agricultural knowledge and experience;
• be physically capable of carrying on the demanding business of farming;
• have sufficient financial resources to enable them to make the necessary investment in the farming of the holding, such as to give to the landlord of the holding the assurance that the applicant will be able to establish, or maintain, a viable farming business and thereby be in a position to meet their obligations to the landlord under the tenancy.

2. Also relevant to the suitability of an applicant to succeed to an agricultural holding and his ability to farm such a holding are:

• where known, the skills that the applicant has demonstrated as a farmer. An applicant may have training and experience but, if demonstrably, he, or she, is not a good farmer, then that would, undoubtedly, afford a Tribunal good reason to regard the applicant in question as unsuitable to take on the tenancy of a holding;
• the character of the applicant. An applicant, however able, as a farmer, but who cannot be trusted by the landlord, as tenant of the holding, cannot be suitable to take on, or succeed to an agricultural holding.

3. The fact that an applicant is wealthy does not make them unsuitable. The Tribunal is not obliged to limit the category of suitable applicants to those who, absent a direction from the Tribunal, in their favour, would suffer hardship. If an applicant has substantial financial resources that is not a handicap, or bar, to their suitability as a tenant. Rather, that reinforces that suitability, in that it affords the landlords the security and satisfaction that the applicant has the resources available to ensure the proper farming of the holding and to meet, in full, all their obligations as tenant of the holding.
4. The purpose of the succession provisions was not primarily to prevent hardship to the near relatives of a tenant farmer, who had been working on and living off the land, albeit that it might, in particular cases have that consequence. Rather, the purpose was to ensure, in the interest of landlords and in recognition that the extension of security had the effect of taking land out of a landlord's full control, that the extension of security only went to persons who met the strict eligibility requirements of the Act and further that the person who took on the holding was, in all respects (training, skills, resources, health and character) a suitable person to carry on the farming of the land and to be tenant of the land.

How the Tribunal should approach an application for consent to a notice to quit on sound estate management grounds

1. The proposal put forward by the landlords must, be a 'good thing' for the estate and, to be a good thing, it must be better than the alternative. Here, that meant finding that the landlords’ proposal was better for the estate than the continued farming of one of the three major holdings on the estate by an experienced and skilful farmer, who had farmed the holding to the highest standards of husbandry. That comparison set the landlords a high hurdle.
2. In deciding what was in the interests of the “sound management” of the estate, the management with which the statute is concerned is the management of the estate with a view to achieving the statute's primary purpose, namely the protection, improvement and husbandry of the land in question. The sound estate management purpose must be a purpose which relates to the actual management of the estate and is designed to improve, or protect, the farming of the estate land and, thereby, to benefit the husbandry of the estate land. It must be desirable in the interests of the sound management of the estate as an agricultural, or farming unit.
3. The question is not, at all, concerned with whether the landlord's intended purpose would be desirable in the interests of the management of the estate as an economic unit. The statute is concerned with the sound management of the estate for the purposes which underly the Act; namely the protection, or improvement of the farming of the estate land and the good husbandry of the land forming the estate.
4. Therefore it is not sound estate management to clear tenants from the estate to accommodate a sale. Nor is it sound estate management to terminate the tenancies of agricultural holdings in order to replace such tenancies with farm business tenancies. Although that would be economically advantageous to the owners of the estate, it would not contribute to the husbandry of the land, or serve to improve the farming of the estate land.
5. Similarly, the sound estate management ground cannot be used to enable the development of land or buildings on the holding for a purpose other than for agriculture, unless the purpose is to raise money for necessary expenditure upon the estate to improve, or protect, the farming and husbandry of the estate land, taken as a whole.
6. However, the fact that the landlord hopes, or intends, that a particular course of action will be profitable does not preclude that activity from constituting sound estate management, if, otherwise, it falls within the ambit of sound estate management.
7. The amalgamation of a holding into other holdings on an agricultural estate is capable in principle of constituting sound management of the estate in some circumstances.
8. If the landlords’ real reason for applying for consent to the notice to quit is a desire to get rid of the tenant, and the sound estate management reasons put forward are a construct to achieve that purpose, the Tribunal should test the application and the material put forward in support of the application with more than usual care and with a critical, even sceptical, eye, in order to ensure that the application is well made.
9. However, if, objectively considered, a landlord puts forward and establishes a proposal, in respect of an estate, which is desirable on the grounds of sound estate management and which requires the termination of the tenancy of a holding upon the estate, then, the fact, that there is a bad relationship between landlord and tenant and even that the landlord is motivated in his actions by the wish to secure the removal of the tenant, would not, in itself, preclude the Tribunal from giving, subject to the fair and reasonable landlord proviso, its permission to the operation of the relevant notice to quit.
10. The Tribunal will not admit in evidence supposed expert evidence if it is apparent that the witness is not truly independent but is a 'hired gun' put forward by the party calling him to make their case and with evidence tailored to that purpose.

How the Tribunal should approach an application for costs under rule 13 o

1. No jurisdiction to award costs exists unless and until there has been a finding that the party against whom costs are sought has behaved unreasonably in bringing, defending, or conducting the proceedings in question. That finding is not a matter of discretion, but requires the Tribunal to apply an objective standard of conduct.
2. If that finding is made, the Tribunal must exercise a discretion as to whether it is appropriate to make an order for costs and, if so, what order. This discretion is not constrained by a requirement of establishing a strict causal nexus between the unreasonable conduct and the costs said to be recoverable on the ground of that conduct. The Tribunal must, however, apply a principle of relevance, when exercising discretion, and, hence, must have regard to the nature, gravity and effect of the unreasonable conduct.
3. Conduct, however unreasonable, prior and unrelated to the bringing of the proceedings in question cannot give rise to a finding of unreasonableness, sufficient to bring the costs jurisdiction into play. However, the motive of a party in bringing proceedings may be relevant in determining the reasonableness, or otherwise, of that party in commencing proceedings.
4. Conduct cannot be stigmatised as unreasonable simply because it leads, in the event, to an unsuccessful outcome. The acid test is whether the conduct permitted of a reasonable explanation; would a reasonable person in the position of the relevant party have conducted himself, or herself, in the manner complained of. Conduct can be unreasonable even if it is neither vexatious nor designed to harass the other side rather than advance the resolution of the case.
5. The objective standard of conduct required of tribunal users should not be set at an unrealistically high level and, correspondingly and consequentially, costs orders should be reserved for the clearest cases. A Tribunal should not be over zealous in detecting unreasonable conduct after the event. In particular, a Tribunal should be careful to guard against hindsight and against the determination of a costs application with the benefit of hindsight and with the ex post facto clarity that accompanies hindsight. Experience shows that that which is apparently obvious following analysis and determination is, often, very much less obvious prior to that determination. Advancing a legal argument is not unreasonable even if it fails, unless it is palpably, hopeless.
6. If a party is without legal advice and representation, then the objective standard of reasonable conduct to be applied to that party will be the standard to be expected of a party in that position. Correspondingly, where both parties have, throughout, had the benefit of specialist legal advice and representation, then the objective standard of reasonableness to be applied should have regard to that fact.
7. Indemnity costs are appropriate where the conduct was not only unreasonable, but unreasonable to a high degree so as to take the case out of the norm. The question  is whether a reasonable claimant in the position of the actual claimant would have concluded that the claim was so weak or speculative that it should not, or should no longer be, pursued.
8. Sometimes, the lack of proper independence of an expert will only justify indemnity costs in respect of the costs generated by the expert and by their conduct. However, if his evidence is at the heart of the case, that limitation is not appropriate.

The decision dated 16 August 2019 on suitability and the sound estate management ground can be downloaded here.

The costs decision dated 8 April 2020 can be downloaded here.

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