Important decision on agricultural Notices to Quit

Thomas v Turner is a controversial Court of Appeal decision narrowing scope for the court to 'rescue' and hold valid an incorrect agricultural Notice to Quit

09 November 2022

 

The Court of Appeal decision in O G Thomas Amaethyddiath v Turner & Ors [2022] EWCA Civ 1446 is a timely reminder to agricultural landowners to call for a written tenancy as soon as possible. Failure to do so can create a variety of issues, including a problem in identifying who should be given a notice to quit. The case, which will be seen as an adverse decision for landowners, emphasises the importance of getting notices right first time. The court here showed a significant reluctance to “rescue” a defective notice, even when the defect was a direct result of the recipient’s actions or omissions.

What happened?

The original tenant, Mr Thomas, held an oral tenancy of an agricultural holding governed by the Agricultural Holdings Act 1986 (the “AHA”). Without notification to the landlord, the tenancy was assigned to the a company of which Mr Thomas was the sole shareholder, director and company secretary, with the registered address at his home address. Notice to quit was served on Mr Thomas three days after assignment of the tenancy (four days after incorporation of the company), but with the landlord not knowing about the assignment. The company said that it was the tenant and the notice to quit was not validly served on it, as it was addressed to Mr Thomas, not the company. The appeal considered the validity of that notice to quit.

What did the Court say?

The County Court and the High Court had both held that the notice to quit was valid. They had both applied the very well-known case of Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] AC 747. The Mannai test is whether the reasonable recipient, with knowledge of the context, would understand the purpose and meaning of the notice, despite an error in the notice. If the reasonable recipient would appreciate that the notice contained an error but still understood what meaning the notice intended to convey, then that is how the notice should be interpreted. Both the County and High Courts considered that a reasonable recipient of the notice would have read it as having been addressed to the company. 

But, the Court of Appeal allowed the appeal. Lord Justice Lewison, a very respected property lawyer, gave the leading judgment. He did not consider that the notice to quit was saved by the test in Mannai. He held that the reasonable recipient would not have understood the notice (that was addressed to the original tenant and repeatedly asserted he was the current tenant) as being addressed to the company, as they would have known that the landlord was unaware of the assignment. Lord Justice Lewison noted his reluctance in reaching this conclusion and said it seems to be clear that the landlord fell into a trap “wittingly or unwittingly” created by the tenant.

The Court of Appeal also considered whether section 93 of the AHA would mean the notice was valid, on the basis that section 93 states that a notice is duly given or served on a company if given to the company secretary at its registered office. However, the Court of Appeal held that section 93 is only concerned with service, and not form, of documents, and therefore did not protect the landlord in this case.

Why does this matter?

This is a very controversial decision. It goes against what many will see as natural justice. 

From a practical perspective this means that, as far as possible, notices need to be right first time. That goes for all notices, not just those related to AHA tenancies. It isn’t safe to rely on the court “rescuing” a notice, and those seeking to rely on the application of Mannai need to be aware of this case.

It is also a reminder that oral AHA tenancies are usually assignable, and landlords need to be alive to that, to manage the associated risks. All of those risks are serious from a landowner perspective, and impact on long term plans for the holding.

What if I need help with this?

Service of notices, especially related to unwritten tenancies, needs to be handled carefully as the risks associated with invalid notice or incorrect service can be significant – delays in removing tenants, delays to development or other plans for the land, and the risk of expensive and time consuming litigation. We can help mitigate those risks by providing you with the right professional advice to ensure that the right steps taken at the right time to maximise success and minimise cost and delay. Our expert team of Kevin Kennedy, Maddie Dunn and Ken Kaar can advise you in this difficult area.

Written by Maddie Dunn

Key contact

Kevin Kennedy

Kevin Kennedy Partner

  • Agricultural Disputes
  • Trust and Probate Disputes
  • Estates and Land

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