Sowden v Smyth-Tyrrell and another

Agricultural holding – Arbitration – Case D Notice – Validity – Claimant seeking to challenge award of arbitrator under Agricultural Holdings Act 1986 – Whether serious irregularity in award – Whether Case D notice being valid – Whether claimant entitled to appeal on point of law – Claims dismissed The claimant held two parcels of land at Bosawsack, near Constantine in Cornwall under two separate written agricultural tenancy agreements. The claimant was also the freehold owner of a house and buildings on land surrounded by one of the two parcels. The defendants were the claimant’s landlords. They issued two notices under Case D in part 1 of Schedule 3 to the Agricultural Holdings Act 1986 requiring work to be done by the claimant to remedy alleged breaches of terms of the tenancy agreements. The matter was referred to arbitration and the arbitrator made a final award. The claimant challenged the award under section 68 of the 1996 Act, on the grounds that there had been a serious irregularity in that the award treated the Case D notice to remedy as if it alleged that the construction of a concrete path and wall were a breach of clause 26 of the relevant tenancy agreement, when in fact that notice only alleged that it was a breach of clause 27. He also applied for permission to appeal under section 69 of the Act on a point of law, ie whether, on the facts found, and given the statutory requirements, the Case D notice was valid and effective to render the claimant liable to remove the path and wall. In his challenge under section 68, the claimant relied principally on section 68(2)(d) contending that the arbitrator did not deal properly with the argument that the Case D notice, in particularising the breach and remedial work required, did not refer to the correct clause in the tenancy agreement and did not deal with the tenant’s argument based on waiver or acquiescence. Held: The claims were dismissed. (1) The purpose of the part of the Case D notice describing the term of the tenancy said to have been broken was to inform the tenant of the source of the obligation. The adequacy of the description was a question of degree. Any inaccuracy was not necessarily fatal. The factors to be taken into account included how trivial the error was, however obviously it was a mere slip, and whether the tenant had been misled. In the present case the notice correctly stated the breach relied on and the work needed to remedy it. It also identified the source of the obligation as a clause in the tenancy agreement, but gave the wrong one. Anyone looking at clause 27 would see clause 26 next to it. The test was objective. The question was whether the missing information was of critical importance in context. Three pointers were indicated by Lewison LJ in the case of Elim Court RTM Co Ltd v Avon Freeholders Ltd [2017] EWCA Civ 89; [2017] PLSCS 46: (i) whether the missing information was particularised in the statute or merely required by its general provisions; (ii) whether the information was required by the statute itself or by subordinate legislation; and (iii) whether the server of the notice could immediately serve another, if it was invalid. But they were not the only matters to take into account: Official Solicitor v Thomas [1986] 2 EGLR 1 and Dallhold Estates (UK) Pty Ltd v Lindsey Trading Properties Inc [1994] 1 EGLR 93 followed. (2) By implication, the Case D notice had to deal with both the breach and the work needed to remedy it. Since there was no requirement in the statute itself to particularise the term alleged to have been breached, and the only reference to particulars of the term in Form 2 in the Agricultural Holdings (Forms of Notice to Pay Rent or to Remedy) Regulations 1987 came in a box at the end of the general description, the first two of the three pointers referred to by the Court of Appeal in Elim pointed away from holding the particular term allegedly breached to be of critical importance. As to the third point, it would now be too late to serve another notice if the first one was held to be invalid. It was clear that the error in the Case D notice referring to clause 27 could not have misled the reasonable tenant. Overall, the error in the statement as to precisely which term of the tenancy had been breached did not render the notice invalid. (3) The defendants were not estopped or otherwise prevented by operation of the doctrines of acquiescence or waiver from relying on the breach of clause 26. Waiver of the right to forfeit was a kind of election where the landlord had to decide whether he treated the lease as continuing to subsist or not. It had no effect on the underlying liability in damages arising from the breach of covenant itself. Thus, a demand made of the tenant for the payment of rent with knowledge of the breach on behalf of the landlord did not destroy the liability for breach of covenant and did not make it impossible for a Case D notice to remedy to be based upon it. The wider waiver argument was hopeless in law. But in any event both it and the narrower pure estoppel argument were peripheral, unsupported by the evidence and could not be described as essential issues. The focus had to be on the result and whether it was so unfair that it could not reasonably have been expected of the process. Here, the process had not reached such a result and there was no substantial injustice caused. (4) Under section 69(3), the court had to give permission to appeal only if it was satisfied: … “(c) that, on the basis of the findings of fact in the award – (i) the decision of the tribunal on the question is obviously wrong, or (ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt”. Since the court had decided that the Case D notice was valid and effective, condition (c)(i) of section 69(3) was not met. Even if there was any serious doubt, the matter was not of general public importance, and so condition (c)(ii) was not met either. William Batstone (instructed by Foot Anstey) appeared for the claimant; Guy Adams (instructed by Clarke Willmott) appeared for the defendants. Eileen O’Grady, barrister Click here to read a transcript of Sowden v Smyth-Tyrrell and another.