Field Reports: Kingsbridge Pension Fund Trust v David Michael Downs

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The Kingsbridge Pension Fund Trust v David Michael Downs [2017] UKUT 237 (LC)

The Upper Tribunal (Lands Chamber) has held that, in determining whether a person is eligible to apply for a new tenancy on retirement of a tenant under the Agricultural Holdings Act 1986, the livelihood condition need only be satisfied in the 7 year period running up to the date when the retirement notice was given, and not in the 7 year period preceding the determination of the application by the Tribunal.

Facts

The Appellant was the freehold owner of an agricultural holding which was subject to a tenancy under Pt IV of the Agricultural Holdings Act 1986. The tenant was the Respondent’s father who, on 30 March 2011, had served on the Appellant a retirement notice (under s.49(1)(b) of the 1986 Act)  nominating the Respondent as his successor as tenant of the holding. On 19 April 2011, the Respondent applied to the Tribunal under s.53 for a direction entitling him to a tenancy of the holding.

The application was opposed, the Appellant arguing, inter alia, that the Tribunal had to be satisfied that the Respondent fulfilled the livelihood condition in respect of the 7 year period up to the service of the retirement notice and also the 7 year period up to determination of the application. The FTT struck out that part of the Appellant’s case on the basis that it was an abuse of process because it had already determined the issue at an earlier stage of proceedings.  In refusing permission to appeal, the FTT also considered that the arguments in relation to the livelihood condition were unmeritorious. The Upper Tribunal granted permission to appeal on the basis that the point of construction of the 1986 Act was properly arguable and went to the heart of the FTT’s jurisdiction to make a direction for a new tenancy.

Statutory scheme

Part IV of the 1986 Act sets out codes of succession on death and retirement. The scheme for succession on retirement is set out in sections 34, 49-59 and Schedule 6 of the 1986 Act.  The process is triggered by the tenant’s service of the retirement notice nominating a successor. The nominated successor must be both eligible and suitable for succession.

Only an eligible person named in the retirement notice may apply to the Tribunal for a direction entitling him to a tenancy of the holding (s.50(1)). ‘Eligible person’ is defined in s.50(2) and means a close relative of the retiring tenant in who case the following conditions are satisfied:

"(a) In the last 7 years his only or principal source of livelihood throughout a continuous period of not less than five years, or two or more discontinuous periods together amounting to not less than 5 years, derived from his agricultural work on the holding or of an agricultural unit of which the holding forms part [(“the livelihood condition”)]; and

(b) is not the occupier of a commercial unit of agricultural land [(“the occupancy condition”)]. "

Section 53(5) provides that:

“If the Tribunal are satisfied-

(a) that the nominated successor was an eligible person at the date of the giving of the retirement notice, and

(b) that he has not subsequently ceased to be such a person,

the Tribunal shall determine whether he is in their opinion a suitable person to become the tenant of the holding.”

The livelihood condition for succession on retirement and death are almost identical save that the latter refers to the period of 7 years ending with the date of death; whereas no end date is specified in the succession on retirement test.1  The question as to the relevant 7 year period came before the High Court in Shirley v Crabtree [2008] 1 WLR 18 where the landlord argued that the phrase “the last 7 years” did not define a fixed period but expressed a period in relative terms depending on when the matter fell to be determined and that  the language of s.50(2) and s.53(5) indicated that the livelihood condition had to be satisfied both at the date that notice of retirement was given and at the date of the commencement of the hearing before the tribunal. Dismissing the landlord’s appeal, the High Court held that the Tribunal had only to be satisfied in respect of the period ending with service of the retirement notice and, once established, that qualification could never be lost.

The decision

The President of the Upper Tribunal likewise rejected the same arguments in this appeal.  The natural reading of "the last seven years" refers to a single, finite period of 7 years; there is no rolling period of time. The reference in s.50(1) to the retirement notice as part of the phrase "the eligible person named in the retirement notice", gives the temporal context for the phrase "the last seven years" in s.50(2)(a): it provides the end date for the seven-year period in the livelihood condition in s.50(2)(a), and the start date for the operation of the occupancy condition under s.50(2)(b).

It therefore follows that there cannot be two 7 year periods and the cessation of eligibility in s.53(5)(b) is incapable of applying to the livelihood condition; a person ceases to be eligible in respect of the occupancy condition (which operates in a different way being concerned with the present situation).

The differences between codes for succession on death and on retirement did not shed any light on whether Parliament had intended to depart from the model of a single, finite 7 year period when enacting the livelihood condition for the retirement code.  An alternative construction is inconsistent with the object of the retirement code, viz., to avoid a tenancy holding on into old age at the expense of good husbandry.

In short, this decision does not alter what had already been held in Shirley v Crabtree, namely, that the 7 year period is not a rolling period of time but finite and predicated on the date of the retirement notice. The livelihood condition need not be satisfied in respect of two 7 year periods.

Abuse of process

The case has taken a rather tortuous route; this was an appeal on a preliminary issue as to the FTT’s jurisdiction, and not from a direction entitling the Respondent to a new tenancy which is yet to be heard. Whilst the delay may not have been solely due to the Appellant, the President observed that that the litigation had previously been conducted in an abusive manner.  Indeed, the Appellant's construction of the statutory scheme, if adopted, would have afforded an incentive for landlords to adopt delaying tactics to make it more difficult and costly for an applicant to satisfy the livelihood condition.

There is, however, a more interesting point which emerges from the way in which the case came before the Upper Tribunal. The issue of the 7 year period first arose in the Respondent’s application varying the FTT’s order requiring “up to date” disclosure of documents relevant to the livelihood condition. As the FTT subsequently acceded, disclosure should have been, and was, limited to the 7 year period ending on the date the retirement notice was served.  The Appellant had not responded to that application nor, when the FTT refused its application to revisit the decision, did it seek to appeal the FTT decision. Nonetheless, the Appellant included the argument challenging Shirley v Crabtree in the statement of case which was then struck out by the FTT as an abuse of process.  As the President says there was a clear tension between the abuse of process and the existence of an arguable error of law which went to the jurisdiction of the FTT but the point was not addressed in written or oral submissions. It is not to say that other cases should proceed on the same basis.  As the President says at §17 of his decision,

“Where a party fails to apply for and obtain permission to appeal on a point of law at the appropriate stage, but seeks to do so in relation to a later decision, there will need to be proper argument and citation of authority on the relationship between the jurisdiction to control an abuse of proceedings… and resolution of points of law going to the jurisdiction of the court or tribunal from which it is sought to appeal.”  

1It was a lacuna which was not addressed in TRIG2.