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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Fitzhugh v Fitzhugh [2012] EWCA Civ 694 (01 June 2012) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2012/694.html Cite as: [2012] EWCA Civ 694 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Mr Justice Morgan
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE RIMER
and
LORD JUSTICE PATTEN
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HARRY FITZHUGH |
Claimant/ Respondent |
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- and - |
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ANTHONY FITZHUGH |
Defendant/Appellant |
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Mr Timothy Clarke (instructed by Moody & Woolley) for the Respondent, Harry Fitzhugh
Hearing date: 17 May 2012
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Crown Copyright ©
Lord Justice Rimer :
Introduction
The facts
'1. The Licensor grants to the Licensee the right to keep sheep cattle horses or pigs on the premises described in the First Schedule hereto for grazing purposes and the right to mow premises twice a year and to take away the grass
2. Further the Licensor permits the Licensee to enter onto the premises to the extent necessary to exercise the rights and for the avoidance of doubt full occupation and possession of the premises remains with the Licensor subject only to the rights granted by this Licence to the Licensee
3. The Licensee agrees with the Licensor to pay the Licence fee of one pound a year and to use the premises for the exercise of the rights and for no other purposes and on the termination of the Agreement to remove the Licensee's stock from the premises
4. The rights granted under and this Licence itself will terminate immediately on the happening of any of the following events:-
(a) The Licensee dying or becoming incapable by reason of mental or physical illness from discharging his obligations under this Agreement
(b) The Licensee commits any grave or persistent breaches of this Licence and the Licensor having given written notice to the Licensee of such breach or breaches the Licensee fails within such period as the Licensor may specify to rectify such breaches if capable of rectification
(d) [sic: there is no (c)] Upon the Licensor obtaining planning permission for the development of all or any part of the land the subject of this licence …
6. This Licence and the rights contained in it are personal to the Licensor and Licensee and will not be capable of being assigned or otherwise dealt with'
The judge's decision
'89 … to hold that no notice can be given is an unsatisfactory contractual result which the parties cannot have intended. It also seems to me that a requirement in my example of A and B that A gets B removed or A gets an injunction requiring B to serve a notice on himself is equally a cumbersome, slow, expensive proceeding which I hesitate to think the parties intended. There is in my judgment a solution to these difficulties. The solution is to construe the reference to the Licensor in clause 4(b) as referring to all persons who together are the Licensor apart from any person who is also the Licensee. If that is the construction of the word 'Licensor' in clause 4(b) then the notice can be given by Harry alone, and this notice, being so given, was an effective notice.'
'There are, in my opinion, quite strong grounds for saying that in the particular context where the landlord himself is one of the tenants (not the present case), the word "tenant" in section 2(1)(b) would be capable of bearing more than one meaning, namely, (1) all the joint tenants or (2) all the joint tenants other than the landlord himself; and that the court should prefer the second construction as leading to a "sensible and just result" complying with the statutory objective (see Johnson v. Moreton [1980] AC 37, 50G, per Lord Salmon) instead of adopting a construction which would invalidate a counter-notice given in such circumstances, unless the landlord had joined in or consented to its service on himself. On the other hand, I think that the engrafting of further exceptions, by a process of statutory interpretation on the ordinary meaning of the phrase "the tenant," to cover the case (such as the present) where one of the joint tenants was merely a company controlled by the landlord or was otherwise associated with the landlord, would present rather greater difficulties, if only because of problems of definition and deciding where to draw the line.
However, I find it unnecessary to express any concluded view on the question whether, as a matter of construction, any exception should be engrafted on to what I would regard as the ordinary meaning of the phrase "the tenant," as used in section 2(1)(b), in the case where the tenants are more than one in number. Even assuming for present (as I will assume) that as a matter of statutory interpretation the phrase must mean all the joint tenants, in any case where joint tenants are involved, I am still of the opinion that, for the reasons to be given later in this judgment, the counter-notices in the present case must be treated as having been served with the authority of [the company], even though that authority was not in fact given.'
The reasons referred to in the latter part of that quotation were public policy reasons relating to the efficacy of the restrictive condition in clause 11 of the partnership agreement. Slade LJ explained them as follows ([1986] 1 WLR 861, 881C):
'I am driven to the conclusion that, if a land owner chooses to grant other persons a tenancy of agricultural land (whether or not including himself as a tenant), public policy (affirmatively) requires that those other tenants should have authority, or be treated as having authority, to serve an effective counter-notice under section 2(1) of the Act of 1977 on behalf of all the tenants without his concurrence, and thus (negatively) requires the avoidance of any contractual condition, whether express or implied and whether contained in the tenancy agreement itself or in a partnership agreement or elsewhere, which purports to deny those other tenants such authority. I might add that any contrary decision of this court would be likely to open the door to widespread evasion of the Act of 1977 to the detriment of the security of tenure which Parliament clearly intended to confer on agricultural tenants: see and compare Johnson v. Moreton [1980] AC 37, 52-53, per Lord Salmon.'
'93. … A and B will be joint owners and necessarily trustees. In a case where the facts permit a notice to be given under 4(b), that is a case of grave or persistent breaches by the licensee, there must be a very strong argument that B's duty as a trustee, assessing him in that capacity, is to join in a notice to himself under 4(b). If he fails to join in that notice he is acting in breach of trust, he is committing a wrong to his fellow trustee A and the beneficiaries under the trust. If he then receives a notice from A alone and is able to challenge that notice on the ground that it is given by A alone and not by A plus B, he is in a real sense taking advantage of his own breach. There is a principle, whether it is a general principle of law or a principle of interpretation it matters not, that one should not take advantage, the court should not permit one to take advantage of one's own breach. That is a powerful argument for holding that when one comes to the word 'Licensor' in clause 4(b), one should interpret it as referring to everyone who is not also a licensee. …
95. By that process of reasoning, I do reach the conclusion that the notice given on 16th February 2006 was valid and effective under clause 4(b). The non-payment of rent was a persistent breach, it was not rectified within the period permitted. The consequence is that the licence was indeed terminated.'
The appeal
Lord Justice Patten :
Lord Justice Longmore :