Property law reports

Gift of agricultural tenancy: undue influence

Agricultural holding - tenancy - first defendant claiming agricultural tenancy - whether disposition made by oral agreement, or signed document or resulting from undue influence - claim allowed

Padgham and another v Rochelle and another: Ch D (Mr Launcelot Henderson QC, sitting as a deputy judge of the division): 1 August 2002

W owned farm buildings and land that he maintained with the assistance of his son, the first defendant (R).

By his will dated 1982, W appointed R as an executor and left a substantial amount of the property to the claimants, his grandchildren, in equal shares.

Prior to his death in 1995, and without taking independent advice, W signed a written agreement, drafted by R, which purported to give to R an agricultural tenancy of the land and outbuildings that had been bequeathed to W's grandchildren.

R also claimed that he and W had reached an oral agreement in 1973, allegedly confirmed in 1995, that R should run the farming business in its entirety.

The claimant grandchildren argued that no such oral tenancy had been granted, and that the 1995 written agreement was invalid, either because it was void for uncertainty or because it did not comply with the requirements under section 52 of the Law of Property Act 1925.

They further contended that if the agreement were found to be valid, it should be set aside for undue influence.

Vivian Chapman (instructed by Furley Page, Canterbury) for the claimants; Nicholas Asprey (instructed by Brachers, Maidstone) for the first defendant; Gilead Cooper (instructed by Champion Miller and Honey, Tenterden) for the second defendant.

Held: The claim was allowed.

Any agreement between the parties was merely an informal family arrangement concerning joint or shared occupation, and there had been no intention to create legal relations.

The arrangement concerning the payment of rent was informal, and did not include an agreed figure.

There was no evidence of any change in the ownership of the farm's livestock, and it was implausible that the deceased would have granted a tenancy, or the right to exclusive occupation of the whole of the farm, in return for no more than a vague obligation to feed the animals and arrange for their sale.

W continued to purchase and graze animals on the land without reference to R and singularly failed, on specific occasions, to inform farming officials or family members of any express agreement of the kind suggested by R.

Since the 1995 written agreement had been drawn up by laypersons without the benefit of professional advice, the court was under a duty to construe it reasonably and to bridge any gaps left by the parties, if that were possible.

Upon that basis, the terms of the document and its commencement date were discernable, and the document was therefore valid.

It did not fulfil the requirements of section 52 of the 1925 Act, but it would take effect in equity in accordance with the doctrine in Walsh v Lonsdale (1882) 21 ChD 9.

Although the document had the effect of passing the tenancy to R, it was clear that W did not have the benefit of any independent advice and did not, therefore, understand the effect that the transaction would have either on his existing testamentary dispositions or the value of his property.

R would have been the sole beneficiary of the arrangement and substantial harm would have been caused to W's testamentary disposition to the claimants.

Given that W reposed trust and confidence in R, and following the discussion as to the assumption of the burden of proof found in Royal Bank of Scotland plc v Etridge (No 2) [2001] UKHL 44, further addressed in Hammond v Osborn [2002] EWCA Civ 885, it was for R to demonstrate that he did not exert undue influence on W.

This he failed to do.

Given that it was impossible to conclude that the agreement was signed by W after full, free and informed thought, it was accordingly set aside.

Town and country planning: supplementary planning guidance

Planning appeal - supplementary planning guidance - inspector allowing appeal on basis of outdated planning guidance - whether error justifying quashing of decision - claim allowed

Patel v Secretary of State for Transport, Local Government and the Regions and another; QBD: Administrative Court (Mr Justice Collins): 2 September 2002

The claimant opposed his neighbour's planned house extension for which, in September 2001, the second defendant council refused planning permission.

In October 2001, the relevant supplementary planning guidance, contained in SPG 5, was amended.

On the neighbour's appeal to the first defendant secretary of state, the inspector considered SPG 5 and concluded that the appeal should be allowed and permission for the extension granted.

However, references to SPG 5 in his decision related to the old version, not the revised one.

The claimant challenged that decision under section 288 of the Town and Country Planning Act 1990, on the ground that the inspector had erred in having regard to an outdated policy document.

Martin Hutchings (instructed by Colemans, Kingston-upon-Thames) for the claimant; James Maurici (instructed by the Treasury Solicitor) for the first defendant.

The second defendants did not appear and were not represented.

Held: The claim was allowed.

The inspector had erred in having regard to the outdated SPG 5.

It was impossible to be certain that his decision would have been the same had he considered the new version.

The decision would accordingly be quashed and remitted for reconsideration.