Those involved with agricultural tenancies under the 1986 Act (often known as old-style tenancies) will probably be familiar with the procedural nightmare which the Act involves. It certainly causes both land agents and solicitors sleepless nights because a failure to follow the strict letter of the law will invariably render an application invalid.
A case decided earlier this year illustrated the point perfectly. However, before looking at what happened, it is worth remembering one important legal fact. That is, a company has a separate legal entity from its directors or shareholders. A company can be prosecuted, sue and be sued, in its own right.
Thwarted by administration mistake
In the case in question, the tenant, Mr Jones died. That meant that his son, Cecil, applied to the Tribunal for succession to the tenancy within the statutory 3-month period following his father’s date of death. In such an application, an applicant must prove a number of facts which means that he or she satisfies the tests of eligibility and suitability to succeed to the tenancy. Together, these tests often provide a formidable set of obstacles but in the Jones case, the Tribunal never even got to them. In his application, Cecil Jones named a Dan Adams as the landlord. This was not the case as the tenant was, in fact, a company, Adams DSB Ltd. As it happened, Dan Adams was the sole director of the company but, as we know, a company is a separate legal entity! As the 3-month period had elapsed before the mistake was realised, it was not possible to issue new proceedings against the correct landlord. The Tribunal was therefore asked to correct the error.
Contested hearing and appeals
After a contested hearing, the Tribunal did just that and substituted the name of the company for its director. This might well be seen as a common-sense solution as it was clear that, as sole director, Dan Adams and the company had a shared knowledge of the application. However, that pragmatic approach did not meet the approval of Mr Adams and he appealed against the decision to the Upper Tribunal. After another contested hearing, the appeal was dismissed, and it was ruled that the lower Tribunal had the power to amend the application as had previously been decided. The point was made that the company had not been prejudiced by the mistake and had, indeed, protected itself by responding to the proceedings.
Both Mr Cecil Jones and his advisers will have breathed a collective sigh of relief but, yet again, the point that proceedings under this legislation must accurately identify the parties and comply in all respects with timescales is well made. Be warned!
Contact us if you need a confidential conversation.