Jeanette Dennis, partner at Ashtons Legal, looks at the family dispute over land between Procter v. Procter, and why it’s important to get professional input when preparing documents.
The May 2022 High Court judgment concerned Suzie Procter and her two brothers Philip and Jamie, who for many years had been caught up in a bitter farming family dispute. This latest judgment is one of a series of judgments over many years.
The dispute here concerned approximately 600 acres of land, including 128 acres which is a golf course. The remaining land is arable and is owned by the family partnership of Philip and Jamie, following Suzie having allegedly retired from the partnership in 2010.
The land was valued several years ago as a whole without any agricultural tenancy element and was estimated as being worth in excess of £7.5m.
Suzie believed that she should have one third of that amount, but her brothers maintained they had a tenancy over it which she was attempting to end. The tenancy was granted to the three of them, back in 1994, and various family trusts owned the freehold by the time of the proceedings.
The legal case dealt with whether Suzie - as one of the three tenants - could serve a valid notice to quit which terminated the tenancy.
There were lots of interesting points and arguments, the main points concerning whether Suzie as a non-partner could terminate the partnership with her brothers who are partners. Also, it raised the question of what right the ‘partnership’ has in respect of enforcing the obligations against the tenants - including the non-partner - and whether a valid notice to quit can be withdrawn.
The court confirmed that once a valid notice to quit has been served the tenancy will automatically come to an end, even though the party giving it later purports to waive or withdraw it. The parties may create a new tenancy, so this is what in practice is meant by ‘waiving’ a notice to quit, but the old tenancy would no longer exist.
The court also held that Suzie - as a non-partner - held the tenancy as an asset of the partnership on trust with her brothers and that the tenants had a fiduciary duty to the partnership to look after that asset and not to destroy it or cancel it. It was decided that Suzie’s action was effectively in breach of the fiduciary duties of the tenants who held the tenancy on trust for the partners.
The case also confirmed that a non-partner (as a co-tenant under a tenancy in these circumstances) could serve a notice to quit, as the law for many years has confirmed that joint tenants are only such whilst they all agree.
In the Procter v. Procter case the fact the notice to quit could not be withdrawn would obviously have given the wrong result, so the court found an innovative solution, drawing on the long legal history of equitable remedies including (for breach of trust or breach of fiduciary duty) the remedy of rescission.
The remedy of rescission refers to the undoing or unmaking of a contract between parties. Rescission of a contract can be ordered by a court as a remedy in a civil lawsuit, and is intended to bring the parties as close to the same position they were in before they entered into the contract as possible.
There are some lessons for farming families to bear in mind here, as the judge said clauses could have been included in the tenancy agreement such as any notice to quit needing to have the signatures of everyone. The judge also felt the issue could have been better covered in the partnership agreement.
The fiduciary duties of tenants holding tenancy agreements on statutory trusts for partners in partnerships include implied duties to act in the best interests of the partnership, for no collateral purpose, and to preserve the trust/partnership properties.
This Procter v. Procter case highlights the need for good professional input when preparing documents relating to agricultural land, agricultural tenancies and agricultural partnerships.
Contact Jeanette Dennis on jeanette.dennis@ashtonslegal.co.uk or call 07971 671193.
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