Barrett v Morgan 2000

Barrett v Morgan [2000] 2 AC 264

Head lease terminated on agreement between landlord and tenant; impact on sub-tenancy

Facts

Barrett owned agricultural land over which he granted a periodic tenancy. The tenant sub-let the land to Morgan who farmed it. Barrett and the tenant sought vacant possession and agreed that Barrett would serve notice to quit upon the tenant who would not contest the notice. Barrett’s claim for possession was refused on the basis that the sub-lease survived the termination of the head lease. Barrett appealed.

Issues

Barrett argued a sub-lease is automatically determined upon determination of the head lease. The only exception is where the tenant surrenders his interest to the landlord, and the landlord then takes the reversionary interest subject to the existing sub-tenancy. Service of a notice to quit by the landlord is not the same as surrender, it is the exercise of the common law right of any landlord under a periodic tenancy. The tenants were content for the tenancy to come to an end but this was not the same as surrendering their interest. Morgan argued the termination of the lease by agreement amounted to an effective surrender of the lease and his interest, therefore, survived the transfer. Public policy favoured farmers holding security of tenure, and the transfer was a collusive act by the landlord and tenant, which was analogous to surrender in substance and effect.

Held

Notice to quit and surrender are inherently distinctive ways of determining a tenancy. The landlord was entitled to serve the notice and did not require the consent of the tenant. It did not follow that the failure to serve a counter notice amounted to an effective surrender of the head lease. The serving of the notice to quit, therefore, effectively terminated the sub-tenancy.