Agreement for use of paddock for grazing — Use for purpose of farming business — Whether paddock was agricultural land in hands of tenant — Whether agreement made in contemplation of use of paddock for period of less than a year or successive periods of less than a year — High Court holding that tenant in occupation throughout the year — Creation of agricultural holding on land — Tenant’s rights binding on landlord’s successor
Until his death in 1987, D lived at Clophill House, Clophill, Bedfordshire. The house and grounds included a paddock of just under two acres, which lay beyond the garden, separated from it by a wrought-iron grille and railings. B was a local farmer. He claimed that in spring 1973 D had let the paddock to him from year to year for keeping livestock and that he thereby became the tenant of an agricultural holding for the purpose of the Agricultural Holdings Act 1986. B sought a declaration to that effect. If B were correct his rights bound T, who bought the house and its adjoining land from D’s executors in July 1988.
To make good his claim B had to show that he was the tenant under a “contract for an agricultural tenancy” (section 1(1)). For that purpose two relevant conditions had to be satisfied: first, the land had to be let for use as “agricultural land” (section 1(2)). That meant “land used for agriculture which was so used for the purpose of a trade or business” (section 1(4)(a)). “Agriculture” included grazing (section 96(1)). Second, the letting had to be “for a term of years or from year to year” (section 1(5)). The tenant was assisted in satisfying the second requirement by section 2, which provided that a licence or letting for less than a year should take effect as if it were an agreement to let the land for a tenancy from year to year. However, section 2(3)(a) provided that section 2 did not apply to an agreement for the letting of land or the granting of a licence to occupy land made in contemplation of the use of the land only for grazing or mowing (or both) during some specified period of the year. The effect of the proviso in section 2(3)(a) was that if a licence was granted in contemplation of the use of the land for grazing of less than a year or for successive periods of less than a year the agreement was not a “contract of tenancy” because it would not be an agreement for letting land for a term of years or from year to year. There was no dispute that B made an agreement with D allowing him to use the paddock for grazing. The question was whether that agreement was made in contemplation of the use of the paddock for a period of less than a year or successive periods of less than a year. On the evidence, B’s agreement allowed him the use of the paddock for grazing in consideration of a small rent, initially £10 pa, and then increased to £25 pa. It was further found as a fact that the position of the paddock was an important feature of D’s garden and that the daffodils, densely planted at the near end of the paddock, were a spectacular sight in March and April. The question was whether the agreement contemplated that livestock might be grazed in the paddock except for the two months when the daffodils were in flower; or whether grazing was indeed permitted throughout the year provided that the livestock did not include cattle which were liable to damage the flowers. A further fact found was that B had kept a mare and, from time to time, her foals in the paddock from 1973 until 1982, throughout the year, including the daffodil season. They were used for pleasure and not for business.
Held The court made the declaration in B’s favour.
1. On the evidence, the use which D and B contemplated was that livestock might be grazed in the paddock throughout the year. However, during the period when the daffodils were in flower, the livestock should not include cattle or other animals liable to damage the flowers.
2. Although nothing had been said about the term of the arrangement, it was implicit in D’s acceptance of an annual rent that the arrangement, whether it was technically a tenancy or a licence, would continue from year to year until determined by notice.
3. If the agreement had been confined to the grazing of cattle, it would have been excluded from the Agricultural Holdings Act 1986 by the proviso in section 2(3). On that footing the only permitted user would have been grazing for a specified period of the year, namely a 10-month season when the daffodils were not in flower. However, the agreement was not limited in that way: B was permitted to use the paddock for grazing at any time of the year provided that cattle were not in the paddock during the daffodil season.
4. The requirement of the 1986 Act that the land should be used as the tenant’s trade or business was part of the definition of “agricultural land”. By section 1(2) an agricultural holding had to relate to “agricultural land”. However, that requirement was satisfied if the land was let for agriculture for the purposes of a trade or business notwithstanding that it was simultaneously used for another purpose such as keeping a mare for pleasure or growing wild flowers for pleasure. The fact that there was a period during the term of the letting or licence when the land would not be used for both business and pleasure but only for pleasure, made no difference unless either: (1) the business purpose was relatively so minor that it could no longer be regarded as the purpose of the letting or licence; or (2) that the agreement could be regarded as two distinct agreements, one relating to business use and one relating to the other use.
5. In the present case, B was let on to the land to use it for the purpose of his farming business albeit that he might use it for other purposes also. He did in fact use it for the purposes of his farming business. The paddock was therefore in B’s hands “agricultural land”. Once that point was reached the limitation in section 1(4) to use for the purpose of a trade or business had no further relevance.
6. The question posed by section 2(3) was different and arose only once it was shown that the land was “agricultural land”. It was then necessary to ask whether the contemplated use of that land was “only” grazing or mowing (or both) during some specified period of the year. If it was more than grazing or mowing or was grazing or mowing for a year or more, the proviso did not apply. Trivial or significant use might be disregarded.
7. This was not a case in which the tenant was allowed into possession simply for a limited period of time and then went out of possession until the next season. B was in occupation of the paddock throughout the year. A mare and her foals belonging to him in the field throughout the year were visible signs of his continuing occupation, notwithstanding that the daffodils were in bloom and the cattle were elsewhere. If a tenant were permitted to use the land for the whole year and were permitted to use it for other purposes when it was not being used for grazing, it could no longer be said that the contemplated user of the land was “only” for grazing during a part of the year. Where, as in this case, some grazing continued throughout the year, albeit by different animals, some of which were not used in the tenant’s business, it was clearer still that the proviso had no application.
8. On the evidence available it seemed unlikely that D intended to create an agricultural holding on land which was an extension of his garden and had to be reached through it. However, he had reached an agreement with B, the legal result of which was to create an agricultural holding whether he realised it or not. Moreover that agreement bound D’s successors.
Peter Cranfield (instructed by Park Woodfine & Co, of Bedford) appeared for the plaintiff, B; Richard Bray (instructed by ET Ray, of Bletchley) appeared for the defendant, T.
