Rating — Agricultural building — Chicken-processing factory — Factory up to 120 miles from poultry-rearing farms — Whether “occupied” with agricultural buildings used for keeping or breeding of livestock — Whether exempt from rating — Lands tribunal holding that factory was “agricultural building” and was exempt — Court of Appeal holding that tribunal misdirected itself and remitting question to Tribunal — Appeal against Court of Appeal decision dismissed — House of Lords holding that farms not “occupied together with” factory and so not exempt from rates
The company was in the business of breeding, rearing, slaughtering, processing, packing, selling and distributing turkeys and chickens for human consumption. For that purpose it owned and occupied 67 poultry-breeding and rearing farms situated between a quarter of a mile and 120 miles from Dalton, Thirsk, North Yorkshire, where the company owned and occupied a provender mill and premises and a separate processing factory and premises.
The mill produced and supplied to the 67 farms pelleted food for consumption by the poultry but, it also supplied 6% to 8% of its total production to farms occupied by independent turkey rearers. The factory received the substantial production (though not the entire production) of poultry from 48 of the farms scattered over a large area. Poultry was not received from other farms. The poultry was processed at the factory and either frozen or sold fresh to depots. A question arose whether the poultry processing factory was an “agricultural building” within the meaning of section 26 of the General Rates Act 1967 and sections 1 and 2 of the Rating Act 1971, so as to be exempt from rates.
The issue was whether the factory could be said to have been “occupied together with” buildings used for the keeping or breeding of livestock so as to satisfy the requirements of section 2(1)(b) of the 1971 Act and came within the extended definition of “agricultural building”. The local valuation court and the Lands Tribunal held that it was an “agricultural building” and was exempt. The Court of Appeal held that the Lands Tribunal had misdirected itself in law and remitted the question to the Lands Tribunal ([1992] 1 EGLR 179). The company appealed to the House of Lords.
Held The appeal was dismissed. The processing factory was to be reinstated in the valuation list, the agreed rating valuation being £20,150.
1. For one building to be “occupied together with” another for the purposes of the 1971 Act they must be in the same occupation and the activities carried on in both must be jointly controlled or managed. The buildings must be so occupied and the activities so controlled and managed at the same time. These were necessary conditions to be satisfied but to satisfy each of them separately or together was not sufficient to establish that one building was “occupied together with” another for rating purposes. Nor was there any geographical test which gave a conclusive answer — though the distance between the buildings was a relevant condition.
2. It was not sufficient to ask generally whether the buildings or buildings and land in question were all part of the same business enterprise. It had to be shown that the two buildings, or the buildings and agricultural land, were occupied together so as to form in a real sense a simple agricultural unit. Contiguity or propinquity might go far to show that they were. Thus, farm buildings surrounded by land which was farmed with other land nearby though not contiguous, or even land in another neighbouring village, might well as a matter of fact be formed to be “occupied together with” each other. On the other hand separation might indicate that they were not and the greater the distance the less likely they were to be one agricultural unit.
3. In view of the extension of the 1971 Act of the definition of “agricultural buildings” for purposes of derating, it was not right to ask whether the two premises constituted one “farm” in the ordinary sense. The question was whether the two buildings, or the buildings and land, were worked together so as to form one agricultural unit.
4. In the present case there were 48 farms with their broiler houses and each broiler house must be surrounded by at least 2 ha of land to qualify. They were kept separate and distinct in part, to prevent or reduce the spread of disease. Yet it was an inescapable finding that they were separate and distinct farms and were to be treated as such for rating purposes, since it had not been suggested that any two or more of the broiler houses were in reality seen as a single unit. It was quite impossible on the findings of the Lands Tribunal to say that each farm or broiler house was occupied together with all of the other broiler houses as one unit or that the factory was occupied as one unit together with all of the farms, some of which were 100 miles away.
5. Applying the test whether the several buildings were worked together as one agricultural unit and having regard to their physical separation, as part of that test, the Lands Tribunal could not conclude that the 48 farms were “occupied together with” the factory for purposes of the 1971 Act.
Peter Curry QC and Malcolm Davis-White (instructed by Stephens & Scown) appeared for the appellant company; Christopher Cochrane QC and Simon Bird (instructed by Sharpe Pritchard) appeared for the respondents, Farmer (VO) and Hambleton District Council
