[2024] UKUT 149 (LC)

Provision for the exemption of agricultural buildings was first made in the Rating and Valuation (Apportionment) Act 1928, which defined “agricultural buildings” as:

It is important, for present purposes, that that definition required a building occupied together with agricultural land to be solely used in connection with agricultural operations on that land.

The Rating Act 1971 extended exemption to buildings used for “keeping or breeding of livestock”, and also, by section 2, to buildings occupied together with such buildings. It was section 2 that was under consideration in Farmer v Buxted, which was about a poultry processing factory used for the slaughter and processing of chickens reared in “broiler houses” (meaning houses for battery hens) at 48 farms at various distances – ranging from one quarter of a mile to 120 miles – away from the factory.

To be exempt under section 2 a building that was not itself used for keeping or breeding livestock had to be “occupied together with” one or more such buildings and used solely in connection with operations carried on in those same buildings (or occupied together with those buildings and with agricultural land, and used solely in connection with operations in the buildings and with agricultural operations on that land). The same provision is found today in paragraph 5 of schedule 5 to the LGFA 1988. In Farmer v Buxted the ratepayer argued that the processing plant was occupied together with the broiler houses on the 48 farms. By the time the case reached the House of Lords it was no longer in dispute that the factory was solely used in connection with the agricultural operations carried on in the broiler houses. The issue was whether it was also occupied together with those farms.

By 1992 when Farmer v Buxted was heard a body of case-law had built up around the meaning of “occupied together with”. The Lands Tribunal had taken the view in a number of cases that geographical separation did not matter; what mattered was that the functional connection between the building in question and the building or land together with which it was claimed to be occupied. Thus in Hilleshog Sugar Beet Breeding Co. Ltd. v. Wilkes (Valuation Officer) [1971] R.A. 275 it was found that a plant research centre was occupied together with a number of plots of land up to 40 miles away; in Handley (Valuation Officer) v Bernard Matthews plc. [1988] R.A. 222 a hereditament used for producing pelleted turkey feed was found to be occupied together with 29 farms, between 9 and 74 miles distant, where the turkeys were kept. In Maurice E. Taylor (Merchants) Ltd. v Commissioner of Valuation [1981] N.I. 236 the Court of Appeal found that a shed and a potato bagging and grading store were occupied together with land where the potatoes were grown, between 10 and 20 miles away; Gibson LJ and Lord Lowry LCJ both expressed the view that the connection implied in “occupied together with” was functional rather than geographical.

In Farmer v Buxted Lord Slynn at page 377 made special mention of a recent Court of Appeal decision, W & JB Eastwood Ltd. v Herrod [1971] A.C. 160:

That then was the background to Farmer v Buxted, where many of the broiler houses together with which the factory was said to be occupied were many miles away. It is interesting to look at the arguments presented to the House of Lords, set out in the Appeal Cases report. We can see that the parties agreed that the factory and the broiler houses must be in common occupation at the same time, which they were; there must be a geographical connection; and there must be a functional connection. For the ratepayer it was emphasised that distance was not decisive; for the Valuation Officer it was argued that the farms were just too far apart: “Without some form of geographical test a building in Dover could be exempt if it were 'occupied together with' a poultry farm in Calais. The buildings need not be contiguous, but through location, common ownership, common machinery and common workforce they must as a matter of fact be one poultry farm” (page 372).

The House of Lords found that the factory was not occupied together with the broiler houses. Lord Slynn, with whom their lordships all agreed, said this at page 378:

When the LGFA 1988 was enacted, paragraph 5 of Schedule 5 repeated the provisions of section 2 of the 1971 Act, and paragraph 3 of Schedule 5 echoed the definition in the 1928 Act, as follows:

However, paragraph 3 (but not paragraph 5) was amended in 2003; its current text is as follows, with the amendment underlined:

The purpose of the amendment was to allow exemption for buildings that were shared by a number of famers; the Explanatory Memorandum to the amending statute (the Local Government Act 2003) said:

So whereas before 2003 paragraph 3 of Schedule 5 required the building in question to be occupied together with agricultural land and used solely in connection with agricultural operations on that land – which Viscount Dilhorne in Eastwood described as “an attempt by the draftsman to define a farm in statutory language” - the building may now be used in connection with agricultural operations on that or other land. Does the change in the use requirement have any effect upon the meaning of the occupation requirement? That is the question we have to answer in relation to the three buildings at Chequer Tree Farm.