Eastwood (W. & J. B.) Ltd v Herrod

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date24 June 1968
Judgment citation (vLex)[1968] EWCA Civ J0624-3
Date24 June 1968

[1968] EWCA Civ J0624-3

In The Supreme Court of Judicature

Court of Appeal


The Master Of The Rolls (Lord Denning)

Lord Justice Diplock and

Mr. Justice Goff

On appeal from the Lands Tribunal

W. & J.B. Eastwood Limited
G. E. Herrod (Valuation Officer)

Mr. DOUGLAS FRANK, Q.C., and Mr. W.J.G. GLOVER (instructed by Solicitor of Inland Revenue) appeared on behalf of the Appellant, the Valuation Officer.

Mr. DAVID WTDDICOKBE, Q.C., and Mr. MICHAEL FITZGERALD (instructed by Messrs. Sharpe Pritchard & Co., agents for Messrs. Harrop White Vallance and Dawson, Mansfield) appeared on behalf of the Respondents.


Eastwoods have a large undertaking in Lincolnshire where they produce broiler chickens for the table. They do it at the rate of 150,000 birds a week. Their holding consists of 1150 acres of farm land and 100 acres of buildings. The question is whether the buildings are exempt from rating as being "agricultural buildings". The buildings are these:


(i) The Layer Houses: there are 20 big layer houses. Eastwoods buy day old chicks (hens and cockerels) from outside. They keep them in the layer houses where the hens lay fertile ergs. The hens stay in the layer houses all their lives, but the cockerels are put out on free range for 12 weeks out of their life cycle of 64 weeks.


(ii) The Hatchery. The fertile eggs are taken from the layer houses to the hatchery. It is a large building where the eggs are hatched out at the rate of 30, 000 or 40,000 a day.


(iii) The Broiler Houses. There are 72 large broiler houses. The day old chicks are taken from the hatchery to the broiler houses where they are kept for 10 weeks. They neversee the light of day.


(iv) The Packing; Station. This is a large building 9 miles away at Gainsborough. The broiler birds are taken, at the age of 10 weeks, from the broiler houses to the packing station. They are killed, plucked, cleaned and dried by factory methods. They are then put in cold store ready for despatch to customers.


(v) The Mill. This is a large building where Eastwoods manufacture pellets for feeding the birds. The mill produces 650 tons of food for them each week. Only 4% of the ingredients are home grown on the 1150 acres. The remaining 96% come from outside suppliers.


The land can be divided into two categories:- (i) 1130 acres which is used in growing barley to send to the mill: but, for good cultivation, some of it is rotated with other crops, (ii) 20 acres which is used as grassland on which the cockerels have free range for 12 weeks out of their lives. Then 20 acres are rotated a different 20 acres every 3 months. The litter from the layerhouses and broiler houses is spread on the land as manure.


The Lands Tribunal held that all the buildings were "agricultural buildings", and therefore exempt from rates. The Valuation Officer appeals to this Court. The question depends on the statutory definition contained in Section 2 of the Rating and Valuation (Apportionment) Act, 1928, which says: Agricultural land' means any land used as arable meadow or pasture ground only a and "land exceeding one quarter of an acre used for the purpose of poultry farming 'Agricultural buildings' means buildings (other than dwelling-houses) occupied together with agricultural land or being or forming part of a market garden, and in either case used solely in connection with agricultural operations thereon".


At the time when that statute was passed in 1928 there was no difficulty in applying it. In those days cowsheds, dairies, barns and so forth were all agricultural buildings exempt from rates. But it is very different with the intensive farming of today, with its broiler houses, battery houses and such like. It is very difficult to apply the Statute to them. So much so that the cases have got into a troublesome state. Very fine distinctions have been taken. If there are broiler houses on adjoining farms, one may be liable to rates and the other not. This case is brought before us to try and resolve the difficulties.


If I were unfettered by previous cases, I would say at once that all the buildings of Eastwoods layer houses, broiler houses, the packing station, the mill the lot were all rateable: they are not agricultural buildings within the statute.


I would analyse the position in this way; the "agricultural land" is the 1150 acres apart from the buildings. The "agricultural operations thereon" are the agricultural operations on the land, that is, on the 1150 acres of land as distinct from the operations in the buildings. Those agricultural operations consist of the growing and harvesting of crops and the running of chickens. "The buildings" of Eastwoods are occupied by them"together with the agricultural land". They are used "in connection with" the agricultural operations on the land. But they are not used "solely" in connection with those operations. They are also used in connection with a different operation altogether, namely, the production of broiler chickens for the table. That operation is not an agricultural operation carried out on the land at all. It is a factory operation carried out in the buildings. So that the buildings do not satisfy the definition of "agricultural buildings11 and are rateable accordingly.


So much for the statute, without being embarrassed by the cases. But there is one case which does embarrass me, and It Is a case in this Court. It is Thompson v. Milk Marketing Board (1952 2 Q.B. 817). It concerned a cattle breeding centre established by the Milk Marketing Board. There were a lot of buildings including an office block and a laboratory block, and also a bull pen block and fodder stores. The pens housed 32 bulls which were used for the extraction of semen. There were also 29 acres of agricultural land of which 8 acres were arable and another 21 acres grassland. These 29 acres produced about one fourth of the food needed by the bulls. The Lands Tribunal approached the case as I think it should be approached. They held that on the 29 acres there were agricultural operations consisting of the raising and harvesting of food and the paaturing and exercising of animals. Each of the buildings was used, in varying extent, "in connection with" those operations. The Tribunal thought that none of those buildings satisfied the test of being used solely in connection with those operations. The Tribunal held therefore that they were not "agricultural buildings" such as to be exempt from rating. But this Court reversed the decision of the Tribunal. It held that the buildings were agricultural buildings. The Court took as an illustration a cowshed on a farm. It is an agricultural building, they said, because: "The cows are pastured in order that milk may be obtained and distributed. It is a combined agricultural operation carried onin part on" the land and In part in the building". Lord Justice Somervell there applied a test which is called the "combined operation" test. He said (at page 821) that: "Where the land is substantial and is used as a part of the agricultural purpose to which both land and buildings are solely put, I think the words of the definition are satisfied. One does not have to consider which plays the major part".


Following that case there have been several "combined operation" cases before the Lands Tribunal where broiler houses and battery houses have been held exempt from rates, either because the chickens were for a few weeks on free range on the land, or because the farmer grew some of the food for them on the land.


I must say that I cannot reconcile the test in Thompson's case with the words of the Statute itself. I see no room in the Statute for the "combined operation" test. The reason why a cowshed is exempt is not because there is a combined operation in the land and in the building. It is because the agricultural operation on the land is the pasturing of cows for milk, and the cowshed is used solely in connection with that operation. It subserves that operation only.


But are we at liberty to depart from the test of Thompson v. Milk Marketing Board? I think we are; and for this reason: there are several other oases in this Court Which are in conflict with it. I refer particularly to the cases of Gilmore v. Baker Carr (1962 1 W.L.R. 1105) and ( Geary v. Lee 1968 R.A. 281) on 26th March of this year. Those cases concerned mixed farms where there were combined operations. There were broiler houses and battery houses which produced large quantities of manure for the land. Yet they were not exempt from rates. Those cases cannot stand with the "combined operation" cases. A broiler house or a battery house should be rateable or non-rateable as it stands. It should not depend on whether the farmer has his chickens on free range for a few weeks or grows a little of the food for the birds.being then that there are conflicting tests laid down in this Court, we are at liberty to choose between them. That is clearly stated in Young v. Bristol Aeroplane Co. Ltd. (1944 1 K.B. 718). It is true that in Gilmore v. Baker Carr and Geary v. Lee we did not realise that we were laying down anything in conflict with Thompson v. Milk Marketing Board. So we distinguished it. Now we can take the next step and say that the test in Thompson's Case is not merely distinguishable from the other cases but in conflict with them, and hence we can depart from it. The cynic can comment on this process if he likes. It is a way round the strict doctrine of precedent. But I prefer it to the endless task of distinguishing the indistinguishable and reconciling the Irreconcilable. That is the way we have had to do it in the past, and in so doing we have made confusion worse confounded. It is better to make a clean cut and to depart from prior precedent if we are satisfied that it is wrong. Has it not been said recently by high...

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